[Federal Register Volume 60, Number 117 (Monday, June 19, 1995)]
[Notices]
[Pages 31953-31960]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14936]



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DEPARTMENT OF COMMERCE
[A-357-809]


Notice of Final Determination of Sales at Less than Fair Value: 
Small Diameter Circular Seamless Carbon and Alloy Steel Standard, Line, 
and Pressure Pipe From Argentina

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

EFFECTIVE DATE: June 19, 1995.

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FOR FURTHER INFORMATION CONTACT: Irene Darzenta or Fabian Rivelis, 
Office of Antidumping Investigations, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone 
(202) 482-6320 or (202) 482-3853.

Final Determination

    The Department of Commerce (the Department) determines that small 
diameter circular seamless carbon and alloy steel standard, line, and 
pressure pipe (seamless pipe) from Argentina is being, or is likely to 
be, sold in the United States at less than fair value, as provided in 
section 735 of the Tariff Act of 1930, as amended (the Act) (1994). The 
estimated margins are shown in the ``Suspension of Liquidation'' 
section of this notice.

Case History

    Since our preliminary determination on January 19, 1995 (60 FR 
5348, January 27, 1994), the following events have occurred.
    In response to a request from respondent Siderca S.A.I.C. 
(Siderca), we postponed the final determination until June 12, 1995, 
pursuant to section 735(a)(2)(A) of the Act (60 FR 9012, February 16, 
1995).
    In our notice of preliminary determination we stated that we would 
solicit further information on various scope-related issues, including 
class or kind of merchandise. On February 10, 1995, we issued a 
questionnaire to interested parties to request further information on 
whether the scope of the investigation constitutes more than one class 
or kind of merchandise. Responses to this questionnaire were submitted 
on March 27, 1995.
    On April, 27, 1995, Koppel Steel Corporation, a U.S. producer of 
subject merchandise which appeared as an interested party from the 
outset of this investigation, requested co-petitioner status.
    On May 5, 1995, respondent submitted its case brief. Petitioner 
1 submitted its rebuttal brief on May 15, 1995. In its rebuttal 
brief, petitioner requested that the Department reject ``substantial 
portions'' of Siderca's case brief because it allegedly constituted a 
``new submission of factual information.'' Siderca objected to this 
request on May 19, 1995. Petitioner responded to this letter on May 26, 
1995. However, we determined that Siderca's case brief did not contain 
new factual information. (See Comment 1 in the ``Interested Party 
Comment'' section [[Page 31954]] of this notice.) In addition, on June 
1, 1995, the Department returned Siderca's May 19, 1995, letter, as 
well as petitioner's letter of May 26, 1995, because they constituted 
unsolicited submissions untimely filed after the briefing period.

    \1\  All references to ``petitioner'' in this notice include 
Koppel Steel Corporation.
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Scope of Investigation

