03-17374. Certain Hot-Rolled Carbon Steel Flat Products From South Africa: Preliminary Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on certain hot-rolled carbon steel flat products from South Africa in response to requests by petitioners, Bethlehem Steel Corporation, National Steel Corporation, United States Steel Corporation, and Nucor Corporation. The review covers shipments of this merchandise to the United States for the period May 3, 2001 through August 31, 2002, by Iscor Ltd. (Iscor), Saldanha Steel Ltd. (Saldanha) and Highveld Steel & Vanadium Corp. Ltd. (Highveld). Iscor, Saldanha and Highveld informed the Department that they would not be participating in the review. We preliminarily determine that the application of adverse facts available (AFA) is warranted with respect to Iscor, Saldanha and Highveld. For our analysis on this issue see the “Preliminary Results of Review” section below.

EFFECTIVE DATE:

July 9, 2003.

FOR FURTHER INFORMATION CONTACT:

Elfi Blum or Scot Fullerton, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230 at [phone] or [phone], respectively.

Background

On September 19, 2001, the Department published in the Federal Register the antidumping duty order on certain hot-rolled carbon steel flat products from South Africa (66 FR 48242). On September 30, 2002, in accordance with section 751(a) of the Tariff Act of 1930 (the Act) and section 19 CFR 351.213(b) of the regulations, petitioners, Bethlehem Steel Corporation, National Steel Corporation, and United States Steel Corporation (collectively, petitioners), requested a review of the antidumping duty order on certain hot-rolled carbon steel flat products from South Africa. On September 30, 2002, petitioner, Nucor Corporation, also requested a review of this antidumping duty order. On October 24, 2002, we published a notice of “Initiation of Antidumping Review.” See 67 FR 65336. On December 30, 2002, Iscor and Saldanha (Iscor/Saldanha) informed the Department that the entity was unable to respond to the Department's questionnaire.^[1] On January 21, 2003, Highveld informed the Department that it was withdrawing its participation in the administrative review.

On February 20, 2003, petitioners submitted timely new factual information and a proposed methodology to calculate a new total facts available margin for respondents. On March 26, 2003 and May 20, 2003 respectively, Highveld and Iscor/Saldanha submitted comments in response to petitioners' submission. Petitioners submitted rebuttal comments on May 7, 2003 and on May 27, 2003, respectively. On June 30, 2003 Highveld filed a response to petitioners' rebuttal comments, to which petitioners responded on July 2, 2003.^[2]

Scope of the Antidumping Duty Order

For purposes of this review, 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 this review. Specifically included within the scope of this review 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 review, regardless of definitions in the Harmonized Tariff Schedule of the United States (HTS), 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 review unless otherwise excluded. The following products, by way of example, are outside or specifically excluded from the scope of this review:

• Alloy hot-rolled steel products in which at least one of the chemical elements exceeds those listed above (including, e.g., ASTM specifications A543, A387, A514, A517, A506).
• Society of Automotive Engineers (SAE)/American Iron and Steel Institute (AISI) grades of series 2300 and higher.
• Ball bearings steels, as defined in the HTS.
• Tool steels, as defined in the HTS.
• Silico-manganese (as defined in the HTS) 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 HTS.

The merchandise subject to this review is classified in the HTS 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 flat-rolled carbon steel flat products covered by this review, 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 HTS subheadings are provided for convenience and U.S. Customs purposes (as of March 1, 2003, renamed the U.S. Bureau of Customs and Border Protection), the written description of the merchandise under review is dispositive.

Period of Review

This is the first administrative review following the publication of the antidumping duty order. The period of review (POR) is May 3, 2001 through August 31, 2002.

