Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Bar From the United Kingdom

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final determination of sales at less than fair value.

SUMMARY:

The Department of Commerce is conducting an antidumping duty investigation of stainless steel bar from the United Kingdom. We determine that stainless steel bar from the United Kingdom is being, or is likely to be, sold in the United States at less than fair value, as provided in section 735(a) of the Tariff Act of 1930, as amended. On August 2, 2001, the Department of Commerce published its preliminary determination of sales at less than fair value of stainless steel bar from the United Kingdom. Based on the results of verification and our analysis of the comments received, we have made changes in the margin calculations. Therefore, this final determination differs from the preliminary determination. The final weighted-average dumping margins are listed below in the section entitled “Continuation of Suspension of Liquidation.”

EFFECTIVE DATE:

January 23, 2002.

FOR FURTHER INFORMATION CONTACT:

Kate Johnson or Rebecca Trainor, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-4929 or (202) 482-4007, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“the 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 of Commerce (“Department”) regulations are to 19 CFR part 351 (April 2000).

Case History

Since the publication of the preliminary determination in this investigation (see Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Stainless Steel Bar from the United Kingdom, 66 FR 40214 (August 2, 2001) (“Preliminary Determination”)), the following events have occurred:

On August 24, 27, and September 4, 2001, we received requests for a public hearing from Firth Rixson Special Steels Limited (“FRSS”), Corus Engineering Steels Ltd. (“Corus”) and the petitioners, respectively. We conducted verification of Corus's questionnaire responses during the period September through November 2001. See “Verification” section of this notice for further discussion. On November 2, 2001, we received a case brief from Valkia Ltd. (“Valkia”) in response to a letter issued by the Department on October 19, 2001. Corus submitted revised sales and cost data pursuant to verification findings on November 30, 2001.

The petitioners and FRSS filed case briefs on December 7, 2001. The petitioners and Corus filed rebuttal briefs on December 13, 2001. A public hearing was held on December 14, 2001.

Although the deadline for this determination was originally December 17, 2001, in order to accommodate certain verifications that were delayed because of the events of September 11, 2001, the Department tolled the final determination deadline in this and the concurrent stainless steel bar investigations until January 15, 2002.

Scope of Investigation

For purposes of this investigation, the term “stainless steel bar” includes articles of stainless steel in straight lengths that have been either hot-rolled, forged, turned, cold-drawn, cold-rolled or otherwise cold-finished, or ground, having a uniform solid cross section along their whole length in the shape of circles, segments of circles, ovals, rectangles (including squares), triangles, hexagons, octagons, or other convex polygons. Stainless steel bar includes cold-finished stainless steel bars that are turned or ground in straight lengths, whether produced from hot-rolled bar or from straightened and cut rod or wire, and reinforcing bars that have indentations, ribs, grooves, or other deformations produced during the rolling process.

Except as specified above, the term does not include stainless steel semi-finished products, cut length flat-rolled products (i.e., cut length rolled products which if less than 4.75 mm in thickness have a width measuring at least 10 times the thickness, or if 4.75 mm or more in thickness having a width which exceeds 150 mm and measures at least twice the thickness), products that have been cut from stainless steel sheet, strip or plate, wire (i.e., cold-formed products in coils, of any uniform solid cross section along their whole length, which do not conform to the definition of flat-rolled products), and angles, shapes and sections.

The stainless steel bar subject to this investigation is currently classifiable under subheadings 7222.11.00.05, 7222.11.00.50, 7222.19.00.05, 7222.19.00.50, 7222.20.00.05, 7222.20.00.45, 7222.20.00.75, and 7222.30.00.00 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 scope of this investigation is dispositive.

Prior to the preliminary determination in this investigation, the respondents in this and the companion SSB investigations filed comments seeking to exclude certain products from the scope of these investigations. The specific products identified in their exclusion requests were: stainless steel tool steel, welding wire, special-quality oil field equipment steel (SQOFES), and special profile wire.

