[Federal Register Volume 63, Number 236 (Wednesday, December 9, 1998)]
[Notices]
[Pages 67855-67857]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32728]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-583-816]


Stainless Steel Butt-Weld Pipe Fittings From Taiwan: Final 
Results of Antidumping Duty Administrative Review

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

ACTION: Notice of Final Results of Antidumping Duty Administrative 
Review.

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SUMMARY: On June 5, 1998, the Department of Commerce (``the 
Department'') published the preliminary results of the administrative 
review of the antidumping duty order on certain stainless steel butt-
weld pipe fittings from Taiwan. This review covers one manufacturer and 
exporter of the subject merchandise. The period of review (``POR'') is 
June 1, 1996 through May 31, 1997. Based on our analysis of the 
comments received, we have changed the results from those presented in 
the preliminary results of review.

EFFECTIVE DATE: December 9, 1998.

FOR FURTHER INFORMATION CONTACT: Becky Hagen or Bob Bolling, AD/CVD 
Enforcement Group III--Office 7, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Room 7866, Washington, DC 20230; telephone 
(202) 482-1102 or (202) 482-3434, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    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 (``URAA''). In addition, unless 
otherwise indicated, all citations to the Department's regulations are 
to 19 CFR Part 353.

Background

    On June 5, 1998, the Department published in the Federal Register 
the preliminary results of the administrative review of the antidumping 
duty order on certain stainless steel butt-weld pipe fittings from 
Taiwan (63 FR 30710). On September 30, 1998, the Department extended 
the time limit for the final results to December 2, 1998, in accordance 
with the Act. See Butt-Weld Pipe Fittings from Taiwan; Extension of 
Time Limits for Antidumping Duty Administrative Review (63 FR 54108, 
October 8, 1998). The Department has now completed this administrative 
review in accordance with section 751 of the Act.

Scope of the Review

    The products subject to this review are certain stainless steel 
butt-weld pipe fittings, whether finished or unfinished, under 14 
inches inside diameter.
    Certain stainless steel butt-weld pipe fittings (``pipe fittings'') 
are used to connect pipe sections in piping systems where conditions 
require welded connections. The subject merchandise is used where one 
or more of the following conditions is a factor in designing the piping 
system: (1) Corrosion of the piping system will occur if material other 
than stainless steel is used; (2) contamination of the material in the 
system by the system itself must be prevented; (3) high temperatures 
are present; (4) extreme low temperatures are present; (5) high 
pressures are contained within the system.
    Pipe fittings come in a variety of shapes, with the following five 
shapes the most basic: ``elbows,'' ``tees,'' ``reducers,'' ``stub 
ends,'' and ``caps.'' The edges of finished pipe fittings are beveled. 
Threaded, grooved, and bolted

[[Page 67856]]

fittings are excluded from this review. The pipe fittings subject to 
this review are classifiable under subheading 7307.23.00 of the 
Harmonized Tariff Schedule of the United States (``HTSUS''). These 
HTSUS item numbers are provided for convenience and customs purposes. 
The written descriptions remain dispositive.
    Pipe fittings manufactured to American Society of Testing and 
Materials specification A774 are included in the scope of this order.
    The POR is June 1, 1996 through May 31, 1997. This review covers 
sales of certain stainless steel butt-weld pipe fittings from Taiwan by 
Ta Chen Stainless Pipe Co., Ltd. (``Ta Chen'').

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. We received comments from Ta Chen, exporters of 
the subject merchandise (``respondent'') and rebuttal comments from 
petitioner, Flowline Division of Markovitz Enterprises Inc.

