[Federal Register Volume 59, Number 45 (Tuesday, March 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-5305]


[[Page Unknown]]

[Federal Register: March 8, 1994]


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DEPARTMENT OF COMMERCE
[A-583-822]

 

Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination; Class 150 Stainless Steel Threaded 
Pipe Fittings From Taiwan

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: March 5, 1994.

FOR FURTHER INFORMATION CONTACT: Michelle A. Frederick or David J. 
Goldberger, Office of Antidumping Investigations, Import 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
0186 or 482-4136, respectively.

Preliminary Determination

    We preliminarily determine that Class 150 stainless steel threaded 
pipe fittings (SST pipe fittings) from Taiwan are being, or are likely 
to be, sold in the United States at less than fair value, as provided 
in section 733 of the Tariff Act of 1930, as amended (the Act). The 
estimated margins are shown in the ``Suspension of Liquidation'' 
section of this notice.

Case History

    Since the initiation of this investigation on August 23, 1993 (58 
FR 45482, August 30, 1993), the following events have occurred: On 
September 16, 1993, the U.S. International Trade Commission (ITC) 
issued an affirmative preliminary injury determination in this case.
    In September and October 1993, the Department of Commerce (the 
Department) presented an antidumping duty questionnaire to Enlin Steel 
Corporation (Enlin), Ta Chen Stainless Pipe Co., Ltd. (Ta Chen), and 
Yih Tai Industries Co., Ltd. (Yih Tai), respectively. Enlin, Ta Chen, 
and Yih Tai accounted for at least 60 percent of the exports of the 
subject merchandise to the United States during the period of 
investigation (POI). In response to submissions regarding the reporting 
of certain product characteristics, the Department issued a revised 
appendix V of the antidumping duty questionnaire to the respondents in 
November 1993.
    Enlin, Ta Chen, and Yih Tai submitted sales questionnaire responses 
in October and November 1993. The Department issued supplemental sales 
questionnaires in December 1993; the responses to these supplemental 
questionnaires were received in January 1994.
    On December 2, 1993, petitioners in this investigation, Capital 
Manufacturing Company and Alloy Stainless Products Co., Inc. 
(petitioners), requested that the Department postpone the preliminary 
determination in accordance with section 733(c)(1) of the Act. We 
granted this request and postponed the date of the preliminary 
determination until not later than March 1, 1994, in accordance with 19 
CFR 353.15(c) (58 FR 65577, December 15, 1993).
    On December 16, 1993, in accordance with 19 CFR 353.31(c)(1)(i), 
petitioners filed a timely allegation of sales below the cost of 
production (COP). At the Department's request, petitioners filed a 
supplement to their COP allegation on January 12, 1994. During December 
1993, and January 1994, we received comments from Enlin and Yih Tai 
objecting to the information contained in the petitioners' allegation.
    On February 7, 1994, the Department issued a cost of production/
constructed value (Section D) questionnaire to Enlin, Ta Chen, and Yih 
Tai, as the Department had reasonable grounds to believe or suspect 
that all three companies had sold SST pipe fittings in the home market 
or third-country at prices which were below their respective costs of 
production. On February 18, 1994, Yih Tai requested that the Department 
reconsider its decision to initiate a sales-below-cost investigation of 
Yih Tai's Canadian sales.
    Because the Section D responses are not due until after the 
preliminary determination, we will address the issue of whether 
respondents were selling subject merchandise in the home market or 
third-country at below cost prices in our final determination.

Standing

    On January 3, 1994, in accordance with 19 CFR 353.31(c)(2), Yih Tai 
filed a timely allegation that petitioners lack standing in this 
investigation. Under section 732(b)(1) of the Act, in order to have 
standing to file an antidumping petition, a petitioner must be an 
``interested party.'' Section 771(9)(C) of the Act defines the term 
``interested party,'' in relevant part, as ``a manufacturer, producer, 
or wholesaler in the United States of the `like product.''' Yih Tai has 
alleged that, based on the fact that petitioners only ``finish'' SST 
pipe fittings which are made from castings, the petitioners' activities 
are insufficient to qualify them as interested parties. However, 
petitioners have far more extensive production activities with respect 
to SST pipe fittings made through methods of manufacture other than 
casting. Given the Department's previous decision that all SST pipe 
fittings, whether finished or unfinished, and regardless of method of 
manufacture, constitute one category of such or similar merchandise, 
the Department concludes that petitioners qualify as interested parties 
(see September 29, 1993, Memorandum from David Binder to Richard W. 
Moreland). Therefore, petitioners have standing under section 732(b)(1) 
of the Act. We note that the ITC has found that the value that 
petitioners add to castings is sufficient to qualify them as producers 
of the like product.

