Certain Cut-to-Length Carbon Steel Plate From Germany: Preliminary Results of Antidumping Duty Administrative Reviews

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results in the antidumping duty administrative reviews of certain cut-to-length carbon steel plate from Germany.

SUMMARY:

In response to requests from Bethlehem Steel Corporation, U.S. Steel Group, a unit of USX Corporation (collectively, “Petitioners”) and Novosteel SA (“Novosteel”), the U.S. Department of Commerce (“Department”) is conducting administrative reviews of the antidumping duty orders on certain cut-to-length carbon steel plate (“CTL plate”) from Germany for the periods August 1, 1997 through July 31, 1998 and August 1, 1998 through July 31, 1999. The Department preliminarily determines that a 36.00 dumping margin exists for Reiner Brach GmbH & Co. KG's (“Reiner Brach”) sales of CTL plate in the United States for the period August 1, 1997 through July 31, 1998, and that a 36.00 dumping margin exists for Reiner Brach's sales of CTL plate in the United States for the period August 1, 1998 through July 31, 1999. The preliminary results are listed in the section titled “Preliminary Results of the Reviews,” infra. Interested parties are invited to comment on these preliminary results. Parties who submit comments are requested to submit with the argument: (1) a statement of the issues, and (2) a brief summary of the arguments.

EFFECTIVE DATE:

September 7, 2000.

FOR FURTHER INFORMATION CONTACT:

Robert A. Bolling, Enforcement Group III, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230, telephone 202-482-3434, fax 202-482-1388.

SUPPLEMENTARY INFORMATION:

Applicable Statute

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations codified at 19 CFR Part 351 (1999).

Background

On August 19, 1993, the Department published the antidumping duty order on certain cut-to-length carbon steel plate from Germany. See Antidumping Duty Orders and Amendments to Final Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate From Germany, 58 FR 44170 (August 19, 1993) (“Antidumping Duty Order”). On August 11, 1998, the Department published a notice of opportunity to request administrative review of this order for the period August 1, 1997 through July 31, 1998. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 63 FR 42821 (August 11, 1998). Novosteel, a Swiss exporter of subject merchandise, timely requested that the Department conduct an administrative review of Novosteel's sales for this period (“97-98 Review”). On September 24, 1998, Novosteel requested that the Department defer the 97-98 Review for a one year period, in accordance with 19 CFR 351.213(c); the Department agreed to this request. See Initiation of Antidumping and Countervailing Duty Administrative Review, Requests for Revocation in Part and Deferral of Administrative Reviews, 63 FR 58009 (October 29, 1998). On August 11, 1999, the Department published a notice of opportunity to request administrative review of this order for the period August 1, 1998 through July 31, 1999. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 63 FR 42821 (August 11, 1998). On August 13, 1999, Novosteel timely requested that the Department conduct an administrative review of Novosteel's U.S. entries for this period (“98-99 Review”). On August 31, 1999, Petitioners also timely requested that the Department conduct an administrative review of Novosteel's U.S. entries for the 98-99 period of review (“POR”). In accordance with section 751(a) of the Act, the Department published in the Federal Register notices of initiation of the 97-98 Review and the 98-99 Review. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 64 FR 60161 (November 4, 1999)(97-98); Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 64 FR 53318 (October 1, 1999) (98-99).

On October 4, 1999, the Department issued Novosteel its questionnaire for the 97-98 Review and the 98-99 Review. On December 9, 1999, Novosteel responded to Section A of the Department's questionnaires. In the Section A response, sales documentation demonstrated that the producer of the subject merchandise, Reiner Brach had knowledge that the subject merchandise was being exported to the United States. See Exhibits 3 and 4 of the December 9, 1999 response. Also, on January 7, 2000, Novosteel responded to Sections B and C of the Department's questionnaires. On January 18, 2000, Petitioners submitted a request that the Department terminate the administrative reviews with respect to Novosteel, arguing that a review of Novosteel, a non-producing exporter, would only be appropriate where the supplier did not have knowledge that the merchandise would be exported to the United States. Petitioners argued that Novosteel's supplier, producer Reiner Brach, had knowledge that the merchandise would be sold to the United States and that, thus, the appropriate sales to be reviewed were those made by Reiner Brach to Novosteel. On February 2, 2000, Reiner Brach submitted a letter opposing termination of the administrative review of Novosteel and agreed to become a respondent for these administrative reviews.

