01-2519. Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Steel Concrete Reinforcing Bars From Belarus

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

EFFECTIVE DATE:

January 30, 2001.

FOR FURTHER INFORMATION CONTACT:

Alexander Amdur or Karine Gziryan at [phone] or [phone], respectively; AD/CVD Enforcement, Office 4, Group II, Import Administration, Room 1870, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to Department of Commerce (the Department) regulations refer to the regulations codified at 19 CFR part 351 (April 2000).

Preliminary Determination

We preliminarily determine that steel concrete reinforcing bars (rebar) from Belarus are being sold, or are likely to be sold, in the United States at less than fair value (LTFV), as provided in section 733 of the Act. The estimated margins of sales at LTFV are shown in the Suspension of Liquidation section of this notice.

Case History

This investigation was initiated on July 18, 2000.^[1] See Initiation of Antidumping Duty Investigations: Steel Concrete Reinforcing Bars from Austria, Belarus, Indonesia, Japan, Latvia, Moldova, the People's Republic of China, Poland, the Republic of Korea, the Russian Federation, Ukraine, and Venezuela, 65 FR 45754 (July 25, 2000) (Initiation Notice). Since the initiation of this investigation, the following events have occurred:

On August 14, 2000, the United States International Trade Commission (ITC) preliminarily determined that there is a reasonable indication that imports of the products subject to this investigation are threatening material injury or materially injuring a regional industry in the United States producing the domestic like product. See Certain Steel Concrete Reinforcing Bars From Austria, Belarus, China, Indonesia, Japan, Korea, Latvia, Moldova, Poland, Russia, Ukraine, and Venezuela, 65 FR 51329 (August 23, 2000). With respect to subject imports from Austria, Russia, and Venezuela, the ITC determined that imports from these countries during the period of investigation (POI) were negligible and, therefore, these investigations were terminated. The ITC also determined that there is no reasonable indication that an industry in the United States is materially injured or threatened with material injury, by reason of subject imports from Japan. Id.

On August 18, 2000, we sent the antidumping questionnaire to the Embassy of the Republic of Belarus with a letter requesting that it forward the questionnaire to all exporters who had shipments of rebar to the United States during the POI.^[2] We received responses from one company, Byelorussian Steel Works (BSW). We have reason to believe that this company accounted for all shipments of rebar from Belarus to the United States during the POI. We issued supplemental questionnaires to BSW, where appropriate.

On November 9, 2000, the petitioner requested a postponement of the preliminary determination in this investigation. On November 21, 2000, the Department published a Federal Register notice postponing the deadline for the preliminary determination until January 16, 2001. See Notice of Postponement of Preliminary Antidumping Duty Determinations: Steel Concrete Reinforcing Bars from Belarus, Indonesia, Latvia, Moldova, the People's Republic of China, Poland, the Republic of Korea and Ukraine, 65 FR 69909 (November 21, 2000).

Postponement of the Final Determination

Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by the petitioner. The Department's regulations, at 19 CFR 351.210(e)(2), require that requests by respondents for postponement of a final determination be accompanied by a request for extension of provisional measures from a four-month period to not more than six months.

On November 15, 2000, BSW requested that, in the event of an affirmative preliminary determination in this investigation, the Department postpone its final determination until 135 days after the publication of the preliminary determination. BSW also included a request to extend the provisional measures to not more than six months. Accordingly, since we have made an affirmative preliminary determination, we have postponed the final determination until not later than 135 days after the date of the publication of the preliminary determination.

Period of Investigation

The POI is October 1, 1999, through March 31, 2000. This period corresponds to the two most recent fiscal quarters prior to the month of the filing of the petition (i.e., June 2000).

Scope of Investigation

For purposes of these investigations, the product covered is all rebar sold in straight lengths, currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under item number 7214.20.00 or any other tariff item number. Specifically excluded are plain rounds (i.e., non-deformed or smooth bars) and rebar that has been further processed through bending or coating. HTSUS subheadings are provided for convenience and Customs purposes. The written description of the scope of this proceeding is dispositive.

Critical Circumstances

In a letter filed on August 22, 2000, the petitioner alleged that there is a reasonable basis to believe or suspect that critical circumstances exist with respect to imports of rebar from Belarus. Under section 733(e)(1) of the Act, when critical circumstances allegations are submitted more than 20 days before the scheduled date of the preliminary determination, the Department shall determine on the basis of information available whether there is a reasonable basis to believe or suspect that critical circumstances exist.

