24156 Federal Register / Vol. 63, No. 84 / Friday, May 1, 1998 / Notices

made to the Board on a case-by-case

basis.

In accordance with the Board’s

regulations, a member of the FTZ Staff

has been designated examiner to

investigate the application and report to

the Board.

Public comment on the application is

invited from interested parties.

Submissions (original and 3 copies)

shall be addressed to the Board’s

Executive Secretary at the address

below. The closing period for their

receipt is June 30, 1998. Rebuttal

comments in response to material

submitted during the foregoing period

may be submitted during the subsequent

15-day period (to July 15, 1998).

A copy of the application and

accompanying exhibits will be available

for public inspection at each of the

following locations:

Office of the Port Director, U.S. Customs

Service, 150 Marine Street, Lake

Charles, LA 70601

Office of the Executive Secretary,

Foreign-Trade Zones Board, Room

3716, U.S. Department of Commerce,

14th & Pennsylvania Avenue, NW,

Washington, DC 20230.

Dated: April 23, 1998.

Dennis Puccinelli,

Acting Executive Secretary.

[FR Doc. 98–11667 Filed 4–30–98; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–412–810; C–412–811; A–428–811; C–

428–812]

Hot-Rolled Lead and Bismuth Carbon

Steel Products From Germany and the

United Kingdom; Negative Preliminary

Determinations of Circumvention of

Antidumping and Countervailing Duty

Orders

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of negative preliminary

determinations of circumvention of

antidumping and countervailing duty

orders.

SUMMARY: On April 14, 1997, the

Department of Commerce received an

application requesting circumvention

inquiries of the antidumping and

countervailing duty orders on hot-rolled

lead and bismuth carbon steel products

from Germany and the United Kingdom.

The application alleged that the

principal German and British producers

of hot-rolled lead and bismuth carbon

steel products are circumventing the

respective orders by shipping leaded

steel billets to the United States, where

they are easily and inexpensively

converted into the hot-rolled lead and

bismuth carbon steel products covered

by the orders. Pursuant to the

application, the Department of

Commerce initiated anticircumvention

inquiries on June 25, 1997.

We preliminarily determine that

imports into the United States of leaded

steel billets that were exported from

Germany and the United Kingdom do

not constitute circumvention of the

antidumping and countervailing duty

orders on hot-rolled lead and bismuth

carbon steel products from Germany

and the United Kingdom, within the

meaning of section 781(a) of the Tariff

Act of 1930, as amended. Interested

parties are invited to comment on these

preliminary determinations.

EFFECTIVE DATE: May 1, 1998.

FOR FURTHER INFORMATION CONTACT:

Anne D’Alauro, Russell Morris, or

Richard Herring, Office of CVD/AD

Enforcement VI, Import Administration,

International Trade Administration,

U.S. Department of Commerce, 14th

Street and Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone

(202) 482–2786.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute are references to

the provisions of the Tariff Act of 1930,

as amended, by the Uruguay Round

Agreements Act (URAA), effective

January 1, 1995 (the Act). In addition,

unless otherwise indicated, all

references to the Department’s

regulations are to 19 CFR Parts 353 and

355 (1997).

Background

On March 22, 1993, the Department of

Commerce (the Department) published

in the Federal Register the antidumping

duty orders (58 FR 15334) and

countervailing duty orders (58 FR

15325, 15327) on hot-rolled lead and

bismuth carbon steel products (hotrolled lead bar) from Germany and the

United Kingdom. On April 14, 1997, the

Department received an application

(amended on May 14, 1997) filed by

Inland Steel Bar Company and USS/

KOBE Steel Company (the petitioners),

requesting that the Department conduct

anticircumvention inquiries of the

antidumping and countervailing duty

orders on hot-rolled lead bar from

Germany and the United Kingdom

pursuant to section 781(a) of the Tariff

Act. The petitioners alleged that the

principal German (Saarstahl A.G. i.K.

and Thyssen Stahl A.G.) and British

(British Steel plc) producers of hotrolled lead bar are circumventing the

respective orders by shipping leadedsteel billets (lead billets) to the United

States, where they are easily and

inexpensively converted into the hotrolled lead bar products covered by the

orders.

The Department received written

comments opposing the request to

initiate the inquiries from Thyssen on

May 12, 1997, from Saarstahl A.G. i.K.

on May 16, 1997, from British Steel plc

on May 23, 1997, and from the

European Community (EC) on May 27,

1997. We also received written

comments in opposition to the initiation

of the inquiries from Bar Technologies,

Inc. (Bar Tech) on May 19, 1997,

Sheffield Steel Corporation on June 2,

1997, Birmingham Steel Corporation on

June 3, 1997, and Nucor Steel

Corporation on June 5, 1997.

Pursuant to the petitioners’

application and in accordance with 19

CFR 353.29(e) and 355.29(e), the

Department initiated circumvention

inquiries of the antidumping and

countervailing duty orders on hot-rolled

lead bar from Germany and the United

Kingdom (62 FR 34213; June 25, 1997).

We sent initial questionnaires to the

foreign respondents on June 25, 1997,

and received responses on July 21, 1997.

On September 10, 1997, the Department

again issued questionnaires to all

foreign respondents. Also on this date,

the Department issued questionnaires to

those U.S. steel companies which were

identified in the foreign respondents’

July 21, 1997 questionnaire responses as

lead billet customers. The U.S. steel

companies which responded to the

Department’s questionnaires on October

29, 1997 and November 3, 1997,

purchased virtually all of the foreign

respondents’ exports of lead billets to

the United States in 1995 and 1996, and

rolled them into hot-rolled lead bar

(hereafter referred to as U.S. re-rollers).

