[Federal Register Volume 63, Number 6 (Friday, January 9, 1998)]
[Notices]
[Pages 1437-1440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-489]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-583-815]


Certain Welded Stainless Steel Pipe From Taiwan; Preliminary 
Results of Administrative Review

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

ACTION: Notice of preliminary results of administrative review.

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SUMMARY: In response to requests by petitioners 1 and 
respondent Ta Chen Stainless Pipe Co., Ltd. (Ta Chen), the Department 
of Commerce (the Department) is conducting an administrative review of 
the antidumping duty order on certain welded stainless steel pipe from 
Taiwan (A-583-815). This review covers one manufacturer/exporter of the 
subject merchandise to the United States during the period December 1, 
1995 through November 30, 1996.
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    \1\ Avesta Sheffield, Inc., Damascus Tube Division, Damascus-
Bishop Tube Co., Trent Tube Division, Crucible Materials 
Corporation, and the United Steelworkers of America (AFL-CIO/CLC).
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    We preliminarily determine that a de minimis dumping margin exists 
for Ta Chen's sales of welded stainless steel pipe (WSSP) in the United 
States. 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 on entries of Ta Chen merchandise during the 
period of review, in accordance with the Department's regulations (19 
CFR 353.6). Interested parties are invited to

[[Page 1438]]

comment on these preliminary results. Parties who submit comments are 
requested to submit with the argument (1) a statement of the issues and 
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(2) a brief summary of the argument.

EFFECTIVE DATE: January 9, 1998.

FOR FURTHER INFORMATION CONTACT: Robert James at (202) 482-5222 or John 
Kugelman at (202) 482-0649, 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), are 
to the provisions effective January 1, 1995, the effective date of the 
amendments made to the Tariff Act by the Uruguay Round Agreements Act. 
In addition, unless otherwise indicated, all citations to the 
Department's regulations are to the regulations codified at 19 CFR Part 
353 (April 1, 1997).

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 December 3, 1996, the Department published the notice of 
``Opportunity to Request Administrative Review'' for the period 
December 1, 1995 through November 30, 1996 (61 FR 64051). In accordance 
with 19 CFR 353.22(a)(1) (1995), petitioners and Ta Chen requested that 
we conduct a review of Ta Chen's sales. On January 17, 1997, we 
published in the Federal Register a notice of initiation of this 
antidumping duty administrative review covering the period December 1, 
1995 through November 30, 1996 (62 FR 2647).
    Because it was not practicable to complete this review within the 
normal time frame, on July 24, 1997, we published in the Federal 
Register our notice of extension of time limits for this review (62 FR 
39824). As a result, we extended the deadline for these preliminary 
results to December 31, 1997. The deadline for the final results of 
this review will continue to be 120 days after publication of these 
preliminary results.

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 a tubular configuration and welding along the seam. WSSP is a 
commodity product generally used as a conduit to transmit liquids or 
gases. Major applications for 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: 
7306.40.5005, 7306.04.5015, 7306.40.5040, 7306.40.5065, and 
7306.40.5085. Although these subheadings include both pipes and tubes, 
the scope of this review is limited to welded austenitic stainless 
steel pipes. Although the HTS subheadings are provided for convenience 
and Customs purposes, our written description of the scope of this 
order is dispositive.
    The period for this review is December 1, 1995 through November 30, 
1996. This review covers one manufacturer/exporter, Ta Chen.

Export Price

    Ta Chen reported in its initial and supplemental questionnaire 
responses that all of its U.S. sales were first sold to unaffiliated 
purchasers prior to importation into the United States. Each of these 
sales was made through Ta Chen's wholly-owned U.S. subsidiary, TCI. Ta 
Chen claims that it ``sold'' the merchandise to TCI, which immediately 
transferred the WSSP to the first unaffiliated U.S. customer. For each 
of these sales, Ta Chen claims that TCI acted merely as a 
``facilitator,'' handling sales- and Customs-related paper work; Ta 
Chen states that at no time did TCI take physical possession of the 
merchandise or enter it into TCI's warehouse. In each instance, 
according to Ta Chen, the price and quantity of the U.S. sale to the 
unaffiliated customer were determined prior to importation into the 
United States. Therefore, in calculating U.S. price we used export 
price (EP), as defined in section 772(a) of the Tariff Act, for all of 
Ta Chen's sales. We calculated EP as the packed, delivered or ex-U.S. 
port price to unaffiliated purchasers in the United States. In 
accordance with section 772(c)(2)(A) of the Tariff Act, we reduced this 
price by Taiwanese pre-sale inland freight, international ocean 
freight, marine insurance, Taiwanese brokerage and handling, U.S. 
brokerage and handling, U.S. duty, and U.S. inland freight. Where 
appropriate, we also reduced the EP by Taiwanese and U.S. bank charges.

