[Federal Register Volume 68, Number 137 (Thursday, July 17, 2003)]
[Notices]
[Pages 42393-42396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-18133]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-852]


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

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: Marin Weaver at (202) 482-2336, or 
Christopher C. Welty at (202) 482-8173; 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 the Republic of Korea (Korea) 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 margins assigned to Kiswire Ltd.\1\ 
(Kiswire) and Dong-Il Steel Mfg. Co. Ltd. (Dong-Il) are based on 
adverse facts available (AFA). The estimated margin of sales at LTFV is 
shown in the Suspension of Liquidation section of this notice.
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    \1\ In the Initiation Notice and the Respondent Selection Memo, 
the Department refered to Kiswire as Koryo Steel Company and Korean 
Iron and Steel Works Ltd., respectively. Upon further examination of 
the relevant record data the Department has determined that Kiswire 
Ltd. is a more accurate translation of the second largest Korean 
producer of PC strand.
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    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.\2\ 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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    \2\ 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 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 Kiswire and Dong-Il, specifying that their responses 
to Section A of the questionnaire would be due on April 25, 2003, and 
that responses to Sections B-D of the questionnaire would be due May 
12, 2003.\3\ On April 25, 2003, the Department received a letter from 
Dong-Il stating that it ``decided not to submit {its{time}  data and 
information required in {the Department's{time}  questionnaire for this 
Anti-Dumping case.'' See Dong-Il submission dated April 25, 2003. Dong-
Il provided no further elaboration, nor did it suggest alternatives to 
meet the Department's requirements pursuant to 782(c) of the Act. Id. 
On June 5, 2003, the Department sent a letter to Kiswire stating that 
we had not received its questionnaire response and informing Kiswire, 
that we had confirmed that it received the original questionnaire. See 
Letter from Department to Kiswire, dated June 5, 2003; see also, 
Memorandum from Christopher C. Welty, International Trade Compliance 
Analyst, to the File, Re: Federal Express tracking information, dated 
June 18, 2003. In the letter, the Department also informed Kiswire that 
its failure to provide the Department with the requested information 
could result in the use of the facts available and an inference that 
may be adverse to its interests. The Department did not receive a 
response from Kiswire to the Department's letter.
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    \3\ 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.

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[[Page 42394]]

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.
    Upon consideration of the resources available to the Department, we 
determined that it was not practicable to examine all known producers/
exporters of the subject merchandise. Instead, because there were 
numerous producers/exporters of subject merchandise during the period 
of investigation (POI), we examined company-specific export data and 
U.S. Bureau of Customs and Border Protection (BCBP) import data for the 
POI and selected as mandatory respondents the two companies that 
accounted for the majority of subject imports from Korea, Kiswire and 
Dong-Il. 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 AFA 
is appropriate for the preliminary determination with respect to 
Kiswire and Dong-Il.

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 sections 
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.
    As discussed above, Kiswire and Dong-Il failed to respond to the 
Department's request for information, thus the curative provisions of 
sections 782(d) and (e) of the Act are not applicable. Specifically, 
because the information that Kiswire and Dong-Il failed to report is 
critical for calculating preliminary dumping margins the Department 
must resort to facts otherwise available to ensure that Kiswire and 
Dong-Il do not obtain a more favorable result than they would by 
responding to the Department's request for information. The failure of 
Kiswire and Dong-Il to respond significantly impedes this process 
because the Department cannot accurately determine a margin for these 
parties. Thus, in reaching our preliminary determination, pursuant to 
sections 776(a)(2)(A), (B), and (C) of the Act, we have based Kiswire 
and Dong-Il'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, at 870 (1994) (SAA). Furthermore, ``{a{time} ffirmative 
evidence of bad faith on the part of 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, Kiswire and Dong-Il have failed to cooperate to the best 
of their ability by failing to respond to the Department's antidumping 
questionnaires. In addition, neither company made an effort to provide 
an explanation for its failure to respond, nor proposed an alternate 
form of submitting the required data. These omissions constitute a 
failure on the part of both of these companies to cooperate ``to the 
best of {their{time}  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

[[Page 42395]]