    The following scope language reflects certain modifications made 
for purposes of the final determination, where appropriate, as 
discussed in the ``Scope Issues'' section below.
    The scope of this investigation includes seamless pipes produced to 
the ASTM A-335, ASTM A-106, ASTM A-53 and API 5L specifications and 
meeting the physical parameters described below, regardless of 
application. The scope of this investigation also includes all products 
used in standard, line, or pressure pipe applications and meeting the 
physical parameters below, regardless of specification.
    For purposes of this investigation, seamless pipes are seamless 
carbon and alloy (other than stainless) steel pipes, of circular cross-
section, not more than 114.3 mm (4.5 inches) in outside diameter, 
regardless of wall thickness, manufacturing process (hot-finished or 
cold-drawn), end finish (plain end, bevelled end, upset end, threaded, 
or threaded and coupled), or surface finish. These pipes are commonly 
known as standard pipe, line pipe or pressure pipe, depending upon the 
application. They may also be used in structural applications. Pipes 
produced in non-standard wall thicknesses are commonly referred to as 
tubes.
    The seamless pipes subject to these investigations are currently 
classifiable under subheadings 7304.10.10.20, 7304.10.50.20, 
7304.31.60.50, 7304.39.00.16, 7304.39.00.20, 7304.39.00.24, 
7304.39.00.28, 7304.39.00.32, 7304.51.50.05, 7304.51.50.60, 
7304.59.60.00, 7304.59.80.10, 7304.59.80.15, 7304.59.80.20, and 
7304.59.80.25 of the Harmonized Tariff Schedule of the United States 
(HTSUS).
    The following information further defines the scope of this 
investigation, which covers pipes meeting the physical parameters 
described above:
    Specifications, Characteristics and Uses: Seamless pressure pipes 
are intended for the conveyance of water, steam, petrochemicals, 
chemicals, oil products, natural gas and other liquids and gasses in 
industrial piping systems. They may carry these substances at elevated 
pressures and temperatures and may be subject to the application of 
external heat. Seamless carbon steel pressure pipe meeting the American 
Society for Testing and Materials (ASTM) standard A-106 may be used in 
temperatures of up to 1000 degrees fahrenheit, at various American 
Society of Mechanical Engineers (ASME) code stress levels. Alloy pipes 
made to ASTM standard A-335 must be used if temperatures and stress 
levels exceed those allowed for A-106 and the ASME codes. Seamless 
pressure pipes sold in the United States are commonly produced to the 
ASTM A-106 standard.
    Seamless standard pipes are most commonly produced to the ASTM A-53 
specification and generally are not intended for high temperature 
service. They are intended for the low temperature and pressure 
conveyance of water, steam, natural gas, air and other liquids and 
gasses in plumbing and heating systems, air conditioning units, 
automatic sprinkler systems, and other related uses. Standard pipes 
(depending on type and code) may carry liquids at elevated temperatures 
but must not exceed relevant ASME code requirements.
    Seamless line pipes are intended for the conveyance of oil and 
natural gas or other fluids in pipe lines. Seamless line pipes are 
produced to the API 5L specification.
    Seamless pipes are commonly produced and certified to meet ASTM A-
106, ASTM A-53 and API 5L specifications. Such triple certification of 
pipes is common because all pipes meeting the stringent A-106 
specification necessarily meet the API 5L and ASTM A-53 specifications. 
Pipes meeting the API 5L specification necessarily meet the ASTM A-53 
specification. However, pipes meeting the A-53 or API 5L specifications 
do not necessarily meet the A-106 specification. To avoid maintaining 
separate production runs and separate inventories, manufacturers triple 
certify the pipes. Since distributors sell the vast majority of this 
product, they can thereby maintain a single inventory to service all 
customers.
    The primary application of ASTM A-106 pressure pipes and triple 
certified pipes is in pressure piping systems by refineries, 
petrochemical plants and chemical plants. Other applications are in 
power generation plants (electrical-fossil fuel or nuclear), and in 
some oil field uses (on shore and off shore) such as for separator 
lines, gathering lines and metering runs. A minor application of this 
product is for use as oil and gas distribution lines for commercial 
applications. These applications constitute the majority of the market 
for the subject seamless pipes. However, A-106 pipes may be used in 
some boiler applications.
    The scope of this investigation includes all seamless pipe meeting 
the physical parameters described above and produced to one of the 
specifications listed above, regardless of application, and whether or 
not also certified to a non-covered specification. Standard, line and 
pressure applications and the above-listed specifications are defining 
characteristics of the scope of this investigation. Therefore, seamless 
pipes meeting the physical description above, but not produced to the 
A-335, A-106, A-53, or API 5L standards shall be covered if used in a 
standard, line or pressure application.
    For example, there are certain other ASTM specifications of pipe 
which, because of overlapping characteristics, could potentially be 
used in A-106 applications. These specifications generally include A-
162, A-192, A-210, A-333, and A-524. When such pipes are used in a 
standard, line or pressure pipe application, such products are covered 
by the scope of this investigation.
    Specifically excluded from this investigation are boiler tubing and 
mechanical tubing, if such products are not produced to A-335, A-106, 
A-53 or API 5L specifications and are not used in standard, line or 
pressure applications. In addition, finished and unfinished OCTG are 
excluded from the scope of this investigation, if covered by the scope 
of another antidumping duty order from the same country. If not covered 
by such an OCTG order, finished and unfinished OCTG are included in 
this scope when used in standard, line or pressure applications. 
Finally, also excluded from this investigation are redraw hollows for 
cold-drawing when used in the production of cold-drawn pipe or tube.
    Although the HTSUS subheadings are provided for convenience and 
customs purposes, our written description of the scope of this 
investigation is dispositive.

Scope Issues

    Interested parties in these investigations have raised several 
issues related to the scope. We considered these issues in our 
preliminary determination and invited additional comments from the 
parties. These issues, which are discussed below, are: (A) Whether to 
continue to include end use as a factor in defining the scope of these 
investigations; (B) whether the seamless pipe subject to these 
investigations constitutes more than one class or kind of merchandise; 
and (C) miscellaneous scope clarification issues and scope exclusion 
requests.

[[Page 31955]]

A. End Use

    We stated in our preliminary determination that we agreed with 
petitioner that pipe products identified as potential substitutes used 
in the same applications as the four standard, line, and pressure pipe 
specifications listed in the scope would fall within the class or kind 
of subject merchandise and, therefore, within the scope of any orders 
issued in these investigations. However, we acknowledged the 
difficulties involved with requiring end-use certifications, 
particularly the burdens placed on the Department, the U.S. Customs 
Service, and the parties, and stated that we would strive to simplify 
any procedures in this regard.
    For purposes of these final determinations, we have considered 
carefully additional comments submitted by the parties and have 
determined that it is appropriate to continue to employ end use to 
define the scope of these cases with respect to non-listed 
specifications. We find that the generally accepted definition of 
standard, line and pressure seamless pipes is based largely on end use, 
and that end use is implicit in the description of the subject 
merchandise. Thus, end use must be considered a significant defining 
characteristic of the subject merchandise. Given our past experience 
with substitution after the imposition of antidumping orders on steel 
pipe products,2 we agree with petitioner that if products produced 
to a non-listed specification (e.g., seamless pipe produced to A-162, a 
non-listed specification in the scope) were actually used as standard, 
line, or pressure pipe, then such product would fall within the same 
class or kind of merchandise subject to these investigations.

