83 FR 5405 - Carbon and Certain Alloy Steel Wire Rod From Mexico: Initiation of Anti-Circumvention Inquiry of Antidumping Duty Order

DEPARTMENT OF COMMERCE
International Trade Administration

Federal Register Volume 83, Issue 26 (February 7, 2018)

In response to a request from Nucor Corporation (Nucor), the Department of Commerce (Commerce) is initiating an anti-circumvention inquiry to determine whether certain imports of carbon and certain alloy steel wire rod from Mexico with actual diameters that are less than 4.75 millimeters (mm) produced and/or exported to the United States by Deacero S.A.P.I. de C.V. (Deacero) is circumventing the antidumping duty (AD) order on carbon and certain alloy steel wire rod from Mexico.

[Federal Register Volume 83, Number 26 (Wednesday, February 7, 2018)]
[Notices]
[Pages 5405-5407]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-02445]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-830]


Carbon and Certain Alloy Steel Wire Rod From Mexico: Initiation 
of Anti-Circumvention Inquiry of Antidumping Duty Order

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

SUMMARY: In response to a request from Nucor Corporation (Nucor), the 
Department of Commerce (Commerce) is initiating an anti-circumvention 
inquiry to determine whether certain imports of carbon and certain 
alloy steel wire rod from Mexico with actual diameters that are less 
than 4.75 millimeters (mm) produced and/or exported to the United 
States by Deacero S.A.P.I. de C.V. (Deacero) is circumventing the 
antidumping duty (AD) order on carbon and certain alloy steel wire rod 
from Mexico.

DATES: Applicable February 7, 2018.

FOR FURTHER INFORMATION CONTACT: Jolanta Lawska or Eric B. Greynolds, 
AD/CVD Operations, Office III, Enforcement and Compliance, 
International Trade Administration, U.S. Department of Commerce, 1401 
Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-8362 
and (202) 482-6071, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On October 27, 2017, Nucor, a domestic interested party, requested 
that Commerce initiate an anti-circumvention inquiry with regard to 
carbon and certain alloy steel wire rod from Mexico with actual 
diameters that are less than 4.75 mm (hereinafter referred to as 
narrow-gauge wire rod) that are produced and/or exported to the United 
States by Deacero.\1\ Nucor alleges that such narrow-gauge wire rod 
constitutes merchandise altered in form or appearance in such minor 
respects that it should be included within the scope of the order on 
wire rod from Mexico pursuant to 781(c) of the Tariff Act of 1930, as 
amended, (the Act) and 19 CFR 351.225(i) and, thus, falls within the 
scope of the Order.\2\ In its November 30, 2017, submission, Deacero 
opposed Nucor's request for an initiation of an anti-circumvention 
proceeding.\3\ On December 6, 2017, Nucor submitted a surrebuttal to 
Deacero's Rebuttal Comments.\4\ On December 13, 2017, Commerce 
determined that it required additional time beyond the regulatory 45-
day time limit to initiate a circumvention inquiry and, therefore, 
Commerce extended the time-period for issuing the initiation decision 
