Steel Concrete Reinforcing Bar From The Republic of Korea: Notice of Preliminary Results and Preliminary Rescission, in Part, of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results and preliminary rescission, in part, of antidumping duty administrative review.

DATES:

Effective Date: June 8, 2004.

SUMMARY:

In response to a request from the petitioner, the Department of Commerce (“the Department”) is conducting an administrative review of the antidumping duty order on steel concrete reinforcing bar (“rebar”) from the Republic of Korea (“Korea”). The period of review (“POR”) is September 1, 2002, through August 31, 2003. This review covers six manufacturers/exporters of subject merchandise.

As a result of our review, we preliminarily determine that four respondents had no sales or shipments of subject merchandise to the United States during the POR. Therefore, we are preliminarily rescinding the review with respect to these respondents. The remaining two respondents, Dongil Industries Co. Ltd. (“Dongil”) and Hanbo Iron & Steel Co., Ltd. (“Hanbo”), failed to respond to our questionnaire. As a result, we are basing our preliminary results for Dongil and Hanbo on total adverse facts available (“AFA”). If these preliminary results are adopted in our final results of review, we will instruct U.S. Customs and Border Protection (“CBP”) to assess antidumping duties on all appropriate entries. We invite parties to comment on these preliminary results.

FOR FURTHER INFORMATION CONTACT:

Richard Johns or Mark Manning, Antidumping and Countervailing Duty Enforcement Group II, Office 4, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-2305 and (202) 482-5253, respectively.

SUPPLEMENTARY INFORMATION:

Background

On September 7, 2001, the Department published an antidumping duty order on rebar from Korea. See Antidumping Duty Orders: Steel Concrete Reinforcing Bars From Belarus, Indonesia, Latvia, Moldova, People's Republic of China, Poland, Republic of Korea and Ukraine, 66 FR 46777 (September 7, 2001). On September 2, 2003, the Department published a notice of opportunity to request the second administrative review of this order. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 68 FR 52181 (September 2, 2003). On September 30, 2003, in accordance with 19 CFR 351.213(b), the petitioner requested an administrative review of six manufacturers/exporters of rebar from Korea: Dongil, Dongkuk Steel Mill Co. Ltd. (“DSM”), Hanbo, INI Steel, Korea Iron and Steel Co., Ltd. (“KISCO”), and Kosteel Co., Ltd. (“Kosteel”). On October 24, 2003, the Department published the notice of initiation of this administrative review, covering the period September 1, 2002, through August 31, 2003. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 68 FR 60910 (October 24, 2003).

On October 22, 2003, the Department issued the antidumping questionnaire to each of the six manufacturers/exporters listed above. On November 12, 2003, DSM and KISCO notified the Department that they had no sales or shipments of subject merchandise to the United States during the POR. On December 3, 2003, Kosteel also notified the Department that it had no sales or shipments of subject merchandise to the United States during the POR. Dongil, Hanbo, and INI Steel failed to respond to the Department's November 12, 2003, questionnaire.

On May 6, 2004, the Department notified interested parties that we intend to rescind this administrative review with respect to those manufacturers/exporters that had no sales or shipments during the POR. See Memorandum to the File from Richard Johns, International Trade Compliance Analyst, “Rescission of Antidumping Duty Administrative Review of Steel Concrete Reinforcing Bars from Korea for the Period of Review September 1, 2002 through August 31, 2003,” dated May 6, 2004. We invited interested parties to comment on our intention to rescind the review with respect to companies for which there is no evidence of sales or shipments of subject merchandise to the United States during the POR.

On May 11, 2004, the Department sent a letter to Dongil, Hanbo, and INI Steel informing these companies that we did not receive a response from them to the antidumping questionnaire. In the letter, the Department stated that, if the reason as to why they did not respond to the antidumping questionnaire is that they had no shipments of subject merchandise to the United States during the POR, they should inform the Department of this fact; otherwise, the Department may conclude that these companies decided not to cooperate with the Department's review. In response, on May 13, 2004, INI Steel reported that it had no sales or shipments of subject merchandise to the United States during the POR. Dongil and Hanbo did not respond to the Department's May 11, 2004, letter.

