[Federal Register Volume 66, Number 249 (Friday, December 28, 2001)]
[Notices]
[Pages 67197-67202]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31981]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-869]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Structural Steel Beams
From The People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary determination of sales at less than fair
value.
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SUMMARY: We preliminarily determine that structural steel beams from
the People's Republic of China are being, or are likely to be, sold in
the United States at less than fair value, as provided in section
733(b) of the Tariff Act of 1930, as amended.
Interested parties are invited to comment on this preliminary
determination. Since we are postponing the final determination, we will
make our final determination not later than 135 days after the date of
publication of this preliminary determination in the Federal Register.
EFFECTIVE DATE: December 28, 2001.
FOR FURTHER INFORMATION CONTACT: Lyn Johnson or Richard Rimlinger,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone: (202) 482-5287 and (202) 482-4477,
respectively.
SUPPLEMENTARY INFORMATION:
The Applicable Statue 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's
regulations are to the regulations codified at 19 CFR part 351 (April
2001).
Preliminary Determination
We preliminarily determine that structural steel beams from the
People's Republic of China (``PRC'') are being, or are likely to be,
sold in the United States at less than fair value (``LTFV''), as
provided in section 733 of the Act. The estimated margins of sales at
LTFV for the period of investigation (``POI''), October 1, 2000,
through March 31, 2001, are shown in the ``Suspension of Liquidation''
section of this notice.
Background
On June 20, 2001, the Department of Commerce (``the Department'')
published in the Federal Register the Notice of Initiation of
Antidumping Duty Investigations: Structural Steel Beams from the
People's Republic of China, Germany, Italy, Luxembourg, Russia, South
Africa, Spain, and Taiwan (66 FR 33048). The Department notified the
U.S. Embassy in the PRC of the initiation of this investigation on June
12, 2001.
On July 9, 2001, the United States International Trade Commission
(``ITC'') preliminarily determined that there is a reasonable
indication that imports of structural steel beams from the PRC are
materially injuring the United States industry (see ITC Investigation
Nos. 731-TA-935-942 (Publication No. 3438)).
On July 17, 2001, the Department issued its antidumping
questionnaire to the Chinese Ministry of Foreign Trade & Economic
Cooperation with a letter requesting that it forward the questionnaire
to all Chinese exporters of structural steel beams who had shipments
during the POI. We also sent courtesy copies of the antidumping
questionnaire to the following possible producers/exporters of subject
merchandise named in the petition: Chongqing Iron & Steel (Group Co.
Ltd.), Fushun Special Steel Co. Ltd., Guangzhou Iron & Steel Holdings
Ltd., Hangzhou Iron & Steel Group Co., Hefei Iron & Steel Co., Jinan
Iron & Steel Group, Lingyuan Iron & Steel Group Co. Ltd., Maanshan Iron
& Steel Co., Ltd (``Maanshan''), Shanghai Pudong Iron & Steel (Group)
Co. Ltd., Taiyuan Iron & Steel (Group) Co. Ltd., and Wuhan Iron & Steel
Group Co.
During the period August through November 2001, the Department
received responses to sections A, C, and D of the Department's original
and supplemental questionnaires from Maanshan. We received no other
responses to our questionnaire.\1\
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\1\ The Hangzhou Iron & Steel Group and the Jinan Iron & Steel
Group notified the Department via facsimile on July 28, 2001, and
August 2, 2001, respectively, that they had no shipments of the
subject merchandise during the POI. The Department put this
information on the administrative record of this proceeding.
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On September 6, we requested publicly-available information for
valuing the factors of production and comments on surrogate-country
selection. We received comments from Maanshan and from the Committee
for Fair Beam Imports (``petitioners'') on November 29, 2001.