until January 29, 2018.\5\ On December 15, 2017, Commerce officials 
discussed via telephone Nucor's request that the Department initiate a 
minor alteration anti-circumvention inquiry on wire rod produced and/or 
exported by Deacero regardless of minimum diameter. During the 
conversation, counsel indicated that Nucor would consider supplementing 
its allegation with a discussion of how wire rod with diameters that 
are less than 4.4 mm constitute circumvention via minor alteration.\6\ 
On January 23, 2018, Nucor submitted supplemental information regarding 
the Circumvention Allegation.\7\ Also, on January 23, 2018, Commerce 
uniformly tolled all Enforcement and Compliance deadlines to account 
for the three-day closure of the Federal Government that occurred from 
January 20 through January 22, 2018.\8\ As a result, the deadline for 
Commerce to determine whether to initiate on Nucor's circumvention 
allegation was extended to January 31, 2018. On January 30, 2018, 
Deacero objected to Nucor's request for Commerce to include wire rod 
produced and/or exported by Deacero with actual diameters less than 4.4 
mm in the parameters of its circumvention inquiry and requested that 
Commerce exercise its discretion to extend the deadline to determine 
whether to initiate a circumvention inquiry to afford interested 
parties sufficient time to file comments regarding Nucor's allegations 
of circumvention.\9\
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    \1\ See Nucor's Letter, ``Carbon and Certain Alloy Steel Wire 
Rod from Mexico: Request for Circumvention Ruling,'' dated October 
27, 2017 (Circumvention Allegation). The request was not filed in 
its entirety until after close of business on October 27, 2017. 
Thus, the date of acceptance of this request was October 30, 2017.
    \2\ See Notice of Antidumping Duty Orders: Carbon and Certain 
Alloy Steel Wire Rod from Brazil, Indonesia, Mexico, Moldova, 
Trinidad and Tobago, and Ukraine, 67 FR 65945 (October 29, 2002) 
(Order).
    \3\ See Deacero's Letter, ``Carbon and Certain Wire Rod from 
Mexico--Opposition to Circumvention Inquiry,'' dated November 30, 
2017 (Deacero's Rebuttal Comments).
    \4\ See Nucor's Letter, ``Carbon and Certain Alloy Steel Wire 
Rod from Mexico: Response to Deacero's Opposition to Circumvention 
Inquiry,'' dated December 6, 2017 (Nucor's Surrebuttal Comments).
    \5\ See Memorandum to the File, ``Extension of Time to Determine 
Whether to Initiate,'' dated December 13, 2017.
    \6\ See Memorandum to the File, ``Telephone Discussion with 
Counsel to Nucor Corporation (Nucor),'' dated December 18, 2017.
    \7\ See Nucor's Letter, ``Carbon and Certain Alloy Steel Wire 
Rod from Mexico: Supplemental Information for Anti-Circumvention 
Ruling Request,'' dated January 23, 2018 (Supplemental Circumvention 
Allegation).
    \8\ See Memorandum to the File, ``Deadlines Affected by the 
Shutdown of the Federal Government,'' dated January 23, 2018.
    \9\ See Deacero's Letter, ``Carbon and Certain Wire Rod from 
Mexico--Request Regarding Nucor's Request for Anti-Circumvention 
Inquiry,'' dated January 30, 2018.
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Scope of the Order