On May 12, 2004, the Department released to interested parties the results of a U.S. Customs and Border Protection (“CBP”) data query for shipments of subject merchandise to the United States during the POR. See Memorandum to the File from Richard Johns, International Trade Compliance Analyst, “U.S. Customs and Border Protection Data Query Results,” dated May 12, 2004. We invited interested parties to comment on the results of this data query. We received the petitioner's comments regarding the Department's May 6, 2004, and May 12, 2004, memoranda on May 20, 2004. In its comments, the petitioner did not provide any evidence of sales or shipments from DSM, INI Steel, KISCO, or Kosteel. The petitioner recommends that the Department apply total AFA against Dongil and Hanbo because these companies failed to provide the information requested by the Department's October 22, 2003, antidumping questionnaire and May 11, 2004, letter. The petitioner also recommends that the Department not rescind the review with respect to DSM, INI Steel, KISCO, and Kosteel because the Department's query of CBP data covered only the months of the POR. According to the petitioner, limiting the data query to only the months of the POR fails to capture sales made during the POR which were based upon entries made prior to the POR, in addition to sales made during the POR which were based upon entries made after the POR. To account for these potential problems, the petitioner urges the Department to request further information from DSM, INI Steel, KISCO, and Kosteel regarding the date of sale used by these companies when they informed the Department that they had no sales during the POR.

Due to the unexpected emergency closure of the main Commerce building on Tuesday, June, 1, 2004, the Department has tolled the deadline for these preliminary/final results by one day to June 2, 2004.

As noted above, DSM, INI Steel, KISCO, and Kosteel notified the Department that they had no sales or shipments of subject merchandise in the United States during the POR. The Department obtained data from CBP that supported their claims of no entries during the POR. In addition, no interested party provided evidence of sales or shipments of subject merchandise from DSM, INI Steel, KISCO, or Kosteel during the POR. Furthermore, with respect to the arguments raised by the petitioner in its comments on our intent to rescind this review in part, we note that the antidumping questionnaire issued to the six respondents contains clear instructions on how to identify the universe of sales that should be reported in this POR. Accordingly, we are preliminarily rescinding the review with respect to DSM, INI Steel, KISCO, and Kosteel. Because Dongil and Hanbo failed to respond to the Department's October 22, 2003, questionnaire and May 11, 2004, letter, we preliminarily find that the application of total AFA is warranted in this case.

Scope of the Review

The product covered by this administrative review is all rebar 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. The HTSUS subheadings are provided for convenience and customs purposes. The written description of the scope of this proceeding is dispositive.

Facts Available

Section 776(a)(2) of the Tariff Act of 1930, as amended (“the Act”), provides that if any interested party: (A) Withholds information that has been requested by the Department; (B) fails to provide such information by the deadlines for submission of the information or in the form or manner requested; (C) significantly impedes an antidumping investigation; or (D) provides such information but the information cannot be verified, the Department shall, subject to section 782(d) of the Act, use facts otherwise available in making its determination.

Section 782(d) of the Act provides that, if the Department determines that a response to a request for information does not comply with the request, the Department will inform the person submitting the response of the nature of the deficiency and shall, to the extent practicable, provide that person the opportunity to remedy or explain the deficiency. If that person submits further information that continues to be unsatisfactory, or this information is not submitted within the applicable time limits, the Department may, subject to section 782(e), disregard all or part of the original and subsequent responses, as appropriate.

Section 782(e) of the Act states that the Department shall not decline to consider information deemed “deficient” under section 782(d) if: (1) The information is submitted by the established deadline; (2) the information can be verified; (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination; (4) the interested party has demonstrated that it acted to the best of its ability; and (5) the information can be used without undue difficulties.

