[Federal Register Volume 71, Number 240 (Thursday, December 14, 2006)]
[Notices]
[Pages 75229-75231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-21315]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-840]


Preliminary Results of Antidumping Duty Changed Circumstances 
Review: Carbon and Certain Alloy Steel Wire Rod from Canada

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On November 6, 2006, the Department of Commerce published a 
notice of initiation of a changed circumstances review of the 
antidumping duty order on carbon and certain alloy steel wire rod 
products from Canada. We have preliminarily concluded that 1) Ivaco 
Rolling Mills 2004 L.P. is the successor-in-interest to Ivaco Rolling 
Mills L.P.; and 2) Sivaco Ontario, a division of Sivaco Wire Group 2004 
L.P., is the successor-in-interest to Ivaco Inc. As a result, Ivaco 
Rolling Mills 2004 L.P., and Sivaco Ontario, a division of Sivaco Wire 
Group 2004 L.P., (collectively ``Ivaco'') should receive the same 
antidumping duty treatment with respect to carbon and certain alloy 
steel wire rod from Canada as Ivaco Rolling Mills L.P. and Ivaco Inc.

EFFECTIVE DATE: December 14, 2006.

FOR FURTHER INFORMATION CONTACT: Audrey Twyman or Brandon Farlander, at 
(202) 482-3534 or (202) 482-0182, respectively; AD/CVD Operations, 
Office 1, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street & Constitution Avenue, NW, 
Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    In its January 12, 2006 response to Section A of the Department's 
original questionnaire, Ivaco notified the Department that the assets 
of Ivaco, Inc. and all of its divisions (e.g., Sivaco Ontario, and 
Sivaco Quebec) had been purchased on December 1, 2004. As a result, the 
Department self-initiated a changed circumstances review of the 
antidumping duty order on carbon and certain alloy steel wire rod from 
Canada. See Preliminary Results of Antidumping Duty Administrative 
Review and Notice of Initiation of Changed Circumstances Review: Carbon 
and Certain Alloy Steel Wire Rod from Canada, 71 FR 64921 (November 6, 
2006). On June 1, 2006, and October 27, 2006, the Department issued 
Ivaco supplemental questionnaires requesting further details on Ivaco's 
successor-in-interest claims. The company's responses were received by 
the Department on July 6, 2006, and November 20, 2006.

Scope of the Order

    The merchandise subject to this order is certain hot-rolled 
products of carbon steel and alloy steel, in coils, of approximately 
round cross section, 5.00 mm or more, but less than 19.00 mm, in solid 
cross-sectional diameter.
    Specifically excluded are steel products possessing the above-noted 
physical characteristics and meeting the Harmonized Tariff Schedule of 
the United States (HTSUS) definitions for (a) stainless steel; (b) tool 
steel; (c) high nickel steel; (d) ball bearing steel; and (e) concrete 
reinforcing bars and rods. Also excluded are (f) free machining steel 
products (i.e., products that contain by weight one or more of the 
following elements: 0.03 percent or more of lead, 0.05 percent or more 
of bismuth, 0.08 percent or more of sulfur, more than 0.04 percent of 
phosphorus, more than 0.05 percent of selenium, or more than 0.01 
percent of tellurium).
    Also excluded from the scope are 1080 grade tire cord quality wire 
rod and 1080 grade tire bead quality wire rod. Grade 1080 tire cord 
quality rod is defined as: (i) grade 1080 tire cord quality wire rod 
measuring 5.0 mm or more but not more than 6.0 mm in cross-sectional 
diameter; (ii) with an average partial decarburization of no more than 
70 microns in depth (maximum individual 200 microns); (iii) having no 
non-deformable inclusions greater than 20 microns and no deformable 
inclusions greater than 35 microns; (iv) having a carbon segregation 
per heat average of 3.0 or better using European Method NFA 04-114; (v) 
having a surface quality with no surface defects of a length greater 
than 0.15 mm; (vi) capable of being drawn to a diameter of 0.30 mm or 
less with 3 or fewer breaks per ton, and (vii) containing by weight the 
following elements in the proportions shown: (1) 0.78 percent or more 
of carbon, (2) less than 0.01 percent of aluminum, (3) 0.040 percent or 
less, in the aggregate, of phosphorus and sulfur, (4) 0.006 percent or 
less of nitrogen, and (5) not more than 0.15 percent, in the aggregate, 
of copper, nickel and chromium.
    Grade 1080 tire bead quality rod is defined as: (i) grade 1080 tire 
bead quality wire rod measuring 5.5 mm or more but not more than 7.0 mm 
in cross-sectional diameter; (ii) with an average partial 
decarburization of no more than 70 microns in depth (maximum individual 
200 microns); (iii) having no non-deformable inclusions greater than 20 
microns and no

