[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.
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Margin
Manufacturer/exporter (percent)
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Kawasaki Steel Corporation................................. 115.22
Nippon Steel Corporation................................... 115.22
All Others................................................. 112.56
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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]
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