Stainless Steel Wire Rod from Italy; Preliminary Results of Full Sunset Review of Countervailing Duty Order

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Preliminary Results of Full Sunset Review: Stainless Steel Wire Rod from Italy.

SUMMARY:

On August 1, 2003, the Department of Commerce (“the Department”) initiated a sunset review of the countervailing duty order on stainless steel wire rod (“SSWR”) from Italy pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). See Initiation of Five-Year (Sunset) Reviews, 68 FR 45219, (August 1, 2003). On the basis of substantive responses filed by domestic and respondent interested parties, the Department is conducting a full sunset review. As a result of this review, the Department preliminarily finds that revocation of the countervailing duty order would likely lead to continuation or recurrence of subsidies at the levels indicated in the Preliminary Results of Review section of this notice.

EFFECTIVE DATE:

March 4, 2004.

FOR FURTHER INFORMATION CONTACT:

Hilary Sadler, Esq. or Martha Douthit, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, D.C. 20230; telephone: (202) 482-4340 or (202) 482-5050.

SUPPLEMENTARY INFORMATION:

Department's Regulations:

The Department's procedures for the conduct of sunset reviews are set forth in 19 CFR 351.218. Guidance on methodological or analytical issues relevant to the Department's conduct of sunset reviews is set forth in the Department's Policy Bulletin 98.3 - Policies Regarding the Conduct of Five-year (“Sunset”) Reviews of Antidumping and Countervailing Duty Orders; Policy Bulletin, 63 FR 18871 (April 16, 1998) (“Sunset Policy Bulletin”).

Background:

On August 1, 2003, the Department initiated a sunset review of the countervailing duty order on SSWR from Italy, pursuant to section 751(c) of the Tariff Act of 1930, as amended, (“the Act”). See Initiation of Five-Year (Sunset) Reviews, 68 FR 45219, (August 1, 2003). The Department received a notice of intent to participate on behalf of Carpenter Technology Corporation (“Carpenter Technology”), a domestic interested party, within the applicable deadline specified in section 351.218(d)(1)(I) of the Sunset Regulations. Carpenter Technology claimed interested-party status under section 771(9)(C) of the Act, as a U.S. producer of the subject merchandise. Carpenter Technology participated in the original investigation and has been involved in this proceeding since its inception.¹

On September 2, 2003, we received a response from Cogne Acciai Speciali S.r.l. (“CAS”), at that time, a respondent interested party². See Response of CAS, September 2, 2003. CAS qualified as an interested party under section 771(9)(A) of the Act, as a foreign producer and exporter of the subject merchandise. On August 29, 2003, we received a response from the Government of Italy (“GOI”) expressing its willingness to participate in this review as the authority responsible for defending the interests of Italian companies involved in this review. See Response of the GOI, August 29, 2003. On August 28, 2003, the Delegation of the European Commission (“EC”) expressed its willingness to participate in this review as the authority responsible for defending the interest of the Member States of the European Union (“EU”). See Response of the EC, August 28, 2003. The GOI and EC note that they have in the past participated in this proceeding.

On September 2, 2003, the Department received a complete substantive response from domestic interested parties within the 30-day deadline specified in the Sunset Regulations under section 351.218(d)(3)(I). See Response of Carpenter Technology, September 2, 2003. On September 8, 2003, Carpenter Technology filed a rebuttal response to respondent interested parties' substantive response. No rebuttal response was filed by respondents.

In a sunset review, the Department normally will conclude that there is adequate response to conduct a full sunset review where respondent interested parties account for more than 50 percent, by volume, of total exports of subject merchandise to the United States. See 19 CFR 351.218(e)(1)(ii)(A) (63 FR 13516 (March 20, 1998)). Although CAS, accounted for less than the 50 percent threshold that the Department normally considers to be an adequate response under 19 CFR section 351.218(e)(I)(ii)(A), on September 24, 2003, the Department determined that the responses by CAS, the only respondent company in this review, the GOI, and the EC provided an adequate basis for a full review. See Memorandum for Ronald K. Lorentzen, Acting Director, Office of Policy, Import Administration, from Hilary E. Sadler, Esq., Office of Policy, Re: Sunset Review of Stainless Steel Wire Rod from Italy; Adequacy of Respondent Interested Party Response to the Notice of Initiation, September 24, 2003. Therefore, the Department is conducting a full (240 day) sunset review in accordance with 19 CFR 351.218(e)(2)(I).

