65 FR 18056, April 6, 2000 A-469-803 A-412-814 Sunset Reviews 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 Reviews of the Antidumping Duty Orders on Certain Cut-to-Length Carbon Steel Plate from Spain and the United Kingdom Summary We have analyzed the substantive responses of interested parties in the expedited sunset reviews of the antidumping duty orders covering certain cut-to-length carbon steel plate ("CTL plate") from Spain and the United Kingdom. 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 comments by parties: 1. Likelihood of continuation or recurrence of dumping A. Weighted-average dumping margin B. Volume of imports C. Other factors 2. Magnitude of the margin likely to prevail A. Margins from investigation B. Use of a more recent margin C. Duty absorption History of the Orders: On July 9, 1993, the Department published in the Federal Register the final determinations of sales at less than fair value of certain cut-to-length carbon steel plate ("CTL plate") from Spain and from the United Kingdom (see 58 FR 37211, 37215, respectively). On August 19, 1993, the Department published in the Federal Register the antidumping duty orders on CTL plate from Spain and the United Kingdom (see 58 FR 44167, 44165, respectively). In the antidumping duty order on CTL plate from Spain, the Department established an estimated weighted-average dumping margin of 105.61 percent for Empresa Nacional Siderurgica, S.A. ("Ensidesa")(1) and "all others." In the antidumping duty order of CTL plate from the United Kingdom, the Department established an estimated weighted-average dumping margin of 109.22 for British Steel plc. ("British Steel") and all other British producers and exporters of CTL plate. There have been no administrative reviews of these antidumping duty orders. The orders remain in effect for all producers and exporters of CTL plate from Spain and the United Kingdom. Background: On September 1, 1999, the Department published the notice of initiation of sunset review of the antidumping duty orders on CTL plate from Spain and the United Kingdom (64 FR 47767). On September 10, 1999, the Department received Notices of Intent to Participate on behalf of Bethlehem Steel Corporation and U.S. Steel Group (a unit of USX Corporation) (hereinafter "the domestic interested parties") within the deadline specified in section 351.218(d)(1)(i) of the Sunset Regulations. On October 1, 1999, we received complete substantive responses to the notice of initiation from the domestic interested parties within the deadline specified in section 351.218(d)(3)(i) of the Sunset Regulations. The domestic interested parties claimed interested party status under section 771(9)(C) of the Act as U.S. producers of a domestic like product. The Department did not receive a substantive response from any respondent interested party to either of these two reviews. As a result, and in accordance with our regulations (19 CFR 351.218(e)(1)(ii)(C)(2)), we determined to conduct expedited sunset reviews of these antidumping duty orders. 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. 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). These reviews concern transition orders within the meaning of section 751(c)(6)(C)(ii) of the Act. Therefore, on December 22, 1999, the Department determined that the sunset reviews of the antidumping duty orders on CTL plate from Spain and the United Kingdom are extraordinarily complicated and extended the time limit for completion of the final results of these reviews until not later than, March 29, 2000, in accordance with section 751(c)(5)(B) of the Act (64 FR 71726). 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 interested parties. 1. 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 of CTL plate from Spain and the United Kingdom would likely lead to continuation of dumping by foreign producers and exporters based on the continuation of dumping and the decline in import volumes after the issuance of the antidumping duty orders. Spain - With respect to whether dumping continued at levels above de minimis after the issuance of the antidumping duty order, the domestic interested parties state that, in the investigation, the Department determined a weighted-average dumping margin of 105.61 percent for Ensidesa, currently Aceralia Corporacion Siderurgica, S.A. ("Aceralia"). Furthermore, the domestic interested parties assert that because the deposit rate with respect to this order has remained unchanged, and producers and exporters continued sales of the subject merchandise into the United States with the order in place (albeit in much smaller quantities), it is likely that revocation would lead to the continuation or recurrence of dumping. With respect to import volumes, the domestic interested parties, utilizing the Department of Commerce's IM 145 and EM 545 trade statistics, assert that imports of CTL plate from Spain declined from 54,055 short tons in 1992, the year prior to the antidumping duty order, to 980 short tons in 1993, to zero short tons in 1994. Thereafter, between 1995 and 1999, shipments of CTL plate to the United States were in small quantities. See the Domestic Interested Parties Substantive Response at 8 and 9. In addition, the domestic interested parties assert that despite deposit rates for producers and exporters of the subject merchandise of 105.61 percent, in 1999, Spanish producers and exporters of CTL plate continued making sales into the United States. The domestic interested parties argue that it is not likely that consumers would purchase the subject merchandise at fair value with added antidumping duties. Therefore, the domestic interested parties assert that Spanish producers and exporters of CTL plate are either selling the subject merchandise at below fair value, or are absorbing dumping duties through their affiliates. See id. at 10. For these reasons, the domestic interested parties conclude that is likely that revocation of the order would lead to the continuation or recurrence of dumping. United Kingdom - In their substantive response, the domestic interested parties argue that, in the antidumping duty order of CTL plate from the United Kingdom, the Department issued a dumping margin of 109.22 percent for British Steel plc and "all others." The domestic interested parties argue that because this rate has remained unchallenged over the history of this order, producers and exporters of CTL plate from the United Kingdom cannot sell the subject merchandise at fair market value. See the domestic interested parties Substantive Response at 7, 8, 9. In addition, the domestic interested parties argue that the fact that British Steel is also subject to the antidumping orders on other steel products demonstrates that British Steel will continue to dump the subject merchandise in the United States if the order is revoked.