[Federal Register Volume 60, Number 156 (Monday, August 14, 1995)]
[Notices]
[Pages 41876-41879]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20030]



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DEPARTMENT OF COMMERCE
[A-351-505]


Certain Malleable Cast Iron Pipe Fittings From Brazil; Final 
Results of Antidumping Duty Administrative Review

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

ACTION: Notice of final results of antidumping duty administrative 
review.

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SUMMARY: On February 22, 1995, the Department of Commerce (the 
Department) published the preliminary results of its administrative 
review of the antidumping duty order on certain malleable cast iron 
pipe fittings from Brazil. This review covers Industria de Fundicao 
Tupy S.A. (Tupy), a manufacturer and exporter of this merchandise to 
the United States, and the period May 1, 1993 through April 30, 1994. 
The firm failed to submit a response to our questionnaire. As a result, 
we determined to use the best information otherwise available (BIA) for 
cash deposit and assessment purposes.
    We gave interested parties an opportunity to comment on the 
preliminary results. Based on our analysis of the comments received, we 
have made certain changes for the final results.

EFFECTIVE DATE: August 14, 1995.

FOR FURTHER INFORMATION CONTACT: Thomas E. Schauer or Richard 
Rimlinger, Office of Antidumping Compliance, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone 
(202) 482-4852/4477.

SUPPLEMENTARY INFORMATION:

Background

    On May 4, 1994, the Department published in the Federal Register 
(59 

[[Page 41877]]
FR 23051) a notice of ``Opportunity to Request an Administrative 
Review'' of the antidumping duty order on certain malleable cast iron 
pipe fittings from Brazil. On May 4, 1994, we received from the 
petitioners in this case, Grinnell Corporation, Ward Manufacturing 
Inc., and Stockham Valves and Fittings Co., a request to initiate an 
administrative review of Tupy, a manufacturer and exporter of this 
merchandise to the United States. On July 15, 1994, in accordance with 
19 CFR 353.22(c), we initiated an administrative review of this order 
for Tupy covering the period May 1, 1993 through April 30, 1994 (see 59 
FR 36160). On February 22, 1995, we published the preliminary results 
of this administrative review (see 60 FR 9821).
    The Department conducted this administrative review in accordance 
with section 751 of the Tariff Act of 1930, as amended (the Tariff 
Act).
    Unless otherwise indicated, all citations to the statute and to the 
Department's regulations are references to the provisions as they 
existed on December 31, 1994.

Scope of Review

    Imports covered by this review are shipments of certain malleable 
cast iron pipe fittings, other than grooved, from Brazil. In the 
original order, these products were classifiable in the Tariff 
Schedules of the United States, Annotated, under item numbers 610.7000 
and 610.7400. These products are currently classifiable under item 
numbers 7307.19.00 and 7307.19.90 of the Harmonized Tariff Schedule 
(HTS). The HTS item numbers are provided for convenience and Customs 
purposes. The written description remains dispositive.

Best Information Available

    In accordance with section 776(c) of the Tariff Act, we have 
determined that the use of BIA is appropriate for Tupy. Our regulations 
provide that we may take into account whether a party refuses to 
provide information (19 CFR 353.37(b)) in selecting BIA. Generally, 
whenever a company refuses to cooperate with the Department or 
otherwise significantly impedes the proceeding, as Tupy did here, the 
Department uses as BIA the highest rate for any company for the same 
class or kind of merchandise from the current or any prior segment of 
the proceeding. When a company substantially cooperates with our 
requests for information, but fails to provide all the information 
requested in a timely manner or in the form requested, we use as BIA 
the higher of (1) the highest rate (including the ``all others'' rate) 
ever applicable to the firm for the same class or kind of merchandise 
from the same country from either the less-than-fair-value (LTFV) 
investigation or a prior administrative review; or (2) the highest 
calculated rate in the review for any firm for the same class or kind 
of merchandise from the same country. See Antifriction Bearings (Other 
Than Tapered Roller Bearings) and Parts Thereof From the Federal 
Republic of Germany, et al.; Final Results of Antidumping Duty 
Administrative Review, 57 FR 28360, 28379 (June 24, 1992); see also 
Allied-Signal Aerospace Co. v. United States, 996 F.2d 1185 (Fed. Cir. 
1993). In our preliminary results of review, we preliminarily applied 
to Tupy, as first-tier BIA, a rate of 5.64 percent, which was the rate 
we determined in the LTFV investigation.
    Upon review of the comments our choice of a rate to use as first-
tier BIA has changed. In this case, Tupy is the only company to have 
ever been reviewed or investigated, and we have only calculated one 
margin, which was in the less-than-fair-value (LTFV) investigation. Due 
to the unusual situation, we have determined to use as BIA the simple 
average of the rates from the petition. See our response to Comment, 
below. The rate we have calculated for Tupy is 34.64 percent.

