Steel Concrete Reinforcing Bar From The Republic of Korea: Notice of Preliminary Results and Preliminary Rescission, in Part, of Antidumping Duty Administrative Review, 59440-59447 [E6-16678]
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Federal Register / Vol. 71, No. 195 / Tuesday, October 10, 2006 / Notices
all appropriate entries. The Department
will issue appropriate appraisement
instructions for the companies subject to
these reviews directly to CBP within 15
days of publication of the final results
of these reviews. For assessment
purposes for companies with a
calculated rate, where possible, the
Department calculated importer-specific
assessment rates for freshwater crawfish
tail meat from the PRC on a per–unit
basis. Specifically, the Department
divided the total dumping margins
(calculated as the difference between
normal value and export price) for each
importer by the total quantity of subject
merchandise sold to that importer
during the POR to calculate a per-unit
assessment amount. The Department
will direct CBP to assess importer–
specific assessment rates based on the
resulting per-unit (i.e., per-kilogram)
rates by the weight in kilograms of each
entry of the subject merchandise during
the POR. However, the final results of
this review shall be the basis for the
assessment of antidumping duties on
entries of merchandise covered by the
final results of these reviews and for
future deposits of estimated duties,
where applicable.
jlentini on PROD1PC65 with NOTICES
Cash Deposit Requirements
The following cash deposit
requirements will be effective upon
publication of the final results of these
reviews for all shipments of the subject
merchandise entered, or withdrawn
from warehouse, for consumption on or
after the publication date, as provided
for by section 751(a)(2)(C) of the Act: (1)
For the exporters listed above, the cash
deposit rate will be that established in
the final results of this review (except,
if the rate is zero or de minimis, no cash
deposit will be required); (2) for
previously investigated or reviewed PRC
and non-PRC exporters not listed above
that have separate rates, the cash
deposit rate will continue to be the
exporter-specific rate published for the
most recently completed review; (3) for
all PRC exporters of subject
merchandise which have not been
found to be entitled to a separate rate,
the cash deposit rate will be the PRCwide rate of 223.01 percent; and (4) for
all non-PRC exporters of subject
merchandise which have not received
their own rate, the cash deposit rate will
be the rate applicable to the PRC
exporters that supplied that non-PRC
exporter. These deposit requirements,
when imposed, shall remain in effect
until publication of the final results of
the next administrative review.
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Notification to Importers
This notice 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 duties
occurred and the subsequent assessment
of double antidumping duties.
These administrative, new shipper
reviews, and notice are in accordance
with sections 751(a)(1), 751(a)(2)(B), and
777(i) of the Act and 19 CFR 351.213
and 351.214.
Dated: October 2, 2006.
Joseph A. Spetrini,
Acting Assistant Secretaryfor Import
Administration.
[FR Doc. E6–16677 Filed 10–6–06; 8:45 am]
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
International Trade Administration
[A–580–844]
Steel Concrete Reinforcing Bar From
The Republic of Korea: Notice of
Preliminary Results and Preliminary
Rescission, in Part, of Antidumping
Duty Administrative Review
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: In response to requests by
Dongkuk Steel Mill Co. Ltd. (DSM), a
producer/exporter of the subject
merchandise, and petitioners,1 the
Department of Commerce (the
Department) is conducting an
administrative review of the
antidumping duty order on steel
concrete reinforcing bar (rebar) from the
Republic of Korea (Korea). This review
covers seven producers/exporters of the
subject merchandise. The period of
review (POR) is September 1, 2004,
through August 31, 2005.
As discussed below, the Department
has preliminarily determined to
collapse DSM, Korea Iron and Steel Co.,
Ltd. (KISCO), and Hwanyoung Steel
Industries Co. (HSI), into a single entity
for purposes of this administrative
review. We preliminarily determine that
DSM/KISCO/HSI made sales at less than
normal value (NV) during the POR.
AGENCY:
1 The petitioners are the Rebar Trade Action
Coalition and its individual members-Gerdau
Ameristeel, CMC Steel Group, Nucor Corporation,
and TAMCO.
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Further, as a result of our review, we
preliminarily determine that three
respondents had no sales or shipments
of subject merchandise to the United
States during the POR. Therefore, we are
preliminarily rescinding the review
with respect to these respondents. One
remaining respondent, Dongil Industries
Co. Ltd. (Dongil), failed to respond to
our questionnaire. As a result, we are
basing our preliminary results for
Dongil on total adverse facts available
(AFA). If these preliminary results are
adopted in our final results of
administrative review, we will instruct
U.S. Customs and Border Protection
(CBP) to assess antidumping duties on
all appropriate entries. Interested parties
are invited to comment on these
preliminary results of review. Unless we
extend the deadline, we will issue the
final results of review no later than 120
days from the date of publication of this
notice.
DATES: Effective Date: October 10, 2006.
FOR FURTHER INFORMATION CONTACT:
Mark Manning or Drew Jackson, AD/
CVD Operations, Office 4, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW., Washington, DC 20230;
telephone: (202) 482–5253, or (202)
482–4406, respectively.
Background
On September 7, 2001, the
Department published an antidumping
duty order on rebar from Korea. See
Antidumping Duty Orders: Steel
Concrete Reinforcing Bars From Belarus,
Indonesia, Latvia, Moldova, People’s
Republic of China, Poland, Republic of
Korea and Ukraine, 66 FR 46777
(September 7, 2001). On September 1,
2005, the Department published in the
Federal Register a notice of
‘‘Opportunity to Request Administrative
Review’’ of the antidumping duty order
on rebar from Korea. See Antidumping
or Countervailing Duty Order, Finding,
or Suspended Investigation;
Opportunity to Request Administrative
Review, 70 FR 52072 (September 1,
2005). On September 21, 2005, in
accordance with 19 CFR 351.213(b)(2),
DSM requested that the Department
conduct an administrative review of its
sales and entries of subject merchandise
into the United States during the POR.
Additionally, in accordance with 19
CFR 351.213(b)(1), on September 30,
2005, petitioners requested that the
Department conduct a review of DSM,
Dongil, Hanbo Iron & Steel Co., Ltd.
(Hanbo), INI Steel (INI), Kosteel Co., Ltd
(Kosteel), and KISCO. On October 25,
2005, the Department initiated an
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administrative review of Dongil, DSM,
Hanbo, INI, Kosteel Co., and KISCO. See
Initiation of Antidumping and
Countervailing Duty Administrative
Reviews, 70 FR 61601 (October 25,
2005).
On October 19, 2005, the Department
issued its antidumping questionnaire to
Dongil, DSM, Hanbo, INI, Kosteel, and
KISCO. In December 2005, DSM and
KISCO responded to the Department’s
antidumping questionnaire.2
Additionally, KISCO’s affiliate, HSI,
responded to the Department’s
antidumping questionnaire in December
2005. Thereafter, the Department issued
supplemental questionnaires to DSM,
KISCO, and HSI, and received timely
responses. The petitioners submitted
comments regarding the respondents’
supplemental questionnaire responses
on May 26, 2006, and September 13,
2006.
On October 21, 2005, Hanbo and INI
notified the Department that neither
they nor any of their affiliates had any
sales or exports of subject merchandise
during the POR. On August 2, 2006, the
Department sent a letter to Kosteel and
Dongil informing these companies that
we did not receive a response from them
to the antidumping questionnaire. In the
letter, the Department stated that, if they
did not respond to the antidumping
questionnaire because they had no
shipments of subject merchandise to the
United States during the POR, they
should inform the Department of this
fact; otherwise, the Department may
conclude that these companies decided
not to cooperate with the Department’s
review. In response, on August 8, 2006,
Kosteel reported that it had no sales or
shipments of subject merchandise to the
United States during the POR. Dongil
did not respond to the Department’s
August 2, 2006, letter.
Because it was not practicable to issue
the preliminary results of this review
within the normal time frame, on May
30, 2006, the Department published in
the Federal Register a notice of the
extension of time limits for these
preliminary results. See Steel Concrete
Reinforcing Bars from the Republic of
Korea: Extension of the Time Limit for
the Preliminary Results of Antidumping
Duty Administrative Review, 71 FR
30658 (May 30, 2006). This extension
established the deadline for these
2 KISCO and its affiliate, HSI, reported that they
had no sales or shipments of subject merchandise
to the United States during the POR. However,
because DSM and KISCO were found to be affiliated
and were collapsed in a prior review, the
Department reviewed KISCO and HSI’s submissions
regarding, inter alia, their corporate structure and
affiliations, home market sales, and cost of
production.26, 2006, and September 13, 2006.
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preliminary results as September 30,
2006. The first business day after this
deadline is October 2, 2006.
Period of Review
The POR is September 1, 2004,
through August 31, 2005.
Scope of the Order
The product covered by this order is
all rebar sold in straight lengths,
currently classifiable in the Harmonized
Tariff Schedule of the United States
(HTSUS) under item number 7214.20.00
or any other tariff item number.
Specifically excluded are plain rounds
(i.e., non-deformed or smooth bars) and
rebar that has been further processed
through bending or coating. The HTSUS
subheading is provided for convenience
and customs purposes. The written
description of the scope of this
proceeding is dispositive.
Partial Rescission of Review
As noted above, Hanbo, INI, and
Kosteel informed the Department that
they had no shipments of subject
merchandise to the United States during
the POR. We obtained entry data from
CBP and found that these data support
the statements made by these
respondents, that they had no
shipments of subject merchandise
during the POR. Therefore, in
accordance with 19 CFR 351.213(d)(3)
and consistent with the Department’s
practice, we are preliminarily
rescinding our review with respect to
Hanbo, INI, and Kosteel. (See, e.g.,
Certain Welded Carbon Steel Pipe and
Tube from Turkey; Final Results and
Partial Rescission of Antidumping
Administrative Review, 63 FR 35190,
35191 (June 29, 1998); and Certain Fresh
Cut Flowers from Colombia; Final
Results and Partial Rescission of
Antidumping Duty Administrative
Review, 62 FR 53287, 53288 (October
14, 1997)).
Facts Available
Section 776(a)(2) of the Tariff Act of
1930, as amended (the Act), provides
that if any interested party: (A)
Withholds information that has been
requested by the Department; (B) fails to
provide such information by the
deadlines for submission of the
information or in the form or manner
requested; (C) significantly impedes a
proceeding; or (D) provides such
information but the information cannot
be verified, the Department shall,
subject to section 782(d) of the Act, use
facts otherwise available in making its
determination.
If the Department determines that a
response to a request for information
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does not comply with the request,
section 782(d) of the Act provides that
the Department will inform the person
submitting the response of the nature of
the deficiency and shall, to the extent
practicable, provide that person the
opportunity to remedy or explain the
deficiency. If that person submits
further information that continues to be
unsatisfactory, or this information is not
submitted within the applicable time
limits, the Department may, subject to
section 782(e), disregard all or part of
the original and subsequent responses,
as appropriate.
Section 782(e) of the Act states that
the Department shall not decline to
consider information submitted by an
interested party and is necessary to the
determination, but does not meet all of
the Department’s applicable
requirements, if: (1) The information is
submitted by the established deadline;
(2) the information can be verified; (3)
the information is not so incomplete
that it cannot serve as a reliable basis for
reaching the applicable determination;
(4) the interested party has
demonstrated that it acted to the best of
its ability; and (5) the information can
be used without undue difficulties.
