[Federal Register Volume 67, Number 169 (Friday, August 30, 2002)]
[Notices]
[Pages 55802-55805]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-22253]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-428-832]


Notice of Final Determination of Sales at Less Than Fair Value: 
Carbon and Certain Alloy Steel Wire Rod From Germany

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

EFFECTIVE DATE: August 30, 2002.

FOR FURTHER INFORMATION CONTACT: Steve Bezirganian, or Robert James, at 
(202) 482-1131, or (202) 482-0649, respectively; Antidumping and 
Countervailing Duty Enforcement Group III, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue NW., Washington, DC 20230.

The Applicable Statute

    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, as amended (the 
Tariff Act), by the Uruguay Round Agreements Act (URAA). In addition, 
unless otherwise indicated, all citations to the Department's 
regulations are references to the provisions codified at 19 CFR Part 
351 (2001).

Final Determination

    We determine carbon and certain alloy steel wire rod from Germany 
(wire rod) is being sold, or is likely to be sold, in the United States 
at less than fair value (LTFV), as provided in section 735 of the 
Tariff Act. The estimated margins of sales at LTFV are shown in the 
``Continuation of Suspension of Liquidation'' section of this notice.

Case History

    On April 10, 2002, the Department published its preliminary 
determination in this investigation. See Notice of Preliminary 
Determination of Sales at Less Than Fair Value: Carbon and Certain 
Alloy Steel Wire Rod from Germany, 67 FR at 17384 (Preliminary 
Determination). Since the April 2, 2002, signing of our Preliminary 
Determination the following events have occurred:
    On April 4, 2002, the sole respondent, Saarstahl AG (Saarstahl) 
submitted a request that the Department postpone its final 
determination by fifty additional days; Saarstahl also agreed to the 
extension of provisional measures to a period not to exceed six months, 
as required by section 733(d) of the Tariff Act. Accordingly, on May 
13, 2002, we published in the Federal Register our notice of 
postponement of the final determination. See Postponement of Final 
Antidumping Duty Determinations; Carbon and Certain Alloy Steel Wire 
Rod from Germany, Indonesia and Moldova, 67 FR at 32013 (May 13, 2002).
    The Department verified Saarstahl's cost of production responses 
from May 27 through May 31, 2002. From June 13, 2002 to June 20, 2002, 
we verified Saarstahl's sales responses. We issued our cost 
verification report on June 21, 2002, with our sales verification 
report following on July 10, 2002.
    Saarstahl submitted information on June 7, 2002, concerning monthly 
imports of subject steel wire rod for the period January through April 
2002.
    On June 24, 2002, petitioners and Saarstahl submitted case briefs. 
Both parties submitted rebuttal briefs on July 29, 2002. On August 5, 
2002, the Department held a public hearing.

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 filing of the petition (i.e., August 2001), and is in 
accordance with section 351.204(b)(1) of the Department's regulations.

Scope Issues

    Since the Preliminary Determination a number of parties filed 
requests asking the Department to exclude various products from the 
scope of these 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

[[Page 55803]]

Germany's request for ``super clean valve spring wire;'' (iv) Tokusen 
USA's January 22, 2002 request for grade 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, ``Carbon and Certain 
Alloy Steel Wire Rod * * * Requests for Scope Exclusion'' dated August 
23, 2002, which is on file in room B-099 of the main Commerce building.

Scope of the Investigation

    The merchandise covered by these investigations 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).
    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.

Critical Circumstances

    Section 735(a)(3) of the Tariff Act provides that if our final 
determination is affirmative, then the determination shall also contain 
a finding of whether (i) there is a history of dumping and material 
injury by reason of dumped imports in the United States or elsewhere of 
the subject merchandise, or the person by whom, or for whose account, 
the merchandise was imported, knew or should have known that the 
exporter was selling the subject merchandise at less that its fair 
value and that there would be material injury by reason of such sales, 
and (ii) there have been massive imports of the subject merchandise 
over a relatively short period.
    On February 5, 2002, we preliminarily found that both criteria, 
i.e., knowledge of dumping and material injury and massive imports of 
subject merchandise, had been met by Saarstahl and preliminarily found 
that critical circumstances exist. See Carbon and Alloy Steel Wire Rod 
From Germany, Mexico, Moldova, Trinidad and Tobago, and Ukraine: Notice 
of Preliminary Determination of Critical Circumstances, 67 Fed. Reg. at 
6224 (February 11, 2002).
    We have concluded in this final determination that critical 
circumstance exist for imports of steel wire rod from Germany. See the 
Department's response to Comment 6 in the Issues and Decision 
Memorandum, dated August 23, 2002.