Based on the Novosteel's questionnaire responses, the Department determined that Reiner Brach not only was the producer of the subject merchandise, but also had knowledge that the products were destined for the United States, and that, thus, the sale between Reiner Brach and Novosteel was the appropriate link in the sales chain upon which the Department should be conducting its antidumping analysis regarding these sales of the subject merchandise in the United States during the aforementioned PORs. While the result of this change in focus is that the margin calculated in these reviews will be that of Reiner Brach, rather than of Novosteel, per se, Novosteel affirmatively accepted the change of analytical focus to Reiner Brach, and petitioners have not disagreed with this approach. Therefore, bearing these factors in mind, and in consideration of the small size and lack of experience of Reiner Brach, in addition to noting that two PORs are at issue, the Department determined that it was proper use of its discretion to conduct administrative reviews for the 97-98 and 98-99 PORs of Reiner Brach's sales.

On February 15, 2000, the Department issued Reiner Brach questionnaires for the 97-98 and the 98-99 Reviews. On March 15, 2000, the Department received Reiner Brach's response to Section A of the Department's questionnaire, and on April 6, 2000 the Department received Reiner Brach's response to Sections B and C of the Department's questionnaire.

On April 7, 2000, the Department determined that it was not practicable to complete these reviews within the normal time frame. Therefore, the Department extended the time limits for these administrative reviews to August 30, 2000. See Notice of Postponement of Preliminary Results of Antidumping Duty Administrative Reviews: Certain Cut-to-Length Carbon Steel Plate from Germany, 65 FR 18294 (April 7, 2000).

On April 26, 2000, we requested Reiner Brach to provide the Department with its missing variable cost of manufacturing (“VCOM”) and total cost of manufacturing (“TCOM”) data. On May 8, 2000, Reiner Brach provided the Department with its VCOM and TCOM data. On May 17, 2000, the petitioners alleged that Reiner Brach was selling the subject merchandise in the home market below its cost of production. On May 25, 2000, the Department issued a supplemental questionnaire on Sections A, B, and C to Reiner Brach. On June 5, 2000, the Department initiated a cost of production inquiry in this case, for both review periods, and requested that Reiner Brach respond to Section D of the questionnaire. On June 15, 2000, Reiner Brach responded to the Department's supplemental questionnaire of May 25, 2000. On June 29, 2000, the Department received Reiner Brach's response to Section D of the Department's questionnaire. On July 11 and 17, 2000, the Department issued a supplemental questionnaire on Section D, and additional questions on Sections A-C. On July 24, 2000, Reiner Brach responded to the Department's supplemental questionnaires of July 11 and July 17, 2000.

Scope of the Reviews

The products covered by these administrative reviews constitute one “class or kind” of merchandise: certain cut-to-length carbon steel plate. These products include hot-rolled carbon steel universal mill plates (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 millimeters but not exceeding 1,250 millimeters and of a thickness of not less than 4 millimeters, 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 hot-rolled carbon steel flat-rolled products in straight lengths, 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 millimeters or more in thickness and of a width which exceeds 150 millimeters and measures at least twice the thickness, as currently classifiable in the Harmonized Tariff Schedule (“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, and 7212.50.0000. Included 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. Excluded is grade X-70 plate. These HTS item numbers are provided for convenience and Customs purposes. The written description remains dispositive.

Periods of Review

The periods of review (“POR”) for these administrative reviews are August 1, 1997 through July 31, 1998 and August 1, 1998 through July 31, 1999.

