[Federal Register: August 30, 2002 (Volume 67, Number 169)]
[Page 55808-55810]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-428-833]
Final Affirmative Countervailing Duty Determination and Final
Negative Critical Circumstances Determination Carbon and Certain Alloy
Steel Wire Rod from Germany
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 producers and exporters
of carbon and certain alloy steel wire rod from Germany. For more
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 Germany.
EFFECTIVE DATE: August 30, 2002.
FOR FURTHER INFORMATION CONTACT: FOR FURTHER INFORMATION CONTACT:
Melanie Brown, Office of Antidumping/Countervailing Duty Enforcement,
Group 1, Import Administration, U.S. Department of Commerce, Room 3096,
14th Street and Constitution Avenue, NW., Washington, DC 20230,
telephone: (202) 482-4987.
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 these investigations 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
Affirmative Countervailing Duty Determination and Preliminary Negative
Critical Circumstances Determination: Carbon and Certain Alloy Steel
Wire Rod from Germany, 67 FR 5991 (February 8, 2002) (``Preliminary
Determination'')).
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, Canada, Germany, Trinidad and Tobago, and Turkey:
Notice of Alignment With Final Antidumping Duty Determinations, 67 FR
12524 (March 19, 2002).
From March 11 to 20, 2002, we conducted verification of the
questionnaire responses submitted by Saarstahl AG (``Saarstahl''),
Ispat Hamburger Stahlwerke, Ispat Stalwerk Ruhrort, and Ispat Walzdraht
Hochfeld (collectively ``Ispat''), and the Government of Germany.
On May 29, 2002 we received case briefs from Saarstahl, Ispat, and
the petitioners. On June 3, 2002, we received rebuttal briefs from
Saarstahl, Ispat, the Government of Germany, and the petitioners.
Period of Investigation
The period for which we are measuring subsidies, or the period of
investigation (``POI''), is calendar year 2000.
Scope of Investigation
The merchandise covered by this investigation 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.
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. This 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.
This 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).
[[Page 55809]]
The designation of the products as ``tire cord quality''' or ``tire
bead quality''' 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, petitioners (Co-Steel
Raritan, Inc., GS Industries, Keystone Consolidated Industries, Inc.,
and North Star Steel Texas, Inc.) 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.
In addition, Moldova Steel Works requested the exclusion of various
grades of tire cord wire rod on July 17, 2002. The Rubber Manufacturers
Association (the 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, dated August 23,
2002,``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,'' which is on file in the CRU.
Injury Test
Because Germany is a ``Subsidies Agreement Country'' within the
meaning of section 701(b)(1) of the Act, the International Trade
Commission (``ITC'') is required to determine whether imports of the
subject merchandise from Germany materially injure, or threaten
material injury to, a U.S. industry. On October 29, 2001, the ITC
published its preliminary determination finding that there is a
reasonable indication that an industry in the United States is being
materially injured by reason of imports from Germany 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
Section 703(e)(1) of the Act provides that critical circumstances
exist if the Department determines that there is a reasonable basis to
believe or suspect that (1) an alleged subsidy is inconsistent with the
Agreement on Subsidies and Countervailing Measures referred to in
section 101(d)(12) of the Uruguay Round Agreements Act (``Subsidies
Agreement'') (see section 771(8) of the Act), and (2) there have been
massive imports of the subject merchandise over a relatively short
period of time. In past critical circumstances determinations, the
Department has only found ``prohibited subsidies'' under Part II of the
Subsidies Agreement to be inconsistent with the Subsidies Agreement.
See, e.g., Notice of Preliminary Affirmative Countervailing Duty
Determination, Preliminary Affirmative Critical Circumstances
Determination, and Alignment of Final Countervailing Duty
Determination: Certain Softwood Lumber Products from Canada, 66 FR
43186, 43189 (August 17, 2001). In the instant investigation,
petitioners argue that the class of subsidies found to be inconsistent
with the Subsidies Agreement should be expanded to include ``actionable
subsidies'' under Part III of the Subsidies Agreement.
