[Federal Register: January 27, 2003 (Volume 68, Number 17)]
[Notices]
[Page 3859-3863]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27ja03-43]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-821-808]
Suspension of Antidumping Duty Investigation of Certain Cut-to-
Length Carbon Steel Plate from the Russian Federation
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') has revised
the agreement suspending the antidumping duty investigation involving
certain cut-to-length carbon steel plate (``CTL steel plate'') from the
Russian Federation (``Russia''). The basis for this action is an
agreement between the Department and the Russian CTL steel plate
producers accounting for substantially all imports of CTL steel plate
from Russia, wherein each signatory producer/exporter individually
agrees to make any necessary price revisions to eliminate completely
any amount by which the normal value (NV) of this merchandise exceeds
the U.S. price of its merchandise subject to the Agreement.
EFFECTIVE DATE: January 23, 2003.
FOR FURTHER INFORMATION CONTACT: Jean Kemp, Stephen Bailey or Lilit
Astvatsatrian, at (202) 482-4037, (202) 482-1102, and (202) 482-6412,
respectively, Antidumping and Countervailing Duty Enforcement Group
III, Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
[[Page 3860]]
Background
On October 24, 1997, the Department and the Ministry of Foreign
Economic Relations and Trade of the Russian Federation entered into an
agreement (62 FR 61780, November 19, 1997) suspending the antidumping
investigation on CTL steel plate from the Russian Federation. Upon
request of petitioners, the investigation was continued and the
Department made an affirmative final determination of sales at less
than fair value.\1\ Likewise, the International Trade Commission
continued its investigation and made an affirmative determination as to
material injury to an industry in the United States.\2\ On June 6,
2002, based on the evidence on Russian economic reforms to that date,
the Department revoked Russia's status as a non-market economy country
under section 771(18)(B) of the Act. On November 21, 2002,
representatives from JSC Severstal, JSC Magnitogorsk Iron and Steel
Works and JSC NOSTA (OKIW) Integrated Iron-Steel Works (collectively
the ``Russian CTL steel plate producers'') initialed a proposed,
revised suspension agreement. We invited comments on the proposed
agreement. On December 11, 2002, we received comments from petitioners,
Bethlehem Steel Corporation and United States Steel Corporation.
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\1\ See Notice of Final Determination of Sales at Less Than Fair
Value: Certain Cut-to-Length Carbon Steel Plate from the Russian
Federation, 62 FR 61787, 61794, Nov. 19, 1997.
\2\ See Certain Carbon Steel Plate From China, Russia, South
Africa, and Ukraine, 62 FR 66128, Dec. 17, 1997.
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On December 20, 2002, the final suspension agreement was signed by
the Russian CTL steel plate producers and the Department, the effective
date being January 23, 2003.
Scope of Investigation
For a complete description of the scope of the investigation, see
Agreement Suspending the Antidumping Investigation on Certain Cut-to-
Length Carbon Steel Plate from the Russian Federation, Appendix B,
signed December 20, 2002, attached hereto.
Suspension of Investigation
The Department consulted with the parties to the proceeding and has
considered the comments submitted with respect to the proposed
suspension agreement. Based on our review of these comments, we have
made one change to the proposed agreement which was correcting the
effective date of the agreement from January 23, 2002 to January 23,
2003. In accordance with section 734(b) of the Act, we have determined
that the agreement will eliminate completely sales at less than fair
value of imported subject merchandise. Moreover, in accordance with
section 734(d) of the Act, we have determined that the agreement is in
the public interest, and that the agreement can be monitored
effectively. We find, therefore, that the criteria for suspension of an
investigation pursuant to sections 734(b) and (d) of the Act have been
met. The terms and conditions of this agreement, signed December 20,
2002, are set forth in Appendix I to this notice.
This notice is published pursuant to section 734(f)(1)(A) of the
Act.
Dated: January 17, 2003.
Faryar Shirzad,
Assistant Secretary for Import Administration.
