Enforcement and Compliance, International Trade Administration, Department of Commerce.
On June 3, 2015, the Department of Commerce (the Department) received antidumping duty (AD) and countervailing duty (CVD) petitions concerning imports of corrosion-resistant steel products (CORE) from India, Italy, the People's Republic of China (PRC), the Republic of Korea, and Taiwan.
On July 23, Start Printed Page 685052015, the Department received timely allegations that critical circumstances exist with respect to imports of the merchandise under investigation.
Based on information provided by Petitioners, data placed on the record of these investigations by the mandatory respondents, and data collected by the Department, the Department preliminarily determines that critical circumstances exist for imports of CORE from certain producers and exporters from Italy, the PRC, Korea, and Taiwan.
Effective date: November 5, 2015.
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FOR FURTHER INFORMATION CONTACT:
Mark Hoadley, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-3148.
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Section 703(e)(1) of the Tariff Act of 1930, as amended (the Act), provides that the Department will preliminarily determine that critical circumstances exist in CVD investigations if there is a reasonable basis to believe or suspect: (A) that “the alleged countervailable subsidy” is inconsistent with the Subsidies and Countervailing Measures (SCM) Agreement of the World Trade Organization, and (B) that there have been massive imports of the subject merchandise over a relatively short period. Section 733(e)(1) of the Act provides that the Department will preliminarily determine that critical circumstances exist in AD investigations if there is a reasonable basis to believe or suspect: (A)(i) That there is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise, or (ii) that the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales, and (B) that there have been massive imports of the subject merchandise over a relatively short period. Section 19 CFR 351.206 provides that imports must increase by at least 15 percent during the “relatively short period” to be considered “massive” and defines a “relatively short period” as normally being the period beginning on the date the proceeding begins (i.e., the date the petition is filed) and ending at least three months later.
The regulations also provide, however, that, if the Department finds that importers, or exporters or producers, had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely, the Department may consider a period of not less than three months from that earlier time.
Alleged Countervailable Subsidies Are Inconsistent With the SCM Agreement
To determine whether an alleged countervailable subsidy is inconsistent with the SCM Agreement, in accordance with section 703(e)(1)(A) of the Act, the Department considered the evidence currently on the record of the five CVD investigations. Specifically, as determined in our initiation checklists, the following subsidy programs, alleged in the Petitions and supported by information reasonably available to Petitioners, appear to be either export contingent or contingent upon the use of domestic goods over imported goods, which would render them inconsistent with the SCM Agreement.
India: Four export-contingent duty exemption/remission schemes,
four duty and tax exemption programs for “Export Oriented Units,” 
the Export Promotion of Capital Goods Scheme,
Pre-Shipment and Post-Shipment Export Financing,
Market Development Assistance Scheme,
Market Access Initiative,
Focus Product Scheme,
Status Certificate Program,
five duty and tax exemption programs for special economic zones,
Incremental Exports Incentivisation Scheme,
and three duty and tax exemption programs provided by the state of Gujarat for special economic zones 
Italy: Several export-contingent preferential financial products provided by the Special Section for Export Credit Insurance 
The PRC: Export loans,
Income Tax Credits for Domestically-Owned Companies Purchasing Domestically Produced Equipment,
Preferential Income Tax Subsidies for Foreign-Invested Enterprises—Export Oriented FIEs,
Foreign Trade Development Fund Grants,
Export Assistance Grants,
Programs to Rebate Antidumping Legal Fees,
Subsidies for Development of Famous Export Brands and China World Top Brands,
Sub-Central Government Programs to Promote Famous Export Brands and China World Top Brands,
and Export Interest Subsidies 
Korea: Several export-contingent preferential financial products and services provided by the Korean Export-Import Bank Countervailable Subsidy Programs,
preferential loans from the Korea Development Bank and Industrial Base Fund,
and export financing provided by the Korea Trade Insurance Corporation 
Taiwan: Grants for International Development Activities 
Therefore, the Department preliminarily determines that there are alleged subsidies in each CVD investigation inconsistent with the SCM agreement.
History of Dumping and Material Injury/Knowledge of Sales Below Fair Value and Material Injury
In order to determine whether there is a history of dumping pursuant to section 733(e)(1)(A)(i) of the Act, the Department generally considers current or previous AD orders on subject merchandise from the country in question in the United States and current orders imposed by other countries with regard to imports of the same merchandise. The Department has previously issued an AD order on CORE Start Printed Page 68506from Korea,
based on nearly identical HTS categories, as well as AD orders on carbon steel flat products from the PRC.
Moreover, there are current AD orders imposed by other World Trade Organization members against certain coated steel products (i.e., carbon steel flat products either clad, plated or coated with zinc, aluminum, or nickel) from Korea, the PRC, and Taiwan.
Certain HTS numbers subject to these orders overlap with HTS numbers listed under our current CORE scope. Therefore, there is a history of dumping of subject merchandise exported from Korea, the PRC, and Taiwan.
