[Federal Register Volume 66, Number 86 (Thursday, May 3, 2001)]
[Notices]
[Pages 22152-22157]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-10847]



[[Page 22152]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-823-811]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Certain Hot-Rolled Carbon Steel Flat Products from Ukraine

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

ACTION: Notice of preliminary determination in the less than fair value 
investigation of certain hot-rolled carbon steel flat products from 
Ukraine.

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SUMMARY: On December 12, 2000, the Department of Commerce published a 
notice of initiation of an antidumping duty investigation of certain 
hot-rolled carbon steel flat products from Ukraine. This investigation 
covers four producers of the subject merchandise. The period of 
investigation is April 1, 2000 through September 30, 2000. The 
Department preliminarily determines that certain hot-rolled carbon 
steel flat products from Ukraine are being, or are likely to be, sold 
in the United States at less than fair value, as provided in section 
733 of the Tariff Act of 1930, as amended.

EFFECTIVE DATE: May 3, 2001.

FOR FURTHER INFORMATION CONTACT: Lori Ellison or Laurel LaCivita of 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-5811 and (202) 482-4243, 
respectively.

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``the Act''), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Act by the Uruguay Round Agreements Act (``URAA''). In addition, 
unless otherwise indicated, all citations to the Department's 
regulations are to the regulations codified at 19 CFR Part 351 (2000).

Preliminary Determination

    We preliminarily determine that certain hot-rolled carbon steel 
flat products (``hot-rolled steel'') from Ukraine are being, or are 
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 of sales at LTFV are shown in the ``Suspension of Liquidation'' 
section of this notice.

Case History

    On December 4, 2000, the Department initiated an antidumping duty 
investigation of hot-rolled steel from Ukraine.\1\ See Notice of 
Initiation of Antidumping Duty Investigations: Certain Hot-Rolled 
Carbon Steel Flat Products From Argentina, India, Indonesia, 
Kazakhstan, the Netherlands, the People's Republic of China, Romania, 
South Africa, Taiwan, Thailand, and Ukraine, 65 FR 77568 (December 12, 
2000). Since the initiation of this investigation the following events 
have occurred.
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    \1\ The petitioners with respect to the investigation in Ukraine 
are: Bethlehem Steel Corporation, LTV Steel Company, Inc., National 
Steel Corporation, U.S. Steel Group, a unit of USX Corporation, the 
United Steelworkers of America, Gallatin Steel Company, IPSCO Steel 
Inc., Nucor Corp., Steel Dynamics, Inc., Weirton Steel Corp., and 
Independent Steelworkers Union.
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    The Department set aside a period for all interested parties to 
raise issues regarding product coverage. See Initiation Notice at 
77569. We received no comments from any parties in this investigation. 
The Department did, however, receive comments regarding product 
coverage in the investigation of hot-rolled carbon steel products from 
the Netherlands. In that investigation we received comments regarding 
product coverage as follows: from Duracell Global Business Management 
Group on December 11, 2000; from Energizer on December 15, 2000, from 
Bouffard Metal Goods Inc., and Truelove & MacLean, Inc. on December 18, 
2000, from the Corus Group plc., which includes Corus Steel USA (CSUSA) 
and Corus Staal BV (Corus Staal), and Thomas Steel Strip on December 
26, 2000; and from Rayovac Corporation on March 12, 2001.
    On December 22, 2000, the Department issued a letter to interested 
parties in all of the concurrent certain hot-rolled carbon steel flat 
products antidumping investigations, providing an opportunity to 
comment on the Department's proposed model matching characteristics and 
hierarchy. Comments were submitted by: Petitioners (January 5, 2001); 
Corus Staal BV and Corus Steel USA Inc., collectively referred to as 
Corus, respondent in the Netherlands investigation (January 3, 2001); 
Iscor Limited, respondent in the South Africa investigation (January 3, 
2001); and Zaporizhstal, respondent in the Ukraine investigation 
(January 3, 2001). Petitioners agreed with the Department's proposed 
characteristics and hierarchy of characteristics. Corus suggested 
adding a product characteristic to distinguish prime merchandise from 
non-prime merchandise. Neither Iscor nor Zaporizhstal proposed any 
changes to either the list of product characteristics proposed by the 
Department or the hierarchy of those product characteristics but, 
rather, provided information relating to its own products that was not 
relevant in the context of determining what information to include in 
the Department's questionnaires.
    For purposes of the questionnaires subsequently issued by the 
Department to the respondents, no changes were made to the product 
characteristics or the hierarchy of those characteristics from those 
originally proposed by the Department in its December 22, 2000 letter. 
With respect to Corus' request, the additional product characteristic 
suggested by Corus, to distinguish prime merchandise from non-prime 
merchandise, is unnecessary. The Department already asks respondents to 
distinguish prime from non-prime merchandise in field number 2.2 
``Prime vs. Secondary Merchandise.'' See the Department's Antidumping 
Duty Questionnaire, at C-5 and C-6 (January 4, 2001).
    On December 29, 2000, the United States International Trade 
Commission (``ITC'') issued its affirmative preliminary determination 
that there is a reasonable indication that an industry in the United 
States is materially injured by reason of imports of the subject 
merchandise from Ukraine, which was published on January 4, 2001. See 
Hot-Rolled Steel Products from Argentina, China, India, Indonesia, 
Kazakhstan, Netherlands, Romania, South Africa, Taiwan, Thailand, and 
Ukraine, 66 FR 805 (January 4, 2001) (``ITC Preliminary 
Determination'').
    On January 4, 2001, we issued questionnaires to the Embassy of 
Ukraine and to all of the known producers of the subject merchandise in 
Ukraine: Dnepropetrovsk Comintern Steel Works (``Dnepropetrovsk''), 
Ilyich Iron & Steel Works, Mariupol (``Ilyich''), Krivoi Rog State 
Mining and Metallurgical Works (``Krivorozhstal'') and Zaporozhstal 
Iron & Steel Works (``Zaporizhstal'').
    On January 22, 2001, Krivorozhstal responded that it does not 
manufacture any of the subject merchandise and, accordingly, could not 
be one of the exporters of the subject merchandise to the United 
States.
    On January 25, 2001, the Department requested comments from 
interested parties regarding surrogate country selection, and 
information to value factors of production. On February 6, 2001, we 
received comments concerning

