[Federal Register Volume 78, Number 222 (Monday, November 18, 2013)]
[Notices]
[Pages 69041-69047]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-27304]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-996, A-428-843, A-588-872, A-580-872, A-401-809, A-583-851]
Non-Oriented Electrical Steel From the People's Republic of
China, Germany, Japan, the Republic of Korea, Sweden, and Taiwan:
Initiation of Antidumping Duty Investigations
AGENCY: Enforcement and Compliance, formerly Import Administration,
International Trade Administration, Department of Commerce.
DATES: Effective Date: November 18, 2013.
FOR FURTHER INFORMATION CONTACT: Yang Jin Chun at (202) 482-5760 (the
People's Republic of China (PRC)); Patrick O'Connor at (202) 482-0989
(Germany); Thomas Martin at (202) 482-3936 (Japan); Dmitry Vladimirov
at (202) 482-0665 (the Republic of Korea (Korea)); Drew Jackson at
(202) 482-4406 (Sweden); or Krisha Hill at (202) 482-4037 (Taiwan), AD/
CVD Operations, Enforcement and Compliance, U.S. Department of
Commerce, 14th Street and Constitution Avenue NW., Washington, DC
20230.
SUPPLEMENTARY INFORMATION:
The Petitions
On September 30, 2013, the Department of Commerce (the Department)
received antidumping duty (AD) petitions concerning imports of non-
oriented electrical steel (NOES) from the PRC, Germany, Japan, Korea,
Sweden, and Taiwan filed in proper form on behalf of AK Steel
Corporation (Petitioner). The AD petitions were accompanied by three
countervailing duty (CVD) petitions.\1\ Petitioner is the sole domestic
producer of NOES.
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\1\ See Petitions for the Imposition of Antidumping and
Countervailing Duties on Imports of Non-Oriented Electrical Steel
From the People's Republic of China, Germany, Japan, the Republic of
Korea, Sweden, and Taiwan, dated September 30, 2013 (Petitions).
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On October 22, 2013, and October 29, 2013, the Department requested
additional information and clarification of certain areas of the
Petitions.\2\ Petitioner filed responses to these requests on October
25, 2013, October 28, 2013 and October 30, 2013.
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\2\ See letter from the Department to Petitioner entitled ``Re:
Petitions for the Imposition of Antidumping Duties on Imports of
Non-Oriented Electrical Steel from the People's Republic of China,
the Federal Republic of Germany, Japan, the Republic of Korea,
Sweden, and Taiwan and Countervailing Duties on Imports of Non-
Oriented Electrical Steel from the People's Republic of China, the
Republic of Korea, and Taiwan: Supplemental Questions'' dated
October 22, 2013, and letters from the Department to Petitioner
entitled ``Petition for the Imposition of Antidumping Duties on
Imports of Non-Oriented Electrical Steel from {country{time} :
Supplemental Questions'' on each of the country-specific records
dated October 22, 2013; see also Memorandum to the File entitled,
Antidumping Duty Investigations of Non-Oriented Electrical Steel
from the Federal Republic of Germany and from the State of Japan,''
dated October 29, 2013.
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In accordance with section 732(b) of the Tariff Act of 1930, as
amended (the Act), Petitioner alleges that imports of NOES from the
PRC, Germany, Japan, Korea, Sweden, and Taiwan 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
Petitioner supporting its allegations.
The Department finds that Petitioner filed these Petitions on
behalf of the domestic industry because Petitioner is an interested
party as defined in section 771(9)(C) of the Act. The Department also
finds that Petitioner has demonstrated sufficient industry support with
respect to the initiation of the AD investigations that Petitioner is
requesting. See the ``Determination of Industry Support for the
Petitions'' section below.
Periods of Investigations
Pursuant to 19 CFR 351.204(b)(1), because the Petitions were filed
on September 30, 2013, the period of investigation (POI) for the PRC
investigation is January 1, 2013, through June 30, 2013. The POI for
the Germany, Japan, Korea, Sweden, and Taiwan investigations is July 1,
2012, through June 30, 2013.
