[Federal Register: December 14, 2006 (Volume 71, Number 240)]
[Notices]
[Page 75229-75231]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14de06-31]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-122-840]
Preliminary Results of Antidumping Duty Changed Circumstances
Review: Carbon and Certain Alloy Steel Wire Rod from Canada
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: On November 6, 2006, the Department of Commerce published a
notice of initiation of a changed circumstances review of the
antidumping duty order on carbon and certain alloy steel wire rod
products from Canada. We have preliminarily concluded that 1) Ivaco
Rolling Mills 2004 L.P. is the successor-in-interest to Ivaco Rolling
Mills L.P.; and 2) Sivaco Ontario, a division of Sivaco Wire Group 2004
L.P., is the successor-in-interest to Ivaco Inc. As a result, Ivaco
Rolling Mills 2004 L.P., and Sivaco Ontario, a division of Sivaco Wire
Group 2004 L.P., (collectively ``Ivaco'') should receive the same
antidumping duty treatment with respect to carbon and certain alloy
steel wire rod from Canada as Ivaco Rolling Mills L.P. and Ivaco Inc.
EFFECTIVE DATE: December 14, 2006.
FOR FURTHER INFORMATION CONTACT: Audrey Twyman or Brandon Farlander, at
(202) 482-3534 or (202) 482-0182, respectively; AD/CVD Operations,
Office 1, Import Administration, International Trade Administration,
U.S. Department of Commerce, 14th Street & Constitution Avenue, NW,
Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
Background
In its January 12, 2006 response to Section A of the Department's
original questionnaire, Ivaco notified the Department that the assets
of Ivaco, Inc. and all of its divisions (e.g., Sivaco Ontario, and
Sivaco Quebec) had been purchased on December 1, 2004. As a result, the
Department self-initiated a changed circumstances review of the
antidumping duty order on carbon and certain alloy steel wire rod from
Canada. See Preliminary Results of Antidumping Duty Administrative
Review and Notice of Initiation of Changed Circumstances Review: Carbon
and Certain Alloy Steel Wire Rod from Canada, 71 FR 64921 (November 6,
2006). On June 1, 2006, and October 27, 2006, the Department issued
Ivaco supplemental questionnaires requesting further details on Ivaco's
successor-in-interest claims. The company's responses were received by
the Department on July 6, 2006, and November 20, 2006.
Scope of the Order
The merchandise subject to this order is certain hot-rolled
products of carbon steel and alloy steel, in coils, of approximately
round cross section, 5.00 mm or more, but less than 19.00 mm, in solid
cross-sectional diameter.
Specifically excluded are steel products possessing the above-noted
physical characteristics and meeting the Harmonized Tariff Schedule of
the United States (HTSUS) definitions for (a) stainless steel; (b) tool
steel; (c) high nickel steel; (d) ball bearing steel; and (e) concrete
reinforcing bars and rods. Also excluded are (f) free machining steel
products (i.e., products that contain by weight one or more of the
following elements: 0.03 percent or more of lead, 0.05 percent or more
of bismuth, 0.08 percent or more of sulfur, more than 0.04 percent of
phosphorus, more than 0.05 percent of selenium, or more than 0.01
percent of tellurium).
Also excluded from the scope are 1080 grade tire cord quality wire
rod and 1080 grade tire bead quality wire rod. Grade 1080 tire cord
quality rod is defined as: (i) grade 1080 tire cord quality wire rod
measuring 5.0 mm or more but not more than 6.0 mm in cross-sectional
diameter; (ii) with an average partial decarburization of no more than
70 microns in depth (maximum individual 200 microns); (iii) having no
non-deformable inclusions greater than 20 microns and no deformable
inclusions greater than 35 microns; (iv) having a carbon segregation
per heat average of 3.0 or better using European Method NFA 04-114; (v)
having a surface quality with no surface defects of a length greater
than 0.15 mm; (vi) capable of being drawn to a diameter of 0.30 mm or
less with 3 or fewer breaks per ton, and (vii) containing by weight the
following elements in the proportions shown: (1) 0.78 percent or more
of carbon, (2) less than 0.01 percent of aluminum, (3) 0.040 percent or
less, in the aggregate, of phosphorus and sulfur, (4) 0.006 percent or
less of nitrogen, and (5) not more than 0.15 percent, in the aggregate,
of copper, nickel and chromium.
