[Federal Register Volume 65, Number 26 (Tuesday, February 8, 2000)]
[Notices]
[Pages 6136-6139]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-2849]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-805]


Certain Circular Welded Non-Alloy Steel Pipe From Mexico; Final 
Results of Administrative Reviews

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

ACTION:  Notice of final results of administrative reviews.

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SUMMARY:  On June 25, 1999, the Department of Commerce (the Department) 
published in the Federal Register the preliminary results of the 1992-
1993 and 1993-1994 administrative reviews of the antidumping duty order 
on certain circular welded non-alloy steel pipe from Mexico (64 FR 
34190). These reviews cover one manufacturer/exporter of the subject 
merchandise during the periods of review (POR) for April 28, 1992 
through October 31, 1993, (the 92/93 POR) and November 1, 1993 through 
October 31, 1994 (the 93/94 POR).
    We gave interested parties an opportunity to comment on the 
preliminary results. Based upon our analysis of the comments received 
we have not changed the results from those presented in our preliminary 
results for the 92/93 administrative review. However, we have changed 
the results for the 93/94 administrative review.

EFFECTIVE DATE:  February 8, 2000.

FOR FURTHER INFORMATION CONTACT:  John Drury at (202) 482-0195 or Linda 
Ludwig at (202) 482-3833, 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

[[Page 6137]]

amended (the Tariff Act) and to the Department's regulations are in 
reference to the provisions as they existed on December 31, 1994.

SUPPLEMENTARY INFORMATION:

Background

    The Department published an antidumping duty order on circular 
welded non-alloy steel pipe and tube from Mexico on November 2, 1992 
(57 FR 49453). The Department published a notice of Opportunity to 
Request an Administrative Review of the antidumping duty order for the 
92/93 POR on November 3, 1993 (58 FR 58682). On November 19, 1993, 
respondent Hylsa S.A. de C.V. (Hylsa) requested that the Department 
conduct an administrative review of the antidumping duty order on 
circular welded non-alloy steel pipe and tube from Mexico. On November 
30, 1993, respondent Tuberia Nacional S.A. de C.V. (TUNA) requested 
that the Department conduct an administrative review of this order. We 
initiated this review on January 18, 1994 (59 FR 2593).
    The Department published a notice of Opportunity to Request an 
Administrative Review of the antidumping duty order for the 93/94 POR 
on November 10, 1994 (59 FR 56034). On November 29, 1994, respondent 
Hylsa requested that the Department conduct an administrative review of 
the antidumping duty order on circular welded non-alloy steel pipe and 
tube from Mexico. On November 30, 1994, respondent Western American 
Manufacturing, Inc. (Western American) requested that the Department 
conduct an administrative review of this order. We initiated this 
review on December 15, 1994. (59 FR 64650).
    We published the preliminary results of these reviews, and 
termination of reviews with respect to TUNA and Western American, in 
the Federal Register on June 25, 1999 (Circular Welded Non-Alloy Steel 
Pipe and Tube From Mexico: Preliminary Results of Antidumping Duty 
Administrative Reviews; and Partial Revocation, 64 FR 34190 
(Preliminary Results)). Hylsa filed a case brief on July 26, 1999; we 
did not receive any other case or rebuttal comments.
    The Department has now completed these reviews in accordance with 
section 751 of the Tariff Act.

Scope of the Review

    The review of circular welded non-alloy steel pipe and tube covers 
products of circular cross-section, not more than 406.4 millimeters (16 
inches) in outside diameter, regardless of wall thickness, surface 
finish (black, galvanized, or painted), or end finish (plain end, 
beveled end, threaded, or threaded and coupled). Those pipes and tubes 
are generally known as standard pipe, though they may also be called 
structural or mechanical tubing in certain applications. Standard pipes 
and tubes are intended for the low pressure conveyance of water, steam, 
natural gas, air and other liquids and gases in plumbing and heating 
systems, air conditioning units, automatic sprinkler systems, and other 
related uses. Standard pipe may also be used for light load-bearing and 
mechanical applications, such as for fence tubing, and for protection 
of electrical wiring, such as conduit shells.
    The scope is not limited to standard pipe and fence tubing, or 
those types of mechanical and structural pipe that are used in standard 
pipe applications. All carbon steel pipes and tubes within the physical 
description outlined above are included within the scope of this 
review, except line pipe, oil country tubular goods, boiler tubing, 
cold-drawn or cold-rolled mechanical tubing, pipe and tube hollows for 
redraws, finished scaffolding, and finished rigid conduit. In 
accordance with the Final Negative Determination of Scope Inquiry (56 
FR 11608, March 21, 1996), pipe certified to the API 5L line pipe 
specification, or pipe certified to both the API 5L line pipe 
specifications and the less-stringent ASTM A-53 standard pipe 
specifications, which fall within the physical parameters as outlined 
above, and entered as line pipe of a kind used for oil and gas 
pipelines, are outside of the scope of the antidumping duty order.
    Imports of these products are currently classifiable under the 
following Harmonized Tariff Schedule (HTS) subheadings: 7306.3010.00, 
7306.30.50.25, 7306.30.50.32, 7306.30.50.40, 7306.30.50.55, 
7306.30.50.85, and 7306.30.50.90. These HTS item numbers are provided 
for convenience and customs purposes. The written descriptions remain 
dispositive.

