[Federal Register Volume 68, Number 76 (Monday, April 21, 2003)]
[Notices]
[Pages 19499-19504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-9734]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-824]


Preliminary Results of Anti-Circumvention Review of Antidumping 
Order: Corrosion-Resistant Carbon Steel Flat Products from Japan

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

ACTION: Notice of Preliminary Results of Anti-Circumvention Review of 
Antidumping Order: Corrosion-Resistant Carbon Steel Flat Products from 
Japan.

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SUMMARY: As a result of our inquiry, we preliminarily determine that 
respondents' exports of boron-added corrosion-resistant carbon steel 
flat (``CRS'') products from Japan to the United States are not 
circumventing the antidumping duty order on corrosion-resistant carbon 
steel flat products from Japan.

EFFECTIVE DATE: April 21, 2003.

FOR FURTHER INFORMATION CONTACT: Catherine Bertrand or James Doyle, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC, 20230; telephone: (202) 482-3207 and(202) 482-0159, 
respectively.

SUPPLEMENTARY INFORMATION:

Background

    On September 11, 1998, petitioner USS-POSCO Industries (``UPI'') 
requested that the Department conduct an anti-circumvention inquiry 
pursuant to section 781(c) of the Tariff Act of 1930, as amended (``the 
Act'') to determine whether imports of boron-added CRS products, 
falling within the physical dimensions outlined in the scope of the 
order, are circumventing the antidumping duty order on corrosion-
resistant carbon steel sheet from Japan. See Antidumping Duty Orders; 
Certain Corrosion Resistant Carbon Steel Flat Products from Japan, 58 
FR 44163 (August 19, 1993). Specifically, petitioner alleges that 
Japanese exporters have been circumventing the order by exporting hot-
dipped and electrolytically zinc coated sheet to which small amounts of 
boron (e.g., 0.0020 and 0.0025 percent by weight based on laboratory 
tests of

[[Page 19500]]

two samples) have been added. Carbon steel sheet, as defined by the 
HTSUS, has a maximum boron content of less than 0.0008% by weight. If 
the boron content exceeds that level, the products enter the United 
States as a hot-dipped or electrolytic alloy rather than carbon steel 
sheet, and are thus not required to pay antidumping duties.
    Petitioner argues that import statistics indicate that imports of 
hot-dipped and electrolytic alloy sheet to West Coast ports rose from 
25,256 NT in 1996 to 50,478 NT for the first 6 months of 1998, while 
imports of the carbon sheet equivalent decreased from 16,013 NT in 1996 
to 5,975 NT for the first six months of 1998.\1\
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    \1\ The HTS does not provide a separate designation for boron-
added CRS products. As a result, UPI has relied on the broader 
``alloy'' category designated by the relevant HTS numbers, as these 
are the HTS numbers under which boron-added CRS products would 
properly be entered.
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    In addition, petitioner alleges that the addition of boron is 
generally immaterial (if not detrimental) to the performance 
characteristics of the merchandise, and that other than the addition of 
boron, the overall characteristics of the alloy vis-a-vis the carbon 
product are virtually identical. In fact, petitioner claims that, in 
some circumstances, the addition of boron could hamper the product's 
formability.\2\
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    \2\ Formability: the relative ease with which a metal can be 
shaped through plastic deformation. Plastic deformation: deformation 
that does or will remain permanent after removal of the load that 
caused it. Metals Handbook, 1985, edited by Howard E. Boyer and 
Timothy L. Gall.
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    On October 30, 1998, the Department initiated this anti-
circumvention inquiry in response to petitioner's request. See Notice 
of Initiation of Anti-circumvention Inquiry on Antidumping Duty Order: 
Corrosion-Resistant Carbon Steel Flat Products from Japan, 63 FR 58364 
(October 30, 1998). The Court of International Trade (``CIT'') enjoined 
the case by a temporary restraining order on October 30, 1998, which 
was lifted on October 18, 2000, following a decision by the U.S. Court 
of Appeals for the Federal Circuit (``CAFC''). On December 4, 2000, the 
Department sent a first round of questionnaires to Nippon Steel 
Corporation (``NSC''), NKK Steel Corporation (``NKK''), Nisshin Steel 
Company Limited (``Nisshin''), Kobe Steel Company Limited (``Kobe''), 
Sumitomo Steel Corporation (``Sumitomo''), and Kawasaki Steel 
Corporation (``Kawasaki''). Nisshin did not respond to any of the 
Department's communications. A supplemental questionnaire was issued on 
February 6, 2001, after which Kawasaki and Sumitomo informed the 
Department by letter on February 22 and 20, 2001, respectively, that 
they would not be participating in this inquiry. The remaining three 
companies submitted their supplemental responses on February 27, 2001. 
The Department issued a second supplemental to NSC and NKK on March 13 
and March 15, 2001, respectively. In addition, the Department sent 
questionnaires to two of NSC's trading companies and to one of NKK's 
traders. Department officials conducted verifications of NKK, one of 
its traders and NSC from April 23 through April 27, 2001. On August 8, 
2001, the Department issued a third supplemental to NSC and NKK and a 
second supplemental to Kobe. On February 19, 2003, the Department 
issued a fourth supplemental questionnaire to NSC and NKK.