Appendix I--Agreement Suspending the Antidumping Investigation of
Certain Cut-to-Length Carbon Steel Plate From the Russian Federation
(A-821-808)
Pursuant to section 734(b) of the Tariff Act of 1930, as amended
(19 U.S.C. 1673(c)(b)) (the ``Act''), and 19 CFR 351.208 (the
``Regulations''), the U.S. Department of Commerce (the ``Department'')
and the signatory producers/exporters of Certain Cut-to-Length Carbon
Steel Plate from the Russian Federation (the ``Signatories'') enter
into this suspension agreement (the ``Agreement''). As of the Effective
Date, this Agreement supercedes the suspension agreement entered into
by the Department and the Ministry of Foreign Economic Relations and
Trade of the Russian Federation on October 24, 1997. By agreement of
the Parties, the October 24, 1997 suspension agreement shall cease to
have force or effect as of the Effective Date of this Agreement. On the
basis of this Agreement, the Department shall continue to suspend its
antidumping investigation which it completed on November 19, 1997 (62
FR 61787), with respect to certain cut-to-length carbon steel plate
from the Russian Federation, subject to the terms and provisions set
forth below.
(A) Product Coverage
For purposes of this Agreement, the products covered are certain
cut-to-length carbon steel plate, as described in Appendix B.
(B) U.S. Import Coverage
The signatory producers/exporters collectively are the producers
and exporters in the Russian Federation that, during the most recently
completed calendar year, accounted for substantially all (not less than
85 percent) of the subject merchandise imported into the United States,
as provided in the Department's regulations. The Department may at
anytime during the period of the Agreement require additional
producers/exporters in the Russian Federation to sign the Agreement in
order to ensure that not less than substantially all imports into the
United States are covered by the Agreement.
In reviewing the operation of the Agreement for the purpose of
determining whether this Agreement has been violated or is no longer in
the public interest, the Department will consider imports into the
United States from all sources of the merchandise described in Section
A of the Agreement. For this purpose, the Department will consider
factors including, but not limited to, the following: volume of trade,
pattern of trade, whether or not the reseller is an original equipment
manufacturer, and the reseller's export price (EP).
(C) Basis of the Agreement
On and after the effective date of the Agreement, each signatory
producer/exporter individually agrees to make any necessary price
revisions to eliminate completely any amount by which the normal value
(NV) of this merchandise exceeds the U.S. price of its merchandise
subject to the Agreement. For this purpose, the Department will
determine the NV in accordance with section 773(e) of the Act and U.S.
price in accordance with section 772 of the Act.
(1) For the period from January 23, 2003, the effective date of
this agreement, through September 30, 2003 (the interim period), each
signatory producer/exporter agrees not to sell its merchandise subject
to this Agreement in the United States.
(2) For the first sales period only, October 1, 2003 through
December 31, 2003, each signatory producer/exporter agrees not to sell
its merchandise subject to this Agreement to any unaffiliated purchaser
in the United States at prices that are less than the NV of the
merchandise, as determined by the Department on the basis of
information submitted to the Department not later than the dates
specified in section D of this Agreement and provided to the parties
not later than September 20, 2003.
(3) For all sales occurring on and after January 1, 2004, each
signatory producer/exporter agrees not to sell its merchandise subject
to this Agreement to any unaffiliated purchaser in the
[[Page 3861]]
United States at prices that are less than the NV of the merchandise,
as determined by the Department on the basis of information submitted
to the Department not later than the dates specified in section D of
this Agreement and provided to the parties not later than December 20
and June 20 of each year.\3\ This NV shall apply to sales occurring
during the semiannual period beginning on the first day of the month
following the date the Department provides the NV, as stated in this
paragraph.
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\3\ For the first sales period only, October 1, 2003 through
December 31, 2003, the issuance of the normal value may be delayed
in order to resolve issues raised in comments from interested
parties or by the Department and for the purpose of allowing
sufficient time for signatories to respond to the Department's
request for cost data. Some of these issues may arise due to
Russia's new status as a market economy with respect to the
Department's proceedings. In accordance with section 773(f) of the
Act, the Department will examine prices and costs within Russia and,
for any sales period, may disregard particular prices or costs when
the prices are not in the ordinary course of trade, the costs are
not in accordance with the generally accepted accounting principles,
the costs do not reasonably reflect the costs associated with the
production and sale of the merchandise, or in other situations
provided for in the Act or the Department's regulations. Examples of
possible areas in which adjustments may be necessary include, but
are not limited to, costs related to energy, depreciation,
transactions among affiliates, barters, as well as items that are
not recognized by the Russian Accounting System.
