[Federal Register Volume 60, Number 230 (Thursday, November 30, 1995)]
[Notices]
[Pages 61529-61533]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29270]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-485-804]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Circular Welded Non-
Alloy Steel Pipe From Romania
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: November 30, 1995.
FOR FURTHER INFORMATION CONTACT: John Beck or Magd Zalok, Office of
Antidumping Investigations, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue NW., Washington, D.C. 20230; telephone: (202) 482-
3464 or (202) 482-4162, respectively.
The Applicable Statute: Unless otherwise indicated, all citations to
the Tariff Act of 1930 (the Act) are references to the provisions
effective January 1, 1995, the effective date of the amendments made to
the Act by the Uruguay Round Agreements Act.
PRELIMINARY DETERMINATION: Because of the Federal Government shutdown,
the deadline for this preliminary determination has been extended by
the number of days of the shutdown, six days, to Tuesday, November 21,
1995.
We preliminarily determine that circular welded non-alloy steel
pipe (pipe) from Romania is being, or is likely to be, sold in the
United States at less than fair value (LTFV), as provided in section
733 of the Act. The estimated margins are shown in the ``Suspension of
Liquidation'' section of this notice.
Case History
Since the initiation of this investigation on May 16, 1995 (60 FR
27078, May 22, 1995), the following events have occurred:
On May 30, 1995, a letter of appearance was filed on behalf of
Tepro S.A. (Tepro), a producer of the subject merchandise, as well as
Metagrimex S.A. (Metagrimex), Metalexportimport S.A.
(Metalexportimport), and Metanef S.A. (Metanef), exporters of the
subject merchandise. On June 7, 1995, a cable was sent to the U.S.
Embassy in Romania requesting the identification of Romanian producers
and exporters of pipe exported to the United States. We received a
response on June 13, 1995, identifying the same companies named in the
May 30, 1995, letter of appearance.
On June 12, 1995, the United States International Trade Commission
(ITC) notified the Department of Commerce (the Department) of its
affirmative preliminary determination.
On June 30, 1995, we presented questionnaires to the Romanian
Embassy and counsel for Tepro, Metagrimex, Metalexportimport and
Metanef. Supplemental questionnaires were issued in August and
September 1995. Responses to the original and supplemental
questionnaires were received in August, September, and October 1995.
On September 14, 1995, the Department, at the request of the
petitioner, postponed the preliminary determination to November 15,
1995 (60 FR 48690, September 20, 1995).
Postponement of Final Determination
Pursuant to section 735(a)(2)(A) of the Act, on November 20, 1995,
the respondents requested that, in the event of an affirmative
preliminary determination in this investigation, the Department
postpone its final determination until 135 days after the date of
publication of an affirmative preliminary determination in the Federal
Register. Pursuant to 19 CFR 353.20(b), because our preliminary
determination is affirmative, the respondents account for a significant
proportion of exports of the subject merchandise, and no compelling
reasons for denial exist, we are granting respondents' request and
postponing the final determination.
Scope of Investigation
The following scope language reflects certain modifications from
the notice of initiation. In the initiation notice, we indicated that
our scope language may change based on any final scope determination
regarding the antidumping duty orders on certain circular welded non-
alloy steel pipe from Brazil, the Republic of Korea, Mexico, and
Venezuela. See Preliminary Affirmative Determination of Scope Inquiry
on Antidumping Duty Orders on Certain Circular Welded Non-Alloy Steel
Pipe From Brazil, the Republic of Korea, Mexico, and Venezuela (59 FR
1929, January 13, 1994). However, the final determination has not yet
been made. Consequently, we have modified our scope language in an
effort to eliminate the need for use certification at this time.
For purpose of this investigation, circular welded non-alloy steel
pipes (standard pipes) are all pipes and tubes, of circular cross-
section, not more than 406.4 mm (16 inches) in outside diameter,
regardless of wall thickness, surface finish (black, galvanized, or
painted), end finish (plain end, bevelled end, threaded, or threaded
and coupled), or industry specification (ASTM, proprietary, or other)
used in standard or structural pipe applications.
