[Federal Register Volume 69, Number 70 (Monday, April 12, 2004)]
[Notices]
[Pages 19153-19161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8245]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-829]


Stainless Steel Wire Rod from the Republic of Korea: Final 
Results of Antidumping Duty Administrative Review

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

[[Page 19154]]


ACTION: Notice of final results of antidumping duty administrative 
review.

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SUMMARY: On October 7, 2003, the Department of Commerce (the 
Department) published in the Federal Register the preliminary results 
of the 2001-2002 administrative review of the antidumping duty order on 
stainless steel wire rod (SSWR) from the Republic of Korea (Korea). 
This review covers a collapsed entity that consists of Changwon 
Specialty Steel Co., Ltd. (Changwon), Dongbang Special Steel Co., Ltd. 
(Dongbang), and Pohang Iron and Steel Co., Ltd. (POSCO) (collectively 
the respondent). The period of review (POR) is September 1, 2001, 
through August 31, 2002.
    We provided interested parties with an opportunity to comment on 
the preliminary results of review. After analyzing the comments 
received, we made changes to the preliminary margin calculations. 
Therefore, the final weighted-average dumping margin for the companies 
under review differs from the margin published in the preliminary 
results of review. The final weighted-average dumping margin is listed 
below in the section entitled ``Final Results of Review.

EFFECTIVE DATE: April 12, 2004.

FOR FURTHER INFORMATION CONTACT: Karine Gziryan or Howard Smith, Office 
of AD/CVD Enforcement, Group II, Office 4, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone 
(202) 482-4081 and (202) 482-5193, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On October 7, 2003, the Department of Commerce (the Department) 
published in the Federal Register the preliminary results of the 2001-
2002 administrative review of the antidumping duty order on SSWR from 
Korea. See Stainless Steel Wire Rod From the Republic of Korea: 
Preliminary Results of Antidumping Duty Administrative Review, 68 FR 
57879 (Preliminary Results). On November 7, 2003, and November 14, 
2003, respectively, the respondent and the petitioners, Carpenter 
Technology Corp. and Empire Specialty Steel, submitted case and 
rebuttal briefs. No party requested a hearing.
    The Department has conducted this administrative review in 
accordance with section 751 of the Tariff Act of 1930, as amended (the 
Act).

Scope of the Order

    For purposes of the order, SSWR comprises products that are hot-
rolled or hot-rolled annealed and/or pickled and/or descaled rounds, 
squares, octagons, hexagons or other shapes, in coils, that may also be 
coated with a lubricant containing copper, lime or oxalate. SSWR is 
made of alloy steels containing, by weight, 1.2 percent or less of 
carbon and 10.5 percent or more of chromium, with or without other 
elements. These products are manufactured only by hot-rolling or hot-
rolling annealing, and/or pickling and/or descaling, are normally sold 
in coiled form, and are of solid cross-section. The majority of SSWR 
sold in the United States is round in cross-sectional shape, annealed 
and pickled, and later cold-finished into stainless steel wire or 
small-diameter bar. The most common size for such products is 5.5 
millimeters or 0.217 inches in diameter, which represents the smallest 
size that normally is produced on a rolling mill and is the size that 
most wire-drawing machines are set up to draw. The range of SSWR sizes 
normally sold in the United States is between 0.20 inches and 1.312 
inches in diameter.
    Two stainless steel grades are excluded from the scope of the 
order. SF20T and K-M35FL are excluded. The chemical makeup for the 
excluded grades is as follows:


------------------------------------------------------------------------
 
------------------------------------------------------------------------
                                  SF20T
 
Carbon...................................  0.05 max.
Manganese................................  2.00 max.
Phosphorous..............................  0.05 max.
Sulfur...................................  0.15 max.
Silicon..................................  1.00 max.
Chromium.................................  19.00/21.00.
Molybdenum...............................  1.50/2.50.
Lead-added...............................  (0.10/0.30).
Tellurium-added..........................  (0.03 min).
                                 K-M35FL
 
Carbon...................................  0.015 max.
Silicon..................................  0.70/1.00.
Manganese................................  0.40 max.
Phosphorous..............................  0.04 max.
Sulfur...................................  0.03 max.
Nickel...................................  0.30 max.
Chromium.................................  12.50/14.00.
Lead.....................................  0.10/0.30.
Aluminum.................................  0.20/0.35.
------------------------------------------------------------------------

    The products subject to the order are currently classifiable under 
subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 7221.00.0045, and 
7221.00.0075 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 scope of the order 
is dispositive.

Duty Absorption

    In the Preliminary Results, the Department found that the collapsed 
entity POSCO/Changwon/Dongbang absorbed antidumping duties on all U.S. 
sales made through its affiliated importer. No parties commented on 
this preliminary decision. For the final results of review, we continue 
to find that POSCO/Changwon/Dongbang absorbed antidumping duties.

Analysis of Comments Received

Section 201 Duties

    As noted in the Preliminary Results, because the Department has not 
previously addressed the appropriateness of deducting section 201 
duties from export price (EP) and constructed export price (CEP), on 
September 9, 2003, the Department published a request for public 
comments on this issue. See Notice of Antidumping Proceedings: 
Treatment of Section 201 Duties and Countervailing Duties, 68 FR 53104 
(Sep. 9, 2003). In response to this request, the Department received 
comments from numerous parties. In addition, the petitioners and 
respondent submitted comments on the record of the instant review 
regarding the appropriateness of deducting section 201 duties from EP 
and CEP.
    The petitioners argue that the statute requires deduction from U.S. 
price of increased customs duties as a result of the President's 
section 201 determination. The petitioners maintain that section 772(c) 
of the Act instructs that EP and CEP should be reduced by ``the amount, 
if any, included in such price, attributable to any additional costs, 
charges, or expenses, and United States import duties, which are 
incident to bringing the subject merchandise from the original place of 
shipment in the exporting country to the place of delivery in the 
United States * * * (772(c)(2)(A)) (19 U.S.C. 1677a(c)(2)(A))'' 
(emphasis added). The petitioners contend that because this provision 
requires the Department to deduct ``any'' United States import duties 
that are incident to the transactions, and does not explicitly or 
implicitly exempt section 201 duties, the Department must deduct 
section 201 duties from EP and CEP in the margin calculation. The 
petitioners state that the Department enjoys no Chevron deference in 
this regard as section 201 duties are plainly ``United States import 
duties.'' See Chevron U.S.A. Inc. v. Natural Resources Defense Council, 
467 U.S. 837 (1984).
    Moreover, the petitioners maintain that even though the Department 
has never directly addressed the issue of

