[Federal Register Volume 67, Number 169 (Friday, August 30, 2002)]
[Notices]
[Pages 55808-55810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-22242]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-428-833]


Final Affirmative Countervailing Duty Determination and Final 
Negative Critical Circumstances Determination Carbon and Certain Alloy 
Steel Wire Rod from Germany

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

ACTION: Notice of final affirmative countervailing duty determination 
and final negative critical circumstances determination.

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SUMMARY: The Department of Commerce has made a final determination that 
countervailable subsidies are being provided to producers and exporters 
of carbon and certain alloy steel wire rod from Germany. For more 
information on the estimated countervailing duty rates, please see the 
``Suspension of Liquidation'' section below. We have also made a final 
determination that critical circumstances do not exist with respect to 
imports of carbon and certain alloy steel wire rod from Germany.

EFFECTIVE DATE: August 30, 2002.

FOR FURTHER INFORMATION CONTACT: FOR FURTHER INFORMATION CONTACT: 
Melanie Brown, Office of Antidumping/Countervailing Duty Enforcement, 
Group 1, Import Administration, U.S. Department of Commerce, Room 3096, 
14th Street and Constitution Avenue, NW., Washington, DC 20230, 
telephone: (202) 482-4987.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions of the Tariff Act of 1930, as amended by 
the Uruguay Round Agreements Act effective January 1, 1995 (``the 
Act''). In addition, unless otherwise indicated, all citations to the 
Department of Commerce's (``the Department'') regulations are to 19 CFR 
Part 351 (April, 2001).

Petitioners

    The petitioners in these investigations are Co-Steel Raritan, Inc., 
GS Industries, Keystone Consolidated Industries, Inc., and North Star 
Steel Texas, Inc. (collectively, ``petitioners'').

Case History

    The following events have occurred since the publication of the 
preliminary determination in the Federal Register (see Preliminary 
Affirmative Countervailing Duty Determination and Preliminary Negative 
Critical Circumstances Determination: Carbon and Certain Alloy Steel 
Wire Rod from Germany, 67 FR 5991 (February 8, 2002) (``Preliminary 
Determination'')).
    On March 19, 2002, we published a Federal Register notice aligning 
the final determination in this proceeding with the earliest final 
determination in the companion antidumping duty investigations. See 
Countervailing Duty Investigations of Carbon and Certain Alloy Steel 
Wire Rod from Brazil, Canada, Germany, Trinidad and Tobago, and Turkey: 
Notice of Alignment With Final Antidumping Duty Determinations, 67 FR 
12524 (March 19, 2002).
    From March 11 to 20, 2002, we conducted verification of the 
questionnaire responses submitted by Saarstahl AG (``Saarstahl''), 
Ispat Hamburger Stahlwerke, Ispat Stalwerk Ruhrort, and Ispat Walzdraht 
Hochfeld (collectively ``Ispat''), and the Government of Germany.
    On May 29, 2002 we received case briefs from Saarstahl, Ispat, and 
the petitioners. On June 3, 2002, we received rebuttal briefs from 
Saarstahl, Ispat, the Government of Germany, and the petitioners.

Period of Investigation

    The period for which we are measuring subsidies, or the period of 
investigation (``POI''), is calendar year 2000.

