[Federal Register Volume 59, Number 191 (Tuesday, October 4, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-24535]


[[Page Unknown]]

[Federal Register: October 4, 1994]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE
[A-427-813]

 

Preliminary Determination of Sales at Less Than Fair Value: 
Certain Carbon Steel Butt-Weld Pipe Fittings From France

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

EFFECTIVE DATE: October 4, 1994.

FOR FURTHER INFORMATION CONTACT:
Gary Bettger or Penelope Naas, Office of Countervailing Investigations, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230; telephone (202) 482-2239 or 482-3534, 
respectively.

Preliminary Determination: We have preliminarily determined that 
certain carbon steel butt-weld pipe fittings from France are being sold 
in the United States at less than fair value, as provided in section 
733 of the Tariff Act of 1930 (``the Act''), as amended. The estimated 
margins of sales at less than fair value are shown in the ``Suspension 
of Liquidation'' section of this notice.

Case History

    Since the initiation of this investigation on March 21, 1994 (59 FR 
14148, March 25, 1994), the following events have occurred:
    On April 11, 1994, the United States International Trade Commission 
(``ITC'') issued an affirmative preliminary injury determination (see, 
ITC Investigation No. 731-TA-688, 59 FR 18825 (April 20, 1994)).
    In accordance with 19 CFR 353.42(b), the Department of Commerce 
(``the Department'') issued its antidumping duty questionnaire to 
Interfit, S.A. (``interfit'') and its related U.S. company, Vallourec, 
Inc. (``Vallourec''), on April 29, 1994. Interfit is the only company 
named in the petition as a producer and exporter to the United States 
of the subject merchandise.
    On June 14, 1994, petitioner alleged that Interfit was selling the 
subject merchandise in France at less than its cost of production 
(``COP''). We found reasonable grounds to believe or suspect that sales 
in the home market were being made at less than COP and thus initiated 
a COP investigation.
    On June 30, 1994, petitioner requested a 50-day postponement of the 
preliminary determination. The request was granted by the Department on 
July 19, 1994 (59 FR 37961, July 26, 1994).
    On August 4, 1994, petitioner alleged critical circumstances with 
regard to imports of certain carbon steel butt-weld pipe fittings from 
France.
    On September 6, 1994, Interfit submitted constructed value (``CV'') 
data for models reflecting a large percentage of sales made in the 
United States during the period of investigation (``POI''). On 
September 23, 1994, Interfit provided CV information for the remaining 
models sold in the United States.

Scope of the Investigation

    The products covered by this investigation are certain carbon steel 
butt-weld pipe fittings having an inside diameter of less than fourteen 
inches (355 millimeters), imported in either finished or unfinished 
condition. Pipe fittings are formed or forged steel products used to 
join pipe sections in piping systems where conditions require permanent 
welded connections, as distinguished from fittings based on other 
methods of fastening (e.g. threaded, grooved, or bolted fittings). 
Butt-weld fittings come in a variety of shapes which include 
``elbows,'' ``tees,'' ``caps,'' and ``reducers.'' The edges of finished 
pipe fittings are beveled, so that when a fitting is placed against the 
end of a pipe (the ends of which have also been beveled), a shallow 
channel is created to accommodate the ``bead'' of the weld which joins 
the fitting to the pipe. These pipe fittings are currently classifiable 
under subheading 7307.93.3000 of the Harmonized Tariff Schedule of the 
United States (``HTSUS'').
    Although the HTSUS subheading is provided for convenience and 
customs purposes, our written description of the scope of this 
investigation is dispositive.

Period of Investigation

    The POI is September 1, 1993, through February 28, 1994.