The Department issued supplemental

questionnaires to both the U.S. re-rollers

and foreign respondents.

In conducting the inquiries, we

requested and received detailed

information on a range of topics, such

as processing, pricing information, and

conversion costs. We also collected data

on patterns of trade, sourcing patterns,

and other trend data for the period

January 1, 1991, through June 30, 1997.

Scope of Antidumping and

Countervailing Duty Orders

Imports covered by these orders

include hot-rolled bars and rod of nonalloy or other alloy steel, whether or not
Federal Register / Vol. 63, No. 84 / Friday, May 1, 1998 / Notices 24157

descaled, containing by weight 0.03

percent of lead or 0.05 percent of

bismuth, in coils or cut lengths, and in

numerous shapes and sizes. The order

excludes ‘‘other alloy steels,’’ as defined

by Chapter 72, note 1(f) of the

Harmonized Tariff Schedule of the

United States (HTSUS), ‘‘except steels

classified as other alloy steel by reason

of containing by weight 0.4 percent or

more of lead or 0.1 percent or more of

bismuth, tellurium or selenium.’’ Most

of the products covered are provided for

under subheadings 7213.20.00.00 and

7214.30.00.00 of the HTSUS. Small

quantities of these products may also

enter the United States under the

following HTSUS subheadings:

7213.31.30.00, 60.00; 7213.39.00.30,

00.60, 00.90; 7214.40.00.10, 00.30,

00.50; 7214.50.00.10, 00.30, 00.50;

7214.60.00.10, 00.30, 00.50; and

7228.30.80.00. Although the HTSUS

subheadings are provided for

convenience and for customs purposes,

the written description of the scope of

the order remains dispositive.

Scope of the Circumvention Inquiries

The products subject to these

circumvention inquiries are carbon or

alloy steel billets containing 0.03

percent or more of lead or 0.05 percent

or more of bismuth (the only accepted

metallurgical equivalent to lead), and

other alloy steel billets by reason of

containing by weight 0.4 percent or

more of lead or 0.1 percent or more of

bismuth, tellurium or selenium, that

meet the chemical requirements for the

merchandise subject to the orders.

Facts Available

Section 776(a)(2) of the Act requires

the Department to use facts available if

‘‘an interested party or any other person

* * * withholds information that has

been requested by the administering

authority * * * under this title.’’ The

facts on the record show that Bar Tech

did not comply with the Department’s

requests for information required to

calculate the value of the processing

performed in the United States. In our

initial questionnaire dated September

10, 1997, the Department requested

information regarding the total amount

of lead billet consumed in the

production of one unit of hot-rolled lead

bar (lead billet consumption rate). Bar

Tech responded to our questionnaire on

October 29, 1997, but did not provide its

lead billet consumption rate.

The Department’s supplemental

questionnaires dated November 18,

1997 and January 7, 1998, again

requested that Bar Tech report its lead

billet consumption rate. Bar Tech,

however, did not provide its lead billet

consumption rate to the Department.

Section 776(b) of the Act permits the

administrative authority to use an

inference that is adverse to the interests

of an interested party if that party has

‘‘failed to cooperate by not acting to the

best of its ability to comply with a

request for information.’’ Such an

adverse inference may include reliance

on information derived from (1) the

petition, (2) a final determination in the

investigation under this title, (3) any

previous review under section 751 or

determination under section 753

regarding the country under

consideration, or (4) any other

information placed on the record.

Because Bar Tech did not comply with

the Department’s request to provide its

lead billet consumption rate, we find

that Bar Tech failed to cooperate by not

acting to the best of its ability to comply

with the Department’s request.

Therefore, we are using adverse

inferences in accordance with section

776(b) of the Act. The adverse inference

for Bar Tech’s lead billet consumption

rate is the use of the highest average

lead billet consumption rate submitted

by another U.S. re-roller participating in

these inquiries.

Nature of the Circumvention Inquiry

Section 781(a)(1) of the Act provides

that the Department, after taking into

account any advice provided by the

United States International Trade

Commission (ITC) under section 781(e),

may include the imported merchandise

under review within the scope of an

order if the following criteria have been

met:

A. The merchandise sold in the

United States is of the same class or

kind as any other merchandise that is

the subject of—

(i) An antidumping duty order issued

under section 736,

(ii) A finding issued under the

Antidumping Act, 1921, or

(iii) A countervailing duty order

issued under section 706 or section 303;

B. Such merchandise sold in the

United States is completed or assembled

in the United States from parts or

components produced in the foreign

country with respect to which such

order or finding applies;

C. The process of assembly or

completion in the United States is

minor or insignificant; and

D. The value of the parts or

components [produced in the foreign

country with respect to which the order

applies], is a significant portion of the

total value of the merchandise.

If one of the four elements does not

apply, there can be no finding of

circumvention. However, even if all four

of these criteria are met, the Act requires

that the Department also consider

additional factors. Section 781(a)(3) of

the Act directs the Department to

consider, in determining whether to

include parts or components produced

in a foreign country within the scope of

a countervailing and antidumping duty

order, such factors as: (A) the pattern of

trade, including sourcing patterns; (B)

whether the manufacturer or exporter of

the parts or components is affiliated

with the person who assembles or

completes the merchandise sold in the

United States from the parts or

components produced in the foreign

country; and (C) whether imports into

the United States of the parts or

components produced in such foreign

country have increased after the

initiation of the investigation which

resulted in the issuance of such order or

finding.