General Issues Raised By the Petitioner

    Comment: Petitioner contends that the Department's use of its 
standard BIA practice for the preliminary results of this review is 
inappropriate. Petitioner points out that this resulted in no change in 
the margin applicable to respondent. Petitioner argues that this 
rewards respondent for being uncooperative with the Department's 
information requests.
    Petitioner also argues that, since Tupy is the sole respondent in 
this case, under the Department's regular practice, Tupy's margin would 
never change in an administrative review so long as it does not respond 
to the Department's requests for information. Thus, Tupy would be able 
to dump at will without fear of repercussion unless the Department 
alters its choice of BIA for this case. Petitioner argues that the 
Department is not limited to the standards enunciated in Antifriction 
Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From 
the Federal Republic of Germany, et al.; Final Results of Antidumping 
Duty Administrative Review, 56 FR 31692, 31704 (July 11, 1991). Rather, 
petitioner states, the Department has the authority to choose other BIA 
when the circumstances warrant it, citing Krupp Stahl, A.G. v. United 
States, 822 F. Supp. 789 (CIT 1993) (Krupp Stahl) in support of its 
arguments.
    Petitioner suggests that the Department use as BIA the simple 
average of the margins alleged in the petition. Petitioner also 
suggests, as an alternative methodology, that the Department should 
adjust the original margin for appreciation of Brazil's currency 
against the dollar since the period of the original LTFV investigation. 
Citing reports from the International Trade Commission (ITC) submitted 
as an attachment to its case brief, petitioner argues that the 
Brazilian cruzeiro has appreciated against the dollar between the 
period of investigation and the current period of review by 33.2 
percent, and that the Department should assume that Brazilian foreign 
market values have increased similarly. Petitioner states that there is 
precedent for this approach in Malleable Iron Pipe Fittings, Other than 
Grooved, from Korea; Preliminary Results of Administrative Review, 54 
FR 7577 (Feb. 22, 1989), in Malleable Iron Pipe Fittings, Other than 
Grooved, from Korea; Final Results of Administrative Review, 54 FR 
13090 (Mar. 30, 1989), and in Malleable Iron Pipe Fittings, Other than 
Grooved, from Taiwan; Preliminary Results of Administrative Review, 54 
FR 38713 (Sept. 20, 1989).
    Respondent argues that the Department applied BIA correctly in the 
preliminary results, and that petitioner misrepresents the decision in 
Krupp Stahl. Respondent contends that, while Krupp Stahl allowed the 
Department to use a preliminary margin from the LTFV investigation, 
which adopted the petition rates, the court did not hold that a margin 
alleged in a petition can be used over a published margin for a 
particular company.
    Respondent also argues that the courts have held, in Rhone Poulenc, 
Inc. v. United States, 899 F.2d 1185, 1191 (1990), that the purpose of 
BIA is ``to determine current margins as accurately as possible'', and 
that the Department may not use BIA in a punitive manner. Respondent 
claims that using rates from the petition would be less accurate than 
using the rates calculated by the Department in the LTFV investigation.
    Respondent argues that the methodology suggested by petitioner for 
adjusting the margin for changes in currency values would result in an 
inaccurate margin because the rates used in the ITC report cited in 
petitioner's case brief use real exchange rates instead of nominal 
exchange rates. Respondent argues that petitioner has not provided any 
compelling argument 

