[Federal Register Volume 66, Number 189 (Friday, September 28, 2001)]
[Notices]
[Pages 49628-49632]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-24413]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-560-812]


Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Hot-Rolled Carbon Steel Flat Products From Indonesia

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

EFFECTIVE DATE: September 28, 2001.

FOR FURTHER INFORMATION CONTACT: Mark Manning or Ronald Trentham at 
(202) 482-3936 and (202) 482-6320, respectively, AD/CVD Enforcement, 
Group II, Office 4, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    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's regulations are 
to 19 CFR Part 351 (2000).

Final Determination

    We determine that certain hot-rolled carbon steel flat products 
from Indonesia are being sold, or are likely to be sold, in the United 
States at less than fair value (LTFV), as provided in section 735 of 
the Act. The estimated margins of sales at LTFV are shown in the Final 
Determination of Investigation section of this notice.

Case History

    The preliminary determination in this investigation was published 
on May 3, 2001. See Notice of Preliminary Determination of Sales at 
Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products 
From Indonesia, 66 FR 22163 (May 3, 2001) (Preliminary Determination). 
Since the preliminary determination, the following events have 
occurred. On May 11, 2001, we received a letter from PT Krakatau Steel 
Corporation (Krakatau), the respondent, that requested permission to 
submit a revised response to the Department's April 16, 2001 
supplemental questionnaire. The Department granted this request on May 
23, 2001 and received Krakatau's submission on May 29, 2001. We 
verified Krakatau's questionnaire responses from July 23 through July 
27, 2001. On August 17, 2001, we released a calculation memorandum and 
computer programs to interested parties for the purpose of allowing 
parties to comment on the margin calculation methodology that would be 
used in the event the Department calculated a margin for the final LTFV 
determination. The petitioners \1\ and respondent filed case briefs on 
August 24 and August 27, 2001, respectively. Both parties filed 
rebuttal briefs on August 31, 2001. A public hearing was held on 
September 6, 2001. Although the deadline for this determination was 
originally September 17, 2001, in light of the events of September 11, 
2001 and the subsequent closure of the Federal Government for reasons 
of security, the time frame for issuing this determination has been 
extended by four days.
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    \1\ The petitioners in this investigation are Bethlehem Steel 
Corporation, Gallatin Steel Company, IPSCO Steel Inc., LTV Steel 
Company, Inc., National Steel Corporation, Nucor Corporation, Steel 
Dynamics, Inc., U.S. Steel Group (a unit of USX Corporation), 
Weirton Sttel Corporation, Independent Steelworkers Union, ad United 
Steelworkers of America (collectively the petitioners).
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    The Department has conducted this investigation in accordance with 
section 731 of the Act.

Scope of Investigation

    For purposes of this investigation, the products covered are 
certain hot-rolled carbon steel flat products of a rectangular shape, 
of a width of 0.5 inch or greater, neither clad, plated, nor coated 
with metal and whether or not painted, varnished, or coated with 
plastics or other non-metallic substances, in coils (whether or not in 
successively superimposed layers), regardless of thickness, and in 
straight lengths of a thickness of less than 4.75 mm and of a width 
measuring at least 10 times the thickness. Universal mill plate (i.e., 
flat-rolled products rolled on four faces or in a closed box pass, of a

[[Page 49629]]

width exceeding 150 mm, but not exceeding 1250 mm, and of a thickness 
of not less than 4.0 mm, not in coils and without patterns in relief) 
of a thickness not less than 4.0 mm is not included within the scope of 
this investigation.
    Specifically included within the scope of this investigation are 
vacuum degassed, fully stabilized (commonly referred to as 
interstitial-free (IF)) steels, high strength low alloy (HSLA) steels, 
and the substrate for motor lamination steels. IF steels are recognized 
as low carbon steels with micro-alloying levels of elements such as 
titanium or niobium (also commonly referred to as columbium), or both, 
added to stabilize carbon and nitrogen elements. HSLA steels are 
recognized as steels with micro-alloying levels of elements such as 
chromium, copper, niobium, vanadium, and molybdenum. The substrate for 
motor lamination steels contains micro-alloying levels of elements such 
as silicon and aluminum.
    Steel products to be included in the scope of this investigation, 
regardless of definitions in the Harmonized Tariff Schedule of the 
United States (HTSUS), are products in which: i) iron predominates, by 
weight, over each of the other contained elements; ii) the carbon 
content is 2 percent or less, by weight; and iii) none of the elements 
listed below exceeds the quantity, by weight, respectively indicated:

1.80 percent of manganese, or

2.25 percent of silicon, or

1.00 percent of copper, or

0.50 percent of aluminum, or

1.25 percent of chromium, or

0.30 percent of cobalt, or

0.40 percent of lead, or

1.25 percent of nickel, or

0.30 percent of tungsten, or

0.10 percent of molybdenum, or

0.10 percent of niobium, or

0.15 percent of vanadium, or

0.15 percent of zirconium.

