[Federal Register Volume 67, Number 90 (Thursday, May 9, 2002)]
[Notices]
[Pages 31218-31222]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11188]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-826]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Certain Cold-Rolled Carbon Steel Flat Products From India

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

EFFECTIVE DATE: May 9, 2002.

FOR FURTHER INFORMATION CONTACT: Paige Rivas at (202) 482-0651 or Mark 
Manning at (202) 482-5253, AD/CVD Enforcement Office IV, Group II, 
Import Administration, Room 1870, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230.

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to Department of Commerce (Department) 
regulations refer to the regulations codified at 19 CFR part 351 (April 
2001).

Preliminary Determination

    We preliminarily determine that certain cold-rolled carbon steel 
flat products (cold-rolled steel) from India are being sold, 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 are shown in the Suspension of Liquidation section of this 
notice.

Case History

    This investigation was initiated on October 18, 2001. \1\ See 
Notice of Initiation of Antidumping Duty Investigations: Certain Cold-
Rolled Carbon Steel Flat Products From Argentina, Australia, Belgium, 
Brazil, France, Germany, India, Japan, Korea, the Netherlands, New 
Zealand, the People's Republic of China, the Russian Federation, South 
Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 
54198 (October 26, 2001) (Initiation Notice). Since the initiation of 
the investigation, the following events have occurred.
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    \1\ The petitioners in this investigation are Bethlehem Steel 
Corporation, LTV Steel Company Inc., National Steel Corporation, 
Nucor Corporation, Steel Dynamics, Inc., United States Steel 
Corporation, WCI Steel, Inc., and Weirton Steel Corporation 
(collectively, the petitioners).
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    On October 31, 2001, we solicited comments from interested parties 
regarding the criteria to be used for model-matching purposes, and we 
received comments on our proposed matching criteria on November 8, 
2001. On November 8, 2001, we received model match comments from 
petitioners and respondents. On November 26, 3001, we informed 
respondents of our revised model match criteria.
    On November 13, 2001, the United States International Trade 
Commission (ITC) preliminarily determined that there is a reasonable 
indication that an industry in the United States is materially injured 
or threatened with material injury by reason of imports from Argentina, 
Australia, Belgium, Brazil, China, France, Germany, India, Japan, 
Korea, the Netherlands, New Zealand, Russia, South Africa, Spain, 
Sweden, Taiwan, Thailand, Turkey, and Venezuela of cold-rolled steel 
products. See Certain Cold-Rolled Steel Products From Argentina, 
Australia, Belgium, Brazil, China, France, Germany, India, Japan, 
Korea, Netherlands, New Zealand, Russia, South Africa, Spain, Sweden, 
Taiwan, Thailand, Turkey, and Venezuela, 66 FR 57985 (November 19, 
2001).
    Based on our analysis of an allegation contained in the petition, 
we found at the initiation of this investigation that there were 
reasonable grounds to believe or suspect that the respondent's sales of 
the subject merchandise in its

[[Page 31219]]

comparison market were made at prices below its cost of production 
(COP). Accordingly, pursuant to section 773(b) of the Act, we initiated 
a country-wide sales-below-cost investigation. See Initiation Notice.
    On November 20, 2001, the Department issued a complete antidumping 
questionnaire to Ispat Industries, Ltd. (Ispat). \2\ See Memorandum to 
Holly A. Kuga, Selection of Respondents for the Antidumping 
Investigation of Certain Cold-Rolled Carbon Steel Flat Products from 
India (Respondent Selection Memo) (November 20, 2001).
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    \2\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under investigation that it sells, and the manner in 
which it sells that merchandise in all of its markets. Section B 
requests a complete listing of all home market sales, or, if the 
home market is not viable, of sales in the most appropriate third-
country market (this section is not applicable to respondents in 
non-market economy (NME) cases). Section C requests a complete 
listing of U.S. sales. Section D requests information on the cost of 
production (COP) of the foreign like product and the constructed 
value (CV) of the merchandise under investigation. Section E 
requests information on further manufacturing.
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    On February 7, 2002, the petitioners requested a postponement of 
the preliminary determination in this investigation. On February 22, 
2002, the Department published a Federal Register notice postponing the 
deadline for the preliminary determination until April 26, 2002. See 
Postponement of Preliminary Determinations of Antidumping Duty 
Investigations: Certain Cold-Rolled Carbon Steel Flat Products from 
Argentina (A-357-816), Australia (A-602-804), Belgium (A-423-811), 
Brazil (A-351-834), the People's Republic of China (A-570-872), France 
(A-427-822), Germany (A-428-834), India (A-533-826), Japan (A-588-859), 
Korea (A-580-848), the Netherlands (A-421-810), New Zealand (A-614-
803), Russia (A-821-815), South Africa (A-791-814), Spain (A-469-812), 
Sweden (A-401-807), Taiwan (A-583-839), Thailand (A-549-819), Turkey 
(A-489-810) and Venezuela (A-307-822), 67 FR 36 (February 22, 2002).

