[Federal Register Volume 78, Number 211 (Thursday, October 31, 2013)]
[Notices]
[Pages 65283-65289]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-25805]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-994, A-851-803, A-428-842, A-588-871, A-580-871, A-455-804, A-
821-821]
Grain-Oriented Electrical Steel From the People's Republic of
China, the Czech Republic, Germany, Japan, the Republic of Korea,
Poland, and the Russian Federation: Initiation of Antidumping Duty
Investigations
AGENCY: Enforcement and Compliance, formerly Import Administration,
International Trade Administration, Department of Commerce.
DATES: Effective Date: October 31, 2013.
FOR FURTHER INFORMATION CONTACT: Patrick Edwards at (202) 482-8029 (the
People's Republic of China (PRC)); Elizabeth Eastwood at (202) 482-3874
(the Czech Republic, Germany, Poland, and the Russian Federation
(Russia)); or Steve Bezirganian at (202) 482-1131 (Japan and the
Republic of Korea (Korea)), AD/CVD Operations, Enforcement and
Compliance, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue NW., Washington, DC
20230.
SUPPLEMENTARY INFORMATION:
The Petitions
On September 18, 2013, the Department of Commerce (the Department)
received antidumping duty (AD) petitions concerning imports of grain-
oriented electrical steel (GOES) from the PRC, the Czech Republic,
Germany, Japan, Korea, Poland, and Russia (the Petitions) filed in
proper form on behalf of AK Steel Corporation, Allegheny Ludlum, LLC,
and the United Steelworkers (collectively, the petitioners).\1\ The
Petitions were accompanied by one countervailing duty (CVD)
petition.\2\ The petitioner companies are domestic producers of GOES
and the United Steelworkers is the union that represents employees of
Allegheny Ludlum, LLC that engage in the production of GOES. On
September 23 and 30, 2013, the Department requested additional
information and clarification of certain areas of the Petitions.\3\ The
petitioners filed responses to these requests on September 26, 2013,
and October 17, 2013.\4\
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\1\ See ``Petition for the Imposition of Antidumping Duties on
Imports of Grain-Oriented Electrical Steel from the People's
Republic of China, the Czech Republic, the Federal Republic of
Germany, Japan, the Republic of Korea, Poland and the Russian
Federation,'' dated September 18, 2013 (Petitions).
\2\ See ``Petition for the Imposition of Countervailing Duties
on Imports of Grain-Oriented Electrical Steel from the People's
Republic of China,'' dated September 18, 2013.
\3\ See letter from the Department to the petitioners entitled,
``Petition for the Imposition of Antidumping Duties on Imports of
Grain-Oriented Electrical Steel from the People's Republic of China,
the Czech Republic, the Federal Republic of Germany, Japan, the
Republic of Korea, Poland, and the Russian Federation: Supplemental
Questions,'' on each of the country-specific records, dated
September 23, 2013; see also letter from the Department to the
petitioners entitled, ``Petition for the Imposition of Antidumping
Duties on Imports of Grain-Oriented Electrical Steel from the
Russian Federation: Supplemental Questions,'' dated September 30,
2013.
\4\ See Supplement to all the Petitions, dated September 26,
2013 (Petition Supplement), Supplement to the PRC Petition, dated
September 26, 2013, Supplement to the Czech Republic Petition, dated
September 26, 2013, Supplement to the Germany Petition, dated
September 26, 2013, Supplement to the Japan Petition, dated
September 26, 2013, Supplement to the Korea Petition, dated
September 26, 2013, Supplement to the Poland Petition, dated
September 26, 2013, and Supplement to the Russia Petition, dated
September 26, 2013; see also Second Supplement to the Czech
Petition, dated October 17, 2013, Second Supplement to the Germany
Petition, dated October 17, 2013, Second Supplement to the Japan
Petition, dated October 17, 2013, Second Supplement to the Korea
Petition, dated October 17, 2013, and Second Supplement to the
Russia Petition, dated October 17, 2013 (Second Supplement).
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In accordance with section 732(b) of the Tariff Act of 1930, as
amended (the Act), the petitioners allege that imports of GOES from the
PRC, the Czech Republic, Germany, Japan, Korea, Poland, and Russia are
being, or are likely to be, sold in the United States at less than fair
value within the meaning of section 731 of the Act and that such
imports are materially injuring, or threatening material injury to, an
industry in the United States. Also, consistent with section 732(b)(1)
of the Act, the Petitions are accompanied by information reasonably
available to the petitioners supporting their allegations.
The Department finds that the petitioners filed these Petitions on
behalf of the domestic industry because the petitioners are interested
parties as defined in sections 771(9)(C) and (D) of the Act. The
Department also finds that the petitioners have demonstrated sufficient
industry support with respect to the initiation of the AD
investigations that the petitioners are requesting.\5\
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\5\ See the ``Determination of Industry Support for the
Petitions'' section.
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Periods of Investigations
Pursuant to 19 CFR 351.204(b)(1), because the Petitions were filed
on September 18, 2013, the period of investigation (POI) for the PRC
investigation is January 1, 2013, through June 30, 2013. The POI for
the Czech Republic, Germany, Japan, Korea, Poland, and Russia
investigations is July 1, 2012, through June 30, 2013.
Scope of the Investigations
The product covered by these investigations is GOES from the PRC,
the Czech Republic, Germany, Japan, Korea, Poland and Russia. For a
full description of the scope of the investigations, see the ``Scope of
the Investigations,'' in Appendix I of this notice.