[[Page 75230]]

deformable inclusions greater than 35 microns; (iv) having a carbon 
segregation per heat average of 3.0 or better using European Method NFA 
04-114; (v) having a surface quality with no surface defects of a 
length greater than 0.2 mm; (vi) capable of being drawn to a diameter 
of 0.78 mm or larger with 0.5 or fewer breaks per ton; and (vii) 
containing by weight the following elements in the proportions shown: 
(1) 0.78 percent or more of carbon, (2) less than 0.01 percent of 
soluble aluminum, (3) 0.040 percent or less, in the aggregate, of 
phosphorus and sulfur, (4) 0.008 percent or less of nitrogen, and (5) 
either not more than 0.15 percent, in the aggregate, of copper, nickel 
and chromium (if chromium is not specified), or not more than 0.10 
percent in the aggregate of copper and nickel and a chromium content of 
0.24 to 0.30 percent (if chromium is specified).
    For purposes of grade 1080 tire cord quality wire rod and grade 
1080 tire bead quality wire rod, an inclusion will be considered to be 
deformable if its ratio of length (measured along the axis - that is, 
the direction of rolling - of the rod) over thickness (measured on the 
same inclusion in a direction perpendicular to the axis of the rod) is 
equal to or greater than three. The size of an inclusion for purposes 
of the 20 microns and 35 microns limitations is the measurement of the 
largest dimension observed on a longitudinal section measured in a 
direction perpendicular to the axis of the rod. This measurement 
methodology applies only to inclusions on certain grade 1080 tire cord 
quality wire rod and certain grade 1080 tire bead quality wire rod that 
are entered, or withdrawn from warehouse, for consumption on or after 
July 24, 2003.
    The designation of the products as ``tire cord quality'' or ``tire 
bead quality'' indicates the acceptability of the product for use in 
the production of tire cord, tire bead, or wire for use in other rubber 
reinforcement applications such as hose wire. These quality 
designations are presumed to indicate that these products are being 
used in tire cord, tire bead, and other rubber reinforcement 
applications, and such merchandise intended for the tire cord, tire 
bead, or other rubber reinforcement applications is not included in the 
scope. However, should petitioners or other interested parties provide 
a reasonable basis to believe or suspect that there exists a pattern of 
importation of such products for other than those applications, end-use 
certification for the importation of such products may be required. 
Under such circumstances, only the importers of record would normally 
be required to certify the end use of the imported merchandise.
    All products meeting the physical description of subject 
merchandise that are not specifically excluded are included in this 
scope.
    The products under review are currently classifiable under 
subheadings 7213.91.3010, 7213.91.3015, 7213.91.3090, 7213.91.3092, 
7213.91.4510, 7213.91.4590, 7213.91.6010, 7213.91.6090, 7213.99.0031, 
7213.99.0038, 7213.99.0090, 7227.20.0010, 7227.20.0020, 7227.20.0090, 
7227.20.0095, 7227.90.6010, 7227.90.6051, 7227.90.6053, 7227.90.6058, 
7227.90.6059, and 7227.90.6080 of the HTSUS. Although the HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the scope of this proceeding is dispositive.