In the preliminary determinations, we concluded that all of these products, except for special profile wire, are within the scope of these investigations. Specifically, regarding stainless steel tool steel, welding wire, and SQOFES, after considering the respondents' comments and the petitioners' objections to the exclusion requests, we preliminarily determined that the scope is not overly broad. Therefore, stainless steel tool steel, welding wire, and SQOFES are within the scope of these SSB investigations. In addition, we preliminarily determined that SQOFES does not constitute a separate class or kind of merchandise from SSB. Regarding special profile wire, we preliminarily determined that this product does not fall within the scope as it is written because its cross section is in the shape of a concave polygon. Therefore, we did not include special profile wire in these investigations. (For details, see the Memorandum to Susan Kuhbach and Louis Apple from the Stainless Steel Bar Team, dated July 26, 2001, entitled “Scope Exclusion Requests,” and the Memorandum to Louis Apple from the Stainless Steel Bar Team, dated July 26, 2001, entitled “Whether Special Profile Wire Product is Included in the Scope of the Investigation.”)

Finally, we note that in the concurrent countervailing duty investigation of stainless steel bar from Italy, the Department preliminarily determined that hot-rolled stainless steel bar is within the scope of these investigations. (See Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Countervailing Duty Determination with Final Antidumping Duty Determination: Stainless Steel Bar from Italy, 66 FR 30414 (June 6, 2001).)

With the exception of one respondent in the Germany investigation which filed comments on the Department's preliminary scope decision with respect to SQOFES with which the Department disagrees and has addressed in the January 15, 2002, Decision Memorandum in that case, no other parties filed comments on our preliminary scope decisions. Furthermore, no additional information has otherwise come to our attention to warrant a change in our preliminary decisions. Therefore, we have made no changes for purposes of the final determinations.

Period of Investigation

The period of investigation (“POI”) for this investigation is October 1, 1999, through September 30, 2000.

Use of Facts Available

In the Preliminary Determination, we based Crownridge's and FRSS's antidumping duty rates on the facts otherwise available, in accordance with section 776(a)(2)(A) and (B) of the Act, respectively. See also the Memorandum to Richard W. Moreland from Louis Apple entitled “Preliminary Determination of Stainless Steel Bar (SSB) from the United Kingdom: Use of Facts Available,” dated July 26, 2001 (Facts Available Memorandum).

Section 776(a)(2) of the Act provides that “if an interested party or any other person (A) withholds information that has been requested by the [Department] under this title, (B) fails to provide such information by the deadlines for submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782, (C) significantly impedes a proceeding under this title, or (D) provides such information but the information cannot be verified as provided in section 782(i), the [Department] shall, subject to section 782(d), use the facts otherwise available in reaching the applicable determination under this title.”

Section 776(b) of the Act further provides that adverse inferences may be used when an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information. Crownridge did not respond to the antidumping questionnaire. In the preliminary determination, we determined that it was appropriate to assign Crownridge a margin based on facts available (i.e., the all others rate), rather than on adverse facts available, because the information on the record at that time indicated that it was unable to provide a response. We have changed this determination based on information placed on the record since the preliminary determination, indicating that Crownridge (now operating as Valkia) could have responded to the Department's questionnaire and that it provided misleading information during our investigation. Consequently, we find that Crownridge/Valkia failed to act to the best of its ability to comply with a request for information, and a margin based on adverse facts available is warranted. This issue is addressed in further detail in Comment 2 of the January 15, 2002 Decision Memorandum.

As explained in the Preliminary Determination, FRSS withheld or failed to provide the data required to perform the antidumping duty calculations, despite ample opportunity to do so. On this basis we determined that FRSS failed to cooperate by not acting to the best of its ability in this investigation, and the application of a dumping rate based on adverse inferences is warranted. This issue is addressed in further detail in Comment 1 of the January 15, 2002, Decision Memorandum.

