01-24750. Notice of Final Determination of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products From Kazakhstan

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final determination in the less than fair value investigation of certain hot-rolled carbon steel flat products from Kazakhstan.

SUMMARY:

We determine that certain hot-rolled carbon steel flat products from Kazakhstan are being, or are likely to be, sold in the United States at less than fair value. On May 3, 2001, the Department of Commerce published a notice of preliminary determination of sales at less than fair value in the investigation of hot-rolled carbon steel flat products from Kazakhstan. See Notice of Preliminary Determination of Sales at Not Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products from Kazakhstan, 66 FR 22168 (May 3, 2001) (“Preliminary Determination”). This investigation covers one manufacturer/exporter of the subject merchandise. The period of investigation (“POI”) is April 1, 2000 through September 30, 2000.

Based upon our verification of the data and analysis of the comments received, we have made changes in the margin calculations. Therefore, the final determination of this investigation differs from the preliminary determination. The final weighted-average dumping margin is listed below in the section titled “Continuation of Suspension of Liquidation.”

EFFECTIVE DATE:

October 3, 2001.

FOR FURTHER INFORMATION CONTACT:

Juanita H. Chen at 202-482-0409, Import Administration, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230.

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations at 19 CFR part 351 (2000).

Background

On December 4, 2000, the Department initiated an antidumping duty investigation of hot-rolled steel from Kazakhstan. See Notice of Initiation of Antidumping Duty Investigations: Certain Hot-Rolled Carbon Steel Flat Products from Argentina, India, Indonesia, Kazakhstan, the Netherlands, the People's Republic of China, Romania, South Africa, Taiwan, Thailand, and Ukraine, 65 FR 77568 (December 12, 2000) (“Notice of Initiation”).

On March 16, 2001, co-petitioners Bethlehem Steel Corporation, LTV Steel Company, Inc., National Steel Corporation, and U.S. Steel Group, a unit of USX Corporation ^[1] (hereinafter collectively “Bethlehem, et al.”) requested that the Department initiate a middleman dumping investigation. On June 15, 2001, the Department issued a memorandum stating we are not initiating a middleman dumping investigation because Bethlehem, et al., have not provided specific evidence of dumping by a particular middleman. See Memorandum for Joseph A. Spetrini on Whether to Initiate a Middleman Dumping Investigation (June 15, 2001).

On March 21, 2001, OJSC Ispat Karmet (“Ispat Karmet”) requested that the Department determine that the hot-rolled steel industry in Kazakhstan is a market-oriented industry (“MOI”). We address Ispat's request in the Issues and Decision Memorandum from Joseph A. Spetrini, Deputy Assistant Secretary, to Faryar Shirzad, Assistant Secretary (September 21, 2001).

On May 3, 2001, the Department published a notice of preliminary determination of sales at less than fair value (“LTFV”) in the investigation of certain hot-rolled carbon steel flat products from Kazakhstan. See Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products From Kazakhstan, 66 FR 22168 (May 3, 2001). On June 1, 2001, the Department published a notice of postponement of the final determination in the investigation, as well as an extension of provisional measures from a four month period to a period not to exceed six months. See Postponement of Final Determination for Antidumping Duty Investigation: Certain Hot-Rolled Carbon Steel Flat Products from Kazakhstan, 66 FR 29773 (June 1, 2001).

On May 23, 2001, Bethlehem, et al., timely submitted a request for a hearing. On May 29, 2001, Ispat Karmet timely submitted a request for a public hearing. On June 1, 2001, co-petitioners IPSCO Steel Inc., Gallatin Steel Company, Nucor Corporation, Steel Dynamics, Inc., Weirton Steel Corporation, and the Independent Steelworkers Union, timely submitted a request for a hearing.

On July 16, 2001 through July 20, 2001, the Department conducted a sales and factors of production verification of Ispat Karmet. See Report on the U.S. Sales and Factors of Production Verification of OJSC Ispat Karmet (August 2, 2001) (“Verification Report”).

