Preliminary Determination of Critical Circumstances: Certain Cut- To-Length Carbon-Quality Steel Plate From Japan

DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-847]

Preliminary Determination of Critical Circumstances: Certain Cut-

To-Length Carbon-Quality Steel Plate From Japan

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: April 26, 1999.

FOR FURTHER INFORMATION CONTACT: Wendy J. Frankel at (202) 482-5849

(Japan), Irene Darzenta Tzafolias at (202) 482-0922 (Indonesia and the

Former Yugoslav Republic of Macedonia ( FYR Macedonia)), and James

Maeder at (202) 482-3330 (Czech Republic), Import Administration,

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

Street and Constitution Avenue, NW, Washington, DC 20230.

PRELIMINARY DETERMINATION OF CRITICAL CIRCUMSTANCES:

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are

references to the provisions effective January 1, 1995, the effective

date of the amendments made to the Tariff Act of 1930 (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 351 (1998).

Critical Circumstances

In antidumping (AD) petitions filed on February 16, 1999,

petitioners alleged that certain cut-to-length plate from eight

countries (the Czech Republic, Indonesia, Japan, FYR Macedonia, France,

India, Indonesia, and the Republic of Korea) is being dumped in the

United States and that there is a reasonable basis to believe or

suspect that critical circumstances exist with respect to imports from

the Czech Republic, Indonesia, Japan, and FYR Macedonia. On March 8,

1999, the Department of Commerce (the Department) initiated

investigations to determine whether imports of certain cut-to-length

carbon-quality steel plate (CTL plate) from the eight countries subject

to AD petitions are being, or are likely to be, sold in the United

States at less than fair value (LTFV) (64 FR 12959, March 16, 1999). At

that time we also initiated investigations to determine whether

critical circumstances exist with respect to imports of CTL plate from

the Czech Republic, Indonesia, Japan, and FYR Macedonia.

On April 2, 1999, the International Trade Commission (ITC)

determined that imports of CTL plate from the Czech Republic and FYR

Macedonia are negligible and, therefore, terminated the investigations

regarding these countries. Thus, the issue of critical circumstances

with regard to imports from these countries is moot. With respect to

imports from Indonesia and Japan, however, the ITC determined that

there is a reasonable indication of material injury to the domestic

industry from imports of CTL plate from Japan.

In accordance with 19 CFR 351.206(c)(2)(i), because petitioners

submitted a critical circumstances allegation at least 20 days before

the scheduled date of the preliminary determination, the Department

must issue a preliminary critical circumstances determination not later

than the date of the preliminary determination. In a policy bulletin

issued on October 8, 1998, the Department stated that it may issue a

preliminary critical circumstances determination prior to the date of

the preliminary determination of dumping, assuming adequate evidence of

critical circumstances is available (See Change in Policy Regarding

Timing of Issuance of Critical Circumstances Determinations, 63 FR

55364). In accordance with this policy, at this time we are issuing a

preliminary critical circumstances decision in the investigation of

imports of CTL plate from Japan for the reasons discussed below and in

the April 8,

[[Page 20252]]

1999, Memorandum from Holly A. Kuga to Bernard Carreau regarding:

Antidumping Duty Investigation of Certain Cut-To-Length Carbon Quality

Steel Plate from Japan--Preliminary Determination of Critical

Circumstances (Critical Circumstances Preliminary Determination Memo).

However, with respect to imports of CTL plate from Indonesia, at this

time, there is insufficient evidence on the record that importers,

exporters, or producers knew or should have known, at some time prior

to the filing of the petition, that a proceeding concerning Indonesia

was likely. Consequently, the appropriate comparison period for

determining whether imports have been massive would begin at the time

of filing of the petition. Because data for this period are not yet

available, the Department will make its preliminary critical

circumstances finding by the date of its preliminary determination

regarding dumping.

Section 733(e)(1) of the Act provides that the Department will

determine that critical circumstances exist if there is a reasonable

basis to believe or suspect that: (A)(i) there is a history of dumping

and material injury by reason of dumped imports in the United States or

elsewhere of the subject merchandise, or (ii) the person by whom, or

for whose account, the merchandise was imported knew or should have

known that the exporter was selling the subject merchandise at less

than its fair value and that there was likely to be material injury by

reason of such sales, and (B) there have been massive imports of the

subject merchandise over a relatively short period.