The scope specifically includes, but is not limited to, all pipe
produced to the ASTM A-53, ASTM A-135, ASTM A-795, and BS-1387
specifications. It also includes any pipe multiple-stencilled or
multiple-certified to one of the above-listed specifications and to any
other specification. Pipe which meets the above physical parameters and
which is produced to proprietary specifications, the API-5L, the API-5L
X-42, or to any other non-listed specification is included within the
scope of this investigation if used in a standard or structural pipe
application, regardless of the Harmonized Tariff Schedule of the United
States (HTSUS) category into which it was classified. If the pipe does
not meet any of the above identified specifications, although it is
within the identified physical parameters described in the second
paragraph of this section, our presumption is that it
[[Page 61530]]
is not used in a standard pipe application.
Standard pipe uses include the low-pressure conveyance of water,
steam, natural gas, air, and other liquids and gases in plumbing and
heating systems, air conditioning units, automatic sprinkler systems,
and other related uses. Standard pipe may carry liquids at elevated
temperatures but may not be subject to the application of external
heat. Standard pipe uses also include load-bearing applications in
construction and residential and industrial fence systems. Standard
pipe uses also include shells for the production of finished conduit
and pipe used for the production of scaffolding.
Specifically excluded from this investigation are mechanical
tubing, tube and pipe hollows for redrawing, and finished electrical
conduit if such products are not certified to ASTM A-53, ASTM A-120,
ASTM A-135, ASTM A-795, and BS-1387 specifications and are not used in
standard pipe applications. Additionally, pipe meeting the
specifications for oil country tubular goods is not covered by the
scope of this investigation, unless also certified to a listed standard
pipe specification or used in a standard pipe application.
The merchandise under investigation is currently classifiable under
items 7306.30.10.00, 7306.30.50.25, 7306.30.50.32, 7306.30.50.40,
7306.30.50.55, 7306.30.50.85, and 7306.30.50.90 of the HTSUS. Although
the HTSUS subheadings are provided for convenience and customs
purposes, our written description of the scope of this investigation is
dispositive.
Regarding implementation of the use provision of the scope of this
investigation, and any order which may be issued in this investigation,
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 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 use certification until such time as
petitioner or other interested parties provide the Department with a
reasonable basis to believe or suspect that substitution is occurring.
Second, we will require 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 pipe
produced to the API-5L specification is being used as standard pipe, we
will require use certifications for imports of API-5L specification
pipe. Third, normally we will require only the importer of record to
certify to the 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.
Period of Investigation
The period of investigation is October 1, 1994, through March 31,
1995.
Nonmarket Economy Country Status
The Department has treated Romania as a nonmarket economy country
(NME) in all past antidumping investigations (see, e.g., Final
Determination of Sales at Less Than Fair Value: Circular Welded Non-
Alloy Steel Pipe from Romania (57 FR 42957, September 17, 1992). Since
neither respondents nor petitioners have challenged such treatment, we
will continue to treat Romania as a NME in this investigation, in
accordance with section 771(18)(C) of the Act.
When the Department is investigating imports from a NME, section
773(c)(1) of the Act directs us to base normal value (NV) on the NME
producer's factors of production, valued in a comparable market economy
that is a significant producer of comparable merchandise. The sources
of individual factor prices are discussed under the NV section, below.
