65 FR 18050, April 6, 2000 A-427-808 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 Memorandum for the Sunset Review of the Antidumping Duty Order on Corrosion-Resistant Carbon Steel Flat Products from France; Final Results Summary We have analyzed the substantive responses of interested parties in the expedited sunset review of the antidumping duty order covering corrosion-resistant carbon steel flat products from France. We recommend that, for our expedited 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: Weighted-average dumping margin Volume of imports Other factors 2. Magnitude of the margin likely to prevail Margins from investigation History of Order: The antidumping duty order on corrosion-resistant carbon steel flat products ("corrosion-resistant steel") from France was published in the Federal Register on August 19, 1993 (58 FR 44169).(1) In the order, the Department assigned a weighted-average dumping margin of 29.41 percent ad valorem to Usinor Sacilor ("Usinor") as well as all other French producers of the subject merchandise. The Department has not conducted any administrative reviews of the order since that time. The order remains in effect for all manufacturers and exporters of the subject merchandise. We note that the Department has not conducted any duty-absorption investigations, either. Background: On September 1, 1999, the Department initiated a sunset review of the antidumping duty order on corrosion-resistant steel from France (64 FR 47767) pursuant to section 751(c)(6)(A)(i) of the Tariff Act of 1930, as amended ("the Act"). On September 10, 1999, the Department received a Notice of Intent to Participate on behalf of Bethlehem Steel Corp., Ispat Inland Inc., LTV Steel Inc., National Steel Corp., and U.S. Steel Group, a unit of USX Corp. (hereinafter collectively referred to as the "domestic interested parties"), manufacturers of the domestic like product, within the deadline specified in section 351.218(d)(1)(i) of the Sunset Regulations. In their Notice of Intent to Participate, the domestic interested parties declared that none of them is a U.S. importer of the subject merchandise; however, they indicated that, except for Bethlehem Steel Corp., all of the other domestic interested parties are affiliated with various foreign producers and exporters of the like product.(2) We received a complete substantive response on behalf of the domestic interested parties on October 4, 1999, within the 30-day deadline specified in the Sunset Regulations under section 351.218(d)(3)(i). The domestic interested parties claimed interested party status under section 771(9)(C) of the Act, as manufacturers of the domestic like product. The domestic interested parties noted that they were willing to participate fully in the instant review and that one or more of them have been involved in the proceeding since the petition was filed. We did not receive a substantive response from any respondent interested party to this proceeding. Consequently, pursuant to section 351.218(e)(1)(ii)(C) of the Sunset Regulations, the Department determined to conduct an expedited, 120-day, sunset review of this order. In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a review as extraordinarily complicated if it is a review of a transition order (i.e., an order in effect on January 1, 1995). This review concerns a transition order within the meaning of section 751(c)(6)(C)(ii) of the Act because the order was published on August 19, 1993. Therefore, on December 22, 1999, the Department determined that the sunset review of the antidumping duty order on corrosion-resistant steel from France is extraordinarily complicated 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.(3) Discussion of the Issues In accordance with section 751(c)(1) of the Act, the Department conducted this sunset 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 duty order. In addition, section 752(c)(3) of the Act provides that the Department shall provide to the International Trade Commission ("the Commission") the magnitude of the margin of dumping likely to prevail if the order is revoked. Below we address substantive responses of interested parties. 1. Likelihood of Continuation or Recurrence of Dumping Interested Parties' Substantive Responses: The domestic interested parties argue that dumping of the subject merchandise will continue or recur if the antidumping duty order were revoked. In support of their argument, the domestic interested parties claim that import volumes of the subject merchandise declined substantially after the issuance of the order. Specifically, the domestic interested parties indicate that, between 1992 and 1993, imports of the subject merchandise declined 92.78 percent, from 94,684 to 6,833 short tons and that the French exports share of subject merchandise vis à vis U.S. total consumption of corrosion- resistant steel decreased from 0.79 percent to 0.05 percent. In addition, the domestic interested parties note that, during the subsequent years, imports of the subject merchandise have further declined and allegedly ceased.