    All products that meet the physical and chemical description 
provided above are within the scope of this investigation unless 
otherwise excluded. The following products, by way of example, are 
outside or specifically excluded from the scope of this investigation:
     Alloy hot-rolled steel products in which at least one of 
the chemical elements exceeds those listed above (including, e.g., 
American Society for Testing and Materials (ASTM) specifications A543, 
A387, A514, A517, A506).
     Society of Automotive Engineers (SAE)/American Iron & 
Steel Institute (AISI) grades of series 2300 and higher.
     Ball bearing steels, as defined in the HTSUS.
     Tool steels, as defined in the HTSUS.
     Silico-manganese (as defined in the HTSUS) or silicon 
electrical steel with a silicon level exceeding 2.25 percent.
     ASTM specifications A710 and A736.
     USS abrasion-resistant steels (USS AR 400, USS AR 500).
     All products (proprietary or otherwise) based on an alloy 
ASTM specification (sample specifications: ASTM A506, A507).
     Non-rectangular shapes, not in coils, which are the result 
of having been processed by cutting or stamping and which have assumed 
the character of articles or products classified outside chapter 72 of 
the HTSUS.
    The merchandise subject to these investigations is classified in 
the HTSUS under the following tariff classification numbers: 
7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 7208.25.30.00, 
7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 7208.27.00.30, 
7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 7208.37.00.30, 
7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 7208.38.00.90, 
7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 7208.40.60.30, 
7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 7208.90.00.00, 
7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 7211.19.30.00, 
7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 7211.19.75.60, and 
7211.19.75.90. Certain hot-rolled carbon steel flat products covered by 
this investigation, including vacuum degassed fully stabilized; high 
strength low alloy; and the substrate for motor lamination steel may 
also enter under the following tariff classification numbers: 
7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 
7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 
7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 
7226.91.70.00, 7226.91.80.00, and 7226.99.00.00. Subject merchandise 
may also enter under 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 
7212.40.10.00, 7212.40.50.00, and 7212.50.00.00. Although the HTSUS 
tariff classification numbers are provided for convenience and U.S. 
Customs Service (Customs) purposes, the written description of the 
merchandise under investigation is dispositive.

Period of Investigation

    The period of investigation (POI) is October 1, 1999 through 
September 30, 2000. This period corresponds to the four most recent 
fiscal quarters prior to the month of the filing of the petition (i.e., 
November 2000).

Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by the respondent for use in our final 
determination. We used standard verification procedures including 
examination of relevant accounting and production records, and original 
source documents provided by the respondent. See Memorandum to the File 
from Mark Manning, ``Sales Verification Report for PT Krakatau Steel 
Corporation,'' dated August 10, 2001 (Sales Verification Report).

Use of Facts Available

    In the preliminary determination, the Department based the dumping 
margin for Krakatau on facts otherwise available pursuant to section 
776(a)(2)(A) of the Act. The use of facts otherwise available was 
warranted because Krakatau failed to adequately respond to the 
Department's questionnaire. The Department also found that Krakatau 
failed to cooperate by not acting to the best of its ability. As a 
result, pursuant to section 776(b) of the Act, the Department used an 
adverse inference in selecting from the facts available. Specifically, 
the Department assigned Krakatau a margin of 59.25 percent, the margin 
published in the Department's Notice of Initiation, which was based on 
information in the petition. See Notice of Initiation of Antidumping 
Duty Investigations: Certain Hot-Rolled Carbon Steel Flat Products From 
Argentina, India, Indonesia, Kazakhstan, the Netherlands, the People's 
Republic of China, Romania, South Africa, Taiwan, Thailand, and 
Ukraine, 65 FR 77568 (December 12, 2000).
    After the preliminary determination, the Department allowed 
Krakatau to submit a revised questionnaire response. In this response, 
Krakatau corrected several of the deficiencies upon which the 
Department based its preliminary total adverse facts available 
determination. In light of the corrected information, we conducted 
verification and released a calculation memorandum and dumping 
calculations, unadjusted for verification findings, to interested 
parties for comment. Based upon our analysis of the comments received, 
we find that Krakatau has corrected enough of its deficiencies to allow 
the Department to calculate an dumping margin for the final 
determination. However, because of additional deficiencies discovered 
at verification,

[[Page 49630]]

we are applying partial facts available to two aspects of Krakatau's 
sales response.

