65 FR 25909, May 4, 2000 A-351-825 A-533-810 A-588-833 A-469-805 Sunset Reviews Public Document MEMORANDUM TO: Troy H. Cribb Acting Assistant Secretary for Import Administration FROM: Jeffrey A. May Director Office of Policy SUBJECT: Issues and Decision Memo for the Sunset Reviews of the Antidumping Duty Orders on Stainless Steel Bar from Brazil, India, Japan, and Spain; Final Results of Expedited Reviews Summary We have analyzed the substantive responses of interested parties in the expedited sunset reviews of the antidumping duty orders covering stainless steel bar ("SSB") from Brazil, India, Japan, and Spain. We recommend that 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 these expedited sunset reviews for which we received substantive responses by parties: 1. Likelihood of continuation or recurrence of dumping Weighted-average dumping margin Volume of imports 2. Magnitude of the margin likely to prevail Margins from investigation Use of a more recent margin History of the Orders Brazil The Department published its final affirmative determination of sales at less than fair value ("LTFV") with respect to imports of SSB from Brazil on December 28, 1994 (59 FR 66914). In this determination, the Department found a weighted-average dumping margin of 19.43 percent for Acos Villares, S.A., and 19.43 percent for all other producers and manufacturers of SSB from Brazil. On February 21, 1995, the Department published its antidumping duty order on SSB from Brazil (60 FR 9661). Since the order was issued, the Department has not conducted an administrative review or a new shipper review with respect to SSB from Brazil. We note that, to date, the Department has not issued any duty absorption findings in this case. The order remains in effect for all manufacturers and exporters of the subject merchandise from Brazil. India The Department published its final affirmative determination of sales at LTFV with respect to imports of SSB from India on December 28, 1994 (59 FR 66915). In this determination, the Department found a weighted-average dumping margin of 3.87 percent for Grand Foundry, Limited, 21.02 percent for Mukand, Limited, and 12.45 percent for all other producers and manufacturers of SSB from India. On February 21, 1995, the Department published its antidumping duty order on SSB from India (60 FR 9661). Since the issuance of the order the Department has completed three administrative reviews(1) and four new shipper reviews with respect to SSB from India.(2) We note that, to date, the Department has not issued any duty absorption findings in this case. The order remains in effect for all manufacturers and exporters of the subject merchandise from India. Japan The Department published its final affirmative determination of sales at LTFV with respect to imports of SSB from Japan on December 28, 1994 (59 FR 66930). In this determination, the Department found a weighted-average dumping margin of 61.47 percent for Aichi Steel Works, Ltd., Daido Steel Co. Ltd., Sanyo Special Steel Co. Ltd. and all other producers and manufacturers of SSB from Japan. On February 21, 1995, the Department published its antidumping duty order on SSB from Japan (60 FR 9661). Since the issuance of the order the Department has completed two administrative reviews(3) and one changed-circumstances review.(4) We note that, to date, the Department has not issued any duty absorption findings in this case. The order remains in effect for all manufacturers and exporters of the subject merchandise from Japan. Spain The Department published its final affirmative determination of sales at LTFV on December 28, 1994, (59 FR 66931). The Department subsequently published the amended final affirmative determination of sales at LTFV and antidumping duty order with respect to imports of SSB from Spain on March 2, 1995 (60 FR 11656). In this determination, the Department found a weighted-average dumping margin of 62.85 percent for Acensor, S.A. (and all successor companies), 7.72 percent for Roldan, S.A., ("Roldan") and 25.77 percent for all other producers and manufacturers of SSB from Spain. Since the issuance of the order, the Department, at the request of Roldan, has initiated an administrative review with respect to SSB from Spain(5). Pursuant also to Roldan's request the Department terminated that review.(6) We note that, to date, the Department has not issued any duty absorption findings in this case. The order remains in effect for all manufacturers and exporters of the subject merchandise from Spain. Background On December 30, 1999, the Department published the notice of initiation of the sunset reviews of the antidumping duty orders on SSB from Brazil, India, Japan, and Spain (64 FR 73510). The Department received Notices of Intent to Participate on behalf of Empire Specialty Steel Inc. (formerly AL Tech Specialty Steel Corp.), Carpenter Technology Corp., Republic Technologies International (formerly Republic Engineered Steels, Inc.), Crucible Specialty Metals Division of Crucible Materials Corp., Electralloy Corp., Slater Steels Corporation, and the United Steelworkers of America, AFL-CIO/CLC (collectively "domestic interested parties"), within the deadline specified in section 351.218(d)(1)(i) of the Sunset Regulations. The domestic interested parties claimed interested party status under section 771(9)(C) and (D) of the Act, as U.S. manufacturers of SSB and a certified union. We received complete substantive responses, in the Brazilian, Indian, Japanese, and Spanish reviews, from the domestic interested parties on January 28, 2000, within the 30-day deadline specified in the Sunset Regulations under section 351.218(d)(3)(i). In their substantive responses, the domestic interested parties stated that they were the petitioners in the original investigations of SSB from Brazil, India, Japan, and Spain. Furthermore, the domestic interested parties stated that they have been involved in these proceedings since their inception.