[Federal Register Volume 65, Number 179 (Thursday, September 14, 2000)]
[Notices]
[Pages 55504-55508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23685]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-856, A-580-846, A-469-810]


Initiation of Antidumping Duty Investigations: Stainless Steel 
Angle From Japan, Korea, and Spain

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: September 14, 2000.

FOR FURTHER INFORMATION CONTACT: Davina Hashmi (Spain) at (202) 482-
5760, Brian Smith (Korea) at (202) 482-1766, or Jarrod Goldfeder 
(Japan) at (202) 482-0189, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230.

Initiation of Investigations

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department of Commerce's (the 
Department's) regulations are to 19 CFR part 351 (April 1999).

The Petitions

    On August 18, 2000, the Department received petitions filed in 
proper form by Slater Steels Corporation (Speciality Alloys Division) 
and the United Steelworkers of America, AFL-CIO/CLC

[[Page 55505]]

(collectively the petitioners). The Department received supplemental 
information to the petitions on August 23, 28 and September 5, 6, 2000.
    In accordance with section 732(b) of the Act, the petitioners 
allege that imports of stainless steel angle (SSA) from Japan, Korea, 
and Spain are being, or are likely to be, sold in the United States at 
less than fair value within the meaning of section 731 of the Act and 
that such imports are materially injuring an industry in the United 
States.
    The Department finds that the petitioners filed these petitions on 
behalf of the domestic industry because they are interested parties as 
defined in sections 771(9)(C) and (D) of the Act and they have 
demonstrated sufficient industry support with respect to each of the 
antidumping investigations that they are requesting the Department to 
initiate. (See Determination of Industry Support for the Petitions 
below.)

Scope of Investigations

    For purposes of these investigations, the term ``stainless steel 
angle'' includes hot-rolled, whether or not annealed or descaled, 
stainless steel products of equal leg length angled at 90 degrees that 
are not otherwise advanced. The stainless steel angle subject to these 
investigations is currently classifiable under subheadings 
7222.40.30.20 and 7222.40.30.60 of the Harmonized Tariff Schedules of 
the United States (HTSUS). Specifically excluded from the scope of 
these investigations is stainless steel angle of unequal leg length. 
Although the HTSUS subheadings are provided for convenience and Customs 
purposes, our written description of the scope of these investigations 
is dispositive.

Determination of Industry Support for the Petitions

    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (1) At least 
25 percent of the total production of the domestic like product; and 
(2) more than 50 percent of the production of the domestic like product 
produced by that portion of the industry expressing support for, or 
opposition to, the petition.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to determine whether a 
petition has the requisite industry support, the statute directs the 
Department to look to producers and workers who produce the domestic 
like product. The International Trade Commission (ITC), which is 
responsible for determining whether ``the domestic industry'' has been 
injured, must also determine what constitutes a domestic like product 
in order to define the industry. While both the Department and the ITC 
must apply the same statutory definition regarding the domestic like 
product (section 771(10) of the Act), they do so for different purposes 
and pursuant to separate and distinct authority. In addition, the 
Department's determination is subject to limitations of time and 
information. Although this may result in different definitions of the 
like product, such differences do not render the decision of either 
agency contrary to the law.\1\
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    \1\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp. 
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays 
and Display Glass Therefore from Japan: Final Determination; 
Rescission of Investigation and Partial Dismissal of Petition, 56 FR 
32376, 32280-81 (July 16, 1991).
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    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic-
like-product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition. Moreover, the petitioners do not offer a definition of 
domestic like product distinct from the scope of the investigations. In 
this case, ``the article subject to an investigation'' includes certain 
products which have not previously been included within the scope of 
investigations involving stainless steel angle with the exception of 
Japan.\2\ To this end, the Department has reviewed reasonably available 
information to determine whether the products within the scope of the 
investigations constitute one or more than one domestic like product.
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    \2\ The Department determined that SSA from Japan was being sold 
in the United States at less than fair value in a previous 
investigation (see Final Determination of Sales at Less Than Fair 
Value: Antidumping Duty Investigation of Stainless Steel Angle from 
Japan, 60 FR 16608 (March 31, 1995)). However, the ITC concluded 
that the domestic industry was materially injured, or threatened 
with material injury, by imports from Japan at that time (see 
Stainless Steel Angle from Japan, Inv. No. 731-TA-699 (Final), USITC 
Pub. 2887 (May 17, 1995)).
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    We reviewed this description with product experts at the 
Department, the U.S. Customs Service, and the ITC. Based on our 
analysis of the information the petitioners presented in the petition 
and the information independently obtained and reviewed by the 
Department, we have determined that there is a single domestic like 
product which is defined in the ``Scope of Investigations'' section 
above. Moreover, the Department has determined that the petitions 
contain adequate evidence of industry support and, therefore, polling 
is unnecessary. (See Import Administration Antidumping Investigation 
Initiation Checklists, Re: Industry Support, September 7, 2000, 
hereinafter the IA Initiation Checklists, on file in the Central 
Records Unit (CRU), Room B-099 of the main Department of Commerce 
building). The Department received no opposition to the petitions. For 
all countries, the petitioners established industry support 
representing over 50 percent of total production of the domestic like 
product. Accordingly, the Department determines that these petitions 
are filed on behalf of the domestic industry within the meaning of 
section 732(b)(1) of the Act.