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(D) Monitoring
Each signatory producer/exporter will supply to the Department all
information that the Department decides is necessary to ensure that the
producer/exporter is in full compliance with the terms of the
Agreement. As explained below, the Department will provide each
signatory producer/exporter a detailed request for information and
prescribe a required format and method of data compilation, not later
than the beginning of each reporting period.
(1) Sales Information
The Department will require each producer/exporter to report, on
computer tape in the prescribed format and using the prescribed method
of data compilation, each sale of the merchandise subject to the
Agreement, either directly or indirectly to unaffiliated purchasers in
the United States, including each adjustment applicable to each sale,
as specified by the Department.
The first report of sales data shall be submitted to the
Department, on computer tape in the prescribed format and using the
prescribed method of data compilation, not later than January 31, 2004,
and shall contain the specified sales information covering the period
October 1, 2003 to December 31, 2003. Subsequent reports of sales data
shall be submitted to the Department not later than July 31 and January
31 of each year, and each report shall contain the specified sales
information for the semiannual period ending one month prior to the due
date, except that if the Department receives information that a
possible violation of the Agreement may have occurred, the Department
may request sales data on a monthly, rather than a semiannual basis.
(2) Cost Information
Producer/exporters must request NVs for all subject merchandise
that will be sold in the United States. For those products which the
producer/exporter is requesting NVs, the Department will require each
producer/exporter to report: their actual cost of manufacturing;
selling, general and administrative (SG&A) expenses; and profit data on
a semiannual basis, in the prescribed format and using the prescribed
method of data compilation. As indicated in Appendix A, profit will be
reported by the producers/exporters on a semiannual basis. Each such
producer/exporter also must report anticipated increases in production
costs in the semiannual period in which the information is submitted
resulting from factors such as anticipated changes in production yield,
changes in production process, changes in production quantities or
changes in production facilities.
The first report of cost data shall be submitted to the Department
not later than May 15, 2003, and shall contain the specified cost data
covering the period January 1, 2003 through March 31, 2003. The second
report of cost data shall be submitted to the Department not later than
August 14, 2003, and shall contain the specified cost data covering the
period January 1, 2003 through June 30, 2003. Each subsequent report
shall be submitted to the Department not later than February 14 and
August 14 of each year, and each report shall contain the specified
information for the semiannual period ending 45 days prior to the due
date.
(3) Special Adjustment of Normal Value
If the Department determines that the NV it determined for a
previous semiannual period was erroneous because the reported costs for
that period were inaccurate or incomplete, or for any other reason, the
Department may adjust NV in a subsequent period or periods, unless the
Department determines that Section F of the Agreement applies.
(4) Verification
Each producer/exporter agrees to permit full verification of all
cost and sales information annually, or more frequently, as the
Department deems necessary.
(5) Bundling or Other Arrangements
Producers/exporters agree not to circumvent the Agreement. In
accordance with the dates set forth in section D(1) of this Agreement,
producers/exporters will submit a written statement to the Department
certifying that the sales reported herein were not, or are not part of
or related to, any bundling arrangement, on-site processing
arrangement, discounts/free goods/financing package, swap or other
exchange where such arrangement is designed to circumvent the basis of
the Agreement.
Where there is reason to believe that such an arrangement does
circumvent the basis of the Agreement, the Department will request
producers/exporters to provide within 15 days all particulars regarding
any such arrangement, including, but not limited to, sales information
pertaining to covered and non-covered merchandise that is manufactured
or sold by producers/exporters. The Department will accept written
comments, not to exceed 30 pages, from all parties no later than 15
days after the date of receipt of such producer/exporter information.
If the Department, after reviewing all submissions, determines that
such arrangement circumvents the basis of the Agreement, it may, as it
deems most appropriate, utilize one of two options: (1) The amount of
the effective price discount resulting from such arrangement shall be
reflected in the NV in accordance with section D(3) of this Agreement,
or (2) the Department shall determine that the Agreement has been
violated and take action according to the provisions under section F of
this Agreement.