Section 733(e)(1) of the Act provides that the Department will determine that there is a reasonable basis to believe or suspect that critical circumstances exist if: (A)(i) There is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise, or (ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales, and (B) there have been massive imports of the subject merchandise over a relatively short period. Section 351.206(h)(1) of the Department's regulations provides that, in determining whether imports of the subject merchandise have been “massive,” the Department normally will examine: (i) The volume and value of the imports; (ii) seasonal trends; and (iii) the share of domestic consumption accounted for by the imports. In addition, section 351.206(h)(2) of the Department's regulations provides that an increase in imports of 15 percent or more during the “relatively short period” of time may be considered “massive.”

In determining whether there are “massive imports” over a “relatively short period,” pursuant to section 733(e)(1)(B) of the Act, the Department normally compares the import volume of the subject merchandise for three months immediately preceding the filing of the petition (i.e., the base period), and three months following the filing of the petition (i.e., the comparison period). However, as stated in section 351.206(i) of the Department's regulations, if the Secretary finds that importers, exporters, or producers had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely, then the Secretary may consider a time period of not less than three months from that earlier time (i.e., from that time prior to the beginning of the proceeding). Imports normally will be considered massive when imports during the comparison period have increased by 15 percent or more compared to imports during the base period.

In this case, the petitioner argues that importers, exporters, or producers of rebar from Belarus had reason to believe that an antidumping proceeding was likely before the filing of the petition. Based upon information contained in the petition, we found that press reports and published statements were sufficient to establish that, by the end of December 1999, importers, exporters, and foreign producers knew or should have known that a proceeding was likely concerning rebar from Belarus. As a result, pursuant to section 351.206(i) of the Department's regulations, the Department has considered whether there have been massive imports after that time based on a comparison of periods immediately preceding and following the end of December 1999 (i.e., April 1999 through December 1999, and January 2000 through September 2000, respectively). See Memorandum from Tom Futtner to Holly A. Kuga, Antidumping Duty Investigations of Steel Concrete Reinforcing Bar from Belarus—Preliminary Negative Determination of Critical Circumstances (Critical Circumstances Preliminary Determination Memorandum), dated January 16, 2000.

In its critical circumstances allegation, the petitioner also alleges that rebar is a product for which demand is subject to seasonal shifts, and that it is appropriate to use a seasonal methodology to examine whether an import surge occurred with respect to Belarus. We disagree with the petitioner's analysis of massive imports based on seasonality because the evidence on the record does not substantiate that imports of rebar from Belarus are subject to seasonal shifts. See Critical Circumstances Preliminary Determination Memorandum.

In order to determine whether imports from Belarus have been massive, the Department requested that BSW, the only Belorussian producer and exporter to the United States of the subject merchandise,^[3] provide its shipment data for the last three years. Based on our analysis of the shipment data reported, because imports have decreased during the comparison period, we preliminarily find that the criterion under section 733(e)(1) of the Act has not been met, i.e., there have not been massive imports of rebar from BSW over a relatively short time. See Critical Circumstances Preliminary Determination Memorandum. For this reason, we preliminarily determine that critical circumstances do not exist for imports of rebar from Belarus.

Non-Market Economy Status for Belarus

In accordance with section 771(18)(C) of the Act, any determination that a foreign country has at one time been considered a non-market economy (NME) shall remain in effect until revoked. This status covers the geographic area of the former U.S.S.R., each part of which retains the NME status of the former U.S.S.R. Therefore, Belarus will be treated as a NME country unless and until its NME status is revoked (see Preliminary Determinations of Sales at Less Than Fair Value: Uranium From Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine and Uzbekistan; and Preliminary Determinations of Sales at Not Less Than Fair Value: Uranium From Armenia, Azerbaijan, Belarus, Georgia, Moldova and Turkmenistan, 57 FR 23380 (June 3, 1992)).

The respondent in this investigation has not requested a revocation of Belarus's NME status. We have, therefore, preliminarily continued to treat Belarus as a NME.

When the Department is investigating imports from a NME country, section 773(c)(1) of the Act directs us to base normal value (NV) on the NME producer's factors of production, valued in a comparable market economy that is a significant producer of comparable merchandise. The sources of individual factor prices are discussed under the Normal Value section, below.

Separate Rates

It is the Department's policy to assign all exporters of subject merchandise in a NME country a single rate, unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. BSW has submitted separate rates information in its section A responses, and has requested a separate, company-specific rate. BSW has stated that it is wholly owned by the Ministry of Industry of the Republic of Belarus, but that is not controlled by the Government of the Republic of Belarus.