U.S. Re-rollers

We requested information from U.S.

re-rollers with respect to these

circumvention inquiries. Information

was submitted by the following U.S. rerollers: American Steel & Wire (AS&W),

a wholly-owned subsidiary of

Birmingham Steel Corporation; Bar

Tech; Nucor Steel Corporation (Nucor);

Republic Engineered Steels (Republic);

and Sheffield Steel Corporation

(Sheffield). Based upon our analysis of

the information submitted by the foreign

respondents and the U.S. re-rollers, we

have determined that no affiliation

exists between the U.S. re-rollers and

the foreign respondents, as defined in

section 771(33) of the Act. A

determination with respect to section

781(a)(1) and (2) of the Act, is based

solely on the processing of lead billets

into hot-rolled lead bar by these

unaffiliated U.S. re-rollers.

The rolling facilities owned by each of

the U.S. re-rollers were in operation

before the initiation of the respective

antidumping and countervailing (AD

and CVD) investigations of hot-rolled

lead bar from Germany and the United

Kingdom. All of the U.S. re-rollers,

except Bar Tech, existed as re-rollers

before the initiation of the

investigations. Bar Tech was established

after the issuance of the AD and CVD

orders when Bar Tech purchased

Bethlehem Steel’s Bar, Rod & Wire

(BRW) facilities in Lackawanna, New

York in 1994. Bethlehem Steel, a former

re-roller of hot-rolled lead bar, was one

of the original petitioners in the lead bar

investigations.

Much of the information provided by

the U.S. re-rollers is proprietary.

Therefore, in most instances, the
24158 Federal Register / Vol. 63, No. 84 / Friday, May 1, 1998 / Notices

information used in our analysis below

has been ranged, and our discussion of

this information has been generalized in

order to maintain the proprietary

treatment of submitted information. In

addition, for most of the U.S. re-rollers,

the source of their imported lead billets

is also proprietary. Therefore, the

analysis below refers to both imports

from Germany and the United Kingdom.

Statutory Analysis

(1) Whether the Class or Kind of

Merchandise Is Sold in the United

States

AS&W, Bar Tech, Republic, and

Sheffield sell hot-rolled lead bar in the

United States. Nucor processes lead

billets into hot-rolled lead bar, which

the company further processes into

cold-finished products.

(2) Whether Merchandise Sold in the

United States Is Completed or

Assembled in the United States From

Foreign Parts or Components

All of the U.S. re-rollers purchase lead

billets from one or more of the foreign

respondents subject to the AD and CVD

orders. They each use the lead billets to

produce hot-rolled lead bar in the

United States.

(3) Whether the Process of Assembly or

Completion Is Minor or Insignificant

Section 781(a)(2) lists the factors the

Department will consider in

determining whether the process of

assembly or completion is minor or

insignificant. The Statement of

Administrative Action (SAA), H. Doc.

No. 316, Vol. 1, 103d Cong., 2nd Sess.

(1994), states that no single factor listed

in section 781(a)(2) of the Act will be

controlling. SAA at 893. The SAA also

states that the Department will evaluate

each of the factors as they exist in the

United States depending on the

particular circumvention scenario. Id.

Therefore, the importance of any one of

the factors listed under 781(a)(2) of the

Act can vary from case to case

depending on the particular

circumstances unique to each specific

circumvention inquiry. Each of the

factors set forth in section 781(a)(2) of

the Act is examined below for the U.S.

re-rollers.

(a) The Level of Investment in the

United States

The rolling facilities owned by each of

the U.S. re-rollers were in operation

before the initiation of the respective

AD and CVD investigations of hot-rolled

lead bar from Germany and the United

Kingdom. Although Bar Tech did not

exist before the initiation of the

investigations, the facility producing

subject merchandise that is operated by

the company does pre-date the

investigations. Each of the U.S. rerollers has made substantial capital

investments in its respective rolling

mills.

AS&W entered the hot-rolled lead bar

market in 1986, with its purchase of

rolling facilities from U.S. Steel. In

1993, Birmingham Steel acquired AS&W

and entered the specialty bar, rod, and

wire products business. In 1996,

Birmingham Steel invested $132 million

in a new high-quality rolling mill at

AS&W’s Cleveland, Ohio facility,

enabling the company to produce largersized bar products and bars with tighter

size tolerances and more stringent

mechanical properties. AS&W primarily

produces non-lead hot-rolled bars, and

less than a quarter of the mill’s

production utilizes lead billets. AS&W

sells the hot-rolled lead bar that it

produces to unaffiliated customers.

Bar Tech came into existence in 1994,

with the purchase of Bethlehem Steel’s

BRW facilities for $19 million. Between

1994 and 1997, Bar Tech made

additional investments in the rolling

facilities’ buildings, machinery, and

equipment. In April 1996, Bar Tech

acquired Bliss & Laughlin (B&L), the

largest cold-finishing company in the

United States. In September 1997, Bar

Tech announced plans to invest $30

million in its steelmaking facilities.

Approximately half of the investment is

allocated for the production of lead and

non-lead semi-finished steels (billets) at

its Johnstown meltshop. The majority of

the remaining investment is designated

for equipment upgrades at its 13 inch

rolling mill in Lackawanna, New York

to roll both lead and non-lead billets.

Nucor’s steel mill in Darlington,

South Carolina became operational as a

new steel mill in 1969. Prior to 1991,

Nucor added a high-speed rolling line to

its mill. The addition of such equipment

allows for automatic straightening,

shearing, stacking, and bundling of bar,

and has significantly enhanced Nucor’s

ability to produce hot-rolled lead and

non-lead bar from lead and non-lead

billets. Since 1991, Nucor has made

several investments for a variety of

improvements.