[[Page 19155]]

how to treat section 201 duties in any final determination, there is 
precedent supporting the deduction of section 201 duties from U.S. 
price in the margin calculation. The petitioners note that in Softwood 
Lumber From Canada, the Department deducted from U.S. price the quota-
based fee on lumber that was imposed under the Softwood Lumber 
Agreement (SLA). See Notice of Preliminary Determination of Sales at 
Less Than Fair Value and Postponement of Final Determination: Softwood 
Lumber From Canada, 66 FR 56062, 56067 (Nov. 6, 2001) (Softwood Lumber 
From Canada). According to the petitioners, this quota-based fee 
operates much the same as the 201 duties operate in this case. Further, 
the petitioners claim that section 201 duties are as much United States 
import tariffs as the ``special tariff'' that the Department deducted 
from the U.S. price in Fuel Ethanol from Brazil. See Notice of Final 
Determination of Sales at Less Than Fair Value: Fuel Ethanol from 
Brazil, 51 FR 5572 (Feb. 14, 1986) (Fuel Ethanol from Brazil) (in which 
the Department deducted from U.S. price additional duties over the 
existing ad valorem tariff for a particular type of ethyl alcohol).
    Additionally, the petitioners state that past and current U.S. 
administrations have considered section 201 duties to simply be an 
increase in the normally applicable ad valorem customs duties. Thus, 
according to the petitioners, failing to deduct section 201 duties from 
U.S. price will directly contradict the characterization of these 
duties by several Administrations that have imposed the duties.
    Furthermore, the petitioners note that the 2003 Harmonized Tariff 
Schedule (HTS) treats section 201 duties as a temporary modification to 
the regular customs duties. Consistent with the description of section 
201 duties in the Presidential Proclamation No. 7529, 67 FR 10553 (Mar. 
5, 2002) (Presidential Proclamation) and the head notes to the chapter, 
HTS Chapter 99 first identifies the existing (i.e., normal) tariff rate 
for each product covered by the safeguard action and then simply notes 
an increase of 15 percent (e.g., the duty stated in HTS Chapter 72 plus 
15 percent). Thus, the petitioners claim that for U.S. Customs and 
Border Protection's (CBP) purposes, section 201 duties, while temporary 
in duration, are like any other applicable duty assessed upon 
importation, such as the Most Favored Nation (MFN) \1\ duty rate or 
harbor maintenance fees. Also, the petitioners note that CBP 
regulations are instructive on this point and they clearly spell out 
the difference between regular and ``special duties.'' Specifically, 
the petitioners point out that 19 CFR 159, subpart D, includes a 
category entitled ``special duties,'' which include antidumping and 
countervailing duties while it does not include section 201 duties. 
Therefore, the petitioners conclude that for purposes of customs law, 
section 201 duties are regular duties. The petitioners also note that 
there is nothing in the antidumping statute or the Department's 
regulations that indicate that duties under section 201 should be 
treated any differently than ad valorem duties with respect to the 
Department's margin calculations.
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    \1\ As of 1998, Most Favored-Nation (MFN) status was changed to 
Normal Trade Relations (NTR) status.
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    In addition, the petitioners contend that there is no legal support 
for considering section 201 duties to be like antidumping (AD) duties, 
which are not deducted from U.S. price in margin calculations. As 
explained in Federal Mogul v. United States, 813 F. Supp. 856 (Ct. 
Int'l Trade 1993), there is a clear distinction between import duties 
that can be accurately determined and which are deducted from U.S. 
price in determining the dumping margin, and AD duties deposits which 
are estimated amounts that may not bear any relationship to the actual 
duties owed. Further, the petitioners assert that by making this 
distinction between AD duties and other import duties, the Department 
intended for all other import duties, where deposits of the actual 
normal import duties owed can be accurately determined, to be deducted 
from U.S. price. The petitioners argue that in both Hoogovens Staal v. 
United States, 4 F. Supp. 2d 1213, 1220 (Ct. Int'l Trade 1998) and 
Bethlehem Steel v. United States, 27 F. Supp. 2d 201, 208 (Ct. Int'l 
Trade 1998), the Court justified the agency's policy of not deducting 
AD duties on the basis that such duties were unique because they 
reflected estimates of the level of price discrimination.
    Furthermore, the petitioners assert that the deduction of section 
201 duties from U.S. price does not constitute double counting, which 
is another reason that has been given for the Department's policy 
against deducting from U.S. price. Specifically, petitioners argue that 
section 201 duties are imposed to offset injury resulting from import 
competition while AD duties are imposed to offset the amount of price 
discrimination between relevant markets.
    Lastly, the petitioners argue that the deduction of section 201 
duties from U.S. price is required to maintain the effectiveness of 
both the section 201 relief and the antidumping duty order. If foreign 
producers and their affiliated importers absorb section 201 duties by 
effectively lowering their U.S. prices and these duties have not been 
subtracted from U.S. price, the petitioners contend that the amount of 
dumping will be understated and the domestic industry will not benefit 
by the section 201 relief. Alternatively, the petitioners argue that 
the failure to deduct section 201 duties from U.S. price would result 
in an unfair comparison of U.S. price and normal value because the U.S. 
price would contain a duty that is not part of normal value. Therefore, 
the petitioners argue, the failure to subtract section 201 duties from 
U.S. price in margin calculations will either negate the section 201 
relief or replace the relief granted under the antidumping duty 
provisions with the section 201 relief. The petitioners contend that 
there is nothing in the Presidential Proclamation that authorizes such 
a result. For all of the above reasons, the petitioners contend that 
the Department should deduct section 201 duties from U.S. price in 
calculating dumping margins.
    The respondent maintains that United States import duties do not 
include section 201 duties.\2\ Although the respondent acknowledges 
that neither the statute, the Department's regulations, nor the 
legislative history defines the term ``United States import duties,'' 
it maintains that this term is clearly not all-inclusive, given the 
Department's longstanding policy of not deducting AD duties (absent a 
determination of duty reimbursement) and countervailing (CV) duties 
from U.S. price. According to the respondent, the Department's 
treatment of AD duties and CV duties as duties that are separate from 
other customs duties has effectively created two categories of import 
duties: Normal customs duties and special customs duties. The 
respondent notes that the Department's policy of not subtracting 
special customs duties from U.S. price has been

[[Page 19156]]

