[Federal Register Volume 65, Number 84 (Monday, May 1, 2000)]
[Notices]
[Pages 25305-25308]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-10691]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-853]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Circular Seamless Stainless Steel Hollow Products From Japan

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

EFFECTIVE DATE: May 1, 2000.

FOR FURTHER INFORMATION CONTACT: Charles Riggle at (202) 482-0650 or 
Constance Handley at (202) 482-0631, Import Administration, Room 1870, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230.

The Applicable Statute and Regulations

    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

[[Page 25306]]

indicated, all citations to Department of Commerce (Department) 
regulations refer to the regulations codified at 19 CFR part 351 (April 
1999).

Preliminary Determination

    We preliminarily determine that circular seamless stainless steel 
hollow products (SSHP) from Japan are being sold, or are likely to be 
sold, in the United States at less than fair value (LTFV), as provided 
in section 733 of the Act. The estimated margins of sales at LTFV are 
shown in the Suspension of Liquidation section of this notice.

Case History

    On October 26, 1999, the Department received a petition on SSHP 
from Japan filed in proper form by Altx, Inc., American Extruded 
Products, PMAC Ltd, DMV Stainless USA, Inc., Salem Tube Inc., Sandvik 
Steel Co., International Extruded Products LLC and the United Steel 
Workers of America, AFL-CIO/CLC. On November 9, 1999, Pennsylvania 
Extruded Company (Pexco) joined as a co-petitioner in the case.
    This investigation was initiated on November 15, 1999. See 
Initiation of Antidumping Duty Investigation: Circular Seamless 
Stainless Steel Hollow Products from Japan (Initiation Notice), 64 FR 
63285 (November 19, 1999). Since the initiation of the investigation, 
the following events have occurred:
    On December 22, 1999, the Department selected the following 
companies as mandatory respondents in the investigation: Sanyo Special 
Tube Company Ltd. (Sanyo) and Sumitomo Metal Industries Ltd. (SMI). See 
Selection of Respondents, below. On December 29, 1999, the Department 
issued the antidumping questionnaires to each of the selected 
respondents. On February 28, March 3, March 8, and March 15, 2000, the 
Department issued supplemental questionnaires to SMI. SMI responded to 
the section A supplemental questionnaire on March 6, 2000, however, it 
did not respond to any of the other supplemental questionnaires.
    On December 10, 1999, the United States International Trade 
Commission (ITC) preliminarily determined that there is a reasonable 
indication that imports of the products subject to this antidumping 
investigation are materially injuring the U.S. industry. See Circular 
Seamless Stainless Steel Hollow Products from Japan, 64 FR 71496 
(December 21, 1999).

Period of Investigation

    The period of investigation (POI) is October 1, 1998, through 
September 30, 1999. This period corresponds to the four most recent 
fiscal quarters prior to the month of the filing of the petition (i.e., 
October 1999).

Scope of Investigation \1\

    The scope of this investigation covers seamless stainless hollow 
products, including pipes, tubes, redraw hollows, and hollow bars, of 
circular cross section, containing 10.5 percent or more by weight 
chromium, regardless of production process, outside diameter, wall 
thickness, length, industry specification (domestic, foreign or 
proprietary), grade or intended use. Common specifications for the 
subject seamless stainless steel hollow products include, but are not 
limited to, ASTM-A-213, ASTM-A-268, ASTM-A-269, ASTM-A-270, ASTM-A-271, 
ASTM-A-312, ASTM-A-376, ASTM-A-498, ASTM-A-511, ASTM-A-632, ASTM-A-731, 
ASTM-A-771, ASTM-A-789, ASTM-A-790, ASTM-A-826 and their proprietary or 
foreign equivalents.
---------------------------------------------------------------------------

    \1\ On March 28, 2000, the petitioners requested that the scope 
of the investigation be amended to exclude certain products. This 
change is reflected in the current scope.
---------------------------------------------------------------------------

