65 FR 18049, April 6, 2000 A-602-803 Sunset Review Public Document MEMORANDUM TO: Robert S. LaRussa Assistant Secretary for Import Administration FROM: Jeffrey A. May Director Office of Policy SUBJECT: Issues and Decision Memo for the Sunset Review of the Antidumping Duty Order on Certain Corrosion-Resistant Carbon Steel Flat Products from Australia; Final Results Summary We have analyzed the substantive responses of interested parties in the expedited sunset review of the antidumping duty order covering certain corrosion-resistant carbon steel flat products ("CR flat products") from Australia. We recommend that for our final results you approve the positions we have developed in the Discussion of the Issues section of this memorandum. Below is the complete list of the issues in this expedited sunset review for which we received substantive responses by parties: 1. Likelihood of continuation or recurrence of dumping A. Weighted-average dumping margin B. Volume of imports 2. Magnitude of the margin likely to prevail A. Margins from investigation B.Use of a more recent margin History of the Order The Department published its final determination of sales at less than fair value ("LTFV") with respect to CR flat products from Australia on July 9, 1993 (58 FR 37079). In this determination, the Department published one company- specific weighted-average dumping margin of 24.96 percent for the Broken Hill Proprietary Company Ltd., BHP Trading, Inc., SupraCote, Inc., and ASC Pacific, Inc. (collectively, "BHP"), as well as an "all others" rate of 24.96 percent. On August 19, 1993, the Department issued the antidumping duty order on CR flat products from Australia (58 FR 44161 (August 19, 1993)). Since the issuance of the order, the Department has conducted two administrative reviews. (1) In the first review (covering 1993-1994), the Department published one company-specific weighted-average dumping margin of 39.11 percent for BHP. The margin for BHP was subsequently amended to 39.05 percent after correcting a ministerial error. In the second (1994-1995) review, the Department, based on best information available, determined the margin for BHP to be 39.05 percent. The order remains in effect for all known producers/exporters of the subject merchandise from Australia. To date, the Department has not issued any duty absorption findings in this case. Background On September 1, 1999, the Department initiated a sunset review of the antidumping order on CR flat products from Australia (64 FR 47767), pursuant to section 751(c) of the Tariff Act of 1930, as amended ("the Act"). The Department received a notice of intent to participate on behalf of Bethlehem Steel Corporation and U.S. Steel Group, a unit of USX Corporation, Ispat Inland, Inc., and National Steel Corporation (collectively, "domestic interested parties") in this case on September 15, 1999, within the deadline specified in section 351.218(d)(1)(i) of the Sunset Regulations. Pursuant to 19 U.S.C. § 1677(9)(C), the domestic interested parties claimed interested party status as domestic producers of a like product. Moreover, the domestic interested parties stated that they were petitioners in the original antidumping investigation and have participated in all of the administrative reviews conducted by the Department. The Department received complete substantive responses from the domestic interested parties on October 1, 1999, within the 30-day deadline specified in the Sunset Regulations under section 351.218(d)(3)(i). We did not receive a substantive response from any respondent interested party to these proceedings. As a result, pursuant to section 751(c)(3)(B) of the Act and 19 CFR 351.218(e)(1)(ii)(C), the Department determined to conduct an expedited, 120-day review of the order. In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a sunset review as extraordinarily complicated if it is a review of a transition order (i.e., an order in effect on January 1, 1995). This reviews concerns a transition order within the meaning of section 751(c)(6)(C)(ii) of the Act. On December 22, 1999, the Department determined that the sunset review of the antidumping duty order on CR flat products from Australia is extraordinarily complicated pursuant to section 751(c)(5)(C)(v) of the Act, and extended the time limit for completion of the final results of this review until not later than March 29, 2000, in accordance with section 751(c)(5)(B) of the Act. (2) Discussion of the Issues In accordance with section 751(c)(1) of the Act, the Department is conducting this review to determine whether revocation of the antidumping duty order would be likely to lead to continuation or recurrence of dumping. Section 752(c) of the Act provides that, in making this determination, the Department shall consider the weighted-average dumping margins determined in the investigation and subsequent reviews and the volume of imports of the subject merchandise for the period before and the period after the issuance of the antidumping order, and shall provide to the International Trade Commission ("the Commission") the magnitude of the margin of dumping likely to prevail if the order was revoked. Below we address the comments