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Notice

Stainless Steel Wire Rod from the Republic of Korea: Preliminary Results of Antidumping Duty Administrative Review

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Information about this document as published in the Federal Register.

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AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to a request by Carpenter Technology Corporation, a domestic interested party, the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on stainless steel wire rod (SSWR) from the Republic of Korea (Korea). This review covers two producers/exporters of the subject merchandise that have been collapsed for purposes of the Department's analysis, consistent with prior determinations in this proceeding. The period of review is September 1, 2005, through August 31, 2006.

The Department has preliminarily determined that the companies subject to this review made U.S. sales of SSWR at prices less than normal value. If these preliminary results are adopted in our final results of administrative review, we will instruct U.S. Customs and Border Protection to assess antidumping duties on all appropriate entries. Interested parties are invited to comment on these preliminary results of review. We will issue the final results of review no later than 120 days from the date of publication of this notice.

EFFECTIVE DATE:

June 11, 2007.

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FOR FURTHER INFORMATION CONTACT:

Thomas Schauer, AD/CVD Operations, Office 5, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230, telephone: (202) 482-0410.

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SUPPLEMENTARY INFORMATION:

Background

On September 15, 1998, the Department published in the Federal Register the antidumping duty order on SSWR from Korea. See Notice of Amendment of Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Stainless Steel Wire Rod From Korea, 63 FR 49331 (September 15, 1998) (Amended Final Determination), and Stainless Steel Wire Rod From Korea: Amendment of Final Determination of Sales at Less Than Fair Value Pursuant to Court Decision, 66 FR 41550 (August 8, 2001) (Amended Final Determination Pursuant to Court Decision). In September 2006, the Department published in the Federal Register a notice of “Opportunity to Request Administrative Review” of the antidumping duty order on SSWR from Korea. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 71 FR 52061 (September 1, 2006).

On September 29, 2006, in accordance with 19 CFR § 351.213(b)(1), Carpenter Technology Corporation requested that the Department conduct a review of Changwon Specialty Steel Co., Ltd. (Changwon), and Dongbang Special Steel Co., Ltd. (Dongbang), and any of their affiliates (collectively, the respondent1) for the period from September 1, 2005, through August 31, 2006.

In October 2006, the Department initiated an administrative review of the respondent. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 71 FR 63752 (October 31, 2006). On November 2, 2006, the Department issued its antidumping questionnaire to the respondent. The respondent did not respond to the Department's questionnaire. On December 15, 2006, we sent a letter to the respondent requesting that it respond to our questionnaire. The respondent submitted no response to this letter.

The Department is conducting this administrative review in accordance with section 751 of the Tariff Act of 1930, as amended (the Act). The period of review is September 1, 2005, through August 31, 2006.

Scope of the Order

For purposes of this order, the products covered are those SSWR that are hot-rolled or hot-rolled annealed and/or pickled and/or descaled rounds, squares, octagons, hexagons or other shapes, in coils, that may also be coated with a lubricant containing copper, lime Start Printed Page 32075or oxalate. SSWR is made of alloy steels containing, by weight, 1.2 percent or less of carbon and 10.5 percent or more of chromium, with or without other elements. These products are manufactured only by hot-rolling or hot-rolling annealing, and/or pickling and/or descaling, are normally sold in coiled form, and are of solid cross-section. The majority of SSWR sold in the United States is round in cross-sectional shape, annealed and pickled, and later cold-finished into stainless steel wire or small-diameter bar. The most common size for such products is 5.5 millimeters or 0.217 inches in diameter, which represents the smallest size that normally is produced on a rolling mill and is the size that most wire-drawing machines are set up to draw. The range of SSWR sizes normally sold in the United States is between 0.20 inches and 1.312 inches in diameter.

Two stainless steel grades are excluded from the scope of the order. SF20T and K-M35FL are excluded. The chemical makeup for the excluded grades is as follows:

SF20T
Carbon0.05 max
Manganese2.00 max
Phosphorous0.05 max
Sulfur0.15 max
Silicon1.00 max
Chromium19.00/21.00
Molybdenum1.50/2.50
Lead-added(0.10/0.30)
Tellurium-added(0.03 min)
K-M35FL
Carbon0.015 max
Silicon0.70/1.00
Manganese0.40 max
Phosphorous0.04 max
Sulfur0.03 max
Nickel0.30 max
Chromium12.50/14.00
Lead0.10/0.30
Aluminum0.20/0.35

The products subject to the order are currently classifiable under subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 7221.00.0045, and 7221.00.0075 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the order is dispositive.

Use of Adverse Facts Available

Section 776(a)(2) of the Act provides that, if an interested party (A) withholds information that has been requested by the Department, (B) fails to provide such information in a timely manner or in the form or manner requested, subject to sections 782(c)(1) and (e) of the Act, (C) significantly impedes a proceeding under the antidumping statute, or (D) provides such information but the information cannot be verified, the Department shall use, subject to section 782(d) of the Act, the facts otherwise available in reaching the applicable determination.

