Stainless Steel Wire Rod From Korea; Final Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, U.S. Department of Commerce.

ACTION:

Notice of final results of antidumping duty administrative review.

SUMMARY:

On October 9, 2001, the Department of Commerce (the Department) published the preliminary results of administrative review of the antidumping duty order on stainless steel wire rod (SSWR) from Korea (66 FR 51385). This review covers two manufacturers/exporters of the subject merchandise. The period of review (POR) is September 1, 1999, through August 31, 2000.

We gave interested parties an opportunity to comment on the preliminary results. Based on our analysis of the comments received and the correction of certain clerical errors, we have made changes in the margin calculations presented in the preliminary results of review. The final weighted-average dumping margins for the company under review is listed below in the section entitled “Final Results of Review.”

EFFECTIVE DATE:

February 13, 2002.

FOR FURTHER INFORMATION CONTACT:

Alexander Amdur or Karine Gziryan, Office of AD/CVD Enforcement, Group II, Office 4, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-5346 and (202) 482-4081, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

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's regulations are to 19 CFR Part 351 (2000).

Background

This review covers two manufacturers/exporters, Changwon Specialty Steel Co., Ltd. (Changwon) and Dongbang Specialty Steel Co., Ltd. (Dongbang) (collectively, respondents).

The POR is September 1, 1999, through August 31, 2000.

On October 9, 2001, the Department published in the Federal Register the preliminary results of administrative review of the antidumping duty order on stainless steel wire rod (SSWR) from Korea. See Stainless Steel Wire Rod from Korea; Preliminary Results of Antidumping Duty Administrative Review, 66 FR 51385 (October 9, 2001) (Preliminary Results).

We invited parties to comment on our preliminary results of review. On December 5, 2001, the respondents submitted a case brief. The petitioners (i.e., Carpenter Technology Corp., Empire Specialty Steel, and the United Steel Workers of America, AFL-CIO/CLC), submitted a rebuttal brief on December 12, 2001.

The Department has conducted this administrative review in accordance with section 751 of the Act.

Scope of the Order

For purposes of this review, SSWR comprises products that are hot-rolled or hot-rolled annealed and/or pickled and/or descaled rounds, squares, octagons, hexagons or other shapes, in coils, that may also be coated with a lubricant containing copper, lime or oxalate. SSWR is made of alloy steels containing, by weight, 1.2 percent or less of carbon and 10.5 percent or more of chromium, with or without other elements. These products are manufactured only by hot-rolling or hot-rolling annealing, and/or pickling and/or descaling, are normally sold in coiled form, and are of solid cross-section. The majority of SSWR sold in the United States is round in cross-sectional shape, annealed and pickled, and later cold-finished into stainless steel wire or small-diameter bar. The most common size for such products is 5.5 millimeters or 0.217 inches in diameter, which represents the smallest size that normally is produced on a rolling mill and is the size that most wire-drawing machines are set up to draw. The range of SSWR sizes normally sold in the United States is between 0.20 inches and 1.312 inches in diameter.

Two stainless steel grades are excluded from the scope of the review. SF20T and K-M35FL are excluded. The chemical makeup for the excluded grades is as follows:

The products subject to this review are currently classifiable under subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 7221.00.0045, and 7221.00.0075 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 review is dispositive.

Duty Absorption

On November 14, 2000, the petitioners requested that the Department determine whether antidumping duties had been absorbed during the POR by the respondents. Section 751(a)(4) of the Act provides for the Department, if requested, to determine during an administrative review initiated two or four years after the publication of the order, whether antidumping duties have been absorbed by a foreign producer or exporter, if the subject merchandise is sold in the United States through an affiliated importer. Because the collapsed entity Pohang Iron and Steel Co., Ltd. (POSCO)/Changwon/Dongbang (see “Collapsing” section of this notice) sold to unaffiliated customers in the United States, in part, through an importer, Pohang Steel America Corporation, that is affiliated, and because this review was initiated two years after the publication of the order, we will make a duty absorption determination in this segment of the proceeding within the meaning of section 751(a)(4) of the Act.

On February 16, 2001, the Department requested evidence from each respondent to demonstrate that U.S. purchasers will pay any ultimately assessed duties charged to them. The Department requested that this information be provided no later than March 2, 2001. No respondent provided such evidence. Furthermore, in the Preliminary Results, 66 FR at 51386, we notified interested parties that, if they wish to submit evidence that the unaffiliated purchasers in the United States will pay any ultimately assessed duty charged to affiliated importers, they must do so no later than 15 days after publication of the preliminary results. No interested party provided such evidence. Accordingly, based on the record, we cannot conclude that the unaffiliated purchaser in the United States will ultimately pay the assessed duty. Consequently, we have determined that duty absorption by the collapsed entity POSCO/Changwon/Dongbang has occurred in this administrative review.

Collapsing

During the less than fair value (LTFV) investigation, POSCO was the sole supplier to Dongbang of black coil (unfinished SSWR). See Notice of Final Determination of Sales at Less than Fair Value: Stainless Steel Wire Rod from Korea, 63 FR 40404, 40410 (July 29, 1998) (Final Determination). Based on this fact, and the fact that Dongbang was not able to obtain suitable black coil from alternative sources, the Department determined that POSCO and its wholly-owned subsidiary, Changwon, were affiliated with Dongbang through a close supplier relationship pursuant to section 771(33)(G) of the Act and section 351.102(b) of the Department's regulations. See id. The Department, in the investigation stage, also collapsed Changwon, POSCO, and Dongbang as a single entity for purposes of the dumping analysis in accordance with section 351.401(f) of the Department's regulations. See id.