Scope of the Investigations
The product covered by these investigations is NOES from the PRC,
Germany, Japan, Korea, Sweden, and Taiwan. For a full description of
the scope of the investigations, see the ``Scope of the
Investigations,'' in Appendix I of this notice.
Comments on Scope of Investigations
During our review of the Petitions, the Department issued questions
to, and received responses from, Petitioner 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
[[Page 69042]]
regulations,\3\ we are setting aside a 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 26, 2013. All comments must be filed on the records of the
PRC, Germany, Japan, Korea, Sweden, and Taiwan AD investigations as
well as the concurrent PRC, Korea, and Taiwan CVD investigations.
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\3\ 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 IA ACCESS.\4\ An electronically filed document must be received
successfully in its entirety by the time and date noted above.
Documents excepted from the electronic submission requirements must be
filed manually (i.e., in paper form) with Enforcement and Compliance's
APO/Dockets Unit, 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 deadline noted above.
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\4\ 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 NOES to be reported in
response to the Department's antidumping duty 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 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 NOES, 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 20, 2013. Rebuttal comments must
be received by November 27, 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.\5\ Therefore, all
deadlines in these investigations have been tolled by 16 days. The
revised deadline for the initiation of these investigations is November
6, 2013.
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\5\ 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 ``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,\6\ 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.\7\
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\6\ See section 771(10) of the Act.
\7\ 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 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
Petitions).
With regard to the domestic like product, Petitioner does 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 NOES constitutes a single
domestic like product and we have analyzed industry support in terms of
that domestic like product.\8\
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\8\ For a discussion of the domestic like product analysis in
this case, see Antidumping Duty Investigation Initiation Checklist:
Non-Oriented Electrical Steel from the People's Republic of China
(the PRC AD Initiation Checklist), at Attachment II, Analysis of
Industry Support for the Petitions Covering Non-Oriented Electrical
Steel from the People's Republic of China, Germany, Japan, the
Republic of Korea, Sweden, and Taiwan (Attachment II); Antidumping
Duty Investigation Initiation Checklist: Non-Oriented Electrical
Steel from Germany (Germany Initiation Checklist), at Attachment II;
Antidumping Duty Investigation Initiation Checklist: Non-Oriented
Electrical Steel from Japan (Japan Initiation Checklist), at
Attachment II; Antidumping Duty Investigation Initiation Checklist:
Non-Oriented Electrical Steel from the Republic of Korea (Korea AD
Initiation Checklist), at Attachment II; Antidumping Duty
Investigation Initiation Checklist: Non-Oriented Electrical Steel
from Sweden (Sweden Initiation Checklist), at Attachment II; and
Antidumping Duty Investigation Initiation Checklist: Non-Oriented
Electrical Steel from Taiwan (Taiwan AD Initiation Checklist), at
Attachment II. These checklists are dated concurrently with this
notice and on file electronically via IA ACCESS. Access to documents
filed via IA ACCESS is also available in the Central Records Unit,
Room 7046 of the main Department of Commerce building.
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[[Page 69043]]
In determining whether Petitioner has 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, Petitioner provided its own
production of the domestic like product in 2012.\9\ Petitioner states
that it is the only producer of NOES in the United States; therefore,
the Petitions are supported by 100 percent of the U.S. industry.\10\
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\9\ See Volume I of the Petitions, at 2.
\10\ Id., at 2 and Exhibit I-1.
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On October 28, 2013, we received a submission on behalf of JFE
Steel Corporation and Nippon Steel & Sumitomo Metal Corporation,
Japanese producers of NOES, questioning Petitioner's industry support
calculation. On October 30, 2013, Petitioner responded to the Japanese
producers' challenge.\11\
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\11\ For further discussion of these submissions, see the PRC AD
Initiation Checklist, Germany Initiation Checklist, Japan Initiation
Checklist, Korea AD Initiation Checklist, Sweden Initiation
Checklist, and Taiwan AD Initiation Checklist, at Attachment II.
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Our review of the data provided in the Petitions, supplemental
submissions, and other information readily available to the Department
indicates that Petitioner has established industry support.\12\ First,
the Petitions established 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).\13\ 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.\14\ 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.\15\ 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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\12\ Id.