Originally, the Department's preliminary results of this review were scheduled for November 19, 2003. However, several issues have arisen regarding the recent revocation of the order with respect to CAS and its effect on this sunset review. See Notice of Implementation Under Section 129 of the Uruguay Round Agreements Act: Countervailing Measures Concerning Certain Steel Products From the European Communities, 68 FR 64858 (November 17, 2003).

Because of the numerous, complex issues in this proceeding, the Department extended the deadlines for the preliminary and final determinations. See Section 751(c)(5)(B) of the Act. On February 19, 2004, the Department extended the issuance date of the preliminary determination to February 27, 2004 as well as the issuance date of the final determination on or before June 28, 2004. See Notice of extension of time limit for preliminary and final results of full sunset review: Stainless Steel Wire Rod from Italy, 69 FR 8627 (February 25, 2004).

Scope of Review:

For purposes of this review, certain stainless steel wire rod (SSWR or subject merchandise) comprises products that are hot-rolled or hot- rolled annealed and/or pickled and/or descaled rounds, squares, octagons, hexagons or other shapes, in coils, that may also be coated with a lubricant containing copper, lime or oxalate. SSWR is made of alloy steels containing, by weight, 1.2 percent or less of carbon and 10.5 percent or more of chromium, with or without other elements. These products are manufactured only by hot- rolling or hot-rolling, annealing, and/or pickling and/or descaling, and are normally sold in coiled form, and are of solid cross-section. The majority of SSWR sold in the United States is round in cross-sectional shape, annealed and pickled, and later cold-finished into stainless steel wire or small-diameter bar. The most common size for such products is 5.5 millimeters or 0.217 inches in diameter, which represents the smallest size that normally is produced on a rolling mill and is the size that most wire drawing machines are set up to draw. The range of SSWR sizes normally sold in the United States is between 0.20 inches and 1.312 inches in diameter. Two stainless steel grades SF20T and K-M35FL are excluded from the scope of the order. The percentages of chemical makeup for the excluded grades are as follows:

SF20T:

Carbon ....... 0.05 max

Manganese .... 2.00 max

Phosphorous .. 0.05 max

Sulfur ....... 0.15 max

Silicon ...... 1.00 max

Chromium ..... 19.00/21.00

Molybdenum ... 1.50/2.50

Lead ......... added (0.10/0.30)

Tellurium .... added (0.03 min)

K-M35FL:

Carbon ....... 0.015 max

Manganese .... 0.40 max

Phosphorous .. 0.04 max

Sulfur ....... 0.03 max

Silicon ...... 0.70/1.00

Chromium ..... 12.50/14.00

Nickel ....... 0.30 max

Lead ......... added (0.10/0.30)

Aluminum ..... 0.20/0.35

The products covered by this review are currently classifiable under subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 7221.00.0045, and 7221.00.0075 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheadings are provided for convenience and Customs purposes, the written description of the scope of this review is dispositive.

Analysis of Comments Received:

All issues raised in the substantive responses and rebuttals by parties to this sunset review are addressed in the “Issues and Decision Memorandum” (“Decision Memo”) from Ronald K. Lorentzen, Acting Director, Office of Policy, Import Administration, to James J. Jochum, Assistant Secretary for Import Administration, dated February 27, 2004, which is hereby adopted by this notice. The issues discussed in the accompanying Decision Memo include the likelihood of continuation or recurrence of countervailable subsidies and the net subsidy likely to prevail were the order revoked. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, room B-099, of the main Commerce building.

In addition, a complete version of the Decision Memo can be accessed directly on the Web at www.ia.ita.doc.gov/frn,, under the heading “Italy.” The paper copy and electronic version of the Decision Memo are identical in content.

Preliminary Results of Review:

We preliminarily determine that revocation of the countervailing duty order on SSWR from Italy would be likely to lead to continuation or recurrence of countervailable subsidies at the rate listed below:

Any interested party may request a hearing within 30 days of publication of this notice in accordance with 19 CFR 351.310(d)(i). Any hearing, if requested, will be held on April 28, 2004. Interested parties may submit case briefs no later than April 19, 2004, in accordance with 19 CFR 351.309(c)(1)(i). Rebuttal briefs, which must be limited to issues raised in the case briefs, may be filed not later than April 26, 2004, in accordance with 19 CFR 351.309(d)(I). The Department will issue a notice of final results of this sunset review, which will include the results of its analysis of issues raised in any such briefs, not later than June 28, 2004.³

This five-year (“sunset”) review and notice are in accordance with sections 751(c), 752, and 777(I)(1) of the Act.