Preliminary Determination of Sales at Less Than Fair Value: Certain Cut-To-Length Carbon-Quality Steel Plate Products From India

DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-817]

Preliminary Determination of Sales at Less Than Fair Value:

Certain Cut-To-Length Carbon-Quality Steel Plate Products From India

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: July 29, 1999.

[[Page 41203]]

FOR FURTHER INFORMATION CONTACT: James Terpstra, Timothy Finn, or Lyman

Armstrong, Office 4, Group II, Import Administration, International

Trade Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-

3965, (202) 482-0065, and (202) 482-3601, respectively.

The Applicable Statute

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 references are made to the Department's

regulations at 19 CFR Part 351 (1998).

Preliminary Determination

We preliminarily determine that certain cut-to-length carbon-

quality steel plate products (``CTL plate'') from India are being, or

are likely to be, sold in the United States at less than fair value

(``LTFV''), as provided in section 733 of the Act. The estimated

margins of sales at LTFV are shown in the ``Suspension of Liquidation''

section of this notice.

Case History

Since the initiation of this investigation (Notice of Initiation of

Antidumping Investigations: Certain Cut-To-Length Carbon-Quality Steel

Plate from Czech Republic, France, India, Indonesia, Italy, Japan,

Republic of Korea, and Former Yugoslav Republic of Macedonia), 64 FR

12959 ( March 16, 1999) (``Initiation Notice''), the following events

have occurred:

In their petition, the petitioners 1 identified the

Steel Authority of India (``SAIL'') as the sole exporter of CTL plate

from India. Based on the petition and information provided by the U.S.

embassy in New Delhi indicating that SAIL was the sole exporter of

subject merchandise from January 1, 1998 through December 31, 1998, the

period of investigation (``POI''), we issued an antidumping

questionnaire to SAIL on March 17, 1999.2

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\1\ The petitioners are Bethlehem Steel Corporation, Gulf States

Steel, Inc., IPSCO Steel Inc., Tuscaloosa Steel Corporation, the

United Steelworkers of America, and the U.S. Steel Group (a unit of

USX Corporation).

\2\ Section A of the questionnaire requested general information

concerning the company's corporate structure and business practices,

the merchandise under investigation that it sells, and the sales of

that merchandise in all markets. Sections B and C of the

questionnaire requested home market sales listings and U.S. sales

listings. Section D of the questionnaire requested information

regarding the cost of production of the foreign like product and the

constructed value of the merchandise under investigation. Section E

of the questionnaire requested information regarding the cost of

further manufacture or assembly performed in the United States.

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In April 1999, the United States International Trade Commission

(``ITC'') issued an affirmative preliminary injury determination in

this case (see ITC Investigation No. 731-TA-815-822).

Between April 12, and May 11, 1999, SAIL submitted responses to all

applicable sections of the questionnaire. On May 20, 1999, SAIL

submitted certain clarifications which supplemented its Section A

response.

On May 24, 1999, petitioners submitted comments regarding SAIL's

questionnaire responses, and on May 27, 1999, we issued a supplemental

questionnaire covering Sections A-D of SAIL's response.

On June 1, 1999, petitioners submitted additional comments on

SAIL's April 12, 1999 and May 10, 1999 questionnaire responses.

On June 3 and 8, 1999, SAIL submitted certain clarifications

supplementing SAIL's May 10, 1999 response.

On June 11, 1999, we issued a further supplemental questionnaire

covering Sections A-C of SAIL's questionnaire response.

On June 16, 1999, SAIL submitted a revised electronic database. See

also Facts Available section below.

On June 18, 1999, we issued a further supplemental questionnaire

concerning SAIL's Section D response, which SAIL had supplemented on

June 8, 1999. Also on June 18, 1999, SAIL submitted certain data

supplementing its previous submissions.