(6) Rejection of Submissions
The Department may reject any information submitted after the
deadlines set forth in this section or any information which it is
unable to verify to its satisfaction. If information is not submitted
in a complete and timely fashion or is not fully verifiable, the
Department may calculate NV, and/or U.S. price based on facts otherwise
available, as it determines appropriate, unless the Department
determines that section F of this Agreement applies.
[[Page 3862]]
(E) Disclosure and Comment
(1) The Department may make available to representatives of each
domestic party to the proceeding, under appropriately drawn
administrative protective orders, business proprietary information
submitted to the Department during the reporting period as well as
results of its analysis under section 777 of the Act.
(2) For the first sales period, beginning October 1, 2003, the
Department will disclose to each producer/exporter the preliminary
results and methodology of the Department's calculations of its NV no
later than August 20, 2003. At that time, the Department may also make
available such information to the domestic parties to the proceeding in
accordance with this section.
(3) Not later than November 20 and May 20 of each ensuing sales
period, the Department will disclose to each producer/exporter the
preliminary results and methodology of the Department's calculations of
its NV. At that time, the Department may also make available such
information to the domestic parties to the proceeding, in accordance
with this section.
(4) Not later than 7 days after the date of disclosure under
section E(2) and E(3) of this Agreement, the parties to the proceeding
may submit written comments to the Department, not to exceed 15 pages.
After reviewing these submissions, the Department will provide to each
producer/exporter its NV as provided in section C(2) of this Agreement.
In addition, the Department may provide such information to domestic
interested parties as specified in this section.
(F) Violations of the Agreement
If the Department determines that the Agreement is being or has
been violated or no longer meets the requirements of section 734(b) or
(d) of the Act, the Department shall take action it determines
appropriate under section 734(i) of the Act and the regulations.
(G) Other Provisions
In entering into the Agreement, the signatory producers/exporters
do not admit that any sales of merchandise subject to the Agreement
have been made at less than fair value.
(H) Termination or Withdrawal
The Department will not consider requests for termination of this
suspended investigation prior to January 2008. Termination of the
suspended investigation will be considered in accordance with the five-
year review provisions of section 351.222 of the Department's
regulations.
Any producer/exporter may withdraw from the Agreement at any time
upon notice to the Department. Withdrawal shall be effective 60 days
after such notice is given to the Department. Upon withdrawal, the
Department shall follow the procedures outlined in section 734(i)(1) of
the Act.
(I) Definitions
For purposes of the Agreement, the following definitions apply:
(1) U.S. price means the export price or constructed export price
at which merchandise is sold by the producer or exporter to the first
unaffiliated person in the United States, including the amount of any
discounts, rebates, price protection or ship and debit adjustments, and
other adjustments affecting the net amount paid or to be paid by the
unaffiliated purchaser, as determined by the Department under section
772 of the Act.
(2) Normal Value means the constructed value (CV) of the
merchandise, as determined by the Department under section 773 of the
Act and the corresponding sections of the Department's regulations, and
as adjusted in accordance with Appendix A to this Agreement.
(3) Producer/Exporter means (1) the foreign manufacturer or
producer, (2) the foreign producer or reseller which also exports, and
(3) the affiliated person by whom or for whose account the merchandise
is imported into the United States, as defined in section 771(28) of
the Act.
(4) Date of sale means the date of the invoice as recorded in the
exporter or producer's records kept in the ordinary course of business,
unless the Department determines that a different date better reflects
the date on which the exporter or producer establishes the material
terms of sale, as determined by the Department under its regulations.
The effective date of this Agreement is January 23, 2003.
For the Russian Federation Producers/Exporters: Andrey V.
Shikhanovich for JSC Severstal; Date: December 20, 2002. Andrey V.
Shikhanovich for JSC Magnitogorsk, Iron and Steel Works (MMK); Date:
December 20, 2002. Dmitry V. Tarasov for JSC NOSTA (OKIW), Integrated
Iron-Steel Works; Date: December 20, 2002.
