[Federal Register Volume 67, Number 15 (Wednesday, January 23, 2002)]
[Notices]
[Pages 3149-3152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-1653]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-847]


Notice of Final Determination of Sales at Less Than Fair Value: 
Stainless Steel Bar From Korea

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

ACTION: Notice of final determination of sales at less than fair value.

-----------------------------------------------------------------------

SUMMARY: The Department of Commerce is conducting an antidumping duty 
investigation of stainless steel bar from Korea. We determine that 
stainless steel bar from Korea is being, or is likely to be, sold in 
the United States at less than fair value, as provided in section 
735(a) of the Tariff Act of 1930, as amended. On August 2, 2001, the 
Department of Commerce published its preliminary determination of sales 
at less than fair value of stainless steel bar from Korea.

[[Page 3150]]

Based on the results of verification and our analysis of the comments 
received, we have made changes in the margin calculations. Therefore, 
this final determination differs from the preliminary determination. 
The final weighted-average dumping margins are listed below in the 
section entitled ``Continuation of Suspension of Liquidation.''

EFFECTIVE DATE: January 23, 2002.

FOR FURTHER INFORMATION CONTACT: Brian Smith or Sophie Castro, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230; telephone: (202) 482-1766 or (202) 482-0588, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``the Act''), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Act by the Uruguay Round Agreements Act (``URAA''). In addition, 
unless otherwise indicated, all citations to the Department of Commerce 
(``Department'') regulations are to 19 CFR part 351 (April 2000).

Case History

    Since the publication of the preliminary determination in this 
investigation (see Notice of Preliminary Determination of Sales at Less 
Than Fair Value and Postponement of Final Determination: Stainless 
Steel Bar From Korea, 66 FR 40222 (August 2, 2001) (``Preliminary 
Determination'')), the following events have occurred:
    In August through September 2001, we conducted verifications of the 
questionnaire responses submitted by Changwon Specialty Steel Co., Ltd. 
(``Changwon'') and Dongbang Industrial Co. Ltd., (``Dongbang'') 
(collectively, ``the respondents''). In October 2001, the respondents 
submitted revised sales and cost databases pursuant to verification 
findings at the Department's request. We issued verification reports in 
November 2001. See ``Verification'' section of this notice for further 
discussion.
    The petitioners \1\ and the respondents filed case and rebuttal 
briefs, respectively, on November 16 and November 27, 2001. All parties 
withdrew their request for a hearing on November 28, 2001.
---------------------------------------------------------------------------

    \1\ The petitioners in this case (i.e., Carpenter Technology 
Corp., Crucible Specialty Metals, Electralloy Corp., Empire 
Specialty Steel Inc., Slater Steels Corp., and the United 
Steelworkers of America)
---------------------------------------------------------------------------

    Although the deadline for this determination was originally 
December 16, 2001, in order to accommodate certain verifications that 
were delayed because of the events of September 11, 2001, the 
Department tolled the final determination deadline in this and the 
concurrent stainless steel bar investigations until January 15, 2002.