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surrogate country selection from both the petitioners and Zaporizhstal.
    On February 9, 2001, Zaporizhstal submitted its section A response, 
including a request for ``market economy treatment to Ukraine * * * or, 
at a minimum, market-oriented industry treatment to Zaporizhstal.'' On 
February 16, 2001, the government of Ukraine confirmed its support for 
these requests. See Memorandum to the File from Lori Ellison to Edward 
Yang, Request for Revocation of NME Status/MOI Treatment for 
Zaporizhstal, dated April 16, 2001. Also on February 16, 2001, the 
State Committee of Industrial Policy of Ukraine entered an appearance 
as an interested party to the proceeding. On February 21, 2001, Ilyich 
entered an appearance as a foreign producer and exporter of the subject 
merchandise and an interested party to the proceeding, but did not 
respond to the Department's questionnaire. Dnepropetrovsk similarly did 
not respond to the Department's questionnaire.
    On February 23, 2001, the Department issued a section A 
supplemental questionnaire to Zaporizhstal. On February 26, 2001, the 
Department sent Zaporizhstal a questionnaire concerning its request for 
market-economy treatment for Ukraine and/or market-oriented industry 
(``MOI'') treatment for Zaporizhstal. On February 27, 2001, 
Zaporizhstal submitted section C and D responses. In addition, it 
provided section C responses for Midland Industries Limited (``Midland 
Industries''), Midland Metals International, Inc. (``Midland Metals''), 
Midland Resources Holding Limited (``Midland Resources''), and Rudolph 
Robinson International, Ltd. (``Robinson''). (These companies, and 
Zaporizhstal, are occasionally referred to as ``respondents'' in this 
notice). Also on February 27, 2001, Zaporizhstal also submitted an 
unsolicited section B response (home market sales) in light of its 
request for market-economy treatment for Ukraine and/or market-oriented 
industry treatment for itself.
    On March 9, 2001, respondents submitted a response to the first 
supplemental section A questionnaire. On March 13, 2001, Department 
officials met with counsel for respondents regarding this response and 
issued a letter to them in which the Department explained that a large 
number of their answers were unresponsive and grossly deficient despite 
explicit instructions in the original questionnaire and the 
supplemental questionnaire of February 23, 2001. See Memorandum to the 
File from Lori Ellison to Rick Johnson; Ex-Parte Meeting, dated March 
19, 2001.
    On March 14, 2001, the Department issued a supplemental section C 
and D questionnaire to respondents. On March 19, 2001, Zaporizhstal 
responded to certain issues noted in our March 13, 2001 letter 
regarding affiliation. In addition, on March 20, 2001, we issued a 
second supplemental section A questionnaire to respondents.
    On March 22, 2001, certain petitioners (Bethlehem Steel 
Corporation, LTV Steel Company, Inc., National Steel Corporation, and 
U.S. Steel Group, a unit of USX Corporation) (hereinafter referred to 
as Bethlehem et al.) requested that the Department conduct a middleman 
dumping investigation of Robinson and other trading companies through 
whom Zaporizhstal's subject merchandise was sold to the United States.
    On March 27, 2001, we issued a supplemental questionnaire to 
respondents concerning their claims of affiliation. On April 5, 2001, 
respondents submitted their second supplemental section A questionnaire 
response and their supplemental section C and D questionnaire 
responses. On April 9, 2001 respondents submitted responses to the 
March 27, 2001 affiliation questionnaire. On April 11, 2001 respondents 
submitted unsolicited information purporting to respond to selected 
questions from the Department's supplemental questionnaires. These 
responses were not filed on a timely basis.