Comments on the Scope of Investigations
During our review of the Petitions, the Department issued questions
to, and received responses from, the petitioners pertaining to the
proposed scope to ensure that the scope language in the Petitions would
be an accurate reflection of the products for which the domestic
industry is seeking relief. As discussed in the preamble to the
regulations,\6\ we are setting aside a
[[Page 65284]]
period for interested parties to raise issues regarding product
coverage. The Department encourages all interested parties to submit
such comments by 5:00 p.m. Eastern Time on November 13, 2013. All
comments must be filed on the records of the PRC, Czech Republic,
Germany, Japan, Korea, Poland, and Russia AD investigations, as well as
the concurrent PRC CVD investigation.
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\6\ See Antidumping Duties; Countervailing Duties; Final rule,
62 FR 27296, 27323 (May 19, 1997).
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Filing Requirements
All submissions to the Department must be filed electronically
using Enforcement and Compliance's Antidumping Countervailing Duty
Centralized Electronic Service System (IA ACCESS).\7\ An electronically
filed document must be received successfully in its entirety by 5:00
p.m. on the date of the applicable deadline. Documents excepted from
the electronic submission requirements must be filed manually (i.e., in
paper form) with the APO/Dockets Unit of Enforcement and Compliance,
Room 1870, U.S. Department of Commerce, 14th Street and Constitution
Avenue NW., Washington, DC 20230, and stamped with the date and time of
receipt by the applicable deadline.
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\7\ See Antidumping and Countervailing Duty Proceedings:
Electronic Filing Procedures; Administrative Protective Order
Procedures, 76 FR 39263 (July 6, 2011) for details of the
Department's electronic filing requirements, which went into effect
on August 5, 2011. Information on help using IA ACCESS can be found
at https://iaaccess.trade.gov/help.aspx and a handbook can be found
at https://iaaccess.trade.gov/help/Handbook%20on%20Electronic%20Filling%20Procedures.pdf.
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Comments on Product Characteristics for Antidumping Duty Questionnaires
The Department requests comments from interested parties regarding
the appropriate physical characteristics of GOES to be reported in
response to the Department's AD questionnaires. This information will
be used to identify the key physical characteristics of the subject
merchandise in order to report the relevant factors and costs of
production (COPs) accurately as well as to develop appropriate product-
comparison criteria.
Interested parties may provide any information or comments that
they feel are relevant to the development of an accurate list of
physical characteristics. Specifically, they may provide comments as to
which characteristics are appropriate to use as: (1) General product
characteristics and (2) product-comparison criteria. We note that it is
not always appropriate to use all product characteristics as product-
comparison criteria. We base product-comparison criteria on meaningful
commercial differences among products. In other words, while there may
be some physical product characteristics utilized by manufacturers to
describe GOES, it may be that only a select few product characteristics
take into account commercially-meaningful physical characteristics. In
addition, interested parties may comment on the order in which the
physical characteristics should be used in matching products.
Generally, the Department attempts to list the most important physical
characteristics first and the least important characteristics last.
In order to consider the suggestions of interested parties in
developing and issuing the AD questionnaires, we must receive comments
on product characteristics by November 13, 2013. Rebuttal comments must
be received by November 20, 2013. All comments and submissions to the
Department must be filed electronically using IA ACCESS, as referenced
above.
Tolling of Deadlines
As explained in the memorandum from the Assistant Secretary for
Enforcement and Compliance, the Department has exercised its discretion
to toll deadlines for the duration of the closure of the Federal
Government from October 1, through October 16, 2013.\8\ Therefore, all
deadlines in these investigations have been tolled by 16 days. If the
new deadline falls on a non-business day, in accordance with the
Department's practice, the deadline will become the next business day.
The revised deadline for the initiation of these investigations is
October 24, 2013.
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\8\ See Memorandum for the Record from Paul Piquado, Assistant
Secretary for Enforcement and Compliance, ``Deadlines Affected by
the Shutdown of the Federal Government'' dated October 18, 2013.
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Determination of Industry Support for the Petitions
Section 732(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 732(c)(4)(A) of the Act
provides that a petition meets this requirement if the domestic
producers or workers who support the petition account for: (i) At least
25 percent of the total production of the domestic like product; and
(ii) more than 50 percent of the production of the domestic like
product produced by that portion of the industry expressing support
for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of
the Act provides that, if the petition does not establish support of
domestic producers or workers accounting for more than 50 percent of
the total production of the domestic like product, the Department
shall: (i) Poll the industry or rely on other information in order to
determine if there is support for the petition, as required by
subparagraph (A); or (ii) determine industry support using a
statistically valid sampling method to poll the industry.
Section 771(4)(A) of the Act defines the term ``industry'' as the
producers as a whole of a domestic like product. Thus, to determine
whether a petition has the requisite industry support, the statute
directs the Department to look to producers and workers who produce the
domestic like product. The International Trade Commission (ITC), which
is responsible for determining whether ``the domestic industry'' has
been injured, must also determine what constitutes a domestic like
product in order to define the industry. While both the Department and
the ITC must apply the same statutory definition regarding the domestic
like product,\9\ they do so for different purposes and pursuant to a
separate and distinct authority. In addition, the Department's
determination is subject to limitations of time and information.
Although this may result in different definitions of the like product,
such differences do not render the decision of either agency contrary
to law.\10\
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\9\ See section 771(10) of the Act.
\10\ See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT
2001) (citing Algoma Steel Corp., Ltd. v. United States, 688 F.
