[Federal Register: August 30, 2002 (Volume 67, Number 169)]
               
[Page 55805-55808]

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DEPARTMENT OF COMMERCE

International Trade Administration

[C-351-833]

 
Final Affirmative Countervailing Duty Determination and Final 
Negative Critical Circumstances Determination: Carbon and Certain Alloy 
Steel Wire Rod from Brazil

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

ACTION: Notice of final affirmative countervailing duty determination 
and final negative critical circumstances determination.

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SUMMARY: The Department of Commerce has made a final determination that 
countervailable subsidies are being provided to certain producers and 
exporters of carbon and certain alloy steel wire rod from Brazil. For 
information on the estimated countervailing duty rates, please see the 
``Suspension of Liquidation'' section, below. We have also made a final 
determination that critical circumstances do not exist with respect to 
imports of carbon and certain alloy steel wire rod from Brazil.

EFFECTIVE DATE: August 30, 2002.

FOR FURTHER INFORMATION CONTACT: Melani Miller, Jennifer D. Jones, 
Andrew Smith, or Daniel J. Alexy, Office of AD/CVD Enforcement Group 1, 
Import Administration, U.S. Department of Commerce, Room 3099, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-0116, (202) 482-1276, (202) 482-4194, or (202) 482-1540, 
respectively.

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 effective January 1, 1995 (``the 
Act''). In addition, unless otherwise indicated, all citations to the 
Department of Commerce's (``the Department'') regulations are to 19 CFR 
Part 351 (April 2001).

Petitioners

    The petitioners in this investigation are Co-Steel Raritan, Inc., 
GS Industries, Keystone Consolidated Industries, Inc., and North Star 
Steel Texas, Inc. (collectively, ``petitioners'').

Case History

    The following events have occurred since the publication of the 
preliminary determination in the Federal Register. See Preliminary 
Negative Countervailing Duty Determination: Carbon and Certain Alloy 
Steel Wire Rod from Brazil, 67 FR 5967 (February 8, 2002) 
(``Preliminary Determination'').
    On February 13 and 14, 2002, the petitioners submitted further 
comments with respect to the responses filed by the respondents in the 
proceeding, the Government of Brazil (``GOB''), Companhia Siderurgica 
Belgo-Mineira (``Belgo Mineira''), and Gerdau S.A. (``Gerdau''). The 
Department issued supplemental questionnaires to the GOB, Gerdau, and 
Belgo Mineira on February 19, 2002, and received responses to those 
questionnaires on March 7, 2002.
    From March 12, 2002 to March 27, 2002, we conducted a verification 
of the questionnaire responses submitted by the GOB, Belgo Mineira, and 
Gerdau.
    On March 19, 2002, we published a Federal Register notice aligning 
the final determination in this proceeding with the earliest final 
determination in the companion antidumping duty investigations. See 
Countervailing Duty Investigations of Carbon and Certain Alloy Steel 
Wire Rod from Brazil,

[[Page 55806]]

Canada, Germany, Trinidad and Tobago, and Turkey: Notice of Alignment 
With Final Antidumping Duty Determinations, 67 FR 12524 (March 19, 
2002).
    On July 2, 2002, we received a combined case brief from the GOB, 
Belgo Mineira, and Gerdau, and a case brief from the petitioners. On 
July 15, 2002, we received a combined rebuttal brief from the GOB, 
Belgo Mineira, and Gerdau, as well as a rebuttal brief from the 
petitioners.

Period of Investigation

    The period for which we are measuring subsidies, or period of 
investigation is calendar year 2000.