Grade 1080 tire bead quality rod is defined as: (i) grade 1080 tire
bead quality wire rod measuring 5.5 mm or more but not more than 7.0 mm
in cross-sectional diameter; (ii) with an average partial
decarburization of no more than 70 microns in depth (maximum individual
200 microns); (iii) having no non-deformable inclusions greater than 20
microns and no
[[Page 75230]]
deformable inclusions greater than 35 microns; (iv) having a carbon
segregation per heat average of 3.0 or better using European Method NFA
04-114; (v) having a surface quality with no surface defects of a
length greater than 0.2 mm; (vi) capable of being drawn to a diameter
of 0.78 mm or larger with 0.5 or fewer breaks per ton; and (vii)
containing by weight the following elements in the proportions shown:
(1) 0.78 percent or more of carbon, (2) less than 0.01 percent of
soluble aluminum, (3) 0.040 percent or less, in the aggregate, of
phosphorus and sulfur, (4) 0.008 percent or less of nitrogen, and (5)
either not more than 0.15 percent, in the aggregate, of copper, nickel
and chromium (if chromium is not specified), or not more than 0.10
percent in the aggregate of copper and nickel and a chromium content of
0.24 to 0.30 percent (if chromium is specified).
For purposes of grade 1080 tire cord quality wire rod and grade
1080 tire bead quality wire rod, an inclusion will be considered to be
deformable if its ratio of length (measured along the axis - that is,
the direction of rolling - of the rod) over thickness (measured on the
same inclusion in a direction perpendicular to the axis of the rod) is
equal to or greater than three. The size of an inclusion for purposes
of the 20 microns and 35 microns limitations is the measurement of the
largest dimension observed on a longitudinal section measured in a
direction perpendicular to the axis of the rod. This measurement
methodology applies only to inclusions on certain grade 1080 tire cord
quality wire rod and certain grade 1080 tire bead quality wire rod that
are entered, or withdrawn from warehouse, for consumption on or after
July 24, 2003.
The designation of the products as ``tire cord quality'' or ``tire
bead quality'' indicates the acceptability of the product for use in
the production of tire cord, tire bead, or wire for use in other rubber
reinforcement applications such as hose wire. These quality
designations are presumed to indicate that these products are being
used in tire cord, tire bead, and other rubber reinforcement
applications, and such merchandise intended for the tire cord, tire
bead, or other rubber reinforcement applications is not included in the
scope. However, should petitioners or other interested parties provide
a reasonable basis to believe or suspect that there exists a pattern of
importation of such products for other than those applications, end-use
certification for the importation of such products may be required.
Under such circumstances, only the importers of record would normally
be required to certify the end use of the imported merchandise.
All products meeting the physical description of subject
merchandise that are not specifically excluded are included in this
scope.
The products under review are currently classifiable under
subheadings 7213.91.3010, 7213.91.3015, 7213.91.3090, 7213.91.3092,
7213.91.4510, 7213.91.4590, 7213.91.6010, 7213.91.6090, 7213.99.0031,
7213.99.0038, 7213.99.0090, 7227.20.0010, 7227.20.0020, 7227.20.0090,
7227.20.0095, 7227.90.6010, 7227.90.6051, 7227.90.6053, 7227.90.6058,
7227.90.6059, and 7227.90.6080 of the HTSUS. Although the HTSUS
subheadings are provided for convenience and customs purposes, the
written description of the scope of this proceeding is dispositive.
Preliminary Results of the Review
Pursuant to section 751(b) of the Tariff Act of 1930, as amended
(``the Act''), and 19 CFR 351.216, we will conduct a changed
circumstances review upon receipt of information concerning, or a
request from an interested party for a review of, an antidumping duty
finding or order that shows changed circumstances sufficient to warrant
a review of the order. The information submitted by Ivaco stating the
change in ownership and change in the respondent entities' legal names
demonstrates changed circumstances sufficient to warrant a review. See
19 CFR 351.216(d).
The respondents named in our initiation notice were Ivaco Rolling
Mills L.P. (aka Ivaco Rolling Mills 2004 L.P.), and Sivaco Ontario
Processing (aka Sivaco Ontario, a division of Sivaco Wire Group 2004
L.P.).\1\ In the most recently completed review, the responding
entities were Ivaco Rolling Mills L.P. (the producer) and Ivaco
Inc.,\2\ which through its division Sivaco Ontario, purchased wire rod
from Ivaco Rolling Mills L.P. and sold wire rod to unaffiliated
customers after further processing.
