[Federal Register Volume 78, Number 211 (Thursday, October 31, 2013)]
[Notices]
[Pages 65283-65289]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-25805]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-994, A-851-803, A-428-842, A-588-871, A-580-871, A-455-804, A-
821-821]


Grain-Oriented Electrical Steel From the People's Republic of 
China, the Czech Republic, Germany, Japan, the Republic of Korea, 
Poland, and the Russian Federation: Initiation of Antidumping Duty 
Investigations

AGENCY: Enforcement and Compliance, formerly Import Administration, 
International Trade Administration, Department of Commerce.

DATES: Effective Date: October 31, 2013.

FOR FURTHER INFORMATION CONTACT: Patrick Edwards at (202) 482-8029 (the 
People's Republic of China (PRC)); Elizabeth Eastwood at (202) 482-3874 
(the Czech Republic, Germany, Poland, and the Russian Federation 
(Russia)); or Steve Bezirganian at (202) 482-1131 (Japan and the 
Republic of Korea (Korea)), AD/CVD Operations, Enforcement and 
Compliance, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW., Washington, DC 
20230.

SUPPLEMENTARY INFORMATION:

The Petitions

    On September 18, 2013, the Department of Commerce (the Department) 
received antidumping duty (AD) petitions concerning imports of grain-
oriented electrical steel (GOES) from the PRC, the Czech Republic, 
Germany, Japan, Korea, Poland, and Russia (the Petitions) filed in 
proper form on behalf of AK Steel Corporation, Allegheny Ludlum, LLC, 
and the United Steelworkers (collectively, the petitioners).\1\ The 
Petitions were accompanied by one countervailing duty (CVD) 
petition.\2\ The petitioner companies are domestic producers of GOES 
and the United Steelworkers is the union that represents employees of 
Allegheny Ludlum, LLC that engage in the production of GOES. On 
September 23 and 30, 2013, the Department requested additional 
information and clarification of certain areas of the Petitions.\3\ The 
petitioners filed responses to these requests on September 26, 2013, 
and October 17, 2013.\4\
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    \1\ See ``Petition for the Imposition of Antidumping Duties on 
Imports of Grain-Oriented Electrical Steel from the People's 
Republic of China, the Czech Republic, the Federal Republic of 
Germany, Japan, the Republic of Korea, Poland and the Russian 
Federation,'' dated September 18, 2013 (Petitions).
    \2\ See ``Petition for the Imposition of Countervailing Duties 
on Imports of Grain-Oriented Electrical Steel from the People's 
Republic of China,'' dated September 18, 2013.
    \3\ See letter from the Department to the petitioners entitled, 
``Petition for the Imposition of Antidumping Duties on Imports of 
Grain-Oriented Electrical Steel from the People's Republic of China, 
the Czech Republic, the Federal Republic of Germany, Japan, the 
Republic of Korea, Poland, and the Russian Federation: Supplemental 
Questions,'' on each of the country-specific records, dated 
September 23, 2013; see also letter from the Department to the 
petitioners entitled, ``Petition for the Imposition of Antidumping 
Duties on Imports of Grain-Oriented Electrical Steel from the 
Russian Federation: Supplemental Questions,'' dated September 30, 
2013.
    \4\ See Supplement to all the Petitions, dated September 26, 
2013 (Petition Supplement), Supplement to the PRC Petition, dated 
September 26, 2013, Supplement to the Czech Republic Petition, dated 
September 26, 2013, Supplement to the Germany Petition, dated 
September 26, 2013, Supplement to the Japan Petition, dated 
September 26, 2013, Supplement to the Korea Petition, dated 
September 26, 2013, Supplement to the Poland Petition, dated 
September 26, 2013, and Supplement to the Russia Petition, dated 
September 26, 2013; see also Second Supplement to the Czech 
Petition, dated October 17, 2013, Second Supplement to the Germany 
Petition, dated October 17, 2013, Second Supplement to the Japan 
Petition, dated October 17, 2013, Second Supplement to the Korea 
Petition, dated October 17, 2013, and Second Supplement to the 
Russia Petition, dated October 17, 2013 (Second Supplement).
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    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (the Act), the petitioners allege that imports of GOES from the 
PRC, the Czech Republic, Germany, Japan, Korea, Poland, and Russia are 
being, or are likely to be, sold in the United States at less than fair 
value within the meaning of section 731 of the Act and that such 
imports are materially injuring, or threatening material injury to, an 
industry in the United States. Also, consistent with section 732(b)(1) 
of the Act, the Petitions are accompanied by information reasonably 
available to the petitioners supporting their allegations.
    The Department finds that the petitioners filed these Petitions on 
behalf of the domestic industry because the petitioners are interested 
parties as defined in sections 771(9)(C) and (D) of the Act. The 
Department also finds that the petitioners have demonstrated sufficient 
industry support with respect to the initiation of the AD 
investigations that the petitioners are requesting.\5\
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    \5\ See the ``Determination of Industry Support for the 
Petitions'' section.
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Periods of Investigations

    Pursuant to 19 CFR 351.204(b)(1), because the Petitions were filed 
on September 18, 2013, the period of investigation (POI) for the PRC 
investigation is January 1, 2013, through June 30, 2013. The POI for 
the Czech Republic, Germany, Japan, Korea, Poland, and Russia 
investigations is July 1, 2012, through June 30, 2013.

Scope of the Investigations

    The product covered by these investigations is GOES from the PRC, 
the Czech Republic, Germany, Japan, Korea, Poland and Russia. For a 
full description of the scope of the investigations, see the ``Scope of 
the Investigations,'' in Appendix I of this notice.