Scope of the Order

    The scope of this order is as follows: the products covered by the 
antidumping duty order include flat-rolled carbon steel products, of 
rectangular shape, either clad, plated, or coated with corrosion-
resistant metals such as zinc, aluminum, or zinc-, aluminum-, nickel- 
or iron-based alloys, whether or not corrugated or painted, varnished 
or coated with plastics or other nonmetallic substances in addition to 
the metallic coating, in coils (whether or not in successively 
superimposed layers) and of a width of 0.5 inch or greater, or in 
straight lengths which, if of a thickness less than 4.75 millimeters, 
are of a width of 0.5 inch or greater and which measures at least 10 
times the thickness or if of a thickness of 4.75 millimeters or more 
are of a width which exceeds 150 millimeters and measures at least 
twice the thickness, as currently classifiable in the HTSUS under item 
numbers 7210.30.0030, 7210.30.0060, 7210.41.0000, 7210.49.0030, 
7210.49.0090, 7210.61.0000, 7210.69.0000, 7210.70.6030, 7210.70.6060, 
7210.70.6090, 7210.90.1000, 7210.90.6000, 7210.90.9000, 7212.20.0000, 
7212.30.1030, 7212.30.1090, 7212.30.3000, 7212.30.5000, 7212.40.1000, 
7212.40.5000, 7212.50.0000, 7212.60.0000, 7215.90.1000, 7215.90.3000, 
7215.90.5000, 7217.20.1500, 7217.30.1530, 7217.30.1560, 7217.90.1000, 
7217.90.5030, 7217.90.5060, 7217.90.5090. Included in this order are 
corrosion-resistant flat-rolled products of non-rectangular cross-
section where such cross-section is achieved subsequent to the rolling 
process (i.e., products which have been ``worked after rolling'') for 
example, products which have been beveled or rounded at the edges.
    Excluded from this order are flat-rolled steel products either 
plated or coated with tin, lead, chromium, chromium oxides, both tin 
and lead (``terne plate''), or both chromium and chromium oxides 
(``tin-free steel''), whether or not painted, varnished or coated with 
plastics or other nonmetallic substances in addition to the metallic 
coating.
    Also excluded from this order are clad products in straight lengths 
of 0.1875 inch or more in composite thickness and of a width which 
exceeds 150 millimeters and measures at least twice the thickness.
    Also excluded from this order are certain clad stainless flat-
rolled products, which are three-layered corrosion-resistant carbon 
steel flat-rolled products less than 4.75 millimeters in composite 
thickness that consist of a carbon steel flat-rolled product clad on 
both sides with stainless steel in a 20%-60%-20% ratio.
    Also excluded from this order are certain corrosion-resistant 
carbon steel flat products meeting the following specifications: (1) 
widths ranging from 10 millimeters (0.394 inches) through 100 
millimeters (3.94 inches); (2) thicknesses, including coatings, ranging 
from 0.11 millimeters (0.004 inches) through 0.60 millimeters (0.024 
inches); and (3) a coating that is from 0.003 millimeters (0.00012 
inches) through 0.005 millimeters (0.000196 inches) in thickness and 
that is comprised of either two evenly applied layers, the first layer 
consisting of 99% zinc, 0.5% cobalt, and 0.5% molybdenum, followed by a 
layer consisting of chromate, or three evenly applied layers, the first 
layer consisting of 99% zinc, 0.5% cobalt, and 0.5% molybdenum followed 
by a layer consisting of chromate, and finally a layer consisting of 
silicate.
    Also excluded from this order are carbon steel flat products 
measuring 1.84 millimeters in thickness and 43.6 millimeters or 16.1 
millimeters in width consisting of carbon steel coil (SAE 1008) clad 
with an aluminum alloy that is balance aluminum, 20% tin, 1% copper, 
0.3% silicon, 0.15% nickel, less than 1% other materials and meeting 
the requirements of SAE standard 783 for Bearing and Bushing Alloys.
    Also excluded from this order are carbon steel flat products 
measuring 0.97 millimeters in thickness and 20 millimeters in width 
consisting of carbon steel coil (SAE 1008) with a two-layer lining, the 
first layer consisting of a copper-lead alloy powder that is balance 
copper, 9% to 11% tin, 9% to 11% lead, less than 1% zinc, less than