Scope of Investigation

    The merchandise covered by these investigations is certain hot-
rolled products of carbon steel and alloy steel, in coils, of 
approximately round cross section, 5.00 mm or more, but less than 19.00 
mm, in solid cross-sectional diameter (``subject merchandise'' or 
``wire rod'').
    Specifically excluded are steel products possessing the above-noted 
physical characteristics and meeting the Harmonized Tariff Schedule of 
the United States (``HTSUS'') definitions for (a) stainless steel; (b) 
tool steel; (c) high nickel steel; (d) ball bearing steel; and (e) 
concrete reinforcing bars and rods. Also excluded are (f) free 
machining steel products (i.e., products that contain by weight one or 
more of the following elements: 0.03 percent or more of lead, 0.05 
percent or more of bismuth, 0.08 percent or more of sulfur, more than 
0.04 percent of phosphorus, more than 0.05 percent of selenium, or more 
than 0.01 percent of tellurium).
    Also excluded from the scope are 1080 grade tire cord quality wire 
rod and 1080 grade tire bead quality wire rod. Grade 1080 tire cord 
quality rod is defined as: (i) Grade 1080 tire cord quality wire rod 
measuring 5.0 mm or more but not more than 6.0 mm in cross-sectional 
diameter; (ii) with an average partial decarburization of no more than 
70 microns in depth (maximum individual 200 microns); (iii) having no 
inclusions greater than 20 microns; (iv) having a carbon segregation 
per heat average of 3.0 or better using European Method NFA 04-114; (v) 
having a surface quality with no surface defects of a length greater 
than 0.15 mm; (vi) capable of being drawn to a diameter of 0.30 mm or 
less with 3 or fewer breaks per ton; and (vii) containing by weight the 
following elements in the proportions shown: (1) 0.78 percent or more 
of carbon, (2) less than 0.01 percent of aluminum, (3) 0.040 percent or 
less, in the aggregate, of phosphorus and sulfur, (4) 0.006 percent or 
less of nitrogen, and (5) not more than 0.15 percent, in the aggregate, 
of copper, nickel and chromium.
    Grade 1080 tire bead quality rod is defined as: (i) Grade 1080 tire 
bead quality wire rod measuring 5.5 mm or more but not more than 7.0 mm 
in cross-sectional diameter; (ii) with an average partial 
decarburization of no more than 70 microns in depth (maximum individual 
200 microns); (iii) having no inclusions greater than 20 microns; (iv) 
having a carbon segregation per heat average of 3.0 or better using 
European Method NFA 04-114; (v) having a surface quality with no 
surface defects of a length greater than 0.2 mm; (vi) capable of being 
drawn to a diameter of 0.78 mm or larger with 0.5 or fewer breaks per 
ton; and (vii) containing by weight the following elements in the 
proportions shown: (1) 0.78 percent or more of carbon, (2) less than 
0.01 percent of soluble aluminum, (3) 0.040 percent or less, in the 
aggregate, of phosphorus and sulfur, (4) 0.008 percent or less of 
nitrogen, and (5) either not more than 0.15 percent, in the aggregate, 
of copper, nickel and chromium (if chromium is not specified), or not 
more than 0.10 percent in the aggregate of copper and nickel and a 
chromium content of 0.24 to 0.30 percent (if chromium is specified).
    The designation of the products as ``tire cord quality''[quot] or 
``tire bead quality''[quot] indicates the acceptability of the product 
for use in the production of tire cord, tire bead, or wire for use in 
other rubber reinforcement applications such as hose wire. These 
quality designations are presumed to indicate that these products are 
being used in tire cord, tire bead, and other rubber reinforcement 
applications, and such merchandise intended for the tire cord, tire 
bead, or other rubber reinforcement applications is not included in the 
scope. However, should petitioners or other interested parties provide 
a reasonable basis to believe or suspect that there exists a pattern of 
importation of such products for other than those applications, end-use 
certification for the importation of such products may be required. 
Under such circumstances, only the importers of record would normally 
be required to certify the end use of the imported merchandise.
    All products meeting the physical description of subject 
merchandise that are not specifically excluded are included in this 
scope.
    The products under investigation are currently classifiable under 
subheadings 7213.91.3010, 7213.91.3090, 7213.91.4510, 7213.91.4590, 
7213.91.6010, 7213.91.6090, 7213.99.0031, 7213.99.0038, 7213.99.0090, 
7227.20.0010, 7227.20.0020, 7227.20.0090, 7227.20.0095, 7227.90.6051, 
7227.90.6053, 7227.90.6058, and 7227.90.6059 of the HTSUS. Although the 
HTSUS subheadings are provided for convenience and customs purposes, 
the written description of the scope of this proceeding is dispositive.

