[Federal Register Volume 77, Number 235 (Thursday, December 6, 2012)]
[Notices]
[Pages 72820-72824]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-29537]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-821-809]


Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From the 
Russian Federation; 2010-2011; Final Results of Administrative Review 
and Revision of Agreement Suspending Antidumping Duty Investigation

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

SUMMARY: On June 1, 2012, the Department of Commerce (``the 
Department'') published its preliminary results of administrative 
review of the Agreement Suspending the Antidumping Duty Investigation 
on Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from 
the Russian Federation (``the Agreement'') for the period July 1, 2010 
through June 30, 2011. See Hot-Rolled Flat-Rolled

[[Page 72821]]

Carbon-Quality Steel Products From the Russian Federation; Preliminary 
Results of the Administrative Review of the Suspension Agreement, 77 FR 
32513 (June 1, 2012) (``Preliminary Results''). In its Preliminary 
Results, the Department determined that, although the Government of the 
Russian Federation was in compliance with the Agreement, the 
Department's evaluation with respect to the status of the Agreement 
indicated that the Agreement was not meeting its statutory requirement 
to prevent price undercutting of domestic hot-rolled steel prices. On 
November 14 and 15, 2012, respectively, the Department and the Ministry 
of Economic Development of the Russian Federation (``The Economy 
Ministry of Russia'') initialed a draft revision to the Agreement which 
realigns the reference prices issued pursuant to the Agreement with 
current U.S. market prices. The Department requested, and received on 
November 23, 2012, comments from interested parties on the initialed 
draft revision. On November 30, 2012, the Department and The Economy 
Ministry of Russia signed the final revision to the Agreement. The 
revision to the Agreement reestablishes the effectiveness of the 
reference price mechanism and, thus, brings the revised Agreement into 
compliance with the statutory requirement to prevent the undercutting 
of domestic price levels by imports of Russian hot-rolled steel.

DATES: Effective Date: November 30, 2012.

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

SUPPLEMENTARY INFORMATION:

Background

    In response to a request from Nucor Corporation (``Nucor''), a 
domestic interested party, the Department conducted an administrative 
review of the Agreement, and, on June 1, 2012, the Preliminary Results 
were published in the Federal Register. 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 reviewed the current status 
of, and compliance with, the Agreement, which was signed by the 
Department and the Ministry of Trade of the Russian Federation on July 
12, 1999, and suspended the antidumping duty investigation. Because the 
Department determined that the Russian Federation was a non-market 
economy country at that time, the 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; 
that effective monitoring is possible; and that the agreement ``will 
prevent the suppression or undercutting of price levels of domestic 
products by imports of the merchandise under investigation.'' Section 
734(l)(1). For this purpose, the 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 in the Agreement relied 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.
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    \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 country under section 
771(18)(B) of the Act, with such revocation effective as of April 1, 
2002.
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    In evaluating the information on the record of the administrative 
review with respect to the current status of, and compliance with, the 
Agreement, the Department preliminarily determined that the 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, preliminarily determined that 
the Agreement was no longer fulfilling its statutory requirement. See 
Preliminary Results, 77 FR at 32516. The Department preliminarily 
determined that the record evidence indicated that the adjustments made 
quarterly within the Agreement's existing reference price mechanism 
failed to keep pace with changes in U.S. market 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 Department preliminarily determined 
that the record evidence indicated that the failing reference price 
mechanism, as described, had led to the undercutting of domestic hot-
rolled steel price levels by Russian hot-rolled steel imports during 
the period of review (``POR''). As a separate matter, in its 
preliminary results, the Department found no evidence, in the 
information submitted by interested parties in the administrative 
review, that the Agreement had been violated during the POR.
    After the publication of the Preliminary Results, the Department 
offered interested parties an opportunity to place additional factual 
information on the record of this administrative review. The Russian 
producers Joint Stock Company Severstal (``Severstal''), Novolipetsk 
Steel, Magnitogorsk Iron and Steel Works, and OJSC ``OMK-Steel'' 
(collectively, ``the Russian producers''), and Nucor placed factual 
information on the record on July 5, 2012. Severstal and the domestic 
producers Nucor, ArcelorMittal USA LLC, United States Steel 
Corporation, Gallatin Steel Company, Steel Dynamics, Inc., and SSAB 
N.A.D., Inc. (collectively, ``the domestic producers''), placed 
rebuttal factual information on the record on July 16, 2012. The 
Economy Ministry of Russia, the Russian producers and the domestic 
producers submitted case and rebuttal briefs in response to the 
Preliminary Results on July 23, 2012, and August 1, 2012, respectively.
    On September 21, 2012, the Department extended the deadline for the 
final results of review from October 1, 2012, until November 28, 2012. 
See Memorandum to Lynn Fischer Fox, Deputy Assistant Secretary for 
Policy and Negotiations in Import Administration, regarding ``Extension 
of Deadline for Final Results of Administrative Review of the 
Suspension Agreement'' (September 21, 2012). The Department 
subsequently exercised its discretion to toll deadlines for the 
duration of the closure of the Federal Government from October 29, 
2012, through October 30, 2012. Thus, all deadlines in this segment of 
the proceeding have been extended by two days. The revised deadline for 
the final results of this review is now November 30, 2012. See 
Memorandum to the Record from Paul Piquado, Assistant Secretary for 
Import Administration, regarding ``Tolling of Administrative Deadlines 
As a Result of the Government Closure during the Recent Hurricane'' 
(October 31, 2012).
    On January 31, 2012, the Department requested consultations with 
The Economy Ministry of Russia, under Section VIII.C of the Agreement, 
to