(7) We did not receive a substantive response from any respondent interested party to these proceedings. As a result, pursuant to 751(c)(3)(B) of the Act and 19 CFR 351.218(e)(1)(ii)(C) of the Department's Regulations, the Department determined to conduct expedited, 120-day, reviews of these orders. Discussion of the Issues In accordance with section 751(c)(1) of the Act, the Department conducted these sunset reviews to determine whether revocation of the antidumping duty orders 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 the comments of the interested parties. Likelihood of Continuation or Recurrence of Dumping: Interested Party Comments In their substantive responses, the domestic interested parties argue that revocation of the antidumping duty orders would likely lead to continuation or recurrence of dumping by Brazilian Indian, Japanese, and Spanish manufacturers and exporters of the subject merchandise. With respect to the Indian and Japanese orders, the domestic interested parties assert that dumping has continued throughout the life of the orders at above de minimis levels. Albeit, there has not been an administrative review of the Brazilian and Spanish SSB orders, the domestic interested parties argue that the dumping margins from the original investigation are still applicable. Moreover, the domestic interested parties note that, with respect to Brazil, the annual shipments of SSB have declined significantly since the order was issued. Using statistical data, the domestic interested parties argued that the annual volume of Brazilian SSB imports during the five years subsequent to the order represented a 84 percent decline from pre-order levels. Using statistical data, the domestic interested parties argue that in the two-year period before the filing of the Indian petition, the annual average imports of SSB from India were approximately 3,215 short tons. They note that, with the discipline of the antidumping duty order in place, the imports of the subject merchandise significantly declined. Moreover, they assert that in the first full year following the imposition of the order, shipments of SSB dropped significantly to 1,952 short tons. Furthermore, the domestic interested parties add, these imports dropped even more precipitously from 1997 to 1999. Again, using statistical data, the domestic interested parties assert that in the two-year period before the filing of the Japanese petition, imports of SSB from Japan averaged 14,740 short tons annually. Moreover, in the three-year period following the issuance of the order the domestic interested parties note that imports of SSB to the United States averaged about 240 short tons per year, and have continued to decline since. The domestic interested parties argue that in the two-year period before the filing of the petition imports of SSB from Spain averaged 6,491 short tons annually. They support their argument with statistical data; however, they note that in the first year in which antidumping duties were imposed, imports of SSB dropped 80.3 percent, and dropped an average of 29.3 percent from 1996 through 1998. In summary, the domestic interested parties argue that the Department should determine that there is a likelihood that dumping would continue were the orders revoked because (1) dumping margins above de minimis levels have been in place since the imposition of the orders and (2) imports of the subject merchandise have declined significantly since the imposition of the orders. 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 ("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. 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). Section 751(c)(4)(B) of the Act provides that, in addition to considering the guidance on likelihood cited above, the Department shall determine that revocation of the order would be likely to lead to continuation or recurrence of dumping where a respondent interested party waives its participation in the sunset review. In these instant reviews, the Department did not receive a substantive response from any respondent interested party. Pursuant to section 351.218(d)(2)(iii) of the Sunset Regulations, this constitutes a waiver of participation. As outlined in each respective section above, the domestic interested parties argue that a significant decline in the volume of imports of the subject merchandise from Brazil, India, Japan, and Spain, since the imposition of the orders, provides further evidence that dumping would continue or recur if the orders were revoked. In their substantive response, they provided statistics demonstrating the decline in import volumes of SSB from Brazil, India, Japan, and Spain. The Department agrees with the domestic interested parties' argument that Brazilian, Indian, Japanese, and Spanish imports of the subject merchandise fell sharply after the order was imposed and never regained pre-order volumes.