upheld by the CIT because such deductions ``would reduce the U.S. 
price--and increase the margin--artificially'' (Hoogovens Staal v. 
United States, 4 F. Supp. 2d 1213, 1220 (Ct. Int'l Trade 1998)); see 
also AK Steel Corp. v. United States, 988 F. Supp. 594 (Ct. Int'l Trade 
1998) (making an additional deduction from USP for the same AD duties 
that correct this price discrimination would result in double counting 
* * * '').
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    \2\ Although the respondent commented on the issue of whether 
section 201 duties should be subtracted from U.S. price in 
calculating dumping margins, it noted that this issue has been 
recently commented on by interested parties. Thus, the respondent 
urges the Department to wait until it has reviewed these comments 
and made a decision on the issue before reaching a conclusion in the 
present case. The petitioners point out that the issue in question 
is squarely before the Department in this case and the Department is 
obligated to reach its decision in this matter on the merits of the 
issue in this case. However, the petitioners state that the 
Department has had sufficient time to analyze the interested party 
comments it has received on this issue prior to the final results in 
this case and it should do so.
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    Further, the respondent argues that Section 201 duties are not 
normal customs duties, but are ``special'' customs duties because: (1) 
Like AD and CV duties, they are specifically imposed to protect 
domestic industries against certain imports in accordance with the 
World Trade Organization (WTO) agreements; (2) they are not merely an 
extra cost or expense to the importer; (3) the mere inclusion of 
section 201 duties in the HTS does not render them ``normal'' customs 
duties; (4) the placement of Section 201 duties in Chapter 99 of the 
HTS demonstrates that they are special customs duties--Congress 
establishes normal customs duties which are published in Chapters 1 
through 98 of the HTS, and delegates its power to the executive branch 
to impose special customs duties, such as antidumping, countervailing 
and section 201 duties; and (5) CBP does not consider section 201 
duties to be normal import duties--they refer to them as a ``special 
duty for targeted steel products,'' and ``new additional duties'' that 
are ``cumulative on top of normal duties, antidumping/countervailing 
duties * * *'' \3\
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    \3\ See U.S. Bureau of Customs and Border Protection, ``Steel 
201 Questions and Answers'' (Mar.29, 2002), available at http://www.customs.ustreas.gov.
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    Additionally, the respondent argues that the decisions in Softwood 
Lumber from Canada and Fuel Ethanol from Brazil do not support a 
conclusion that section 201 duties should be deducted from U.S. price. 
The respondent claims that in Softwood Lumber from Canada, the quota-
based fee that the Department deducted from U.S. price was an export 
tax that Canadian exporters had agreed to pay if their exports exceeded 
certain quantities pursuant to the SLA--not a U.S. import duty imposed 
by the U.S. government. The respondent further claims that the 
rationale the Department applied in Fuel Ethanol from Brazil does not 
apply to section 201 duties because (1) the tariff in Fuel Ethanol from 
Brazil was added to the HTS by Congress whereas the section 201 duties 
are imposed by the U.S. President, and (2) section 201 duties are 
imposed to counter injury to the domestic industry due to increased 
imports whereas the tariff in Fuel Ethanol from Brazil was imposed to 
offset a federal excise tax subsidy that domestic producers received 
for fuel-grade ethanol.
    Moreover, the respondent argues that the deduction of section 201 
duties from U.S. price will result in an illegal double safeguard 
remedy for the domestic industry. According to the respondent, the 
deduction of section 201 duties will increase the amount of AD duties 
owed by the amount of the section 201 duties paid, and will 
inappropriately amplify the remedial impact on the domestic industry. 
The respondent claims that courts have been unwilling to support a 
deduction in an antidumping calculation that would double the effect of 
import relief or artificially inflate the calculated margins. The 
respondent further claims, that the law does not intend for the 
Department to create dumping margins artificially through the deduction 
of other special protective tariffs and it is contrary to good trade 
policy for the Department to do so.
    In addition, the respondent contends that it is not necessary to 
deduct section 201 duties to achieve a fair comparison with normal 
value. The respondent claims that the petitioners' argument assumes 
that an increase in one cost element necessarily translates into a 
dollar-for-dollar change in the selling price. However, the respondent 
maintains that this is not true and notes that an additional cost, such 
as a section 201 duty, may simply result in a lower profit margin on 
the sale. Thus, the respondent points out, the Department does not 
automatically deduct all business expenses from the gross unit price.
    Finally, the respondent claims that deduction of section 201 duties 
from U.S. price further increases the impact of section 754 of the Act 
(19 U.S.C. 1671), the ``Byrd Amendment.'' Specifically, the respondent 
contends that if the Department subtracts section 201 duties from U.S. 
price it will increase the amount of AD duties owed, and distributed 
under the ``Byrd Amendment.'' The respondent states that ``the 
distribution of duties collected pursuant to section 201 is 
inconsistent with both the statute and the United States WTO 
obligations.'' Also, the respondent claims that like the ``Byrd 
Amendment,'' the deduction of section 201 duties from U.S. price ``is a 
non-permissible specific action against dumping'' contrary to Article 
18.1 of the WTO's Antidumping Agreement, because it increases the 
remedy to U.S. industries through higher dumping margins and provides 
foreign producers and exporters with a further incentive to reduce 
their exports to the United States.
    The Department has addressed whether it is appropriate to deduct 
section 201 duties from EP and CEP in Appendix I to this notice. See 
Appendix I.

Other Comments

    With the exception of the issue regarding section 201 duties 
addressed above, all issues raised in the case and rebuttal briefs by 
parties to this proceeding are listed in the Appendix to this notice 
and addressed in the ``Issues and Decision Memorandum'' (Decision 
Memorandum), dated April 5, 2004, which is hereby adopted by this 
notice. Parties can find a complete discussion of the issues raised in 
this administrative review and the corresponding recommendations in the 
public Decision Memorandum which is on file in the Central Records 
Unit, room B-099 of the main Department building. In addition, a 
complete version of the Decision Memorandum can be accessed directly on 
the Web at http://ia.ita.doc.gov. The paper copy and electronic version 
of the Decision Memorandum are identical in content.

Changes Since the Preliminary Results

    After analyzing the comments received, we made changes to the 
preliminary margin calculations. Also, we have corrected certain 
ministerial errors in our preliminary margin calculations. A summary of 
these adjustments follows:
    1. We changed the matching hierarchy for certain steel grades. See 
Comment 1 of the Decision Memorandum.
    2. We excluded from Dongbang's reported home market indirect 
selling expenses certain expenses related to third-country operations. 
See Comment 6 of the Decision Memorandum.
    3. We excluded Changwon's loss on inventory valuation from the 
general and administrative (G&A) expenses used to calculate the G&A 
expense ratio. See Comment 7 of the Decision Memorandum.
    4. We excluded Dongbang's valuation loss on using the equity method 
from the G&A expenses used to calculate the G&A expense ratio. See 
Comment 8 of the Decision Memorandum.
    5. For Dongbang, we calculated home market imputed credit expense 
on both its home market sales prices and the freight revenue earned on 
the sales. See Comment 9 of the Decision Memorandum.
    6. We corrected a ministerial error involving home market direct 
selling

[[Page 19157]]

expenses. See Comment 10 of the Decision Memorandum.

Final Results of Review

    We determine that the following weighted-average percentage margin 
exists for the period September 1, 2001, through August 31, 2002:

------------------------------------------------------------------------
                                                                Margin
                    Manufacturer/Exporter                      (percent)
------------------------------------------------------------------------
POSCO/Changwon/Dongbang.....................................        1.67
------------------------------------------------------------------------

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. In accordance with 19 CFR 
351.212(b)(1), the Department calculated an importer (or where 
necessary, customer)-specific assessment rate for merchandise subject 
to this review. For Changwon's sales, since Changwon reported the 
entered values and importer for its sales, we have calculated importer-
specific ad valorem duty assessment rates based on the ratio of the 
total amount of dumping margins calculated for the examined sales to 
the entered value of sales used to calculate those duties. For 
Dongbang's reported sales, since Dongbang did not report the entered 
value or importers for its sales, we have calculated customer-specific 
per-unit assessment rates for the merchandise in question by 
aggregating the dumping margins calculated for all U.S. sales to each 
customer and dividing this amount by the total quantity of those sales. 
To determine whether the per-unit duty assessment rates were de minimis 
(i.e., less than 0.50 percent ad valorem), in accordance with the 
requirement set forth in 19 CFR 351.106(c)(2), we calculated customer-
specific ad valorem ratios based on the export prices. We will instruct 
CBP to assess antidumping duties on all appropriate entries covered by 
this review whenever any customer-specific or importer-specific 
assessment rate calculated in the final results of this review is above 
de minimis. The Department will issue appraisement instructions 
directly to the CBP within 15 days of publication of these final 
results of review.