Scope of Investigation

    The merchandise covered by this investigation is certain hot-rolled 
products of carbon steel and alloy steel, in coils, of approximately 
round cross section, 5.00 mm or more, but less than 19.00 mm, in solid 
cross-sectional diameter.
    Specifically excluded are steel products possessing the above-noted 
physical characteristics and meeting the Harmonized Tariff Schedule of 
the United States (``HTSUS'') definitions for (a) stainless steel; (b) 
tool steel; (c) high nickel steel; (d) ball bearing steel; and (e) 
concrete reinforcing bars and rods. Also excluded are (f) free 
machining steel products (i.e., products that contain by weight one or 
more of the following elements: 0.03 percent or more of lead, 0.05 
percent or more of bismuth, 0.08 percent or more of sulfur, more than 
0.04 percent of phosphorus, more than 0.05 percent of selenium, or more 
than 0.01 percent of tellurium).
    Also excluded from the scope are 1080 grade tire cord quality wire 
rod and 1080 grade tire bead quality wire rod. This grade 1080 tire 
cord quality rod is defined as: (i) Grade 1080 tire cord quality wire 
rod measuring 5.0 mm or more but not more than 6.0 mm in cross-
sectional diameter; (ii) with an average partial decarburization of no 
more than 70 microns in depth (maximum individual 200 microns); (iii) 
having no inclusions greater than 20 microns; (iv) having a carbon 
segregation per heat average of 3.0 or better using European Method NFA 
04-114; (v) having a surface quality with no surface defects of a 
length greater than 0.15 mm; (vi) capable of being drawn to a diameter 
of 0.30 mm or less with 3 or fewer breaks per ton, and (vii) containing 
by weight the following elements in the proportions shown: (1) 0.78 
percent or more of carbon, (2) less than 0.01 percent of aluminum, (3) 
0.040 percent or less, in the aggregate, of phosphorus and sulfur, (4) 
0.006 percent or less of nitrogen, and (5) not more than 0.15 percent, 
in the aggregate, of copper, nickel and chromium.
    This grade 1080 tire bead quality rod is defined as: (i) Grade 1080 
tire bead quality wire rod measuring 5.5 mm or more but not more than 
7.0 mm in cross-sectional diameter; (ii) with an average partial 
decarburization of no more than 70 microns in depth (maximum individual
    200 microns); (iii) having no inclusions greater than 20 microns; 
(iv) having a carbon segregation per heat average of 3.0 or better 
using European Method NFA 04-114; (v) having a surface quality with no 
surface defects of a length greater than 0.2 mm; (vi) capable of being 
drawn to a diameter of 0.78 mm or larger with 0.5 or fewer breaks per 
ton; and (vii) containing by weight the following elements in the 
proportions shown: (1) 0.78 percent or more of carbon, (2) less than 
0.01 percent of soluble aluminum, (3) 0.040 percent or less, in the 
aggregate, of phosphorus and sulfur, (4) 0.008 percent or less of 
nitrogen, and (5) either not more than 0.15 percent, in the aggregate, 
of copper, nickel and chromium (if chromium is not specified), or not 
more than 0.10 percent in the aggregate of copper and nickel and a 
chromium content of 0.24 to 0.30 percent (if chromium is specified).

[[Page 55809]]

    The designation of the products as ``tire cord quality''' or ``tire 
bead quality''' indicates the acceptability of the product for use in 
the production of tire cord, tire bead, or wire for use in other rubber 
reinforcement applications such as hose wire. These quality 
designations are presumed to indicate that these products are being 
used in tire cord, tire bead, and other rubber reinforcement 
applications, and such merchandise intended for the tire cord, tire 
bead, or other rubber reinforcement applications is not included in the 
scope. However, should petitioners or other interested parties provide 
a reasonable basis to believe or suspect that there exists a pattern of 
importation of such products for other than those applications, end-use 
certification for the importation of such products may be required. 
Under such circumstances, only the importers of record would normally 
be required to certify the end use of the imported merchandise.
    All products meeting the physical description of subject 
merchandise that are not specifically excluded are included in this 
scope.
    The products under investigation are currently classifiable under 
subheadings 7213.91.3010, 7213.91.3090, 7213.91.4510, 7213.91.4590, 
7213.91.6010, 7213.91.6090, 7213.99.0031, 7213.99.0038, 7213.99.0090, 
7227.20.0010, 7227.20.0020, 7227.20.0090, 7227.20.0095, 7227.90.6051, 
7227.90.6053, 7227.90.6058, and 7227.90.6059 of the HTSUS. Although the 
HTSUS subheadings are provided for convenience and customs purposes, 
the written description of the scope of this proceeding is dispositive.