Supp. 639, 644 (CIT 1988), aff'd 865 F.2d 240 (Fed. Cir. 1989)).
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Section 771(10) of the Act defines the term ``domestic like
product'' as ``a product which is like, or in the absence of like, most
similar in characteristics and uses with, the article subject to an
investigation under this title.'' Thus, the reference point from which
the domestic like product analysis begins is ``the article subject to
an investigation'' (i.e., the class or kind of merchandise to be
investigated, which normally will be the scope as defined in the
petition).
With regard to the domestic like product, the petitioners do not
offer a definition of the domestic like product distinct from the scope
of the investigations. Based on our analysis of the information
submitted on the record, we have determined that GOES, as defined in
the scope of the investigations, constitutes a single domestic like
product and we have analyzed industry support in terms of that domestic
like product.\11\
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\11\ For a discussion of the domestic like product analysis in
this case, see Antidumping Duty Investigation Initiation Checklist:
Grain-Oriented Electrical Steel from the People's Republic of China
(PRC AD Initiation Checklist), at Attachment II, Analysis of
Industry Support for the Petitions Covering Grain-Oriented
Electrical Steel from the People's Republic of China, Czech
Republic, Germany, Japan, the Republic of Korea, Poland, and the
Russian Federation (Attachment II); Antidumping Duty Investigation
Initiation Checklist: Grain-Oriented Electrical Steel from Czech
Republic (Czech Republic Initiation Checklist), at Attachment II;
Antidumping Duty Investigation Initiation Checklist: Grain-Oriented
Electrical Steel from Germany (Germany Initiation Checklist), at
Attachment II; Antidumping Duty Investigation Initiation Checklist:
Grain-Oriented Electrical Steel from Japan (Japan Initiation
Checklist), at Attachment II; Antidumping Duty Investigation
Initiation Checklist: Grain-Oriented Electrical Steel from the
Republic of Korea (Korea Initiation Checklist), at Attachment II;
Antidumping Duty Investigation Initiation Checklist: Grain-Oriented
Electrical Steel from Poland (Poland Initiation Checklist), at
Attachment II; and Antidumping Duty Investigation Initiation
Checklist: Grain-Oriented Electrical Steel from the Russian
Federation (Russia Initiation Checklist), at Attachment II. These
checklists are dated concurrently with this notice and are on file
electronically via IA ACCESS. Access to documents filed via IA
ACCESS is also available in the Central Records Unit (CRU), Room
7046 of the main Department of Commerce building.
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[[Page 65285]]
In determining whether the petitioners have standing under section
732(c)(4)(A) of the Act, we considered the industry support data
contained in the Petitions with reference to the domestic like product
as defined in the ``Scope of the Investigations'' in Appendix I of this
notice. To establish industry support, the petitioners provided their
own production of the domestic like product in 2012.\12\ The
petitioners state that there are no other known producers of GOES in
the United States; therefore, the Petitions are supported by 100
percent of the U.S. industry.\13\
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\12\ See Volume I of the Petitions, at 4.
\13\ Id., at 1-3.
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Our review of the data provided in the Petitions and other
information readily available to the Department indicates that the
petitioners have met the statutory criteria for industry support
pursuant to section 732(c)(4) of the Act.\14\ First, the Petitions
establish support from domestic producers (or workers) accounting for
more than 50 percent of the total production of the domestic like
product and, as such, the Department is not required to take further
action in order to evaluate industry support (e.g., polling).\15\
Second, the domestic producers (or workers) have met the statutory
criteria for industry support under section 732(c)(4)(A)(i) of the Act
because the domestic producers (or workers) who support the Petitions
account for at least 25 percent of the total production of the domestic
like product.\16\ Finally, the domestic producers (or workers) have met
the statutory criteria for industry support under section
732(c)(4)(A)(ii) of the Act because the domestic producers (or workers)
who support the Petitions account for more than 50 percent of the
production of the domestic like product produced by that portion of the
industry expressing support for, or opposition to, the Petitions.\17\
Accordingly, the Department determines that the Petitions were filed on
behalf of the domestic industry within the meaning of section 732(b)(1)
of the Act.
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\14\ See PRC AD Initiation Checklist, Czech Republic Initiation
Checklist, Germany Initiation Checklist, Japan Initiation Checklist,
Korea Initiation Checklist, Poland Initiation Checklist, and Russia
Initiation Checklist, at Attachment II.
\15\ See section 732(c)(4)(D) of the Act; see also PRC AD
Initiation Checklist, Czech Republic Initiation Checklist, Germany
Initiation Checklist, Japan Initiation Checklist, Korea Initiation
Checklist, Poland Initiation Checklist, and Russia Initiation
Checklist, at Attachment II.
\16\ See PRC AD Initiation Checklist, Czech Republic Initiation
Checklist, Germany Initiation Checklist, Japan Initiation Checklist,
Korea Initiation Checklist, Poland Initiation Checklist, and Russia
Initiation Checklist, at Attachment II.
\17\ Id.
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The Department finds that the petitioners filed the Petitions on
behalf of the domestic industry because they are interested parties as
defined in section 771(9)(C) and (D) of the Act and have demonstrated
sufficient industry support with respect to the AD investigations that
they are requesting the Department initiate.\18\
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\18\ Id.
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Allegations and Evidence of Material Injury and Causation
The petitioners allege that the U.S. industry producing the
domestic like product is being materially injured, or threatened with
material injury, by reason of the imports of the subject merchandise
sold at less than normal value (NV). In addition, the petitioners
allege that subject imports exceed the negligibility threshold provided
for under section 771(24)(A) of the Act.\19\
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\19\ See Volume I of the Petitions, at 15-16 and Exhibit
GENERAL-6.