Furthermore, section 776(b) of the Act
states 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, in
reaching the applicable determination
under this title, ‘‘may use an inference
that is adverse to the interests of that
party in selecting from among the facts
otherwise available.’’ See also Statement
of Administrative Action (SAA)
accompanying the URAA, H.R. Rep. No.
103–316 at 870 (1994).
Application of Facts Available
The evidence on the record of this
review establishes that, pursuant to
section 776(a)(2)(A) of the Act, the use
of total facts available (FA) is warranted
in determining the dumping margin for
U.S. sales of rebar made by Dongil
because it failed to provide any
requested information to the
Department. As stated above, on
October 19, 2005, the Department issued
the antidumping questionnaire to six
manufacturers/exporters of the subject
merchandise. Five companies
responded to the questionnaire, with
three of the five companies ultimately
advising the Department that they did
not have shipments or sales of subject
merchandise to the United States during
the POR. The remaining company,
Dongil, failed to respond to the
Department’s antidumping
questionnaire. On August 2, 2005, we
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informed Dongil that, because it failed
to respond to the Department’s
antidumping questionnaire, and had not
informed the Department as to whether
it had sales or shipments of subject
merchandise to the United States during
the POR, we may use AFA to determine
its dumping margin. Dongil did not
respond to the Department’s August 2,
2005, letter.
Because Dongil failed to provide the
necessary information requested by the
Department, pursuant to section
776(a)(2)(A) of the Act, we must
establish the margins for this company
based on the facts otherwise available.
Use of Adverse Inferences
In selecting from among the facts
otherwise available, pursuant to section
776(b) of the Act, an adverse inference
is warranted when the Department has
determined that a respondent has
‘‘failed to cooperate by not acting to the
best of its ability to comply with a
request for information.’’ Section 776(b)
of the Act goes on to state that an
adverse inference may include reliance
on information derived from (1) The
petition; (2) a final determination in the
investigation under this title; (3) any
previous review under section 751 or
determination under section 753, or (4)
any other information on the record.
Adverse inferences are appropriate
‘‘to ensure that the party does not obtain
a more favorable result by failing to
cooperate than if it had cooperated
fully.’’ See SAA at 870; Timken Co. V,
United States, 354 F.3d 1334, 1345 (Fed.
Cir. 2004); Mannesmannrohren-Werke
AG v. United States, 77 F. Supp. 2d
1302 n.7 (CIT 1999). The Court of
Appeals for the Federal Circuit (CAFC),
in Nippon Steel Corporation v. United
States, 337 F. 3d 1373, 1381 (Fed. Cir.
2003), provided an explanation of the
‘‘failure to act to the best of its ability’’
standard, holding that the Department
need not show intentional conduct
existed on the part of the respondent,
but merely that a ‘‘failure to cooperate
to the best of a respondent’s ability’’
existed, i.e., information was not
provided ‘‘under circumstances in
which it is reasonable to conclude that
less than full cooperation has been
shown.’’ Id. at 1383. The CAFC did
acknowledge, however, that ‘‘deliberate
concealment or inaccurate reporting’’
would certainly be a reason to apply
AFA, although it indicated that
inadequate responses to agency
inquiries ‘‘would suffice’’ as well. Id.
To examine whether the respondent
‘‘cooperated’’ by ‘‘acting to the best of
its ability’’ under section 776(b) of the
Act, the Department considers, inter
alia, the accuracy and completeness of
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submitted information and whether the
respondent has hindered the calculation
of accurate dumping margins. See
Mannesmannrohren-Werke AG v.
United States, 120 F.Supp. 2d
1075,1096 (CIT 2000).
The record shows that Dongil failed to
cooperate to the best of its ability,
within the meaning of section 776(b) of
the Act. In reviewing the evidence on
the record, the Department finds that
Dongil failed to provide requested
information. Moreover, Dongil failed to
offer any explanation for its failure to
respond to our antidumping
questionnaire or August 2, 2005, letter.
As a general matter, it is reasonable for
the Department to assume that Dongil
possessed the records necessary to
participate in this review; however, by
not supplying the information the
Department requested, Dongil failed to
cooperate to the best of its ability. As
Dongil has failed to cooperate to the best
of its ability, we are applying an adverse
inference pursuant to section 776(b) of
the Act. As AFA for Dongil, we have
used a rate of 102.28 percent, which is
the highest margin from any segment of
the proceeding. Specifically, this rate
was the highest margin alleged for any
Korean company in the petition and is
the rate used as AFA for Hanbo in the
final determination of the less-than-fairvalue (LTFV) investigation. See Notice
of Final Determination of Sales at Less
Than Fair Value: Steel Concrete
Reinforcing Bars From the Republic of
Korea, 66 FR 33526 (June 22, 2001).
This rate was also used as AFA for both
Hanbo and Dongil in the last completed
administrative review of this order. See
Steel Concrete Reinforcing Bars From
the Republic of Korea: Notice of Final
Results and Final Partial Rescission of
Antidumping Duty Administrative
Review, 69 FR 54642 (September 9,
2004).
Corroboration of Information
Section 776(c) of the Act requires the
Department to corroborate, to the extent
practicable, secondary information used
as FA. Secondary information is defined
as ‘‘{i}nformation 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
and 19 CFR 351.308(d).
The SAA further provides that the
term ‘‘corroborate’’ means that the
Department will satisfy itself that the
secondary information to be used has
probative value. See SAA at 870. Thus,
to corroborate secondary information,
the Department will, to the extent
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practicable, examine the reliability and
relevance of the information used.
During the LTFV investigation, we
examined the reliability of the 102.28
percent rate selected as AFA for Hanbo
and found it to be reliable. See
Memorandum to Troy H. Cribb,
Assistant Secretary for Import
Administration, from Holly A. Kuga,
Acting Deputy Assistant Secretary for
AD/CVD Enforcement, Group II, ‘‘The
Use of Facts Available for Hanbo Iron &
Steel Co. Ltd., and Corroboration of
Secondary Information,’’ dated January
16, 2001, and placed on the record of
this review concurrently with these
preliminary results. There is no
information on the record of this review
to demonstrate that this rate is no longer
reliable.
As to the relevance of the AFA rate,
the CAFC has stated that Congress
‘‘intended for an adverse facts available
rate to be a reasonably accurate estimate
of the respondent’s actual rate, albeit
with some built-in increase intended as
a deterrent to non-compliance.’’ F.Lli De
Cecco Di Filippo Fara S. Martino S.p.A.,
v. U.S., 216 F.3d 1027, 1032 (Fed. Cir.
2000). The Department considers
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 AFA, the Department
will disregard the selected margin and
determine an appropriate margin. See,
e.g., Fresh Cut Flowers from Mexico:
Final Results of Antidumping
Administrative Review, 61 FR 6812
(February 22, 1996).
With respect to the rate selected for
Dongil, we note that in determining the
relevant AFA rate, the Department
assumes that if an uncooperative
respondent could have demonstrated
that its dumping margin is lower than
the highest prior margin, it would have
provided information showing the
margin to be less. See Rhone Poulenc,
Inc. v. United States, 899 F.2d 1185,
1190–91 (Fed. Cir. 1990) (Rhone
Poulenc). In Rhone Poulenc, the CAFC
found that the presumption that, ‘‘the
highest prior margin was the best
information of current margins’’ was a
permissible interpretation of 19 U.S.C.
1677e(c). See Rhone Poulenc, 899 F.2d
at 1190. In upholding this presumption,
the CAFC cited the rationale underlying
the adverse inference rule, that the
presumption ‘‘reflects a common sense
inference that the highest prior margin
is the most probative evidence of
current margins because, if it were not
so, the importer, knowing of the rule,
would have produced current
information showing the margin to be
less.’’ Id. In other proceedings, the
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Department has used the highest margin
in the proceeding as AFA.
See, e.g., Freshwater Crawfish Tail
Meat from the People’s Republic of
China; Notice of Final Results of
Antidumping Duty Administrative
Review, 68 FR 19504, 19508 (April 21,
2003). In fact, the Department used the
102.28 percent rate as AFA in the final
determination of the LTFV investigation
with respect to Hanbo and,
subsequently, applied it to both Dongil
and Hanbo in the last completed
administrative review. Therefore, Dongil
had notice that the 102.28 percent rate
may be used as the AFA rate that would
be applied for its failure to cooperate.
Consequently, in keeping with Rhone
Poulenc, we consider the 102.28 percent
rate to be the most probative evidence
of current margin for Dongil because, if
it were not so, Dongil, knowing 102.28
percent rate may be assigned as AFA,
would have produced current
information showing the margin to be
less. Further, since Dongil’s current
margin is 102.28 percent, assigning a
rate less than this amount as AFA
would allow Dongil to benefit from its
non-cooperation. Therefore, we consider
the 102.28 percent rate to be relevant.
Accordingly, we have determined, to
the extent practicable, that the rate
selected as AFA are both reliable and
relevant. Therefore, we have
corroborated this rate in accordance
with section 776(c) of the Act.
Affiliation
We preliminarily find that DSM,
KISCO, HSI, and Dongkuk Industries
Co., Ltd. (DKI) 3 are affiliated through to
sections 771(33)(A) and 771(33)(F) of
the Act. Pursuant to section 771(33)(A)
of the Act, the following persons, among
others, are affiliated: ‘‘Members of a
family, including brothers and sisters
(whether by the whole or half blood),
spouse, ancestors, and lineal
descendants. * * * ’’ See section
771(33)(A) of the Act. The record shows
that certain senior executives of DSM,
KISCO, HSI, and DKI are descendants of
a common progenitor, the late KyungHo Chang. These members of the Chang
family are related as uncles, nephews,
and first cousins. Since the details of
these relationships are business
proprietary information, please see the
Memorandum from Thomas F. Futtner,
Acting Office Director, to Stephen J.
Claeys, Deputy Assistant Secretary for
Import Administration, ‘‘Whether to
Collapse Dongkuk Steel Mill Co., Ltd.,
3 DKI is a manufacturer of cold-rolled steel,
pickled and oiled coils, and hot-dip galvanized coil.
DKI is also a trading company that exports various
steel products. DKI does not produce subject
merchandise.
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Korea Iron and Steel Co., Ltd., and
Hwanyoung Steel Ind. Co. Ltd. Into a
Single Entity,’’ dated October 2, 2006
(Collapsing Memorandum).
Accordingly, consistent with the
definition of ‘‘family’’ under section
771(33)(A) of the Act, the Department’s
prior practice, the controlling precedent
(see Ferro Union Inc. v. Wheatland Tube
Co., 44 F. Supp. 2d 1310, 1325–1326
(CIT 1999) (Ferro Union Inc.)), our
findings in the LTFV investigation (see
Notice of Final Determination of Sales
at Less Than Fair Value: Steel Concrete
Reinforcing Bars From the Republic of
Korea, 66 FR 33526 (June 22, 2001)
(LTFV Final Determination)), and the
most recently completed review in
which the Department calculated a
dumping margin for DSM/KISCO (see
Steel Concrete Reinforcing Bar From
The Republic of Korea: Final Results of
Antidumping Duty Administrative
Review, 69 FR 19399 (April 13, 2004)),
the Department preliminarily
determines that certain senior
executives of DSM, KISCO, DKI, and
HSI are members of the Chang family,
and thus are affiliated. See Collapsing
Memorandum.
