[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