[Federal Register Volume 66, Number 16 (Wednesday, January 24, 2001)]
[Notices]
[Pages 7617-7619]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-2054]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-823]


Final Determination of Circumvention of the Antidumping Order: 
Cut-to-Length Carbon Steel Plate From Canada

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

ACTION: Notice of final determination of circumvention of the 
antidumping order: Cut-to-length carbon steel plate from Canada.

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SUMMARY: We have determined that imports of certain cut-to-length 
carbon steel plate products, known as grader blade and draft key steel, 
falling within the physical dimensions outlined in the scope of the 
order, and containing a minimum of both 0.0008 percent boron by weight 
and 0.55 percent carbon by weight, and produced by Co-Steel Lasco, Inc. 
(``CSL'') and Gerdau MRM Steel (``MRM''), are circumventing the 
antidumping duty order on cut-to-length carbon steel plate from Canada 
(58 FR 44162, August 19, 1993).

EFFECTIVE DATE: January 24, 2001.

FOR FURTHER INFORMATION CONTACT: Michael Panfeld, or Rick Johnson, 
Enforcement Group III, Office 9, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 1401 Constitution 
Avenue, NW., Washington, DC 20230, telephone 202-482-0172 (Panfeld) or 
202-482-3818 (Johnson), fax 202-482-1388.

SUPPLEMENTARY INFORMATION:

Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 1930 
(``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's regulations are to the 
regulations at 19 CFR part 351 (2000).

Scope of the Order

    The scope language contained in the final determination and 
antidumping duty order describes the covered merchandise as follows:

Certain Cut-to-Length Carbon Steel Plate

    These products include hot-rolled carbon steel universal mill 
plates (i.e., flat-rolled products rolled on four faces or in a 
closed box pass, of a width exceeding 150 millimeters but not 
exceeding 1,250 millimeters and of a thickness of not less than 4 
millimeters, not in coils and without patterns in relief), of 
rectangular shape, neither clad, plated nor coated with metal, 
whether or not painted, varnished, or coated with plastics or other 
nonmetallic substances; and certain hot-rolled carbon steel flat-
rolled products in straight lengths, of rectangular shape, hot 
rolled, neither clad, plated, nor coated with metal, whether or not 
painted, varnished, or coated with plastics or other nonmetallic 
substances, 4.75 millimeters or more in thickness and of a width 
which exceeds 150 millimeters and measures at least twice the 
thickness, as currently classifiable in the HTS under item numbers 
7208.31.000, 7208.32.000, 7208.33.1000, 7208.33.5000, 7208.41.000, 
7208.42.000, 7208.43.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 
7211.11.0000, 7211.12.0000, 7211.21.0000, 7211.22.0045, 
7211.90.0000, 7212.40.1000, 7212.40.5000, and 7212.50.0000. Included 
in this investigation is flat-rolled products of nonrectangular 
cross-section where such cross-section is achieved subsequent to the 
rolling process (i.e., products which have been ``worked after 
rolling'')--for example, products which have been beveled or rounded 
at the edges. Excluded from this investigation is grade X-70 plate.
    Although the Harmonized Tariff Schedule of the United States 
(HTS) subheadings are provided for convenience and customs purposes, 
our written description of the scope of this proceeding is 
dispositive.

See, e.g., Antidumping Duty Orders: Certain Corrosion-Resistant Carbon 
Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate From 
Canada, 58 FR 44162 (August 19, 1993).

Scope of the Anticircumvention Inquiry

    The merchandise subject to this inquiry is certain cut-to-length 
plate, commonly known as grader blade and draft key steel, made of in-
scope high carbon steel to which a small amount of boron (minimum 
0.0008 percent boron by weight) has been added, falling within the 
physical dimensions outlined in the scope of the order. High carbon 
steel is defined as steel of AISI or SAE grades 1050, 1152, or 1552, or 
higher, i.e., carbon steels that may contain 0.55 percent or more 
carbon by weight. ``Grader blade'' steel is typically used in grading 
equipment such as bulldozers and snowplows. ``Draft key'' steel is used 
specifically to make locking mechanisms for railroad couplings. Unless 
otherwise indicated, the terms ``boron-added grader blade and draft key 
carbon steel'', ``boron-added steel for use in grader blades and draft 
keys'', and ``boron-added steel'' are synonymous for the purpose of 
this notice.
    We also wish to correct an incorrect HTS number cited in the 
Preliminary Determination. The correct HTS numbers for this merchandise 
are: 7225.40.30.50 and 7226.91.50.00.

