Certain Hot-Rolled Carbon Steel Flat Products from Thailand: Preliminary Results of Antidumping Duty Administrative Review, 39047-39054 [E9-18733]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 74, Number 149 (Wednesday, August 5, 2009)]
[Notices]
[Pages 39047-39054]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-18733]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-817]


Certain Hot-Rolled Carbon Steel Flat Products from Thailand: 
Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY:  In response to a request from United States Steel Corporation 
(U.S. Steel or Petitioner), the Department of Commerce (the Department) 
is conducting an administrative review of the antidumping duty order on 
certain hot-rolled carbon steel flat products (hot-rolled steel) from 
Thailand. This administrative review covers imports of subject 
merchandise produced and exported by respondent G Steel Public Company 
Limited (G Steel). The period of review is November 1, 2007 through 
October 31, 2008.
    We preliminarily determine that: (1) G J Steel Public Company 
Limited (G J Steel) is the successor-in-interest to Nakornthai Strip 
Mill Public Company Limited (Nakornthai); (2) because of G Steel's 
refusal to cooperate with the Department in the conduct of this 
administrative review, G Steel made sales of subject merchandise at 
less than normal value (NV); and (3) G J Steel and G Steel constitute a 
single entity.
    If these preliminary results are adopted in our final results, we 
will instruct U.S. Customs and Border Protection (CBP) to assess 
antidumping duties on appropriate entries based on the difference 
between the export price and the NV. Interested parties are invited to 
comment on these preliminary results.

EFFECTIVE DATE: August 5, 2009.

FOR FURTHER INFORMATION CONTACT: David Cordell or Robert James AD/CVD 
Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
0408 or (202) 482-0469, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On November 29, 2001, the Department published the antidumping duty 
order on hot-rolled steel from Thailand. See Antidumping Duty Order: 
Certain Hot-Rolled Carbon Steel Flat Products From Thailand, 66 FR 
59562 (November 29, 2001) (Antidumping Duty Order). On November 3, 
2008, the Department published the opportunity to request an 
administrative review of, inter alia, hot-rolled steel from Thailand 
for the period November 1, 2007, through October 31, 2008. See 
Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity to Request Administrative Review, 73 FR 
65288 (November 3, 2008).
    In accordance with 19 CFR 351.213(b)(1), on December 1, 2008, 
Petitioner requested an administrative review of G Steel's sales of 
subject merchandise. Additionally, on December 1, 2008, G Steel and G J 
Steel submitted a request that the Department review both G Steel and G 
J Steel's sales. G Steel and GJ Steel's submission further requested 
the Department to ``treat both companies as affiliated, and as 
affiliated producers, as a single entity entitled to a single 
antidumping duty rate as a result of this administrative review.'' On 
December 24, 2008, the Department published in the Federal Register a 
notice of initiation of this antidumping duty administrative review 
covering the period November 1, 2007, through October 31, 2008. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Request for Revocation in Part, 73 FR 79055 (December 24, 
2008).
    On January 13, 2009, the Department issued its antidumping 
questionnaire to G Steel and G J Steel under separate cover letters. On 
February 1, 2009, G Steel and G J Steel submitted a combined section A 
questionnaire response (Section A Response). On March 12, 2009, prior 
to the deadlines for the remainder of their additional questionnaire 
responses, G Steel and G J Steel withdrew their requests for a review, 
and asked the Department to rescind the review with respect to G J 
Steel as no other party had requested a review of G J Steel. In their 
request for withdrawal, G Steel and G J Steel maintained they did not 
sell subject merchandise below normal value during this period of 
review, but explained that the ongoing worldwide financial crisis

[[Page 39048]]

prevented them from continuing to participate in the review. G Steel 
and G J Steel also stated their request for withdrawal comes within 90 
days of the publication of the notice of initiation. Finally, both 
companies requested the return of information disclosed under the 
Department's Administrative Protective Order, to which request the 
Department acceded in its April 9, 2009 letter to G Steel and G J 
Steel.
    On April 7, 2009, domestic interested party Nucor Corporation 
(Nucor) submitted comments in which Nucor argued the Department should 
treat the companies' withdrawal as a refusal to cooperate and should 
assign both companies a margin based on adverse facts available. See 
Nucor's Comments on G / G J Steel's Withdrawal, dated April 7, 2009 
(Nucor's Comments). Nucor also insisted the Department should not 
terminate the review with respect to G J Steel. Nucor maintains there 
is sufficient evidence on the public record of this proceeding to 
establish that the Department should treat G Steel and G J Steel as a 
single entity. To do otherwise, Nucor maintains, would lead to a 
significant potential for ``manipulation of price or production.'' On 
April 20, 2009, U.S. Steel submitted additional factual information for 
the record (U.S. Steel's Factual Information). On April 28, 2008, U.S. 
Steel submitted comments (U.S. Steel's Comments) arguing the Department 
should not rescind the review, either in whole or in part. Furthermore, 
U.S. Steel argued the Department should treat G Steel and G J Steel as 
a single entity and continue the review with respect to sales of 
subject merchandise by both producers.
    On June 26, 2009, the Department rescinded the review with respect 
to G J Steel. See Certain Hot-Rolled Carbon Steel Flat Products From 
Thailand: Notice of Partial Rescission of Antidumping Duty 
Administrative Review, 74 FR 30524 (June 26, 2009) (Partial 
Rescission). The Department did not, however, issue liquidation 
instructions or cash deposit instructions with respect to G J Steel 
because the Department indicated it may decide to ``collapse'' G Steel 
with G J Steel pursuant to 19 CFR 351.401(f). See Partial Rescission. 
Accordingly, the Department has addressed the issue of G Steel and G J 
Steel's affiliation and the proper treatment of these firms in the 
context of these preliminary results.
    On July 7, 2009 U.S. Steel submitted comments and recommendations 
for the Department to consider in reaching its preliminary results.