Verification

In accordance with section 782(i) of the Act, the Department conducted verification of Reiner Brach's data for the 97-98 and 98-99 PORs using standard verification procedures, including on-site inspection of the manufacturer's facilities, examination of relevant sales and financial records, and selection of original documentation containing relevant information. Verification was conducted at Reiner Brach's headquarters in Mulheim, Germany from August 2, 2000 through August 5, 2000. See Home Market Verification Report of Reiner Brach GmbH & Co. KG, from Rick Johnson and Robert A. Bolling to the File (August 21, 2000).

Facts Available

Section 776(a)(2) of the Act provides that, if an interested party: (A) Withholds information that has been requested by the Department; (B) fails to provide such information in a timely manner or in the form or manner requested; (C) significantly impedes a proceeding under the antidumping statute; or (D) provides such information but the information cannot be verified, the Department shall use facts otherwise available in reaching the applicable determination.

At the verification of Reiner Brach, the Department discovered that Reiner Brach provided data on only a minimal portion of its home market sales of the foreign like product for each period of review. Reiner Brach stated at verification that it had only reported a minimal portion of its home market sales because it interpreted the Department of Commerce's questionnaire to mean that Reiner Brach only had to report identical sales in the home market that matched its U.S. sales. See Home Market Verification of Reiner Brach GmbH & Co. KG (“Verification Report”) dated August 21, 2000 at pages 2, 6, and 7.

The Department also discovered at verification that Reiner Brach had failed to provide accurate and complete cost of production information. Reiner Brach stated at verification that it had reported costs for both PORs based on the same cost data. Although, according to a company official, Reiner Brach had the ability to provide its costs for each POR, it nevertheless did not do so. See Verification Report at page 11. Moreover, at verification Reiner Brach stated that cost data were available for both PORs, but Reiner Brach did not provide this data to the Department for several reasons. First, cost data for 1999 were available, but the company did not have the personnel available to gather the data and allocate the costs to each cost center. Second, cost data for 1997 were available, but Reiner Brach did not review its records because the data was “not of interest to Reiner Brach.” Third, Reiner Brach did not use July 1999 costs becasue many of its employees were on vacation and July's costs would not have been representative of a normal production month. See Verification Report at page 11.

Accordingly, Reiner Brach failed to provide the Department with information which the Department had requested and needed to calculate a dumping margin. Therefore, we determine that Reiner Brach withheld information requested by the Department. Therefore, the Department finds it necessary to use the facts otherwise available for Reiner Brach, in accordance with section 776(a)(2)(A) of the Act. Because the Department lacks both a useable home market sales database and a reliable cost database, the information provided cannot serve as a reliable basis for calculating a margin for Reiner Brach. Consequently, section 782(e) of the Act is inapplicable. Therefore, the Department is basing the results of both reviews on total facts available.

In selecting from among the facts otherwise available, section 776(b) of the Act provides that adverse inferences may be used when a party has failed to cooperate by not acting to the best of its ability to comply with the Department's requests for information. See also Statement of Administrative Action accompanying the URAA, H.R. Rep. No. 103-316, Vol. I, at 870 (1994) (“SAA”). In this case, Reiner Brach acknowledged that it had the requested data in its records and was capable of providing it to the Department, but nevertheless failed to provide a complete response to the Department's questionnaire. Thus, we find that Reiner Brach failed to cooperate by not acting to the best of its ability with respect to its home market sales and cost data. Accordingly, when selecting among the facts available, we find that the use of an adverse inference is warranted in accordance with section 776(b) of the Act.

Section 776(b) of the Act states that an adverse inference may include reliance on information derived from the petition or any other information placed on the record. See also SAA at 829-831. As adverse facts available, the Department is assigning to Reiner Brach, for both review periods, a dumping margin of 36.00 percent, which represents the highest rate determined for any company in any segment of the proceeding. This rate was calculated during the less-than-fair-value investigation. See Antidumping Duty Order. Further, the Department determines that use of this margin accomplishes the statute's aim of encouraging participation. As the SAA provides, where a party has not cooperated in a proceeding:

Commerce * * * may employ adverse inferences about the missing information to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully. In employing adverse inferences, one factor the agencies will consider is the extent to which a party may benefit from its own lack of cooperation. SAA at 870.