Preliminary Results of the Review

    Pursuant to section 751(b) of the Tariff Act of 1930, as amended 
(``the Act''), and 19 CFR 351.216, we will conduct a changed 
circumstances review upon receipt of information concerning, or a 
request from an interested party for a review of, an antidumping duty 
finding or order that shows changed circumstances sufficient to warrant 
a review of the order. The information submitted by Ivaco stating the 
change in ownership and change in the respondent entities' legal names 
demonstrates changed circumstances sufficient to warrant a review. See 
19 CFR 351.216(d).
    The respondents named in our initiation notice were Ivaco Rolling 
Mills L.P. (aka Ivaco Rolling Mills 2004 L.P.), and Sivaco Ontario 
Processing (aka Sivaco Ontario, a division of Sivaco Wire Group 2004 
L.P.).\1\ In the most recently completed review, the responding 
entities were Ivaco Rolling Mills L.P. (the producer) and Ivaco 
Inc.,\2\ which through its division Sivaco Ontario, purchased wire rod 
from Ivaco Rolling Mills L.P. and sold wire rod to unaffiliated 
customers after further processing.
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    \1\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Deferral of Administrative Reviews, 70 FR 
72107 (December 1, 2005).
    \2\ See Final Results of Antidumping Duty Administrative Review: 
Carbon and Certain Alloy Steel Wire Rod from Canada, 71 FR 3822 
(January 24, 2006).
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    As noted above in the ``Background'' section of this notice, Ivaco 
notified the Department that the assets of Ivaco, Inc. and all of its 
divisions were purchased on December 1, 2004. Subsequent to the 
purchase, Ivaco Rolling Mills L.P. was renamed and is now known as 
Ivaco Rolling Mills 2004 L.P., and Sivaco Ontario and Sivaco Quebec 
were reorganized into divisions of Sivaco Wire Group 2004 L.P. Ivaco, 
Inc. is now known as Heico 2004 Member Inc. (``Heico 2004''). Heico 
2004 functions as a headquarters, managing the operations of Ivaco 
Rolling Mills 2004 L.P. and Sivaco Wire Group 2004 L.P. Heico 2004, 
Ivaco Rolling Mills 2004 L.P., and Sivaco Wire group 2004 L.P. are 
commonly owned.
    Therefore, the Department self-initiated a changed circumstances 
review to determine whether Ivaco Rolling Mills 2004 L.P. and Sivaco 
Wire Group 2004 L.P., including its divisions, Sivaco Ontario and 
Sivaco Quebec, are successors-in-interest to Ivaco Rolling Mills L.P. 
and Ivaco Inc., respectively.
    In determining whether one company is the successor-in-interest to 
another for purposes of applying the antidumping duty law, the 
Department examines several factors including, but not limited to, 
changes in: (1) management; (2) production facilities; (3) supplier 
relationships; and (4) customer base. See, e.g., Polychloroprene Rubber 
from Japan: Final Results of Changed Circumstances Review, 67 FR 58 
(January 2, 2002) (``Polychloroprene Rubber from Japan'') (citing Brass 
Sheet and Strip from Canada: Final Results of Antidumping Duty 
Administrative Review, 57 FR 20460, 20462 (May 13, 1992) (``Canadian 
Brass'')).\3\ While no single factor or combination of factors will 
necessarily provide a dispositive indication, the Department will 
generally consider the new company to be the successor-in-interest to 
the previous company if the resulting operation with regard to the 
subject merchandise is not materially dissimilar to that of its 
predecessor. See, e.g., Industrial Phosphoric Acid from Israel; Final 
Results of Antidumping Duty Changed Circumstances Review, 59 FR 6944, 
6945 (February 14, 1994); and Final Determination of Sales at Less Than 
Fair Value and Affirmative Final Determination of Critical 
Circumstances: Certain Orange Juice from Brazil, 71 FR 2183 (January 
13, 2006) and accompanying Issues and Decision Memorandum, at Comment 
3. Thus, if the evidence demonstrates that, with respect to the 
production and sale of the subject merchandise, the new

[[Page 75231]]