Period of Review

    The period of review is November 1, 2007, through October 31, 2008.

Scope of the Order

    For purposes of the order, the products covered are certain hot-
rolled carbon steel flat products of a rectangular shape, of a width of 
0.5 inch or greater, neither clad, plated, nor coated with metal and 
whether or not painted, varnished, or coated with plastics or other 
non-metallic substances, in coils (whether or not in successively 
superimposed layers), regardless of thickness, and in straight lengths, 
of a thickness of less than 4.75 mm and of a width measuring at least 
10 times the thickness. Universal mill plate (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 4.0 mm, not in coils and without patterns in relief) of a 
thickness not less than 4.0 mm is not included within the scope of this 
review.
     Specifically included within the scope of this review are vacuum 
degassed, fully stabilized (commonly referred to as interstitial-free 
(IF)) steels, high strength low alloy (HSLA) steels, and the substrate 
for motor lamination steels. IF steels are recognized as low carbon 
steels with micro-alloying levels of elements such as titanium or 
niobium (also commonly referred to as columbium), or both, added to 
stabilize carbon and nitrogen elements. HSLA steels are recognized as 
steels with micro-alloying levels of elements such as chromium, copper, 
niobium, vanadium, and molybdenum. The substrate for motor lamination 
steels contains micro-alloying levels of elements such as silicon and 
aluminum.
    Steel products to be included in the scope of this review, 
regardless of definitions in the Harmonized Tariff Schedule of the 
United States (HTSUS), are products in which: i) iron predominates, by 
weight, over each of the other contained elements; ii) the carbon 
content is 2 percent or less, by weight; and iii) none of the elements 
listed below exceeds the quantity, by weight, respectively indicated:
    1.80 percent of manganese, or
    2.25 percent of silicon, or
    1.00 percent of copper, or
    0.50 percent of aluminum, or
    1.25 percent of chromium, or
    0.30 percent of cobalt, or
    0.40 percent of lead, or
    1.25 percent of nickel, or
    0.30 percent of tungsten, or
    0.10 percent of molybdenum, or
    0.10 percent of niobium, or
    0.15 percent of vanadium, or
    0.15 percent of zirconium.
    All products that meet the physical and chemical description 
provided above are within the scope of this review unless otherwise 
excluded. The following products, by way of example, are outside or 
specifically excluded from the scope of this review:
    - Alloy hot-rolled steel products in which at least one of the 
chemical elements exceeds those listed above (including, e.g., American 
Society for Testing and Materials (ASTM) specifications A543, A387, 
A514, A517, A506).
    - Society of Automotive Engineers (SAE)/American Iron & Steel 
Institute (AISI) grades of series 2300 and higher.
    - Ball bearing steels, as defined in the HTSUS.
    - Tool steels, as defined in the HTSUS.
    - Silico-manganese (as defined in the HTSUS) or silicon electrical 
steel with a silicon level exceeding 2.25 percent.
    - ASTM specifications A710 and A736.
    - USS abrasion-resistant steels (USS AR 400, USS AR 500).
    - All products (proprietary or otherwise) based on an alloy ASTM 
specification (sample specifications: ASTM A506, A507).
    - Non-rectangular shapes, not in coils, which are the result of 
having been processed by cutting or stamping and which have assumed the 
character of articles or products classified outside chapter 72 of the 
HTSUS.
    The merchandise subject to this review is classified in the HTSUS 
at subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 
7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 
7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 
7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 
7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 
7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 
7208.90.00.00, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 
7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 
7211.19.75.60, and 7211.19.75.90. Certain hot-rolled carbon steel flat 
products covered by this review, including: vacuum degassed fully 
stabilized; high strength low alloy; and the substrate for motor 
lamination steel may also enter under the following tariff numbers: 
7225.11.00.00, 7225.19.00.00,

[[Page 39049]]

7225.30.30.50, 7225.30.70.00, 7225.40.70.00, 7225.99.00.90, 
7226.11.10.00, 7226.11.90.30, 7226.11.90.60, 7226.19.10.00, 
7226.19.90.00, 7226.91.50.00, 7226.91.70.00, 7226.91.80.00, and 
7226.99.00.00. Subject merchandise may also enter under 7210.70.30.00, 
7210.90.90.00, 7211.14.00.30, 7212.40.10.00, 7212.40.50.00, and 
7212.50.00.00. Although the HTSUS subheadings are provided for 
convenience and Customs purposes, the written description of the 
merchandise under review is dispositive.