Use of Facts Available

    Section 776(a)(2) of the Tariff Act provides that if any interested 
party: (A)

[[Page 55804]]

Withholds information that has been requested by the Department; (B) 
fails to provide such information by the deadlines for submission of 
the information or in the form or manner requested; (C) significantly 
impedes an antidumping investigation; or (D) provides such information 
but the information cannot be verified, the Department shall, subject 
to section 782(d), use the facts otherwise available in making its 
determination.
    Section 782(d) of the Tariff Act requires the Department to 
``promptly inform'' a respondent of the nature of any deficiencies 
found in its response and to ``provide that person with an opportunity 
to remedy or explain the deficiency in light of the time limits 
established for the completion of investigations. * * *'' To the extent 
the respondent fails to address the deficiencies, and subject to 
section 782(e), the Department may disregard all or part of the 
response. Section 782(e) provides the Department shall not decline to 
consider information deemed deficient under section 782(d) if: (1) The 
information is submitted by the deadline established for its 
submission; (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 
it acted to the best of its ability in providing the information and 
meeting the requirements established by the Department with respect to 
the information; and (5) the information can be used without undue 
difficulties.
    We used facts available in the Preliminary Determination because we 
determined certain information was not available on the record, or was 
not provided by the deadline or in the form or manner requested. 
Specifically, Saarstahl failed to provide requested documentation, 
including worksheets and other documentation, to support its derivation 
of various reported expenses. Further, Saarstahl failed to provide 
information in the manner requested pertaining to certain expenses 
incurred on both its home market and U.S. sales. For example, contrary 
to our specific instructions, Saarstahl reported movement expenses 
based upon ``estimated freight expenses (Fracht-Ruckstellung) 
calculated at the time of sale for each invoice.'' Saarstahl's January 
22, 2002, Section B response at B-21. This involved inland plant-to-
warehouse and plant-to-customer freight, and warehousing expenses in 
the home market. For U.S. sales, the Fracht-Ruckstellung included 
foreign inland freight, freight to the port, ocean freight, inland and 
marine insurance, U.S. customs duties and, where applicable, 
warehousing expenses. Saarstahl failed to provide the requested actual 
expenses or supporting documentation (for example, tariff schedules or 
contracts demonstrating the freight rates in effect during the POI). 
Furthermore, Saarstahl has not explained fully its original allocations 
based upon the Fracht-Ruckstellung, or provided the Department the 
means of establishing independently the validity of the underlying 
estimates. (For further details of these deficiencies, see the 
``Preliminary Analysis Memorandum,'' dated April 2, 2002.)
    With regard to packing expenses, Saarstahl reported identical 
packing expenses, by mill, for both home market and U.S. sales, despite 
indications in its initial responses that sales for export require 
greater packing materials. Saarstahl also did not initially provide 
worksheets supporting the calculation of packing costs for two of the 
three mills producing subject wire rod products during the POI.
    In accordance with section 776(a) of the Tariff Act, we have 
continued to use partial facts available in instances where Saarstahl 
failed to provide necessary information on its home market and U.S. 
freight expenses in the manner or form requested. As non-adverse facts 
available for U.S. sales, for the movement expenses at issue, we set 
these expenses to no less than the median value reported for each 
expense; similarly, for the home market, we set the movement expenses 
to no greater than the median value reported for each expenses. As to 
packing expenses, we have altered our methodology to reflect our 
finding at verification that there is apparently little significant 
differences in packing costs for export sales versus home market sales. 
For further details regarding our selection of facts available for 
freight and packing expenses, see Comments 7 and 8, and our Final 
Analysis Memorandum, dated concurrently with this notice. A public file 
of this and all documents generated by the Department can be found in 
our Central Records Unit, room B-099 in the main Commerce building.
    In addition, we applied adverse facts available for certain 
unreported U.S. sales discovered at verification. Section 776(b) of the 
Tariff Act provides that adverse inferences may be used in selecting 
the facts otherwise available when a party has failed to cooperate by 
not acting to the best of its ability to comply with requests for 
information. See Statement of Administrative Action accompanying the 
URAA, H.R. Rep. No. 103-316, vol.1, at 870 (1994) (SAA). For additional 
details, see also Comment 2 of the Issues and Decision Memorandum, 
dated August 23, 2002.

Currency Conversion

    We made currency conversions into U.S. dollars based on the 
exchange rates in effect on the dates of the U.S. sales as certified by 
the Federal Reserve Bank, in accordance with section 773A(a) of the 
Tariff Act.