Normal Value

A. Viability

    Based upon (i) our comparison of the aggregate quantity of home 
market and U.S. sales, (ii) the absence of any information that a 
particular market situation in Taiwan does not permit a proper 
comparison, and (iii) the fact that Ta Chen's quantity of sales in the 
home market exceeded five percent of its sales to the U.S. market, we 
determined that the quantity of foreign like product Ta Chen sold in 
Taiwan was sufficient to permit a proper comparison with the sales of 
subject merchandise to the United States pursuant to section 773(a) of 
the Tariff Act. Therefore, in accordance with section 773(a)(1)(B)(i) 
of the Tariff Act, we based NV on the prices at which the foreign like 
products were first sold for consumption in the exporting market, i.e., 
Taiwan.

B. Cost-of-Production Analysis

    Because we disregarded sales below the cost of production in the 
less-than-fair-value (LTFV) investigation (at the time of our 
initiation of this administrative review, the most-recently completed 
segment of these proceedings), we have reasonable grounds to believe or 
suspect that sales of the foreign like product under consideration for 
determining NV in this review may have been at prices below the cost of 
production (COP), as provided in section 773(b)(2)(A)(ii) of the Tariff 
Act (see Final Determination of Sales at Less Than Fair Value; Certain 
Welded Stainless Steel Pipe from Taiwan, 57 FR 53705 (November 12, 
1992)). Therefore, pursuant to section 773(b)(1) of the Tariff Act, we 
initiated a COP investigation of sales by Ta Chen (see Memorandum to 
the File, dated February 11, 1997, available in Room B-099 of the Main 
Commerce Building).
    In accordance with section 773(b)(3) of the Tariff Act, we 
calculated COP based on the sum of materials and fabrication employed 
in producing the foreign like product, plus selling, general, and 
administrative expenses (SG&A) and the cost of all expenses incidental 
to placing the foreign like product in condition packed ready for

[[Page 1439]]

shipment. We relied on the home market sales and COP information Ta 
Chen provided in its questionnaire responses.
    After calculating COP, we tested whether home market sales of 
subject WSSP were made at prices below COP within an extended period of 
time in substantial quantities, and whether such prices permitted the 
recovery of all costs within a reasonable period of time. We compared 
model-specific COPs to the reported home market prices less any 
applicable movement charges and post-sale price adjustments (reported 
as discounts).
    Pursuant to section 773(b)(2)(C) of the Tariff Act, where less than 
twenty percent of Ta Chen's home market sales for a model were at 
prices less than the COP, we did not disregard any below-cost sales of 
that model because we determined that the below-cost sales were not 
made within an extended period of time in ``substantial quantities.'' 
Where twenty percent or more of Ta Chen's home market sales were at 
prices less than the COP, we determined that such sales were made 
within an extended period of time in substantial quantities in 
accordance with section 773(b)(2) (B) and (C) of the Tariff Act. To 
determine whether such sales were at prices which would not permit the 
full recovery of all costs within a reasonable period of time, in 
accordance with section 773(b)(2)(D) of the Tariff Act, we compared 
home market prices to the weighted-average COPs for the POR.
    The results of our cost test for Ta Chen indicated that for certain 
home market models less than twenty percent of the sales of the model 
were at prices below COP. We therefore retained all sales of these 
models in our analysis and used them as the basis for determining NV. 
Our cost test for Ta Chen also indicated that for certain other home 
market models more than twenty percent of the home market sales within 
an extended period of time were at prices below COP and would not 
permit the full recovery of all costs within a reasonable period of 
time. In accordance with section 773(b)(1) of the Tariff Act, we 
therefore excluded the below-cost sales of these models from our 
analysis and used the remaining above-cost sales as the basis for 
determining NV.