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 margins for 
any of the respondents in this investigation, we assign to Kiswire and 
Dong-Il the highest margin from the proceeding, which is the highest 
margin alleged for Korea in the petition, as recalculated in the 
initiation and described in detail below. See Initiation Notice, 68 FR 
at 9052-53.
    When using facts otherwise available, section 776(c) of the Act 
provides that, when the Department relies on secondary information 
(such as the petition) in using facts otherwise available, 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 export price (EP) and 
normal value (NV) calculations on which the margins in the petition 
were based. See Memorandum from Christopher C. Welty, International 
Trade Compliance Analyst, to Gary Taverman, Director Office 5, Re: 
Corroboration of Data Contained in the Petition for Assigning Facts 
Available Rates (Corroboration Memo), dated July 10, 2003.
1. Corroboration of Export Price
    The petitioners based EP on prices within the POI for sales of PC 
strand produced by two Korean companies and offered for sale to an 
unaffiliated U.S. customer. The petitioners averaged the gross prices, 
by company, and deducted from the average prices international freight 
and insurance expenses, U.S. customs duties, U.S. harbor maintenance 
and merchandise processing fees, and the U.S. inland freight expenses.
    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. See Corroboration Memo at 2.
2. Corroboration of Normal Value
    With respect to NV, the petitioners provided home market prices 
based on prices within the POI for sales of PC strand produced by two 
Korean companies and offered for sale to an unaffiliated customer in 
Korea. The price quotes are based on information gathered by a market 
researcher familiar with the Korean sales. See Memorandum to the File 
Re: Telephone Conversation with Market Researcher Regarding the 
Petitions for Imposition of Antidumping Duties: Prestressed Concrete 
Steel Wire Strand from Korea (February 11, 2003). To calculate the NV, 
the petitioners deducted inland freight from the home market prices 
and, consistent with our statutory EP circumstances-of-sale calculation 
methodology, adjusted the home market prices for imputed credit and 
commissions by deducting home market credit expenses from the home 
market prices and adding the U.S. imputed credit and U.S. commission 
expenses to these 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 Korea using publicly available data. To 
calculate SG&A and interest expenses, the petitioners relied upon 
amounts reported in the 2001 financial statements of Kiswire and Dong-
Il. 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 
and electricity 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 constructed value (CV) 
calculations to be based on the currency rates from the Import 
Administration website rather than on Federal Reserve Bank currency 
rates. See Initiation Checklist at 16 and Attachments II and III.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners based NV for sales in Korea on CV. The petitioners 
calculated CV using the same COM, SG&A and interest expense figures 
used to compute the Korean home market costs. Consistent with 773(e)(2) 
of the Act, the petitioners included in CV an amount for profit. The 
petitioners based Kiswire's profit ratio on amounts reported in 
Kiswire's 2001 financial statements. For Dong-Il, no profit margin was 
calculated because the company was not profitable in either 2001 or 
2000.
    The Department was provided with no useful information by the 
respondents or other interested parties and is aware of no other 
independent source of information that would enable it to further 
corroborate the margin calculations in the petition. Specifically, we 
attempted to locate both home market prices through publicly available 
sources and U.S. producer costs upon which the CV was based, but we 
were unable to do so. See Corroboration Memo at 3 and 4.
    The implementing regulation for section 776 of the Act, at 19 CFR 
351.308(d) states, ``{t{time} 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.''
    Therefore, based on our efforts, described above, to corroborate 
information contained in the petition,

[[Page 42396]]

and in accordance with 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 Kiswire and Dong-Il, 
we have applied the margin rate of 54.19 percent, which is the highest 
estimated dumping margin set forth in the notice of initiation. See 
Initiation Notice, 68 FR at 9053.

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 four 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 
based on a simple average. 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 margins 
and the price-to-CV margins from the initiation notice, which takes 
into account the Department's pre-initiation adjustments to the labor 
and utility values alleged in the petition. Therefore, we have 
calculated a margin of 35.64 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 Korea, 
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. These instructions suspending liquidation will remain in effect 
until further notice.
    The dumping margins are as follows:

------------------------------------------------------------------------
                                                              Margin
                    Producer/exporter                      (percentage)
------------------------------------------------------------------------
Kiswire Ltd.............................................           54.19
Dong-Il Steel Mfg. Co. Ltd..............................           54.19
All Others..............................................           35.64
------------------------------------------------------------------------

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 Korea 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.
    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. 03-18133 Filed 7-16-03; 8:45 am]
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