Comments on G Steel's and G J Steel's Request for Rescission of Review

    In response to the request for withdrawal from the review by G 
Steel and G J Steel, Nucor claims the Department should treat the two 
companies' withdrawal as a refusal to cooperate with the Department's 
administrative proceeding and, accordingly, rely upon adverse 
inferences in determining the antidumping duty. See Nucor's Comments at 
1. Nucor further argues the Department should not terminate the review 
with respect to G J Steel, but instead should determine a final margin 
for both companies based upon adverse inferences. Id. at 3. Nucor 
states the Department's regulations indicate that in certain instances, 
the Department will treat companies as a single entity, thereby 
``collapsing'' them for purposes of calculating or assigning a dumping 
margin. Id. Nucor asserts collapsed companies must be: (1) affiliated 
within the meaning section 771(33) of the Tariff Act of 1930, as 
amended (the Act)); (2) have production facilities for similar or 
identical products; and (3) present a significant potential for 
manipulation of price or production. Nucor claims all three of these 
criteria are satisfied.
    First, Nucor claims G Steel and G J Steel are affiliated because G 
Steel owns more than five percent of the outstanding voting stock or 
shares of G J Steel, and that G Steel controls G J Steel. Id. 
Additionally, citing the section A response, Nucor claims G Steel 
treats G J Steel as a subsidiary and that G Steel's management was 
granted authority over the operations of G J Steel. Furthermore, Nucor 
cites to the preparation of consolidated financial statements, for the 
two companies. Nucor concludes that G Steel clearly controls G J Steel 
because it owns nearly half of G J Steel's stock, which is clearly more 
than the five percent threshold outlined in the statute. Id. at 4.
    Second, Nucor contends that according to the section A response, G 
Steel and G J Steel are both ``producers of subject merchandise'' and 
both companies have participated as respondents in prior reviews of the 
order. Id. Thus, Nucor avers the second factor, namely having 
production facilities for similar or identical products, has been 
fulfilled.
    Third, Nucor argues that G Steel having ownership or control over 
nearly half of G J Steel's stock demonstrates a significant potential 
for manipulation of price and/or production. Nucor notes G Steel has 
stated that it assumed direct managerial control and authority over G J 
Steel. Nucor further asserts the two companies appear to be 
intertwined, as G Steel directly manages G J Steel and the companies 
sell each other's merchandise. Nucor argues that by requesting they be 
treated as a single entity for purposes of calculating an antidumping 
duty margin, G Steel and G J Steel have acknowledged that their 
operations are not sufficiently separate to be assigned separate rates. 
Id. at 4-5.
    Nucor therefore contends the Department's collapsing requirements 
have been met. Nucor argues that if the companies are not treated as a 
single entity, there is a significant potential for the resulting 
differences in their antidumping margins to result in manipulation of 
price or production by shifting production and sales to the company 
with the lower rate. Thus, Nucor requests that the Department treat G 
Steel and G J Steel as a single entity. See id. at 5.
    In its April 28, 2009, comments, U.S. Steel argues the Department 
should not rescind the instant review, either in whole or in part. See 
U.S. Steel's Comments at 2. Citing Notice of Rescission of Antidumping 
Duty Administrative Review: Stainless Steel Sheet and Strip in Coils 
from Italy, 70 FR 76775, 76777 (December 28, 2005) U.S. Steel asserts 
it is the Department's well-established practice not to rescind a 
review at one party's request unless all the parties that requested a 
review have also withdrawn their requests. U.S. Steel further claims 
the Department definitely cannot rescind the review with respect to G 
Steel and, moreover, should continue the review for both G Steel and G 
J Steel because the two companies should be collapsed and treated as a 
single entity. Id. at 3.
    With regard to collapsing G Steel and G J Steel, U.S. Steel claims 
the two companies' submission of a combined section A response 
demonstrates they intended to be treated as a single entity. Id. at 3-
4. Furthermore, U.S. Steel argues that given the joint nature of G 
Steel and G J Steel's response, it would be impossible to calculate 
separate dumping margins for each producer based on the information 
available. Thus, U.S. Steel continues, the Department has no choice but 
to treat G Steel and G J Steel as a single entity. Id.
    Citing the Department's regulations at 19 CFR 351.401(f)(1), U.S. 
Steel asserts the Department will treat two or more producers as a 
single entity when three criteria are satisfied: (1) the producers are 
affiliated; (2) the 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 
(3) there is a significant potential for the manipulation of price or 
costs of production. Id. at 4. U.S. Steel argues that each of these 
criteria are met.
    First, U.S. Steel argues that G Steel and G J Steel are affiliated 
producers within the statutory definition at section 771(33)(E) of the 
Act, which includes (``{a{time} ny person directly owning, controlling, 
or holding power to vote, 5 percent or more of the outstanding voting 
stock or shares of any organization and such organization'' as 
``affiliated persons.''). Id. at 5. U.S. Steel contends the section A 
response demonstrates that G J Steel has been a subsidiary of G Steel 
since June 2008, with G Steel and its affiliate owning 49.66 percent of 
G J Steel's common shares. Id.
    Second, U.S. Steel argues the section A response shows ``both 
companies produce only hot-rolled steel,'' including the subject 
merchandise. See id. Furthermore, U.S. Steel contends that G Steel and 
G J Steel use similar production processes to produce the subject 
merchandise. Id.
    Third, with regard to the potential for manipulation, U.S. Steel 
states the Department's regulations at 19 CFR 351.401(f)(2) provide 
three considerations: (1) the level of common ownership between the two 
companies; (2) the extent to which managerial employees or board 
members of one company sit on the board of the other; and (3) whether 
the companies are intertwined. See id. U.S. Steel asserts that each of 
these considerations has been satisfied. First, citing the section A 
response, U.S. Steel contends G Steel and its affiliate own 49.66 
percent of G J Steel's common shares and are the largest shareholders 
of G J Steel. Citing Ball Bearings and Parts Thereof from France, 
Germany, Italy, Japan, and the United Kingdom: Final Results of 
Antidumping Duty Administrative Reviews, 71 FR 40064 (July 16, 2006) 
and accompanying Issues and Decision Memorandum at Comment 18 (Ball 
Bearings), U.S. Steel asserts the

[[Page 39050]]

