[Federal Register Volume 60, Number 22 (Thursday, February 2, 1995)]
[Notices]
[Pages 6507-6510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2614]



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DEPARTMENT OF COMMERCE
[A-580-825]


Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Oil Country Tubular Goods From 
Korea

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

EFFECTIVE DATE: February 2, 1995.

FOR FURTHER INFORMATION CONTACT: John Beck or Jennifer Stagner, Office 
of Antidumping Investigations, Import Administration, U.S. Department 
of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 
20230; telephone (202) 482-3464 or (202) 482-1673, respectively.

Preliminary Determination

    We preliminarily determine that oil country tubular goods (OCTG) 
from Korea are being, or are likely to be, sold in the United States at 
less than fair value, as provided in section 733(b) 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 July 20, 1994 (59 FR 
37962, July 26, 1994), the following events have occurred.
    On August 15, 1994, the U.S. International Trade Commission (ITC) 
issued an affirmative preliminary determination.
    On August 26, 1994, the Department determined that Hyundai Steel 
Pipe Company, Ltd. (HSP) and Union Steel Manufacturing Company, Ltd. 
(Union), Korean exporters of the subject merchandise, were the 
appropriate recipients of the antidumping duty 

[[Page 6508]]
questionnaire. These two companies accounted for at least 60 percent of 
exports of OCTG from Korea during the period of investigation.
    On August 26, 1994, the Department sent antidumping duty 
questionnaires to HSP and Union pursuant 19 CFR 353.42(b)(1). On 
September 9, 1994, Union informed the Department that it would not be 
responding to the Department's questionnaire due to resource 
constraints.
    The Department received HSP's questionnaire responses in September 
and October 1994 and in January 1995. The Department received 
deficiency questionnaire responses in October and November 1994.
    On September 29, 1994, the Department determined that HSP's home 
market was not viable within the meaning of 773(a)(1)B of the Act and 
19 CFR 353.48 and that Canada was the appropriate third-country market 
for this investigation.
    On October 17, 1994, and November 3, 1994, the petitioners alleged 
that HSP was selling OCTG to Canada at less than its cost of production 
(COP). On November 28, 1994, the Department initiated a COP 
investigation against HSP (see the November 28, 1994, memorandum from 
Richard W. Moreland to Barbara R. Stafford).
    On November 10, 1994, Maverick Tube Corp., Bellville Tube Corp., 
and IPSCO Steel Pipe Inc. (the petitioners), made a timely request that 
the Department postpone the preliminary determination in accordance 
with section 733(c)(1) of the Act (19 U.S.C. 1673b(c)(1)), and 19 CFR 
353.15(c). We did so on November 15, 1994 (59 FR 60130, November 22, 
1994).
    On January 12, 1995, HSP requested that the final determination be 
postponed in accordance with 19 CFR 353.20(b) in the event of an 
affirmative preliminary determination.

Scope of Investigation

    For purposes of this investigation, OCTG are hollow steel products 
of circular cross-section, including oil well casing, tubing, and drill 
pipe, of iron (other than cast iron) or steel (both carbon and alloy), 
whether seamless or welded, whether or not conforming to American 
Petroleum Institute (API) or non-API specifications, whether finished 
or unfinished (including green tubes and limited service OCTG 
products). This investigation does not cover casing, tubing, or drill 
pipe containing 10.5 percent or more of chromium. The OCTG subject to 
this investigation is currently classified in the Harmonized Tariff 
Schedule of the United States (HTSUS) under item numbers:

7304.20.10.00, 7304.20.10.10, 7304.20.10.20, 7304.20.10.30, 
7304.20.10.40, 7304.20.10.50, 7304.20.10.60, 7304.20.10.80, 
7304.20.20.00, 7304.20.20.10, 7304.20.20.20, 7304.20.20.30, 
7304.20.20.40, 7304.20.20.50, 7304.20.20.60, 7304.20.20.80, 
7304.20.30.00, 7304.20.30.10, 7304.20.30.20, 7304.20.30.30, 
7304.20.30.40, 7304.20.30.50, 7304.20.30.60, 7304.20.30.80, 
7304.20.40.00, 7304.20.40.10, 7304.20.40.20, 7304.20.40.30, 
7304.20.40.40, 7304.20.40.50, 7304.20.40.60, 7304.20.40.80, 
7304.20.50.10, 7304.20.50.15, 7304.20.50.30, 7304.20.50.45, 
7304.20.50.50, 7304.20.50.60, 7304.20.50.75, 7304.20.60.10, 
7304.20.60.15, 7304.20.60.30, 7304.20.60.45, 7304.20.60.50, 
7304.20.60.60, 7304.20.60.75, 7304.20.70.00, 7304.20.80.00, 
7304.20.80.30, 7304.20.80.45, 7304.20.80.60, 7305.20.20.00, 
7305.20.40.00, 7305.20.60.00, 7305.20.80.00, 7306.20.10.30, 
7306.20.10.90, 7306.20.20.00, 7306.20.30.00, 7306.20.40.00, 
7306.20.60.10, 7306.20.60.50, 7306.20.80.10, and 7306.20.80.50.

