[Federal Register Volume 64, Number 108 (Monday, June 7, 1999)]
[Notices]
[Pages 30306-30309]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14337]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-583-008]


Certain Circular Welded Carbon Steel Pipes and Tubes From Taiwan: 
Preliminary Results of Antidumping Duty Administrative Review and 
Partial Recission of Review

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

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

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SUMMARY: In response to a request from the petitioners, the Department 
of Commerce (the Department) is conducting an administrative review of 
the antidumping duty order on certain circular welded steel pipes and 
tubes

[[Page 30307]]

from Taiwan. The review covers four manufacturers/exporters of the 
subject merchandise to the United States and the period May 1, 1997 
through April 30, 1998. We preliminarily determine that Yun Din Steel 
Co. Ltd., Yieh Loong Co., Ltd., Kao Hsing Chang Iron & Steel 
Corporation , and Yieh Hsing Enterprise Co. Ltd. sold subject 
merchandise below normal value during the period of review. If these 
preliminary results are adopted in our final results of review, we will 
instruct the U.S. Customs Service to assess antidumping duties on all 
appropriate entries.
    Interested parties are invited to comment on these preliminary 
results. Parties who submit argument in this proceeding are requested 
to submit with the argument (1) a statement of the issue and (2) a 
brief summary of the argument (no longer than five pages, including 
footnotes).

EFFECTIVE DATE: June 7, 1999.

FOR FURTHER INFORMATION CONTACT: Martin Odenyo or Thomas Killiam, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230; telephone (202) 482-5254/3019.
    Applicable Statute: Unless otherwise indicated, all citations to 
the Tariff Act of 1930, as amended (the Act) are references to the 
provisions effective January 1, 1995, the effective date of the 
amendments made to the 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 351 (1998).

SUPPLEMENTARY INFORMATION:

Background

    On May 29, 1998, the petitioners, Allied Tube & Conduit Corp., 
Wheatland Tube Company, Sawhill Tubular Division of Armco Inc., and 
Laclede Steel Co., filed a request for review of seven Taiwanese 
companies: Yieh Hsing Enterprise Co., Ltd. (Yieh Hsing), Kao Hsing 
Chang Iron & Steel Corporation (KHC), Yun Din Steel Co. Ltd. (Yun Din), 
Yieh Loong Co., Ltd. (Yieh Loong), Far East Machinery Co., Ltd. 
(FEMCO), Sheng Yu Steel Co., Ltd. (Sheng Yu, formerly An Mau Steel Co., 
Ltd.), and Tai Feng Industries. We initiated the review on June 29, 
1998 (63 FR 35188).
    In response to our requests for information, FEMCO and Sheng Yu 
reported that they had no sales or shipments of subject merchandise 
during the period of review (POR). On inquiry by the Department, 
Customs did not report any shipments by either company during the POR. 
Accordingly, we are rescinding the review with respect to FEMCO and 
Sheng Yu. Tai Feng Industries ceased operations in November 1983. See 
Circular Welded Carbon Steel Pipes and Tubes from Taiwan; Final Results 
of Administrative Review of Antidumping Duty Order (51 FR 234, December 
5, 1986). Accordingly, we are rescinding the review with respect to Tai 
Feng. Yun Din and Yieh Loong did not respond to our requests for 
information and are discussed below in ``Facts Available.''
    On September 23, 1998, the petitioners alleged that Yieh Hsing and 
KHC made home market sales below the cost of production (COP) during 
the POR. The Department found that the petitioners' allegation 
constituted a reasonable basis to believe or suspect that KHC and Yieh 
Hsing made sales in the home market below COP. Accordingly, in 
accordance with section 773(b) of the Act, on October 6, 1998, the 
Department initiated an investigation of sales below cost.
    Under section 751(a)(3)(A) of the Act, the Department may extend 
the deadline for completion of an administrative review if it 
determines that it is not practicable to complete the review within the 
statutory time limit of 365 days. On December 30, 1998, the Department 
extended the time limit for the preliminary results to May 28, 1999. 
See Extension of Time Limits for Antidumping Duty Administrative Review 
(64 FR 860, January 6, 1999).

