[Federal Register Volume 73, Number 203 (Monday, October 20, 2008)]
[Notices]
[Pages 62250-62252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-24910]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-849]


Certain Cut-to-Length Carbon Steel Plate from the People's 
Republic of China: Initiation of Antidumping Circumvention Inquiry

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request from Nucor Corporation, SSAB N.A.D., 
Evraz Claymont Steel, and Evraz Oregon Steel Mills, domestic interested 
parties in the above-mentioned proceeding (collectively ``certain 
domestic producers''), the Department of Commerce (the Department) is 
initiating an antidumping circumvention inquiry pursuant to section 
781(c) of the Tariff Act of 1930, as amended (the Act). This inquiry 
will determine whether the inclusion of 0.0008 percent or more, by 
weight, of boron in certain steel plates results in those steel plates 
having been ``altered in form or appearance in minor respects'' from 
the subject merchandise such that the plates can be considered subject 
to the antidumping duty order on certain cut-to-length carbon steel 
plate from the People's Republic of China (PRC) under the minor 
alterations provision. See Suspension Agreement on Certain Cut-to-
Length Carbon Steel Plate From the People's Republic of China; 
Termination of Suspension Agreement and Notice of Antidumping Duty 
Order, 68 FR 60081 (October 21, 2003).

EFFECTIVE DATE: October 20, 20088.

FOR FURTHER INFORMATION CONTACT: Steve Bezirganian or Robert James, AD/
CVD Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC, 20230; telephone: (202) 482-
1131 or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 13, 2008, certain domestic producers requested that the 
Department make a final circumvention ruling within 45 days pursuant to 
section 781(d) of the Act, with respect to certain steel plates 
containing 0.0008 percent or more, by weight, of boron. Those parties 
urged the Department to find that such plates are circumventing the 
antidumping duty order on certain cut-to-length carbon steel plate from 
the PRC by virtue of minor alterations to subject merchandise. See 
section 781(c) of the Act.
    Certain domestic producers cite U.S. trade data indicating that 
imports from the PRC of merchandise classified under Harmonized Tariff 
Schedule of the United States (HTSUS) numbers that include subject 
merchandise declined after the order went into effect. See certain 
domestic producers' August 13, 2008, submission (August 13 submission) 
at 15 and Exhibit 5. Certain domestic producers also note that during 
the same period, imports from the PRC of merchandise classified under 
the HTSUS as putatively non-subject

[[Page 62251]]