Comments on the Scope of Investigations

    During our review of the Petitions, the Department issued questions 
to, and received responses from, the petitioners pertaining to the 
proposed scope to ensure that the scope language in the Petitions would 
be an accurate reflection of the products for which the domestic 
industry is seeking relief. As discussed in the preamble to the 
regulations,\6\ we are setting aside a

[[Page 65284]]

period for interested parties to raise issues regarding product 
coverage. The Department encourages all interested parties to submit 
such comments by 5:00 p.m. Eastern Time on November 13, 2013. All 
comments must be filed on the records of the PRC, Czech Republic, 
Germany, Japan, Korea, Poland, and Russia AD investigations, as well as 
the concurrent PRC CVD investigation.
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    \6\ See Antidumping Duties; Countervailing Duties; Final rule, 
62 FR 27296, 27323 (May 19, 1997).
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Filing Requirements

    All submissions to the Department must be filed electronically 
using Enforcement and Compliance's Antidumping Countervailing Duty 
Centralized Electronic Service System (IA ACCESS).\7\ An electronically 
filed document must be received successfully in its entirety by 5:00 
p.m. on the date of the applicable deadline. Documents excepted from 
the electronic submission requirements must be filed manually (i.e., in 
paper form) with the APO/Dockets Unit of Enforcement and Compliance, 
Room 1870, U.S. Department of Commerce, 14th Street and Constitution 
Avenue NW., Washington, DC 20230, and stamped with the date and time of 
receipt by the applicable deadline.
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    \7\ See Antidumping and Countervailing Duty Proceedings: 
Electronic Filing Procedures; Administrative Protective Order 
Procedures, 76 FR 39263 (July 6, 2011) for details of the 
Department's electronic filing requirements, which went into effect 
on August 5, 2011. Information on help using IA ACCESS can be found 
at https://iaaccess.trade.gov/help.aspx and a handbook can be found 
at https://iaaccess.trade.gov/help/Handbook%20on%20Electronic%20Filling%20Procedures.pdf.
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Comments on Product Characteristics for Antidumping Duty Questionnaires

    The Department requests comments from interested parties regarding 
the appropriate physical characteristics of GOES to be reported in 
response to the Department's AD questionnaires. This information will 
be used to identify the key physical characteristics of the subject 
merchandise in order to report the relevant factors and costs of 
production (COPs) accurately as well as to develop appropriate product-
comparison criteria.
    Interested parties may provide any information or comments that 
they feel are relevant to the development of an accurate list of 
physical characteristics. Specifically, they may provide comments as to 
which characteristics are appropriate to use as: (1) General product 
characteristics and (2) product-comparison criteria. We note that it is 
not always appropriate to use all product characteristics as product-
comparison criteria. We base product-comparison criteria on meaningful 
commercial differences among products. In other words, while there may 
be some physical product characteristics utilized by manufacturers to 
describe GOES, it may be that only a select few product characteristics 
take into account commercially-meaningful physical characteristics. In 
addition, interested parties may comment on the order in which the 
physical characteristics should be used in matching products. 
Generally, the Department attempts to list the most important physical 
characteristics first and the least important characteristics last.
    In order to consider the suggestions of interested parties in 
developing and issuing the AD questionnaires, we must receive comments 
on product characteristics by November 13, 2013. Rebuttal comments must 
be received by November 20, 2013. All comments and submissions to the 
Department must be filed electronically using IA ACCESS, as referenced 
above.

Tolling of Deadlines

    As explained in the memorandum from the Assistant Secretary for 
Enforcement and Compliance, the Department has exercised its discretion 
to toll deadlines for the duration of the closure of the Federal 
Government from October 1, through October 16, 2013.\8\ Therefore, all 
deadlines in these investigations have been tolled by 16 days. If the 
new deadline falls on a non-business day, in accordance with the 
Department's practice, the deadline will become the next business day. 
The revised deadline for the initiation of these investigations is 
October 24, 2013.
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    \8\ See Memorandum for the Record from Paul Piquado, Assistant 
Secretary for Enforcement and Compliance, ``Deadlines Affected by 
the Shutdown of the Federal Government'' dated October 18, 2013.
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Determination of Industry Support for the Petitions