[[Page 72822]]

discuss the issues of the alleged sales of Russian hot-rolled steel 
imports at prices that called into question the effectiveness of the 
Agreement's reference price mechanism and whether or not the Agreement 
was fulfilling its statutory mandate to prevent the undercutting and 
suppression of domestic hot-rolled steel prices. On February 23, 2012, 
and September 26-27, 2012, the Department and The Economy Ministry of 
Russia held consultations in Washington, DC, and on June 1, 2012, in 
Paris, France, to discuss these issues. The Department and The Economy 
Ministry of Russia exchanged several written proposals in an attempt to 
resolve these concerns and to bring the Agreement into alignment with 
its statutory requirement to prevent the undercutting of domestic price 
levels for hot-rolled steel.
    On November 14 and 15, 2012, respectively, the Department and The 
Economy Ministry of Russia initialed a draft revision to the Agreement 
in which the parties agreed to updated reference prices for the fourth 
quarter of the 2012 Export Limit Period, based on current domestic 
prices published by the industry publication SteelBenchmarker, as well 
as a modification to the quarterly adjustment mechanism for making 
future quarterly reference price adjustments. On November 15, 2012, the 
Department released to interested parties the initialed draft revision 
to the Agreement and requested that comments be submitted to the 
Department by November 23, 2012. 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; 
Request for Comments'' (November 15, 2012). The initialed draft 
revision and request for comments were also published in the Federal 
Register on November 23, 2012. See 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, 77 FR 70142 (November 23, 2012). The 
Department received timely comments on the draft revision from The 
Economy Ministry of Russia, the Russian producers, and the domestic 
producers. The Department has considered, and responded to, all 
relevant comments concerning the revised Agreement in the Issues and 
Decision Memorandum (``Decision Memorandum'') accompanying this notice. 
The revised Agreement is effective on November 30, 2012, the date of 
the signing of the revised Agreement.

Scope of Agreement

    The merchandise subject to the Agreement is certain hot-rolled 
flat-rolled carbon-quality steel products. The covered merchandise is 
classified in the Harmonized Tariff Schedule of the United States 
(``HTSUS'') at subheadings: 7208.10.15.00, 7208.10.30.00, 
7208.10.60.00, 7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 
7208.26.00.60, 7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 
7208.36.00.60, 7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 
7208.38.00.30, 7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 
7208.39.00.90, 7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 
7208.54.00.00, 7208.90.00.00, 7210.70.30.00, 7210.90.90.00, 
7211.14.00.30, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 
7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 
7211.19.75.60, 7211.19.75.90, 7212.40.10.00, 7212.40.50.00, 
7212.50.00.00. Certain hot-rolled flat-rolled carbon-quality steel 
covered include: Vacuum degassed, fully stabilized; high strength low 
alloy; and the substrate for motor lamination steel may also enter 
under the following tariff numbers: 7225.11.00.00, 7225.19.00.00, 
7225.30.30.50, 7225.30.70.00, 7225.40.70.00, 7225.99.00.90, 
7226.11.10.00, 7226.11.90.30, 7226.11.90.60, 7226.19.10.00, 
7226.19.90.00, 7226.91.50.00, 7226.91.70.00, 7226.91.80.00, and 
7226.99.01.80. Although the HTSUS subheadings are provided for 
convenience and Customs purposes, the written description of the 
covered merchandise is dispositive.
    See the accompanying Decision Memorandum for the full description 
of merchandise covered by the Agreement.

Period of Review

    The POR is July 1, 2010 through June 30, 2011.