Fair Value Comparisons

    To determine whether Interfit's sales for export to the Untied 
States were made at less than fair value, 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

    Because Interfit's U.S. sales of certain carbon steel butt-weld 
pipe fittings were made to an unrelated distributor in the United 
States prior to importation, and the exporter's sales price methodology 
was not indicated by other circumstances, we based USP on the purchase 
price (``PP'') sales methodology in accordance with section 772(b) of 
the Act.
    We calculated Interfit's PP sales based on packed, c.i.f., duty 
paid, landed prices to unrelated customers in the United States. We 
made deductions to the U.S. price, where appropriate, for foreign 
inland freight, foreign brokerage, marine insurance, ocean freight, 
U.S. brokerage, U.S. duties, and rebates.
    No commissions were paid to unrelated distributors in the United 
States or home market, and we do not have an appropriate benchmark 
against which to test whether the commission arrangements between 
Interfit and its related party are at arm's length. Therefore, we did 
not make an adjustment for commissions claimed by Interfit that were 
paid to its U.S. subsidiary for various charges incurred in selling the 
subject merchandise. (See Final Determination of Sales at Less than 
Fair Value: Coated Groundwood Paper from Belgium, Finland, France, 
Germany and the United Kingdom, 56 FR 56359, November 4, 1992.)

Foreign Market Value

    In order to determine whether Interfit had a sufficient volume of 
sales in the home market to serve as a viable basis for calculating 
FMV, we compared the volume of home market sales of subject merchandise 
to the volume of third country sales of subject merchandise, in 
accordance with section 773(a)(1)(B) of the Act. On this basis, we 
determined that the home market was viable. For purposes of calculating 
FMV, we used reported CV for products sold by Interfit in the United 
States during the POI.

Cost of Production

    Interfit provided incomplete and inappropriate cost data for home 
market sales. Specifically, Interfit did not provide COP information 
for all comparison models sold in France during the POI. Furthermore, 
Interfit provided transfer prices for the main input into its pipe 
fittings. As this input was purchased from related parties, it is the 
Department's practice to use the cost of producing the input, rather 
than the transfer price. See Final Determination of Sales at Less than 
Fair Value: Ferrosilicon from Venezuela (58 FR 27522; 1993). Finally, 
the costs reported by Interfit did not reflect the specific time period 
requested by the Department.
    Accordingly, we do not have the information necessary to make a 
determination whether Interfit's home market sales are being sold below 
the COP. In accordance with section 776(c) of the Act as best 
information available (``BIA'') we have determined that all sales in 
the home market were made at less than the COP and, in accordance with 
section 773(b) of the Act, we have based foreign market value on CV.

Constructed Value

    We calculated CV based on the sum of the cost of materials, 
fabrication, general expenses, U.S. packing costs and profit. In 
accordance with section 773(e)(1)(B)(i) and (ii) of the Act, we (1) 
included the greater of Interfit's reported general expenses or the 
statutory minimum of ten percent of the COM, as appropriate, and (2) 
used the statutory minimum of eight percent of the sum of COM and 
general expenses for profit.
    For comparisons to CV, we made circumstance-of-sale adjustments for 
differences in credit expenses between the two markets, pursuant to 19 
CFR 353.56(a)(2). In calculating U.S. credit expense, we used the rate 
respondent reported at which it could borrow in U.S. dollars during the 
POI. (For further discussions regarding the Department's treatment of 
credit in this investigation, please see September 26, 1994, Memorandum 
to Susan G. Esserman from Barbara R. Stafford on file in Room B-099 of 
the Department of Commerce.) We have not made a deduction for the 
direct selling expenses reported by respondent. We have determined that 
these expenses (product liability premiums and inventory carrying 
costs) are, in fact, indirect selling expenses.
    Because of the deficiencies in the cost data described above, we 
are requesting further information from Interfit. We also intend to 
verify that the prices paid by Interfit to its related suppliers are, 
in fact, at arms-length.
    The CV data originally provided by Interfit did not cover all of 
the models sold by the company in the United States during the POI. On 
September 23, 1994, Interfit supplied the CV data for the remaining 
models. Because this information was not received in time to be used in 
this preliminary determination, we have used BIA for sales involving 
these models. As BIA, we have imputed the highest non-aberrational 
margin calculated from the CV information that Interfit submitted on 
September 6, 1994. (See Final Determination of Sales at Less than Fair 
Value: Certain Hot-Rolled Carbon Steel Flat Products and Certain Cold-
Rolled Carbon Steel Flat Products from the Netherlands, 58 FR 37199; 
July 9, 1993). In our final determination, we intend to use all the CV 
data submitted by Interfit so long as it can be verified.