\13\ Id.; see also section 732(c)(4)(D) of the Act.
\14\ See the PRC AD Initiation Checklist, Germany Initiation
Checklist, Japan Initiation Checklist, Korea AD Initiation
Checklist, Sweden Initiation Checklist, and Taiwan AD Initiation
Checklist, at Attachment II.
\15\ Id.
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The Department finds that Petitioner filed the Petitions on behalf
of the domestic industry because it is an interested party as defined
in section 771(9)(C) of the Act and it has demonstrated sufficient
industry support with respect to the AD investigations that it is
requesting the Department initiate.\16\
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\16\ Id.
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Allegations and Evidence of Material Injury and Causation
Petitioner alleges that the U.S. industry producing the domestic
like product is being materially injured, or is threatened with
material injury, by reason of the imports of the subject merchandise
sold at less than normal value (NV). In addition, Petitioner alleges
that subject imports exceed the negligibility threshold provided for
under section 771(24)(A) of the Act.\17\
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\17\ See Volume I of the Petitions, at 11 and Exhibit I-8.
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Petitioner contends that the industry's injured condition is
illustrated by reduced market share; underselling and price depression
or suppression; lost sales and revenues; and adversely impacted
production, capacity utilization, and financial performance.\18\ 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.\19\
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\18\ Id., at 9-28 and Exhibits I-6 through I-25.
\19\ See the PRC AD Initiation Checklist, Germany Initiation
Checklist, Japan Initiation Checklist, Korea AD Initiation
Checklist, Sweden Initiation Checklist, and Taiwan AD Initiation
Checklist, at Attachment III, Analysis of Allegations and Evidence
of Material Injury and Causation for the Petitions Covering Non-
Oriented Electrical Steel from the People's Republic of China,
Germany, Japan, the Republic of Korea, Sweden, and Taiwan.
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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 NOES from the PRC, Germany,
Japan, Korea, Sweden, and Taiwan. 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 PRC, Japan and Korea, Petitioner based U.S. price on price
quotes obtained by an independent researcher for subject merchandise
produced in the subject country by producer(s) of NOES in that country
and sold or offered for export sale to the United States by producer(s)
and/or traders of NOES.\20\
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\20\ See the PRC AD Initiation Checklist, Japan Initiation
Checklist, and Korea AD Initiation Checklist.
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For Germany, Taiwan, and Sweden, and as additional indicators of
export prices for Japan, Petitioner based U.S. prices on the free-on-
board (FOB) foreign port prices of entries of merchandise under
consideration obtained from U.S. Customs and Border Protection's (CBP)
Automated Manifest System, which Petitioner then linked to publicly
available data maintained by the U.S. Census Bureau via the ITC's
Dataweb.\21\
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\21\ See Germany Initiation Checklist, Japan Initiation
Checklist, Sweden Initiation Checklist, and Taiwan AD Initiation
Checklist.
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In addition, for Japan, Korea, Germany, Taiwan, and Sweden,
Petitioner also based U.S. prices on FOB foreign port average unit
value data for products classified under the appropriate Harmonized
Tariff Schedule of the United States (HTSUS) numbers for the
merchandise under consideration imported from these respective
countries into the United States during the POI, derived from official
U.S. import statistics, also obtained via Dataweb.\22\
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\22\ See Germany Initiation Checklist, Japan Initiation
Checklist, Korea AD Initiation Checklist, Sweden Initiation
Checklist, and Taiwan AD Initiation Checklist.
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For the PRC, Germany, Japan, Korea, Sweden, and Taiwan, Petitioner
made deductions for movement and other expenses consistent with the
sales and delivery terms.\23\ For the PRC, Petitioner additionally
adjusted the quoted U.S. prices for a portion of value-added tax
[[Page 69044]]
that was not refunded/rebated.\24\ For Japan, Petitioner additionally
adjusted the quoted U.S. prices for mark-ups from trading
companies.\25\ Petitioner made no other adjustments to U.S. price.