On September 25, 2001, pursuant to 19 CFR 351.205(e), the
petitioners made a timely request to postpone the preliminary
determination. We granted this request on October 2, 2001, and
postponed the preliminary determination until no later than November
30, 2001. (See Notice of Postponement of Preliminary Determinations of
Sales at Less Than Fair Value: Structural Steel Beams from the People's
Republic of China, Germany, Italy, Luxembourg, Russia, South Africa,
Spain and Taiwan, 66 FR 51639 (October 10, 2001).) On October 30, 2001,
the petitioners made another timely request to postpone the preliminary
determination for an additional 19 days. We granted this request on
October 31, 2001, and postponed the preliminary determination until no
later than December 19, 2001. (See Notice of Postponement of
Preliminary Antidumping Duty Determinations: Structural Steel Beams
from the People's Republic of China, Germany, Italy, Luxembourg,
Russia, South Africa, Spain and Taiwan, 66 FR 56078 (November 6,
2001).)
Postponement of Final Determination and Extension of Provisional
Measures
Pursuant to section 735(a)(2) of the Act, on December 13, 2001,
Maanshan requested that, in the event of an affirmative preliminary
determination in this investigation, the Department postpone its final
determination until not later than 135 days after the date of the
publication of the preliminary determination in the Federal Register
and extend the provisional measures to not more than six months. In
accordance with 19 CFR 351.210(b), because (1) our preliminary
determination is affirmative, (2) Maanshan accounts for a significant
proportion of exports of the subject merchandise, and (3) no compelling
[[Page 67198]]
reasons for denial exist, we are granting the respondent's request and
are postponing the final determination until no later than 135 days
after the publication of this notice in the Federal Register.
Suspension of liquidation will be extended accordingly.
Scope of Investigation
The scope of this investigation covers doubly-symmetric shapes,
whether hot-or cold-rolled, drawn, extruded, formed or finished, having
at least one dimension of at least 80 mm (3.2 inches or more), whether
of carbon or alloy (other than stainless) steel, and whether or not
drilled, punched, notched, painted, coated, or clad. These structural
steel beams include, but are not limited to, wide-flange beams (``W''
shapes), bearing piles (``HP'' shapes), standard beams (``S'' or ``I''
shapes), and M-shapes. All the products that meet the physical and
metallurgical descriptions provided above are within the scope of this
investigation unless otherwise excluded. The following products are
outside and/or specifically excluded from the scope of this
investigation: (1) structural steel beams greater than 400 pounds per
linear foot, (2) structural steel beams that have a web or section
height (also known as depth) over 40 inches, and (3) structural steel
beams that have additional weldments, connectors, or attachments to I-
sections, H-sections, or pilings; however, if the only additional
weldment, connector or attachment on the beam is a shipping brace
attached to maintain stability during transportation, the beam is not
removed from the scope definition by reason of such additional
weldment, connector, or attachment.
The merchandise subject to this investigation is classified in the
Harmonized Tariff Schedule of the United States (``HTSUS'') at
subheadings 7216.32.0000, 7216.33.0030, 7216.33.0060, 7216.33.0090,
7216.50.0000, 7216.61.0000, 7216.69.0000, 7216.91.0000, 7216.99.0000,
7228.70.3040, and 7228.70.6000. Although the HTSUS subheadings are
provided for convenience and customs purposes, the written description
of the merchandise under investigation is dispositive.
Scope Comments
In accordance with the preamble to our regulations (see Antidumping
Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997)), we
set aside a period of time for parties to raise issues regarding
product coverage and encouraged all parties to submit comments within
20 calendar days of publication of the Initiation Notice (see 66 FR
33048-33049). Interested parties submitted such comments by July 10,
2001. Additional comments were subsequently submitted by interested
parties.
Pursuant to the Department's solicitation of scope comments in the
Initiation Notice, interested parties in this and the concurrent
structural steel beams investigations request that the following
products be excluded from the scope of the investigations: (1) beams of
grade A913/65 and (2) forklift mast profiles.
With respect to the scope-exclusion requests for the A913/65 beam
and forklift mast profiles, the interested parties rely upon 19 CFR
351.225(k)(2) and reason that, in general, these products differ from
the structural steel beams covered by the scope of the investigations
in terms of physical characteristics, ultimate uses, purchaser
expectations, channels of trade, manner of advertising and display and/
or price. They also argue that these products are not produced by the
petitioners.
In considering whether these products should be included within the
scope of the investigations, we analyzed the arguments submitted by all
of the interested parties in the context of the criteria enumerated in
the court decision Diversified Products Corp. v. United States, 572 F.