Comments

    Comment 1: Ta Chen argues that the Department made a clerical 
programming error in the margin calculation program by setting cost of 
manufacture (``TOTCOMCV'') equal to Ta Chen's total constructed value 
(``TOTCV''). Respondent argues that Ta Chen's cost of manufacture 
(``TOTCOMCV'') should be set equal to Ta Chen's total cost of 
manufacture (``TOTCOM''). The petitioner did not comment on this 
argument.
    Department's Position: We agree with respondent and have corrected 
this error for the final results. The final margin program now sets the 
cost of manufacture equal to total cost of manufacture. For a more 
specific discussion of the change that the Department has made in its 
final margin program, please see the Department's analysis memorandum 
and final antidumping duty margin calculation program.
    Comment 2: Ta Chen argues that inventory carrying costs associated 
with time on the water should not be included in U.S. indirect selling 
expenses deducted from U.S. price. It asserts that only indirect 
selling expenses associated with economic activity occurring in the 
United States should be deducted from U.S. price pursuant to 
determining net price. Respondent states that the preliminary results 
added the ocean time in transit between Ta Chen's plant in Tainan, 
Taiwan and Ta Chen International's (``TCI'') warehouses in Long Beach, 
California to Ta Chen's reported inventory carrying costs. It argues 
that that inventory carrying cost is not associated with economic 
activity in the United States, and therefore should not be included in 
U.S. indirect selling expenses.
    Petitioner argues that, while it is true that the amendments to the 
dumping statute now only recognize those indirect selling expenses 
associated with economic activity occurring in the United States, it is 
not true that ``time on the water'' necessarily took place outside the 
United States. Additionally, petitioner argues, the Department's 
Antidumping Manual (``AD Manual'') notes that foreign inventory 
carrying costs do not form part of the constructed export price 
(``CEP'') deduction, and the AD Manual makes no mention of the costs 
incurred once a product leaves the foreign country. Petitioner asserts 
that Ta Chen revised its reported inventory carrying costs at 
verification to include ``time on the water'' in the calculations, 
which was accepted by the Department. They argue that the Department's 
inclusion of ``time on the water'' is consistent with its past 
practice, and does not constitute an unintentional error.
    Department's Position: We agree with Ta Chen that the inventory 
carrying costs incurred for the time on the water between Taiwan and 
the United States should not be deducted from the price used to 
calculate CEP. The Department has addressed this issue in the past in 
Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts 
Thereof From France, Germany, Italy, Japan, Romania, Singapore, Sweden, 
and the United Kingdom; Final Results of Antidumping Duty 
administrative Reviews, 63 FR 33320, 33344 (June 18, 1998) and Color 
Picture Tubes From Japan; Final Results of Antidumping Duty 
Administrative Review, 62 FR 34201, 34206 (June 25, 1997). In both 
instances, the Department stated that it is clear from the Statement of 
Administrative Action (``SAA'') that under section 772(d) of the Act we 
should deduct from CEP only those expenses associated with commercial 
activity in the United States which relate to the resale to an 
unaffiliated purchaser. In Color Picture Tubes From Japan, we further 
explained that the SAA indicates CEP ``is now calculated to be, as 
closely as possible, a price corresponding to a price between non-
affiliated exporters and importers.'' 62 FR at 34207 (quoting SAA at 
823). Section 351.402(b) of the Department's new regulations 
1 codifies this principle, stating that we will make 
adjustments under section 772(d) for expenses associated with 
commercial activity in the United States, no matter where it was 
incurred. Therefore, consistent with section 772(d) and the SAA, we 
deduct only those expenses representing activities undertaken to make 
the sale to the unaffiliated customer in the United States. We 
ordinarily do not deduct indirect expenses incurred in selling to the 
affiliated U.S. importer. See, e.g., Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, From Japan and Tapered Roller 
Bearings, Four Inches or Less in Outside Diameter, and Components 
Thereof, From Japan; Final Results of Antidumping Duty Administrative 
Reviews and Termination in Part, 62 FR 11825, 11834 (March 13, 1997); 
Gray Portland Cement and Clinker From Mexico; Final Results of 
Antidumping Duty Administrative Review, 62 FR 17148, 17168 (April 9, 
1997).
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    \1\ Although this review was conducted under the Department's 
old regulations at 19 CFR part 353, section 351.701 of the new 
regulations states that the old regulations will apply to reviews 
requested before the new regulations take effect to the extent the 
old regulations ``were not invalidated by the URAA.'' Here, the old 
regulations governing exporter sales price deductions are not in 
conformity with the requirements of the URAA, therefore the new 
regulations at 351.402(b) apply to this CEP deduction issue.
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    We do not consider the portion of Ta Chen's inventory carrying 
costs during the period of transit to be associated with commercial 
activity in the United States. These expenses were incurred from the 
date of exportation to the date the affiliated importer received the 
subject merchandise in the United States and, therefore, relate to the 
sale to Ta Chen's U.S. affiliate and not to the sale to the 
unaffiliated customer. See Certain Stainless Wire Rods From France: 
Amended Final Results of Antidumping Duty Administrative Review (Steel 
Wire Rods), 62 FR 25915, 25916 (May 12, 1997). Accordingly, for these 
final results we have not deducted such costs from the CEP.
    Comment 3: Ta Chen argues that the CEP profit calculation 
erroneously imputes a profit on TCI's direct expenses and commission 
payments in the United States. It states that the CEP profit 
calculation should only be an imputed profit on Ta Chen's indirect 
selling expenses occurring in the United States, not on U.S. direct 
selling expenses and commissions.
    Petitioner argues that it is the Department's policy to use total 
U.S. selling expenses, including direct selling expenses and 
commission, in the derivation of CEP profit.