In accordance with our standard practice, we determine the margin used as adverse facts available by selecting the higher of (1) the highest margin stated in the notice of initiation, or (2) the highest margin calculated for any respondent. See, e.g., Notice of Preliminary Determinations of Sales at Less Than Fair Value: Certain Large Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe From Japan and Certain Small Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe From Japan and the Republic of South Africa, 64 FR 69718, 69722 (December 14, 1999), followed in Notice of Final Determinations of Sales at Less Than Fair Value: Certain Large Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe From Japan and Certain Small Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe From Japan and the Republic of South Africa, 65 FR 25907 (May 4, 2000); and Notice of Preliminary Determination of Sales at Less Than Fair Value: Stainless Steel Wire Rod from Korea and Germany, 63 FR 10826, 10847 (March 5, 1998), followed in Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Wire Rod from Korea and Germany, 63 FR 40433 (July 29, 1998).

Section 776(c) of the Act provides that, when the Department relies on secondary information (such as the petition) in using the facts otherwise available, it must, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. The Statement of Administrative Action accompanying the URAA, H.R. Doc. No. 103-316 (1994) (“SAA”), states that “corroborate” means to determine that the information used has probative value. See SAA at 870.

In this case, when analyzing the petition for purposes of the initiation, we reviewed all of the data upon which the petitioners relied in calculating the estimated dumping margins and determined that the margins in the petition were appropriately calculated and supported by adequate evidence in accordance with the statutory requirements for initiation. For the preliminary determination, in order to corroborate the petition margins for purposes of using them as adverse facts available, we re-examined the price and cost information provided in the petition in light of information developed during the investigation. See the Facts Available Memorandum for further details of our corroboration methodology. Since the preliminary determination, we have received no additional information which would cause us to reconsider whether the information in the petition has probative value. Therefore, we have continued to find in the final determination that the rates contained in the petition have probative value.

As we noted in the Preliminary Determination, in accordance with section 776(c) of the Act, we were able to corroborate the information in the petition using information from independent sources that were reasonably at our disposal. As a result, we have assigned to Crownridge/Valkia and FRSS the highest rate contained in the petition, 125.77 percent, for purposes of the final determination. See Comment 1 and Comment 2 of the January 15, 2002 Decision Memorandum.

Fair Value Comparisons

With respect to Corus, to determine whether sales of stainless steel bar from The United Kingdom to the United States were made at less than fair value, we compared constructed export price (“CEP”) to normal value (“NV”). Our calculations followed the methodologies described in the Preliminary Determination, except as noted below, and in the January 15, 2002, Decision Memorandum and Memorandum from Taija A. Slaughter to Neal A. Halper (Calculation Memo), which is on file in the Import Administration's Central Records Unit (“CRU”), Room B-099 of the main Department of Commerce building.

Constructed Export Price

For sales to the United States, we used CEP as defined in section 772(b) of the Act. We calculated CEP based on the same methodologies described in the Preliminary Determination, with the following exceptions:

We based the final margin calculations on databases provided by Corus since the Preliminary Determination, containing corrections to various clerical errors related to Corus's reported sales expense fields, resulting from verification. See the November 30, 2001 verification reports on file in room B-099 of the Commerce Department.

Normal Value

We used the same methodology as that described in the Preliminary Determination to determine the cost of production (“COP”), whether comparison market sales were at prices below the COP, and the NV, with the following exceptions:

1. Cost of Production Analysis

We based the cost of production analysis on a database provided by Corus since the Preliminary Determination reflecting minor corrections resulting from verification. See the November 9, 2001 verification report on file in room B-099 of the Commerce Department. We also revised Corus's reported general and administrative expenses to include an amount for restructuring costs. See Corus's Comment 1 in the January 15, 2002, Decision Memorandum and the Calculation Memo for further details of this adjustment.

