[Federal Register Volume 62, Number 190 (Wednesday, October 1, 1997)]
[Notices]
[Pages 51581-51584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26042]



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DEPARTMENT OF COMMERCE

International Trade Administration
[A-274-802]


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

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

EFFECTIVE DATE: October 1, 1997.

FOR FURTHER INFORMATION CONTACT: Abdelali Elouaradia or Alexander 
Braier, Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone: (202) 482-2243 or (202) 482-3818, 
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 
Trinidad & Tobago 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 
Initiation of Antidumping Duty Investigations: Steel Wire Rod from 
Canada, Germany, Trinidad and Tobago, and Venezuela, 62 FR 13854 (March 
24, 1997) (``Initiation''), the following events have occurred:
    On April 14, 1997, the United States International Trade Commission 
(``ITC'') notified the Department of Commerce (``the Department'') of 
its affirmative preliminary injury determination in this case.
    On April 21, 1997, the Department issued the antidumping duty 
questionnaire to counsel for the following producer/exporter of steel 
wire rod to the United States: Caribbean Ispat, ltd. (CIL). 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.
    CIL submitted its questionnaire responses in May and June 1997. The 
Department issued supplemental requests for information in June, July, 
August and September 1997 and received the supplemental responses to 
these requests in June, July, August and September 1997. 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 CIL's 
questionnaire responses in June, July, August, and September 1997.
    On July 3, 1997, petitioners made a timely request for a 
postponement of the preliminary determination in this investigation and 
the companion investigations of steel wire rod from Canada, Germany, 
and Venezuela to September 24, 1997. On July 14, 1997, the Department 
postponed the preliminary determinations in these investigations until 
September 24, 1997, in accordance with section 733(c)(1) of the Act 
(See Notice of Postponement of Preliminary Antidumping Duty 
Determinations: Canada, Germany, Trinidad and Tobago, and Venezuela, 62 
FR 38257 (July 17, 1997).

Postponement of Final Determination

    On September 22, 1997, CIL, the only respondent participating in 
this investigation, requested that, pursuant to section 735(a)(2)(A) of 
the Act, in the event of an affirmative preliminary determination in 
this investigation, the Department postpone its final determination, 
until not later than 135 days after the date of publication of the 
affirmative preliminary in the Federal Register. In accordance with 
section 735 (a)(2)(A) of the Act and 19 CFR 353.2(b), inasmuch as our 
preliminary determination is affirmative, CIL accounts for a 
significant proportion of exports of the subject merchandise, and we 
have not identified any compelling reasons for denying this request, we 
are granting CIL's request and postponing the final determination. 
Suspension of liquidation will be extended accordingly. See 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

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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 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.

Period of Investigation

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

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondent, covered by the description in the 
Scope of Investigation section, above, and sold in the home market 
during the POI, to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. Where there were no 
sales of identical merchandise in the home market to compare to U.S. 
sales, we compared U.S. sales to the next most similar foreign like 
product on the basis of the characteristics listed in the antidumping 
duty questionnaire and the May 22, 1997, reporting instructions.
    Consistent with our practice, we compared prime merchandise sold in 
the United States to prime merchandise sold in the home market, and 
secondary merchandise to secondary merchandise. See, e.g., Ceratin 
Cold-rolled Carbon Steel Flat Products from the Netherlands; Final 
Results of Antidumping Duty Administrative Review, 61 FR 48465 
(September 13, 1996).