    \2\ See Preliminary Affirmative Determination of Scope Inquiry 
on Antidumping Duty Orders on Certain Welded Non-Alloy Steel Pipes 
from Brazil, the Republic of Korea, Mexico and Venezuela, 59 FR 
1929, January 13, 1994.
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    Furthermore, we disagree with respondents' general contention that 
using end use for the scope of an antidumping case is beyond the 
purview of the U.S. antidumping law. The Department has interpreted 
scope language in other cases as including an end-use specification. 
See Ipsco Inc. v. United States, 715 F.Supp. 1104 (CIT 1989) (Ipsco). 
In Ipsco, the Department had clarified the scope of certain orders, in 
particular the phrase, ``intended for use in drilling for oil and 
gas,'' as covering not only API specification OCTG pipe but, `` `all 
other pipe with [certain specified] characteristics used in OCTG 
applications * * *.' '' Ipsco at 1105. In reaching this determination, 
the Department also provided an additional description of the covered 
merchandise, and initiated an end-use certification procedure.
    Regarding implementation of the end use provision of the scope of 
these investigations, and any orders which may be issued in these 
investigations, we are well aware of the difficulty and burden 
associated with such certifications. Therefore, in order to maintain 
the effectiveness of any order that may be issued in light of actual 
substitution in the future (which the end-use criterion is meant to 
achieve), yet administer certification procedures in the least 
problematic manner, we have developed an approach which simplifies 
these procedures to the greatest extent possible.
    First, we will not require end-use certification until such time as 
petitioner or other interested parties provide a reasonable basis to 
believe or suspect that substitution is occurring.3 Second, we 
will require end-use certification only for the product(s) (or 
specification(s)) for which evidence is provided that substitution is 
occurring. For example, if, based on evidence provided by petitioner, 
the Department finds a reasonable basis to believe or suspect that 
seamless pipe produced to A-162 specification is being used as pressure 
pipe, we will require end-use certifications for imports of A-162 
specification. Third, normally we will require only the importer of 
record to certify to the end use of the imported merchandise. If it 
later proves necessary for adequate implementation, we may also require 
producers who export such products to the United States to provide such 
certification on invoices accompanying shipments to the United States. 
For a complete discussion of interested party comments and the 
Department's analysis on this topic, see June 12, 1995, End Use 
Decision Memorandum from Deputy Assistant Secretary Barbara Stafford 
(DAS) to Assistant Secretary Susan Esserman (AS).

    \3\ This approach is consistent with petitioner's request.
B. Class or Kind

    In the course of these investigations, certain respondents have 
argued that the scope of the investigations should be divided into two 
classes or kinds. Siderca S.A.I.C., the Argentine respondent, has 
argued that the scope should be divided according to size: seamless 
pipe with an outside diameter of 2 inches or less and pipe with an 
outside diameter of greater than 2 inches constitute two classes or 
kinds. Mannesmann S.A., the Brazilian respondent, and Mannesmannrohren-
Werke, A.G., the German respondent, argued that the scope should be 
divided based upon material composition: carbon and alloy steel 
seamless pipe constitute two classes or kinds.
    In our preliminary determinations, we found insufficient evidence 
on the record that the merchandise subject to these investigations 
constitutes more than one class or kind. We also indicated that there 
were a number of areas where clarification and additional comment were 
needed. For purposes of the final determination, we considered a 
significant amount of additional information submitted by the parties 
on this issue, as well as information from other sources. This 
information strongly supports a finding of one class or kind of 
merchandise. As detailed in the June 12, 1995, Class or Kind Decision 
Memorandum from DAS to AS, we analyzed this issue based on the criteria 
set forth by the Court of International Trade in Diversified Products 
v. United States, 6 CIT 155, 572 F. Supp. 883 (1983). These criteria 
are as follows: (1) The general physical characteristics of the 
merchandise; (2) expectations of the ultimate purchaser; (3) the 
ultimate use of the merchandise; (4) the channels of trade in which the 
merchandise moves; and (5) the cost of that merchandise.
    In the past, the Department has divided a single class or kind in a 
petition into multiple classes or kinds where analysis of the 
Diversified Products criteria indicates that the subject merchandise 
constitutes more than one class or kind. See, for example, Final 
Determination of Sales at Less than Fair Value; Anti-Friction Bearings 
(Apart from Tapered Roller Bearings) from Germany, 54 FR 18992, 18998 
(May 3, 1989) (``AFBs from Germany''); Pure and Alloy Magnesium from 
Canada: Final Affirmative Determination; Rescission of Investigation 
and Partial Dismissal of Petition, 57 FR 30939 (July 13, 1992).
1. Physical Characteristics
    We find little meaningful difference in physical characteristics 
between seamless pipe above and below two inches. Both are covered by 
the same technical specifications, which contains detailed 
requirements.\4\ While we recognize that carbon and alloy pipe do have 
some important physical [[Page 31956]] differences (primarily the 
enhanced heat and pressure tolerances associated with alloy grade 
steels), it is difficult to say where carbon steel ends and alloy steel 
begins. As we have discussed in our Class or Kind Decision Memorandum 
of June 12, 1995, carbon steel products themselves contain alloys, and 
there is a range of percentages of alloy content present in merchandise 
made of carbon steel. We find that alloy grade steels, and pipes made 
therefrom, represent the upper end of a single continuum of steel 
grades and associated attributes.\5\

    \4\ The relevant ASTM specifications, as well as product 
definitions from other independent sources (e.g., American Iron and 
Steel Institute (AISI)), describe the sizes for standard, line, and 
pressure pipe, as ranging from \1/2\ inch to 60 inches (depending on 
application). None of these descriptions suggest a break point at 
two inches.
    \5\ The Department has had numerous cases where steel products 
including carbon and alloy grades were considered to be within the 
same class or kind. See, e.g., Preliminary Determination of Sales at 
Less than Fair Value: Oil Country Tubular Goods from Austria, et 
al., 60 FR 6512 (February 2, 1995); Final Determination of Sales at 
Less than Fair Value: Certain Alloy and Carbon Hot-Rolled Bars, 
Rods, and Semi-Finished Products of Special Bar Quality Engineered 
Steel from Brazil, 58 FR 31496 (June 3, 1993); Final Determination 
of Sales at Less than Fair Value: Forged Steel Crankshafts from the 
United Kingdom, 60 FR 22045 (May 9, 1995).
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    In those prior determinations where the Department divided a single 
class or kind, the Department emphasized that differences in physical 
characteristics also affected the capabilities of the merchandise 
(either the mechanical capabilities, as in AFBs from Germany, 54 FR at 
18999, 19002-03, or the chemical capabilities, as in Pure and Alloy 
Magnesium from Canada, 57 FR at 30939), which in turn established the 
boundaries of the ultimate use and customer expectations of the 
products involved.
    As the Department said in AFBs from Germany,

    [t]he real question is whether the physical differences are so 
material as to alter the essential nature of the product, and, 
therefore, rise to the level of class or kind distinctions. We 
believe that the physical differences between the five classes or 
kinds of the subject merchandise are fundamental and are more than 
simply minor variations on a theme.