Supp. 883, 889 (CIT 1983) (``Diversified''). For these analyses, we
relied upon the petition, the submissions by all interested parties,
the International Trade Commission's (``ITC'') preliminary
determination, and other information.
After considering the respondent's comments and the petitioners'
objections to the exclusion requests regarding the A913/65 beam, we
find that the description of this grade of structural steel beam is
dispositive such that further consideration of the criteria provided in
their submissions is unnecessary. Furthermore, the description of the
merchandise contained in the relevant submissions pertaining to this
grade of beam does not preclude this product from being within the
scope of the investigations. Accordingly, we preliminarily determine
that the A913/65 beam does not constitute a separate class or kind of
merchandise and, therefore, falls within the scope as defined in the
petition.
With respect to forklift mast profiles, having considered the
comments we received from the interested parties and the criteria
enumerated in Diversified, we find that the profiles in question, being
doubly-symmetric and having an I-shape, fall within the scope of the
investigations. These profiles also meet the other criteria included in
the scope language contained in the petition. While the description by
the interested party requesting the exclusion indicates some
differences, such as in price, between forklift mast profiles and
structural steel beams, these differences are not sufficient to
recognize forklift mast profiles as a separate class or kind of
merchandise. However, given these differences between forklift mast
profiles and structural steel beams, we preliminarily determine that
forklift mast profiles should be separately identified for model-
matching purposes.
We also received a scope-exclusion request by an interested party
for fabricated steel beams. This request was subsequently withdrawn
pursuant to an agreement with the petitioners to clarify the scope
language by adding that ``* * * beams that have additional weldments,
connectors or attachments to I-sections, H-sections, or pilings are
outside the scope definition.'' However, ``* * * if the only additional
weldment, connector or attachment on the beam is a shipping brace
attached to maintain stability during transportation, the beam is not
removed from the scope definition by reason of such additional
weldment, connector or attachment.'' Accordingly, we modified the scope
definition to account for this clarification. See the ``Scope'' section
above.
We have addressed these scope-exclusion requests in detail in a
Memorandum to Louis Apple and Laurie Parkhill, Directors, AD/CVD
Enforcement Group I, Offices 2 and 3, respectively, from The Structural
Steel Beams Teams Re: Scope Exclusion Requests, dated December 19,
2001.
Period of Investigation
The POI is October 1, 2000, through March 31, 2001.
Non-Market-Economy Country Status
The Department has treated the PRC as a non-market-economy
(``NME'') country in all past antidumping investigations (see, e.g.,
Notice of Final Determination of Sales at Less Than Fair Value: Bulk
Aspirin From the People's Republic of China, 65 FR 33805 (May 25,
2000), and Notice of Final Determination of Sales at Less Than Fair
Value: Certain Non-Frozen Apple Juice Concentrate from the People's
Republic of China, 65 FR 19873 (April 13, 2000)). A designation as an
NME remains in effect until it is revoked by the Department (see
section 771(18)(C) of the Act). The respondents in this investigation
have not requested a revocation of the PRC's NME status. We have,
therefore, preliminarily
[[Page 67199]]
determined to continue to treat the PRC as an NME country.
When the Department is investigating imports from an NME, section
773(c)(1) of the Act directs us to base the normal value (``NV'') on
the NME producer's factors of production, valued in a comparable market
economy that is a significant producer of comparable merchandise. The
sources of individual factor prices are discussed under the ``Normal
Value'' section, below. Furthermore, no interested party has requested
that we treat the structural steel beams industry in the PRC as a
market-oriented industry and no information has been provided that
would lead to such a determination. Therefore, we have preliminarily
continued to treat the PRC as an NME.
Separate Rates
It is the Department's policy to assign all exporters of
merchandise subject to investigation in an NME country a single rate,
unless an exporter can demonstrate that it is sufficiently independent
so as to be entitled to a separate rate. Maanshan has provided the
requested company-specific separate-rates information and has indicated
that there is no element of government ownership or control. Based on
Maanshan's claim, we considered whether it is eligible for a separate
rate.