In November 1989, Republic was

created through an employee stock

ownership plan with the purchase of

LTV’s Bar Division. With the purchased

steelmaking facilities, Republic gained

the ability to produce lead and non-lead

ingots, and hot-rolled and cold-finished

bar products. Republic currently

produces lead billets via the ingot

process in a shared facility; however,

the quantity it can produce is restricted

by environmental permit limits. During

the 1990’s, Republic invested in the

construction of a continuous casting

facility which has the capability to

produce both lead and non-lead billets;

however, Republic currently only

produces non-lead billets at the facility.

Sheffield was established in the early

1980’s, with the purchase of the Sand

Springs, Oklahoma meltshop and rolling

facility in 1981, and the construction of

the Kansas City, Missouri rolling facility

in 1985. In 1986, Sheffield purchased a

12 inch rolling mill facility in Joliet,

Illinois from Continental Steel for $3.5

million. This rolling mill was originally

installed around 1957. Since acquiring

the Joliet mill in 1986, Sheffield has

made additional investments of

approximately $6 million in the facility,

which is the company’s only rolling

mill which produces hot-rolled lead bar.

Sheffield entered the hot-rolled lead bar

market in 1992.

(b) The Level of Research and

Development (R&D) in the United States

Four of the five re-rollers reported

that they had little or no R&D related to

the production of hot-rolled lead bar.

One U.S. re-roller reported that it

conducted some R&D with respect to the

development of heating, rolling and

inspection practices used in the

production of leaded steels. The U.S. rerollers reported that there have been few

technological breakthroughs affecting

leaded steels since 1991. Because the

rolling of hot-rolled lead bar is a

technically mature process, R&D into

the process of rolling bar is not a

significant factor in this industry.

(c) The Nature of the Production Process

in the United States

The International Trade Commission

(ITC) states that the manufacturing

process for the production of hot-rolled

lead bar consists of three different

stages: (1) melting, (2) casting, and (3)

hot-rolling. See Certain Hot-Rolled Lead

and Bismuth Carbon Steel Products

From Brazil, France, and the United

Kingdom, Determinations of the

Commission in Investigations Nos. 701–

TA–314 thru 317, USITC Publication

2611 (March 1993). Lead billets are

created during the second stage; the U.S.

re-rollers perform the third and final

stage in the manufacturing process of

hot-rolled lead bar.

Each of the U.S. re-rollers are fully

operational hot-rolled lead and non-lead

bar producers, manufacturing bar in a

like manner. The nature of the process

overall consists of a series of sizing and

shaping of the lead billets to produce

specific sized and shaped hot-rolled bar

on rolling equipment used to

manufacture either hot-rolled lead or
Federal Register / Vol. 63, No. 84 / Friday, May 1, 1998 / Notices 24159

non-lead bars. The rolling process does

not require equipment dedicated

exclusively to the production of hotrolled lead bar. Three of the five rerollers also have cold-finishing

operations to further process the hotrolled lead bar. In the cold-finishing

process, the bar undergoes surface

treatments in the form of polishing,

turning, grinding, and straightening.

The process for producing hot-rolled

lead bar from lead billets is as follows.

First, the lead billets are placed in a reheat furnace and heated to a

temperature usually above 2200 degrees

Fahrenheit. This heating procedure

increases the malleability of the steel,

reducing energy consumption and wear

on the rolling mill. Once the lead billets

reach the necessary temperature,

walking beams gradually discharge

them from the re-heat furnace onto the

rolling lines. The lead billets are then

rolled on a series of rolling mills,

including roughing, intermediate, and

finishing mills. Each rolling mill has a

series of stands which compress and

shape the lead billets with each pass

through. As a lead billet passes through

the stands, it becomes elongated and its

cross-section becomes smaller. This

process transforms a lead billet into a

hot-rolled lead bar product having a

specific size and shape. Generally four

to 15 percent of a lead billet’s weight is

lost in the rolling process.

The hot-rolled lead bar is then placed

on a hot bed and cooled to a

temperature of about 800 degrees

Fahrenheit. Once cooled, the hot-rolled

lead bar undergoes straightening, nondestructive testing, deburring, and saw

cutting. The hot-rolled lead bar is either

coiled or cut into various lengths at the

finishing shear. At this stage, some rerollers apply a surface treatment to

clean and coat their products. After

being inspected for straightness, length,

and defects, the hot-rolled lead bars are

weighed, packaged, and placed in the

warehouse for later shipment

There are environmental issues and

limitations in rolling lead billets versus

non-lead billets. Environmental

controls, worker safety, and health

regulations are more stringent for lead

than for non-lead grades. For instance,

additional ventilation of exhaust fumes

is necessary as lead and bismuth steel

wastes are classified as hazardous

waste, necessitating their segregation

and separate treatment from other scrap.

Specialized safety equipment and more

rigorous operating procedures must also

be used in compliance with

Occupational Safety and Health

Administration (OSHA) standards.

(d) The Extent of Production Facilities

in the United States

In general, each of the U.S. re-rollers

have production facilities in various

states throughout the United States, but

the rolling of hot-rolled lead bar mainly

takes place in Illinois, Ohio, Utah,

South Carolina, and New York. As we

have noted earlier, most of the U.S. rerollers were rolling lead billets into hotrolled lead bar before the initiation of

the AD and CVD investigations of hotrolled lead bar from Germany and the

United Kingdom.

In analyzing the extent of production

facilities, we considered the square

footage of building space dedicated to

rolling the semifinished product (lead

billet) into hot-rolled lead bar, the

number of employees involved in

rolling the lead billets, and the capital

equipment used in the production of

hot-rolled lead bar. Sheffield, for

example, reported that its Joliet rolling

facility encompasses 334,305 square feet

for the processing of lead billet into hotrolled lead bar.