Section 771(33)(F) of the Act states
that, ‘‘two or more persons directly or
indirectly controlling, controlled by, or
under common control with, any
person,’’ shall be considered to be
affiliated. A person includes any
interested party as well as any other
individual, enterprise, or entity. See 19
CFR 351.102. The courts have agreed
that a family group is an entity and thus
is a ‘‘person,’’ for purposes of section
771(33)(F) of the Act. See Ferro Union
Inc., 44 F. Supp. 2d at 1326; Dongkuk
Steel Mill Co., v. United States, Slip Op.
05–75 at 13 (CIT June 22, 2005)
(Dongkuk). As further defined by
section 771(33) of the Act, ‘‘a person
shall be considered to control another
person if the person is legally or
operationally in a position to exercise
restraint or direction over the other
person.’’ See section 771(33) of the Act.
The record shows that certain members
of the Chang family are senior
executives of these companies. See
Collapsing Memorandum. Additionally,
these same members of the Chang
family are the largest shareholders of
DSM, KISCO, and DKI. Id. Further,
KISCO is the largest shareholder of HSI.
Accordingly, the Chang family’s
leadership positions within these
companies, as well as the fact that they
control the largest blocks of outstanding
shares in DSM, KISCO, and DKI (and
KISCO is the largest shareholder in
HSI), puts the Chang family in a
position to legally and/or operationally
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59443
control DSM, KISCO, DKI, and HSI, thus
satisfying the requirements of affiliation
under section 771(33)(F) of the Act. The
Court of International Trade (CIT)
upheld the Department’s similar finding
of affiliation in the 2001–2002 Final
Results. See Dongkuk, Slip. Op 05–75 at
4.
In addition, section 771(33)(E) of the
Act states that two or more persons shall
be considered to be affiliated if any
person directly or indirectly owns 5
percent or more of the outstanding
voting shares of an organization. In this
case, record evidence demonstrates that
KISCO directly owns over 5 percent of
HSI’s outstanding shares. Therefore, we
find that KISCO is affiliated with HSI
pursuant to section 771(33)(E) of the
Act. See Collapsing Memorandum.
Collapsing
Section 351.401(f)(1) of the
Department’s regulations states that in
an antidumping proceeding the
Department ‘‘will treat two or more
affiliated producers as a single entity
where those producers have production
facilities for similar or identical
products that would not require
substantial retooling of either facility in
order to restructure manufacturing
priorities and the Secretary concludes
that there is a significant potential for
the manipulation of price or
production.’’ See 19 CFR 351.401(f)(1).
Section 351.401(f)(2) of the
Department’s regulations identifies
factors to be considered to determine
whether there is a significant potential
for manipulation. These include: (i) The
level of common ownership; (ii) the
extent to which managerial employees
or board members of one firm sit on the
board of directors of an affiliated firm;
and (iii) whether operations are
intertwined, such as through the sharing
of sales information, involvement in
production and pricing decisions, the
sharing of facilities or employees, or
significant transactions between the
affiliated producers.
As discussed above, and in the
accompanying Collapsing
Memorandum, based on the evidence on
the record in this review, we have
preliminarily determined that DSM is
affiliated with KISCO and HSI by virtue
of common control by the Chang family.
See sections 771(33)(A) and (F) of the
Act. Accordingly, the Department
preliminarily determines that the first of
the three requirements for collapsing the
companies has been met. The CIT
upheld the Department’s decision to
collapse DSM and KISCO in the 2001–
2002 Final Results. See Dongkuk, Slip.
Op 05–75 at 16–17.
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Having determined that DSM, KISCO,
and HSI are affiliated, the Department
examines whether the producers have
production facilities for similar or
identical products that would not
require ‘‘substantial retooling * * * in
order to restructure manufacturing
priorities.’’ Cf. Notice of Preliminary
Results of New Shipper Review of the
Antidumping Duty Order on Certain
Pasta From Italy, 69 FR 319, 321
(January 5, 2004). Based on the
questionnaire responses submitted by
DSM, KISCO, and HSI, the Department
has preliminarily determined that the
three companies’ production facilities
would not require substantial retooling
to restructure manufacturing priorities.
See Collapsing Memorandum.
Further, based on the record of this
proceeding, the Department
preliminarily determines that significant
potential for manipulation of price or
production exists. In analyzing whether
there exists a potential for price or
production manipulation, the
Department may consider the following
factors: (1) The level of common
ownership; (2) the extent to which
managerial employees or directors of
one firm also sit on the board of the
other firm; and (3) whether operations
are intertwined. See 19 CFR
351.401(f)(2). Based on information
supplied by DSM, KISCO, and HSI, the
Department preliminarily determines
that each of these factors has been
satisfied in this segment of the
proceeding. See Collapsing
Memorandum for a full discussion of
the issues. As the CIT recognized in
Dongkuk, the agency’s concern is with
the potential for manipulation, which
continues to exist in this case. See
Dongkuk, Slip. Op 05–75 at 17.
Based on these reasons, we find that
DSM, KISCO, and HSI are affiliated
producers with similar or identical
production facilities that would not
require substantial retooling of either
facility in order to restructure
manufacturing priorities. We also find
that there exists a significant potential
for the manipulation of price or
production. Therefore, we have
collapsed DSM, KISCO, and HSI, and
are treating them as a single entity for
purposes of these preliminary results.
Comparison Methodology
In order to determine whether the
respondents sold rebar to the United
States at prices less than NV, the
Department compared the constructed
export price (CEP) of individual U.S.
sales to the monthly weighted-average
NV of sales of the foreign like product
made in the ordinary course of trade.
See section 777A(d)(2) of the Act; see
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also section 773(a)(1)(B)(i) of the Act.
Section 771(16) of the Act defines
foreign like product as merchandise that
is identical or similar to subject
merchandise and produced by the same
person and in the same country as the
subject merchandise. Thus, we
considered all products covered by the
scope of the order, that were produced
by the same person and in the same
country as the subject merchandise and
sold by respondents in the comparison
market during the POR, to be foreign
like products, for the purpose of
determining appropriate product
comparisons to rebar sold in the United
States.
The Department compared U.S. sales
to sales made in the comparison market
within the contemporaneous window
period, which extends from three
months prior to the month in which the
U.S. sale was made until two months
after the month in which the U.S. sale
was made. In making product
comparisons, the Department selected
identical foreign like products based on
the physical characteristics reported by
the respondents in the following order
of importance: type of steel, yield
strength, size, and coating. The
Department reclassified the yield
strength designation of certain
merchandise based on its preliminary
finding that the merchandise was
weldable. For further information, see
the analysis memorandum for DSM/
KISCO/HSI, dated concurrently with
this notice.
Duty Drawback
Before increasing a respondent’s
reported U.S. sales prices by the amount
of duty drawback, pursuant to section
772(c)(1)(B) of the Act, the Department’s
practice is to examine whether: (1)
Import duties and rebates are directly
linked to, and are dependent upon, one
another, or, in the context of a duty
exemption, the exemption is linked to
the exportation of subject merchandise
and (2) the company claiming the
adjustment can demonstrate that there
are sufficient imports of raw materials to
account for the duty drawback received
on exports of the manufactured product.
See Steel Wire Rope from the Republic
of Korea; Final Results of Antidumping
Duty Administrative Review, 61 FR
55965, 55968 (October 30, 1996); see
also, Stainless Steel Sheet and Strip in
Coils from Mexico; Final Results of
Antidumping Duty Administrative
Review, 68 FR 6889 (February 11, 2003)
and accompanying Issues and Decision
Memorandum at Comment 5.
DSM reported that it received duty
drawback pursuant to Korea’s Act on
Special Cases Concerning the
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Fmt 4703
Sfmt 4703
Refundment of Customs Duties, Etc.,
Levied on Raw Materials for Export
(Duty Refund Program). DSM reported
that it received certain ‘‘drawback’’
amounts associated with duties paid on
imported inputs pursuant to the Korean
Government’s individual application
system, where the duty is rebated based
upon each applicant’s use of the
imported input. Since the applicable
criteria have been met in this case, in
calculating CEP for DSM/KISCO/HSI,
the Department has preliminarily added
an amount for duty drawback to the
reported prices. We made additions to
the starting price for duty drawback in
accordance with section 772(c)(1)(B) of
the Act.
Level of Trade and CEP Offset
In accordance with section
773(a)(1)(B) of the Act, to the extent
practicable, we determined NV based on
sales in the comparison market at the
same level of trade (LOT) as the CEP
sales. The NV LOT is that of the starting
price sales in the comparison market or,
when NV is based on CV, that of the
sales from which we derive selling,
general, and administrative expenses
and profit. For CEP sales, the U.S. LOT
is the level of the constructed export
sale from the exporter to its affiliate.
The Department adjusts CEP, pursuant
to section 772(d) of the Act, prior to
performing the LOT analysis, as
articulated in 19 CFR 351.412. See
Micron Technology, Inc. v. United
States, 243 F.3d, 1301, 1315 (Fed. Cir.
2001).
To determine whether NV sales are at
a different LOT than the CEP sales, we
examine stages in the marketing process
and selling functions along the chain of
distribution between the producer and
the unaffiliated customer. If the
comparison market sales are at a
different LOT, and the difference affects
price comparability, as manifested in a
pattern of consistent price differences
between the sales on which NV is based
and comparison-market sales at the LOT
of the export transaction, we make a
LOT adjustment under section
773(a)(7)(A) of the Act. For CEP sales, if
the NV level is more remote from the
factory than the CEP level and there is
no basis for determining whether the
difference in the levels between NV and
CEP affects price comparability, we
adjust NV under section 773(A)(7)(B) of
the Act (the CEP offset provision). See
Notice of Final Determination of Sales
at Less Than Fair Value: Certain Carbon
Steel Plate from South Africa, 62 FR
61731, 61732 (November 19, 1997).
In determining whether the
respondents made sales at separate
LOTs, we obtained information from
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DSM, HSI and KISCO regarding the
marketing stages for the reported U.S.
and comparison market sales, including
a description of the selling activities
performed by respondents for each
channel of distribution. Generally, if the
reported LOTs are the same, the
functions and activities of the seller at
each level should be similar.
Conversely, if a party reports that LOTs
are different for different groups of
sales, the selling functions and activities
of the seller for each group should be
dissimilar.
In implementing these principles in
this review, we asked DSM/KISCO/HSI
to identify the specific differences and
similarities in selling functions and
support services between all phases of
marketing in the home market and the
United States. DSM/KISCO/HSI
identified one channel of distribution in
the home market: direct sales from its
factory to its customers. DSM/KISCO/
HSI also identified three types of home
market customers: end-users,
distributors or government entities.
Regardless of the type of customer,
DSM/KISCO/HSI performed the same
type of selling functions in the home
market. Because DSM/KISCO/HSI
provided these services to each type of
customer through one channel of
distribution, we have determined that
one level of trade exists for DSM/
KISCO/HSI’s HM sales.
For the U.S. market, DSM/KISCO/HSI
reported one channel of distributionsales to unaffiliated U.S. customers
through Dongkuk International, Inc.
(DKA), DSM’s affiliated U.S. sales
company.4 All of DSM/KISCO/HSI’s
U.S. sales were CEP transactions and
DSM/KISCO/HSI performed the same
selling functions in each instance.
