[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