Period of Investigation

    The period of investigation (``POI'') is April 1, 2000, through 
September 30, 2000. This period corresponds to the two most recent 
fiscal quarters prior to the month of the filing of the petition (i.e., 
November 2000). See 19 CFR 351.204(b)(1).

Scope of Investigation

    For purposes of this investigation, the products covered are 
certain hot-rolled carbon steel flat products of a rectangular shape, 
of a width of 0.5 inch or greater, neither clad, plated, nor coated 
with metal and whether or not painted, varnished, or coated with 
plastics or other non-metallic substances, in coils (whether or not in 
successively superimposed layers), regardless of thickness, and in 
straight lengths of a thickness of less than 4.75 mm and of a width 
measuring at least 10 times the thickness. Universal mill plate (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 4.0 mm, not in coils and without patterns in relief) 
of a thickness not less than 4.0 mm is not included within the scope of 
this investigation.
    Specifically included within the scope of this investigation are 
vacuum degassed, fully stabilized (commonly referred to as 
interstitial-free (IF)) steels, high strength low alloy (HSLA) steels, 
and the substrate for motor lamination steels. IF steels are recognized 
as low carbon steels with micro-alloying levels of elements such as 
titanium or niobium (also commonly referred to as columbium), or both, 
added to stabilize carbon and nitrogen elements. HSLA steels are 
recognized as steels with micro-alloying levels of elements such as 
chromium, copper, niobium, vanadium, and molybdenum. The substrate for 
motor lamination steels contains micro-alloying levels of elements such 
as silicon and aluminum.
    Steel products to be included in the scope of this investigation, 
regardless of definitions in the Harmonized Tariff Schedule of the 
United States (HTSUS), are products in which: (i) Iron predominates, by 
weight, over each of the other contained elements; (ii) the carbon 
content is 2 percent or less, by weight; and (iii) none of the elements 
listed below exceeds the quantity, by weight, respectively indicated:

1.80 percent of manganese, or
2.25 percent of silicon, or
1.00 percent of copper, or
0.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
1.25 percent of nickel, or
0.30 percent of tungsten, or
0.10 percent of molybdenum, or
0.10 percent of niobium, or
0.15 percent of vanadium, or
0.15 percent of zirconium.