    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (i) At least 
25 percent of the total production of the domestic like product; and 
(ii) more than 50 percent of the production of the domestic like 
product produced by that portion of the industry expressing support 
for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of 
the Act provides that, if the petition does not establish support of 
domestic producers or workers accounting for more than 50 percent of 
the total production of the domestic like product, the Department 
shall: (i) Poll the industry or rely on other information in order to 
determine if there is support for the petition, as required by 
subparagraph (A); or (ii) determine industry support using a 
statistically valid sampling method to poll the industry.
    Section 771(4)(A) of the Act defines the term ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether a petition has the requisite industry support, the statute 
directs the Department to look to producers and workers who produce the 
domestic like product. The International Trade Commission (ITC), which 
is responsible for determining whether ``the domestic industry'' has 
been injured, must also determine what constitutes a domestic like 
product in order to define the industry. While both the Department and 
the ITC must apply the same statutory definition regarding the domestic 
like product,\9\ they do so for different purposes and pursuant to a 
separate and distinct authority. In addition, the Department's 
determination is subject to limitations of time and information. 
Although this may result in different definitions of the like product, 
such differences do not render the decision of either agency contrary 
to law.\10\
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    \9\ See section 771(10) of the Act.
    \10\ See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT 
2001) (citing Algoma Steel Corp., Ltd. v. United States, 688 F. 
Supp. 639, 644 (CIT 1988), aff'd 865 F.2d 240 (Fed. Cir. 1989)).
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    Section 771(10) of the Act defines the term ``domestic like 
product'' as ``a product which is like, or in the absence of like, most 
similar in characteristics and uses with, the article subject to an 
investigation under this title.'' Thus, the reference point from which 
the domestic like product analysis begins is ``the article subject to 
an investigation'' (i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition).
    With regard to the domestic like product, the petitioners do not 
offer a definition of the domestic like product distinct from the scope 
of the investigations. Based on our analysis of the information 
submitted on the record, we have determined that GOES, as defined in 
the scope of the investigations, constitutes a single domestic like 
product and we have analyzed industry support in terms of that domestic 
like product.\11\
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    \11\ For a discussion of the domestic like product analysis in 
this case, see Antidumping Duty Investigation Initiation Checklist: 
Grain-Oriented Electrical Steel from the People's Republic of China 
(PRC AD Initiation Checklist), at Attachment II, Analysis of 
Industry Support for the Petitions Covering Grain-Oriented 
Electrical Steel from the People's Republic of China, Czech 
Republic, Germany, Japan, the Republic of Korea, Poland, and the 
Russian Federation (Attachment II); Antidumping Duty Investigation 
Initiation Checklist: Grain-Oriented Electrical Steel from Czech 
Republic (Czech Republic Initiation Checklist), at Attachment II; 
Antidumping Duty Investigation Initiation Checklist: Grain-Oriented 
Electrical Steel from Germany (Germany Initiation Checklist), at 
Attachment II; Antidumping Duty Investigation Initiation Checklist: 
Grain-Oriented Electrical Steel from Japan (Japan Initiation 
Checklist), at Attachment II; Antidumping Duty Investigation 
Initiation Checklist: Grain-Oriented Electrical Steel from the 
Republic of Korea (Korea Initiation Checklist), at Attachment II; 
Antidumping Duty Investigation Initiation Checklist: Grain-Oriented 
Electrical Steel from Poland (Poland Initiation Checklist), at 
Attachment II; and Antidumping Duty Investigation Initiation 
Checklist: Grain-Oriented Electrical Steel from the Russian 
Federation (Russia Initiation Checklist), at Attachment II. These 
checklists are dated concurrently with this notice and are on file 
electronically via IA ACCESS. Access to documents filed via IA 
ACCESS is also available in the Central Records Unit (CRU), Room 
7046 of the main Department of Commerce building.

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[[Page 65285]]

    In determining whether the petitioners have standing under section 
732(c)(4)(A) of the Act, we considered the industry support data 
contained in the Petitions with reference to the domestic like product 
as defined in the ``Scope of the Investigations'' in Appendix I of this 
notice. To establish industry support, the petitioners provided their 
own production of the domestic like product in 2012.\12\ The 
petitioners state that there are no other known producers of GOES in 
the United States; therefore, the Petitions are supported by 100 
percent of the U.S. industry.\13\
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    \12\ See Volume I of the Petitions, at 4.
    \13\ Id., at 1-3.
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    Our review of the data provided in the Petitions and other 
information readily available to the Department indicates that the 
petitioners have met the statutory criteria for industry support 
pursuant to section 732(c)(4) of the Act.\14\ First, the Petitions 
establish support from domestic producers (or workers) accounting for 
more than 50 percent of the total production of the domestic like 
product and, as such, the Department is not required to take further 
action in order to evaluate industry support (e.g., polling).\15\ 
Second, the domestic producers (or workers) have met the statutory 
criteria for industry support under section 732(c)(4)(A)(i) of the Act 
because the domestic producers (or workers) who support the Petitions 
account for at least 25 percent of the total production of the domestic 
like product.\16\ Finally, the domestic producers (or workers) have met 
the statutory criteria for industry support under section 
732(c)(4)(A)(ii) of the Act because the domestic producers (or workers) 
who support the Petitions account for more than 50 percent of the 
production of the domestic like product produced by that portion of the 
industry expressing support for, or opposition to, the Petitions.\17\ 
Accordingly, the Department determines that the Petitions were filed on 
behalf of the domestic industry within the meaning of section 732(b)(1) 
of the Act.
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    \14\ See PRC AD Initiation Checklist, Czech Republic Initiation 
Checklist, Germany Initiation Checklist, Japan Initiation Checklist, 
Korea Initiation Checklist, Poland Initiation Checklist, and Russia 
Initiation Checklist, at Attachment II.
    \15\ See section 732(c)(4)(D) of the Act; see also PRC AD 
Initiation Checklist, Czech Republic Initiation Checklist, Germany 
Initiation Checklist, Japan Initiation Checklist, Korea Initiation 
Checklist, Poland Initiation Checklist, and Russia Initiation 
Checklist, at Attachment II.
    \16\ See PRC AD Initiation Checklist, Czech Republic Initiation 
Checklist, Germany Initiation Checklist, Japan Initiation Checklist, 
Korea Initiation Checklist, Poland Initiation Checklist, and Russia 
Initiation Checklist, at Attachment II.
    \17\ Id.
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    The Department finds that the petitioners filed the Petitions on 
behalf of the domestic industry because they are interested parties as 
defined in section 771(9)(C) and (D) of the Act and have demonstrated 
sufficient industry support with respect to the AD investigations that 
they are requesting the Department initiate.\18\
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    \18\ Id.
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Allegations and Evidence of Material Injury and Causation

