[Federal Register Volume 77, Number 226 (Friday, November 23, 2012)]
[Notices]
[Pages 70142-70144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-28452]


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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-821-809]


Initialed Draft Revision to the Agreement Suspending the 
Antidumping Investigation on Certain Hot-Rolled Flat-Rolled Carbon 
Quality Steel Products From the Russian Federation; Request for Comment

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') and the 
Russian Federation's Ministry of Economic Development (``MED'') have 
initialed a draft revision to the Agreement Suspending the Antidumping 
Investigation on Certain Hot-Rolled Flat-Rolled Carbon Quality Steel 
Products (``Suspension Agreement''). The proposed revision will update 
the reference prices provided under the Suspension Agreement applicable 
to October 1, 2012 through December 31, 2012, to bring them into 
alignment with current U.S. prices. The Department is now inviting 
interested parties to comment on the text of the proposed revision.

DATES: Comments must be submitted by no later than November 23, 2012.

FOR FURTHER INFORMATION CONTACT: Sally C. Gannon at (202) 482-0162 or 
Anne D'Alauro (202) 482-4830, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street & 
Constitution Avenue NW., Washington, DC 20230.

Background

    On July 12, 1999, the Department and the Ministry of Trade 
(``MOT'') of the Russian Federation signed an agreement under section 
734(l) of the Tariff Act of 1930, as amended (``the Act''), suspending 
the antidumping duty (``AD'') investigation on hot-rolled flat-rolled 
carbon-quality steel products (``hot-rolled steel'') from the Russian 
Federation. See Suspension of Antidumping Duty Investigation: Hot-
Rolled Flat-Rolled Carbon-Quality Steel Products From the Russian 
Federation, 64 FR 38642 (July 19, 1999). Upon the request of the 
petitioners, the investigation was continued and the Department made an 
affirmative final determination of sales at less than fair value. See 
Notice of Final Determination of Sales at Less Than Fair Value: Hot-
Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian 
Federation, 64 FR 38626 (July 19, 1999). Likewise, the International 
Trade Commission (``ITC'') continued its investigation and made an 
affirmative determination of material injury to an industry in the 
United States. See Certain Hot-Rolled Steel Products from Brazil and 
Russia, 64 FR 46951 (August 27, 1999). MOT was the predecessor to MED, 
which is now the relevant agency representing the Government of the 
Russian Federation for purposes of this Suspension Agreement.
    On August 1, 2011, Nucor Corporation (``Nucor'') submitted a 
request for an administrative review pursuant to Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity to Request Administrative Review, 76 FR 38609 (July 1, 
2011). On August 26, 2011, the Department initiated an administrative 
review of the Suspension Agreement. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Requests for Revocation 
in Part, 76 FR 53404 (August, 26, 2011). On April 2, 2012, the 
Department postponed the preliminary results of this review until May 
24, 2012. See Notice of Extension of Time Limit for the Preliminary 
Results of Administrative Review of the Suspension Agreement on Hot-
Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian 
Federation, 77 FR 19619 (April 2, 2012).
    On June 1, 2012, the preliminary results of the administrative 
review were published. See Notice of Preliminary Results of the 
Administrative Review of the Suspension Agreement on Hot-Rolled

[[Page 70143]]

Flat-Rolled Carbon-Quality Steel Products from the Russian Federation, 
77 FR 32513 (June 1, 2012) (``Preliminary Results''). Section 
751(a)(1)(C) of the Act specifies that, in an administrative review of 
a suspension agreement, the Department shall ``review the current 
status of, and compliance with, any agreement by reason of which an 
investigation was suspended.'' In this case, the Department and MOT 
(the predecessor to MED) of the Russian Federation signed the 
Suspension Agreement, which suspended the underlying AD investigation 
on July 12, 1999. Because the Department determined that the Russian 
Federation was a non-market economy at that time, the Suspension 
Agreement was entered into under section 734(l) of the Act, which 
applies to non-market-economy countries.\1\ This section provides that 
the Department may suspend an investigation upon acceptance of an 
agreement with a non-market-economy country to restrict the volume of 
imports into the United States, if the Department determines that the 
agreement: is in the public interest, effective monitoring is possible, 
and the agreement ``will prevent the suppression or undercutting of 
price levels of domestic products by imports of the merchandise under 
investigation.'' See Section 734(l)(1) of the Act. For this purpose, 
the Suspension Agreement's terms established annual quota limits and a 
reference price mechanism to provide minimum prices for sales of 
Russian hot-rolled steel imports into the U.S. market. The reference 
price mechanism relies on quarterly adjustments, based on the average 
unit prices of fairly-traded imports as reported by the U.S. Bureau of 
the Census, as specified under Section III.E of the Agreement.
---------------------------------------------------------------------------

    \1\ In a memorandum dated June 6, 2002, based on the evidence of 
Russian economic reforms to that date, the Department revoked 
Russia's status as a non-market-economy under section 771(18)(B) of 
the Act, with such revocation effective as of April 1, 2002.
---------------------------------------------------------------------------