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The petitioners contend that the industry's injured condition is
illustrated by reduced market share; underselling and price depression
or suppression; lost sales and revenues; decline in production,
capacity utilization, and shipments; reduced employment variables; and
decline in financial performance.\20\ We have assessed the allegations
and supporting evidence regarding material injury, threat of material
injury, and causation, and we have determined that these allegations
are properly supported by adequate evidence and meet the statutory
requirements for initiation.\21\
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\20\ See Volume I of the Petitions, at 13-29 and Exhibits
GENERAL-4 and GENERAL-6 through GENERAL-12.
\21\ See PRC AD Initiation Checklist, Czech Republic Initiation
Checklist, Germany Initiation Checklist, Japan Initiation Checklist,
Korea Initiation Checklist, Poland Initiation Checklist, and Russia
Initiation Checklist, at Attachment III, Analysis of Allegations and
Evidence of Material Injury and Causation for the Petitions Covering
Grain-Oriented Electrical Steel From the People's Republic of China,
Czech Republic, Germany, Japan, the Republic of Korea, Poland, and
the Russian Federation.
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Allegations of Sales at Less Than Fair Value
The following is a description of the allegations of sales at less
than fair value upon which the Department based its decision to
initiate AD investigations of imports of GOES from the Czech Republic,
Germany, Japan, Korea, Poland, the PRC, and Russia. The sources of data
for the deductions and adjustments relating to U.S. price and NV are
discussed in greater detail in the country-specific initiation
checklists.
Export Price
For the Czech Republic, Japan, Korea, Poland, and Russia, the
petitioners based U.S. price on offers for sales of GOES from producers
of subject merchandise produced in, and exported from, the subject
country. The petitioners made deductions from U.S. price for movement
expenses consistent with the delivery terms. For Japan and Korea, the
petitioners also made deductions from U.S. price for trader markups
when traders made the offers for sale; these deductions were estimated
based on the financial statements of independent steel traders.\22\ The
petitioners made no other adjustments to U.S. price.\23\
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\22\ See Japan Initiation Checklist; and Korea Initiation
Checklist.
\23\ See Czech Republic Checklist; Japan Initiation Checklist;
Korea Initiation Checklist; Poland Initiation Checklist; and Russia
Initiation Checklist.
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Constructed Export Price
For Germany, Japan, and the PRC, the petitioners calculated
constructed export price (CEP) based on offers for sales of GOES from
producers of subject merchandise produced in, and exported from, the
subject country. The petitioners classified these offers as CEP
transactions based on research showing the majority of imports from
these producers were facilitated by their U.S. affiliates. The
petitioners made deductions from U.S. price for movement expenses,
consistent with the delivery terms. The petitioners also deducted U.S.
indirect selling expenses estimated using the financial statements of
an independent steel trader (for Germany, Japan, and the PRC) and
imputed credit expenses (for Germany).
[[Page 65286]]
The petitioners made no other adjustments to U.S. price.\24\
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\24\ See PRC AD Initiation Checklist; Germany Initiation
Checklist; and Japan Initiation Checklist.
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Normal Value
For the Czech Republic, Germany, Japan, Korea, Poland, and Russia,
the petitioners based NV on price information from a producer of GOES
in each of these countries that was sold in the subject country
obtained through market research for the foreign like product. The
petitioners made adjustments to NV for imputed credit expenses
consistent with the sales terms. The petitioners also made a
difference-in-merchandise adjustment to NV, where applicable, to
account for differences between the home market and U.S. products (for
Germany, Japan, Korea, and Russia). The petitioners made no other
adjustments to NV.\25\
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\25\ See Czech Republic Initiation Checklist; Germany Initiation
Checklist; Japan Initiation Checklist; Korea Initiation Checklist;
Poland Initiation Checklist; and Russia Initiation Checklist.
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With respect to the PRC, the petitioners state that the Department
has long treated the PRC as a non-market economy (NME) country.\26\ In
accordance with section 771(18)(C)(i) of the Act, the presumption of
NME status remains in effect until revoked by the Department. The
presumption of NME status for the PRC has not been revoked by the
Department and, therefore, remains in effect for purposes of the
initiation of this investigation. Accordingly, the NV of the product is
appropriately based on factors of production (FOPs) valued in a
surrogate market economy country, in accordance with section 773(c) of
the Act. In the course of this investigation, all parties, including
the public, will have the opportunity to provide relevant information
related to the issues of the PRC's NME status and the granting of
separate rates to individual exporters.
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\26\ See Volume II of the Petitions, at 1.
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The petitioners claim that Thailand is an appropriate surrogate
country because it is a market economy that is at a level of economic
development comparable to that of the PRC, it is a significant producer
of the merchandise under consideration, and the data for valuing FOPs
are both available and reliable.\27\ However, to calculate factory
overhead, selling, general and administrative (SG&A) expenses, and
profit, the petitioners used the financial statements of an Indian
steel producer because, to the best of their knowledge, there are no
publicly available, contemporaneous financial statements for any
company in the Philippines, Indonesia, Ukraine, Thailand, Colombia, or
South Africa that is a vertically-integrated producer (like the PRC
GOES producers) of merchandise comparable to the subject merchandise
and that shows a profit. The petitioners also examined countries not
traditionally used as surrogates for the PRC (such as Malaysia) but are
close to the PRC in terms of per-capita GNI and found no appropriate
companies that did not have financial losses.\28\
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\27\ Id., at 2.