    The petitioners allege that the U.S. industry producing the 
domestic like product is being materially injured, or threatened with 
material injury, by reason of the imports of the subject merchandise 
sold at less than normal value (NV). In addition, the petitioners 
allege that subject imports exceed the negligibility threshold provided 
for under section 771(24)(A) of the Act.\19\
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    \19\ See Volume I of the Petitions, at 15-16 and Exhibit 
GENERAL-6.
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    The petitioners contend that the industry's injured condition is 
illustrated by reduced market share; underselling and price depression 
or suppression; lost sales and revenues; decline in production, 
capacity utilization, and shipments; reduced employment variables; and 
decline in financial performance.\20\ We have assessed the allegations 
and supporting evidence regarding material injury, threat of material 
injury, and causation, and we have determined that these allegations 
are properly supported by adequate evidence and meet the statutory 
requirements for initiation.\21\
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    \20\ See Volume I of the Petitions, at 13-29 and Exhibits 
GENERAL-4 and GENERAL-6 through GENERAL-12.
    \21\ See PRC AD Initiation Checklist, Czech Republic Initiation 
Checklist, Germany Initiation Checklist, Japan Initiation Checklist, 
Korea Initiation Checklist, Poland Initiation Checklist, and Russia 
Initiation Checklist, at Attachment III, Analysis of Allegations and 
Evidence of Material Injury and Causation for the Petitions Covering 
Grain-Oriented Electrical Steel From the People's Republic of China, 
Czech Republic, Germany, Japan, the Republic of Korea, Poland, and 
the Russian Federation.
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Allegations of Sales at Less Than Fair Value

    The following is a description of the allegations of sales at less 
than fair value upon which the Department based its decision to 
initiate AD investigations of imports of GOES from the Czech Republic, 
Germany, Japan, Korea, Poland, the PRC, and Russia. The sources of data 
for the deductions and adjustments relating to U.S. price and NV are 
discussed in greater detail in the country-specific initiation 
checklists.

Export Price

    For the Czech Republic, Japan, Korea, Poland, and Russia, the 
petitioners based U.S. price on offers for sales of GOES from producers 
of subject merchandise produced in, and exported from, the subject 
country. The petitioners made deductions from U.S. price for movement 
expenses consistent with the delivery terms. For Japan and Korea, the 
petitioners also made deductions from U.S. price for trader markups 
when traders made the offers for sale; these deductions were estimated 
based on the financial statements of independent steel traders.\22\ The 
petitioners made no other adjustments to U.S. price.\23\
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    \22\ See Japan Initiation Checklist; and Korea Initiation 
Checklist.
    \23\ See Czech Republic Checklist; Japan Initiation Checklist; 
Korea Initiation Checklist; Poland Initiation Checklist; and Russia 
Initiation Checklist.
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Constructed Export Price

    For Germany, Japan, and the PRC, the petitioners calculated 
constructed export price (CEP) based on offers for sales of GOES from 
producers of subject merchandise produced in, and exported from, the 
subject country. The petitioners classified these offers as CEP 
transactions based on research showing the majority of imports from 
these producers were facilitated by their U.S. affiliates. The 
petitioners made deductions from U.S. price for movement expenses, 
consistent with the delivery terms. The petitioners also deducted U.S. 
indirect selling expenses estimated using the financial statements of 
an independent steel trader (for Germany, Japan, and the PRC) and 
imputed credit expenses (for Germany).

[[Page 65286]]

The petitioners made no other adjustments to U.S. price.\24\
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    \24\ See PRC AD Initiation Checklist; Germany Initiation 
Checklist; and Japan Initiation Checklist.
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Normal Value

    For the Czech Republic, Germany, Japan, Korea, Poland, and Russia, 
the petitioners based NV on price information from a producer of GOES 
in each of these countries that was sold in the subject country 
obtained through market research for the foreign like product. The 
petitioners made adjustments to NV for imputed credit expenses 
consistent with the sales terms. The petitioners also made a 
difference-in-merchandise adjustment to NV, where applicable, to 
account for differences between the home market and U.S. products (for 
Germany, Japan, Korea, and Russia). The petitioners made no other 
adjustments to NV.\25\
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    \25\ See Czech Republic Initiation Checklist; Germany Initiation 
Checklist; Japan Initiation Checklist; Korea Initiation Checklist; 
Poland Initiation Checklist; and Russia Initiation Checklist.
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    With respect to the PRC, the petitioners state that the Department 
has long treated the PRC as a non-market economy (NME) country.\26\ In 
accordance with section 771(18)(C)(i) of the Act, the presumption of 
NME status remains in effect until revoked by the Department. The 
presumption of NME status for the PRC has not been revoked by the 
Department and, therefore, remains in effect for purposes of the 
initiation of this investigation. Accordingly, the NV of the product is 
appropriately based on factors of production (FOPs) valued in a 
surrogate market economy country, in accordance with section 773(c) of 
the Act. In the course of this investigation, all parties, including 
the public, will have the opportunity to provide relevant information 
related to the issues of the PRC's NME status and the granting of 
separate rates to individual exporters.
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    \26\ See Volume II of the Petitions, at 1.
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    The petitioners claim that Thailand is an appropriate surrogate 
country because it is a market economy that is at a level of economic 
development comparable to that of the PRC, it is a significant producer 
of the merchandise under consideration, and the data for valuing FOPs 
are both available and reliable.\27\ However, to calculate factory 
overhead, selling, general and administrative (SG&A) expenses, and 
profit, the petitioners used the financial statements of an Indian 
steel producer because, to the best of their knowledge, there are no 
publicly available, contemporaneous financial statements for any 
company in the Philippines, Indonesia, Ukraine, Thailand, Colombia, or 
South Africa that is a vertically-integrated producer (like the PRC 
GOES producers) of merchandise comparable to the subject merchandise 
and that shows a profit. The petitioners also examined countries not 
traditionally used as surrogates for the PRC (such as Malaysia) but are 
close to the PRC in terms of per-capita GNI and found no appropriate 
companies that did not have financial losses.\28\
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    \27\ Id., at 2.
    \28\ See Volume II of the Petitions, at 6 and 8-10; see also 
Supplement to the PRC Petition, at 5-7.
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    Based on the information provided by the petitioners, we believe it 
is appropriate to use Thailand as a surrogate country for initiation 
purposes. We also believe that, for initiation purposes, it is 
appropriate to use the Indian financial statements as the surrogate 
source for financial ratios. Interested parties will have the 
opportunity to submit comments regarding surrogate country selection 
and will be provided an opportunity to submit publicly available 
information to value FOPs within 40 days before the scheduled date of 
the preliminary determination.\29\
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    \29\ See 19 CFR 351.301(c)(3)(i). Note that this is the revised 
regulation published on April 1, 2013. See http://www.gpo.gov/fdsys/pkg/CFR-2013-title19-vol3/html/CFR-2013-title19-vol3.htm.
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Factors of Production