Furthermore, section 776(b) of the Act states that if the Department “finds that an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information from the administering authority or the Commission, the administering authority or the Commission * * *, in reaching the applicable determination under this title, may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available.” See also Statement of Administrative Action (“SAA”) accompanying the URAA, H.R. Rep. No. 103-316 at 870 (1994).

Application of Facts Available

The evidence on the record of this review establishes that, pursuant to section 776(a)(2)(A) of the Act, the use of total facts available (“FA”) is warranted in determining the dumping margin for U.S. sales of rebar made by Dongil and Hanbo because these two companies failed to provide requested information. As stated above, on October 22, 2003, the Department issued the antidumping questionnaire to six manufacturers/exporters of the subject merchandise. Four companies ultimately advised the Department that they did not have shipments or sales of subject merchandise to the United States during the POR. Dongil and Hanbo failed to respond to the Department's antidumping questionnaire. On May 11, 2004, we informed Dongil and Hanbo that, because they failed to respond to the Department's antidumping questionnaire, and had not informed the Department as to whether they had sales or shipments of subject merchandise to the United States during the POR, we may use AFA to determine their dumping margins. Dongil and Hanbo did not respond to the Department's May 11, 2004, letter. Based on the data obtained from CBP, the Department cannot conclude that these companies had no sales to the United States during the POR. See Memorandum to the File from Richard Johns, International Trade Compliance Analyst, “Entry Data With Respect to Dongil and Hanbo,” dated June 1, 2004.

Because Dongil and Hanbo failed to provide the necessary information requested by the Department, pursuant to section 776(a)(2)(A) of the Act, we must establish the margins for these companies based on the facts otherwise available.

Use of Adverse Inferences

In selecting from among the facts otherwise available, pursuant to section 776(b) of the Act, an adverse inference is warranted when the Department has determined that a respondent has “failed to cooperate by not acting to the best of its ability to comply with a request for information.” Section 776(b) of the Act goes on to note that an adverse inference may include reliance on information derived from (1) the petition; (2) a final determination in the investigation under this title; (3) any previous review under section 751 or determination under section 753, or (4) any other information on the record.

Adverse inferences are appropriate “to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.” See SAA at 870; Borden, Inc. v. United States, 4 F. Supp. 2d 1221 (CIT 1998); Mannesmannrohren-Werke AG v. United States, 77 F. Supp. 2d 1302 (CIT 1999). The Court of Appeals for the Federal Circuit (CAFC), in Nippon Steel Corporation v. United States, 337 F. 3d 1373, 1380 (Fed. Cir. 2003), provided an explanation of the “failure to act to the best of its ability” standard, holding that the Department need not show intentional conduct existed on the part of the respondent, but merely that a “failure to cooperate to the best of a respondent's ability” existed, i.e., information was not provided “under circumstances in which it is reasonable to conclude that less than full cooperation has been shown.” Id. The CAFC did acknowledge, however, that “deliberate concealment or inaccurate reporting” would certainly be a reason to apply AFA, although it indicated that inadequate responses to agency inquiries “would suffice” as well. Id.

To examine whether the respondent “cooperated” by “acting to the best of its ability” under section 776(b) of the Act, the Department considers, inter alia, the accuracy and completeness of submitted information and whether the respondent has hindered the calculation of accurate dumping margins. See Certain Welded Carbon Steel Pipes and Tubes From Thailand: Final Results of Antidumping Duty Administrative Review, 62 FR 53808, 53819-53820 (October 16, 1997).