On June 29, 1999, SAIL made three submissions. The first two

submissions were due on June 28 and responded to the Department's

letter of June 18, 1999 to SAIL. The third submission responded to the

Department's May 27, 1999 supplemental questionnaire, which was due

June 18, 1999. On July 2, 1999, we returned all three of these

submissions to SAIL as untimely. See also the Facts Available section

below.

On July 6, 1999, petitioners submitted comments regarding

deficiencies in SAIL's questionnaire responses.

Finally, on July 12, 1999, we issued a letter to SAIL providing it

with a final opportunity to submit a reliable electronic database and

information on product-specific costs. On July 16, 1999, SAIL provided

this information. See also Facts Available section below.

Facts Available

We have determined that the use of facts available is appropriate

for SAIL for purposes of this preliminary determination. Although SAIL

filed a questionnaire response, it contained numerous errors. Moreover,

because of the problems with the electronic databases that SAIL

submitted, its questionnaire response cannot be used to calculate a

reliable margin at this time. Section 776(a)(2)(B) of the Act provides

that the administering authority shall use facts otherwise available

when an interested party ``fails to provide such information by the

deadlines for the submission of the information or in the form and

manner requested.'' Therefore, the use of facts available is warranted

in this case.

Section 776(b) of the Act provides that adverse inferences may be

used in selecting from the facts available if a party has failed to

cooperate by not acting to the best of its ability to comply with a

request for information. As explained in more detail below, SAIL was

provided with numerous opportunities and (effective) extensions of time

to fully respond to the Department's original and supplemental

questionnaires. However, even with several opportunities to remedy

problems, SAIL failed to provide, inter alia, a reliable electronic

database. Therefore, the Department preliminarily finds that SAIL did

not act to the best of its ability to provide the information

requested. As a consequence, we have used an adverse inference in

selecting the facts available to determine SAIL's margin.

As we discuss below, there are three inter-related problems with

SAIL's questionnaire response: (1) technical errors in its electronic

databases; (2) lateness and incompleteness of certain narrative

portions of its questionnaire response; and (3) the lack of product-

specific costs. However, our decision to use facts available for the

preliminary determination is based primarily on our inability to use

the electronic databases that SAIL submitted.

The problems with the electronic databases began with SAIL's first

electronic submission which was formatted incorrectly and was

substantially incomplete. As much of the underlying problems with these

data involve proprietary information, there is a detailed discussion of

these problems in a Memorandum to the File regarding Problems with

SAIL's Questionnaire Response, dated July 19, 1999 (``SAIL memo'').

From the time these electronic databases were submitted on May 11,

1999, until the submission of its revised electronic tapes on July 16,

1999, the Department repeatedly requested that SAIL revise and correct

various sections of these databases. However, SAIL never

[[Page 41204]]

resolved all of the ongoing technical problems to a point where the

databases could be used reliably in our preliminary determination. SAIL

argued that it is a large, decentralized steel producer with 3 plants,

6 regional sales offices, and 42 local service centers which is not

fully automated, making the preparation of consolidated electronic

databases extremely difficult. On July 12, 1999, we gave SAIL one final

opportunity to supply reliable electronic databases to the Department.

Furthermore, certain portions of SAIL's original questionnaire

response were substantially incomplete. Throughout its original

response, SAIL either failed to provide information, or stated that

certain information would be submitted at a later date, effectively

granting itself an extension of time for the submission of factual

information. After several such submissions, we returned SAIL's

information as untimely. See our letter of July 2, 1999. Although we

have issued several supplemental questionnaires and SAIL responded to

them, we have been unable to evaluate adequately the firm's selling

practices because of problems with the electronic databases discussed

above. On July 16, 1999 SAIL submitted one final electronic database.

We intend to issue a final supplemental questionnaire to SAIL after

reviewing this electronic data.

Regarding the lack of product-specific costs, SAIL claims that its

cost accounting records do not track costs on the product-specific

basis required by the questionnaire. Instead, SAIL records cost on a

more aggregated level. However, in its questionnaire response, SAIL

reported different costs for different products using certain cost

allocations. SAIL claimed that the allocation method it used was the

only one available given the limitations of its accounting system.