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual dumping margins for each known exporter and producer of the 
subject merchandise. Where it is not practicable to examine all known 
producers/exporters of subject merchandise, section 777A(c)(2) of the 
Act permits the Department to investigate either (1) a sample of 
exporters, producers, or types of products that is statistically valid 
based on the information available at the time of selection, or (2) 
exporters and producers accounting for the largest volume of the 
subject merchandise that can reasonably be examined. Using company-
specific export data for the period of investigation (POI), which we 
obtained from a variety of sources under the Harmonized Tariff 
Schedules of the United States (HTSUS) number that corresponds to the 
subject merchandise, we found that nine producers/exporters may have 
exported cold-rolled steel to the United States during the POI. 
According to data on the record, Ispat represented over half of the 
imports during the POI. Due to limited resources, we determined that we 
could only investigate this one largest producer/exporter. See 
Respondent Selection Memo. Therefore, we designated Ispat as the 
mandatory respondent and sent it the antidumping questionnaire.

Critical Circumstances

    In a letter dated December 7, 2001, the petitioners alleged that 
there is a reasonable basis to believe or suspect that critical 
circumstances exist with respect to imports of cold-rolled steel from 
India. On April 10, 2002, the Department preliminarily determined that 
critical circumstances exist with respect to imports of cold-rolled 
steel from India. See Memorandum From Bernard Carreau to Faryar Shirzad 
Re: Preliminary Affirmative Determinations of Critical Circumstances; 
see also Notice of Preliminary Determination of Critical Circumstances: 
Certain Cold-Rolled Carbon Steel Flat Products From Australia, the 
People's Republic of China, India, the Republic of Korea, the 
Netherlands, and the Russian Federation, 67 FR 19157 (April 18, 2002) 
(Critical Circumstances Notice).

Period of Investigation

    The POI is July 1, 2000, through June 30, 2001. This period 
corresponds to the four most recent fiscal quarters prior to the month 
of the filing of the petition (i.e., September 2001).

Scope of Investigation

    For purposes of this investigation, the products covered are 
certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel 
products. For a full description of the scope of this investigation, 
please see the Scope Appendix attached to the Notice of Preliminary 
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled 
Carbon Steel Flat Products from Argentina, published concurrently with 
this preliminary determination.

Facts Available (FA)

1. Application of FA
    Section 776(a)(2) of the Act provides that, if an interested party 
(A) withholds information requested by the Department, (B) fails to 
provide such information by the deadline, or in the form or manner 
requested, (C) significantly impedes a proceeding, or (D) provides 
information that 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 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.
    On November 20, 2001, the Department issued an antidumping 
questionnaire to Ispat. Section A was due on December 10, 2001, and 
Sections B-D were due on December 26, 2001. On November 28, 2001, and 
December 11, 2001, Ispat notified the Department that it did not intend 
to respond to the Department's questionnaire. Ispat asserted that its 
sales to the United States were insignificant and asked the Department 
to exclude it from the investigation. In letters dated December 6, 
2001, and January 10, 2002, Ispat was informed that the Department 
continued to consider Ispat a mandatory respondent in this 
investigation. As stated in the Respondent Selection Memo, the 
Department found that Ispat was the largest exporter of subject 
merchandise during the POI and, therefore, designated Ispat as a 
mandatory respondent. See Respondent Selection Memo. In addition, the 
Department informed Ispat that it would attempt to accommodate any 
difficulties that Ispat had in answering the questionnaire, and would 
consider any suggestions Ispat provided as to alternative methods for 
submitting the requested information. The Department also advised Ispat 
that failure to submit the requested information by the date specified 
might result in use of the FA under section 776 of the Act and section 
351.308 of the Department's regulations.
    Although we requested that Ispat suggest alternative methods for 
submitting the requested information, it did not submit a response to 
that

