[Federal Register: July 17, 2003 (Volume 68, Number 137)]
[Notices]
[Page 42389-42393]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17jy03-43]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-533-828]
Notice of Preliminary Determination of Sales at Less Than Fair
Value: Prestressed Concrete Steel Wire Strand From India
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Preliminary Determination of Sales at Less Than Fair
Value.
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EFFECTIVE DATE: July 17, 2003.
FOR FURTHER INFORMATION CONTACT: Tisha Loeper-Viti at (202) 482-7425,
or Martin Claessens at (202) 482-5451; AD/CVD Enforcement Office V,
Group II, Import Administration, International Trade Administration,
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
Preliminary Determination
We preliminarily determine that prestressed concrete steel wire
strand (PC strand) from India is being sold, or is likely to be sold,
in the United States at less than fair value (LTFV), as provided in
section 733 of the Tariff Act of 1930, as amended (the Act). The
preliminary margin assigned to Tata Iron and Steel Co. Ltd. is based on
adverse facts available (AFA). The estimated margin of sales at LTFV is
shown in the Suspension of Liquidation section of this notice.
Interested parties are invited to comment on this preliminary
determination. We will make our final determination not later than 75
days after the date of this preliminary determination.
Case History
This investigation was initiated on February 20, 2003.\1\ See
Notice of Initiation of Antidumping Duty Investigations: Prestressed
Concrete Steel Wire Strand From Brazil, India, the Republic of Korea,
Mexico, and Thailand, 68 FR 9050 (February 27, 2003) (Initiation
Notice). Since the initiation of the investigation, the following
events have occurred:
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\1\ The petitioners in this investigation are American Spring
Wire Corp., Insteel Wire Products Company, and Sumiden Wire Products
Corp.
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The U.S. Department of Commerce (the Department) set aside a period
for all interested parties to raise issues regarding product coverage.
See Initiation Notice, 68 FR at 9050. No comments were received from
interested parties in this investigation.
The Department issued a letter on March 7, 2003, to interested
parties in all of the concurrent PC strand antidumping investigations,
providing an opportunity to comment on the Department's proposed model
match characteristics and its hierarchy of characteristics. The
petitioners submitted comments on March 18 and 20, 2003. The Department
also received comments on model matching from respondents in the
concurrent investigation involving Mexico on March 18, 2003. These
comments were taken into consideration by the Department in developing
the model matching characteristics and hierarchy for all of the PC
strand antidumping investigations.
On March 17, 2003, the United States International Trade Commission
(ITC) preliminarily determined that there is a reasonable indication
that imports of the products subject to this investigation are
materially injuring an industry in the United States producing the
domestic like product. See Prestressed Concrete Steel Wire Strand From
Brazil, India, Korea, Mexico, and Thailand, 68 FR 13952 (March 21,
2003).
On April 4, 2003, the Department issued its antidumping
questionnaire to Tata SSL Ltd.\2\ The Department was subsequently
informed that Tata SSL Ltd. had been retroactively amalgamated with
Tata Iron and Steel Co. Ltd. (TISCO) and was now known as TISCO (Wire
Division).\3\ We received responses to Sections A-D of the antidumping
questionnaire from TISCO and issued it supplementary questionnaires
where appropriate. TISCO failed to respond to the Department's second
supplemental Section D questionnaire, issued on July 1, 2003, in which
the Department
[[Page 42390]]
requested detailed information and supporting documentation regarding
the company's costs of production. (See, Facts Available section of
this notice for a discussion as to why TISCO's Section D response was
deemed unuseable for this preliminary determination.)
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\2\ Section A of the questionnaire requests general information
concerning a company's corporate structure and business practices,
the merchandise under investigation that it sells, and the manner in
which it sells that merchandise in all of its markets. Section B
requests a complete listing of all home market sales or, if the home
market is not viable, of sales in the most appropriate third-country
market (this section is not applicable to respondents in non-market
economy cases). Section C requests a complete listing of U.S. sales.
Section D requests information on the cost of production of the
foreign like product and the constructed value of the merchandise
under investigation. Section E requests information on further
manufacturing.
\3\ On May 3, 2003, the respondent notified the Department that
under a ``Scheme of Amalgamation,'' Tata SSL Ltd. and Tata Iron and
Steel Co. Ltd. were united as a single company, with Tata SSL Ltd.
becoming known as Tata Iron and Steel Co. Ltd. (Wire Division). This
amalgamation was approved by the High Court of Judicature at Bombay
on April 21, 2003 with an effective date retroactive to April 1,
2002.