However, it is not clear whether SAIL's reported costs are reliable for

margin calculation purposes, or that they are based on the most

reasonable method available from its accounting records. Because a

decision on this issue necessarily requires a detailed analysis of

SAIL's accounting system, we have determined that it is necessary to

examine this issue exhaustively at verification. See also the SAIL memo

for a more detailed discussion.

For the preliminary determination, we assigned SAIL the average of

the margins in the petition, which is 58.50 percent. Although we find

that SAIL did not fully cooperate to the best of its ability, SAIL

tried to provide the Department with the data requested in the

antidumping questionnaire. Recognizing SAIL's attempts to respond to

the Department's information requests, and in light of its claimed

difficulties, we do not believe that it is appropriate to assign the

highest margin alleged in the petition at this time. See e.g., Krupp

Stahl AG v. U.S., 822 F. Supp. 789, 793 (Court of International Trade

1993), which referenced a Court of Appeals' opinion sanctioning the

Department's practice of taking into account the level of respondent's

cooperation, and Notice of Final Determination of Sales at Less Than

Fair Value: Steel Wire Rod from Germany, 63 FR 8953, 8955 (February 23,

1998).)

Section 776(c) of the Act provides that where the Department

selects from among the facts otherwise available and relies on

``secondary information,'' such as the petition, the Department shall,

to the extent practicable, corroborate that information from

independent sources reasonably at the Department's disposal. The

Statement of Administrative Action accompanying the URAA, H.R. Doc. No.

103-316, (1994) (hereinafter, the ``SAA'') states that ``corroborate''

means to determine that the information used has probative value. See

SAA at 870.

In accordance with section 776(c) of the Act, we sought to

corroborate the data contained in the petition. We reviewed the

adequacy and accuracy of the information in the petition during our

pre-initiation analysis of the petition, to the extent appropriate

information was available for this purpose (e.g., import statistics and

foreign market research reports). See Initiation Notice.

For purposes of the preliminary determination, we attempted to

corroborate the information in the petition. The petition margins were

based on both price-to-price and price-to-constructed value

comparisons. Petitioners calculated export price was based on U.S.

price offerings, with deductions taken for international movement

charges. We compared this with information from U.S. Customs and found

them consistent. Petitioners based normal value on prices for

comparable products sold in the home market obtained from market

research. Petitioners calculated constructed value based on their own

production experience adjusted for known differences. We compared the

petition information with reliable information obtained during the

investigation, primarily SAIL's financial statements and other

published materials from the questionnaire response and found them

consistent. Given the problems with the data submitted by SAIL, as

discussed above, this was the only information in the questionnaire

response that was reliable for these purposes, the actual reported

prices and costs being difficult to adequately evaluate at this time.

Consequently, we find that information in the petition continues to be

of probative value. See Corroboration Memo, July 19, 1999.

Scope of Investigation

The products covered by the scope of this investigation are certain

hot-rolled carbon-quality steel: (1) 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 nominal or

actual thickness of not less than 4 mm, which are cut-to-length (not in

coils) and without patterns in relief), of iron or non-alloy-quality

steel; and (2) flat-rolled products, hot-rolled, of a nominal or actual

thickness of 4.75 mm or more and of a width which exceeds 150 mm and

measures at least twice the thickness, and which are cut-to-length (not

in coils). Steel products to be included in this scope are of

rectangular, square, circular or other shape and of rectangular or non-

rectangular cross-section where such non-rectangular 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. Steel products that meet the noted

physical characteristics that are painted, varnished or coated with

plastic or other non-metallic substances are included within this

scope. Also, specifically included in this scope are high strength, low

alloy (HSLA) steels. HSLA steels are recognized as steels with micro-

alloying levels of elements such as chromium, copper, niobium,

titanium, vanadium, and molybdenum. Steel products to be included in

this scope, regardless of Harmonized Tariff Schedule of the United

States (HTSUS) definitions, are products in which: (1) Iron

predominates, by weight, over each of the other contained elements, (2)