For U.S. Department of Commerce: Faryar Shirzad, Assistant
Secretary for Import Administration; Date: December 20, 2002.
Appendix A--Principles of Cost
General Framework
The cost information reported to the Department that will form
the basis of the NV calculations for purposes of the Agreement must
be \4\:
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\4\ See footnote 1 in Section C(2) of the Agreement.
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[sbull] Comprehensive in nature and based on a reliable
accounting system (i.e., a system based on well-established
standards that can be tied to the audited financial statements);
[sbull] Representative of the company's costs incurred for the
general class of merchandise;
[sbull] Calculated on a semiannual weighted-average basis of the
plants or cost centers manufacturing the product;
[sbull] Based on fully-absorbed costs of production, including
any downtime;
[sbull] Valued in accordance with generally accepted accounting
principles;
[sbull] Reflective of appropriately allocated common costs so
that the costs necessary for the manufacturing of the product are
not absorbed by other products; and
[sbull] Reflective of the actual cost of producing the product.
Additionally, a single figure should be reported for each cost
component.
Cost of Manufacturing (COM)
Costs of manufacturing are reported by major cost category and
for major stages of production. Weighted-average costs are used for
a product that is produced at more than one facility, based on the
cost at each facility.
Direct materials is the cost of those materials which are input
into the production process and physically become part of the final
product.
Direct labor are the costs identified with a specific product.
These costs are not allocated among products except when two or more
products are produced at the same cost center. Direct labor costs
should include salary, bonus and overtime pay, training expenses,
and all fringe benefits. Any contracted-labor expense should reflect
the actual billed cost or the actual costs incurred by the
subcontractor when the corporation has influence over the
contractor.
Factory overhead is the overhead costs including indirect
materials, indirect labor, depreciation, and other fixed and
variable expenses attributable to a production line or factory.
Because overhead costs are typically incurred for an entire
production line. Acceptable cost allocation can be based on labor
hours or machine hours. Overhead costs should reflect any idle or
downtime and be fully absorbed by the products.
Cost of Production (COP)
COP is equal to the sum of materials, labor, and overhead (COM)
plus SG&A expense in the home market (HM).
SG&A expense are those expenses incurred for the operation of
the corporation as a whole and not directly related to the
manufacture of a particular product. They include corporate general
and administrative expenses, financing expenses, and general
research and development expenses. Additionally, direct and indirect
selling expenses incurred in the HM for sales of the
[[Page 3863]]
product under investigation are included. Such expenses are
allocated over cost of goods sold.
Constructed Value
Is equal to the sum of materials, labor and overhead (COM) and
SG&A expenses plus profit in the comparison market and the cost of
packing for exportation to the United States.
Calculation of Suspension Agreement NVs
NVs (for purposes of the Agreement) are calculated by adjusting
the CV and are provided for both EP and CEP transactions. In effect,
any expenses uniquely associated with the covered products sold in
the HM are subtracted from the CV, and any such expenses which are
uniquely associated with the covered products sold in the United
States are added to the CV to calculate the NV.
Export Price--Generally, a U.S. sale is classified as an export
price sale when the first sale to an unaffiliated person occurs
before the goods are imported into the United States. In cases where
the foreign manufacturer knows or has reason to believe that the
merchandise is ultimately destined for the United States, the
manufacturer's sales is the sale subject to review. If, on the other
hand, the manufacturer sold the merchandise to a foreign trader
without knowledge of the trader's intention to export the
merchandise to the United States, then the trader's first sale to an
unaffiliated person is the sale subject to review. For EP NVs, the
CV is adjusted for movement costs and differences in direct selling
expenses such as commissions, credit, warranties, technical expenses
such as commissions, credit, warranties, technical services,
advertising, and sales promotion.
Constructed Export Price--Generally, a U.S. sale is classified
as a constructed export price sale when the first sale to an
unaffiliated person occurs after importation. However, if the first
sale to an unaffiliated person is made by a person in the United
States affiliated with the foreign exporter, constructed export
price applies even if the sale occurs prior to importation, unless
the U.S. affiliate performs only clerical functions in connection
with the sale. For CEP NVs, the CV is adjusted similar to EP sales,
with differences for adjustment to U.S. and HM indirect-selling
expenses.