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Selection of Respondents
Section 777A(c)(1) of the Act directs the Department to calculate
individual dumping margins for each known exporter and producer of the
subject merchandise. Where it is not practicable to examine all known
producers/exporters of subject merchandise, section 777A(c)(2) of the
Act permits the Department to investigate either: (1) A sample of
exporters, producers, or types of products that is statistically valid,
based on the information available at the time of selection; or (2)
exporters and producers accounting for the largest volume of the
subject merchandise that can reasonably be examined.
In the petition, the petitioners identified five producers of PC
strand in India. We examined company-specific export data obtained from
the U.S. Bureau of Customs and Border Protection (BCBP), the Iron and
Steel Works of the World (14th ed.), and the Tata Group's websites
which indicate that Tata SSL is the only producer of the subject
merchandise within the Tata Group during the period of investigation
(POI). Furthermore, we have no evidence suggesting that any other
Indian company is exporting PC strand to the United States. See
memorandum from Daniel O'Brien, International Trade Compliance Analyst,
to Gary Taverman, Director, Office 5, Re: Selection of Respondents,
dated April 4, 2003.
Period of Investigation
The POI is January 1, 2002, through December 31, 2002. This period
corresponds to the four most recent fiscal quarters prior to the month
of filing of the petition (i.e., January, 2003) involving imports from
a market economy, and is in accordance with our regulations. See 19 CFR
351.204(b)(1).
Scope of Investigation
For purposes of this investigation, PC strand is steel strand
produced from wire of non-stainless, non-galvanized steel, which is
suitable for use in prestressed concrete (both pretensioned and post-
tensioned) applications. The product definition encompasses covered and
uncovered strand and all types, grades, and diameters of PC strand.
The merchandise under investigation is currently classifiable under
subheadings 7312.10.3010 and 7312.10.3012 of the Harmonized Tariff
Schedule of the United States (HTSUS). Although the HTSUS subheadings
are provided for convenience and customs purposes, the written
description of the merchandise under investigation is dispositive.
Facts Available
For the reasons discussed below, we determine that the use of
adverse facts available is appropriate for the preliminary
determination with respect to TISCO.
A. Use of Facts Available
Section 776(a)(2) of the Act provides that, if an interested party
withholds information requested by the Department, fails to provide
such information by the deadline or in the form or manner requested,
significantly impedes a proceeding, or provides information which
cannot be verified, the Department shall use, subject to section 782(d)
and (e) of the Act, facts otherwise available in reaching the
applicable determination. Section 782(d) of the Act provides that if
the Department determines that a response to a request for information
does not comply with the Department's request, the Department shall
promptly inform the responding party and provide an opportunity to
remedy the deficient submission. Section 782(e) of the Act further
states that 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.
In this case, TISCO has failed to provide pertinent information
requested by the Department necessary to properly calculate an
antidumping margin for its preliminary determination. Specifically,
TISCO failed to provide the requested detailed cost of manufacturing
information for the steel wire rod input used to produce the subject
merchandise. In addition, TISCO failed to provide the following
requested information, all of which was pertinent to the Department's
calculations: (1) A description of the steel making and wire rod
production facilities' normal cost accounting system and how it is used
to record, classify, aggregate, and allocate the costs incurred to
produce different grades and dimension of products; (2) a description
of the level of product specificity over which the steel making and
wire rod production facilities' cost accounting system normally
captures production costs; (3) an explanation of how the product
specific costs recorded in the steel making and wire rod production
facilities' normal accounting system compare to the reported cost data;
(4) a listing and description of all differences between costs computed
under respondents normal steel making and wire rod production cost and
financial accounting systems and the reported costs, including an
explanation of why it was necessary to depart from respondent's normal
accounting practices in order to compute the submitted COP and
constructed value (CV) figures; (5) an indication of whether its steel
making and wire rod facilities utilized inputs obtained from affiliated
suppliers; (6) a description of the company's steel making and wire rod
production facilities; and (7) a copy of either the audited financial
statements for the year ended March 31, 2003, or if not yet available,
a copy of the draft financial statements for the same period. The cost
of steel wire rod constitutes a significant percentage of the total
cost of manufacturing the subject merchandise, and detailed information
on the steelmaking and rolling stages of the wire rod production
process is critical for the Department to analyze adequately the
reported cost information. As a result of TISCO's failure to provide
the above requested information, the Department is unable to use the
reported steel wire rod cost of manufacturing data. Thus, in reaching
our preliminary determination, pursuant to sections 776(a)(2)(A), (B),
and (C) of the Act, we have based TISCO's margin rate on facts
available.
