[Federal Register Volume 63, Number 66 (Tuesday, April 7, 1998)]
[Notices]
[Pages 16982-16984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9099]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-583-815]


Certain Welded Stainless Steel Pipe From Taiwan; Preliminary 
Results of Changed Circumstances Antidumping Duty Administrative Review

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


[[Page 16983]]


ACTION: Notice of preliminary results of changed circumstances 
antidumping duty administrative review.

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SUMMARY: Pursuant to a request from Chang Mien Industries Co., Ltd. 
(Chang Mien), the Department of Commerce (the Department) initiated a 
changed circumstances administrative review of the antidumping duty 
order on certain welded stainless steel pipe from Taiwan, 62 FR 30567, 
(June 4, 1997). Chang Mien requested that the Department determine that 
Chang Mien is the successor firm to Chang Tieh Industry, Co., Ltd. 
(Chang Tieh), a respondent excluded from the order in the less-than-
fair-value (LTFV) investigation. See Notice of Amended Final 
Determination and Antidumping Duty Order; Certain Welded Stainless 
Steel Pipes From Taiwan, 59 FR 6619, (February 11, 1994); see also 
Amended Final Determination and Antidumping Duty Order; Certain Welded 
Stainless Steel Pipe From Taiwan, 57 FR 62300 (December 30, 1992). 
Based on the information Chang Mien provided in its responses to the 
Department's questionnaires and on the data obtained at verification, 
we have preliminarily determined that Chang Mien is the successor-in-
interest to Chang Tieh.

EFFECTIVE DATE: April 7, 1998.

FOR FURTHER INFORMATION CONTACT:
Maureen McPhillips at (202) 482-0193, or Linda Ludwig at (202) 482-
3383, AD/CVD Enforcement Group III, Office 8, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230.

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act. In addition, unless otherwise indicated, 
all references to the Department's regulations are to 19 CFR Part 353 
(April 1, 1997).

Verification

    As provided in section 776(b) of the Act, we verified information 
provided by Chang Mien using standard verification procedures, 
including the examination of relevant sales and financial records, and 
the selection of original source documentation containing relevant 
information.

SUPPLEMENTARY INFORMATION:

Background

    On September 11, 1996, Chang Mien requested that the Department 
conduct a changed circumstances administrative review pursuant to 
section 751(b) of the Act to determine whether Chang Mien should 
properly be considered the successor firm to Chang Tieh. In the LTFV 
investigation, the Department excluded Chang Tieh from the antidumping 
duty order on certain welded stainless steel pipe from Taiwan after 
calculating a margin of zero for Chang Tieh. Chang Mien maintains that, 
as Chang Mien and Chang Tieh were related at the time of the LTFV 
investigation, Chang Mien is entitled to Chang Tieh's exclusion from 
the order ab initio. Chang Mien further states that, since publication 
of the antidumping duty order on this product, Chang Mien has absorbed 
Chang Tieh, and asks that the Department issue a determination that 
Chang Mien is the successor firm to Chang Tieh and as such is entitled 
to Chang Tieh's exclusion from the antidumping duty order. Pursuant to 
Chang Mien's request, the Department initiated a changed circumstance 
review on June 4, 1997. See Certain Welded Stainless Steel Pipe from 
Taiwan; Invitation of Changed Circumstances Antidumping Duty 
Administrative Review, 62 FR 30567.

Scope of the Review

    The merchandise subject to this antidumping duty order is 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 this 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 include, but are not limited to, digester 
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, 7306.40.5015, 
7306.40.5040, 7306.40.5065 and 7306.40.5085. Although these subheadings 
include both pipes and tubes, the scope of this antidumping duty order 
is limited to welded austenitic stainless steel pipes. Although the HTS 
subheadings are provided for convenience and Customs purposes, the 
written description of the scope of this order is dispositive.

Preliminary Results of Changed Circumstances Antidumping Duty 
Administrative Review

    In accordance with section 751(b) of the Act, the Department 
initiated a changed circumstances administrative review on June 4, 
1997, to determine whether Chang Mien is the successor company to Chang 
Tieh.
    In determining whether a merged company is the successor to another 
for purposes of the antidumping duty law, the Department examines a 
number of factors including, but not limited to, changes in (1) 
management, (2) production facilities, (3) supplier relationships, and 
(4) customer base. See e.g., Brass Sheet and Strip from Canada; Final 
Results of Antidumping Duty Administrative Review, 57 FR 20460 (May 13, 
1992). While no one or several of these factors will necessarily 
provide a dispositive indication, the Department will generally 
consider the company that merged with another company to be a successor 
to the previous company if its resulting operation is substantially 
similar to that of the predecessor. See e.g., Industrial Phosphoric 
Acid from Israel; Final Results of Changed Circumstances Review, 59 FR 
6944 (February 14, 1994). Thus, if evidence demonstrates that, with 
respect to the production and sale of the subject merchandise, the 
successor company operates as the same business entity as the former 
company, the Department will treat the successor company the same as 
the predecessor for purposes of antidumping duty liability.
    To determine whether Change Mien is the successor-in-interest to 
Chang Tieh, we examined Chang Mein's initial request for a changed 
circumstances review, and Chang Mien's responses to the Department's 
supplemental questionnaires of October 27, 1997, and December 5, 1997. 
In addition, from January 21 through January 23, 1997, we verified 
Chang Mien's responses at its facilities in Kaoshung, Taiwan.
    Chang Mien, founded in 1972, began sales operations in 1977, 
originally as a carbon steel coil center. In early 1984, Chang Mien 
formed a subsidiary, Chang Tieh, to produce and market stainless steel 
pipe. In 1989 Chang Mien acquired land adjacent to its steel coil 
centers for construction of its stainless steel pipe mill. Chang Tieh 
began producing non-