Surrogate Country
Section 773(c)(4) of the Act requires the Department to value the
NME producer's factors of production, to the extent possible, in one or
more market economy countries that: (1) are at a level of economic
development comparable to that of the NME country; and (2) are
significant producers of comparable merchandise. The Department has
determined that Algeria, Colombia, the Dominican Republic, Ecuador,
Morocco and Peru are the countries most comparable to Romania in terms
of overall economic development (see the July 25, 1995, memorandum from
David Mueller, Director, Office of Policy, to David L. Binder,
Director, Antidumping Investigations Division II). On July 28, 1995,
the Department issued a letter allowing all interested parties an
opportunity to comment on those countries and to provide the Department
with information to value Tepro's factors of production. Responses to
that letter were received in September, October and November, 1995.
According to the information on the record, we have determined that
Colombia is also a significant producer of pipe among these six
potential surrogate countries. Accordingly, where possible, we have
calculated NV using Colombian prices to value the Romanian producer's
factors of production. Where we did not have Colombian values, we used
values for inputs from: (1) Thailand, which was the surrogate country
in the first investigation of this product from Romania (see the Final
Determination of Sales at Less than Fair Value: Circular Welded Non-
Alloy Steel Pipe from Romania (Steel Pipe I) (57 FR 42957, September
17, 1992)), when no information was available from any other surrogate
countries listed in the July 25, 1995, memorandum referenced above; or
(2) U.S. import prices, when no current information was available from:
(a) any other surrogate countries listed in the July 25, 1995,
memorandum referenced above; or (b) Thailand. For a complete analysis
of the selection of the surrogate country, see the November 21, 1995,
memorandum from the team to Barbara R. Stafford, Deputy Assistant
Secretary for Investigations.
Separate Rates
To establish whether a firm is sufficiently independent from
government control to be entitled to a separate rate, the Department
analyzes each exporting entity under a test articulated in the Final
Determination of Sales at Less Than Fair Value: Sparklers from the
People's Republic of China (56 FR 20588, May 6, 1991) and amplified in
the Final Determination of Sales at Less Than Fair Value: Silicon
Carbide from the People's Republic of China (59 FR 22585, 22586, May 2,
1994) (Silicon Carbide). Under the separate rates criteria, the
Department assigns separate cash deposit rates in nonmarket economy
cases only if a respondent demonstrates the absence of both de jure and
de facto governmental control over export activities.
The Department typically considers three factors which support,
though do not require, a finding of de jure absence of central control.
These factors include: (1) an absence of restrictive stipulations
associated with an individual exporter's business and export licenses;
(2) any legislative enactments decentralizing control of companies; or
(3) any other formal measures by the government decentralizing control
of companies. The Department typically considers four factors in
evaluating whether each
[[Page 61531]]
respondent is subject to de facto governmental control of its export
functions: (1) whether the export prices are set by or subject to the
approval of a governmental authority; (2) whether the respondent has
authority to negotiate and sign contracts and other agreements; (3)
whether the respondent has autonomy from the government in making
decisions regarding the selection of management; and (4) whether the
respondent retains the proceeds of its export sales and makes
independent decisions regarding disposition of profits or financing of
losses (see Silicon Carbide).
Regarding the absence of de jure control, the three exporters of
the subject merchandise, Metagrimex, Metanef and Metalexportimport,
have provided their business licenses issued by the Romanian Chamber of
Commerce and Industry. According to each of the three exporters, this
license does not require renewal, does not impose any limitations on or
create any entitlements for the operations of these exporters, and can
only be revoked by the issuing authorities if the requirements of the
license are not fulfilled. The three exporters have also provided
copies of several laws which they claim provide for the elimination of
the state monopoly in the economy and foreign trade. We have reviewed
these laws and have found no evidence to contradict that claim.
The three exporters have also asserted absence of governmental
control based on all the de facto criteria. All three respondents have
stated that: (1) they establish their own export prices; (2) they
negotiate contracts, without guidance from any governmental entities or
organizations; and (3) there are no restrictions on the use of their
export revenues and they make independent decisions regarding
disposition of profits or financing of losses. Concerning autonomy from
the government in making decisions regarding the selection of
management, both Metagrimex and Metanef have each asserted that their
Council of Administration, which selects the management of the company
and is similar to a board of directors, is free from government control
and the companies are therefore able to make their own management
personnel decisions. Metalexportimport has asserted that its five
member Council of Administration includes one member appointed by the
state ownership fund 1 (SOF) and one member appointed by the
private ownership fund 2 (POF). The SOF and POF were created by
the Romanian government to help privatize Romanian companies.
