[Federal Register Volume 65, Number 68 (Friday, April 7, 2000)]
[Notices]
[Pages 18301-18304]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-8697]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-502]


Certain Welded Carbon Steel Pipes and Tubes 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: Certain welded carbon steel pipes and tubes from 
Thailand.

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SUMMARY: In response to requests by a Thai manufacturer, Saha Thai 
Steel Company, Ltd. (``Saha Thai''), and two importers, Ferro Union 
Inc. (``Ferro Union''), and ASOMA Corp. (``ASOMA''), the Department of 
Commerce (``the Department'') is conducting an administrative review of 
the antidumping duty order on certain welded carbon steel pipes and 
tubes from Thailand. This review covers Saha Thai Steel Pipe Co., Ltd. 
(``Saha Thai''), a Thai manufacturer of the subject merchandise to the 
United States. The period of review (POR) is March 1, 1998, through 
February 28, 1999.
    We have preliminarily determined that the respondent sold subject 
merchandise at less than normal value (``NV'') during the POR. If these 
preliminary results are adopted in our final results, we will instruct 
U.S. Customs to assess antidumping duties based on the differences 
between the export price and NV.
    Interested parties are invited to comment on these preliminary 
results. Parties who submit argument in this proceeding should also 
submit with the argument: (1) A statement of the issue; and (2) a brief 
summary of the argument.

EFFECTIVE DATE: April 7, 2000.

FOR FURTHER INFORMATION CONTACT: Linda Ludwig or Javier Barrientos, AD/
CVD Enforcement Group III, Room 7866, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230; telephone: 
(202) 482-3833 and (202) 482-2243, respectively.

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 those codified at 19 CFR part 351 (1999).

[[Page 18302]]


SUPPLEMENTARY INFORMATION:   

Background

    On March 11, 1986, the Department published in the Federal Register 
an antidumping duty order on certain welded carbon steel pipes and 
tubes from Thailand (51 FR 8341). On March 9, 1999, the Department 
published a notice of opportunity to request an administrative review 
of this order covering the period March 1, 1998, through February 28, 
1999 (64 FR 11439). Timely requests for an administrative review of the 
antidumping order with respect to sales by Saha Thai during the POR 
were filed by Saha Thai, Ferro Union and ASOMA. The Department 
published a notice of initiation of this antidumping duty 
administrative review on May 28, 1999 (64 FR 28973).
    Because the Department determined that it was not practicable to 
complete this review within statutory time limits, on December 3, 1999, 
we published in the Federal Register our notice of extension of the 
time limit for this review (64 FR 67876). As a result, we extended the 
deadline for these preliminary results. The deadline for the final 
results will continue to be 120 days after publication of these 
preliminary results.

Scope of the Review

    The products covered by this administrative review are certain 
welded carbon steel pipes and tubes from Thailand. The subject 
merchandise has an outside diameter of 0.375 inches or more, but not 
exceeding 16 inches. These products, which are commonly referred to in 
the industry as ``standard pipe'' or ``structural tubing,'' are 
hereinafter designated as ``pipe and tube.'' The merchandise is 
classifiable under the Harmonized Tariff Schedule (HTS) item numbers 
7306.30.1000, 7306.30.5025, 7306.30.5032, 7306.30.5040, 7306.30.5055, 
7306.30.5085, and 7306.30.5090. Although the HTS subheadings are 
provided for convenience and Customs purposes, our written description 
of the scope of the order is dispositive.

Date of Sale

    As in previous segments of this proceeding, Saha Thai reported 
invoice date as the date of sale. In order to determine whether invoice 
date was the appropriate date of sale, i.e., whether the material terms 
of sale were established on that or an earlier date, we examined the 
contracts provided by Saha Thai for its U.S. sales and found that the 
terms of sale changed in a significant number of sales. Therefore, we 
have preliminarily determined that the invoice date is the appropriate 
date of sale. With respect to home market sales, the invoice is the 
first written document that establishes the terms of sale.

Normal Value Comparisons

    To determine whether sales of steel pipes and tubes from Thailand 
to the United States were made at less than NV, we compared the export 
price (EP) to the NV for Saha Thai as specified 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 individual U.S. transactions.
    Saha Thai's reported U.S. sales include both its own sales and 
sales made by another company of subject merchandise processed by Saha 
Thai under a tolling agreement. We have included all of these sales in 
our analysis for these preliminary results. After reviewing the 
submissions we requested additional information regarding Saha Thai and 
its relationship with the other company to which it provided tolling 
services and the degree to which certain costs and expenses incurred by 
Saha Thai and this other company (e.g., the cost of tolling services, 
coil cost, interest expenses, exchange rate losses and selling 
expenses) were fully allocated and reported. We have also requested 
additional information regarding the various weight conversion 
methodologies used in reporting sales, costs and expenses. Due to the 
timing of these requests, we were not able to use this information for 
these preliminary results. Parties are invited to comment on this 
information as part of their case briefs and/or rebuttal briefs. This 
information plus any relevant comments will be fully considered in our 
final results of this review.