Scope Comments

    On April 2, 2002, in conjunction with the preliminary 
determinations in the companion antidumping duty proceedings, the scope 
in both the companion countervailing duty and antidumping duty 
proceedings was revised. See Memorandum to Faryar Shirzad, dated April 
2, 2002, ``Carbon and Certain Alloy Steel Wire Rod: Requests for 
exclusion of various tire cord quality wire rod and tire bead quality 
wire rod products from the scope of Antidumping Duty (Brazil, Canada, 
Egypt, Germany, Indonesia, Mexico, Moldova, South Africa, Trinidad and 
Tobago, Ukraine, and Venezuela) and Countervailing Duty (Brazil, 
Canada, Germany, Trinidad and Tobago, and Turkey) Investigations,'' 
which is on file in the Department's Central Records Unit in Room B-099 
of the main Department building (``CRU'').
    Since April 2, 2002, a number of parties have filed requests asking 
the Department to exclude various products from the scope of the 
concurrent antidumping duty (Brazil, Canada, Germany, Indonesia, 
Mexico, Moldova, Trinidad and Tobago and Ukraine) and countervailing 
duty (Brazil, Canada, Germany, Trinidad and Tobago, and Turkey) 
investigations. On May 6, 2002, Ispat Hamburger Stahlwerke GmbH and 
Ispat Walzdraht Hochfeld GmbH (collectively, Ispat Germany) requested 
an exclusion for ``super clean valve spring wire.'' Two parties filed 
additional exclusion requests on June 14, 2002: Bluff City Steel asked 
that the Department exclude ``clean-steel precision bar,'' and Lincoln 
Electric Company sought the exclusion of its EW 2512 grade of metal 
inert gas welding wire. On June 28, 2002, petitioners (Co-Steel 
Raritan, Inc., GS Industries, Keystone Consolidated Industries, Inc., 
and North Star Steel Texas, Inc.) filed objections to a range of scope 
exclusion requests including: i) Bluff City Steel's request for clean 
precision bar; ii) Lincoln Electric Company's request for EW 2512 grade 
wire rod; iii) Ispat Germany's request for ``super clean valve spring 
wire;'' iv) Tokusen USA's January 22, 2002 request for 1070 grade tire 
cord and tire bead quality wire rod (tire cord wire rod); and v) 
various parties' request for 1090 grade tire cord wire rod.
    In addition, Moldova Steel Works requested the exclusion of various 
grades of tire cord wire rod on July 17, 2002. The Rubber Manufacturers 
Association (the RMA), Ispat Germany, Lincoln Electric and Bluff City 
filed rebuttals to petitioners' June 28 submission on July 8, 11, 17, 
and 29, 2002, respectively. The RMA filed additional comments on July 
30, 2002.\1\
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    \1\ On August 9, 2002, Bekaert Corporation requested an 
exclusion for certain high chrome/high silicon steel wire rod from 
the scope of these investigations. This request was filed too late 
to be considered for the final determinations in these 
investigations.
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    The Department has analyzed these requests and the petitioners' 
objections and we find no modifications to the scope are warranted. See 
Memorandum from Richard Weible to Faryar Shirzad, dated August 23, 
2002,``Carbon and Certain Alloy Steel Wire Rod; Antidumping Duty 
(Brazil, Canada, Germany, Indonesia, Mexico, Moldova, Trinidad and 
Tobago, and Ukraine) and Countervailing Duty (Brazil, Canada, Germany, 
Trinidad and Tobago, and Turkey) Investigations: Requests for Scope 
Exclusion,'' which is on file in the CRU.