    All products that meet the physical and chemical description 
provided above are within the scope of this investigation unless 
otherwise excluded. The following products, by way of example, are 
outside or specifically excluded from the scope of this investigation:
    <bullet> Alloy hot-rolled steel products in which at least one of 
the chemical elements exceeds those listed above (including, e.g., 
American Society for Testing and Materials (ASTM) specifications A543, 
A387, A514, A517, A506).
    <bullet> Society of Automotive Engineers (SAE)/American Iron & 
Steel Institute (AISI) grades of series 2300 and higher.
    <bullet> Ball bearing steels, as defined in the HTSUS.
    <bullet> Tool steels, as defined in the HTSUS.

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    <bullet> Silico-manganese (as defined in the HTSUS) or silicon 
electrical steel with a silicon level exceeding 2.25 percent.
    <bullet> ASTM specifications A710 and A736.
    <bullet> USS abrasion-resistant steels (USS AR 400, USS AR 500).
    <bullet> All products (proprietary or otherwise) based on an alloy 
ASTM specification (sample specifications: ASTM A506, A507).
    <bullet> Non-rectangular shapes, not in coils, which are the result 
of having been processed by cutting or stamping and which have assumed 
the character of articles or products classified outside chapter 72 of 
the HTSUS.
    The merchandise subject to this investigation is classified in the 
HTSUS at subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 
7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 
7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 
7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 
7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 
7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 
7208.90.00.00, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 
7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 
7211.19.75.60, and 7211.19.75.90. Certain hot-rolled carbon steel flat 
products covered by this investigation, including: vacuum degassed 
fully stabilized; high strength low alloy; and the substrate for motor 
lamination steel may also enter under the following tariff numbers: 
7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 
7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 
7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 
7226.91.70.00, 7226.91.80.00, and 7226.99.00.00. Subject merchandise 
may also enter under 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 
7212.40.10.00, 7212.40.50.00, and 7212.50.00.00. Although the HTSUS 
subheadings are provided for convenience and U.S. Customs purposes, the 
written description of the merchandise under investigation is 
dispositive.

Middleman Dumping Allegation

    On March 22, 2001, Bethlehem et al. requested that the Department 
conduct a middleman dumping investigation of Robinson and other trading 
companies through whom Zaporizhstal's subject merchandise was sold to 
the United States. They allege that the trading companies purchased 
subject merchandise from Midland Industries, and resold such 
merchandise into the United States at prices less than the trading 
companies' cost of acquisition and associated expenses. Further, 
Bethlehem et al. maintain that the trading companies' resale prices do 
not permit the recovery of these companies' total acquisition and 
associated costs. Because of the complexity of the issue, the 
Department has not yet determined the proper course of action on the 
petitioners' middleman dumping allegation. Accordingly, we will address 
the middleman dumping issue in the final determination.

Nonmarket-Economy Country Status

    The Department has treated Ukraine as a non-market economy 
(``NME'') country in all past antidumping investigations. See, e.g., 
Notice of Preliminary Determinations of Sales at Less Than Fair Value: 
Steel Concrete Reinforcing Bars from Poland, Indonesia, and Ukraine, 66 
FR 8343 (January 30, 2001) and Notice of Final Determination of Sales 
at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from 
Ukraine (``CTL Plate from Ukraine'') 62 FR 61754 (November 19, 1997). 
This NME designation remains in effect until it is revoked by the 
Department (see section 771(18)(C) of the Act). During this 
investigation, Zaporizhstal requested revocation of Ukraine's NME 
status. Following the official endorsement of this request by the 
Ukrainian government, the Department issued a letter to Zaporizhstal 
and the Ukrainian Embassy requesting, inter alia, that the company and 
the Government of Ukraine submit evidence addressing the statutory 
criteria relevant to their NME status and described in section 
771(18)(B) of the Act. In addition, the Department requested that 
Zaporizhstal submit evidence of progress regarding those factors under 
section 771(18)(B) which Ukraine did not satisfy in its 1996 request 
for revocation. See CTL Plate from Ukraine, 62 FR 61754. However, as of 
the date of this determination, we have received no response to this 
request for information. Given that no evidence or argumentation on the 
record exists regarding progress since the earlier determination, for 
purposes of this preliminary determination, we have continued to treat 
Ukraine as an NME country.