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\23\ See the PRC AD Initiation Checklist, Germany Initiation
Checklist, Japan Initiation Checklist, Korea AD Initiation
Checklist, Sweden Initiation Checklist, and Taiwan AD Initiation
Checklist.
\24\ See the PRC AD Initiation Checklist.
\25\ See Japan Initiation Checklist.
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Normal Value
For Japan, Korea, Taiwan, and Sweden, Petitioner based NV on price
quotes provided by an independent researcher for the foreign like
product produced in the subject country by producer(s) of NOES in that
country and sold or offered for sale in the subject country by
producer(s) and/or traders of NOES.\26\
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\26\ See Japan Initiation Checklist, Korea AD Initiation
Checklist, Sweden Initiation Checklist, and Taiwan AD Initiation
Checklist.
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For Germany, Petitioner was unable to obtain home-market or third-
country prices; accordingly, Petitioner based NV on constructed value
(CV).\27\
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\27\ See Germany Initiation Checklist.
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For Sweden, Petitioner made deductions for movement expenses
consistent with the terms of delivery.\28\ For Japan, Petitioner
adjusted the quoted prices for taxes and mark-ups from trading
companies.\29\ For Korea and Taiwan, Petitioner treated quoted prices
as the ex-factory prices.\30\
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\28\ See Japan Initiation Checklist and Sweden Initiation
Checklist.
\29\ See Japan Initiation Checklist.
\30\ See Korea AD Initiation Checklist and Taiwan AD Initiation
Checklist.
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With respect to the PRC, Petitioner states that the Department has
long treated the PRC as a non-market economy (NME) country.\31\ 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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\31\ See Volume II of the Petition at 1.
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Petitioner claims that Thailand is an appropriate surrogate country
because it is a market economy country 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.\32\ Petitioner used the 2012-2013
financial statements of an Indian vertically integrated steel producer
Tata Steel Limited (Tata) to calculate surrogate financial ratios.
Petitioner justified its selection of the Tata financial statements as
follows: \33\ (1) Petitioner has been unable to locate any publicly
available financial statements for a vertically integrated steel
producer in Thailand with operations comparable to the PRC producer.
Like the PRC producer, Tata is a vertically integrated steel producer
and, thus, its operations and experiences are an appropriate surrogate;
(2) Tata's operations earned a profit in 2012-2013. The Thai steel
companies that Petitioner identified were not profitable; (3)
Petitioner has been unable to locate publicly available,
contemporaneous financial statements for any company in other potential
surrogate countries that is a vertically-integrated producer of
comparable merchandise and that shows a profit; \34\ (4) Tata has
issued unconsolidated financial statements that reflect almost
exclusively its returns on steel manufacturing operations; and (5)
Tata's unconsolidated financial statements are prepared at a level of
detail that permit recognition of energy costs to prevent double
counting with other factors.
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\32\ Id., at 2.
\33\ Id., at 6.
\34\ See Supplement to the China Petition, dated October 28,
2013 (China Supplement), at 3.
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Petitioner also explained that, in 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 78 FR 65283 (October 31,
2013), the Department initiated a less-than-fair-value investigation of
grain-oriented electrical steel from the PRC based on the use of Indian
financial statements. Based on information provided by Petitioner, 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.\35\
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\35\ See 19 CFR 351.301(c)(3)(i) (2013).
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Factors of Production
Petitioner based the FOPs usage for materials, labor and energy on
the consumption rates of its own production of NOES in the United
States.
Valuation of Raw Materials
Petitioner valued the FOPs for various raw material inputs used to
produce subject merchandise based on Thai data from the Global Trade
Atlas (GTA) statistics for the POI for the PRC under applicable HTSUS
codes.\36\ Petitioner added to this value the average Thai brokerage
and inland freight charges reported for importing goods into Thailand,
as published by the World Bank in Doing Business 2013: Thailand.\37\
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\36\ See Volume II of the Petition, at 4 and Exhibits II-8, II-
9, and II-13.
\37\ Id., at 5 and Exhibits II-7 and II-9.
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Petitioner made a deduction for the value of scrap recovered during
the production process based on the average import value of other
ferrous waste and scrap using HTSUS subheading 7204.49 as published by
GTA for the period from January 2013 through June 2013.\38\
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\38\ Id., at 4-5 and Exhibit II-9.
