Affirmative Preliminary Determination of Circumvention of the Antidumping Duty Order on Certain Cut-to-Length Carbon Steel Plate from the People's Republic of China, 33991-33994 [E9-16646]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 74, Number 133 (Tuesday, July 14, 2009)]
[Notices]
[Pages 33991-33994]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-16646]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-849]


Affirmative Preliminary Determination of Circumvention of the 
Antidumping Duty Order on Certain Cut-to-Length Carbon Steel Plate from 
the People's Republic of China

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

ACTION: Notice of Preliminary Determination of Circumvention of 
Antidumping Duty Order.

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SUMMARY: We preliminarily determine that imports from the People's 
Republic of China (PRC) of cut-to-length carbon steel plate products 
with 0.0008 percent or more boron, by weight, produced by Tianjin, 
regardless of the exporter or the importer of the merchandise, and 
otherwise meeting the description of in-scope merchandise, are within 
the class or kind of merchandise subject to the order on certain cut-
to-length carbon steel plate from the PRC. We also preliminarily 
determine that imports from the PRC of cut-to-length carbon steel plate 
products with 0.0008 percent or more boron, by weight, imported by 
Toyota Tsusho, regardless of the producer or exporter of the 
merchandise, and otherwise meeting the description of in-scope 
merchandise, are within the class or kind of merchandise subject to the 
order on certain cut-to-length carbon steel plate from the PRC.

EFFECTIVE DATE: July 14, 2009.

FOR FURTHER INFORMATION CONTACT: Steve Bezirganian, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC, 
20230; telephone: (202) 482-1131.

SUPPLEMENTARY INFORMATION:

Background

    In response to a request from Nucor Corporation, SSAB N.A.D., Evraz 
NA Claymont Steel, Evraz NA Oregon Steel Mills, and Arcelor Mittal USA 
Inc., domestic interested parties in the above-mentioned proceeding 
(collectively certain domestic producers), the Department of Commerce 
(the Department) initiated an antidumping circumvention inquiry 
pursuant to section 781(c) of the Tariff Act of 1930, as amended (the 
Act). See Certain Cut-to-Length Carbon Steel Plate from the People's 
Republic of China: Initiation of Antidumping Circumvention Inquiry, 73 
FR 62250 (October 20, 2008) (Initiation Notice). On November 17, 2008, 
the Department issued questionnaires to Tianjin (Tianjin Questionnaire) 
and Toyota Tsusho (Toyota Tsusho Questionnaire).
    On December 8, 2008, Toyota Tsusho informed the Department that it 
would not submit a response to the Department's questionnaire. On 
December 23, 2008, Tianjin submitted a response to the Department's 
questionnaire (Tianjin Questionnaire Response). On December 31, 2008, 
SSAB N.A.D., Evraz NA Claymont Steel, and Evraz NA Oregon Steel Mills 
submitted comments on the Tianjin Questionnaire Response, and on 
January 13, 2009, Nucor Corporation submitted comments on the Tianjin 
Questionnaire Response.
    On January 23, 2009, the Department requested from U.S. Customs and 
Border Protection (CBP) documentation pertaining to various entries of 
steel plate that had been classified under the HTSUS as ``alloy'' steel 
plate. Such documentation was provided by CBP to the Department on 
March 9, 2009 (see the March 12, 2009 memorandum from Steve Bezirganian 
to The File (CBP Entry Documents)).
    On February 10, 2009, the Department issued a supplemental 
questionnaire to Tianjin (Tianjin Supplemental Questionnaire). On March 
6, 2009, Tianjin submitted a response to the Tianjin Supplemental 
Questionnaire, but the Department noted in its letter of March 12, 
2009, that Tianjin had failed to follow certain filing requirements and 
asked Tianjin to re-file its response appropriately. Tianjin re-filed 
its response on March 16, 2009 (Tianjin Supplemental Questionnaire 
Response). On March 19, 2009, SSAB N.A.D., Evraz NA Claymont Steel, and 
Evraz NA Oregon Steel Mills submitted comments on the Tianjin 
Supplemental Questionnaire Response. On March 27, 2009, Nucor 
Corporation submitted comments on the Tianjin Supplemental

