02-24788. Notice of Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products From the People's Republic of China

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of the final determination of the less-than-fair-value investigation of certain cold-rolled carbon steel flat products from the People's Republic of China.

SUMMARY:

The Department of Commerce is issuing its final determination of the less-than-fair-value investigation of certain cold-rolled carbon steel flat products from the People's Republic of China.

EFFECTIVE DATE:

October 3, 2002.

FOR FURTHER INFORMATION CONTACT:

Carrie Blozy at [phone] or James Doyle at [phone], Import Administration, 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 the Department of Commerce (the Department) regulations refer to the regulations codified at 19 CFR part 351 (2001).

Final Determination

We determine that certain cold-rolled carbon steel flat products (cold rolled steel) from the People's Republic of China (the PRC) are being sold, or are likely to be sold, in the United States at less than fair value (LTFV), as provided in section 735 of the Act. The estimated margins of sales at LTFV are shown in the Continuation of Suspension of Liquidation section of this notice.

Case History

On May 9, 2002, the Department published its preliminary determination in the above-captioned antidumping duty investigation. See Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products From the People's Republic of China, 67 FR 31235 (May 9, 2002) (Preliminary Determination). This investigation was initiated on October 18, 2001.^[1] See Notice of Initiation of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products From Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 54198 (October 26, 2001) (Initiation Notice).

Since the preliminary determination, the following events have occurred. On May 7, 2002, pursuant to 19 CFR 351.224(c)(1) and (2), Pangang Economic and Trading Group Corporation (Pangang) requested that the Department correct alleged ministerial errors in its preliminary calculations of the margin for Pangang. Of the three errors alleged, the Department determined that only one of them constituted a ministerial error. See Memorandum to Edward Yang: Antidumping Duty Investigation of Certain Cold-Rolled Carbon Steel Flat Products from the People's Republic of China: Analysis of Allegation of Ministerial Errors, dated May 17, 2002 (Ministerial Error Memo). Specifically, the Department found that it had overstated selling, general, and administrative expenses (SG&A) by including depreciation. See id. at 2. However, the Department did not find that the error constituted a significant ministerial error as defined under section 351.224(g), and stated that the error would be addressed in the final determination. See id. at 3.

On May 13, 2002, we received a joint request from the Chinese government and Pangang proposing a suspension agreement in accordance with the Department's regulations at 19 CFR 351.208. On June 26, 2002, the Department met with representatives of Pangang to discuss the proposed suspension agreement.

On May 20, 2002, Pangang submitted certain corrections and clarifications to Pangang's U.S. sales and factors of production data. The Department conducted a verification of Pangang's sales and factors of production data at Pangang's headquarters in Panzhihua, PRC, from May 27, 2002 through May 31, 2002. See Verification of Sales and Factors of Production for Pangang Economic and Trading Group Corporation (“Pangang”) in the Antidumping Duty Investigation of Certain Cold-Rolled Carbon Steel Flat Products from the People's Republic of China (“PRC”) (June 26, 2002).

On May 30, 2002, Pangang requested that the Department postpone its final determination in the investigation until 135 days after the date of the publication of the preliminary determination in the Federal Register. In addition, in accordance with 19 CFR 351.210(e)(2) Pangang requested that the Department extend the application of the provisional measures prescribed under section 733(d) of the Act to not more than six months. On June 20, 2002, the Department postponed the final determination until September 23, 2002. See Notice of Postponement of Final Antidumping Duty Determination: Certain Cold-Rolled Carbon Steel Flat Products From the People's Republic of China, 67 FR 41954 (June 20, 2002).

On July 2, 2002, Pangang submitted comments and publicly available information from surrogate countries for the Department's consideration when valuing factors of production.

We gave interested parties an opportunity to comment on the preliminary determination. On July 12, 2002, petitioners and Pangang submitted case briefs with respect to the sales and factors of production verification and the Department's Preliminary Determination. Petitioners and Pangang submitted rebuttal briefs on July 18, 2002.

Scope of Investigation

With respect to scope, in the preliminary LTFV determinations in all of the cold-rolled steel investigation cases, the Department preliminarily excluded certain porcelain enameling steel from the scope of these investigations. See Scope Appendix to the Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, 67 FR 31181 (May 9, 2002) (Scope Appendix—Argentina Preliminary LTFV Determination:). On June 13, 2002, we issued a preliminary decision on the remaining 75 scope exclusion requests filed in a number of the on-going cold-rolled steel investigations (see the June 13, 2002, memorandum regarding “Preliminary Scope Rulings in the Antidumping Investigations on Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, and in the Countervailing Duty Investigations of Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Brazil, France, and Korea” (Preliminary Scope Rulings), which is on file in the Department's Central Records Unit (CRU), room B-099 of the main Department building. We gave parties until June 20, 2002, to comment on the preliminary scope rulings, and until June 27, 2002, to submit rebuttal comments. We received comments and/or rebuttal comments from petitioners and respondents from various countries subject to these investigations of cold-rolled steel. In addition, on June 13, 2002, North American Metals Company (an interested party in the Japanese proceeding) filed a request that the Department issue a “correction” for an already excluded product. On July 8, 2002, the petitioners objected to this request.

