[Federal Register Volume 59, Number 27 (Wednesday, February 9, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-2995]
[[Page Unknown]]
[Federal Register: February 9, 1994]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-351-821]
Final Determination of Sales at Less Than Fair Value: Certain
Carbon and Alloy Steel Wire Rod from Brazil
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
FOR FURTHER INFORMATION CONTACT: Ellen Grebasch or Erik Warga, Office
of Antidumping Investigations, Import Administration, U.S. Department
of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC
20230; telephone (202) 482-3773 or 482-0922, respectively.
FINAL DETERMINATION: We determine that imports of certain carbon and
alloy steel wire rod (``steel wire rod'') from Brazil are being, or are
likely to be, sold in the United States at less than fair value (LTFV),
as provided in section 735 of the Tariff Act of 1930, as amended (the
Act). The estimated margins are shown in the ``Suspension of
Liquidation'' section of this notice.
Case History
Since our November 19, 1993, preliminary determination (58 FR
62636, November 29, 1993), the following events have occurred:
On December 8, 1993, interested party Michelin Tire Corporation
requested a public hearing.
Petitioners (Connecticut Steel Corporation, Georgetown Steel
Corporation, Keystone Steel & Wire Company, and North Star Steel Texas,
Inc.), respondent Siderurgica Mendes Junior (``SMJ''), and other
interested parties (``the Barnes Group''--comprised of Barnes Group
Inc., Associated Spring, and NHK-Associated Spring Suspension
Components Inc.--and Amercord Inc.) filed case briefs on January 5, and
rebuttal briefs on January 10, 1994. The other mandatory respondent,
Cia Siderurgica de Guanabara (``Cosigua''), did not file a brief or a
rebuttal.
A public hearing took place on January 12, 1994. At our request,
interested parties in the companion investigation of wire rod from
Canada also submitted case and rebuttal briefs and attended the hearing
to discuss the scope of the three ongoing investigations of certain
carbon and alloy steel wire rod.
Scope of Investigation
The products covered by this investigation are hot-rolled carbon
steel and alloy steel wire rod, in coils, of approximately round cross
section, between 0.20 and 0.75 inches in solid cross-sectional
diameter. The following products are excluded from the scope of this
investigation:
Steel; wore rod 5.5 mm or less in diameter, with
tensile strength greater than or equal to 1040 MPa, and the
following chemical content, by weight: carbon greater than or equal
to 0.79%, aluminum less than or equal to 0.005%, phosphorous plus
sulfur less than or equal to 0.040%, and nitrogen less than or equal
to 0.006%;
Free-machining steel containing 0.03% or more of lead,
0.05% or more of bismuth, 0.08% or more of sulfur, more than 0.4% of
phosphorus, more than 0.05% of selenium, and/or more than 0.01% of
tellurium;
Stainless steel rods, tool steel rods, free-cutting
steel rods, sulfurized steel rods, ball bearing steel rods, high-
nickel steel rods, and concrete reinforcing bars and rods; and
Wire rod 7.9 to 18 mm in diameter, containing 0.43 to
0.73% carbon by weight, and having partial decarburization and seams
no more than 0.75 mm in depth.
The products under investigation are currently classifiable under
subheadings 7213.31.3000, 7213.31.6000. 7213.39.0030, 7213.39.0090,
7213.41.3000, 7213.41.6000, 7213.49.0030, 7213.49.0090, 7213.50.0020,
7213.50.0040, 7213.50.0040, 7213.50.0080, 7227.20.0000, 7227.90.6000,
and 7227.90.6050 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheadings are provided for convenience
and customs purposes, our written description of the scope of this
investigation is dispositive.
Period of Investigation
The period of investigation is October 1, 1992, through March 31,
1993.
Such or Similar Comparisons
We have determined that the merchandise covered by this
investigation constitutes a single category of ``such or similar''
merchandise.
Best Information Available
Because both mandatory respondents failed to respond to our
questionnaire, we based our determination on best information available
(BIA) pursuant to section 776(c) of the Act.