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Petitioner 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
Petitioner calculated labor using a 2006 industry-specific wage
rate for Thailand, which was published in 2007 by the Thailand National
Statistics Office. Petitioner adjusted this wage rate for inflation
using the Thai Consumer Price Index as published by the International
Monetary Fund.\39\
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\39\ Id. at 5 and Exhibit II-10.
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Valuation of Energy
Petitioner valued electricity based on the data from the
Metropolitan Electricity Authority.\40\ Petitioner used the GTA
statistics for Thai imports of natural gas and universal conversion
factors to calculate the volume-based surrogate value for natural
gas.\41\
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\40\ See ``Non-Oriented Electrical Steel From The People's
Republic of China: Petitioner's Response To The Department's
Questions Regarding The Petition,'' dated October 28, 2013, at 4 and
Exhibits S-2 and S-5.
\41\ Id.
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[[Page 69045]]
Valuation of Factory Overhead, Selling, General and Administrative
Expenses, and Profit
Petitioner calculated surrogate financial ratios (i.e., factory
overhead, selling, general and administrative (SG&A) expenses, and
profit) using the audited financial statements of Tata Steel Limited,
an Indian producer of comparable merchandise, for the fiscal year
ending March 31, 2013.\42\ According to Petitioner, Tata Steel Limited
is a vertically-integrated Indian producer of a wide variety of steel
products. Petitioner asserts that the 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\ See Volume II of the Petition, at 6 and Exhibit II-12.
\43\ Id.
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Sales Below Cost Allegations
For Japan, Korea, Sweden, and Taiwan, Petitioner provided
information demonstrating reasonable grounds to believe or suspect that
sales of NOES 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. Petitioner calculated COM (except for depreciation) based on
Petitioner's experience adjusted for known differences between the
industry in the United States and the industries of the respective
country (i.e., Japan, Korea, Sweden, and Taiwan), during the proposed
POI.\47\ Using publicly-available data to account for price
differences, Petitioner multiplied their usage quantities by the
submitted value of the inputs used to manufacture NOES in each country.
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\47\ See Japan Initiation Checklist; Korea AD Initiation
Checklist; Sweden Initiation Checklist; and Taiwan AD Initiation
Checklist.
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To determine depreciation, SG&A, and financial expense rates,
Petitioner 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 NOES from Japan, Korea, Sweden, and Taiwan.
Normal Value Based on Constructed Value
For Japan, Korea, Sweden, and Taiwan, because they alleged sales
below cost, pursuant to sections 773(a)(4), 773(b), and 773(e) of the
Act, Petitioner additionally calculated NV based on constructed value
(CV). Petitioner calculated CV using the same average COM, SG&A,
financial expense, and packing figures used to compute the COPs.
Petitioner relied on the same financial statements used as the basis
for the depreciation and SG&A expense rates to calculate the profit
rates.\49\
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\49\ Id.
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For Germany, Petitioner based NV on CV, as neither a home market
nor a third country price was reasonably available. Pursuant to section
773(e) of the Act, CV consists of the COM; SG&A expenses; financial
expenses; packing expenses; and profit. Petitioner calculated COM
(except for depreciation) based on Petitioner's experience adjusted for
known differences between the German and U.S. industries during the
proposed POI, multiplied by the value of the inputs used to manufacture
NOES in Germany using publicly available data.\50\
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\50\ See Germany Initiation Checklist.
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To determine depreciation, SG&A, and financial expense rates,
Petitioner relied on the financial statements of a German producer of
comparable merchandise.\51\ Petitioner relied on the same financial
statements used as the basis for the depreciation and SG&A expense
rates to calculate the profit rate.\52\
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\51\ Id.
\52\ Id.