    Although the HTSUS subheadings are 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 January 1, 1994, through June 
30, 1994.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Statute and to the 
Department's regulations are in reference to the provisions as they 
existed on December 31, 1994.

Best Information Available

    We have determined, in accordance with section 776(c) of the Act 
(19 U.S.C. 1677e(c)), that the use of best information available (BIA) 
is appropriate for sales of the subject merchandise by Union. In 
deciding whether to use BIA, section 353.37(b) provides that the 
Department may take into account whether a party refused or was unable 
to produce information in a timely manner. In this case, Union refused 
to provide the information requested.
    In determining what to use as BIA, the Department follows a two-
tiered methodology whereby the Department normally assigns lower 
margins to those respondents who cooperate in an investigation, and 
margins based on more adverse assumptions for those respondents who do 
not cooperate in an investigation.
    In this case, because Union failed to respond to the Department's 
questionnaire, we find that it has not cooperated in this 
investigation. Accordingly, under our BIA methodology, uncooperative 
respondents are assigned the higher of the highest margin alleged in 
the petition or the highest rate calculated for another respondent. In 
this instance, we are assigning the highest margin among the margins 
alleged in the petition (see, Antifriction Bearings (Other Than Tapered 
Roller Bearings) and Parts Thereof From the Federal Republic of 
Germany: Final Determination of Sales at Less Than Fair Value (54 FR 
18992, 19033, May 3, 1989)). The Department's two-tier methodology for 
assigning BIA based on the degree of the respondents' cooperation has 
been upheld by the U.S. Court of Appeals for the Federal Circuit (see 
Allied-Signal Aerospace Co. v. the United States, Slip Op. 93-1049 (Fed 
Cir. June 22, 1993); see also Krupp Stahl AG. et al v. the United 
States, Slip Op. 93-84 (CIT May 26, 1993)).

Such or Similar Comparisons

    We have determined for purposes of the preliminary determination 
that the OCTG covered by this investigation comprises a single category 
of ``such or similar'' merchandise within the meaning of section 
771(16) of the Act. All comparisons of U.S. to third-country sales 
involved identical merchandise.

Fair Value Comparisons
    To determine whether HSP's sales of OCTG from Korea 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.

United States Price

    We based USP on exporter's sales price (ESP), in accordance with 
section 772(c) of the Act, because the subject merchandise was sold to 
the first unrelated purchaser after importation into the United States.
    We calculated ESP based on packed, ex-U.S. warehouse prices to 
unrelated customers in the United States. We made deductions from gross 
unit price, where appropriate, for foreign brokerage charges, foreign 
inland freight, ocean freight, marine insurance, U.S. duty, U.S. inland 
freight, U.S. brokerage, wharfage fees, credit expense, and U.S. 

[[Page 6509]]
and foreign indirect selling expenses, including inventory carrying 
costs and other U.S. and foreign indirect selling expenses. We added 
duty drawback in accordance with section 772(d)(1)(B) of the Act.

Foreign Market Value

    We compared the volume of home market sales of subject merchandise 
to the volume of third-country sales to determine whether there was a 
sufficient volume of sales in the home market to serve as a viable 
basis for calculating FMV, in accordance with section 773(a)(1)(B) of 
the Act. Pursuant to 19 CFR 353.48, we found that the home market was 
not viable because it represented less than five percent of the amount 
sold to third countries. We, therefore, based FMV on third-country 
sales. We selected Canada as the third-country market because Canada 
was the only third country to which HSP sold the subject merchandise 
and the sales to this market were greater than five percent of the 
sales made to the United States.

Cost of Production Analysis

    As stated above, based on the petitioners' allegation that HSP was 
selling OCTG in Canada at prices below its COP, the Department 
initiated a COP investigation.
    In order to determine whether the third-country prices were above 
HSP's COP, we calculated the COP based on the sum of HSP's cost of 
materials, fabrication, general expenses, and packing, in accordance 
with section 353.51(c). We accepted HSP's cost data for purposes of the 
preliminary determination.