[[Page 16984]]

annealed pipe in 1990; the following year, Chang Tieh purchased and 
installed an annealing furnace permitting it to produce ASTM A312 heat-
treated pipe, the subject merchandise of the antidumping duty order. 
While the non-annealed pipe was intended almost exclusively for 
domestic consumption, the addition of the annealing furnace allowed 
Chang Tieh to target export markets.
    In 1993 Chang Mien sought to merge Chang Tieh and another firm, 
Jumbo Stainless Steel Corporation (Jumbo), into a single entity bearing 
the Chang Mien name. The merger was prompted by Chang Mien's desire to 
become a publicly-traded company on Taiwain's stock exchange. The 
merger of the affiliated companies into one larger, consolidated entity 
would make Chang Mien more attractive to investors in the market. Chang 
Mien's 1991-1992 audited financial statements noted that a resolution 
to absorb Chang Tieh and Jumbo with Chang Mien was adopted by the 
stockholders on October 16, 1992. The Company (i.e. Chang Mien) would 
be the continuing company, while Chang Tieh and Jumbo would be the 
merged companies and cease to exist. The merger of Chang Tieh and Jumbo 
was approved by the Fair Trade Commission of the Executive Yuan on 
March 16, 1993.
    Chang Mien maintains that it was related to or affiliated with 
respondent Chang Tieh, since both companies were owned by the same 
individual. As such, Chang Mien asserts in its request for review that 
it should have been excluded from the antidumping duty order ab initio 
(see Chang Mien's Request for Sec. 751(b) Review, September 11, 1996, 
Public Version, p. 2). Therefore, Chang Mien maintains that when it 
absorbed Chang Tieh, it assumed Chang Tieh's exclusion from the 
antidumping duty order.
    Basing our analysis on the four criteria cited above and evidence 
on the record, we have preliminarily determined that Chang Mien is the 
successor-in-interest to Chang Tieh. First, during the LTFV 
investigation, the Department established Chang Tieh's relationship 
with Chang Mien by virtue of common ownership by the same individual. 
In addition, the management and organizational structure of the former 
Chang Tieh, while undergoing some changes since the Department's 1991 
period of investigation, remained essentially intact in the time 
following the March 1993 merger. The production facilities, although 
upgraded to some extent, are virtually the same, maintaining the same 
production capacity. Although Chang Mien has recently added new 
suppliers as the business environment changed, for the years 
immediately following the merger, Chang Mien continued to deal with 
essentially the same steel suppliers as those used by Chang Tieh prior 
to the merger. Chang Mien's customer base has changed considerably from 
the customers served by Chang Tieh, due to customer name changes, 
bankruptcy, new customers, etc. However, given that Chang Mien absorbed 
Chang Tieh more than four years ago we would expect change in the 
customer base. Moreover, changes in the U.S. customer base are 
understandable, given that Chang Tieh was a first-time entrant into the 
U.S. pipe market during the 1991 POI. Therefore, factors other than the 
merger of Chang Tieh with Chang Mien, contributed to the evolution to 
customer base.
    As stated previously, we do not consider any one factor 
dispositive; our decision is based on the totality of the evidence. Our 
analysis of the evidence on the record leads us to preliminarily 
determine that Chang Mien is the successor-in-interest to Chang Tieh, 
since it essentially operates as the same entity as the former company, 
maintaining the same management, production facilities, and supplier 
relationships as did Chang Tieh prior to its merger with Chang Mien.
    Interested parties may submit case briefs and/or written comments 
no later than 30 days after the date of publication of these 
preliminary results. Rebuttal briefs and rebuttals to written comments, 
limited to issues raise din such briefs or comments, may be filed no 
later than 37 days after the date of publication. The Department will 
publish the final results of this changed circumstances review which 
will include its analysis of any such written comments.
    This notice is in accordance with section 751(b) of the Act, as 
amended (19 U.S.C. 1675(b)), and section 353.22(f) of the Department's 
regulations.

    Dated: March 31, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-9099 Filed 4-6-98; 8:45 am]
BILLING CODE 3510-DS-M