Injury Test

    Because Germany is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b)(1) of the Act, the International Trade 
Commission (``ITC'') is required to determine whether imports of the 
subject merchandise from Germany materially injure, or threaten 
material injury to, a U.S. industry. On October 29, 2001, the ITC 
published its preliminary determination finding that there is a 
reasonable indication that an industry in the United States is being 
materially injured by reason of imports from Germany of the subject 
merchandise. See Carbon and Certain Alloy Steel Wire Rod From Brazil, 
Canada, Egypt, Germany, Indonesia, Mexico, Moldova, South Africa, 
Trinidad and Tobago, Turkey, Ukraine, and Venezuela, 66 FR 54539 
(October 29, 2001).

Critical Circumstances

    Section 703(e)(1) of the Act provides that critical circumstances 
exist if the Department determines that there is a reasonable basis to 
believe or suspect that (1) an alleged subsidy is inconsistent with the 
Agreement on Subsidies and Countervailing Measures referred to in 
section 101(d)(12) of the Uruguay Round Agreements Act (``Subsidies 
Agreement'') (see section 771(8) of the Act), and (2) there have been 
massive imports of the subject merchandise over a relatively short 
period of time. In past critical circumstances determinations, the 
Department has only found ``prohibited subsidies'' under Part II of the 
Subsidies Agreement to be inconsistent with the Subsidies Agreement. 
See, e.g., Notice of Preliminary Affirmative Countervailing Duty 
Determination, Preliminary Affirmative Critical Circumstances 
Determination, and Alignment of Final Countervailing Duty 
Determination: Certain Softwood Lumber Products from Canada, 66 FR 
43186, 43189 (August 17, 2001). In the instant investigation, 
petitioners argue that the class of subsidies found to be inconsistent 
with the Subsidies Agreement should be expanded to include ``actionable 
subsidies'' under Part III of the Subsidies Agreement.
    In the Preliminary Determination the Department found that critical 
circumstances do not exist with respect to subject merchandise from 
Germany because we found that no subsidies inconsistent with the 
Subsidies Agreement exist in Germany. Thus, the first requirement of 
section 703(e)(1) of the Act has not been met. More specifically, we 
found no prohibited subsidies (i.e., Part II of the Subsidies

[[Page 55810]]

Agreement) to be countervailable in this case. Actionable subsidies, 
although they may give rise to a right to a remedy (e.g., 
countervailing duties), are not inconsistent with the Subsidies 
Agreement within the meaning of section 703(e)(1) of the Act.
    There is no new information on the record to call into question our 
preliminary negative critical circumstances determination. Therefore, 
we continue to find that critical circumstances do not exist with 
respect to imports of the subject merchandise from Germany.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this investigation are addressed in the ``Issues and Decision 
Memorandum'' from Richard W. Moreland, Deputy Assistant Secretary, 
Import Administration to Faryar Shirzad, Assistant Secretary, Import 
Administration, dated August 23, 2002 (``Decision Memorandum'') or in 
the memorandum entitled ``Discussion of Comments Containing Proprietary 
Information'' from Richard W. Moreland, Deputy Assistant Secretary, 
Import Administration to Faryar Shirzad, Assistant Secretary, Import 
Administration, dated August 23, 2002 (``Proprietary Comments 
Memorandum''), which are hereby adopted by this notice. Attached to 
this notice as Appendix I is a list of the issues which parties have 
raised and to which we have responded in the Decision Memorandum. 
Attached to this notice as Appendix II is a list of the issues which 
parties have raised and to which we have responded in the ``Proprietary 
Comments Memorandum.'' Parties can find a complete discussion of all 
issues raised in this investigation and the corresponding 
recommendations in these memoranda (in public form), which are on file 
in the CRU. In addition, a complete version of the Decision Memorandum 
can be accessed directly on the Internet at http://ia.ita.doc.gov/frn/ 
under the heading ``Germany.'' The paper copy and electronic version of 
the Decision Memorandum are identical in content.