    The petitioners based the FOPs for materials, labor, and energy on 
the consumption rates of the U.S. producers of GOES products. The 
petitioners assert that the experience of the U.S. producers is 
appropriate for comparison to producers in the PRC because the U.S. 
producers are comparable producers of the subject merchandise.\30\
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    \30\ See Volume II of the Petitions, at 6 and Exhibit C-13.
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Valuation of Raw Materials

    The petitioners valued the FOPs for pig-iron (i.e., the primary raw 
material used to produce subject merchandise) and iron and steel scrap 
using the average cost, insurance, and freight import value at the Thai 
port of entry using HTSUS subheadings 7201.10 and 7204.10, as published 
by Global Trade Atlas (GTA) for the period from January 2013 through 
June 2013.\31\ The petitioners added to these values the average Thai 
brokerage and inland freight charges for importing the goods into 
Thailand, as published by the World Bank in Doing Business 2013: 
Thailand.\32\
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    \31\ Id., at Exhibit C-14.
    \32\ Id., at Exhibits C-9 and C-10.
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    The petitioners excluded all import values from countries 
previously determined by the Department to maintain broadly available, 
non-industry-specific export subsidies and from countries previously 
determined by the Department to be NME countries. In addition, in 
accordance with the Department's practice, the average import value 
excludes imports that were labeled as originating from an unidentified 
country.

Valuation of Labor

    The petitioners valued labor using information published in a 2007 
industrial survey by the Thailand National Statistics Office.\33\ The 
survey provides a Thai wage rate for the manufacture of basic iron and 
steel in 2006, which the petitioners adjusted for inflation and then 
converted using the average exchange rate during the POI.\34\ The 
petitioners then applied that resulting labor rate to the labor hours 
expended by U.S. GOES producers.\35\
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    \33\ Id., at 7 and Exhibit C-17.
    \34\ Id.; see also Volume II of the Petitions, at Exhibit C-3A.
    \35\ Id., at Exhibit C-19.
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Valuation of Energy

    The petitioners valued electricity using a 2012 electricity rate in 
Thai baht per kilowatt hour, as reported by the Electricity Generating 
Authority of Thailand.\36\ In accordance with the Department's policy 
not to adjust energy tariffs for inflation if those tariffs are likely 
still in force, the petitioners did not adjust this value for 
inflation.\37\ After converting the Thai electricity rate into U.S. 
dollars, the petitioners multiplied that rate by the electricity 
consumption of U.S. producers of

[[Page 65287]]

GOES, in order to obtain an electricity cost per metric ton of 
output.\38\
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    \36\ Id., at 7 and Exhibit C-15.
    \37\ Id.; see also Certain Kitchen Appliance Shelving and Racks 
From the People's Republic of China: Antidumping Duty Administrative 
Review, 2010-2011, 77 FR 61385 (October 9, 2012), and accompanying 
Preliminary Decision Memorandum at 16, unchanged in Certain Kitchen 
Appliance Shelving and Racks From the People's Republic of China; 
2010-2011; Final Results of Antidumping Duty Administrative Review, 
78 FR 5414 (January 25, 2013); Certain Activated Carbon From the 
People's Republic of China: Final Results and Partial Rescission of 
Second Antidumping Duty Administrative Review, 75 FR 70208 (November 
17, 2010), and accompanying Issues and Decision Memorandum at 
Comment 4; and Certain Oil Country Tubular Goods From the People's 
Republic of China: Notice of Preliminary Determination of Sales at 
Less Than Fair Value, Affirmative Preliminary Determination of 
Critical Circumstances and Postponement of Final Determination, 74 
FR 59117 (November 17, 2009), unchanged in Certain Oil Country 
Tubular Goods From the People's Republic of China: Final 
Determination of Sales at Less Than Fair Value, Affirmative Final 
Determination of Critical Circumstances and Final Determination of 
Targeted Dumping, 75 FR 20335 (April 19, 2010).
    \38\ See Volume II of the Petitions, at 7 and Exhibit AD-C-19.
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    The petitioners valued natural gas using publicly available Thai 
import data obtained from GTA in U.S. dollars for the POI.\39\ To 
convert the unit of measurement from kilograms to cubic feet, the 
petitioners used universal conversion factors published by Chemlink Pty 
Ltd.\40\ Finally, the petitioners applied the gas rate obtained to the 
volume of natural gas consumed by U.S. producers to obtain the natural 
gas surrogate cost per metric ton of output.\41\
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    \39\ Id., at 7.
    \40\ Id., at 7 and Exhibit C-16.
    \41\ Id., at 7 and Exhibit C-19.
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Valuation of Factory Overhead, Selling, General and Administrative 
Expenses, and Profit