Scope of the Review

    Imports covered by this review are shipments of certain circular 
welded carbon steel pipes and tubes. The Department defines such 
merchandise as welded carbon steel pipes and tubes of circular cross 
section, with walls not thinner than 0.065 inch and 0.375 inch or more 
but not over 4\1/2\ inches in outside diameter. These products are 
commonly referred to in the industry as ``standard pipe'' and are 
produced to various American Society for Testing Materials 
specifications, most notably A-53, A-120, or A-135. Standard pipe is 
currently classified under Harmonized Tariff Schedule of the United 
States (HTSUS) item numbers 7306.30.5025, 7306.30.5032, 7306.30.5040, 
and 7306.30.5055. Although the HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the 
merchandise under review is dispositive.
    The review covers the period May 1, 1997 through April 30, 1998. 
The Department is conducting this review in accordance with section 751 
of the Act.

Facts Available

    In accordance with section 776(a)(2)(A) of the Act, we determine 
that the use of facts available is the appropriate basis for dumping 
margins for Yun Din and Yieh Loong. The Department issued 
questionnaires to Yun Din and Yieh Loong on June 10, 1998. Our 
questionnaires established the Section A deadline as July 28, 1998, and 
the Sections B through E deadline as August 21, 1998. On September 16, 
1998, after receiving no response from Yun Din and Yieh Loong, we 
forwarded an additional letter to both companies, indicating that if we 
did not receive a complete response to our questionnaire by October 1, 
1998, we would proceed with appraisements based upon facts available. 
To date, we have not received a response from Yieh Loong. On March 2, 
1999, we received a letter from Yu Din, in which the company expressed 
its intent to submit a response to our questionnaire. On March 3, 1999, 
we responded to the letter by informing Yu Din that the Department's 
administrative reviews are controlled by statutory deadlines which 
prevent the Department from accepting a response to our questionnaire 
at such an extreme date past our established deadlines.
    Section 776(b) of the Act provides that adverse inferences may be 
used with respect to a party that has failed to cooperate by not acting 
to the best of its ability to comply with requests for information. See 
Statement of Administrative Action accompanying the URAA, H.R. Rep. No. 
316, 103rd Cong., 2d Sess. 870 (SAA). The failure of Yun Din and Yieh 
Loong to reply to the Department's questionnaire in a timely manner 
demonstrates that they failed to act to the best of their ability in 
this review and, therefore, an adverse inference is warranted.
    As adverse facts available for Yun Din and Yieh Loong, we have used 
the highest rate for any respondent in any segment of this proceeding. 
This is an appropriate adverse rate because, but for the application of 
the highest rate in this case, uncooperative respondents would have no 
incentive to cooperate in future proceedings. Thus, we are applying the 
rate of 14.08 percent, the highest rate for any respondent in this 
review.

Fair Value Comparisons

    To determine whether sales of subject merchandise in the United 
States were made at less than fair value, we compared export price (EP) 
to the normal value (NV), as described in the ``Export Price'' and 
``Normal Value''

[[Page 30308]]

sections of this notice. In accordance with section 777A(d)(2) of the 
Act, we calculated monthly weighted-average prices for NV and compared 
these to individual U.S. transactions.

Export Price

    The Department treated Yieh Hsing's and KHC's sales to the United 
States as EP sales, as defined in section 772(a) of the Act, because 
the merchandise was sold to unaffiliated U.S. purchasers prior to the 
date of importation and the constructed export price methodology was 
not warranted by the facts of the record. We based EP on the delivered, 
packed prices to unrelated purchasers in the United States. We made 
adjustments, where applicable, for foreign inland freight, foreign 
brokerage charges, and ocean freight in accordance with section 772(c) 
of the Act.

Normal Value

    In order to determine whether there were sufficient sales of 
certain circular welded carbon steel pipes and tubes in the home market 
(HM) to serve as a viable basis for calculating NV, we compared the 
volume of home market sales of subject merchandise to the volume of 
subject merchandise sold in the United States, in accordance with 
section 773(a)(1)(C) of the Act. Yieh Hsing's and KHC's respective 
aggregate volumes of HM sales of the foreign like product were greater 
than five percent of their respective aggregate volumes of U.S. sales 
of the subject merchandise. Therefore, we have based NV on HM sales. In 
accordance with section 773(a)(6) of the Act, we adjusted NV, where 
appropriate, by deducting home market packing expenses and adding U.S. 
packing expenses. We also made deductions from NV for HM inland 
freight, warranty expenses, early payment discounts, and other 
discounts. Finally, we made an adjustment to NV for differences in 
credit expenses, pursuant to section 773(a)(6)(C) of the Act.