Analysis of Comments Received

Comment 1: Use of Best Information Available for 92/93 Administrative 
Review.

    Hylsa takes issue with the Department's statement that [t]he 
inability of Hylsa to reconcile aggregate quantities and values to its 
financial statements throws into doubt the accuracy of Hylsa's reported 
transaction-specific sales, and that because of such inaccuracies, the 
Department does [n]ot believe that it is possible to calculate an 
accurate margin for the first review. (64 FR 34190, at 34192). On the 
contrary, Hylsa states that the Department was able to verify that the 
reported information was consistent with the sales information in 
Hylsa's accounting system. Any discrepancies, argues Hylsa, were minor, 
and did not undermine the integrity of the response.
    By way of explaining any discrepancies, Hylsa points to the fact 
that the verification for the review took place over 2\1/2\ years after 
Hylsa filed its initial response. In the intervening time, according to 
Hylsa, a failure of a computer hard drive resulted in the loss of the 
database used to prepare the original response. Compounding the 
problem, according to Hylsa, is the fact that it had to respond to 
Department requests for submissions and information concerning four 
separate reviews. According to Hylsa, the burden of responding to 
information requests, and preparing for verifications for the 94/95 
administrative review concerning the same product, prevented Hylsa from 
having adequate time and resources to resolve this problem.
    In examining the discrepancies found by the Department, Hylsa 
classifies them into two categories. The first category contains errors 
that Hylsa asserts are inconsequential because, according to Hylsa, the 
sales involved will not be used in the Department's margin 
calculations. These involve third country sales, and sales regarding 
unreported secondary merchandise.
    Hylsa places the discrepancies between both U.S. and home market 
quantity and value figures into the second category. These 
discrepancies might affect the Department's dumping calculations. 
However, according to Hylsa, these discrepancies were small and 
insignificant for the purposes of verifying the accuracy of Hylsa's 
response.
    Furthermore, Hylsa states that it cooperated with the Department to 
the best of its ability to provide the requested information. Given the 
nature of the errors, and the fact that Hylsa cooperated with the 
Department, Hylsa believes that the submitted information was 
sufficient and that there is no reasonable basis for the Department not 
to use the submitted data.
    Petitioners did not comment on the issues.

Department's Position

    We disagree with respondent. To begin, the Department takes issue 
with Hylsa's statement that it could not provide the necessary database 
because of a computer failure. During the

[[Page 6138]]

