[Federal Register Volume 61, Number 56 (Thursday, March 21, 1996)]
[Notices]
[Pages 11608-11613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6862]



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DEPARTMENT OF COMMERCE
[A-351-809, A-580-809, A-201-805, A-307-805]


Final Negative Determination of Scope Inquiry on Certain Circular 
Welded Non-Alloy Steel Pipe and Tube From Brazil, the Republic of 
Korea, Mexico and Venezuela

AGENCY: Import Administration, International Trade Administration 
Commerce.

ACTION: Notice of Final Negative Determination of Scope Inquiry.

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SUMMARY: On January 13, 1994, we preliminarily determined that (i) pipe 
certified to American Petroleum Institute (API) 5L line pipe 
specifications (API 5L line pipe or line pipe) and (ii) pipe certified 
to both the API 5L line pipe specifications and the less-stringent 
American Society for Testing and Materials (ASTM) A-53 standard pipe 
specifications (dual-certified pipe,1) when actually used as 
certain circular welded non-alloy steel pipe (standard pipe), and 
falling within the physical parameters outlined in the scope of the 
orders, are within the scope of the antidumping duty orders on standard 
pipe from Brazil, the Republic of Korea, Mexico and Venezuela. See 
Preliminary Affirmative Determination of Scope Inquiry, 59 FR 1929 
(January 13, 1994) (Preliminary). We gave interested parties an 
opportunity to comment.

    \1\ This merchandise, sometimes referred to as ``dual-
stenciled,'' may also include ``multiple-stenciled'' pipe.
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    After a thorough analysis of the comments received from the 
parties, as well as a review of the record evidence from the less-than-
fair-value (LTFV) investigations which gave rise to these antidumping 
duty orders, we determine that (i) pipe certified to the API 5L line 
pipe specification, and (ii) pipe certified to both the API 5L line 
pipe specifications and the less-stringent ASTM A-53 standard pipe 
specifications which fall within the physical parameters outlined in 
the scope of the orders and enter as line pipe of a kind used for oil 
and gas pipelines are outside the scope of the antidumping duty orders 
on certain welded carbon steel non-alloy pipe from Brazil, Korea, 
Mexico and Venezuela, irrespective of end use.

EFFECTIVE DATE: March 21, 1996.

FOR FURTHER INFORMATION CONTACT: Robert M. James at (202) 482-5222 or 
Zev Primor at (202) 482-5253, 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.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute (the 
Tariff Act of 1930, as amended (the Tariff Act)) and to the 
Department's regulations are in reference to the provisions as they 
existed on December 31, 1994.

Background

    On April 22, 1993, Allied Tube & Conduit Corporation, Sawhill 
Tubular Division, Tex-Tube Division American Tube Company, Century Tube 
Corporation, Laclede Steel Company, LTV Tubular Products Company, 
Sharon Tube Company, Western Tube & Conduit Corporation, Wheatland Tube 
Company, and CSI Tubular Products, Inc., petitioners in these cases, 
requested that the Department of