With regard to the number and level

of skilled employees involved in rolling

lead billets into hot-rolled lead bar,

Sheffield, for example, reported that in

the production process of hot-rolled

lead bar, from the time the lead billets

are received in the billet yard to the

time that hot-rolled lead bar is shipped

to a customer, there are 25 skilled

workers responsible for the rolling of a

lead billet into hot-rolled lead bar, and

all of the other ancillary functions.

With respect to the capital equipment

used in the processing of lead billet into

hot-rolled lead bar, the U.S. re-rollers

have invested a substantial amount of

money not only in the construction of

factory buildings used in rolling

operations for both lead and non-lead

products, but also in the purchase of

sophisticated machinery required to

produce hot-rolled bar from lead and

non-lead billets, and the maintenance

required for such machinery.

(e) Whether the Value of the Processing

Performed in the United States

Represents a Small Proportion of the

Value of the Merchandise Sold in the

United States

We calculated the difference in value

between the hot-rolled lead bar sold in

the United States and the value of the

lead billets purchased from the foreign

respondents that were used in the

production of that merchandise. For

ASW, BarTech, Republic, and Sheffield,

we based our calculation of value-added

to the merchandise sold in the United

States on the difference between the

delivered lead billet import price and

the ex-factory sales price of the hotrolled lead bar. This methodology was

used because both transactions (lead

billet purchases and hot-rolled lead bar

sales) were sales between unaffiliated

parties. To derive the value of

processing performed by each U.S. reroller, we subtracted from the ex-factory

sales price of hot-rolled lead bar to

unaffiliated customers the delivered

price of lead billets, after adjusting for

a yield factor (to account for additional

lead billet consumed in the production

of one unit of hot-rolled lead bar).

In regard to Nucor, because the

company uses all the hot-rolled lead bar

that it produces to further manufacture

cold-finished products, we applied a

different value-added methodology. We

based our calculation of value-added on

the comparison between the conversion

fee Nucor’s rolling mill charged its

affiliated cold-finisher and the resulting

total input cost of hot-rolled lead bar to

the cold-finisher, after adjusting both for

a yield factor (to account for additional

lead billet consumed in the production

of one unit of hot-rolled lead bar).

Some of the U.S. re-rollers purchased

lead billets from all three suppliers of

lead billets subject to these inquiries,

while others purchased exclusively

from one source. Some of the U.S. rerollers, however, were unable to identify

the supplier of lead billets on a

transaction-specific basis with respect to

the U.S. sales of the processed hotrolled lead bar. Therefore, for each U.S.

re-roller, the calculation of value-added

is based upon a weighted-average price

of imported lead billet from the foreign

respondent(s) from whom the U.S. reroller purchased its lead billets. Because

the processing of the imported lead

billet into hot-rolled lead bar is virtually

identical regardless of the source of the

imported lead billet, we consider this

weighted-average, non-supplier specific

calculation of value-added to be

appropriate in those instances.

However, where possible, we used the

supplier-specific information to

calculate the value-added to each

supplier.

The value of processing performed in

the United States ranges from

approximately 10 percent to 29 percent

for the U.S. re-rollers. The value of

processing varies because of the lead

billet prices charged by the foreign

respondents to the U.S. re-rollers, the

U.S. re-roller’s yield factor for rolling

one unit of lead billet into one unit of

hot-rolled lead bar, and the different

prices charged by the U.S. re-rollers to

their customers due to size and shape of

the hot-rolled lead bar. Because the

calculation of the value of processing is

based upon proprietary data, the value-
24160 Federal Register / Vol. 63, No. 84 / Friday, May 1, 1998 / Notices

added percentages presented above have

been ranged

(4) Whether the Value of Imported Parts

Is a Significant Portion of Value of Lead

Bar

Under section 781(a)(1)(D) of the Act,

the value of the imported parts or

components must be a significant

portion of the total value of the subject

merchandise sold in the United States

in order to find circumvention. The

imported lead billet is the sole material

input into the completed hot-rolled lead

bar and a significant portion of the value

of the completed hot-rolled lead bar is

based upon this material cost.

Other Factors To Consider

In making a determination whether to

include parts or components within an

order, section 781(a)(3) of the Act

instructs us to take into account such

factors as: the pattern of trade, including

sourcing patterns; whether affiliation

exists between the exporter of the parts

and the person who assembles or

completes the merchandise sold in the

United States; and whether imports into

the United States of the parts produced

in the foreign country have increased

after the initiation of the investigation

which resulted in the issuance of the

order. Each of these factors are

examined below.

(1) Pattern of Trade and Sourcing

The first factor to consider under

section 781(a)(3) is changes in the

pattern of trade, including changes in

the sourcing patterns of the lead billets.

SAA at 894. Unlike our examination of

the processing of lead billets into hotrolled lead bar in the United States,

which was essentially the same for all

of the U.S. re-rollers, there are

differences in the pattern of trade among

the U.S. re-rollers and the three foreign

respondents (British Steel, Thyssen, and

Saarstahl). Among the foreign

respondents, British Steel and Thyssen

are the two largest lead billet exporters

to the United States. In comparison,

Saarstahl is a small exporter of lead

billets.

British Steel began selling lead billets

to the United States in 1994. By 1996,

the company’s lead billet sales doubled.

British Steel’s sales of hot-rolled lead

bar peaked in 1992, declined in 1993

and 1994, rebounded in 1995, and

continued to trend upwards in 1996. In

general, sales of hot-rolled lead bar by

British Steel have greatly exceeded its

sales of lead billets to the U.S. market

(in spite of the AD and CVD orders).