Scope of Investigation

    For purposes of this investigation, the term ``stainless steel 
bar'' includes articles of stainless steel in straight lengths that 
have been either hot-rolled, forged, turned, cold-drawn, cold-rolled or 
otherwise cold-finished, or ground, having a uniform solid cross 
section along their whole length in the shape of circles, segments of 
circles, ovals, rectangles (including squares), triangles, hexagons, 
octagons, or other convex polygons. Stainless steel bar includes cold-
finished stainless steel bars that are turned or ground in straight 
lengths, whether produced from hot-rolled bar or from straightened and 
cut rod or wire, and reinforcing bars that have indentations, ribs, 
grooves, or other deformations produced during the rolling process.
    Except as specified above, the term does not include stainless 
steel semi-finished products, cut length flat-rolled products (i.e., 
cut length rolled products which if less than 4.75 mm in thickness have 
a width measuring at least 10 times the thickness, or if 4.75 mm or 
more in thickness having a width which exceeds 150 mm and measures at 
least twice the thickness), products that have been cut from stainless 
steel sheet, strip or plate, wire (i.e., cold-formed products in coils, 
of any uniform solid cross section along their whole length, which do 
not conform to the definition of flat-rolled products), and angles, 
shapes and sections.
    The stainless steel bar subject to this investigation is currently 
classifiable under subheadings 7222.11.00.05, 7222.11.00.50, 
7222.19.00.05, 7222.19.00.50, 7222.20.00.05, 7222.20.00.45, 
7222.20.00.75, and 7222.30.00.00 of the Harmonized Tariff Schedule of 
the United States (``HTSUS''). Although the HTSUS subheadings are 
provided for convenience and customs purposes, the written description 
of the scope of this investigation is dispositive.
    Prior to the preliminary determination in this investigation, the 
respondents in the companion stainless steel bar investigations filed 
comments seeking to exclude certain products from the scope of these 
investigations. The specific products identified in their exclusion 
requests were: stainless steel tool steel, welding wire, special-
quality oil field equipment steel (``SQOFES''), and special profile 
wire.
    In the preliminary determinations, we concluded that all of these 
products, except for special profile wire, are within the scope of 
these investigations. Specifically, regarding stainless steel tool 
steel, welding wire, and SQOFES, after considering the respondents' 
comments and the petitioners' objections to the exclusion requests, we 
preliminarily determined that the scope is not overly broad. Therefore, 
stainless steel tool steel, welding wire, and SQOFES are within the 
scope of these stainless steel bar investigations. In addition, we 
preliminarily determined that SQOFES does not constitute a separate 
class or kind of merchandise from stainless steel bar. Regarding 
special profile wire, we preliminarily determined that this product 
does not fall within the scope as it is written because its cross 
section is in the shape of a concave polygon. Therefore, we did not 
include special profile wire in these investigations. (For details, see 
the Memorandum to Susan Kuhbach and Louis Apple from the Stainless 
Steel Bar Team, dated July 26, 2001, entitled ``Scope Exclusion 
Requests,'' and the Memorandum to Louis Apple from the Stainless Steel 
Bar Team, dated July 26, 2001, entitled ``Whether Special Profile Wire 
Product is Included in the Scope of the Investigation.'')
    Finally, we note that in the concurrent countervailing duty 
investigation of stainless steel bar from Italy, the Department 
preliminarily determined that hot-rolled stainless steel bar is within 
the scope of these investigations. (See Preliminary Affirmative 
Countervailing Duty Determination and Alignment of Final Countervailing 
Duty Determination with Final Antidumping Duty Determination: Stainless 
Steel Bar from Italy, 66 FR 30414 (June 6, 2001).)
    With the exception of one respondent in the Germany investigation 
which filed comments on the Department's preliminary scope decision 
with respect to SQOFES with which the Department disagrees and has 
addressed in the January 15, 2002, Decision Memorandum in that case, no 
other parties filed comments on our preliminary scope decisions. 
Furthermore, no additional information has otherwise come to our 
attention to warrant a change in our preliminary decisions. Therefore, 
we have made no changes for purposes of the final determinations.

[[Page 3151]]

Period of Investigation

    The period of investigation (``POI'') for this investigation is 
October 1, 1999, through September 30, 2000.

Fair Value Comparisons

    To determine whether sales of stainless steel bar from Korea to the 
United States were made at less than fair value, we compared export 
price (``EP'') or constructed export price (``CEP'') to normal value 
(``NV''). Our calculations followed the methodologies described in the 
Preliminary Determination, except as noted below, and in the January 
15, 2002 Decision Memorandum and each individual respondent's 
calculation memorandum, which are on file in the Import 
Administration's Central Records Unit (``CRU''), Room B-099 of the main 
Department of Commerce building.

Export Price and Constructed Export Price

    For certain sales to the United States, we used EP as defined in 
section 772(a) of the Act. For the remaining sales to the United 
States, we used CEP as defined in section 772(b) of the Act. We 
calculated EP and CEP based on the same methodologies described in the 
Preliminary Determination, with the following exceptions:

Changwon

    We accepted Changwon's revised U.S. sales listing pursuant to 
verification findings. Specifically, we accepted the correction to 
Changwon's U.S. short-term interest rate and imputed credit 
calculations, and allowed certain duty drawback adjustments to be made 
to the U.S. sales listing. We accepted the adjustment to the direct 
selling expense ratio applicable to Changwon's affiliate, POSTEEL. We 
also corrected a ministerial error by reclassifying sales through 
Changwon's U.S. affiliate, POSAM, as CEP sales, consistent with our 
preliminary and final determinations.