[[Page 11609]]
Commerce (the Department) conduct an anticircumvention inquiry. 
Petitioners argued pursuant to section 781(c) of the Tariff Act and 19 
CFR 353.29(g)(1993), that certain exports from Brazil, Korea and Mexico 
of API 5L line pipe and dual-certified pipe were circumventing the 
antidumping duty orders on standard pipe because they were actually 
used in a standard pipe application. The Department concluded that a 
scope inquiry pursuant to 19 CFR 353.29(i) was the appropriate avenue 
for addressing the issues raised by petitioners.
    The Department initiated its scope inquiry on June 7, 1993 and 
granted interested parties the opportunity to comment on whether API 5L 
line pipe and dual-certified pipe, when used in standard pipe 
applications, are within the scope of the orders. We received comments 
from petitioners and six respondents on July 6, 1993 and rebuttal 
comments on July 19, 1993. Petitioners and five respondents also met 
separately with the Acting Assistant Secretary for Import 
Administration to voice their concerns on this issue.
    Exports of standard pipe from Venezuela were the subject of a 
concurrent antidumping investigation. The scope of the resulting order 
is identical to that of the orders covering Brazil, Korea and Mexico. 
As a result, we determined that it was appropriate to include imports 
from Venezuela in the present scope inquiry. See Memorandum from 
Director, Office of Antidumping Compliance, to Deputy Assistant 
Secretary for Compliance, October 25, 1993 (hereafter, October 25 
Memorandum). In this memorandum we also determined that the record 
evidence regarding the scope of the orders contained sufficient 
ambiguity to necessitate further comments by the parties. Accordingly, 
we asked that interested parties comment on the so-called ``Diversified 
Products'' criteria (see below). Petitioners and four respondents filed 
comments on November 22, 1993 and rebuttals on December 3, 1993.
    On January 13, 1994, the Department published in the Federal 
Register its preliminary affirmative scope determination. We concluded 
that sufficient ambiguity existed in the record to necessitate 
consideration of the ``Diversified Products'' criteria found at 19 CFR 
353.29(i)(2). We further determined that the meaning of certain 
exclusionary language in the scope of the orders was unclear and, 
further, that petitioners had predicated this exclusionary language 
upon the ``actual end use'' of the subject merchandise (as opposed to 
the ``chief'' or ``primary end use,'' as respondents argue). We further 
determined that the scope language ``does not clearly include or 
exclude line pipe or dual certified pipe . . . which is actually used 
in standard pipe applications.'' Preliminary at 1930. As a result of 
our Diversified Products analysis, we determined that line pipe and 
dual-certified pipe, when actually used in a standard pipe application 
and falling within the physical parameters outlined in the orders, are 
within the scope of these orders. See Preliminary at 1933.
    Since publication of our preliminary determination we received 
comments and rebuttal comments from the following parties: petitioners; 
Mannesmann Pipe & Steel Corporation (Mannesmann); Korea Iron and Steel 
Association, Dongbu Steel Company, Ltd., Hyundai Steel Pipe Company, 
Ltd., Korea Steel Pipe Company, Ltd., Pusan Steel Pipe Company, Ltd., 
and Union Steel Manufacturing Company, Ltd. (collectively, the Korean 
respondents); Hyundai Pipe Co., Ltd. (Hyundai); Villacero and Tuberia 
Nacional (Villacero); Hylsa, S.A. de C.V. (Hylsa); and Western American 
Manufacturing, Inc. (Western). The Governments of Korea and Mexico also 
submitted comments.
    On April 13, 1994, the Department issued a draft end-use 
certificate and requested comments from the interested parties 
regarding implementation of end-use certification procedures in the 
event of a final affirmative determination. Petitioners, respondents, 
and the Government of Mexico commented on the draft end-use 
certificate, as did a number of U.S. pipe importers and distributors. 
In light of our negative final determination, however, the issue of 
end-use certification is moot, so we have not addressed these comments.

Analysis

    The regulations governing the Department's antidumping scope 
determinations can be found at 19 CFR 353.29. Our criteria for 
determining whether a product is included in the scope of an order are 
set forth in section 353.29(i)(1). These criteria are the descriptions 
of the merchandise contained in the order, the petition, the initial 
LTFV investigation, and the determinations of the Department and the 
International Trade Commission (ITC). If these descriptions are not 
dispositive of the issue, the Department will further consider the 
factors provided for under 19 CFR 353.29(i)(2), commonly referred to as 
the ``Diversified Products'' criteria (see Diversified Products Corp. 
v. United States, 572 F. Supp. 883 (CIT 1983)). These factors are as 
follows: (i) the physical characteristics of the product subject to the 
scope inquiry; (ii) the expectations of the ultimate purchasers; (iii) 
the ultimate use of the product; and (iv) the channels of trade. 
However, if the record of the Department's and ITC's proceedings is 
dispositive of the issue, then the Department will issue a final scope 
determination without reference to the ``Diversified Products'' 
criteria.
    After careful consideration of the comments by the interested 
parties, and based upon our review of the record for purposes of this 
final determination, we have determined that the scope language adopted 
by the Department in the antidumping duty orders excludes line pipe and 
dual-certified pipe. This conclusion is supported by the record of the 
Department's original investigations. We will address each of the 
relevant aspects of the original investigations in turn, below.2