At the request of multiple respondents, the Department held a public hearing with respect to the Preliminary Scope Rulings on July 1, 2002. The Department's final decisions on the scope exclusion requests are addressed in the following paragraph.

For purposes of this investigation, the products covered are certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel products. A full description of the scope of this investigation is contained in “Appendix I” attached to the Notice of Correction to Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Australia, 67 FR 52934 (Aug. 14, 2002). For a complete discussion of the comments received on the Preliminary Scope Rulings, see the memorandum regarding “Issues and Decision Memorandum for the Final Scope Rulings in the Antidumping Duty Investigations on Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, and in the Countervailing Duty Investigations of Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Brazil, France, and Korea,” dated July 10, 2002, which is on file in the CRU.

Period of Investigation

The period of investigation (POI) is January 1, 2001, through June 30, 2001. This period corresponds to the two most recent fiscal quarters prior to the filing of the petition (i.e., September 2001).

Final Critical Circumstances Determination

On November 29, 2001, and December 7, 2001, four of the petitioners in the investigation (Nucor Corporation, Steel Dynamics, Inc., WCI Steel, Inc., and Weirton Steel Company) submitted an allegation of critical circumstances with respect to imports of cold-rolled steel from Russia and requested an expedited decision in the matter. On April 10, 2002, the Department issued its preliminary affirmative determination that critical circumstances exist with respect to imports of cold-rolled steel from the PRC. See Memorandum to Faryar Shirzad from Joseph A. Spetrini: Preliminary Affirmative Determinations of Critical Circumstances (April 10, 2002); and Notice of Preliminary Determinations of Critical Circumstances: Certain Cold-Rolled Carbon Steel Flat Products From Australia, the People's Republic of China, India, the Republic of Korea, the Netherlands, and the Russian Federation, 67 FR 19157 (April 18, 2002) (Critical Circumstances Notice). We received no comments regarding our preliminary finding that critical circumstances exist for imports of cold-rolled steel from the PRC and the final dumping margins are sufficient to impute importer knowledge of dumping. Therefore, we have not changed our determination and continue to find that critical circumstances exist for imports of cold-rolled steel from the PRC.

Nonmarket Economy Country Status

The Department has treated the PRC as a nonmarket economy (NME) country in all past antidumping investigations. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Certain Circular Welded Carbon-Quality Steel Pipe from the People's Republic of China, 67 FR 36570, 36571 (May 24, 2002); Notice of Final Determination of Sales at Less Than Fair Value: Structural Steel Beams from the People's Republic of China, 67 FR 35479, 35480 (May 20, 2002); Notice of Final Determination of Sales at Less Than Fair Value: Folding Metal Tables and Chairs from the People's Republic of China, 67 FR 20090, 20091 (April 24, 2002). This NME designation remains in effect until it is revoked by the Department. See section 771(18)(C) of the Act. No party has sought revocation of the NME status in this investigation. Therefore, in accordance with section 771(18)(C) of the Act, we will continue to treat the PRC as a NME country for purposes of this investigation.

Separate Rates

In our preliminary determination, we found that Pangang had met the criteria for the application of a separate antidumping duty rate. For a more detailed discussion, see the Department's Preliminary Determination.

PRC-Wide Rate and Adverse Facts Available

In NME cases, it is the Department's policy to assume that all exporters located in the NME comprise a single exporter under common control, the “NME entity.” This presumption can be rebutted. The Department assigns a single NME rate to the NME entity unless an exporter can demonstrate eligibility for a separate rate. As explained above, only Pangang received a separate rate. For the reasons set forth in the Preliminary Determination, we continue to find that the use of adverse facts available for the calculation of the PRC-wide rate is appropriate. See the Preliminary Determination for further discussion of this topic.

In our Preliminary Determination, as adverse facts available, we used the highest rate calculated for a respondent, i.e., the rate calculated for Pangang. As explained below, in our final determination we have applied as adverse facts available for Pangang the calculated margin for Pangang from the Preliminary Determination, adjusted for a clerical error and certain corrected data (105.35 percent). For our final determination, we have also applied this rate to the PRC-wide entity.

Verification

As provided in section 782(i) of the Act, we verified the information submitted by Pangang 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 Pangang.

Analysis of Comments Received

As noted below, the Department has determined to apply total adverse facts available for the one participating respondent, Pangang, and to the PRC-wide entity. The Department finds it unnecessary to address the comments raised by the parties that do not pertain to the Department's total adverse facts available decision.

The Department recognizes that the respondent, Pangang, raised the following issues: (1) U.S. Sales through Third Parties; (2) Self-Produced Energy and Gas Factors; (3) Valuation of Oxygen, Nitrogen, and Argon; (4) Valuation of Electricity; (5) Valuation of Iron Ore; (6) Valuation of Aluminum; (7) Valuation of Steam Coal; (8) Valuation of SG&A, Interest and Profit; (9); Inland Freight Distance; and (10) SG&A Ratio Clerical Errors. However, based on our determination to use total adverse facts available, the Department finds it unnecessary to address these comments.