Therefore, the U.S. market has one LOT.
When we compared CEP sales (after
deductions made pursuant to section
772(d) of the Act) to HM sales, we
determined that for CEP sales, DSM/
KISCO/HSI’s U.S. affiliate performed
many services associated with its U.S.
sales. The differences in selling
functions performed for DSM/KISCO/
HSI’s home market and CEP
transactions indicate that HM sales
involved a more advanced stage of
distribution than CEP sales. In the home
market, DSM/KISCO/HSI provides
services normally found further down
the chain of distribution that are
normally performed by the affiliated
reseller in the U.S. market.
Based on our analysis, we determined
that CEP and the starting price of HM
sales represent different stages in the
4 As noted above, all U.S. sales were made by
DSM.
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16:42 Oct 06, 2006
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marketing process, and are thus at
different LOTs. Therefore, when we
compared CEP sales to HM sales, we
examined whether a LOT adjustment
may be appropriate. In this case, DSM/
KISCO/HSI sold at one LOT in the home
market; therefore, there is no basis upon
which to determine whether there is a
pattern of consistent price differences
between levels of trade. Further, we do
not have the information which would
allow us to examine pricing patterns of
DSM/KISCO/HSI’s sales of other similar
products, and there is no other record
evidence upon which such an analysis
could be based.
Because the data available do not
provide an appropriate basis for making
a LOT adjustment, but the LOT in Korea
for DSM/KISCO/HSI is at a more
advanced stage than the LOT of the CEP
sales, a CEP offset is appropriate in
accordance with section 773(a)(7)(B) of
the Act, as claimed by DSM/KISCO/HSI.
Therefore, we applied the CEP offset to
NV. See Memorandum to the File from
the Team, Level of Trade Analysis:
DSM/KISCO/HSI, dated concurrently
with this notice.
Constructed Export Price
We based the price of DSM/KISCO/
HSI’s U.S. sales of subject merchandise
on CEP, in accordance with section
772(b) of the Act, because DSM sold
subject merchandise to unaffiliated
purchasers in the United States after
importation through its U.S. affiliate,
DKA. We calculated CEP using prices,
less discounts, for packed subject
merchandise delivered to the first
unaffiliated purchaser in the United
States. In accordance with sections
772(c)(2)(A) and 772(d)(1) and (3) of the
Act, we made deductions from the
starting price, where appropriate, for the
following expenses: foreign and U.S.
inland freight, foreign and U.S.
brokerage and handling, international
freight, marine insurance, U.S. duties,
U.S. warehousing expense, direct and
indirect selling, to the extent these
expenses are associated with economic
activity in the United States, and CEP
profit.
Normal Value
After testing home market viability,
whether comparison market sales to
affiliates were at arm’s-length prices,
and whether comparison market sales
were at below cost prices, we calculated
NV for DSM/KISCO/HSI as noted in the
‘‘Price-to-Price Comparisons’’ section of
this notice.
A. Home Market Viability
In accordance with section
773(a)(1)(C) of the Act, in order to
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Fmt 4703
Sfmt 4703
59445
determine whether there was a
sufficient volume of sales in the home
market to serve as a viable basis for
calculating NV (i.e., the aggregate
volume of home market sales of the
foreign like product is greater than or
equal to five percent of the aggregate
volume of U.S. sales), we compared the
aggregate volume of DSM/KISCO/HSI’s
home market sales of the foreign like
product to the aggregate volume of its
U.S. sales of subject merchandise.
Because the aggregate volume of DSM/
KISCO/HSI’s home market sales of
foreign like product is more than five
percent of the aggregate volume of its
U.S. sales of subject merchandise, we
based NV on sales of the foreign like
product in the respondent’s home
market. See section 773(a)(1)(C)(ii) of
the Act.
B. Affiliated Party Transactions and
Arm’s-Length Test
The Department may calculate NV
based on a sale to an affiliated party
only if it is satisfied that the price to the
affiliated party is comparable to the
price at which sales are made to parties
not affiliated with the exporter or
producer, i.e., sales at arm’s-length. See
19 CFR 351.403(c). Sales to affiliated
customers for consumption in the home
market that were determined not to be
at arm’s-length were excluded from our
analysis. DSM/KISCO/HSI reported
sales of the foreign like product to
affiliated customers. To test whether
these sales were made at arm’s-length
prices, the Department compared the
prices of sales of comparable
merchandise to affiliated and
unaffiliated customers, net of all rebates,
movement charges, direct selling
expenses, and packing. Pursuant to 19
CFR 351.403(c), and in accordance with
the Department’s practice, when the
prices charged to an affiliated party
were, on average, between 98 and 102
percent of the prices charged to
unaffiliated parties for merchandise
comparable to that sold to the affiliated
party, we determined that the sales to
the affiliated party were at arm’s-length.
See Antidumping Proceedings:
Affiliated Party Sales in the Ordinary
Course of Trade, 67 FR 69186
(November 15, 2002). DSM/KISCO/
HSI’s sales to its affiliated home market
customers did not pass the arm’s-length
test. Therefore, we have excluded these
sales from our analysis.
C. Cost of Production Analysis
In the most recently completed
proceeding segment in which DSM/
KISCO received a calculated dumping
margin, the Department determined that
these companies sold certain foreign
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like product at prices below the cost of
producing the merchandise and
excluded such sales from the
calculation of NV. See Steel Concrete
Reinforcing Bar from The Republic of
Korea: Notice of Preliminary Results of
Antidumping Duty Administrative
Review, 68 FR 57883, 57885 (October 7,
2003) (no change at final). Therefore, in
accordance with section 773(b)(2)(A)(ii)
of the Act, there are reasonable grounds
to believe or suspect that during the
instant POR, DSM/KISCO/HSI sold
foreign like product at prices below the
cost of producing the merchandise. As
a result, the Department initiated a cost
of production (COP) inquiry with
respect to DSM/KISCO/HSI.
quantities.’’ Where 20 percent or more
of a respondent’s sales of a given
product are made at prices less than the
COP during the POR, we determine that
such sales are made in ‘‘substantial
quantities’’ and within an extended
period of time pursuant to sections
773(b)(2)(B) and (C) of the Act. In such
cases, because we use POR average
costs, we also determine, in accordance
with section 773(b)(2)(D) of the Act, that
such sales are not made at prices that
would permit recovery of all costs
within a reasonable period of time. In
the instant review, based on this test, we
did not disregard below cost sales for
DSM/KISCO/HSI.
1. Calculation of COP
In accordance with section 773(b)(3)
of the Act, for each unique foreign like
product sold by DSM/KISCO/HSI
during the POR, we calculated a
weighted-average COP based on the sum
of the respondent’s materials and
fabrication costs, general and
administrative expenses, interest
expenses, and import duties normally
associated with imported material. See
Stainless Steel Sheet and Strip in Coils
from Mexico; Final Results of
Antidumping Duty Administrative
Review 68 FR 6889 (February 11, 2003).
For further information, see the analysis
memorandum for DSM/KISCO/HSI,
dated concurrently with this notice.
Price-to-Price Comparisons
jlentini on PROD1PC65 with NOTICES
2. Test of Comparison Market Sales
Prices
In order to determine whether sales
were made at prices below the COP on
a product specific basis, we compared
the respondent’s weighted-average COP
to the prices of its home market sales of
foreign like product, as required under
section 773(b) of the Act. In accordance
with sections 773(b)(1)(A) and (B) of the
Act, in determining whether to
disregard home market sales made at
prices less than the COP, we examined
whether such sales were made: (1) In
substantial quantities within an
extended period of time; and (2) at
prices which permitted the recovery of
all costs within a reasonable period of
time. We compared the COP to home
market sales prices, less any applicable
movement charges and direct and
indirect selling expenses.
3. Results of the COP Test
Pursuant to section 773(b)(2)(C) of the
Act, where less than 20 percent of a
respondent’s sales of a given product are
made at prices less than the COP, we do
not disregard any below cost sales of
that product because the below cost
sales are not made in ‘‘substantial
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16:42 Oct 06, 2006
Jkt 211001
Where it was appropriate to base NV
on prices, we used the prices at which
the foreign like product was first sold
for consumption in the home market, in
the usual commercial quantities, in the
ordinary course of trade, and, to the
extent possible, at the same LOT as the
comparison U.S. sale. We calculated NV
using prices, less any discounts or
rebates, for packed foreign like product
delivered to unaffiliated purchasers or,
where appropriate, affiliated purchasers
in the home market. In accordance with
sections 773(a)(6)(A), (B), and (C) of the
Act, where appropriate, we deducted
from the starting price the following
home market expenses: movement,
packing, and credit. Additionally, we
added interest revenue to the starting
price. We added to the starting price the
following U.S. expenses: Packing,
credit, and other direct selling expenses.
Finally, where appropriate, we made
price adjustments for physical
differences in the merchandise and
made a reasonable allowance for other
selling expenses where commissions
were paid in only one of the markets
under consideration.
See 773(a)(6)(C)(ii) of the Act and 19
CFR 351.410(e).
Currency Conversion
Pursuant to section 773A(a) of the
Act, we converted amounts expressed in
foreign currencies into U.S. dollar
amounts based on the exchange rates in
effect on the dates of the U.S. sales, as
certified by the Federal Reserve Bank.
Preliminary Results of Review
As a result of this review, we
preliminarily determine that the
following weighted-average dumping
margins exist for the period September
1, 2004, through August 31, 2005:
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Frm 00021
Fmt 4703
Sfmt 4703
Manufacturer/Exporter
Dongkuk Steel Mill Co. Ltd./
Korea Iron and Steel Co.,
Ltd./Hwanyoung Steel Ind.
Co. Ltd. .................................
Dongil Industries Co Ltd. ..........
Margin
(percent)
0.00
102.28
Public Comment
Within 10 days of publicly
announcing the preliminary results of
this review, we will disclose to
interested parties any calculations
performed 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.
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
In accordance with 19 CFR
351.212(b)(1), in these preliminary
results of review we calculated
importer-specific assessment rates
because the importer is known for all of
the sales made by the collapsed entity.
Since the collapsed entity reported the
entered value, we calculated ad valorem
assessment rates for the collapsed entity
by summing, on an importer-specific
basis, the dumping margins calculated
for all of the collapsed entity’s sales to
the importer and dividing this amount
by the total quantity of those sales. If the
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importer-specific assessment rate is
above de minimis (i.e., 0.50 percent ad
valorem or greater), we will instruct
CBP to assess the importer-specific rate
uniformly, as appropriate, on all entries
of subject merchandise during the POR
that were entered by the importer or
sold to the customer. The Department
will issue appropriate assessment
instructions based on the final results of
review directly to CBP within 15 days
of publication of those final results.
The Department clarified its
‘‘automatic assessment’’ regulation on
May 6, 2003 (68 FR 23954). This
clarification will apply to entries of
subject merchandise during the period
of review produced by companies
included in these final results of review
for which the reviewed companies did
not know their merchandise was
destined for the United States. In such
instances, we will instruct CBP to
liquidate unreviewed entries at the allothers rate if there is no rate for the
intermediate company involved in the
transaction. For a full discussion of this
clarification, see Antidumping and
Countervailing Duty Proceedings:
Assessment of Antidumping Duties, 68
FR 23954 (May 6, 2003).
