[Federal Register Volume 60, Number 124 (Wednesday, June 28, 1995)]
[Notices]
[Pages 33575-33577]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-15622]



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[A-469-806]


Final Determination of Sales at Less Than Fair Value: Oil Country 
Tubular Goods from Spain

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

EFFECTIVE DATE: June 28, 1995.

FOR FURTHER INFORMATION CONTACT: Magd Zalok or William Crow, Office of 
Antidumping Investigations, Import Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW., Washington, DC 
20230; telephone (202) 482-4162 or 482-0116, respectively.

Final Determination

    We determine that oil country tubular goods (OCTG) from Spain are 
being 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''). The 
estimated margins are shown in the ``Suspension of Liquidation'' 
section of this notice.

Case History

    Since the preliminary determination of sales at less than fair 
value in this investigation on January 26, 1995 (60 FR 6516, February 
2, 1995), the following events have occurred. On February 8, 1995, (60 
FR 8632, February 15, 1995) the Department postponed the final 
determination in accordance with section 735(a)(2) of the Act and 19 
CFR 353.20(b)(1).
    In March 1995, the Department conducted its sales and cost 
verifications of the respondent, Tubos Reunidos (``TR'') in Spain. 
Verification reports were issued in April and May 1995.
    On May 9, 1995, the petitioners and TR submitted case briefs. 
Rebuttal briefs were submitted by both parties on May 16, 1995. On May 
17, 1995, the Department held a public hearing.

Scope of the 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 (HTSUS) under item numbers:

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, 7304.20.20.10, 
7304.20.20.20, 7304.20.20.30, 7304.20.20.40, 7304.20.20.50, 
7304.20.20.60, 7304.20.20.80, 7304.20.30.10, 7304.20.30.20, 
7304.20.30.30, 7304.20.30.40, 7304.20.30.50, 7304.20.30.60, 
7304.20.30.80, 7304.20.40.10, 7304.20.40.20, 7304.20.40.30, 
7304.20.40.40, 7304.20.40.50, 7304.20.40.60, 7304.20.40.80, 
7304.20.50.15, 7304.20.50.30, 7304.20.50.45, 7304.20.50.60, 
7304.20.50.75, 7304.20.60.15, 7304.20.60.30, 7304.20.60.45, 
7304.20.60.60, 7304.20.60.75, 7304.20.70.00, 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.

    After the publication of the preliminary determination, we found 
that HTSUS item numbers 7304.20.10.00, 7304.20.20.00, 7304.20.30.00, 
7304.20.40.00, 7304.20.50.10, 7304.20.50.50, 7304.20.60.10, 
7304.20.60.50, and 7304.20.80.00 were no longer valid HTSUS item 
numbers. Accordingly, these numbers have been deleted from the scope 
definition.
    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 (BIA)

    We have determined that TR's questionnaire responses provide an 
inadequate basis for estimating dumping margins. At verification, we 
discovered significant omissions, discrepancies, and a large number of 
errors in TR's responses, as well as an overall lack of support for 
certain of TR's sales data. Instead of reporting the actual prices 
charged to the first unrelated U.S. customers, as requested by the 
Department, TR incorrectly reported the U.S. prices invoiced to its 
related subsidiary, and failed to provide adequate support 
documentation at verification for the actual prices invoiced to the 
U.S. customers. TR omitted reporting all charges in the U.S. market for 
freight, guarantee and return credits and did not provide adequate 
support documentation at verification for these charges. TR also 
omitted reporting the sale of certain OCTG products, and provided no 
evidence at verification that the sales of these products were not 
covered by the scope of this investigation. In its responses, TR stated 
that its home market was not viable with respect to the sale of the 
[[Page 33576]] subject merchandise. However, the sales of certain OCTG 
products discovered at verification indicate a viable home market, 
thereby making the use of a third country market, instead of the home 
market as a basis for determining foreign market value, questionable. 
Finally, in addition to the significant omissions, the charges and 
adjustments reported by TR were replete with discrepancies and errors, 
making it impossible for the Department to conduct a complete 
verification of TR's responses.
    In order to determine whether sales are made in the United States 
at less than fair value, it is critical that the Department be provided 
with accurate and reliable sales information to be used in its 
analysis. Because of the inaccuracies discovered in TR's submitted 
information, the Department was unable to verify that information, as 
required by section 776(1) of the Act. That section of the Act provides 
that, if the Department is unable to verify, within the time specified, 
the accuracy and completeness of the factual information submitted, it 
shall use BIA as the basis for its determination. Consequently, we have 
based this determination on BIA.
    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 impede the proceeding, or assign a lower rate for those 
respondents who have cooperated in an investigation. When a company is 
determined to be uncooperative, it has been the Department's practice 
to apply the highest rate alleged in the petition as BIA. When a 
company is determined to be cooperative, it has been the Department's 
practice to apply as BIA the higher of: (1) The average of the margins 
in the petition; or (2) the calculated margin for another firm for the 
same class or kind of merchandise from the same country. This 
methodology for assigning BIA 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).)
    In spite of the numerous errors in its response, we have determined 
that TR was cooperative during this proceeding and have assigned to it 
a cooperative BIA margin of 11.95 percent, based on the average of the 
margins alleged in the petition. For further information on the use of 
a cooperative BIA margin, see the ``DOC Position'' section of this 
notice.

