[Federal Register Volume 68, Number 137 (Thursday, July 17, 2003)]
[Notices]
[Pages 42389-42393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-18132]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-828]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Prestressed Concrete Steel Wire Strand From India

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

ACTION: Notice of Preliminary Determination of Sales at Less Than Fair 
Value.

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EFFECTIVE DATE: July 17, 2003.

FOR FURTHER INFORMATION CONTACT: Tisha Loeper-Viti at (202) 482-7425, 
or Martin Claessens at (202) 482-5451; AD/CVD Enforcement Office V, 
Group II, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Preliminary Determination

    We preliminarily determine that prestressed concrete steel wire 
strand (PC strand) from India is being sold, or is likely to be sold, 
in the United States at less than fair value (LTFV), as provided in 
section 733 of the Tariff Act of 1930, as amended (the Act). The 
preliminary margin assigned to Tata Iron and Steel Co. Ltd. is based on 
adverse facts available (AFA). The estimated margin of sales at LTFV is 
shown in the Suspension of Liquidation section of this notice.
    Interested parties are invited to comment on this preliminary 
determination. We will make our final determination not later than 75 
days after the date of this preliminary determination.

Case History

    This investigation was initiated on February 20, 2003.\1\ See 
Notice of Initiation of Antidumping Duty Investigations: Prestressed 
Concrete Steel Wire Strand From Brazil, India, the Republic of Korea, 
Mexico, and Thailand, 68 FR 9050 (February 27, 2003) (Initiation 
Notice). Since the initiation of the investigation, the following 
events have occurred:
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    \1\ The petitioners in this investigation are American Spring 
Wire Corp., Insteel Wire Products Company, and Sumiden Wire Products 
Corp.
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    The U.S. Department of Commerce (the Department) set aside a period 
for all interested parties to raise issues regarding product coverage. 
See Initiation Notice, 68 FR at 9050. No comments were received from 
interested parties in this investigation.
    The Department issued a letter on March 7, 2003, to interested 
parties in all of the concurrent PC strand antidumping investigations, 
providing an opportunity to comment on the Department's proposed model 
match characteristics and its hierarchy of characteristics. The 
petitioners submitted comments on March 18 and 20, 2003. The Department 
also received comments on model matching from respondents in the 
concurrent investigation involving Mexico on March 18, 2003. These 
comments were taken into consideration by the Department in developing 
the model matching characteristics and hierarchy for all of the PC 
strand antidumping investigations.
    On March 17, 2003, the United States International Trade Commission 
(ITC) preliminarily determined that there is a reasonable indication 
that imports of the products subject to this investigation are 
materially injuring an industry in the United States producing the 
domestic like product. See Prestressed Concrete Steel Wire Strand From 
Brazil, India, Korea, Mexico, and Thailand, 68 FR 13952 (March 21, 
2003).
    On April 4, 2003, the Department issued its antidumping 
questionnaire to Tata SSL Ltd.\2\ The Department was subsequently 
informed that Tata SSL Ltd. had been retroactively amalgamated with 
Tata Iron and Steel Co. Ltd. (TISCO) and was now known as TISCO (Wire 
Division).\3\ We received responses to Sections A-D of the antidumping 
questionnaire from TISCO and issued it supplementary questionnaires 
where appropriate. TISCO failed to respond to the Department's second 
supplemental Section D questionnaire, issued on July 1, 2003, in which 
the Department

[[Page 42390]]

requested detailed information and supporting documentation regarding 
the company's costs of production. (See, Facts Available section of 
this notice for a discussion as to why TISCO's Section D response was 
deemed unuseable for this preliminary determination.)
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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 cases). Section C requests a complete listing of U.S. sales. 
Section D requests information on the cost of production of the 
foreign like product and the constructed value of the merchandise 
under investigation. Section E requests information on further 
manufacturing.
    \3\ On May 3, 2003, the respondent notified the Department that 
under a ``Scheme of Amalgamation,'' Tata SSL Ltd. and Tata Iron and 
Steel Co. Ltd. were united as a single company, with Tata SSL Ltd. 
becoming known as Tata Iron and Steel Co. Ltd. (Wire Division). This 
amalgamation was approved by the High Court of Judicature at Bombay 
on April 21, 2003 with an effective date retroactive to April 1, 
2002.
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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 reasonably be examined.
    In the petition, the petitioners identified five producers of PC 
strand in India. We examined company-specific export data obtained from 
the U.S. Bureau of Customs and Border Protection (BCBP), the Iron and 
Steel Works of the World (14th ed.), and the Tata Group's websites 
which indicate that Tata SSL is the only producer of the subject 
merchandise within the Tata Group during the period of investigation 
(POI). Furthermore, we have no evidence suggesting that any other 
Indian company is exporting PC strand to the United States. See 
memorandum from Daniel O'Brien, International Trade Compliance Analyst, 
to Gary Taverman, Director, Office 5, Re: Selection of Respondents, 
dated April 4, 2003.