    The petitioners calculated surrogate financial ratios (i.e., 
factory overhead, selling, general and administrative (SG&A) expenses, 
and profit) using the 2012-2013 unconsolidated financial statements of 
Tata Steel, a vertically-integrated Indian producer of a wide variety 
of steel products.\42\ The petitioners assert that use of these 
financial statements is appropriate because there was limited access to 
other publicly-available financial statements of a vertically-
integrated steel company which manufactured comparable merchandise and 
which was also profitable.\43\
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    \42\ Id., at 8-9 and Exhibit C-18.
    \43\ Id.; see also Supplement to the PRC Petition, at 6-7.
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Sales Below Cost Allegations

    For the Czech Republic, Germany, Japan, Korea, Poland, and Russia, 
the petitioners provided information demonstrating reasonable grounds 
to believe or suspect that sales of GOES in the respective home markets 
were made at prices below the fully-absorbed COP, within the meaning of 
section 773(b) of the Act, and requested that the Department conduct 
country-wide sales-below-cost investigations. The Statement of 
Administrative Action (SAA), submitted to the Congress in connection 
with the interpretation and application of the Uruguay Round Agreements 
Act, states that an allegation of sales below COP need not be specific 
to individual exporters or producers.\44\ The SAA states that 
``Commerce will consider allegations of below-cost sales in the 
aggregate for a foreign country, just as Commerce currently considers 
allegations of sales at less than fair value on a country-wide basis 
for purposes of initiating an antidumping investigation.'' \45\
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    \44\ See SAA, H.R. Doc. No. 103-316, Vol. 1 (1994), at 833, 
reprinted in 1994 U.S.C.C.A.N. 3773.
    \45\ Id.
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    Further, the SAA provides that section 773(b)(2)(A) of the Act 
retains the requirement that the Department have ``reasonable grounds 
to believe or suspect'' that below-cost sales have occurred before 
initiating such an investigation. Reasonable grounds exist when an 
interested party provides specific factual information on costs and 
prices, observed or constructed, indicating that sales in the foreign 
market in question are at below-cost prices.\46\
---------------------------------------------------------------------------

    \46\ Id.
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Cost of Production

    Pursuant to section 773(b)(3) of the Act, COP consists of the cost 
of manufacturing (COM); SG&A expenses; financial expenses; and packing 
expenses. The petitioners calculated COM based on the petitioners' 
experience adjusted for known differences between their industry in the 
United States and the industries of the respective country (i.e., the 
Czech Republic, Germany, Japan, Korea, Poland, and Russia), during the 
proposed POI.\47\ Using publicly-available data to account for price 
differences, the petitioners multiplied their usage quantities by the 
submitted value of the inputs used to manufacture GOES in each country.
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    \47\ See Czech Republic Initiation Checklist; Germany Initiation 
Checklist; Japan Initiation Checklist; Korea Initiation Checklist; 
Poland Initiation Checklist; and Russia Initiation Checklist.
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    To determine factory overhead, SG&A, and financial expense rates, 
the petitioners relied on financial statements of producers of 
comparable merchandise operating in the respective foreign country.\48\
---------------------------------------------------------------------------

    \48\ Id.
---------------------------------------------------------------------------

    Based upon a comparison of the prices of the foreign like product 
in the home market to the calculated COP of the most comparable 
product, we find reasonable grounds to believe or suspect that sales of 
the foreign like products were made at prices that are below the COP, 
within the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly, 
the Department is initiating country-wide cost investigations on sales 
of GOES from the Czech Republic, Germany, Japan, Korea, Poland, and 
Russia.

Normal Value Based on Constructed Value

    For the Czech Republic, Germany, Japan, Korea, Poland, and Russia, 
because they alleged sales below cost, pursuant to sections 773(a)(4), 
773(b), and 773(e) of the Act, the petitioners calculated NV based on 
constructed value (CV). The petitioners calculated CV using the same 
average COM, SG&A, financial expense, and packing figures used to 
compute the COPs. The petitioners relied on the same financial 
statements used as the basis for the factory overhead, SG&A, and 
financial expense rates to calculate the profit rates.\49\
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    \49\ See Czech Republic Initiation Checklist; Germany Initiation 
Checklist; Japan Initiation Checklist; Korea Initiation Checklist; 
Poland Initiation Checklist; and Russia Initiation Checklist.
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Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of GOES from the PRC, the Czech Republic, Germany, 
Japan, Korea, Poland, and Russia are being, or are likely to be, sold 
in the United States at less than fair value. Based on comparisons of 
export price or CEP to NV, in accordance with section 773(a)(1) of the 
Act, the estimated dumping margins for GOES from: (1) The Czech 
Republic range from 68.46 percent to 235.50 percent; \50\ (2) Germany 
range from 38.54 percent to 241.91 percent; \51\ (3) Japan range from 
44.95 percent to 172.30 percent; \52\ (4) Korea range from 49.51 
percent to 257.61 percent; \53\ (5) Poland range from 56.69 percent to 
99.51 percent; \54\ and (6) Russia range from 43.52 percent to 119.88 
percent.\55\ Based on a comparison of CEP to NV, in accordance with 
section 773(c) of the Act, the estimated dumping margin for GOES from 
the PRC is 159.21 percent.\56\
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    \50\ See Czech Republic Initiation Checklist.
    \51\ See Germany Initiation Checklist.
    \52\ See Japan Initiation Checklist.
    \53\ See Korea Initiation Checklist.
    \54\ See Poland Initiation Checklist.
    \55\ See Russia Initiation Checklist.
    \56\ See PRC AD Initiation Checklist.
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Initiation of Antidumping Duty Investigations

    Based upon the examination of the Petitions on GOES from the PRC, 
the Czech Republic, Germany, Japan, Korea, Poland, and Russia, we find 
that the Petitions meet the requirements of section 732 of the Act. 
Therefore, we are initiating AD investigations to determine whether 
imports of GOES from the PRC, the Czech Republic, Germany, Japan, 
Korea, Poland, and Russia are being, or are likely to be, sold in the 
United States at less than fair value. In accordance with section 
733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we 
will

[[Page 65288]]

make our preliminary determinations no later than 140 days after the 
date of this initiation.

