[Federal Register Volume 62, Number 223 (Wednesday, November 19, 1997)]
[Notices]
[Pages 61751-61754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30390]


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DEPARTMENT OF COMMERCE

[A-791-804]


Suspension of Antidumping Duty Investigation: Certain Cut-to-
Length Carbon Steel Plate From South Africa

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

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SUMMARY: The Department of Commerce (the Department) has suspended the 
antidumping duty investigation involving certain cut-to-length carbon 
steel plate (CTL plate) from South Africa. The basis for this action is 
an agreement between the Department and Iscor Ltd. (Iscor) and Highveld 
Steel and Vanadium Corporation Ltd. (Highveld) to revise their prices 
to eliminate completely sales of this merchandise to the United States 
at less than fair value.

EFFECTIVE DATE: October 24, 1997.

FOR FURTHER INFORMATION CONTACT: Charles Rast, Nancy Decker, or Linda 
Ludwig, Office of AD/CVD Enforcement III, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th & 
Constitution Avenue N.W., Washington, D.C. 20230; telephone (202) 482-
5811, (202) 482-0196, or (202) 482-3833, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On December 3, 1996, the Department initiated an antidumping 
investigation under section 732 of the Tariff Act of 1930, (the Act), 
as amended, to determine whether imports of CTL plate from South Africa 
are being or are likely to be sold in the United States at less than 
fair value (61 FR 64051 (December 3, 1996)). On December 19, 1996, the 
United States International Trade Commission (ITC) notified the 
Department of its affirmative preliminary injury determination (see ITC 
Investigation Nos. 731-TA-753-756). On June 2, 1996, the Department 
preliminarily determined that CTL plate 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 Tariff Act of 1930, as amended by the Uruguay 
Round Agreements Act (62 FR 31967 (June 11, 1997)).
    The Department and Iscor and Highveld initialed a proposed 
agreement suspending this investigation on September 25, 1997. On 
September 26, 1997, we invited interested parties to provide written 
comments on the agreement and received comments from Geneva Steel, Gulf 
States Steel, Iscor and Highveld.
    The Department and Iscor and Highveld signed the final suspension 
agreement on October 24, 1997.

Scope of Investigation

    See Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Cut-to-Length Carbon Steel Plate from South Africa, signed 
October 24, 1997.

Suspension of Investigation

    The Department consulted with the parties to the proceeding and has 
considered the comments submitted with respect to the proposed 
suspension agreement. In accordance with Section 734(b) of the Act, we 
have determined that the agreement will completely eliminate sales at 
less than fair value, that the agreement is in the public interest, and 
that the agreement can be monitored effectively. See Public Interest 
Memorandum, October 24, 1997. We find, therefore, that the criteria for 
suspension of an investigation pursuant to section 734(b) of the Act 
have been met. The terms and conditions of this agreement, signed 
October 24, 1997, are set forth in Annex 1 to this notice.
    Pursuant to section 734(f)(2)(A) of the Act, the suspension of 
liquidation of all entries of cut-to-length carbon steel plate from 
South Africa entered or withdrawn from warehouse, for consumption, as 
directed in our Notice of Preliminary Determination of Sales at Less 
Than Fair Value and Postponement of Final Determination: Certain Cut-
to-Length Carbon Steel Plate From South Africa is hereby terminated. 
Any cash deposits on entries of cut-to-length carbon steel plate from 
South Africa pursuant to that suspension of liquidation shall be 
refunded and any bonds shall be released.
    On October 14, 1997 we received a request from petitioners 
requesting that

[[Page 61752]]

we continue the investigation. We received separate requests from the 
United Steelworkers of America, Bethlehem Steel Corp., and U.S. Steel 
Corp. (a unit of USX Corporation), interested parties under section 
771(9)(D) of the Act. Pursuant to these requests, we have completed the 
investigation in accordance with section 734(g) of the Act, and have 
notified the International Trade Commission (ITC) of our determination. 
If the ITC's injury determination is negative, the agreement will have 
no force or effect, and the investigation will be terminated (see 
section 734(f)(3)(A) of the Act). If the ITC's determination is 
affirmative, the Department will not issue an antidumping duty order as 
long as the suspension agreement remains in force (see section 
734(f)(3)(B) of the Act).
    This notice is published pursuant to section 734(f)(1)(A) of the 
Act.