alloy steel rose substantially. See id. As a result, certain domestic 
producers note, a single alloy HTSUS number accounted for nearly 95 
percent of the total non-alloy and alloy steel plate imported from the 
PRC in the most recent quarter for which data are available (April 2008 
through June 2008). See id.
    Certain domestic producers suggest this trend reflects, at least in 
part, a move by PRC producers and exporters to add small amounts of 
boron during the steel production process. See id., at 5. They note 
that steel consisting of 0.0008 percent or more boron is classified for 
U.S. Customs purposes as alloy steel. See id. Such ``alloy'' steel 
products are not classified in HTSUS numbers listed with the 
description of the scope of the order. Certain domestic producers state 
boron is being added in the steel production process to avoid 
antidumping duties. See id., at 10.
    Certain domestic producers assert that physical characteristics, 
expectations of ultimate users, uses, channels of marketing, and costs 
are unaffected by the inclusion of such small quantities of boron. See 
id., at 10-13. Certain domestic producers also refer to evidence of a 
specific offer made for such PRC steel that contained what they 
described as language indicating a conscious attempt to avoid 
classification of the merchandise under the order. See id., at 10 and 
Exhibit 1. Certain domestic producers suggest the shift to the 
ostensibly ``alloy'' plate products indicates an attempt to conceal 
Chinese producers' true interest in re-entering the U.S. market in the 
context of the recently initiated sunset review of the order. See id., 
at 14-15. In addition, certain domestic producers note the Department 
ruled that circumvention had taken place under another cut-to-length 
carbon steel plate order as a result of such boron additions. See id., 
at 9 (citing Final Determination of Circumvention of the Antidumping 
Order: Cut-to-Length Carbon Steel Plate From Canada, 66 FR 7617 
(January 24, 2001) (Final Canada Plate Determination)). Finally, 
certain domestic producers reference media reports that the PRC 
government is taking steps to curb efforts by PRC exporters to evade 
PRC export taxes through boron-inclusion resulting in steel plate 
products being classified as ``alloy'' steel. See id., at 10 and 
Exhibit 2.
    On August 26, 2008, the Department identified various issues in 
certain domestic producers' August 13, 2008, submission that required 
clarification. Certain domestic producers provided a response on 
September 10, 2008 (September 10, 2008, submission). Certain domestic 
producers identified publicly the parties they claimed were involved 
with circumvention: Tianjin Iron and Steel Co., Ltd. (Tianjin) and 
Toyota Tsusho America (Toyota Tsusho). See September 10, 2008, 
submission, at 3. Certain domestic producers also clarified the 
proposed scope of the antidumping circumvention inquiry. Specifically, 
they proposed that manufacturers and exporters of certain merchandise 
containing boron at alloy steel levels, but otherwise meeting the 
description of the scope of the antidumping duty order, be required to 
demonstrate that the merchandise had certain additional chemical and 
testing result properties for such merchandise to be considered not 
subject to the antidumping duty order. See id., at 7; see also ``Scope 
of the Minor Alterations Antidumping Circumvention Proceeding'' section 
below. Certain domestic producers provided mill test certificate 
information to support its claims. See September 13, 2008, submission, 
at Exhibits S-2 and S-5. Certain domestic producers also provided 
additional information and clarification, including, for example, 
discussion of the potential impact of boron on the hardenability of 
steels, and how hardenability is measured. See September 10, 2008, 
submission at 5-9 and Exhibit S-4.
    On September 19, 2008, the Department obtained additional 
information through a telephone conversation with individuals speaking 
on behalf of one of the domestic producers. These individuals clarified 
that the request did cover products with any boron level greater than 
or equal to 0.0008 percent. Also, the request for antidumping 
circumvention inquiry was limited to merchandise produced by Tianjin 
and/or imported by Toyota Tsusho. See the September 30, 2008, telephone 
memorandum from Steve Bezirganian to the File (September 30, 2008, 
memorandum). In a submission filed on October 1, 2008 (October 1, 2008, 
submission), certain domestic producers confirmed the accuracy of the 
information recorded in September 30, 2008, memorandum. See October 1, 
2008, submission at 2. In that filing, certain domestic producers also 
provided additional evidence of offers for plate containing added boron 
and involving Tianjin and Toyota Tsusho. See October 1, 2008, 
submission at 1-2 and Exhibit 1.
    Scope of Order
    The product covered by this order is certain cut-to-length carbon 
steel plate from the People's Republic of China. Included in this 
description is hot-rolled iron and non-alloy steel universal mill 
plates (i.e., flat-rolled products rolled on four faces or in a closed 
box pass, of a width exceeding 150 mm but not exceeding 1250 mm and of 
a thickness of not less than 4 mm, not in coils and without patterns in 
relief), of rectangular shape, neither clad, plated nor coated with 
metal, whether or not painted, varnished, or coated with plastics or 
other nonmetallic substances; and certain iron and non-alloy steel 
flat-rolled products not in coils, of rectangular shape, hot-rolled, 
neither clad, plated, nor coated with metal, whether or not painted, 
varnished, or coated with plastics or other nonmetallic substances, 
4.75 mm or more in thickness and of a width which exceeds 150 mm and 
measures at least twice the thickness. Included as subject merchandise 
in this order are flat-rolled products of nonrectangular cross-section 
where such cross-section is achieved subsequent to the rolling process 
(i.e., products which have been ``worked after rolling'') - for 
example, products which have been bevelled or rounded at the edges. 
This merchandise is currently classified in the Harmonized Tariff 
Schedule of the United States (HTS) under item numbers 7208.40.3030, 
7208.40.3060, 7208.51.0030, 7208.51.0045, 7208.51.0060, 7208.52.0000, 
7208.53.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.13.0000, 
7211.14.0030, 7211.14.0045, 7211.90.0000, 7212.40.1000, 7212.40.5000, 
7212.50.0000. Although the HTS subheadings are provided for convenience 
and customs purposes, the written description of the scope of this 
order is dispositive. Specifically excluded from subject merchandise 
within the scope of this order is grade X-70 steel plate.

Merchandise Subject to the Minor Alterations Antidumping Circumvention 
Proceeding

    The merchandise subject to this antidumping circumvention inquiry 
consists of all merchandise produced by Tianjin and/or imported by 
Toyota Tsusho containing 0.0008 percent or more boron, by weight, and 
otherwise meeting the requirements of the scope of the antidumping duty 
order as listed under the ``Scope of the Order'' section above, with 
the exception of merchandise meeting all of the following requirements: 
aluminum level of 0.02 percent or greater, by weight; a ratio of 3.4 to 
1 or greater, by weight, of titanium to nitrogen; and a hardenability 
test (i.e., Jominy test)

[[Page 62252]]

result indicating a boron factor of 1.8 or greater.