1. Application of Facts Available

    Section 776(a)(2) of the Act provides that, if an interested party 
(A) withholds information requested by the Department, (B) fails to 
provide such information by the deadline, or in the form or manner 
requested, subject to sections 782(c)(1) and (e) of the Act, (C) 
significantly impedes a proceeding, or (D) provides information that 
cannot be verified, the Department shall use, subject to section 782(d) 
of the Act, facts otherwise available in reaching the applicable 
determination. Pursuant to section 782(e) of the Act, the Department 
shall not decline to consider submitted information if all of the 
following requirements are met: (1) The information is submitted by the 
established deadline; (2) the information can be verified; (3) the 
information is not so incomplete that it cannot serve as a reliable 
basis for reaching the applicable determination; (4) the interested 
party has demonstrated that it acted to the best of its ability; and 
(5) the information can be used without undue difficulties.
    In selecting from among the facts otherwise available, section 
776(b) of the Act authorizes the Department to use an adverse inference 
if the Department finds that an interested party failed to cooperate by 
not acting to the best of its ability to comply with the request for 
information. See, e.g., Certain Welded Carbon Steel Pipes and Tubes 
From Thailand: Final Results of Antidumping Duty Administrative Review, 
62 FR 53808, 53819-20 (October 16, 1997). Finally, section 776(b) of 
the Act states that an adverse inference may include reliance on 
information derived from the petition. See also Statement of 
Administrative Action (SAA) accompanying the URAA, H.R. Rep. No. 103-
316 at 870 (1994).
    For the reasons discussed below, the Department determines that, in 
accordance with sections 776(a)(2)(B) and 776(b) of the Act, the use of 
partial adverse facts available is appropriate for the final 
determination for Krakatau. The evidence on the record establishes that 
the use of partial facts available for Krakatau is warranted because 
Krakatau failed to provide complete sales questionnaire responses 
within the meaning of section 776(a)(2)(B) of the Act. In its initial 
and supplemental responses, Krakatau failed to provide information 
concerning the currency of its reported U.S. sales and its calculation 
of its home market and U.S. market short-term interest rates in the 
manner requested in the Department's initial and supplemental 
antidumping questionnaires.
    Moreover, Krakatau does not fall within the deadline exceptions 
established in 782(c)(1) of the Act. At no time did Krakatau notify the 
Department that it was unable to submit the requested information in 
the requested form and manner; nor did it suggest alternative forms in 
which it would be able to submit the requested information. Throughout 
the course of this antidumping investigation, the Department gave 
Krakatau, a company without U.S. legal counsel, assistance and 
opportunities to comply with the Department's requests for information, 
as provided by section 782(c)(2).\2\ Specifically, taking into 
consideration the fact that the respondent is a pro se company, the 
Department provided Krakatau detailed information and guidance on how 
to properly calculate and report sales and cost data and adjustments, 
granted Krakatau extensions to reply to requests for information, and 
provided an opportunity to explain and correct the deficiencies in its 
responses. However, at no point in the investigation did Krakatau 
notify the Department that it had any difficulties in submitting the 
information in the form and manner requested, seek guidance on 
alternative reporting requirements, or propose an alternate form for 
submitting the required data, as contemplated in section 782(c)(1) of 
the Act. Despite the efforts at assistance on the part of the 
Department, Krakatau failed to provide information reliable enough that 
it can serve as a basis for reaching the applicable determination.
    Pursuant to section 782(e)(3) of the Act, we find that certain 
aspects of the sales information Krakatau provided in its initial and 
supplemental responses is deficient such that the Department cannot use 
this information in reaching the applicable determination. 
Specifically, our analysis of Krakatau's sales response found 
deficiencies with regard to the Bank of Indonesia (BOI) exchange rates 
used by Krakatau to convert its U.S. dollar invoice prices into the 
reported rupiah prices, and the calculation of its home market and U.S. 
market interest rates that are used in its imputed credit calculations.
    We also find that pursuant to section 776(b) of the Act, the 
application of an adverse inference in this case is appropriate. 
Krakatau failed to act to the best of its ability to comply with the 
Department's requests for information when it failed to report its U.S. 
market sales in the currency of transaction (i.e., U.S. dollars) and 
its home market and U.S. market short-term interest rates. Despite the 
Department's directions in the original and supplemental 
questionnaires, and the extensions granted, Krakatau made no effort to 
provide any explanation or propose an alternate form of submitting the 
data.
    Furthermore, the information cannot be obtained elsewhere. There is 
no information on the record of this investigation with which the 
Department could determine the correct exchange rates and short-term 
interest rates. Without this information, the Department cannot 
accurately determine the dumping margin for Krakatau. Despite the 
Department's directions in the questionnaires, Krakatau did not provide 
the information requested by the Department, made no effort to explain 
any difficulties it was having in supplying the information, and did 
not propose an alternate form of submitting the information. For these 
reasons, we find that Krakatau did not act to the best of its ability 
in responding to the Department's requests for information, see, e.g., 
Circular Stainless Steel Hollow Products, and that, consequently, an 
adverse inference is warranted under section 776(b) of the Act.
    Pursuant to section 776(b) of the Act, the Department is applying 
partial adverse facts available to the exchange rates needed to convert 
Krakatau's U.S. sales from the reported rupiah values to the original 
U.S. dollar invoice prices and Krakatau's short-term home market and 
U.S. market interest rates. Section 776(b) of the Act authorizes the 
Department to use as adverse facts available information derived from 
the petition, the final determination from the LTFV investigation, a 
previous administrative review, or any other information placed on the 
record. As adverse facts available, we are applying the largest BOI 
exchange rate contained in the U.S. market discrepancy chart, which was 
obtained at verification, to all U.S. sales invoiced in time periods 
not covered by this chart. See Sales Verification Report, at Exhibits 3 
and 4. With regard to the short-term interest rates, we are applying 
the largest imputed credit expense for any single U.S. sale to all of 
the respondent's U.S. sales, and applying the smallest imputed credit 
expense for any single home market sale to all of Krakatau's reported 
home market sales.