Market Oriented Industry

    As indicated above (see ``Case History''), Zaporizhstal, with the 
support of the Government of Ukraine, has requested market-oriented-
industry treatment for Zaporizhstal (that is, that the hot-rolled steel 
industry in Ukraine be treated as a market-oriented industry). 
Accordingly, on February 26, 2001, we issued a questionnaire concerning 
Zaporizhstal's market-oriented industry treatment. Specifically, we 
requested that Zaporizhstal and the Government of Ukraine address the 
following criteria: (1) For the merchandise under investigation, there 
must be virtually no government involvement in setting prices or 
amounts to be produced; (2) the industry producing the merchandise 
under investigation should be characterized by private or collective 
ownership; and (3) market-determined prices must be paid for all 
significant inputs, whether material or non-material (e.g., labor and 
overhead), and for all but an insignificant portion of all the inputs 
accounting for the total value of the merchandise under review. To 
date, we have received no response to this request for information.
    Furthermore, we note that in this investigation, there are three 
known producers of subject merchandise: Ilyich, Dnepropetrovsk, and 
Zaporizhstal. Of these three, Ilyich and Denpropetrovsk have failed to 
respond to the Department's questionnaire. As the Department stated in 
Notice of Final Determination of Sales at Less Than Fair Value: 
Freshwater Crawfish Tail Meat From the People's Republic of China, 62 
FR 41351 (August 1, 1997), ``consistent with past practice, we require 
information on the entire industry, or virtually the entire industry, 
in order to make an affirmative determination that an industry is 
market oriented.'' As further noted in that determination, the 
Department received questionnaire responses from only a small portion 
of the exporters named in the petition, and data on the record in that 
case revealed that several exporters who did not respond to the 
Department's questionnaire exported the subject merchandise into the 
United States during the POI. Finally, we also noted in that case that 
``although we received a letter from the China Chamber on March 6, 
1997, this letter did not adequately respond to the Department's 
original request for information, and did not provide the necessary 
information regarding the universe of PRC crawfish producers and 
exporters.''
    In this case, we likewise are faced with the fact that known 
exporters of Ukrainian subject merchandise have not responded to the 
Department's requests for information. Furthermore, we have received no 
information from the Government of Ukraine, despite our

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explicit request. Consequently, consistent with Department practice, 
for purposes of this preliminary determination, we have continued to 
treat the hot-rolled steel industry in Ukraine as not qualified for MOI 
treatment.

No Shipper Treatment for Krivorozhstal

    Krivorozhstal reported that it did not have any sales of hot-rolled 
carbon steel flat products to the United States. The Department 
confirmed, through a review of U.S. Customs data, the absence of 
shipments from Krivorozhstal to the U.S. during the POI. Therefore, in 
accordance with the Department's practice, we did not investigate 
Krivorozhstal.

Ukraine-Wide Rate

    We sent questionnaires to all four companies identified as 
potential respondents in the petition. We did not receive responses 
from Ilyich and Dnepropetrovsk. As discussed below in the ``Separate 
Rates'' section of the notice, Zaporizhstal has significantly impeded 
this investigation. Given that we did not make a determination of a 
separate rate for Zaporizhstal, the Ukraine-wide rate will be 
applicable to it. In addition, U.S. import statistics indicate that the 
total quantity and value of U.S. imports of hot-rolled steel from 
Ukraine is greater than the total quantity and value of hot-rolled 
steel reported by Zaporizhstal (see Memorandum to Edward C. Yang, Facts 
Available Corroboration Memorandum, Preliminary Determination of Hot-
Rolled Carbon Steel Flat Products from Ukraine, April 23, 2001 (``FA/
Corroboration Memorandum'')). Accordingly, we are applying the Ukraine-
wide rate to all exporters in Ukraine based on our presumption that 
those respondents who failed to respond to our questionnaire constitute 
a single enterprise under common control by the government of Ukraine. 
See, e.g., Final Determination of Sales at Less Than Fair Value: 
Bicycles from the People's Republic of China, 61 FR 19026 (April 30, 
1996) (``Bicycles''). Therefore, the Ukraine-wide rate applies to all 
entries of the subject merchandise from Ukraine.