The Department's separate rates test is not concerned, in general, with macroeconomic/border-type controls (e.g., export licenses, quotas, and minimum export prices), particularly if these controls are imposed to prevent dumping. Rather, the test focuses on controls over export-related investment, pricing, and output decision-making process at the individual firm level. See Certain Cut-to-Length Carbon Steel Plate from Ukraine: Final Determination of Sales at Less Than Fair Value, 62 FR 61754, 61757 (November 19, 1997); Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 62 FR 61276, 61279 (November 17, 1997); and Honey from the People's Republic of China: Preliminary Determination of Sales at Less Than Fair Value, 60 FR 14725, 14726 (March 20, 1995).

To establish whether a firm is sufficiently independent to be entitled to a separate rate, the Department analyzes each exporting entity under the test established in Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991), and amplified in Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994) (Silicon Carbide). Under this test, the Department assigns separate rates in NME cases only if an exporter can affirmatively demonstrate the absence of both (1) de jure and (2) de facto governmental control over export activities. See Silicon Carbide and Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol from the People's Republic of China, 60 FR 22545 (May 8, 1995).

1. Absence of De Jure Control

The Department considers the following de jure criteria in determining whether an individual company may be granted a separate rate: (1) An absence of restrictive stipulations associated with an individual exporter's business and export licenses; (2) any legislative enactments decentralizing control of companies; and (3) any other formal measures by the government decentralizing control of companies.

In its questionnaire response, BSW asserts that under its Charter, it operates as an independent economic unit with those rights accorded to a legal entity, including the ownership of property, and independent responsibility for its sales. BSW also states that its owner, the Ministry of Industry of the Republic of Belarus, does not control the company's export activities. BSW further claims that there are no licensing requirements, quotas, or any other restrictions or controls by the Government of Belarus on exports of subject merchandise to the United States or any other destination.

However, despite requests by the Department in its original and supplemental questionnaires, BSW did not place on the record any legislative enactments or other formal measures by the Government of the Republic of Belarus that support its claims, and that demonstrate the absence of de jure control. While BSW's Charter may provide for the company to operate independently in some respects, the Charter (which BSW placed on the record) is subject to the laws of Belarus (which BSW did not submit), and does not by itself prove the absence of de jure control. Therefore, without any documentary proof of the absence of de jure control, BSW has not overcome the presumption of de jure control.

2. Absence of De Facto Control

The Department typically considers four factors in evaluating whether each respondent is subject to de facto governmental control of its export functions: (1) Whether the export prices are set by or subject to the approval of a governmental authority; (2) whether the respondent has authority to negotiate and sign contracts and other agreements; (3) whether the respondent has autonomy from the government in making decisions regarding the selection of management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding disposition of profits or financing of losses.

BSW reports that it has authority to negotiate and sign contracts, and claims that no organization outside BSW reviews or approves any aspect of BSW's export sales transactions. In addition, the submitted sales documentation shows no government involvement in setting export prices. In regard to management selection, BSW states that the Ministry of Industry of the Republic of Belarus appoints the Directors of BSW. Then, in consultation with the General Director of BSW, the Directors appoint the management of BSW. BSW notes that the General Director also must notify the Government of any change in the position of Chief Engineer, the second most senior position in the company.

In regard to export revenue and profits, BSW reports that it has no restrictions on the use of its export revenue, but states that by special decrees of the Republic of Belarus, it is required to sell a certain percentage of its export revenue. BSW also claims that the management of BSW is solely responsible for the disposition of profits. However, proprietary documents on the record of this investigation indicate that the Ministry of Industry of the Republic of Belarus influences the allocation of BSW's profit.

While the record evidence indicates that BSW sets its own export prices and has the authority to negotiate and sign contracts, it appears that BSW does not have autonomy from the government in selecting its management: BSW's Directors, appointees of the Ministry of Industry, select the management. Furthermore, BSW does not have complete operational control over either the proceeds of its export sales or its profits. Other record evidence, including BSW's Charter, indicates that in general, BSW's relevant activities are under the jurisdiction of its owner, the Ministry of Industry of the Republic of Belarus. In view of BSW's relationship with the Ministry of Industry of the Republic of Belarus, BSW has not overcome the presumption of de facto government control. Due to the proprietary nature of these issues, for further details, see Memorandum on Whether to Grant BSW a Separate Rate dated January 16, 2001.

The failure to demonstrate either the absence of de jure or de facto control makes an exporter ineligible for a separate rate. In this case, we have preliminarily determined that BSW has failed to demonstrate the absence of both de jure and de facto control. Therefore, the Department preliminarily determines that BSW is not eligible to receive a separate rate.