    The merchandise subject to this order is certain hot-rolled 
products of carbon steel and alloy steel, in coils, of approximately 
round cross section, 5.00 mm or more, but less than 19.00 mm, in solid 
cross-sectional diameter.
    Specifically excluded are steel products possessing the above-noted 
physical characteristics and meeting the Harmonized Tariff Schedule of 
the United States (HTSUS) definitions for (a) stainless steel; (b) tool 
steel; (c) high

[[Page 5406]]

nickel steel; (d) ball bearing steel; and (e) concrete reinforcing bars 
and rods. Also excluded are (f) free machining steel products (i.e., 
products that contain by weight one or more of the following elements: 
0.03 percent or more of lead, 0.05 percent or more of bismuth, 0.08 
percent or more of sulfur, more than 0.04 percent of phosphorus, more 
than 0.05 percent of selenium, or more than 0.01 percent of tellurium).
    Also excluded from the scope are 1080 grade tire cord quality wire 
rod and 1080 grade tire bead quality wire rod. This grade 1080 tire 
cord quality rod is defined as: (i) Grade 1080 tire cord quality wire 
rod measuring 5.0 mm or more but not more than 6.0 mm in cross-
sectional diameter; (ii) with an average partial decarburization of no 
more than 70 microns in depth (maximum individual 200 microns); (iii) 
having no inclusions greater than 20 microns; (iv) having a carbon 
segregation per heat average of 3.0 or better using European Method NFA 
04-114; (v) having a surface quality with no surface defects of a 
length greater than 0.15 mm; (vi) capable of being drawn to a diameter 
of 0.30 mm or less with 3 or fewer breaks per ton, and (vii) containing 
by weight the following elements in the proportions shown: (1) 0.78 
percent or more of carbon, (2) less than 0.01 percent of aluminum, (3) 
0.040 percent or less, in the aggregate, of phosphorus and sulfur, (4) 
0.006 percent or less of nitrogen, and (5) not more than 0.15 percent, 
in the aggregate, of copper, nickel and chromium.
    This grade 1080 tire bead quality rod is defined as: (i) Grade 1080 
tire bead quality wire rod measuring 5.5 mm or more but not more than 
7.0 mm in cross-sectional diameter; (ii) with an average partial 
decarburization of no more than 70 microns in depth (maximum individual 
200 microns); (iii) having no inclusions greater than 20 microns; (iv) 
having a carbon segregation per heat average of 3.0 or better using 
European Method NFA 04-114; (v) having a surface quality with no 
surface defects of a length greater than 0.2 mm; (vi) capable of being 
drawn to a diameter of 0.78 mm or larger with 0.5 or fewer breaks per 
ton; and (vii) containing by weight the following elements in the 
proportions shown: (1) 0.78 percent or more of carbon, (2) less than 
0.01 percent of soluble aluminum, (3) 0.040 percent or less, in the 
aggregate, of phosphorus and sulfur, (4) 0.008 percent or less of 
nitrogen, and (5) either not more than 0.15 percent, in the aggregate, 
of copper, nickel and chromium (if chromium is not specified), or not 
more than 0.10 percent in the aggregate of copper and nickel and a 
chromium content of 0.24 to 0.30 percent (if chromium is specified).
    The designation of the products as ``tire cord quality'' or ``tire 
bead quality'' indicates the acceptability of the product for use in 
the production of tire cord, tire bead, or wire for use in other rubber 
reinforcement applications such as hose wire. These quality 
designations are presumed to indicate that these products are being 
used in tire cord, tire bead, and other rubber reinforcement 
applications, and such merchandise intended for the tire cord, tire 
bead, or other rubber reinforcement applications is not included in the 
scope. However, should petitioners or other interested parties provide 
a reasonable basis to believe or suspect that there exists a pattern of 
importation of such products for other than those applications, end-use 
certification for the importation of such products may be required. 
Under such circumstances, only the importers of record would normally 
be required to certify the end use of the imported merchandise.
    All products meeting the physical description of subject 
merchandise that are not specifically excluded are included in this 
scope.
    The products within the scope of this order are currently 
classifiable under subheadings 7213.91.3010, 7213.91.3090, 
7213.91.4510, 7213.91.4590, 7213.91.6010, 7213.91.6090, 7213.99.0031, 
7213.99.0038, 7213.99.0090, 7227.20.0010, 7227.20.0020, 7227.20.0090, 
7227.20.0095, 7227.90.6051, 7227.90.6053, 7227.90.6058, and 
7227.90.6059 of the HTSUS. Although the HTSUS subheadings are provided 
for convenience and customs purposes, the written description of the 
scope of this proceeding is dispositive.

Prior Anti-Circumvention Determination

    On September 24, 2012, Commerce issued an affirmative final 
circumvention determination in which it determined that, pursuant to 
section 781(c) of the Act and 19 CFR 351.225(i), wire rod with an 
actual diameter of 4.75 mm to 5.0 mm produced and/or exported by 
Deacero constituted a circumventing minor alteration of the Order and, 
as such, was covered by the scope of the Order.\10\ Commerce's finding 
was subsequently affirmed by the Court of Appeals for the Federal 
Circuit.\11\
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    \10\ See Carbon and Certain Alloy Steel Wire Rod from Mexico: 
Affirmative Final Determination of Circumvention of the Antidumping 
Duty Order, 77 FR 59892 (October 1, 2012) (4.75 Wire Rod from 
Mexico) and accompanying Issues and Decision Memorandum (IDM) at 18.
    \11\ See Deacero S.A. de C.V. v. United States, 817 F.3d 1332 
(Fed. Cir. 2016) (Deacero).
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Initiation of Minor Alteration Anti-Circumvention Proceeding