54 FR at 19002. In the present cases, there is insufficient evidence to 
conclude that the differences between pipe over 2 inches in outside 
diameter and 2 inches or less in outside diameter, rise to the level of 
a class or kind distinction.
    Furthermore, with regard to Siderca's allegation that a two-inch 
breakpoint is widely recognized in the U.S. market for seamless pipe, 
the Department has found only one technical source of U.S. market data 
for seamless pipe, the Preston Pipe Report. The Preston Pipe Report, 
which routinely collects and publishes U.S. market data for this 
merchandise, publishes shipment data for the size ranges \1/2\ to 4\1/
2\ inches: it does not recognize a break point at 2 inches. 
Accordingly, the Department does not agree with Siderca that ``the U.S. 
market'' recognizes 2 inches as a physical boundary line for the 
subject merchandise.
    In these present cases, therefore, the Department finds that there 
is insufficient evidence that any physical differences between pipe 
over 2 inches in outside diameter and 2 inches or less in outside 
diameter, or between carbon and alloy steel, rise to the level of class 
or kind distinctions.
2. Ultimate Use and Purchaser Expectations
    We find no evidence that pipe above and below two inches is used 
exclusively in any specific applications. Rather, the record indicates 
that there are overlapping applications. For example, pipe above and 
below two inches may both be used as line and pressure pipe. The 
technical definitions for line and pressure pipe provided by ASTM, 
AISI, and a variety of other sources do not recognize a distinction 
between pipe over and under two inches.
    Likewise, despite the fact that alloy grade steels are associated 
with enhanced heat and pressure tolerances, there is no evidence that 
the carbon or alloy content of the subject merchandise can be 
differentiated in the ultimate use or expectations of the ultimate 
purchaser of seamless pipe.
3. Channels of Trade
    Based on information supplied by the parties, we determine that the 
vast majority of the subject merchandise is sold through the same 
channel of distribution in the United States and is triple-stenciled in 
order to meet the greatest number of applications.
    Accordingly, the channels of trade offer no basis for dividing the 
subject merchandise into multiple classes or kinds based on either the 
size of the outside diameter or on pipe having a carbon or alloy 
content.
4. Cost
    Based on the evidence on the record, we find that cost differences 
between the various products do exist. However, the parties varied 
considerably in the factors which they characterized as most 
significant in terms of affecting cost. There is no evidence that the 
size ranges above and below two inches, and the difference between 
carbon and alloy grade steels, form a break point in cost which would 
support a finding of separate classes or kinds.
    In conclusion, while we recognize that certain differences do exist 
between the products in the proposed class or kind of merchandise, we 
find that the similarities significantly outweigh any differences. 
Therefore, for purposes of the final determination, we will continue to 
consider the scope as constituting one class or kind of merchandise.

C. Miscellaneous Scope Clarification Issues and Exclusion Requests

    The miscellaneous scope issues include: (1) Whether OCTG and 
unfinished OCTG are excluded from the scope of these investigations; 
(2) whether pipes produced to non-standard wall thicknesses (commonly 
referred to as ``tubes'') are covered by the scope; (3) whether certain 
merchandise (e.g., boiler tubing, mechanical tubing) produced to a 
specification listed in the scope but used in an application excluded 
from the scope is covered by the scope; and (4) whether redraw hollows 
used for cold drawing are excluded from the scope. For a complete 
discussion of interested party comments and the Department's analysis 
on these topics, see June 12, 1995, Additional Scope Clarifications 
Decision Memorandum from DAS to AS.
    Regarding OCTG, petitioner requested that OCTG and unfinished OCTG 
be included within the scope of these investigations if used in a 
standard, line or pressure pipe application. However, OCTG and 
unfinished OCTG, even when used in a standard, line or pressure pipe 
application, may come within the scope of certain separate, concurrent 
investigations. We intend that merchandise from a particular country 
not be classified simultaneously as subject to both an OCTG order and a 
seamless pipe order. Thus, to eliminate any confusion, we have revised 
the scope language above to exclude finished and unfinished OCTG, if 
covered by the scope of another antidumping duty order from the same 
country. If not covered by such an OCTG order, finished and unfinished 
OCTG are included in this scope when used in a standard, line or 
pressure pipe application, and, as with other non-listed 
specifications, may be subject to end-use certification if there is 
evidence of substitution.
    Regarding pipe produced in non-standard wall thicknesses, we 
determine that these products are clearly within the parameters of the 
scope of these investigations. For clarification purposes, we note that 
the physical parameters of the scope include all seamless carbon and 
alloy steel pipes, of circular cross-section, not more than 4.5 inches 
in outside diameter, regardless of [[Page 31957]] wall thickness. 
Therefore, the fact that such products may be referred to as tubes by 
some parties, and may be multiple-stenciled, does not render them 
outside the scope.
    Regarding pipe produced to a covered specification but used in a 
non-covered application, we determine that these products are within 
the scope. We agree with the petitioner that the scope of this 
investigation includes all merchandise produced to the covered 
specifications and meeting the physical parameters of the scope, 
regardless of application. The end-use criteria included in the scope 
is only applicable to products which can be substituted in the 
applications to which the covered specifications are put i.e. standard, 
line, and pressure applications.
    It is apparent that at least one party in this case interpreted the 
scope incorrectly. Therefore, we have clarified the scope to make it 
more explicit that all products made to ASTM A-335, ASTM A-106, ASTM A-
53 and API 5L are covered, regardless of end use.
    With respect to redraw hollows for cold drawing, the scope language 
excludes such products specifically when used in the production of 
cold-drawn pipe or tube. We understand that petitioner included this 
exclusion language expressly and intentionally to ensure that hollows 
imported into the United States are sold as intermediate products, not 
as merchandise to be used in a covered application.