    \2\ Because in this final scope determination we have found the 
scope language to be dispositive, we have not addressed the 
``Diversified Products'' criteria found in section 353.29(i)(2), nor 
have we specifically addressed comments by the parties on these 
criteria.
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The Language of the Petitions Did Not Address Line or Dual-
Certified Pipe

    The original antidumping duty petitions defined the subject 
merchandise as ``welded non-alloy steel pipes, of circular cross-
section, not more than 406.4 mm (16 inches) in outside diameter 
regardless of wall thickness, surface finish . . . or end finish . . . 
These pipes and tubes are generally known as standard pipe, though they 
may also be called structural or mechanical tubing in certain 
applications.'' Antidumping Petition, September 24, 1991 at 4. The 
product descriptions continued, as required by our regulations,3 
with an illustrative listing of typical uses for standard pipe, and 
observed that the subject merchandise is most commonly produced to the 
ASTM A-53 specification for standard pipe. The petitions did not 
mention either line pipe or dual-certified pipe.

    \3\ 19 CFR 353.12(b)(4) directs petitioners to include ``[a] 
detailed description of the merchandise that defines the requested 
scope of the investigation including technical characteristics and 
uses of the merchandise, and its current U.S. Tariff classification 
number.'' (Emphasis added.)
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    In its initiation notice, the Department adopted petitioners' 
language to define the merchandise covered by the six concurrent 
investigations and also did not mention either line pipe or dual-
certified pipe. See Initiation of Antidumping Duty Investigations: 
Circular Welded Non-Alloy Steel Pipe

[[Page 11610]]
from Brazil, the Republic of Korea, Mexico, Romania, Taiwan and 
Venezuela, 56 FR 52528 (October 21, 1991). The petitions and the 
Department's notice of initiation do not indicate that actual end use 
was a consideration in crafting the scope of the investigations. To the 
extent that uses of the subject merchandise are noted, this was in 
accordance with the Department's regulations. These materials support 
the conclusion that physical characteristics, not actual end uses, 
defined the scope of the petitions and the initial investigations. 
However, the petitions and the initiation notice do not address and, 
therefore, do not definitively resolve the treatment of line pipe or 
dual-certified pipe.

The Final Scope Language Adopted by the Department Excludes Line 
and Dual-Certified Pipe

    While the record reflects some initial uncertainty at least as to 
whether multiple-stenciled pipe was covered by the Department's 
investigations, this uncertainty was resolved early in the proceedings. 
Prior to submitting their questionnaire responses, respondents 
requested clarification as to whether triple-certified pipe was 
included in the scope of the investigations. See Memoranda, Case 
Analyst to the File, November 15, 1991. In their comments of November 
19, 1991, petitioners recognized that an importer could sell dual-
certified pipe entered under the HTS line pipe item into either the 
line pipe or standard pipe market after it entered the United 
States.4 Indeed, the purpose of dual-certifying a product is to 
alert potential consumers of that product's suitability for use in 
either line pipe or standard pipe applications. Petitioners did not tie 
treatment of dual-certified pipe to the market in which it was sold. 
Instead, petitioners stated that ``[d]ual or triple certified standard 
pipe should be covered by these investigations only if they enter the 
United States under one of the tariff numbers listed in section I.D.3 
of the petitions.'' These tariff numbers, under heading 7306.30 of the 
HTS, cover standard pipe, and not line or dual-certified pipe. See 
Petitioners' November 19, 1991 submission at 1. Petitioners further 
stated that ``[a]ny pipe entered under [HTS] item 7306.10.10 [i.e., the 
item heading for line pipe] would be line pipe outside the scope of the 
petitions.'' This statement indicates that in the petitioners' view, 
the inclusion or exclusion of line pipe is tied to the HTS category.

