[Federal Register Volume 62, Number 190 (Wednesday, October 1, 1997)]
[Notices]
[Pages 51577-51580]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26041]


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

DEPARTMENT OF COMMERCE

International Trade Administration
[A-428-822]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Steel Wire Rod From 
Germany

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: October 1, 1997.

FOR FURTHER INFORMATION CONTACT: Judith Wey Rudman or John Brinkmann, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone: (202) 482-0192 or (202) 482-5288, 
respectively.

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 references to the provisions codified at 19 CFR part 
353 (April 1997). Although the Department's new regulations, codified 
at 19 CFR 351 (62 FR 27296; May 19, 1997), do not govern these 
proceedings, citations to those regulations are provided, where 
appropriate, to explain current departmental practice.

Preliminary Determination

    We preliminarily determine that steel wire rod (``SWR'') from 
Germany is being, or is 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 are shown in the ``Suspension of Liquidation'' 
section of this notice.

Case History

    Since the initiation of this investigation on March 18, 1997 (see 
Notice of Initiation of Antidumping Duty Investigations: Steel Wire Rod 
from Canada, Germany, Trinidad and Tobago, and Venezuela, 62 FR 13854 
(March 24, 1997), ``Notice of Initiation''), the following events have 
occurred:
    On April 14, 1997, the United States International Trade Commission 
(``ITC'') notified the Department of its affirmative preliminary injury 
determination in this case.

[[Page 51578]]

    On April 21, 1997, the Department issued the antidumping duty 
questionnaire to the following producers/exporters of SWR to the United 
States: Brandenburg Elektrostahlwerk GmbH (``Brandenburg''); Ispat 
Hamburger Stahlwerke GmbH (``IHSW''); Saarstahl AG (``Saarstahl''); and 
Thyssen Stahl AG (``Thyssen'') (collectively ``respondents''). The 
questionnaire is divided into four sections: Section A requests general 
information concerning a company's corporate structure and business 
practices, the merchandise under investigation that it sells, and the 
sales of the merchandise in all of its markets. Sections B and C 
request home market sales listings and U.S. sales listings, 
respectively. Section D requests information on the cost of production 
(``COP'') of the foreign like product and the constructed value 
(``CV'') of the subject merchandise.
    During April and May 1997, the Department received interested party 
comments regarding modifications to the product characteristic 
reporting requirements. On May 22, 1997, the Department issued revised 
product characteristic reporting instructions.
    IHSW submitted its questionnaire responses in May and June 1997. 
The Department issued supplemental requests for information in June, 
July, and September 1997, and received the supplemental responses to 
these requests in July, August, and September 1997. The petitioners in 
this investigation (Connecticut Steel Group, Co-Steel Raritan, GS 
Industries, Inc., Keystone Steel & Wire Co., North Star Steel Texas, 
Inc., and Northwestern Steel & Wire Co.) filed comments on IHSW's 
questionnaire responses in June, July, August, and September 1997.
    On June 11, 1997, Saarstahl informed the Department that it did not 
have the necessary resources to respond to the Department's 
questionnaire. In addition, without explanation, neither Brandenburg 
nor Thyssen responded to the questionnaire (see the ``Facts Available'' 
section below, for further discussion).
    On July 3, 1997, petitioners made a timely request that the 
Department postpone the preliminary determination in this investigation 
and the companion investigations of SWR from Canada, Trinidad and 
Tobago, and Venezuela to September 24, 1997. We did so on July 14, 
1997, in accordance with section 733(c)(1) of the Act (see Notice of 
Postponement of Preliminary Antidumping Duty Determinations: Steel Wire 
Rod from Canada, Germany, Trinidad and Tobago, and Venezuela, 62 FR 
38257 (July 17, 1997 )).