Court Holdings Relating to This Inquiry

    In a prior scope decision, issued to the parties on January 16, 
1998, the Department found that, based on statements in the petition, 
the scope of the original order did not cover grader blade steel and 
draft key steel produced with 0.0008 percent boron or more by weight 
(``boron-added carbon steel''), the merchandise in question in this 
inquiry. Respondents argued at initiation that by finding that the 
product is outside the scope of the order, the Department may not 
initiate a ``minor alterations'' anticircumvention inquiry, citing the 
decision of the CIT in Wheatland Tube Co. v. United States, 973 F.Supp. 
149 (CIT 1997). See, Initiation of Anticircumvention Inquiry on 
Antidumping Duty Order, 63 FR 29179, 19181 (1998).
    Since the time of initiation, the United States Court of Appeals 
for the Federal Circuit (``CAFC'') has clarified the law in this area. 
In Wheatland Tube Co. v. United States, 161 F.3d 1365 (Fed. Cir. 1998) 
(Wheatland), the CAFC held that, under the facts of that case,

[[Page 7618]]

an anticircumvention inquiry was not appropriate. However, the 
appellate court also determined that ``(i)n essence, section 1677j(c) 
includes within the scope of an antidumping order products that are so 
insignificantly changed from a covered product that they should be 
considered within the scope of the order even though the alterations 
remove them from the order's literal scope.'' See Wheatland, 161 F.3d 
at 1371. Thus, under Wheatland, the Department may properly inquire 
whether, although the merchandise in question is outside the order's 
literal scope, the merchandise has been altered from an in-scope 
product in such a minor way that it should be considered within the 
scope of the order.
    Prior to this holding of the Court of Appeals in Wheatland, parties 
sought to enjoin this inquiry, arguing that the Department was 
prohibited from taking any action under the minor alterations provision 
in cases where the product fell outside of the scope of the relevant 
order as a result of the alteration. Additionally, after the issuance 
of the Court of Appeals decision in Wheatland, respondents argued 
before the CIT that the decision supported their interpretation of the 
minor alterations provision, and that the Department should be enjoined 
from conducting further proceedings. In response to these arguments, 
the CIT in this case issued a preliminary injunction on December 16, 
1998, without opinion or other explanation, prohibiting further 
continuation of the inquiry. See Co-Steel Lasco v. United States, Court 
No. 98-08-02684. The CIT subsequently issued its findings of fact and 
conclusions of law in an unpublished order dated March 9, 1999. 
Petitioners appealed from this injunction.
    At the same time that the Court of Appeals was considering this 
issue in this case, it was considering the same issue in Nippon Steel 
Corp. v. United States (Nippon), a case involving a circumvention 
inquiry with virtually identical facts: an allegation of addition of 
minute amounts of boron to carbon steel,\1\ and an injunction issued by 
the CIT based upon respondents' reading of the Wheatland opinion. 219 
F.3d 1348 (Fed. Cir., July 26, 2000). In Nippon, the Court of Appeals 
clarified the issue and rejected the injunction issued by the CIT. 
Specifically, the Court of Appeals clarified that the holding of 
Wheatland was limited to situations in which the result of the 
alteration was a product which was well-known before the order was 
issued and which was explicitly excluded from the order. By contrast, 
the investigation in issue in Nippon (and similarly in this case) 
involves a product (boron-added carbon steel) which was not a well-
known product prior to the order and was not ``specifically excluded'' 
from the original scope. Indeed, petitioners had alleged in Nippon that 
because the minute amounts of boron have no effect on the steel, the 
product does not appear to have any commercial or metallurgical 
justification other than circumvention of the order (an allegation 
which we have confirmed in this case). Thus, although the boron-added 
carbon steel was technically outside the order, the Court held that the 
circumvention inquiry could proceed.
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    \1\ See, Corrosion-Resistant carbon Steel Flat Products from 
Japan; Initiation of Anticircumvention Inquiry on Antidumping Duty 
Order, 63 Fed. Reg. 58364 (Oct. 30, 1998).
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    Based upon the court's opinion in Nippon, the Court of Appeals also 
rejected, without opinion, the injunction of the present inquiry. See 
Co-Steel Lasco v. United States, 99-1339 (September 22, 2000). As a 
result, the CIT dismissed the complaint of respondents on October 12, 
2000, and the Department continued this inquiry.