    Dated: November 7, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.

Appendix 1--Suspension Agreement Cut-to-Length Carbon Steel Plate From 
the Republic South Africa

    Under section 734(b) of the Tariff Act of 1930, as amended (19 
U.S.C. 1673c(b)) (the Act), and 19 CFR 353.18, the U.S. Department 
of Commerce (the Department) and the signatory producers/exporters 
of cut-to-length carbon steel plate from the Republic of South 
Africa enter into this suspension agreement (the Agreement). On the 
basis of this suspension agreement, the Department shall suspend its 
antidumping investigation initiated on December 3, 1996 (61 FR 
64051), with respect to cut-to-length carbon steel plate from the 
Republic of South Africa, subject to the terms and provisions forth 
below.

(A) Product Coverage

    The merchandise subject to this Agreement is the following 
merchandise which has the Republic of South Africa as its origin:
    (1) For purposes of the Agreement, cut-to-length carbon steel 
plate includes hot-rolled iron and non-alloy steel universal mill 
plates (i.e., flat-rolled products rolled on four faces or in a 
closed box pass, of a width exceeding 150 mm but not exceeding 1250 
mm and of a thickness of not less than 4 mm, 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 
iron and non-alloy steel flat-rolled products not in coils, 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 mm or more in thickness and of a 
width which exceeds 150 mm and measures at least twice the 
thickness.
    (2) Included as subject merchandise in this Agreement 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. This 
merchandise is currently classified in the Harmonized Tariff 
Schedule of the United States (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, 7212.50.0000. Excluded 
from subject merchandise within the scope of this agreement is grade 
X-70 plate. Although the HTS subheadings are provided for 
convenience and customs purposes, our written description of the 
scope of this Agreement is dispositive.

(B) U.S. Import Coverage

    The signatory producers/exporters collectively are the producers 
and exporters in the Republic of South Africa that, during the 
antidumping investigation on the merchandise subject to the 
Agreement, accounted for substantially all (not less than 85 
percent) of the subject merchandise imported into the United States, 
as provided in the Department's regulations. The Department may at 
any time during the period of the Agreement require additional 
producers/exporters in the Republic of South Africa to sign the 
Agreement in order to ensure that not less than substantially all 
imports into the United States are covered by the Agreement.
    In reviewing the operation of the Agreement for the purpose of 
determining whether this Agreement has been violated or is no longer 
in the public interest, the Department will consider imports into 
the United States from all sources of the merchandise described in 
Section A of the Agreement. For this purpose, the Department will 
consider factors including, but not limited to, the following: 
volume of trade, pattern of trade, whether or not the reseller is an 
original equipment manufacturer, and the reseller's export price 
(EP).

(C) Basis of the Agreement

    On and after the effective date of the Agreement, each signatory 
producer/exporter individually agrees to make any necessary price 
revisions to eliminate completely any amount by which the normal 
value (NV) of this merchandise exceeds the U.S. price of its 
merchandise subject to the Agreement. For this purpose, the 
Department will determine the NV in accordance with section 773(e) 
of the Act and U.S. price in accordance with section 772 of the Act.
    (1) For all sales occurring on and after the effective date of 
the Agreement through March 31, 1998 (interim period), each 
signatory producer/exporter agrees not to sell its merchandise 
subject to the Agreement to unaffiliated purchasers in the United 
States at prices that are less than its NV, as determined by the 
Department, and provided to parties not later than November 7, 1997; 
and
    (2) For all sales occurring on and after April 1, 1998, each 
producer/exporter agrees not to sell its merchandise subject to the 
Agreement to any unaffiliated purchaser in the United States at 
prices that are less than the NV of the merchandise, as determined 
by the Department on the basis of information submitted to the 
Department not later than the dates specified in section D of the 
Agreement and provided to parties not later than December 10, March 
10, June 10, and September 10 of each year. This NV shall apply to 
sales occurring during the fiscal quarter beginning on the first day 
of the month following the date the Department provides the NV, as 
stated in this paragraph.

