Antidumping: Steel wire rod from Germany,
[Federal Register: February 23, 1998 (Volume 63, Number 35)]
[Notices]
[Page 8953-8957]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23fe98-64]
DEPARTMENT OF COMMERCE
International Trade Administration
[A-428-822]
Notice of Final Determination of Sales at Less Than Fair Value: Steel Wire Rod From Germany
AGENCY: Import Administration, International Trade Administration, Department of Commerce.
EFFECTIVE DATE: February 23, 1998.
FOR FURTHER INFORMATION CONTACT: Judith Wey Rudman or John Brinkmann, Office of AD/CVD Enforcement II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482- 0192 or (202) 482-5288.
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (``the Act''), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (``URAA''). In addition, unless otherwise indicated, all citations to the Department's regulations are references to the provisions codified at 19 CFR Part 353 (April 1997). Although the Department's new regulations, codified at 19 CFR 351 (62 FR 27296; May 19, 1997), do not govern these proceedings, citations to those regulations are provided, where appropriate, to explain current departmental practice.
Final Determination
We determine that steel wire rod from Germany is being 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
Since the preliminary determination in this investigation on September 24, 1997, (62 FR 51577, October 1, 1997) (``Notice of Preliminary Determination''), the following events have occurred:
On September 29, 1997, we issued a second supplemental request for information covering all sections of the questionnaire to Ispat Hamburger Stahlwerke GmbH (``IHSW''), the only company to respond to the Department's original antidumping duty questionnaire. IHSW submitted its response to this supplemental questionnaire, including revised United States, home market, cost of production (COP), and constructed value (CV) databases, on October 14, 1997. At the Department's request, IHSW submitted clarifications of its response on October 23 and 24, 1997.
On October 14, 1997, Connecticut Steel Group, Co-Steel Raritan, GS Industries, Inc., Keystone Steel & Wire Co., North Star Steel Texas, Inc., and Northwestern Steel & Wire Co. (collectively ``petitioners'') informed the Department that IHSW's parent company had purchased two units of Thyssen Stahl AG (``Thyssen'') and requested that the Department collapse IHSW and Thyssen when determining the dumping margins for these companies (see Comment 3 below).
The Department conducted verifications of IHSW's cost and sales information in November 1997, in Hamburg, Germany. The Department issued the sales and cost verification reports on December 16 and 18, 1997, respectively, citing numerous deficiencies in IHSW's cost and sales information. Because it seemed at the time that the deficiencies could be corrected and that we would be able to confirm that corrections made to the databases were done completely and accurately, the Department allowed IHSW a final opportunity to submit revised cost and sales databases. On December 19, 1997, the Department transmitted to IHSW a list of specific revisions to be made to its databases (see December 19, 1997, Memorandum to Gary Taverman). IHSW submitted its revised response on January 9, 1998. On
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January 12, 1998, IHSW notified the Department that there were certain errors in the January 9 submission.
Petitioners, IHSW, and Saarstahl AG (``Saarstahl'') submitted case briefs on January 15, 1998. Petitioners and IHSW submitted rebuttal briefs on January 21, 1998.
Scope of Investigation
The products covered by this investigation are certain hot-rolled carbon steel and alloy steel products, in coils, of approximately round cross section, between 5.00 mm (0.20 inch) and 19.0 mm (0.75 inch), inclusive, in solid cross-sectional diameter. Specifically excluded are steel products possessing the above noted physical characteristics and meeting the Harmonized Tariff Schedule of the United States (HTSUS) definitions for (a) stainless steel; (b) tool steel; (c) high nickel steel; (d) ball bearing steel; (e) free machining steel that contains by weight 0.03 percent or more of lead, 0.05 percent or more of bismuth, 0.08 percent or more of sulfur, more than 0.4 percent of phosphorus, more than 0.05 percent of selenium, and/or more than 0.01 percent of tellurium; or (f) concrete reinforcing bars and rods.
The following products are also excluded from the scope of this investigation:
‹bullet› Coiled products 5.50 mm or less in true diameter with an average partial decarburization per coil of no more than 70 microns in depth, no inclusions greater than 20 microns, containing by weight the following: carbon greater than or equal to 0.68 percent; aluminum less than or equal to 0.005 percent; phosphorous plus sulfur less than or equal to 0.040 percent; maximum combined copper, nickel and chromium content of 0.13 percent; and nitrogen less than or equal to 0.006 percent. This product is commonly referred to as ``Tire Cord Wire Rod.''