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 of New York.

Critical Circumstances

    Petitioner alleges that critical circumstances exist with respect 
to imports of the subject merchandise from France. Section 733(e)(1) of 
the Act provides that the Department will determine that critical 
circumstances exist if:
    (A)(i) There is a history of dumping in the United States or 
elsewhere of the class or kind of merchandise which is the subject of 
this investigation, or
    (ii) The person by whom, or for whose account, the merchandise was 
imported knew or should have known that the exporter was selling the 
merchandise which is the subject of the investigation at less than its 
fair value, and
    (B) There have been massive imports of the class or kind of 
merchandise which is the subject of this investigation over a 
relatively short period.
    Regarding A(i) above, in determining whether there has been a 
history of dumping, we normally consider whether there has been an 
antidumping order in the United States or elsewhere on such or similar 
merchandise. Regarding (A)(ii) above, we normally consider margins of 
25 percent or more for purchase price sales sufficient to impute 
knowledge of dumping. (See, Final Determination of Sales at Less Than 
Fair Value; Tapered Roller Bearings and Parts Thereof, Finished or 
Unfinished, from Italy, 52 FR 24198, June 29, 1987.)
    Pursuant to section 733(e)(1)(B), we generally consider the 
following factors in determining whether imports have been massive over 
a short period of time: (1) The volume and value of the imports; (2) 
seasonal trends (if applicable); and (3) the share of domestic 
consumption accounted for by imports. If imports during the period 
immediately following the filing of the petition increase by at least 
fifteen percent over imports during a comparable period immediately 
preceding the filing of a petition, we normally consider them massive.
    In order to determine whether imports have been massive over a 
relatively short period of time, we compared the reported shipments of 
butt-weld pipe fittings by Interfit to the United States in the seven 
months after the petition was filed to the seven months immediately 
before this period. Our analysis showed that the volume of imports of 
subject merchandise to the United States by Interfit had actually 
decreased over that period of time. (See, 19 CFR 353.16(f)(2).) Based 
on this analysis, we determine that imports of butt-weld pipe fittings 
from Interfit were not massive over a relatively short period of time. 
Accordingly, as one of the criteria enumerated in Section 733(A)(3) of 
the Act is not met, we preliminarily determine that critical 
circumstances does not exist for imports of butt-weld pipe fittings 
from France.

Verification

    As provided in section 776(b) of the Act, we will verify 
information used in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d)(1) of the Act, we are directing 
the U.S. Customs Service to suspend liquidation of all entries of 
certain carbon steel butt-weld pipe fittings from France, as defined in 
the ``Scope of Investigation'' section of this notice, 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 dumping margin, as shown below. This suspension of 
liquidation will remain in effect until further notice. The weighted-
average dumping margins are as follows:

------------------------------------------------------------------------
                                                                 Margin 
                Manufacturer/producer/exporter                  percent 
------------------------------------------------------------------------
Interfit.....................................................      12.04
All others...................................................      12.04
------------------------------------------------------------------------

ITC Notification

    In accordance with section 733(f) of this 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 within 75 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.
    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 November 16, 1994, and rebuttal briefs no later 
than November 23, 1994. A hearing, if requested, will be held on 
November 28, 1994, at the Department of Commerce in Room 1414. 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 353.3(b), 
oral presentations will be limited to issues raised in the briefs.
    We will make our final determination not later than 75 days after 
of this preliminary determination.
    This determination is published pursuant to section 733(f) of the 
Act and 19 CFR 353.15(a)(4).

    Dated: September 26, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-24535 Filed 10-3-94; 8:45 am]
BILLING CODE 3510-DS-M