In determining what rate to use as BIA, the Department of Commerce
(``the Department'') follows a two-tiered methodology, whereby the
Department normally assigns lower margins to those respondents who
cooperated in an investigation and margins based on more adverse
assumptions for those respondents who did not cooperate in an
investigation. According to the Department's two-tiered BIA methodology
outlined in the Final Determination of Sales at Less Than Fair Value:
Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled
Carbon Steel Flat Products, and Certain Cut-to-Length Carbon Steel
Plate From Belgium, 58 FR 37083, (July 9, 1993), when a company refuses
to provide the information requested in the form required, or otherwise
significantly impedes the Department's investigation, it is appropriate
for the Department to assign to that company the higher of (1) the
margin alleged in the petition, or (2) the highest calculated rate of
any respondent in the investigation. Because there were no cooperative
respondents in this investigation, we are assigning to all exporters,
as BIA, a margin of 36.02 percent, the highest margin calculated based
on information in the petition on merchandise that is within the scope
of this investigation (as amended).
Fair Value Comparisons
To determine whether respondents made sales of steel wire rod from
Brazil in the United States at less than fair value, we compared the
United States price (USP) to the foreign market value (FMV), as
specified in the ``United States Price'' and ``Foreign Market Value''
sections of this notice.
United States Price
We calculated USP using the methodology described in the
preliminary determination, except that we calculated taxes on U.S.
sales in accordance with our revised tax methodology. Our revised
methodology consisted of applying the home market tax rate to USP. See,
e.g., Stainless Steel Wire Rod from France (58 FR 68865, December 29,
1993) (Final Determination) (``French Wire Rod'').
Foreign Market Value
We calculated FMV using the methodology described in the
preliminary determination, except that the ICMs value-added tax was not
deducted from FMV. In addition, we calculated a readjustment of the
amount of tax on the U.S. credit expenses added to FMV by applying the
tax rate to those expenses. This readjustment amount was also added to
FMV (See French Wire Rod).
Currency Conversion
We made currency conversions based on the official exchange rates
in effect on the dates of the U.S. sales as certified by the Federal
Reserve Bank.
Interested Party Comments
Comment 1. Michelin contends that the Department must exclude from
the scope of the investigation tire cord quality 1070 steel wire rod
(``TCQ 1070''), which Michelin imports, because Michelin has been
unable to obtain that product in commercial quantities from any U.S.
manufacturer. Additionally, Michelin suggests that the Flat Panel
Displays case\1\ (``FPDs'') established that the Department is required
to determine, within a class or kind of merchandise, whether ``there
are any distinct products for which U.S. manufactures do not
manufacture a like product.'' Michelin contends that TCQ 1070 is a
distinct product, and that the portion of the petition pertaining to
TCQ 1070 should be dismissed for lack of standing on the part of
petitioners. If TCQ 1070 is not found to be a distinct product Michelin
suggests that TCQ 1070 is essentially the same as tire cord quality
1080 steel wire rod (``TCQ 1080''), which is already excluded from the
scope of the investigation pursuant to petitioners' October 19, 1993,
petition amendment. Accordingly, Michelin argues, TCQ 1070 and TCQ 1080
should be evaluated jointly. Based on this premise, Michelin contends
that the Department should determine that the two subsets of all steel
wire rod--tire cord quality and non-tire cord quality--constitute two
distinct classes or kinds of merchandise based on the Diversified
Products criteria,\2\ and class-or-kind-specific dumping margins should
be calculated.
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\1\Final Determination and Partial Rescission: Flat Panel
Displays from Japan (56 FR 32376, July 16, 1991).
\2\The Diversified Products Corp. v. United States (572 F. Supp.
883 (CIT 1983)) case upheld a class-or-kind decision which
considered the following criteria: (1) The product's general
physical characteristics; (2) its ultimate use; (3) the expectations
of the ultimate purchaser; (4) the channels of trade; and (5) cost.
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Stelco Inc., commenting on scope in the context of the companion
investigation of wire rod from Canada,\3\ argues that the antidumping
law does not permit the Department to accept without explanation or
analysis petitioners' October 18, 1993, amendment to the petition
(excluding TCQ 1080) over the objection of an interested party. To
grant a contested exclusion request, Stelco suggests, requires an
explicit finding that the product in question be ``* * * co-extensive
with a rational class or kind of wire rod product subcategory.'' A
reasonable analysis, according to Stelco, can lead only to the joint
consideration and disposition of petitioners' amendment (excluding TCQ
1080) and Michelin's request (to exclude TCQ 1070).
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\3\Stelco, a Canadian wire rod producer, is not an interested
party in this proceeding. However, the scope issues in the three
concurrent wire rod investigations are essentially the same and thus
best disposed of together. Therefore, we have placed Stelco's scope
comments on the record in this proceeding.