(D) Monitoring

    Each signatory producer/exporter will supply to the Department 
all information that the Department decides is necessary to ensure 
that the producer/exporter is in full compliance with the terms of 
the Agreement. As explained below, the Department will provide each 
signatory producer/exporter a detailed request for information and 
prescribe a required format and method of data compilation, not 
later than the beginning of each reporting period.

(1) Sales Information

    The Department will require each producer/exporter to report, on 
computer tape in the prescribed format and using the prescribed 
method of data compilation, each sale of the merchandise subject to 
the Agreement, either directly or indirectly to unaffiliated 
purchasers in the United States, including each adjustment 
applicable to each sale, as specified by the Department.
    The first report of sales data shall be submitted to the 
Department, on computer tape in the prescribed format and using the 
prescribed method of data compilation, not later than January 31, 
1998, and shall contain the specified sales information covering the 
period October 24, 1997, to December 31, 1997. Subsequent reports of 
sales data shall be submitted to the Department not later than 
January 31, April 30, July 31, and October 31 of each year, and each 
report shall contain the specified sales information for the 
quarterly period ending one month prior to the due date, except that 
if the Department receives information that a possible violation of 
the Agreement may have occurred, the Department may request sales 
data on a monthly, rather than quarterly basis.

(2) Cost Information

    Producer/exporters must request NVs for all subject merchandise 
that will be sold in the United States. For those products which the 
producer/exporter is requesting NVs, the Department will require 
each producer/exporter to report: their actual cost of 
manufacturing; selling, general and administrative (SG&A) expenses; 
and profit data on a quarterly basis, in the prescribed format and 
using the prescribed method of data compilation. As indicated in 
Appendix B, profit will be reported by the producers/exporters on a 
quarterly basis. Each such producer/exporter also must report 
anticipated increases in production costs and may report anticipated 
decreases in production costs in the quarter in which the 
information is submitted resulting from factors such as anticipated 
changes in

[[Page 61753]]

production yield, changes in production process, changes in 
production quantities or changes in production facilities.
    The first report of cost data for the post-interim period shall 
be submitted to the Department not later than January 20, 1998, and 
shall contain the specified cost data covering the period October 1, 
1997, through December 31, 1997. Each subsequent report shall be 
submitted to the Department not later than January 20, April 20, 
July 20, and October 20 of each year, and each report shall contain 
specified information for the quarter ending one month prior to the 
due date.

(3) Special Adjustment of Normal Value

    If the Department determines that the NV it determined for a 
previous quarter was erroneous because the reported costs for that 
period were inaccurate or incomplete, or for any other reason, the 
Department may adjust NV in a subsequent period or periods, unless 
the Department determines that Section F of the Agreement applies.

(4) Verification

    Each producer/exporter agrees to permit full verification of all 
cost and sales information semi-annually, or more frequently, as the 
Department deems necessary.

(5) Bundling or Other Arrangements

    Producers/exporters agree not to circumvent the Agreement. In 
accordance with the date set forth in Section D(1) of the Agreement, 
producers/exporters will submit a written statement to the 
Department certifying that the sales reported herein were not, or 
are not part of or related to, any bundling arrangement, on-site 
processing arrangement, discounts/free goods/financing package, swap 
or other exchange where such arrangement is designed to circumvent 
the basis of the Agreement.
    Where there is reason to believe that such an arrangement does 
circumvent the basis of the Agreement, the Department will request 
producers/exporters to provide within 15 days all particulars 
regarding any such arrangement, including, but not limited to, sales 
information pertaining to covered and non-covered merchandise that 
is manufactured or sold by producers/exporters. The Department will 
accept written comments, not to exceed 30 pages, from all parties no 
later than 15 days after the date of receipt of such producer/
exporter information.
    If the Department, after reviewing all submissions, determines 
that such arrangement circumvents the basis of the Agreement, it 
may, as it deems most appropriate, utilize one of two options: (1) 
the amount of the effective price discount resulting from such 
arrangement shall be reflected in the NV in accordance with Section 
D(3), or (2) the Department shall determine that the Agreement has 
been violated and take action according to the provisions under 
Section F.