Application of Facts Available

Pursuant to sections 776(a)(1) and (2) of the Act, if necessary information is not available on the record, or if an interested party or any other person (A) withholds information that has been requested by the administering authority; (B) fails to provide such information by the deadlines for the submission of the information or in the form and manner requested; (C) significantly impedes a proceeding under the antidumping statute; or (D) provides such information but the information cannot be verified as provided in section 782(i) of the Act, the administering authority shall, subject to section 782(d) of the Act, use the facts otherwise available in reaching the applicable determination. In this case, Iscor/Saldanha's and Highveld's stated decision not to participate in the review constitutes a refusal to provide the information necessary to conduct the Department's antidumping analysis, pursuant to section 776(a)(2)(A) of the Act. Moreover, respondents' non-participation significantly impedes the review process. See section 776(a)(2)(C) of the Act. Therefore, the Department must resort to facts otherwise available in reaching the applicable determination. Absent any response on the record from respondents, sections 782(d) and (e) do not apply.

Section 776(b) of the Act further provides that, in selecting from among the facts otherwise available, the Department may use an inference adverse to the interests of a party that has failed to cooperate by not acting to the best of its ability to comply with a request for information (see also the Statement of Administrative Action (SAA), accompanying the Uruguay Round Agreements Act (URAA), H. Doc. No. 103-316 at 870). By refusing to respond to the Department's questionnaire, Iscor/Saldanha and Highveld have failed to cooperate to the best of their ability. The Department is unable to perform any company-specific analysis or calculate dumping margins, if any, for the POR. Therefore, pursuant to section 776(b) of the Act, the Department has determined that an adverse inference is warranted with respect to Iscor/Saldanha and Highveld.

We note that, in selecting an AFA rate, the Department's practice has been to assign respondents who fail to cooperate with the Department the highest margin determined for any party in the less-than-fair-value (LTFV) investigation or in any administrative review. See Sigma Corp. v. United States, 117 F.3d 1401,1411 (Fed. Cir. 1997). As AFA, the Department is assigning the rate of 9.28 percent. This was the only rate in the notice of initiation of investigation. See 67 FR 65336. It is also the rate applied in the final determination of the investigation of sales at LTFV because we found in the investigation that the parties did not cooperate to the best of their ability and we applied AFA (see LTFV investigation). It is the rate currently in effect for all exporters. We preliminarily determine that it is appropriate to continue to apply this rate for purposes of these preliminary results.

Corroboration

Section 776(c) of the Act provides that when the Department relies on the facts otherwise available and relies on “secondary information,” the Department shall, to the extent practicable, corroborate that information from independent sources reasonably at the Department's disposal. The SAA clarifies that the petition is “secondary information,” and states that “corroborate” means to determine that the information used has probative value. See SAA at 870. To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information to be used. We have previously examined the reliability of the 9.28 percent rate and found it to be reliable. See Memorandum from Doug Campau to Barbara Tillman, Preliminary Determination of Certain Hot-Rolled Carbon Steel Flat Products From South Africa: Corroboration of Secondary Information, dated April 23, 2001, and placed on the record of this review on June 30, 2003. We have re-examined the information used as facts available in the investigation and we consider it corroborated, and therefore reliable, for purposes of this first administrative review. Accordingly, we determine that the information from the petition remains the most appropriate basis for AFA.

The Department considers information reasonably at its disposal to determine whether a margin continues to have relevance. Where circumstances indicate that the selected margin is not appropriate as AFA, the Department will disregard the margin and determine an appropriate margin. For example, in Fresh Cut Flowers from Mexico: Final Results of Antidumping Administrative Review, 61 FR 6812 (February 22, 1996), the Department disregarded the highest margin in that case as best information available (the predecessor to facts available) because the margin was based on another company's aberrational business expense that resulted in an unusually high margin. Similarly, the Department does not apply a margin that has been discredited. See D & L Supply Co. v. United States, 113 F.3d 1220, 1221 (Fed. Cir. 1997) (the Department will not use a margin that has been judicially invalidated). None of these unusual circumstances are present here. Moreover, the rate selected is the rate currently applicable to all exporters.

