02-31035. Certain Cut-to-Length Carbon Steel Plate From Ukraine; Preliminary Results of Administrative Review of the Suspension Agreement

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results of the administrative review of the suspension agreement on certain cut-to-length carbon steel plate from Ukraine.

SUMMARY:

In response to a request from the Ministry of Economy and for European Integration Issues of Ukraine (respondent) on behalf of the Government of Ukraine, the Department of Commerce (the Department) is conducting an administrative review of the suspension agreement on certain cut-to-length carbon steel plate from Ukraine (the Agreement) for the period November 1, 2000 through October 31, 2001, to review the current status of, and compliance with, the Agreement. For the reasons stated in this notice, the Department preliminarily determines the Government of Ukraine (GOU) is in compliance with the Agreement. The preliminary results are set forth in the section titled “Preliminary Results of Review,” infra. Interested parties are invited to comment on these preliminary results. Parties who submit comments are requested to submit with the argument: (1) A statement of the issues, and (2) a brief summary of the arguments.

EFFECTIVE DATE:

December 9, 2002.

FOR FURTHER INFORMATION CONTACT:

Patricia Tran or Robert James, AD/CVD Enforcement Group III, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230, telephone: [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

On October 24, 1997, the Department signed an agreement with the Government of Ukraine which suspended the antidumping duty investigation on certain cut-to-length carbon steel plate (CTL plate) from Ukraine. See Suspension of Antidumping Duty Investigation: Certain Cut-to-Length Carbon Steel Plate from Ukraine, 62 FR 61766 (November 19, 1997). In accordance with section 734(g) of the Tariff Act of 1930 (the Tariff Act), on November 19, 1997, the Department also published its final determination of sales at less than fair value in this case. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From Ukraine, 62 FR 61754 (November 19, 1997).

On October 30, 2001, the Government of Ukraine submitted a request for an administrative review pursuant to the notice of Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 66 FR 49923 (October 1, 2001). The Department initiated a review of the Agreement on December 13, 2001. See Notice of Initiation of Antidumping and Countervailing Duty Administrative Reviews (Initiation Notice), 66 FR 65470 (December 19, 2001).

On July 1, 2002, the Department extended the time limit for the preliminary results of review by 120 days. See Notice of Extension of Time Limits for the Preliminary Results of Administrative Review of the Suspension Agreement on Certain Cut-to-Length Carbon Steel Plate from Ukraine, 67 FR 44174 (July 1, 2002).

Scope of Review

The products covered by this agreement include hot-rolled iron and non-alloy steel universal mill plates (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 mm, not in coils and without patterns in relief), of rectangular shape, neither clad, plated nor coated with metal, whether or not painted, varnished, or coated with plastics or other nonmetallic substances; and certain iron and non-alloy steel flat-rolled products not in coils, of rectangular shape, hot-rolled, neither clad, plated, nor coated with metal, whether or not painted, varnished, or coated with plastics or other nonmetallic substances, 4.75 mm or more in thickness and of a width which exceeds 150 mm and measures at least twice the thickness. Included as subject merchandise in this Agreement are flat-rolled products of nonrectangular cross-section where such cross-section is achieved subsequent to the rolling process (i.e., products which have been “worked after rolling”) for example, products which have been beveled or rounded at the edges. This merchandise is currently classified in the Harmonized Tariff Schedule of the United States (HTS) under item numbers 7208.40.3030, 7208.40.3060, 7208.51.0030, 7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000. Although the HTS subheadings are provided for convenience and customs purposes, the written description of the scope of this Agreement is dispositive. Specifically excluded from subject merchandise within the scope of this Agreement is grade X-70 steel plate.

Period of Review

The period of review (POR) is November 1, 2000 through October 31, 2001.

Preliminary Results of Review

Section 751(a)(1)(C) of the Tariff Act specifies that the Department shall “review the current status of, and compliance with, any agreement by reason of which an investigation was suspended.” In this case the Department and the GOU signed the Agreement suspending the antidumping duty investigation on CTL Plate from Ukraine on October 24, 1997. In order to effectively restrict the volume of exports of CTL Plate from Ukraine to the United States, Article VI of the Agreement provides for the implementation by the GOU of certain legal and administrative provisions. Moreover, Article VIII of the Agreement (Monitoring) requires the GOU to “provide to the Department such information as is necessary and appropriate to monitor the implementation of and compliance with the terms of [the] Agreement.” The Department primarily relies upon three tools to administer the Agreement: (i) Export licenses issued by the GOU, and received by the Department from the U.S. Customs Service; (ii) reference prices, revised quarterly by the Department; and (iii) the annual export limits setting a quota on total imports of CTL plate from Ukraine. The GOU must restrict the volume of direct and indirect exports of CTL plate from Ukraine to the United States by means of export licenses. In addition, subject merchandise may not be sold below the quarterly reference prices issued by the Department.