2. Calculation of NV

We calculated NV based on the same methodologies described in the Preliminary Determination, using a database provided by Corus since the Preliminary Determination, reflecting minor corrections to Corus's home market sales expense fields, resulting from verification. See the November 9, 2001 verification report on file in room B-099 of the Commerce Department. We deducted various discounts, rebates, movement expenses, direct selling expenses, and packing cost from the reported gross unit price, which were inadvertently not included in the calculation of NV in the preliminary determination. We also corrected an error with respect to the weight-averaging of net home market price.

Currency Conversions

We made currency conversions in accordance with section 773A of the Act in the same manner as in the Preliminary Determination.

Verification

In this investigation, and in the companion SSB investigations from Germany, France, Italy, Korea and Taiwan, verifications were scheduled for all responding companies during the period August through October 2001. Based on the security concerns and logistical difficulties brought about by the tragic events of September 11, for some companies in these countries we were unable to complete our verifications as scheduled. However, for these companies, we did verify major portions of the company's questionnaire responses.

While the statute at 782(i)(1) and the Department's regulations at 351.307(b)(1)(i) direct the Department to verify all information relied upon in a final determination of an investigation, the Department's verification process is akin to an “audit” and the Department has the discretion to determine the specific information it will examine in its audits. See PMC Specialties Group, Inc. v. United States, 20 C.I.T. 1130 (1996). The courts concur that verification is a spot check and is not intended to be an exhaustive examination of the respondent's records. See Mansato v. United States, 698 F.Supp. 275, 281 (C.I.T. 1988). Furthermore, the courts have noted that Congress has given Commerce wide latitude in formulating its verification procedures. See Micron Tech., Inc. v. United States, 117 F.3d 1386, 1396 (Fed. Cir. 1997).

In these investigations, we believe that we have met the standard for having verified the information being used in this final determination, despite our inability to complete the verifications as originally scheduled. Although the amount of information verified was less than planned, the respondents did not control what was verified and what was not verified. It was the Department, not the companies, that established the original verification schedule and determined the order in which the segments would be verified. Moreover, each company was fully prepared to proceed with each segment of the original verification based upon the Department's schedule and could not have anticipated that the Department would perhaps not actually verify all segments. Finally, we note that all responding companies and the petitioners fully cooperated with the Department's post-September 11 efforts to conduct as many segments of verification as practicable.

Based on the information verified, we are relying on the responses as submitted, subject to the minor corrections previously noted elsewhere in this notice and the Decision Memorandum.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this investigation are addressed in the January 15, 2001, Decision Memorandum, which is hereby adopted by this notice. Attached to this notice as an appendix is a list of the issues which parties have raised and to which we have responded in the Decision Memorandum. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in the Department's CRU. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov/frn/frnhome.htm. The paper copy and electronic version of the Decision Memorandum are identical in content.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(A) of the Act, we are directing the U.S. Customs Service (“Customs”) to continue to suspend liquidation of all imports of stainless steel bar from the United Kingdom that are entered, or withdrawn from warehouse, for consumption on or after August 2, 2001, the date of publication of the Preliminary Determination in the Federal Register. Customs shall continue to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds the CEP, as indicated in the chart below. These suspension of liquidation instructions will remain in effect until further notice.

The weighted-average dumping margins are as follows:

ITC Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (“ITC”) of our determination. As our final determination is affirmative, the ITC will, within 45 days, determine whether these imports are materially injuring, or threaten material injury to, the U.S. industry. If the ITC determines that material injury, or threat of material injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order.

This notice also serves as a reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Appendix

List of Comments in the Issues and Decision Memorandum

1. Facts Available Margin for FRSS

2. Facts Available Margin for Crownridge/Valkia

Corus Issues

3. Restructuring Costs

4. Redundancy Expenses

5. Allocation of Parent Company G&A Expenses

6. Calculation of U.S. Credit Expense

7. Assignment of Product Control Numbers

8. Corus's Comparison Hierarchy

9. CEP Offset Adjustment

10. Treatment of Negative Margin Sales

11. Calculation of NV