[[Page 19501]]

1% other materials and meeting the requirements of SAE standard 792 for 
Bearing and Bushing Alloys, the second layer consisting of 45% to 55% 
lead, 38% to 50% PTFE, 3% to 5% molybdenum disulfide and less than 2% 
other materials.
    Also excluded from this order are doctor blades meeting the 
following specifications: carbon steel coil or strip, plated with 
nickel phosphorous, having a thickness of 0.1524 millimeters (0.006 
inches), a width between 31.75 millimeters (1.25 inches) and 50.80 
millimeters (2.00 inches), a core hardness between 580 to 630 HV, a 
surface hardness between 900 - 990 HV; the carbon steel coil or strip 
consists of the following elements identified in percentage by weight: 
0.90% to 1.05% carbon; 0.15% to 0.35% silicon; 0.30% to 0.50% 
manganese; less than or equal to 0.03% of phosphorous; less than or 
equal to 0.006% of sulfur; other elements representing 0.24%; and the 
remainder of iron.
    Also excluded from this order are products meeting the following 
specifications: carbon steel flat products measuring 1.64 millimeters 
in thickness and 19.5 millimeters in width consisting of carbon steel 
coil (SAE 1008) with a lining clad with an aluminum alloy that is 
balance aluminum; 10 to 15% tin; 1 to 3% lead; 0.7 to 1.3% copper; 1.8 
to 3.5% silicon; 0.1 to 0.7% chromium, less than 1% other materials and 
meeting the requirements of SAE standard 783 for Bearing and Bushing 
Alloys.
    Also, excluded from this order are products meeting the following 
specifications: carbon steel coil or strip, measuring 1.93 millimeters 
or 2.75 millimeters (0.076 inches or 0.108 inches) in thickness, 87.3 
millimeters or 99 millimeters (3.437 inches or 3.900 inches) in width, 
with a low carbon steel back comprised of: carbon under 8%, manganese 
under 0.4%, phosphorous under 0.04%, and sulfur under 0.05%; clad with 
aluminum alloy comprised of: 0.7% copper, 12% tin, 1.7% lead, 0.3% 
antimony, 2.5% silicon, 1% maximum total other (including iron), and 
remainder aluminum.
    Also excluded from this order are products meeting the following 
specifications: carbon steel coil or strip, clad with aluminum, 
measuring 1.75 millimeters (0.069 inches) in thickness, 89 millimeters 
or 94 millimeters (3.500 inches or 3.700 inches) in width, with a low 
carbon steel back comprised of: carbon under 8%, manganese under 0.4%, 
phosphorous under 0.04%, and sulfur under 0.05%; clad with aluminum 
alloy comprised of: 0.7% copper, 12% tin, 1.7% lead, 2.5% silicon, 0.3% 
antimony, 1% maximum total other (including iron), and remainder 
aluminum.
    Also excluded from this order are products meeting the following 
specifications: carbon steel coil or strip, measuring a minimum of and 
including 1.10mm to a maximum of and including 4.90mm in overall 
thickness, a minimum of and including 76.00mm to a maximum of and 
including 250.00mm in overall width, with a low carbon steel back 
comprised of: carbon under 0.10%, manganese under 0.40%, phosphorous 
under 0.04%, sulfur under 0.05%, and silicon under 0.05%; clad with 
aluminum alloy comprised of: under 2.51% copper, under 15.10% tin, and 
remainder aluminum as listed on the mill specification sheet.
    Also excluded from this order are products meeting the following 
specifications: (1) diffusion annealed, non-alloy nickel-plated carbon 
products, with a substrate of cold-rolled battery grade sheet 
(``CRBG'') with both sides of the CRBG initially electrolytically 
plated with pure, unalloyed nickel and subsequently annealed to create 
a diffusion between the nickel and iron substrate, with the nickel 
plated coating having a thickness of 0-5 microns per side with one side 
equaling at least 2 microns; and with the nickel carbon sheet having a 
thickness of from 0.004'' (0.10mm) to 0.030'' (0.762mm) and conforming 