British Steel’s sales of hot-rolled lead

bar in the U.S. market have remained

significant since the imposition of the

orders. In fact, Sheffield reported that its

primary competition for hot-rolled lead

bar shapes is imports from British Steel.

Thyssen has been selling lead billets

to the United States since 1988, well

before the Department initiated its hotrolled lead bar investigations in May

1992. Thyssen’s lead billet shipments to

the United States increased steadily

from 1991 to 1996, peaking in 1996,

while its hot-rolled lead bar sales to the

U.S. market terminated in 1992 .

Thyssen has stated that lead billets, and

not hot-rolled lead bar, have always

been its primary U.S. market, and the

pattern of trade for both products

indicates this to be accurate.

Saarstahl began selling lead billets to

the United States in 1992, the last year

the steelmaker sold hot-rolled lead bar

to U.S. customers. Saarstahl’s exports of

lead billets to the United States peaked

in 1993, and since then have

significantly decreased.

AS&W has been purchasing lead

billets since its inception in 1986.

AS&W reported that since 1992, the

company has sourced lead billets from

both foreign and domestic suppliers. A

major change in the company’s sourcing

was the termination of a billet supply

agreement (inclusive of lead and nonlead billets) with USS/KOBE. When

Birmingham Steel purchased AS&W in

1993, there was a lead billet supply

agreement in effect with USS/Lorain

Works, which subsequently became

USS/KOBE. USS/KOBE terminated the

supply agreement in 1996, citing a lack

of lead billet availability. With the

termination of this supply agreement,

AS&W was no longer able to source lead

billets domestically.

Bar Tech began purchasing lead

billets in 1996. Bar Tech has not

sourced lead billets from domestic

producers. Bar Tech never purchased

lead bar from the foreign respondents.

Nucor did not begin purchasing lead

billets until 1992, when the company

began sourcing from foreign

respondents. Purchases from the foreign

respondents have been generally

declining. Nucor had previously

purchased hot-rolled lead bar from

foreign sources.

Republic’s predecessor began

purchasing lead billets from foreign

sources in the mid-80’s. Since becoming

an independent company in 1989,

Republic has continued to source its

lead billets from foreign sources to

supplement its own production.

Republic has never purchased lead

billets from domestic producers. The

company did purchase hot-rolled lead

bar from foreign sources in the early

1990’s; however, since 1993, Republic

has sourced hot-rolled lead bar

exclusively from domestic suppliers.

Sheffield has sourced lead billets from

both domestic and foreign producers

since it began purchasing lead billets in

1992. Throughout much of 1993,

Sheffield sourced lead billets from

Inland; however, by late 1993, Inland

stopped its external sales of lead billets

citing its own internal lead billet

consumption needs. In June 1995,

Inland was again in a position to supply

lead billets. Sheffield placed orders with

Inland, but by the fourth quarter of

1995, Inland once again stopped selling

lead billets. Since 1996, Sheffield has

sourced lead billets from abroad.

(2) Affiliation

The second factor to consider under

section 781(a)(3) of the Act is whether

the manufacturer or exporter of the lead

billets is affiliated with the entity that

assembles or completes the merchandise

sold in the United States from the

imported lead billets. In these

circumvention inquiries, the

Department inquired whether affiliation

existed between the U.S. re-roller and

the foreign respondents, pursuant to

section 771(33) of the Act. Based upon

our analysis of the questionnaire

responses from both the U.S. re-rollers

and the foreign respondents, we find

that no affiliation exists between the

parties. There is neither common

ownership, direct or indirect, between

the U.S. re-rollers and the foreign

suppliers of lead billets, nor a joint

venture between the companies.

Further, there are no facts (e.g., close

supplier relationship) that suggest

control of any of the re-rollers by the

foreign respondents. In sum, we have

found no evidence to indicate that the

foreign respondents have attempted

either to purchase or to construct rerolling facilities in the United States

which would allow them to import lead

billet and process it into hot-rolled lead

bar for their own use.

(3) Whether Imports Have Increased

The third factor to consider under

section 781(a)(3) is whether imports of

lead billets into the United States have

increased after the initiation of the hotrolled lead bar investigations. Therefore,

we have analyzed the level of imports

of lead billets from both Germany and

the United Kingdom since 1992, the

year in which the AD and CVD

investigations of hot-rolled lead bar

were initiated. While we find that

imports of lead billets have increased

from all three foreign respondents, the

increase appears to be the result of

causes other than the initiation of the

hot-rolled lead bar investigations.
Federal Register / Vol. 63, No. 84 / Friday, May 1, 1998 / Notices 24161

According to some of the U.S. rerollers, there has been a switch from

domestically produced lead billets to

foreign-sourced imports because Inland

and USS/KOBE have not met the lead

billet supply needs of the U.S. market.

In addition, there were two new

entrants to the hot-rolled lead bar

market after the initiation of the hotrolled lead bar investigations that

required supplies of lead billet.

Sheffield entered into the hot-rolled

lead bar market after Bethlehem Steel

exited the market in 1992. Two years

later, Bar Tech entered the hot-rolled

lead bar market after purchasing

Bethlehem’s rolling facilities.

Bethlehem Steel, one of the original

petitioners in the hot-rolled lead bar

investigations, produced its own lead

billets; however, neither Sheffield nor

Bar Tech currently have lead billet

production and thus, must source their

lead billets from other outside sources.

