(65 FR 18052, April 6, 2000) A-351-817 A-201-809 Sunset Reviews Public Document MEMORANDUM TO: Robert S. LaRussa Assistant Secretary for Import Administration FROM: Jeffery 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 Brazil and Mexico; Final Results 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 ("cut-to-length plate") from Brazil and Mexico. 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 cut- to-length plate from Brazil on July 9, 1993 (58 FR 37091). In this determination, the Department found a weighted-average dumping margin of 42.08 percent for Usinas Siderurgicas de Minas Gerais S.A. ("USIMINAS"), 109.00 percent for Companhia Siderurgica Paulista ("COSIPA"), and 75.54 percent for all other producers and manufacturers of cut-to-length plate. On August 19, 1993, the Department published its antidumping duty order on cut-to-length plate from Brazil (58 FR 44164). Since the issuance of the order, the Department has completed two administrative reviews. In the final results of the first administrative review, Companhia Siderurgica de Tubarao ("CST"), the only company reviewed, received a zero dumping margin.(1) For the purpose of the second administrative review, USIMINAS and COSIPA were collapsed ("USMINAS/COSIPA") and treated as one entity.(2) In the amended final results of the second administrative review, the Department found an antidumping duty margin of 11.70 percent for USMINAS/COSIPA.(3) 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. Mexico The Department published its final affirmative determination of sales at LTFV with respect to imports of cut-to-length plate from Mexico on July 9, 1993 (58 FR 37192). In this determination, the Department found a weighted-average dumping margin of 49.25 percent for Altos Hornos de Mexico, S.A. de C.V. ("AHMSA") and all other producers and manufacturers of cut-to-length plate from Mexico. On August 19, 1993, the Department published its antidumping duty order on cut-to-length plate from Mexico (58 FR 44165). The Department determined that the dumping margin for AHMSA in the first administrative review was 49.25 percent.(4) In the second administrative review we determined that the dumping margin for AHMSA was 1.77.(5) 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 Mexico. Background On September 1, 1999, the Department published the notice of initiation of sunset reviews of the antidumping duty orders on cut-to- length plate from Brazil and Mexico (63 FR 47767). The Department received Notices of Intent to Participate on behalf of Bethlehem Steel Corporation and U.S. Steel Group, a unit of USX Corporation ("the domestic producers"), within the deadline specified in section 351.218(d)(1)(i) of the Department's Regulations as codified at 19 CFR Part 351 (1999) ("Sunset Regulations"). The domestic producers claimed interested party status under section 771(9)(C) of the Tariff Act of 1930, as amended ("the Act"), as U.S. manufacturers of cut-to- length plate. We received a complete substantive response, in both the Brazilian and Mexican reviews, from the domestic producers on October 1, 1999, within the 30-day deadline specified in the Sunset Regulations under section 351.218(d)(3)(i). In their substantive responses, the domestic producers stated that they were the petitioners in the original investigations of cut-to-length plate from Brazil and Mexico. Furthermore, the domestic producers stated that they had participated in each subsequent segment of the case. We did not receive a substantive response from any respondent interested party to these proceedings. As a result, pursuant to 19 CFR 351.218(e)(1)(ii)(C)(2), the Department determined to conduct expedited, 120-day, reviews of these orders. 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). The reviews at issue concern transition orders within the meaning of section 751(c)(6)(C)(ii) of the Act. Therefore, the Department determined that the sunset reviews of the antidumping duty orders on cut-to-length plate from Brazil and Mexico 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.(6) 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 producers argue that revocation of the antidumping duty orders would likely lead to continuation or recurrence of dumping by Brazilian and Mexican manufacturers and exporters of the subject merchandise. The domestic producers assert that dumping has continued throughout the life of the orders at above de minimis levels. Moreover, the domestic producers note that, with respect to Brazil, the annual shipments of cut-to-length plate have declined significantly since the order was issued. Using statistical data from the U.S. Census Bureau, the domestic producers argued that the annual volume of Brazilian cut-to-length plate imports during the six years subsequent to the order represented a 95 percent decline from pre-order levels. Similarly, they add, the import penetration rate ("IPR") for cut-to-length plate from Brazil dramatically decreased following the issuance of the order as well. With respect to the Mexican order, the domestic producers argue that imports of cut-to-length plate from Mexico were approximately 59,993 tons before the issuance of the order. They note that, with the discipline of the antidumping duty order in place, the imports of the subject merchandise nearly ceased, and Mexican producers and exporters' share of total U.S. imports of cut-to-length plate fell, from 7.62 percent in 1992 to a range of 0.01 to 0.03 percent from 1993 through 1997. In summary, the domestic producers 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 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). 