Cash Deposit Requirements

    The following deposit requirements will be effective upon 
publication of this notice of final results of administrative review 
for all shipments of SSWR from Korea entered, or withdrawn from 
warehouse, for consumption on or after the date of publication, as 
provided by section 751(a)(1) of the Act: (1) The cash deposit rate for 
the reviewed firm will be the rate shown above; (2) for previously 
reviewed or investigated companies not listed above, the cash deposit 
rate will continue to be the company-specific rate published for the 
most recent period; (3) if the exporter is not a firm covered in this 
review, a prior review, or the original less-than-fair-value (LTFV) 
investigation, but the manufacturer is, the cash deposit rate will be 
the rate established for the most recent period for the manufacturer of 
the merchandise; and (4) the cash deposit rate for all other 
manufacturers or exporters will continue to be rate of 5.77 percent, 
which is the ``all others'' rate established in the LTFV investigation 
(see Stainless Steel Wire Rod From Korea: Amendment of Final 
Determination of Sales at Less Than Fair Value Pursuant to Court 
Decision, 66 FR 41550 (August 8, 2001)). These cash deposit 
requirements, when imposed, shall remain in effect until publication of 
the final results of the next administrative review.

Notification to Importers

    This notice also serves as a final reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of doubled antidumping duties.

Notification Regarding APOs

    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305. Timely written notification of 
return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of an APO is a sanctionable violation.
    We are issuing and publishing this determination and notice in 
accordance with sections section 751(a)(1) and 777(i) (1) of the Act.

    Dated: April 5, 2004.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.

Appendix I--Proposed Treatment of Section 201 Duties as a Cost

Background

    Section 772(c)(2)(A) of the Tariff Act of 1930, as amended, 
requires that in calculating dumping margins, the Department must 
deduct from prices in the United States any ``United States import 
duties'' or other selling expenses included in those prices.\4\ The 
issue has been raised whether this provision requires the Department 
to deduct duties imposed under Section 201 of the Trade Act of 1974 
(``201 duties'') from U.S. prices in calculating dumping margins.\5\
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    \4\ 19 U.S.C. 1677a(c)(2)(A). This statutory deduction existed 
prior to the passage of the Uruguay Round Agreements Act (URAA), and 
the URAA did not modify it in any respect.
    \5\ Antidumping Proceedings: Treatment of Section 201 Duties and 
Countervailing Duties, 68 FR 53104 (Sept. 9, 2003).
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    The only time the Department has addressed the issue is in 
Carbon and Certain Alloy Steel Wire Rod from Trinidad and Tobago.\6\ 
In that proceeding, Commerce declined to adjust U.S. prices by the 
amount of 201 duties, finding the impact of such an adjustment to be 
insignificant.\7\ However, Commerce stated that the question of 
whether to treat 201 duties as a cost merited public notice and 
comment. Accordingly, the Department solicited comments on the 
issue.\8\
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    \6\ See Recommendation Memorandum from Gary Taverman to Bernard 
Carreau, Carbon and Certain Alloy Steel Wire Rod from Trinidad and 
Tobago, Final Determination of Sales at Less Than Fair Value, 67 FR 
55788 (Aug. 30, 2002).
    \7\ Id.
    \8\ Antidumping Proceedings: Treatment of Section 201 Duties and 
Countervailing Duties, 68 FR 53,104 (Sept. 9, 2003).
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    The Department received extensive comments and has considered 
them at great length. On the basis of that consideration, it has 
determined not to deduct 201 duties from U.S. prices in calculating 
dumping margins. The reasons for this decision are set forth below.

Comments in Support of Deducting Section 201 Duties

    Many commenters note that section 772(c) of the Act requires 
that initially reported U.S. prices be reduced by ``the amount, if 
any, included in such price, attributable to any additional costs, 
charges, or expenses, and United States import duties, which are 
incident to bringing the subject merchandise from the original place 
of shipment in the exporting country to the place of delivery in the 
United States* * *''. They contend that the term ``United States 
import duties'' includes 201 duties, so that the Department must 
deduct 201 duties from U.S. prices. The commenters state that the 
Department enjoys no Chevron\9\ deference in this regard, as 201

[[Page 19158]]

duties are plainly ``United States import duties.''
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    \9\ See Chevron U.S.A. Inc. v. Natural Resources Defense 
Council, 467 U.S. 837 (1984).
---------------------------------------------------------------------------

    Additionally, several commenters state that past and current 
Administrations have considered 201 duties simply to be an increase 
in the normally applicable ad valorem customs duties. Thus, 
according to the commenters, failing to deduct 201 duties from U.S. 
price will directly contradict the characterization of these duties 
by several Administrations that have imposed the duties.
    Several commenters note that the 2003 Harmonized Tariff Schedule 
(HTS) treats 201 duties as a temporary modification to the regular 
customs duties. Section 201 identifies as a type of relief that the 
President can provide under that section ``an increase in * * * any 
duty on the imported article.'' The Presidential Proclamation 
imposing the 201 duties on certain steel imports directs that the 
duties be memorialized in the Harmonized Tariff Schedules of the 
United States (``HTSUS''), just like any other U.S. import 
duties,\10\ and that the HTSUS is the accepted repository of U.S. 
import duties. Consistent with the description of 201 duties in the 
Presidential Proclamation and the head notes to the chapter, HTS 
Chapter 99 first identifies the existing (i.e., normal) tariff rate 
for each product covered by the safeguard action and then simply 
notes an additional increase in that duty (e.g., the duty stated in 
HTS Chapter 72 plus 15 percent). Thus, the commenters claim that for 
U.S. Customs and Border Protection's (CBP) purposes, 201 duties, 
while temporary in duration, are like any other applicable duty 
assessed upon importation, such as the Most Favored Nation \11\ 
(MFN) duty rate or harbor maintenance fees.
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    \10\ President's Proclamation 7529 of March 5, 2002, To 
Facilitate Positive Adjustment to Competition from Imports of 
Certain Steel Products, 67 FR 10,553 (March 7, 2002).
    \11\ As of 1998, Most Favored-Nation (MFN) status was changed to 
Normal Trade Relations (NTR) status.
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    The commenters note that CBP regulations are instructive on this 
point and they assert that the regulations clearly spell out the 
difference between regular and ``special duties.''\12\ Therefore, 
the commenters conclude that for purposes of customs law, 201 duties 
are regular duties. The commenters also note that there is nothing 
in the antidumping statute or the Department's regulations that 
indicates that 201 duties would be treated any differently than ad 
valorem duties with respect to the Department's margin calculations.
---------------------------------------------------------------------------