Further, according to the ITC, in the

United States almost all semifinished

steel such as blooms, billets, and slabs

are used in captive production of

finished steel products. Steel

processors, such as the U.S. re-rollers,

are an important outlet for excess

semifinished steel products

manufactured by steel producers. In the

relatively limited semifinished steel

market, the consumer is likely also to be

the supplier’s competitor in sales of

finished steel. See USITC Publication

2758, Industry & Trade Summary

Semifinished Steel (March 1994) at

pages 3, 5, and 11. Because the

consumer of a billet is generally a

competitor of the supplier, the

dynamics of supply operate differently

than for finished steel products. A

steelmaker with excess melting capacity

may have incentive to refrain from

selling semifinished steel, such as

billets.

It has also been difficult to measure

the rise in imports of lead billets from

Germany and the United Kingdom

against import trends from other

countries. This is because the primary

HTS number under which lead billets

are imported is a basket category which

includes other imports of semifinished

products of iron or nonalloy steel with

a chemical content of under 0.25

percent carbon. In its application,

Inland and USS/KOBE provided import

data for this HTS category. According to

these data, imports of semifinished

products of iron or nonalloy steels from

countries not subject to antidumping or

countervailing duty orders increased

after the initiation of the hot-rolled lead

bar investigations, and in some cases

significantly.

Summary of Statutory Analysis

As discussed above, in order to make

an affirmative determination of

circumvention, all the elements under

sections 781(a)(1) and (2) of the Act

must be satisfied. In addition, section

781(a)(3) of the Act instructs the

Department to consider, in determining

whether to include parts or components

within the scope of an order, such

factors as: pattern of trade, affiliation,

and whether imports into the United

States of such parts or components

increased after the initiation of the

investigation which resulted in the

issuance of the order. When the criteria

of sections 781(a)(1) and (2) are applied

to the individual facts, our analysis of

whether circumvention is occurring is

inconclusive. However, when the

evidence to be considered under section

781(a)(3) of the Act is incorporated into

our analysis, we find that all of the

evidence, taken as a whole, does not

lead us to find a basis for including lead

billets within the scope of the AD and

CVD orders on hot-rolled lead bar from

Germany and the United Kingdom.

Pursuant to sections 781(a)(1) and (2),

we find that the processing of lead

billets into hot-rolled lead bar is

essentially identical for all of the U.S.

re-rollers involved in these inquiries. A

detailed description of the re-rolling

process is provided above. Though the

U.S. re-rollers perform only one of the

three processes needed to produce hotrolled lead bar, they do perform the

final process of converting the

semifinished steel product into a

functional finished steel good. Also,

because the production process of

converting lead billets into hot-rolled

lead bar is a technically mature process,

we did not expect to find significant

R&D expenditures by the U.S. re-rollers.

The process of rolling lead billet into

hot-rolled lead bar requires significant

capital investment in rolling machinery

and equipment, and compliance with a

variety of OSHA and environmental

regulations. Capital equipment and

machinery used by the U.S. re-rollers,

once purchased, installed, and

operational, represent significant fixed

plant and equipment which cannot be

easily disassembled and transported to

another location. Investment in rerolling facilities requires a long-term

investment of capital, long-term

corporate planning, and a long-term

business commitment by the U.S. reroller.

Pursuant to section 781(a)(3), in

reaching our determination, we took

into consideration the factors of pattern

of trade, sourcing, affiliation, and

import trends. The facts concerning

pattern of trade, sourcing, affiliation,

and import trends do not indicate that

there is circumvention of the hot-rolled

lead bar orders. Even if we were to

conclude that the calculated value of

processing performed by the U.S. rerollers in the United States is relatively

small, when we examined sections

781(a)(1) and (2) in conjunction with the

factors under section 781(a)(3), the facts,

taken as a whole, do not lead us to find

that circumvention of the hot-rolled

lead bar orders is occurring.

Throughout the United States, the

U.S. re-rollers have extensive capitalintensive rolling facilities staffed by

skilled workers. As previously

discussed, the U.S. re-rollers are not

affiliated with the foreign respondents

and their rolling facilities were in

existence and operational before the

initiation of the hot-rolled lead bar

investigations. Indeed, the petition for

the hot-rolled lead bar investigations

was filed on behalf of two of the five

U.S. re-rollers, AS&W and Republic. In

addition, a third U.S. re-roller, Bar Tech,

purchased its rolling facilities from

Bethlehem Steel, one of the two original

petitioners in the hot-rolled lead bar

investigations.

According to the responses from the

U.S. re-rollers, most of their investment

in rolling facilities in the United States

was made before the initiation of the AD

and CVD investigations of hot-rolled

lead bar from Germany and the United

Kingdom. In addition, some of the U.S.

re-rollers made large investments in

their rolling mills after 1992, the year in

which the investigations on hot-rolled

lead bar began. Thus, before and after

1992, U.S. re-rollers made large

investments of capital and resources

into their rolling facilities. These facts

demonstrate that there were substantial

production facilities for converting lead

billets into hot-rolled lead bar before the

initiation of the hot-rolled lead bar

investigations.

Further, as discussed above, British

Steel remains a large exporter of hotrolled lead bar to the United States and

its bar market in the United States is

still much larger than its U.S. lead billet

market. Thyssen was primarily a lead

billet exporter to the United States

before 1992, the year the lead bar

investigations were initiated. That did

not change after the initiation of the hotrolled lead bar investigations. Saarstahl,

which exports a relatively small volume

of lead billets to the United States, is not

a major player in the U.S. lead billet

market.

With respect to the U.S. re-rollers,

changes in their respective sourcing

patterns after 1992, appear to be due to

changes in the U.S. market, independent
24162 Federal Register / Vol. 63, No. 84 / Friday, May 1, 1998 / Notices

of the hot-rolled lead bar investigations.