Export Price

    Based upon our review of the record evidence, we classified all 
Saha Thai sales to United States customers as EP sales because, as in 
previous segments of this proceeding, we found that Saha Thai is not 
affiliated with its U.S. distributors, which are the first purchasers 
in the United States. Certain Welded Carbon Steel Pipes and Tubes From 
Thailand: Final Results of Antidumping Duty Administrative Review, 61 
FR 56515, 56517 (November 1, 1996). Therefore, we calculated the EP 
based on the price from Saha Thai to the first unaffiliated purchaser 
in the U.S. in accordance with section 772(a) of the Act.
    Where appropriate, in accordance with section 772(c)(2) of the Act, 
we made deductions from the starting price for ocean freight to the 
U.S. port, foreign inland freight, foreign brokerage and handling, 
foreign inland insurance, bill of lading charge, U.S. duty and U.S. 
brokerage and handling charges. In addition, pursuant to section 
772(c)(1)(B) of the Act, we have made an adjustment for duty drawback.

Normal Value

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV, we 
compared the volume of Saha Thai's home market sales of the foreign 
like product to the volume of U.S. sales of subject merchandise, in 
accordance with section 773(a)(1) of the Act. Based on this comparison, 
we determined that the aggregate volume of Saha Thai's home market 
sales of the foreign like product is greater than five percent of the 
aggregate volume of Saha Thai's U.S. sales. Thus, we determined that 
Saha Thai had a viable home market during the POR. Consequently, we 
based NV on home market sales.
    We applied the standard arm's length test to Saha Thai's sales to 
affiliated parties. Therefore, where Saha Thai's sales to affiliated 
parties were not made at arm's length prices, we excluded these sales 
from our home market normal value calculation.
    Pursuant to section 773(b)(2)(A)(ii) of the Act, there were 
reasonable grounds to believe or suspect that Saha Thai had made home 
market sales at prices below its cost of production (``COP'') in this 
review because the Department had disregarded sales that failed the 
cost test in the 1996-1997 administrative review (i.e., the most 
recently completed review at the time we issued our antidumping 
questionnaire). As a result, the Department initiated an investigation 
to determine whether Saha Thai made home market sales during the POR at 
prices below its COP. We calculated the COP based on the sum of 
respondent's cost of materials and fabrication for the foreign like 
product, plus amounts for SG&A and packing costs, in accordance with 
section 773(b)(3) of the Act.
    For these preliminary results we are using respondent's reported 
COP. We have requested additional information about Saha Thai's costs 
and those of another company for which Saha Thai provided tolling 
services. We invite parties to comment on this information and will 
consider this information for the final results.

[[Page 18303]]

    We compared the COP figures to home market sales of the foreign 
like product as required under section 773(b) of the Act, in order to 
determine whether these sales had been made at prices below the COP. On 
a product-specific basis, we compared the COP to home market prices, 
less any applicable movement charges and discounts.
    In determining whether to disregard home market sales made at 
prices below the COP, we examined: (1) Whether, within an extended 
period of time, such sales were made in substantial quantities, and (2) 
whether such sales were made at prices which permitted the recovery of 
all costs within a reasonable period of time in the normal course of 
trade.
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of the respondent's sales of a given product were at prices 
less than the COP, we did not disregard any below-cost sales of that 
product because we determined that the below-cost sales were not made 
in ``substantial quantities.'' Where 20 percent or more of the 
respondent's sales of a given product during the POR were at prices 
less than the COP, we determined such sales to have been made in 
substantial quantities within an extended period of time in accordance 
with section 773(b)(1)(A) of the Act. In such cases, we also determined 
that such sales were not made at prices which would permit recovery of 
all costs within a reasonable period of time, in accordance with 
section 773(b)(1)(B) of the Act. Therefore, we disregarded the below-
cost sales.
    Where appropriate, we adjusted Saha Thai's home market sales for 
discounts, direct selling expenses and inland freight. In addition, in 
accordance with section 773(a)(6), we deducted home market packing 
costs and added U.S. packing costs, U.S imputed credit, bank charges, 
and penalty fees.
    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of Saha Thai's cost of materials, fabrication, SG&A, 
profit, and U.S. packing costs. In accordance with section 773(e)(2)(A) 
of the Act, we based SG&A expenses and profit on the amounts incurred 
and realized by Saha Thai in connection with the production and sale of 
the foreign like product in the ordinary course of trade, for 
consumption in the foreign country. For selling expenses, we used the 
average of the selling expenses reported for home market sales that 
passed the cost test, weighted by the total quantity of those sales. 
For actual profit, we first calculated the difference between the home 
market sales value and home market COP, and divided the difference by 
the home market COP. We then multiplied this percentage by the COP for 
each U.S. model to derive an actual profit.