    \12\ Specifically, the commenters point out that 19 CFR 159, 
subpart D, includes a category entitled ``special duties,'' which 
include antidumping and countervailing duties, but it does not 
include 201 duties.
---------------------------------------------------------------------------

    Numerous commenters contend that there is no legal support for 
considering 201 duties to be like antidumping duties, which are not 
deducted from U.S. price in margin calculations. As explained in 
Federal Mogul v. United States, 813 F. Supp. 856 (Ct. Int'l Trade 
1993), there is a clear distinction between import duties that can 
be accurately determined and which are deducted from U.S. price in 
determining the dumping margin, and antidumping duty deposits, which 
are estimated amounts that may not bear any relationship to the 
actual duties owed. The commenters assert that, by making this 
distinction between antidumping duty deposits and other import 
duties, the Department intended that all import duties, the amount 
of which can be determined upon importation, to be deducted from 
U.S. prices.\13\
---------------------------------------------------------------------------

    \13\ The commenters argue that in both Hoogovens Staal v. United 
States, 4 F. Supp. 2d 1213, 1220 (Ct. Int'l Trade 1998) and 
Bethlehem Steel v. United States, 27 F. Supp. 2d 201, 208 (Ct. Int'l 
Trade 1998), the Court justified the agency's policy of not 
deducting antidumping duties on the basis that such duties were 
unique because they reflected estimates of the level of price 
discrimination.
---------------------------------------------------------------------------

    Moreover, these commenters maintain that even though the 
Department has never directly addressed the issue of how to treat 
201 duties in any final determination, there is precedent supporting 
the deduction of 201 duties from U.S. price in the margin 
calculation. The commenters note that in Certain Softwood Lumber 
Products From Canada (Softwood Lumber From Canada), the Department 
deducted from U.S. price the quota-based fee on lumber that resulted 
from the Softwood Lumber Agreement.\14\ According to the commenters, 
this quota-based fee operates much the same as the 201 duties 
operate in this case. Further, the commenters claim that 201 duties 
are as much United States import tariffs as the ``special tariff'' 
that the Department deducted from the U.S. price in Fuel Ethanol 
from Brazil, in which the Department deducted from U.S. price 
additional duties over the existing ad valorem tariff for a 
particular type of ethyl alcohol.\15\
---------------------------------------------------------------------------

    \14\ See Notice of Preliminary Determination of Sales at Less 
Than Fair Value and Postponement of Final Determination: Softwood 
Lumber From Canada, 66 FR 56062, 56067 (Nov. 6, 2001).
    \15\ See Notice of Final Determination of Sales at Less Than 
Fair Value: Fuel Ethanol from Brazil, 51 FR 5,572 (Feb.14, 1986) 
(``Fuel Ethanol from Brazil'').
---------------------------------------------------------------------------

    Some commenters assert that deducting 201 duties from U.S. price 
would not constitute double counting, which is another reason that 
has been given for the Department's policy against deducting 
antidumping duties from U.S. price. These commenters argue that 201 
duties are imposed to offset injury resulting from import 
competition while antidumping duties are imposed to offset the 
amount of price discrimination between relevant markets.
    Several commentators assert current U.S. practice is 
inconsistent with that of our trading partners. In particular, these 
commenters argue that the European Union and Canada deduct 
antidumping (AD), countervailing (CVD), and safeguard duties from 
the export price in calculating dumping margins, and that the United 
States should conform its practice to those of our trading partners.
    Lastly, several commenters argue that the deduction of 201 
duties from U.S. prices is required in order to maintain the 
effectiveness of both the section 201 relief and the antidumping 
duty order. If foreign producers and their affiliated importers 
absorb 201 duties by effectively lowering their U.S. prices and 
these duties have not been subtracted from U.S. price, the 
commenters contend that the amount of dumping will be understated 
and the domestic industry will not benefit from the Section 201 
relief. Alternatively, the failure to deduct 201 duties from U.S. 
price would result in an unfair comparison of U.S. price and normal 
value because the U.S. price would contain a duty that is not part 
of normal value. Therefore, the commenters argue, failing to 
subtract 201 duties from U.S. price in margin calculations will 
either negate the section 201 relief or replace the relief granted 
under the antidumping duty provisions with the section 201 relief.

Comments in Opposition To Deducting Section 201 Duties

    Many commenters maintain that the term ``United States import 
duties'' does not include 201 duties. While acknowledging that 
neither the statute, the Department's regulations, nor the 
legislative history defines the term, they maintain that it is not 
all-inclusive, given the Department's longstanding policy of not 
deducting antidumping duties (absent a determination of duty 
reimbursement) and countervailing duties from U.S. price. According 
to the commenters, the Department's treatment of antidumping duties 
and countervailing duties as duties that are separate from other 
customs duties has effectively created two categories of import 
duties: normal customs duties and special customs duties.
    Numerous commenters note that the Department's policy of not 
subtracting special customs duties from U.S. price has been upheld 
by the United States Court of International Trade (CIT) because such 
deductions ``would reduce the U.S. price--and increase the margin--
artificially.''\16\ These commenters argue that 201 duties are not 
normal customs duties, but are ``special'' customs duties because: 
(1) Like antidumping and countervailing duties, they are 
specifically imposed to protect domestic industries against certain 
imports in accordance with the World Trade Organization (WTO) 
agreements; (2) they are not merely an extra cost or expense to the 
importer; (3) the mere inclusion of 201 duties in the HTS does not 
render them ``normal'' customs duties; (4) the placement of 201 
duties in Chapter 99 of the HTS demonstrates that they are special 
customs duties--Congress establishes normal customs duties which are 
published in Chapters 1 through 98 of the HTS, and delegates its 
power to the executive branch to impose special customs duties, such 
as antidumping, countervailing and 201 duties; and (5) CBP does not 
consider the 201 duties on steel to be normal import duties--it 
refers to them as a ``special duty for targeted steel products,'' 
and ``new additional duties'' that are ``cumulative on

[[Page 19159]]

top of normal duties, antidumping/countervailing duties* * *''\17\
---------------------------------------------------------------------------

    \16\ See Hoogovens Staal v. United States, 4 F. Supp. 2d 1220; 
see also AK Steel Corp. v. United States, 988 F. Supp. 594 (Ct. 
Int'l Trade 1998) (``making an additional deduction from U.S. price 
for the same antidumping duties that correct this price 
discrimination would result in double counting * * *'')
    \17\ See Steel 201 Questions and Answers, U.S. Bureau of Customs 
and Border Protection (Mar. 29, 2002), available at http://www.customs.ustreas.gov.
---------------------------------------------------------------------------