U.S. re-rollers were purchasing lead

billets and rolling them into hot-rolled

lead bar before 1992. As noted above,

Republic began purchasing lead billets

in the mid-80’s from foreign sources.

New hot-rolled lead bar entrants came

into the market after the departure of

Bethlehem, causing an increase in the

demand for lead billets. While

Bethlehem was able to produce its own

lead billets, the two new entrants, Bar

Tech and Sheffield, have to purchase

their lead billets from independent

sources. In addition, there were also

shifts from domestic to foreign billet

suppliers because the domestic

companies producing lead billets were

only able to meet their own internal

consumption needs. As discussed

above, since 1996, both AS&W and

Sheffield have been forced to source

lead billets from foreign suppliers as a

result of the termination of their supply

arrangements with USS/KOBE and

Inland, respectively.

Our analysis demonstrates that

imposition of the hot-rolled lead bar

orders in 1993, was not the impetus for

the importation of lead billet by the U.S.

re-rollers in order to produce hot-25

rolled lead bar. As noted above, a

number of the U.S. re-rollers were

producing hot-rolled lead bar prior to

the orders and continued to produce

hot-rolled lead bar after the orders. In

addition, these unaffiliated U.S. rerollers invested a substantial amount in

their rolling facilities both before and

after the AD and CVD orders to roll both

lead and non-lead billets into hot-rolled

bar.

The facts of these inquiries also show

that the foreign respondents did not

change their product lines in the United

States as a result of the initiation of the

hot-rolled lead bar investigations. As

noted, Thyssen’s primary market in the

United States has been lead billets since

the mid-80’s. British Steel, which

commenced selling lead billets in 1994,

continues to export a significant amount

of hot-rolled lead bar to the United

States.

Based upon this analysis under

section 781(a) of the Act, we

preliminarily find that circumvention of

the AD and CVD orders on hot-rolled

lead bar is not occurring by reason of

imports of lead billets from Germany

and the United Kingdom.

Public Comment

Interested parties may request

disclosure of the calculations performed

for these determinations within five

days of the date of publication of this

determination, and may request a

hearing within 10 days of publication.

Case briefs and/or written comments

from interested parties may be

submitted no later than 30 days after the

date of publication of this notice.

Rebuttal briefs and rebuttals to

comments, limited to issues raised in

those briefs or comments, may be filed

no later than 37 days after the

publication of this notice. Any hearing,

if requested, will be held 44 days after

the publication of this notice. The

Department will publish the final

determinations with respect to these

anti-circumvention inquiries, including

the results of its analysis of any written

comments.

These negative preliminary

circumvention determinations and

notice are in accordance with section

781(a) of the Tariff Act and 19 CFR

353.29(e) and 19 CFR 355.29(e).

Dated: April 23, 1998.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 98–11666 Filed 4–30–98; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

Notice of Membership Opportunity for

the U.S.-Haiti Business Development

Council

AGENCY: International Trade

Administration, Department of

Commerce.

SUMMARY: The U.S.-Haiti Business

Development Council (BDC) was

established in December, 1994 as a

principal component of the Department

of Commerce’s program of activities in

support of the Clinton Administration’s

Haiti Recovery Initiative. The BDC is

chaired jointly by the U.S. and Haitian

governments. The Department of

Commerce is currently seeking

nominations of outstanding individuals

to serve on the U.S. section of the BDC

as representatives of their particular

industry sector. The purpose of the BDC

is to provide a forum through which

U.S. and Haitian private sector

representatives can engage in

constructive exchanges of information

on commercial matters, and in which

governments can exchange information

and more effectively work together on

issues of mutual concern relating to the

following:

—Identifying commercial opportunities,

impediments, and issues of concern to

the respective business communities;

—Improving the dissemination of

appropriate commercial information

on both markets;

—Promoting trade/business

development and promotion programs

to assist the respective business

communities in accessing each

market, including trade missions,

exhibits, seminars, and other events;

—Facilitating appropriate technical

cooperation; and,

—Considering other steps that may be

taken to foster growth and enhance

commercial relations.

Obligations

Private sector members will be

appointed for a two (2) year term and

will serve at the discretion of the

Secretary of Commerce. Private sector

members shall serve as representatives

of the business community and the

industry their business represents.

Private sector members are expected to

participate fully in defining the agenda

for the Council and in implementing its

work program. It is expected that private

sector members chosen for BDC

membership will attend at least seventyfive percent (75%) of the BDC meetings

which will be held in the United States

and Haiti.

Private sector members are fully

responsible for travel, living and

personal expenses associated with their

participation in the BDC. The private

sector members will serve in a

representative capacity presenting the

views and interests of the particular

business sector in which they operate;

private sector members are not special

government employees. It is anticipated

that the private sector members of the

BDC will form a steering committee to

guide overall private sector

participation. It is further anticipated

that the steering committee will arrange

for staff support for the BDC activities

at the expense of the steering committee

members.

Criteria

The Council shall be composed of two

sections, a U.S. section and a Haitian

section. The U.S. section will be chaired

by the Under Secretary for International

Trade of the Department of Commerce,

or his designee, and will include

approximately 25 members from the

U.S. private sector. All potential

candidates will be vetted in accordance

with the Department of Commerce’s

vetting procedures.

In order to be eligible for membership

in the U.S. section, potential candidates

must:

— Must represent a U.S. commercial

interest involved in trade and/or

investment in Haiti; and,

—Not be a registered foreign agent

under the Foreign Agents Registration

Act of 1938, as amended (FARA).