[Federal Register Volume 64, Number 151 (Friday, August 6, 1999)]
[Notices]
[Pages 42902-42905]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20344]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-549-807]


Certain Carbon Steel Butt-Weld Pipe Fittings From Thailand; 
Preliminary Results of Antidumping Duty Administrative 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 timely request by Thai Benkan Corporation, 
Ltd., (TBC), the Department of Commerce (the Department) is conducting 
an administrative review of the antidumping duty order on certain 
carbon steel butt-weld pipe fittings (pipe fittings) from Thailand. 
This review covers TCB, a manufacturer/exporter of this merchandise to 
the United States, during the period July 1, 1997, through June 30, 
1998. We have preliminarily determined that sales of the subject 
merchandise have been made below normal value. 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 
based on the difference between the export price and the normal value. 
Interested parties are invited to comment on these preliminary results. 
Parties who submit arguments in this proceeding are requested to submit 
with the arguments: (1) a statement of the issues; and (2) a brief 
summary of the arguments.

EFFECTIVE DATE: August 6, 1999.

FOR FURTHER INFORMATION CONTACT: Zev Primor or Wendy Frankel, 
Antidumping/Countervailing Duty Enforcement, Office 4 Group II, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-4114 or 482-5849, respectively.

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions as of January 1, 1995, the effective date 
of the amendments made to the Tariff Act of 1930, (the Act) as amended, 
by the Uruguay Round Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department's regulations 
refer to the regulations codified at 19 CFR Part 351 (April 1998).

SUPPLEMENTARY INFORMATION:

Background

    On July 6, 1992, the Department published in the Federal Register 
an antidumping duty order on pipe fittings from Thailand (57 FR 29702). 
On July 30, 1998, the respondent requested, in accordance with section 
351.213(b) of the Department's regulations, an administrative review of 
the antidumping duty order on pipe fittings from Thailand covering the 
period July 1, 1997, through June 30, 1998. We published a notice of 
initiation of the review on August 27, 1998 (63 FR 45796). On September 
15, 1998, the Department sent an antidumping questionnaire to TBC. The 
Department received questionnaire responses in October and November of 
1998. On May 7, 1999, we issued a supplemental questionnaire and 
received a response to that questionnaire on May 27, 1999. The 
Department is conducting this review in accordance with section 751 of 
the Act.

Extension of Deadlines

    Under section 751(a)(3)(A) of the Act, the Department may extend 
the deadline for completion of preliminary review results if it 
determines that it is not practicable to complete the review within the 
statutory time limit. On March 10, 1999, the Department extended the 
time limit for the preliminary results of this case (Notice of 
Extension of Time Limits for Preliminary Results of Antidumping Duty 
Administrative Review, 64 FR 11824).

Scope of the Review

    The product covered by this order is certain carbon steel butt-weld 
pipe

[[Page 42903]]

fittings, having an inside diameter of less than 14 inches, imported in 
either finished or unfinished form. These formed or forged pipe 
fittings are used to join sections in piping systems where conditions 
require permanent, welded connections, as distinguished from fittings 
based on other fastening methods (e.g., threaded, grooved, or bolted 
fittings.) Carbon steel pipe fittings are currently classified under 
subheading 7307.93.30 of the Harmonized Tariff Schedule (HTS). Although 
the HTS subheadings are provided for convenience and customs purposes, 
our written description of the scope of this proceeding is dispositive. 
The review covers TBC and the period of review (POR) July 1, 1997, 
through June 30, 1998.

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by TBC. We used standard verification procedures, including 
on-site inspection of the respondent's facilities, the examination of 
relevant sales, financial, and/or cost records, and selection of 
original documentation containing relevant information. Our 
verification results are outlined in the verification reports placed on 
file in the Central Records Unit (CRU).

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products within the scope of this review that were produced by the 
respondent, and sold in the ordinary course of trade in the comparison 
market during the POR, to be foreign like products for purposes of 
determining the appropriate product comparisons to U.S. sales.