Suspension of Liquidation

    As a result of our Preliminary Determination, we instructed the 
Customs Service to suspend liquidation of all entries of carbon and 
certain alloy steel wire rod from Germany which were entered or 
withdrawn from warehouse, for consumption on or after February 8, 2002, 
the date of the publication of the Preliminary Determination in the 
Federal Register. In accordance with section 703(d) of the Act, we 
instructed Customs to discontinue the suspension of liquidation for 
merchandise for countervailing duty purposes entered on or after June 
8, 2002, but to continue the suspension of liquidation of entries made 
between February 8, 2002 and June 7, 2002.
    We have calculated an individual net subsidy rate for each 
manufacturer of the subject merchandise pursuant to section 
705(c)(1)(B)(i) of the Act. In accordance with sections 777A(e)(2) and 
705(c)(5)(A) of the Act, we have calculated the ``all others'' rate as 
the weighted average rate of Saarstahls's and Ispat's net subsidy 
rates. We determine the total estimated net countervailable subsidy 
rates to be:

------------------------------------------------------------------------
                  Producer/Exporter                     Net Subsidy Rate
------------------------------------------------------------------------
Saarstahl, AG........................................   18.46 percent ad
                                                                 valorem
Ispat (collectively, IHSW, IWHG, ISRG)...............    1.12 percent ad
                                                                 valorem
All Others...........................................   16.26 percent ad
                                                                 valorem
------------------------------------------------------------------------

    We will issue a countervailing duty order and reinstate the 
suspension of liquidation if the ITC issues a final affirmative injury 
determination, and we will instruct Customs to require a cash deposit 
of estimated countervailing duties for such entries of merchandise in 
the amounts indicated above. If the ITC determines that material 
injury, or threat of material injury, does not exist, this proceeding 
will be terminated and all estimated duties deposited or securities 
posted as a result of the suspension of liquidation will be refunded or 
canceled.

ITC Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our determination. In addition, we are making available to the 
ITC all non-privileged and non-proprietary information related to this 
investigation. We will allow the ITC access to all privileged and 
business proprietary information in our files, provided the ITC 
confirms that it will not disclose such information, either publicly or 
under an Administrative Protective Order (``APO''), without the written 
consent of the Assistant Secretary for Import Administration.

Return or Destruction of Proprietary Information

    In the event that the ITC issues a final negative injury 
determination, this notice will serve as the only reminder to parties 
subject to an APO of their responsibility concerning the destruction of 
proprietary information disclosed under APO in accordance with 19 CFR 
351.305(a)(3). Failure to comply is a violation of the APO.
    This determination is published pursuant to sections 705(d) and 
777(i) of the Act.

    Dated: August 23, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.

Appendix I

List of Comments and Issues in the Decision Memorandum
Comment 1: Appropriate AUL for Saarstahl
Comment 2: Appropriate AUL for IHSW
Comment 3: Saarstahl's Untimely Submission of Sales Data
Comment 4: Use of Adverse Facts Available
Comment 5: Schmiede's Sales
Comment 6: Saarstahl's Bankruptcy
Comment 7: Assumption of Saarstahl's Legacy Costs
Comment 8: Saarstahl's 1997 Reorganization
Comment 9: Saarstahl's ECSC Article 54 Loans
Comment 10: Saarstahl's Creditworthiness
Comment 11: Saarstahl's Research and Development Assistance
Comment 12: Previously Countervailed Programs for Saarstahl
Comment 13: HSW's Change of Ownership
Comment 14: Other Benefits Allegedly Conferred in the Sale of HSW
Comment 15: Application of the ``Same Person'' Test to IHSW
Comment 16: IHSW's Creditworthiness
Comment 17: Cross-ownership Between Ispat and WDI
Comment 18: ISRG's Intercompany Sales
Comment 19: ISRG's Article 56 Grant
Comment 20: ISRG's Rheinland-Pfalz State Government Grant
[FR Doc. 02-22242 Filed 8-29-02; 8:45 am]
BILLING CODE 3510-DS-S