(6) Rejection of Submissions

    The Department may reject any information submitted after the 
deadlines set forth in this section or any information which it is 
unable to verify to its satisfaction. If information is not 
submitted in a complete and timely fashion or is not fully 
verifiable, the Department may calculate normal value, NV, and/or 
U.S. price based on facts otherwise available, as it determines 
appropriate, unless the Department determines that Section F 
applies.

(E) Disclosure and Comment

    (1) The Department may make available to representatives of each 
domestic party to the proceeding, under appropriately drawn 
administrative protective orders, business proprietary information 
submitted to the Department during reporting period as well as the 
results of its analysis under section 773 of the Act.
    (2) Not later than February 20, May 20, August 20, and November 
20 of each year, the Department will disclose to each producer/
exporter the results and the methodology of the Department's 
calculations of its NV. At that time, the Department may also make 
available such information to the domestic parties to the 
proceeding, in accordance with this section.
    (3) Not later than 7 days after the date of disclosure under 
paragraph E(2), the parties to the proceeding may submit written 
comments to the Department, not to exceed 15 pages. After reviewing 
these submissions, the Department will provide to each producer/
exporter its NV as provided in paragraph C(2). In addition, the 
Department may provide such information to domestic interested 
parties as specified in this section.

(F) Violations of the Agreement

    If the Department determines that the Agreement is being or has 
been violated or no longer meets the requirements of section 734(b) 
or (d) of the Act, the Department shall take action it determines 
appropriate under section 734(i) of the Act and the regulations. In 
the event that the Department determines that the investigation 
shall be resumed, it will be resumed on the basis of the original 
administrative record, and the statutes, regulations, policies, and 
practices in effect on the effective date of the Agreement.

(G) Other Provision

    In entering into the Agreement, the signatory producers/
exporters do not admit that any sales of the merchandise subject to 
the Agreement have been made at less than fair value.

(H) Termination

    The Department will not consider requests for termination of 
this suspended investigation prior to October 2002. Termination will 
be conducted in accordance with section 351.222 of the Department's 
regulations.
    Any producer/exporter may terminate the Agreement at any time 
upon notice to the Department. Termination shall be effective 60 
days after such notice is given to the Department. Upon termination, 
the Department shall follow the procedures outlined in section 
734(i)(1) of the Act.

(I) Definitions

    For purposes of the Agreement, the following definitions apply:
    (1) U.S. PRICE--means the export price or constructed export 
price at which merchandise is sold by the producer or exporter to 
the first unaffiliated person in the United States, including the 
amount of any discounts, rebates, price protection or ship and debit 
adjustments, and other adjustments affecting the net amount paid or 
to be paid by the unaffiliated purchaser, as determined by the 
Department under section 772 of the Act.
    (2) NORMAL VALUE--means the constructed value (CV) of the 
merchandise, as determined by the Department under section 773 of 
the Act and the corresponding sections of the Department's 
regulations, and as adjusted in accordance with Appendix A to this 
Agreement.
    (3) PRODUCER/EXPORTER--means (1) the foreign manufacturer or 
producer, (2) the foreign producer or reseller which also exports, 
and (3) the affiliated person by whom or for whose account the 
merchandise is imported into the United States, as defined in 
section 771(28) of the Act.
    (4) DATE OF SALE--means normally the date of the invoice as 
recorded in the exporter or producer's records kept in the ordinary 
course of business, unless the Department determines that a 
different date better reflects the date on which the exporter or 
producer establishes the material terms of sale, as determined by 
the Department under its regulations.
    The effective date of the Agreement is October 24, 1997.