    \4\ Petitioners reiterated this knowledge in their April 22, 
1993 anticircumvention petitions: ``[E]nd users of dual-certified 
pipe knew that such pipe could be used as either line pipe or 
standard pipe . . . End users in the plumbing and building trade, 
for example, purchase it for use as standard pipe while energy 
companies and utilities purchase it for use as line pipe.'' 
Anticircumvention Petitions at 13.
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    With regard to dual-certified pipe, petitioners noted that this 
pipe ``generally enters the United States under the separate tariff 
item H[T]S 7306.10.10 while other standard pipe enters into tariff 
items H[T]S 7306.30.10 or 7306.30.50.'' Petitioners explained that:

    ``General Rules of Interpretation 6 and 3(a) of the [HTS] 
provide that goods that are classifiable under two or more tariff 
subheadings are to be classified under the subheading providing the 
most specific description. Subheading 7306.10 which covers `line 
pipe of a kind used for oil and gas pipelines' is more specific 
than, and therefore takes precedence over, subheading 7306.30, 
`other, welded, of circular cross-section, of iron or non-alloy 
steel'.'' 5

    \5\ Petitioners' November 19, 1991 Letter at 1 and 2.

    Here, petitioners recognized that dual-certified pipe was entering 
the United States under the HTS item for line pipe because the proper 
Customs classification for dual-certified pipe is under this item. 
Taken together, these statements establish that petitioners understood 
that HTS classification of pipe products was based upon the specificity 
of the category, not actual use, and that dual-certified pipe would be 
placed in the line pipe category and, thus, excluded from the order.
    Petitioners reiterated their intention to exclude any pipe entered 
as line pipe in a March 5, 1992 letter to the Department (addressing 
structural tubing and mechanical tubing). In this submission, 
petitioners stated that ``[t]he scope, as defined by the petition, the 
Department and the Commission, clearly excludes both imports of line 
pipe entering the United States in [HTS] category 7306.10 and oil 
country tubular goods . . .''.
    Accordingly, the Department did not require respondents to report 
API 5L line pipe and dual-certified pipe as part of its investigations, 
and our preliminary and final determinations of sales at less-than-
fair-value adopted the exclusionary language suggested by petitioners 
in defining the scope of the orders:

    . . . circular welded non-alloy steel pipes and tubes, of 
circular cross-section, not more than 406.4 millimeters (16 inches) 
in outside diameter, regardless of wall thickness, surface finish 
(black, galvanized, or painted), or end finish (plain end, bevelled 
end, threaded, or threaded and coupled). These pipes and tubes are 
generally known as standard pipe, though they may also be called 
structural or mechanical tubing in certain applications. Standard 
pipes and tubes are intended for 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 also be 
used for light load-bearing and mechanical applications, such as for 
fence tubing, and for protection of electrical wiring, such as 
conduit shells.
    The scope is not limited to standard pipe and tube fencing or 
those types of mechanical and structural pipe that are used in 
standard pipe applications. All carbon steel pipes and tubes within 
the physical description outlined above are included within the 
scope of this investigation, except line pipe, oil country tubular 
goods, boiler tubing, mechanical tubing, pipe and tube hollows for 
redraws, finished scaffolding, and finished conduit. Standard pipe 
that is dual or triple certified/stenciled that enters the U.S. as 
line pipe of a kind used for oil or gas pipelines is also not 
included in this investigation.6