In this case, the calculated margin information from the less-than-fair-value investigation represents appropriate information for determining a dumping margin. The Department has determined that using this rate from the less-than-fair-value investigation as an adverse inference is proper because it is the highest calculated rate in this proceeding for certain cut-to-length plate from Germany and, as the “all others” rate in this case, is the rate currently applicable to exports by Reiner Brach and Novosteel. Therefore, use of this information will ensure that the respondent does not obtain a more favorable result by failing to cooperate in these administrative reviews.

Section 776(c) of the Act provides that, when the Department relies on secondary information (which, as explained in the SAA at 870, includes information from the petition or the investigation, or any previous reviews) as facts otherwise available, 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 SAA also states 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 SAA at 870).

The selected margin was a calculated rate based on information provided by one company, AG der Dillinger Huttenwerke (“Dillinger”). See Notice of Final Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate From Germany, 58 FR 37136 (July 9, 1993) (“LTFV Final Determination”); and Amendment to Final Results of Antidumping Duty Administrative Review: Certain Cut-To-Length Carbon Steel Plate from Germany, 61 FR 26159 (May 24, 1996); Final Results of Antidumping Duty Administrative Review: Certain Cut-To-Length Carbon Steel Plate from Germany, 62 FR 18390 (April 15, 1997). Therefore, the Department has determined that the selected rate is a usable rate. Additionally, the United States Court of International Trade (“CIT”) has upheld the Department's use of an “all others” rate from the investigation as facts available in a subsequent review. See Kompass Food Trading International, et al. The United States, Slip Op. 00-90 (July 31, 2000), at 14. Further, we have determined that no record evidence indicates that the business practices of Reiner Brach differ significantly of those of other members of the German steel industry. Accordingly, we find, for purposes of this preliminary results, that the “all others” margin from the LTFV Final Determination, which is the rate currently applicable to Reiner Brach, is corroborated to the extent practicable.

Preliminary Results of the Reviews

We preliminarily determine that the following percentage weighted-average margins exist for the periods August 1, 1997 through July 31, 1998 and August 1, 1998 through July 31, 1999:

The Department will disclose calculations performed within five days of the date of publication of this notice to the parties of this proceeding in accordance with 19 CFR 351.224(b). An interested party may request a hearing within 30 days of publication of these preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, will be held 37 days after the date of publication, or the first working day thereafter. Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of these preliminary results of review. Rebuttal briefs and rebuttals to written comments, limited to issues raised in such briefs or comments, may be filed no later than 35 days after the date of publication. Parties who submit arguments are requested to submit with the argument (1) a statement of the issue, (2) a brief summary of the argument and (3) a table of authorities. Further, we would appreciate it if parties submitting written comments would provide the Department with an additional copy of the public version of any such comments on diskette. The Department will issue the final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, within 120 days of publication of these preliminary results.

Upon issuance of the final results of the review, the Department will determine, and Customs will assess, antidumping duties on all appropriate entries. The Department will issue appraisement instructions directly to Customs. The final results of this review will be the basis for the assessment of antidumping duties on entries of merchandise covered by the results and for future deposits of estimated duties.

Furthermore, the following deposit requirements will be effective upon completion of the final results of this administrative review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication of the final results of this administrative review, as provided in section 751(a)(1) of the Act: (1) The cash deposit rate for Reiner Brach, the only reviewed company, will be that established in the final results of the 98-99 Review; (2) for previously reviewed or investigated companies not covered in this review, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the original LTFV investigation, but the manufacturer is, the cash deposit rate will be the rate established in the most recent period for the manufacturer of the merchandise; and (4) if neither the exporter nor the manufacturer is a firm covered in this or any previous review conducted by the Department, the cash deposit rate will continue to be the “all others” rate established in the LTFV investigation, which was 36.00 percent. See LTFV Final Determination.

This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties has occurred and the subsequent assessment of double antidumping duties.

This administrative review and notice is published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.