Period of Investigation

    The POI is January 1, 2002, through December 31, 2002. This period 
corresponds to the four most recent fiscal quarters prior to the month 
of filing of the petition (i.e., January, 2003) involving imports from 
a market economy, and is in accordance with our regulations. See 19 CFR 
351.204(b)(1).

Scope of Investigation

    For purposes of this investigation, PC strand is steel strand 
produced from wire of non-stainless, non-galvanized steel, which is 
suitable for use in prestressed concrete (both pretensioned and post-
tensioned) applications. The product definition encompasses covered and 
uncovered strand and all types, grades, and diameters of PC strand.
    The merchandise under investigation is currently classifiable under 
subheadings 7312.10.3010 and 7312.10.3012 of the Harmonized Tariff 
Schedule of the United States (HTSUS). Although the HTSUS subheadings 
are provided for convenience and customs purposes, the written 
description of the merchandise under investigation is dispositive.

Facts Available

    For the reasons discussed below, we determine that the use of 
adverse facts available is appropriate for the preliminary 
determination with respect to TISCO.

A. Use of Facts Available

    Section 776(a)(2) of the Act provides that, if an interested party 
withholds information requested by the Department, fails to provide 
such information by the deadline or in the form or manner requested, 
significantly impedes a proceeding, or provides information which 
cannot be verified, the Department shall use, subject to section 782(d) 
and (e) of the Act, facts otherwise available in reaching the 
applicable determination. Section 782(d) of the Act provides that if 
the Department determines that a response to a request for information 
does not comply with the Department's request, the Department shall 
promptly inform the responding party and provide an opportunity to 
remedy the deficient submission. Section 782(e) of the Act further 
states that 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.
    In this case, TISCO has failed to provide pertinent information 
requested by the Department necessary to properly calculate an 
antidumping margin for its preliminary determination. Specifically, 
TISCO failed to provide the requested detailed cost of manufacturing 
information for the steel wire rod input used to produce the subject 
merchandise. In addition, TISCO failed to provide the following 
requested information, all of which was pertinent to the Department's 
calculations: (1) A description of the steel making and wire rod 
production facilities' normal cost accounting system and how it is used 
to record, classify, aggregate, and allocate the costs incurred to 
produce different grades and dimension of products; (2) a description 
of the level of product specificity over which the steel making and 
wire rod production facilities' cost accounting system normally 
captures production costs; (3) an explanation of how the product 
specific costs recorded in the steel making and wire rod production 
facilities' normal accounting system compare to the reported cost data; 
(4) a listing and description of all differences between costs computed 
under respondents normal steel making and wire rod production cost and 
financial accounting systems and the reported costs, including an 
explanation of why it was necessary to depart from respondent's normal 
accounting practices in order to compute the submitted COP and 
constructed value (CV) figures; (5) an indication of whether its steel 
making and wire rod facilities utilized inputs obtained from affiliated 
suppliers; (6) a description of the company's steel making and wire rod 
production facilities; and (7) a copy of either the audited financial 
statements for the year ended March 31, 2003, or if not yet available, 
a copy of the draft financial statements for the same period. The cost 
of steel wire rod constitutes a significant percentage of the total 
cost of manufacturing the subject merchandise, and detailed information 
on the steelmaking and rolling stages of the wire rod production 
process is critical for the Department to analyze adequately the 
reported cost information. As a result of TISCO's failure to provide 
the above requested information, the Department is unable to use the 
reported steel wire rod cost of manufacturing data. Thus, in reaching 
our preliminary determination, pursuant to sections 776(a)(2)(A), (B), 
and (C) of the Act, we have based TISCO's margin rate on facts 
available.