of interested parties. Likelihood of Continuation or Recurrence of Dumping Interested Party Comments In their substantive response, the domestic interested parties argue that revocation of the antidumping duty order on CR flat products from Australia would likely result in the continuation or recurrence of dumping. The domestic interested parties argue that the history of this proceeding, including increasing dumping margins combined with a significant decline in import volumes since the imposition of the order, demonstrate that dumping is likely to continue or recur if the order is revoked. Specifically, the domestic interested parties, quoting the Sunset Policy Bulletin and the SAA, point out that the Department will normally find that dumping is likely to continue or recur where dumping has continued at any level above de minimis after the imposition of the order. Here, the domestic interested parties argue since BHP's dumping margins have increased from 24.96 percent in the original investigation to 39.05 percent in the first and second administrative reviews, the Department clearly should not revoke the order. Additionally, the domestic interested parties maintain that imports of the subject merchandise have fallen dramatically since the imposition of the order and are currently at less than five percent of their pre-order levels (see October 1, 1999, substantive response of the domestic interested parties at 10). Therefore, the domestic interested parties conclude that dumping of CR flat products from Australia is likely to continue or recur if the order is revoked. Department's Determination Drawing on the guidance provided in the legislative history accompanying the Uruguay Round Agreements Act ("URAA"), specifically the Statement of Administrative Action ("SAA"), H.R. Doc. No. 103-316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1 (1994), and the Senate Report, S. Rep. No. 103-412 (1994), the Department issued its Sunset Policy Bulletin providing guidance on methodological and analytical issues, including the basis for likelihood determinations. The Department clarified that determinations of likelihood will be made on an order-wide basis (see section II.A.2 of the Sunset Policy Bulletin). In addition, the Department indicated that it will normally determine that revocation of an antidumping order is likely to lead to continuation or recurrence of dumping where (a) dumping continued at any level above de minimis after the issuance of the order, (b) imports of the subject merchandise ceased after the issuance of the order, or (c) dumping was eliminated after the issuance of the order and import volumes for the subject merchandise declined significantly (see section II.A.3). In addition to considering the guidance on likelihood cited above, section 751(c)(4)(B) of the Act provides that the Department shall conclude that revocation of the order would be likely to lead to continuation or recurrence of dumping where an interested party waives its participation in the sunset review. In this review, the Department did not receive a substantive response from any respondent interested party. Pursuant to section 351.218(d)(2)(iii) of the of the Sunset Regulations, this constitutes a waiver of participation. Consistent with section 752(c) of the Act, the Department considered whether dumping continued at any level above de minimis after the issuance of the order. In this case, BHP has continued to have above de minimis margins in each of the two administrative reviews conducted by the Department. As discussed in section II.A.3 of the Sunset Policy Bulletin, the SAA at 890, and the House Report at 63-64, if companies continue to dump with the discipline of an order in place, the Department may reasonably infer that dumping would continue if the discipline were removed. As pointed out above, dumping margins above de minimis continue to exist for shipments of the subject merchandise from Australia. In addition, consistent with section 752(c) of the Act, the Department also considered the volume of imports of the subject merchandise before and after the issuance of the order. As discussed above, the domestic interested parties argue that a significant decline in the volume of imports of the subject merchandise from Australia since the imposition of the order provides further evidence that dumping would continue if the order was revoked. Moreover, as mentioned above, in their substantive responses, the domestic interested parties provide statistics demonstrating the decline in import volumes of CR flat products from Australia. Utilizing U.S. Census data, including IM146 reports, on imports of the subject merchandise from these countries, we agree with the domestic interested parties' assertions that imports of the subject merchandise declined after the order was imposed and have not regained pre-order volumes. (3) As noted above, in conducting a sunset review, pursuant to section 752(c) of the Act, the Department considers the weighted-average dumping margins and volume of imports before and after the imposition of the order when determining whether revocation of an antidumping duty order would lead to the continuation or recurrence