Postponement of Final Determination and Extension of Provisional 
Measures

    Pursuant to section 735(a)(2)(A) of the Act and section 
353.20(b)(1) of the Department's interim regulations, on September 9, 
1997, IHSW requested that, in the event of an affirmative preliminary 
determination in this investigation, the Department postpone its final 
determination. While IHSW is only one of four German producer/exporters 
identified in the petition, we determine that it accounts ``for a 
significant proportion of exports of the merchandise which is the 
subject of the investigation,'' and therefore, that it is eligible to 
request such an extension. First, IHSW is the only German respondent 
participating in this investigation; its exports thus account for all 
of the German SWR production analyzed by the Department for this 
preliminary determination. Second, the problem anticipated by the 
``significant proportion'' requirement--that a single producer 
representing a relatively small proportion of the production of the 
subject merchandise could delay a final determination against the 
wishes of the other producers--is not present in this proceeding. The 
three other German respondents (Brandenburg, Saarstahl and Thyssen) in 
this investigation did not object to the extension request submitted by 
IHSW. Finally, the Department has identified no compelling reason to 
deny IHSW's request for extension. For these reasons, we are postponing 
the final determination until no later than the 135th day following 
publication of this preliminary determination notice. Suspension of 
liquidation will be extended accordingly (see Preliminary Determination 
of Sales at Less Than Fair Value and Postponement of Final 
Determination: Open-End Spun Rayon Singles Yarn From Austria, 62 FR 
14399, 14400 (March 26, 1997); Final Determination of Sales at Less 
Than Fair Value: Certain Pasta From Italy, 61 FR 30326 (June 14, 
1996)).

Scope of Investigation

    The products covered by this investigation are certain hot-rolled 
carbon steel and alloy steel products, in coils, of approximately round 
cross section, between 5.00 mm (0.20 inch) and 19.0 mm (0.75 inch), 
inclusive, in solid cross-sectional diameter. Specifically excluded are 
steel products possessing the above noted physical characteristics and 
meeting the Harmonized Tariff Schedule of the United States (HTSUS) 
definitions for (a) stainless steel; (b) tool steel; (c) high nickel 
steel; (d) ball bearing steel; (e) free machining steel that contains 
by weight 0.03 percent or more of lead, 0.05 percent or more of 
bismuth, 0.08 percent or more of sulfur, more than 0.4 percent of 
phosphorus, more than 0.05 percent of selenium, and/or more than 0.01 
percent of tellurium; or (f) concrete reinforcing bars and rods.
    The following products are also excluded from the scope of this 
investigation:
    Coiled products 5.50 mm or less in true diameter with an average 
partial decarburization per coil of no more than 70 microns in depth, 
no inclusions greater than 20 microns, containing by weight the 
following: carbon greater than or equal to 0.68 percent; aluminum less 
than or equal to 0.005 percent; phosphorous plus sulfur less than or 
equal to 0.040 percent; maximum combined copper, nickel and chromium 
content of 0.13 percent; and nitrogen less than or equal to 0.006 
percent. This product is commonly referred to as ``Tire Cord Wire 
Rod.''
    Coiled products 7.9 to 18 mm in diameter, with a partial 
decarburization of 75 microns or less in depth and seams no more than 
75 microns in depth, containing 0.48 to 0.73 percent carbon by weight. 
This product is commonly referred to as ``Valve Spring Quality Wire 
Rod.''
    The products under investigation are currently classifiable under 
subheadings 7213.91.3000, 7213.91.4500, 7213.91.6000, 7213.99.0030, 
7213.99.0090, 7227.20.0000, and 7227.90.6050 of the HTSUS. Although the 
HTSUS subheadings are provided for convenience and customs purposes, 
our written description of the scope of this investigation is 
dispositive.
    North American Wire Products Corporation (NAW), an importer of the 
subject merchandise from Germany, has requested that the Department 
exclude steel wire rod used to manufacture pipe wrapping wire from the 
scope of the antidumping and the companion countervailing duty 
investigations. Petitioners have not agreed to this scope exclusion. 
For purposes of the preliminary determination, we have not excluded 
steel wire rod for manufacturing pipe wrapping wire from the scope. 
However, we will address this issue further in our final determination.

Period of Investigation

    The period of investigation (``POI'') is January 1 through December 
31, 1996.

Fair Value Comparisons

    To determine whether sales of SWR by IHSW to the United States were 
made at less than fair value, we would

[[Page 51579]]

normally compare the export price or constructed export price to the 
normal value. Although IHSW responded to the Department's 
questionnaires, as discussed in the ``Facts Available'' section of this 
notice below, there are significant deficiencies that have rendered 
their response unreliable and therefore unusable for the calculation of 
LTFV margins in this preliminary determination. Therefore, in 
accordance with section 776 of the Act, our results are based on facts 
otherwise available.