B. Application of Adverse Inferences for Facts Available

    In applying facts otherwise available, section 776(b) of the Act 
provides that the Department may use an inference adverse to the 
interests of a party that has failed to cooperate by not acting to the 
best of its ability to comply with the Department's requests for 
information. See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value and Final Negative Critical Circumstances: Carbon and 
Certain Alloy Steel Wire Rod from Brazil, 67 FR 55792, 55794-96 (August 
30, 2002). Adverse inferences are appropriate ``to ensure that the 
party does not obtain a more favorable result by failing to cooperate 
than if it had cooperated fully.'' See Statement of Administrative 
Action accompanying the Uruguay Round Agreements Act, H.R. Rep. No. 
103-316,

[[Page 42391]]

at 870 (1994) (SAA). Furthermore, ``{affirmative{time}  evidence of bad 
faith on the part of a respondent is not required before the Department 
may make an adverse inference.'' See Antidumping Countervailing Duties: 
Final Rule, 62 FR 27296, 27340 (May 19, 1997).
    In this case, TISCO has failed to timely provide a complete and 
useable response to the Department's Section D questionnaires, which 
included two supplemental questionnaires. The original questionnaire 
was issued on April 4, 2003, to which TISCO submitted its Section D 
response on May 27, 2003. In order to address the deficiencies in 
TISCO's response, the Department issued the first supplemental Section 
D questionnaire on June 6, 2003. TISCO's response was received on June 
24 and 25, 2003. On July 1, 2003, the Department issued the second 
supplemental section D questionnaire, once again requesting detailed 
cost of manufacturing information for the steel wire rod input used to 
produce the subject merchandise, in addition to numerous other 
important methodological inquires. In this questionnaire we noted that 
in its previous submission, TISCO failed to provide the requested 
detailed cost of manufacturing for the steel wire rod used to produce 
the subject merchandise, and that this information is necessary for the 
Department to analyze adequately the response.
    We established July 7, 2003, as the due date for the second 
supplemental section D questionnaire in order to allow the Department 
adequate time to analyze the response and to incorporate it into the 
calculation of the dumping margin for the preliminary determination. 
TISCO, however, having been informed of the importance of the requested 
information for the Department's analysis, failed to respond, even 
after the Department had granted it another extension of the deadline, 
i.e., until July 9, 2003. TISCO's failure to provide this critical 
information in a timely manner has rendered its entire submission 
inadequate and unusable for the preliminary determination. This 
constitutes a failure on the part of this company to cooperate ``to the 
best of its ability to comply with a request for information'' by the 
Department within the meaning of section 776 of the Act. Therefore, the 
Department has preliminarily determined that in selecting from among 
the facts otherwise available, an adverse inference is warranted. See, 
e.g., Notice of Final Determination of Sales at Less than Fair Value: 
Circular Seamless Stainless Steel Hollow Products from Japan, 65 FR 
42985, 42986 (July 12, 2000) (the Department applied total AFA where 
respondent failed to respond to the antidumping questionnaires).