History of Dumping and Importer Knowledge

We are not aware of any existing antidumping order in any country

on CTL plate from Japan. However, on May 30, 1978, the Department of

the Treasury published in the Federal Register (T.D. 78-150, 43 FR

22937) a dumping finding on carbon steel plate from Japan, which was

revoked based on changed circumstances on April 17, 1986 (51 FR 13039).

Thus there has been a history dumping of carbon steel plate from Japan.

Moreover, we examined whether there was importer knowledge. In

determining whether there is a reasonable basis to believe or suspect

that an importer knew or should have known that the exporter was

selling CTL plate at LTFV and thereby causing material injury, the

Department must rely on the facts before it at the time the

determination is made. The Department normally considers margins of 25

percent or more and a preliminary ITC determination of material injury

sufficient to impute knowledge of dumping and the likelihood of

resultant material injury.

In the present case, since we have not yet made a preliminary

finding of dumping, the most reasonable source of information

concerning knowledge of dumping is the petition itself. In the

petition, petitioners calculated estimated dumping margins for several

Japanese producers, the levels of which ranged from 55 to 59 percent,

all exceeding the 25 percent threshold. Therefore, we preliminarily

determine that importers knew or should have known that the exporters

were dumping the subject merchandise.

As to the knowledge of likely injury from such dumped imports, the

ITC preliminarily found material injury to the domestic industry due to

imports of CTL plate from Japan. Therefore, with respect to Japan, we

preliminarily find that there is a reasonable basis to believe or

suspect that importers knew or should have known that material injury

from the dumped merchandise was likely.

Massive Imports

In determining whether there are ``massive imports'' over a

``relatively short time period,'' the Department ordinarily bases its

analysis on import data for at least the three months preceding (the

``base period'') and following (the ``comparison period'') the filing

of the petition. Imports normally will be considered massive when

imports during the comparison period have increased by 15 percent or

more compared to imports during the base period. However, as stated in

the Department's regulations, at section 351.206(i), if the Secretary

finds that importers, exporters, or producers had reason to believe, at

some time prior to the beginning of the proceeding, that a proceeding

was likely, then the Secretary may consider a time period of not less

than three months from that earlier time.

In this case, petitioners argue that importers, exporters, or

producers of Japanese CTL plate had reason to believe that an

antidumping proceeding was likely before the filing of the petition.

The Department examined whether conditions in the industry and

published reports and statements provide a basis for inferring

knowledge that a proceeding was likely. For Japan, we found that such

press reports, particularly throughout the summer of 1998, were

sufficient to establish that by the end of August 1998, importers,

exporters, or producers knew or should have known that a proceeding was

likely concerning CTL plate from Japan. (See discussion in the Critical

Circumstances Preliminary Determination Memo). Accordingly, we examined

the increase in import volumes from September 1998 through January 1999

as compared to April 1998 through August 1998 and found that imports of

CTL plate from Japan increased by more than 175 percent (see Attachment

II to the Critical Circumstances Preliminary Determination Memo).

Therefore, pursuant to section 733(e) of the Act and section 351.206(h)

of the Department's regulations, we preliminarily determine that there

have been massive imports of CTL plate from Japan over a relatively

short time.

Conclusion

We preliminarily determine that there is a reasonable basis to

believe or suspect that critical circumstances exist for imports of CTL

plate from Japan.

Suspension of Liquidation

In accordance with section 733(e)(2) of the Act, upon issuance of

an affirmative preliminary determination of sales at LTFV in the Japan

investigation, the Department will direct the U.S. Customs Service to

suspend liquidation of all entries of CTL plate from Japan, that are

entered, or withdrawn from warehouse, for consumption on or after 90

days prior to the date of publication in the Federal Register of our

preliminary determination of sales at LTFV. The Customs Service shall

require a cash deposit or posting of a bond equal to the estimated

preliminary dumping margins reflected in the preliminary determination

of sales at LTFV published in the Federal Register. This suspension of

liquidation will remain in effect until further notice.

Final Critical Circumstances Determination

We will make a final determination concerning critical

circumstances for Japan when we make our final determination regarding

sales at LTFV in that investigation, which will be 75 days (unless

extended) after the preliminary determination regarding sales at LTFV.

ITC Notification

In accordance with section 733(f) of the Act, we have notified the

ITC of our determination. This notice is published pursuant to section

777(i) of the Act.

[[Page 20253]]

Dated: April 9, 1999.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-10418 Filed 4-23-99; 8:45 am]

BILLING CODE 3510-DS-P