[Federal Register Volume 62, Number 94 (Thursday, May 15, 1997)]
[Notices]
[Pages 26776-26778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12800]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-583-815]


Certain Welded Stainless Steel Pipe From Taiwan; Preliminary 
Results of Antidumping Duty Administrative Reviews

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

ACTION: Notice of preliminary results of administrative reviews.

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SUMMARY: In response to requests by respondent Ta Chen Stainless Pipe 
Co., Ltd. (Ta Chen), the Department of Commerce (the Department) is 
conducting administrative reviews of the antidumping duty order on 
certain welded stainless steel pipe from Taiwan (A-583-815). These 
reviews cover one manufacturer/exporter of the subject merchandise to 
the United States during the periods June 22, 1992 through November 30, 
1993 and December 1, 1993 through November 30, 1994.
    We preliminarily determine that Ta Chen made sales of welded 
stainless steel pipe (WSSP) below the foreign market value (FMV) for 
both periods of review (POR). If these preliminary results are adopted 
in our final results of administrative review, we will instruct the 
U.S. Customs Service to assess antidumping duties equal to the 
difference between United States price (USP) and the FMV.
    We invite interested parties to comment on these preliminary 
results. Parties who submit comments are requested to submit with the 
argument (1) a statement of the issues and (2) a brief summary of the 
argument.

EFFECTIVE DATE: May 15, 1997.

FOR FURTHER INFORMATION CONTACT: Robert James at (202) 482-5222 or John 
Kugelman at (202) 483-0649, Antidumping and Countervailing Duty 
Enforcement Group III, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230.

APPLICABLE STATUTE AND REGULATIONS: Unless otherwise indicated, all 
citations to 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.

SUPPLEMENTARY INFORMATION:

Background

    On December 30, 1992, the Department published in the Federal 
Register the antidumping duty order on WSSP from Taiwan (57 FR 62300). 
On November 26, 1993, the Department published the notice of 
``Opportunity to Request Administrative Review'' for the period June 
22, 1992 through November 30, 1993 (58 FR 62326). In accordance with 19 
CFR 353.22(a)(1), Ta Chen requested that we conduct a review of its 
sales for this period. On January 18, 1994, we published in the Federal 
Register a notice of initiation of an antidumping duty administrative 
review covering the period June 22, 1992 through November 30, 1993. The 
Department subsequently published a notice of ``Opportunity to Request 
Administrative Review'' for the period December 1, 1993 through 
November 30, 1994 on December 6, 1994 (59 FR 62710). Again, Ta Chen 
requested a

[[Page 26777]]

review of its sales for this period. On January 13, 1995, we published 
in the Federal Register our notice of initiation of the second 
administrative review (60 FR 3192). The Department is now conducting 
these administrative reviews in accordance with section 751 of the 
Tariff Act.

Scope of the Review

    The merchandise subject to this administrative review is certain 
welded austenitic stainless steel pipe (WSSP) that meets the standards 
and specifications set forth by the American Society for Testing and 
Materials (ASTM) for the welded form of chromium-nickel pipe designated 
ASTM A-312. The merchandise covered by the scope of the order also 
includes austenitic welded stainless steel pipes made according to the 
standards of other nations which are comparable to ASTM A-312.
    WSSP is produced by forming stainless steel flat-rolled products 
into tubular configuration and welding along the seam. WSSP is a 
commodity product generally used as a conduit to transmit liquids or 
gases. Major applications of WSSP include, but are not limited to, 
digester lines, blow lines, pharmaceutical lines, petrochemical stock 
lines, brewery process and transport lines, general food processing 
lines, automotive paint lines, and paper process machines.
    Imports of WSSP are currently classifiable under the following 
Harmonized Tariff Schedule of the United States (HTS) subheadings: 
7306.40.1000, 7306.40.5005, 7306.40.5015, 7306.40.5145, 7306.40.5060, 
and 7306.40.5075. Although these subheadings include both pipes and 
tubes, the scope of this investigation is limited to welded austenitic 
stainless steel pipes. The HTS subheadings are provided for convenience 
and Customs purposes; the written description of the scope of this 
order remains dispositive.