[[Page 67857]]

    Department's Position: The Department agrees with petitioner. Ta 
Chen argues that the Department should not impute a CEP profit on Ta 
Chen's U.S. direct selling expenses and commissions. Instead, Ta Chen 
asserts that the Department should only impute CEP profit on Ta Chen's 
indirect selling expenses occurring in the United States. Respondent's 
proposed methodology is directly contrary to the plain language of 
Section 772(d)(3) of the Act. Section 772(d)(3) provides that the 
Department shall reduce the starting price used to establish CEP by the 
profit allocated to the expenses described in section 772(d)(1)&(2). 
Section 772(d)(1) lists the following expenses:
    (A) Commissions for selling the subject merchandise in the United 
States;
    (B) Expenses that result from, and bear a direct relationship to, 
the sale, such as credit expenses, guarantees and warranties;
    (C) Any selling expenses that the seller pays on behalf of the 
purchaser; and
    (D) Any selling expenses not deducted under * * * (A), (B), or (C) 
[above].
    Further, for purposes of calculating the applicable percentage, 
section 772(f)(2)(B) defines total U.S. expenses as those expenses 
deducted under section 772(d)(1)&(2). Therefore, contrary to Ta Chen's 
argument, the plain language of the statute directs the Department to 
deduct from CEP the profit allocated to all U.S. expenses, including 
U.S. direct selling expenses and commissions. Thus, the Department has 
not changed the CEP profit methodology used in the Preliminary Results.

Final Results of Review

    As a result of this review, we determine that the following margin 
exists for the period June 1, 1996 through May 31, 1997:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
               Producer/manufacturer/exporter                   margin
                                                              (percent)
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Ta Chen....................................................         0.34
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    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
shall issue appraisement instructions directly to the Customs Service. 
For assessment purposes, we have calculated importer-specific duty 
assessment rates for the merchandise based on the ratio of the total 
amount of antidumping duties calculated for the examined sales during 
the POR to the total entered value of sales examined during the POR. As 
a result of this review, we have determined that the importer-specific 
duty assessment rate is necessary.
    Furthermore, the following deposit requirements shall be effective 
upon publication of this notice of final results of review for all 
shipments of certain stainless steel butt-weld pipe fittings from 
Taiwan, entered, or withdrawn from warehouse, for consumption on or 
after the publication date, as provided for by section 751(a)(1) of the 
Tariff Act: (1) No cash deposit will be required for the reviewed 
company because its rate, stated above, is de minimis; (2) for 
previously investigated or reviewed companies not listed above, 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, or the original LTFV investigations, 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 
reviews, the cash deposit rate for this case will continue to be 51.03 
percent, the ``All Others'' rate made effective by the LTFV 
investigation. These deposit requirements shall remain in effect until 
publication of the final results of the next administrative review.
    This notice serves as a final reminder to importers of their 
responsibility under 19 CFR 353.26 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 antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective order (``APO'') of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with section 353.34(d) of the Department's 
regulations. Timely notification of return/destruction of APO materials 
or conversion to judicial protective order is hereby requested. Failure 
to comply with the regulations and the terms of an APO is a 
sanctionable violation.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 1675(a)(1) and 
1677(f)(i)(1)).

    Dated: December 2, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-32728 Filed 12-8-98; 8:45 am]
BILLING CODE 3510-DS-P