The record shows that Dongil and Hanbo failed to cooperate to the best of their ability, within the meaning of section 776(b) of the Act. In reviewing the evidence on the record, the Department finds that Dongil and Hanbo failed to provide requested information. Moreover, these companies failed to offer any explanation for their failure to respond to our antidumping questionnaire or May 11, 2004, letter. As a general matter, it is reasonable for the Department to assume that these companies possessed the records necessary to participate in this review; however, by not supplying the information the Department requested, these companies failed to cooperate to the best of their ability. As these companies have failed to cooperate to the best of their ability, we are applying an adverse inference pursuant to section 776(b) of the Act. As AFA for Dongil and Hanbo, we have used a rate of 102.28 percent, which is the highest margin from any segment of the proceeding. Specifically, this rate was the highest margin alleged for any Korean company in the petition and is the rate used as AFA for Hanbo in the final determination of the less-than-fair-value (“LTFV”) investigation. See Notice of Final Determination of Sales at Less Than Fair Value: Steel Concrete Reinforcing Bars From the Republic of Korea, 66 FR 33526 (June 22, 2001).

Corroboration of Information

Section 776(c) of the Act requires the Department to corroborate, to the extent practicable, secondary information used as FA. Secondary information is defined as “{i}nformation derived from the petition that gave rise to the investigation or review, the final determination concerning the subject merchandise, or any previous review under section 751 concerning the subject merchandise.” See SAA accompanying the URAA, H.R. Doc. No. 103-316 at 870 (1994) and 19 CFR 351.308(d).

The SAA further provides that the term “corroborate” means that the Department will satisfy itself that the secondary information to be used has probative value. See SAA at 870. Thus, to corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used. During the LTFV investigation, we examined the reliability of the 102.28 percent rate selected as AFA for Hanbo and found it to be reliable. See Memorandum to Troy H. Cribb, Assistant Secretary for Import Administration, from Holly A. Kuga, Acting Deputy Assistant Secretary for AD/CVD Enforcement, Group II, “The Use of Facts Available for Hanbo Iron & Steel Co. Ltd., and Corroboration of Secondary Information,” dated January 16, 2001, and placed on the record of this review concurrently with these preliminary results. We have re-examined the information used as FA in the LTFV investigation and we consider it reliable, for purposes of this second administrative review.

As to the relevance of the AFA rate, the CIT has stated that Congress “intended for an adverse facts available rate to be a reasonably accurate estimate of the respondent's actual rate, albeit with some built-in increase intended as a deterrent to non-compliance.” F.Lli De Cecco Di Filippo Fara S. Martino S.p.A., v. U.S., 216 F.3d 1027, 1032 (Fed. Cir. 2000). The Department considers information reasonably at its disposal to determine whether a margin continues to have relevance. Where circumstances indicate that the selected margin is not appropriate as AFA, the Department will disregard the selected margin and determine an appropriate margin. See e.g., Fresh Cut Flowers from Mexico: Final Results of Antidumping Administrative Review, 61 FR 6812 (February 22, 1996).

With respect to the rate selected for Dongil and Hanbo, we note that in determining the relevant AFA rate, the Department assumes that if an uncooperative respondent could have demonstrated that its dumping margin is lower than the highest prior margin, it would have provided information showing the margin to be less. See Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190-91 (Fed. Cir. 1990) (“Rhone Poulenc”). Given Dongil and Hanbo's failure to cooperate to the best of their respective abilities in the instant administrative review, we have no reason to believe that the dumping margins for their sales of subject merchandise would be any less than the current “all others” rate of 22.89 percent for Dongil, which does not have its own individual rate, or Hanbo's current cash deposit rate of 102.28 percent. In Rhone Poulenc, the CAFC found that the presumption that, “the highest prior margin was the best information of current margins” was a permissible interpretation of 19 U.S.C. 1677e(c). See Rhone Poulenc, 899 F.2d at 1190. In upholding this presumption, the CAFC cited the rationale underlying the adverse inference rule, that the presumption “reflects a common sense inference that the highest prior margin is the most probative evidence of current margins because, if it were not so, the importer, knowing of the rule, would have produced current information showing the margin to be less.” Id. In other proceedings, the Department has used the highest margin as AFA. See, e.g., Freshwater Crawfish Tail Meat from the People's Republic of China; Notice of Final Results of Antidumping Duty Administrative Review, 68 FR 19504 (April 21, 2003). In fact, the Department used the 102.28 percent rate as AFA in the final determination of the LTFV investigation with respect to Hanbo. Therefore, Dongil and Hanbo had notice that the 102.28 percent rate may be used as the AFA rate that would be applied for their failure to cooperate. Consequently, in keeping with Rhone Poulenc, we consider the 102.28 percent rate to be the most probative evidence of current margins for Dongil and Hanbo because, if it were not so, these two manufacturers/exporters, knowing of the rule, would have produced current information showing the margin to be less. Therefore, we consider the 102.28 percent rate to be relevant.