Fair Value Comparisons

    With respect to TBC, in determining whether this respondent's sales 
of pipe fittings to customers in the United States were made at less 
than fair value, we compared export price (EP) to normal value (NV), as 
described in the ``Export Price,'' and ``Normal Value'' 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 
the prices of individual U.S. transactions.
    During the POR, TBC reported that it made all of its sales to the 
United States through its affiliate, Benkan America, Inc. (BA), which 
is the importer of record for the subject merchandise. When sales are 
made prior to the date of importation through an affiliate in the 
United States, the Department uses the following criteria to determine 
whether U.S. sales should be classified as EP sales: (1) whether the 
merchandise in question is shipped directly from the manufacturer to 
the unaffiliated buyer without being introduced into the physical 
inventory of the selling agent; (2) whether direct shipment from the 
manufacturer to the unaffiliated buyer is the customary channel for 
sales of the subject merchandise between the parties involved; and (3) 
whether the affiliate in the United States acts only as a processor of 
sales-related documentation and a communication link with the 
unaffiliated U.S. buyer. Where the factors indicate that the activities 
of the selling entity in the United States are ancillary to the sale 
(e.g., arranging transportation or customs clearance), we treat the 
transactions as EP sales. Where the U.S. selling agent is substantially 
involved in the sales process (e.g., negotiating prices and key sales 
terms), we treat the transactions as CEP sales. See Notice of Final 
Determination of Sales at Less Than Fair Value: Stainless Steel Wire 
Rod From Korea, 63 FR 40404, 40417-19 (July 29, 1998).
    According to TBC, the imported merchandise was delivered directly 
to the unaffiliated customers' warehouses without being moved into BA's 
inventory. See TBC's October 22, 1998, questionnaire response at A-12. 
Additionally, in its supplemental questionnaire response, dated May 27, 
1999, TBC reiterated that BA never moved the subject merchandise into 
its inventory or otherwise took possession of the merchandise. 
Furthermore, TBC states that BA merely acted as a processor of paper 
and a communication link between the foreign producer and unaffiliated 
U.S. customers. At no point, according to TBC, was BA involved in any 
pricing decisions; rather BA served only as a paper facilitator 
ensuring that purchasing orders from the unrelated U.S. customers were 
transferred to TBC and that TBC's sales invoices were properly 
delivered to U.S. customers. Finally, TBC stated that the above method 
of transaction represents BA's normal practice of facilitating the sale 
of merchandise produced by foreign affiliates. Accordingly, TBC 
reported these sales as EP sales. See TBC's supplemental questionnaire 
response, dated May 27, 1999, at S-5.
    Based on our review of the record information concerning TBC's 
sales to the United States and after conducting a sales verification, 
we determined that BA does not maintain warehousing facilities in the 
United States. Thus it is not able to store TBC's merchandise prior to 
a sale in the United States. Moreover, our verification of the sales 
transaction methods indicates that BA was not involved in any part of 
the price negotiation process nor did it provide any additional 
services to the U.S. customers. See Memorandum to the File regarding 
Verification of the Sales Questionnaire Responses of Thai Benkan, Ltd., 
Certain Carbon Steel Butt-Weld Pipe Fittings from Thailand, 
Administrative Review (1997-1998) (TBC Verification Report) dated July 
31, 1999. As such, we have concluded that the subject merchandise was 
sold prior to importation (outside of the United States) to the 
unaffiliated U.S. purchaser. Consequently, we preliminary determine 
that these sales are EP transactions.

Export Price

    We calculated EP in accordance with sections 772(a) and (c) of the 
Act where the respondents sold the subject merchandise directly to the 
first unaffiliated purchasers in the United States prior to 
importation. Specifically, we calculated EP based on the packed prices 
to unaffiliated customers in the United States. We made deductions, 
where appropriate, for foreign inland freight from the plant to the 
port, foreign inland insurance, foreign brokerage and handling, 
international freight, marine insurance, U.S. customs brokerage and 
duties, and U.S. inland freight because these expenses were incident to 
bringing the subject merchandise from the original place of shipment in 
the exporting country to the place of delivery. We also increased EP by 
the allocated amount of duty drawback.

Normal Value

1. Viability

    In accordance with section 773(a)(1)(C)(ii) of the Act, we 
determine that the home market for the respondent serves as a viable 
basis for calculating normal value (NV) because the aggregate volume of 
the respondent's home market sales of the foreign like product was 
greater than five percent of the aggregate volume of its U.S. sales of 
the subject merchandise.

2. Arm's-Length Transactions

    A significant number of home market sales was made through TBC's 
affiliates: Marubeni Thailand Co., Ltd., Benkan Corporation of Japan 
and Bensho Corporation, Ltd. However, in all cases, TBC reported home 
market sales from its affiliates to the first unrelated home market 
customer. Consequently, no sales to affiliated parties were considered 
in our analysis.

[[Page 42904]]

Level of Trade

    In accordance with section 773(a)(1)(B) 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 the CEP transaction. The NV 
LOT for EP sales is that of the starting-price sales in the comparison 
market, or when NV is based on constructed value (CV), that of the 
sales from which we derive selling, general and administrative expenses 
and profit. For EP sales, the U.S. LOT is also the level of the 
starting-price sale, which is usually from the exporter to the 
importer.
    To determine whether NV sales are at a different LOT than EP, 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 different 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 transaction, we 
make an LOT adjustment under section 773(a)(7)(A) of the Act. 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, 61732 
(November 19, 1997).
    Based on our analysis of these factors, we found that for TBC no 
LOT difference existed between its respective U.S. and home market 
sales. Therefore, we have made no LOT adjustment under section 
773(a)(7)(A) of the Act. For a detailed discussion of these LOT issues, 
see Memorandum to the File regarding Level of Trade Analysis of Thai 
Benkan, Ltd.; Certain Carbon Steel Butt-Weld Pipe Fittings from 
Thailand, Administrative Review (1997-1998) (TBC LOT Analysis), dated 
July 30, 1999.