On March 29, 2002, September 26, 2002, and October 29, 2002, the Department issued questionnaires to the GOU. The GOU submitted its responses to our March 29, 2002, September 26, 2002, and October 29, 2002 requests for information on May 13, 2002, October 14, 2002, and November 12, 2002, respectively. Our review of the information submitted by the GOU indicates that the GOU adhered to the major terms of the agreement. The GOU implemented the provisions of the Agreement through the passage of Presidential Decrees, Orders of the Ministry of Foreign Economic Relations and Trade of Ukraine, and Statute of the Cabinet of Ministers of Ukraine. See Exhibit 1 through 6 of May 13, 2002 response, and Exhibit I-3 of the October 14, 2002 and October 18, 2002 responses.

These legal enactments by the GOU established an export licensing program for all exports of CTL plate to the United States and mandated that merchandise would not be sold under the reference price. Pursuant to section VIII of the Agreement, the GOU conformed to the Agreement's monitoring requirement by timely filing semi-annual reports indicating the volume of sales of CTL plate in the home market and to third countries. It has also timely filed monthly reports on export licenses issued for sales of subject merchandise to the United States. The Agreement also stipulates the GOU must ensure compliance “by any official Ukrainian institution, chamber, or other entities authorized by the [GOU], all producers, exporters, brokers, and traders of CTL plate, and their affiliated parties, as well as independent trading companies/resellers utilized by the Ukrainian producer to make sales to the United States.” The Ukrainian producers conformed to this requirement by inserting a clause in its contracts which prohibited the re-exportation of subject merchandise to the United States without the written permission of the producer and required their customers to include re-exportation cautions in contracts of further resells of the goods. See GOU's response on October 14, 2002 at 133.

Our review of the information submitted by the GOU indicates that each of the export licenses governed by the Agreement were at or above the quarterly FOB reference prices stipulated by the Agreement. Furthermore, data supplied by the GOU in its monthly reports, as well as our independent review of import data compiled by the U.S. Customs Service, indicates Ukraine did not exceed its annual export limits. Therefore, we preliminarily determine that the GOU has been in compliance with the Agreement. We note, however, that upon further review of the record and specifically the information provided by the GOU in its November 12, 2002 submission, Azovstal reported sales made during the POR to an affiliated trading company, instead of sales to the first unaffiliated customer. Appendix B12 of the Agreement requires Azovstal to report the name and address of the first unaffiliated customer. Consequently, certain information concerning the movement expenses incurred by this affiliated trading company on sales to the first unaffiliated customer in the United States and the nature of the affiliation between Azovstal and the trading company is not on the record of this segment of the proceeding. On November 25, 2002, we sent a supplemental questionnaire to the GOU requesting the GOU to provide sales to the first unaffiliated customer, the movement expenses incurred on all sales to these customers, and to describe the nature of the affiliation between the Ukrainian producer and its affiliated trading company. If appropriate, we will use the reported movement expenses to adjust the unaffiliated customer's reported CFR unit prices to the FOB prices specified in section IV E of the Agreement. We will inform the public of our decision in a Memorandum to the File. Additionally, prior to issuing the final results of this review, we will conduct a verification in Ukraine to verify the information submitted by the GOU in this proceeding.

Public Comment

Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request to the Assistant Secretary for Import Administration, U.S. Department of Commerce, Room 1870, within 30 days of the date of publication of this notice. Requests should contain: (1) The party's name, address, and telephone number; (2) the number of participants; and (3) a list of the issues to be discussed. At the hearing, each party may make an affirmative presentation only on issues raised in that party's case brief, and may make rebuttal presentations only on arguments included in that party's rebuttal brief. See 19 CFR 351.310(c).

Case briefs from interested parties may be submitted no later than one week after the issuance of the verification reports. Rebuttal briefs, limited to issues raised in case briefs, may be filed not later than five days after the date of filing case briefs. 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. Any hearing, if requested, will be held 37 days after the date of publication or the first business day thereafter. If this review proceeds normally, the Department will publish the final results of this administrative review, including its analysis of issues raised in the case and rebuttal briefs, not later than 120 days after the date of publication of this notice.

We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Tariff Act.

Dated: December 2, 2002.

Faryar Shirzad,

Assistant Secretary for Import Administration.