Department does not require a majority share ownership for collapsing; 
thus, G Steel's level of ownership is more than sufficient for 
collapsing purposes. Moreover, citing the section A response, U.S. 
Steel claims G J Steel was included in G Steel's financial statements 
because G Steel has had financial and operational management of G J 
Steel since June 2, 2008. See U.S. Steel's Comments at 6. Second, U.S. 
Steel avers G Steel and G J Steel share common board members. Id. 
Third, U.S. Steel insists the two companies have intertwined 
operations. Id. at 7. Citing Notice of Preliminary Determination of 
Sales at Less Than Fair Value and Postponement of Final Determination: 
Steel Concrete Reinforcing Bars From the Republic of Korea, 66 FR 8348, 
8352 (January 30, 2001) (Rebar from Korea), U.S. Steel also states that 
G Steel and G J Steel's financial statements ``show significant trade 
accounts receivable and payable between the two companies.'' Id.
    Finally, U.S. Steel claims G Steel's and G J Steel's U.S. sales of 
subject merchandise do not constitute large percentages of their home 
market sales of hot-rolled steel. See id. Citing Rebar from Korea, 66 
FR at 8352, U.S. Steel states the Department has previously found this 
demonstrates that companies ``potentially have the capacity to absorb 
the other's export market sales, in the event they were to shift export 
sales to the company with a lower margin.''
    In its July 7, 2009, comments, U.S. Steel restated its argument 
that G Steel and G J Steel should be collapsed based upon the 
companies' representations to the Department in this review. Moreover, 
U.S. Steel assets G Steel and G J Steel have not rebutted U.S. Steel's 
April 28, 2009, comments demonstrating that G Steel and G J Steel 
should be collapsed. U.S. Steel argues the Department should base the 
dumping margin for G Steel and G J Steel on AFA because the companies 
failed to cooperate with the Department in this review. U.S. Steel 
argues the Department should use the petition rate of 20.30 percent 
because it was corroborated and used as total AFA for G Steel's 
predecessor, Siam Strip Mill Public Co., Ltd. (SSM), in the original 
investigation. U.S. Steel concludes this rate of 20.30 percent should 
be used so that G Steel and G J Steel do not benefit from their refusal 
to participate in this administrative review.

Department's Position

    The Department has already determined that the review should be 
rescinded with respect to G J Steel. See Partial Rescission. However, 
pursuant to the Department's statement in the Partial Rescission that 
it would examine whether G Steel and G J Steel should be treated as a 
collapsed entity as part of the ongoing administrative review, an 
analysis of the governing law and parties' arguments on this issue 
follows here.
    The Department's determination concerning collapsing, or treating 
two or more producers as a single entity, is governed by the 
Department's regulations at 19 CFR 351.401(f)(1), which states the 
Department will treat two or more producers as a single entity when 
three criteria are satisfied: (1) the producers are affiliated; (2) the 
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 (3) there is a 
significant potential for the manipulation of price or costs of 
production. We preliminarily determine that each of these criteria is 
satisfied here.
    With respect to the first criterion, namely affiliation, there is 
ample evidence that G Steel and G J Steel are affiliated. First, the 
companies' consolidated section A response states that G Steel and its 
affiliate own 49.66 percent of G J Steel's common shares. See Section A 
Response, Public Version at A-12 A-14. The antidumping statute provides 
numerous criteria that may indicate affiliation, including; 
``{a{time} ny person directly owning, controlling, or holding power to 
vote, 5 percent or more of the outstanding voting stock or shares of 
any organization and such organization.'' See section 771(33)(E) of the 
Act. Thus, the substantial ownership interest in G J Steel held by G 
Steel and its affiliate satisfies the statutory definition for 
affiliation. Moreover, G Steel's request was submitted jointly with G J 
Steel and both companies filed a single entry of appearance. See G 
Steel and G J Steel's Request for Administrative Review and Entry of 
Appearance, dated December 1, 2008. In this document G Steel asked the 
Department to ``treat both companies as affiliated and, as affiliated 
producers, as a single entity entitled to a single antidumping duty 
rate as a result of this administrative review.'' Id. Moreover, 
although the Department sent two separate cover letters along with its 
questionnaire to G Steel and G J Steel, the two companies together 
submitted a joint response to the Department's section A questionnaire. 
See Section A Response, Public Version. As G Steel and G J Steel stated 
in their section A response, ``G Steel and G J Steel respond to 
questions regarding U.S. sales collectively.'' Id. at 2, n.2. In 
addition, the response stated, ``G Steel now treats G J Steel as its 
subsidiary and has prepared consolidated financial statements that 
include the operations of G J Steel from June 2, 2008 forward.'' Id. at 
A-14. Furthermore, as U.S. Steel pointed out in its July 7, 2009 
comments, G Steel stated that it has ``management authority over the 
financial polices and operations'' of G J Steel. See U.S. Steel's July 
7, 2009 comments at 3, citing Section A Response, Public Version, at 
Exhibit A-12 (G Steel's Consolidated Financial Statements for the Six-
month Period Ending June 30, 2008, at page 3) In short, the joint 
submissions by G Steel and G J Steel demonstrate that the companies 
consider themselves to be affiliated.
    With respect to the second criterion, the record demonstrates that 
G Steel and G J Steel have production facilities for similar or 
identical products that would not require substantial retooling of 
either facility in order to restructure manufacturing priorities. G 
Steel and G J Steel state that both companies ``only produce and sell 
hot-rolled coil'' and that both companies ``manufacture products to the 
specifications commonly used'' in both the U.S. and home markets. See 
Section A Response, Public Version, at A-40. Further, the flow charts 
and production processes shown in Exhibit A-15 of the consolidated 
section A response describe a similar production process used by both 
companies. Id. at Exhibit A-15. Finally, the companies' product 
brochures describe nearly identical processes and time lengths. Id. at 
Exhibit A-16 (G Steel's and G J Steel's product brochures, at page 1 of 
each brochure). Further, neither G Steel nor G J Steel would have to 
substantially retool its facilities in order to shift production of 
subject merchandise towards the company that has been assigned the 
lower margin. See Section A Response, Public Version at A-7 - A-8, A-41 
and Exhibit A-15.
    With respect to the third criterion, the significant potential for 
manipulations of prices or costs of production, the Department's 
regulations at 19 CFR 351.401(f)(2) sets forth three considerations: 
(1) the level of common ownership between the two companies; (2) the 
extent to which managerial employees or board members of one company 
sit on the board of the other; and (3) whether the companies are 
intertwined. The Department concurs with U.S. Steel's assertion that 
each of these considerations has been satisfied. First, concerning the 
level of common ownership, G Steel and its affiliate own