\28\ See Volume II of the Petitions, at 6 and 8-10; see also
Supplement to the PRC Petition, at 5-7.
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Based on the information provided by the petitioners, we believe it
is appropriate to use Thailand as a surrogate country for initiation
purposes. We also believe that, for initiation purposes, it is
appropriate to use the Indian financial statements as the surrogate
source for financial ratios. Interested parties will have the
opportunity to submit comments regarding surrogate country selection
and will be provided an opportunity to submit publicly available
information to value FOPs within 40 days before the scheduled date of
the preliminary determination.\29\
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\29\ See 19 CFR 351.301(c)(3)(i). Note that this is the revised
regulation published on April 1, 2013. See http://www.gpo.gov/fdsys/pkg/CFR-2013-title19-vol3/html/CFR-2013-title19-vol3.htm.
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Factors of Production
The petitioners based the FOPs for materials, labor, and energy on
the consumption rates of the U.S. producers of GOES products. The
petitioners assert that the experience of the U.S. producers is
appropriate for comparison to producers in the PRC because the U.S.
producers are comparable producers of the subject merchandise.\30\
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\30\ See Volume II of the Petitions, at 6 and Exhibit C-13.
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Valuation of Raw Materials
The petitioners valued the FOPs for pig-iron (i.e., the primary raw
material used to produce subject merchandise) and iron and steel scrap
using the average cost, insurance, and freight import value at the Thai
port of entry using HTSUS subheadings 7201.10 and 7204.10, as published
by Global Trade Atlas (GTA) for the period from January 2013 through
June 2013.\31\ The petitioners added to these values the average Thai
brokerage and inland freight charges for importing the goods into
Thailand, as published by the World Bank in Doing Business 2013:
Thailand.\32\
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\31\ Id., at Exhibit C-14.
\32\ Id., at Exhibits C-9 and C-10.
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The petitioners excluded all import values from countries
previously determined by the Department to maintain broadly available,
non-industry-specific export subsidies and from countries previously
determined by the Department to be NME countries. In addition, in
accordance with the Department's practice, the average import value
excludes imports that were labeled as originating from an unidentified
country.
Valuation of Labor
The petitioners valued labor using information published in a 2007
industrial survey by the Thailand National Statistics Office.\33\ The
survey provides a Thai wage rate for the manufacture of basic iron and
steel in 2006, which the petitioners adjusted for inflation and then
converted using the average exchange rate during the POI.\34\ The
petitioners then applied that resulting labor rate to the labor hours
expended by U.S. GOES producers.\35\
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\33\ Id., at 7 and Exhibit C-17.
\34\ Id.; see also Volume II of the Petitions, at Exhibit C-3A.
\35\ Id., at Exhibit C-19.
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Valuation of Energy
The petitioners valued electricity using a 2012 electricity rate in
Thai baht per kilowatt hour, as reported by the Electricity Generating
Authority of Thailand.\36\ In accordance with the Department's policy
not to adjust energy tariffs for inflation if those tariffs are likely
still in force, the petitioners did not adjust this value for
inflation.\37\ After converting the Thai electricity rate into U.S.
dollars, the petitioners multiplied that rate by the electricity
consumption of U.S. producers of
[[Page 65287]]
GOES, in order to obtain an electricity cost per metric ton of
output.\38\
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\36\ Id., at 7 and Exhibit C-15.
\37\ Id.; see also Certain Kitchen Appliance Shelving and Racks
From the People's Republic of China: Antidumping Duty Administrative
Review, 2010-2011, 77 FR 61385 (October 9, 2012), and accompanying
Preliminary Decision Memorandum at 16, unchanged in Certain Kitchen
Appliance Shelving and Racks From the People's Republic of China;
2010-2011; Final Results of Antidumping Duty Administrative Review,
78 FR 5414 (January 25, 2013); Certain Activated Carbon From the
People's Republic of China: Final Results and Partial Rescission of
Second Antidumping Duty Administrative Review, 75 FR 70208 (November
17, 2010), and accompanying Issues and Decision Memorandum at
Comment 4; and Certain Oil Country Tubular Goods From the People's
Republic of China: Notice of Preliminary Determination of Sales at
Less Than Fair Value, Affirmative Preliminary Determination of
Critical Circumstances and Postponement of Final Determination, 74
FR 59117 (November 17, 2009), unchanged in Certain Oil Country
Tubular Goods From the People's Republic of China: Final
Determination of Sales at Less Than Fair Value, Affirmative Final
Determination of Critical Circumstances and Final Determination of
Targeted Dumping, 75 FR 20335 (April 19, 2010).
\38\ See Volume II of the Petitions, at 7 and Exhibit AD-C-19.
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The petitioners valued natural gas using publicly available Thai
import data obtained from GTA in U.S. dollars for the POI.\39\ To
convert the unit of measurement from kilograms to cubic feet, the
petitioners used universal conversion factors published by Chemlink Pty
Ltd.\40\ Finally, the petitioners applied the gas rate obtained to the
volume of natural gas consumed by U.S. producers to obtain the natural
gas surrogate cost per metric ton of output.\41\
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\39\ Id., at 7.
\40\ Id., at 7 and Exhibit C-16.
\41\ Id., at 7 and Exhibit C-19.
