Suspension of Antidumping Duty Investigation: Certain Cut-to- Length Carbon Steel Plate From South Africa

DEPARTMENT OF COMMERCE

[A-791-804]

Suspension of Antidumping Duty Investigation: Certain Cut-to-

Length Carbon Steel Plate From South Africa

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

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SUMMARY: The Department of Commerce (the Department) has suspended the

antidumping duty investigation involving certain cut-to-length carbon

steel plate (CTL plate) from South Africa. The basis for this action is

an agreement between the Department and Iscor Ltd. (Iscor) and Highveld

Steel and Vanadium Corporation Ltd. (Highveld) to revise their prices

to eliminate completely sales of this merchandise to the United States

at less than fair value.

EFFECTIVE DATE: October 24, 1997.

FOR FURTHER INFORMATION CONTACT: Charles Rast, Nancy Decker, or Linda

Ludwig, Office of AD/CVD Enforcement III, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th &

Constitution Avenue N.W., Washington, D.C. 20230; telephone (202) 482-

5811, (202) 482-0196, or (202) 482-3833, respectively.

SUPPLEMENTARY INFORMATION:

Background

On December 3, 1996, the Department initiated an antidumping

investigation under section 732 of the Tariff Act of 1930, (the Act),

as amended, to determine whether imports of CTL plate from South Africa

are being or are likely to be sold in the United States at less than

fair value (61 FR 64051 (December 3, 1996)). On December 19, 1996, the

United States International Trade Commission (ITC) notified the

Department of its affirmative preliminary injury determination (see ITC

Investigation Nos. 731-TA-753-756). On June 2, 1996, the Department

preliminarily determined that CTL plate is being, 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 by the Uruguay

Round Agreements Act (62 FR 31967 (June 11, 1997)).

The Department and Iscor and Highveld initialed a proposed

agreement suspending this investigation on September 25, 1997. On

September 26, 1997, we invited interested parties to provide written

comments on the agreement and received comments from Geneva Steel, Gulf

States Steel, Iscor and Highveld.

The Department and Iscor and Highveld signed the final suspension

agreement on October 24, 1997.

Scope of Investigation

See Notice of Final Determination of Sales at Less Than Fair Value:

Certain Cut-to-Length Carbon Steel Plate from South Africa, signed

October 24, 1997.

Suspension of Investigation

The Department consulted with the parties to the proceeding and has

considered the comments submitted with respect to the proposed

suspension agreement. In accordance with Section 734(b) of the Act, we

have determined that the agreement will completely eliminate sales at

less than fair value, that the agreement is in the public interest, and

that the agreement can be monitored effectively. See Public Interest

Memorandum, October 24, 1997. We find, therefore, that the criteria for

suspension of an investigation pursuant to section 734(b) of the Act

have been met. The terms and conditions of this agreement, signed

October 24, 1997, are set forth in Annex 1 to this notice.

Pursuant to section 734(f)(2)(A) of the Act, the suspension of

liquidation of all entries of cut-to-length carbon steel plate from

South Africa entered or withdrawn from warehouse, for consumption, as

directed in our Notice of Preliminary Determination of Sales at Less

Than Fair Value and Postponement of Final Determination: Certain Cut-

to-Length Carbon Steel Plate From South Africa is hereby terminated.

Any cash deposits on entries of cut-to-length carbon steel plate from

South Africa pursuant to that suspension of liquidation shall be

refunded and any bonds shall be released.

On October 14, 1997 we received a request from petitioners

requesting that

[[Page 61752]]

we continue the investigation. We received separate requests from the

United Steelworkers of America, Bethlehem Steel Corp., and U.S. Steel

Corp. (a unit of USX Corporation), interested parties under section

771(9)(D) of the Act. Pursuant to these requests, we have completed the

investigation in accordance with section 734(g) of the Act, and have

notified the International Trade Commission (ITC) of our determination.

If the ITC's injury determination is negative, the agreement will have

no force or effect, and the investigation will be terminated (see

section 734(f)(3)(A) of the Act). If the ITC's determination is

affirmative, the Department will not issue an antidumping duty order as

long as the suspension agreement remains in force (see section

734(f)(3)(B) of the Act).

This notice is published pursuant to section 734(f)(1)(A) of the

Act.