[[Page 33992]]

Questionnaire Response. Subsequent to this submission, no additional 
submissions were made.\1\
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    \1\ On April 13, 2009, the Department indicated that in a 
memorandum to the file that the deadline for submission of new 
information in this proceeding would be April 20, 2009.
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Scope of the Order

    The product covered by this order is certain cut-to-length carbon 
steel plate from the People's Republic of China. Included in this 
description is hot-rolled iron and non-alloy steel universal mill 
plates (i.e., flat-rolled products rolled on four faces or in a closed 
box pass, of a width exceeding 150 mm but not exceeding 1250 mm and of 
a thickness of not less than 4 mm, not in coils and without patterns in 
relief), of rectangular shape, neither clad, plated nor coated with 
metal, whether or not painted, varnished, or coated with plastics or 
other nonmetallic substances; and certain iron and non-alloy steel 
flat-rolled products not in coils, of rectangular shape, hot-rolled, 
neither clad, plated, nor coated with metal, whether or not painted, 
varnished, or coated with plastics or other nonmetallic substances, 
4.75 mm or more in thickness and of a width which exceeds 150 mm and 
measures at least twice the thickness. Included as subject merchandise 
in this order are flat-rolled products of nonrectangular cross-section 
where such cross-section is achieved subsequent to the rolling process 
(i.e., products which have been ``worked after rolling'') - for 
example, products which have been bevelled or rounded at the edges. 
This merchandise is currently classified in the Harmonized Tariff 
Schedule of the United States (HTSUS) under item numbers 7208.40.3030, 
7208.40.3060, 7208.51.0030, 7208.51.0045, 7208.51.0060, 7208.52.0000, 
7208.53.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.13.0000, 
7211.14.0030, 7211.14.0045, 7211.90.0000, 7212.40.1000, 7212.40.5000, 
7212.50.0000. Although the HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the scope 
of this order is dispositive. Specifically excluded from subject 
merchandise within the scope of this order is grade X-70 steel plate.

Merchandise Subject to the Minor Alterations Antidumping Circumvention 
Proceeding

    The merchandise subject to this antidumping circumvention inquiry 
(Inquiry Merchandise) consists of all merchandise produced by Tianjin 
and/or imported by Toyota Tsusho containing 0.0008 percent or more 
boron, by weight, and otherwise meeting the requirements of the scope 
of the antidumping duty order as listed under the ``Scope of the 
Order'' section above, with the exception of merchandise meeting all of 
the following requirements: aluminum level of 0.02 percent or greater, 
by weight; a ratio of 3.4 to 1 or greater, by weight, of titanium to 
nitrogen; and a hardenability test (i.e., Jominy test) result 
indicating a boron factor of 1.8 or greater. This merchandise is 
currently classified in the Harmonized Tariff Schedule of the United 
States (HTSUS) under item numbers 7225.40.3050, 7225.99.0090, 
7226.91.5000, and 7226.99.0180. Although the HTSUS subheadings are 
provided for convenience and customs purposes, the written description 
of Inquiry Merchandise is dispositive.

Legal Framework

    Section 781(c) of the Act, dealing with minor alterations of 
merchandise, states: (1) In general. The class or kind of merchandise 
subject to (A) an investigation under this title, (B) an antidumping 
duty order issued under section 736, (C) a finding issued under the 
Antidumping Act, 1921, or (D) a countervailing duty order issued under 
section 706 or section 303, shall include articles altered in form or 
appearance in minor respects (including raw agricultural products that 
have undergone minor processing), whether or not included in the same 
tariff classification. (2) Exception. Paragraph (1) shall not apply 
with respect to altered merchandise if the administering authority 
determines that it would be unnecessary to consider the altered 
merchandise within the scope of the investigation, order, or finding.
    Section 351.225(i) of the Department's regulations states that 
under section 781(c) of the Act, the Secretary may include within the 
scope of an antidumping or countervailing duty order articles altered 
in form or appearance in minor respects.