Application of Facts Available

    Section 776(a) of the Act provides that, if an interested party 
withholds information that has been requested by the Department, fails 
to provide such information in a timely manner or in the form or manner 
requested, significantly impedes a proceeding under the antidumping 
statute, or provides information which cannot be verified, the 
Department shall use, subject to sections 782(d) and (e) of the Act, 
facts otherwise available in reaching the applicable determination. The 
statute requires that certain conditions be met before the Department 
may resort to facts available. Where the Department determines that a 
response to a request for information does not comply with the request, 
section 782(d) of the Act provides that the Department will so inform 
the party submitting the response and will, to the extent practicable, 
provide that party the opportunity to remedy or explain the deficiency. 
If the party fails to remedy the deficiency within the applicable time 
limits, the Department may, subject to section 782(e) of the Act, 
disregard all or part of the original and subsequent responses, as 
appropriate. Pursuant to section 782(e) of the Act, the Department 
shall not decline to consider information deemed ``deficient'' under 
section 782(d) of the Act if: (1) The information is submitted by the 
established deadline; (2) the information can be verified; (3) the 
information is not so incomplete that it cannot serve as a reliable 
basis for reaching the applicable determination; (4) the interested 
party has demonstrated that it acted to the best of its ability; and 
(5) the information can be used without undue difficulties.
    In selecting from among the facts available, section 776(b) of the 
Act authorizes the Department to use an adverse inference, if the 
Department finds that an interested party failed to cooperate by not 
acting to the best of its ability to comply with the request for 
information. See also ``Statement of Administrative Action'' 
accompanying the URAA, H.R. Rep. No. 103-316, 870 (``SAA''). The 
statute and SAA provide that such an adverse inference may be based on 
secondary information, including information drawn from the petition.
    In accordance with sections 776(a) and (b) of the Act, for the 
reasons explained below, we preliminarily determine that the use of 
total adverse facts available is warranted with respect to respondents 
Dnepropetrovsk, Ilyich, and Zaporizhstal.

Ilyich and Dnepropetrovsk

    Although Ilyich entered an appearance as a foreign producer and 
exporter of the subject merchandise, it ultimately did not respond to 
any of the Department's questionnaires. Similarly, Dnepropetrovsk 
failed to provide any response to the Department's questionnaires. 
Given these companies' failure to respond, section 776(a) directs the 
Department to use facts available. In selecting from among facts 
available, section 776(b) of the Act authorizes the Department to use 
adverse inference where the parties fail to cooperate to the best of 
their abilities. Failure to respond to the Department's questionnaires 
demonstrates such lack of cooperation on the part of Ilyich and 
Dnepropretovsk. Therefore, for purposes of the preliminary 
determination, we have used adverse inference in selecting from among 
facts otherwise available, pursuant to section 776(b) of the Act.

Zaporizhstal

    Although Zaporizhstal has responded in part to the Department's 
questionnaires and supplemental questionnaires over the course of this 
proceeding, its response is too deficient to be used as a basis for 
calculating a dumping margin. Specifically, it has not provided the 
Department with complete, documented, factors of production 
information. Moreover, the factors of production data which has been 
submitted has not been prepared in accordance with the Department's 
instructions, and its use would significantly distort the margin 
calculation. In addition, statements made in the Zaporizhstal's April 
5, 2001 second supplemental section A response indicate that 
Zaporizhstal made sales of subject merchandise to the United States 
through an affiliated party, Midland Resources. However, Zaporizhstal 
had not previously identified this sales channel, and did not report 
the U.S. sales of Midland Resources. Finally, Zaporizhstal did not 
timely file its response to a large number of questions relating to 
U.S. sales of Midland Industries' (a company with which Zaporizhstal 
claims to be affiliated), thereby effectively denying the Department 
the ability to analyze significant sales information for the purposes 
of the preliminary determination. Accordingly, we have relied on the 
facts otherwise available for purposes of this preliminary 
determination, pursuant to section 776(a)(2)(A) and (B) of the Act. For 
a detailed analysis of Zaporizhstal's responses and their underlying 
deficiencies, see Memorandum to Edward C. Yang, Facts Available 
Corroboration Memorandum, Preliminary Determination of Hot-Rolled 
Carbon Steel Flat Products from Ukraine, April 23, 2001 (``FA/
Corroboration Memorandum'').
    As described in the FA/Corroboration Memorandum, Zaporizhstal 
failed to provide adequate responses to the Department's supplemental 
questionnaires, despite the