[[Page 39051]]

49.66 percent of G J Steel's common shares and are the largest 
shareholders of G J Steel. See Section A Response, Public Version at A-
13 A-14. As evidenced in Ball Bearings, the Department's practice is 
that a majority share is not required for collapsing; thus, G Steel's 
level of ownership is sufficient for collapsing purposes. See Ball 
Bearings, Issues and Decision Memorandum at Comment 18. Moreover, the 
record demonstrates that G J Steel was included in G Steel's financial 
statements because G Steel has had financial and operational management 
of G J Steel since June 2, 2008. See Section A Response, Public Version 
at Exhibit A-12. Second, the Department concurs with U.S. Steel's 
assertion that G Steel and G J Steel share common board members. See 
U.S. Steel's New Factual Information; U.S. Steel's Comments, at Exhibit 
B. Third, there is substantial evidence that the companies are 
intertwined. U.S. Steel is correct in its assertion that G Steel and G 
J Steel's financial statements ``show significant trade accounts 
receivable and payable between the two companies.'' See Section A 
Response, Public Version at Exhibit A-12 (G Steel's Consolidated 
Financial Statements for the year ending March 31, 2008 at 11-12). 
Additionally, G Steel's and G J Steel's U.S. sales of subject 
merchandise do not constitute large percentages of their home market 
sales of hot-rolled steel. See id. at Exhibit A-1. Thus, consistent 
with our findings in Rebar from Korea, this demonstrates that the two 
companies ``potentially have the capacity to absorb the other's export 
market sales, in the event they were to shift export sales to the 
company with a lower margin.'' Rebar from Korea, 66 FR at 8352. 
Further, G Steel and G J Steel sell subject merchandise to the same 
affiliated customers, and these affiliated customers resell both of the 
companies' merchandise in the home market. See Section A Response, 
Public Version, at Exhibit A-1. In addition, G Steel and G J Steel sell 
each other's merchandise in the home market. See id. at A-6 
(``{S{time} ome home market sales made by G Steel were sold by G J 
Steel, and vice versa.'').
    Therefore, pursuant to the Department's regulations and practice, 
the Department preliminarily determines that all criteria concerning 
the collapsing of G Steel and G J Steel have been satisfied. To treat G 
J Steel and G Steel as separate and independent entities would 
contradict the record evidence, including the companies' 
representations to the Department that they are affiliated.