Initiation Standard for Cost Investigations

    Pursuant to section 773(b) of the Act, the petitioners provided 
information demonstrating reasonable grounds to believe or suspect that 
sales in the home markets of Japan, Korea, and Spain were made at 
prices below the cost of production (COP) and, accordingly, requested 
that the Department conduct country-wide sales-below-COP investigations 
in connection with the requested antidumping investigations in Japan, 
Korea, and Spain. The Statement of Administrative Action (SAA), 
submitted to the Congress in connection with the interpretation and 
application of the URAA, states that an allegation of sales below COP 
need not be specific to individual exporters or producers. SAA, H.R. 
Doc. No. 316 at 833 (1994). The SAA, at 833, states that ``Commerce 
will consider allegations of below-cost sales in the aggregate for a 
foreign country, just as Commerce currently considers allegations of 
sales at less than fair value on a country-wide basis for purposes of 
initiating an antidumping investigation.''
    Further, the SAA provides that new section 773(b)(2)(A) of the Act 
retains the requirement that the Department have ``reasonable grounds 
to believe or suspect'' that below-cost sales have occurred before 
initiating such an investigation. Reasonable grounds exist when an 
interested party provides specific factual information on costs and 
prices, observed or constructed, indicating that sales in the foreign 
market in question are at below-cost prices. Id. We have analyzed the

[[Page 55506]]

country-specific allegations as described below.

Export Price and Normal Value

    The following are descriptions of the allegations of sales at less 
than fair value upon which we have based our decisions to initiate 
these investigations. A more detailed description of these allegations 
is provided in the respective IA Initiation Checklists. Should the need 
arise to use any of this information in our preliminary or final 
determinations for purposes of facts available under section 776 of the 
Act, we may re-examine the information and revise the margin 
calculations, if appropriate.