Fair Value Comparisons

    To determine whether sales of steel wire rod sold by CIL to the 
United States were made at less than fair value, we compared the Export 
Price (``EP'') to the normal value (``NV''), as described in the ``EP'' 
and ``Normal Value'' sections of this notice below. In accordance with 
section 777A(d)(1)(A)(i), we calculated weighted-average EPs for 
comparisons to weighted-average NVs.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (LOT) as the EP. The NV LOT is that of the 
starting-price sales in the comparison market or, when NV is based on 
constructed value (CV), that of the sales from which we derive selling, 
general and administrative (SG&A) expenses and profit. For EP, the U.S. 
LOT is also the level of the starting-price sale, which is usually the 
sale from the exporter to the importer. For CEP, it is the level of the 
constructed sale from the exporter to the importer.
    To determine whether NV sales are at a different LOT than the EP 
sales, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we make an LOT adjustment under section 
773(a)(7)(A) of the Act. See Certain Welded Carbon Steel Standard Pipes 
and Tubes From India: Preliminary Results of New Shipper Antidumping 
Duty Administrative Review, 62 FR 23760, 23761 (May 1, 1997).
    Respondent claimed one LOT in the NV market and one LOT in the U.S. 
market. CIL did not claim an LOT adjustment. To examine whether such an 
adjustment was necessary, we examined CIL's distribution system, 
including selling functions, classes of customers, and selling 
expenses. We noted that CIL's selling expenses for the POI were the 
same for all customers. We found that the selling functions, which 
included sales administration, billing, maintaining inventory, and in 
some cases arranging freight services, are sufficiently similar in the 
U.S. and the home market to consider them as one level of trade. Based 
on the findings noted above, we conclude that for these preliminary 
results, CIL's U.S. and home market sales were made at the same LOT.

Export Price

    We based price in the United States on EP, in accordance with 
subsections 772 (a) and (c) of the Act because the subject merchandise 
was sold directly to the first unaffiliated purchaser in the United 
States prior to importation and CEP was not otherwise warranted based 
on the facts on the record.
    We calculated EP based on packed prices to the first unaffiliated 
customer in the United States. We made adjustments, where appropriate, 
for international ocean freight, marine insurance, U.S. brokerage and 
handling, U.S. Customs duties and user fee, U.S. inland freight from 
port to unaffiliated customer, U.S. inland insurance and survey fee in 
both the United States and Trinidad in accordance with section 
772(c)(2) of the Act.

Normal Value

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
if the aggregate volume of home market sales of the foreign like 
product is greater than five percent of the aggregate volume of U.S. 
sales), we compare the respondent's volume of home market sales of the 
foreign like product to the volume of U.S. sales of the subject 
merchandise, in accordance with section 773(a)(1)(C) of the Act. Since 
CIL's aggregate volume of home market sales of the foreign like product 
was greater than five percent of its aggregate volume of U.S. sales for 
the subject merchandise, we determined that the home market was viable. 
Therefore, we have based NV on home market sales.

Cost of Production Analysis

    Pursuant to an allegation made by petitioners, we initiated a cost 
of production investigation in our notice of initiation. See Notice of 
Initiation, 62 FR 13854 (March 24, 1997). Before making any fair value 
comparisons, we conducted the COP analysis described below.
A. Calculation of COP
    We calculated the COP based on the sum of respondent's cost of 
materials and fabrication for the foreign like product, plus amounts 
for home market general expenses and packing costs in accordance with 
section 773(b)(3) of the Act. We have recalculated CIL's general and 
administrative amounts to include only net foreign exchange losses 
related to accounts payable . See Memorandum to Chris Marsh From Taija 
Slaughter, September 12, 1997.
B. Test of Home Market Prices
    We used the respondent's submitted POI weighted-average COPs, as 
adjusted (see above). We compared the weighted-average COP figures to 
home market sales of the foreign like product as required under section 
773(b) of the Act. In determining whether to disregard home-market 
sales made at prices below the COP, we examined whether (1)

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within an extended period of time, such sales were made in substantial 
quantities, and (2) whether such sales were made at prices which 
permitted the recovery of all costs within a reasonable period of time. 
On a product-specific basis, we compared the COP to the home market 
prices, less any applicable movement charges, rebates, discounts, and 
direct and indirect selling expenses.
C. Results of COP Test
    Pursuant to section 773(b)(2)(C), where less than 20 percent of the 
respondent's sales of a given product were at prices less than the COP, 
we did not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of the respondent's sales of a 
given product during the POI were at prices less than the COP, we 
determined such sales to have been made in ``substantial quantities'' 
within an extended period of time in accordance with section 
773(b)(2)(B) of the Act. In such cases, we also determined that such 
sales were not made at prices which would permit recovery of all costs 
within a reasonable period of time, in accordance with section 
773(b)(2)(D) of the Act and, therefore, we disregarded the below-cost 
sales. Where all sales of a specific product were at prices below the 
COP, we disregarded all sales of that product, and calculated NV based 
on CV, in accordance with section 773(a)(4) of the Act.
D. Calculation of CV
    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of respondent's cost of materials, fabrication, SG&A, 
interest expenses and profit. As noted above, we recalculated CIL's 
general and administrative amounts. In accordance with section 
773(e)(2)(A) of the Act, we based SG&A and profit on the amounts 
incurred and realized by the respondent in connection with the 
production and sale of the foreign like product in the ordinary course 
of trade, for consumption in the foreign country.