Successor-in-Interest Determination

    The Department preliminarily determines that it is necessary to 
conduct a successor-in-interest analysis in the context of the instant 
review to examine the effect of G J Steel's name change. Specifically, 
during the period of review, Nakornthai changed its name to G J Steel. 
See Section A Response, Public Version at A-1. The Department notes 
that if the Department were to collapse G J Steel and G Steel without 
examining the name change, it would be possible for G J Steel to use 
Nakornthai's lower rate. Therefore, the Department must determine 
whether G J Steel is, in fact, the successor-in-interest to Nakornthai.
    In making a successor-in-interest determination, the Department 
examines several factors including, but not limited to, changes in: (1) 
management; (2) production facilities; (3) supplier relationships; and 
(4) customer base. See, e.g., Notice of Final Results of Changed 
Circumstances Antidumping Duty Administrative Review: Polychloroprene 
Rubber From Japan, 67 FR 58 (January 2, 2002); Brass Sheet and Strip 
from Canada: Final Results of Antidumping Duty Administrative Review, 
57 FR 20460 (May 13, 1992). While no single factor or combination of 
factors will necessarily provide a dispositive indication of a 
successor-in-interest relationship, the Department will generally 
consider the new company to be the successor to the previous company if 
the new company's resulting operation is not materially dissimilar to 
that of its predecessor. See, e.g., Fresh and Chilled Atlantic Salmon 
From Norway; Final Results of Changed Circumstances Antidumping Duty 
Administrative Review, 64 FR 9979 (March 1, 1999); Industrial 
Phosphoric Acid from Israel; Final Results of Changed Circumstances 
Review, 59 FR 6944 (February 14, 1994). Thus, if the evidence 
demonstrates that with respect to the production and sale of the 
subject merchandise, the new company operates as the same business 
entity as the former company, the Department will accord the new 
company the same antidumping treatment as its predecessor. 
Successorship analyses can be carried out as part of an administrative 
review. See, e.g., Notice of Preliminary Results of Antidumping Duty 
Administrative Review, Notice of Intent to Revoke in Part: Individually 
Quick Frozen Raspberries from Chile, 71 FR 45000, at fn.1 (August 8, 
2006); unchanged in relevant part in final results, Notice of Final 
Results of Antidumping Duty Administrative Review, and Final 
Determination to Revoke the Order In Part: Individually Quick Frozen 
Red Raspberries from Chile, 72 FR 70295 (December 11, 2007).
    The Department preliminarily determines that G J Steel is the 
successor-in-interest to Nakornthai. First, with regard to management, 
it appears G J Steel's management is the same as Nakornthai's 
management. For example, Mr. Sirichai Sae-Kue was identified as 
Nakornthai's Vice-President - Commercial and Ms. Panee Tanaprateepkul 
as Nakornthai's Vice-President - Administration. See Section A 
Response, Public Version at Exhibit A-12 (Nakornthai Annual Report for 
2007 at 86). Public records, specifically the Business Week profile for 
G J Steel, state that Mr. Sae-Kue now serves as the President of G J 
Steel and Ms. Panee Tanaprateepkul continues to serve as Vice President 
of Procurement, Human Resources & Admin & Logistic for G J Steel. See 
Business Week Profile for G J Steel Public Company Limited, available 
at https://investing.businessweek.com/research/stocks/people/people.asp?ric=GJS.BK (last accessed on July 28, 2009), which is 
incorporated on the record of this proceeding as a Memorandum to the 
File, dated July 29, 2009.
    Second, with regard to production facilities, record evidence 
demonstrates Nakornthai used the same production facilities as G J 
Steel. For example, the Nakornthai Annual Report for 2007 shows 
Nakornthai's production facilities are located at Hermaraj Chonburi 
Industrial Estate in Chonburi See Section A Response, Public Version at 
Exhibit A-12 at 76 (Nakornthai Annual Report for 2007). The last page 
of the product catalog for G J Steel identifies the same location 
identified above for the G J Steel factory. See Section A Response, 
Public Version at Exhibit A-16. Furthermore, the same exhibits show the 
head office of Nakornthai was in the same location as the head office 
of G J Steel, and that Nakornthai and G J Steel produced or produce the 
same product, namely hot-rolled coil.
    Although the Department lacks information concerning G J Steel's 
supplier relationships and customer base, there is additional evidence 
to demonstrate that G J Steel is the successor-in-interest to 
Nakornthai. For example, the Nakornthai Annual Report for 2007 shows 
that Nakornthai owned 100 percent of the shares of NSM Steel Company 
Limited (NSM Cayman). NSM Cayman is identified as a subsidiary of 
Nakornthai which was incorporated for the purpose of issuing notes and

[[Page 39052]]

debentures and using the proceeds to make loans to Nakornthai. See id. 
at Exhibit A-12 at 108. The interim financial statements for G J Steel 
show that NSM Cayman is a subsidiary of G J Steel, and that G J Steel 
possesses the same relationship with NSM Cayman as did Nakornthai. See 
Section A Response, Public Version at Exhibit A-12, at 11 (interim 
financial statements for G J Steel for the three and six month periods 
ending June 30, 2008).
    Moreover, the notes to the interim financial statements indicate 
that on June 5, 2008, the company changed its name from ``Nakornthai 
Strip Mill Public Company'' to ``G J Steel Public Company Limited.'' 
See Section A Response, Public Version, Exhibit A-12 at 38 n.18 (notes 
to the interim financial statements for the three-month and six-month 
periods ending June 30, 2008 (unaudited)). This company name change was 
registered with the Business Development Department of the Thailand 
Ministry of Commerce on June 5, 2008, and the Stock Exchange of 
Thailand was informed to ``change the stock symbol from ``NSM'' to 
``GJS'' in accordance with the change of the company's name at the same 
date.'' Id. at n.18 and n. 19 (notes to the interim financial 
statements for the three-month and six-month periods ending September 
30, 2008 (unaudited)).