Sales Below Cost Investigation

    In accordance with section 773(b)(1) of the Act, in determining 
whether to disregard home market sales made at prices below COP, we 
examined whether such sales were made within an extended period of time 
in substantial quantities, and whether such sales were made at prices 
which would permit recovery of all costs within a reasonable period of 
time. Because KHC failed to provide any costs for certain models, as 
facts available we used the highest average cost for the same category 
of product.
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given model were at prices less 
than COP, we did not disregard any below-cost sales of that model 
because these below-cost sales were not made in substantial quantities. 
We found that, for certain models, 20 percent or more of the home 
market sales were sold at below-cost prices. Where 20 percent or more 
of a respondent's home market sales of a given model were at prices 
less than the COP, we disregarded the below-cost sales because such 
sales were found to be made (1) in substantial quantities within an 
extended period of time and (2) at prices which would not permit 
recovery of all costs within a reasonable period of time, in accordance 
with section 773(b)(2)(D) of the Act) (i.e., the sales were made at 
prices below the weighted-average per unit COP for the POR). We used 
the remaining above-cost sales as the basis of determining NV if such 
sales existed, in accordance with section 773(b)(1).

Constructed Value

    In accordance with section 773(e)(1) of the Act, we calculated CV 
based on the sum of the respondent's cost of materials, fabrication, 
and general expenses. In accordance with section 773(e)(2)(A) of the 
Act, we based selling, general, and administrative (SG&A) expenses and 
profit on the amounts incurred and realized by KHC or Yieh Hsing in 
connection with the production and sale of the foreign like product in 
the ordinary course of trade for consumption in the home market. For 
selling expenses, we used the weighted-average HM selling expenses. 
Pursuant to section 773(e)(3) of the Act, we included U.S. packing. 
Because KHC failed to provide any constructed value data for certain 
models, as facts available we used the highest average cost for the 
same category of product.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we determine NV based on sales in the comparison 
market at the same level of trade (LOT) as the EP or CEP transactions. 
The NV LOT is that of the starting price sale in the comparison market 
or, when NV is based on CV, that of the sale 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 the exporter to the 
importer. For CEP 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 or CEP 
sales, 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 comparison market sales at the LOT of 
the export transactions, we make a LOT adjustment under section 
773(a)(7)(A) of the 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 differences in the levels between NV and 
CEP affects price comparability, we adjust NV under section 
773(A)(7)(B) of the Act (the CEP offset provision). (See, e.g., Certain 
Carbon Steel Plate from South Africa, Final Determination of Sales at 
Less Than Fair Value, 62 FR 61731 (November 19, 1997).)
    In implementing these principles in this review, we asked the 
respondents to identify the specific differences and similarities in 
selling functions and/or support services between all phases of 
marketing in the home market and the United States.
    Yieh Hsing provided information with respect to its selling 
activities associated with home market sales. Yieh Hsing offers each of 
its three classes of customers (distributors, retailers, and end-users) 
the same degree of nominal sales support, such as the opportunity to 
either purchase merchandise out of inventory or have it made to order. 
Yieh Hsing did not conduct advertising or inventory maintenance in the 
home market; however, it provided general technical advice and sale-
specific warranty services to all its home market customers. We 
determine that there is no difference in selling functions between Yieh 
Hsing's three classes of HM customers. We therefore determine that Yieh 
Hsing sells to one level of trade in the home market.
    Yieh Hsing similarly provided information with respect to the 
selling functions associated with its U.S. sales. Yieh Hsing's 
customers in the U.S. market consisted only of distributors, to whom it 
provided freight and delivery arrangements. Yieh Hsing provided no 
other services, such as inventory maintenance, technical advice, 
warranty services, or advertising, to its U.S. customers.
    For home market sales, but not U.S. sales, Yieh Hsing provided 
general technical advice and sale-specific warranty services. 
Otherwise, the levels of customer assistance and sales support which 
Yieh Hsing provided its home

