66 FR 18752, April 11, 2001 A-560-811 A-455-803 A-823-809 Investigation Public Document MEMORANDUM TO: Bernard T. Carreau, fulfilling the duties of Assistant Secretary for Import Administration FROM: Holly A. Kuga Acting Deputy Assistant Secretary for Import Administration Group II DATE: April 2, 2001 SUBJECT: Issues and Decision Memorandum for the Antidumping Duty Investigations of Steel Concrete Reinforcing Bars from Indonesia, Poland, and Ukraine Summary We have analyzed the comment in the case brief submitted by the petitioner in the antidumping duty investigation of steel concrete reinforcing bars (rebar) from Ukraine. (1) As discussed below, we recommend that we adhere to the antidumping margin found for the sole respondent in the preliminary determination. We also recommend that the margins in the Indonesia and Poland proceedings remain unchanged from the respective preliminary determinations. Section I of this memorandum sets out the scope of these investigations. Section II analyzes the sole comment raised by an interested party (the petitioner). Finally, we recommend approval of the Department of Commerce's (the Department's) position developed for the issue in question. Background On January 30, 2001, the Department published the preliminary determinations in the antidumping investigations of rebar from Indonesia, Poland and Ukraine. The investigation of rebar from Indonesia covers eight manufacturers/exporters and the Poland and Ukraine investigations each cover one manufacturer/exporter. (2) The period of investigation (POI) for Indonesia and Poland is April 1, 1999 through March 31, 2000. Because Ukraine is a non-market economy, the POI for Ukraine is October 1, 1999 through March 31, 2000. I. Scope of the Investigations For purposes of these investigations, the product covered is all steel concrete reinforcing bars sold in straight lengths, currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under item number 7214.20.00 or any other tariff item number. Specifically excluded are plain rounds (i.e., non-deformed or smooth bars) and rebar that has been further processed through bending or coating. HTSUS subheadings are provided for convenience and Customs purposes; the written description of the scope of this proceeding is dispositive. II. Analysis of Issue in Petitioner's Case Brief (Ukraine) The petitioner contends that the Department was correct in basing the dumping margin for the sole respondent in the Ukraine investigation, Krovoi Rog State Mining and Metal Works (Krivorozhstal), on adverse facts available, inasmuch as Krivorozhstal submitted incomplete and non-informative responses to the Department's antidumping questionnaires. However, the petitioner contends that the Department erred in basing the dumping margin for Krivorozhstal on the margin contained in the petition. According to the petitioner, a final dumping margin should be calculated by valuing the factors of production data submitted by Krivorozhstal using surrogate value information submitted by the petitioner during the course of the investigation. DOC Position: Given the facts of this case, we disagree with the petitioner that it would be appropriate to rely on the factor of production data submitted by Krivorozhstal in lieu of the factors of production provided in the petition. In the preliminary determination, the Department found that Krivorozhstal's submitted factors of production were deficient in two critical respects. First, Krivorozhstal's spreadsheets were not accompanied by narrative explanations. The section D questionnaire requires a full narrative explanation of the factors of production and a detailed description of the production processes utilized for the production of the subject merchandise. The respondent's questionnaire responses provided no such explanations; moreover, many of the factors of production listed in the spreadsheets were ambiguous or unintelligible. Second, Krivorozhstal failed to provide a unique set of factors of production for each unique product. In its supplemental questionnaire of October 26, 2000, the Department had requested that Krivorozhstal ensure that it provide a revised set of factors for each control number. The company did not do so, noting that its normal cost accounting records do not distinguish costs among different rebar products, but offering no alternative basis for allocating costs according to the Department's definition of unique products, as required by section 782(c)(1) of the Tariff Act of 1930, as amended (the Act). In addition, the Department determined that Krivorozhstal did not provide complete and comprehensive factors of production information to account for all aspects of its fully-integrated raw material extraction and steel production facilities. Specifically, Krivorozhstal did not provide factors to account for its "Mine and Ore Dressing Complex," which crushes iron ore, producing iron-ore fluxed magnesia sinter and iron-ore magnetite. The Department concluded that the "inability to calculate a normal value based on Krivorozhstal's data precludes the calculation of a meaningful dumping margin based on the respondent's information." See Notice of Preliminary Determinations of Sales at Less Than Fair Value: Steel Concrete Reinforcing Bars From Poland, Indonesia, and Ukraine, 66 FR 8343, 8344 (January 30, 2001), and accompanying decision memorandum. We further found that Krivorozhstal had not acted to the best of its ability, warranting the use of adverse facts available. Therefore, the preliminary dumping margin for Krivorozhstal was based on the highest margin alleged in the petition (41.69 percent). Krivorozhstal was afforded an additional opportunity to remedy these deficiencies after the preliminary determination, via a supplemental questionnaire issued on January 11, 2001. The respondent did not respond to this questionnaire and noted that it could not commit to a specific date for verification of its questionnaire responses. See letter from Krivorozhstal to the Department of Commerce, dated February 9, 2001. Therefore, the Department continues to find, pursuant to section 776(b) of the Act, that the use of adverse facts available is warranted. We believe that the petition provides a much more appropriate basis for adverse facts available than the incomplete and unclear factor of production data submitted by Krivorozhstal. The Department has not found, and the petitioner has not pointed to, any methodological error in the petition that would make the margins contained therein unreliable. Moreover, as reflected in the preliminary determination, the Department corroborated the information contained in the petition by re-examining the EP and NV data which formed the basis for the highest margin in the petition and found that this data has probative value. See Decision Memorandum to Troy Cribb Regarding the Use of Facts Available for the Antidumping Investigation of Steel Concrete Reinforcing Bars from Ukraine (January 16, 2001). By contrast, as explained above, the Department has found numerous deficiencies in the Krivorozhstal data that render them unreliable. (3) After considering all alternatives to the petition calculations (including the possibility of relying on other surrogate value information on the record), we believe that the petition is the most appropriate basis for adverse facts available. Recommendation Based on our analysis of the sole comment received, we recommend continued reliance on the petition margin as the basis for the dumping margin for Krivorozhstal in the Ukraine investigation. If this recommendation is accepted, we will publish the final determination of the investigation in the Federal Register. We also recommend that the margins for the investigated respondents in the Indonesia and Poland proceedings remain the same as applied in the preliminary determination. Agree__________ Disagree__________ _________________ Bernard T. Carreau, fulfilling the duties of Assistant Secretary for Import Administration _________________ (Date) ______________________________________________________________________________ footnotes: 1. No case or rebuttal briefs were filed in the cases involving Indonesia and Poland, nor was a rebuttal brief filed in the case involving Ukraine. 2. Indonesia: PT The Master Steel Manufacturing Co., PT Gunung Gahapi Sakti, PT Bhirma Steel, Krakatau Wajatama, PT Jakarta Steel Perdana Industri, PT Hanil Jaya Metal Works, PT Pulogadung Steel, and PT Jakarta Cakra Tunggal; Poland: Huta Ostrowiec S.A.; Ukraine: Krovoi Rog State Mining and Metal Works. 3. We note that the petitioner itself cited to numerous deficiencies in the Krivorozhstal factors of production data in their submission of November 29, 2000, on the record of this case. The petitioner characterized the Krivorozhstal data as "so incomplete as to be fundamentally deficient." The petitioner further noted that the respondent's failure to provide timely and complete factor data "also impeded the analysis of the surrogate country itself, since the choice of a surrogate country is based in part upon the availability of factor data." See letter from the petitioner to the Department of Commerce, dated November 29, 2000, at 4.