(2) With respect to import volumes of CTL plate from the United Kingdom, the domesticinterested parties note that, prior to the issuance of the antidumping duty order, import volume increased rapidly. Once the order was imposed, import volumes declined to negligible levels. See the domestic interested parties Substantive Response, Attachment 5. Citing to the Department of Commerce's IM-145 and EM 545 trade statistics, the domestic interested parties argue that shipments of CTL plate from the United Kingdom declined from 43,489 short tons in 1990 to 21,277 short tons in 1992 (the period of the investigation). The domestic interested parties argue that shipments of the subject merchandise continued to decline until 1995 when a slight increase took place. However, the domestic interested parties argue that although import volume increased in 1995, the level of imports after 1995 remain depressed and have not regained pre-order import levels. In further support of continuation of the antidumping duty orders on CTL plate from Spain and the United Kingdom, the domestic interested parties argue that the Department should consider other factors such as the change in exchange rate, the effect of the Asian crisis, Spain's restructuring of its steel industry, Aceralia's production and capacity utilization, Aceralia's rising inventories, Spain's history of attempts to avoid the effect of the antidumping duty order, British Steel's history of dumping, British Steel's plans to increase steel production, and British Steel's need to increase exports to the United States. The domestic interested parties argue that these other factors demonstrate that it is likely that revocation of these orders will lead to continuation or recurrence of dumping.Department's Position: Section II.A.3 of the Sunset Policy Bulletin, the Statement of Administrative Action ("SAA"), H.R. Doc. No. 103-316, Vol. 1, 103d Cong., 2d sess. 890 (1994), and the H.R. Doc. No. 103-826, Part 1, 103d Cong. 208 Sess. 63-64 (1994) House Report, provide that if companies continue dumping with the discipline of an order in place, the Department may reasonably infer that dumping would continue if the discipline were removed. An examination of the history of these antidumping duty orders indicates that following the issuance of these orders, imports of the subject merchandise declined significantly. Furthermore, the margins from the original investigations are still in effect and dumping continued after the issuance of the orders by producers and exporters of CTL plate from Spain and the United Kingdom. On the basis that dumping has continued over the life of these orders, imports have declined, respondent interested parties waived their right to participate in the these reviews, and absent argument and evidence to the contrary, the Department determines that dumping would likely continue or recur if the antidumping duty orders on CTL plate from Spain and the United Kingdom were revoked. Because the Department based these determinations on the fact that dumping continued at levels above de minimis after the issuance of the order, it is not necessary to address the domestic interested parties' other arguments. 2. Magnitude of the margin likely to prevail Interested Party Comments: The domestic interested parties argue that, consistent with the SAA, the Department should report to the Commission the rates from the original investigations as the magnitude of the margin likely to prevail if the antidumping duty orders on CTL plate from Spain and the United Kingdom were revoked. The domestic interested parties argue that these rates are the only calculated rates that reflect the behavior of exporters without the discipline of the orders in place. Further, there have been no administrative reviews of these orders. With respect to companies that did not participate in the investigation, or companies that did not begin shipping until after the order were issued, the domestic interested parties argue that the Department should use the "all others" rate from the investigations. The Department's Position: In the Sunset Policy Bulletin, the Department stated that, consistent with the SAA and House Report, the Department will provide to the Commission the company-specific margins from the investigation because that is the only calculated rate that reflects the behavior of exporters without the discipline of an order. 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. We agree with the domestic interested parties that the margins from the original investigations on CTL plate from Spain and the United Kingdom, which are the only margins ever calculated in these cases, are probative of the behavior of producers and exporters in Spain and the United Kingdom without the discipline of the order. Absent argument or evidence to the contrary, we find no reason to deviate from our stated policy of normally reporting the margins from the original investigation. Therefore, we will report to the Commission the margins contained in the Final Results of Review of this decision memo. Final Results of Review: We determine that revocation of the antidumping duty orders would be likely to lead to continuation or recurrence of dumping at the following percentage weighted-average margins: __________________________________________________________________ Manufacturers/Producers Margin (percent) __________________________________________________________________ SPAIN Empresa Nacional Siderurgica, S.A. ("Ensidesa") 105.61 All Others 105.61 UNITED KINGDOM British Steel plc 109.22 All Others 109.22 __________________________________________________________________ Recommendations 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. In their substantive response the domestic interested parties assert that Spain has restructured its steel industry and consolidated the major Spanish producers under a single company, Aceralia Corporation Siderurgica, S.A. ("Aceralia"). The domestic interested parties therefore note that, currently Aceralia is the sole producer of CTL plate from Spain. 2. The domestic interested parties cite to the Department's final results of administrative reviews on other steel products, e.g. Certain Hot-rolled Lead and bismuth Carbon Steel Products from the United Kingdom, 58 FR 6207 (Jan 27, 1993), and Stainless Steel Sheet and Strip in Coils from the United Kingdom, 64 FR 60688 (June 8, 1999). See the Domestic Interested Parties Substantive Response at 7 & 8.