Facts Available

    Section 776(a)(2) of the Act provides that if an interested party 
(1) withholds information that has been requested by the Department, 
(2) fails to provide such information in a timely manner or in the form 
or manner requested, (3) significantly impedes a determination under 
the antidumping statute, or (4) provides such information but the 
information cannot be verified, the Department shall use facts 
otherwise available in reaching the applicable determination (subject 
to subsections 782 (d) and (e)). As detailed below, the Department has 
determined that all four respondents have failed to cooperate to the 
best of their ability in this investigation as defined under 776(a)(2) 
and that the use of facts otherwise available is applicable.
    Brandenburg, Saarstahl, and Thyssen have clearly failed to 
cooperate to the best of their ability in this investigation, as they 
have not responded to the Department's antidumping questionnaire. 
Accordingly, the Department is required to base the antidumping rate 
for these companies on the facts otherwise available.
    The use of facts otherwise available is also applicable to IHSW 
because they ``fail[ed] to provide [requested] information by the 
deadlines for submission of the information or in the form and manner 
requested.'' As discussed in the ``Case History'' section above, and as 
required by section 782(d), the Department informed IHSW of the 
deficiencies in its responses through the issuance of several extensive 
supplemental questionnaires covering all sections of the original 
questionnaire. However, despite the detailed requests for supplemental 
information issued by the Department and the extension of time granted 
to IHSW to file its responses, IHSW's questionnaire responses remained 
seriously deficient.
    The significant deficiencies in the information submitted by IHSW 
include: (1) A significant number of missing sales in the home market 
sales database, rendering the database unreliable and unusable for 
making price-to-price comparisons and calculating a profit amount for 
CV; (2) the failure to notify the Department that major inputs were 
purchased from affiliated suppliers and, once this fact was discovered, 
the failure to demonstrate that inputs purchased from affiliated 
suppliers were arm's-length transactions. Without information as to 
whether transfer prices between IHSW and its affiliates were set at 
arm's length or the affiliated suppliers' cost information, we cannot 
determine if the major inputs were properly valued in calculating the 
reported COPs and CVs. Furthermore, without information concerning the 
quantities of inputs purchased from affiliated suppliers, the 
Department cannot make adjustments to IHSW's COP and CV databases. 
Since the COP and CV data cannot be relied upon, the Department cannot 
conduct a COP analysis, calculate the difference-in-merchandise 
adjustments (difmers), or calculate an accurate profit for purposes of 
calculating CV; (3) IHSW has not provided product specific costs and 
has failed to explain how its cost groups were derived, raising further 
concerns about the reliability of the COP and CV data; and (4) there 
are errors and inconsistencies in IHSW's creation of product control 
numbers. If product control numbers are not properly assigned based on 
product matching criteria, the Department cannot accurately determine 
which products in the home market should be matched to U.S. sales for 
purposes of making price-to-price comparisons. (For a more detailed 
discussion of the deficiencies in the information IHSW has provided, 
see the September 24, 1997, Memorandum to Richard W. Moreland.)
    IHSW's questionnaire responses constituted deficient submissions 
within the meaning of section 782(d). Under these circumstances, 
section 776(a) directs the Department to use facts available subject to 
section 782(e). Section 782(e) provides that the Department shall not 
decline to consider information that is submitted by an interested 
party and is necessary to the determination, but does not meet all the 
applicable requirements established by the Department, if--
    (1) The information is submitted by the deadline established for 
its submission,
    (2) the information can be verified,
    (3) the information is not so incomplete that it cannot serve as a 
reliable basis for reaching the applicable determination,
    (4) the interested party has demonstrated that it acted to the best 
of its ability in providing the information and meeting the 
requirements established by the Department with respect to the 
information, and
    (5) the information can be used without undue difficulties.
    Thus, if any one of these criteria is not met, the Department may 
decline to consider the information at issue in making its 
determination. IHSW's information has satisfied the first two criteria. 
Regarding criterion (3), as detailed above, IHSW's home market sales 
data and cost of production information is so deficient as to render it 
unreliable. As to criterion (4), IHSW has not demonstrated that it 
acted to the best of its ability in providing the requested information 
because IHSW failed to respond in a satisfactory manner to the 
Department's requests for information. Despite repeated requests that 
IHSW correct the deficiencies in its submissions, as detailed above, 
significant inconsistencies remain in IHSW's data. Finally, as to 
criterion (5), the information is so deficient that the Department 
cannot conduct a proper LTFV analysis.
    As indicated above, the analysis of IHSW's responses to date, in 
the context of sections 782 (d) and (e), demonstrates that IHSW has 
failed to provide its home market sales and COP information in the form 
and manner requested. The information provided by IHSW is unreliable 
and inadequate for the purpose of calculating a preliminary LTFV 
margin. Section 776(a) thus requires the Department to use facts 
otherwise available in making its preliminary determination with 
respect to IHSW.
    Section 776(b) provides that adverse inferences may be used for a 
party that has failed to cooperate by not acting to the best of its 
ability to comply with requests for information (see also the Statement 
of Administrative Action (``SAA''), accompanying the URAA, H.R. Rep. 
No. 316, 103rd Cong., 2d Sess. 870). As discussed above, Brandenburg, 
IHSW, Saarstahl, and Thyssen have failed to act to the best of their 
ability to comply with requests for information and, therefore, adverse 
inferences are warranted with respect to all four companies.
    Consistent with Department practice in cases where respondents 
refuse to participate or provide seriously deficient information that 
precludes the Department from conducting its LTFV analysis, as facts 
otherwise available, we are basing their margins on information in the 
petition. Section 776(c) provides that when the Department relies on 
secondary information (e.g., the petition) as the facts otherwise 
available, it must, to the extent