B. Application of Adverse Inferences for Facts Available
In applying facts otherwise available, section 776(b) of the Act
provides that 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 the Department's requests for
information. See, e.g., Notice of Final Determination of Sales at Less
Than Fair Value and Final Negative Critical Circumstances: Carbon and
Certain Alloy Steel Wire Rod from Brazil, 67 FR 55792, 55794-96 (August
30, 2002). Adverse inferences are appropriate ``to ensure that the
party does not obtain a more favorable result by failing to cooperate
than if it had cooperated fully.'' See Statement of Administrative
Action accompanying the Uruguay Round Agreements Act, H.R. Rep. No.
103-316,
[[Page 42391]]
at 870 (1994) (SAA). Furthermore, ``{affirmative{time} evidence of bad
faith on the part of a respondent is not required before the Department
may make an adverse inference.'' See Antidumping Countervailing Duties:
Final Rule, 62 FR 27296, 27340 (May 19, 1997).
In this case, TISCO has failed to timely provide a complete and
useable response to the Department's Section D questionnaires, which
included two supplemental questionnaires. The original questionnaire
was issued on April 4, 2003, to which TISCO submitted its Section D
response on May 27, 2003. In order to address the deficiencies in
TISCO's response, the Department issued the first supplemental Section
D questionnaire on June 6, 2003. TISCO's response was received on June
24 and 25, 2003. On July 1, 2003, the Department issued the second
supplemental section D questionnaire, once again requesting detailed
cost of manufacturing information for the steel wire rod input used to
produce the subject merchandise, in addition to numerous other
important methodological inquires. In this questionnaire we noted that
in its previous submission, TISCO failed to provide the requested
detailed cost of manufacturing for the steel wire rod used to produce
the subject merchandise, and that this information is necessary for the
Department to analyze adequately the response.
We established July 7, 2003, as the due date for the second
supplemental section D questionnaire in order to allow the Department
adequate time to analyze the response and to incorporate it into the
calculation of the dumping margin for the preliminary determination.
TISCO, however, having been informed of the importance of the requested
information for the Department's analysis, failed to respond, even
after the Department had granted it another extension of the deadline,
i.e., until July 9, 2003. TISCO's failure to provide this critical
information in a timely manner has rendered its entire submission
inadequate and unusable for the preliminary determination. This
constitutes a failure on the part of this company to cooperate ``to the
best of its ability to comply with a request for information'' by the
Department within the meaning of section 776 of the Act. Therefore, the
Department has preliminarily determined that in selecting from among
the facts otherwise available, an adverse inference is warranted. See,
e.g., Notice of Final Determination of Sales at Less than Fair Value:
Circular Seamless Stainless Steel Hollow Products from Japan, 65 FR
42985, 42986 (July 12, 2000) (the Department applied total AFA where
respondent failed to respond to the antidumping questionnaires).
C. Selection and Corroboration of Information Used as Facts Available
Where the Department applies AFA because a respondent failed to
cooperate by not acting to the best of its ability to comply with a
request for information, section 776(b) of the Act authorizes the
Department to rely on information derived from the petition, a final
determination, a previous administrative review, or other information
placed on the record. See also 19 CFR 351.308(c); SAA at 829-831. In
this case, because we are unable to calculate a margin based on TISCO's
own data and because an adverse inference is warranted, we assign to
TISCO the highest margin from the proceeding, which is the highest
margin alleged for India in the petition, as recalculated in the
initiation and described in detail below. See Initiation Notice, 68 FR
at 9052.
When using facts otherwise available, section 776(c) of the Act
provides that, when the Department relies on secondary information
(such as the petition), it must, to the extent practicable, corroborate
that information from independent sources that are reasonably at its
disposal. The SAA clarifies that ``corroborate'' means that the
Department will satisfy itself that the secondary information to be
used has probative value. See SAA at 870. The Department's regulations
state that independent sources used to corroborate such evidence may
include, for example, published price lists, official import statistics
and customs data, and information obtained from interested parties
during the particular investigation. See 19 CFR 351.308(d); see also
SAA at 870.
To assess the reliability of the petition margin for the purposes
of this investigation, to the extent appropriate information was
available, we reviewed the adequacy and accuracy of the information in
the petition for both this preliminary determination and during our
pre-initiation analysis. See Office of AD/CVD Enforcement Initiation
Checklist, at 15 (February 20, 2003) (Initiation Checklist). Also, as
discussed below, we examined evidence supporting the calculations in
the petition to determine the probative value of the margins in the
petition for use as AFA for purposes of this preliminary determination.