Scope Comments

    On April 2, 2002, in conjunction with the preliminary 
determinations in the companion antidumping duty proceedings, the scope 
in both the companion countervailing duty and antidumping duty 
proceedings was revised. See Memorandum to Faryar Shirzad, dated April 
2, 2002, ``Carbon and Certain Alloy Steel Wire Rod: Requests for 
exclusion of various tire cord quality wire rod and tire bead quality 
wire rod products from the scope of Antidumping Duty (Brazil, Canada, 
Egypt, Germany, Indonesia, Mexico, Moldova, South Africa, Trinidad and 
Tobago, Ukraine, and Venezuela) and Countervailing Duty (Brazil, 
Canada, Germany, Trinidad and Tobago, and Turkey) Investigations,'' 
which is on file in the Department's Central Records Unit in Room B-099 
of the main Department building (``CRU'').
    Since April 2, 2002, a number of parties have filed requests asking 
the Department to exclude various products from the scope of the 
concurrent antidumping duty (Brazil, Canada, Germany, Indonesia, 
Mexico, Moldova, Trinidad and Tobago and Ukraine) and countervailing 
duty (Brazil, Canada, Germany, Trinidad and Tobago, and Turkey) 
investigations. On May 6, 2002, Ispat Hamburger Stahlwerke GmbH and 
Ispat Walzdraht Hochfeld GmbH (collectively, ``Ispat Germany'') 
requested an exclusion for ``super clean valve spring wire.'' Two 
parties filed additional exclusion requests on June 14, 2002: Bluff 
City Steel asked that the Department exclude ``clean-steel precision 
bar,'' and Lincoln Electric Company sought the exclusion of its EW 2512 
grade of metal inert gas welding wire. On June 28, 2002, the 
petitioners filed objections to a range of scope exclusion requests 
including: (i) Bluff City Steel's request for clean precision bar; (ii) 
Lincoln Electric Company's request for EW 2512 grade wire rod; (iii) 
Ispat Germany's request for ``super clean valve spring wire;'' (iv) 
Tokusen USA's January 22, 2002 request for 1070 grade tire cord and 
tire bead quality wire rod (tire cord wire rod); and (v) various 
parties' request for 1090 grade tire cord wire rod.

[[Page 55807]]

    In addition, Moldova Steel Works requested the exclusion of various 
grades of tire cord wire rod on July 17, 2002. The Rubber Manufacturers 
Association (``RMA''), Ispat Germany, Lincoln Electric and Bluff City 
filed rebuttals to petitioners' June 28 submission on July 8, 11, 17, 
and 29, 2002, respectively. The RMA filed additional comments on July 
30, 2002.\1\
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    \1\ On August 9, 2002, Bekaert Corporation requested an 
exclusion for certain high chrome/high silicon steel wire rod. from 
the scope of these investigations. This request was filed too late 
to be considered for the final determinations in these 
investigations.
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    The Department has analyzed these requests and the petitioners 
objections and we find no modifications to the scope are warranted. See 
Memorandum from Richard Weible to Faryar Shirzad, ``Carbon and Certain 
Alloy Steel Wire Rod; Antidumping Duty (Brazil, Canada, Germany, 
Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine) and 
Countervailing Duty (Brazil, Canada, Germany, Trinidad and Tobago, and 
Turkey) Investigations: Requests for Scope Exclusion'' dated August 23, 
2002, which is on file in the CRU.

Injury Test

    Because Brazil is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, the International Trade 
Commission (``ITC'') is required to determine whether imports of the 
subject merchandise from Brazil materially injure, or threaten material 
injury to, a U.S. industry. On October 15, 2001, the ITC transmitted to 
the Department its preliminary determination that there is a reasonable 
indication that an industry in the United States is being materially 
injured by reason of imports from Brazil of the subject merchandise. 
See Carbon and Certain Alloy Steel Wire Rod From Brazil, Canada, Egypt, 
Germany, Indonesia, Mexico, Moldova, South Africa, Trinidad and Tobago, 
Turkey, Ukraine, and Venezuela, 66 FR 54539 (October 29, 2001).