‹bullet› Coiled products 7.9 to 18 mm in diameter, with a partial decarburization of 75 microns or less in depth and seams no more than 75 microns in depth, containing 0.48 to 0.73 percent carbon by weight. This product is commonly referred to as ``Valve Spring Quality Wire Rod.''
‹bullet› Coiled products 11 mm to 12.5 mm in diameter, with an average partial decarburization per coil of no more than 70 microns in depth, no inclusions greater than 20 microns, containing by weight the following: carbon greater than or equal to 0.72 percent; manganese 0.50-1.10 percent; phosphorus less than or equal to 0.030 percent; sulfur less than or equal to 0.035 percent; and silicon 0.10-0.35 percent. This product is free of injurious piping and undue segregation. The use of this excluded product is to fulfill contracts for the sale of Class III pipe wrap wire in conformity with ASTM specification A648-95 and imports of this product must be accompanied by such a declaration on the mill certificate and/or sales invoice. This excluded product is commonly referred to as ``Semifinished Class III Pipe Wrap Wire.''
The products under investigation are currently classifiable under subheadings 7213.91.3000, 7213.91.4500, 7213.91.6000, 7213.99.0030, 7213.99.0090, 7227.20.0000, and 7227.90.6050 of the HTSUS. Although the HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of this investigation is dispositive.
Exclusion of Pipe Wrap Wire
As stated in the Notice of Preliminary Determination, North American Wire Products Corporation (NAW), an importer of the subject merchandise from Germany, requested that the Department exclude steel wire rod used to manufacture Class III pipe wrapping wire from the scope of the investigations of steel wire rod from Canada, Germany, Trinidad and Tobago, and Venezuela. On December 22, 1997, NAW submitted to the Department a proposed exclusion definition. On December 30, 1997 and January 7, 1998, petitioners submitted letters concurring with the definition of the scope exclusion and agreeing to the exclusion of this product from the scope of the investigation. We have reviewed NAW's request and petitioners' comments and have excluded steel wire rod for manufacturing Class III pipe wrapping wire from the scope of the four concurrent investigations (see Memorandum to Richard W. Moreland dated January 9, 1998).
Period of Investigation
The period of investigation (``POI'') is January 1 through December 31, 1996.
Facts Available
At the preliminary determination, the Department found that Brandenburg Elektrostahlwerk GmbH (``Brandenburg''), Saarstahl, and Thyssen ``have clearly failed to cooperate to the best of their ability in this investigation, as they have not responded to the Department's antidumping questionnaire.'' See Notice of Preliminary Determination. Accordingly, the Department based the antidumping rate for these companies on facts otherwise available and assigned them the highest margin from the petition (as adjusted by the Department), 153.10 percent.
With regard to IHSW, the Department found that ``despite the detailed requests for supplemental information issued by the Department and the extension of time granted to IHSW to file its responses, IHSW's questionnaire responses remained seriously deficient.'' See Notice of Preliminary Determination. In particular, IHSW's home market sales data and cost of production information were so deficient as to render them unreliable for conducting a proper LTFV analysis and sales-below-cost test. Because of these deficiencies, the Department was unable to use IHSW's responses to calculate a margin for the preliminary determination of sales at less than fair value and therefore relied on facts otherwise available. The Department stated that it would proceed with the investigation and verify IHSW's information if IHSW cooperated and provided ``complete and accurate'' information in response to a supplemental questionnaire. We further stated that ``{i}f IHSW's reported information verified, we will use such information in making the final determination.''
As stated in the ``Case History'' section above, the Department issued a second supplemental questionnaire to IHSW following the preliminary determination and conducted verification of IHSW's revised cost and sales information. During these verifications, numerous inconsistencies were found when we compared IHSW's reported cost and sales data to the company's records, as noted in the verification reports (see the December 16 sales verification report, the December 18 cost verification report, and the Memorandum to Gary Taverman dated December 19, 1997). After the verifications, the Department granted IHSW a final opportunity to correct the deficiencies in its cost and sales databases.
Despite allowing IHSW numerous opportunities to correct its questionnaire responses, the cost and sales information submitted by IHSW remains seriously deficient and unusable. The significant deficiencies in the information submitted by IHSW include: (1) Failure to calculate COP and CV in accordance with the Department's instruction with respect to the weighting factor; (2) the multiple counting of production quantities in deriving per unit COP; (3) failure to make specific changes to identified errors in the coding of reported product characteristics, resulting in the incorrect assignment of product control numbers;
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the impact is particularly significant in the U.S. sales database where correcting the control numbers would affect 72 percent of the volume of reported U.S. sales; and (4) numerous errors and inconsistencies in IHSW's sales database which call into question the integrity of the entire response. (For a more detailed discussion of the deficiencies in the information IHSW has provided, see the February 13, 1998, Memorandum to Richard W. Moreland.) Despite specific instructions from the Department detailing what corrections should be made, IHSW's January 9 response contained numerous errors in the COP and CV databases. Without accurate COP and CV databases, we cannot perform a reliable sales-below-cost test and LTFV analysis. Further, given IHSW's repeated failure throughout the investigation to correct its deficiencies and its failure to submit an accurate response on January 9, we cannot be certain that the problems with IHSW's responses are limited to only those uncovered in our analysis of the January 9 submission.