    \6\ Final Determination of Sales at Less Than Fair Value, 57 FR 
42940 (September 17, 1992); see also Preliminary Determination of 
Sales at Less Than Fair Value, 57 FR 17883 (April 28, 1992) 
(emphasis added).
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    In keeping with the petition and petitioners' November 19, 1991 
letter, the scope language adopted by the Department does not make 
actual end use a principal consideration in defining the products 
covered by the investigations. The first paragraph of the scope 
language merely describes the physical characteristics of the subject 
merchandise and offers, as do many antidumping duty orders, an 
illustrative list of its typical uses. The second paragraph states that 
``[a]ll carbon steel pipes and tubes within the physical description 
outlined above are included within the scope of these orders . . .''. 
Therefore, the language of the scope of the orders relies on physical 
characteristics, not on actual or potential end uses.
    The scope language goes on to specifically exclude certain types of 
pipe that fit the physical description, including ``line pipe, oil 
country tubular goods, pipe and tube hollows for redraws, finished 
scaffolding, and finished conduit.'' The scope language excludes these 
separate categories of pipe, based upon industry classifications, 
without discussion of actual end uses. It follows that line pipe is not 
covered by the order regardless of how it is finally used.
    As to dual-certified pipe, the same analysis of the order's 
language holds. The scope provides that ``[s]tandard pipe that is dual 
or triple certified/

[[Page 11611]]
stenciled that enters the U.S. as line pipe of a kind used for oil or 
gas pipelines is also not included in these orders.'' The emphasis on 
pipe ``that enters the U.S. as line pipe,'' language suggested by 
petitioners, underscores that the key factors the Department used in 
determining the scope of the investigations were the physical 
characteristics and the classification of the merchandise as it passed 
through U.S. Customs (i.e., ``enters the U.S.''), and not on its 
disposition at some later point in the stream of commerce. This 
conclusion is supported by the fact that the phrase ``line pipe of a 
kind used for oil and gas pipelines'' is taken verbatim from HTS item 
7306.10.10. The phrase ``of a kind used for'' is commonly used by 
Customs to signify the chief, or principal, use of a product and not 
its actual use. See Group Italglass U.S.A., Inc. v. United States, Slip 
Op. 93-46 at 6 (CIT March 29, 1993) (``The language in heading 7010 `of 
a kind' preceding `used for' simply buttresses the interpretative rule 
for use provisions that it is the use of the class or kind of goods 
imported that is controlling rather than the use to which the specific 
imports were put.''). Therefore, by the language of the scope, if pipe 
enters the United States as pipe ``of a kind used for oil and gas 
pipelines'' (i.e., is classified by Customs under HTS item 7306.10.10), 
it is excluded from the scope of the orders.

The Determinations of the ITC Did Not Cover Line Pipe

    The ITC, in defining the like product for purposes of its injury 
investigations, followed the language adopted by the Department in the 
notice of initiation. In its preliminary determination, the ITC first 
discussed the products ``subject to these investigations;'' the ITC 
later defined line pipe and dual-certified pipe under the separate 
heading ``Other Pipe and Tube Products,'' stating that line pipe is 
``produced to meet different specifications than `standard' pipes, and 
a large percentage of line pipes are made to larger diameters than the 
pipes and tubes subject to these investigations.'' Determinations of 
the Commission (Preliminary), USITC Publication 2454 (November 1991) at 
A-9. The ITC continued to draw a distinction between line and dual-
certified pipe in its final determination and did not include producers 
of line pipe in its definition of the U.S. industry for purposes of its 
affirmative injury determination. The ITC did not, therefore, examine 
the impact of imports of line pipe upon the domestic industry. See 
Determinations of the Commission (Final), USITC Publication 2564 
(October 1992) at I-7 through I-13. Under U.S. law, the Department 
cannot cover within the scope of an order merchandise which has not 
first been subject to an affirmative injury determination. See Section 
731 of the Tariff Act.
    The record with respect to dual-certified pipe is less clear. The 
ITC's ``Producers' Questionnaire'' requested data on domestic 
production of pipes ``that were single or multiple stenciled to meet 
standard pipe specifications.'' ITC Producers' Questionnaire at 14 
(original emphasis; submitted as Exhibit 10 to Petitioners' July 6, 
1993 Comments). The ITC noted that 15.5 percent of the reported 
domestic shipments comprised dual-certified pipe and that ``the 
products in question were not sold as standard pipe.'' USITC 
Publication 2564 at I-12, note 20 and I-21, note 48. However, the ITC 
did not indicate whether or not these shipments were included in its 
injury analysis. Furthermore, as petitioners have acknowledged, the ITC 
did not include dual-certified pipe in its purchasers' or importers' 
questionnaires. See Petitioners' February 23, 1994 Comments at 16. 
Therefore, while the ITC's determinations support the conclusion that 
line pipe is not covered, the record with respect to the ITC's 
treatment of dual-certified pipe is inconclusive, but cannot be read to 
conflict with the Department's scope language excluding dual-certified 
pipe.
    In light of the language of the scope and the underlying record of 
the investigations, the Department has concluded that an affirmative 
scope ruling would be contrary to the scope language as written and 
would represent an impermissable expansion of the scope of the orders. 
Accordingly, we have concluded that API 5L line pipe and dual-certified 
pipe do not fall within the scope of the orders.