    Several commenters argue that the decisions in Softwood Lumber 
from Canada and Fuel Ethanol from Brazil do not support a conclusion 
that 201 duties should be deducted from U.S. price. They claim that 
in Softwood Lumber from Canada, the quota-based fee that the 
Department deducted from U.S. price was an export tax that Canadian 
exporters had agreed to pay if their exports exceeded certain 
quantities pursuant to the Softwood Lumber Agreement--not U.S. 
import duties imposed by the U.S. government, and thus the analogies 
to Softwood Lumber from Canada are misplaced. Similarly, commenters 
note that the rationale the Department applied in Fuel Ethanol from 
Brazil does not apply to 201 duties because: (1) The tariff in Fuel 
Ethanol from Brazil was added to the HTS by Congress whereas the 201 
duties are imposed by the President; and (2) 201 duties are imposed 
to counter injury to the domestic industry due to increased imports 
whereas the tariff in Fuel Ethanol from Brazil was imposed to offset 
a federal excise tax subsidy that domestic producers received for 
fuel-grade ethanol.
    Many commenters argue that the deduction of 201 duties from U.S. 
price will result in an illegal double safeguard remedy for the 
domestic industry. According to these commenters, the deduction of 
201 duties will increase the amount of antidumping duties owed by 
the amount of the 201 duties paid, inappropriately amplifying the 
remedial impact of the 201 duties on the domestic industry. These 
commenters claim that courts have been unwilling to support a 
deduction in an antidumping calculation that would double the effect 
of import relief or artificially inflate the calculated margins. 
Moreover, commenters note that the AD law does not intend for the 
Department to create dumping margins artificially through the 
deduction of other special protective tariffs and it is contrary to 
good trade policy for the Department to do so.
    Some commenters contend that it is not necessary to deduct 201 
duties to achieve a fair comparison with normal value. They claim 
that the arguments by those in support of treating 201 duties as a 
cost assume that an increase in one cost element necessarily 
translates into a dollar-for-dollar change in the selling price. 
However, the commenters in opposition maintain that this is not true 
and note that an additional cost, such as a 201 duty, may simply 
result in a lower profit margin on the sale. The commenters point 
out that the Department does not automatically deduct all business 
expenses from the gross unit price.
    Finally, several commenters claim that deduction of 201 duties 
from U.S. price further increases the impact of section 754 of the 
Act (19 U.S.C. 1675c), the ``Byrd Amendment.'' Specifically, the 
commenters contend that, if the Department subtracts 201 duties from 
U.S. price, it will increase the amount of antidumping duties owed 
and distributed under the ``Byrd Amendment,'' which has been found 
to be inconsistent with the obligations of the United States under 
the WTO Agreements.

The Department's Position

    For the several reasons explained below, the Department has 
determined not to deduct 201 duties from U.S. prices under Section 
772(c)(2)(A) of the Act in calculating dumping margins, either as 
``United States import duties'' or as selling expenses.\18\
---------------------------------------------------------------------------

    \18\ This issue concerns sales of imported goods at prices that 
normally are considered to cover the applicable import duties. 
Generally speaking, this means sales of goods on which the seller, 
rather than the buyer, must pay the import duties. This normally 
occurs where the sales examined by Commerce are by sellers in the 
United States who are affiliated with the foreign producer or 
exporter (``constructed export price'' or ``CEP'' sales). Because 
these sales normally occur after importation, the seller has already 
paid any import duties at the time of the sale. In contrast, sales 
from foreign producers or exporters to unrelated customers in the 
United States (``export price,'' or ``EP'' sales) normally occur 
before importation. Because the buyer must pay any import duties 
after these sales are completed, it is generally presumed that the 
prices do not include any import duties.
---------------------------------------------------------------------------

    Although the AD law does not define the term ``United States 
import duties,'' the Senate Report that accompanied the Antidumping 
Act of 1921 (the ``1921 Act'') contrasts antidumping duties (which 
it refers to as ``special dumping duties'') with normal customs 
duties (which it refers to as ``United States import duties'').\19\ 
Moreover, Section 211 of the 1921 Act provides that, for the limited 
purpose of duty drawback, ``the special dumping dut[ies] * * * shall 
be treated in all respects as regular Customs duties.''\20\ If 
``special dumping duties'' normally were considered to be just one 
type of ``United States import duty,'' this special provision would 
have served no purpose.
---------------------------------------------------------------------------

    \19\ See S. Rep. No. 67-16, at 4 (1921).
    \20\ The Antidumping Act of 1921 (the ``1921 Act''), 42 Stat. 15 
(1921).
---------------------------------------------------------------------------

    That ``special dumping duties'' were considered to be distinct 
from normal customs duties is also indicated by the fact that 
Section 202(a) of the 1921 Act provides that ``special dumping 
duties'' may be applied to ``duty-free'' merchandise.\21\ In this 
context, ``duty-free'' must mean ``free from normal Customs 
duties.'' If ``duty-free'' had meant ``free from any import 
duties,'' that would have included antidumping duties, so that 
special dumping duties would have been applied to merchandise exempt 
from special dumping duties. Plainly, ``duty-free'' was understood 
to mean ``free from normal Customs duties.''
---------------------------------------------------------------------------

    \21\ The 1921 Act, 42 Stat. 11.
---------------------------------------------------------------------------

    Thus, Congress has long recognized that at least some duties 
implementing trade remedies--including at least antidumping duties--
are special duties that should be distinguished from ordinary 
customs duties. Accordingly, Commerce consistently has treated AD 
duties as special duties not subject to the requirement to deduct 
``United States import duties'' (normal customs duties) from U.S. 
prices in calculating dumping margins.\22\ The U.S. Court of 
International Trade has upheld this position on five occasions.\23\ 
Moreover, Congress specifically endorsed this position in the 
Statement of Administrative Action (``SAA'') accompanying the 
Uruguay Round Agreements Act when, in explaining the consideration 
of duty absorption in administrative reviews, it stated that 
``[t]his new provision of law is not intended to provide for the 
treatment of antidumping duties as a cost.'' \24\
---------------------------------------------------------------------------

    \22\ In addition to being different from normal customs duties 
because they implement a trade remedy, AD duties also embody dumping 
margins. Thus, to deduct the dumping duty from the U.S. price in 
calculating the dumping margin essentially would be to deduct the 
dumping margin itself from the U.S. price in calculating the 
margin--a circular calculation. The Department explained its reasons 
for not deducting antidumping duties from U.S. prices in Certain 
Cold-Rolled Carbon Steel Flat Products from Korea; Final Results of 
Antidumping Duty Administrative Review, 63 FR 781, 786 (Jan. 7, 
1998).
    \23\ See, e.g., Hoogovens Staal v. United States, 4 F. Supp. 2d 
1213, 1220 (Ct. Int'l Trade 1998) (Commerce need not deduct AD 
duties from the initial price in the United States as either U.S. 
import duties or as costs); Bethlehem Steel v. United States, 27 F. 
Supp. 2d 208 (Commerce need not deduct AD duties from the initial 
price in the United States as either U.S. import duties or as 
costs); U.S. Steel Group v. United States, 15 F. Supp. 2d 892, 898-
900 (Ct. Int'l Trade 1998) (Commerce need not deduct either AD or 
CVDs from the starting price in the United States in calculating AD 
duties); AK Steel Corp. v. United States, 988 F. Supp. 594 (Ct. 
Int'l Trade 1997) (actual antidumping and countervailing duties need 
not be deducted from the initial price in the United States); 
Federal Mogul Corp. v. United States, 813 F. Supp. 856, 872 (Ct. 
Int'l Trade 1993) (Commerce need not deduct estimated AD deposits 
from the initial price in the United States); PQ Corp. v. United 
States, 652 F. Supp. 724, 737 (Ct. Int'l Trade 1987) (Commerce need 
not deduct estimated AD deposits from the initial price in the 
United States).
    \24\ Uruguay Round Agreements Act, Statement of Administrative 
Action, H.R. Doc. No. 103-316, Vol. 1, at p. 885 (1994)(herinafter 
``SAA'').
---------------------------------------------------------------------------