Final Results of Administrative Review

    As noted above, in its Preliminary Results, the Department 
evaluated the information on the record of the administrative review 
with respect to the current status of, and compliance with, the 
Agreement and preliminarily determined that the Agreement's reference 
price mechanism was no longer preventing price undercutting by Russian 
imports of hot-rolled steel into the U.S. market, and, as a result, 
that the Agreement was no longer fulfilling its statutory requirement. 
The Department indicated in its Preliminary Results that, on February 
23, 2012, it had entered into consultations with The Economy Ministry 
of Russia to discuss the issues of the alleged sales of Russian hot-
rolled steel imports at prices that called into question the 
effectiveness of the Agreement's reference price mechanism and whether 
the Agreement was fulfilling its statutory mandate to prevent the 
undercutting and suppression of domestic hot-rolled steel prices. The 
Department further indicated that it intended to move forward with 
additional consultations with The Economy Ministry of Russia during the 
course of the administrative review period, as mutually agreed, in an 
attempt to resolve these concerns and to bring the Agreement back into 
alignment with its statutory requirement to prevent price undercutting. 
See Preliminary Results, 77 FR at 32516.
    Pursuant to the government-to-government negotiations that took 
place during the course of the administrative review, including direct 
consultations in February, June and September of 2012, the Department 
and The Economy Ministry of Russia reached an agreement on a revised 
Agreement that would meet the statutory requirement of preventing the 
undercutting of domestic prices of hot-rolled steel. The Department and 
The Economy Ministry of Russia signed the revision to the Agreement on 
November 30, 2012, the same day these final results were issued. As 
described above, the revised Agreement provides updated reference 
prices for the fourth quarter of the 2012 Export Limit Period, based on 
current domestic prices published by the industry publication 
SteelBenchmarker, and modifies the quarterly adjustment mechanism for 
updating the reference prices going forward. The use of a published 
source for current U.S. market pricing of hot-rolled steel to update 
the reference prices, and the modifications to the quarterly adjustment 
mechanism going forward, ensure that the revised Agreement complies 
with the statutory requirements, pursuant to section 734(l) of the Act.
    For a detailed discussion of the relevant comments received from 
interested parties, and the Department's response to those comments, 
see the Decision Memorandum. Because the Department has determined that 
the revised Agreement, which has been signed by the Department and The 
Economy Ministry of Russia, is in compliance with the requirements of 
section 734 of the Act, the Department

[[Page 72823]]

finds that the interested parties' comments concerning the original, 
unrevised Agreement are moot. In addition, because we have not reached 
a final determination with respect to the original, unrevised 
Agreement, the provisions of 19 CFR 351.209(c) with respect to 
suspension of liquidation do not apply.
    This notice serves as the only 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(a)(3). 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 notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.
    The text of the signed revision to the Agreement follows in Annex 1 
to this notice.

    Dated: November 30, 2012.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.

Annex 1

REVISION TO THE AGREEMENT SUSPENDING THE ANTIDUMPING INVESTIGATION ON 
CERTAIN HOT-ROLLED FLAT-ROLLED CARBON-QUALITY STEEL PRODUCTS FROM THE 
RUSSIAN FEDERATION

    The Agreement Suspending the Antidumping Investigation on Certain 
Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian 
Federation (``Agreement''), signed by the United States Department of 
Commerce and the Ministry of Trade of the Russian Federation on July 
12, 1999, is revised as set forth below. Consistent with Section XI.C 
of the Agreement governing ``Other Provisions,'' the English and 
Russian language versions of this revision shall be authentic, with the 
English version being controlling.
    If a provision of the Agreement conflicts with a provision of this 
revision, the provision of the revision shall supersede the provision 
of the Agreement to the extent of the conflict. All other provisions of 
the Agreement and their applicability continue with full force. The 
Agreement and the present revision to the Agreement are applied without 
prejudice to either party's rights under the WTO.
    The United States Department of Commerce (``DOC'') and Ministry of 
Economic Development of the Russian Federation (``The Economy Ministry 
of Russia'') hereby agree as follows:

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\
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    \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.
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    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\
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    \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.
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    5. The resulting updated Reference Prices for the fourth quarter of 
the 2012 Export Limit Period, corresponding to October 1, 2012 through 
December 31, 2012, and effective as of the date of the signing of this 
revision to the Agreement, are as follows:

------------------------------------------------------------------------
                                                            Q4 2012
                        Group                           reference price
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One--Commercial and Structural Quality
    A36, A1011-CS....................................            $601.75
    A1011-SS--Grades 30, 33, 36, 40..................
    A1018-SS--Grades 30, 33, 36, 40..................
    API 5L Grades A & B..............................
Two--HSLA & HSLA-F Quality
Grades: A572, A1011-HSLAS............................             661.92
    A1018-HSLAS, A1011-HSLAS-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
------------------------------------------------------------------------


[[Page 72824]]

    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 The 
Economy Ministry of Russia with the worksheets supporting its 
calculation of the quarterly Reference Prices at the time it provides 
the Reference Prices to The Economy Ministry of Russia. 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 The Economy Ministry of Russia 
until the U.S. Bureau of the Census releases data for October 2012 
which shall be incorporated into this calculation.

    Signed in Washington, DC, on November 30, 2012.

    For the United States Department of Commerce:

Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.

    For the Ministry of Economic Development of the Russian 
Federation:

Rinat M. Dosmukhamedov,
Trade Representative of the Russian Federation in the USA.

[FR Doc. 2012-29537 Filed 12-5-12; 8:45 am]
BILLING CODE 3510-DS-P