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 rates for the companies
examined in the instant review will be
the rate established in the final results
of this review (except that if the rate for
a particular company is de minimis, i.e.,
less than 0.5 percent, no cash deposit
will be required for that company); (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
22.89 percent, the ‘‘all others’’ rate made
effective by the LTFV investigation. See
LTFV Final Determination. These cash
deposit rates, when imposed, shall
remain in effect until publication of the
final results of the next administrative
review.
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16:42 Oct 06, 2006
Jkt 211001
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 and countervailing 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 and countervailing duties
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.
Dated: October 2, 2006.
Joseph A. Spetrini,
Acting Assistant Secretary, for Import
Administration.
[FR Doc. E6–16678 Filed 10–6–06; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
[I.D. 100306I]
New England Fishery Management
Council; Public Meeting
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Notice of a public meeting.
AGENCY:
SUMMARY: The New England Fishery
Management Council (Council) is
scheduling a public meeting of its
Research Steering Committee in
October, 2006 to consider actions
affecting New England fisheries in the
exclusive economic zone (EEZ).
Recommendations from this group will
be brought to the full Council for formal
consideration and action, if appropriate.
DATES: This meeting will be held on
Wednesday, October 25, 2006, at 9 a.m.
ADDRESSES: This meeting will be held at
the Sheraton Colonial, One Audubon
Road, Wakefield, MA 01880; telephone:
(781) 245–9300; fax: (781) 245–0842.
Council address: New England
Fishery Management Council, 50 Water
Street, Mill 2, Newburyport, MA 01950.
FOR FURTHER INFORMATION CONTACT: Paul
J. Howard, Executive Director, New
England Fishery Management Council;
telephone: (978) 465–0492.
SUPPLEMENTARY INFORMATION: The
Research Steering Committee will
review: three cod-tagging projects
PO 00000
Frm 00022
Fmt 4703
Sfmt 4703
59447
undertaken as part of the overall
Northeast Regional Cod Tagging
Program coordinated by the Gulf of
Maine Research Institute (GMRI); the
GMRI cod tagging program itself; two
Northeast Consortium-funded cod
projects and the National Marine
Fisheries Service-sponsored cod
industry-based survey that was the
subject of a peer-review in August.
Additionally, the committee will review
the scientific basis for NMFS policies
that guide the issuance of Exempted
Fishing Permits in the Northeast Region.
Although non-emergency issues not
contained in this agenda may come
before this group for discussion, those
issues may not be the subject of formal
action during this meeting. Action will
be restricted to those issues specifically
listed in this notice and any issues
arising after publication of this notice
that require emergency action under
section 305(c) of the Magnuson-Stevens
Act, provided the public has been
notified of the Council’s intent to take
final action to address the emergency.
Special Accommodations
This meeting is physically accessible
to people with disabilities. Requests for
sign language interpretation or other
auxiliary aids should be directed to Paul
J. Howard, Executive Director, at (978)
465–0492, at least 5 days prior to the
meeting date.
Authority: 16 U.S.C. 1801 et seq.
Dated: October 4, 2006.
Tracey L. Thompson,
Acting Director, Office of Sustainable
Fisheries, National Marine Fisheries Service.
[FR Doc. E6–16638 Filed 10–6–06; 8:45 am]
BILLING CODE 3510–22–S
DEPARTMENT OF COMMERCE
National Technical Information Service
National Technical Information Service
Advisory Board
National Technical Information
Service, Commerce.
ACTION: Notice; solicitation of
applications for NTIS Advisory Board
membership.
AGENCY:
SUMMARY: The National Technical
Information Service (NTIS) is seeking a
qualified candidate to serve as one of
the five members of the NTIS Advisory
Board. NTIS Advisory Board will meet
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Secretary of Commerce, the Under
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E:\FR\FM\10OCN1.SGM
10OCN1
Agencies
[Federal Register Volume 71, Number 195 (Tuesday, October 10, 2006)]
[Notices]
[Pages 59440-59447]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-16678]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-844]
Steel Concrete Reinforcing Bar From The Republic of Korea: Notice
of Preliminary Results and Preliminary Rescission, in Part, of
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to requests by Dongkuk Steel Mill Co. Ltd. (DSM),
a producer/exporter of the subject merchandise, and petitioners,\1\ the
Department of Commerce (the Department) is conducting an administrative
review of the antidumping duty order on steel concrete reinforcing bar
(rebar) from the Republic of Korea (Korea). This review covers seven
producers/exporters of the subject merchandise. The period of review
(POR) is September 1, 2004, through August 31, 2005.
---------------------------------------------------------------------------
\1\ The petitioners are the Rebar Trade Action Coalition and its
individual members-Gerdau Ameristeel, CMC Steel Group, Nucor
Corporation, and TAMCO.
---------------------------------------------------------------------------
As discussed below, the Department has preliminarily determined to
collapse DSM, Korea Iron and Steel Co., Ltd. (KISCO), and Hwanyoung
Steel Industries Co. (HSI), into a single entity for purposes of this
administrative review. We preliminarily determine that DSM/KISCO/HSI
made sales at less than normal value (NV) during the POR. Further, as a
result of our review, we preliminarily determine that three respondents
had no sales or shipments of subject merchandise to the United States
during the POR. Therefore, we are preliminarily rescinding the review
with respect to these respondents. One remaining respondent, Dongil
Industries Co. Ltd. (Dongil), failed to respond to our questionnaire.
As a result, we are basing our preliminary results for Dongil on total
adverse facts available (AFA). If these preliminary results are adopted
in our final results of administrative review, we will instruct U.S.
Customs and Border Protection (CBP) to assess antidumping duties on all
appropriate entries. Interested parties are invited to comment on these
preliminary results of review. Unless we extend the deadline, we will
issue the final results of review no later than 120 days from the date
of publication of this notice.
DATES: Effective Date: October 10, 2006.
FOR FURTHER INFORMATION CONTACT: Mark Manning or Drew Jackson, AD/CVD
Operations, Office 4, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
5253, or (202) 482-4406, respectively.
Background
On September 7, 2001, the Department published an antidumping duty
order on rebar from Korea. See Antidumping Duty Orders: Steel Concrete
Reinforcing Bars From Belarus, Indonesia, Latvia, Moldova, People's
Republic of China, Poland, Republic of Korea and Ukraine, 66 FR 46777
(September 7, 2001). On September 1, 2005, the Department published in
the Federal Register a notice of ``Opportunity to Request
Administrative Review'' of the antidumping duty order on rebar from
Korea. See Antidumping or Countervailing Duty Order, Finding, or
Suspended Investigation; Opportunity to Request Administrative Review,
70 FR 52072 (September 1, 2005). On September 21, 2005, in accordance
with 19 CFR 351.213(b)(2), DSM requested that the Department conduct an
administrative review of its sales and entries of subject merchandise
into the United States during the POR. Additionally, in accordance with
19 CFR 351.213(b)(1), on September 30, 2005, petitioners requested that
the Department conduct a review of DSM, Dongil, Hanbo Iron & Steel Co.,
Ltd. (Hanbo), INI Steel (INI), Kosteel Co., Ltd (Kosteel), and KISCO.
On October 25, 2005, the Department initiated an
[[Page 59441]]
administrative review of Dongil, DSM, Hanbo, INI, Kosteel Co., and
KISCO. See Initiation of Antidumping and Countervailing Duty
Administrative Reviews, 70 FR 61601 (October 25, 2005).
On October 19, 2005, the Department issued its antidumping
questionnaire to Dongil, DSM, Hanbo, INI, Kosteel, and KISCO. In
December 2005, DSM and KISCO responded to the Department's antidumping
questionnaire.\2\ Additionally, KISCO's affiliate, HSI, responded to
the Department's antidumping questionnaire in December 2005.
Thereafter, the Department issued supplemental questionnaires to DSM,
KISCO, and HSI, and received timely responses. The petitioners
submitted comments regarding the respondents' supplemental
questionnaire responses on May 26, 2006, and September 13, 2006.
---------------------------------------------------------------------------
\2\ KISCO and its affiliate, HSI, reported that they had no
sales or shipments of subject merchandise to the United States
during the POR. However, because DSM and KISCO were found to be
affiliated and were collapsed in a prior review, the Department
reviewed KISCO and HSI's submissions regarding, inter alia, their
corporate structure and affiliations, home market sales, and cost of
production.26, 2006, and September 13, 2006.
---------------------------------------------------------------------------
On October 21, 2005, Hanbo and INI notified the Department that
neither they nor any of their affiliates had any sales or exports of
subject merchandise during the POR. On August 2, 2006, the Department
sent a letter to Kosteel and Dongil informing these companies that we
did not receive a response from them to the antidumping questionnaire.
In the letter, the Department stated that, if they did not respond to
the antidumping questionnaire because they had no shipments of subject
merchandise to the United States during the POR, they should inform the
Department of this fact; otherwise, the Department may conclude that
these companies decided not to cooperate with the Department's review.
In response, on August 8, 2006, Kosteel reported that it had no sales
or shipments of subject merchandise to the United States during the
POR. Dongil did not respond to the Department's August 2, 2006, letter.
Because it was not practicable to issue the preliminary results of
this review within the normal time frame, on May 30, 2006, the
Department published in the Federal Register a notice of the extension
of time limits for these preliminary results. See Steel Concrete
Reinforcing Bars from the Republic of Korea: Extension of the Time
Limit for the Preliminary Results of Antidumping Duty Administrative
Review, 71 FR 30658 (May 30, 2006). This extension established the
deadline for these preliminary results as September 30, 2006. The first
business day after this deadline is October 2, 2006.
Period of Review
The POR is September 1, 2004, through August 31, 2005.
Scope of the Order
The product covered by this order is all rebar sold in straight
lengths, currently classifiable in the Harmonized Tariff Schedule of
the United States (HTSUS) under item number 7214.20.00 or any other
tariff item number. Specifically excluded are plain rounds (i.e., non-
deformed or smooth bars) and rebar that has been further processed
through bending or coating. The HTSUS subheading is provided for
convenience and customs purposes. The written description of the scope
of this proceeding is dispositive.
Partial Rescission of Review
As noted above, Hanbo, INI, and Kosteel informed the Department
that they had no shipments of subject merchandise to the United States
during the POR. We obtained entry data from CBP and found that these
data support the statements made by these respondents, that they had no
shipments of subject merchandise during the POR. Therefore, in
accordance with 19 CFR 351.213(d)(3) and consistent with the
Department's practice, we are preliminarily rescinding our review with
respect to Hanbo, INI, and Kosteel. (See, e.g., Certain Welded Carbon
Steel Pipe and Tube from Turkey; Final Results and Partial Rescission
of Antidumping Administrative Review, 63 FR 35190, 35191 (June 29,
1998); and Certain Fresh Cut Flowers from Colombia; Final Results and
Partial Rescission of Antidumping Duty Administrative Review, 62 FR
53287, 53288 (October 14, 1997)).
Facts Available
Section 776(a)(2) of the Tariff Act of 1930, as amended (the Act),
provides that if any interested party: (A) Withholds information that
has been requested by the Department; (B) fails to provide such
information by the deadlines for submission of the information or in
the form or manner requested; (C) significantly impedes a proceeding;
or (D) provides such information but the information cannot be
verified, the Department shall, subject to section 782(d) of the Act,
use facts otherwise available in making its determination.