Standing
    The Argentine, Brazilian, and German respondents have challenged 
the standing of Gulf States Tube to file the petition with respect to 
pipe and tube between 2.0 and 4.5 inches in outside diameter, arguing 
that Gulf States Tube does not produce these products.
    Pursuant to section 732(b)(1) of the Act, an interested party as 
defined in section 771(9)(C) of the Act has standing to file a 
petition. (See also 19 CFR 353.12(a).) Section 771(9)(C) of the Act 
defines ``interested party,'' inter alia, as a producer of the like 
product. For the reasons outlined in the ``Scope Issues'' section 
above, we have determined that the subject merchandise constitutes a 
single class or kind of merchandise. The International Trade Commission 
(ITC) has also preliminarily determined that there is a single like 
product consisting of circular seamless carbon and alloy steel 
standard, line, and pressure pipe, and tubes not more than 4.5 inches 
in outside diameter, and including redraw hollows. (See USITC 
Publication 2734, August 1994 at 18). For purposes of determining 
standing, the Department has determined to accept the ITC's definition 
of like product, for the reasons set forth in the ITC's preliminary 
determination. Because Gulf States is a producer of the like product, 
it has standing to file a petition with respect to the class or kind of 
merchandise under investigation. Further, as noted in the ``Case 
History'' section of this notice, on April 27, 1995, Koppel, a U.S. 
producer of the product size range at issue, filed a request for co-
petitioner status, which the Department granted. As a producer of the 
like product, Koppel also has standing.
    The Argentine respondent argues that Koppel's request was filed too 
late to confer legality on the initiation of these proceedings with 
regard to the products at issue. Gulf States Tube maintains that the 
Department has discretion to permit the amendment of a petition for 
purposes of adding co-petitioners who produce the domestic like 
product, at such time and upon such circumstances as deemed appropriate 
by the Department.
    The Court of International Trade (CIT) has upheld in very broad 
terms the Department's ability to allow amendments to petitions. For 
example, in Citrosuco Paulista, S.A. v. United States, 704 F. Supp. 
1075 (Ct. Int'l Trade 1988), the Court sustained the Department's 
granting of requests for co-petitioner status filed by six domestic 
producers on five different dates during an investigation. The Court 
held that the addition of the co-petitioners cured any defect in the 
petition, and that allowing the petition to be amended was within 
Commerce's discretion:

    [S]ince Commerce has statutory discretion to allow amendment of 
a dumping petition at any time, and since Commerce may self-initiate 
a dumping petition, any defect in a petition filed by [a domestic 
party is] cured when domestic producers of the like product [are] 
added as co-petitioners and Commerce [is] not required to start a 
new investigation.

Citrosuco, 704 F. Supp. at 1079 (emphasis added). The Court reasoned 
that if Commerce were to have dismissed the petition for lack of 
standing, and to have required the co-petitioners to refile at a later 
date, it ``would have elevated form over substance and fruitlessly 
delayed the antidumping investigation * * * when Congress clearly 
intended these cases to proceed expeditiously.'' Id. at 1083-84.
    Koppel has been an interested party and a participant in these 
investigations from the outset. The timing of Koppel's request for co-
petitioner status and the fact that it made its request in response to 
Siderca's challenge to Gulf States's Tube's standing does not render 
its request invalid. See Final Affirmative Countervailing Duty 
Determination; Live Swine and Fresh, Chilled, and Frozen Pork Products 
from Canada, 50 FR 25097 (June 17, 1985). The Department has rejected a 
request to add a co-petitioner based on the untimeliness of the request 
only where the Department determined that there was not adequate time 
for opposing parties to submit comments and for the Department to 
consider the relevant arguments. See Final Affirmative Countervailing 
Duty Determination: Certain Stainless Steel Hollow Products from 
Sweden, 52 FR 5794, 5795, 5803 (February 26, 1987). In this 
investigation, the respondents have had an opportunity to comment on 
Koppel's request for co-petitioner status, and the Argentine respondent 
has done so in its case brief. Therefore, we have determined that, 
because respondents would not be prejudiced or unduly burdened, 
amendment of the petition to add Koppel as co-petitioner is 
appropriate.