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Fair Value Comparisons
Based on the data provided by Petitioner, there is reason to
believe that imports of NOES from the PRC, Germany, Japan, Korea,
Sweden, and Taiwan are being, or are likely to be, sold in the United
States at less than fair value. Based on comparisons of export price
(EP) to NV in accordance with section 773(a) of the Act, the estimated
dumping margins for NOES from: (1) Germany range from 73.74 percent to
98.84 percent; \53\ (2) Japan range from 88.63 percent to 204.79
percent; \54\ (3) Korea range from 16.00 percent to 68.82 percent; \55\
(4) Sweden range from 62.17 percent to 126.72 percent; \56\ and (5)
Taiwan range from 52.23 percent to 101.51 percent.\57\ Based on
comparisons of EP to NV in accordance with section 773(c) of the Act,
the estimated dumping margins for NOES from the PRC range from 244.54
percent to 407.52 percent.\58\
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\53\ Id.
\54\ See Japan Initiation Checklist.
\55\ See Korea AD Initiation Checklist.
\56\ See Sweden Initiation Checklist.
\57\ See Taiwan AD Initiation Checklist.
\58\ See the PRC AD Initiation Checklist.
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Initiation of Antidumping Duty Investigations
Based upon the examination of the AD Petitions on NOES from the
PRC, Germany, Japan, Korea, Sweden, and Taiwan, 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
NOES from the PRC, Germany, Japan, Korea, Sweden, and Taiwan 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 make our preliminary
determinations no
[[Page 69046]]
later than 140 days after the date of this initiation.
Respondent Selection
Petitioner named three companies as producers/exporters of NOES
from Germany, five from Japan, three from Korea, one from Sweden, and
two from Taiwan.\59\ Following standard practice in AD investigations
involving market-economy countries, the Department will, where
appropriate, select respondents based on CBP data for U.S. imports of
NOES. For Germany, Korea and Japan, we intend to release CBP data under
Administrative Protective Order (APO) to all parties with access to
information protected by APO within five-business days of publication
of this Federal Register. For Sweden and Taiwan, the Department intends
to examine all known producers/exporters identified in the Petitions in
these investigations.\60\ The Department invites comments regarding
respondent selection within seven days of publication of this Federal
Register notice.
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\59\ See the Petitions at Volume I, Exhibit I-4.
\60\ The Petitions name Surahammars Bruks AB as a producer/
exporter of NOES in Sweden, and China Steel Corporation and Leicong
Industrial Company, Ltd., as producers/exporters of NOES in Taiwan.
See id.
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With respect to the PRC, Petitioner has identified 25 potential
respondents. In accordance with our standard practice for respondent
selection in cases involving 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 at
http://www.trade.gov/enforcement/news.asp. Exporters and producers of
NOES 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 exporters/producers no
later than November 26, 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 application.\61\
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://www.trade.gov/enforcement/news.asp 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
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
the 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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\61\ See Policy Bulletin 05.1: Separate-Rates Practice and
Application of Combination Rates in Antidumping Investigation
involving Non-Market Economy Countries (April 5, 2005), available at
http://enforcement.trade.gov/policy/bull05-1.pdf (Policy Bulletin
05.1).
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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.\62\
\62\ See Policy Bulletin 05.1 at 6 (emphasis added).
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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 PRC, Germany, Japan, Korea, Sweden,
and Taiwan via IA ACCESS. To the extent practicable, we will attempt to
provide a copy of the public version of the Petitions to each exporter
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 November 5,
2013, Department officials met with Korean Government officials to
discuss that government's inquiry regarding 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 December 2,
2013, whether there is a reasonable indication that imports of NOES
from the PRC, Germany, Japan, Korea, Sweden, and Taiwan 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.
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
[[Page 69047]]
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.
Review the final rule, available at http://enforcement.trade.gov/frn/2013/1304frn/2013-08227.txt prior to submitting factual information in
these investigations.
Revised Extension of Time Limits Regulation
On September 20, 2013, the Department modified its regulation
concerning the extension of time limits for submissions in AD and CVD
proceedings.\63\ The modification clarifies that parties may request an
extension of time limits before a time limit established under Part 351
expires, or as otherwise specified by the Secretary. In general, an
extension request will be considered untimely if it is filed after the
time limit established under Part 351 expires. For submissions which
are due from multiple parties simultaneously, an extension request will
be considered untimely if it is filed after 10:00 a.m. on the due date.