If the Department determines that a response to a request for
information does not comply with the request, section 782(d) of the Act
provides that the Department will inform the person submitting the
response of the nature of the deficiency and shall, to the extent
practicable, provide that person the opportunity to remedy or explain
the deficiency. If that person submits further information that
continues to be unsatisfactory, or this information is not submitted
within the applicable time limits, the Department may, subject to
section 782(e), disregard all or part of the original and subsequent
responses, as appropriate.
Section 782(e) of the Act states that the Department shall not
decline to consider information submitted by an interested party and is
necessary to the determination, but does not meet all of the
Department's applicable requirements, if: (1) The information is
submitted by the established deadline; (2) the information can be
verified; (3) the information is not so incomplete that it cannot serve
as a reliable basis for reaching the applicable determination; (4) the
interested party has demonstrated that it acted to the best of its
ability; and (5) the information can be used without undue
difficulties.
Furthermore, section 776(b) of the Act states 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, in reaching the applicable determination
under this title, ``may use an inference that is adverse to the
interests of that party in selecting from among the facts otherwise
available.'' See also Statement of Administrative Action (SAA)
accompanying the URAA, H.R. Rep. No. 103-316 at 870 (1994).
Application of Facts Available
The evidence on the record of this review establishes that,
pursuant to section 776(a)(2)(A) of the Act, the use of total facts
available (FA) is warranted in determining the dumping margin for U.S.
sales of rebar made by Dongil because it failed to provide any
requested information to the Department. As stated above, on October
19, 2005, the Department issued the antidumping questionnaire to six
manufacturers/exporters of the subject merchandise. Five companies
responded to the questionnaire, with three of the five companies
ultimately advising the Department that they did not have shipments or
sales of subject merchandise to the United States during the POR. The
remaining company, Dongil, failed to respond to the Department's
antidumping questionnaire. On August 2, 2005, we
[[Page 59442]]
informed Dongil that, because it failed to respond to the Department's
antidumping questionnaire, and had not informed the Department as to
whether it had sales or shipments of subject merchandise to the United
States during the POR, we may use AFA to determine its dumping margin.
Dongil did not respond to the Department's August 2, 2005, letter.
Because Dongil failed to provide the necessary information
requested by the Department, pursuant to section 776(a)(2)(A) of the
Act, we must establish the margins for this company based on the facts
otherwise available.
Use of Adverse Inferences
In selecting from among the facts otherwise available, pursuant to
section 776(b) of the Act, an adverse inference is warranted when the
Department has determined that a respondent has ``failed to cooperate
by not acting to the best of its ability to comply with a request for
information.'' Section 776(b) of the Act goes on to state that an
adverse inference may include reliance on information derived from (1)
The petition; (2) a final determination in the investigation under this
title; (3) any previous review under section 751 or determination under
section 753, or (4) any other information on the record.
Adverse inferences are appropriate ``to ensure that the party does
not obtain a more favorable result by failing to cooperate than if it
had cooperated fully.'' See SAA at 870; Timken Co. V, United States,
354 F.3d 1334, 1345 (Fed. Cir. 2004); Mannesmannrohren-Werke AG v.
United States, 77 F. Supp. 2d 1302 n.7 (CIT 1999). The Court of Appeals
for the Federal Circuit (CAFC), in Nippon Steel Corporation v. United
States, 337 F. 3d 1373, 1381 (Fed. Cir. 2003), provided an explanation
of the ``failure to act to the best of its ability'' standard, holding
that the Department need not show intentional conduct existed on the
part of the respondent, but merely that a ``failure to cooperate to the
best of a respondent's ability'' existed, i.e., information was not
provided ``under circumstances in which it is reasonable to conclude
that less than full cooperation has been shown.'' Id. at 1383. The CAFC
did acknowledge, however, that ``deliberate concealment or inaccurate
reporting'' would certainly be a reason to apply AFA, although it
indicated that inadequate responses to agency inquiries ``would
suffice'' as well. Id.
To examine whether the respondent ``cooperated'' by ``acting to the
best of its ability'' under section 776(b) of the Act, the Department
considers, inter alia, the accuracy and completeness of submitted
information and whether the respondent has hindered the calculation of
accurate dumping margins. See Mannesmannrohren-Werke AG v. United
States, 120 F.Supp. 2d 1075,1096 (CIT 2000).
The record shows that Dongil failed to cooperate to the best of its
ability, within the meaning of section 776(b) of the Act. In reviewing
the evidence on the record, the Department finds that Dongil failed to
provide requested information. Moreover, Dongil failed to offer any
explanation for its failure to respond to our antidumping questionnaire
or August 2, 2005, letter. As a general matter, it is reasonable for
the Department to assume that Dongil possessed the records necessary to
participate in this review; however, by not supplying the information
the Department requested, Dongil failed to cooperate to the best of its
ability. As Dongil has failed to cooperate to the best of its ability,
we are applying an adverse inference pursuant to section 776(b) of the
Act. As AFA for Dongil, we have used a rate of 102.28 percent, which is
the highest margin from any segment of the proceeding. Specifically,
this rate was the highest margin alleged for any Korean company in the
petition and is the rate used as AFA for Hanbo in the final
determination of the less-than-fair-value (LTFV) investigation. See
Notice of Final Determination of Sales at Less Than Fair Value: Steel
Concrete Reinforcing Bars From the Republic of Korea, 66 FR 33526 (June
22, 2001). This rate was also used as AFA for both Hanbo and Dongil in
the last completed administrative review of this order. See Steel
Concrete Reinforcing Bars From the Republic of Korea: Notice of Final
Results and Final Partial Rescission of Antidumping Duty Administrative
Review, 69 FR 54642 (September 9, 2004).
Corroboration of Information
Section 776(c) of the Act requires the Department to corroborate,
to the extent practicable, secondary information used as FA. Secondary
information is defined as ``{i{time} nformation 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 and 19 CFR 351.308(d).
The SAA further provides that the term ``corroborate'' means that
the Department will satisfy itself that the secondary information to be
used has probative value. See SAA at 870. Thus, to corroborate
secondary information, the Department will, to the extent practicable,
examine the reliability and relevance of the information used. During
the LTFV investigation, we examined the reliability of the 102.28
percent rate selected as AFA for Hanbo and found it to be reliable. See
Memorandum to Troy H. Cribb, Assistant Secretary for Import
Administration, from Holly A. Kuga, Acting Deputy Assistant Secretary
for AD/CVD Enforcement, Group II, ``The Use of Facts Available for
Hanbo Iron & Steel Co. Ltd., and Corroboration of Secondary
Information,'' dated January 16, 2001, and placed on the record of this
review concurrently with these preliminary results. There is no
information on the record of this review to demonstrate that this rate
is no longer reliable.
As to the relevance of the AFA rate, the CAFC has stated that
Congress ``intended for an adverse facts available rate to be a
reasonably accurate estimate of the respondent's actual rate, albeit
with some built-in increase intended as a deterrent to non-
compliance.'' F.Lli De Cecco Di Filippo Fara S. Martino S.p.A., v.
U.S., 216 F.3d 1027, 1032 (Fed. Cir. 2000). The Department considers
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 AFA, the Department will
disregard the selected margin and determine an appropriate margin. See,
e.g., Fresh Cut Flowers from Mexico: Final Results of Antidumping
Administrative Review, 61 FR 6812 (February 22, 1996).
With respect to the rate selected for Dongil, we note that in
determining the relevant AFA rate, the Department assumes that if an
uncooperative respondent could have demonstrated that its dumping
margin is lower than the highest prior margin, it would have provided
information showing the margin to be less. See Rhone Poulenc, Inc. v.
United States, 899 F.2d 1185, 1190-91 (Fed. Cir. 1990) (Rhone Poulenc).
In Rhone Poulenc, the CAFC found that the presumption that, ``the
highest prior margin was the best information of current margins'' was
a permissible interpretation of 19 U.S.C. 1677e(c). See Rhone Poulenc,
899 F.2d at 1190. In upholding this presumption, the CAFC cited the
rationale underlying the adverse inference rule, that the presumption
``reflects a common sense inference that the highest prior margin is
the most probative evidence of current margins because, if it were not
so, the importer, knowing of the rule, would have produced current
information showing the margin to be less.'' Id. In other proceedings,
the
[[Page 59443]]
Department has used the highest margin in the proceeding as AFA.
See, e.g., Freshwater Crawfish Tail Meat from the People's Republic
of China; Notice of Final Results of Antidumping Duty Administrative
Review, 68 FR 19504, 19508 (April 21, 2003). In fact, the Department
used the 102.28 percent rate as AFA in the final determination of the
LTFV investigation with respect to Hanbo and, subsequently, applied it
to both Dongil and Hanbo in the last completed administrative review.
Therefore, Dongil had notice that the 102.28 percent rate may be used
as the AFA rate that would be applied for its failure to cooperate.
Consequently, in keeping with Rhone Poulenc, we consider the 102.28
percent rate to be the most probative evidence of current margin for
Dongil because, if it were not so, Dongil, knowing 102.28 percent rate
may be assigned as AFA, would have produced current information showing
the margin to be less. Further, since Dongil's current margin is 102.28
percent, assigning a rate less than this amount as AFA would allow
Dongil to benefit from its non-cooperation. Therefore, we consider the
102.28 percent rate to be relevant.
Accordingly, we have determined, to the extent practicable, that
the rate selected as AFA are both reliable and relevant. Therefore, we
have corroborated this rate in accordance with section 776(c) of the
Act.
Affiliation
We preliminarily find that DSM, KISCO, HSI, and Dongkuk Industries
Co., Ltd. (DKI) \3\ are affiliated through to sections 771(33)(A) and
771(33)(F) of the Act. Pursuant to section 771(33)(A) of the Act, the
following persons, among others, are affiliated: ``Members of a family,
including brothers and sisters (whether by the whole or half blood),
spouse, ancestors, and lineal descendants. * * * '' See section
771(33)(A) of the Act. The record shows that certain senior executives
of DSM, KISCO, HSI, and DKI are descendants of a common progenitor, the
late Kyung-Ho Chang. These members of the Chang family are related as
uncles, nephews, and first cousins. Since the details of these
relationships are business proprietary information, please see the
Memorandum from Thomas F. Futtner, Acting Office Director, to Stephen
J. Claeys, Deputy Assistant Secretary for Import Administration,
``Whether to Collapse Dongkuk Steel Mill Co., Ltd., Korea Iron and
Steel Co., Ltd., and Hwanyoung Steel Ind. Co. Ltd. Into a Single
Entity,'' dated October 2, 2006 (Collapsing Memorandum). Accordingly,
consistent with the definition of ``family'' under section 771(33)(A)
of the Act, the Department's prior practice, the controlling precedent
(see Ferro Union Inc. v. Wheatland Tube Co., 44 F. Supp. 2d 1310, 1325-
1326 (CIT 1999) (Ferro Union Inc.)), our findings in the LTFV
investigation (see Notice of Final Determination of Sales at Less Than
Fair Value: Steel Concrete Reinforcing Bars From the Republic of Korea,
66 FR 33526 (June 22, 2001) (LTFV Final Determination)), and the most
recently completed review in which the Department calculated a dumping
margin for DSM/KISCO (see Steel Concrete Reinforcing Bar From The
Republic of Korea: Final Results of Antidumping Duty Administrative
Review, 69 FR 19399 (April 13, 2004)), the Department preliminarily
determines that certain senior executives of DSM, KISCO, DKI, and HSI
are members of the Chang family, and thus are affiliated. See
Collapsing Memorandum.