Furthermore, section 776(b) of the Act provides that, if the Department finds that an interested party “has failed to cooperate by not acting to the best of its ability to comply with a request for information,” the Department may use information that is adverse to the interests of that party in selecting among the facts otherwise available. See Statement of Administrative Action (SAA) accompanying the Uruguay Round Agreements Act (URAA), H.R. Rep. No. 103-316 at 870 (1994).

By not responding to our questionnaire, the respondent withheld information we requested. Therefore, we have no choice but to rely upon the facts otherwise available in reaching our determination pursuant to section 776(a)(2) of the Act. See Stainless Steel Sheet and Strip in Coils from Japan: Preliminary Results of Antidumping Duty Administrative Review, 70 FR 18369 (April 11, 2005) (“because this company refused to participate in this administrative review, we find that...the use of total facts available is appropriate”) (results unchanged in the final); see Notice of Preliminary Determination of Sales at Less Than Fair Value and Affirmative Preliminary Determination of Critical Circumstances: Wax and Wax/Resin Thermal Transfer Ribbons From Japan, 68 FR 71072 (December 22, 2003) (“{s}ince UC and DNP withheld information requested by the Department, the Department has no choice but to rely on the facts otherwise available in order to determine a margin for these parties”) (results unchanged in the final). Because the respondent did not respond to the Department's questionnaires in those cases, the Department could not calculate an accurate margin.

In applying facts otherwise available, section 776(b) of the Act states that, if an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information from the Department, in reaching the applicable determination under section 776(b) of the Act the Department may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available. By failing to submit a response to the Department's questionnaire, the respondent did not cooperate to the best of its ability in this review. Accordingly, we find that an adverse inference is warranted to ensure that the respondent will not obtain a more favorable result than had it fully complied with our request in this review.

As adverse facts available, we have used the highest rate from any segment of the proceeding, which is a rate from the less-than-fair-value investigation, 28.44 percent. See Notice of Amendment of Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Stainless Steel Wire Rod From Korea, 63 FR 49331 (September 15, 1998) (Amended Final Determination). This rate was the highest rate in the petition and was used as adverse facts available for Sammi Steel Co., Ltd. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Stainless Steel Wire Rod from Korea, 63 FR 10825 (March 5, 1998) (Preliminary LTFV); see also Amended Final Determination.

When a respondent is not cooperative, like the respondent here, the Department has the discretion to presume that the highest prior margin is probative evidence of current margins. See Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1339 (Fed. Cir. 2002) (citing Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190 (Fed. Cir. 1990) (Rhone Poulenc)). As stated in Rhone Poulenc, “if it were not so, the {respondent}, knowing of the rule, would have produced current information showing the margin to be less.” See Rhone Poulenc, 899 F.2.d at 1190. Further, as stated in Shanghai Taoen, “{t}he purposes of using the highest prior antidumping duty rate are to offer assurance that the exporter will not benefit from refusing to provide information, and to produce an antidumping duty rate that bears some relationship to past practices in the industry in question.” Shanghai Taoen Int'l Trading Co. v. United States, 360 F. Supp. 2d 1339, 1348 (CIT 2005) (Shanghai Taoen) (citing D&L Supply Co. v. United States, 113 F.3d 1220,1223 (Fed. Cir. 1997)).

Section 776(c) of the Act states that, “{w}hen the administering authority or the Commission relies on secondary information rather than on information obtained in the course of an investigation or review, the administering authority or the Commission, as the case may be, shall, to the extent practicable, corroborate that information from independent sources that are reasonably at their disposal.” Secondary information is Start Printed Page 32076defined as “information derived from the petition that gave rise to the investigation or review, the final determination concerning the subject merchandise, or any previous review under section 751 concerning the subject merchandise.” See SAA at 870. Where the Department relies upon secondary information to determine adverse facts available, as here, section 776(c) of the Act requires that the Department corroborate, to the extent practicable, secondary 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. Id. To corroborate secondary information, the Department will examine, to the extent practicable, the reliability and relevance of the information. The SAA emphasizes, however, that the Department need not prove that the selected facts available are the best alternative information. Id. at 869. The 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 19 CFR § 351.308(d) and SAA at 870. Information from a prior segment of this proceeding, such as that used here, constitutes secondary information. See, e.g., Anhydrous Sodium Metasilicate from France: Preliminary Results of Antidumping Duty Administrative Review, 68 FR 44283 (July 28, 2003). As described further below, in accordance with these standards, the Department finds that the petition rate is relevant and reliable.

The reliability of the adverse facts-available rate was determined by our corroboration of that rate in the original less-than-fair-value (LTFV) investigation. See Preliminary LTFV, 63 FR at 10826-7. No party contested the application of that rate in the investigation. See Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Wire Rod From Korea, 63 FR 40404 (July 29, 1998). Furthermore, the Department has received no information to date that warrants revisiting the issue of the reliability of the adverse facts-available rate. Thus, the Department finds that the margin calculated in the LTFV investigation is reliable.

