[Federal Register Volume 67, Number 90 (Thursday, May 9, 2002)]
[Notices]
[Pages 31222-31225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11189]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-859]


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

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

EFFECTIVE DATE: May 9, 2002.

FOR FURTHER INFORMATION CONTACT: Sally C. Gannon at (202) 482-0162, 
Mark Hoadley at (202) 482-0666, or Julio Fernandez at (202) 482-0190, 
Office of AD/CVD Enforcement VII, Import Administration, 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 Japan 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 occurred.
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    \1\ The petitioners in this investigation are Bethlehem 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 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, the 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 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 Section A antidumping 
questionnaires to four producers/exporters of subject merchandise, 
Sumitomo Metal Industries, Ltd. (Sumitomo), NKK Corporation (NKK), 
Nippon Steel Corporation (Nippon), and Kawasaki Steel Corporation 
(Kawasaki), requesting that they respond to part 1 of Section A, i.e., 
the total quantity and value of sales of subject merchandise to the 
United States, the home market, and to third countries, within 10 days 
(November 30, 2001). We requested that they complete the remainder of 
Section A by December 11, 2001.\2\ Additionally, the Department issued 
a request to the Embassy of Japan for information regarding the 
quantity and value of sales of subject merchandise to the United States 
for all known producers/exporters. The Department received responses to 
part 1 of the Section A questionnaire from NKK and Kawasaki on November 
30, 2001, but not from Sumitomo or Nippon. On November 30, 2001, Nippon 
requested, and the Department granted, an extension of the deadline for 
submitting its response to part 1 of Section A of the Department's 
questionnaire until December 5, 2001. On December 4, 2001, Sumitomo and 
Nippon each informed the Department by telephone that they would not be 
responding to any part of the Department's questionnaire. See 
Memorandum to the File from Mark Hoadley through Sally Gannon, 
Regarding Certain Cold-Rolled Carbon Steel Flat Products from Japan 
(December 5, 2001). On December 7, 2001, the Department received 
quantity and value information from the Embassy of Japan for the four 
producers/exporters named above and for two additional companies: 
Nisshin Steel Co., Ltd. and Kobe Steel, Ltd. Also on December 7, 2001, 
the Department received a request from Kawasaki that the deadline for 
its submission of the remainder of Section A be extended to December 
18, 2001. We granted the extension.
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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 December 17, 2001, based on the information received on the 
record, the Department selected Kawasaki and Nippon as mandatory 
respondents in this investigation and requested that they complete 
Sections B through E of the antidumping questionnaire. Refer to 
Selection of Respondents section below. We set a deadline of January 
21, 2001, for Sections B through E.
    On December 18, 2001, the Department received a Section A response 
from Kawasaki. On January 4, 2001, the Department issued a supplemental 
questionnaire to

[[Page 31223]]

Kawasaki, pertaining to its December 18 response. We set a deadline of 
January 18, 2002 to respond to this supplemental questionnaire. The 
Department never received a response to Sections A through E or 
requests for extensions from Nippon, and never received a response to 
the supplemental questionnaire, Sections B through E, or requests for 
extensions from Kawasaki. On January 18, 2002, Kawasaki submitted a 
letter informing the Department that it would not be responding further 
to the Department's questionnaire.
    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 
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 8227 (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 be reasonably examined. Using company-
specific export data for the POI provided by the Embassy of Japan in 
its December 7, 2001 submission, we found that six producers/exporters 
exported cold-rolled steel to the United States during the POI. 
According to the data provided by the Embassy, Kawasaki and Nippon 
combined represented over 60 percent of the imports during the POI. Due 
to limited resources, we determined that we could only investigate 
these two largest producers/exporters. Therefore, we designated 
Kawasaki and Nippon as the mandatory respondents. See Memorandum to 
Barbara Tillman from the Team, Regarding Antidumping Duty Investigation 
of Certain Cold-Rolled Carbon Steel Flat Products from Japan; Selection 
of Mandatory Respondents (December 17, 2001) (Respondent Selection 
Memo).

Period of Investigation

    The period of investigation (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, as 
well as a complete discussion of all scope exclusion requests submitted 
in the context of the on-going cold-rolled steel investigations, 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 Section A of the 
antidumping questionnaires to Kawasaki and Nippon. The Section A 
response was due on December 11, 2001. We issued Sections B-E on 
December 17, 2001, to both companies with a due date of January 21, 
2002, and a supplemental to Kawasaki on its Section A response on 
January 4, 2002, with a due date of January 18, 2002. Furthermore, we 
granted an extension until December 18, 2001, to Kawasaki to submit its 
Section A response, the only extension request we received from either 
of these two parties. Nevertheless, Kawasaki responded only to Section 
A of our antidumping questionnaire, and Nippon failed to respond to any 
part of the questionnaire. As stated in the Respondent Selection Memo, 
the Department found that Kawasaki and Nippon were the largest 
producers/exporters of subject merchandise during the POI and, 
therefore, designated them as mandatory respondents. See Respondent 
Selection Memo. In addition, the Department informed both companies 
that it would attempt to accommodate any difficulties that they had in 
answering the questionnaire. The Department also informed both 
companies that failure to submit the requested information by the date 
specified might result in use of FA.
    Although we informed both companies that we would attempt to 
accommodate any difficulties that they had in answering the 
questionnaire, only Kawasaki submitted an extension request, and only 
for the original Section A response. Neither party made any additional 
contact with the Department to request an extension, or to suggest any 
alternative methods of providing the requested information that would 
accommodate any difficulties they might have experienced, or expected 
to experience, in responding to the questionnaires.
    As described above, Kawasaki and Nippon failed to provide full 
responses to the Department's questionnaire despite the Department's 
willingness to accommodate their difficulties. Because they failed to 
provide the necessary information requested by the Department, pursuant 
to section 776(a)(2)(B) of the Act, we have applied the FA to determine 
their dumping margins.
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