In the Preliminary Determination the Department found that critical
circumstances do not exist with respect to subject merchandise from
Germany because we found that no subsidies inconsistent with the
Subsidies Agreement exist in Germany. Thus, the first requirement of
section 703(e)(1) of the Act has not been met. More specifically, we
found no prohibited subsidies (i.e., Part II of the Subsidies
[[Page 55810]]
Agreement) to be countervailable in this case. Actionable subsidies,
although they may give rise to a right to a remedy (e.g.,
countervailing duties), are not inconsistent with the Subsidies
Agreement within the meaning of section 703(e)(1) of the Act.
There is no new information on the record to call into question our
preliminary negative critical circumstances determination. Therefore,
we continue to find that critical circumstances do not exist with
respect to imports of the subject merchandise from Germany.
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'') or in
the memorandum entitled ``Discussion of Comments Containing Proprietary
Information'' from Richard W. Moreland, Deputy Assistant Secretary,
Import Administration to Faryar Shirzad, Assistant Secretary, Import
Administration, dated August 23, 2002 (``Proprietary Comments
Memorandum''), which are 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.
Attached to this notice as Appendix II is a list of the issues which
parties have raised and to which we have responded in the ``Proprietary
Comments Memorandum.'' Parties can find a complete discussion of all
issues raised in this investigation and the corresponding
recommendations in these memoranda (in public form), which are on file
in the CRU. In addition, a complete version of the Decision Memorandum
can be accessed directly on the Internet at https://enforcement.trade.gov/frn/
under the heading ``Germany.'' The paper copy and electronic version of
the Decision Memorandum are identical in content.
Suspension of Liquidation
As a result of our Preliminary Determination, we instructed the
Customs Service to suspend liquidation of all entries of carbon and
certain alloy steel wire rod from Germany which were entered or
withdrawn from warehouse, for consumption on or after February 8, 2002,
the date of the publication of the Preliminary Determination in the
Federal Register. In accordance with section 703(d) of the Act, we
instructed Customs to discontinue the suspension of liquidation for
merchandise for countervailing duty purposes entered on or after June
8, 2002, but to continue the suspension of liquidation of entries made
between February 8, 2002 and June 7, 2002.
We have calculated an individual net subsidy rate for each
manufacturer of the subject merchandise pursuant to section
705(c)(1)(B)(i) of the Act. In accordance with sections 777A(e)(2) and
705(c)(5)(A) of the Act, we have calculated the ``all others'' rate as
the weighted average rate of Saarstahls's and Ispat's net subsidy
rates. We determine the total estimated net countervailable subsidy
rates to be:
------------------------------------------------------------------------
Producer/Exporter Net Subsidy Rate
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Saarstahl, AG........................................ 18.46 percent ad
valorem
Ispat (collectively, IHSW, IWHG, ISRG)............... 1.12 percent ad
valorem
All Others........................................... 16.26 percent ad
valorem
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We will issue a countervailing duty order and reinstate the
suspension of liquidation 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: Appropriate AUL for Saarstahl
Comment 2: Appropriate AUL for IHSW
Comment 3: Saarstahl's Untimely Submission of Sales Data
Comment 4: Use of Adverse Facts Available
Comment 5: Schmiede's Sales
Comment 6: Saarstahl's Bankruptcy
Comment 7: Assumption of Saarstahl's Legacy Costs
Comment 8: Saarstahl's 1997 Reorganization
Comment 9: Saarstahl's ECSC Article 54 Loans
Comment 10: Saarstahl's Creditworthiness
Comment 11: Saarstahl's Research and Development Assistance
Comment 12: Previously Countervailed Programs for Saarstahl
Comment 13: HSW's Change of Ownership
Comment 14: Other Benefits Allegedly Conferred in the Sale of HSW
Comment 15: Application of the ``Same Person'' Test to IHSW
Comment 16: IHSW's Creditworthiness
Comment 17: Cross-ownership Between Ispat and WDI
Comment 18: ISRG's Intercompany Sales
Comment 19: ISRG's Article 56 Grant
Comment 20: ISRG's Rheinland-Pfalz State Government Grant
[FR Doc. 02-22242 Filed 8-29-02; 8:45 am]
BILLING CODE 3510-DS-S