to the following chemical specifications (%): C <= 0.08; Mn <= 0.45; P 
<= 0.02; S <= 0.02; Al <= 0.15; and Si <= 0.10; and the following 
physical specifications: Tensile = 65 KSI maximum; Yield = 32 - 55 KSI; 
Elongation = 18% minimum (aim 34%); Hardness = 85 - 150 Vickers; Grain 
Type = Equiaxed or Pancake; Grain Size (ASTM) = 7-12; Delta r value = 
aim less than +/- 0.2; Lankford value = [gteqt] 1.2.; and (2) next 
generation diffusion-annealed nickel plate meeting the following 
specifications: (a) nickel-graphite plated, diffusion annealed, tin-
nickel plated carbon products, with a natural composition mixture of 
nickel and graphite electrolytically plated to the top side of 
diffusion annealed tin-nickel plated carbon steel strip with a cold 
rolled or tin mill black plate base metal conforming to chemical 
requirements based on AISI 1006; having both sides of the cold rolled 
substrate electrolytically plated with natural nickel, with the top 
side of the nickel plated strip electrolytically plated with tin and 
then annealed to create a diffusion between the nickel and tin layers 
in which a nickel-tin alloy is created, and an additional layer of 
mixture of natural nickel and graphite then electrolytically plated on 
the top side of the strip of the nickel-tin alloy; having a coating 
thickness: top side: nickel-graphite, tin-nickel layer [gteqt] 1.0 
micrometers; tin layer only [gteqt] 0.05 micrometers, nickel-graphite 
layer only  0.2 micrometers, and bottom side: nickel layer 
[gteqt] 1.0 micrometers; (b) nickel-graphite, diffusion annealed, 
nickel plated carbon products, having a natural composition mixture of 
nickel and graphite electrolytically plated to the top side of 
diffusion annealed nickel plated steel strip with a cold rolled or tin 
mill black plate base metal conforming to chemical requirements based 
on AISI 1006; with both sides of the cold rolled base metal initially 
electrolytically plated with natural nickel, and the material then 
annealed to create a diffusion between the nickel and the iron 
substrate; with an additional layer of natural nickel-graphite then 
electrolytically plated on the top side of the strip of the nickel 
plated steel strip; with the nickel-graphite, nickel plated material 
sufficiently ductile and adherent to the substrate to permit forming 
without cracking, flaking, peeling, or any other evidence of 
separation; having a coating thickness: top side: nickel-graphite, tin-
nickel layer [gteqt] 1.0 micrometers; nickel-graphite layer [gteqt] 0.5 
micrometers; bottom side: nickel layer [gteqt] 1.0 micrometers; (c) 
diffusion annealed nickel-graphite plated products, which are cold-
rolled or tin mill black plate base metal conforming to the chemical 
requirements based on AISI 1006; having the bottom side of the base 
metal first electrolytically plated with natural nickel, and the top 
side of the strip then plated with a nickel-graphite composition; with 
the strip then annealed to create a diffusion of the nickel-graphite 
and the iron substrate on the bottom side; with the nickel-graphite and 
nickel plated material sufficiently ductile and adherent to the 
substrate to permit forming without cracking, flaking, peeling, or any 
other evidence of separation; having coating thickness: top side: 
nickel-graphite layer [gteqt] 1.0 micrometers; bottom side: nickel 
layer [gteqt] 1.0 micrometers; (d) nickel-phosphorous plated diffusion 
annealed nickel plated carbon product, having a natural composition 
mixture of nickel and phosphorus electrolytically plated to the top 
side of a diffusion annealed nickel plated steel strip with a cold 
rolled or tin mill black plate base metal conforming to the chemical 
requirements based on AISI 1006; with both sides of the base metal 
initially electrolytically plated with natural nickel, and the material 
then annealed