In accordance with section 776(c) of the Act, to the extent
practicable, we examined the key elements of the constructed export
price (CEP) and normal value (NV) calculations on which the margins in
the petition were based. See Memorandum from Martin Claessens,
International Trade Compliance Analyst, to Gary Taverman, Director,
Office 5, Re: Corroboration of Data Contained in the Petition for
Assigning Facts Available Rates, dated July 10, 2003 (Corroboration
Memo).
1. Corroboration of Constructed Export Price
The petitioners based CEP on prices for sales of PC strand from an
Indian producer, through its U.S. affiliate, to an unaffiliated U.S.
purchaser. The petitioners calculated U.S. price by subtracting imputed
credit expenses, international freight and insurance, U.S. merchandise
processing and harbor maintenance fees, and U.S. inland freight. The
petitioners also subtracted an amount for commissions.
We compared the U.S. market price quotes with official U.S. import
statistics and U.S. customs data, and found the prices used by the
petitioners to be reliable.
2. Corroboration of Normal Value
With respect to the NV, the petitioners provided a home market
price for low-relaxation PC strand that was obtained from foreign
market research. See Memorandum to the File Re: Telephone Conversation
with Market Researcher Regarding the Petitions for Imposition of
Antidumping: Prestressed Concrete Steel Wire Strand from India, dated
February 7, 2003. To calculate the NV, the petitioners deducted imputed
credit expenses and inland freight from the home market prices.
The petitioners also provided information demonstrating reasonable
grounds to believe or suspect that sales of PC strand in the home
market were made at prices below the fully absorbed cost of production
(COP), within the meaning of section 773(b) of the Act, and requested
that the Department conduct a country-wide sales-below-cost
investigation.
Pursuant to section 773(b)(3) of the Act, COP consists of the cost
of manufacturing (COM), selling, general, and administrative (SG&A)
expenses, financial expenses, and packing expenses. The petitioners
calculated COM based on their own production experience, adjusted for
known differences between costs incurred to produce PC strand products
in the United States and India using publicly available data. To
calculate SG&A, the petitioners relied upon amounts
[[Page 42392]]
reported in the March 31, 2002 financial statements of Tata SSL Ltd. To
calculate interest expense, the petitioners relied upon the March 31,
2002 financial statements of TISCO. Based upon a comparison of the
price of the foreign like product in the home market to the calculated
COP of the product, we found reasonable grounds to believe or suspect
that sales of the foreign like product were made below the COP, within
the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly, the
Department initiated a country-wide cost investigation. For initiation
purposes and for the purposes of this preliminary determination, we
recalculated the labor costs by first indexing the costs in the foreign
denominated currency and then converting the costs to U.S. dollars
based on the prevailing exchange rate for the comparison period. In
addition, we adjusted the petitioners' COP and CV calculations to be
based on the currency rates from the Import Administration website
rather than on Federal Reserve Bank currency rates. Finally, we have
recalculated G&A and interest to remove allocations of certain expenses
between COM and SG&A. To be conservative, we have reclassified all
amounts where allocations were made, as COM. See Initiation Checklist
at 14 and Attachments II, III, IV, V and VI.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioners based NV on CV. The petitioners calculated CV using the
same COM, SG&A and interest expense figures used to compute the India
home market costs. Consistent with 773(e)(2) of the Act, the
petitioners included in CV an amount for profit. For profit, the
petitioners relied upon amounts reported in Tata SSL Ltd.''s March 31,
2002 financial statements.
The implementing regulation for section 776 of the Act, at 19 CFR
351.308(d), states, ``[t]he fact that corroboration may not be
practicable in a given circumstance will not prevent the Secretary from
applying an adverse inference as appropriate and using the secondary
information in question.'' Additionally, we note that the SAA at 870
specifically states that, where ``corroboration may not be practicable
in a given circumstance,'' the Department need not ``prove that the
facts available are the best alternative.'' There are no independent
sources for the cost data used to calculated the CV in the petition.
Where relevant information was available from TISCO's audited financial
statements, that information was used in the calculation of CV.
Therefore, based on our efforts, described above, to corroborate
information contained in the petition, and in accordance with section
776(c) of the Act, we consider the margins in the petition to be
corroborated to the extent practicable for purposes of this preliminary
determination.
Accordingly, in selecting AFA with respect to TISCO, we have
applied the margin rate of 102.07 percent, which is the highest
estimated dumping margin set forth in the notice of initiation. See
Initiation Notice, 68 FR at 9052.