of dumping. Based on this analysis, the Department finds that the existence of dumping margins above de minimis levels and a reduction in import volumes after the issuance of the order is highly probative of the likelihood of continuation or recurrence of dumping. A deposit rate above a de minimis level continues in effect for imports of the subject merchandise for all Australian manufacturers/exporters. Therefore, given that dumping has continued over the life of the order, import volumes declined significantly after the imposition of the order, respondent interested parties waived participation, and absent argument and evidence to the contrary, the Department determines that dumping is likely to continue if the order were revoked. Magnitude of the Margin Interested Party Comments The domestic interested parties, in their substantive response, recommend forwarding to the Commission the more recently calculated margin of 39.05 percent for BHP, arguing that in this case, dumping margins have increased after the issuance of the order (see October 1, 1999, substantive response of the domestic interested parties at 12). Department's Determination In the Sunset Policy Bulletin, the Department stated that it normally will provide to the Commission the margin that was determined in the final determination in the original investigation. Further, for companies not specifically investigated or for companies that did not begin shipping until after the order was issued, the Department normally will provide a margin based on the "all others" rate from the investigation. (See section II.B.1 of the Sunset Policy Bulletin.) Exceptions to this policy include the use of a more recently calculated margin, where appropriate, and consideration of duty absorption determinations. (See sections II.B.2 and 3 of the Sunset Policy Bulletin.) To date, the Department has not issued any duty absorption findings in this case. As for the use of a more recently calculated margin for BHP, the Department disagrees with the domestic interested parties. While it is true that the margin calculated for BHP in the first administrative review (and subsequently applied in the second review) was higher than the margin calculated in the original investigation, the mere fact that a higher margin exists does not, per se, warrant the use of a more recently calculated margin for BHP. Rather, the Sunset Policy Bulletin provides that the Department may forward to the Commission a more recently calculated margin for a particular company where dumping margins increased after the issuance of the order where that particular company increased dumping to maintain or increase market share. The domestic interested parties provide no specific information concerning an attempt by BHP to maintain or increase market share by increased dumping. Therefore, consistent with the Sunset Policy Bulletin, the Department finds that the margins calculated in the original investigations are probative of the behavior of Australian producers/exporters if the order were revoked as they are the only margins which reflect their behavior absent the discipline of the order. As such, the Department will report to the Commission the rates from the original investigations as contained in the Final Results of Review section of this decision memo. Final Results of Review We determine that revocation of the antidumping duty order on CR flat products from Australia would be likely to lead to continuation or recurrence of dumping at the following percentage weighted-average margins: ------------------------------------------------------------------------ Manufacturer/Exporter Margin (percent) ------------------------------------------------------------------------ Broken Hill Proprietary Co., Ltd. 24.96 All Others 24.96 ------------------------------------------------------------------------ Recommendation Based on our analysis of the comments received, we recommend adopting all of the above positions. If these recommendations are accepted, we will publish the final results of review in the Federal Register. AGREE____ DISAGREE____ Joseph A. Spetrini Acting Assistant Secretary for Import Administration (Date) _________________________________________________________________ Footnotes: 1. See Certain Corrosion-Resistant Carbon Steel Flat Products from Australia: Final Results of Antidumping Duty Administrative Review, 61 FR 14049 (March 29, 1996); as amended, Certain Corrosion-Resistant Carbon Steel Flat Products from Australia: Amendment to Final Results of Antidumping Duty Administrative Review, 61 FR 40399 (August 2, 1996); and Certain Corrosion-Resistant Carbon Steel Flat Products from Australia: Final Results of Antidumping Duty Administrative Review, 61 FR 44039 (August 27, 1996). 2. See Extension of Time Limit for Preliminary Results of Full Five-Year Reviews, 64 FR 71726 (December 22, 1999). 3. The Department bases this determination on information submitted by the domestic interested parties in their October 1, 1999, submission, as well as U.S. IM146 Reports, U.S. Department of Commerce statistics, U.S. Department of Treasury statistics, and information obtained from the U.S. International Trade Commission.