A. Japan

    The petitioners identified Aichi Steel Works, Ltd. (Aichi), Daido 
Steel Co., Ltd., and Sumitomo Metal Industries, Ltd., as producers and 
exporters of SSA from Japan. According to the petitioners, these three 
companies account for the vast majority of subject merchandise exported 
from Japan to the United States. The petitioners based export price 
(EP) on C&F and F.O.B. U.S. prices from Aichi directly to an 
unaffiliated distributor and through a U.S. distributor to an 
unaffiliated purchaser for two grades of SSA. The petitioners obtained 
these prices from U.S. industry sources. The petitioners made 
deductions from EP for ocean freight and insurance (calculated from 
official U.S. import statistics), duties (from the HTSUS), harbor-
maintenance and merchandise-processing fees, and U.S. and foreign 
inland freight. In addition, with respect to sales made through the 
distributor, the petitioners adjusted the U.S. prices downward for a 
distributor mark-up based on pricing data submitted in the petition.
    With respect to normal value (NV), the petitioners provided Aichi's 
home-market prices for two grades of SSA sold to unaffiliated home-
market customers which were obtained from foreign market research. 
These products are comparable to the products exported to the United 
States which served as the basis for EP. The prices the petitioners 
used in the calculation of NV were delivered prices, exclusive of 
taxes. The petitioners made a deduction from NV for foreign inland 
freight which was also obtained from foreign market research. Pursuant 
to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c), the 
petitioners made a circumstance-of-sale adjustment for differences in 
credit expenses between home-market and U.S. sales. The petitioners did 
not adjust the prices for differences in packing costs because they 
assumed that packing costs were the same for both markets.
    Having analyzed the petition, we made revisions to the Japan-
specific data contained in the petition. Consistent with the EP 
calculation, we revised the distributor mark-up such that the mark-up 
rate is applied to starting prices on a grade-specific basis. For 
purposes of calculating NV, we recalculated home-market inland freight 
by relying upon all freight amounts included in the foreign market 
research. (See IA Initiation Checklist for further discussion of these 
changes.)
    In addition, the petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of SSA in the home 
market were made at prices below the COP within the meaning of section 
773(b) of the Act, and requested that the Department conduct a country-
wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the cost 
of manufacturing (COM), selling, general, and administrative (SG&A) 
expenses (which include financial expenses) and packing costs. To 
calculate Aichi's COM, the petitioners relied upon their own production 
experience, adjusted for known differences between costs incurred to 
produce SSA in the United States and in Japan using information 
obtained through market research and publicly available data. To 
calculate SG&A expenses, the petitioners relied upon Aichi's 1999 
financial statements.
    Based upon the comparison of the adjusted prices of the foreign 
like product in the home market to the COP of the product, we find 
reasonable grounds to believe or suspect that sales of the foreign like 
product were made below the COP within the meaning of section 
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a 
country-wide cost investigation.
    Pursuant to sections 773(a)(4), 773(b), and 773(e) of the Act, the 
petitioners also based NV for sales in Japan on constructed value (CV). 
The petitioners calculated CV using the same figures for COM, SG&A 
expenses, and packing costs they used to compute Japanese home-market 
costs. Consistent with section 773(e)(2) of the Act, the petitioners 
also added to CV an amount for profit, which was based upon Aichi's 
1999 financial statements.
    The petitioners provided estimated dumping margins in two ways: (1) 
Home market price (HMP) compared to EP (with margins ranging from 29.62 
to 107.39 percent); (2) CV compared to EP (with margins ranging from 
69.00 to 107.70 percent). As a result of our adjustments to the 
petitioners' calculations noted above, the revised HMP-to-EP and CV-to-
EP comparisons result in margins that range from 29.80 to 105.97 
percent and from 73.01 to 114.51 percent, respectively.

B. Korea

    The petitioners identified Bae Myung Metal Co., Ltd. (Bae Myung), 
as a producer and an exporter of SSA from Korea. According to the 
petitioners, Bae Myung accounts for all the subject merchandise 
exported from Korea to the United States. The petitioners based EP on 
U.S. prices from Bae Myung to unaffiliated U.S. purchasers through 
distributors for two grades of SSA. The petitioners obtained these 
prices from U.S. industry sources. The petitioners made deductions from 
EP for C.I.F. charges, including ocean freight and insurance (from 
official U.S. import statistics), duties (from the HTSUS), harbor-
maintenance and merchandise-processing fees, and U.S. and foreign 
inland freight. In addition, with respect to sales made through 
distributors, the petitioners adjusted the U.S. prices downward for a 
distributor mark-up based on pricing data they submitted in the 
petition.
    With respect to NV, the petitioners provided Bae Myung's home-
market prices for two grades of SSA sold to unaffiliated home-market 
customers which they obtained from foreign market research. These 
products are comparable to the products exported to the United States 
which served as the basis for EP. The prices the petitioners used in 
the calculation of NV were delivered prices, exclusive of taxes. The 
petitioners made a deduction from NV for foreign inland freight which 
they also obtained from foreign market research. Pursuant to section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c), the petitioners 
made a circumstance-of-sale adjustment for differences in credit 
expenses between home-market and U.S. sales. The petitioners did not 
adjust the prices for differences in packing costs because they assumed 
that packing costs were the same for both markets.
    In addition, the petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of SSA in the home 
market were made at prices below the COP within the meaning of section 
773(b) of the Act, and they requested that the Department conduct a 
country-wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the COM, 
SG&A expenses (which include financial expenses), and packing costs. To