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\1\ See Initiation of Antidumping and Countervailing Duty
Administrative Reviews and Deferral of Administrative Reviews, 70 FR
72107 (December 1, 2005).
\2\ See Final Results of Antidumping Duty Administrative Review:
Carbon and Certain Alloy Steel Wire Rod from Canada, 71 FR 3822
(January 24, 2006).
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As noted above in the ``Background'' section of this notice, Ivaco
notified the Department that the assets of Ivaco, Inc. and all of its
divisions were purchased on December 1, 2004. Subsequent to the
purchase, Ivaco Rolling Mills L.P. was renamed and is now known as
Ivaco Rolling Mills 2004 L.P., and Sivaco Ontario and Sivaco Quebec
were reorganized into divisions of Sivaco Wire Group 2004 L.P. Ivaco,
Inc. is now known as Heico 2004 Member Inc. (``Heico 2004''). Heico
2004 functions as a headquarters, managing the operations of Ivaco
Rolling Mills 2004 L.P. and Sivaco Wire Group 2004 L.P. Heico 2004,
Ivaco Rolling Mills 2004 L.P., and Sivaco Wire group 2004 L.P. are
commonly owned.
Therefore, the Department self-initiated a changed circumstances
review to determine whether Ivaco Rolling Mills 2004 L.P. and Sivaco
Wire Group 2004 L.P., including its divisions, Sivaco Ontario and
Sivaco Quebec, are successors-in-interest to Ivaco Rolling Mills L.P.
and Ivaco Inc., respectively.
In determining whether one company is the successor-in-interest to
another for purposes of applying the antidumping duty law, the
Department examines several factors including, but not limited to,
changes in: (1) management; (2) production facilities; (3) supplier
relationships; and (4) customer base. See, e.g., Polychloroprene Rubber
from Japan: Final Results of Changed Circumstances Review, 67 FR 58
(January 2, 2002) (``Polychloroprene Rubber from Japan'') (citing Brass
Sheet and Strip from Canada: Final Results of Antidumping Duty
Administrative Review, 57 FR 20460, 20462 (May 13, 1992) (``Canadian
Brass'')).\3\ While no single factor or combination of factors will
necessarily provide a dispositive indication, the Department will
generally consider the new company to be the successor-in-interest to
the previous company if the resulting operation with regard to the
subject merchandise is not materially dissimilar to that of its
predecessor. See, e.g., Industrial Phosphoric Acid from Israel; Final
Results of Antidumping Duty Changed Circumstances Review, 59 FR 6944,
6945 (February 14, 1994); and Final Determination of Sales at Less Than
Fair Value and Affirmative Final Determination of Critical
Circumstances: Certain Orange Juice from Brazil, 71 FR 2183 (January
13, 2006) and accompanying Issues and Decision Memorandum, at Comment
3. Thus, if the evidence demonstrates that, with respect to the
production and sale of the subject merchandise, the new
[[Page 75231]]
company operates as the same business entity as the former company, the
Department will accord the new company the same antidumping duty
treatment as its predecessor.
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\3\ ``{G{time} enerally, in the case of an asset acquisition,
the Department will consider the acquiring company to be a successor
to the company covered by the antidumping duty order, and thus
subject to its duty deposit rate, if the resulting operation is
essentially similar to that existing before the acquisition.''
Canadian Brass, 57 FR at 20461.
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Taking each condition in order, we begin with management. Ivaco
reported that the key management personnel of both Ivaco Rolling Mills
L.P. and Sivaco Ontario are identical to the management of each company
after the acquisition. See Supplemental Questionnaire Response of
Ivaco, at 1 and Appendices 1 and 2 (November 20, 2006). We find that
the management structure has remained unchanged.
Second, we looked at the production facilities for subject
merchandise. Ivaco explained that there have been no material changes
to its operations or the way it produces or sells subject merchandise
after the acquisition. See Section A Response, at Volume 1, page A-10
(January 12, 2006). We find that Ivaco's productions facilities have
not changed as a result of the acquisition.