Postponement of Final Determination

    Pursuant to section 735(a)(2)(A) of the Act, Yih Tai and Enlin 
requested on February 10 and February 18, 1994, respectively, that, in 
the event of an affirmative preliminary determination in this 
investigation, the Department postpone the final determination to 135 
days after the date of publication of the affirmative preliminary 
determination. Pursuant to 19 CFR 353.20(b), if exporters who account 
for a significant proportion of exports of the merchandise under 
investigation request an extension in the event of an affirmative 
preliminary determination, we are required, absent compelling reasons 
to the contrary, to grant the request. Based on U.S. import statistics, 
Yih Tai and Enlin both account for a significant portion of the POI 
exports of the subject merchandise.
    Therefore, we are postponing the final determination for this 
investigation until the 135th day after the publication of this notice 
in the Federal Register.

Scope of the Investigation

    The products covered by this investigation are Class 150 SST pipe 
fittings, defined as cast or forged stainless steel products used to 
connect pipe sections with an ability to withstand normal pressure 
service (150 pounds per square inch (psi) at 350 degrees Fahrenheit and 
300 psi at -20 to 150 degrees Fahrenheit) as well as resistance to 
corrosion or extreme temperatures, or prevention of metallic 
contamination to materials in the system. Included in the scope of this 
investigation are both finished and unfinished Class 150 SST pipe 
fittings of any size. Unfinished Class 150 SST pipe fittings are 
defined as those products that have been advanced after casting or 
forging, but which require threading and machining to finish the 
fittings; finished Class 150 SST pipe fittings are defined as those 
products that have been formed in the shape of elbows, tees, reducers, 
etc. and have been further advanced after casting or forging, and 
require no further processing to be acceptable as a finished product to 
the end user. Class 150 SST pipe fittings are composed of alloys 
including, but not limited to, 304 and 316, and are manufactured in the 
shape of 90-degree elbows, 45-degree elbows, street elbows, tees, 
crosses, couplings, reducing couplings, half-couplings, caps, square 
head plugs, hex head plugs, hex bushings, unions, locknuts, and welding 
spuds. Excluded from the scope of investigation are SST pipe fittings 
manufactured in the shape of nipples.
    The products under investigation are currently classifiable under 
subheadings 7307.19.9030, 7307.19.9060, 7307.19.9080, 7307.22.1000, 
7307.22.5000, and 7307.29.0090 of the Harmonized Tariff Schedule of the 
United States (HTSUS). Although the HTSUS subheadings are provided for 
convenience and customs purposes, our written description of the scope 
of these investigations is dispositive.

Period of Investigation

    The period of investigation (POI) is January 1 through June 30, 
1993.

Such or Similar Comparisons

    We have determined that the products covered by this investigation 
constitute a single category of such or similar merchandise. All three 
respondents reported that they sold merchandise in the home market or 
third-country market identical to that sold in the United States. 
Accordingly, none provided difference in merchandise (difmer) 
information in their sales listings. For a small number of U.S. sales 
reported by Enlin, however, our examination of the questionnaire 
response indicated that identical matches did not exist. Because Enlin 
did not report difmer information, we were precluded from identifying 
similar merchandise for comparison with these sales under section 
771(16) (B) or (C) of the Act. Therefore, in accordance with section 
776(c) of the Act, we applied best information available (BIA) in 
determining the margins for these sales. As BIA, in accordance with 
normal practice, we applied the higher of either (1) the average of all 
margins alleged in the petition for the class or kind of merchandise, 
or (2) the highest non-aberrational calculated margin for any other 
sale of merchandise of the same class of kind made by the Department in 
this investigation. (See, e.g., Final Determination of Sales at Less 
Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain 
Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant 
Carbon Steel Flat Products, and Certain Cut-to-Length Carbon Steel 
Plate from France, 58 FR 37131, July 9, 1993.) We determined the 
highest non-aberrational calculated margin by selecting the highest 
margin, after excluding those margins which were substantially higher 
than the vast majority of other margins calculated.

Fair Value Comparisons

    To determine whether sales of the respondents to the United States 
were made at less than fair value (LTFV), we compared the United States 
price (USP) to the foreign market value (FMV), as specified in the 
``United States Price'' and ``Foreign Market Value'' sections of this 
notice.