Comments by the Parties

    Petitioners maintain that our preliminary affirmative scope 
determination is correct, is supported by substantial record evidence 
and is in accordance with law. According to petitioners, the ``plain 
language'' of the scope includes all pipe meeting the published 
physical description of the subject merchandise which is used as, or 
intended for use as, standard pipe ``without regard to the tariff 
number or industry specifications.'' Petitioners' February 16, 1994 
Comments at 2. In light of the Department's preliminary determination 
that the scope is not dispositive of this issue, petitioners aver that 
the Department's analysis of the ``Diversified Products'' criteria 
leads properly to the same affirmative determination. Id. at 3.
    Petitioners support the Department's preliminary conclusion (as 
outlined in its October 25 Memorandum) that petitioners relied upon HTS 
item numbers to identify merchandise covered by the investigations 
because they presumed incorrectly that these tariff classifications 
were based upon the actual and not the principal end use of the 
merchandise. Petitioners February 23, 1994 Rebuttal Comments at 9 and 
10. Further, petitioners suggest, the Department's statements in the 
orders' scope that standard pipes ``are intended for [specific uses]'' 
and that ``line pipe of a kind used for oil and gas pipelines is 
excluded'' constitute an ``actual'' end-use test and that the 
merchandise covered by the scope of the orders is, in fact, defined in 
terms of actual end use. Thus, the Department must conduct an analysis 
of whether the merchandise is actually used in a standard- or line-pipe 
application. See, e.g., Petitioners' Rebuttal Comments, February 23, 
1994 at 7 through 9, and 12 through 13. Petitioners further argue that 
the Court of International Trade (CIT), in Ipsco, Inc. v. United 
States, 715 F. Supp. 1104 (CIT 1989) (Ipsco), held that the 
Department's use of the phrase ``intended for use'' permits an inquiry 
into how the API 5L and dual-certified pipes at issue here are actually 
used. Id. at 14.
    Finally, Petitioners suggest that, because the ITC included in its 
analysis dual-certified pipe used as standard pipe, a final affirmative 
determination would be fully consonant with the requirement, pursuant 
to the statute and the General Agreement on Tariffs and Trade (GATT), 
that products be subject to an affirmative injury finding prior to the 
imposition of antidumping duties. Id. at 15.
    Hylsa, the Korean Respondents, Mannesmann, Villacero and Western 
agree that the plain language of the scope of these orders is 
dispositive of this issue in that this language expressly excludes the 
subject products. Respondents further argue that use, actual or 
otherwise, played no role in the Department's determination of the 
scope of the orders. Respondents suggest that the phrase ``of a kind 
used for'' is a Customs ``term of art'' which imposes a chief- or 
primary-use test, not an actual end-use test. See, e.g., Villacero's 
Comments, February 11, 1994 at 7; Korean Respondents' Comments, 
February 16, 1994 at 6 and 7, and 8 through 17, and Hylsa's Comments, 
February 16, 1994 at 4 through 9. Respondents also find the Ipsco 
decision inapposite here,