Accordingly, we determine that the highest rate from any previous segment of this administrative proceeding (i.e., the rate of 9.28 percent for the determination of sales at LTFV) is in accord with the requirement of section 776(c) of the Act that secondary information be corroborated (i.e., that it have probative value).

Preliminary Results of Review

As a result of our review, we preliminarily determine the antidumping margins for Iscor/Saldanha and Highveld, based on total adverse facts available, to be as follows:

Manufacturer/exporter	Time period	Margin (percent)
Iscor/Saldanha	05/03/01-08/31/02	9.28
Highveld	05/03/01-08/31/02	9.28

Duty Assessments and Cash Deposit Requirements

The Department shall determine, and the U.S. Bureau of Customs and Border Protection (BCBP) shall assess, antidumping duties on all appropriate entries. The Department will issue appropriate appraisement instructions directly to BCBP within 15 days of publication of the final results of review. Furthermore, the following deposit rates will be effective with respect to all shipments of certain hot-rolled carbon steel flat products from South Africa entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results, as provided for by section 751(a)(2)(C) of the Act: (1) For Iscor/Saldanha and Highveld, the cash deposit rate will be the rate established in the final results of this review; (2) for previously reviewed or investigated companies not listed above, the cash deposit rate will be the company-specific rate established for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the LTFV investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the subject merchandise; and (4) for all other producers and/or exporters of this merchandise, the cash deposit rate shall be the all other rate established in the LTFV investigation, which is 9.28 percent. These deposit rates, when imposed, shall remain in effect until publication of the final results of the next administrative review.

Public Comment

Pursuant to 19 CFR 351.224(b), the Department will disclose to parties to the proceeding any calculations performed in connection with these preliminary results within five days after the date of publication of this notice. Pursuant to 19 CFR 351.309, interested parties may submit written comments in response to these preliminary results. Case briefs are to be submitted within 30 days after the date of publication of this notice, and rebuttal briefs, limited to arguments raised in case briefs, are to be submitted no later than five days after the time limit for filing case briefs. Parties who submit arguments in this proceeding are requested to submit with the argument: (1) a statement of the issues, and (2) a brief summary of the argument. Case and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f).

Also, pursuant to 19 CFR 351.310, within 30 days of the date of publication of this notice, interested parties may request a public hearing on arguments to be raised in the case and rebuttal briefs. Unless the Secretary specifies otherwise, the hearing, if requested, will be held two days after the date for submission of rebuttal briefs. Parties will be notified of the time and location. The Department will publish the final results of this administrative review, including the results of its analysis of issues raised in any case or rebuttal brief, not later than 120 days after publication of these preliminary results, unless extended.

Notification to Importers

This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

This administrative review and notice are issued in accordance with sections 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 1675(a)(1) and 19 U.S.C 1677f(i)(1)).

Dated: July 2, 2003.

Joseph A. Spetrini,

Acting Assistant Secretary for Grant Aldonas, Under Secretary.

Footnotes

1.  In the final results of the antidumping investigation, the Department determined that Iscor and Saldanha were affiliated, and should be treated as a single entity for purposes of the investigation. See Notice of Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Hot-Rolled Carbon Steel Flat Products from South Africa, 66 FR 48242 (Sept. 19, 2001) (LTFV investigation). This was based on information on the public record of the contemporaneous countervailing duty investigation of hot-rolled products from South Africa that 1) Iscor is a 50 percent shareholder in Saldanha, and is in a position to exercise control of Saldanha's assets, and 2) both companies produce the subject merchandise. In this review, the Department requested that, if the circumstances had not changed, the two parties file a combined response. Although Iscor/Saldanha did not file any response, the December 30, 2002 letter declining to respond to the questionnaire was filed jointly.

2.  Both respondents submitted new factual information in several of their submissions. The Department rejected those submissions and asked respondents to re-file these respective submissions without new factual information. The Department then requested that petitioners re-file their comments to remove any references to new factual information that respondents had submitted.