C. Product Comparisons

    We compared Ta Chen's U.S. sales with contemporaneous sales of the 
foreign like product in the home market. We considered pipe identical 
based on product nomenclature and considered specifications/alloy, 
nominal pipe size, and wall thickness in determining the most similar 
types of pipe. We used a twenty percent cap in reported differences in 
merchandise as the maximum difference in cost allowable for similar 
merchandise. For purposes of these preliminary results, we have used 
the difference-in-merchandise information Ta Chen submitted with its 
supplemental questionnaire response of October 30, 1997.

D. Level of Trade

    As set forth in section 773(a)(1)(B)(i) of the Tariff Act, to the 
extent practicable, the Department will calculate NV based on sales in 
the comparison market at the same level of trade (LOT) as the EP 
transaction. The NV LOT is that of the starting-price sales in the 
comparison market or, when NV is based on constructed value, that of 
the sales from which we derive SG&A expenses and profit. For EP, the 
U.S. LOT is also the level of the starting-price sale, which is usually 
from exporter to importer. In cases involving constructed export price 
(CEP) sales, it is the level of the constructed sale from the exporter 
to the importer.
    To determine whether NV sales are at a different LOT than EP 
transactions, we examine stages in the marketing process and selling 
functions along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and the comparison-market sales at the LOT 
of the export transaction, we make an LOT adjustment under section 
773(a)(7)(A) of the Tariff Act. Finally, for CEP sales, if the NV level 
is more remote from the factory than the CEP level and there is no 
basis for determining whether the difference in the levels between NV 
and CEP affects price comparability, we adjust NV pursuant to section 
773(a)(7)(B) of the Tariff Act (the CEP offset provision). See Notice 
of Final Determination of Sales at Less Than Fair Value: Certain Cut-
to-Length Carbon Steel Plate from South Africa, 62 FR 61731 (November 
19, 1997).
    In its questionnaire responses Ta Chen stated that there were few 
differences in its selling activities by customer categories within 
each market. In order to confirm independently the absence of separate 
levels of trade within or between the U.S. and home markets, we 
examined Ta Chen's questionnaire responses for indications that Ta 
Chen's functions as a seller differed qualitatively or quantitatively 
among customer categories. Where possible, we further examined whether 
each selling function was performed on a substantial portion of sales.
    Ta Chen sold to distributors in the U.S. market. In the home 
market, Ta Chen sold to local distributors and end users. With respect 
to the home market, Ta Chen claimed that its two customer categories 
constituted a single level of trade. Base upon our examination of 
information supplied by Ta Chen in its original and supplemental 
questionnaire responses, we agree that only one level of trade existed 
for Ta Chen in the home market. According to Ta Chen, it provided no 
strategic or economic planning services, market research, business-
development services, personnel training, engineering, advertising, 
procurement services, inventory maintenance, or post-sale warehousing 
for customers in either category. Customers in both categories received 
the same degree of packing, after-sales services, and freight and 
delivery arrangements. End-user customers did receive slightly higher 
levels of research and development and technical assistance than did 
distributors; however this one difference is not sufficient to 
establish discrete levels of trade.
    For its U.S. sales, Ta Chen reported a single customer category, 
i.e., distributors. In determining whether, in fact, a single stage of 
marketing existed, we examined the selling functions as reflected in 
the starting price to the unaffiliated U.S. customer. TCI processed 
paperwork and provided certain selling functions for all of Ta Chen's 
U.S. sales which, in every instance, were to pipe distributors in the 
United States. We find preliminarily that TCI provided very limited 
selling functions for these sales and, therefore, find that no 
significant differences in the selling functions between sales to 
different customers. As a result, we preliminarily agree with Ta Chen 
that Ta Chen's EP sales constitute a single level of trade.
    When we compared Ta Chen's sales at its EP level of trade to its 
home market level of trade, we found that Ta Chen provided little or no 
strategic or economic planning, market research, engineering services, 
advertising, after-sales services, or post-sale warehousing at either 
the EP or home market level of trade. Ta Chen reported that it provided 
moderate-to-low technical assistance at its home market level of trade, 
while providing none at the EP level. All packing expenses at either 
level of trade were borne by Ta Chen; freight and delivery arrangements 
varied between the two markets in that U.S. movement

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expenses on certain U.S. sales were incurred by TCI, while other sales 
were made on ``FOB U.S. port'' terms. Our analysis of the selling 
functions performed by Ta Chen in both markets leads us to conclude 
that sales within or between each market are not made at different 
levels of trade. Accordingly, we preliminarily find that all sales in 
the home market and the U.S. market were made at the same level of 
trade. We have not, therefore, made a level-of-trade adjustment because 
all price comparisons are at the same level of trade and an adjustment 
pursuant to section 773(a)(7)(A) of the Tariff Act is not appropriate.