The Belarus-Wide Rate

As in all NME cases, the Department implements a policy whereby there is a rebuttable presumption that all exporters or producers comprise a single exporter under common government control, the “NME entity.” The Department assigns a single NME rate to the NME entity, unless an exporter can demonstrate eligibility for a separate rate. Information on the record of this investigation indicates that BSW was the only Belorussian producer and exporter to sell the subject merchandise to the United States during the POI. Since the only Belorussian producer and exporter of the subject merchandise responded to the Department's questionnaire, and we have no reason to believe that there are other non-responding exporters/producers of the subject merchandise during the POI, we calculated a Belarus-wide rate based on the weighted-average margin determined for BSW.

Fair Value Comparisons

To determine whether sales of rebar from Belarus were made in the United States at less than fair value, we compared export price (EP) to a NV calculated using our NME methodology, as described below. In accordance with section 777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs.

Export Price

We used EP methodology in accordance with section 772(a) of the Act because the merchandise was sold, prior to importation, by BSW to an unaffiliated purchaser for exportation to the United States, and constructed export price (CEP) methodology was not otherwise warranted based on the facts on the record. At the time of sale, BSW knew that its reported sales of the subject merchandise were destined for the United States.

We calculated EP based on the packed, delivered-at-frontier (DAF) and free-carrier (FCA) prices charged to the first unaffiliated customer for exportation to the United States. Where appropriate, we made deductions from the starting price (gross unit price) for inland freight from the factory to the frontier. Because inland freight was provided by NME companies, we based freight charges on surrogate freight rates from Thailand (see the Normal Value section for further discussion).

Normal Value

A. Surrogate Country

Section 773(c)(4) of the Act requires the Department to value the NME producer's factors of production, to the extent possible, in one or more market economy countries that: (1) Are at a level of economic development comparable to that of the NME country; and (2) are significant producers of comparable merchandise. The Department initially determined that Colombia, Ecuador, Namibia, South Africa, and Thailand were the countries most comparable to Belarus in terms of overall economic development (see the August 31, 2000, memorandum, Antidumping Duty Investigation of Steel Concrete Reinforcing Bars (Rebar) from Belarus: Nonmarket Economy Status and Surrogate Country Selection).

Because of a lack of necessary factor price information from the other potential surrogate countries that are significant producers of products comparable to the subject merchandise, we have relied, where possible, on information from Thailand, the source of the most complete information from among the potential surrogate countries. Accordingly, we have calculated NV by applying Thai values to BSW's factors of production. See Factors of Production Valuation Memorandum, dated January 16, 2001 (Surrogate Value Memorandum).

B. Factors of Production

In accordance with section 773(c) of the Act, we calculated NV based on the factors of production reported by BSW for the POI. To calculate NV, we multiplied the reported per-unit quantities by publicly available surrogate values from Thailand.

In selecting the surrogate values, we considered the quality, specificity, and contemporaneity of the data. As appropriate, we included freight costs in input prices to make them delivered prices. Specifically, we added to the surrogate values a surrogate freight cost using the reported distance from the domestic supplier to the factory where this distance was shorter than the distance from the nearest seaport to the factory. This adjustment is in accordance with the Court of Appeals for the Federal Circuit's decision in Sigma Corp. v. United States, 117 F. 3d 1401 (Fed. Cir. 1997). Where a producer did not report the distance between the domestic supplier and the factory, we used as facts available the longest distance reported, i.e., the distance from the nearest seaport to the factory. For those values not contemporaneous with the POI, we adjusted the values to account for inflation using wholesale price indices published in the International Monetary Fund's International Financial Statistics.

We valued material inputs and packing materials (including steel scrap, ferroalloys, lime, limestone, coke, dolomite, haydite, fluorspar, wire with silicon calcium powder, electrodes, nitrogen, oxygen, argon, wire, and labels) using values from the appropriate Harmonized Tariff Schedule (HTS) number, from 1997, 1998, and 1999 Thai imports statistics reported in the United Nations Commodity Trade Statistics. Where a material input was purchased in a market-economy currency from an unaffiliated market-economy supplier, we valued such material input at the actual purchase price in accordance with section 351.408 (c)(1) of the Department's regulations. For a complete analysis of surrogate values, see Surrogate Value Memorandum.

We valued labor using the method described in 19 CFR 351.408(c)(3).

To value electricity, we used the 1997 Thai electricity rates, as adjusted, reported in the publication Energy Prices and Taxes, fourth quarter 1999. We based the value of natural gas on 1993 Thai prices reported in Coal and Natural Gas Competition in APEC Economies, published by the Asian Institute of Technology in August 1999.