Results of COP Analysis

    Under our standard practice, where we find that less than 10 
percent of a company's sales are at prices below the COP, we disregard 
any below-cost sales because that company's below-cost sales were not 
made in substantial quantities. Where we find between 10 and 90 percent 
of the company's sales of a given product were at prices below the COP, 
and the below cost sales were made over an extended period of time, we 
disregard only the below-cost sales. Where we find that more than 90 
percent of the company's sales were at prices below the COP, and the 
sales were made over an extended period of time, we disregard all sales 
for that product and calculate FMV based on constructed value (CV).
    In accordance with section 773(b)(1) of the Act, in order to 
determine whether below-cost sales were made over an extended period of 
time, we compare the number of months in which below-cost sales 
occurred for each product to the number of months in the POI in which 
that product was sold. If a product was sold in three or more months of 
the POI, we do not exclude below-cost sales unless there were below-
cost sales in at least three months during the POI. When we find that 
sales of a product only occurred in one or two months, the number of 
months in which the sales occurred constituted the extended period of 
time; i.e., where sales of a product were made in only two months, the 
extended period of time was two months, where sales of a product were 
made in only one month, the extended period of time was one month (see 
the Preliminary Results and Partial Termination of Antidumping Duty 
Administrative Review: Tapered Roller Bearings, Four Inches or Less in 
Outside Diameter, and Components Thereof, From Japan (58 FR 69336, 
69338, December 10, 1993).
    Based on this preliminary analysis, none of HSP's Canadian sales 
were found to be below cost. Accordingly, we calculated FMV based on 
C&F prices to unrelated customers in Canada. We made deductions from 
gross unit price for foreign brokerage charges, foreign inland freight, 
ocean freight, other expenses and credit expense. In addition, we 
deducted indirect selling expenses, including, where appropriate, 
inventory carrying costs and other indirect selling expenses, up to the 
amount of indirect selling expenses incurred on U.S. sales, in 
accordance 19 CFR 353.56(b)(2). We deducted third-country packing costs 
and added U.S. packing costs. Finally, we added duty drawback.

Currency Conversion

    Pursuant to 19 CFR 353.60, 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 the 
information used in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d)(1) (19 U.S.C. 1673b(d)(1)), of 
the Act, we are directing the Customs Service to suspend liquidation of 
all entries of OCTG from Korea, 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 preliminary dumping margin, as shown below. 
The suspension of liquidation will remain in effect until further 
notice.

------------------------------------------------------------------------
                                                                Margin  
               Producer/Manufacturer/Exporter                 percentage
------------------------------------------------------------------------
Hyundai Steel Pipe Company, Ltd.............................      00.00 
Union Steel Manufacturing Company...........................      12.17 
All Others..................................................      12.17 
------------------------------------------------------------------------

Postponement of Final Determination
    On January 12, 1995, in accordance with 19 CFR 353.20(b), HSP 
requested that, in the event of an affirmative determination, the 
Department postpone the final determination. We find no compelling 
reason to deny the request. Accordingly, we are postponing the date of 
the final determination until not later than 135 days after the date of 
publication of this notice.

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our preliminary 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

    In accordance with 19 CFR 353.38, case briefs or other written 
comments in at least ten copies may be submitted by any interested 
party to the Assistant Secretary for Import Administration no later 
than April 21, 1995, and rebuttal briefs no later than April 28, 1995. 
We request that parties in this case provide an executive summary of no 
more than two pages in conjunction with case briefs on the major issues 
to be addressed. Further, briefs should contain a table of authorities. 
Citations to Commerce determinations and court decisions should include 
the page number where cited information appears. In preparing the 
briefs, please begin each issue on a separate page. In accordance with 
19 CFR 353.38(b), we will hold a public hearing, if requested, to give 
interested parties an opportunity to comment on arguments raised in 
case or rebuttal briefs. Tentatively, the hearing will be held on May 
3, 1995, at 10:00 a.m. at the U.S. Department of Commerce, Room 1851, 
14th Street and Constitution Avenue, N.W., Washington, D.C. 20230. 
Parties should 

[[Page 6510]]
confirm the time, date, and place of the hearing 48 hours before the 
scheduled time.
    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 in the Federal Register. Requests should 
contain: (1) The party's name, address, telephone number; (2) the 
number of participants; and (3) a list of the issues to be discussed. 
In accordance with 19 CFR 353.38(b), oral presentations will be limited 
to the issues raised in the briefs.
    This determination is published pursuant to section 733(f) of the 
Act (19 U.S.C. 1673b(f)) and 19 CFR 353.15(a)(4).

    Dated: January 26, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-2614 Filed 2-1-95; 8:45 am]
BILLING CODE 3510-DS-P