[Federal Register Volume 60, Number 22 (Thursday, February 2, 1995)]
[Notices]
[Pages 6516-6519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2618]



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DEPARTMENT OF COMMERCE
[A-469-806]


Preliminary Determination of Sales at Not Less Than Fair Value: 
Antidumping Duty Investigation of Oil Country Tubular Goods From Spain

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

EFFECTIVE DATE: February 2, 1995.

FOR FURTHER INFORMATION CONTACT: William Crow or Lisa Girardi, Office 
of Antidumping Investigations, Import Administration, U.S. Department 
of Commerce, 14th Street and Constitution Avenue, N.W., Washington, 
D.C. 20230; telephone (202) 482-0116, or (202) 482-4105. 

[[Page 6517]]


Preliminary Determination:

    The Department preliminarily determines that oil country tubular 
goods (OCTG) from Spain are not being 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). We have calculated a preliminary margin of 
zero percent for Spanish OCTG sold in the United States during the 
period of investigation.

Case History

    Since the initiation of this investigation on July 27, 1994, (59 FR 
37962, July 20, 1994), the following events have occurred.
    On August 15, 1994, the U.S. International Trade Commission (ITC) 
issued an affirmative preliminary injury determination in this 
proceeding (see ITC Investigation No. 731-TA-717).
    On August 26, 1994, the Department of Commerce (the Department) 
issued an antidumping questionnaire to Tubos Reunidos S.A. (TR), and an 
antidumping survey to Tubacex S.A. On September 9, 1994, we received a 
letter from Tubacex S.A. stating that it did not sell the subject 
merchandise to the United States during the period of investigation. On 
September 27, 1994, the Department selected TR as the sole mandatory 
respondent in the investigation. TR accounts for at least 60 percent of 
exports of OCTG from Spain during the period of investigation. TR 
submitted responses to our questionnaire in September and October 1994, 
and responses to our deficiency questionnaires in November and December 
1994.
    On November 10, 1994, Koppel Steel Corporation, U.S. Steel Group (a 
unit of USX Corporation) and USS/Kobe Steel Company, (the petitioners) 
timely requested that the Department postpone the preliminary 
determination in accordance with section 733(c)(1) of the Act (19 CFR 
353.15(c)(1994)). We did so on November 15, 1994 (59 FR 60130, November 
22, 1994).
    On November 2, 1994, the petitioners alleged that TR was selling 
the subject merchandise in third country markets at below its cost of 
production. On January 5, 1995, the Department determined that TR's 
home market was not viable within the meaning of section 773(a)(1)(b) 
of the Act and 19 CFR 353.48. On January 5, 1995, the Department 
selected India as the third country market for this investigation (see 
January 5, 1995, memorandum from David L. Binder to Gary Taverman). 
After analyzing the petitioners' allegation, we found reasonable 
grounds to believe or suspect that sales in India were being made at 
less than the cost of production. Consequently, on January 9, 1995, the 
Department initiated an investigation of sales below cost for TR's 
sales to India, in accordance with section 773(b) of the Act and 19 CFR 
353.51. On January 11, 1995, we issued Section D of the antidumping 
questionnaire concerning cost of production to TR.
    On January 26, 1995, in accordance with 19 CFR 353.20(b), 
respondent requested that, in the event of an affirmative preliminary 
determination by the Department, the Department postpone the final 
determination. However, because this preliminary determination is 
negative, the criteria for a postponement of the final determination 
under 19 CFR 353.20(b)(1) have not been met. Accordingly, the final 
determination has not been postponed.

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 scope does not cover casing, tubing, or drill pipe 
containing 10.5 percent or more of chromium. The OCTG subject to this 
investigation are currently classified in the Harmonized Tariff 
Schedule of the United States (HTS) 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 HTS 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.
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(b) 
of the Act.
    The respondent reported sales of both identical merchandise and 
similar merchandise in India during the POI. Where there were sales of 
similar merchandise in the third country market to compare to U.S. 
sales, we made comparisons on the basis of the characteristics listed 
in Appendix V of the Department's questionnaire. However, we modified 
the matching hierarchy in Appendix V so that sales of Indian casing 
would first be matched to sales of U.S. casing. Thus we made similar 
merchandise comparisons on the basis of: (1) Whether OCTG is casing or 
tubing; (2) whether OCTG is seamless or welded; (3) the grade of OCTG; 
(4) end-finish (5) outside diameter, (6) OCTG length (7) full-body 
normalization and (8) wall thickness. TR had incorrectly reported 
multiple costs instead of one POI cost for unique products. After 
weight-averaging the multiple costs reported for unique products to 
derive single POI costs specific to each product model, the Department 
used TR's reported costs to adjust for physical differences in 
merchandise.