Dated: November 7, 1997.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

Appendix 1--Suspension Agreement Cut-to-Length Carbon Steel Plate From

the Republic South Africa

Under section 734(b) of the Tariff Act of 1930, as amended (19

U.S.C. 1673c(b)) (the Act), and 19 CFR 353.18, the U.S. Department

of Commerce (the Department) and the signatory producers/exporters

of cut-to-length carbon steel plate from the Republic of South

Africa enter into this suspension agreement (the Agreement). On the

basis of this suspension agreement, the Department shall suspend its

antidumping investigation initiated on December 3, 1996 (61 FR

64051), with respect to cut-to-length carbon steel plate from the

Republic of South Africa, subject to the terms and provisions forth

below.

(A) Product Coverage

The merchandise subject to this Agreement is the following

merchandise which has the Republic of South Africa as its origin:

(1) For purposes of the Agreement, cut-to-length carbon steel

plate includes 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.

(2) 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. Excluded

from subject merchandise within the scope of this agreement is grade

X-70 plate. Although the HTS subheadings are provided for

convenience and customs purposes, our written description of the

scope of this Agreement is dispositive.

(B) U.S. Import Coverage

The signatory producers/exporters collectively are the producers

and exporters in the Republic of South Africa that, during the

antidumping investigation on the merchandise subject to the

Agreement, accounted for substantially all (not less than 85

percent) of the subject merchandise imported into the United States,

as provided in the Department's regulations. The Department may at

any time during the period of the Agreement require additional

producers/exporters in the Republic of South Africa to sign the

Agreement in order to ensure that not less than substantially all

imports into the United States are covered by the Agreement.

In reviewing the operation of the Agreement for the purpose of

determining whether this Agreement has been violated or is no longer

in the public interest, the Department will consider imports into

the United States from all sources of the merchandise described in

Section A of the Agreement. For this purpose, the Department will

consider factors including, but not limited to, the following:

volume of trade, pattern of trade, whether or not the reseller is an

original equipment manufacturer, and the reseller's export price

(EP).

(C) Basis of the Agreement

On and after the effective date of the Agreement, each signatory

producer/exporter individually agrees to make any necessary price

revisions to eliminate completely any amount by which the normal

value (NV) of this merchandise exceeds the U.S. price of its

merchandise subject to the Agreement. For this purpose, the

Department will determine the NV in accordance with section 773(e)

of the Act and U.S. price in accordance with section 772 of the Act.

(1) For all sales occurring on and after the effective date of

the Agreement through March 31, 1998 (interim period), each

signatory producer/exporter agrees not to sell its merchandise

subject to the Agreement to unaffiliated purchasers in the United

States at prices that are less than its NV, as determined by the

Department, and provided to parties not later than November 7, 1997;

and

(2) For all sales occurring on and after April 1, 1998, each

producer/exporter agrees not to sell its merchandise subject to the

Agreement to any unaffiliated purchaser in the United States at

prices that are less than the NV of the merchandise, as determined

by the Department on the basis of information submitted to the

Department not later than the dates specified in section D of the

Agreement and provided to parties not later than December 10, March

10, June 10, and September 10 of each year. This NV shall apply to

sales occurring during the fiscal quarter beginning on the first day

of the month following the date the Department provides the NV, as

stated in this paragraph.

(D) Monitoring

Each signatory producer/exporter will supply to the Department

all information that the Department decides is necessary to ensure

that the producer/exporter is in full compliance with the terms of

the Agreement. As explained below, the Department will provide each

signatory producer/exporter a detailed request for information and

prescribe a required format and method of data compilation, not

later than the beginning of each reporting period.

(1) Sales Information

The Department will require each producer/exporter to report, on

computer tape in the prescribed format and using the prescribed

method of data compilation, each sale of the merchandise subject to

the Agreement, either directly or indirectly to unaffiliated

purchasers in the United States, including each adjustment

applicable to each sale, as specified by the Department.

The first report of sales data shall be submitted to the

Department, on computer tape in the prescribed format and using the

prescribed method of data compilation, not later than January 31,

1998, and shall contain the specified sales information covering the

period October 24, 1997, to December 31, 1997. Subsequent reports of

sales data shall be submitted to the Department not later than

January 31, April 30, July 31, and October 31 of each year, and each

report shall contain the specified sales information for the

quarterly period ending one month prior to the due date, except that

if the Department receives information that a possible violation of

the Agreement may have occurred, the Department may request sales

data on a monthly, rather than quarterly basis.