To determine whether importers knew or should have known that exporters were selling at less than fair value, we typically consider the magnitude of dumping margins, including margins alleged in petitions.
The Department has found margins of 15 to 25 percent (depending on whether sales are export price sales or constructed export price sales) to be sufficient for this purpose.
Dumping margins alleged in all five AD petitions are significantly above the 15 to 25 percent threshold: 71.09 percent (India),
123.76 percent (Italy),
80.06 percent (Korea),
120.20 percent (the PRC),
and 84.40 percent (Taiwan).
Therefore, on that basis, we preliminarily conclude importers knew or should have known exporters in all five countries were selling at less than fair value.
To determine whether importers knew or should have known that there was likely to be material injury, we typically consider the preliminary injury determinations of the International Trade Commission (ITC).
If the ITC finds material injury (as opposed to the threat of injury), we normally find that the ITC's determination provided importers with sufficient knowledge of injury. Where, as in this case,
the ITC finds only threat of material injury, the Department may consider additional sources of information, such as trade and price statistics or press reports.
Petitioners placed several press reports on the record indicating injury. For example: U.S. steel companies are struggling against a combination of lower oil prices, oversupply and excessive imports fed by a strong dollar. Those headwinds have become a perfect storm that could lead to more idled plants and layoffs, and spur a major international trade case against China, which steel makers accuse of undercutting the market with artificially low-priced product. U.S. Steel executives have expressed the great concern about cheap imports. On Thursday, CEO and President Mario Longhi testified before the Congressional Steel Caucus and warned of long-term damage to domestic steel makers from what the industry says is illegal dumping by foreign companies. China's state-subsidized industry continue to pump out steel, even as demand slows at home. That has led to surging exports, particularly to the United States.
In addition, the Department has relied on massive imports and high dumping margins as factors indicating importers knew or should have known that there was likely to be material injury.
As noted above, dumping margins alleged in the five AD petitions range from 71.09 percent to 123.76 percent. As discussed below, we have determined imports were massive for certain producers/exporters shipping from Italy, Korea, the PRC, and Taiwan. Therefore, we preliminarily conclude importers knew or should have known that there was likely to be material injury as a result of sales sold at less than fair value, exported from all five countries.
In determining whether there are “massive imports” over a “relatively short period,” pursuant to sections 703(e)(1)(B) and 733(e)(1)(B) of the Act, the Department normally compares the import volumes of the subject merchandise for at least three months immediately preceding the filing of the petition (i.e., the “base period”) to a comparable period of at least three months following the filing of the petition (i.e., the “comparison period”). Imports normally will be considered massive when imports during the comparison period have increased by 15 percent or more compared to imports during the base period.
Based on evidence provided by Petitioners, the Department finds that pursuant to 19 CFR 351.206(i), importers, exporters or producers had reason to believe, at some time prior to the filing of the petition, that a proceeding was likely. Specifically, the Department concludes that the factual information provided by Petitioners indicates that by March 2015, importers, exporters or producers had reason to believe that proceedings were likely. Among the documents Petitioners provided to support their claim of so-called “early knowledge,” the Department finds the following particularly relevant.
- On March 10, 2015, Steel Market Update acknowledged and responded to an influx of “recent” inquiries from Start Printed Page 68507importers of cold-rolled steel and CORE steel products “asking questions about the potential for a trade case or anti-dumping filing by the domestic mills against foreign steel imports.” 
- On March 26, 2015, American Metal Market issued a press release stating that nearly 70 percent of industry participants expected cold-rolled and CORE steel cases to be filed in 2015.
- On March 27, 2015, the Pittsburgh Tribune published an article stating that “domestic steel makers are beginning to take their case to Washington.” One expert quoted in the article concluded that a trade case appeared “inevitable.” 
- On March 30, 2015, Barron's published analysis by Credit Suisse concluding U.S. steel industry officials had “no intention of delay” and would pursue trade remedies as soon as possible. The article states that the U.S. industry would not pursue safeguard actions, but instead would pursue AD/CVD remedies focused on hot-rolled coil, cold-rolled coil, and CORE steel products.
While additional information presented in Petitioners' exhibits indicate rumors of trade cases had been circulating as far back as 2014,
the above statements indicate that by March 2015, these rumors had turned to expectations among steel importers, exporters, and producers that forthcoming petitions were inevitable.
Thus, in order to determine whether there has been a massive surge in imports for each cooperating mandatory respondent, the Department compared the total volume of shipments from March 2015 through September 2015 (all months for which data was available) with the preceding seven-month period of August 2014 through February 2015. For “all others,” the Department compared Global Trade Atlas (GTA) data for the period March through August (the last month for which GTA data is currently available) with the proceeding six-month period of September 2014 through February 2015.