[[Page 31220]]

request. Furthermore, Ispat did not respond to the sections A, B, C, 
and D by the respective due dates, nor did the company request that the 
Department grant any extension of the deadlines to respond. Rather, 
Ispat did not respond to the Department's requests for information at 
all.
    As described above, Ispat failed to provide a response to the 
Department's questionnaire despite the Department's willingness to 
consider alternative methods for submitting the information. Because 
Ispat failed to provide any of the necessary information requested by 
the Department, pursuant to section 776(a)(2)(B) of the Act, we have 
applied the FA to calculate the dumping margin.
2. Selection of Adverse FA (AFA)
    In selecting from among the facts otherwise available, section 
776(b) of the Act authorizes the Department to use an adverse inference 
if the Department finds that an interested party failed to cooperate by 
not acting to the best of its ability to comply with the request for 
information. See, e.g., Certain Welded Carbon Steel Pipes and Tubes 
From Thailand: Final Results of Antidumping Duty Administrative Review, 
62 FR 53808, 53819-20 (October 16, 1997). Ispat was notified in the 
Department's questionnaire and in additional letters that failure to 
submit the requested information by the date specified might result in 
use of the FA. Moreover, Ispat failed to offer any alternative methods 
for submitting the requested information. As a general matter, it is 
reasonable for the Department to assume that Ispat possessed the 
records necessary for this investigation and that by not supplying the 
information the Department requested, Ispat failed to cooperate to the 
best of its ability. As Ispat failed to cooperate to the best of its 
ability, we are applying an adverse inference pursuant to section 
776(b) of the Act. As AFA, we have used 153.65 percent, the rate 
derived from the petition. See Initiation Notice.
3. Corroboration of Information
    Section 776(b) of the Act authorizes the Department to use as AFA 
information derived from the petition, the final determination from the 
LTFV investigation, a previous administrative review, or any other 
information placed on the record.
    Section 776(c) of the Act requires the Department to corroborate, 
to the extent practicable, secondary information used as FA. Secondary 
information is defined as ``{i}nformation derived from the petition 
that gave rise to the investigation or review, the final determination 
concerning the subject merchandise, or any previous review under 
section 751 concerning the subject merchandise.'' See Statement of 
Administrative Action (SAA) accompanying the URAA, H.R. Doc. No. 103-
316 at 870 (1994) and 19 CFR 351.308(d).
    The SAA clarifies that ``corroborate'' means that the Department 
will satisfy itself that the secondary information to be used has 
probative value (see SAA at 870). The SAA also states that independent 
sources used to corroborate such evidence may include, for example, 
published price lists, official import statistics and customs data, and 
information obtained from interested parties during the particular 
investigation (see SAA at 870).
    In order to determine the probative value of the margins in the 
petition for use as AFA for purposes of this determination, we examined 
evidence supporting the calculations in the petition. We reviewed the 
adequacy and accuracy of the information in the petition during our 
pre-initiation analysis of the petition, to the extent appropriate 
information was available for this purpose (see India Initiation 
Checklist on file in the Central Records Unit (Initiation Checklist), 
Room B-099, of the Main Commerce Department building, for a discussion 
of the margin calculation in the petition). In addition, in order to 
determine the probative value of the margin in the petition for use as 
AFA for purposes of this determination, we examined evidence supporting 
the calculation in the petition. In accordance with section 776(c) of 
the Act, to the extent practicable, we examined the key elements of the 
export price (EP) and CV calculations on which the margin in the 
petition was based.
    The Department was provided with no useful information by the 
respondents or other interested parties and is aware of no other 
independent sources of information that would enable us to further 
corroborate the margin calculations in the petition. It is worth noting 
that the implementing regulation for section 776 of the Act states, 
``(t)he fact that corroboration may not be practicable in a given 
circumstance will not prevent the Secretary from applying an adverse 
inference as appropriate and using secondary information in question.'' 
See 19 CFR 351.308(c). Additionally, the SAA at 870 specifically states 
that where ``corroboration may not be practicable in a given 
circumstance,'' the Department need not prove that the facts available 
are the best alternative information.'' Therefore, based on our 
efforts, described above, to corroborate information contained in the 
petition, and in accordance with 776(c) of the Act, we consider the 
margins in the petitions to be corroborated to the extent practicable 
for purposes of this preliminary determination.