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Valuation of Factory Overhead, Selling, General and Administrative
Expenses, and Profit
The petitioners calculated surrogate financial ratios (i.e.,
factory overhead, selling, general and administrative (SG&A) expenses,
and profit) using the 2012-2013 unconsolidated financial statements of
Tata Steel, a vertically-integrated Indian producer of a wide variety
of steel products.\42\ The petitioners assert that use of these
financial statements is appropriate because there was limited access to
other publicly-available financial statements of a vertically-
integrated steel company which manufactured comparable merchandise and
which was also profitable.\43\
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\42\ Id., at 8-9 and Exhibit C-18.
\43\ Id.; see also Supplement to the PRC Petition, at 6-7.
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Sales Below Cost Allegations
For the Czech Republic, Germany, Japan, Korea, Poland, and Russia,
the petitioners provided information demonstrating reasonable grounds
to believe or suspect that sales of GOES in the respective home markets
were made at prices below the fully-absorbed COP, within the meaning of
section 773(b) of the Act, and requested that the Department conduct
country-wide sales-below-cost investigations. The Statement of
Administrative Action (SAA), submitted to the Congress in connection
with the interpretation and application of the Uruguay Round Agreements
Act, states that an allegation of sales below COP need not be specific
to individual exporters or producers.\44\ The SAA states that
``Commerce will consider allegations of below-cost sales in the
aggregate for a foreign country, just as Commerce currently considers
allegations of sales at less than fair value on a country-wide basis
for purposes of initiating an antidumping investigation.'' \45\
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\44\ See SAA, H.R. Doc. No. 103-316, Vol. 1 (1994), at 833,
reprinted in 1994 U.S.C.C.A.N. 3773.
\45\ Id.
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Further, the SAA provides that section 773(b)(2)(A) of the Act
retains the requirement that the Department have ``reasonable grounds
to believe or suspect'' that below-cost sales have occurred before
initiating such an investigation. Reasonable grounds exist when an
interested party provides specific factual information on costs and
prices, observed or constructed, indicating that sales in the foreign
market in question are at below-cost prices.\46\
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\46\ Id.
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Cost of Production
Pursuant to section 773(b)(3) of the Act, COP consists of the cost
of manufacturing (COM); SG&A expenses; financial expenses; and packing
expenses. The petitioners calculated COM based on the petitioners'
experience adjusted for known differences between their industry in the
United States and the industries of the respective country (i.e., the
Czech Republic, Germany, Japan, Korea, Poland, and Russia), during the
proposed POI.\47\ Using publicly-available data to account for price
differences, the petitioners multiplied their usage quantities by the
submitted value of the inputs used to manufacture GOES in each country.
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\47\ See Czech Republic Initiation Checklist; Germany Initiation
Checklist; Japan Initiation Checklist; Korea Initiation Checklist;
Poland Initiation Checklist; and Russia Initiation Checklist.
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To determine factory overhead, SG&A, and financial expense rates,
the petitioners relied on financial statements of producers of
comparable merchandise operating in the respective foreign country.\48\
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\48\ Id.
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Based upon a comparison of the prices of the foreign like product
in the home market to the calculated COP of the most comparable
product, we find reasonable grounds to believe or suspect that sales of
the foreign like products were made at prices that are below the COP,
within the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly,
the Department is initiating country-wide cost investigations on sales
of GOES from the Czech Republic, Germany, Japan, Korea, Poland, and
Russia.
Normal Value Based on Constructed Value
For the Czech Republic, Germany, Japan, Korea, Poland, and Russia,
because they alleged sales below cost, pursuant to sections 773(a)(4),
773(b), and 773(e) of the Act, the petitioners calculated NV based on
constructed value (CV). The petitioners calculated CV using the same
average COM, SG&A, financial expense, and packing figures used to
compute the COPs. The petitioners relied on the same financial
statements used as the basis for the factory overhead, SG&A, and
financial expense rates to calculate the profit rates.\49\
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\49\ See Czech Republic Initiation Checklist; Germany Initiation
Checklist; Japan Initiation Checklist; Korea Initiation Checklist;
Poland Initiation Checklist; and Russia Initiation Checklist.
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Fair Value Comparisons
Based on the data provided by the petitioners, there is reason to
believe that imports of GOES from the PRC, the Czech Republic, Germany,
Japan, Korea, Poland, and Russia are being, or are likely to be, sold
in the United States at less than fair value. Based on comparisons of
export price or CEP to NV, in accordance with section 773(a)(1) of the
Act, the estimated dumping margins for GOES from: (1) The Czech
Republic range from 68.46 percent to 235.50 percent; \50\ (2) Germany
range from 38.54 percent to 241.91 percent; \51\ (3) Japan range from
44.95 percent to 172.30 percent; \52\ (4) Korea range from 49.51
percent to 257.61 percent; \53\ (5) Poland range from 56.69 percent to
99.51 percent; \54\ and (6) Russia range from 43.52 percent to 119.88
percent.\55\ Based on a comparison of CEP to NV, in accordance with
section 773(c) of the Act, the estimated dumping margin for GOES from
the PRC is 159.21 percent.\56\
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\50\ See Czech Republic Initiation Checklist.
\51\ See Germany Initiation Checklist.
\52\ See Japan Initiation Checklist.
\53\ See Korea Initiation Checklist.
\54\ See Poland Initiation Checklist.
\55\ See Russia Initiation Checklist.
\56\ See PRC AD Initiation Checklist.
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Initiation of Antidumping Duty Investigations
Based upon the examination of the Petitions on GOES from the PRC,
the Czech Republic, Germany, Japan, Korea, Poland, and Russia, we find
that the Petitions meet the requirements of section 732 of the Act.