(2) Cost Information

Producer/exporters must request NVs for all subject merchandise

that will be sold in the United States. For those products which the

producer/exporter is requesting NVs, the Department will require

each producer/exporter to report: their actual cost of

manufacturing; selling, general and administrative (SG&A) expenses;

and profit data on a quarterly basis, in the prescribed format and

using the prescribed method of data compilation. As indicated in

Appendix B, profit will be reported by the producers/exporters on a

quarterly basis. Each such producer/exporter also must report

anticipated increases in production costs and may report anticipated

decreases in production costs in the quarter in which the

information is submitted resulting from factors such as anticipated

changes in

[[Page 61753]]

production yield, changes in production process, changes in

production quantities or changes in production facilities.

The first report of cost data for the post-interim period shall

be submitted to the Department not later than January 20, 1998, and

shall contain the specified cost data covering the period October 1,

1997, through December 31, 1997. Each subsequent report shall be

submitted to the Department not later than January 20, April 20,

July 20, and October 20 of each year, and each report shall contain

specified information for the quarter ending one month prior to the

due date.

(3) Special Adjustment of Normal Value

If the Department determines that the NV it determined for a

previous quarter was erroneous because the reported costs for that

period were inaccurate or incomplete, or for any other reason, the

Department may adjust NV in a subsequent period or periods, unless

the Department determines that Section F of the Agreement applies.

(4) Verification

Each producer/exporter agrees to permit full verification of all

cost and sales information semi-annually, or more frequently, as the

Department deems necessary.

(5) Bundling or Other Arrangements

Producers/exporters agree not to circumvent the Agreement. In

accordance with the date set forth in Section D(1) of the Agreement,

producers/exporters will submit a written statement to the

Department certifying that the sales reported herein were not, or

are not part of or related to, any bundling arrangement, on-site

processing arrangement, discounts/free goods/financing package, swap

or other exchange where such arrangement is designed to circumvent

the basis of the Agreement.

Where there is reason to believe that such an arrangement does

circumvent the basis of the Agreement, the Department will request

producers/exporters to provide within 15 days all particulars

regarding any such arrangement, including, but not limited to, sales

information pertaining to covered and non-covered merchandise that

is manufactured or sold by producers/exporters. The Department will

accept written comments, not to exceed 30 pages, from all parties no

later than 15 days after the date of receipt of such producer/

exporter information.

If the Department, after reviewing all submissions, determines

that such arrangement circumvents the basis of the Agreement, it

may, as it deems most appropriate, utilize one of two options: (1)

the amount of the effective price discount resulting from such

arrangement shall be reflected in the NV in accordance with Section

D(3), or (2) the Department shall determine that the Agreement has

been violated and take action according to the provisions under

Section F.

(6) Rejection of Submissions

The Department may reject any information submitted after the

deadlines set forth in this section or any information which it is

unable to verify to its satisfaction. If information is not

submitted in a complete and timely fashion or is not fully

verifiable, the Department may calculate normal value, NV, and/or

U.S. price based on facts otherwise available, as it determines

appropriate, unless the Department determines that Section F

applies.

(E) Disclosure and Comment

(1) The Department may make available to representatives of each

domestic party to the proceeding, under appropriately drawn

administrative protective orders, business proprietary information

submitted to the Department during reporting period as well as the

results of its analysis under section 773 of the Act.

(2) Not later than February 20, May 20, August 20, and November

20 of each year, the Department will disclose to each producer/

exporter the results and the methodology of the Department's

calculations of its NV. At that time, the Department may also make

available such information to the domestic parties to the

proceeding, in accordance with this section.

(3) Not later than 7 days after the date of disclosure under

paragraph E(2), the parties to the proceeding may submit written

comments to the Department, not to exceed 15 pages. After reviewing

these submissions, the Department will provide to each producer/

exporter its NV as provided in paragraph C(2). In addition, the

Department may provide such information to domestic interested

parties as specified in this section.

(F) Violations of the Agreement

If the Department determines that the Agreement is being or has

been violated or no longer meets the requirements of section 734(b)

or (d) of the Act, the Department shall take action it determines

appropriate under section 734(i) of the Act and the regulations. In

the event that the Department determines that the investigation

shall be resumed, it will be resumed on the basis of the original

administrative record, and the statutes, regulations, policies, and

practices in effect on the effective date of the Agreement.