The Department's separate-rate test is unconcerned, in general,
with macroeconomic/ border-type controls (e.g., export licenses,
quotas, and minimum export prices), particularly if these controls are
imposed to prevent dumping. The test focuses, rather, on controls over
the investment, pricing, and output decision-making process at the
individual firm level. See Certain Cut-to-Length Carbon Steel Plate
from Ukraine: Final Determination of Sales at Less than Fair Value, 62
FR 61754, 61757 (Nov. 19, 1997); Tapered Roller Bearings and Parts
Thereof, Finished and Unfinished, from the People's Republic of China:
Final Results of Antidumping Duty Administrative Review, 62 FR 61276,
61279 (Nov. 17, 1997); and Honey from the People's Republic of China:
Preliminary Determination of Sales at Less than Fair Value, 60 FR
14725, 14726 (Mar. 20, 1995).
To establish whether a firm is sufficiently independent from
government control to be entitled to a separate rate, the Department
analyzes each exporting entity under a test arising out of the Final
Determination of Sales at Less Than Fair Value: Sparklers from the
People's Republic of China, 56 FR 20588 (May 6, 1991), as modified by
Final Determination of Sales at Less Than Fair Value: Silicon Carbide
from the People's Republic of China, 59 FR 22585 (May 2, 1994) (Silicon
Carbide). Under the separate-rates criteria, the Department assigns
separate rates in NME cases only if the NME respondents can demonstrate
the absence of both de jure and de facto governmental control over
export activities. See Silicon Carbide and Final Determination of Sales
at Less Than Fair Value: Furfuryl Alcohol from the People's Republic of
China, 60 FR 22545 (May 8, 1998).
1. Absence of De Jure Control
The Department considers the following de jure criteria in
determining whether an individual company may be granted a separate
rate: (1) An absence of restrictive stipulations associated with an
individual exporter's business and export licenses; (2) any legislative
enactments decentralizing control of companies; and (3) any other
formal measures by the government decentralizing control of companies.
Manshaan has placed on the record a number of documents to
demonstrate absence of de jure control, including the ``Foreign Trade
Law of the People's Republic of China'' and the ``Company Law of the
People's Republic of China.'' In prior cases, the Department has
analyzed these laws and found that they establish an absence of de jure
control. See, e.g., Notice of Final Determination of Sales at Less Than
Fair Value: Certain Partial-Extension Steel Drawer Slides with Rollers
from the People's Republic of China, 60 FR 54472, 54474 (October 24,
1995). We have no information in this proceeding which would cause us
to reconsider this determination.
2. Absence of De Facto Control
The Department typically considers four factors in evaluating
whether each respondent is subject to de facto governmental control of
its export functions: (1) Whether the export prices are set by, or
subject to, the approval of a governmental authority; (2) whether the
respondent has authority to negotiate and sign contracts, and other
agreements; (3) whether the respondent has autonomy from the government
in making decisions regarding the selection of its management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding disposition of profits or
financing of losses.
As stated in previous cases, there is some evidence that certain
enactments of the PRC central government have not been implemented
uniformly among different sectors and/or jurisdictions in the PRC. See
Silicon Carbide. Therefore, the Department has determined that an
analysis of de facto control is critical in determining whether
respondents are, in fact, subject to a degree of governmental control
which would preclude the Department from assigning separate rates.
Maanshan asserted the following: (1) There is no government
participation in setting export prices; (2) its managers have authority
to bind sales contracts; (3) it does not have to notify any government
authorities of its management selection, and (4) there are no
restrictions on the use of its export revenue and it is responsible for
financing it own losses. Additionally, Maanshan's questionnaire
response does not suggest that pricing is coordinated among exporters.
Furthermore, our analysis of Maanshan's questionnaire response reveals
no other information indicating government control.
The petitioners in this case argue that, because Maanshan is 63
percent owned by a holding company which is, in turn, wholly owned by
the Anhui provincial government, and because certain managers of the
holding company also serve on the board of directors of Maanshan, the
respondent is ineligible for a separate rate due to potential
government control. However, the petitioners have not submitted any
specific evidence indicating that the conditions for de facto control
exist. As stated in the Silicon Carbide, 59 FR at 22587, ownership of
the company by a state-owned enterprise does not require the
application of a single rate. Therefore, based on the information
provided, we preliminarily determine that there is an absence of de
facto governmental control of Maanshan's export functions.