Export Price

    With respect to the margin in the petition, EP was based on an 
offer for sale of two types of Indian cold-rolled steel in the United 
States. The petitioners calculated a net EP by deducting port charges, 
freight charges, shipping charges, customs duties, and trading company 
mark-up. Our review of the EP calculations indicated that the 
information in the petition has probative value, as the information 
included in the margin calculations in the petition is from actual 
source documents and is concurrent, for the most part, with the POI.

Normal Value

    The petitioners calculated normal value (NV) from price information 
obtained from foreign market research for grades and sizes of cold-
rolled steel comparable to the products exported to the United States 
which serve as the basis for EP. The petitioners made no adjustment to 
NV. The grade and size of this merchandise was comparable to the 
merchandise offered for sale that was used as the basis of EP. In 
addition, the home market price quote was contemporaneous with the U.S. 
offer for sale obtained by the petitioners.
    With respect to NV, the petitioners also provided information 
demonstrating reasonable grounds to believe or suspect that sales of 
cold-rolled steel in the home market were made at prices below COP 
within the meaning of section 773(b) of the Act. COP consists of the 
cost of manufacturing (COM), selling, general, and administrative 
(SG&A) expenses, and packing. To calculate the foreign producers' COP, 
the petitioners used publicly available data obtained from Ispat's 
March 31, 2001, financial statements for the cost of the raw material 
input, hot-rolled coil, and SG&A expenses. The petitioners' used their 
own information, adjusted for known differences between costs in the 
United States and India, for the cost of transforming the hot-rolled 
coil into subject merchandise. Because Ispat does not separately report 
depreciation attributable to the company's cold-rolling operations in 
its financial statements, the petitioners excluded Ispat's depreciation 
relative to cold-rolling from the calculation of COP.

[[Page 31221]]

    Because the Indian price of cold-rolled carbon steel flat products 
is below the COP, the petitioners also based NV on CV, pursuant to 
sections 773(a)(4), 773(b) and 773(e) of the Act. The petitioners 
calculated CV using the same COM and SG&A expenses used to compute home 
market COP, and included an amount for profit. Because Ispat reported a 
net loss for the year, the petitioners based the amount for profit on 
the 2001 financial statements of a company in the same general 
industry, Tata Iron and Steel Company, Ltd. (TISCO). For initiation 
purposes, we conservatively recalculated CV by including Ispat's zero 
profit. This allowed the Department to obtain SG&A expenses, financial 
expenses, and profit from the same source financial statements. 
However, we also stated that if we need to rely on the use of facts 
otherwise available in the future, we would then pursue alternative 
methods for computing the profit rate. See Initiation Checklist at 7.
    For purposes of this preliminary determination, pursuant to section 
773(e)(2)(B)(iii) of the Act, we calculated CV by including a positive 
amount for profit. Because the only information on the record 
concerning the profit of a company other than Ispat in the same general 
industry is from the petition, we included the same amount for profit 
as done by the petitioners. The estimate dumping rate using TISCO's 
profit is 153.65 percent, which is also the petition rate.
    With respect to the CV data, we were able to corroborate the 
reasonableness of these data by examining the financial statements used 
to calculate COP and the petitioners' own information about the cost of 
transforming the hot-rolled coil into subject merchandise. With respect 
to the petitioners' own information regarding the cost of transforming 
the hot-rolled coil into subject merchandise, we corroborated the 
information by tracing the surrogate factors and values to the 
affidavit provided by the U.S. surrogate. Where applicable, we 
corroborated the petitioners' own information adjusted for known 
differences with publicly available data. With regard to the CV 
contained in the petition, the Department was provided no useful 
information by the respondent or other interested parties and is aware 
of no other independent sources of information that would enable us to 
further corroborate the margin calculations in the petition.
    Accordingly, in selecting AFA with respect to Ispat, the Department 
applied the petition rate of 153.65 percent.