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 noted above, the Department has conducted administrative reviews of the Brazilian and Mexican orders finding dumping margins above de minimis for most producers/exporters reviewed in each of the reviews.(7) As outlined in each respective section above, the domestic producers argue that a significant decline in the volume of imports of the subject merchandise from Brazil and Mexico, 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 cut-to-length plate from Brazil and Mexico. The Department agrees with the domestic producers' argument that Brazilian and Mexican imports of the subject merchandise fell sharply after the order was imposed and never regained pre-order volumes. 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 producers recommend that, consistent with theSunset Policy Bulletin, the Department provide to the Commission the company-specific margins from the original investigations for each of the companies investigated. Moreover, regarding companies not reviewed in the original investigations, the domestic producers suggests that the Department report the "all others" rates included in 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 producers, in part. We determine that the margins from the Department's original investigations, as amended, are probative of the behavior of Brazilian and Mexican manufacturers and exporters of cut-to-length plate 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. However, as indicated in the final results of the second administrative review of the Brazilian order, the Department determined to collapse USIMINAS and COSIPA and treat them as a single entity for the purposes of that review.(8) Since it is the Department's practice to collapse affiliated producers for purposes of calculating a margin in an administrative review, we determine it is appropriate to treat USMINAS and COSIPA as a single entity for the purpose of this sunset review. Therefore, because USIMINAS is the dominant firm in USIMINAS/COSIPA entity, we determine that USIMINAS', margin found in the original investigation is the dumping margin likely to prevail for USIMINAS/COSIPA. 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 Reviewssection of this decision memo. Final Results of Reviews We determine that revocation of the antidumping duty orders on cut- to-length plate from Brazil and Mexico would be likely to lead to continuation or recurrence of dumping at the following percentage weighted-average margins: Brazilian Manufacturers/Exporters Margin (percent) _____________________________________________________________________ Usinas Siderurgicas de Minas Gerais S.A. ("USIMINAS")/ Companhia Siderurgica Paulista ("COSIPA") . . . . . . . 42.08 All Others . . . . . . . . . . . . . . . . . . . . . . 75.54 _____________________________________________________________________ Mexican Manufacturers/Exporters Margin (percent) _____________________________________________________________________ Altos Hornos de Mexico . . . . . . . . . . . . . .. . . 49.25 All Others . . . . . . . . . . . . . . . . . . . . . . .49.25 _____________________________________________________________________ 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____ Joseph A. Spetrini Acting Assistant Secretary for Import Administration (Date) ___________________________________________________________________ Footnotes: 1. See Certain Cut-to-Length Carbon Steel Plate from Brazil; Final Results of Antidumping Duty Administrative Review, 62 FR 18486 (April 15, 1997); 63 FR 20570 (April 27, 1998) (as amended). 2. See Certain Cut-to-Length Carbon Steel Plate from Brazil; Final Results of Antidumping Duty Administrative Review, 63 FR 12744 (March 16, 1998). 3. See Certain Cut-to-Length Carbon Steel Plate from Brazil; Amendment of Final Results of Antidumping Duty Administrative Review, 63 FR 20570 (April 27, 1998). 4. See Cut-to-Length Carbon Steel Plate from Mexico; Final Results of Antidumping Duty Administrative Review, 64 FR 76 (January 4, 1999). 5. See Cut-to-Length Carbon Steel Plate from Mexico; Final Results of Antidumping Duty Administrative Review, 65 FR 8338 (February 18, 2000). 6. See Extension of Time Limit for Final Results of Five-Year Reviews, 64 FR 71726 (December 22,1999). 7. CST received a zero dumping margin in the first administrative review of the Brazilian order, supra at footnote 1. 8. See Certain Cut-to-Length Carbon Steel Plate from Brazil; Final Results of Antidumping Duty Administrative Review, 63 FR 12744 (March 16, 1998), where the Department found that USIMINAS owned 49.79 percent of COSIPA. Given this level of ownership, the companies are affiliated within the meaning of section 771(33)(E) of the Act. It is the Department's practice to collapse affiliated producers for purposes of calculating a margin when the affiliated producers have production facilities for similar or identical products that would not require substantial retooling in order to restructure manufacturing priorities and when the facts demonstrate that there is significant potential for manipulation of pricing or production. See also Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil; Preliminary Determination of Sales at Less Than Fair Value, 64 FR 61249 (November 10, 1999).