Consequently, we preliminarily determine that the respondent has met
the criteria for the application of a separate rate.
The PRC-Wide Rate
In NME cases, it is the Department's policy to make a rebuttal
presumption that all exporters located in the NME comprise a single
exporter under common control, the ``NME entity.'' The Department
assigns a single NME rate to the NME entity unless an exporter can
demonstrate eligibility for a separate rate. All exporters were given
the opportunity to respond to the Department's questionnaire. As
explained above, we received timely Section A responses from Maanshan.
Our review of U.S. import statistics, however, reveals that Maanshan
did not account for all imports of subject merchandise into the United
States from
[[Page 67200]]
the PRC. For this reason, we preliminarily determine that some PRC
exporters of structural steel beams failed to respond to our
questionnaire. Consequently, we are applying adverse facts available
(see below) to determine the single antidumping rate--the PRC-wide
rate-applicable to all other exporters in the PRC based on our
presumption that those respondents who failed to demonstrate
entitlement to a separate rate constitute a single enterprise under
common control by the Chinese government. See, e.g., Final
Determination of Sales at Less Than Fair Value: Synthetic Indigo from
the People's Republic of China, 65 FR 25706, 25707 (May 3, 2000). The
PRC-wide rate applies to all entries of subject merchandise except for
entries from Maanshan.
Use of Facts Otherwise Available
Section 776(a) of the Act provides that, if an interested party
withholds information that has been requested by the Department, fails
to provide such information in a timely manner or in the form or manner
requested, significantly impedes a proceeding under the antidumping
statute, or provides information which cannot be verified, the
Department shall use, subject to sections 782(d) and (e) 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 that information is necessary to
the determination but does not meet all of the requirements established
by the Department provided that 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. Section 776(a)(2)(B) of the Act
requires the Department to use facts available when a party does not
provide the Department with information by the established deadline or
in the form and manner requested by the Department. In addition,
section 776(b) of the Act provides that, if the Department finds that
an interested party ``has failed to cooperate by not acting to the best
of its ability to comply with a request for information,'' the
Department may use information that is adverse to the interests of that
party as facts otherwise available. Adverse inferences are appropriate
``to ensure that the party does not obtain a more favorable result by
failing to cooperate than if it had cooperated fully.'' See Statement
of Administrative Action (SAA) accompanying the URAA, H.R. Doc. No.
316, 103d Cong., 2d Session at 870 (1994). Furthermore, ``an
affirmative finding of bad faith on the part of the respondent is not
required before the Department may make an adverse inference.''
Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296,
27340 (May 19, 1997).
An adverse inference may include reliance on information derived
from the petition, the final determination in the investigation, any
previous review, or any other information placed on the record. See
section 776(b) of the Act. However, section 776(c) provides that, when
the Department relies on secondary information rather than on
information obtained in the course of a review, the Department shall,
to the extent practicable, corroborate that information from
independent sources that are reasonably at its disposal. The SAA states
that the independent sources may include published price lists,
official import statistics and customs data, and information obtained
from interested parties during the particular investigation or review.
See SAA at 870. The SAA clarifies that ``corroborate'' means that the
Department will satisfy itself that the secondary information to be
used has probative value. Id. As noted in Tapered Roller Bearings and
Parts Thereof, Finished and Unfinished, from Japan, and Tapered Roller
Bearings, Four Inches or Less in Outside Diameter, and Components
Thereof, from Japan; Preliminary Results of Antidumping Duty
Administrative Reviews and Partial Termination of Administrative
Reviews, 61 FR 57391, 57392 (November 6, 1996), to corroborate
secondary information, the Department will, to the extent practicable,
examine the reliability and relevance of the information used.
In the case of the single Chinese enterprise, as explained above,
some exporters of the subject merchandise failed to respond to the
Department's request for information. Pursuant to section 776(a) of the
Act, in reaching our preliminary determination, we have used total
facts available for the PRC-wide rate because certain entities did not
respond. Also, the complete failure of these exporters to respond to
the Department's requests for information constitutes a failure to
cooperate to the best of their ability. Therefore, pursuant to section
776(b) of the Act, the Department preliminarily finds that, in
selecting from among the facts available, an adverse inference is
appropriate.