We invited parties to comment on our Preliminary Determination. On August 10, 2001, Ispat Karmet submitted a case brief which we rejected for containing untimely factual information. On August 16, 2001, Ispat Karmet submitted a revised case brief which we rejected for containing untimely factual information. On August 20, 2001 Ispat Karmet submitted its final revised case brief (“Ispat Karmet's Brief”). Petitioners did not submit a case brief. Co-petitioners Bethlehem, et al. submitted their rebuttal brief (“Petitioners” Rebuttal”) on August 20, 2001. On August 23, 2001, all parties withdrew their requests for a hearing. Although the deadline for this determination was originally September 17, 2001, in light of the events of September 11, 2001 and the subsequent closure of the Federal Government for reasons of security, the time frame for issuing this final determination has been extended by four days.

The Department has conducted and completed the investigation in accordance with section 735 of the Act.

Scope of Investigation

For purposes of this investigation, the products covered are certain hot-rolled carbon steel flat products of a rectangular shape, of a width of 0.5 inch or greater, neither clad, plated, nor coated with metal and whether or not painted, varnished, or coated with plastics or other non-metallic substances, in coils (whether or not in successively superimposed layers), regardless of thickness, and in straight lengths of a thickness of less than 4.75 mm and of a width measuring at least 10 times the thickness. Universal mill plate (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 mm, but not exceeding 1250 mm, and of a thickness of not less than 4.0 mm, not in coils and without patterns in relief) of a thickness not less than 4.0 mm is not included within the scope of these investigations.

Specifically included within the scope of this investigation are vacuum degassed, fully stabilized (commonly referred to as interstitial-free (“IF”)) steels, high strength low alloy (“HSLA”) steels, and the substrate for motor lamination steels. IF steels are recognized as low carbon steels with micro-alloying levels of elements such as titanium or niobium (also commonly referred to as columbium), or both, added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying levels of elements such as chromium, copper, niobium, vanadium, and molybdenum. The substrate for motor lamination steels contains micro-alloying levels of elements such as silicon and aluminum.

Steel products to be included in the scope of this investigation, regardless of definitions in the Harmonized Tariff Schedule of the United States (“HTSUS”), are products in which: (i) Iron predominates, by weight, over each of the other contained elements; (ii) the carbon content is 2 percent or less, by weight; and (iii) none of the elements listed below exceeds the quantity, by weight, respectively indicated:

1.80 percent of manganese, or

2.25 percent of silicon, or

1.00 percent of copper, or

0.50 percent of aluminum, or

1.25 percent of chromium, or

0.30 percent of cobalt, or

0.40 percent of lead, or

1.25 percent of nickel, or

0.30 percent of tungsten, or

0.10 percent of molybdenum, or

0.10 percent of niobium, or

0.15 percent of vanadium, or

0.15 percent of zirconium.

All products that meet the physical and chemical description provided above are within the scope of this investigation unless otherwise excluded. The following products, by way of example, are outside or specifically excluded from the scope of this investigation:

—Alloy hot-rolled steel products in which at least one of the chemical elements exceeds those listed above (including, e.g., American Society for Testing and Materials (“ASTM”) specifications A543, A387, A514, A517, A506).

—Society of Automotive Engineers (“SAE”)/American Iron & Steel Institute (“AISI”) grades of series 2300 and higher.

—Ball bearing steels, as defined in the HTSUS.

—Tool steels, as defined in the HTSUS.

—Silico-manganese (as defined in the HTSUS) or silicon electrical steel with a silicon level exceeding 2.25 percent.

—ASTM specifications A710 and A736.

—USS abrasion-resistant steels (USS AR 400, USS AR 500).

—All products (proprietary or otherwise) based on an alloy ASTM specification (sample specifications: ASTM A506, A507).

—Non-rectangular shapes, not in coils, which are the result of having been processed by cutting or stamping and which have assumed the character of articles or products classified outside chapter 72 of the HTSUS.

The merchandise subject to this investigation is classified in the 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, 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, and 7211.19.75.90. Certain hot-rolled carbon steel flat products covered by this investigation, including: 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 7226.99.00.00. Subject merchandise may also enter under 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 7212.40.10.00, 7212.40.50.00, and 7212.50.00.00. Although the HTSUS subheadings are provided for convenience and U.S. Customs purposes, the written description of the merchandise under investigation is dispositive.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs to this investigation are addressed in the Issues and Decision Memorandum from Joseph A. Spetrini, Deputy Assistant Secretary, to Faryar Shirzad, Assistant Secretary (September 21, 2001) (“Decision Memo”), which is hereby adopted by this notice. A list of the issues which parties have raised and to which we have responded, and other issues addressed, is attached to this notice as an Appendix. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in the Decision Memo, a public memorandum which is on file at the U.S. Department of Commerce, in the Central Records Unit, in room B-099. In addition, a complete version of the Decision Memo can be accessed directly on the Web at http://ia.ita.doc.gov. The paper copy and electronic version of the Decision Memo are identical in content.