Home market direct-selling expenses are expenses that are
incurred as a direct result of a sale. These include such expenses
as commissions, advertising, discounts and rebates, credit, warranty
expenses, freight costs, etc. Certain direct-selling expenses are
treated individually. They include:
Commission expenses are payments to unaffiliated parties for
sales in the HM.
Credit expenses are expenses incurred for the extension of
credit to HM customers.
Movement expenses are freight, brokerage and handling, and
insurance expenses.
U.S. direct-selling expenses are the same as HM direct-selling
expenses except that they are incurred for sales in the United
States.
Movement expenses are additional expenses incidental to
importation into the United States. These typically include U.S.
inland freight, insurance, brokerage and handling expenses, U.S.
Customs duties, and international freight.
U.S. indirect-selling expenses include general fixed expenses
incurred by the U.S. sales subsidiary or affiliated exporter for
sales to the United States. They may also include a portion of
indirect expenses incurred in the HM for export sales.
For EP Transactions
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+ Direct Materials
+ Direct Labor
+ Factory Overhead
= Cost of Manufacturing (COM)
+ Home Market SG&A
= Cost of Production (COP)
+ U.S. Packing
+ Profit
= Constructed Value
+ U.S. Direct-Selling Expense
+ U.S. Commission Expense
+ U.S. Movement Expense
+ U.S. Credit Expense
- HM Direct-Selling Expense
- HM Commission Expense \1\
- HM Credit Expense
= NV for EP Sales
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\1\ If the company does not have HM commissions, HM indirect expenses
are subtracted only up to the amount of the U.S. Commissions.
For CEP Transactions
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+ Direct Materials
+ Direct Labor
+ Factory Overhead
= Cost of Manufacturing (COM)
+ Home Market SG&A
= Cost of Production (COP)
+ U.S. Packing
+ Profit
= Constructed Value
+ U.S. Direct-Selling Expense
+ U.S. Indirect-selling Expense
+ U.S. Commission Expense
+ U.S. Movement Expense
+ U.S. Credit Expense
+ U.S. Further Manufacturing Expenses (if any)
+ CEP Profit
- HM Direct-Selling Expense
- HM Commission Expense \1\
- HM Credit Expense
= NV for CEP Sales
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\1\ If the company does not have HM commissions, HM indirect expenses
are subtracted only up to the amount of the U.S. Commissions.
Appendix B
For purposes of this Agreement, the products covered are hot-
rolled iron and non-alloy steel universal mill plates (i.e., flat-
rolled products rolled on four faces or in a closed box pass, of a
width exceeding 150 mm but not exceeding 1250 mm and of a thickness
of not less than 4 mm, not in coils and without patterns in relief),
of rectangular shape, neither clad, plated nor coated with metal,
whether or not painted, varnished, or coated with plastics or other
nonmetallic substances; and certain iron and non-alloy steel flat-
rolled products not in coils, of rectangular shape, hot-rolled,
neither clad, plated, nor coated with metal, whether or not painted,
varnished, or coated with plastics or other nonmetallic substances,
4.75 mm or more in thickness and of a width which exceeds 150 mm and
measures at least twice the thickness. Included as subject
merchandise in this petition are flat-rolled products of
nonrectangular cross-section where such cross-section is achieved
subsequent to the rolling process (i.e., products which have been
``worked after rolling'')--for example, products which have been
bevelled or rounded at the edges. This merchandise is currently
classified in the Harmonized Tariff Schedule of the United States
(HTS) under item numbers 7208.40.3030, 7208.40.3060, 7208.51.0030,
7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000,
7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.13.0000,
7211.14.0030, 7211.14.0045, 7211.90.0000, 7212.40.1000,
7212.40.5000, 7212.50.0000. Excluded from the subject merchandise
within the scope of this Agreement is grade X-70 plate. Although the
HTS subheadings are provided for convenience and customs purposes,
our written description of the scope of this investigation is
dispositive.
[FR Doc. 03-1782 Filed 1-24-03; 8:45 am]