In selecting from among the facts otherwise available and using an
adverse inference, we reviewed the information provided in the petition
and in the response submitted by Maanshan. For export price, the
petition contained price quotations which the petitioners obtained from
a PRC producer of subject merchandise. We corroborated the petitioners'
price quotations with data submitted by Maanshan in its questionnaire
response. The price quotations fell within the range of export prices
reported by Maanshan and are therefore reliable and relevant.
For normal value, we attempted to corroborate the petitioners'
factors-of-production data. However, due to different reporting formats
and factor groupings by the petitioners and the respondent, we were
unable to reconcile the two sets of factors of production for
corroboration purposes. Therefore, as facts available we preliminarily
used the factors of production reported by Maanshan and applied the
valuations which we used to calculate normal value for Maanshan. Using
this data we calculated an all-PRC rate of 177.21 percent. See the
Facts-Available Decision Memo dated December 19, 2001, in Central
Records for a comprehensive explanation of how we corroborated this
rate.
Fair Value Comparisons
To determine whether sales of structural steel beams to the United
States by Maanshan were made at less than fair value, we compared
export price to NV, as described in the ``Export Price'' and ``Normal
Value'' sections of this notice. In accordance with section
777A(d)(1)(A)(i) of the Act, we calculated weighted-average export
prices. We calculated weighted-average NVs.
Export Price
In accordance with section 772(a) of the Act, we used export price
(``EP'') because the subject merchandise was sold directly to
unaffiliated customers in the United States prior to importation and
because constructed export price was not otherwise indicated. In
accordance with section 777A(d)(1)(A)(i) of the Act, we compared POI-
wide weighted-average EPs to the NVs. We calculated EP based on prices
to unaffiliated purchasers in the United States. We made deductions,
where appropriate, for foreign inland freight and brokerage and
handling. Because certain domestic charges, such as those for foreign
inland freight and brokerage and handling, were provided by NME
companies, we valued those
[[Page 67201]]
charges based on surrogate rates from India. See the Factors-of-
Production Valuation Memorandum, dated December 19, 2001 (``FOP
Memorandum'').
Normal Value
1. Surrogate Country
When the Department is investigating imports from an NME country,
section 773(c)(1) of the Act directs it to base NV, in most
circumstances, on the NME producer's factors of production, valued in a
surrogate market-economy country or countries considered to be
appropriate by the Department. In accordance with section 773(c)(4) of
the Act, the Department, in valuing the factors of production, shall
utilize, to the extent possible, the prices or costs of factors of
production in one or more market-economy countries that are at a level
of economic development comparable to the NME country and are
significant producers of comparable merchandise. The sources of the
surrogate factor values are discussed under the NV section below.
The Department has determined that India, Pakistan, Indonesia, Sri
Lanka and the Philippines are countries comparable to the PRC in terms
of economic development. See Memorandum from Jeffrey May to Laurie
Parkhill, dated August 31, 2001. Customarily, we select an appropriate
surrogate based on the availability and reliability of data from these
countries. For PRC cases, the primary surrogate has often been India if
it is a significant producer of comparable merchandise. In this case,
we have found that India is a significant producer of comparable
merchandise. We used India as the primary surrogate country and,
accordingly, we have calculated NV using Indian prices to value the PRC
producer's factors of production, when available and appropriate. We
have obtained and relied upon publicly available information wherever
possible. See FOP Memorandum. In accordance with 19 CFR
351.301(c)(3)(i), for the final determination in an antidumping
investigation, interested parties may submit publicly available
information to value the factors of production within 40 days after the
date of publication of this preliminary determination.
2. Factors of Production
Section 773(c)(1) of the Act provides that the Department shall
determine the NV using a factors-of-production methodology if: (1) The
merchandise is exported from an NME country; and (2) the information
does not permit the calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act.