C. Selection and Corroboration of Information Used as Facts Available

    Where the Department applies AFA because a respondent failed to 
cooperate by not acting to the best of its ability to comply with a 
request for information, section 776(b) of the Act authorizes the 
Department to rely on information derived from the petition, a final 
determination, a previous administrative review, or other information 
placed on the record. See also 19 CFR 351.308(c); SAA at 829-831. In 
this case, because we are unable to calculate a margin based on TISCO's 
own data and because an adverse inference is warranted, we assign to 
TISCO the highest margin from the proceeding, which is the highest 
margin alleged for India in the petition, as recalculated in the 
initiation and described in detail below. See Initiation Notice, 68 FR 
at 9052.
    When using facts otherwise available, section 776(c) of the Act 
provides that, when the Department relies on secondary information 
(such as the petition), it must, to the extent practicable, corroborate 
that information from independent sources that are reasonably at its 
disposal. 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 Department's regulations 
state 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 19 CFR 351.308(d); see also 
SAA at 870.
    To assess the reliability of the petition margin for the purposes 
of this investigation, to the extent appropriate information was 
available, we reviewed the adequacy and accuracy of the information in 
the petition for both this preliminary determination and during our 
pre-initiation analysis. See Office of AD/CVD Enforcement Initiation 
Checklist, at 15 (February 20, 2003) (Initiation Checklist). Also, as 
discussed below, we examined evidence supporting the calculations in 
the petition to determine the probative value of the margins in the 
petition for use as AFA for purposes of this preliminary determination. 
In accordance with section 776(c) of the Act, to the extent 
practicable, we examined the key elements of the constructed export 
price (CEP) and normal value (NV) calculations on which the margins in 
the petition were based. See Memorandum from Martin Claessens, 
International Trade Compliance Analyst, to Gary Taverman, Director, 
Office 5, Re: Corroboration of Data Contained in the Petition for 
Assigning Facts Available Rates, dated July 10, 2003 (Corroboration 
Memo).
1. Corroboration of Constructed Export Price
    The petitioners based CEP on prices for sales of PC strand from an 
Indian producer, through its U.S. affiliate, to an unaffiliated U.S. 
purchaser. The petitioners calculated U.S. price by subtracting imputed 
credit expenses, international freight and insurance, U.S. merchandise 
processing and harbor maintenance fees, and U.S. inland freight. The 
petitioners also subtracted an amount for commissions.
    We compared the U.S. market price quotes with official U.S. import 
statistics and U.S. customs data, and found the prices used by the 
petitioners to be reliable.
2. Corroboration of Normal Value
    With respect to the NV, the petitioners provided a home market 
price for low-relaxation PC strand that was obtained from foreign 
market research. See Memorandum to the File Re: Telephone Conversation 
with Market Researcher Regarding the Petitions for Imposition of 
Antidumping: Prestressed Concrete Steel Wire Strand from India, dated 
February 7, 2003. To calculate the NV, the petitioners deducted imputed 
credit expenses and inland freight from the home market prices.
    The petitioners also provided information demonstrating reasonable 
grounds to believe or suspect that sales of PC strand in the home 
market were made at prices below the fully absorbed cost of production 
(COP), within the meaning of section 773(b) of the Act, and requested 
that the Department conduct a country-wide sales-below-cost 
investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the cost 
of manufacturing (COM), selling, general, and administrative (SG&A) 
expenses, financial expenses, and packing expenses. The petitioners 
calculated COM based on their own production experience, adjusted for 
known differences between costs incurred to produce PC strand products 
in the United States and India using publicly available data. To 
calculate SG&A, the petitioners relied upon amounts

[[Page 42392]]

reported in the March 31, 2002 financial statements of Tata SSL Ltd. To 
calculate interest expense, the petitioners relied upon the March 31, 
2002 financial statements of TISCO. Based upon a comparison of the 
price of the foreign like product in the home market to the calculated 
COP of the product, we found reasonable grounds to believe or suspect 
that sales of the foreign like product were made below the COP, within 
the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly, the 
Department initiated a country-wide cost investigation. For initiation 
purposes and for the purposes of this preliminary determination, we 
recalculated the labor costs by first indexing the costs in the foreign 
denominated currency and then converting the costs to U.S. dollars 
based on the prevailing exchange rate for the comparison period. In 
addition, we adjusted the petitioners' COP and CV calculations to be 
based on the currency rates from the Import Administration website 
rather than on Federal Reserve Bank currency rates. Finally, we have 
recalculated G&A and interest to remove allocations of certain expenses 
between COM and SG&A. To be conservative, we have reclassified all 
amounts where allocations were made, as COM. See Initiation Checklist 
at 14 and Attachments II, III, IV, V and VI.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners based NV on CV. The petitioners calculated CV using the 
same COM, SG&A and interest expense figures used to compute the India 
home market costs. Consistent with 773(e)(2) of the Act, the 
petitioners included in CV an amount for profit. For profit, the 
petitioners relied upon amounts reported in Tata SSL Ltd.''s March 31, 
2002 financial statements.
    The implementing regulation for section 776 of the Act, at 19 CFR 
351.308(d), states, ``[t]he fact that corroboration may not be 
practicable in a given circumstance will not prevent the Secretary from 
applying an adverse inference as appropriate and using the secondary 
information in question.'' Additionally, we note that the SAA at 870 
specifically states that, where ``corroboration may not be practicable 
in a given circumstance,'' the Department need not ``prove that the 
facts available are the best alternative.'' There are no independent 
sources for the cost data used to calculated the CV in the petition. 
Where relevant information was available from TISCO's audited financial 
statements, that information was used in the calculation of CV.
    Therefore, based on our efforts, described above, to corroborate 
information contained in the petition, and in accordance with section 
776(c) of the Act, we consider the margins in the petition to be 
corroborated to the extent practicable for purposes of this preliminary 
determination.
    Accordingly, in selecting AFA with respect to TISCO, we have 
applied the margin rate of 102.07 percent, which is the highest 
estimated dumping margin set forth in the notice of initiation. See 
Initiation Notice, 68 FR at 9052.