Therefore, we are initiating AD investigations to determine whether
imports of GOES from the PRC, the Czech Republic, Germany, Japan,
Korea, Poland, and Russia are being, or are likely to be, sold in the
United States at less than fair value. In accordance with section
733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we
will
[[Page 65288]]
make our preliminary determinations no later than 140 days after the
date of this initiation.
Respondent Selection
Although the Department normally relies on import data from U.S.
Customs and Border Protection to select a limited number of producers/
exporters for individual examination in AD investigations, if
appropriate, these Petitions name only one company as a producer/
exporter of GOES in the Czech Republic: ArcelorMittal Frydek-Mistek
A.S.; one company as a producer/exporter of GOES in Germany:
ThyssenKrupp Electrical Steel GmbH; one company as a producer/exporter
of GOES in Korea: POSCO; one company as a producer/exporter of GOES in
Poland: Stalprodukt S.A.; one company as a producer/exporter of GOES in
Russia: Novolipetsk Steel; and two companies as producers/exporters of
GOES in Japan: JFE Steel Corporation and Nippon Steel & Sumitomo Metal
Corporation.\57\ Furthermore, we currently know of no additional
producers/exporters of subject merchandise from these countries.
Accordingly, the Department intends to examine all known producers/
exporters in these investigations (i.e., the companies cited above). We
invite interested parties to comment on this issue. Parties wishing to
comment must do so within seven days of the publication of this notice
in the Federal Register for the Czech Republic, Germany, Korea, Poland,
Russia, and Japan.
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\57\ See Volume I of the Petitions, at Exhibit GENERAL-3. The
petitioners also name additional companies in Japan, Korea, and
Russia which appear to be non-producing exporters or trading
companies (i.e., Metal One Corporation in Japan, Hyundai Corporation
in Korea, and PJSC Ashinskiy Metallurgical Works in Russia). Id. In
a letter dated October 23, 2013, the petitioners clarified their
understanding of the commercial nature of exports by these
companies. Specifically, the petitioners indicated that GOES is a
highly use-dependent product, the demand for which is dependent on
the unique design and engineering specifications of each transformer
in which it is incorporated. Thus, the petitioners stated that, to
the best of their knowledge, the foreign producers listed in the
Petitions have knowledge of the ultimate destination of their sales
of GOES. Based on this information, at this time we intend to review
only the identified producers as respondents. If we receive
information during the specified comment period below which
indicates that the producers do not, in fact, know that certain of
the merchandise sold to the trading companies/exporters was destined
for the United States, the Department may consider examining these
trading companies/exporters as additional respondents at a later
date.
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With respect to the PRC, in accordance with our standard practice
for respondent selection for NME countries, we intend to issue quantity
and value questionnaires to each potential respondent and base
respondent selection on the responses received. In addition, the
Department will post the quantity and value questionnaire along with
the filing instructions on the Enforcement and Compliance Web site
(http://enforcement.trade.gov/ia-highlights-and-news.html). Exporters
and producers of GOES from the PRC that do not receive quantity and
value questionnaires via mail may still submit a quantity and value
response and can obtain a copy from the Enforcement and Compliance Web
site. The quantity and value questionnaire must be submitted by all PRC
producers/exporters no later than November 13, 2013. All quantity and
value questionnaires must be filed electronically using IA ACCESS.
Separate Rates
In order to obtain separate rate status in an NME investigation,
exporters and producers must submit a separate rate status
application.\58\ The specific requirements for submitting the separate
rate application in the PRC investigation are outlined in detail in the
application itself, which will be available on the Department's Web
site at http://enforcement.trade.gov/ia/ia-highlights-and-news.html on
the date of publication of this initiation notice in the Federal
Register. The separate rate application will be due 60 days after
publication of this initiation notice. For exporters and producers who
submit a separate rate status application and have been selected as
mandatory respondents, these exporters and producers will no longer be
eligible for consideration for separate rate status unless they respond
to all parts of the questionnaire as mandatory respondents. The
Department requires that PRC respondents submit a response to both the
quantity and value questionnaire and the separate rate application by
their respective deadlines in order to receive consideration for
separate rate status.
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\58\ See Policy Bulletin 05.1: Separate-Rates Practice and
Application of Combination Rates in Antidumping Investigation
involving Non-Market Economy Countries (April 5, 2005) (Separate
Rates and Combination Rates Bulletin), available on the Department's
Web site at http://enforcement.trade.gov/policy/bull05-1.pdf.
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Use of Combination Rates
The Department will calculate combination rates for certain
respondents that are eligible for a separate rate in an NME
investigation. The Separate Rates and Combination Rates Bulletin
states:
{w{time} hile continuing the practice of assigning separate rates
only to exporters, all separate rates that the Department will now
assign in its NME Investigation will be specific to those producers
that supplied the exporter during the period of investigation. Note,
however, that one rate is calculated for the exporter and all of the
producers which supplied subject merchandise to it during the period
of investigation. This practice applies both to mandatory
respondents receiving an individually calculated separate rate as
well as the pool of non-investigated firms receiving the weighted-
average of the individually calculated rates. This practice is
referred to as the application of ``combination rates'' because such
rates apply to specific combinations of exporters and one or more
producers. The cash-deposit rate assigned to an exporter will apply
only to merchandise both exported by the firm in question and
produced by a firm that supplied the exporter during the period of
investigation.\59\
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\59\ See Separate Rates and Combination Rates Bulletin at 6
(emphasis added).