---------------------------------------------------------------------------
\3\ DKI is a manufacturer of cold-rolled steel, pickled and
oiled coils, and hot-dip galvanized coil. DKI is also a trading
company that exports various steel products. DKI does not produce
subject merchandise.
---------------------------------------------------------------------------
Section 771(33)(F) of the Act states that, ``two or more persons
directly or indirectly controlling, controlled by, or under common
control with, any person,'' shall be considered to be affiliated. A
person includes any interested party as well as any other individual,
enterprise, or entity. See 19 CFR 351.102. The courts have agreed that
a family group is an entity and thus is a ``person,'' for purposes of
section 771(33)(F) of the Act. See Ferro Union Inc., 44 F. Supp. 2d at
1326; Dongkuk Steel Mill Co., v. United States, Slip Op. 05-75 at 13
(CIT June 22, 2005) (Dongkuk). As further defined by section 771(33) of
the Act, ``a person shall be considered to control another person if
the person is legally or operationally in a position to exercise
restraint or direction over the other person.'' See section 771(33) of
the Act. The record shows that certain members of the Chang family are
senior executives of these companies. See Collapsing Memorandum.
Additionally, these same members of the Chang family are the largest
shareholders of DSM, KISCO, and DKI. Id. Further, KISCO is the largest
shareholder of HSI. Accordingly, the Chang family's leadership
positions within these companies, as well as the fact that they control
the largest blocks of outstanding shares in DSM, KISCO, and DKI (and
KISCO is the largest shareholder in HSI), puts the Chang family in a
position to legally and/or operationally control DSM, KISCO, DKI, and
HSI, thus satisfying the requirements of affiliation under section
771(33)(F) of the Act. The Court of International Trade (CIT) upheld
the Department's similar finding of affiliation in the 2001-2002 Final
Results. See Dongkuk, Slip. Op 05-75 at 4.
In addition, section 771(33)(E) of the Act states that two or more
persons shall be considered to be affiliated if any person directly or
indirectly owns 5 percent or more of the outstanding voting shares of
an organization. In this case, record evidence demonstrates that KISCO
directly owns over 5 percent of HSI's outstanding shares. Therefore, we
find that KISCO is affiliated with HSI pursuant to section 771(33)(E)
of the Act. See Collapsing Memorandum.
Collapsing
Section 351.401(f)(1) of the Department's regulations states that
in an antidumping proceeding the Department ``will treat two or more
affiliated producers as a single entity where those producers have
production facilities for similar or identical products that would not
require substantial retooling of either facility in order to
restructure manufacturing priorities and the Secretary concludes that
there is a significant potential for the manipulation of price or
production.'' See 19 CFR 351.401(f)(1).
Section 351.401(f)(2) of the Department's regulations identifies
factors to be considered to determine whether there is a significant
potential for manipulation. These include: (i) The level of common
ownership; (ii) the extent to which managerial employees or board
members of one firm sit on the board of directors of an affiliated
firm; and (iii) whether operations are intertwined, such as through the
sharing of sales information, involvement in production and pricing
decisions, the sharing of facilities or employees, or significant
transactions between the affiliated producers.
As discussed above, and in the accompanying Collapsing Memorandum,
based on the evidence on the record in this review, we have
preliminarily determined that DSM is affiliated with KISCO and HSI by
virtue of common control by the Chang family. See sections 771(33)(A)
and (F) of the Act. Accordingly, the Department preliminarily
determines that the first of the three requirements for collapsing the
companies has been met. The CIT upheld the Department's decision to
collapse DSM and KISCO in the 2001-2002 Final Results. See Dongkuk,
Slip. Op 05-75 at 16-17.
[[Page 59444]]
Having determined that DSM, KISCO, and HSI are affiliated, the
Department examines whether the producers have production facilities
for similar or identical products that would not require ``substantial
retooling * * * in order to restructure manufacturing priorities.'' Cf.
Notice of Preliminary Results of New Shipper Review of the Antidumping
Duty Order on Certain Pasta From Italy, 69 FR 319, 321 (January 5,
2004). Based on the questionnaire responses submitted by DSM, KISCO,
and HSI, the Department has preliminarily determined that the three
companies' production facilities would not require substantial
retooling to restructure manufacturing priorities. See Collapsing
Memorandum.
Further, based on the record of this proceeding, the Department
preliminarily determines that significant potential for manipulation of
price or production exists. In analyzing whether there exists a
potential for price or production manipulation, the Department may
consider the following factors: (1) The level of common ownership; (2)
the extent to which managerial employees or directors of one firm also
sit on the board of the other firm; and (3) whether operations are
intertwined. See 19 CFR 351.401(f)(2). Based on information supplied by
DSM, KISCO, and HSI, the Department preliminarily determines that each
of these factors has been satisfied in this segment of the proceeding.
See Collapsing Memorandum for a full discussion of the issues. As the
CIT recognized in Dongkuk, the agency's concern is with the potential
for manipulation, which continues to exist in this case. See Dongkuk,
Slip. Op 05-75 at 17.
Based on these reasons, we find that DSM, KISCO, and HSI are
affiliated producers with similar or identical production facilities
that would not require substantial retooling of either facility in
order to restructure manufacturing priorities. We also find that there
exists a significant potential for the manipulation of price or
production. Therefore, we have collapsed DSM, KISCO, and HSI, and are
treating them as a single entity for purposes of these preliminary
results.
Comparison Methodology
In order to determine whether the respondents sold rebar to the
United States at prices less than NV, the Department compared the
constructed export price (CEP) of individual U.S. sales to the monthly
weighted-average NV of sales of the foreign like product made in the
ordinary course of trade. See section 777A(d)(2) of the Act; see also
section 773(a)(1)(B)(i) of the Act. Section 771(16) of the Act defines
foreign like product as merchandise that is identical or similar to
subject merchandise and produced by the same person and in the same
country as the subject merchandise. Thus, we considered all products
covered by the scope of the order, that were produced by the same
person and in the same country as the subject merchandise and sold by
respondents in the comparison market during the POR, to be foreign like
products, for the purpose of determining appropriate product
comparisons to rebar sold in the United States.
The Department compared U.S. sales to sales made in the comparison
market within the contemporaneous window period, which extends from
three months prior to the month in which the U.S. sale was made until
two months after the month in which the U.S. sale was made. In making
product comparisons, the Department selected identical foreign like
products based on the physical characteristics reported by the
respondents in the following order of importance: type of steel, yield
strength, size, and coating. The Department reclassified the yield
strength designation of certain merchandise based on its preliminary
finding that the merchandise was weldable. For further information, see
the analysis memorandum for DSM/KISCO/HSI, dated concurrently with this
notice.
Duty Drawback
Before increasing a respondent's reported U.S. sales prices by the
amount of duty drawback, pursuant to section 772(c)(1)(B) of the Act,
the Department's practice is to examine whether: (1) Import duties and
rebates are directly linked to, and are dependent upon, one another,
or, in the context of a duty exemption, the exemption is linked to the
exportation of subject merchandise and (2) the company claiming the
adjustment can demonstrate that there are sufficient imports of raw
materials to account for the duty drawback received on exports of the
manufactured product. See Steel Wire Rope from the Republic of Korea;
Final Results of Antidumping Duty Administrative Review, 61 FR 55965,
55968 (October 30, 1996); see also, Stainless Steel Sheet and Strip in
Coils from Mexico; Final Results of Antidumping Duty Administrative
Review, 68 FR 6889 (February 11, 2003) and accompanying Issues and
Decision Memorandum at Comment 5.
DSM reported that it received duty drawback pursuant to Korea's Act
on Special Cases Concerning the Refundment of Customs Duties, Etc.,
Levied on Raw Materials for Export (Duty Refund Program). DSM reported
that it received certain ``drawback'' amounts associated with duties
paid on imported inputs pursuant to the Korean Government's individual
application system, where the duty is rebated based upon each
applicant's use of the imported input. Since the applicable criteria
have been met in this case, in calculating CEP for DSM/KISCO/HSI, the
Department has preliminarily added an amount for duty drawback to the
reported prices. We made additions to the starting price for duty
drawback in accordance with section 772(c)(1)(B) of the Act.
Level of Trade and CEP Offset
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determined NV based on sales in the comparison market
at the same level of trade (LOT) as the CEP sales. The NV LOT is that
of the starting price sales in the comparison market or, when NV is
based on CV, that of the sales from which we derive selling, general,
and administrative expenses and profit. For CEP sales, the U.S. LOT is
the level of the constructed export sale from the exporter to its
affiliate. The Department adjusts CEP, pursuant to section 772(d) of
the Act, prior to performing the LOT analysis, as articulated in 19 CFR
351.412. See Micron Technology, Inc. v. United States, 243 F.3d, 1301,
1315 (Fed. Cir. 2001).
To determine whether NV sales are at a different LOT than the CEP
sales, we examine stages in the marketing process and selling functions
along the chain of distribution between the producer and the
unaffiliated customer. If the comparison market sales are at a
different LOT, and the difference affects price comparability, as
manifested in a pattern of consistent price differences between the
sales on which NV is based and comparison-market sales at the LOT of
the export transaction, we make a LOT adjustment under section
773(a)(7)(A) of the Act. For CEP sales, if the NV level is more remote
from the factory than the CEP level and there is no basis for
determining whether the difference in the levels between NV and CEP
affects price comparability, we adjust NV under section 773(A)(7)(B) of
the Act (the CEP offset provision). See Notice of Final Determination
of Sales at Less Than Fair Value: Certain Carbon Steel Plate from South
Africa, 62 FR 61731, 61732 (November 19, 1997).
In determining whether the respondents made sales at separate LOTs,
we obtained information from
[[Page 59445]]
DSM, HSI and KISCO regarding the marketing stages for the reported U.S.
and comparison market sales, including a description of the selling
activities performed by respondents for each channel of distribution.
Generally, if the reported LOTs are the same, the functions and
activities of the seller at each level should be similar. Conversely,
if a party reports that LOTs are different for different groups of
sales, the selling functions and activities of the seller for each
group should be dissimilar.
In implementing these principles in this review, we asked DSM/
KISCO/HSI to identify the specific differences and similarities in
selling functions and support services between all phases of marketing
in the home market and the United States. DSM/KISCO/HSI identified one
channel of distribution in the home market: direct sales from its
factory to its customers. DSM/KISCO/HSI also identified three types of
home market customers: end-users, distributors or government entities.
Regardless of the type of customer, DSM/KISCO/HSI performed the same
type of selling functions in the home market. Because DSM/KISCO/HSI
provided these services to each type of customer through one channel of
distribution, we have determined that one level of trade exists for
DSM/KISCO/HSI's HM sales.
For the U.S. market, DSM/KISCO/HSI reported one channel of
distribution-sales to unaffiliated U.S. customers through Dongkuk
International, Inc. (DKA), DSM's affiliated U.S. sales company.\4\ All
of DSM/KISCO/HSI's U.S. sales were CEP transactions and DSM/KISCO/HSI
performed the same selling functions in each instance. Therefore, the
U.S. market has one LOT.