Period of Investigation

    The period of investigation (POI) is January 1, 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

    In accordance with section 776(c) of the Act, we have determined 
that the use of best information available (BIA) is appropriate for 
Siderca, the only named respondent in this investigation. As stated in 
our notice of preliminary determination, on September 12, 1994, Siderca 
notified the Department that it would not participate in this 
investigation. Because Siderca refused to answer the Department's 
questionnaire, we find that it has not cooperated in this 
investigation.
    In determining what rate to use as BIA, the Department follows a 
two-tiered BIA methodology, whereby the Department may impose the most 
adverse rate upon those respondents who refuse to cooperate or 
otherwise significantly impede the proceeding, or assign a lower rate 
for those respondents who have cooperated in an investigation. The 
Department's BIA methodology for uncooperative respondents is to assign 
the higher of the highest margin alleged in the petition or the highest 
rate calculated for another respondent. The Department's practice for 
applying BIA to cooperative respondents is to use the higher of the 
average of the margins alleged in the petition or the calculated 
[[Page 31958]] margin for another firm for the same class or kind of 
merchandise from the same country. See Final Determination of Sales at 
Less than Fair Value: Antifriction Bearings (Other Than Tapered Roller 
Bearings) and Parts Thereof From the Federal Republic of Germany, 54 FR 
18992, 19033 (May 3, 1989). The Department's two-tier methodology for 
assigning BIA based on the degree of 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, 996 F2d 1185 (Fed 
Cir. 1993); see also Krupp Stahl AG. et al v. the United States, 822 F. 
Supp. 789 (CIT 1993).) Because there are no other respondents in this 
investigation we are assigning to Siderca, as BIA, the highest margin 
among the margins alleged in the petition.

Fair Value Comparisons

    To determine whether sales of subject merchandise from Germany to 
the United States were made at less than fair value, we compared United 
States price (USP) to foreign market value (FMV) as reported in the 
petition. See Initiation of Antidumping Duty Investigation of Small 
Diameter Circular Seamless Carbon and Alloy Steel Standard, Line and 
Pressure Pipe from Argentina, Brazil, Germany, and Italy (59 FR 37025, 
July 20, 1994).
Interested Party Comments

Comment 1
    Petitioner contends that Siderca's submissions of factual 
information made after its September 12, 1994, letter indicating that 
it would not participate in the investigation, are untimely. As such, 
they must be stricken from the record and not considered by the 
Department in its final determination. In addition, petitioner states 
that none of the factual information upon which Siderca relies in its 
case brief has been verified by the Department, which is required under 
the antidumping statute if it is to be utilized by the Department in 
making a final determination. Also, petitioner states that some of 
Siderca's later submissions (e.g., submissions on October 12, 1994, and 
March 27, 1995) related to standing and class or kind issues did not 
contain certifications of factual information.

DOC Position

    We disagree with petitioner. Despite the fact that Siderca chose 
not to respond to the Department's questionnaire, and thus not to 
participate in this investigation, the Department cannot preclude it 
from commenting as an interested party in this investigation. 
Furthermore, all of the information contained in Siderca's brief was 
submitted previously on the record, so that its case brief contained no 
new factual information. In addition, the omission of certification 
from earlier submissions was a clerical oversight which was cured 
without prejudicing petitioner.

Comment 2

    Siderca maintains that Gulf States is not a producer of standard, 
line and pressure pipe between 2.0 and 4.5 inches in outer diameter 
(OD) and, therefore, lacks standing as an ``interested party'' under 
section 771(9)(C) of the Act to petition on behalf the U.S. industry 
which produces this merchandise. Siderca also asserts that the request 
of Koppel Steel Corporation for co-petitioner status does not remedy 
Gulf States' lack of standing or cure the petitioner's defects. 
Consequently, Siderca urges the Department to rescind the initiation of 
the investigation with respect to seamless pipe in the OD size range 
between 2.0 and 4.5.
    Specifically, respondent states that Gulf States openly admits in 
the petition that it neither manufactures or sells seamless pipe 
greater than or equal to 2\3/8\ inches in OD, and that publicly 
available evidence shows that Gulf States neither manufactures or sells 
seamless pipe between 1.9 and 2\3/8\ inches in OD. Respondent also 
maintains that Gulf States fails to meet the statutory test for 
interested party status to file a petition under Section 771(9)(C) of 
the Act, and has no legally-recognizable stake in the market for pipe 
greater than 2.0 inches in OD, as provided for in the legislative 
history of the standing requirement.
    Furthermore, Siderca asserts that the ITC's one like product 
preliminary determination does not change this analysis because the 
like product determination made by the ITC when it considers the issue 
of material injury is different from the like product determination 
made by the Commerce Department when it considers the issue of 
standing. The Commerce Department is not required to adopt the ITC's 
like product definition for purposes of determining petitioner's 
standing. Siderca adds that seamless carbon and alloy pipe is produced 
in a continuum of sizes at least up to 36 inches in OD; there is no 
``bright line'' at any point on that continuum above 2.0 inches, other 
than a line that may be drawn where the facilities of producers impose 
physical limitations. Thus, if the Department concludes that a producer 
of seamless pipe up to 2.0 inches is an interested party with regard to 
seamless pipe of greater OD, then there is no more of a justification 
for a producer such as Gulf States to petition on pipe up to 4.5 inches 
than there is for it to petition up to 36 inches. Once the Department 
determines that a petitioner is an interested party for sizes beyond 
its production capability, there is no reason for drawing the line at 
4.5 inches or any other point along the continuum.
    With respect to Koppel's request for co-petitioner status, 
respondent states that this request was filed too late (almost 10 
months after the June 23, 1994, filing of the petition) to confer 
legality on the initiation of this proceeding with regard to seamless 
pipe between 2.0 and 4.5 inches in OD. According to Siderca, this 
action is unprecedented, and was precipitated by Gulf States' and 
Koppel's realization that the petition and Department's subsequent 
initiation are legally deficient with respect to seamless pipe over 2.0 
inches. Siderca also points out that all of the information on which 
the Department relied in making its initiation determination came from 
Gulf States, not Koppel. If Koppel is not accepted as co-petitioner, 
the initiation of these investigations with regard to pipe between 2.0 
and 4.5 inches in OD must be rescinded because Gulf States is not an 
interested party with respect to merchandise of this size range.
    Siderca also asserts that if the Department does not reject the 
petition or rescind the initiation with respect to seamless pipe of 
this size range, it should determine that there are two classes or 
kinds of merchandise, i.e., 2.0 inches and below; and between 2.0 and 
4.5 inches, because these pipe size ranges differ in terms of physical 
characteristics, purchaser expectations, end use and cost.
    Gulf States contends that Siderca's objection to its standing is 
without merit because: (1) There is no basis in law or in fact for 
treating pipe larger than 2.0 inches in OD as a separate class or kind 
of merchandise; and (2) in any event, Gulf States produces pipe in the 
categories of merchandise proposed by Siderca. Contrary to respondent's 
claim, petitioner points out that in its March 27, 1995, submission, it 
provided extensive factual information concerning the stencilling, 
sale, distribution, and cost of production for all sizes of subject 
merchandise produced by Gulf States, including seamless pipe larger 
than 2.0 inches in OD. Therefore, petitioner asserts that even if pipe 
over 2.0 inches in OD were to constitute a separate class or kind of 
merchandise, Gulf States would nonetheless have standing as a 
[[Page 31959]] petitioner. Additionally, Gulf States maintains that 
Siderca's claim that Koppel cannot be added as a co-petitioner at the 
time it made its request on April 27, 1995, is legally incorrect. 
Citing Citrosuco Paulista, S.A. v. United States (704 F. Supp. 1075 
(CIT 1988)), petitioner asserts that the Department has discretion to 
permit the amendment of a petition for the purposes of adding co-
petitioners who produce the like product, at such time and upon such 
circumstances as deemed appropriate by the Department.