    In evaluating the information on the record of the administrative 
review with respect to the current status of, and compliance with, the 
Suspension Agreement, the Department preliminarily determined that the 
Suspension Agreement's reference price mechanism, in its current form, 
was no longer preventing price undercutting by Russian imports of hot-
rolled steel into the U.S. market, and, as a result, also preliminarily 
determined that the Suspension Agreement was no longer fulfilling its 
statutory requirement. The record evidence indicated that the 
adjustments made quarterly within the Suspension Agreement's current 
reference price mechanism have failed to keep pace with changes in U.S. 
prices. Further, once the reference prices became too low relative to 
U.S. market prices, the subsequent quarterly adjustments were no longer 
effective in providing new reference prices that were reflective of 
U.S. market prices for hot-rolled steel. In addition, the record 
evidence and the Department's analysis indicated that the failing 
reference price mechanism, as described, has led to the undercutting of 
domestic hot-rolled steel price levels by Russian hot-rolled steel 
imports during the period of review (``POR''). In its Preliminary 
Results, the Department separately determined that the Government of 
the Russian Federation did not violate the terms of the Suspension 
Agreement during the POR.
    In the Preliminary Results, the Department stated that, in February 
2012, it had entered into consultations with MED to discuss the issues 
raised in the administrative review and the ineffective reference price 
mechanism and that it intended to move forward with additional 
consultations with MED during this administrative review, as mutually 
agreed, in an attempt to resolve these concerns and to bring the 
Suspension Agreement back into alignment with its statutory requirement 
to prevent the undercutting of domestic price levels for hot-rolled 
steel. See Preliminary Results, at 32516. Since the preliminary results 
were issued, MED and the Department negotiated and initialed a revision 
to the Suspension Agreement to address the concerns with the 
ineffective reference price mechanism in the current agreement.

Initialed Draft Revision

    On November 14, 2012, and November 15, 2012, respectively, the 
Department and MED initialed a draft revision to the Suspension 
Agreement. The proposed revision updates the reference prices provided 
within the Suspension Agreement for the October 1, 2012 through 
December 31, 2012, period in order to bring them into alignment with 
U.S. market prices and also modifies the existing mechanism for 
calculating percentage changes going forward. The text of the draft 
revision follows in Annex 1 to this notice.
    On November 15, 2012, the Department released the initialed draft 
revision and a request for comments to interested parties. See 
Memorandum to All Interested Parties from Sally C. Gannon re ``Draft 
Revision to the Agreement Suspending the Antidumping Investigation on 
Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from the 
Russian Federation'' (November 15, 2012) (``Request for Comments''). 
The Department noted in the Request for Comments that, although the 
draft revision and request for comments would be published in the 
Federal Register, the Request for Comments constituted the official 
notice to all known interested parties of this opportunity and that 
comments were due to be submitted to the Department by close-of-
business on November 23, 2012. As also noted in the Request for 
Comments, any comments submitted to the Department must be filed both 
on the Suspension Agreement and Administrative Review segments of this 
proceeding.
    With this additional notice, the Department reiterates that 
interested parties are invited to submit comments to the Department on 
the draft revision to the Suspension Agreement no later than November 
23, 2012. Comments from interested parties must be filed electronically 
using Import Administration's Antidumping and Countervailing Duty 
Centralized Electronic Service System (``IA ACCESS'') and must be 
received by IA ACCESS by 5 p.m. Eastern Time by November 23, 2012. All 
information provided to the Department will be subject to release under 
Administrative Protective Order (``APO'') and should be submitted in 
accordance with 19 CFR 351.103 and 19 CFR 351.105 of the Department's 
regulations, including the service of copies of comments on interested 
parties to this proceeding. The APO and public service lists in this 
proceeding can be found at the following Web site address: http://ia.ita.doc.gov/apo/apo-svc-lists.html. The Department will consider all 
comments received by the close of the comment period. Any finalized 
revision to the Agreement must be signed by the Department and MED by 
November 30, 2012.

    Dated: November 16, 2012.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.

Annex 1

Draft Dated November 14, 2012

Revision to the Antidumping Suspension Agreement On Hot-Rolled Flat-
Rolled Carbon-Quality Steel Products from the Russian Federation
    The Agreement Suspending the Antidumping Investigation on Hot-
Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian 
Federation,

[[Page 70144]]

signed on July 12, 1999, is revised as set forth below.
    The Preamble is revised by adding the following paragraph to the 
end:
    The Ministry of Economic Development of the Russian Federation 
(``MED'') and the Department of Commerce (``DOC'') acknowledge that, 
for purposes of the Agreement Suspending the Antidumping Investigation 
on Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from the 
Russian Federation, as revised (``Agreement''), the successor in 
interest to MOT is MED. All references to MOT in this Agreement shall 
be understood to indicate MED.
    Section III.C is revised, as follows:
    III.C. The Reference Prices for the fourth quarter of the 2012 
Export Limit Period, corresponding to October 1, 2012 through December 
31, 2012, shall be updated by using the following procedure:
    1. To update the Reference Price for Group One products, DOC shall 
average FOB U.S. mill (East of the Mississippi) prices for hot-rolled 
band (``HRB'') from the public source SteelBenchmarker for the two 
months, September and October 2012, resulting in $684 per metric 
ton.\2\
---------------------------------------------------------------------------