(G) Other Provision

In entering into the Agreement, the signatory producers/

exporters do not admit that any sales of the merchandise subject to

the Agreement have been made at less than fair value.

(H) Termination

The Department will not consider requests for termination of

this suspended investigation prior to October 2002. Termination will

be conducted in accordance with section 351.222 of the Department's

regulations.

Any producer/exporter may terminate the Agreement at any time

upon notice to the Department. Termination shall be effective 60

days after such notice is given to the Department. Upon termination,

the Department shall follow the procedures outlined in section

734(i)(1) of the Act.

(I) Definitions

For purposes of the Agreement, the following definitions apply:

(1) U.S. PRICE--means the export price or constructed export

price at which merchandise is sold by the producer or exporter to

the first unaffiliated person in the United States, including the

amount of any discounts, rebates, price protection or ship and debit

adjustments, and other adjustments affecting the net amount paid or

to be paid by the unaffiliated purchaser, as determined by the

Department under section 772 of the Act.

(2) NORMAL VALUE--means the constructed value (CV) of the

merchandise, as determined by the Department under section 773 of

the Act and the corresponding sections of the Department's

regulations, and as adjusted in accordance with Appendix A to this

Agreement.

(3) PRODUCER/EXPORTER--means (1) the foreign manufacturer or

producer, (2) the foreign producer or reseller which also exports,

and (3) the affiliated person by whom or for whose account the

merchandise is imported into the United States, as defined in

section 771(28) of the Act.

(4) DATE OF SALE--means normally the date of the invoice as

recorded in the exporter or producer's records kept in the ordinary

course of business, unless the Department determines that a

different date better reflects the date on which the exporter or

producer establishes the material terms of sale, as determined by

the Department under its regulations.

The effective date of the Agreement is October 24, 1997.

For the Republic of South African Producers/Exporters

Iscor Ltd.

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Marcela B. Stras, Esq., Adduci, Mastriani & Schaumberg, LLP

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Date

Highveld Steel and Vanadium Corp. Ltd.

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Jeff Chegwidden, Director & General Manager Marketing

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Date

For U.S. Department of Commerce

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Robert S. LaRussa, Assistant Secretary for Import Administration

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Date

Appendix A--Cut-to-Length Carbon Steel Plate From the Republic of South

Africa Principles of Cost

General Framework

The cost information reported to the Department that will form

the basis of the NV calculations for purposes of the Agreement must

be:

Comprehensive in nature and based on a reliable

accounting system (i.e., a system based on well-established

standards that can be tied to the audited financial statements);

Representative of the company's costs incurred for the

general class of merchandise;

Calculated on a quarterly weighted-average basis of the

plants or cost centers manufacturing the product;

Based on fully-absorbed costs of production, including

any downtime;

[[Page 61754]]

Valued in accordance with generally accepted accounting

principles;

Reflective of appropriately allocated common costs so

that the costs necessary for the manufacturing of the product are

not absorbed by other products; and

Reflective of the actual cost of producing the product.

Additionally, a single figure should be reported for each cost

component.

Cost of Manufacturing (COM)

Costs of manufacturing are reported by major cost category and

for major stages of production. Weighted-average costs are used for

a product that is produced at more than one facility, based on the

cost at each facility.

Direct materials--cost of those materials which are input into

the production process and physically become part of the final

product.

Direct labor--cost identified with a specific product. These

costs are not allocated among products except when two or more

products are produced at the same cost center. Direct labor costs

should include salary, bonus and overtime pay, training expenses,

and all fringe benefits. Any contracted-labor expense should reflect

the actual billed cost or the actual costs incurred by the

subcontractor when the corporation has influence over the

contractor.

Factory overhead--overhead costs include indirect materials,

indirect labor, depreciation, and other fixed and variable expenses

attributable to a production line or factory. Because overhead costs

are typically incurred for an entire production line, an appropriate

portion of those costs must be allocated to covered products, as

well as any other products produced on that line. Acceptable cost

allocations can be based on labor hours or machine hours. Overhead

costs should also reflect any idle or downtime and be fully absorbed

by the products.