[[Page 11612]]
contending that the issue before the CIT in Ipsco involved an order 
where ``end use was the defining characteristic'' of that order's 
scope. Hyundai's Comments, February 15, 1994 at 7 (original emphasis). 
In contrast, argue respondents, the scope of the standard pipe orders 
includes ``express exclusionary language;'' therefore, respondents 
contend, ``the list of end uses is, as the Department itself concedes, 
`illustrative'.'' Korean Respondents' Comments, February 16, 1994 at 25 
(original emphasis).
    Hylsa, Hyundai, the Korean Respondents, Mannesmann and Villacero 
also argue that, contrary to the statute and the GATT, inclusion of API 
5L line pipe and dual-certified pipe would subject merchandise to 
antidumping duties without the requisite affirmative determination of 
material injury to the domestic industry. Citing to these and previous 
investigations of standard and line pipe, respondents contend that the 
ITC has consistently identified line pipe as a separate like product. 
See, e.g., Korean Respondents' February 16, 1994 Comments at 35 and 36. 
In these investigations, respondents continue, the ITC limited its 
injury analysis to the domestic standard pipe industry and, therefore, 
did not include line or dual-certified pipe in its investigations.

The Department's Response

    For the reasons cited in the analysis section above, the Department 
disagrees with petitioners. After further review of the record 
evidence, we find that the language of the orders excludes API 5L line 
pipe and dual-certified pipe irrespective of actual end use. While 
there may be uncertainty over why these products were excluded from the 
orders, as suggested in our October 25 Memorandum, the descriptions of 
the merchandise contained in the petition, the initial investigations, 
and the determinations of the Department and the ITC, plus the record 
compiled during this scope inquiry, indicate that it is correct to 
conclude that API 5L line pipe and dual-certified pipe were excluded 
from these proceedings from their inception. Further, these documents 
indicate that at the time the petition was filed and during the 
investigations, the actual end use of the imported merchandise was not 
a determinative factor in the formulating the scope description which 
was, rather, based upon physical characteristics coupled with product 
classifications under the Harmonized Tariff Schedule of the United 
States.\7\

    \7\ Petitioners also suggest that the order provides HTS numbers 
``for convenience and customs purposes'' and the written 
descriptions of the merchandise are dispositive. See Petitioners' 
February 23, 1994 Rebuttal Comments at 5 and note 13. While the 
Department typically includes this disclaimer in its published 
notices, here, petitioners explicitly based the product coverage 
upon HTS classifications, and quoted directly from the applicable 
Customs language to further buttress this emphasis on tariff 
classifications. The Department's adoption of petitioners language 
and reliance upon Customs classifications is, in fact, part of the 
written description of the scope and is, therefore, controlling.
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    With respect to petitioners' argument that they misunderstood the 
underlying principles of the HTS tariff classifications, as stated in 
the analysis section above, petitioners' November 19, 1991 letter 
recognizes that the classification system is based on the specificity 
of the HTS category, and that dual-certified pipe entered as line pipe 
could be sold and actually used as either standard or line pipe 
following importation. Further, petitioners state in their July 6, 1993 
scope comments that their position with respect to pipe entered under 
HTS item 7306.10.10 was based not on the actual use of the pipe but, 
rather, on petitioners' lack of interest in pursuing the small quantity 
of dual-certified pipe entered under HTS item 7306.10.10 which might 
later be used as standard pipe. Petitioners noted their ``belief that 
little imported dual stencilled pipe entered as line pipe was going 
into standard pipe applications'' and suggested that the quantity of 
dual-certified pipe actually used in standard pipe applications ``would 
have little or no impact on the operation of a dumping order.'' 
Petitioners July 6, 1993 Scope Comments at 10.\8\