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Petitioners object to the request to exclude TCQ 1070 because the
precedent of other antidumping investigations of wire rod, as well as
the Diversified Products criteria and the criteria used to determine
like products, demonstrate no ``bright line'' upon which to base a
decision to treat TCQ 1070 as a distinct product or to find that wire
rod products comprise multiple classes or kinds. Petitioners also
contend that the request is untimely.
Petitioners claim that there is substitutability between the
products that Michelin would exclude on the one hand and products that
would remain within the scope on the other hand (e.g., tire bead
quality wire rod). Petitioners further claim that the description of
the product that Michelin proposes to exclude encompasses products that
petitioners produce. Finally, petitioners suggest that, even if the
Department determines tire cord quality wire rod to be a distinct
product or a separate class or kind, petitioners' standing must be
accepted unless challenged by a domestic producer.
With respect to Stelco's argument that the Department's acceptance
of petitioners' amendment was unlawful, petitioners contend that
Department precedent requires only that scope amendments ``be timely
and consistent with the intent of the petitioner.''
DOC Position. We agree with petitioners. Accordingly, we have not
excluded TCQ 1070 from the scope of this investigation but will
continue to exclude TCQ 1080.
The Act and our regulations do not provide for consideration of
domestic availability in determining whether a product should or should
not fall within the scope of an investigation. See, e.g., Appendix to
Final Determination of Sales at Less Than Fair Value: Certain Cold-
Rolled Carbon Steel Flat Products from Argentina (58 FR 37062, July 9,
1993) (``Flat-Rolled Steel''). Additionally, our acceptance of
petitioners' amendment excluding TCQ 1080 from the scope of the
petition was lawful and appropriate. Under our regulations, section
353.12(b)(4) requires a petitioner to describe the scope in filing a
petition and section 353.12(e) provides that a petitioner may amend the
petition.
We agree that we must evaluate scope amendments. Generally, when a
petitioner asks to amend the scope of a petition, our chief concern is
the administrative feasibility of granting the request (see, e.g.,
Flat-Rolled Steel cases, where petitioners' late plate scope amendment
was rejected)--including such factors as whether time permits
soliciting any required new information and practicality for customs
purposes. In addition, we will evaluate on its merits any opposition to
an exclusion request. However, the act on the part of a petitioner of
making such a request is generally sufficient justification for
granting such an exclusion, because it is a statement by petitioner
that it does not need relief from a product's competition. Further,
this view of a petitioner's important role in determining the scope is
supported by Department practice in past cases (e.g., Flat-Rolled Steel
cases).
In this case, Stelco opposes the exclusion of TCQ 1080 on the
grounds that this product should not be considered separately from TCQ
1070. While we agree that TCQ 1070 and TCQ 1080 are similar in many
respects, these similarities do not require that the two products'
fates be inextricably intertwined. The two products have different
minimum carbon contents, and the matching criteria in the three
companion wire rod cases (upon which all interested parties were
afforded an opportunity to comment) rank grade/carbon content highest
among relevant characteristics of wire rod. Thus, the two are
meaningfully distinct products, only one of which (TCQ 1070)
petitioners have chosen to include in the scope of their petition.
Notwithstanding Stelco's unsupported allegations concerning
petitioners' exclusion request, neither the statute nor the regulations
requires the Department to determine that products whose exclusion is
contested represent a distinct class or kind of merchandise or a
distinct like product, nor did the FPDs case establish a requirement
for a like product analysis. In FPDs, a like product analysis was
conducted in order to evaluate the petitioner's standing with respect
to one class or kind of merchandise.
With respect to whether TCQ 1070 can be excluded over petitioners'
opposition, such exclusions are possible only if the product is
determined to be part of a separate class or kind of merchandise which
petitioners do not produce. TCQ and non-TCQ wire rod do not constitute
separate classes or kinds of merchandise--even applying the Diversified
Products criteria (which, we note, are guidelines, not mandatory
criteria for defining class or kind).\4\ In short, there is no bright
line among the product groups at issue in this case. Further, there is
no precedent for separate classes or kind in other investigations or
wire rod, and no party broached this issue when asked to comment on
matching criteria. In any case, since petitioners claim that they
produce TCQ 1070, a separate class or kind finding would not result in
a finding that petitioners lack standing.
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\4\Wire rod has in past cases been broadly defined in terms of
the same general physical characteristics and range of ultimate
users. Customers expect to draw or stamp the product into various
other downstream products. While different technical specifications
and uses exist, it would be prohibitively difficult to identify each
unique combination as defining a separate class or kind of
merchandise. No differences in channels of trade, such as sale to
end users versus sales to resellers, distinguish groups of wire rod.