Examples include, but are not limited to: (1) Case and rebuttal briefs,
filed pursuant to 19 CFR 351.309; (2) factual information to value
factors under section 19 CFR 351.408(c), or to measure the adequacy of
remuneration under section 19 CFR 351.511(a)(2), filed pursuant to 19
CFR 351.301(c)(3) and rebuttal, clarification and correction filed
pursuant to 19 CFR 351.301(c)(3)(iv); (3) comments concerning the
selection of a surrogate country and surrogate values and rebuttal; (4)
comments concerning CBP data; and (5) quantity and value
questionnaires. Under certain circumstances, the Department may elect
to specify a different time limit by which extension requests will be
considered untimely for submissions which are due from multiple parties
simultaneously. In such a case, the Department will inform parties in
the letter or memorandum setting forth the deadline (including a
specified time) by which extension requests must be filed to be
considered timely. This modification also requires that an extension
request must be made in a separate, stand-alone submission, and
clarifies the circumstances under which the Department will grant
untimely-filed requests for the extension of time limits. These
modifications are effective for all segments initiated on or after
October 21, 2013. Review Extension of Time Limits; Final Rule,
available at http://www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm, prior to submitting factual information in this segment.
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\63\ See Extension of Time Limits; Final Rule, 78 FR 57790
(September 20, 2013).
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Certification Requirements
Any party submitting factual information in an AD or CVD proceeding
must certify to the accuracy and completeness of that information.\64\
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.\65\ The Department intends to reject factual submissions if the
submitting party does not comply with applicable revised certification
requirements.
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\64\ See section 782(b) of the Act.
\65\ 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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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: November 6, 2013.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.
Appendix I
Scope of the Investigations
The merchandise subject to these investigations consists of non-
oriented electrical steel (NOES), which includes cold-rolled, flat-
rolled, alloy steel products, whether or not in coils, regardless of
width, having an actual thickness of 0.20 mm or more, in which the
core loss is substantially equal in any direction of magnetization
in the plane of the material. The term ``substantially equal'' in
the prior sentence means that the cross grain direction of core loss
is no more than 1.5 times the straight grain direction (i.e., the
rolling direction) of core loss. NOES has a magnetic permeability
that does not exceed 1.65 Tesla when tested at a field of 800 A/m
(equivalent to 10 Oesteds) along (i.e., parallel to) the rolling
direction of the sheet (i.e., B800 value). NOES contains
by weight at least 1.25 percent of silicon but less than 3.5 percent
of silicon, not more than 0.08 percent of carbon, and not more than
1.5 percent of aluminum.
NOES is subject to these investigations whether it is fully
processed (fully annealed to develop final magnetic properties) or
semi-processed (finished to final thickness and physical form but
not fully annealed to develop final magnetic properties); whether or
not it is coated (e.g., with enamel, varnish, natural oxide surface,
chemically treated or phosphate surface, or other non-metallic
materials). Fully processed NOES is typically made to the
requirements of ASTM specification A 677, Japanese Industrial
Standards (JIS) specification C 2552, and/or International
Electrotechnical Commission (IEC) specification 60404-8-4. Semi-
processed NOES is typically made to the requirements of ASTM
specification A 683. However, the scope of these investigations is
not limited to merchandise meeting the specifications noted above.
NOES is sometimes referred to as cold-rolled non-oriented
electrical steel (CRNO), non-grain oriented (NGO), non-oriented
(NO), or cold-rolled non-grain oriented (CRNGO). These terms are
interchangeable.
The subject merchandise is provided for in subheadings
7225.19.0000, 7226.19.1000, and 7226.19.9000 of the Harmonized
Tariff Schedule of the United States (HTSUS). Subject merchandise
may also be entered under subheadings 7225.50.8085, 7225.99.0090,
7226.92.5000, 7226.92.7050, 7226.92.8050, 7226.99.0180 of the HTSUS.
Although HTSUS subheadings are provided for convenience and customs
purposes, the written description of the scope is dispositive.
[FR Doc. 2013-27304 Filed 11-15-13; 8:45 am]
BILLING CODE 3510-DS-P