[[Page 22156]]

Department's clear instructions and repeated attempts to obtain the 
necessary data, pursuant to section 782(d) of the Act. Moreover, we are 
unable, under the application of section 782(e), to use the company's 
information in our preliminary calculations, since the responses 
currently on the record are so incomplete that they cannot serve as a 
reliable basis for reaching the applicable determination. See section 
782(e)(3), (4) and (5) of the Act and the FA/Corroboration Memorandum.
    We also find that the application of adverse inferences in this 
case is appropriate, pursuant to section 776(b) of the Act. As 
discussed above, despite the Department's clear directions in both the 
original and supplemental questionnaires, Zaporizhstal failed to 
provide critical information which was readily at the company's 
disposal. Specifically, it failed to provide a description of its 
calculation methodology for each of its factors of production, or 
worksheets demonstrating how each factor was determined, despite the 
Department's explicit requests. Furthermore, the data that was provided 
was in a distortive format that did not permit the comparison of U.S. 
sales and factors of production based on the product matching 
characteristics identified in the Department's questionnaire, or on any 
other reasonable basis. Zaporizhstal's most recent response to the 
Department's supplemental questionnaire reveals that the company made 
sales of subject merchandise through an affiliated party, but had not 
previously disclosed either this sales channel or the U.S. sales of 
that affiliate. In addition, the company failed to answer a significant 
number of questions concerning the sales of Midland Industries, in a 
timely manner, thereby depriving the Department of reasonable use of 
the information for the purposes of the preliminary determination. For 
these reasons, we find that the company did not cooperate to the best 
of its ability in responding to the Department's request for 
information, and that, consequently, an adverse inference is warranted 
under section 776(b) of the Act when selecting facts available. See 
e.g., Notice of Final Determination of Sales at Less than Fair Value: 
Circular Seamless Stainless Steel Hollow Products from Japan, 65 FR 
42985 (July 12, 2000).

Selection and Corroboration of Facts Available

    Section 776(b) of the Act states that an adverse inference may 
include reliance on information derived from the petition. See also SAA 
at 829-831. Section 776(c) of the Act provides that, when the 
Department relies on secondary information (such as the petition) in 
using the facts otherwise available, it must, to the extent 
practicable, corroborate that information from independent sources that 
are reasonably at its disposal.
    The SAA clarifies that ``corroborate'' means that the Department 
will satisfy itself that the secondary information to be used has 
probative value (see SAA at 870). The SAA also states that independent 
sources used to corroborate such evidence may include, for example, 
published price lists, official import statistics and customs data, and 
information obtained from interested parties during the particular 
investigation (see SAA at 870).
    In order to determine the probative value of the margins in the 
petition for use as adverse facts available for purposes of this 
determination, we examined evidence supporting the calculations in the 
petition. In accordance with section 776(c) of the Act, to the extent 
practicable, we examined the key elements of the export price (EP) and 
normal value (NV) calculations on which the margins in the petition 
were based, as adjusted by the Department for the purposes of 
initiation. Our review of the EP and NV calculations indicated that the 
information in the petition has probative value, as certain information 
included in the margin calculations in the petition is from public 
sources concurrent, for the most part, with the POI. For purposes of 
the preliminary determination, we attempted to further corroborate the 
information in the petition.
    For EP we re-examined the calculations from the petition. Given 
that the EP was based on POI-wide average unit imports values taken 
from publicly available information, and no adjustments to EP were 
made, no further corroboration was necessary.
    For NV, we re-examined the data petitioners relied upon in 
constructing the NV, as adjusted by the Department. We reviewed the 
financial data used in the petition, which is derived from publicly-
available data (i.e., 1997 financial statements from PT Krakatau Steel, 
an Indonesian producer of comparable merchandise), and therefore 
requires no further corroboration. With regard to the usage factors 
provided by petitioners, we find that the petition information is 
corroborated based on a comparison of the usage rates reported by 
Zaporizhstal to those that we used in our initiation of this 
investigation.
    Zaporizhstal is an integrated steel producer with the typical 
coking, sintering and hot-metal production facilities. The factors of 
production information provided in the petition was based on a 
similarly integrated steel producer. We examined these factors and 
found that, although the usage factors information reported by 
Zaporizhstal are grossly deficient, and therefore unusable for the 
purposes of calculating a margin, evidence shows that the usage rates 
for significant factors of production in the petition are nevertheless 
lower than those reported by Zaporizhstal. As such, we find that the 
data we used in the petition, with adjustments, was conservative. Thus, 
we conclude that the 89.49 percent margin, the highest rate from the 
petition, has probative value.