Fair Value Comparisons

    To determine whether sales of OCTG from Spain 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. 
When comparing the U.S. sales to sales of similar merchandise in the 
third country market, we made adjustments for differences in physical 

[[Page 6518]]
characteristics, pursuant to 19 CFR 353.57.

United States Price

    We based USP on purchase price, in accordance with section 772(b) 
of the Act, because the subject merchandise was sold to an unrelated 
purchaser before importation into the United States and because 
exporter's sales price methodology was not otherwise indicated.
    We calculated USP on the basis of packed, CIF duty paid prices to 
unrelated customers. In accordance with section 772(d)(2)(A) of the 
Act, we made deductions from U.S. price, where appropriate, for foreign 
brokerage, foreign inland freight, ocean freight, marine insurance, 
U.S. duty, and U.S. brokerage and handling.
    In order to calculate imputed credit on U.S. sales where the date 
of payment was not reported, we used the date of this preliminary 
determination as the date of payment. Where the respondent did not 
properly account for the quantities shipped on different invoices for a 
purchase order, we recalculated credit by weight-averaging the credit 
expenses for each invoice by the respective quantities shipped for each 
invoice to determine one weighted-average credit expense for the 
purchase order.

Foreign Market Value

    Because there were no sales of the subject merchandise in the home 
market during the POI, we found that the home market was not viable, in 
accordance with 19 CFR 353.48(a). India was selected as the most 
appropriate third country on which to base FMV because: (1) The 
merchandise exported to India is most similar or identical to the 
merchandise exported to the United States; (2) the volume of sales 
during the POI was the second largest of any third country; and (3) 
TR's sales to India were to an OCTG market whose organization and 
development were similar to that of the U.S. market, based on our 
analysis of the sales and distribution process for those sales. (see 
January 5, 1995, memorandum from David L. Binder to Gary Taverman).
    We excluded from our analysis those sales in the third country 
market database with negative quantities or negative sales prices.
    We calculated FMV based on C&F and CIF prices to processor-
distributors and trading companies in India.
    In light of the Court of Appeals for the Federal Circuit's (CAFC) 
decision in Ad Hoc Committee of AZ-NM-TX-FL Producers of Gray Portland 
Cement v. United States, 13 F.3d 398 (Fed. Cir. 1994), the Department 
can no longer deduct third country market movement charges from FMV 
pursuant to its inherent power to fill gaps in the antidumping statute. 
Instead, we will adjust for those expenses under the circumstance-of-
sale provision of 19 CFR 353.56(a), as appropriate. Accordingly, in the 
present case, we deducted from FMV the following direct selling 
expenses pursuant to 19 CFR 353.56(a): post-sale third-country inland 
freight and insurance, ocean freight, and marine insurance expenses.
    We deducted third-country packing costs and added U.S. packing 
costs in accordance with section 773(a)(1) of the Act. We also made 
circumstance-of-sale adjustments for a third-country direct selling 
expense, imputed credit, in accordance with 19 CFR 353.56(a)(2). In 
order to calculate imputed credit on sales to India where the date of 
payment was not reported, we used the date of this preliminary 
determination as the date of payment. Where the respondent did not 
properly account for the quantities shipped on different invoices for a 
purchase order, we recalculated credit by weight-averaging the credit 
expenses for each invoice by the respective quantities shipped for each 
invoice to determine one weighted-average credit expense for the 
purchase order.

Cost of Production (COP)

    As stated above, the petitioners made a sales-below-cost allegation 
on November 2, 1994. The Department initiated a sales-below-cost 
investigation on January 9, 1995, and issued its section D 
questionnaire on January 11, 1995. The section D response is due on 
February 1, 1995, and thus a COP analysis cannot be undertaken for 
purposes of the preliminary determination. We will undertake such an 
analysis for purposes of the final determination.

Currency Conversion

    We have made currency conversions based on the official exchange 
rates, certified by the Federal Reserve Bank of New York, in effect on 
the dates of the U.S. sales.
Verification

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

Preliminary Margin Calculation

    Based on the calculation methodology outlined above, we 
preliminarily calculated the following margins:

------------------------------------------------------------------------
                                                                Margin  
               Producer/manufacturer/exporter                 percentage
------------------------------------------------------------------------
Tubos Reunidos S.A.........................................        00.00
All others.................................................        00.00
------------------------------------------------------------------------

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 March 7, 1995, and rebuttal briefs no later than March 14, 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 March 
21, 1995, at 1 p.m. at the U.S. Department of Commerce, Room 1414, 14th 
Street and Constitution Avenue, N.W., Washington, D.C. 20230. Parties 
should 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).


[[Page 6519]]

    Dated: January 26, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-2618 Filed 2-1-95; 8:45 am]
BILLING CODE 3510-DS-P