Respondent Selection

    Although the Department normally relies on import data from U.S. 
Customs and Border Protection to select a limited number of producers/
exporters for individual examination in AD investigations, if 
appropriate, these Petitions name only one company as a producer/
exporter of GOES in the Czech Republic: ArcelorMittal Frydek-Mistek 
A.S.; one company as a producer/exporter of GOES in Germany: 
ThyssenKrupp Electrical Steel GmbH; one company as a producer/exporter 
of GOES in Korea: POSCO; one company as a producer/exporter of GOES in 
Poland: Stalprodukt S.A.; one company as a producer/exporter of GOES in 
Russia: Novolipetsk Steel; and two companies as producers/exporters of 
GOES in Japan: JFE Steel Corporation and Nippon Steel & Sumitomo Metal 
Corporation.\57\ Furthermore, we currently know of no additional 
producers/exporters of subject merchandise from these countries. 
Accordingly, the Department intends to examine all known producers/
exporters in these investigations (i.e., the companies cited above). We 
invite interested parties to comment on this issue. Parties wishing to 
comment must do so within seven days of the publication of this notice 
in the Federal Register for the Czech Republic, Germany, Korea, Poland, 
Russia, and Japan.
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    \57\ See Volume I of the Petitions, at Exhibit GENERAL-3. The 
petitioners also name additional companies in Japan, Korea, and 
Russia which appear to be non-producing exporters or trading 
companies (i.e., Metal One Corporation in Japan, Hyundai Corporation 
in Korea, and PJSC Ashinskiy Metallurgical Works in Russia). Id. In 
a letter dated October 23, 2013, the petitioners clarified their 
understanding of the commercial nature of exports by these 
companies. Specifically, the petitioners indicated that GOES is a 
highly use-dependent product, the demand for which is dependent on 
the unique design and engineering specifications of each transformer 
in which it is incorporated. Thus, the petitioners stated that, to 
the best of their knowledge, the foreign producers listed in the 
Petitions have knowledge of the ultimate destination of their sales 
of GOES. Based on this information, at this time we intend to review 
only the identified producers as respondents. If we receive 
information during the specified comment period below which 
indicates that the producers do not, in fact, know that certain of 
the merchandise sold to the trading companies/exporters was destined 
for the United States, the Department may consider examining these 
trading companies/exporters as additional respondents at a later 
date.
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    With respect to the PRC, in accordance with our standard practice 
for respondent selection for NME countries, we intend to issue quantity 
and value questionnaires to each potential respondent and base 
respondent selection on the responses received. In addition, the 
Department will post the quantity and value questionnaire along with 
the filing instructions on the Enforcement and Compliance Web site 
(http://enforcement.trade.gov/ia-highlights-and-news.html). Exporters 
and producers of GOES from the PRC that do not receive quantity and 
value questionnaires via mail may still submit a quantity and value 
response and can obtain a copy from the Enforcement and Compliance Web 
site. The quantity and value questionnaire must be submitted by all PRC 
producers/exporters no later than November 13, 2013. All quantity and 
value questionnaires must be filed electronically using IA ACCESS.

Separate Rates

    In order to obtain separate rate status in an NME investigation, 
exporters and producers must submit a separate rate status 
application.\58\ The specific requirements for submitting the separate 
rate application in the PRC investigation are outlined in detail in the 
application itself, which will be available on the Department's Web 
site at http://enforcement.trade.gov/ia/ia-highlights-and-news.html on 
the date of publication of this initiation notice in the Federal 
Register. The separate rate application will be due 60 days after 
publication of this initiation notice. For exporters and producers who 
submit a separate rate status application and have been selected as 
mandatory respondents, these exporters and producers will no longer be 
eligible for consideration for separate rate status unless they respond 
to all parts of the questionnaire as mandatory respondents. The 
Department requires that PRC respondents submit a response to both the 
quantity and value questionnaire and the separate rate application by 
their respective deadlines in order to receive consideration for 
separate rate status.
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    \58\ See Policy Bulletin 05.1: Separate-Rates Practice and 
Application of Combination Rates in Antidumping Investigation 
involving Non-Market Economy Countries (April 5, 2005) (Separate 
Rates and Combination Rates Bulletin), available on the Department's 
Web site at http://enforcement.trade.gov/policy/bull05-1.pdf.
---------------------------------------------------------------------------

Use of Combination Rates

    The Department will calculate combination rates for certain 
respondents that are eligible for a separate rate in an NME 
investigation. The Separate Rates and Combination Rates Bulletin 
states:

{w{time} hile continuing the practice of assigning separate rates 
only to exporters, all separate rates that the Department will now 
assign in its NME Investigation will be specific to those producers 
that supplied the exporter during the period of investigation. Note, 
however, that one rate is calculated for the exporter and all of the 
producers which supplied subject merchandise to it during the period 
of investigation. This practice applies both to mandatory 
respondents receiving an individually calculated separate rate as 
well as the pool of non-investigated firms receiving the weighted-
average of the individually calculated rates. This practice is 
referred to as the application of ``combination rates'' because such 
rates apply to specific combinations of exporters and one or more 
producers. The cash-deposit rate assigned to an exporter will apply 
only to merchandise both exported by the firm in question and 
produced by a firm that supplied the exporter during the period of 
investigation.\59\
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    \59\ See Separate Rates and Combination Rates Bulletin at 6 
(emphasis added).

Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act and 19 CFR 
351.202(f), copies of the public version of the Petitions have been 
provided to the Governments of the Czech Republic, Germany, Japan, 
Korea, Poland, the PRC, and Russia via IA ACCESS. To the extent 
practicable, we will attempt to provide a copy of the public version of 
the Petitions to each known exporter (as named in the Petitions), as 
provided under 19 CFR 351.203(c)(2).

Meeting With the Government of Korea

    Pursuant to a request by the Government of Korea, on October 22, 
2013, Department officials met with Korean Government officials to 
discuss the status of the Department's consideration of the petition 
and industry support, as provided under section 732(b)(3)(B) of the 
Act.

ITC Notification

    We have notified the ITC of our initiation, as required by section 
732(d) of the Act.

Preliminary Determinations by the ITC

    The ITC will preliminarily determine no later than November 20, 
2013, whether there is a reasonable indication that imports of GOES 
from the Czech Republic, Germany, Japan, Korea, Poland, the PRC, and 
Russia are materially injuring, or threatening material injury to, a 
U.S. industry. A negative ITC determination for any country will result 
in the investigation being terminated with respect to that country; 
otherwise, these investigations will proceed according to statutory and 
regulatory time limits.

[[Page 65289]]

Submission of Factual Information

    On April 10, 2013, the Department published Definition of Factual 
Information and Time Limits for Submission of Factual Information: 
Final Rule, 78 FR 21246 (April 10, 2013), which modified two 
regulations related to AD and CVD proceedings: The definition of 
factual information (19 CFR 351.102(b)(21)), and the time limits for 
the submission of factual information (19 CFR 351.301). The final rule 
identifies five categories of factual information in 19 CFR 
351.102(b)(21), which are summarized as follows: (i) Evidence submitted 
in response to questionnaires; (ii) evidence submitted in support of 
allegations; (iii) publicly available information to value factors 
under 19 CFR 351.408(c) or to measure the adequacy of remuneration 
under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by the 
Department; and (v) evidence other than factual information described 
in (i)-(iv). The final rule requires any party, when submitting factual 
information, to specify under which subsection of 19 CFR 351.102(b)(21) 
the information is being submitted and, if the information is submitted 
to rebut, clarify, or correct factual information already on the 
record, to provide an explanation identifying the information already 
on the record that the factual information seeks to rebut, clarify, or 
correct. The final rule also modified 19 CFR 351.301 so that, rather 
than providing general time limits, there are specific time limits 
based on the type of factual information being submitted. These 
modifications are effective for all proceeding segments initiated on or 
after May 10, 2013, and thus are applicable to these investigations. 
Please review the final rule, available at http://enforcement.trade.gov/frn/2013/1304frn/2013-08227.txt, prior to 
submitting factual information in these investigations.

Certification Requirements

    Any party submitting factual information in an AD or CVD proceeding 
must certify to the accuracy and completeness of that information.\60\ 
Parties are hereby reminded that revised certification requirements are 
in effect for company/government officials, as well as their 
representatives. Investigations initiated on the basis of petitions 
filed on or after August 16, 2013, and other segments of any AD or CVD 
proceedings initiated on or after August 16, 2013, should use the 
formats for the revised certifications provided at the end of the Final 
Rule.\61\ The Department intends to reject factual submissions if the 
submitting party does not comply with applicable revised certification 
requirements.
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    \60\ See section 782(b) of the Act.
    \61\ See Certification of Factual Information To Import 
Administration During Antidumping and Countervailing Duty 
Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule); see also 
frequently asked questions regarding the Final Rule, available at 
http://enforcement.trade.gov/tlei/notices/factual_info_final_rule_FAQ_07172013.pdf.
---------------------------------------------------------------------------

Extension of Time Limits

    On September 20, 2013, the Department published Extension of Time 
Limits, Final Rule, 78 FR 57790 (September 20, 2013), which modified 
one regulation related to AD and CVD proceedings regarding the 
extension of time limits for submissions in such proceedings (19 CFR 
351.302(c)). These modifications are effective for all segments 
initiated on or after October 21, 2013, and thus are applicable to 
these investigations. Please review the final rule, available at http://www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm prior to 
requesting an extension.

Notification to Interested Parties

    Interested parties must submit applications for disclosure under 
APO in accordance with 19 CFR 351.305. On January 22, 2008, the 
Department published Antidumping and Countervailing Duty Proceedings: 
Documents Submission Procedures; APO Procedures, 73 FR 3634 (January 
22, 2008). Parties wishing to participate in these investigations 
should ensure that they meet the requirements of these procedures 
(e.g., the filing of letters of appearance as discussed at 19 CFR 
351.103(d)).
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: October 24, 2013.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.

Appendix I

Scope of the Investigations

    The scope of these investigations covers grain-oriented silicon 
electrical steel (GOES). GOES is a flat-rolled alloy steel product 
containing by weight at least 0.6 percent but not more than 6 
percent of silicon, not more than 0.08 percent of carbon, not more 
than 1.0 percent of aluminum, and no other element in an amount that 
would give the steel the characteristics of another alloy steel, in 
coils or in straight lengths. The GOES that is subject to these 
investigations is currently classifiable under subheadings 
7225.11.0000, 7226.11.1000, 7226.11.9030, and 7226.11.9060 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 these 
investigations is dispositive.

[FR Doc. 2013-25805 Filed 10-30-13; 8:45 am]
BILLING CODE 3510-DS-P