Section 776(a)(2) of the Act provides that if an interested party (1) withholds information that has been requested by the Department, (2) fails to provide such information in a timely manner or in the form or manner requested, (3) significantly impedes a determination under the antidumping statute, or (4) provides such information but the information cannot be verified, the Department shall use facts otherwise available in reaching the applicable determination (subject to subsections 782(d) and (e)). As detailed below, the Department has determined that all four respondents have failed to cooperate to the best of their ability in this investigation as defined under 776(a)(2) and that the use of facts otherwise available is applicable.
IHSW's questionnaire responses constituted deficient submissions within the meaning of section 782(d). Under these circumstances, section 776(a) directs the Department to use facts available subject to section 782(e). Section 782(e) provides that the Department shall not decline to consider information that is submitted by an interested party and is necessary to the determination, but does not meet all the applicable requirements established by the Department, if--
(1) The information is submitted by the deadline established for its submission,
(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 in providing the information and meeting the requirements established by the Department with respect to the information, and
(5) The information can be used without undue difficulties.
Thus, if any one of these criteria is not met, the Department may decline to consider the information at issue in making its determination. IHSW's information has arguably satisfied the first two criteria. However, regarding the third criterion, whether the information may serve as a ``reliable basis'' for the Department's determination, as detailed above, IHSW's sales data and cost of production information is so deficient as to render it unusable. In particular, IHSW's failure to: (a) Correct those items on the December 19 list of required revisions completely and accurately; (b) submit the accurate revised cost and sales databases in proper SAS format; and (c) properly change the sales databases to reflect changes in the cost database, calls into question the integrity of the entire January 9 submission. As to criterion (4), IHSW has not demonstrated that it acted to the best of its ability in providing the requested information because IHSW failed to comply with the Department's specific instructions in the requests for information. Finally, as to criterion (5), while the Department may be able to correct some of the errors in IHSW's responses, this would be a difficult task involving significant changes to IHSW's information, including the restructuring of many of IHSW's product control numbers. To attempt to correct all of the errors in IHSW's responses would be burdensome. Moreover, even if the Department attempted to correct the responses, given the numerous errors in IHSW's information on the record, we cannot be certain that an accurate analysis could be conducted.
IHSW has failed to provide its sales and cost information in the form and manner requested under the terms of sections 782(d) and (e) of the Act. The information provided by IHSW is unreliable and inadequate for the purpose of calculating a LTFV margin. Section 776(a) thus requires the Department to use facts otherwise available in making its final determination with respect to IHSW.
Section 776(b) provides that adverse inferences may be used for a party that has failed to cooperate by not acting to the best of its ability to comply with requests for information (see also the Statement of Administrative Action (``SAA''), accompanying the URAA, H.R. Rep. No. 316, 103rd Cong., 2d Sess. 870). As discussed above, Brandenburg, IHSW, Saarstahl, and Thyssen have failed to act to the best of their ability to comply with requests for information and, therefore, adverse inferences are warranted with respect to all four companies. Consistent with Department practice in cases where respondents refuse to participate or provide seriously deficient information that precludes the Department from conducting its LTFV analysis, as facts otherwise available, we are basing their margins for the final determination on information in the petition. As facts otherwise available, the Department is continuing to assign to Brandenburg, Saarstahl, and Thyssen, the companies that did not respond at all to the Department's requests for information, the highest margin from the petition (as adjusted by the Department), 153.10 percent. Since IHSW made some effort to comply with the Department's requests for information, we are continuing to assign IHSW a facts available margin based on a simple average of the margins in the petition (as adjusted by the Department), 72.51 percent.
Section 776(c) provides that when the Department relies on secondary information (e.g., the petition) as the facts otherwise available, it must, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. The Department reviewed the adequacy and accuracy of the secondary information in the petition from which the margins were calculated during our pre-initiation analysis of the petition, to the extent appropriate information was available for this purpose, (e.g., import statistics, independent trade data, U.S. Bureau of Labor Statistics, International Energy Agency). (See Notice of Preliminary Determination and September 24, 1997, Memorandum to Richard W. Moreland).