Because neither POSCO, Changwon, nor Dongbang has provided any new evidence showing that this finding no longer holds true, and because we have not found any new evidence to change this finding, we have continued to find that POSCO and Changwon are affiliated with Dongbang through a close supplier relationship. Further, we have continued to treat POSCO, Changwon, and Dongbang as a single entity and to calculate a single margin for them. (See, e.g., Frozen Concentrated Orange Juice from Brazil; Final Results and Partial Rescission of Antidumping Duty Administrative Review, 66 FR 51008 (October 5, 2001)).

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this proceeding and to which we have responded are listed in the Appendix to this notice and addressed in the “Issues and Decision Memorandum” (Decision Memorandum), dated February 6, 2002, which is hereby adopted by this notice. Parties can find a complete discussion of the issues raised in this review and the corresponding recommendations in the public Decision Memorandum which is on file in the Central Records Unit, room B-099 of the main Department building. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov. The paper copy and electronic version of the Decision Memorandum are identical in content.

Changes Since the Preliminary Results

Based on our analysis of comments received, we have made adjustments to the preliminary results calculation methodologies in calculating the final dumping margin in this proceeding. A summary of these adjustments is discussed below:

1. We included an amortized portion of the deferred foreign exchange losses of POSCO and Dongbang Transport Logistics Co., Ltd. that these two companies wrote off in 1999 to retained earnings in the calculation of the respondents' financial expense. See Comments 2 and 3 of the Decision Memorandum.

2. We included POSCO's consolidated gain on valuation on certain short-term financial instrument in the calculation of the respondents' financial expense. See Comment 4A of the Decision Memorandum.

3. We included a gain on the disposition of fixed assets in POSCO's G&A calculation. See Comment 4B of the Decision Memorandum.

4. We included a casualty insurance refund in Changwon's G&A calculations. See Comment 4D of the Decision Memorandum.

5. We corrected currency conversion errors in the CEP pr of it calculation. See Comment 5 of the Decision Memorandum.

6. We corrected the calculation of foreign market unit price in U.S. dollars. See Comment 6 of the Decision Memorandum.

7. We included missing instructions to identify the identical grades for certain grades in model matching. See Comment 7 of the Decision Memorandum.

8. We applied the variable costs of manufacturing and total costs of manufacturing from the annual cost database. See Comment 8 of the Decision Memorandum.

9. In the preliminary results, we inadvertently applied the Korean won exchange rate to the variable “DINVCARU,” which was reported in U.S. dollars. For the final results, we used the variable “DINVCARU” in our calculations as it was reported in U.S. dollars. See Final Calculation Memorandum.

Final Results of Review

We determine that the following weighted-average percentage margin exists for the period September 1, 1999, through August 31, 2000:

The Department shall determine, and Customs shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b), the Department calculated an assessment rate for each importer of subject merchandise. For Changwon's sales, since Changwon reported the entered values and importer for its sales, we have calculated importer-specific ad valorem duty assessment rates based on the ratio of the total amount of dumping margins calculated for the examined sales to the entered value of sales used to calculate those duties. For Dongbang's reported sales, since Dongbang did not report the entered value for its sales, we have calculated importer-specific per unit duty assessment rates based on the ratio of the total amount of dumping margins calculated for the examined sales to the quantity of sales used to calculate those duties. Where the importer-specific assessment rate is above de minimis, we will instruct Customs to assess the importer-specific rate uniformly on all entries made during the POR.

Cash Deposit Requirements

The following deposit requirements will be effective upon publication of this notice of final results of administrative review for all shipments of SSWR from Korea entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(a)(1) of the Act: (1) the cash deposit rate for the reviewed firm will be the rate shown above; (2) for previously reviewed or investigated companies not listed above, 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 less-than-fair-value (LTFV) investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and (4) the cash deposit rate for all other manufacturers or exporters will continue to be rate of 5.77 percent, which is the “all others” rate established in the LTFV investigation (see Stainless Steel Wire Rod From Korea: Amendment of Final Determination of Sales at Less Than Fair Value Pursuant to Court Decision, 66 FR 41550 (August 8, 2001)).

These cash deposit requirements, when imposed. shall remain in effect until publication of the final results of the next administrative review.

Notification to Importers

This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) 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 occurred and the subsequent assessment of doubled antidumping duties.

Notification Regarding APOs

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 written notification of return/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.

We are issuing and publishing this determination and notice in accordance with sections section 751(a)(1) and 777(i) (1) of the Act.

Appendix Issues in Decision Memo

1. Affiliation Between the Respondents and Their Customers Through a Principal/Agent Relationship

2. Deferred Foreign Exchange Losses

3. Deferred Foreign Exchange Losses of Dongbang Transport

4. Calculation of General and Administrative Expenses:

4A. Gains and Losses on Certain Monetary Instruments

4B. Items Relating to the Disposition of Fixed Assets

4C. Gain and Losses on Futures and Gain on Redemption of Corporate Bond

4D. Casualty Insurance Refund

4E. Down Payment for Other Products

5. Conversion of Values in the Constructed Export Price Profit Calculation

6. Calculation of Foreign Market Unit Price in U.S. Dollars

7. Model Match Calculations in the Margin Program

8. Variable Cost of Manufacturing and Total Cost of Manufacturing Adjustments

9. Correction of Errors Noted in Changwon's Cost of Production Verification Report

10. New Information in the Respondents' Case Brief