Therefore, although Metalexportimport's Council of Administration
includes one member appointed by the SOF and one member appointed by
the POF, the council is made up of five members and, thus, the SOF and
POF have a minority representation. There is, therefore, no evidence
that the central government controls the selection of management for
Metalexportimport. All of these statements will be subject to
verification.
\1\ This fund holds the states shares in this company and all
other companies in which the state owns shares. The state is
required to privatize a certain number of the shares it holds every
year until it no longer holds any shares in any company.
\2\ This fund possesses the Certificates of Ownership which
were distributed to all qualified Romanian citizens and will become
actual shares of Romanian companies after five years.
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Consequently, we preliminarily determine that the information
provided by these three companies supports a preliminary finding that
there is de jure and de facto absence of governmental control of export
functions. Therefore, these three companies have preliminarily met the
criteria for the application of separate rates. For a further
discussion of the Department's preliminary determination that these
three companies are entitled to separate rates, see the November 13,
1995, memorandum from the team to Gary Taverman, Acting Director,
Office of Antidumping Investigations.
Fair Value Comparisons
To determine whether sales of pipe from Romania to the United
States by Metagrimex, Metalexportimport and Metanef were made at less
than fair value, we compared the Export Price (EP) to the NV, as
specified in the ``Export Price'' and ``Normal Value'' sections of this
notice.
Export Price
For all three exporters, we calculated EP in accordance with
section 772(a) of the Act, because the subject merchandise was sold
directly to the first unaffiliated purchaser in the United States prior
to importation. The constructed export price under section 772(b) is
not otherwise warranted on the basis of the facts of this
investigation.
We calculated EP based on packed, FOB Romanian port or C&F U.S.
port prices to unaffiliated purchasers in the United States, as
appropriate. We made deductions from the starting price, where
appropriate, for foreign brokerage and handling, foreign inland freight
and ocean freight. Given that foreign brokerage and handling and
foreign inland freight were services provided by Romanian companies, we
valued these expenses in Thailand (see the Surrogate Country section
above).
Normal Value
In accordance with section 773(c) of the Act, we calculated NV
based on factors of production reported by Tepro, which produced the
pipe for Metagrimex, Metalexportimport and Metanef. To calculate NV,
the reported unit factor quantities were multiplied by publicly
available Colombian values, where possible. As stated above, we used
values from other countries for certain other factors where Colombian
values were not available. The selection of the surrogate values
applied in this determination was based on the quality and
contemporaneity of the data. As appropriate, we adjusted input prices
to make them delivered prices. For those values not contemporaneous
with the period of investigation (POI), we adjusted for inflation using
wholesale price indices or, in the case of labor rates, consumer price
indices, published in the International Monetary Fund's International
Financial Statistics.
In presenting their suggestions to the Department on the
appropriate values to use in this investigation, Tepro and the
petitioners have raised two issues. The first issue involves the
quality of steel to be valued. Tepro has stated that it uses secondary,
not prime, steel, in producing the subject merchandise. Furthermore,
Tepro claimed that the grade of steel it uses is different than that
contained in the steel valuation suggestions presented by the
petitioners. Thus, Tepro argued that the Department should discount any
value it uses to account for the difference between primary and
secondary steel. The petitioners refuted Tepro's arguments, claiming
that Tepro did not provide sufficient support for its claim that it
uses secondary steel in the production of the subject merchandise. The
Department agrees with the petitioners and has preliminarily denied
Tepro's claim for a discount on the value we have used for steel. This
decision was based on: (1) the fact that Tepro's reported scrap rates
do not appear to be indicative of a producer who's chief material input
is second quality; and (2) the results of a test submitted by the
petitioners which showed that the grade of steel used by Tepro is
identical to the grade of steel used by U.S. and other world producers
of the subject merchandise.