At the preliminary determination, the Department reexamined the price information provided in the petition and found it to be of probative value (see the September 24, 1997, Memorandum to Richard W. Moreland). The parties did not comment on this issue. For purposes of the final determination, absent information to the contrary, we find that the information in the petition continues to be of probative value.
All foreign manufacturers/exporters in this investigation are being assigned dumping margins on the basis of facts otherwise available. Section 735(c)(5) of the Act provides that where the dumping margins established for all exporters and producers individually
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investigated are determined entirely under section 776, the Department ``* * * may use any reasonable method to establish the estimated all- others rate for exporters and producers not individually investigated, including averaging the estimated weighted average dumping margins determined for the exporters and producers individually investigated.'' This provision contemplates that we weight average the facts-available margins to establish the all-others rate. Where the data is not available to weight average the facts available rates, the SAA, at 873, provides that we may use other reasonable methods. Inasmuch as we do not have the data necessary to weight average the respondents' facts available margins, we are continuing to base the all-others rate on a simple average of the margins in the petition (as adjusted by the Department), 72.51 percent.
Interested Party Comments
Comment 1. The Application of Facts Available to Saarstahl
Saarstahl contends that the Department should not use an adverse inference in determining its antidumping margin. Saarstahl argues that it has acted to the best of its ability to respond to the Department's questionnaire, but that its financial situation has precluded it from participating in this proceeding. Even if an adverse inference is made in setting its margin, Saarstahl argues that the Department should use the Saarstahl-specific lower margin information contained in the petition rather than the 153.10% margin used in the preliminary determination.
Petitioners contend that Saarstahl's argument that the Department may not use the highest dumping margin alleged in the petition as adverse facts available is directly contradicted by the statute and Department precedent. Further, petitioners claim that factors such as Saarstahl's financial condition are immaterial to the issue of whether Saarstahl cooperated in this investigation (see, e.g., Final Determination of Sales at Less than Fair Value: Large Newspaper Printing Presses and Components Thereof, Whether Assembled or Unassembled from Germany, 61 FR 38166, 38179 (July 23, 1996)). Petitioners insist that the Department acted appropriately in assigning the highest margin alleged in the petition to Saarstahl for the preliminary determination and should use the same rate for the final determination.
DOC Position. We disagree with Saarstahl's contention that it acted to the best of its ability, given its financial hardship, to comply with the Department's information requests. Under limited circumstances, such as where a company immediately informs the Department that it cannot comply with the Department's information requests due to the liquidation of its assets, it may be appropriate not to assign adverse facts available. However, where a respondent continues to produce the subject merchandise but fails altogether to provide information, we find that it has failed to act to the best of its ability. As we explained in Certain Fresh Cut Flowers From Colombia: Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review, 62 FR 16772, 16775 (April 8, 1997), an adverse inference is warranted where a respondent states merely ``that it was on the verge of bankruptcy'' but provides no further information.
Section 782(c)(1) requires that the Department consider modifying its reporting requirements where a respondent promptly notifies the Department that it cannot submit information in the ``requested form and manner'' and suggests ``alternative forms'' in which to submit the requested information. Saarstahl made no such suggestions; it only informed the Department that it would supply the requested information in a letter dated June 11, 1997. Under these circumstances, we continue to find that Saarstahl failed to act to the best of its ability, and that an adverse inference is warranted.
Furthermore, we agree with petitioners that the continued use of the highest margin in the petition as adverse facts available for Saarstahl is warranted given Saarstahl's failure to supply the Department with any of the requested information. The use of the highest calculated rate in the petition as adverse facts available for Saarstahl is consistent with both the Act and Department practice. Section 776(b) of the Act explicitly states that the Department may rely upon information contained in the petition when making adverse inferences. See also SAA at 870. Recently, the Department employed this approach in Notice of Final Determination of Sales at Less Than Fair Value: Collated Roofing Nails from Taiwan, 62 FR 51427, 51428 (October 1, 1997). Comment 2. The Application of Facts Available to IHSW
Petitioners argue that IHSW's January 9 post-verification submission constitutes substantial new information and should be rejected by the Department in favor of facts available. Even if the Department accepts IHSW's January 9 submission, petitioners contend that the information submitted by IHSW remains incomplete and unreliable, and therefore, the Department must use facts available for the final determination.