Dongbang

    We accepted Dongbang's revised U.S. sales listing pursuant to 
verification findings. Specifically, we accepted the adjustments to 
duty drawback and the corrections to the inventory carrying cost 
calculations.

Normal Value

    We used the same methodology as that described in the Preliminary 
Determination to determine the cost of production (``COP''), whether 
comparison market sales were at prices below the COP, and the NV, with 
the following exceptions:
1. Cost of Production Analysis

Changwon

    We disallowed Changwon's claimed offset for gains on marketable 
securities to its reported general and administrative (``G&A'') 
expenses. We further adjusted Changwon's G&A rate by recalculating 
Changwon's reported cost of goods sold value exclusive of packing.

Dongbang

    Pursuant to verification findings, we accepted Dongbang's 
corrections to its COP and constructed value (``CV'') databases to 
adjust for Dongbang's over-allocation of the amount of scrap revenue 
offset against its raw material costs. We accepted Dongbang's G&A 
amount to remove the total amount of scrap revenue that was included 
both as an offset to raw material cost and as part of Dongbang's 
reported G&A expenses. We adjusted Dongbang's recalculation of its 
affiliated supplier's G&A and interest expense used in the calculation 
of COP based on fiscal year 2000 amounts (rather than fiscal year 1999) 
pursuant to verification findings. Using Dongbang's affiliated 
supplier's recalculated COP, we revised our major-input analysis of 
Dongbang's raw material cost to reflect, on a grade-specific basis, the 
highest of COP, transfer price, or when available, market price. We 
made an adjustment to the costs reported for certain products sold but 
not produced during the POI.
2. Calculation of NV

Changwon

    Pursuant to verification findings, we accepted Changwon's exclusion 
of the sales of billets from its home market sales listing because 
billets are raw materials used to produce the subject merchandise 
(i.e., stainless steel bars). We also accepted Changwon's correction of 
clerical errors presented at the onset of verification, namely the 
corrections to Changwon's interest revenue, warranty and inland freight 
calculations. We corrected for ministerial errors identified after the 
preliminary determination. Specifically, we adjusted the preliminary 
margin calculation by adding (rather than deducting) interest revenue 
to NV and correcting an error with respect to home market credit 
expenses which were inadvertently set to zero. We added (rather than 
deducted) the cost of U.S. packing to NV. We also made an additional 
correction to account for the omitted duty drawback adjustment related 
to local export sales.

Dongbang

    We accepted the correction Dongbang presented at the onset of 
verification, namely a correction to Dongbang's home market interest 
rate used to calculate imputed credit. We adjusted Dongbang's 
calculation of its indirect selling expense ratio based on verification 
findings. We corrected for a ministerial error identified after the 
preliminary determination by adding (rather than deducting) the cost of 
U.S. packing to NV in the final determination.

Currency Conversions

    We made currency conversions in accordance with section 773A of the 
Act in the same manner as in the Preliminary Determination.

Verification

    In this investigation, and in the companion stainless steel bar 
investigations from Germany, France, Italy, the United Kingdom and 
Taiwan, verifications were scheduled for all responding companies 
during the period August through October 2001. Based on the security 
concerns and logistical difficulties brought about by the events of 
September 11, we were unable to complete all scheduled verifications in 
these cases. Specifically, in the Korean investigation, we were unable 
to verify the information relating to Changwon's U.S. affiliate, POSAM. 
However, for those companies that we were unable to verify on site, we 
did verify major portions of the company's questionnaire responses.
    While the statute at 782(i)(1) and the Department's regulations at 
351.307(b)(1)(i) direct the Department to verify all information relied 
upon in a final determination of an investigation, the Department's 
verification process is akin to an ``audit'' and the Department has the 
discretion to determine the specific information it will examine in its 
audits. See PMC Specialties Group, Inc. v. United States, 20 C.I.T. 
1130 (1996). The courts concur that verification is a spot check and is 
not intended to be an exhaustive examination of the respondent's 
records. See Mansato v. United States, 698 F.Supp. 275, 281 (Ct. Int'l 
Trade 1988). Furthermore, the courts have noted that Congress has given 
Commerce wide latitude in formulating its verification procedures. See 
Micron Tech., Inc. v. United States, 117 F.3d 1386, 1396 (Fed. Cir. 
1997).
    In these investigations, we believe that we have met the standard 
for having verified the information being used in these final 
determinations, despite our inability to complete the