Use of Best Information Available

    We preliminarily determine that the use of best information 
otherwise available (BIA), in accordance with section 776(c) of the 
Tariff Act, is appropriate for Ta Chen for the period June 22, 1992 
through November 30, 1993 and the period December 1, 1993 through 
November 30, 1994. We find that in each review Ta Chen mischaracterized 
and failed to fully disclose its relationships with certain U.S. 
customers and, as a result, did not report its first U.S. sale to an 
unrelated party. Therefore, Ta Chen failed to provide the Department 
with the U.S. sales data necessary to calculate margins in these two 
reviews. Although the bases for this determination are discussed below, 
much of the relevant information is proprietary in nature and cannot be 
discussed in this public notice. A more detailed analysis is found in 
the Department's proprietary Analysis Memorandum, on file in Room B-099 
of the Main Commerce Building.
    The Department's definition of related parties is found at section 
771(13) of the Tariff Act. Section 771(13) states, inter alia, that:

for purposes of determining United States price, the term 
``exporter'' includes the person by whom or for whose account the 
merchandise is imported into the United States if--
* * * * *
    (B) Such person owns or controls, directly or indirectly, 
through stock ownership or control or otherwise, any interest in the 
business of the exporter, manufacturer, or producer;
    (C) The exporter, manufacturer, or producer owns or controls, 
directly or indirectly, through stock ownership or control or 
otherwise, any interest in the business conducted by such person * * 
*

See Section 771(13) of the Tariff Act (emphasis added).
    Throughout the first and second administrative reviews Ta Chen 
insisted that it was not related to any U.S. customer. However, in a 
supplemental questionnaire response submitted in the third (1994-1995) 
administrative review (relevant portions of which have been 
incorporated into the records of these reviews), Ta Chen for the first 
time disclosed information which clearly indicates that Ta Chen was 
related to two U.S. customers, within the meaning of section 771(13) of 
the Tariff Act, during the first and second review periods. Section 
771(13)(C) holds that the term ``exporter'' includes the person by whom 
or for whose account the merchandise is imported into the United States 
if the exporter ``controls, directly or indirectly, through stock 
ownership or control or otherwise, any interest in the business 
conducted by such person.'' The record evidence leads us to conclude 
that Ta Chen exercised de facto operational control over these U.S. 
customers.
    Our discussion below focuses on two parties, referred to here as 
Company A and Company B, which Ta Chen reported as unrelated customers. 
Prior to June, 1992 Ta Chen had sold pipe from the U.S. inventory of 
its wholly-owned subsidiary, Ta Chen International (TCI). In June 1992, 
after Ta Chen decided to stop selling its products from TCI's 
inventory, TCI and Company A (a U.S. company established in 1988 by the 
president of a Taiwanese firm), signed an agreement whereby Company A 
would purchase all of TCI's considerable U.S. inventory and would 
effectively replace TCI as the principal distributor of Ta Chen pipe 
products in the United States. In a separate June 1992 agreement 
between Ta Chen and Company A, Company A also committed itself to 
purchasing very substantial, and rapidly increasing, dollar values of 
Ta Chen products over the following two years. In September 1993, a 
member of Ta Chen's board of directors sold all of his stock in Ta 
Chen, allegedly severed all ties with Ta Chen, and incorporated a new 
entity, Company B. This new Company B purchased all of Company A's 
assets, including inventory, and assumed all of Company A's obligations 
regarding its lease of space from Ta Chen's president, purchase 
commitments, credit arrangements, etc.
    During the first (1992-1993) and second (1993-1994) periods of 
review Ta Chen controlled both Company A's and then Company B's 
disbursements through physical custody of their signature stamps, 
whereby officials of TCI were authorized to execute checks and other 
instruments on behalf of Company A and Company B. Ta Chen also shared 
common sales department personnel and office equipment with Company A 
and Company B. Furthermore, Ta Chen's sales manager also served as 
sales manager for both Company A and Company B. Ta Chen also had full 
and unrestricted access, via a dedicated telephone connection, to 
Company A's and Company B's computer accounting systems, including 
their accounts receivable, accounts payable, payroll, and other company 
books. Ta Chen indicated that it was the sole supplier of stainless 
steel pipe and pipe fittings to Company A and Company B and, further, 
that its president participated directly in negotiating the terms of 
certain sales Company A and Company B made to subsequent purchasers of 
WSSP in the United States. Finally, first Company A and, later, Company 
B, pledged their accounts receivable and inventory as security for a 
sizable line of credit obtained from a local bank by TCI. These 
companies also pledged their full cooperation in enforcing this lien in 
the event Ta Chen defaulted on its debt.
    In addition, we note that for the first period of review, record 
evidence strongly indicates that Ta Chen and Company B were related 
parties as defined by section 771(13)(B) of the Tariff Act. At least 
for some portion of 1992 until the end of September 1993 (i.e., during 
the first POR), Ta Chen's