DOC Position

    We agree with petitioner for reasons explained in our section on 
``Standing'' in this notice.

Comment 3

    Siderca argues that the Department should reject petitioner's end 
use language in the scope of this investigation which includes products 
not subject to this investigation if they are used in standard line 
pipe applications.
    Respondent maintains that such an end use requirement would result 
in a disparate treatment between imported goods that have crossed the 
border and domestic goods once they are competing in the U.S. 
marketplace, which is contrary to Article III of the General Agreement 
on Tariffs and Trade (GATT).
    Respondent also argues that if an end use certification program 
were implemented, it would be virtually unadministerable because 
importers and producers normally do not know the end use of their 
product. Moreover, respondent cites the Oil Country Tubular Goods from 
Canada investigation, in which the Department abandoned its end use 
program after two years, because the program was cumbersome and 
difficult to administer.
    Petitioner states that end use is an appropriate element of the 
scope and that the Department has included end use has included end use 
as an element of scope in other investigations. Furthermore, petitioner 
maintains that because of overlapping properties, it is possible that 
pipe made to other specifications than A-53, A-106, A-335, and API-5L 
may be applied to uses for which those specifications are normally 
used, creating the likelihood of substitution. Petitioner recognizes 
that defining scope by end use presents more complications for the 
enforcement of an order, but, for simplification, has suggested that 
the Department employ a rebuttable presumption that specification is an 
indication of use for pipe in non-listed specifications. Finally, 
petitioner counters Siderca's assertion that an end use element in the 
scope is contrary to GATT by stating that the GATT is not violated 
unless the country imposing the duties has disregarded its obligations 
under Article VI of the Antidumping Code; and that Siderca does not 
allege that any provisions of relevant GATT antidumping law would be 
violated if the Department, following established U.S. practice 
continues to consider end use as a scope criterion.

DOC Position

    We agree with petitioner for the reasons outlined in the ``Scope 
Issues'' section of this notice.