Use of Facts Otherwise Available

    For the reasons discussed below and in the accompanying AFA 
memorandum, we preliminarily determine that the use of AFA is 
appropriate with respect to G Steel and G J Steel.
A. Use of Facts Available
    Section 776(a)(2) of the Act provides that if an interested party 
withholds information requested by the administering authority, fails 
to provide such information by the deadlines for submission of the 
information and in the form or manner requested, subject to subsections 
(c)(1) and (e) of section 782 of the Act, significantly impedes a 
proceeding under this title, or provides such information but the 
information cannot be verified as provided in section 782(i) of the 
Act, the administering authority shall use, subject to section 782(d) 
of the Act, facts otherwise available in reaching the applicable 
determination. Section 782(d) of the Act provides that if the 
administering authority determines that a response to a request for 
information does not comply with the request, the administering 
authority shall promptly inform the responding party and provide an 
opportunity to remedy the deficient submission. Section 782(e) of the 
Act states further that the Department shall not decline to consider 
submitted information if all of the following requirements are met: (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.
    On March 12, 2009, G Steel and G J Steel notified the Department 
that it would not continue to participate in this administrative review 
and requested the removal of its business-proprietary information (BPI) 
from the administrative record. We granted this request and have 
removed all of its BPI from the administrative record. We also 
instructed counsel for Petitioner to destroy all copies of G Steel's 
and G J Steel's BPI data. See Memorandum to the File, dated April 8, 
2009; see also Letters from the Department to G Steel and G J Steel, 
dated April 8, 2009; Letters from the Department to U.S. Steel and 
Nucor, dated April 9, 2009.
    Because G Steel ended its participation in the instant 
administrative review, G Steel's actions constitute a refusal to 
provide information necessary to conduct the Department's antidumping 
analysis under sections 776(a)(2)(A) and (B) of the Act. Further, due 
to its withdrawal from this review, G Steel has not responded to 
sections B, C and D of the Department's questionnaire. Thus, G Steel's 
withdrawal significantly impedes conduct of the administrative review. 
See section 776(a)(2)(C) of the Act. Therefore, we preliminarily 
determine to base the margin for G Steel and, accordingly G J Steel, on 
facts otherwise available, pursuant to sections 776(a)(2)(A), (B), and 
(C) of the Act. Further, absent any response on the record from G 
Steel, sections 782(d) and (e) of the Act do not apply.
B. Application of Adverse Inferences for Facts Available
    In applying the facts otherwise available, section 776(b) of the 
Act provides that, if the Department finds an interested party has 
failed to cooperate by not acting to the best of its ability to comply 
with a request for information, in reaching the applicable 
determination under this title the Department may use an inference 
adverse to the interests of that party in selecting from among 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 Statement of Administrative Action 
accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, 
vol. 1 (1994) at 870 (SAA). 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).
    G Steel and G J Steel's request for withdrawal from the review and 
its failure to answer sections B, C and D of the Department's 
questionnaire constitutes a refusal to participate in the 
administrative review. This demonstrates that G Steel and G J Steel 
failed to cooperate by not acting to the best of its ability to comply 
with the Department's request for information. Therefore, pursuant to 
section 776(b) of the Act, the Department has preliminarily determined 
that in selecting from among the facts otherwise available, an adverse 
inference is warranted. See, e.g., Notice of Final Determination of 
Sales at Less Than Fair Value: Circular Seamless Stainless Steel Hollow 
Products From Japan, 65 FR 42985, 42986 (July 12, 2000) (the Department 
applied total AFA where a respondent failed to respond to subsequent 
antidumping questionnaires).
C. Selection and Corroboration of Information Used as Facts Available
    Section 776(b) of the Act provides that the Department may use as 
AFA information derived from the petition, the final determination in 
the investigation, any previous review, or any other information placed 
on the record. When selecting an AFA rate from among the possible 
sources of information, the Department's practice has been to ensure 
the margin is sufficiently adverse to induce respondents to provide the 
Department with complete and accurate information in a timely manner. 
See, e.g., Certain Steel Concrete Reinforcing Bars From Turkey; Final 
Results and Rescission of Antidumping Duty Administrative Review in 
Part, 71 FR 65082, 65084 (November 7, 2006).
    As total AFA, we have assigned G Steel and G J Steel the rate of 
20.30 percent which is the highest alleged margin, as recalculated by 
the Department, for Thailand in the original antidumping petition. See 
Memorandum from Joseph A. Spetrini to Bernard T. Carreau, ``Certain 
Hot-

[[Page 39053]]