United States Price

    For each respondent, we based USP on purchase price, in accordance 
with section 772(b) of the Act, when the subject merchandise was sold 
to unrelated purchasers in the United States prior to importation. In 
addition, for Ta Chen, where certain sales to the first unrelated 
purchaser took place after importation into the United States, we also 
based USP on exporter's sales price (ESP), in accordance with section 
772(c) of the Act.
    We made company-specific adjustments as follows:
A. Enlin
    For Enlin, we calculated purchase price based on CIF or C&F prices 
to unrelated customers in the United States. In accordance with section 
772(d)(1)(B) of the Act, we increased U.S. price by the amount of 
import duties imposed by Taiwan on inputs for the subject merchandise 
which have not been collected by reason of the exportation of the 
subject merchandise to the United States.
B. Ta Chen
    For Ta Chen, we calculated purchase price based on FOB Taiwan, FOB 
U.S. port or delivered prices to unrelated customers in the United 
States. We calculated ESP based on delivered prices to unrelated 
customers in the United States. For ESP transactions, we made 
deductions, where appropriate, for the following movement charges in 
accordance with section 772(e) of the Act: foreign inland freight, 
ocean freight, marine insurance, foreign brokerage, U.S. customs fees, 
U.S. customs broker charge, containerization expense, harbor 
construction fees and U.S. inland freight. We also made deductions, 
where appropriate, for credit expenses, bank charges, and indirect 
selling expenses, including inventory carrying expenses and repacking 
in the United States.
    We made an addition to USP for value-added taxes (VAT) in 
accordance with section 772(d)(1)(C) of the Act. In making our 
adjustment for VAT, we followed the instructions of the United States 
Court of International Trade (CIT) in Federal Mogul Corp. v. United 
States, 834 F.Supp. 1391 (CIT 1993). We also deducted the amount of tax 
due solely to price deductions in the original tax base. For discussion 
of this adjustment see Final Results of Administrative Review: Certain 
Industrial Forklifts from Japan, (59 FR 1374, January 10, 1994) and 
Final Determination of Sales at Less Than Fair Value: Certain Stainless 
Steel Wire Rods from France, (58 FR 68865, December 29, 1993).
C. Yih Tai
    For Yih Tai, we calculated purchase price based on CIF prices to 
unrelated customers in the United States. No deductions were either 
claimed or made.

Foreign Market Value

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating 
FMV, for each respondent we compared the volume of home market sales of 
the subject merchandise to the volume of third-country sales of subject 
merchandise, in accordance with section 773(a)(1)(B) of the Act. We 
found that the home market was not viable for sales of SST pipe 
fittings made by either Enlin or Yih Tai. Based on their respective 
questionnaire responses, Canada was selected as the third-country 
market basis for FMV for both Enlin and Yih Tai. We found that the home 
market was viable for sales of SST pipe fittings by Ta Chen.
    We made company-specific adjustments as follows:
A. Enlin
    We calculated FMV based on CIF or FOB prices, inclusive of packing, 
to unrelated customers in Canada. Enlin reported that all Canadian 
sales were made at the same level of trade as that of its U.S. 
customers. Pursuant to section 773(a)(4)(B) and 19 CFR 353.56(a)(2), we 
made circumstance-of-sale adjustments, where appropriate, for 
differences in credit expenses and letter of credit fees. We also made 
circumstance-of-sale adjustments for the following movement expenses: 
Foreign inland freight, ocean freight, marine/air insurance, foreign 
brokerage and handling, and harbor construction fees. We deducted home 
market packing costs and added U.S. packing costs.
    We added the amount of import duties imposed by Taiwan on inputs 
for the subject merchandise which have not been collected by reason of 
the exportation of the subject merchandise to Canada. Because Enlin did 
not include the per-unit amount of these uncollected duties in its 
sales listing, we added to FMV the amount reported for the U.S. 
comparison sale as best information available.
    For both U.S. and third-country sales, we recalculated the imputed 
credit expenses for those sales that had missing payment and/or 
shipment dates. These recalculations were made based on the weighted-
average difference between payment and shipment dates for those sales 
which were both shipped and paid during the POI.
B. Ta Chen
    We based FMV on home market, ex-factory and delivered prices, 
inclusive of packing, to unrelated customers. We included in FMV the 
amount of the VAT included in the home market. As discussed for USP, we 
also calculated the amount of tax that was due solely to the inclusion 
of price deductions in the original tax base (in this case, five 
percent of the sum of any adjustments, expenses, and charges that were 
deducted from the tax base). We deducted this amount from the FMV after 
all other additions and deductions had been made. By making this 
additional tax adjustment, we avoid a distortion that could cause the 
creation of a dumping margin even where pre-tax dumping is zero.
    We compared U.S. sales to home market sales made at the same level 
of trade, where possible, in accordance with 19 CFR 353.58. Where we 
were not able to match at the same level of trade, we made comparisons 
without regard to level of trade.
    For purchase price comparisons, we made deductions, where 
appropriate, for discounts. Pursuant to section 773(a)(4)(B) and 19 CFR 
353.56(a)(2), we made circumstance-of-sale adjustments, where 
appropriate, for differences in credit expenses and bank charges. We 
also made circumstance-of-sale adjustments for the following movement 
expenses: Foreign inland freight, ocean freight, marine insurance, 
foreign brokerage, U.S. customs fees, U.S. customs broker charge, 
containerization expenses, and harbor construction fees. We deducted 
home market packing costs and added U.S. packing costs.
    For ESP comparisons, we made deductions, where appropriate, for 
discounts and foreign inland freight. We also deducted from FMV the 
weighted-average home market indirect selling expenses, including, 
where appropriate, inventory carrying costs. The deduction for home 
market indirect selling expenses was capped by the sum of U.S. indirect 
selling expenses, in accordance with 19 CFR 353.56(b) (1) and (2).
    For both U.S. and home market sales, we made the following 
recalculations to circumstance-of-sale adjustments: We recalculated 
credit expenses because the expenses reported in Ta Chen's sales 
listing were inconsistent with the methodology explained in the 
narrative portion of its submissions. We recalculated indirect selling 
expenses to include selling expenses not originally included in the 
sales listing. Finally, we recalculated inventory carrying expenses to 
correct the price bases, interest rates, and the appropriate time in 
inventory, based on information contained in Ta Chen's questionnaire 
responses.
C. Yih Tai
    We calculated FMV based on CIF prices, inclusive of packing, to 
unrelated customers in Canada. Yih Tai reported that all Canadian sales 
were made at the same level of trade as that of its U.S. customers.
    Pursuant to section 773(a)(4)(B) and 19 CFR 353.56(a)(2), we made 
circumstance-of-sale adjustments, where appropriate, for difference in 
credit expenses, letter of credit fees, and interest revenue. We also 
made circumstance-of-sale adjustments for the following movement 
expenses: Foreign inland freight, foreign brokerage, ocean freight, 
marine insurance, and harbor construction fees. We deducted home market 
packing costs and added U.S. packing costs.
    Because commissions were paid on Canadian but not on U.S. sales, in 
accordance with 19 CFR 353.56(b)(1), we deducted the weighted-average 
third-country commission amount from FMV. We then added to FMV as a 
circumstance-of-sale adjustment the lesser of either (1) the amount of 
the weighted-average commissions paid on third-country sales; or (2) 
the sum of the indirect selling expenses on U.S. sales. U.S. indirect 
selling expenses included inventory carrying expenses.