    \8\ In their April 22, 1993 request for an anticircumvention 
inquiry (which gave rise to the instant scope inquiry), petitioners 
maintained that the scope ``specifically excludes'' API 5L line and 
dual-certified pipe. Petitioners quoted the Department's scope 
language that ``pipe that is dual or triple certified-stenciled that 
enters the U.S. as line pipe of a kind used for oil and gas 
pipelines is also not included in this investigation,'' and stated 
that ``[l]ine pipe is also specifically excluded'' from the scope of 
the orders. See Petitioners' April 22, 1993 Anticircumvention 
Petition at 3 and 25. Petitioners included these statements as part 
of their explanation of why anticircumvention proceedings, and not a 
scope inquiry, were necessary to address petitioners' concerns.
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    Even if it were the case, as we suggested in our October 25 
Memorandum, that petitioners operated under the ``incorrect 
presumption'' that HTS tariff numbers were based upon actual end use, 
and that the subject merchandise would be so classified (see October 25 
Memorandum at 5, note 5 and 8), the Department does not now have the 
discretion to ``correct'' this misapprehension within the context of a 
scope inquiry. It is well established that the Department has the 
authority to clarify the scope of an antidumping duty order. The 
Department may not, however, modify or expand the scope of an order 
``in a way contrary to its terms.'' See, e.g., Smith Corona Corp. v. 
United States, 915 F.2d 683 (Fed. Cir. 1990); Alsthom Atlantique v. 
United States, 787 F.2d 565 (Fed. Cir. 1986); Royal Business Machines 
v. United States, 669 F.2d 692 (Fed. Cir. 1982).\9\ Moreover, 
regardless of petitioners' intentions, the fact remains that, as a 
result of the scope language suggested repeatedly by petitioners and 
adopted by the Department in its initiation of these investigations, 
the ITC did not consider whether the domestic industry was injured by 
imports of line pipe; with respect to dual-certified pipe, the record 
is unclear.

    \9\ This does not, however, preclude the Department's addressing 
the types of concerns raised here by petitioners at the 
investigation stage of a proceeding in formulating the scope 
language. In fact, the Department has addressed these same concerns 
in several recent pipe investigations. See, e.g., Final 
Determination of Sales at Less Than Fair Value: Certain Small 
Diameter Seamless Carbon and Alloy Steel Standard, Line and Pressure 
Pipe from Brazil, 60 FR 31960 (June 19, 1995).
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    As to the decision in Ipsco, it is inapposite to the instant scope 
inquiry. In Oil Country Tubular Goods from Canada (which gave rise to 
the Ipsco decision) the actual end use of the merchandise was an 
explicit part of the scope of the order which contains no exclusionary 
provisions whatever. See Antidumping Duty Order: Oil Country Tubular 
Goods (OCTG) from Canada 51 FR 21782 (June 16, 1986). In contrast to 
that case, here the scope of the order is driven by physical 
characteristics and tariff classification of the merchandise, not 
actual end use, and specifically excludes certain categories of pipe, 
including line and dual-stenciled pipe, without reference to intended 
or actual uses.

Conclusion

    For the reasons cited above, the Department determines that: (i) 
pipe certified to the API 5L line pipe specification, and (ii) pipe 
certified to both the API 5L line pipe specifications and the less-
stringent ASTM A-53 standard pipe specifications which fall within the 
physical parameters outlined in the scope of the orders and enter as 
line pipe of a kind used for oil and gas pipelines are outside the 
scope of the antidumping duty orders on certain welded carbon steel 
non-alloy pipe from Brazil, Korea, Mexico and Venezuela, irrespective 
of end use. We will notify

[[Page 11613]]
directly the U.S. Customs Service of this determination.

    Dated: March 14, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-6862 Filed 3-20-96; 8:45 am]
BILLING CODE 3510-DS-P