2. Selection and Corroboration of Facts Available

    Since the Department is using as adverse facts available 
information submitted by the respondent in the course of this 
verification, or obtained at

[[Page 49631]]

verification, there is no need to conduct a corroboration analysis.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this proceeding and to which we have responded are listed in the 
Appendix to this notice and addressed in the Memorandum from Bernard T. 
Carreau to Faryar Shirzad, ``Issues Memorandum for the Final 
Determination of Sales at Less Than Fair Value: Antidumping Duty 
Investigation of Certain Hot-Rolled Steel Flat Products from 
Indonesia,'' dated September 21, 2001 (Issues Memorandum), which is 
hereby adopted by this notice. Parties can find a complete discussion 
of the issues raised in this investigation and the corresponding 
recommendations in this public memorandum which is on file in the 
Central Records Unit, room B-099 of the main Department building. In 
addition, a complete version of the Issues Memorandum can be accessed 
directly on the Web at http://ia.ita.doc.gov. The paper copy and 
electronic version of the Issues Memorandum are identical in content.

Changes Since the Preliminary Determination

    On August 17, 2001, the Department released to the petitioners and 
Krakatau a calculation memorandum and computer programs demonstrating 
the methodology the Department would follow in the event we calculated 
a dumping margin for the final determination. The programs released at 
that time did not take into account our verification findings. As 
mentioned above, the parties had the opportunity to comment on the 
unadjusted programs and on the verification findings. Based upon our 
analysis of the comments received from the petitioners and Krakatau, we 
made the following revisions to the unadjusted calculations released on 
August 17, 2001:
    A. Convert all reported U.S. prices from rupiahs to U.S. dollars 
using the BOI exchange rates obtained from the U.S. market discrepancy 
chart (Verification Exhibit 4);
    B. Revise the exchange rate errors in the U.S. sales database, as 
listed on Verification Exhibit 4, with the correct data contained in 
that exhibit;
    C. Revise the invoice errors in the U.S. sales database, as listed 
on Verification Exhibit 4, with the correct data contained in that 
exhibit;
    D. Revise the exchange rate errors in the home market sales 
database, as listed on the home market discrepancy chart (Verification 
Exhibit 3), with the correct data contained in that exhibit;
    E. Revise the invoice errors in the home market sales database, as 
listed on Verification Exhibit 3, with the correct data contained in 
that exhibit;
    F. Remove home market sales of cut-to-length products with a 
reported thickness code #5 because such merchandise is non-foreign like 
product;
    G. Apply the largest transaction-specific U.S. credit expense 
(CREDITU) for any single U.S. sale to all of the respondent's U.S. 
sales, and apply the smallest transaction-specific home market credit 
expense (CREDITH) for any single home market sale to all of Krakatau's 
reported home market sales;
    H. Classify the reported home market and U.S. market advertising 
costs as indirect expenses and include these costs with Krakatau's 
reported indirect expenses;
    I. Classify the reported home market and U.S. market technical 
service costs as indirect expenses and include these costs with 
Krakatau's reported indirect expenses;
    J. Revise the reported home market and U.S. market packing costs to 
account for unreported packing labor and overhead;
    K. Revise Krakatau's general and administrative expense ratio to 
account for our findings at verification;