[[Page 19502]]

to create a diffusion of the nickel and iron substrate; another layer 
of the natural nickel-phosphorous then electrolytically plated on the 
top side of the nickel plated steel strip; with the nickel-phosphorous, 
nickel plated material sufficiently ductile and adherent to the 
substrate to permit forming without cracking, flaking, peeling or any 
other evidence of separation; having a coating thickness: top side: 
nickel-phosphorous, nickel layer [gteqt] 1.0 micrometers; nickel-
phosphorous layer [gteqt] 0.1 micrometers; bottom side: nickel layer 
[gteqt] 1.0 micrometers; (e) diffusion annealed, tin-nickel plated 
products, electrolytically plated with natural nickel to the top side 
of a diffusion annealed tin-nickel plated cold rolled or tin mill black 
plate base metal conforming to the chemical requirements based on AISI 
1006; with both sides of the cold rolled strip initially 
electrolytically plated with natural nickel, with the top side of the 
nickel plated strip electrolytically plated with tin and then annealed 
to create a diffusion between the nickel and tin layers in which a 
nickel-tin alloy is created, and an additional layer of natural nickel 
then electrolytically plated on the top side of the strip of the 
nickel-tin alloy; sufficiently ductile and adherent to the substrate to 
permit forming without cracking, flaking, peeling or any other evidence 
of separation; having coating thickness: top side: nickel-tin-nickel 
combination layer [gteqt] 1.0 micrometers; tin layer only [gteqt] 0.05 
micrometers; bottom side: nickel layer [gteqt] 1.0 micrometers; and (f) 
tin mill products for battery containers, tin and nickel plated on a 
cold rolled or tin mill black plate base metal conforming to chemical 
requirements based on AISI 1006; having both sides of the cold rolled 
substrate electrolytically plated with natural nickel; then annealed to 
create a diffusion of the nickel and iron substrate; then an additional 
layer of natural tin electrolytically plated on the top side; and again 
annealed to create a diffusion of the tin and nickel alloys; with the 
tin-nickel, nickel plated material sufficiently ductile and adherent to 
the substrate to permit forming without cracking, flaking, peeling or 
any other evidence of separation; having a coating thickness: top side: 
nickel-tin layer [gteqt] 1 micrometer; tin layer alone [gteqt] 0.05 
micrometers; bottom side: nickel layer [gteqt] 1.0 micrometer.
    Also excluded from this order are products meeting the following 
specifications: (1) widths ranging from 10 millimeters (0.394 inches) 
through 100 millimeters (3.94 inches); (2) thicknesses, including 
coatings, ranging from 0.11 millimeters (0.004 inches) through 0.60 
millimeters (0.024 inches); and (3) a coating that is from 0.003 
millimeters (0.00012 inches) through 0.005 millimeters (0.000196 
inches) in thickness and that is comprised of either two evenly applied 
layers, the first layer consisting of 99% zinc, 0.5% cobalt, and 0.5% 
molybdenum, followed by a layer consisting of phosphate, or three 
evenly applied layers, the first layer consisting of 99% zinc, 0.5% 
cobalt, and 0.5% molybdenum followed by a layer consisting of 
phosphate, and finally a layer consisting of silicate.