Initiation of Minor Alterations Antidumping Circumvention Proceeding

    Section 781(c)(1) of the Act provides that the Department may find 
circumvention of an antidumping duty order when products which are of 
the class or kind of merchandise subject to an antidumping duty order 
have been ``altered in form or appearance in minor respects . . . 
whether or not included in the same tariff classification.'' The 
Department notes that, while the statute is silent as to what factors 
to consider in determining whether alterations are properly considered 
``minor,'' the legislative history of this provision indicates there 
are certain factors which should be considered before reaching a 
circumvention determination. In conducting a circumvention inquiry 
under section 781(c) of the Act, the Department has generally relied 
upon ``such criteria as the overall physical characteristics of the 
merchandise, the expectations of the ultimate users, the use of the 
merchandise, the channels of marketing and the cost of any modification 
relative to the total value of the imported products.'' S. Rep. No.71, 
100th Cong., 1st Sess. 100 (1987) (``In applying this provision, the 
Commerce Department should apply practical measurements regarding minor 
alterations, so that circumvention can be dealt with effectively, even 
where such alterations to an article technically transform it into a 
differently designated article.'').
    As discussed below, certain domestic producers have presented 
evidence with respect to each of these criteria.

Overall Physical Characteristics

    Certain domestic producers acknowledge that the presence of boron 
may be associated with enhanced hardenability of steel. See id. 
However, certain domestic producers have noted that other parameters 
are necessary for boron to have the effect in question (see, e.g., 
September 10, 2008, submission at 5-9, and September 30, 2008, 
memorandum at 1-2). The limitation of the scope of this circumvention 
inquiry accounted for such circumstances. See ``Merchandise Subject to 
the Minor Alterations Antidumping Circumvention Proceeding'' section 
above. Unless these parameters are met, the boron is assumed to have no 
effect upon the hardenability of the steel. See, e.g., September 10, 
2008, submission at 6.

Expectations of the Ultimate Users

    Certain domestic producers indicated they are unaware of any 
instances where customers expected or requested cut-to-length carbon 
steel plate with small amounts of boron added, other than to 
potentially avoid the added expenses to the plate products that result 
from the antidumping duties in place (see August 13, 2008, submission 
at 12), with the exception of those instances in which other parameters 
are fulfilled to allow enhanced hardenability of the product. As noted, 
the scope of the inquiry was limited to account for this exception. See 
Overall Physical Characteristics sub-section above.

Use of the Merchandise

    Certain domestic producers state the product at issue is used for 
the same purposes as subject merchandise. See August 13, 2008, 
submission at 12. This is consistent with their later claim that the 
presence of the additional amounts of boron, in and of itself, is 
insignificant in terms of adding beneficial attributes to the steel. 
See September 10, 2008, submission at 4.

Channels of Marketing

    Certain domestic producers state the channels of marketing for the 
boron-added cut-to-length plate and the subject plate are the same, 
noting that both products are marketed in the same manner, appeal to 
the same end users, and are used for the same end uses. See August 13, 
2008, submission at 12. They note an electronic mail offer involving 
Tianjin and Toyota Tsusho directly targets U.S. customers of subject 
merchandise. See id. at 12-13 and Exhibit 1; see also September 10, 
2008, submission at 3.

Cost of Modification

    Certain domestic producers indicated the addition of boron at 
levels recognized as alloy amounts by the tariff schedule involve 
minimal additional cost. They cite the Department's finding in a 
previous ruling that reaching the 0.0008 percent threshold involved a 
cost amounting to only about one-third of one percent of the sales 
price. See August 13, 2008, submission at 13; see also Preliminary 
Determination of Circumvention of Antidumping Order: Cut-to-Length 
Carbon Steel Plate From Canada, 65 FR 64926, 64928 (October 31, 2000) 
(unchanged at Final Canada Plate Determination).
    Based on the information provided by certain domestic producers, 
the Department finds there is sufficient basis to initiate an 
antidumping circumvention inquiry pursuant to section 781(c) of the Act 
to determine whether the merchandise subject to the inquiry (identified 
in the ``Merchandise Subject to the Minor Alterations Antidumping 
Circumvention Proceeding'' section above) involves a minor alteration 
to subject merchandise that is so insignificant as to render the 
resulting merchandise (classified as ``alloy'' steel under the HTSUS) 
subject to the antidumping duty order on certain cut-to-length carbon 
steel plate from the PRC.
    The Department intends to issue its final determination within 300 
days of the date of publication of this notice.
    The Department will not order the suspension of liquidation of 
entries of any additional merchandise at this time. However, in 
accordance with 19 CFR 351.225(l)(2), if the Department issues a 
preliminary affirmative determination, we will then instruct U.S. 
Customs and Border Protection to suspend liquidation and require a cash 
deposit of estimated duties on the merchandise.
    We intend to notify the International Trade Commission in the event 
of an affirmative preliminary determination of circumvention, in 
accordance with 781(e)(1) of the Act and 19 CFR 351.225(f)(7)(i)(C). 
The Department will, following consultation with interested parties, 
establish a schedule for questionnaires and comments on the issues. As 
noted above, the Department intends to issue its final determinations 
within 300 days of the date of publication of this initiation.
    This notice is published in accordance with sections 781(c) and (d) 
of the Act and 19 CFR 351.225(i).

    Dated: October 10, 2008.
David Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-24910 Filed 10-17-08; 8:45 am]
BILLING CODE 3510-DS-S