[[Page 31224]]

Tubes From Thailand: Final Results of Antidumping Duty Administrative 
Review, 62 FR 53808, 53819-20 (October 16, 1997). Kawasaki and Nippon 
were notified twice in the Department's questionnaires that failure to 
submit the requested information by the date specified might result in 
use of FA. As described above, Kawasaki and Nippon failed to contact 
the Department to express any difficulties they might have been 
experiencing or to suggest how we might accommodate them in overcoming 
these difficulties, with the exception of Kawasaki's single extension 
request, which we granted. As a general matter, it is reasonable for 
the Department to assume that Kawasaki and Nippon possessed the records 
necessary for this investigation, and that by not supplying the 
information the Department requested, they failed to cooperate to the 
best of their ability. As both companies failed to cooperate to the 
best of their ability, we are applying an adverse inference pursuant to 
section 776(b) of the Act. As AFA, we have used 115.22 percent, the 
highest rate derived from the petition. See Initiation Notice.
3. Corroboration of AFA 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 Japan 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 normal value (NV) calculations on which the 
margins in the petition were based.
    a. Export Price
    With respect to the margins in the petition, EP was based on a 
sales offer obtained by petitioners and documented in the petition. We 
compared price quotes for two different products contained in the offer 
with contemporaneous, average per-unit customs import values (AUV) for 
the two ten-digit HTSUS categories matching the two products. We noted 
that the U.S. price quotes were well within the range of the AUVs 
reported by U.S. Customs. The petition also contained public U.S. 
Customs data supporting the conclusion that these two products 
accounted for a substantial share (over 40 percent) of the products 
sold by Japan in the United States during the POI and, thus, are 
representative of Japanese imports as a whole. The petition also 
contains current, supporting documentation for adjustments made to EP, 
including U.S. customs data used to calculate the cost of international 
freight and the amount of customs duties.
    b. Normal Value (NV)
    The petitioners calculated NV from price information obtained from 
foreign market research for cold-rolled steel comparable to the 
products used as the basis for EP. The petitioners made no adjustment 
to NV.
    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 the cost 
of production (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. The petitioners calculated 
COM based on their own production experience, adjusted, using publicly 
available data, for known differences between costs incurred to produce 
cold-rolled carbon steel flat products in the United States and Japan. 
To calculate SG&A, the petitioners relied upon amounts reported in a 
Japanese company's unconsolidated 2001 financial statements. For 
interest expense, the petitioners used the Japanese company's 
consolidated 2001 financial statements. Because the Japanese home 
market price in the petition of cold-rolled steel products was below 
the COP, the petitioners also based NV on constructed value (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. For profit, 
the petitioners relied upon amounts reported in the Japanese steel 
producer's unconsolidated 2001 financial statements. See Initiation 
Checklist.
    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 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.
    Accordingly, in selecting AFA with respect to Kawasaki and Nippon, 
the Department decided to apply the CV margin rate of 115.22 percent, 
which is the highest estimated dumping margin calculated by the 
petitioners in the petition of this investigation. See Initiation 
Notice.

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

[[Page 31225]]

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. Our recent practice under these 
circumstances has been to assign, as the ``all others'' rate, the 
simple average of the margins in the petition. See Notice of Final 
Determination of Sales at Less Than Fair Value: Stainless Steel Plate 
in Coil from Canada (Plate from Canada), 64 FR 15457 (March 31, 1999); 
Notice of Final Determination of Sales at Less Than Fair Value: 
Stainless Steel Plate in Coil from Italy (Plate from Italy), 64 FR 
15458, 15459 (March 21, 1999). For purposes of this preliminary 
determination, we are basing the ``all others'' rate on the simple 
average of margins in the petition, which is 112.56 percent.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
U.S. Customs Service (Customs) to suspend liquidation of all entries of 
cold-rolled steel from Japan that are entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register. We are also instructing 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)
------------------------------------------------------------------------
Kawasaki Steel Corporation.................................       115.22
Nippon Steel Corporation...................................       115.22
All Others.................................................       112.56
------------------------------------------------------------------------

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 these investigations 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 threatening 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

    Unless otherwise directed by the Department, 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 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 
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 Japan 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. 02-11189 Filed 5-8-02; 8:45 am]
BILLING CODE 3510-DS-P