The second issue involves the different sources of information
presented to value the steel factor. Both Tepro and the petitioners
claimed that the information provided by the other was not appropriate.
We have
[[Page 61532]]
determined that the information provided by the petitioners was the
most appropriate source since it included prices for a greater range of
the steel thicknesses used by Tepro. For a complete analysis of these
issues, see the November 21, 1995, memorandum from the team to Barbara
R. Stafford, Deputy Assistant Secretary for Investigations.
Valuation of Factors
To value hot rolled steel coil, the major material input, we used a
steel price list for sheet and coil sold to industrial users in
Colombia published by Acerias Paz del Rio. S.A., a Colombian producer
of steel sheet and coil. We were unable to locate Colombian publicly
available published information (PAPI) for the other material inputs.
Thus, to value saleable steel scrap, we used the same percentage
difference between steel coil and steel scrap used in Steel Pipe I. For
lacquer and marking paint, we used the basket category data for both of
these values that were used in Steel Pipe I. For zinc, saleable zinc
scrap, hydrochloric acid, zinc chloride and ammonium chloride, we used
values based on U.S. import statistics (IM 145) from market economy
countries for the last quarter of 1994 and the first quarter of 1995.
We used U.S. import statistics for these five inputs because values for
these factors were not available from the other surrogate countries and
these factors were not used in Steel Pipe I.
To value unskilled, indirect and packing labor, we used the 1994
wage rate for the manufacturing sector published in the Economic Guide
for Investors by the Colombian government. Since we cannot determine if
the labor values in this case were for skilled or unskilled workers, we
are following the method established in the Preliminary Determination
of Sales at Less than Fair Value: Polyvinyl Alcohol from the PRC (60 FR
52647, October 10, 1995). In that investigation, we found no basis to
assume the skill level of the surrogate value, nor did we have
agreement among the parties regarding the skill level. Thus, we applied
a single wage rate to all reported labor factors. Since we have the
same situation here, we also applied a single wage rate to all reported
labor factors. Further, because this value was exclusive of benefits,
we increased the amount reported to include benefits.
To value electricity, we used electricity rates for Colombian
industrial users published quarterly by the Latin America Energy
Organization (Organizacion Latinoamericana de Energia, or OLADE). For
methane, because we were unable to find a Colombian value, we used the
value of natural gas because, according to the petitioners, it has
substantially the same end use as methane. Tepro also submitted values
for natural gas as well. We based the surrogate value for natural gas
on 1992 Colombian prices shown in a 1993 OLADE publication.
For the packing materials of cold rolled strip, PVC foil and thread
protectors, because we could find no Colombian PAPI, we used the values
in Steel Pipe I.
We were unable to locate Colombian PAPI for overhead and selling,
general and administrative (SG&A) expenses. Thus, for factory overhead
and SG&A expenses, we used the rates used in Steel Pipe I. These rates
showed overhead as a percentage of materials, exclusive of energy, and
SG&A as a percentage of the sum of materials, labor and overhead. For
both overhead and SG&A, we are using the percentages for black plain
end pipe as the percentages for galvanized plain end pipe and are using
the percentages for black threaded and coupled pipe as the percentages
for galvanized threaded and coupled pipe.