Critical Circumstances

    The petitioners have alleged that critical circumstances within the 
meaning of section 703(e) of the Act exist with respect to the subject 
merchandise. We did not address the petitioners' critical circumstances 
allegation in the Preliminary Determination because the Preliminary 
Determination was negative. However, as our final determination is 
affirmative, we are now addressing this allegation.
    As discussed in the Memorandum to Richard Moreland, 
``Countervailing Duty Investigation of Carbon and Certain Alloy Steel 
Wire Rod from Brazil Final Determination of Critical Circumstances,'' 
pursuant to section 705(a)(2) of the Act, we find that critical 
circumstances do not exist for imports of the subject merchandise from 
Brazil.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this investigation are addressed in the ``Issues and Decision 
Memorandum'' from Richard W. Moreland, Deputy Assistant Secretary, 
Import Administration to Faryar Shirzad, Assistant Secretary, Import 
Administration, dated August 23, 2002 (``Decision Memorandum''), which 
is hereby adopted by this notice. Attached to this notice as Appendix I 
is a list of the issues which parties have raised and to which we have 
responded in the Decision Memorandum. Parties can find a complete 
discussion of all issues raised in this investigation and the 
corresponding recommendations in this public memorandum which is on 
file in the CRU. In addition, a complete version of the Decision 
Memorandum can be accessed directly on the Internet at http://
enforcement.trade.gov/frn/ under the heading ``Brazil.'' The paper copy and 
electronic version of the Decision Memorandum are identical in content.

Suspension of Liquidation

    In accordance with section 705(c)(1)(C) of the Act, we are 
directing the Customs Service (``Customs'') to suspend liquidation of 
all imports of the subject merchandise from Brazil that are entered, or 
withdrawn from warehouse, for consumption on or after the date of 
publication of this notice in the Federal Register. These suspension of 
liquidation instructions will remain in effect until further notice.
    We determine the total estimated net subsidy rate for each company 
to be the following:

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                  Producer/Exporter                     Net Subsidy Rate
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Companhia Siderurgica Belgo-Mineira..................               6.74
Gerdau S.A...........................................               4.44
All Others...........................................               6.11
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    We will issue a countervailing duty order if the ITC issues a final 
affirmative injury determination and we will instruct Customs to 
require a cash deposit of estimated countervailing duties for such 
entries of merchandise in the amounts indicated above. If the ITC 
determines that material injury, or threat of material injury, does not 
exist, this proceeding will be terminated and all estimated duties 
deposited or securities posted as a result of the suspension of 
liquidation will be refunded or canceled.

ITC Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our determination. In addition, we are making available to the 
ITC all non-privileged and non-proprietary information related to this 
investigation. We will allow the ITC access to all privileged and 
business proprietary information in our files, provided the ITC 
confirms that it will not disclose such information, either publicly or 
under an Administrative Protective Order (``APO''), without the written 
consent of the Assistant Secretary for Import Administration.

Return or Destruction of Proprietary Information

    In the event that the ITC issues a final negative injury 
determination, this notice will serve as the only reminder to parties 
subject to an APO of their responsibility concerning the destruction of 
proprietary information disclosed under APO in accordance with 19 CFR 
351.305(a)(3). Failure to comply is a violation of the APO.
    This determination is published pursuant to sections 705(d) and 
777(i) of the Act.

    Dated: August 23,2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.

Appendix I

List of Comments and Issues in the Decision Memorandum
Comment 1: Usina Siderurgica da Bahia S.A. (``Usiba'') and Cia 
Siderurgica do Nordeste (``Cosinor'') Privatizations
Comment 2: Government of Brazil (``GOB'') Financing for the Purchase of 
Usiba
Comment 3: Benchmarks for Long-Term, Brazilian Currency Denominated 
Loans and Discount Rates
Comment 4: Financing for the Acquisition or Lease of Machinery and 
Equipment through the Special Agency for Industrial Financing 
(``FINAME'') Loans
Comment 5: National Bank for Economic and Social Development 
(``BNDES'') Export Financing
Comment 6: Reduction of the Urban Building and Land Tax (``IPTU'')
Comment 7: BNDES Financing for Companhia Siderurgica Belgo-Mineira's 
(``Belgo Mineira'') Acquisition of Dedini Siderurgicia de Piracicaba 
(``Dedini'')
Comment 8: Program of Social Integration (``PIS'') and Social 
Contributions of Billings (``COFINS'') - Direct Taxes vs. Indirect 
Taxes

[[Page 55808]]

Comment 9: PIS and COFINS - Excessive Remission
Comment 10: Programa de Financiamento as Exportacoes (``PROEX'') 
Equalization Program
Comment 11: BNDES Financing of Belgo Mineira's Acquisition of Mendes 
Junior Siderurgia S.A. (``MJS'')
[FR Doc. 02-22241 Filed 8-29-02; 8:45 am]
BILLING CODE 3510-DS-S