Criteria for Analysis

    While the statute is silent regarding what factors to consider in 
determining whether alterations are properly considered ``minor,'' the 
legislative history of this provision indicates there are certain 
factors that should be considered before reaching a circumvention 
determination. Previous circumvention cases \2\ have relied on the 
factors listed in the Senate Finance Committee report on the Omnibus 
Trade and Competitiveness Act of 1988 (which amended the Tariff Act of 
1930 to include the anti-circumvention provisions contained in section 
781), which states:
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    \2\ See, e.g., Preliminary Determination of Circumvention of 
Antidumping Order; Cut-to-Length Carbon Steel Plate from Canada, 65 
FR 64926, 64929 (October 31, 2000) (unchanged in final results, 66 
FR 7617, 7618 (January 24, 2001)) (Canadian Plate); see also Final 
Results of Anti-Circumvention Review of Antidumping Order: 
Corrosion-Resistant Carbon Steel Flat Products From Japan, 68 FR 
33676, 33679 (June 5, 2003).
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    {i{time} n applying this provision, the Commerce Department should 
apply practical measurements regarding minor alterations, so that 
circumvention can be dealt with effectively, even where such 
alterations to an article technically transform it into a differently 
designated article. The Commerce Department should consider such 
criteria as the overall physical characteristics of the merchandise, 
the expectations of the ultimate users, the use of the merchandise, the 
channels of marketing and the cost of any modification relative to the 
total value of the imported products.\3\
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    \3\ Omnibus Trade Act of 1987, Report of the Senate Finance 
Committee, S. Rep. No. 71, 100th Cong., 1st Sess., at 100 (1987) 
(emphasis added).
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    In the case of an allegation of a ``minor alteration'' claim under 
section 781(c) of the Act, it is the Department's practice to look at 
the five factors listed in the Senate Finance Committee report to 
determine if circumvention exists in a particular case. See, e.g., 
Canadian Plate, 65 FR at 64929. Each circumvention case is highly 
dependent on the facts on the record, and must be analyzed in light of 
those specific facts. Thus, in circumvention cases we sometimes analyze 
additional criteria to determine if circumvention of the order is 
taking place. Id. at 64930. These may be case-specific. For example, in 
Canadian Plate additional factors analyzed included the circumstances 
under which the products entered the United States, the timing of the 
entries during the circumvention review period, and the quantity of 
merchandise entered during the circumvention review period. Id. at 
64930-31. In a more recent circumvention case, the additional factors 
analyzed included not only the timing of the entries during the period, 
but also other factors, such as the input of customers in the design 
phase. See Affirmative Preliminary Determination of Circumvention of 
the Antidumping Duty Order on Folding

[[Page 33993]]

Metal Tables and Chairs from the People's Republic of China, 73 FR 
63684 (October 27, 2008), unchanged in Affirmative Final Determination 
of Circumvention of the Antidumping Duty Order on Folding Metal Tables 
and Chairs from the People's Republic of China, 74 FR 20920 (May 6, 
2009).

Analysis (Tianjin)