Analysis of Comments Received

    All issues raised in the case briefs by parties to this inquiry are 
addressed in the ``Issues and Decision Memorandum'' (``Decision Memo'') 
from Joseph A. Spetrini, Deputy Assistant Secretary for Import 
Administration to Troy H. Cribb, Assistant Secretary for Import 
Administration, dated January 10, 2001, which is hereby adopted by this 
notice. A list of the issues which parties have raised and to which we 
have responded, all of which are in the Decision Memo, is attached to 
this notice as an Appendix. Parties can find a complete discussion of 
all issues raised in these reviews and the corresponding 
recommendations in this public memorandum which is on file at the U.S. 
Department of Commerce, in the Central Records Unit, in room B-099. In 
addition, a complete version of the Decision Memo is accessible in B-
099 and on the Web at http://ia.ita.doc.gov. The paper copy and 
electronic version of the Decision Memorandum are identical in content.

Final Ruling

    As a result of our inquiry, we determine that exports of boron-
added grader blade and draft key steel from Canada produced by CSL and 
MRM are circumventing the antidumping order on certain cut-to-length 
carbon steel plate from Canada. While carbon steel plate products 
containing over 0.0008 percent boron by weight are, by definition, 
technically outside the literal scope of the antidumping duty order, we 
have determined that, pursuant to the ``minor alterations'' provision 
of the statute, it is appropriate to include the putatively out-of-
scope boron-added steel, which is the subject of this inquiry, in the 
class or kind of merchandise subject to the order on cut-to-length 
carbon steel plate. See section 781(c) of the Act.
    Boron-added steel is made by slightly altering carbon steel during 
its production process. With the exception of the presence of boron, 
boron-added steel has the same physical characteristics as carbon 
steel. There are no differences in the expectations of the ultimate 
users, uses of the merchandise, and channels of marketing between 
boron-added steel and the subject merchandise. Furthermore, the cost of 
adding boron in the course of production is negligible. Since the 
original investigation, the named respondents have shifted their entire 
production for U.S. customers away from in-scope carbon steel to out-
of-scope boron-added steel. No similar shift has occurred in the home 
market, where the vast majority, if not all, of both respondents' 
production is devoted to carbon grader blade and draft key steel 
without boron. The timing of this shift further indicates circumvention 
of the order by making a minor alteration. Taken as a whole, this 
evidence leads to our final determination that boron-added grader blade 
and draft key steel is being produced in circumvention of the 
antidumping law, undermining its intent, and eviscerating its 
effectiveness.
    After a thorough analysis of the physical characteristics of the 
merchandise subject to this inquiry, the expectations of the ultimate 
users, the ultimate use of the merchandise, the cost of modification, 
and the additional factors listed above, we have determined that 
certain Canadian manufacturers/exporters of grader blade and draft key 
steel have made minor alterations in their in-scope merchandise within 
the meaning of section 781(c) of the Act, resulting in circumvention of 
the antidumping order covering certain cut-to-length carbon steel plate 
from Canada. This determination extends only to those products 
manufactured by CSL and MRM.
    This notice also serves as the only reminder to parties subject to 
administrative protective orders (``APO'') of their responsibility 
concerning the return or destruction of proprietary information 
disclosed under

[[Page 7619]]

APO in accordance with 19 CFR 351.305. Timely written notification of 
the return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and terms of an APO is a violation which is subject to 
sanction.
    We are issuing and publishing this determination and notice in 
accordance with sections 751(a)(1) and 777(i) of the Act.

    Dated: January 10, 2001.
Troy H. Cribb,
Assistant Secretary for Import Administration.

Appendix

Issues in Decision Memo

Comments and Responses

    1. The Department should terminate this inquiry because the 
remedy would not bring relief to the U.S. industry.
    2. The Department should terminate this inquiry because there is 
no longer an order which can be circumvented.
    3. Continuation of this Inquiry would not serve the purposes of 
the Statute.
    4. The Department cannot include boron-added carbon steel as 
within the class or kind of merchandise subject to this order.
    5. The Department should recalculate the ``All-Others'' rate.
    6. The addition of boron does not lead to an affirmative 
determination of circumvention.

[FR Doc. 01-2054 Filed 1-23-01; 8:45 am]
BILLING CODE 3510-DS-P