We based our calculation of selling, general and administrative (SG&A) expenses, overhead, and profit on the 1999 financial statement of Sahaviriya Steel Industries Public Company Limited (Sahaviriya), a Thai producer of steel products comparable to the subject merchandise. Although Sahaviriya does not produce rebar, we used Sahaviriya's statement because Sahaviriya is a Thai producer of comparable steel products, and we could not locate a financial statement of a Thai rebar producer from which we could calculate a positive amount of profit. We only included depreciation in our overhead calculation because Sahaviriya's financial statement does not separately list other factory overhead expenses.

To value railway freight rates, we used a November 1999 rate from the State Railway of Thailand.

Verification

In accordance with section 782(i) of the Act, we intend to verify all information relied upon in making our final determination.

Final Critical Circumstances Determination

We will make a final determination concerning critical circumstances for Belarus when we make our final determination regarding sales at LTFV in this investigation, which will be no later than 135 days after the date of publication of the preliminary LTFV determination.

Suspension of Liquidation

We are directing the Customs Service to suspend liquidation of any entries of rebar from Belarus entered, or withdrawn from warehouse, for consumption on or after the date on which this notice is published in the Federal Register. We are instructing the Customs Service 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 in the chart below. These instructions suspending liquidation will remain in effect until further notice.

The weighted-average dumping margins are provided below:

Manufacturer/exporter (percent)	Margin (percent)
Belarus-Wide Rate	73.98

The Belarus-wide rate applies to all entries of the subject merchandise from Belarus.

Disclosure

The Department will disclose calculations performed within five days of the date of publication of this notice to the parties of the proceedings in this investigation in accordance with 19 CFR 351.224(b).

International Trade Commission Notification

In accordance with section 733(f) of the Act, we have notified the ITC of our affirmative sales at less than fair value and negative critical circumstances preliminary determinations. If our final antidumping determination is affirmative, the ITC will determine whether these imports are materially injuring, or threaten material injury, to the U.S. industry. The deadline for that ITC determination would be the later of 120 days after the date of this preliminary determination or 45 days after the date of our final determination.

Public Comment

Case briefs for this investigation must be submitted no later than one week after the issuance of the verification report. Rebuttal briefs must be filed within five days after the deadline for submission of case briefs. A list of authorities used, a table of contents, and an executive summary of issues should accompany any briefs submitted to the Department. Executive summaries should be limited to five pages total, including footnotes. Further, we would appreciate it if parties submitting written comments would provide the Department with an additional copy of the public version of any such comments on diskette.

Section 774 of the Act provides that the Department will hold a hearing to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs, provided that such a hearing is requested by any interested party. If a request for a hearing is made in an investigation, the hearing will tentatively be held two days after the deadline for submission of the rebuttal briefs, at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230. In the event that the Department receives requests for hearings from parties to more than one rebar case, the Department may schedule a single hearing to encompass all the cases. Parties should confirm by telephone the time, date, and place of the hearing 48 hours before the scheduled time.

Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request within 30 days of the publication of this notice. Requests should specify the number of participants and provide a list of the issues to be discussed. Oral presentations will be limited to issues raised in the briefs.

As noted above, the final determination will be issued 135 days after the date of the publication of the preliminary determination.

This determination is issued and published pursuant to sections 733(f) and 777(i)(1) of the Act.

Dated: January 16, 2001.

Troy H. Cribb,

Assistant Secretary for Import Administration.

Footnotes

1.  The petitioner in these investigations is the Rebar Trade Action Coalition (RTAC), and its individual members, AmeriSteel, Auburn Steel Co., Inc., Birmingham Steel Corp., Border Steel, Inc., Marion Steel Company, Riverview Steel, and Nucor Steel and CMC Steel Group. (Auburn Steel was not a petitioner in the Indonesia case).

2.  Section A of the questionnaire requests general information concerning a company's corporate structure and business practices, the merchandise under investigation that it sells, and the manner in which it sells that merchandise in all of its markets. Section B requests a complete listing of all home market sales, or, if the home market is not viable, of sales in the most appropriate third-country market (This section is not applicable to respondents in non-market economy (NME) cases). Section C requests a complete listing of U.S. sales. Section D requests information on the cost of production (COP) of the foreign like product and the constructed value (CV) of the merchandise under investigation. In NME cases, Section D requests information on factors of production. Section E requests information on further manufacturing.

3.  See section of this notice on the Belarus-wide rate.