[[Page 26778]]

board member simultaneously owned Company B and held equity interest in 
Ta Chen. Petitioners have supplied a Dun & Bradstreet report on Company 
B and a supporting affidavit which indicates that while Company B was 
incorporated in 1993, the board member actually founded the company and 
made sales in 1992.
    Based on this evidence of Ta Chen's connections with Company A and 
Company B, in particular its control over operational functions such as 
disbursements, sales personnel, and Ta Chen's involvement in Company 
A's and Company B's sales activities, we preliminarily determine that 
Ta Chen had a substantial interest in Company A and Company B during 
the 1992-1993 and 1993-1994 periods of review. Therefore, Ta Chen was 
related to Company A and Company B within the meaning of section 
771(13) of the Tariff Act. Because Ta Chen reported U.S. sales to 
Company A and Company B instead of the first sale to an unrelated 
party, the use of best information otherwise available is warranted.
    In selecting BIA, the Department has established a ``two-tier'' 
hierarchy:
    1. When a company refuses to cooperate with the Department or 
otherwise significantly impedes the proceedings we use as BIA the 
higher of (a) the highest of the rates found for any firm for the same 
class or kind of merchandise in the same country of origin in the LTFV 
investigation or a prior administrative review, or (b) the highest rate 
found in this review for any firm for the same class or kind of 
merchandise in the same country of origin.
    2. When a company substantially cooperated with our requests for 
information, but failed to provide the information in a timely manner 
or in the form required, we use as BIA the higher of (a) the highest 
rate (including the ``all others'' rate) ever applicable to the firm 
for the same class or kind of merchandise from either the LTFV 
investigation or a prior administrative review, or (b) the highest rate 
calculated in this review for any firm for the class or kind of 
merchandise in the same country of origin. See Antifriction Bearings 
(Other Than Tapered Roller Bearings) and Parts Thereof From France, et 
al.; Final Results of Antidumping Duty Administrative Reviews 57 FR 
28360, 28379 (June 24, 1992); see also Allied Signal v. United States, 
996 F.2d 1195 (Fed. Cir. 1993).
    We find that because Ta Chen failed to provide accurate information 
on its relationships to other companies and misreported its sales in 
both the first and second administrative reviews, Ta Chen failed to 
cooperate with the Department and has significantly impeded these 
proceedings. Accordingly, we are assigning Ta Chen a margin based on 
``first-tier,'' or uncooperative, BIA.

Preliminary Results of Review

    As a result of our review, we preliminarily determine the weighted-
average margin for Ta Chen for the periods June 22, 1992 through 
November 30, 1993 and December 1, 1993 through November 30, 1993 to be 
31.90 percent, i.e., the highest margin found for any respondent in the 
LTFV investigation. See Amended Final Determination and Antidumping 
Duty Order; Certain Welded Stainless Steel Pipe From Taiwan, 57 FR 
62300, 62301 (December 30, 1992).
    Parties to these proceedings may request disclosure within five 
days of publication of this notice and may request a hearing within ten 
days of publication. Any hearing, if requested, will be held 44 days 
after the date of publication, or the first business day thereafter. 
Interested parties may submit case briefs or written comments, or both, 
no later than 30 days after the date of publication. Rebuttal briefs 
and rebuttals to written comments, limited to issues raised in the case 
briefs and comments, may be submitted no later than 37 days after the 
date of publication of this notice. Parties who submit arguments in 
these proceedings are requested to submit with the argument (1) a 
statement of the issues and (2) a brief summary of the argument. The 
Department will issue final results of these administrative reviews, 
including the results of our analysis of the issues in any such written 
comments or at a hearing.
    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between U.S. price and FMV may vary from the percentage 
stated above. The Department will issue appraisement instructions 
directly to the Customs Service.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of these administrative reviews 
for all shipments of WSSP from Taiwan entered, or withdrawn from 
warehouse, for consumption on or after the publication of the final 
results of these administrative reviews, as provided in section 
751(a)(1) of the Tariff Act:
    (1) The cash deposit rate for Ta Chen will be the rate established 
in the final results of these administrative reviews;
    (2) For previously reviewed or investigated companies other than Ta 
Chen, the cash deposit rate will continue to be the company-specific 
rate published for the most recent period;
    (3) If the exporter is not a firm covered in these reviews, or the 
LTFV 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
    (4) If neither the exporter nor the manufacturer is a firm covered 
in these or any other review conducted by the Department, the cash 
deposit rate will be 19.84 percent. See Amended Final Determination and 
Antidumping Duty Order; Certain Welded Stainless Steel Pipe From 
Taiwan, 57 FR 62300 (December 30, 1992).
    This notice serves as a preliminary reminder to importers of their 
responsibility to file a certificate regarding the reimbursement of 
antidumping duties prior to liquidation of the relevant entries during 
each 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. These administrative reviews and this 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.

    Dated: May 8, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-12800 Filed 5-14-97; 8:45 am]
BILLING CODE 3510-DS-P