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, 
dated August 23, 2002, which is hereby adopted by this notice. A list 
of the issues which parties have raised, and to which we responded, is 
attached to this notice as an appendix. Parties can find a complete 
discussion of all issues raised in this investigation and the 
corresponding recommendations in this public memorandum, which is on 
file in the Central Records Unit. In addition, a complete version of 
the Issues and Decision Memorandum can be accessed directly on the Web 
at http://ia.ita.doc.gov. The paper copy and electronic version of the 
Issues and Decision Memorandum are identical in content.

Changes Since the Preliminary Determination

    Based on our analysis of the comments received, we have made 
certain changes to the calculations used in our preliminary results 
(see the Issues and Decision Memorandum comments for details):
    We applied adverse facts available for unreported U.S. sales (see 
Comment 2).
    We used a Euro interest rate for home market sales and for U.S. 
sales denominated in Euros (see Comment 3).
    We used the last day of verification as a proxy for payment date 
for all unpaid sales in the home market and U.S. sales databases (see 
Comment 4)
    We revised the credit period for all sales to one U.S. customer to 
account for split payments for one transaction reviewed at verification 
(see Comment 5).
    We revised our application of facts available for packing expenses 
(see Comment 8).
    We included in the U.S. sales database one sale of merchandise that 
Saarstahl had mischaracterized as tire cord wire rod outside of the 
scope of the investigation (see Comment 9).
    In addition, we made several changes to our calculations to reflect 
other developments in the proceeding: we revised the factor used for 
the

[[Page 55805]]

calculation of GNA to reflect the findings at the cost verification 
(see the August 5, 2002, ``Cost of Production and Constructed Value 
Calculation Adjustments for the Final Determination'' memorandum), and 
we added an adjustment for U.S. billing adjustments (BILADJU) to 
reflect information in Saarstahl's April 30, 2002, submission.
    The methodologies employed to incorporate the above changes in our 
programming are described in the Final Analysis Memorandum.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Tariff Act, the 
Department will direct the U.S. Customs Service to continue to suspend 
liquidation of all entries of wire rod from Germany that are entered, 
or withdrawn from warehouse, for consumption on after 90 days prior to 
the date of publication of the Preliminary Determination in the Federal 
Register. The U.S. Customs Service shall continue to require a cash 
deposit or posting of a bond equal to the weighted-average amount by 
which the NV exceeds the EP, as indicated in the chart below. These 
suspension-of-liquidation instructions will remain in effect until 
further notice. The weighted-average margins for this proceeding are as 
follows:

------------------------------------------------------------------------
                                                                Margin
                   Exporter/manufacturer                      (percent)
------------------------------------------------------------------------
Saarstahl AG...............................................        15.12
All Others.................................................        15.12
------------------------------------------------------------------------

Commission Notification

    In accordance with section 735(d) of the Tariff Act, we have 
notified the International Trade Commission of our determination. As 
our final determination is affirmative, the Commission shall, within 45 
days, determine whether these imports are materially injuring, or 
threatening material injury to, the U.S. industry. If the Commission 
determines that material injury, or threat of material injury does not 
exist, the proceeding will be terminated and all securities posted will 
be refunded or canceled. If the Commission determines such injury does 
exist, the Department will issue an antidumping duty order.
    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of business proprietary information 
disclosed under APO in accordance with 19 CFR 351.305. Timely 
notification of the return or destruction of APO materials, or 
conversion to judicial protective order, is hereby requested. Failure 
to comply with the regulations and the terms of an APO is a 
sanctionable violation.
    This determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Tariff Act.

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

Appendix of Issues in the Issues and Decision Memorandum

Comment 1: Indirect Selling Expenses Incurred in Germany on U.S. 
Sales
Comment 2: Adverse Facts Available for Unreported U.S. Sales
Comment 3: Interest Rates for Euro-Denominated Sales
Comment 4: Missing Payment Dates
Comment 5: Credit Expense Calculations for ``Split Payments''
Comment 6: Critical Circumstances
Comment 7: Use of Facts Available for Freight Expenses
Comment 8: Use of Facts Available for Packing Expenses
Comment 9: Exclusion of Tire Cord Wire Rod and Tire Bead Wire Rod
Comment 10: The ``Zeroing'' Methodology
Comment 11: The Arm's-Length Test
Comment 12: Level of Trade
[FR Doc. 02-22253 Filed 8-29-02; 8:45 am]
BILLING CODE 3510-DS-P