    \2\ Group One corresponds to the original grades in the 
reference price calculation under Section III.C of the Agreement, 
including modifications to that grade grouping made pursuant to 
administrative proceedings conducted over the course of the 
administration of the Agreement. See http://ia.ita.doc.gov/reference-price/refprice-a821809.html for the October 1, 2004-
December 31, 2004 quarter.
---------------------------------------------------------------------------

    2. DOC shall decrease the two-month average price resulting from 
Section III.C.1 by two percent to account for the percentage difference 
between the average SteelBenchmarker price and the average unit value 
of fairly-traded imports for the July 2010 through July 2012 period, 
resulting in $670.32 per metric ton.
    3. DOC shall adjust the price resulting from Section III.C.2 for 
freight and transportation expenses, using the following methodology. 
DOC shall calculate the freight and transportation expenses using 
publicly-available import statistics from the U.S. Bureau of the Census 
(from the International Trade Commission's Dataweb) for January-June 
2012. Based on the difference between the CIF values of Russian hot-
rolled steel imports relative to the Customs values for the same 
entries during this period, DOC shall calculate the percentage ratio to 
be used as a deduction for freight and transportation expenses. DOC 
shall then subtract the resulting percentage amount of 10.23 percent 
from the price calculated in Step 2 above to determine the updated 
Reference Price of $601.75 per metric ton for Group One products for 
the October 1, 2012, through December 31, 2012, quarterly period.
    4. DOC shall calculate the Reference Prices for products in Groups 
Two and Three for the October 1, 2012, through December 31, 2012, 
quarterly period based on a 10 and 28 percent increase, respectively, 
to the Reference Price calculated for Group One, as set forth above.\3\
---------------------------------------------------------------------------

    \3\ Groups Two (including modifications) and Three were added to 
the reference price calculation, in accordance with Section III.D of 
the Agreement, and as a result of administrative proceedings 
conducted over the course of the administration of the Agreement. 
See http://ia.ita.doc.gov/reference-price/refprice-a821809.html for 
the October 1, 2005-December 31, 2005 quarter.
---------------------------------------------------------------------------

    5. The resulting updated Reference Prices for the October 1, 2012 
through December 31, 2012, quarterly period are as follows:

------------------------------------------------------------------------
                                                            Q4 2012
                        Group                           Reference price
------------------------------------------------------------------------
                 One--Commercial and Structural Quality
------------------------------------------------------------------------
A36, A1011-CS; A1011-SS-Grades 30, 33, 36, 40; A1018-            $601.75
 SS-Grades 30, 33, 36, 40; API 5L Grades A & B.......
------------------------------------------------------------------------
                       Two--HSLA & HSLA-F Quality
------------------------------------------------------------------------
Grades: A572, A1011-HSLAS; A1018-HSLAS, A1011-HSLAS-             $661.92
 F; A1018-HSLAS-F; API 5L Gr. X42, X46, X52, X56,
 X60; API 5CT Grades J55 and K55.....................
------------------------------------------------------------------------
        Three--High Grade Coils and Sheets for Pipes and Casings
------------------------------------------------------------------------
API 5L Gr. X65, X70, and X80.........................            $770.24
------------------------------------------------------------------------

    Section III.E is replaced with:
    III.E. Thirty days before the start of each quarter of each Export 
Limit Period (beginning with the first quarter, or January 1, 2013, 
through March 31, 2013), DOC shall calculate the new quarterly 
Reference Prices, based on the percentage increase or decrease in the 
weighted-average unit import values for hot-rolled steel from all 
countries not subject to antidumping duty orders or investigations over 
the most recent three months for which data is available, compared to 
the three preceding months. The source of the unit import values will 
be publicly-available import statistics from the U.S. Bureau of the 
Census (International Trade Commission's Dataweb). DOC will provide MED 
with the worksheets supporting its calculation of the quarterly 
Reference Prices at the time it provides the Reference Prices to MED. 
For the first calculation only, i.e., for the quarterly reference 
prices effective for January 1, 2013, through March 31, 2013, the 
Department shall delay issuance of the reference prices to MED until 
the U.S. Bureau of the Census releases data for October 2012 which 
shall be incorporated into this calculation.
    To the extent that there are any inconsistencies between this 
revision and the Agreement, the provisions of the Agreement are 
superseded, and the provisions of this revision shall govern. All other 
provisions of the Agreement and their applicability continue with full 
force.
-----------------------------------------------------------------------
Ronald K Lorentzen,
Deputy Assistant Secretary for Import Administration.

For the United States Department of Commerce.

Initialed by Ronald K Lorentzen on 11/14/12.

Date:------------------------------------------------------------------
-----------------------------------------------------------------------
Alexey Likhachev,
Deputy Minister.

For the Ministry of Economic Development of the Russian Federation.

Initialed by Alexey Likhachev on 11/15/12.

Date:------------------------------------------------------------------

[FR Doc. 2012-28452 Filed 11-20-12; 11:15 am]
BILLING CODE 3510-DS-P