    The merchandise covered by this petition is found in the Harmonized 
Tariff Schedule of the United States (HTSUS) subheadings 7304.10.50.20, 
7304.10.50.50, 7304.10.50.80, 7304.41.30.05, 
7304.41.30.15,7304.41.30.45, 7304.41.60.05, 7304.41.60.15, 
7304.41.60.45, 7304.49.00.05, 7304.49.00.15, 7304.49.00.45, 
7304.49.00.60. Although HTSUS subheadings are provided for convenience 
and customs purposes, the written description of the merchandise is 
dispositive.
    Excluded from the scope of the investigation are finished oil 
country tubular goods certified to American Petroleum Institute (API) 
standard 5CT or 5D or to a proprietary OCTG specification if such OCTG 
products are (1) not certified, marked or otherwise warranted or 
qualified for use as a non-OCTG product; (2) produced to a common OCTG 
casing, tubing or drill pipe size as found in the standard size tables 
of API specifications 5CT and 5D, or produced to standard VIT sizes for 
deep-water temperature-controlled tubing; (3) rated for a minimum yield 
strength of not less than 85,000 psi and a minimum tensile strength of 
not less than 100,000 psi, as noted on the mill certificate or other 
relevant sales documentation; (4) continuously stenciled with the 
appropriate API and/or proprietary OCTG specification, size (e.g., 
outside diameter and weight), minimum yield and tensile strength, and 
the phrase ``OCTG,'' ``oil country tubular goods'' or a similar phrase, 
with such information also written on the entry documents; (5) not 
marked or otherwise certified as meeting a specification other than an 
API or proprietary OCTG specification whether or not also marked, 
warranted or certified to an OCTG specification; and (6) not used in 
any application other than a down-hole, OCTG application. Any OCTG 
products marked, certified or otherwise warranted for non-OCTG use, or 
actually used in a non-OCTG application, are within the scope of this 
investigation.
    Also excluded from the scope of this investigation is OCTG coupling 
stock that (1) is entered within the same entry as matching 
(complimentary) sizes and matching grades of exempted OCTG, or (2) is 
entered with documentation linking the entered OCTG coupling stock 
products to another entry of matching sizes and grades of OCTG, and (3) 
is actually used in the production of OCTG couplings or other OCTG 
accessories. All coupling stock that does not have such ``Mother-Child 
Traceability'' remains within the scope of the investigation, and 
coupling stock that is traceable remains within the scope if used in an 
application other than the production of OCTG couplings or accessories.
    Line pipe marked, produced, warranted, or certified only to API or 
proprietary line pipe specifications and used in a pipeline application 
is excluded from the scope of the investigation. Line pipe products are 
included in the scope if (1) marked, produced, warranted, or certified 
to one of the covered seamless stainless steel hollow products 
specifications listed above (or their proprietary or foreign 
equivalents), whether or not also certified to an API, proprietary, or 
foreign line pipe specification, or (2) are used in an application 
other than in an oil or gas pipeline.
    Also excluded are hollow drill bars and rods, classifiable under 
item number 7228.80 of the HTSUS.
    With regard to the excluded OCTG products, OCTG coupling stock, and 
line pipe used in oil or gas pipeline applications, the Department will 
not instruct Customs to require end-use certification until such time 
as petitioner or other interested parties provide a reasonable basis to 
believe or suspect that imports of these products are not being used 
for their intended purpose of OCTG or oil or gas line pipe