[[Page 3152]]

verifications as originally scheduled. Although the amount of 
information verified was less than planned, the respondents did not 
control what was verified and what was not verified. It was the 
Department, not the companies, that established the original 
verification schedule and determined the order in which the segments 
would be verified. Moreover, each company was fully prepared to proceed 
with each segment of the original verification based upon the 
Department's schedule and could not have anticipated that the 
Department would perhaps not actually verify all segments. Finally, we 
note that all responding companies and the petitioners fully cooperated 
with the Department's post-September 11 efforts to conduct as many 
segments of verification as practicable.
    Based on the information verified, we are relying on the responses 
as submitted, subject to the minor corrections previously noted 
elsewhere in this notice and the Decision Memorandum.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this investigation are addressed in the January 15, 2001, Decision 
Memorandum, which is hereby adopted by this notice. Attached to this 
notice as an appendix is a list of the issues which parties have raised 
and to which we have responded in the Decision Memorandum. Parties can 
find a complete discussion of all issues raised in this investigation 
and the corresponding recommendations in this public memorandum which 
is on file in the Department's CRU. In addition, a complete version of 
the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov/frn/frnhome.htm. The paper copy and electronic version 
of the Decision Memorandum are identical in content.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(A) of the Act, we are 
directing the Customs Service to continue to suspend liquidation of all 
imports of stainless steel bar from Korea that are entered, or 
withdrawn from warehouse, for consumption on or after August 2, 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 weighted-average amount by which 
the NV exceeds the EP or CEP, as appropriate, as indicated in the chart 
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                        margin
                                                              percentage
------------------------------------------------------------------------
Changwon Specialty Steel Co., Ltd..........................        13.38
Dongbang Industrial Co., Ltd...............................         4.75
All Others Rate............................................        11.30
------------------------------------------------------------------------

ITC 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, within 45 days, 
determine whether these imports are materially injuring, or threaten 
material injury to, the U.S. industry. If the ITC determines that 
material injury, or threat of material 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 duty order.
    This notice also serves as a reminder to parties subject to 
administrative protective order (``APO'') of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305. Timely notification of return or 
destruction of APO materials, or conversion to judicial protective 
order, is hereby requested. Failure to comply with the regulations and 
the terms of an APO is a sanctionable violation.
    This determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Act.

    Dated: January 15, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.

Appendix

List of Comments in the Issues and Decision Memorandum

Common Issues

Comment 1: Product Characteristics and Matching Methodology
Comment 2: Duty Drawback
Comment 3: Application of the Major Input Rule
Comment 4: Ministerial Errors

Company Specific Issues

Changwon Specialty Steel Co., Ltd.

Comment 5: Treatment of Changwon's U.S. Sales Made Through POSTEEL's 
U.S. affiliate
Comment 6: Whether to Grant a Constructed Export Price (``CEP'') 
Offset Adjustment for Changwon's CEP Sales
Comment 7: Interest Rate Selection
Comment 8: General & Administrative (``G&A'') Expenses
Comment 9: Denominator Used to Calculate G&A and Interest Ratios

Dongbang Industrial Co., Ltd.

Comment 10: Treatment of Class II Stainless Steel Bar
Comment 11: Selection of Cost for Products Which Were not Produced 
but Sold During the POI

[FR Doc. 02-1653 Filed 1-22-02; 8:45 am]
BILLING CODE 3510-DS-P