Level of Trade

    As set forth in section 773(a)(1)(B)(i) of the Act and in the SAA, 
to the extent practicable, we determine NV based on sales in the 
comparison market at the same level of trade as the EP or the CEP. The 
NV level of trade is that of the starting-price sales in the comparison 
market or, when NV is based on CV, that of the sales from which we 
derive selling, general and administrative expenses and profit. For EP, 
the U.S. level of trade is the level of the starting-price sale, which 
is usually from exporter to importer.
    To determine whether NV sales are at a different level of trade 
than EP or CEP, 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 level of trade, 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 level of trade of the export transaction, we make a 
level of trade 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 
(November 19, 1997).
    For the U.S. market, Saha Thai reported only one level of trade for 
its EP sales. This single level of trade represents large volume sales 
to unaffiliated trading companies/distributors in the United States. In 
the home market, Saha Thai claimed that it made sales at one level of 
trade. These sales were made to unaffiliated trading companies and 
distributors (made at the same level of trade as U.S. sales). There are 
no significant differences in the selling functions Saha Thai performs 
for these customers in the home market or in the United States. 
Therefore, we conclude that EP and NV sales are made at the same LOT 
and no adjustment is warranted.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A of the Act, based on exchange rates in effect on the dates 
of the U.S. sales as certified by the Federal Reserve Bank. Section 
773A(a) of the Act directs the Department to use a daily exchange rate 
in order to convert foreign currencies into U.S. dollars unless the 
daily rate involves a fluctuation. It is the Department's practice to 
find that a fluctuation exists when the daily exchange rate differs 
from the benchmark rate by 2.25 percent. The benchmark is defined as 
the moving average of rates for the past 40 business days. When we 
determine a fluctuation to have existed, we substitute the benchmark 
rate for the daily rate, in accordance with established practice. See 
Change in Policy Regarding Currency Conversions, 61 FR 9434 (March 8, 
1996).

Preliminary Results of the Review

    We preliminarily determine that the following weighted-average 
dumping margins exist:

------------------------------------------------------------------------
                                                                Margin
       Manufacturer/exporter                 Period           (percent)
------------------------------------------------------------------------
Saha Thai..........................  3/1/98-2/28/99........         0.24
------------------------------------------------------------------------

    The Department will disclose to parties to this proceeding within 5 
days after publication of these preliminary results. Any interested 
party may request a hearing within 30 days of publication. Any hearing, 
if requested, will be held 37 days after the date of publication or the 
first business day thereafter. Case briefs and/or other written 
comments from interested parties may be submitted not later than 30 
days after the date of publication. Rebuttal briefs and rebuttals to 
written comments, limited to issues raised in those comments, may be 
filed not later than 35 days after the date of publication of this 
notice. The Department will publish the final results of this 
administrative review, which will include the results of its analysis 
of issues raised in any such comments, within 120 days from the date of 
publication of these preliminary results.
    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate

[[Page 18304]]

entries. In accordance with 19 CFR 351.212(b), we calculated importer-
specific ad valorem duty assessment rates for the class or kind of 
merchandise based on entered value. Upon completion of this review, the 
Department will issue appraisement instructions directly to the Customs 
Service.
    Furthermore, the following deposit rates will be effective upon the 
publication of the final results of this administrative review for all 
shipments of certain welded carbon steel pipes and tubes from Thailand 
entered, or withdrawn from warehouse, for consumption on or after the 
publication date, as provided for by section 751(a)(2)(c) of the Act: 
(1) The cash deposit rate for the reviewed company will be that 
established in the final results of this review; (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, 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; (4) the cash deposit 
rate for all other manufacturers or exporters will continue to be 15.67 
percent, the ``All Others'' rate made effective by the LTFV 
investigation. 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.
    These preliminary results of review are issued and published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: March 30, 2000.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 00-8697 Filed 4-6-00; 8:45 am]
BILLING CODE 3510-DS-P