[[Page 25307]]

is occurring. If such information is provided, we will require end-use 
certification only for the product(s) (or specification(s)) for which 
the evidence demonstrates such new use. For example, if, based on 
evidence provided by petitioner, the Department finds a reasonable 
basis to believe or suspect that seamless pipe produced to a 
proprietary specification is being used in a non-OCTG application, we 
will require end-use certifications for imports of that specification. 
Normally we will require only the importer of record to certify to the 
end use of the imported merchandise. If it later proves necessary for 
adequate implementation, we may also require producers who export such 
products to the United States to provide such certification on invoices 
accompanying shipments to the United States.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual dumping margins for each known exporter and producer of the 
subject merchandise. However, section 777A(c)(2) of the Act gives the 
Department discretion, when faced with a large number of exporters/
producers, to limit its examination to a reasonable number of such 
companies if it is not practicable to examine all companies. Where it 
is not practicable to examine all known producers/exporters of subject 
merchandise, this provision permits the Department to investigate 
either: (1) a sample of exporters, producers, or types of products that 
is statistically valid based on the information available at the time 
of selection, or (2) exporters and producers accounting for the largest 
volume of the subject merchandise that can be reasonably examined.
    Upon consideration of the resources available to the Department, we 
determined that it was not practicable to examine all known producers/
exporters of the subject merchandise. Instead, because there were 
numerous producers/exporters of the subject merchandise during the POI, 
we selected as mandatory respondents the two with the greatest export 
volume, Sanyo and SMI. Together, they accounted for more than 50 
percent of all known exports of the subject merchandise during the POI 
from Japan. For a more detailed discussion of respondent selection in 
this investigation, see Respondent Selection Memorandum, dated December 
22, 1999.

Facts Available

    Sanyo did not respond to the Department's questionnaire. Section 
776(a)(2) of the Act provides that, if an interested party (A) 
withholds information that has been requested by the Department; (B) 
fails to provide such information in a timely manner or in the form or 
manner requested, subject to sections 782(c)(1) and (e) of the Act; (C) 
significantly impedes a proceeding under the antidumping statute; or 
(D) provides such information but the information cannot be verified, 
the Department shall, subject to subsection 782(d) of the Act, use 
facts otherwise available in reaching the applicable determination. 
Because Sanyo failed to respond to our questionnaire, pursuant to 
section 776(a)(2)(A) of the Act, we resorted to facts otherwise 
available to determine the dumping margins for this company.
    SMI responded to sections A through D of the Department's 
questionnaire, but did not respond to the Department's requests for 
information necessary to correct the deficiencies in its responses. For 
a detailed discussion of this issue, see Memorandum from Constance 
Handley to Holly Kuga, Re: Use of Facts Available, dated April 13, 
2000.
    Because SMI did not fully respond to our requests for information, 
without which we are unable to perform an analysis of its pricing 
practices or costs, we preliminarily determine that the use of facts 
available is appropriate, in accordance with section 776(a)(2)(A) of 
the Act.
    Section 776(b) of the Act provides that the Department may use an 
inference adverse to the interests of a party that has failed to 
cooperate by not acting to the best of its ability to comply with the 
Department's requests for information. See also Statement of 
Administrative Action accompanying the URAA, H.R. Rep. No. 103-316 at 
870 (1994) (SAA). Failure by Sanyo to respond to the Department's 
antidumping questionnaire constitutes a failure to act to the best of 
its ability to comply with a request for information, within the 
meaning of section 776 of the Act. Because Sanyo failed to act to the 
best of its ability to respond to the Department's request for 
information, the Department has preliminarily determined that, in 
selecting from among the facts otherwise available, an adverse 
inference is warranted for Sanyo.
    Likewise, SMI's failure to respond to the preponderance of the 
requests for information, constitutes a failure to act to the best of 
its ability. SMI did not provide the requested information even after 
being granted additional time when it failed to make a timely response. 
Therefore, the Department has preliminarily determined that, in 
selecting from among the facts otherwise available, an adverse 
inference is warranted for SMI.
    Because we were unable to calculate margins for the respondents, 
consistent with Department practice, we assigned to Sanyo and SMI the 
highest margin from the proceeding, which is the highest margin alleged 
in the petition. See, e.g., Notice of Preliminary Determinations of 
Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-
Quality Steel Products From Argentina, Japan and Thailand, 64 FR 60410, 
60414 (November 5, 1999). See Initiation Notice.
    Section 776(b) states that an adverse inference may include 
reliance on information derived from the petition. See also SAA at 829-
831. Section 776(c) of the Act provides that, when the Department 
relies on secondary information (such as the petition) in using the 
facts otherwise available, it must, to the extent practicable, 
corroborate that information from independent sources that are 
reasonably at its disposal.
    The SAA clarifies that ``corroborate'' means that the Department 
will satisfy itself that the secondary information to be used has 
probative value (see SAA at 870). The SAA also states that independent 
sources used to corroborate such evidence may include, for example, 
published price lists, official import statistics and customs data, and 
information obtained from interested parties during the particular 
investigation (see SAA at 870).
    We reviewed the adequacy and accuracy of the information in the 
petition during our pre-initiation analysis of the petition, to the 
extent appropriate information was available for this purpose. See 
Import Administration AD Investigation Initiation Checklist, dated 
November 15, 1999, for a discussion of the margin calculations in the 
petition. In addition, in order to determine the probative value of the 
margins in the petition for use as adverse facts available for purposes 
of this determination, we examined evidence supporting the calculations 
in the petition. In accordance with section 776(c) of the Act, to the 
extent practicable, we examined the key elements of the export price 
(EP) and normal value (NV) calculations on which the margins in the 
petition were based.
    Our review of the EP and NV calculations indicated that the 
information in the petition has