[[Page 51580]]

practicable, corroborate that information from independent sources that 
are reasonably at its disposal. The Department reviewed the adequacy 
and accuracy of the secondary information in the petition from which 
the margins were calculated during our pre-initiation analysis of the 
petition, to the extent appropriate information was available for this 
purpose, (e.g., import statistics, independent trade data, U.S. Bureau 
of Labor Statistics, International Energy Agency). (See Notice of 
Initiation and September 24, 1997, Memorandum to Richard W. Moreland).
    For purposes of the preliminary determination, the Department 
reexamined the price information provided in the petition in light of 
information obtained during the investigation, and found that it 
continues to be of probative value (see the September 24, 1997, 
Memorandum to Richard W. Moreland).
A. Brandenburg, Saarstahl, and Thyssen
    Consistent with Department practice, as facts otherwise available, 
the Department is assigning to Brandenburg, Saarstahl, and Thyssen, the 
companies that did not respond to the Department's requests for 
information, the highest margin from the petition (as adjusted by the 
Department), 153.10 percent (see the March 18, 1997, ``Import 
Administration AD Investigation Initiation Checklist'' and the Notice 
of Initiation for a discussion of the margin calculations in the 
petition and the Department's recalculations).
B. IHSW
    Since IHSW made some effort to comply with the Department's 
requests for information, consistent with Department practice, we are 
assigning IHSW a facts available margin based on a simple average of 
the margins in the petition (as adjusted by the Department), 72.51 
percent.
C. The All-Others Rate
    All foreign manufacturers/exporters in this investigation are being 
assigned dumping margins on the basis of facts otherwise available. 
Section 735(c)(5) of the Act provides that where the dumping margins 
established for all exporters and producers individually investigated 
are determined entirely under section 776, the Department ``* * * may 
use any reasonable method to establish the estimated all-others rate 
for exporters and producers not individually investigated, including 
averaging the estimated weighted average dumping margins determined for 
the exporters and producers individually investigated.'' This provision 
contemplates that we weight average the facts-available margins to 
establish the all-others rate. Where the data is not available to 
weight average the facts available rates, the SAA, at 873, provides 
that we may use other reasonable methods.
    Inasmuch as we do not have the data necessary to weight average the 
respondents' facts available margins, we are basing the All-Others rate 
on a simple average of the margins in the petition (as adjusted by the 
Department), 72.51 percent.

Verification

    We will issue another supplemental questionnaire to IHSW in an 
effort to obtain complete and accurate responses. If the requested 
information is received in a timely manner, we will attempt to conduct 
verification of the company's information as provided in section 782(i) 
of the Act. If IHSW's reported information can be verified, we will use 
such information in making the 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 
amount by which the NV exceeds the export price, 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:

------------------------------------------------------------------------
                                                             Weighted-  
                  Exporter/Manufacturer                   average margin
                                                            percentage  
------------------------------------------------------------------------
Brandenburg Elektrostahlwerk GmbH.......................          153.10
Ispat Hamburger Stahlwerke GmbH.........................           72.51
Saarstahl AG............................................          153.10
Thyssen Stahl AG........................................          153.10
All-Others..............................................           72.51
------------------------------------------------------------------------

    The all-others rate applies to all entries of subject merchandise 
except for the entries of merchandise produced by the exporters/
manufacturers listed above.

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final 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 six copies must 
be submitted to the Assistant Secretary for Import Administration no 
later than January 5, 1998, and rebuttal briefs, no later than January 
12, 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 January 14, 1998, at 8:30 a.m. in room 1414 at the U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
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 ten 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 not later than 135 days after the publication of this 
notice in the Federal Register.
    This determination is published pursuant to section 733(d) of the 
Act.

    Dated: September 24, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-26041 Filed 9-30-97; 8:45 am]
BILLING CODE 3510-DS-P