[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: 94-24536]


[[Page Unknown]]

[Federal Register: October 4, 1994]


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DEPARTMENT OF COMMERCE
[A-508-807]

 

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

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

EFFECTIVE DATE: October 4, 1994.

FOR FURTHER INFORMATION CONTACT:Gary Bettger or Jennifer Yeske, Office 
of Countervailing Investigations, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, D.C. 20230; telephone (202) 482-
2239 or 482-0189, respectively.

PRELIMINARY DETERMINATION: We have preliminarily determined that 
certain carbon steel butt-weld pipe fittings from Israel are being 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 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 14, 1994, the United States International Trade Commission 
(``ITC'') issued an affirmative preliminary injury determination (See 
ITC Investigation No. 731-TA-690, 59 FR 18825 (April 20, 1994)).
    In accordance with 19 CFR 353.42(b) (1994), the Department issued 
its antidumping duty questionnaire to Pipe Fittings Carmiel, Ltd. 
(``Carmiel'') on April 29, 1994, as it accounted for over 60 percent of 
the merchandise sold in the United States during the POI. Carmiel was 
the only exporter from Israel of the subject merchandise to the United 
States during the POI.
    On June 30, 1994, the petitioner requested a 50-day postponement of 
the preliminary determination. The request was granted by the 
Department of Commerce 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 
Israel.

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 while 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 period of investigation (``POI'') is September 1, 1993, through 
February 28, 1994.

Product Comparisons

    Carmiel sold identical products in both Israel and the United 
States during the POI. Therefore, in making our fair value comparisons, 
we compared sales of merchandise identical in all respects.

Fair Value Comparisons

    To determine whether Carmiel's sales for export to the United 
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. In accordance with 19 CFR 353.58, we made comparisons at 
the same level of trade.

United States Price

    Because Carmiel's U.S. sales of certain carbon steel butt-weld pipe 
fittings were made to unrelated purchasers 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 Carmiel's PP sales based on packed C.I.f. prices to 
unrelated customers in the United States. We made deductions to the 
U.S. price, where appropriate, for marine insurance, ocean freight, 
foreign inland freight, port fees, and customs agents fees and 
expenses.
    We made an adjustment to U.S. price for the value-added tax 
(`VAT'') assessed on comparison sales in Israel, in accordance with our 
practice, pursuant to the court of International Trade (``CIT'') 
decision in Federal-Mogul, et al v. United States, 834 F.Supp. 1391 
(CIT 1993). (See Final determination of Sales at Less Than Fair Value: 
Calcium Aluminate Cement, Cement Clinker and Flux from France, 59 FR 
14136, March 25, 1994).

Foreign Market Value

    Carmiel made sales only to the United States and Israel during the 
POI. Based on the substantial quantity of home market sales in relation 
to its U.S. sales, we determined that the home market was viable.
    We have preliminarily determined that respondent's method for 
determining date of sale is not consistent with the Department's 
practice. According to the response, Carmiel makes most of its home 
market sales over the telephone and does not document these orders. 
Moreover, the company did not know the specific date of each sale, but 
claimed to know the month in which the sale was made. Therefore, 
Carmiel reported its home market sales as having occurred the first day 
of the month in which the sale was made.
    Our practice with respect to the date of sale is to use the date of 
the first written document which sets the price and quantity for the 
sale (see Certain Stainless Steel Butt-Weld Pipe and Tube fittings From 
Japan; Final Results of Antidumping Duty Administrative Review (59 FR 
12240, 12241; March 16, 1994) and Antifriction Bearings (Other Than 
Tapered Rolling Bearings) and Parts Thereof From France, et al., (58 FR 
39729,39783; July 26, 1993)). In Carmiel's case, the first written 
document with this information is the invoice. Thus, according to 
Commerce practice, Carmiel should have reported home market sales that 
were invoiced during the POI.
    For purposes of our preliminary determination, however, we have 
used the sales reported by respondent. we will be requesting a better 
explanation of whether the date of sale used by respondent can be 
documented, or, in the absence of documentation, a new sales listing 
before verification.
    We have calculated FMV using the delivered prices reported by 
Carmiel for its home market sales. We adjusted the prices for discounts 
offered to home market customers. Also, in light of the decision of the 
Court of Appeals for the Federal Circuit in Ad Hoc Committee of AZ-NM-
TX-FL Producers of Gray Portland Cement v. United States, 13 F.3d 398 
(Fed. Cir., 1994), we deducted post-sale home market movement charges 
from the FMV under the circumstances-of-sale provision of 19 U.S.C 
1677b(a)(4)(B). This adjustment included home market inland freight.
    We also 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 borrowing 
rate in Israel on short-term New Israeli Shekel (``NIS'') loans linked 
to the dollar. In calculating the home market credit expense, we used 
the borrowing rate on unliked short-term NIS loans. For a further 
discussion of the Department's treatment of credit in this 
investigation, please see Memorandum from Barbara R. Stafford to Susan 
G. Esserman (September 26, 1994) on file in room B-099 of the U.S. 
Department of Commerce.
    We adjusted for VAT in accordance with our practice. (See the 
``United States Price'' Section of this notice, above.)

Currency Conversion

    we made currency conversions based on the official exchange rates 
in effect on the dates of the U.S. sales, as published in the 
International Monetary Fund's International Financial Statistics.

Critical Circumstances

    Petitioner alleges that critical circumstances exist with respect 
to imports of the subject merchandise from Israel. 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 look to see 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.)
    Since the calculated preliminary margin for butt-weld pipe fittings 
from Israel is below 25 percent and there have been no antidumping 
orders in the United States or elsewhere pertaining to butt-weld pipe 
fittings from Israel, the requirements of section 733(e) have not been 
met. Therefore, we have determined that critical circumstances do not 
exist with respect to imports of butt-weld pipe fittings from Israel.

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 Customs Service to suspend liquidation of all entries of certain 
carbon steel butt-weld pipe fittings from Israel, 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 margins, 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 
------------------------------------------------------------------------
Carmiel......................................................       7.33
All others...................................................       7.33
------------------------------------------------------------------------

Adjustment of Deposit Rate for Countervailing Duties

    Article VI, paragraph 5 of the General Agreement on Tariffs and 
Trade provides that ``[no] product * * * shall be subject to both 
antidumping and countervailing duties to compensate for the same 
situation for dumping or export subsidization.'' This provision is 
implemented by section 772(d)(1)(D) or the Act. Since antidumping 
duties cannot be assessed on the portion of the margin attributable to 
export subsidies, there is no basis to require a cash deposit or bond 
for that amount.
    Accordingly, the level of export subsidies as determined in the 
Preliminary Affirmative Countervailing Duty Determination: Certain 
Carbon Steel Butt-Weld Pipe Fittings from Israel, FR 59 28340, June 1, 
1994) which was 0.25 percent ad valorem, will be subtracted from the 
respective margins for cash deposit or bonding purposes. This results 
in a deposit rate of 7.08 percent for Carmiel and all other exporters 
of carbon steel butt-weld pipe fittings from Israel.

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 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 U.S. Department of Commerce in Room 1414. 
Parties should confirm by telephone the time, date, and place of the 
hearing two days prior to the scheduled date. In accordance with 19 CFR 
353.38(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. 94-24536 Filed 10-3-94; 8:45 am]
BILLING CODE 3510-05-M