We were unable to locate Colombian PAPI for profit. In Steel Pipe
I, we used eight percent because it was the statutory minimum profit
percentage. The statutory minimum profit figure is no longer
applicable. We were able to obtain profit information for the pipe
industry in Thailand from the Preliminary Results of the 1992-93
Administrative Review of Pipe and Tube from Thailand (Pipe and Tube
from Thailand). That review contained public information indicating
that the profit for the pipe and tube industry in Thailand is greater
than eight percent (see the November 28, 1994, memorandum from the case
analyst to the file). Thus, we used eight percent as the profit margin
in this preliminary determination not because it was formerly the
statutory minimum profit figure, but because publicly available
information indicates that the profit figure is not less than eight
percent. If additional public information becomes available either as a
result of the final determination in Pipe and Tube from Thailand or
otherwise, we will consider that information in our final
determination.
We were also unable to locate Colombian PAPI for rail freight and
foreign brokerage and handling. Thus, for rail freight, we used the
rate contained in Steel Pipe I. This information was obtained from The
Investment Environment in Thailand for 1991. For foreign brokerage and
handling, we used the rate contained in the public version of a
questionnaire response submitted in the 1994 antidumping duty
investigation of Carbon Steel Butt Weld Pipe Fittings from Thailand. We
used the rate contained in the 1994 investigation because this figure
was more recent than the foreign brokerage and handling rate contained
in Steel Pipe I, which was based on an earlier Carbon Steel Butt Weld
Pipe Fittings from Thailand investigation. For a complete analysis of
surrogate values used in the calculation of NV, see the November 21,
1995, memorandum from the team to Barbara R. Stafford, Deputy Assistant
Secretary for Investigations.
Romania-Wide Rate
The U.S. Embassy in Romania identified what we believe to be the
only three Romanian exporters of the subject merchandise to the United
States during the POI. This information was confirmed by the Romanian
embassy in Washington. All three exporters have responded in this
investigation. We compared the respondents' sales data with U.S. import
statistics for time periods including the POI and found no indication
of unreported sales. Accordingly, we have based the Romania-wide rate
on the weighted-average of the margins calculated in this proceeding.
Verification
As provided in section 782(i) of the Act, we will verify all
information used in making our final determination.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing the
Customs Service to suspend liquidation of all entries of pipe from
Romania, that are entered, or withdrawn from warehouse, for consumption
on or after the date of publication of this notice in the Federal
Register. The Customs Service will require a cash deposit or posting of
a bond equal to the estimated dumping margins by which the normal value
exceeds the export price, as shown below. These suspension of
liquidation instructions will remain in effect until further notice.
The weighted-average dumping margins are as follows:
------------------------------------------------------------------------
Weighted-
average
Manufacturer/producer/exporter margin
percentage
------------------------------------------------------------------------
Metagrimex, S.A............................................. 46.12
Metalexportimport, S.A...................................... 41.96
[[Page 61533]]
Metanef, S.A................................................ 46.34
Romania-Wide Rate........................................... 44.69
------------------------------------------------------------------------
The Romania-wide rate applies to all entries of subject merchandise
except for entries from exporters that are identified individually
above.
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine before the later of 120 days after the date of
this preliminary determination or 45 days after our final determination
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry.
Public Comment
In accordance with 19 CFR 353.38, case briefs or other written
comments in at least ten copies must be submitted to the Assistant
Secretary for Import Administration no later than February 27, 1996,
and rebuttal briefs, no later than March 5, 1996. A list of authorities
used and a summary of arguments made in the briefs should accompany
these briefs. Such summary should be limited to five pages total,
including footnotes. We will hold a public hearing, if requested, to
afford interested parties an opportunity to comment on arguments raised
in case or rebuttal briefs. At this time, the hearing is scheduled for
March 8, 1996, the time and place to be determined, at the U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230. Parties should confirm by telephone the time,
date, and place of the hearing 48 hours before the scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, 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. Requests
should contain: (1) the party's name, address, and 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 issues raised in the briefs. If this investigation
proceeds normally, we will make our final determination by 135 days
after the publication of this notice in the Federal Register.
This determination is published pursuant to section 733(f) of the
Act.
Dated: November 21, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-29270 Filed 11-29-95; 8:45 am]
BILLING CODE 3510-DS-P