Third, we reviewed the supplier relationships before and after the
change in ownership. Ivaco provided Ivaco Rolling Mills L.P.'s accounts
payable records of its top 50 suppliers for the three month period
leading up to the acquisition and the three month period immediately
following the acquisition. Based on a comparison of these supplier
lists, we determine that the vast majority of the suppliers are the
same. Ivaco explained that the few supplier changes that did occur
simply reflected changes in suppliers that take place in the normal
course of business. Ivaco also provided Sivaco Ontario's accounts
payable records of its top 10 suppliers for the same time periods. In
this case, the suppliers are almost identical. See Supplemental
Questionnaire Response of Ivaco, at 1-2 and Appendices 3 and 4
(November 20, 2006).
Fourth, we reviewed the customer base and find that the customer
base is almost identical for both companies before and after the
acquisition. Ivaco explained that the small changes that did occur in
the customer base happened in the normal course of business. See
Supplemental Questionnaire Response of Ivaco, at 2-3 and Appendices 5-7
(November 20, 2006).
In addition, we requested information about Ivaco's marketing and
sales of products before and after the acquisition. Ivaco provided the
distribution process and sales process from the 2003-2004 review, as
well as the 2004-2005 review. We found that the processes remained
unchanged. See Supplemental Questionnaire Response of Ivaco, at 3 and
Appendix 8 (November 20, 2006). Further, Ivaco noted that products and
services continue to be marketed under the Ivaco name because the Ivaco
name was among the assets purchased by the entity. See Supplemental
Questionnaire Response of Ivaco, at Volume 1, page 2 (July 7, 2006).
In summary, Ivaco reported that its acquisition did not
meaningfully affect the production facilities, supplier relationships,
customer base, management, marketing or sale of products and services
by Ivaco Rolling Mills 2004 L.P. or Sivaco Wire Group 2004 L.P.
Moreover, there have been no material changes to Ivaco's operations or
the way it produces and sells subject merchandise resulting from the
acquisition.
Based on Ivaco's evidence of the change in ownership and absent any
other record evidence that would contradict Ivaco's statements, we
preliminarily determine that Ivaco Rolling Mills 2004 L.P., and Sivaco
Wire Group 2004 L.P. are the successor-in-interest to Ivaco Rolling
Mills L.P. and Ivaco Inc. As a result, Ivaco Rolling Mills 2004 L.P.,
and Sivaco Ontario, a division of Sivaco Wire Group 2004 L.P.,
(collectively ``Ivaco'') should receive the same antidumping duty
treatment with respect to carbon and certain alloy steel wire rod from
Canada as Ivaco Rolling Mills L.P. and Ivaco Inc., respectively.
If the above preliminary results are affirmed in the Department's
final results, the cash deposit rate most recently calculated for Ivaco
Rolling Mills L.P. and Ivaco Inc. will apply to all entries of subject
merchandise by Ivaco Rolling Mills 2004 L.P., and Sivaco Ontario, a
division of Sivaco Wire Group 2004 L.P., entered, or withdrawn from
warehouse, for consumption on or after the date of publication of the
final results of this changed circumstances review. See, e.g., Granular
Polytetraflouroethylene Resin from Italy; Final Results of Antidumping
Duty Changed Circumstances Review, 68 FR 25327 (May 12, 2003). This
deposit rate shall remain in effect until publication of the final
results of the next administrative review in which Ivaco participates.
Public Comment
Any interested party may request a hearing within 30 days of
publication of this notice in accordance with 19 CFR 351.310(c).
Interested parties may submit case briefs no later than 30 days after
the date of publication of this notice, in accordance with 19 CFR
351.309(c)(1)(ii). Rebuttal briefs, which must be limited to issues
raised in the case briefs, may be filed no later than 5 days after the
case briefs, in accordance with 19 CFR 351.309(d)(1). Any hearing, if
requested, will be held two days after rebuttal briefs are due, in
accordance with 19 CFR 351.310(d)(1).
The Department will issue its final results of review within 270
days after the date on which the changed circumstances review is
initiated, in accordance with 19 CFR 351.216(e), and will publish these
results in the Federal Register.
The current requirement for a cash deposit of estimated antidumping
duties on all subject merchandise will continue unless and until it is
modified pursuant to the final results of this changed circumstances
review.
This notice is published in accordance with sections 751(b)(1) and
777(i) of the Act and 19 CFR 351.216 of the Department's regulations.
Dated: December 6, 2006.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E6-21315 Filed 12-13-06; 8:45 am]
BILLING CODE 3510-DS-S