Distribution of Copies of the Petitions
In accordance with section 732(b)(3)(A) of the Act and 19 CFR
351.202(f), copies of the public version of the Petitions have been
provided to the Governments of the Czech Republic, Germany, Japan,
Korea, Poland, the PRC, and Russia via IA ACCESS. To the extent
practicable, we will attempt to provide a copy of the public version of
the Petitions to each known exporter (as named in the Petitions), as
provided under 19 CFR 351.203(c)(2).
Meeting With the Government of Korea
Pursuant to a request by the Government of Korea, on October 22,
2013, Department officials met with Korean Government officials to
discuss the status of the Department's consideration of the petition
and industry support, as provided under section 732(b)(3)(B) of the
Act.
ITC Notification
We have notified the ITC of our initiation, as required by section
732(d) of the Act.
Preliminary Determinations by the ITC
The ITC will preliminarily determine no later than November 20,
2013, whether there is a reasonable indication that imports of GOES
from the Czech Republic, Germany, Japan, Korea, Poland, the PRC, and
Russia are materially injuring, or threatening material injury to, a
U.S. industry. A negative ITC determination for any country will result
in the investigation being terminated with respect to that country;
otherwise, these investigations will proceed according to statutory and
regulatory time limits.
[[Page 65289]]
Submission of Factual Information
On April 10, 2013, the Department published Definition of Factual
Information and Time Limits for Submission of Factual Information:
Final Rule, 78 FR 21246 (April 10, 2013), which modified two
regulations related to AD and CVD proceedings: The definition of
factual information (19 CFR 351.102(b)(21)), and the time limits for
the submission of factual information (19 CFR 351.301). The final rule
identifies five categories of factual information in 19 CFR
351.102(b)(21), which are summarized as follows: (i) Evidence submitted
in response to questionnaires; (ii) evidence submitted in support of
allegations; (iii) publicly available information to value factors
under 19 CFR 351.408(c) or to measure the adequacy of remuneration
under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by the
Department; and (v) evidence other than factual information described
in (i)-(iv). The final rule requires any party, when submitting factual
information, to specify under which subsection of 19 CFR 351.102(b)(21)
the information is being submitted and, if the information is submitted
to rebut, clarify, or correct factual information already on the
record, to provide an explanation identifying the information already
on the record that the factual information seeks to rebut, clarify, or
correct. The final rule also modified 19 CFR 351.301 so that, rather
than providing general time limits, there are specific time limits
based on the type of factual information being submitted. These
modifications are effective for all proceeding segments initiated on or
after May 10, 2013, and thus are applicable to these investigations.
Please review the final rule, available at http://enforcement.trade.gov/frn/2013/1304frn/2013-08227.txt, prior to
submitting factual information in these investigations.
Certification Requirements
Any party submitting factual information in an AD or CVD proceeding
must certify to the accuracy and completeness of that information.\60\
Parties are hereby reminded that revised certification requirements are
in effect for company/government officials, as well as their
representatives. Investigations initiated on the basis of petitions
filed on or after August 16, 2013, and other segments of any AD or CVD
proceedings initiated on or after August 16, 2013, should use the
formats for the revised certifications provided at the end of the Final
Rule.\61\ The Department intends to reject factual submissions if the
submitting party does not comply with applicable revised certification
requirements.
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\60\ See section 782(b) of the Act.
\61\ See Certification of Factual Information To Import
Administration During Antidumping and Countervailing Duty
Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule); see also
frequently asked questions regarding the Final Rule, available at
http://enforcement.trade.gov/tlei/notices/factual_info_final_rule_FAQ_07172013.pdf.
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Extension of Time Limits
On September 20, 2013, the Department published Extension of Time
Limits, Final Rule, 78 FR 57790 (September 20, 2013), which modified
one regulation related to AD and CVD proceedings regarding the
extension of time limits for submissions in such proceedings (19 CFR
351.302(c)). These modifications are effective for all segments
initiated on or after October 21, 2013, and thus are applicable to
these investigations. Please review the final rule, available at http://www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm prior to
requesting an extension.
Notification to Interested Parties
Interested parties must submit applications for disclosure under
APO in accordance with 19 CFR 351.305. On January 22, 2008, the
Department published Antidumping and Countervailing Duty Proceedings:
Documents Submission Procedures; APO Procedures, 73 FR 3634 (January
22, 2008). Parties wishing to participate in these investigations
should ensure that they meet the requirements of these procedures
(e.g., the filing of letters of appearance as discussed at 19 CFR
351.103(d)).
This notice is issued and published pursuant to section 777(i) of
the Act.
Dated: October 24, 2013.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.
Appendix I
Scope of the Investigations
The scope of these investigations covers grain-oriented silicon
electrical steel (GOES). GOES is a flat-rolled alloy steel product
containing by weight at least 0.6 percent but not more than 6
percent of silicon, not more than 0.08 percent of carbon, not more
than 1.0 percent of aluminum, and no other element in an amount that
would give the steel the characteristics of another alloy steel, in
coils or in straight lengths. The GOES that is subject to these
investigations is currently classifiable under subheadings
7225.11.0000, 7226.11.1000, 7226.11.9030, and 7226.11.9060 of the
Harmonized Tariff Schedule of the United States (HTSUS). Although
the HTSUS subheadings are provided for convenience and customs
purposes, the written description of the scope of these
investigations is dispositive.
[FR Doc. 2013-25805 Filed 10-30-13; 8:45 am]
BILLING CODE 3510-DS-P