[[Page 55507]]

calculate Bae Myung's COM, the petitioners relied upon their own 
production experience, adjusted for known differences between costs 
incurred to produce SSA in the United States and in Korea using 
information they obtained through market research and publicly 
available data. To calculate SG&A expenses, the petitioners relied upon 
the 1999 financial statements of Pohang Iron and Steel Co. (POSCO), a 
Korean integrated steel manufacturer.
    Based upon the comparison of the adjusted prices of the foreign 
like product in the home market to the COP of the product, we find 
reasonable grounds to believe or suspect that sales of the foreign like 
product were made below the COP within the meaning of section 
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a 
country-wide cost investigation.
    Pursuant to sections 773(a)(4), 773(b), and 773(e) of the Act, the 
petitioners also based NV for sales in Korea on CV. The petitioners 
calculated CV using the same figures for COM, SG&A expenses, and 
packing costs they used to compute Korean home-market costs. Consistent 
with section 773(e)(2) of the Act, the petitioners also added to CV an 
amount for profit, which was based on POSCO's 1999 financial 
statements. Because the petitioners' calculation of the profit 
percentage applied to COP excluded net interest expense from the 
denominator incorrectly, we recalculated the profit percentage to 
include this amount accordingly. (See IA Initiation Checklist for 
further discussion.)
    The petitioners provided estimated dumping margins in two ways: (1) 
HMP compared to EP (with margins ranging from 2.89 to 53.49 percent); 
(2) CV compared to EP (with margins ranging from 60.45 to 101.15 
percent). As a result of our adjustments to the petitioners' 
calculations noted above, the revised CV-to-EP comparisons result in 
margins that range from 59.19 to 99.56 percent.