The Department recognizes that petitioners raised the following issues: (1) U.S. Sales through Third Parties; (2) Valuation of Oxygen, Nitrogen, and Argon; (3) Valuation of Hydrogen Gas; (4) Treatment of Defective Hot-Rolled Sheets; (5) Valuation of Iron Ore; (6) Valuation of Aluminum; (7) Valuation of Electricity; (8) Valuation of Coal Used to Produce Coke; (9) Valuation of Water; (10) Valuation of Recycled Iron Angle; and (11) Valuation of SG&A, Interest and Profit. However, based on our determination to use total adverse facts available, the Department finds it unnecessary to address these comments.

All issues raised in the case and rebuttal briefs to this investigation pertaining to total adverse facts available are addressed in the Issues and Decision Memorandum from Joseph A. Spetrini, Deputy Assistant Secretary, to Faryar Shirzad, Assistant Secretary (September 23, 2002) (Decision Memorandum), 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 Memorandum, 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 Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov. The paper copy and electronic version of the Decision Memorandum are identical in content.

Changes Since the Preliminary Determination

We have adjusted the calculation methodology used in the Preliminary Determination to correct for a clerical error and certain corrected data. See Analysis for the Final Determination of Cold-Rolled Carbon Steel Flat Products from the People's Republic of China: Pangang Group International Economic & Trading Corp., dated September 23, 2002.

Use of Facts Available

Section 776(a)(2) of the Act provides that, if an interested party (A) withholds information requested by the Department, (B) fails to provide such information by the deadline for submission of the information, or in the form and manner requested, (C) significantly impedes a proceeding under the antidumping statute, or (D) provides information that cannot be verified, the Department shall use, subject to sections 782(d) of the Act, facts otherwise available in reaching the applicable determination.

Pursuant to section 782(e) of the Act, the Department shall not decline to consider submitted information if all of the following requirements are met: (1) The information is submitted by the established deadline; (2) the information can be verified; (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination; (4) the interested party has demonstrated that it acted to the best of its ability; and (5) the information can be used without undue difficulties.

During verification the Department discovered that Pangang failed to report a significant percentage of its U.S. sales volume of subject merchandise during the POI. This sales volume accounts for a substantial percentage of Pangang's U.S. sales volume of subject merchandise during the POI. Thus, we find that Pangang withheld information requested by the Department, and have applied facts available pursuant to section 776(a)(2) of the Act. Section 776(b) of the Act provides that, if the Department finds that an interested party “has failed to cooperate by not acting to the best of its ability to comply with a request for information,” the Department may draw an inference that is adverse to the interests of that party in selecting from among the facts otherwise available. In light of the circumstances surrounding Pangang's failure to report a substantial portion of its U.S. sales volume, we determine that Pangang has failed to cooperate to the best of its ability and have applied adverse facts available to Pangang. For a complete discussion of our analysis, see the Decision Memorandum and memorandum Determination of Facts Available for Pangang Economic and Trading Group Corporation in Certain Cold-Rolled Carbon Steel Flat Products from the People's Republic of China, dated September 23, 2002.

Suspension Agreement

As discussed above under “Background,” on May 13, 2002, we received a joint request from the Chinese government and Pangang proposing a suspension agreement in accordance with the Department's regulations at 19 CFR 351.208. On June 26, 2002, the Department met with representatives of Pangang to discuss the proposed suspension agreement. No agreement was concluded.

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 90 days prior to the May 9, 2002 (date 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:

Cold-Rolled Carbon Steel Flat Products

Producer/manufacturer/exporter	Weighted-average margin (percent)
Pangang	105.35
PRC-Wide Rate	105.35

ITC Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (ITC) of our determination. As our final determination is affirmative, the ITC will determine, within 45 days, whether these imports are causing material injury, or threat of material injury, to an industry in the United States. If the ITC determines that material injury, or threat of injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. 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, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation.

Notification Regarding APO

This notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

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

Dated: September 23, 2002.

Faryar Shirzad,

Assistant Secretary for Import Administration.

Appendix I

Comment 1: Application of Adverse Facts Available

Comment 2: U.S. Sales through Third Parties

Comment 3: Self-Produced Energy and Gas Factors

Comment 4: Valuation of Oxygen, Nitrogen, and Argon

Comment 5: Valuation of Electricity

Comment 6: Valuation of Hydrogen Gas

Comment 7: Treatment of Defective Hot-Rolled Sheets

Comment 8: Valuation of Iron Ore

Comment 9: Valuation of Aluminum

Comment 10: Valuation of Coal Used to Produce Coke

Comment 11: Valuation of Steam Coal

Comment 12: Valuation of Water

Comment 13: Valuation of Recycled Iron Angle

Comment 14: Valuation of SG&A, Interest and Profit

Comment 15: Inland Freight Distance

Comment 16: SG&A Ratio Clerical Errors

Footnotes

1.  The petitioners in this investigation are Bethlehem Steel Corporation, LTV Steel Company, Inc., National Steel Corp., Nucor Corporation, Steel Dynamics, Inc., United States Steel Corporation, WCI Steel, Inc., and Weirton Steel Corporation (collectively, the petitioners).