verification, Hylsa stated to the Department that it had changed 
computer systems and neglected to preserve those data files which it 
would need to document and explain its method of responding to the 
Department's questionnaire. (See verification report at page 20). Thus, 
rather than being the result of a computer failure, findings at 
verification indicated that the company, in the process of changing 
computer systems, simply failed to preserve a key database.
    With regard to the errors in quantity and value, both those known 
before verification and those discovered at verification, the 
Department disagrees with Hylsa's statements that they were either 
minor or irrelevant to the Department's analysis. Establishing the 
completeness and accuracy of the response with respect to the quantity 
and value of sales in both the home and U.S. markets is a very 
significant element of verification. Only with a complete and accurate 
response can the Department reasonably calculate values for a price 
analysis.
    19 CFR 353.37(a) states that [t]he Secretary will use the best 
information available whenever the Secretary: (1) Does not receive a 
complete, accurate, and timely response to the Secretary's request for 
factual information; or (2) Is unable to verify, within the time 
specified, the accuracy and completeness of the factual information 
submitted. In the instant case, Hylsa did not provide a complete, 
accurate, and timely response to the Department. Additionally, the 
Department was unable to verify, within the time specified, the 
accuracy and completeness of the information which Hylsa did submit.
    At verification the Department ascertained that Hylsa's submission 
contained two errors. Both errors prevented the Department from 
establishing completeness and accuracy. The first error was that 
certain sales of subject merchandise were not reported to the 
Department until the verification, including large amounts of sales of 
subject merchandise in the home market. The second error was that even 
with these unreported sales included, Hylsa was unable to reconcile 
quantity and value figures. While the Department provided Hylsa with 
three separate opportunities to reconcile its quantity and value 
figures during the verification process, using separate databases, 
Hylsa was ultimately unable to reconcile any of the differences (See 
verification report at 16).
    With regard to the first error (unreported sales), the Department 
discovered at verification that approximately 10 percent of sales of 
subject merchandise in the home market (most of which, but not all, 
were seconds) had not been reported and that a large volume of third 
country sales were not reported. The failure to report approximately 10 
percent of home market sales until verification is especially 
disturbing and, by itself, is reasonable grounds to apply BIA to this 
case (19 CFR 353.37(a)(1)). The importance of providing accurate 
information regarding the quantity and value of sales in the home 
market, on a timely basis, which forms the basis of calculating fair 
market value, cannot be overstated. Full disclosure of such information 
prior to verification is critical to the process of verifying its 
accuracy and suitability for use in determining fair market value. Due 
to stringent time deadlines and the significant limitations on 
Commerce's resources, `it is vital that accurate information be 
provided promptly to allow the agency sufficient time for review.' 
Ceramica Regiomontana, S.A. v. United States, 10 CIT 399, 406, 636 F. 
Supp. 961, 967 (1986). Tatung Co. v. United States, 18 CIT 1137, 1140 
(1994). The failure to report a substantial portion of information 
regarding quantity or value is sufficient grounds for the application 
of BIA. The use of a `neutral' margin . . . [where respondent failed to 
report a significant percentage of its home market prices] . . . would 
be inconsistent with the purpose of BIA, which is to insure a 
reasonably adverse inference against respondents which fail to comply 
fully with the Department's requests for information. (See Notice of 
Final Determinations of Sales at Less Than Fair Value: Certain Hot-
Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel 
Flat Products, Certain Corrosion-resistant Carbon Steel Flat Products 
and Certain Cut-to-Length Carbon Steel Plate from Germany, 58 FR 37136, 
37145 (July 9, 1993)). As the Court noted in Persico Pizzamiglio, S.A. 
v. United States, by allowing the Department to reject a submission in 
toto, the court encourages full disclosure by the respondent, because 
only full disclosure will lead to a dumping margin lower than that 
established by employing BIA. Persico Pizzamiglio, S.A. v. United 
States, 18 CIT 299 (CIT 1994). The lack of full information prior to 
verification substantially compromised the integrity of Hylsa's 
response.
    In addition to the failure of Hylsa to report all home market sales 
of subject merchandise, the Department was unable to verify the 
quantity and value figures for both home market and U.S. sales for the 
review. Hylsa claims that the loss of the database used to create the 
original submission, as well as the need to respond to multiple 
Department requests for information on various reviews over a one-year 
period, complicated its efforts to reconcile quantity and value 
figures. However, the Department provided Hylsa with three separate 
opportunities to reconcile the quantity and value figures during 
verification (See verification report at 16). Hylsa was unable to do 
so. The failure to verify the submitted information is sufficient 
grounds for the application of BIA (19 CFR 353.37(a)(2)).
    Despite its failure to reconcile quantity and value, Hylsa argues 
that the percentage differences were minor and did not prevent the 
Department from making reasonable price comparisons. However, even 
accepting Hylsa's figures, some of the percentage differences are 
sufficiently great to affect the margin calculations (See Analysis 
Memorandum, dated January 7, 2000). More importantly, because the 
Department was unable to verify quantity and value figures, we have no 
way of determining whether the unreported sales we uncovered 
represented all unreported sales. Verification is not a complete audit, 
and not an opportunity to provide substantial new data. As we said in 
Final Results of Antidumping Duty Administrative Review; Sodium Nitrate 
from Chile (52 FR 25897, 25898 (July 9, 1987)):

Comment 4

    SQM claims that during the first period only 3.28 percent and 
during the second period only 1.60 percent of sales in the United 
States of commercial grade nitrates were not included in its response 
and these omissions would not have appreciably affect the Department's 
analysis.

Department's Position

    The Department was unable to complete its price analysis because of 
the omission of an undeterminable number of U.S. sales and a 
substantial number of other deficiencies found at verification. The 
purpose of verification is to confirm the accuracy of the data 
submitted; the Department is not authorized to use verification for the 
purpose of supplementing the information originally missing from the 
response and investigating these unreported sales. Failure to include 
certain sales information in the original response meant that the 
Department was not able to conduct verification.
    Taken together, the Department believes that the totality of the 
errors