Constructed Value

    In this case, we preliminarily determined NV for all U.S. sales 
based on contemporaneous home market sales. Consequently, we did not 
use CV in our analysis.

Price-to-Price Comparisons

    In accordance with section 773(a)(1)(B)(i) of the Act, we based NV 
on the price at which the foreign like product was first sold for 
consumption in the exporting country in the usual commercial quantities 
and in the ordinary course of trade and at the same level of trade as 
the EP sale. In accordance with section 773(a)(6) of the Act, where 
applicable, we made adjustments to home market prices for movement 
expenses (inland freight) and billing adjustments. To adjust for 
differences in circumstances of sales (COS) between the home market and 
the EP transactions in the United States, we reduced home market prices 
by an amount for home market imputed credit expenses, where applicable, 
and made an upward adjustment for U.S. credit, where appropriate. To 
adjust for differences in packing between the two markets, we deducted 
HM packing costs and added U.S. packing costs. In addition, we made 
adjustments, where appropriate, for differences in costs attributable 
to physical differences of the merchandise (DIFMER) pursuant to section 
773(a)(6)(C) of the Act.

Currency Conversion

    Pursuant to section 773A(a) of the Act, for purposes of the 
preliminary results, we converted foreign currencies into the U.S. 
dollars using the official exchange rates in effect on the date of the 
U.S. sales. These official exchange rates are based on the daily rates 
identified by the Federal Reserve Bank. Section 773A(a) of the Act 
directs the Department to use a daily exchange rate to convert foreign 
currencies into U.S. dollars unless the daily rate involves a 
``fluctuation'' It is our practice to find that a fluctuation exists 
when the daily exchange rate differs from a benchmark rate by 2.25 
percent. See Preliminary Results of Antidumping Duty Administrative 
Review: Certain Welded Carbon Steel Pipe and Tube from Turkey, 61 FR 
35188, 35192 (July 5, 1996). The benchmark rate is defined as the 
moving average of the rates for the past 40 business days. Where we 
determined that the daily rates applicable to this review fluctuated, 
as defined above, we converted foreign currencies into U.S. dollars 
using the benchmark exchange rate.

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that the 
following weighted-averaged dumping margins exist for the period July 
1, 1997 through June 20, 1998:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Manufacturer/exporter                        margin
                                                              (percent)
------------------------------------------------------------------------
Thai Benkan Corporation, Ltd...............................         0.94
------------------------------------------------------------------------

    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding any calculations performed in connection with 
these preliminary results within 5 days of the date of publication of 
this notice. Any interested party may request a hearing within 30 days 
of the date of publication of this notice. Any interested party may 
request a hearing within 30 days of the date of publication of this 
notice. Parties who submit arguments in this proceeding are requested 
to submit with each argument: (1) a statement of the issue; and (2) a 
brief summary of the argument. All case briefs must be submitted within 
30 days of the date of publication of this notice. Rebuttal briefs, 
which are limited to issues raised in the case briefs, may be filed not 
later than seven days after the case briefs are filed. A hearing, if 
requested, will be held two days after the date the rebuttal briefs are 
filed or the first business day thereafter.
    The Department will publish a notice of the final results of this 
administrative review, which will include the results of its analysis 
of the issues raised in any written comments or at the hearing, within 
120 days from the publication of these preliminary results.
    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. Upon completion of this 
review, 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 covered by 
the determination and for future deposits of estimated duties. For 
assessment of EP sales we calculated a per-unit customer or importer-
specific assessment rate by aggregating the dumping margins calculated 
for all U.S. sales to each customer/importer and dividing this amount 
by the total quantity of those sales.
    Furthermore, the following cash deposit requirements will be 
effective upon completion of the final results of this administrative 
review for all shipments of pipe fittings from Thailand entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date of the final results of this administrative review, as provided by 
section 751(a)(1) of the Act: The cash deposit rate for the reviewed 
company will be the rate established in the final results of this 
administrative review, except if the rate is less than 0.5 percent ad 
valorem and, therefore, de minimis, no cash deposit will be required; 
(2) for exporters not covered in this review, but covered in the 
original less than fair value (LTFV) investigation or a previous 
review, the cash deposit rate will continue to be the company-specific 
rate published in the most recent period; (3) if the exporter is not a 
firm covered in this review, a previous review, or the

[[Page 42905]]

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) if neither the exporter nor 
the manufacturer is a firm covered in this or any previous reviews or 
the original LTFV investigation, the cash deposit rate will be 39.10 
percent, the ``All Others'' rate which is based on the LTFV 
investigation (57 FR 29702, July 6, 1992). These requirements, when 
imposed, shall remain in effect until publication of the final results 
of the next administrative review.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f) 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 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 
1677f(i)(1)).

    Dated: July 30, 1999.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-20344 Filed 8-5-99; 8:45 am]
BILLING CODE 3510-DS-M