    Like AD duties, 201 duties are special remedial duties. Section 
201 duties represent the amount that the President determines is 
needed to provide ``temporary relief for an industry suffering from 
serious injury * * *''.\25\ This is not to say that 201 duties are 
identical to AD duties. Section 201 duties do not embody dumping 
margins, so that deducting them from U.S. prices in calculating 
dumping duties would not involve the circular logic that would be 
inherent in deducting AD duties. Nevertheless, 201 duties are 
special remedial measures. Although they are not identical to AD 
duties, they are more like them in purpose and function than they 
are like ordinary customs duties. The U.S. International Trade 
Commission has recognized the extraordinary nature of 201 duties, 
similarly referring to them as ``special duties.'' \26\
---------------------------------------------------------------------------

    \25\ S. Rep. No. 93-1298 at 119 (1974).
    \26\ Stainless Steel Plate from Sweden, TC Pub. No. 573, Inv. 
No. AA1921-114 (1973), cited in Avestra AB v. United States, 724 F. 
Supp. 974 (Ct. Int'l Trade 1989).
---------------------------------------------------------------------------

    The fact that 201 duties are recorded in the HTSUS does not 
establish that they are normal customs duties. Unlike normal customs 
duties, 201 duties are imposed only following a finding of serious 
injury to the

[[Page 19160]]

industry in question by the International Trade Commission. That 201 
duties are contained in the HTSUS proves only that this is a 
pragmatic way of implementing their collection along with other 
import duties. In any event, although 201 duties are set out in the 
HTSUS, they are contained in Chapter 99, which is reserved for 
special or temporary duties.
    The Senate Report to the Trade Act of 1974 recognized not only 
that 201 duties and AD duties were similar, but the two remedial 
duties were, in fact, complementary:

Furthermore, the Commission would be required, whenever * * * it has 
reason to believe that the increased imports are attributable in 
part to circumstances which come within the purview of the 
Antidumping Act * * * or other remedial provisions of law, to notify 
promptly the appropriate agency so that such action may be taken as 
is otherwise authorized by such provisions of law. Action under one 
of those provisions when appropriate is to be preferred over action 
under this chapter.\27\
---------------------------------------------------------------------------

    \27\ S. Rep. No. 93-1298 at 123 (1974).
---------------------------------------------------------------------------

    Congress again confirmed this point in 1994, in the Statement of 
Administrative Action accompanying the Uruguay Round Agreements Act:

In determining whether to provide [Section 201] relief and, if so, 
in what amount, the President will continue the practice of taking 
into account relief provided under other provisions of law, such as 
the antidumping * * * law[] which may alter the amount of relief 
necessary under section 203.\28\
---------------------------------------------------------------------------

    \28\ SAA at 964.

    In other words, the injury to the U.S. industry which is the 
subject of an inquiry under Section 201 may be remediable (at least 
to some extent) under the AD law. To some extent, 201 duties are 
interchangeable with special AD duties. It follows that 201 duties 
are more appropriately regarded as a type of special remedial duty, 
rather than ordinary customs duties.
    As for the argument that 201 duties must be deducted from U.S. 
prices because they are included in the term ``any costs, charges, 
or expenses'' of bringing the merchandise into the United States, 
the better argument takes account of the fact that the statute 
refers to any additional ``costs, charges, expenses and United 
States import duties. * * *'' This indicates that import duties are 
considered to be independent of other costs, charges, and expenses. 
While 201 duties are a special type of import duty, they are 
nevertheless a species of import duty, and are thus covered, if at 
all, by the phrase ``United States import duties.'' Thus, the 
Department interprets the statute as providing for the subtraction 
from initial U.S. prices of any ``additional costs, charges, or 
expenses and normal United States import duties * * *'', but not 
other import duties. The correctness of this interpretation may be 
seen from the fact that interpreting ``U.S. import duties'' broadly 
would require the Department to deduct AD duties as U.S. import 
duties. It is well established that this is not required, and the 
Department's longstanding practice is not to make such a deduction.
    The argument that 201 duties should be deducted from U.S. prices 
in calculating dumping margins rests on the premise that the 
Department must restore the dumping margin that would have been 
found absent any 201 duty. This premise is in error. Even to the 
extent that 201 duties may reduce dumping margins, this is not a 
distortion to the margin that must be eliminated, but a partial 
elimination of dumping. Section 201 duties are not directed at any 
type of unfair trade practice that Congress has defined as 
independent from dumping.\29\ Quite the contrary, Congress has 
stated that the remedies provided by the two statutes complement one 
another and may, in fact, be substituted for one another. 
Consequently, to the extent that 201 duties may lower the dumping 
margin, this is a legitimate remedy for dumping.
---------------------------------------------------------------------------

    \29\ AD duties remedy ``material injury.'' 19 U.S.C. 1673. 
Section 201 is aimed at providing temporary relief from imports to 
an industry suffering from ``serious injury, or the threat thereof, 
so that the industry will have sufficient time to adjust to the 
freer international competition.'' S. Rep. No. 93-1298, at 121 
(1974).
---------------------------------------------------------------------------

    Where there is a pre-existing dumping margin, deducting 201 
duties from U.S. prices effectively would collect the 201 duties 
twice--first as 201 duties, and a second time as an increase in that 
dumping margin. Where there was no pre-existing dumping margin, the 
deduction of 201 duties from U.S. prices in an AD proceeding could 
create a margin. Nothing in the legislative history of section 201 
or the AD law indicates that Congress intended such results. 
Moreover, nothing in section 201 indicates that Congress believed 
that 201 duties must have any particular effect on prices in the 
United States in order to provide an effective remedy for serious 
injury. If Congress had intended such a requirement, it presumably 
would have provided some mechanism for measuring the effect of 201 
duties on U.S. prices and adjusting those duties if they did not 
have the intended effect. Congress provided no such mechanism.
    Finally, the SAA language quoted above makes plain that any 
adjustment for the potential overlap between 201 and AD remedies is 
to be made by the President in setting the level of the 201 duties. 
Once the President has struck this balance, it is not Commerce's 
place to upset that balance by subtracting the 201 duties from U.S. 
prices in calculating dumping margins, providing relief beyond what 
the President approved. There is absolutely no indication in the 
Presidential Proclamation placing 201 duties on certain imports of 
steel that the President believed that Commerce effectively would 
increase those duties by taking them into account in calculating 
subsequent dumping margins.
    The suggestion on the part of some commenters that many of our 
major trading partners deduct all import taxes, including safeguard 
duties, from reported prices in calculating dumping margins is 
without foundation. None of these commenters provided the Department 
with any evidence that any of our trading partners actually has made 
such an adjustment. For example,European Union law gives the EC 
Commission discretion to apply both AD duties and safeguard duties 
against the same products in some instances. This by no means 
establishes, however, that the EU ever has deducted safeguard duties 
from EU prices calculating dumping margins. Quite the contrary, the 
EU regulation gives the Commission the discretion to repeal existing 
AD measures to avoid excessive remedies where safeguard measures are 
applied to the same imports.\30\ In the one instance of which we are 
aware in which the EU faced the possibility that AD duties and 
safeguard duties would be applied to the same imports, the Council 
adopted a regulation to prevent this result, except to the extent 
that the AD duty exceeded the safeguard duty.\31\ Thus, deducting 
safeguard duties from EU prices in calculating AD margins, so as to 
collect both the entire safeguard duty and an AD duty increased by 
the amount of the safeguard duty would appear to conflict with the 
EU's actual practice. Similarly, while there is some indication that 
Canadian law might permit safeguard duties to be taken into account, 
we have no evidence that Canada has ever deducted safeguard duties 
from reported prices in Canada in calculating dumping margins. In 
any event, the fact that a particular methodology may be employed by 
another country would not be relevant to the question of what is 
permissible or appropriate under U.S. law.
---------------------------------------------------------------------------