C. Spain

    The petitioners identified Roldan, S.A. (Roldan), as a producer and 
an exporter of SSA from Spain. According to the petitioners, Roldan 
accounts for the vast majority of the subject merchandise exported from 
Spain to the United States. The petitioners based EP on C.I.F. U.S. 
prices from Roldan to a U.S. distributor and through a U.S. distributor 
to an unaffiliated U.S. purchaser for two grades of SSA. The 
petitioners obtained these prices from market research. The petitioners 
made deductions from EP for C.I.F. charges, including ocean freight and 
insurance (from official U.S. import statistics), duties (from the 
HTSUS), harbor-maintenance and merchandise-processing fees, and U.S. 
and foreign inland freight. In addition, with respect to sales made 
through the distributor, the petitioners adjusted the U.S. prices 
downward for a distributor mark-up based on pricing data submitted in 
the petition.
    With respect to NV, the petitioners provided Roldan's home-market 
prices for two grades of SSA sold to unaffiliated home-market customers 
which they obtained from foreign market research. These products are 
comparable to the products exported to the United States which served 
as the basis for EP. The prices used in the calculation of NV were 
delivered prices, exclusive of taxes. The petitioners made a deduction 
from NV for foreign inland freight which they also obtained from 
foreign market research. Pursuant to section 773 (a)(6)(C)(iii) of the 
Act and 19 CFR 351.410(c), the petitioners made a circumstance-of-sale 
adjustment for differences in credit expenses between home-market and 
U.S. sales. The petitioners did not adjust the prices for differences 
in packing costs because they assumed that packing costs were the same 
for both markets.
    In addition, the petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of SSA in the home 
market were made at prices below the COP within the meaning of section 
773(b) of the Act, and they requested that the Department conduct a 
country-wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the COM, 
SG&A expenses (which include financial expenses), and packing costs. To 
calculate Roldan's COM, the petitioners relied upon their own 
production experience, adjusted for known differences between costs 
incurred to produce SSA in the United States and in Spain using 
information obtained through market research and publicly available 
data. To calculate SG&A expenses, the petitioners relied upon Roldan's 
1999 financial statements and the financial statements of its parent 
company, Acerinox.
    Based upon the comparison of the adjusted prices of the foreign 
like product in the home market to the revised COP of the product, we 
find reasonable grounds to believe or suspect that sales of the foreign 
like product were made below the COP within the meaning of section 
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a 
country-wide cost investigation.
    Pursuant to sections 773(a)(4), 773(b), and 773(e) of the Act, the 
petitioners also based NV for sales in Spain on constructed value (CV). 
The petitioners calculated CV using the same figures for COM, SG&A 
expenses and packing costs used to compute Spanish home-market costs. 
Consistent with section 773(e)(2) of the Act, the petitioners also 
added to CV an amount for profit, which was based upon Roldan's 1999 
financial statements.
    The petitioners provided estimated dumping margins in two ways: (1) 
HMP compared to EP (with margins ranging from 6.89 to 36.92 percent); 
(2) CV compared to EP. The petitioners based their CV-to-EP comparisons 
on two sales which resulted in the same margin of 61.45 percent.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of SSA from Japan, Korea, and Spain are being, or 
are likely to be, sold at less than fair value.

Allegations and Evidence of Material Injury and Causation

    The petitioners allege that the U.S. industry producing the 
domestic like product is being materially injured, and is threatened 
with material injury, by reason of the individual and cumulated imports 
of the subject merchandise sold at less than NV. The petitioners 
explain that the industry's injured condition is evident in the 
declining trends in net operating profits, net sales volumes, profit-
to-sales ratios, and capacity utilization. The allegations of injury 
and causation are supported by relevant evidence including U.S. Customs 
import data, lost sales, and pricing information. The Department 
assessed the allegations and supporting evidence regarding material 
injury and causation and determined that these allegations are 
supported by accurate and adequate evidence and meet the statutory 
requirements for initiation. (See IA Initiation Checklists.)

Initiation of Antidumping Investigations

    Based upon our examination of the petitions on SSA and the 
petitioners' responses to our supplemental questionnaires clarifying 
the petitions, as well as our discussion with the authors of the 
market-research reports supporting the petitions on Japan, Korea, and 
Spain and other measures undertaken to confirm the information 
contained in these reports (see IA Initiation Checklists), we have 
found that the petitions meet the requirements of section 732 of the 
Act. Therefore, we

[[Page 55508]]

are initiating antidumping duty investigations to determine whether 
imports of SSA from Japan, Korea, and Spain are being, or are likely to 
be, sold in the United States at less than fair value. Unless this 
deadline is extended, we will make our preliminary determinations no 
later than 140 days after the date of initiation.

Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of each petition has been provided to the 
representatives of Japan, Korea, and Spain. We will attempt to provide 
a copy of the public version of the appropriate petition to each 
exporter named in the petition.

International Trade Commission Notification

    We have notified the ITC of our initiations as required by section 
732(d) of the Act.

Preliminary Determinations by the ITC

    The ITC will determine, by October 2, 2000, whether there is a 
reasonable indication that imports of SSA from Japan, Korea and Spain 
are causing material injury, or threatening to cause material injury, 
to a U.S. industry. A negative ITC determination for any country will 
result in the investigation being terminated with respect to that 
country; otherwise, these investigations will proceed according to 
statutory and regulatory time limits.
    This notice is published pursuant to section 777(i) of the Act.

    Dated: September 7, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-23685 Filed 9-13-00; 8:45 am]
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