[[Page 30309]]

market and U.S. customers were not significantly different, and Yieh 
Hsing did not claim a LOT adjustment. Based upon the foregoing, we 
determine that Yieh Hsing sold at the same LOT in the U.S. market as it 
did in the home market, and consequently no LOT adjustment is 
warranted.
    KHC provided information with respect to the selling activities 
associated with its home market sales. We determine that there is no 
significant difference in selling functions between KHC's two classes 
of HM customers (distributor and end-users). KHC generally provided 
distributors with more services (such as sales allowance discounts, 
quantity and early payment discounts, technical service and warranty 
expenses); however the degree to which it provided such services for 
distributors but not for end-users was not sufficiently documented for 
us to distinguish different levels of trade.
    KHC similarly provided information with respect to selling 
functions associated with its U.S. sales. KHC had only one customer (a 
trading company) in the U.S. market during the POR, and its selling 
functions for that customer did not vary. Therefore, we determine that 
KHC sold at one level of trade in the U.S. market.
    The levels of customer assistance and sales support provided by KHC 
for its home market and U.S. sales were not significantly different. 
KHC did not claim a LOT adjustment for U.S. sales, and the LOT 
information provided by KHC indicates that there was one LOT in the 
U.S. and home markets.

Sales Comparisons

    To determine whether sales of certain circular welded carbon steel 
pipes and tubes in the United States were made at less than NV, we 
compared EP to the NV, as described in the ``United States Price'' and 
``Normal Value'' sections of this notice. In accordance with section 
777(A) of the Act, we calculated monthly weighted-average prices for NV 
and compared these to individual U.S. transactions.
    Where there were no sales of identical merchandise in the home 
market made in the ordinary course of trade to compare to U.S. sales, 
we compared U.S. sales to sales of the most similar foreign like 
product made in the ordinary course of trade, based on the information 
provided by Yieh Hsing and KHC in response to our antidumping 
questionnaire.

Preliminary Results of Review

    We preliminarily determine that the following margins exist for the 
period May 1, 1997 through April 31, 1998:

------------------------------------------------------------------------
                                                              Margin
        Manufacturer/exporter               Period           (percent)
------------------------------------------------------------------------
Yieh Hsing..........................     5/1/97--4/30/98            6.42
KHC.................................     5/1/97--4/30/98           14.08
Yun Din.............................     5/1/97--4/30/98           14.08
Yieh Loong..........................     5/1/97--4/30/98           14.08
------------------------------------------------------------------------

    Interested parties may request a hearing not later than 30 days 
after publication of this notice. Interested parties may also submit 
written arguments in case briefs on these preliminary results within 30 
days of the date of publication of this notice. Rebuttal briefs, 
limited to issues raised in case briefs, may be filed no later than 
five days after the time limit for filing case briefs. Parties who 
submit arguments are requested to submit with each argument a statement 
of the issue and a brief summary of the argument. All memoranda to 
which we refer in this notice can be found in the public reading room, 
located in the Central Records Unit, room B-009 of the main Department 
of Commerce building. Any hearing, if requested, will be held two days 
after the scheduled date for submission of rebuttal briefs.
    The Department will publish the final results of this 
administrative review, including a discussion of its analysis of issues 
raised in any case or rebuttal brief or at a hearing. The Department 
will issue final results of this review within 120 days of publication 
of these preliminary results.
    Upon completion of the final results in this review, the Department 
shall determine, and the Customs Service shall assess, antidumping 
duties on all appropriate entries. In accordance with 19 CFR 351.212 
(b), we have calculated an importer/customer-specific assessment rate 
based on the ratio of the total amount of antidumping duties calculated 
for the examined sales to the quantity of those same sales. This 
Department will issue appraisement instructions on each exporter 
directly to the Customs Service.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of certain circular welded carbon steel pipes and tubes 
from Taiwan entered, or withdrawn from warehouse, for consumption on or 
after the publication date of the final results of this administrative 
review, as provided for by section 751(a)(1) of the Act: (1) The cash 
deposit rates for the reviewed companies will be those rates 
established in the final results of this administrative review, except 
that no cash deposit will be required if the rate is de minimis, i.e., 
less than 0.50 percent; (2) for previously reviewed or investigated 
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, a prior review, or 
the original 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) for all other 
producers and/or exporters of this merchandise, the cash deposit rate 
shall be 9.7%, the ``all others'' rate established in the LTFV 
investigation. These deposit requirements, when imposed, shall remain 
in effect until publication of the final results of the next 
administrative review.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.401(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this period of review. 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 administrative review and notice are issued and published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 
351.213.

    Dated: May 28, 1999.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-14337 Filed 6-4-99; 8:45 am]
BILLING CODE 3510-DS-P