Cost of Production (COP)

Is equal to the sum of materials, labor, and overhead (COM) plus

SG&A expenses in the home market (HM).

SG&A--those expenses incurred for the operation of the

corporation as a whole and not directly related to the manufacture

of a particular product. They include corporate general and

administrative expenses, financing expenses, and general research

and development expenses. Additionally, direct and indirect selling

expenses incurred in the HM for sales of the product under

investigation are included. Such expenses are allocated over cost of

goods sold.

Constructed Value

Is equal to the sum of materials, labor and overhead (COM) and

SG&A expenses plus profit in the comparison market and the cost of

packing for exportation to the United States.

Calculation of Suspension Agreement NVs

NVs (for purposes of the Agreement) are calculated by adjusting

the CV and are provided for both EP and CEP transactions. In effect,

any expenses uniquely associated with the covered products sold in

the HM are subtracted from the CV, and any such expenses which are

uniquely associated with the covered products sold in the United

States are added to the CV to calculate the NV.

Export Price--Generally, a U.S. sale is classified as an export

price sale when the first sale to an unaffiliated person occurs

before the goods are imported into the United States. In cases where

the foreign manufacturer knows or has reason to believe that the

merchandise is ultimately destined for the United States, the

manufacturer's sale is the sale subject to review. If, on the other

hand, the manufacturer sold the merchandise to a foreign trader

without knowledge of the trader's intention to export the

merchandise to the United States, then the trader's first sale to an

unaffiliated person is the sale subject to review. For EP NVs, the

CV is adjusted for movement costs and differences in direct selling

expenses such as commissions, credit, warranties, technical

services, advertising, and sales promotion.

Constructed Export Price--Generally, a U.S. sale is classified

as a constructed export price sale when the first sale to an

unaffiliated person occurs after importation. However, if the first

sale to the unaffiliated person is made by a person in the United

States affiliated with the foreign exporter, constructed export

price applies even if the sale occurs prior to importation, unless

the U.S. affiliate performs only clerical functions in connection

with the sale. For CEP NVs, the CV is adjusted similar to EP sales,

with differences for adjustment to U.S. and HM indirect-selling

expenses.

Home market direct-selling expenses--expenses that are incurred

as a direct result of a sale. These include such expenses as

commissions, advertising, discounts and rebates, credit, warranty

expenses, freight costs, etc. Certain direct-selling expenses are

treated individually. They include:

commission expenses--payments to unaffiliated parties for sales in

the HM.

credit expenses--expenses incurred for the extension of credit to HM

customers.

movement expenses--freight, brokerage and handling, and insurance

expenses.

U.S. direct-selling expenses--the same as HM direct-selling

expenses except that they are incurred for sales in the United

States.

Movement expenses--additional expenses incidental to importation

into the United States. These typically include U.S. inland freight,

insurance, brokerage and handling expenses, U.S. Customs duties, and

international freight.

U.S. indirect-selling expenses--include general fixed expenses

incurred by the U.S. sales subsidiary or affiliated exporter for

sales to the United States. They may also include a portion of

indirect expenses incurred in the HM for export sales.

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FOR EP TRANSACTIONS

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+ direct materials

+ direct labor

+ factory overhead

= Cost of Manufacturing

+ home market SG&A

= Cost of Production

+ U.S. packing

+ Profit

= Constructed Value

+ U.S. direct selling expense

+ U.S. commission expense

+ U.S. movement expense

+ U.S. credit expense

- HM direct selling expense

- HM commission expense \1\

- HM credit expense

= NV for EP sales

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\1\ If the company does not have HM commissions, HM indirect expenses

are subtracted only up to the amount of the U.S. commissions.

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FOR CEP TRANSACTIONS

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+ direct materials

+ direct labor

+ factory overhead

= Cost of Manufacturing

+ home market SG&A

= Cost of Production

+ U.S. packing

+ profit

= Constructed Value

+ U.S. direct selling expense

+ U.S. indirect selling expense

+ U.S. commission expense

+ U.S. movement expense

+ U.S. credit expense

+ U.S. further manufacturing expenses (if

any)

+ CEP profit

- HM direct selling expense

- HM commission expense

- HM credit expense

= NV for CEP sales

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[FR Doc. 97-30390 Filed 11-18-97; 8:45 am]

BILLING CODE 3510-DS-P