Separate Rates

    It is the Department's policy to assign all exporters of 
merchandise subject to investigation in a NME country a single rate, 
unless an exporter can demonstrate that it is sufficiently independent 
from government control so as to be entitled to a separate rate. In 
this case, the single responding company, Zaporizhstal, has claimed to 
be sufficiently independent to warrant a separate rate. However, given 
that Zaporizhstal failed to cooperate in this investigation to the best 
of its ability, we have not made a determination as to whether 
Zaporizhstal merits a separate rate, and are assigning a single 
country-wide rate for all exporters of subject merchandise from Ukraine 
for purposes of our preliminary determination.

Verification

    As provided in section 782(i)(1) of the Act, we intend to verify 
all company information relied upon in making our final determination, 
provided that necessary information is submitted in a timely manner and 
in the form requested by the Department.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
U.S. Customs Service to suspend liquidation of all imports of subject 
merchandise entered, or withdrawn from warehouse, for consumption on or 
after the date of publication of this notice in the Federal Register. 
We will instruct the U.S. Customs Service to require a cash deposit or 
the posting of a bond equal to the weighted-average amount by which the 
NV exceeds the EP, as indicated below. These suspension-of-liquidation 
instructions will remain in effect until further notice. The

[[Page 22157]]

weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                               Weighted-average margin
           Exporter/manufacturer                       percent
------------------------------------------------------------------------
Ukraine-Wide..............................  89.49
------------------------------------------------------------------------

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination of sales at LTFV. 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 the domestic industry in the United States 
is materially injured, or threatened with material injury, by reason of 
imports, or sales (or the likelihood of sales) for importation, of the 
subject merchandise.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than fifty days 
after the date of publication of this notice, and rebuttal briefs, 
limited to issues raised in case briefs, no later than fifty-five days 
after the date of publication of this preliminary determination. See 19 
CFR 351.309(c)(1)(i); 19 CFR 351.309(d)(1). A list of authorities used 
and an executive summary of issues should accompany any briefs 
submitted to the Department. This 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, any hearing will be held fifty-seven days 
after publication of this notice at the U.S. Department of Commerce, 
14th Street and Constitution Avenue, NW., Washington, DC 20230, at a 
time and location to be determined. Parties should confirm by telephone 
the date, time, and location of the hearing two days before the 
scheduled date.
    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 30 days of the date of publication of this notice. See 19 
CFR 351.310(c). 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. At the hearing, each party may make an 
affirmative presentation only on issues raised in that party's case 
brief, and may make rebuttal presentations only on arguments included 
in that party's rebuttal brief. See 19 CFR 351.310(c).
    If this investigation proceeds normally, we will make our final 
determination no later than 75 days after the date of the preliminary 
determination.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act. Effective January 20, 2001, 
Bernard T. Carreau is fulfilling the duties of the Assistant Secretary 
for Import Administration.

    Dated: April 23, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-10847 Filed 5-2-01; 8:45 am]
BILLING CODE 3510-DS-P