Changes Since the Preliminary Determination

Based on our findings at verification, and analysis of comments received, we have made adjustments to the calculation methodology in calculating the final dumping margin in this proceeding. See Analysis Memorandum for OJSC Ispat Karmet (September 21, 2001) (“Analysis Memo”).

Verification

As provided in section 782(i) of the Act, we verified the information submitted by the respondent for use in our final determination. We used standard verification procedures including examination of relevant accounting and production records, and original source documents provided by the respondent. For changes from the Preliminary Determination as a result of verification, see Analysis Memo.

Use of Partial Adverse Facts Available

In accordance with section 776 of the Act, we have determined that the use of partial adverse facts available is appropriate for certain portions of our analysis of Ispat Karmet. For a discussion of our determination with respect to this matter, see Decision Memo.

Nonmarket Economy Country

For this final determination, the Department is continuing to treat Kazakhstan as a non-market economy (“NME”) country, as described in the “Nonmarket Economy Country” section of our Preliminary Determination.

Separate Rates

For this final determination, the Department has determined a separate rate for Ispat. As discussed in the “Separate Rates” section of our Preliminary Determination, in a NME proceeding, the Department presumes that all companies within the country are subject to governmental control and assigns a single rate unless the producer can demonstrate that it is sufficiently independent so as to be entitled a separate rate. The separate rates analysis pertains to the export activities of the producer, and because we determined that Ispat is wholly foreign owned, and because we have no evidence indicating that it is under the control of the Republic of Kazakhstan, specifically with regard to export activities, we determine that Ispat qualifies for a separate rate. See Brake Rotors from the People's Republic of China: Preliminary Results and Partial Rescission of the Fourth New Shipper Review and Rescission of the Third Antidumping Duty Administrative Review, 66 FR 1303 (January 8, 2001); Notice of Final Determination of Sales at Less Than Fair Value: Creatine Monohydrate from the People's Republic of China, 64 FR 71104 (December 20, 1999).

Kazakhstan-Wide Rate

As discussed in our Preliminary Determination, Ispat Karmet has qualified for a separate rate. See “Kazakhstan-Wide Rate” section of our Preliminary Determination. There has been no other evidence submitted since the Preliminary Determination to change Ispat Karmet's qualification. Accordingly, we have calculated a Kazakhstan-wide rate for this investigation based on the weighted-average margin determined for Ispat Karmet. This Kazakhstan-wide rate applies to all entries of subject merchandise except for entries of subject merchandise exported by Ispat Karmet.

Ministerial Error

After the Preliminary Determination, the Department issued a ministerial error memorandum discussing two issues which Ispat Karmet alleged as requiring corrections. See Ministerial Error Memorandum for the Preliminary Determination of Sales at Not Less Than Fair Value (August 17, 2000) (“Ministerial Error Memo”). We agreed with Ispat Karmet on one of the two allegations, i.e., that we should modify freight costs for scrap to apply only to scrap purchased from outside sources. See Ministerial Error Memo at 3. However, as correcting the ministerial error would not have resulted in a change of at least five absolute percentage points in the weighted-average dumping margin, nor a change of not less than 25 percent of the weighted-average dumping margin, we did not amend our Preliminary Determination, but stated we would include the correction, as appropriate, in our final determination. Id. Our determination has not changed since issuance of the Ministerial Error Memo. We agree with Ispat Karmet that we should correct the ministerial error. Without this correction, we cannot properly calculate the margin. Pursuant to 19 CFR 351.224(e), the Department will, “if appropriate, correct any significant ministerial error by amending the preliminary determination, or correct any ministerial error by amending the final determination . . . [and] publish notice of such corrections in the Federal Register.” Accordingly, we have incorporated the correction of the ministerial error in our final determination.