For the Republic of South African Producers/Exporters
    Iscor Ltd.
----------------------------------------------------------------------
Marcela B. Stras, Esq., Adduci, Mastriani & Schaumberg, LLP
----------------------------------------------------------------------
Date

Highveld Steel and Vanadium Corp. Ltd.

----------------------------------------------------------------------
Jeff Chegwidden, Director & General Manager Marketing
----------------------------------------------------------------------
Date

For U.S. Department of Commerce

----------------------------------------------------------------------
Robert S. LaRussa, Assistant Secretary for Import Administration
----------------------------------------------------------------------
Date

Appendix A--Cut-to-Length Carbon Steel Plate From the Republic of South 
Africa Principles of Cost

General Framework

    The cost information reported to the Department that will form 
the basis of the NV calculations for purposes of the Agreement must 
be:
    <bullet> Comprehensive in nature and based on a reliable 
accounting system (i.e., a system based on well-established 
standards that can be tied to the audited financial statements);
    <bullet> Representative of the company's costs incurred for the 
general class of merchandise;
    <bullet> Calculated on a quarterly weighted-average basis of the 
plants or cost centers manufacturing the product;
    <bullet> Based on fully-absorbed costs of production, including 
any downtime;

[[Page 61754]]

    <bullet> Valued in accordance with generally accepted accounting 
principles;
    <bullet> Reflective of appropriately allocated common costs so 
that the costs necessary for the manufacturing of the product are 
not absorbed by other products; and
    <bullet> Reflective of the actual cost of producing the product.
    Additionally, a single figure should be reported for each cost 
component.

Cost of Manufacturing (COM)

    Costs of manufacturing are reported by major cost category and 
for major stages of production. Weighted-average costs are used for 
a product that is produced at more than one facility, based on the 
cost at each facility.
    Direct materials--cost of those materials which are input into 
the production process and physically become part of the final 
product.
    Direct labor--cost identified with a specific product. These 
costs are not allocated among products except when two or more 
products are produced at the same cost center. Direct labor costs 
should include salary, bonus and overtime pay, training expenses, 
and all fringe benefits. Any contracted-labor expense should reflect 
the actual billed cost or the actual costs incurred by the 
subcontractor when the corporation has influence over the 
contractor.
    Factory overhead--overhead costs include indirect materials, 
indirect labor, depreciation, and other fixed and variable expenses 
attributable to a production line or factory. Because overhead costs 
are typically incurred for an entire production line, an appropriate 
portion of those costs must be allocated to covered products, as 
well as any other products produced on that line. Acceptable cost 
allocations can be based on labor hours or machine hours. Overhead 
costs should also reflect any idle or downtime and be fully absorbed 
by the products.

Cost of Production (COP)

    Is equal to the sum of materials, labor, and overhead (COM) plus 
SG&A expenses in the home market (HM).
    SG&A--those expenses incurred for the operation of the 
corporation as a whole and not directly related to the manufacture 
of a particular product. They include corporate general and 
administrative expenses, financing expenses, and general research 
and development expenses. Additionally, direct and indirect selling 
expenses incurred in the HM for sales of the product under 
investigation are included. Such expenses are allocated over cost of 
goods sold.

Constructed Value

    Is equal to the sum of materials, labor and overhead (COM) and 
SG&A expenses plus profit in the comparison market and the cost of 
packing for exportation to the United States.