the carbon content is two percent or less, by weight, and (3) none of

the elements listed below is equal to or exceeds the quantity, by

weight, respectively indicated: 1.80 percent of manganese, or 1.50

percent of silicon, or 1.00 percent of copper, or 0.50 percent of

aluminum, or 1.25 percent of chromium, or 0.30 percent of cobalt, or

0.40 percent of lead, or 1.25 percent of nickel, or 0.30 percent of

tungsten, or 0.10 percent of molybdenum, or 0.10 percent of niobium, or

0.41 percent of titanium, or 0.15 percent of vanadium, or 0.15 percent

zirconium. All products that

[[Page 41205]]

meet the written physical description, and in which the chemistry

quantities do not equal or exceed any one of the levels listed above,

are within the scope of these investigations unless otherwise

specifically excluded. The following products are specifically excluded

from these investigations: (1) Products clad, plated, or coated with

metal, whether or not painted, varnished or coated with plastic or

other non-metallic substances; (2) SAE grades (formerly AISI grades) of

series 2300 and above; (3) products made to ASTM A710 and A736 or their

proprietary equivalents; (4) abrasion-resistant steels (i.e., USS AR

400, USS AR 500); (5) products made to ASTM A202, A225, A514 grade S,

A517 grade S, or their proprietary equivalents; (6) ball bearing

steels; (7) tool steels; and (8) silicon manganese steel or silicon

electric steel.

The merchandise subject to these investigations is classified in

the HTSUS under subheadings: 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, 7225.40.3050,

7225.40.7000, 7225.50.6000, 7225.99.0090, 7226.91.5000, 7226.91.7000,

7226.91.8000, 7226.99.0000.

Although the HTSUS subheadings are provided for convenience and

Customs purposes, the written description of the merchandise under

investigation is dispositive.

Scope Comments

As stated in our notice of initiation, we set aside a period for

parties to raise issues regarding product coverage. In particular, we

sought comments on the specific levels of alloying elements set out in

the description below, the clarity of grades and specifications

excluded from the scope, and the physical and chemical description of

the product coverage.

On March 29, 1999, Usinor, a respondent in the French antidumping

and countervailing duty investigations and Dongkuk Steel Mill Co., Ltd.

and Pohang Iron and Steel Co., Ltd., respondents in the Korean

antidumping and countervailing duty investigations (collectively the

Korean respondents), filed comments regarding the scope of the

investigations on CTL plate and the Department's model matching

criteria. On April 14, 1999, the petitioners filed comments regarding

Usinor's and the Korean respondents' comments regarding model matching.

In addition, on May 17, 1999, ILVA S.p.A. (ILVA), a respondent in the

Italian antidumping and countervailing duty investigations, requested

guidance on whether certain products are within the scope of these

investigations.

Usinor requested that the Department modify the scope to exclude:

(1) plate that is cut to non-rectangular shapes or that has a total

final weight of less than 200 kilograms; and (2) steel that is 4'' or

thicker and which is certified for use in high-pressure, nuclear or

other technical applications; and (3) floor plate (i.e., plate with

``patterns in relief'') made from hot-rolled coil. Further, Usinor

requested that the Department provide clarification of scope coverage

with respect to what it argues are over-inclusive HTSUS subheadings

included in the scope language.

The Department has not modified the scope of these investigations

because the current language reflects the product coverage requested by

the petitioners, and Usinor's products meet the product description.

With respect to Usinor's clarification request, we do not agree that

the scope language requires further elucidation with respect to product

coverage under the HTSUS. As indicated in the scope section of every

Department antidumping and countervailing duty proceeding, the HTSUS

subheadings are provided for convenience and Customs purposes only; the

written description of the merchandise under investigation or review is

dispositive.

The Korean respondents requested confirmation whether the maximum

alloy percentages listed in the scope language are definitive with

respect to covered HSLA steels.