company operates as the same business entity as the former company, the 
Department will accord the new company the same antidumping duty 
treatment as its predecessor.
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    \3\ ``{G{time} enerally, in the case of an asset acquisition, 
the Department will consider the acquiring company to be a successor 
to the company covered by the antidumping duty order, and thus 
subject to its duty deposit rate, if the resulting operation is 
essentially similar to that existing before the acquisition.'' 
Canadian Brass, 57 FR at 20461.
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    Taking each condition in order, we begin with management. Ivaco 
reported that the key management personnel of both Ivaco Rolling Mills 
L.P. and Sivaco Ontario are identical to the management of each company 
after the acquisition. See Supplemental Questionnaire Response of 
Ivaco, at 1 and Appendices 1 and 2 (November 20, 2006). We find that 
the management structure has remained unchanged.
    Second, we looked at the production facilities for subject 
merchandise. Ivaco explained that there have been no material changes 
to its operations or the way it produces or sells subject merchandise 
after the acquisition. See Section A Response, at Volume 1, page A-10 
(January 12, 2006). We find that Ivaco's productions facilities have 
not changed as a result of the acquisition.
    Third, we reviewed the supplier relationships before and after the 
change in ownership. Ivaco provided Ivaco Rolling Mills L.P.'s accounts 
payable records of its top 50 suppliers for the three month period 
leading up to the acquisition and the three month period immediately 
following the acquisition. Based on a comparison of these supplier 
lists, we determine that the vast majority of the suppliers are the 
same. Ivaco explained that the few supplier changes that did occur 
simply reflected changes in suppliers that take place in the normal 
course of business. Ivaco also provided Sivaco Ontario's accounts 
payable records of its top 10 suppliers for the same time periods. In 
this case, the suppliers are almost identical. See Supplemental 
Questionnaire Response of Ivaco, at 1-2 and Appendices 3 and 4 
(November 20, 2006).
    Fourth, we reviewed the customer base and find that the customer 
base is almost identical for both companies before and after the 
acquisition. Ivaco explained that the small changes that did occur in 
the customer base happened in the normal course of business. See 
Supplemental Questionnaire Response of Ivaco, at 2-3 and Appendices 5-7 
(November 20, 2006).
    In addition, we requested information about Ivaco's marketing and 
sales of products before and after the acquisition. Ivaco provided the 
distribution process and sales process from the 2003-2004 review, as 
well as the 2004-2005 review. We found that the processes remained 
unchanged. See Supplemental Questionnaire Response of Ivaco, at 3 and 
Appendix 8 (November 20, 2006). Further, Ivaco noted that products and 
services continue to be marketed under the Ivaco name because the Ivaco 
name was among the assets purchased by the entity. See Supplemental 
Questionnaire Response of Ivaco, at Volume 1, page 2 (July 7, 2006).
    In summary, Ivaco reported that its acquisition did not 
meaningfully affect the production facilities, supplier relationships, 
customer base, management, marketing or sale of products and services 
by Ivaco Rolling Mills 2004 L.P. or Sivaco Wire Group 2004 L.P. 
Moreover, there have been no material changes to Ivaco's operations or 
the way it produces and sells subject merchandise resulting from the 
acquisition.
    Based on Ivaco's evidence of the change in ownership and absent any 
other record evidence that would contradict Ivaco's statements, we 
preliminarily determine that Ivaco Rolling Mills 2004 L.P., and Sivaco 
Wire Group 2004 L.P. are the successor-in-interest to Ivaco Rolling 
Mills L.P. and Ivaco Inc. As a result, Ivaco Rolling Mills 2004 L.P., 
and Sivaco Ontario, a division of Sivaco Wire Group 2004 L.P., 
(collectively ``Ivaco'') should receive the same antidumping duty 
treatment with respect to carbon and certain alloy steel wire rod from 
Canada as Ivaco Rolling Mills L.P. and Ivaco Inc., respectively.
    If the above preliminary results are affirmed in the Department's 
final results, the cash deposit rate most recently calculated for Ivaco 
Rolling Mills L.P. and Ivaco Inc. will apply to all entries of subject 
merchandise by Ivaco Rolling Mills 2004 L.P., and Sivaco Ontario, a 
division of Sivaco Wire Group 2004 L.P., entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of the 
final results of this changed circumstances review. See, e.g., Granular 
Polytetraflouroethylene Resin from Italy; Final Results of Antidumping 
Duty Changed Circumstances Review, 68 FR 25327 (May 12, 2003). This 
deposit rate shall remain in effect until publication of the final 
results of the next administrative review in which Ivaco participates.

Public Comment

    Any interested party may request a hearing within 30 days of 
publication of this notice in accordance with 19 CFR 351.310(c). 
Interested parties may submit case briefs no later than 30 days after 
the date of publication of this notice, in accordance with 19 CFR 
351.309(c)(1)(ii). Rebuttal briefs, which must be limited to issues 
raised in the case briefs, may be filed no later than 5 days after the 
case briefs, in accordance with 19 CFR 351.309(d)(1). Any hearing, if 
requested, will be held two days after rebuttal briefs are due, in 
accordance with 19 CFR 351.310(d)(1).
    The Department will issue its final results of review within 270 
days after the date on which the changed circumstances review is 
initiated, in accordance with 19 CFR 351.216(e), and will publish these 
results in the Federal Register.
    The current requirement for a cash deposit of estimated antidumping 
duties on all subject merchandise will continue unless and until it is 
modified pursuant to the final results of this changed circumstances 
review.
    This notice is published in accordance with sections 751(b)(1) and 
777(i) of the Act and 19 CFR 351.216 of the Department's regulations.

    Dated: December 6, 2006.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E6-21315 Filed 12-13-06; 8:45 am]
BILLING CODE 3510-DS-S