    We examined the evidence and argument we received in the 
questionnaire responses, and in the comments on those questionnaire 
responses, in the context of the Senate Report Criteria; and an 
additional factor (the timing of the entries during the period).
    Based on our review of the record evidence and our analysis of the 
comments received, the Department preliminarily determines that imports 
from the PRC of Inquiry Merchandise produced by Tianjin are within the 
class or kind of merchandise subject to the order on certain cut-to-
length carbon steel plate from the PRC. For a complete discussion of 
the Department's analysis, see the Preliminary Analysis Memorandum for 
the Minor Alterations Circumvention Inquiry of the Antidumping Duty 
Order on Certain Cut-to-Length Carbon Steel Plate from the People's 
Republic of China (Preliminary Analysis Memorandum), dated concurrently 
with this notice.
    As explained in the Preliminary Analysis Memorandum, we 
preliminarily determine that the Inquiry Merchandise has the same 
physical characteristics as products in the scope of the order on 
certain cut-to-length carbon steel plate from the PRC and the ITC Final 
Report except for the presence of boron in excess of 0.0008 percent, by 
weight.\4\ There is no evidence of significant differences in the 
expectations of the ultimate users, uses of the merchandise, and 
channels of marketing between products in the scope of the order and 
those containing boron in excess of 0.0008 percent, by weight. 
Tianjin's main claim regarding what distinguishes its Inquiry 
Merchandise from merchandise covered by the scope is that the presence 
of boron in the former allows for more stable mechanical properties. 
However, the Department finds that the information submitted by Tianjin 
does not support this conclusion. We also determine the cost of 
modification in this case (i.e., adding trace amounts of boron) is 
insignificant. Finally, we find that Tianjin's production and export of 
the Inquiry Merchandise not only followed the imposition of the 
antidumping duty order on certain cut-to-length carbon steel plate from 
the PRC, but also occurred as the PRC government was altering export 
tariff and VAT refund rates in ways that favored PRC exporters' shift 
to exports of steels classifiable as ``alloy'' steel based solely on 
customs classification. See Preliminary Analysis Memorandum for more 
details.
    As a result of our inquiry, we preliminarily determine that imports 
from the PRC of Inquiry Merchandise produced by Tianjin, regardless of 
the exporter or the importer of the merchandise, are within the class 
or kind of merchandise subject to the order on certain cut-to-length 
carbon steel plate from the PRC. See Section 781(c) of the Act.

Facts Available (Toyota Tsusho)

    As noted above, Toyota Tsusho indicated it would not respond to the 
Department's request for information. The questionnaire the Department 
issued to this party was designed to elicit information for purposes of 
conducting both qualitative and quantitative analyses in accordance 
with the criteria enumerated in section 781(c) of the Act as outlined 
above. This approach is consistent with our analysis in previous 
circumvention inquiries. See, e.g., Petroleum Wax Candles From the 
People's Republic of China: Partial Termination of Circumvention 
Inquiry and Affirmative Preliminary Determination of Circumvention of 
the Antidumping Duty Order, 72 FR 14518 (March 28, 2007), unchanged in 
Petroleum Wax Candles from the People's Republic of China: Affirmative 
Final Determination of Circumvention of the Antidumping Duty Order, 72 
FR 31053 (June 5, 2007); Circumvention and Scope Inquiries on the 
Antidumping Duty Order on Certain Frozen Fish Fillets from the 
Socialist Republic of Vietnam: Partial Affirmative Final Determination 
of Circumvention of the Antidumping Duty Order, Partial Final 
Termination of Circumvention Inquiry and Final Rescission of Scope 
Inquiry, 71 FR 38608 (July 7, 2006); and Hot-Rolled Lead and Bismuth 
Carbon Steel Products from Germany and the United Kingdom; Negative 
Final Determinations of Circumvention of Antidumping and Countervailing 
Duty Orders, 64 FR 40336 (July 26, 1999).
    Without this information the Department must use facts available in 
making its determination pursuant to section 776(a)(2) of the Act. 
Section 776(a) of the Act requires the Department to resort to facts 
otherwise available if necessary information is not available on the 
record or when an interested party or any other person fails to provide 
(requested) information by the deadlines for submission of the 
information or in the form and manner requested, subject to subsections 
(c)(1) and (e) of section 782. See sections 776(a)(1) and 776(a)(2)(B) 
of the Act. As provided in section 782(c)(1) of the Act, if an 
interested party, promptly after receiving a request from the 
Department for information, notifies the Department that such party is 
unable to submit the information requested in the requested form and 
manner, the Department may modify the requirements to avoid imposing an 
unreasonable burden on that party. However, Toyota Tsusho informed the 
Department it would not respond to the Department's questionnaire. 
Consequently, because Toyota Tsusho failed to respond to the 
Department's questionnaire and, in fact, stated categorically that it 
would not respond to the Department's questionnaire, with respect to 
this party, we must base the preliminary determination in this inquiry 
on the facts otherwise available.
    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 Notice of Preliminary Results of 
Antidumping Duty Administrative Review, Notice of Partial Rescission of 
Antidumping Duty Administrative Review, Notice of Intent to Revoke in 
Part: Certain Individually Quick Frozen Red Raspberries from Chile, 72 
FR 44112, 44114 (August 7, 2007) (unchanged in Final--Raspberries from 
Chile, 72 FR at 70297). Further, ``affirmative evidence of bad faith on 
the part of a respondent is not required before the Department may make 
an adverse inference.'' See Antidumping Duties; Countervailing Duties, 
62 FR 27296, 27340 (May 19, 1997). See also Nippon Steel Corp. v. 
United States, 337 F.3d 1373, 1380-84 (CAFC 2003). Toyota Tsusho 
provided no indication that it was unable to comply with the 
Department's request for information. Therefore, in selecting from 
among the facts available, the Department determined that an adverse 
inference is warranted, pursuant to section 776(b) of the Act, because 
this party failed to comply with the Department's requests for 
information to the best of its ability.
    As a result of our inquiry, we preliminarily determine that imports 
from the PRC of Inquiry Merchandise imported by Toyota Tsusho, 
regardless of the producer or the exporter of the merchandise, are 
within the class or kind of merchandise subject to the order on certain 
cut-to-length carbon steel plate from the PRC. See Section 781(c) of 
the Act.