D. All Others Rate
Section 735(c)(5)(B) of the Act provides that, where the estimated
weighted-averaged dumping margins established for all exporters and
producers individually investigated are zero, de minimis, or are
determined entirely under section 776 of the Act, the Department may
use any reasonable method to establish the estimated all-others rate
for exporters and producers not individually investigated. This
provision contemplates that we weight-average margins other than zero,
de minimis, and facts available margins to establish that ``All
Others'' rate. Where the data do not permit weight-averaging such
rates, the SAA provides that we use other reasonable methods. See SAA
at 873. Because the petition contained five estimated dumping margins
which we subsequently adjusted in our pre-initiation analysis, we have
used these adjusted dumping margins to create an ``All Others'' rate.
See, e.g., Notice of Preliminary Determination of Sales at Less Than
Fair Value: Polyvinyl Alcohol from Germany, 68 FR 7980, 7983 (February
19, 2003). Specifically, in this case we have used the simple average
of both the price-to-price margin and the price-to-constructed value
margin from the initiation notice, which takes into account the
Department's pre-initiation adjustments as described above under Normal
Value. Therefore, we have calculated a margin of 83.65 percent as the
``All Others'' rate.
Suspension of Liquidation
In accordance with section 733(d)(2) of the Act, we are directing
the BCBP to suspend liquidation of all entries of PC strand from India,
that are entered, or withdrawn from warehouse, for consumption on or
after the date of publication of this notice in the Federal Register.
We are also instructing the BCBP to require a cash deposit or the
posting of a bond equal to the dumping margin as indicated in the chart
below, adjusted for export subsidies found in the preliminary
determination of the companion countervailing duty investigation.
Specifically, consistent with our longstanding practice, where the
product under investigation is also subject to a concurrent
countervailing duty investigation, we instruct the BCBP to require a
cash deposit or posting of a bond equal to the amount by which the
normal value exceeds the CEP, as indicated below, less the amount of
the countervailing duty determined to constitute an export subsidy.
Accordingly, for cash deposit purposes, we are subtracting from TISCO's
cash deposit rate that portion of the rate attributable to the export
subsidies found in the affirmative countervailing duty determination
for this respondent (i.e., 34.99 percent). After the adjustment for the
cash deposit rate attributed to export subsidies, the resulting cash
deposit rate will be 67.08 for TISCO and 48.66 for ``All Others.''
These instructions suspending liquidation will remain in effect until
further notice.
The dumping margins are as follows:
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Margin
Producer/exporter (percentage)
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Tata Iron and Steel Co. Ltd............................... 102.07
All Others................................................ 83.65
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International Trade Commission Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of the Department's preliminary affirmative determination. If the
final determination in this proceeding is affirmative, the ITC will
determine before the later of 120 days after the date of this
preliminary determination or 45 days after the final determination
whether imports of PC strand from India are materially injuring, or
threaten material injury, to the U.S. industry.
Public Comment
Interested parties are invited to comment on the preliminary
determination. Interested parties may submit case briefs within 30 days
of the date of publication of this notice. See 19 CFR 351.309(c)(1)(i).
Rebuttal briefs, the content of which is limited to the issues raised
in the case briefs, must be filed within five days after the deadline
for the submission of case briefs. See 19 CFR 351.309(d). A list of
authorities used, a table of contents, and an executive summary of
issues should accompany any briefs submitted to the Department.
Executive summaries should be limited to five pages total, including
footnotes. Further, we request that parties submitting briefs and
rebuttal briefs provide the Department with a copy of the public
version of such briefs on diskette.
[[Page 42393]]
In accordance with section 774 of the Act, we will hold a public
hearing, if requested, to afford interested parties an opportunity to
comment on arguments raised in case or rebuttal briefs. If a request
for a hearing is made, we will tentatively hold the hearing two days
after the deadline for submission of rebuttal briefs at the U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230, at a time and in a room to be determined. Parties
should confirm by telephone the date, time, and location of the hearing
48 hours before the scheduled date.
Interested parties who wish to request a hearing, or to participate
in a hearing 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, oral presentations will be
limited to issues raised in the briefs. See 19 CFR 351.310(c). The
Department will make its final determination no later than 75 days
after the date of this preliminary determination.
This determination is issued and published in accordance with
sections 733(f) and 777(i)(1) of the Act.
Dated: July 10, 2003.
Jeffrey May,
Acting Assistant Secretary for Grant Aldonas, Under Secretary.
[FR Doc. 03-18132 Filed 7-16-03; 8:45 am]