---------------------------------------------------------------------------
\4\ As noted above, all U.S. sales were made by DSM.
---------------------------------------------------------------------------
When we compared CEP sales (after deductions made pursuant to
section 772(d) of the Act) to HM sales, we determined that for CEP
sales, DSM/KISCO/HSI's U.S. affiliate performed many services
associated with its U.S. sales. The differences in selling functions
performed for DSM/KISCO/HSI's home market and CEP transactions indicate
that HM sales involved a more advanced stage of distribution than CEP
sales. In the home market, DSM/KISCO/HSI provides services normally
found further down the chain of distribution that are normally
performed by the affiliated reseller in the U.S. market.
Based on our analysis, we determined that CEP and the starting
price of HM sales represent different stages in the marketing process,
and are thus at different LOTs. Therefore, when we compared CEP sales
to HM sales, we examined whether a LOT adjustment may be appropriate.
In this case, DSM/KISCO/HSI sold at one LOT in the home market;
therefore, there is no basis upon which to determine whether there is a
pattern of consistent price differences between levels of trade.
Further, we do not have the information which would allow us to examine
pricing patterns of DSM/KISCO/HSI's sales of other similar products,
and there is no other record evidence upon which such an analysis could
be based.
Because the data available do not provide an appropriate basis for
making a LOT adjustment, but the LOT in Korea for DSM/KISCO/HSI is at a
more advanced stage than the LOT of the CEP sales, a CEP offset is
appropriate in accordance with section 773(a)(7)(B) of the Act, as
claimed by DSM/KISCO/HSI. Therefore, we applied the CEP offset to NV.
See Memorandum to the File from the Team, Level of Trade Analysis: DSM/
KISCO/HSI, dated concurrently with this notice.
Constructed Export Price
We based the price of DSM/KISCO/HSI's U.S. sales of subject
merchandise on CEP, in accordance with section 772(b) of the Act,
because DSM sold subject merchandise to unaffiliated purchasers in the
United States after importation through its U.S. affiliate, DKA. We
calculated CEP using prices, less discounts, for packed subject
merchandise delivered to the first unaffiliated purchaser in the United
States. In accordance with sections 772(c)(2)(A) and 772(d)(1) and (3)
of the Act, we made deductions from the starting price, where
appropriate, for the following expenses: foreign and U.S. inland
freight, foreign and U.S. brokerage and handling, international
freight, marine insurance, U.S. duties, U.S. warehousing expense,
direct and indirect selling, to the extent these expenses are
associated with economic activity in the United States, and CEP profit.
Normal Value
After testing home market viability, whether comparison market
sales to affiliates were at arm's-length prices, and whether comparison
market sales were at below cost prices, we calculated NV for DSM/KISCO/
HSI as noted in the ``Price-to-Price Comparisons'' section of this
notice.
A. Home Market Viability
In accordance with section 773(a)(1)(C) of the Act, in order to
determine whether there was a sufficient volume of sales in the home
market to serve as a viable basis for calculating NV (i.e., the
aggregate volume of home market sales of the foreign like product is
greater than or equal to five percent of the aggregate volume of U.S.
sales), we compared the aggregate volume of DSM/KISCO/HSI's home market
sales of the foreign like product to the aggregate volume of its U.S.
sales of subject merchandise. Because the aggregate volume of DSM/
KISCO/HSI's home market sales of foreign like product is more than five
percent of the aggregate volume of its U.S. sales of subject
merchandise, we based NV on sales of the foreign like product in the
respondent's home market. See section 773(a)(1)(C)(ii) of the Act.
B. Affiliated Party Transactions and Arm's-Length Test
The Department may calculate NV based on a sale to an affiliated
party only if it is satisfied that the price to the affiliated party is
comparable to the price at which sales are made to parties not
affiliated with the exporter or producer, i.e., sales at arm's-length.
See 19 CFR 351.403(c). Sales to affiliated customers for consumption in
the home market that were determined not to be at arm's-length were
excluded from our analysis. DSM/KISCO/HSI reported sales of the foreign
like product to affiliated customers. To test whether these sales were
made at arm's-length prices, the Department compared the prices of
sales of comparable merchandise to affiliated and unaffiliated
customers, net of all rebates, movement charges, direct selling
expenses, and packing. Pursuant to 19 CFR 351.403(c), and in accordance
with the Department's practice, when the prices charged to an
affiliated party were, on average, between 98 and 102 percent of the
prices charged to unaffiliated parties for merchandise comparable to
that sold to the affiliated party, we determined that the sales to the
affiliated party were at arm's-length. See Antidumping Proceedings:
Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186
(November 15, 2002). DSM/KISCO/HSI's sales to its affiliated home
market customers did not pass the arm's-length test. Therefore, we have
excluded these sales from our analysis.
C. Cost of Production Analysis
In the most recently completed proceeding segment in which DSM/
KISCO received a calculated dumping margin, the Department determined
that these companies sold certain foreign
[[Page 59446]]
like product at prices below the cost of producing the merchandise and
excluded such sales from the calculation of NV. See Steel Concrete
Reinforcing Bar from The Republic of Korea: Notice of Preliminary
Results of Antidumping Duty Administrative Review, 68 FR 57883, 57885
(October 7, 2003) (no change at final). Therefore, in accordance with
section 773(b)(2)(A)(ii) of the Act, there are reasonable grounds to
believe or suspect that during the instant POR, DSM/KISCO/HSI sold
foreign like product at prices below the cost of producing the
merchandise. As a result, the Department initiated a cost of production
(COP) inquiry with respect to DSM/KISCO/HSI.
1. Calculation of COP
In accordance with section 773(b)(3) of the Act, for each unique
foreign like product sold by DSM/KISCO/HSI during the POR, we
calculated a weighted-average COP based on the sum of the respondent's
materials and fabrication costs, general and administrative expenses,
interest expenses, and import duties normally associated with imported
material. See Stainless Steel Sheet and Strip in Coils from Mexico;
Final Results of Antidumping Duty Administrative Review 68 FR 6889
(February 11, 2003). For further information, see the analysis
memorandum for DSM/KISCO/HSI, dated concurrently with this notice.
2. Test of Comparison Market Sales Prices
In order to determine whether sales were made at prices below the
COP on a product specific basis, we compared the respondent's weighted-
average COP to the prices of its home market sales of foreign like
product, as required under section 773(b) of the Act. In accordance
with sections 773(b)(1)(A) and (B) of the Act, in determining whether
to disregard home market sales made at prices less than the COP, we
examined whether such sales were made: (1) In substantial quantities
within an extended period of time; and (2) at prices which permitted
the recovery of all costs within a reasonable period of time. We
compared the COP to home market sales prices, less any applicable
movement charges and direct and indirect selling expenses.
3. Results of the COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of a respondent's sales of a given product are made at prices
less than the COP, we do not disregard any below cost sales of that
product because the below cost sales are not made in ``substantial
quantities.'' Where 20 percent or more of a respondent's sales of a
given product are made at prices less than the COP during the POR, we
determine that such sales are made in ``substantial quantities'' and
within an extended period of time pursuant to sections 773(b)(2)(B) and
(C) of the Act. In such cases, because we use POR average costs, we
also determine, in accordance with section 773(b)(2)(D) of the Act,
that such sales are not made at prices that would permit recovery of
all costs within a reasonable period of time. In the instant review,
based on this test, we did not disregard below cost sales for DSM/
KISCO/HSI.
Price-to-Price Comparisons
Where it was appropriate to base NV on prices, we used the prices
at which the foreign like product was first sold for consumption in the
home market, in the usual commercial quantities, in the ordinary course
of trade, and, to the extent possible, at the same LOT as the
comparison U.S. sale. We calculated NV using prices, less any discounts
or rebates, for packed foreign like product delivered to unaffiliated
purchasers or, where appropriate, affiliated purchasers in the home
market. In accordance with sections 773(a)(6)(A), (B), and (C) of the
Act, where appropriate, we deducted from the starting price the
following home market expenses: movement, packing, and credit.
Additionally, we added interest revenue to the starting price. We added
to the starting price the following U.S. expenses: Packing, credit, and
other direct selling expenses. Finally, where appropriate, we made
price adjustments for physical differences in the merchandise and made
a reasonable allowance for other selling expenses where commissions
were paid in only one of the markets under consideration.
See 773(a)(6)(C)(ii) of the Act and 19 CFR 351.410(e).
Currency Conversion
Pursuant to section 773A(a) of the Act, we converted amounts
expressed in foreign currencies into U.S. dollar amounts based on the
exchange rates in effect on the dates of the U.S. sales, as certified
by the Federal Reserve Bank.
Preliminary Results of Review
As a result of this review, we preliminarily determine that the
following weighted-average dumping margins exist for the period
September 1, 2004, through August 31, 2005:
------------------------------------------------------------------------
Margin
Manufacturer/Exporter (percent)
------------------------------------------------------------------------
Dongkuk Steel Mill Co. Ltd./Korea Iron and Steel Co., Ltd./ 0.00
Hwanyoung Steel Ind. Co. Ltd..............................
Dongil Industries Co Ltd................................... 102.28
------------------------------------------------------------------------
Public Comment
Within 10 days of publicly announcing the preliminary results of
this review, we will disclose to interested parties any calculations
performed 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. 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
In accordance with 19 CFR 351.212(b)(1), in these preliminary
results of review we calculated importer-specific assessment rates
because the importer is known for all of the sales made by the
collapsed entity. Since the collapsed entity reported the entered
value, we calculated ad valorem assessment rates for the collapsed
entity by summing, on an importer-specific basis, the dumping margins
calculated for all of the collapsed entity's sales to the importer and
dividing this amount by the total quantity of those sales. If the
[[Page 59447]]
importer-specific assessment rate is above de minimis (i.e., 0.50
percent ad valorem or greater), we will instruct CBP to assess the
importer-specific rate uniformly, as appropriate, on all entries of
subject merchandise during the POR that were entered by the importer or
sold to the customer. The Department will issue appropriate assessment
instructions based on the final results of review directly to CBP
within 15 days of publication of those final results.
The Department clarified its ``automatic assessment'' regulation on
May 6, 2003 (68 FR 23954). This clarification will apply to entries of
subject merchandise during the period of review produced by companies
included in these final results of review for which the reviewed
companies did not know their merchandise was destined for the United
States. In such instances, we will instruct CBP to liquidate unreviewed
entries at the all-others rate if there is no rate for the intermediate
company involved in the transaction. For a full discussion of this
clarification, see Antidumping and Countervailing Duty Proceedings:
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).
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 rates for the companies
examined in the instant review will be the rate established in the
final results of this review (except that if the rate for a particular
company is de minimis, i.e., less than 0.5 percent, no cash deposit
will be required for that company); (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 22.89 percent, the ``all
others'' rate made effective by the LTFV investigation. See LTFV Final
Determination. These cash deposit rates, when imposed, shall remain in
effect until publication of the final results of the next
administrative review.
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 and countervailing 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 and countervailing duties
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.
Dated: October 2, 2006.
Joseph A. Spetrini,
Acting Assistant Secretary, for Import Administration.
[FR Doc. E6-16678 Filed 10-6-06; 8:45 am]
BILLING CODE 3510-DS-P