ANALYSIS

    In anti-circumvention cases we have historically analyzed several 
matters in determining if circumvention of the order is taking place. 
As part of our analysis, we look to the claims made in the 
circumvention inquiry request, and if during the review we find that 
those claims are not supported by the information on the record, then 
the existence of circumvention is called into question.
    In the Preliminary Determination of Circumvention of Antidumping 
Order; Cut-to-Length Carbon Steel Plate from Canada, the Department 
found that the order was being circumvented through the addition of 
boron. See Preliminary Determination of Circumvention of Antidumping 
Order; Cut-to-Length Carbon Steel Plate from Canada 65 FR 64926 
(October 31, 2000) (``Canadian Plate''). Although this current anti-
circumvention review also involves the addition of boron to merchandise 
which is subject to the order, each anti-circumvention review is highly 
dependent on the facts on the record, and must be analyzed in light of 
those specific facts. As we did in Canadian Plate, in this case we 
looked at the circumstances surrounding the products allegedly 
circumventing the order, including the timing of those entries during 
the review period and the total quantity of the merchandise entering 
the United States in determining whether the claims made in the 
circumvention inquiry request are correct. See Canadian Plate, 65 FR at 
64930. In addition, in the case of an allegation of a ``minor 
alteration'' claim under 781(c) of the Act, it is the Department's 
practice to look to five specific factors (see the Minor Alterations 
Factors section below) to determine if circumvention exists in a 
particular case. See Brass Sheet and Strip from Germany; Negative 
Preliminary Determination of Circumvention of Antidumping Duty Order, 
(``Brass Sheet'') 55 FR 32655, 32657 (August 10, 1990) and Electrical 
Conductor Aluminum Redraw Rod from Venezuela; Final Affirmative Scope 
Ruling, (``Electrical Conductor'') 56 FR 42310, 42310 (August 27, 
1991). After reviewing the allegations made in the circumvention 
inquiry request, the ``minor alteration'' factors and the information 
on the record, the Department has preliminarily determined that no 
circumvention of the order exists in this case.

Allegations in the Circumvention Inquiry Request

    Petitioner made several allegations in its request regarding the 
subject merchandise and the respondents' conduct. Petitioner alleged 
that the Japanese manufacturers of CRS added the allegedly 
``immaterial'' element, boron, to their product for the sole purpose of 
circumventing the antidumping duty order. See Petitioner's 
Circumvention Inquiry Request dated September 11, 1998 (``Request'') at 
page 7. Petitioner also claimed there were no metallurgical reasons for 
adding boron to CRS. See Request at page 10. Furthermore, petitioner 
alleged that imports into the United States of CRS to which boron had 
been added increased rapidly and substantially since the publication of 
the order. See Request at page 4.
    During the course of the review, the Department found that there 
are commercially and metallurgically viable reasons for the addition of 
boron in the context of the Continuous Annealing Process (``CAP''). In 
the production of CRS, there are essentially two types of annealing 
processes - batch annealing and the CAP. For the CRS producers which 
use the CAP, the addition of boron is not ``immaterial'' to the 
performance characteristics of the final product. This contrasts with 
our findings in Canadian Plate, in which the parties did not use the 
CAP or claim any benefit from the addition of boron with respect to the 
annealing process. Moreover, at verification the Department found 
nothing on the record inconsistent with a respondent's statement that 
the addition of boron helps the product be ``more consistent'' 
throughout the length and width of the coil, and also results in a more 
formable product, when used specifically in the CAP. See NSC's 
Verification Report at page 4. As such, the Department found 
commercially and metallurgically viable reasons for the addition of 
boron to CRS.
    Furthermore, the Department found that there were imports to the 
United States of boron-added CRS at the time the scope of the order was 
drafted and published by the Department. Also, the