E. Home Market Price

    While we found below-cost home market sales for Ta Chen in this 
review, Ta Chen's remaining home market sales at or above cost were 
sufficient to serve as the basis for NV.
    We based home market prices on the packed, ex-factory or delivered 
prices to unaffiliated purchasers in the home market. We made 
adjustments for differences in packing and for movement expenses in 
accordance with sections 773(a)(6)(A) and (B) of the Tariff Act. In 
addition, we made adjustments for differences in cost attributable to 
differences in physical characteristics of the merchandise pursuant to 
section 773(a)(6)(C)(ii) of the Tariff Act, and for differences in 
circumstances of sale (COS) in accordance with section 
773(a)(6)(C)(iii) of the Tariff Act and 19 CFR 353.56. We made COS 
adjustments by deducting home market direct selling expenses and adding 
U.S. direct selling expenses. Finally, where the comparison EP sale 
involved a commission, we increased home market price by the amount of 
this commission and subtracted home market indirect selling expenses up 
to the amount of the U.S. commission, as provided at 19 CFR 353.56(b).
    In accordance with section 773(a)(4) of the Tariff Act, we based NV 
on constructed value (CV) if (i) a sale of a U.S. model matched to a 
home market model for which no sales were above cost, or (ii) we were 
unable to find a contemporaneous home market match for the U.S. sale. 
We calculated CV based on the costs of materials and fabrication 
employed in producing the subject merchandise, SG&A, and profit. In 
accordance with section 773(e)(2)(A) of the Tariff Act, we based SG&A 
expenses and profit on the amounts incurred and realized by the 
respondent in connection with the production and sale of the foreign 
like product in the ordinary course of trade for consumption in Taiwan. 
For selling expenses, we used the weighted-average home market selling 
expenses. Where appropriate, we made adjustments to CV in accordance 
with section 773(a)(8) of the Tariff Act and 19 CFR 353.56 for COS 
adjustments. For comparisons to EP, we made COS adjustments by 
deducting home market direct selling expenses and adding U.S. direct 
selling expenses. We also made adjustments, where applicable, for home 
market indirect selling expenses to offset U.S. commissions.

Fair-Value Comparisons

    To determine whether Ta Chen made sales of subject WSSP in the 
United States at prices that were less than fair value, we compared the 
EP to NV, as described in the ``Export Price'' and ``Normal Value'' 
sections of this notice. In accordance with section 777A(d)(2) of the 
Tariff Act, we calculated monthly weighted-average prices for NV and 
compared these monthly averages to individual U.S. sales transactions.

Preliminary Results of Review

    As a result of our review, we preliminarily determine the weighted-
average margin for Ta Chen for the period December 1, 1995 through 
November 30, 1996 is 0.07 percent.
    Parties to these proceedings may request disclosure within five 
days of the date 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. Case briefs and/or written comments from interested 
parties may be submitted 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 
this administrative review, including the results of our analysis of 
the issues in any such written comments or at a hearing, within 120 
days of publication of these preliminary results.
    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 NV may vary from the percentage 
stated above. The Department will issue appraisement instructions 
directly to Customs. The final results of this review shall be the 
basis for the assessment of antidumping duties on entries of 
merchandise during this period of review, and for future deposits of 
estimated duties.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of WSSP from Taiwan entered, or withdrawn from warehouse, 
for consumption on or after the publication of the final results of 
this administrative review, as provided in section 751(a)(1) of the 
Tariff Act:
    (1) The cash deposit rate for Ta Chen will be zero percent, in 
light of its de minimis weighted-average margin;
    (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 this review, a prior 
review, 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 this or any previous 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 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 
this review period. Failure to comply with this requirement could 
result in the Secretary's presumption that reimbursement of the 
antidumping duties occurred and the subsequent assessment of double 
antidumping duties.
    This administrative review 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: December 30, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-489 Filed 1-8-98; 8:45 am]
BILLING CODE 3510-DS-P