Factors of production include: (1) Hours of labor required; (2)
quantities of raw materials employed; (3) amounts of energy and other
utilities consumed; and (4) representative capital costs. We used
factors of production, reported by respondent, for materials, energy,
labor, by-products, and packing. We valued all the input factors using
publicly available published information, as discussed in the
``Surrogate Country'' and ``Factor Valuations'' sections of this
notice. In accordance with 19 CFR 351.408(c)(1), where a producer
sources an input from a market economy and pays for it in market-
economy currency, the Department employs the actual price paid for the
input to calculate the factors-based NV. See also Lasko Metal Products
v. United States, 437 F.3d 1442, 1445-1446 (Fed. Cir. 1994)
(``Lasko''). Therefore, where Maanshan had market-economy inputs and
paid for these inputs in a market-economy currency, we used the actual
prices paid for those inputs in our calculations.
3. Factor Valuations
In accordance with section 773(c) of the Act, we calculated NV
based on factors of production reported by respondents for the POI. To
calculate NV, the reported per-unit factor quantities were multiplied
by publicly available Indian surrogate values (except as noted below).
In selecting the surrogate values, we considered the quality,
specificity, and contemporaneity of the data. As appropriate, we
adjusted input prices by including freight costs to make them delivered
prices. For a detailed description of all surrogate values used for
respondents, see FOP Memorandum.
Citing Sebacic Acid from the People's Republic of China, Final
Results of Antidumping Duty Administrative Review, 62 FR 65678
(December 15, 1997), Maanshan argued in its October 9, 2001, surrogate-
value submission that the Department should make deductions from
domestic prices to ensure that they are exclusive of India's central
sales tax, any state sales tax, and any government-imposed statutory
levies. However, there were no instances in which we had to use
surrogate values that included such taxes or levies.
We added to Indian import surrogate values a surrogate freight cost
using the shorter of the reported distance from the domestic supplier
to the factory or the distance from the nearest seaport to the factory.
This adjustment is in accordance with the decision in Sigma Corporation
v. United States, 117 F. 3d 1401, 1407-08 (Fed. Cir. 1997).
For those Indian Rupee values not contemporaneous with the POI, we
adjusted for inflation using wholesale price indices published in the
International Monetary Fund's International Financial Statistics for
India. For those U.S. dollar-denominated values not contemporaneous
with the POI, we adjusted for inflation using producer price indices
published in the International Monetary Fund's International Financial
Statistics for the United States.
Except as noted below, we valued raw-material inputs using the
weighted-average unit import values derived from the Monthly Trade
Statistics of Foreign Trade of India--Volume II--Imports (``Indian
Import Statistics'') for the time period April 2000, through February
2001. Where POI-specific Indian Import Statistics were not available,
we used Indian Import Statistics from an earlier period (i.e., April 1,
1999, through March 31, 2000). Although surrogate-value data or sources
to obtain such data were provided by the respondent or the petitioners,
in some cases we found that the Indian Import Statistics provided more
contemporaneous data.
Maanshan argued that, since it generated its own electricity and
produced other energy material inputs during the POI (argon, nitrogen
and oxygen) in sufficient quantities to cover its needs in the
manufacture of the subject merchandise during the POR, the Department
should value these inputs using factors of production for items used by
Maanshan in the production of these inputs. The petitioners argued that
the Department should reject Maanshan's claim because the Department
would have to calculate a number of additional factors to evaluate each
upstream factor of production used in subject merchandise correctly.
Consistent with our approach in Notice of Final Determination of Sales
at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products
From the People's Republic of China, 66 FR 49632 (September 28, 2001),
we valued the respondent's inputs through the use of surrogate
valuation, rather than based on surrogate valuation of the factors
going into the production of those inputs. The respondent's methodology
would add needless complications to our calculation of NV and lead to
potentially erroneous results. Therefore, as the basis for valuing
electricity, we have relied on the 1997 data published in the
International Energy Agency's publication, Energy Prices and Taxes,
[[Page 67202]]
Third Quarter, 2000, and adjusted the amount for inflation. As the
basis for valuing argon, nitrogen, and oxygen, we have relied on 1999
data from UN Trade Commodity Statistics (UNTCS), United Nations. We
also valued bentonite and coal tar using the data from the UNTCS.