(4) (See October 4, 1999, Substantive Response of the domestic interested parties at 4 - 10.) The domestic interested parties also argue that French manufacturers/exporters of steel products have shown a propensity for dumping in North America.(5) The domestic interested parties further state that Usinor is poised to dump more if the order is revoked because it announced plans to cease the production of non-subject merchandise and to concentrate on producing steel products which fall within the scope of this order. Finally, the domestic interested parties indicate that the recent decrease in exports of French steel- products to Asian countries puts more pressure on French companies to divert their steel exports to the U.S. market if were the order revoked. Id. Department's Position: Drawing on the guidance provided in the legislative history accompanying the Uruguay Round Agreements Act ("URAA"), specifically the Statement of Administrative Action ("the 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 bases for likelihood determinations. In its Sunset Policy Bulletin, the Department indicated that determinations of likelihood will be made on an order-wide basis. (See section II.A.2.) 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 determine that revocation of an order is likely to lead to continuation or recurrence of dumping where a respondent interested party waives its participation in the sunset review. In the instant review, the Department did not receive a response from any respondent interested party. Pursuant to section 351.218(d)(2)(iii) of the Sunset Regulations, this constitutes a waiver of participation. Consistent with section 752(c) of the Act, the Department considered import volumes of the subject merchandise before and after the issuance of the order. According to the United States Census Bureau IM146 and the Commission Data, since the imposition of the order, import volumes of the subject merchandise have declined substantially. (See Memorandum to File Regarding Imports for Consumption of the subject merchandise.) In the year preceding the year in which the original antidumping investigation was initiated, 1991, the import volume of the subject merchandise was 67,904 metric tons. In the year immediately following the imposition of the order, 1994, the import volume decreased to 8,880 metric tons. Moreover, in the years between 1994 and 1998, the average annual import volume of the subject merchandise was 4,218 metric tons, about a 94 percent decline when compared to the pre-order volume of 1991. Finally, during the same period, imports of the subject merchandise showed a definite decreasing trend.(6) Therefore, we agree with the domestic interested parties that import volumes of the subject merchandise decreased significantly after the issuance of the order. As indicated in section II.A.3 of the Sunset Policy Bulletin, the SAA at 890, and House Report at 63-64, the Department also considered whether dumping continued at any level above de minimis after the issuance of the order. If companies continue to dump with the discipline of an order in place, the Department may reasonably infer that dumping would continue were the discipline removed. Because the Department has not conducted any administrative review of the order, the margins from the investigation continue to apply. As we have seen in the previous paragraph, French manufacturers/exporters continued to export corrosion-resistant steel to the United States. Therefore, we determine that dumping continued after the issuance of the order. Given that dumping continued over the life of the order, that import volumes of the subject merchandise decreased significantly after the issuance of the order, that French manufacturers/exporters of corrosion-resistant steel waived their right to participated in the instant review, and absent any evidence or argument to the contrary, we agree with the domestic interested parties's contention that dumping is likely to continue if the order is revoked. Insofar as the Department made this determination based on the findings that dumping continued at levels above de minimis and that import volumes of the subject merchandise declined substantially after the issuance of the order, it is not necessary for us to address the domestic interested parties's other arguments. 