Calculation of Suspension Agreement NVs

    NVs (for purposes of the Agreement) are calculated by adjusting 
the CV and are provided for both EP and CEP transactions. In effect, 
any expenses uniquely associated with the covered products sold in 
the HM are subtracted from the CV, and any such expenses which are 
uniquely associated with the covered products sold in the United 
States are added to the CV to calculate the NV.
    Export Price--Generally, a U.S. sale is classified as an export 
price sale when the first sale to an unaffiliated person occurs 
before the goods are imported into the United States. In cases where 
the foreign manufacturer knows or has reason to believe that the 
merchandise is ultimately destined for the United States, the 
manufacturer's sale is the sale subject to review. If, on the other 
hand, the manufacturer sold the merchandise to a foreign trader 
without knowledge of the trader's intention to export the 
merchandise to the United States, then the trader's first sale to an 
unaffiliated person is the sale subject to review. For EP NVs, the 
CV is adjusted for movement costs and differences in direct selling 
expenses such as commissions, credit, warranties, technical 
services, advertising, and sales promotion.
    Constructed Export Price--Generally, a U.S. sale is classified 
as a constructed export price sale when the first sale to an 
unaffiliated person occurs after importation. However, if the first 
sale to the unaffiliated person is made by a person in the United 
States affiliated with the foreign exporter, constructed export 
price applies even if the sale occurs prior to importation, unless 
the U.S. affiliate performs only clerical functions in connection 
with the sale. For CEP NVs, the CV is adjusted similar to EP sales, 
with differences for adjustment to U.S. and HM indirect-selling 
expenses.
    Home market direct-selling expenses--expenses that are incurred 
as a direct result of a sale. These include such expenses as 
commissions, advertising, discounts and rebates, credit, warranty 
expenses, freight costs, etc. Certain direct-selling expenses are 
treated individually. They include:

commission expenses--payments to unaffiliated parties for sales in 
the HM.
credit expenses--expenses incurred for the extension of credit to HM 
customers.
movement expenses--freight, brokerage and handling, and insurance 
expenses.

    U.S. direct-selling expenses--the same as HM direct-selling 
expenses except that they are incurred for sales in the United 
States.
    Movement expenses--additional expenses incidental to importation 
into the United States. These typically include U.S. inland freight, 
insurance, brokerage and handling expenses, U.S. Customs duties, and 
international freight.
    U.S. indirect-selling expenses--include general fixed expenses 
incurred by the U.S. sales subsidiary or affiliated exporter for 
sales to the United States. They may also include a portion of 
indirect expenses incurred in the HM for export sales.

------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
                           FOR EP TRANSACTIONS                          
------------------------------------------------------------------------
               +                 direct materials                       
               +                 direct labor                           
               +                 factory overhead                       
               =                  Cost of Manufacturing                 
               +                 home market SG&A                       
               =                  Cost of Production                    
               +                 U.S. packing                           
               +                 Profit                                 
               =                  Constructed Value                     
               +                 U.S. direct selling expense            
               +                 U.S. commission expense                
               +                 U.S. movement expense                  
               +                 U.S. credit expense                    
               -                 HM direct selling expense              
               -                 HM commission expense \1\              
               -                 HM credit expense                      
               =                  NV for EP sales                       
------------------------------------------------------------------------
\1\ If the company does not have HM commissions, HM indirect expenses   
  are subtracted only up to the amount of the U.S. commissions.         


------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
                          FOR CEP TRANSACTIONS                          
------------------------------------------------------------------------
               +                 direct materials                       
               +                 direct labor                           
               +                 factory overhead                       
               =                 Cost of Manufacturing                  
               +                 home market SG&A                       
               =                 Cost of Production                     
               +                 U.S. packing                           
               +                 profit                                 
               =                 Constructed Value                      
               +                 U.S. direct selling expense            
               +                 U.S. indirect selling expense          
               +                 U.S. commission expense                
               +                 U.S. movement expense                  
               +                 U.S. credit expense                    
               +                 U.S. further manufacturing expenses (if
                                  any)                                  
               +                 CEP profit                             
               -                 HM direct selling expense              
               -                 HM commission expense                  
               -                 HM credit expense                      
               =                  NV for CEP sales                      
------------------------------------------------------------------------


[FR Doc. 97-30390 Filed 11-18-97; 8:45 am]
BILLING CODE 3510-DS-P