[[Page 19503]]

Department found that the decision by some respondents for using the 
CAP and adding boron to that process was made in the 1970s and the 
1980s due to the CAP's shorter processing time. In addition, the 
Department found that, while other respondents determined that the 
addition of boron was beneficial following the publication of the 
order, such determinations were based upon scientific research and 
development. All of the respondents' research and development 
information which we reviewed showed that the addition of boron 
assisted the CAP, and therefore may have led to a more efficient 
production process. See, e.g., Exhibit 9 of NSC's Verification Report 
dated June 7, 2001.
    Petitioner also alleged, using data available to them through 1998, 
that the amount of CRS to which boron was added increased between 1996 
and June 1998. Petitioner projected that this rapid increase in alloy 
imports would continue into the foreseeable future. See Request at page 
4. In order to evaluate petitioner's allegation, we analyzed a broader 
historical view of the trade pattern and found that the increase of CRS 
boron-added imports was temporary. Additionally, data on the record 
shows that there was also an increase during the same time period for 
sales in the home market and third country markets, which suggests that 
the increase alleged by petitioner was unrelated to the existence of 
the CRS Order. The information on the record also reflects that 
currently only very small amounts of CRS boron-added imports are 
entering the Unites States from the two largest exporters of boron-
added CRS. See February 26, 2003, submission from NSC and NKK. The 
information on the record demonstrates that when viewed over the 
relevant time period, increases in CRS boron-added imports are not 
consistent with petitioner's allegation that circumvention of the order 
is taking place.

The Minor Alterations Factors

    The Department's standard practice in analyzing a claim of the 
existence of circumvention under section 781(c) of the Act is to review 
the following factors to determine if an article has been altered in 
form or appearance in minor respects so as to result in circumvention 
of the order: 1) overall physical characteristics; 2) expectations of 
the ultimate users; 3) use of the merchandise; 4) channels of 
marketing; and 5) cost of modification. See Brass Sheet, 55 FR 32657, 
Electrical Conductor, 56 FR 42310, and Canadian Plate, 65 FR 64926. In 
this case, we applied the factors and found that, for companies that 
use the CAP, the addition of boron is not a minor alteration.
    During the course of this inquiry the Department found that there 
are commercially and metallurgically viable reasons for the addition of 
boron when used in the CAP. The information on the record demonstrates 
that boron is beneficial to the overall physical characteristics of the 
final product. Additionally, the boron-added material performed better 
than the non-boron added CRS and was better able to meet specific 
expectations of the ultimate user. Although the cost of adding boron 
was not ``in and of itself'' significant, when taken into consideration 
with the research and development costs these companies expended to 
determine the benefits of adding boron to the CAP, the overall cost was 
significant. Finally, for the factor ``channels of marketing,'' we 
believe the boron-added products move in the same general channel as 
the subject merchandise of the order, however that has been the case 
since the inception of the CAP as boron was introduced to the product 
through the development of the CAP methodology. In this case, showing 
the same channels of marketing were used does not support a finding of 
circumvention. Also, the information on the record, including trade 
statistics, shows that the trade flow of these products was not altered 
by the order, as discussed above. Thus, taking all of these factors 
together, the Department has determined that there was no circumvention 
of the order by the companies reviewed in this case.