IHSW argues that it has been cooperative with the Department to the best of its ability throughout the investigation and, as such, the Department has no basis to use an adverse facts available rate for the final determination. IHSW concedes that it encountered some difficulties in responding to the questionnaires, but claims that its difficulties in reporting information were not the result of IHSW failing to act to the best of its ability, but rather the result of clerical errors or how IHSW maintains its business records. Concerning the submission of data post-verification, IHSW asserts that the Department was properly within its discretion to request revised cost and sales databases from IHSW and that the January 9 submission did not constitute new information. Further, IHSW addresses the specific errors cited in petitioners' case brief, arguing that its January 9 submission is ``sufficiently complete'' to serve as the basis for calculating an antidumping margin. Finally, IHSW contends that the information in its January 9 submission has been verified and can be easily used by the Department.
DOC Position. In allowing IHSW to file its post-verification submission, the Department was not permitting the submission of new information, but rather permitting corrections to the information already on the record, based on the findings at verification. Further, the Department may request the submission of factual information at any time during the proceeding, as provided for at 19 CFR 353.31(b)(1). We have analyzed all of IHSW's information on the record for purposes of the final determination. However, as discussed in detail in the ``Facts Available'' section above, the Department has determined that: (1) IHSW has failed to act to the best of its ability to provide information; and (2) the information provided by IHSW remains unreliable and unusable for purposes of conducting an accurate cost of production or LTFV analysis (see also the February 13, 1998, Memorandum to Richard W. Moreland). Therefore, we are basing our final determination margin for IHSW on facts available.
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Comment 3. Whether To Collapse IHSW and Thyssen and Assign Them a Single Margin Rate
IHSW argues that the Department should not consider collapsing IHSW with Thyssen, as alleged in petitioners' October 14, 1997, submission. IHSW asserts that petitioners' contention is unfounded because: (1) IHSW and Thyssen were completely unrelated during the POI and this issue would be more appropriately considered, if at all, in an administrative review; (2) the acquisition occurred after the POI and therefore, neither company could have exercised control over the other during the POI; and (3) there is no verified information on the record to determine whether the potential for shifting of production between IHSW and Thyssen exists.
Petitioners rebut IHSW's argument, stating that, for the reasons detailed in their October 14, 1997, submission, the Department should collapse IHSW and Thyssen and calculate a single margin rate for the two companies. Petitioners contend that the relationship between IHSW and Thyssen is such that it meets the criteria for collapsing the companies (i.e., the producers are affiliated; the producers have similar manufacturing facilities such that production can be shifted between the two; and ``there is significant potential for manipulation of price or production'').
DOC Position. We disagree with petitioners. IHSW purchased Thyssen's steel wire rod-producing subsidiary six months or more after the POI. There is no evidence of any affiliation between these companies during the POI. Further, the limited evidence concerning this transaction is insufficient to determine that it established any affiliation between IHSW or Thyssen or, if they are affiliated, to determine that collapsing is warranted. Therefore, we have assigned the companies separate cash deposit rates in this final determination. The merits of petitioners' collapsing argument may be explored in the context of an administrative review, if an antidumping order is issued and a review requested, for the period during which the acquisition of Thyssen's rod-producing subsidiary took place.
Continuation of Suspension of Liquidation
In accordance with section 735(c)(4)(A) of the Act, we are directing the Customs Service to continue to suspend liquidation of all entries of steel wire rod from Germany, as defined in the ``Scope of Investigation'' section of this notice, that are entered, or withdrawn from warehouse, for consumption on or after October 1, 1997, the date of publication of our preliminary determination in the Federal Register. For these entries, the Customs Service will require a cash deposit or posting of a bond equal to the estimated amount by which the normal value exceeds the export price as shown below. This suspension of liquidation will remain in effect until further notice.
Margin MFR/producer/exporter
percentage
Brandenburg Elektrostahlwerk GmbH.......................... 153.10 Ispat Hamburger Stahlwerke GmbH............................
72.51 Saarstahl AG............................................... 153.10 Thyssen Stahl AG........................................... 153.10 All-Others.................................................
72.51
The all-others rate applies to all entries of subject merchandise except for the entries of merchandise produced by the exporters/ manufacturers listed above.
ITC Notification
In accordance with section 735(d) of the Act, we have notified the ITC of our determination. As our final determination is affirmative, the ITC will determine whether these imports are causing material injury, or threat of material injury, to the industry within 45 days of its receipt of this notification.
If the ITC determines that material injury, or threat of material 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.
This determination is published pursuant to section 735(d) of the Act.
Dated: February 13, 1998. Robert S. LaRussa, Assistant Secretary for Import Administration.
[FR Doc. 98-4541Filed2-20-98; 8:45 am]
BILLING CODE 3510-DS-P