[[Page 41878]]
why real exchange rates should be used instead of nominal exchange 
rates.
    Respondent also states that, in the precedent cited by petitioner, 
the Department assumed that prices in the United States and the foreign 
market remained constant. Respondent alleges that prices have not been 
constant in the United States, and, therefore, such an assumption 
cannot be made in this case.
    Department's Position: We agree with petitioner. Tupy was the only 
company investigated in the antidumping duty LTFV investigation on 
malleable cast iron pipe fittings from Brazil. Because this is the 
first administrative review of this order, Tupy's final LTFV rate of 
5.64 percent is the only rate for any company from any segment of the 
proceeding. If we were to follow our regular practice for assigning 
uncooperative BIA rates, Tupy would benefit by receiving its own LTFV 
rate in this and any subsequent review in which it chooses not to 
respond to our requests for information. This is contrary to the 
Department's aim in using BIA. As the Court of Appeals for the Federal 
Circuit has affirmed, ``the ITA may use BIA as an investigative tool, 
which [ITA] may wield as an informal club over recalcitrant parties or 
persons'' to induce cooperation with our requests for information. See 
Rhone Poulenc, Inc. v. United States, 899 F.2d 1185 at 1191 (1990) 
(Rhone Poulenc II). Therefore, we find that there is justification in 
this case to depart from past Department practice in determining 
uncooperative BIA.
    By refusing to provide a questionnaire response, as indicated in 
its letter to the Department dated October 31, 1994, Tupy leaves 
unanswered a legitimate question as to whether the firm dumped subject 
merchandise during the period of review to a greater or lesser extent 
than in the past. In not responding to our requests for information, 
Tupy could be relying upon our normal BIA practice to lock in a rate 
that is capped at its LTFV rate. Such a capped BIA rate would allow 
Tupy to practice injurious price discrimination to a greater degree 
than at the time of the LTFV investigation without fear of adverse 
consequences. With such a capped rate, Tupy would no longer have an 
incentive to participate in an administrative review which would 
determine the extent to which Tupy is actually dumping subject 
merchandise in the United States.
    In Rhone Poulenc, Inc. v. United States, 710 F. Supp. 341 (Rhone 
Poulenc I) at 347, the Court of International Trade (CIT) ruled that a 
respondent should not be allowed to control the results of the review 
by providing partial information (or, as in this case, no information) 
or otherwise hindering the review. Citing Rhone Poulenc I, the CIT has 
also determined that ``to use the rate demanded by [the respondent] 
might have the effect of `plac[ing] control of the investigation in the 
hands of uncooperative respondents who could force Commerce to use 
possibly unrepresentative information most beneficial for them.' '' See 
Krupp Stahl, 822 F. Supp. at 793. Contrary to Tupy's claim that the 
function of BIA is solely to find the most accurate rate possible, in 
Krupp Stahl, the CIT characterizes one of the functions of BIA as 
``cooperation-inducing.'' Id.
    We also find incorrect Tupy's assertion that the Krupp Stahl 
decision upholds only the authority to use a preliminary margin based 
on petition rates as BIA, and not the authority to use the petition 
rates themselves. Respondent correctly states that, in Krupp Stahl, the 
petition-based information used as BIA was derived from the LTFV 
preliminary investigation. See 822 F. Supp. at 796. Resort to the 
preliminary determination for evidence of petition-based BIA was 
necessary in that case because the petition was not on the 
administrative record of the review under consideration in Krupp Stahl, 
and each administrative determination must be supported by sufficient 
evidence on the record. See 822 F. Supp. at 795. Contrary to Tupy's 
assertion, the CIT's decision in Krupp Stahl did not limit the use of 
petition-based information in administrative reviews to cases where 
margins in the preliminary determinations were petition-based. Rather, 
in Krupp Stahl, the CIT upheld our interpretation that the use of 
petition-based information as BIA in an administrative review was not 
contrary to the statute, and that it did not ``contravene any clearly 
discernable legislative intent.'' See Krupp Stahl, 822 F. Supp. at 794. 
Because Tupy has failed to cooperate in this administrative review, and 
a BIA rate capped at Tupy's LTFV rate would not induce Tupy's 
cooperation in this or any future review, we have determined that it is 
appropriate to use petition-based information as BIA in this 
administrative review.
    We have also determined that the use of petition-based information 
as BIA is more appropriate than adjusting the LTFV rate for currency 
appreciation. Though the latter methodology may be appropriate in other 
circumstances, in this case we have rates from the petition, which, 
after correction, were found to be acceptable by the Department as a 
basis for initiating the LTFV investigation. Further, there is limited 
record evidence available for determining an adjustment to the LTFV 
margin for currency fluctuations, including whether we should use real 
or nominal exchange rates for such a calculation. Thus, we conclude 
that the use of petition-based rates for BIA is a better approach in 
this administrative review.
    In order to use petition-based information as BIA for Tupy in this 
administrative review, the Department must include the petition in the 
administrative record of this review. Therefore, with the permission of 
petitioner, and pursuant to our regulations at 19 CFR 353.3, we have 
obtained a copy of the petition from the administrative record of the 
LTFV investigation, and included it in the record of this 
administrative review.
    We have determined that the simple average of the rates from the 
petition is a more appropriate standard for BIA in this case. The 
petition rates, as adjusted by the Department for the LTFV initiation 
notice, are 8.8, 14.46, 53.6, and 61.7 percent. See Malleable Cast Iron 
Pipe Fittings From Brazil; Initiation of Antidumping Duty 
Investigation, 50 FR 34730. The simple average of these rates is 34.64 
percent.
Final Results of Review

    We determine the margin for this administrative review to be:

------------------------------------------------------------------------
                       Producer/exporter                          Margin
------------------------------------------------------------------------
Industria de Fundicao Tupy S.A.................................    34.64
------------------------------------------------------------------------

    The Department will instruct the Customs Service to assess 
antidumping duties on all appropriate entries. Furthermore, the 
following deposit requirements will be effective upon publication of 
these final results of administrative review for all shipments of the 
subject merchandise entered, or withdrawn from warehouse for 
consumption, as provided by section 751(a)(1) of the Act: (1) The cash 
deposit rate for the reviewed company will be the rate listed above; 
(2) if the exporter is not a firm covered in this review, a prior 
review, or the original less-than-fair-value investigation, but the 
manufacturer is, the cash deposit rate will be the rate established for 
the most recent period for the manufacturer of the merchandise; and (3) 
the cash deposit rate for all other manufacturers or exporters will be 
the ``all others'' rate of 5.64 percent. This is the rate established 
during the LTFV investigation.
    These deposit requirements shall remain in effect until publication 
of the 

[[Page 41879]]
final results of the next administrative review.
    This notice also serves as a final reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as the only reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning 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 administrative review and notice are in accordance with 
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 
353.22, 353.25.

    Dated: August 7, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-20030 Filed 8-11-95; 8:45 am]
BILLING CODE 3510-DS-P