    \30\ See EC Reg. No. 452/20032, Official Journal L 69, at 8 
(March 13, 2003).
    \31\ See EC Reg. No. 778/2003, Official Journal L 114 at 2 (May 
8, 2003).
---------------------------------------------------------------------------

    Any inconsistencies between the treatment of 201 duties by the 
Department and the CBP in calculating the values to which ad valorem 
duty rates are applied are immaterial. It is well-established that 
the agencies' respective determinations are governed by different 
statutory provisions and regulations with distinct purposes.\32\ In 
any event, any such differences occur only with respect to the 
collection of estimated antidumping duty deposits. Actual 
antidumping duties (as opposed to deposits of estimated antidumping 
duties) are the absolute difference between normal value and export 
price. These duties are aggregated, and then expressed as an amount 
per unit or a percentage of entered value that CBP applies for 
collection purposes. When the latter approach is employed, the 
percentage rate is calibrated so as to collect the correct total of 
absolute antidumping duties.
---------------------------------------------------------------------------

    \32\ CBP valuation methodology is governed by Section 1401a of 
the Trade Agreements Act of 1979. See Koyo Seiko Co., Ltd. v. United 
States, 955 F. Supp. 1532, 1541 (Ct. Int'l Trade 1993) 
(``[C]lassification under the antidumping law need not match the 
Customs classification, as the Customs valuation statute and 
antidumping statute are substantially different in both purpose and 
operation''); See also Royal Business Machines v. United States, 507 
F. Supp. 1007, 1014 n.18 (Ct. Int'l Trade 1980), aff'd 69 C.C.P.A. 
61, 669 F.2d 692 (C.C.P.A. 1982) (``[Customs] may not independently 
modify, directly or indirectly the [antidumping law] determinations, 
their underlying facts, or their enforcement.'').
---------------------------------------------------------------------------

    The Department's 1986 determination in Fuel Ethanol from Brazil 
is not relevant to the issue of the treatment of 201 duties. In that 
determination, the Department deducted

[[Page 19161]]

special tariffs on imported fuel ethanol from the initial U.S. 
prices.\33\ The tariffs in question were not 201 duties. In fact, 
they were not remedial duties under any trade remedy law. Rather, 
they were tariffs added to the HTS by Congress to offset a tax 
subsidy that producers received for fuel-grade ethanol. A 
contemporary investigation by the International Trade Commission did 
not find injury to a U.S. industry.\34\ Consequently, Fuel Ethanol 
from Brazil is not relevant to the issue of whether 201 duties 
should be subtracted from U.S. prices in calculating dumping 
margins.
---------------------------------------------------------------------------

    \33\ Fuel Ethanol from Brazil; Final Determination of Sales at 
Less Than Fair Value, 51 FR 5572 (Feb. 14, 1986).
    \34\ Certain Ethyl Alcohol from Brazil, Inv. No. 731-TA-248, 
USITC Pub. 1818 (Final)(March 1986).
---------------------------------------------------------------------------

    Similarly, the Department's 2002 determination in Softwood 
Lumber from Canada is not relevant to the issue of the treatment of 
201 duties.\35\ That proceeding involved imports of lumber that had 
been subject to a quota-based fee under the U.S.--Canada Softwood 
Lumber Agreement. The export fees applied only to exports of lumber 
from Canada above 14.7 billion board feet. The Department deducted 
these fees from initial U.S. prices, noting that they did not 
qualify for the exemption from such deductions for export payments 
``specifically intended to offset countervailable subsidies.'' \36\ 
Because that determination involved export fees rather than import 
duties, and similarly did not address the purpose of 201 duties or 
account for the legislative history discussed above, it does not 
apply to the issue of whether 201 duties should be deducted.
---------------------------------------------------------------------------

    \35\ Certain Softwood Lumber Products from Canada; Notice of 
Final Determination of Sales at Less Than Fair Value, 67 FR 15539 
(Apr. 2, 2002), and accompanying decision memorandum, at Comment 
Nine.
    \36\ Id.
---------------------------------------------------------------------------

    In conclusion, Commerce will not deduct 201 duties from U.S. 
prices in calculating dumping margins because 201 duties are not 
``United States import duties'' within the meaning of the statute, 
and to make such a deduction effectively would collect the 201 
duties a second time. Our examination of the safeguards and 
antidumping statutes and their legislative histories indicates that 
Congress plainly considered the two remedies to be complementary 
and, to some extent, interchangeable. Accordingly, to the extent 
that 201 duties may reduce dumping margins, this is not a distortion 
of any margin to be eliminated, but a legitimate reduction in the 
level of dumping.

Appendix II--Issues in Decision Memorandum

Comment 1: Whether the Respondent Properly Reported Steel Grade 
Codes
Comment 2: Whether Changwon Improperly Classified Certain Home 
Market Sales as Non-Prime Sales
Comment 3: Whether the Respondent Misreported the Entered Value of 
Constructed Export Price (CEP) Sales
Comment 4: Whether Changwon Properly Accounted for Certain Bank 
Charges
Comment 5: Whether Certain Inland Freight Expenses Incurred by 
Dongbang Are Based on Arm's-length Prices
Comment 6: Whether Dongbang Properly Reported Its Home Market 
Indirect Selling Expenses
Comment 7: Whether the Loss in Valuation of Finished Goods Inventory 
Should Be Included in General and Administrative (G&A) Expenses
Comment 8: Whether the Valuation Loss on Using the Equity Method 
Should Be Included in G&A Expenses
Comment 9: Whether the Department of Commerce (the Department) 
Should Subtract Imputed Credit Expense Associated With Freight 
Revenue From the Home Market Price
Comment 10: Ministerial Error Allegation
Comment 11: Whether the Department Should Grant Changwon a CEP 
Offset to the Home Market Sales

[FR Doc. 04-8245 Filed 4-9-04; 8:45 am]
BILLING CODE 3510-DS-P