We first subtracted shipments reported by the cooperating mandatory respondents from the GTA data. For non-cooperating mandatory respondents (i.e., those mandatory respondents that did not respond to our critical circumstances questionnaire or who otherwise indicated their unwillingness to participate in the investigations), we determined, on the basis of adverse facts available,
that there has been a massive surge in imports. Accordingly, we preliminarily determined the following producers/exporters had massive surges in imports.
- Italy (C-475-833): ILVA S.p.A. (ILVA)
- Korea (A-580-878): Hyundai Steel Company (Hyundai); “All Others”
- Korea (C-580-879): “All Others”
- PRC (A-570-026): the PRC-wide entity; Hebei Iron & Steel Co., Ltd. (Tangshan Branch) (Tangshan); Baoshan Iron & Steel Co., Ltd. (Baoshan)
- PRC (C-570-027): Angang Group Hong Kong Company Ltd. (Angang); Duferco S.A. (Duferco); Handan Iron & Steel Group (Handan); Changshu Everbright Material Technology (Everbright); Baoshan
- Taiwan (A-583-856 and C-583-857): “All Others”
Based on the criteria and findings discussed above, we preliminarily determine that critical circumstances exist with respect to imports of corrosion-resistant steel products shipped by certain producers/exporters. Our findings are summarized as follows.
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|Country||Case No.||Affirmative preliminary critical circumstances
determination||Negative preliminary critical circumstances
|PRC||A-570-026||the PRC-wide entity; Tangshan; Baoshan||Yieh Phui (China) Technomaterial Co., Ltd. (YPC); All Other producers/exporters entitled to a separate rate.|
| ||C-570-027||Angang, Duferco, Handan, Everbright, Baoshan||YPC; All Other producers/exporters.|
|Korea||A-580-878||Hyundai; All Other producers/exporters||Dongkuk Steel Mill Co., Ltd. (Dongkuk/Union).|
| ||C-580-879||All Other producers/exporters||Dongbu Steel Co., Ltd. (Dongbu); Dongkuk/Union.|
|Taiwan||A-583-856||All Other producers/exporters||Yieh Phui Enterprises Co., Ltd. (Yieh Phui); Prosperity Tieh Enterprises Co., Ltd. (Prosperity).|
| ||C-583-857||All Other producers/exporters||Yieh Phui; Prosperity.|
|India||A-533-863||no companies||Uttam Galva Steels, Ltd. (Uttam); JSW Steel Limited (JSW); All Other producers/exporters.|
| ||C-533-864||no companies||Uttam; JSW; All Other producers/exporters.|
|Italy||A-475-832||no companies||Acciaieria Arvedi S.p.A. (Arvedi); Marcegaglia S.p.A. (Marcegaglia); All Other producers/exporters.|
| ||C-475-833||ILVA||Arvedi; Marcegaglia; All Other producers/exporters.|
Final Critical Circumstances Determinations
We will issue final determinations concerning critical circumstances when we issue our final subsidy and less-than-fair-value determinations. All interested parties will have the opportunity to address these determinations in case briefs to be submitted after completion of the preliminary subsidies and less than fair value determinations.
In accordance with sections 703(f) and 733(f) of the Act, we will notify the ITC of our determinations.
Suspension of Liquidation
In accordance with sections 703(e)(2), because we have preliminarily found that critical circumstances exist with regard to imports exported by certain producers and exporters, if we make an affirmative preliminary determination that countervailable subsidies have been provided to these same producers/exporters at above de minimis rates,
we will instruct U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of subject merchandise from these producers/exporters that are entered, or withdrawn from warehouse, for consumption on or after the date that is 90 days prior to the effective date of “provisional measures” (e.g., the date of publication in the Federal Register of the notice of an affirmative preliminary determination that countervailable subsidies have been provided at above de minimis rates). At such time, we will also instruct CBP to require a cash deposit equal to the estimated preliminary subsidy rates reflected in the preliminary determination published in the Federal Register. This suspension of liquidation will remain in effect until further notice.
In accordance with sections 733(e)(2), because we have preliminarily found that critical circumstances exist with regard to imports exported by certain producers and exporters, if we make an affirmative preliminary determination that sales at less than fair value have been made by these same producers/exporters at above de minimis rates,
we will instruct CBP to suspend liquidation of all entries of subject merchandise from these producers/exporters that are entered, or withdrawn from warehouse, for consumption on or after the date that is 90 days prior to the effective date of “provisional measures” (e.g., the date of publication in the Federal Register of the notice of an affirmative preliminary determination of sales at less than fair value at above de minimis rates). At such time, we will also instruct CBP to require a cash deposit equal to the estimated preliminary dumping margins reflected in the preliminary determination published in the Federal Register. This suspension of liquidation will remain in effect until further notice.
This notice is issued and published pursuant to section 777(i) of the Act and 19 CFR 351.206(c)(2).
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Dated: October 29, 2015.
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2015-28252 Filed 11-4-15; 8:45 am]
BILLING CODE 3510-DS-P