2. Magnitude of the Margin Likely to Prevail Interested Parties' Substantive Responses: In their substantive response, at pp. 11 - 12, the domestic interested parties argue that, should the Department revoke the order, dumping would continue at a margin of 29.41 percent, the margin from the original investigation. The domestic interested parties contend that the Department should choose the margin from the original investigation because it is the only margin that reflects the behavior of French exporters of the subject merchandise without the discipline of the order in place. Department's Position: In the Sunset Policy Bulletin, the Department stated that it will normally 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.) The Department, in its final determination of the original investigation established the weighted-average dumping margins for Usinor and for all other French manufacturers/exporters. We note that the Department has not conducted any duty-absorption investigation with respect to the subject merchandise or any reviews of the order. The Department agrees with the domestic interested parties's contention that the likely-to-prevail margins are those from the original investigation. Absent argument or evidence to the contrary, we determine that the margins from the original investigation are probative of the behavior of French manufacturers/exporters of corrosion-resistant steel without the discipline of the order. Therefore, we will report to the International Trade Commission the rates as contained in the Final Results of Review section of of this memorandum and published in the Federal Register. Final Results of Review Based on the above analysis, the Department finds that revocation of the antidumping duty order would be likely to lead to continuation or recurrence of dumping at the margins listed below: ___________________________________________________________ Manufacturer/Exporter Margin (percent) ___________________________________________________________ Usinor --------------------------------------- 29.41 All others ----------------------------------- 29.41 ___________________________________________________________ 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 Antidumping Duty Orders and Amendment to Final Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate From France, 58 FR 44169 (August 19, 1993), as amended, Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain Corrosion- Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate From France; Notice of Final Court Decision and Amended Final Determinations, 61 FR 51274 (October 1, 1996). See also Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate From France; Notice of Court Decision and Continuation of Suspension of Liquidation, 61 FR 31921 (June 21, 1996). 2. Ispat Inland Inc. is a wholly owned subsidiary of Ispat International N. V. of the Netherlands; L-SE is 60% owned by a subsidiary of LTV Steel Company, Inc. and 40% owned by Sumitomo of Japan; NKK of Japan owns 68.8% of National Steel's voting stock; USS- Posoc is owned 50% by USX and 50% by Pohang Iron and Steel of Korea; and PRO-TEC Coating Company is owned 50% by USX and 50% by Kobe Steel of Japan. (See the domestic interested parties' September 10, 1999, intent to participate at ATTACHMENT 2.) 3. See Extension of Time Limit for Final Results of Five-Year Reviews, 64 FR 71726 (December 22, 1999). 4. See domestic interested parties' substantive response at Attachments 2 and 3. According to the domestic interested parties, import volumes of the subject merchandise during the relevant period are as follows: 1991 - 71,760; 1994 - 4,798; 1995 - 1,355; 1996 - 992; 1997 - 5,677; and 1998 - 2,478 (units are in short-tons). Also see footnote 6, infra. 5. The domestic interested parties illustrate the propensity for French producers to dump steel products by citing the below cases: Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order; Stainless Steel Sheet and Strip in Coils From France, 64 FR 40562 (July 27, 1999); Preliminary Determination of Sales at Less Than Fair Value: Certain Cut-To-Length Carbon-Quality Steel Plate Products from France, 64 FR 41198 (July 29, 1999); Certain Corrosion-Resistant Steel Sheet Products from Australia, Brazil, France, the Federal Republic of Germany, Japan, the Republic of Korea, New Zealand, Spain, Sweden, the United Kingdom and the United States of America, Revenue Canada, 4258-93 (June 29, 1994); Certain Stainless Steel Round Bar Originating in or Exported from the Federal Republic of Germany, France, India, Italy, Japan, Sweden, Taiwan, and the United Kingdom, Revenue Canada, 4258-103 (August 5, 1998); and Certain Flat Hot-Rolled Carbon and Alloy Steel Sheet Products Originating in or Exported from France, Romania, the Russian Federation and the Slovak Republic, Revenue Canada, 4258-13 (June 1, 1999). 6. The Commission data (based on HTS numbers delineated in 1993 order (see Notice of Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products From Argentina, at APPENDIX I, 58 FR 37062 (July 9, 1993)) indicate that the import volumes of the subject merchandise during the period 1994 through 1998 are as follows: 1994 - 8,880; 1995 - 4,946; 1996 - 996; 1997 - 4,124; and 1998 - 2,144 metric tons (the investigation was initiated in 1992, and the order was imposed in 1993). Although these numbers are somewhat different from those of the domestic interested parties (see footnote 4, supra and domestic interested parties substantive response at Attachments 2 and 3), the two sets of numbers are comparable to the extent that both show definite and significant decreasing trends through 1996 and that the import volume of the subject merchandise in 1998 is much lower than that of 1991.