All Others

    Section 735(c)(5)(B) of the Act provides that, where the estimated 
weighted-average dumping margins established for all exporters and 
producers individually investigated are zero or de minimis, or are 
determined entirely under section 776 of the Act, the Department may 
use any reasonable method to establish the estimated ``all others'' 
rate for exporters and producers not individually investigated. This 
provision contemplates that we weight-average margins other than zero, 
de minimis, and FA margins to establish the ``all others'' rate. Where 
the data do not permit weight-averaging such rates, the SAA, at 873, 
provides that we may use other reasonable methods. Because the petition 
contained only an estimated price-to-CV dumping margin, there are no 
additional estimated margins available with which to create the ``all 
others'' rate. In this case, we have determined that the only 
reasonable method is to use the single margin alleged in the petition, 
which was also the source of our facts available margin for Ispat. 
Therefore, we applied the petition margin of 153.65 percent as the 
``all others'' rate. See, e.g., Notice of Preliminary Determination of 
Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat 
Products From Indonesia, 66 FR 22163 (May 3, 2001).

Final Critical Circumstances Determination

    We will make a final determination concerning critical 
circumstances for India when we make our final determination regarding 
sales at LTFV in this investigation, which will be no later than 75 
days after the publication of this notice in the Federal Register.

Suspension of Liquidation

    Because of our preliminary affirmative critical circumstances 
finding in this case, and in accordance with section 733(e) of the Act, 
we are directing U.S. Customs to suspend liquidation of all entries of 
cold-rolled steel from India that are entered, or withdrawn from 
warehouse, for consumption on or after the date which is 90 days prior 
to the date of publication of this notice in the Federal Register. We 
are also instructing U.S. Customs to require a cash deposit or the 
posting of a bond equal to the dumping margin, as indicated in the 
chart below.
    These instructions suspending liquidation will remain in effect 
until further notice.

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Ispat Industries, Ltd. (Ispat).............................       153.65
All Others.................................................       153.65
------------------------------------------------------------------------

Disclosure

    The Department will disclose calculations performed within five 
days of the date of publication of this notice to the parties of the 
proceedings in this investigation in accordance with 19 CFR 351.224(b).

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final antidumping determination is 
affirmative, the ITC will determine whether these imports are 
materially injuring, or threaten material injury to, the U.S. industry. 
The deadline for that ITC determination would be the later of 120 days 
after the date of this preliminary determination or 45 days after the 
date of our final determination.

Public Comment

    For the investigation of cold-rolled steel from India, case briefs 
must be submitted no later than 50 days after the publication of this 
notice in the Federal Register. Rebuttal briefs must be filed within 
five calender days after the deadline for submission of case briefs. A 
list of authorities used, a table of contents, and an executive summary 
of issues should accompany any briefs submitted to the Department. 
Executive summaries should be limited to five pages total, including 
footnotes. Public versions of all comments and rebuttals should be 
provided to the Department and made available on diskette. Section 774 
of the Act provides that the Department will hold a hearing to afford 
interested parties an opportunity to comment on arguments raised in 
case or rebuttal briefs, provided that such a hearing is requested by 
any interested party. If a request for a hearing is made in an 
investigation, the hearing will tentatively be held two days after the 
deadline for submission of the rebuttal briefs, at the U.S. Department 
of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230. Parties should confirm by telephone the time, date, and place 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 within 30 days of 
the publication of this notice. Requests should specify the number of 
participants and provide a list of the issues to be discussed. Oral

[[Page 31222]]

presentations will be limited to issues raised in the briefs. If this 
investigation proceeds normally, we will make our final determination 
in the investigation of cold-rolled steel from India no later than 75 
days after the date of this preliminary determination.
    This determination is issued and published pursuant to sections 
733(f) and 777(i)(1) of the Act.

    Dated: April 26, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-11188 Filed 5-8-02; 8:45 am]
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