Suspension Agreement

On May 4, 2001, the government of Kazakhstan submitted a proposal for a suspension agreement (which was received by the Department on May 8, 2001), in accordance with the Department's regulations at 19 CFR 351.208. On July 30, 2001, the Department invited the Minister of Economy and Trade for Kazakhstan to Washington DC to hear the details of the government of Kazakhstan's proposal. On August 2, 2001, Bethlehem, et al. submitted comments on the negotiations between the Department and the Government of Kazakhstan, arguing that negotiation or conclusion of an agreement is untimely and not in compliance with the Department's regulations. On August 10, 2001, the Department submitted a memorandum to the file, explaining that the “Department's regulations allow for flexibility, especially with regard to procedural deadlines where the Secretary determines there is good cause.” See Memorandum to the file from Joe Spetrini, Deputy Assistant Secretary, to Faryar Shirzad, Assistant Secretary for Import Administration (August 10, 2001), at 2. On August 17, 2001, the Department and the Government of Kazakhstan initialed a proposed suspension agreement and the Department gave interested parties until September 6, 2001 to comment on the proposed agreement. On September 6, 2001, we received comments from Petitioners arguing that the statutory requirements for suspending an investigation have not been met, and that the proposed agreement needs substantial revisions. Specifically, Petitioners argue that: (1) The Department has not explained how the proposed agreement complies with the requirements of the Tariff Act, in conformation with 19 CFR 351.208; (2) effective monitoring of the proposed agreement is not practicable; (3) the proposed agreement will not prevent the suppression or undercutting of price levels of domestic products; and (4) it is in the public interest to enter an antidumping order. Also on September 6, 2001, Petitioners requested the antidumping duty investigation be continued, pursuant to 19 CFR 351.208(h). The Department and the Government of Kazakhstan did not sign a suspension agreement on hot-rolled carbon steel flat products from Kazakhstan by the deadline date of September 21, 2001. Consequently, Petitioners' comments are moot.

Fair Value Comparisons

To determine whether sales of hot-rolled steel products from Kazakhstan were made in the United States at LTFV, we compared EP to a normal value (“NV”), as described in the “Export Price” and “Normal Value” sections of the Preliminary Determination.

Surrogate Country

For purposes of the final determination, we continue to find that Egypt remains the appropriate primary surrogate country for Kazakhstan. For further discussion and analysis regarding the surrogate country selection for Kazakhstan, see the “Surrogate Country” section of our Preliminary Determination.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B) of the Act, we are directing the U.S. Customs Service (“Customs”) to continue to suspend liquidation of all imports of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the date of publication of the Preliminary Determination in the Federal Register. We will instruct Customs to continue to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds the EP, as indicated below. These suspension of liquidation instructions will remain in effect until further notice. The weighted-average dumping margins are as follows:

Exporter/Manufacturer	Weighted-average margin (percent)
OJSC Ispat Karmet	243.46
Kazakhstan-Wide	243.46

Disclosure

The Department will disclose calculations performed, within five days of the date of publication of this notice, to the parties in this investigation, in accordance with section 351.224(b) of the Department's regulations.

International Trade Commission Notification

In accordance with section 735(d) of the Act, we have notified the ITC of our affirmative determination of sales at LTFV. As our final determination is affirmative, the ITC will determine within 45 days after our final determination whether imports of hot-rolled steel from Kazakhstan are materially injuring, or threaten material injury to, the U.S. industry. If the ITC determines that material injury, or threat of material injury does not exist, the proceeding will be terminated and all securities posted will be refunded or cancelled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing Customs officials to assess antidumping duties on all imports of the subject merchandise entered for consumption on or after the effective date of the suspension of liquidation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Dated: September 21, 2001.

Faryar Shirzad,

Assistant Secretary for Import Administration.

Appendix I

A. Market Oriented Industry Issue

Comment 1: Market Oriented Industry

B. General Issues

Comment 2: Aberrational Surrogate Values

Comment 3: Choice of Surrogate Values

Comment 4: Double Counting Values

C. Verification Issues

Comment 5: Factors of Production Based on Thickness

Comment 6: Dubai Sales Office

Comment 7: Nominal Thickness

Comment 8: Coil Protectors

Comment 9: Inland Freight Distance

Comment 10: Manganese Ore

Comment 11: Packing Bands

Comment 12: Sales to Ispat Sidbec

Comment 13: Technical Water

Comment 14: Silico-manganese

Footnotes

1.  On July 2, 2001, U.S. Steel Group, a unit of USX Corporation, changed its name to United States Steel LLC. United States Steel LLC is a Delaware limited liability company and the successor by merger to USX Corporation.