Rolled Carbon Steel Flat Products from Thailand: Preliminary 
Determination of Sales at Less Than Fair Value--The Use of Facts 
Available for Siam Strip Mill Public Co. Ltd, and the Corroboration of 
Secondary Information,'' dated April 23, 2001 (Facts Available 
Memorandum). This rate was assigned as AFA to SSM, which was G Steel's 
predecessor in the investigation, and corroborated by the Department 
for its preliminary determination in the investigation. See Notice of 
Preliminary Determination of Sales at Less Than Fair Value: Certain 
Hot-Rolled Carbon Steel Flat Products From Thailand, 66 FR 22199 (May 
3, 2001) (Thailand Preliminary Determination).
    We find this rate is sufficiently adverse to serve the purposes of 
facts available and is appropriate, considering that this AFA rate is 
the highest rate determined for any respondent in this proceeding. In 
choosing the appropriate balance between providing a respondent with an 
incentive to cooperate to the best of its ability and imposing a rate 
that is reasonably related to the respondent's prior commercial 
activity, selecting the highest margin ``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.'' See Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 
1190 (Fed. Cir. 1990).
    Section 776(c) of the Act provides that, to the extent practicable, 
the Department shall corroborate secondary information used for facts 
available by reviewing independent sources reasonably at its disposal. 
Information from a prior segment of the proceeding constitutes 
secondary information. See SAA at 870; see also Antifriction Bearings 
and Parts Thereof From France, et al.: Final Results of Antidumping 
Duty Administrative Reviews, Rescission of Administrative Reviews in 
Part, and Determination To Revoke Order in Part, 69 FR 55574, 55577 
(September 15, 2004). The word ``corroborate'' means that the 
Department will satisfy itself that the secondary information to be 
used has probative value. See SAA at 870; see also Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished, From Japan, and 
Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and 
Components Thereof, From Japan; Preliminary Results of Antidumping Duty 
Administrative Reviews and Partial Termination of Administrative 
Reviews, 61 FR 57391, 57392 (November 6, 1996). To corroborate 
secondary information, the Department will examine, to the extent 
practicable, the reliability and relevance of the information used.
    With respect to the reliability aspect of corroboration, the 
Department found the rate of 20.30 percent to be reliable in the 
investigation. See Thailand Preliminary Determination. There, the 
Department pointed out that the export prices in the petition were 
based on import values compiled by the U.S. Customs Service. See 
Thailand Preliminary Determination, 66 FR at 22202. These data were 
from publicly available sources (i.e., official U.S. government 
statistics). The Department also compared the prices and expenses of 
export sales to the United States by Sahaviriya Steel Industries Public 
Co., Ltd. (Sahaviriya), a respondent in the investigation, to 
corroborate the information submitted in the petition. See Facts 
Available Memorandum. This memorandum was moved to this segment of the 
proceeding in the ``Memorandum to the File, Transfer of Certain 
Documents from Past Segments of Proceeding in the Current 
Administrative Review of Certain Hot-Rolled Carbon Steel Flat Products 
from Thailand (A-549-917)'', dated July 29, 2009 (Document Transfer 
Memorandum). Therefore, we found the U.S. price from the petition 
margin was sufficiently corroborated.
    For the NV calculation, Petitioner relied upon constructed value, 
consisting of cost of manufacture (COM), selling, general, 
administrative expenses (SG&A), interest expenses, and profit. 
Petitioner based depreciation, SG&A, interest, and profit on 
Sahaviriya's publicly available financial statements. Therefore, 
because these data were based on publicly available financial 
statements, we found them to be sufficiently corroborated. Petitioner 
calculated COM based on its own production experience, adjusted for 
known differences between costs incurred to produce hot rolled steel in 
the United States and Thailand using publicly available data. To 
corroborate these data, the Department compared them to the reported 
COM of Sahaviriya and its affiliates. Our analysis showed the 
petitioner's reported costs were reasonably close to the data submitted 
by Sahaviriya and its affiliates. Based on this analysis, we found that 
the COM data used in the antidumping petition have probative value. See 
Facts Available Memorandum at 5 and 6.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. In the 
investigation, the Department determined that in the absence of 
verifiable data provided by the non-responding company, the petition 
information was the best approximation available to the Department of 
that company's pricing and selling behavior in the U.S. market. This 
information was relevant to the mandatory respondent which refused to 
participate in the investigation. See Facts Available Memorandum. No 
party contested the application of that rate in the investigation. See 
Notice of Final Determination of Sales at Less Than Fair Value; Certain 
Hot-Rolled Carbon Steel Flat Products From Thailand, 66 FR 49622 
(September 28, 2001).
    To further corroborate the rate, the Department examined the final 
results of the most recent segment of this proceeding, which is the 
changed circumstances review. We note the rate of 20.30 percent is 
corroborated by margins calculated for individual transactions in the 
changed circumstances review. See Certain Hot-Rolled Carbon Steel Flat 
Products from Thailand: Final Results of Antidumping Duty Changed 
Circumstances Review and Reinstatement in the Antidumping Duty Order, 
74 FR 22885 (May 15, 2009); and Document Transfer Memorandum. As 
certain of the calculations are based on proprietary information, see 
also ``Certain Hot-Rolled Carbon Steel Flat Products from Thailand: 
Corroboration of Total Adverse Facts Available for G Steel Public 
Company Limited (G Steel) and G J Steel Public Company Limited 
(formerly Nakornthai Strip Mill Public Company, Ltd.)'' dated July 29, 
2009, for further discussion.
    Because the AFA rate of 20.30 percent is the highest rate assigned 
to any company in the history of this order, we find the rate is 
relevant for use in this administrative review and, therefore, it has 
probative value for use as AFA. As such, the Department finds this rate 
to be corroborated to the extent practicable, consistent with section 
776(c) of Act. We have, therefore, selected the rate of 20.30 percent 
for G Steel and G J Steel as this rate is the highest margin assigned 
to any company in the history of this order. Thus, we consider the 
20.30 percent rate to be sufficiently high so as to encourage 
participation in future segments of this proceeding.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
dumping margin for G Steel and G J Steel (formerly known as Nakornthai

[[Page 39054]]

Strip Mill Public Company Limited) is 20.30 percent for the period 
November 1, 2007, through October 31, 2008.

Disclosure and Public Comment

    We will disclose pertinent memoranda concerning these preliminary 
results to parties in this review within five days of the date of 
publication of this notice in accordance with 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 a hearing is requested, the Department will notify 
interested parties of the hearing schedule.
    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. See 19 CFR 351.309(c). Interested 
parties may file rebuttal briefs, limited to issues raised in the case 
briefs, no later than 35 days after the publication of these 
preliminary results. See 19 CFR 351.309(d). Any hearing, if requested, 
will be held two days after the deadline for submission of rebuttal 
briefs. See 19 CFR 351.310(d). Parties who submit arguments are 
requested to submit with each argument a statement of the issue, a 
brief summary of the argument, and a table of authorities cited. 
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.
    We intend to issue the final results of this administrative review, 
including the results of our analysis of issues raised in any written 
comments, within 120 days of publication of these preliminary results 
in the Federal Register.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. Because we are relying on total AFA 
to establish G Steel and G J Steel's dumping margin, we will instruct 
CBP to apply a dumping margin of 20.30 percent ad valorem to all 
entries of subject merchandise during the POR that was produced and/or 
exported by G Steel and G J Steel (formerly known as Nakornthai Strip 
Mill Public Company Limited). The Department intends to issue 
instructions to CBP 15 days after the publication of the final results 
of review.

Cash Deposit Requirements

    If these preliminary results are adopted in the final results of 
review, the following deposit requirements will be effective upon 
completion of the final results of this administrative review for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication of the final 
results of this administrative review, as provided in section 751(a)(1) 
of the Act: (1) the cash-deposit rate for G Steel and G J Steel 
(formerly known as Nakornthai Strip Mill Public Company Limited) will 
be the rate established in the final results of this review; (2) for 
previously reviewed or investigated companies not covered in this 
review, 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 less-than-fair-
value (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; (4) if neither the exporter 
nor the manufacturer is a firm covered in this or any previous segment 
of the proceeding, the cash-deposit rate will continue to be the all-
others rate established in the LTFV investigation which is 4.44 
percent. See Antidumping Duty Order. These cash-deposit requirements, 
when imposed, shall remain in effect until further notice.

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. The preliminary results of 
administrative review and this notice are issued and published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: July 29, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
[FR Doc. E9-18733 Filed 8-4-04; 8:45 am]
BILLING CODE 3510-DS-S