Price-to-Price Comparisons

    For those product comparisons for which there were sales at prices 
above the COP, we based NV on prices to home market customers. We made 
adjustments, where appropriate, for physical differences in the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act.
    We calculated NV based on prices to unaffiliated home market 
customers. We made deductions for discounts, rebates, and inland 
freight. In addition, we made circumstance-of-sale adjustments or 
deductions for credit and warranty, where appropriate. In accordance 
with section 773(a)(6), we deducted home market packing costs and added 
U.S. packing costs.

Currency Conversions

    In accordance with section 773(A) of the Act, we made currency 
conversions based on the official exchange rates in effect on the dates 
of the U.S. sales as certified by the Federal Reserve Bank.

Verification

    As provided in section 782(i) of the Act, we will verify all 
information relied upon 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 entries of steel wire rod 
from Trinidad and Tobago, that are entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register. Normally, we would instruct the Customs 
Service to require a cash deposit or the posting of a bond equal to the 
weighted-average amount by which the normal value exceeds the export 
price, as indicated in the chart below. However, the product under 
investigation is also subject to a concurrent countervailing duty 
investigation. Article VI.5 of the General Agreement on Tariffs and 
Trade (GATT) provides that ``[n]o product * * * shall be subject to 
both antidumping and countervailing duties to compensate for the same 
situation of dumping or export subsidization.'' This provision is 
implemented by section 772(c)(1)(C) of the Act. Since antidumping 
duties cannot be assessed on the portion of the margin attributed to 
export subsidies, there is no reason to require a cash deposit or bond 
for that amount.
    The Department has determined in Preliminary Affirmative 
Countervailing Duty Determination: Steel Wire Rod from Trinidad and 
Tobago, 62 FR 41927 (August 4, 1997), that the product under 
investigation benefitted from an export subsidy. To obtain the most 
accurate estimate of the antidumping duty, and to fulfill our 
international obligations arising under the GATT, we are subtracting, 
for deposit purposes, the cash deposit rate attributable to the export 
subsidies found in the countervailing duty investigation. For Caribbean 
Ispat, Ltd., the attributable rate is 3.45 percent. We are also 
subtracting from the ``All Others'' rate the cash deposit rate 
attributable to the export subsidy included in the countervailing duty 
investigation for the All Others rate, 3.45 percent. Pursuant to 
Article of 17.4 of the WTO Agreement on Subsidies and Countervailing 
Measures, in the absence of an affirmative final determination the 
Department will terminate the suspension of liquidation in the 
companion countervailing duty investigation of steel wire rod from 
Trinidad and Tobago, effective December 2, 1997, which is 120 days 
after the date of publication of that preliminary determination. 
Accordingly, on December 2, 1997, if the ITC has not yet made an 
affirmative injury determination in the countervailing duty 
investigation, the antidumping deposit rate will revert to the full 
amount calculated in this preliminary determination. These suspension 
of liquidation instructions will remain in effect until further notice.

------------------------------------------------------------------------
                                                Weighted-               
           Exporter/manufacturer             average margin    Bonding  
                                               percentage     percentage
------------------------------------------------------------------------
Caribbean Ispat Limited....................           13.00         9.55
All Others.................................           13.00         9.55
------------------------------------------------------------------------

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 December 22, 1997, and rebuttal briefs, no later than 
January 5, 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 9, 1998, at the U.S. Department of Commerce, 
14th Street and Constitution Avenue, N.W., Washington, D.C. 20230. 
Parties should

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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 by 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. 97-26042 Filed 9-30-97; 8:45 am]
BILLING CODE 3510-DS-P