    Section 781(c) of the Act provides that Commerce may find 
circumvention of an AD order when products which are of the class or 
kind of merchandise subject to an AD order have been ``altered in form 
or appearance in minor respects * * * whether or not included in the 
same tariff classification.'' Section 781(c)(2) of the Act provides an 
exception that ``{p{time} aragraph 1 shall not apply with respect to 
altered merchandise if the administering authority determines that it 
would be unnecessary to consider the altered merchandise within the 
scope of the AD order.''
    While the statute is silent as to what factors to consider in 
determining whether alterations are properly considered ``minor,'' the 
legislative history of this provision indicates that there are certain 
factors which should be considered before reaching a circumvention 
determination. In conducting a circumvention inquiry under section 
781(c) of the Act, Commerce has generally relied upon ``such criteria 
as the overall physical characteristics of the merchandise, the 
expectations of the ultimate users, the use of the merchandise, the 
channels of marketing and the cost of any modification relative to the 
total value of the imported products.'' \12\ Concerning the allegation 
of minor alteration under section 781(c) of the Act and 19 CFR 
351.225(i), Commerce examines such factors as: (1) Overall physical 
characteristics; (2) expectations of ultimate users; (3) use of 
merchandise; (4) channels of marketing; and (5) cost of any 
modification relative to the value of the imported products.\13\
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    \12\ See S. Rep. No. 71, 100th Cong., 1st Sess. 100 (1987) (``In 
applying this provision, the Commerce Department should apply 
practical measurements regarding minor alterations, so that 
circumvention can be dealt with effectively, even where such 
alterations to an article technically transform it into a 
differently designated article.'').
    \13\ See, e.g., Affirmative Preliminary Determination of 
Circumvention of the Antidumping Duty Order on Certain Cut-to-Length 
Steel Plate from the People's Republic of China, 74 FR 33991, 33992 
(July 14, 2009) (CTL Plate from China Preliminary Scope Ruling), 
unchanged in Affirmative Final Determination of Circumvention of the 
Antidumping Duty Order on Certain Cut-to-Length Carbon Steel Plate 
from the People's Republic of China, 74 FR 40565 (August 12, 2009) 
(CTL Plate from China Final Scope Ruling); see also 4.75 mm Wire Rod 
from Mexico IDM at Comment 1; see also Deacero, 817 F.3d at 1337.

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[[Page 5407]]

Analysis

    After analyzing the information in the Circumvention Allegation and 
Supplemental Circumvention Allegation, we determine that Nucor has 
satisfied the criteria listed above to warrant an initiation of a 
formal anti-circumvention inquiry, pursuant to section 781(c) of the 
Act and 19 CFR 351.225(i), to determine whether wire rod with actual 
diameters that are less than 4.75 mm produced and/or exported to the 
United States by Deacero constitutes merchandise altered in form or 
appearance in such minor respects that should be included within the 
scope of the Order. For a summary of the proprietary comments received 
from interested parties and further discussion of Commerce's basis for 
initiating this minor alteration inquiry, see the Initiation Decision 
Memorandum, dated concurrently with this notice and hereby adopted by 
this notice.\14\ The Initiation Decision Memorandum is a business 
proprietary document, of which a public version is on file 
electronically via Enforcement and Compliance's Antidumping and 
Countervailing Duty Centralized Electronic Service System (ACCESS). 
ACCESS is available to registered users at https://access.trade.gov and 
is available to all parties in the Central Records Unit, room B8024 of 
the main Department of Commerce building. The signed Initiation 
Decision Memorandum and the electronic version of the Initiation 
Decision Memorandum are identical in content.
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    \14\ See Memorandum, ``Initiation of Minor Alteration 
Circumvention Inquiry on Wire Rod With Actual Diameters That Are 
Less Than 4.75 Millimeters,'' dated concurrently with this notice 
(Initiation Decision Memorandum).
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Merchandise Subject to the Anti-Circumvention Inquiry

    This minor alternation anti-circumvention inquiry covers wire rod 
with actual diameters that are less than 4.75 mm produced and/or 
exported to the United States by Deacero.
    Commerce will not order the suspension of liquidation of entries of 
any additional merchandise at this time. However, in accordance with 19 
CFR 351.225(l)(2), if Commerce issues a preliminary affirmative 
determination, we will then instruct U.S. Customs and Border Protection 
to suspend liquidation and require a cash deposit of estimated duties 
on the merchandise.
    Following consultation with interested parties, Commerce will 
establish a schedule for questionnaires and comments on the issues 
related to the Order. In accordance with section 781(f) of the Act, 
Commerce intends to issue its final determinations within 300 days of 
the date of publication of this initiation.
    This notice is published in accordance with sections 781(c) of the 
Act and 19 CFR 351.225(i).

    Dated: January 31, 2018.
Christian Marsh,
Deputy Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2018-02445 Filed 2-6-18; 8:45 am]
 BILLING CODE 3510-DS-P