Verification

    As provided in section 776(b) of the Act, we attempted to verify 
TR's information for purposes of the final determination. However, 
given the significant discrepancies encountered at verification, the 
use of the respondent's information in the final determination was not 
possible.

Interested Party Comments

Comment 1--Use of Total Uncooperative BIA

    The petitioners maintain that because of the gravity of the 
mistakes made by TR, the Department should assign to TR an 
uncooperative BIA margin of 18.6 percent. They point to the 
verification report which shows that TR failed to report the actual 
price as invoiced to the first unrelated U.S. customer, and note that 
many other discrepancies and omissions were found by the Department at 
verification.
    TR maintains that the record clearly reflects that it has 
cooperated fully with the Department in this investigation, submitting 
hundreds of pages of responses to the Department questionnaires and 
supplemental questionnaires within the time allowed. According to the 
respondent, due to the tight time constraints of antidumping 
investigations, a number of errors have been made, many of which came 
to light in preparing documentation for verification. TR maintains that 
it promptly and fully disclosed the errors to the Department as soon as 
the respondent became aware of such errors.
    Moreover, TR contends that only following receipt of the 
verification outline on March 7, 1995, did TR's officials, in the 
course of preparing the payment documentation for verification, see the 
need to refer to the actual invoices re-issued by TR America, inclusive 
of the inland freight. TR maintains that, even if it had realized the 
need earlier to report to the Department the actual invoiced prices 
inclusive of the U.S. inland freight expenses, it would not have 
changed the way in which the sales listing was ultimately prepared. TR 
states that, in order to be able to provide a timely response to the 
Department's questionnaire, it was necessary to report sales data as it 
was reflected in TR's computer in Spain. Furthermore, TR argues that it 
was appropriate not to report sales of class ``C'' OCTG and couplings 
stock because these products are not covered in the scope of the 
investigation. Finally, TR claims that the errors and discrepancies 
discovered for the remaining sales data are insignificant and offset 
each other. Therefore, the respondent requests that the Department use 
the information gathered at verification as a basis for TR's margin 
calculation in the final determination.

DOC Position

    As discussed in the BIA section of this notice, the discrepancies 
found in TR's response render it unusable. The Department, however, 
disagrees with the petitioners on assigning TR a non-cooperative BIA 
margin. Although much of the information found to be deficient could 
not be remedied at verification, TR made a good faith effort by 
responding to the Department's questionnaire, by submitting a 
verifiable cost of production questionnaire response, and by attempting 
to cooperate at the sales verification. We also believe that the 
inaccuracy of TR's responses is the result of inadvertent errors in its 
reporting, and poor verification preparation, not a lack of cooperation 
on the part of the respondent. Thus, we believe that assigning TR a 
cooperative BIA margin is appropriate.
    Because this final determination is based on BIA, all other 
comments are moot.

Suspension of Liquidation

    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 OCTG from Spain 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.

------------------------------------------------------------------------
                                                                Margin  
               Producer/manufacturer/exporter                 percentage
------------------------------------------------------------------------
Tubos Reunidos S.A..........................................      11.95 
All Others..................................................      11.95 
------------------------------------------------------------------------

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
ITC of our determination. The ITC will make its determination whether 
these imports materially injure, or threaten injury to, a U.S. industry 
within 75 days of the publication of this notice, in accordance with 
section 735(b)(3) of the Act. If the ITC determines that material 
injury or threat of material injury does not exist, [[Page 33577]] the 
proceeding will be terminated and all securities posted as a result of 
the suspension of liquidation will be refunded or canceled. However, if 
the ITC determines that such 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 this investigation 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. 1673(d)) and 19 CFR 353.20.

    Dated: June 19, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-15622 Filed 6-27-95; 8:45 am]
BILLING CODE 3510-DS-P