D. All Others Rate

    Section 735(c)(5)(B) of the Act provides that, where the estimated 
weighted-averaged dumping margins established for all exporters and 
producers individually investigated are zero, 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. This 
provision contemplates that we weight-average margins other than zero, 
de minimis, and facts available margins to establish that ``All 
Others'' rate. Where the data do not permit weight-averaging such 
rates, the SAA provides that we use other reasonable methods. See SAA 
at 873. Because the petition contained five estimated dumping margins 
which we subsequently adjusted in our pre-initiation analysis, we have 
used these adjusted dumping margins to create an ``All Others'' rate. 
See, e.g., Notice of Preliminary Determination of Sales at Less Than 
Fair Value: Polyvinyl Alcohol from Germany, 68 FR 7980, 7983 (February 
19, 2003). Specifically, in this case we have used the simple average 
of both the price-to-price margin and the price-to-constructed value 
margin from the initiation notice, which takes into account the 
Department's pre-initiation adjustments as described above under Normal 
Value. Therefore, we have calculated a margin of 83.65 percent as the 
``All Others'' rate.

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing 
the BCBP to suspend liquidation of all entries of PC strand from India, 
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 the BCBP to require a cash deposit or the 
posting of a bond equal to the dumping margin as indicated in the chart 
below, adjusted for export subsidies found in the preliminary 
determination of the companion countervailing duty investigation. 
Specifically, consistent with our longstanding practice, where the 
product under investigation is also subject to a concurrent 
countervailing duty investigation, we instruct the BCBP to require a 
cash deposit or posting of a bond equal to the amount by which the 
normal value exceeds the CEP, as indicated below, less the amount of 
the countervailing duty determined to constitute an export subsidy. 
Accordingly, for cash deposit purposes, we are subtracting from TISCO's 
cash deposit rate that portion of the rate attributable to the export 
subsidies found in the affirmative countervailing duty determination 
for this respondent (i.e., 34.99 percent). After the adjustment for the 
cash deposit rate attributed to export subsidies, the resulting cash 
deposit rate will be 67.08 for TISCO and 48.66 for ``All Others.'' 
These instructions suspending liquidation will remain in effect until 
further notice.
    The dumping margins are as follows:

------------------------------------------------------------------------
                                                                Margin
                     Producer/exporter                      (percentage)
------------------------------------------------------------------------
Tata Iron and Steel Co. Ltd...............................      102.07
All Others................................................       83.65
------------------------------------------------------------------------

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of the Department's preliminary affirmative determination. If the 
final determination in this proceeding is affirmative, the ITC will 
determine before the later of 120 days after the date of this 
preliminary determination or 45 days after the final determination 
whether imports of PC strand from India are materially injuring, or 
threaten material injury, to the U.S. industry.

Public Comment

    Interested parties are invited to comment on the preliminary 
determination. Interested parties may submit case briefs within 30 days 
of the date of publication of this notice. See 19 CFR 351.309(c)(1)(i). 
Rebuttal briefs, the content of which is limited to the issues raised 
in the case briefs, must be filed within five days after the deadline 
for the submission of case briefs. See 19 CFR 351.309(d). 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. Further, we request that parties submitting briefs and 
rebuttal briefs provide the Department with a copy of the public 
version of such briefs on diskette.

[[Page 42393]]

    In accordance with section 774 of the Act, we will hold a public 
hearing, if requested, to afford interested parties an opportunity to 
comment on arguments raised in case or rebuttal briefs. If a request 
for a hearing is made, we will tentatively hold the hearing two days 
after the deadline for submission of rebuttal briefs at the U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230, at a time and in a room to be determined. Parties 
should confirm by telephone the date, time, and location of the hearing 
48 hours before the scheduled date.
    Interested parties who wish to request a hearing, or to participate 
in a hearing if one is requested, must submit a written request to the 
Assistant Secretary for Import Administration, U.S. Department of 
Commerce, Room 1870, within 30 days of the date of publication of this 
notice. Requests should contain: (1) The party's name, address, and 
telephone number; (2) the number of participants; and (3) a list of the 
issues to be discussed. At the hearing, oral presentations will be 
limited to issues raised in the briefs. See 19 CFR 351.310(c). The 
Department will make its final determination no later than 75 days 
after the date of this preliminary determination.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: July 10, 2003.
Jeffrey May,
Acting Assistant Secretary for Grant Aldonas, Under Secretary.
[FR Doc. 03-18132 Filed 7-16-03; 8:45 am]
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