With respect to the relevance aspect of corroboration, the Department will consider information reasonably at its disposal to determine whether a margin continues to have relevance. Where circumstances indicate that the selected margin is not appropriate as adverse facts available, the Department will disregard the margin and determine an appropriate margin. For example, in Fresh Cut Flowers from Mexico: Final Results of Antidumping Administrative Review, 61 FR 6812 (February 22, 1996), the Department disregarded the highest margin in that case as adverse best information available (the predecessor to facts available) because the margin was based on another company's uncharacteristic business expense resulting in an unusually high margin. Similarly, the Department does not apply a margin that has been discredited. See D&L Supply Co. v. United States, 113 F. 3d 1220, 1221 (Fed. Cir. 1997) (the Department will not use a margin that has been judicially invalidated). None of these unusual circumstances is present here.

In addition, although the Department has the discretion to presume that the highest prior margin has probative value, to “satisfy itself that the secondary information to be used has probative value,” the Department has placed the margin-transaction database (i.e., the U.S. sales database with the margins it calculated for each transaction) for the respondent from the immediately prior (2004-05) administrative review of the order on the record of this review. See Memorandum to File titled “Placing Proprietary Data from 2004-05 Administrative Review Record on the Record of This Administrative Review” dated June 1, 2007. This information demonstrates the recent pricing practices of the respondent.

Although the 2004-05 margin-transaction database is not contemporaneous with the period of review, it is only one year removed from the period for this review. The 2004-05 margin-transaction database corroborates the margin of 28.44 percent in that a significant number of transactions had margins equal to or above 28.44 percent. For a detailed explanation on how we corroborated of the margin of 28.44 percent, see Memorandum to File titled “Corroboration of Adverse Facts Available” dated June 1, 2007.

Accordingly, we determine that the highest rate determined in any segment of this administrative proceeding (i.e., 28.44 percent) is in accordance with section 776(c) of the Act's requirement that we corroborate secondary information to the extent practicable (i.e., that it have probative value) and we have used that rate for the respondent in this administrative review.

Preliminary Results of Review

As a result of this review, we preliminarily determine a weighted-average dumping margin of 28.44 percent for Changwon/Dongbang for the period September 1, 2005, through August 31, 2006.

Public Comment

Within 10 days of publicly announcing the preliminary results of this review, we will disclose to interested parties any analysis memoranda in connection with the preliminary results. See 19 CFR § 351.224(b). Any interested party may request a hearing within 30 days of the publication of this notice in the Federal Register. See 19 CFR § 351.310(c). If requested, a hearing will be held 44 days after the date of publication of this notice in the Federal Register or the first workday thereafter. Interested parties are invited to comment on the preliminary results of this review. The Department will consider case briefs filed by interested parties within 30 days after the date of publication of this notice in the Federal Register. Also, interested parties may file rebuttal briefs, limited to issues raised in the case briefs. The Department will consider rebuttal briefs filed not later than five days after the time limit for filing case briefs. Parties who submit arguments are requested to submit with each argument (1) a statement of the issue, (2) a brief summary of the argument, and (3) a table of authorities cited. Further, we request that parties submitting written comments provide the Department with a diskette containing an electronic copy of the public version of such comments. Unless the deadline for issuing the final results of review is extended, the Department will issue the final results of this administrative review, including the results of its analysis of issues raised in the written comments, within 120 days of publication of the preliminary results in the Federal Register.

Assessment Rates

Within 15 days of publication of the final results of review, the Department will issue instructions to CBP directing it to assess the final assessment rate uniformly on all entries during the period of review of subject merchandise that was produced or exported by Changwon/Dongbang. If nothing changes between this notice and the final results of review, the final assessment rate will be the adverse facts-available rate of 28.44 percent.Start Printed Page 32077

Cash-Deposit Requirements

The following cash-deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(1) of the Act: (1) the cash-deposit rate for Changwon/Dongbang will be the rate established in the final results of this review; (2) for previously investigated or reviewed companies not listed above, the cash-deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the LTFV investigation but the manufacturer is, the cash-deposit rate will be the rate established for the most recent period for the manufacturer of the subject merchandise; and (4) the cash-deposit rate for all other manufacturers or exporters will continue to be the “all others” rate of 5.19 percent, which is the “all others” rate established in the LTFV investigation, as adjusted in a subsequent remand redetermination. See Amended Final Determination and Amended Final Determination Pursuant to Court Decision. These cash-deposit rates, when imposed, shall remain in effect until further notice.

Notification to Importers

This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR § 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping occurred and the subsequent assessment of double antidumping duties.

We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

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Dated: June 4, 2007.

David M. Spooner,

Assistant Secretary for Import Administration.

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Footnotes

1.  We collapsed Changwon and Dongbang in the less-than-fair-value investigation and in every subsequent review of this order because we found “a close supplier relationship between the entities.” See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Wire Rod From Korea, 63 FR 40404, 40405 (July 29, 1998).

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[FR Doc. E7-11246 Filed 6-8-07; 8:45 am]

BILLING CODE 3510-DS-S