[[Page 33994]]

Conclusion

    As noted above, we preliminarily determine that imports from the 
PRC of Inquiry Merchandise produced by Tianjin, regardless of the 
exporter or the importer of the merchandise, and otherwise meeting the 
description of in-scope merchandise, are within the class or kind of 
merchandise subject to the order on certain cut-to-length carbon steel 
plate from the PRC. Also as noted above, we preliminarily determine 
that imports from the PRC of Inquiry Merchandise imported by Toyota 
Tsusho, regardless of the producer or exporter of the merchandise, and 
otherwise meeting the description of in-scope merchandise, are within 
the class or kind of merchandise subject to the order on certain cut-
to-length carbon steel plate from the PRC.

Suspension of Liquidation

    In accordance with section 351.225(l)(2) of the Department's 
regulations, we are directing U.S. Customs and Border Protection (CBP) 
to suspend liquidation of Inquiry Merchandise entered, or withdrawn 
from warehouse, for consumption on or after October 20, 2008, the date 
of the initiation of this inquiry. We will also instruct CBP to require 
a cash deposit of estimated duties at the applicable rates for each 
unliquidated entry of the product entered, or withdrawn from warehouse, 
for consumption on or after October 10, 2008, the date of the 
initiation of this inquiry, in accordance with section 351.225(l)(2) of 
our regulations.

Public Comment

    The parameters for submission of public comment for circumvention 
inquiry cases are governed by the regulation covering scope rulings. 
See 19 CFR 351.225. Interested parties are invited to comment on the 
preliminary results and may submit case briefs and/or written comments 
within 20 days of the publication of this notice. See 19 CFR 
351.225(f)(3). Interested parties may file rebuttal briefs and 
rebuttals to written comments, limited to issues raised in such briefs 
or comments, no later than 10 days after the date on which the case 
briefs are due. Id. Interested parties may request a hearing within 20 
days of the publication of this notice. Interested parties will be 
notified by the Department of the location and time of any hearing, if 
one is requested.
    This preliminary determination of circumvention is in accordance 
with section 781(c) of the Act and 19 CFR 351.225.

    Dated: July 7, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
[FR Doc. E9-16646 Filed 7-13-09; 8:45 am]
BILLING CODE 3510-DS-S