Accordingly, we have determined that the rates selected as AFA are both reliable and relevant. Therefore, we have corroborated these rates in accordance with section 776(c) of the Act.

Preliminary Results of Review

As a result of our review, we preliminarily determine the following weighted-average dumping margin exists for the period September 1, 2002, through August 31, 2003:

Public Comment

According to 19 CFR 351.224(b), the Department will disclose any calculations performed in connection with the preliminary results of review within five days of the date of publication of the preliminary notice. However, in the instant review, the Department did not perform any calculations because all margins result from the application of total AFA. Therefore, no calculations will be disclosed in this case.

An interested party may request a hearing within 30 days of publication of the preliminary results. See 19 CFR 351.310(c). We will issue a memorandum identifying the date of a hearing, if one is requested. Pursuant to 19 CFR 351.309, interested parties may submit written comments in response to these preliminary results. Case briefs are to be submitted within 30 days after the date of publication of this notice, and rebuttal briefs, limited to arguments raised in case briefs, are to be submitted no later than five days after the time limit for filing case briefs. Parties who submit arguments are requested to submit with the argument (1) a statement of the issue, (2) a brief summary of the argument, and (3) a table of authorities. Further, the Department requests that parties submitting written comments provide the Department with a diskette containing the public version of those comments. Unless the deadline is extended pursuant to section 751(a)(3)(A) of the Act, the Department will issue the final results of this administrative review, including the results of our analysis of the issues raised by the parties in their comments, within 120 days of publication of the preliminary results. The assessment of antidumping duties on entries of merchandise covered by this review and future deposits of estimated duties shall be based on the final results of this review.

Duty Assessments

The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. According to 19 CFR 351.212(b)(1), the Department normally will calculate an assessment rate for each importer of subject merchandise covered by the review by dividing the dumping margin found on the subject merchandise examined by the entered value of such merchandise for normal customs duty purposes. In the instant review, for the respondents receiving dumping rates based upon AFA, the Department will instruct CBP to liquidate entries according to the AFA ad valorem rate. For the respondents being rescinded from this review, the Department will instruct CBP to assess antidumping duties at the cash deposit rate in effect at the time of entry. The Department will issue appropriate appraisement instructions directly to CBP within fifteen days of publication of the final results of review.

Cash Deposit Rates

The following cash deposit requirements will be effective upon completion of the final results of this administrative review for all shipments of rebar from Korea entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(1) of the Act: (1) The cash deposit rate for Dongil and Hanbo will be the rate established in the final results of this review; (2) for previously reviewed or investigated companies not listed above, the cash deposit rate will continue to be the company-specific rate published for the most recent review period; (3) if the exporter is not a firm covered in this review, a prior review, or the LTFV investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the subject merchandise; and (4) the cash deposit rate for all other manufacturers or exporters will continue to be 22.89 percent, the “all others” rate made effective by the LTFV investigation. See Notice of Final Determination of Sales at Less Than Fair Value: Steel Concrete Reinforcing Bars From the Republic of Korea, 66 FR 33526 (June 22, 2001). These required cash deposit rates shall remain in effect until publication of the final results of the next administrative review.

Notification to Importers

This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act.