(8) Furthermore, the Department has conducted administrative reviews of the Indian and Japanese orders finding dumping margins above de minimis for producers/exporters reviewed. As noted above, in conducting its sunset reviews, the Department considers the weighted-average dumping margins and volume of imports 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 decreases in export volumes after the issuance of the orders are highly probative of the likelihood of continuation or recurrence of dumping. Given that (i) dumping has continued and import volumes declined significantly after the imposition of the orders; (ii) respondent interested parties waived participation in these reviews; and (iii) the absence of argument and evidence to the contrary, the Department determines that dumping is likely to continue or recur if the orders were revoked. Magnitude of the Margin Likely to Prevail: Interested Party Comments In their substantive response, the domestic interested parties recommend that, consistent with the Sunset Policy Bulletin, the Department provide to the Commission the company-specific and "all others" rates from the original investigations. 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 agrees with the domestic interested parties. We determine that the margins from the Department's original investigations are probative of the behavior of Brazilian, Indian, Japanese, and Spanish manufacturers and exporters of SSB if the orders were revoked because they are the only calculated rates which reflect the behavior of exporters without the discipline of the orders in place. Therefore the Department will report to the Commission the company-specific and "all others" rates from the original investigation as contained in the Final Results of Reviews section of this decision memo. Final Results of Reviews We determine that revocation of the antidumping duty orders on SSB from Brazil, India, Japan, and Spain would be likely to lead to continuation or recurrence of dumping at the following percentage weighted-average margins: Brazilian Manufacturers/Exporters Margin (percent) ------------------------------------------------------------------- Acos Villares, S.A. . . . . . . . . . . . . . . . . . . 19.43 All Others . . . . . . . . . . . . . . . . . . . . . . 19.43 ------------------------------------------------------------------- Indian Manufacturers/Exporters Margin (percent) ------------------------------------------------------------------- Grand Foundry Ltd. . . . . . . . . . . . . . . . . . . 3.87 Mukand, Ltd. . . . . . . . . . . . . . . . . . . . . . 21.02 All Others . . . . . . . . . . . . . . . . . . . . . . 12.45 ------------------------------------------------------------------- Japanese Manufacturers/Exporters Margin (percent) ------------------------------------------------------------------- Aichi Steel Works, Ltd. . . . . . . . . . . . . . . . . 61.47 Daido Steel Co., Ltd. . . . . . . . . . . . . . . . . . 61.47 Sanyo Special Steel Co., Ltd. . . . . . . . . . . . . . 61.47 All Others . . . . . . . . . . . . . . . . . . . . . . 61.47 ------------------------------------------------------------------- Spanish Manufacturers/Exporters Margin (percent) ------------------------------------------------------------------- Acensor, S.A. (And all successor companies including Digeco, S.A. and Clorimax, SRL) . . . . . . . 62.85 Roldan, S.A. . . . . . . . . . . . . . . . . . . . . . 7.72 All Others . . . . . . . . . . . . . . . . . . . . . . 25.77 ------------------------------------------------------------------- Recommendation Based on our analysis of the substantive responses received, we recommend adopting all of the above positions. If these recommendations are accepted, we will publish the final results of reviews in the Federal Register. AGREE ____ DISAGREE____ Troy H. Cribb Acting Assistant Secretary for Import Administration (Date) ____________________________________________________________________ footnotes: 1. See Stainless Steel Bar from India: Final Results of Administrative Review, 62 FR 37030 (July 10, 1997); 63 FR 13622 (March 20, 1998); and 64 FR 13771 (March 22, 1999). See also Stainless Steel Bar from India: Preliminary Results of Administrative Review, 65 FR 12209 (March 8, 2000). 2. See Stainless Steel Bar from India: Final Results of Antidumping Duty New Shipper Review, 62 FR 4029 (January 28, 1997); 63 FR 19712 (April 21, 1998); 64 FR 13771 (March 22, 1999); 65 FR 3662 (January 24, 2000). See also Stainless Steel Bar from India: Preliminary Results of Antidumping Duty New Shipper Review, 65 FR 12209 (March 8, 2000). 3. See Stainless Steel Bar from Japan: Final Results of Administrative Review, 64 FR 36333 (July 6, 1999); and 65 FR 13717 (March 14, 2000). 4. See Stainless Steel Bar from Japan: Final Results of Changed- Circumstances Review, and Revocation in Part, 64 FR 50273 (September 16, 1999). The Department revoked this order in part based on the fact that domestic parties support the request of Tohoku Steel Co., Ltd. for a changed-circumstances review and revocation in part of the order with regard to K-M35FL steel bar. 5. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 61 FR 18378 (April 25, 1996). 6. See Stainless Steel Bar from Spain: Termination of Antidumping Duty Review, 61 FR 50469 (September 26, 1996). 7. Two of the original petitioners have undergone a change of name: AL Tech Specialty Steel Corp. is now Empire Specialty Steel Inc. and Republic Engineered Steel, Inc. is now Republic Technologies International. Talley Metals Technology, Inc. also was a petitioner in these cases; Talley was acquired by Carpenter Technology Corp. and is now a part of Carpenter's operations. 8. The domestic interested parties calculations of some of the import volume statistics are slightly higher in the Brazilian and Japanese reviews, and lower in the Spanish review, than the Department's calculations. Because the domestic interested parties failed to provide the Department with the source from which they gathered their information, we will rely on the import statistics compiled from tariff and trade data from the Department of Commerce, Treasury, and the Commission. See statistical information attached.