THE DEPARTMENT'S PRELIMINARY DECISION

    As shown by the analysis above, there are several factors that the 
Department may review to determine if an alteration is ``minor'', and 
therefore if circumvention exists. Notably, in every anti-circumvention 
case the Department investigates, the facts are different and some 
factors may appear to support a finding that an alteration is 
``minor,'' while others may not. Because anti-circumvention cases are 
extremely fact-specific, the Federal Circuit noted in this case that 
this inquiry would ``probably involve subtle distinctions and difficult 
economic issues relating to the nature of, the reason for and the 
effect of the changes NSC Steel made in its steel products.'' Nippon 
Steel Corporation, NKK, et al. v. United States, 219 F.3d 1348, 1354 
(July 26, 2000).
    In this case, the Department initiated the minor alteration inquiry 
based on information available to, and provided by, the petitioner at 
that time it filed its Request. After development of the record and 
consideration of all the information on the record, we preliminarily 
determine that many of the allegations made in the Request are not 
supported by the record. We have made this determination based on 
reviewing the information on the record regarding NSC, NKK, and Kobe, 
and also on the verification of NSC and NKK. NSC and NKK are the two 
largest exporters of this merchandise, use the CAP, and provided 
scientific, commercial, and historical explanations for the addition of 
boron to the CRS.
    The vast majority of merchandise which the Department reviewed in 
this case was boron-added CRS which was used in conjunction with the 
CAP. Kobe did not report to the Department exporting boron- added 
merchandise which had gone though the CAP. However, it did report a 
limited number of sales to one customer of batch annealed, boron-added 
CRS. Kobe's sales were limited in number and also did not reflect the 
surge alleged in the Request. Accordingly, we did not find 
circumvention with respect to any of the merchandise reviewed in this 
case. To the extent that the other Japanese producers of CRS have added 
boron to CRS, exclusive of the CAP, we have no evidence of such usage 
on the record.
    Additionally, after reviewing the data provided by five of the six 
respondents, we conclude that the universe of boron-added CRS from 
Japan has been fully reported. With respect to the volumes provided by 
petitioner in filing its request, the total reported data from all the 
responding companies exceeds the import volumes of the merchandise 
which petitioner identified in its request as problematic for 1996\3\ 
and 1998 and virtually all of these imports of boron-added CRS to the 
United States were produced by NSC and NKK, which were verified by the 
Department. Therefore, there is little likelihood of any significant 
volumes of relevant imports existing which have not been reported by 
other companies. Thus, for purposes of this review we have found no 
circumvention of CRS from Japan.
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    \3\ The volume reported by respondents for 1997 exceeded the 
amount the petitioner reported in its Request for that year. 
Petitioner's data for 1998 was only though June 1998, however when 
doubling that data, NKK and NSC combined imports still exceeded 
petitioner's estimate.
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PRELIMINARY DETERMINATION

    As a result of our inquiry, we have preliminarily determined that 
exports of boron-added corrosion-resistant carbon steel flat products 
from Japan are not circumventing the antidumping duty

[[Page 19504]]

order on corrosion-resistant carbon steel flat products from Japan.
    The evidence on the record of this inquiry, taken as a whole, leads 
to our preliminary determination that the United States imports of 
boron-added corrosion-resistant carbon steel flat products from the 
respondents were not minor alterations of the subject merchandise, 
within the meaning of section 781(c) of the Act. Pursuant to the 
Department's analysis, we believe these boron-added products have 
commercially and metallurgically viable reasons for the addition of 
boron.

Public Comment

    Interested parties are invited to comment on these preliminary 
results. Parties who submit argument in this proceeding are requested 
to submit with the argument (1) a statement of the issue, and (2) a 
brief summary of the argument. Parties to the proceedings may request a 
hearing within 14 days of publication. Any hearing, if requested, will 
be held no later than two days after the deadline for the submission of 
rebuttal briefs, or the first workday thereafter. Case briefs may be 
submitted by interested parties not later than 14 days after the date 
of publication of this notice. Pursuant to 19 CFR 351.309(d)(1), 
rebuttal briefs and rebuttals to written comments, limited to the 
issues raised in those comments, may be filed not later than five days 
after the deadline for submission of case briefs. All written comments 
shall be submitted in accordance with 19 C.F.R. 351.303 and shall be 
served on all interested parties on the Department's service list in 
accordance with 19 C.F.R. 351.303. Persons interested in attending the 
hearing should contact the Department for the date and time of the 
hearing.
    This determination is issued and published in accordance with 
section 781(c) of the Act and section 351.225(i) of the Department's 
regulations.

    Dated: April 14, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-9734 Filed 4-18-03; 8:45 am]
BILLING CODE 3510-DS-S