[[Page 6139]]

and omissions found at verification render Hylsa's submitted data 
unusable for purposes of calculating a margin. To summarize, at 
verification the Department found that both the reported quantity and 
value of home market sales were misreported to varying degrees. 
Additionally, the value of sales to the United States was also 
misreported. Hylsa was unable to reconcile these differences. Finally, 
Hylsa failed to report a number of home market sales of subject 
merchandise until the Department arrived at Hylsa to begin 
verification.
    The decision to resort to BIA in an administrative review is made 
on a case-by-case basis after evaluating all evidence in the 
administrative record. See Allied-Signal Aerospace Corp. v. United 
States, 966 F.2d 1185, 1191 (Fed. Cir. 1993). Once again, the multiple 
and pervasive nature of errors and omissions in the information 
provided by Hylsa prevented the Department from relying on Hylsa's 
response, as the Department was not confident that the response was an 
accurate reflection of Hylsa's sales activity during the POR. 
Therefore, the use of BIA is appropriate. Since Hylsa substantially 
cooperated with the Department's request for information, the 
Department believes that assigning Hylsa second-tier BIA is the most 
reasonable approach. (See Allied Signal Aerospace Corp. v. United 
States, 996 F.2d 1185 (Fed. Cir. 1993) (concluding that the 
Department's two-tiered BIA methodology, under which cooperating 
companies are assigned the lower, second tier BIA rate, is 
reasonable).) As such, the Department is not deviating from its 
preliminary results with respect to the first administrative review.

Comment 2: Use of Best Information Available for 93/94 Administrative 
Review.

    Hylsa believes that the Department's use of BIA in establishing 
Hylsa's cost of production in the second review is unfair. While 
acknowledging that it failed to report weighted-average costs for the 
full POR, Hylsa states that it had no reason to suspect that its 
methodology was inappropriate until verification. In fact, Hylsa 
indicates that it had ample reason to believe that the methodology was 
the Department's preferred methodology for this review.
    In the second administrative review, Hylsa reported six-month costs 
corresponding to the time in which Hylsa made sales to the United 
States. The Department approved a six-month reporting period for sales 
data in this review, and had approved six-month cost reporting for the 
94/95 administrative review. Furthermore, after the submission, the 
Department did not notify Hylsa that the cost data were in error. 
Citing Olympic Adhesives, Inc. v. U.S., 899 F.2d 1565, 1573 (Fed. Cir. 
1990), Hylsa indicates that the Department was required to give notice 
of any perceived inadequacies of the responses. Since the Department 
did not do so prior to verification, Hylsa asserts, there was no reason 
to suspect that the reported cost data was unacceptable. Therefore, in 
the interest of fairness, Hylsa requests that the Department use 
Hylsa's reported costs for this review.
    Petitioners did not comment on the issues.

Department's Position

    We agree with respondent, and have used its reported costs when 
calculating the margin for this administrative review. The Department 
accepted limited reporting in the third administrative review. As the 
Department used a similar methodology in a previous review, the use of 
limited reporting in this review is consistent with previous practice. 
Further, the Department did not request that Hylsa alter its reporting 
methodology in this review. Consequently, application of BIA for this 
review is not warranted.

Final Results of Review

    Based on our review of the arguments presented above, for these 
final results we have made no changes in the margins for Hylsa in the 
first review. We have determined that Hylsa's weighted-average margin 
for the period April 28, 1992 through October 31, 1993 is 32.62 
percent. Hylsa's margin for the November 1, 1993 through October 31, 
1994 period of review is 7.17 percent.
    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. For assessment 
purposes, we have calculated importer-specific ad valorem 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 quantity of sales examined during the POR. The 
Department will issue appraisement instructions directly to Customs.
    Furthermore, the following deposit requirements will be effective 
upon completion of the fnal results of these administrative reviews for 
all shipments of circular welded non-alloy steel pipe from Mexico 
entered, or withdrawn from warehouse, for consumption on or after the 
publication of the final results of these administrative reviews, as 
provided in section 751(a)(1) of the Tariff Act:
    (1) The cash deposit rate for Hylsa will continue to be 8.31 
percent (See Circular Welded Non-Alloy Steel Pipe from Mexico: Final 
Results of Administrative Review, 63 FR 33041 (June 17, 1998);
    (2) For previously reviewed or investigated companies other than 
Hylsa, the cash deposit rate will continue to be the company-specific 
rate publish 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 32.62 percent. See Antidumping Duty Order; 
Circular Welded Non-Alloy Steel Pipe from Mexico, 57 FR 49453 (November 
2, 1992).
    This notice also 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 the antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective orders (APOs) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d). Timely written notification of 
the return or 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 determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Tariff Act (19 U.S.C. 
1675(a)(1) and 1677f(i)(1)).

    Dated: January 11, 2000.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 00-2849 Filed 2-7-00; 8:45 am]
BILLING CODE 3510 -DS-P