Although tire cord quality wire rod has a relatively high cost, it
is not the only type of wire rod included in the scope that has a
high cost.
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In conclusion, petitioners have requested a scope amendment that
can be administered. Petitioners oppose the exclusion of TCQ 1070, and
TCQ 1070 is neither a distinct product for which petitioners lack
standing nor part of a separate tire cord quality class or kind of
merchandise. While similar to TCQ 1080, TCQ 1070 differs in terms of a
characteristic recognized as significant: Carbon content. Challenges to
like product or class-or-kind determinations are subject to very high
standards and are difficult for the Department to sustain. Petitioners'
scope definition is afforded great weight because petitioners can best
determine from what products they require relief. Moreover, in
administering the law the Department may not take into account
potential shortages in domestic supply.
Comment 2. Petitioners and the Barnes Group request the exclusion
of valve spring quality wire rod from the scope of this investigation,
in accordance with petitioners' November 1993 petition amendment.
DOC Position. We agree that valve spring quality wire rod should,
in accordance with petitioners' amendment, be excluded from the scope.
This amendment has not been contested, and nothing on the record in
this proceeding gives rise to concern over feasibility.
Comment 3. SMJ alleges that, in the petition margin calculations on
which the preliminary LTFV margin calculations were based, the
adjustment to USP for foreign inland freight charges was overstated as
a result of an erroneous inflation adjustment. SMJ also alleges that
the margin calculations do not properly account for the 12-percent ICMS
tax that is assessed on home market sales of the subject merchandise.
Petitioners counter that SMJ has misinterpreted information on the
record and arrived at an unsubstantiated conclusion. The only
appropriate change to the preliminary LTFV margin calculations is that,
in calculating the LTFV margin, the Department should revise its
treatment of Brazilian indirect taxes to be consistent with the Court
of International Trade's holding in Federal-Mogul Corporation v. United
States, Court Nos. 91-07-00530 and 91-08-00569, Slip. Op 93-194 (CIT
October 7, 1993). (The Court ordered that, to calculate the addition to
United States price, the home market tax rate be applied to United
States price at the same point in the stream of commerce where the tax
is applied to home market sales.)
DOC Position. We agree with petitioners. The information upon which
the petition margin calculations were based was accepted for purposes
of initiating this investigation. When a respondent has chosen not to
cooperate with our investigation, the BIA margins calculated are not
open to cross-examination unless a plain clerical error or
methodological inconsistency is involved. SMJ has drawn conclusions
based on their own speculation, but not explicitly supported by the
information on the record. With respect to taxes, petitioners have
pointed out a methodological inconsistency (inasmuch as the
Department's treatment of taxes changed after the preliminary
determination). Therefore, we have adjusted USP and FMV according to
the Federal-Mogul CIT decision in order to be consistent with current
practice (see ``United States Price'' section of this notice, above).
Suspension of Liquidation
In accordance with section 733(d)(1) of the Act, we are directing
the Customs Service to continue to suspend liquidation of all entries
of steel wire rod from Brazil that are entered, or withdrawn from
warehouse, for consumption on or after the date of publication of this
notice in the Federal Register. The Customs Service shall require a
cash deposit or posting of a bond equal to the estimated dumping
margins, as shown below. The suspension of liquidation will remain in
effect until further notice. The weighted-average margins are as
follows:
------------------------------------------------------------------------
Margin
Manufacturer/producer/exporter percentage
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All companies............................................... 36.02
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ITC Notification
In accordance with section 735(d) of the Act, we have notified the
ITC of our determination. The ITC will now determine whether these
imports are materially injuring, or threaten material injury to, the
U.S. industry within 45 days. If the ITC determines that material
injury, or threat of material injury, does not exist with respect to
the subject merchandise, 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 from Brazil entered, or
withdrawn from warehouse, for consumption on or after the effective
date of the suspension of liquidation.
Notice to Interested Parties
This notice also serves as the only reminder to parties subject to
administrative protective order (APO) of their responsibility, pursuant
to 19 CFR 353.34(d), concerning the return or destruction of
proprietary information disclosed under APO. Failure to comply is a
violation of the APO.
This determination is published pursuant to section 735(d) of the
Act (19 U.S.C. 1673(d)) and 19 CFR 353.20(a)(4).
Dated: February 2, 1994.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 94-2995 Filed 2-8-94; 8:45 am]
BILLING CODE 3510-DS-M