Comment 4

    Siderca argues that there are two classes or kinds of merchandise: 
standard line pipe 2.0 inches in outside diameter and below; and 
between 2.0 and 4.5 inches in outside diameter. Respondent maintains 
that the criteria articulated in Diversified Products support its 
assertion of two classes of kinds. Specifically, respondent argues that 
the distinct size differences between steel pipe below 2.0 inches in 
outside diameter and steel pipe between 2.0 and 4.5 inches are 
recognized in the industry as differentiating physical characteristics. 
Respondent maintains that line capacity, operating pressure, 
temperature, stress level, and structural integrity will determine the 
size of the pipe, and in turn, will determine the particular 
application.
    With respect to customer expectations, Siderca argues that 
customers purchase pipe in specific sizes knowing that different sizes 
have different applications. Respondent states that pipe under 2.0 
inches is used almost exclusively as pressure pipe because of the 
unique characteristics of pipe that size. Moreover, respondent claims 
that a purchaser will expect pipe above 2.0 inches to be suitable for 
line pipe applications.
    Regarding channels of trade, respondent argues that although pipe 
below 2.0 inches and pipe between 2.0 and 4.5 inches are sold though 
distributors, this fact does not make these two groups a single class 
or kind.
    Siderca argues that the ultimate use of the product depends on the 
size. Respondent states that pipe under 2.0 inches is used almost 
exclusively as pressure pipe and most pipes between 2.0 and 4.5 inches 
are sold as line pipe. Furthermore, respondent claims that seamless 
pipe is almost never used in standard pipe applications.
    Respondent contends that the cost of seamless pipe differs 
significantly depending on size. Respondent states that smaller pipe 
also costs more to manufacture because it requires more manufacturing 
time, on a kilogram basis, than larger pipe. Furthermore, respondent 
maintains that pipe in sizes under 2.0 inches is usually cold-drawn, a 
more costly process than hot-finishing, which is the most common 
production process for pipe above 2.0 inches.
    Petitioner argues that an analysis of the five factors used in the 
diversified products analysis supports a single class or kind of 
merchandise. Regarding the physical characteristics, petitioner argues 
that seamless standard, line, and pressure pipe each meet the same 
physical characteristics described in the petition. Petitioner argues 
that the use of different production facilities to make physically 
identical merchandise does not constitute a difference in physical 
characteristics. Petitioner also states the respondent's argument that 
cold-drawn merchandise (pipe below 2.0 inches) and hot-finished 
merchandise (pipe above 2.0 inches) indicated two classes or kinds is 
contrary to the Department's decision not to create separate classes of 
kinds based on cold-drawn and hot-rolled products in Stainless Steel 
Bar from Italy. Petitioner asserts that respondent's suggestions that 
end users have different expectations for pipe below 2.0 inches is 
unfounded. Petitioner contends that the physical characteristics of 
pipe are set forth in the ASTM and API specifications, which apply to 
all subject pipe regardless of size. Petitioners contend that the sales 
subject seamless pipes are made through the same channels of trade. 
Petitioner maintains that the ultimate end use of the product is 
largely dictated by the specification to which the pipe is produced. 
Petitioner argues that since the majority of imported subject pipe is 
triple certified, the pipe may be put to use in any of the uses that 
either A-106, A-53, or API 5L may be applied.
    Petitioner argues that all subject seamless pipe has sufficiently 
similar costs to be considered a single class or kind of merchandise. 
Petitioner contends that since the majority of the subject pipe is 
triple certified, it has basically identical costs regardless of the 
customer to whom it is sold and that there are only minimal differences 
in production costs between pipe over 2.0 inches and pipe under 2.0 
inches.
DOC Position

    We agree with petitioner for the reasons outlined in the ``Scope 
Issues'' section of this notice. [[Page 31960]] 

Comment 5

    In order to eliminate confusion and uncertainty of the scope, 
respondent argues that the Department should clarify the language of 
the scope and explicitly exclude products that are not intended to be 
part of the investigation. Specifically, respondent argues that the 
Department exclude unfinished oil country tubular goods and tubing 
products made in non-pipe sizes. Furthermore, respondent contends that 
language in the scope concerning ``redraw hollows for cold-drawing when 
used in the production of cold-drawn pipe or tube,'' is confusing. 
Respondent suggests the Department revise this language to simply state 
that the scope excludes hollows for cold-drawing. This would eliminate 
confusion, while not changing the intended scope of the exclusion.
    Petitioner asserts that a modification of the scope to Siderca's 
requests would be unsupported by substantial evidence on the record. 
With respect to OCTG, petitioner notes that the scope explicitly 
excludes OCTG when it is not used or intended for use in one of the 
listed applications and that no further clarification is necessary. 
Petitioner states that tubing in ``non-pipe'' sizes is expressly 
covered by the scope of the investigation when produced to one of the 
listed specifications or when used in a listed application. Petitioner 
maintains that the language in the scope with respect to redraw hollows 
was included expressly to ensure that hollows are actually cold-drawn 
and not sold directly as A-106 pipe.

DOC Position

    We agree with petitioner for the reasons outlined in the ``Scope 
Issues'' section of this notice.

Continuation of Suspension of Liquidation

    In accordance with section 733(d)(1) of the Act 19 USC 1673b(d)(1), 
we directed the Customs Service to suspend liquidation of all entries 
of seamless pipe from Argentina, as defined in the ``Scope of 
Investigation'' section of this notice, that are entered, or withdrawn 
from warehouse, for consumption on or after January 27, 1995.
    Pursuant to the results of this final determination, we will 
instruct the Customs Service to require a cash deposit or posting of a 
bond equal to the estimated final dumping margin, as shown below, for 
entries of seamless pipe from Argentina that are entered, or withdrawn 
from warehouse, for consumption from the date of publication of this 
notice in the Federal Register. The suspension of liquidation will 
remain in effect until further notice.

------------------------------------------------------------------------
                                                             Weighted   
             Manufacturer/producer/exporter               average margin
                                                              percent   
------------------------------------------------------------------------
Siderca S.A.I.C.........................................          108.13
All Others..............................................          108.13
------------------------------------------------------------------------

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
ITC of our determination. The ITC will makes its determination whether 
these imports materially injure, or threaten injury to, a U.S. industry 
within 45 days of the publication of this notice. If the ITC determines 
that material injury or threat of material injury does not exist, the 
proceeding will be terminated and all securities posted as a result of 
the suspension of liquidation will be refunded or cancelled. However, 
if the ITC determines that material injury or threat of material injury 
does exist, the Department will issue an antidumping duty order.

Notification to Interested Parties

    This notice serves as the only reminder to parties subject to 
administrative protective order (APO) in these investigations of their 
responsibility covering the return or destruction of proprietary 
information disclosed under APO in accordance with 19 CFR 353.34(d). 
Failure to comply is a violation of the APO.
    This determination is published pursuant to section 735(d) of the 
Act (19 U.S.C. 1673d(d)) and 19 CFR 353.20(a)(4).

    Dated: June 12, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-14936 Filed 6-16-95; 8:45 am]
BILLING CODE 3510-DS-P