At this time, no party has presented any evidence to suggest that

these maximum alloy percentages are inappropriate. Therefore, we have

not adjusted the scope language. As in all proceedings, questions as to

whether or not a specific product is covered by the scope and, hence,

must be reported, should be timely raised with Department officials.

ILVA requested guidance on whether certain merchandise produced

from billets is within the scope of the current CTL plate

investigations. According to ILVA, the billets are converted into wide

flats and bar products (a type of long product). ILVA notes that one of

the long products, when rolled, has a thickness range that falls within

the scope of these investigations. However, according to ILVA, the

greatest possible width of these long products would only slightly

overlap the narrowest category of width covered by the scope of the

investigations. Finally, ILVA states that these products have different

production processes and properties than merchandise covered by the

scope of the investigations and therefore are not covered by the scope

of the investigations.

As ILVA itself acknowledges, the particular products in question

appear to fall within the parameters of the scope and, therefore, we

are preliminarily treating them as covered merchandise.

Period of Investigation

The period of investigation is January 1, 1998 through December 31,

1998.

Verification

As provided in section 782(i) of the Act, we will verify all

information determined to be acceptable for use in making our final

determination.

Suspension of Liquidation

In accordance with section 733(d) of the Act, we are directing the

Customs Service to suspend liquidation of all imports of subject

merchandise that are entered, or withdrawn from warehouse, for

consumption on or after the date of publication of this notice in the

Federal Register.

We will instruct the Customs Service to require a cash deposit or

the posting of a bond equal to the weighted-average margin, as

indicated in the chart below. We will adjust the deposit requirements

to account for any export subsidies found in the companion

countervailing duty investigation. These suspension of liquidation

instructions will remain in effect until further notice. The weighted-

average dumping margins are as follows:

------------------------------------------------------------------------

Weighted-

Exporter/manufacturer average margin

percentage

------------------------------------------------------------------------

SAIL.................................................... 58.50

All Others \3\.......................................... 58.50

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\3\ The Act normally prohibits inclusion in the ``All Others'' rate of

any margins determined entirely on the basis of facts available,

pursuant to section 776. Where the estimated weighted-average margin

(s) is based entirely on facts available, we must use any reasonable

method to establish the estimated ``All Others'' rate for exporters

and producers nor individually investigated. See section

733(d)(1)(ii); 735(c)(5)(B). In this case, we have determined that the

only reasonable method is to use the 58.50 percent simple average of

the margins alleged in the petition which was also the source of our

facts available margin for SAIL.

ITC Notification

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

ITC of our determination. If our final

[[Page 41206]]

determination is affirmative, the ITC will determine before the later

of 120 days after the date of this preliminary determination or 45 days

after our final determination whether these imports are materially

injuring, or threaten material injury to, the U.S. industry.

Public Comment

Case briefs or other written comments in at least ten copies must

be submitted to the Assistant Secretary for Import Administration no

later than August 25, 1999, and rebuttal briefs no later than September

1, 1998. A list of authorities used and an executive summary of issues

should accompany any briefs submitted to the Department. Such summary

should be limited to five pages total, including footnotes. 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. Tentatively, the hearing

will be held on September 8, 1999, time and room to be determined, at

the U.S. Department of Commerce, 14th Street and Constitution Avenue,

NW, Washington, DC 20230. Parties should confirm by telephone the time,

date, and place of the hearing 48 hours before the scheduled time.

Interested parties who wish to request a hearing, or to participate

if one is requested, must submit a written request to the Assistant

Secretary for Import Administration, U.S. Department of Commerce, Room

1870, within 30 days of the 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.

Oral presentations will be limited to issues raised in the briefs. If

this investigation proceeds normally, we will make our final

determination by no later than 75 days after the date of this

preliminary determination.

This determination is issued and published pursuant to sections

733(d) and 777(i)(1) of the Act.

Dated: July 19, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-19301 Filed 7-28-99; 8:45 am]

BILLING CODE 3510-DS-P