    L. Calculate Krakatau's financial expense ratio based on the 
financial statements of its parent company, PT Bahana Pakarya Industri 
Strategies;
    M. Adjust the total cost of manufacture to include Krakatau's year-
end accounting adjustments;
    N. Revise Krakatau's depreciation of fixed assets to account for 
inflation that occurred prior to the POI;
    O. Adjust the cost of electricity to reflect the market cost of 
electricity as quoted in certain newspaper articles; and
    P. Calculate an average market price for natural gas using prices 
quoted in certain newspaper articles, Krakatau's internal books and 
records, and Talisman Energy Inc.'s 2000 annual report.
    For a further discussion of these calculations, see Memorandum from 
Mark Manning to the File, ``Calculation Memorandum of the Final 
Determination for the Antidumping Duty Investigation of PT Krakatau 
Steel Corporation,'' September 21, 2001; and Memorandum from Laurens 
Van Houten to Neal Halper, ``Cost of Production and Constructed Value 
Calculation Adjustments for the Final Determination,'' September 19, 
2001.

Final Determination of Investigation

    We determine that the following weighted-average percentage margins 
exist for the period October 1, 1999 through September 30, 2000:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
PT Krakatau Steel Corporation..............................        47.86
All Others.................................................        47.86
------------------------------------------------------------------------

Continuation of Suspension of Liquidation

    Pursuant to section 735(c)(1)(B) of the Act, we are instructing the 
U.S. Customs Service to continue to suspend liquidation of all entries 
of hot-rolled steel from Indonesia that are entered, or withdrawn from 
warehouse, for consumption on or after May 3, 2001 (the date of 
publication of the Preliminary Determination in the Federal Register). 
The Customs Service shall continue to require a cash deposit or the 
posting of a bond equal to the estimated amount by which the normal 
value exceeds the U.S. price as shown above.

International Trade Commission Notification

    In accordance with section 735(d) of the Act, we have notified the 
International Trade Commission (ITC) of our determination. As our final 
determination is affirmative, the ITC will determine, within 45 days, 
whether these imports are causing material injury, or threat of 
material injury, to an industry in the United States. If the ITC 
determines that material injury, or threat of injury, does not exist, 
the proceeding will be terminated and all securities posted will be 
refunded or canceled. If the ITC determines that such injury does 
exist, the Department will issue an antidumping order directing Customs 
officials to assess antidumping duties on all imports of the subject 
merchandise entered or withdrawn from warehouse for consumption on or 
after the effective date of the suspension of liquidation.
    This determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Act.

    Dated: September 21, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.

Appendix--Topics in Issues Memorandum

    1. Application of Facts Available to U.S. Sales Database

[[Page 49632]]

    2. Application of Facts Available to Short-Term Interest Rate Used 
to Calculate Credit Expense
    3. General and Administrative Expense Ratio
    4. Financial Expense Ratio
    5. Depreciation Expense
    6. Electricity and Natural Gas Valuation
    7. Year End Audit Adjustments
    8. Understated Direct Material Costs
    9. Calculation of Total Variable Overhead Costs
    10. Inclusion of Direct Selling Expenses in the Cost Test

[FR Doc. 01-24413 Filed 9-27-01; 8:45 am]
BILLING CODE 3510-DS-P