Currency Conversion

    We made currency conversions based on the official exchange rates 
in effect on the dates of the U.S. sales as certified by the Federal 
Reserve Bank.

Verification

    As provided in section 776(b) of the Act, we will verify all 
information that we determine is acceptable for use in making our final 
determination.

Suspension of Liquidation

    In accordance with section 733(d)(1) of the Act, we are directing 
the Customs Service to suspend liquidation of all entries of SST pipe 
fittings from Taiwan, except those of Ta Chen and Yih Tai, that are 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of this notice in the Federal Register. The Customs 
Service shall require a cash deposit or posting of a bond equal to the 
estimated preliminary dumping margins, as shown below. This suspension 
of liquidation will remain in effect until further notice. The LTFV 
margins are as follows:

------------------------------------------------------------------------
                                                        Weighted-average
            Producer/manufacturer/exporter                   margin     
                                                           percentage   
------------------------------------------------------------------------
Enlin Steel Corporation...............................  1.25            
Ta Chen Stainless Pipe Co., Ltd.......................  0.00 (de        
                                                         minimis)       
Yih Tai Industries Co., Ltd...........................  0.15 (de        
                                                         minimis)       
All Others............................................  1.25            
------------------------------------------------------------------------

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final determination is affirmative, 
the ITC will determine whether these imports are materially injuring, 
or threaten material injury to, the U.S. industry before the later of 
120 days after the date of this preliminary determination or 45 days 
after our final determination.

Public Comment

    Interested parties who wish to request a hearing must submit a 
written request to the Assistant Secretary for Import Administration, 
U.S. Department of Commerce, room B-099, within ten days of the 
publication of this notice. Requests should contain: (1) The party's 
name, address, and telephone number; (2) the number of participants; 
and (3) a list of the issues to be discussed.
    A hearing, if requested, will be held on June 16, 1994, at 1 p.m. 
at the U.S. Department of Commerce in room 3708. Parties should confirm 
by telephone the time, date, and place of the hearing 48 hours prior to 
the scheduled time. In accordance with 19 CFR 353.38, case briefs or 
other written comments in at least ten copies must be submitted to the 
Assistant Secretary no later than June 7, 1994, and rebuttal briefs no 
later than June 14, 1994. In accordance with 19 CFR 353.38(b), oral 
presentations will be limited to issues raised in the briefs.
    If this investigation proceeds normally, we will make our final 
determination not later than 135 days after the publication of this 
notice.
    This determination is published pursuant to section 733(f) of the 
Act and 19 CFR 353.15(a)(4).

    Dated: March 1, 1994.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 94-5305 Filed 3-7-94; 8:45 am]
BILLING CODE 3510-DS-P