Furthermore, we used a website (www.indiainfoline.com) providing
market prices for natural gas in 2000 to calculate a percentage of
Maanshan-produced gas to natural gas and derive a surrogate value for
gas. We valued water based on data from the Asian Development Bank's
Second Water Utilities Data Book: Asian and Pacific Region (published
in 1997).
Maanshan purchased iron ore from market-economy suppliers during
the POI, one of which was an affiliate. We compared the price paid to
the affiliated supplier with the prices paid to the unaffiliated
market-economy suppliers and found that the price from the affiliated
supplier was within the same range as those from the unaffiliated
market-economy suppliers. Therefore, we used the weighted-average price
reported by Maanshan.
The only input Maanshan reported for packing was steel strap. We
used Indian Import Statistics data for the POI to value this input.
To value truck rates, we used freight costs based on price quotes
obtained by the Department in November 1999 from trucking companies in
India. For rail transportation, we valued rail rates using information
published by the Indian Railway Conference Association in June 1998, as
adjusted for inflation.
To value marine insurance and brokerage and handling we used a
publicly summarized version of the average value for marine insurance
expenses and brokerage and handling expenses reported in Certain
Stainless Steel Wire Rod from India; Final Results of Antidumping Duty
Administrative and New Shipper Reviews, 64 FR 856 (January 6, 1999).
To value factory overhead, and selling, general and administrative
expenses and profit, we used rates based on financial information from
an Indian integrated steel producer, Tata, a producer of subject
merchandise whose March 2000 financial statement was provided by the
petitioners in an October 9, 2001, submission.
For labor, consistent with 19 CFR 351.408(c)(3), we used the PRC
regression-based wage rate at the Import Administration's home page,
Import Library, Expected Wages of Selected NME Countries, revised in
May 2000 (see http://ia.ita.doc.gov/wages). The source of the wage rate
data on the Import Administration's web site is the 1999 Year Book of
Labour Statistics, International Labor Organization (Geneva: 1999),
Chapter 5B: Wages in Manufacturing.
Verification
As provided in section 782(i)(1) of the Act, we intend to verify
all company information relied upon in making our final determination.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing the
Customs Service to suspend liquidation of all imports of subject
merchandise entered, or withdrawn from warehouse, for consumption on or
after the date of publication of this notice in the Federal Register.
We will instruct the Customs Service to require a cash deposit or the
posting of a bond equal to the weighted-average amount by which the NV
exceeds the EP, as indicated below. These suspension-of-liquidation
instructions will remain in effect until further notice. The weighted-
average dumping margins are as follows:
------------------------------------------------------------------------
Weighted-
average
Exporter/manufacturer percentage
margin
------------------------------------------------------------------------
Maanshan Iron & Steel Co., Ltd............................. 159.60
China-Wide................................................. 117.21
------------------------------------------------------------------------
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine before the later of 120 days after the date of
this preliminary determination or 45 days after our final determination
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry.
Public Comment
Case briefs for this investigation must be submitted to the
Department no later than seven days after the date of the final
verification report issued in this proceeding. Rebuttal briefs must be
filed five days from the deadline date for case briefs. A list of
authorities used and an executive summary of issues should accompany
any briefs submitted to the Department. This summary should be limited
to five pages total, including footnotes. In accordance with section
774 of the Act, we will hold a public hearing, if requested, to afford
interested parties an opportunity to comment on arguments raised in
case or rebuttal briefs. Tentatively, any hearing will be held two days
after the rebuttal brief deadline date at the U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC
20230, at a time and location to be determined. Parties should confirm
by telephone the date, time, and location of the hearing 48 hours
before the scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
1870, within 30 days of the date of publication of this notice. See 19
CFR 351.310(c). Requests should contain: (1) The party's name, address,
and telephone number; (2) the number of participants; and (3) a list of
the issues to be discussed. Oral presentations will be limited to
issues raised in the briefs.
We will make our final determination no later than 135 days after
the publication of this notice in the Federal Register.
This determination is issued and published in accordance with
sections 733(f) and 777(i)(1) of the Act.
Dated: December 19, 2001.
Bernard T. Carreau,
Acting Assistant Secretary for Import Administration.
[FR Doc. 01-31981 Filed 12-27-01; 8:45 am]
BILLING CODE 3510-DS-P