[[Page 25308]]

probative value, as certain information included in the margin 
calculations in the petition is from public sources concurrent, for the 
most part, with the POI (e.g., international freight and insurance, 
customs duty, interest rates). However, with respect to certain other 
data included in the margin calculations of the petition (e.g., gross 
United States and home market unit prices), neither the respondents nor 
other interested parties provided the Department with further relevant 
information, and the Department is aware of no other independent source 
of information that would enable it to further corroborate the 
remaining components of the margin calculation in the petition. The 
implementing regulation for section 776 of the Act, codified at 19 CFR 
351.308(c) states, ``[t]he fact that corroboration may not be 
practicable in a given circumstance will not prevent the Secretary from 
applying an adverse inference as appropriate and using the secondary 
information in question.'' Additionally, we note that the SAA at 870 
specifically states that, where ``corroboration may not be practicable 
in a given circumstance,'' the Department may nevertheless apply an 
adverse inference. Accordingly, we find, for purposes of this 
preliminary determination, that this information is corroborated to the 
extent practicable.

All Others Rate

    Section 735(c)(5)(B) of the Act provides that, where the estimated 
weighted-averaged dumping margins established for all exporters and 
producers individually investigated are zero or de minimis or are 
determined entirely under section 776 of the Act, the Department may 
use any reasonable method to establish the estimated all-others rate 
for exporters and producers not individually investigated. Our recent 
practice under these circumstances has been to assign, as the ``all 
others'' rate, the simple average of the margins in the petition. We 
have done so in this case. See, e.g., Notice of Final Determinations of 
Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-
Quality Steel Products From Argentina, Japan and Thailand, 65 FR 5520, 
5528 (February 4, 2000).

Suspension of Liquidation

    For entries of SSHP from Japan, we are directing the U.S. Customs 
Service to suspend liquidation of those entries that are entered, or 
withdrawn from warehouse, for consumption on or after the date of 
publication of this notice in the Federal Register. We are also 
instructing the Customs Service to require a cash deposit or the 
posting of a bond equal to the dumping margin, as indicated in the 
chart below. These instructions suspending liquidation will remain in 
effect until further notice.

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Sanyo Special Tube.........................................       156.81
Sumitomo Metal Industries..................................       156.81
All Others.................................................        62.14
------------------------------------------------------------------------

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final antidumping determination is 
affirmative, the ITC will determine whether these imports are 
materially injuring, or threaten material injury to, the U.S. industry. 
The deadline for that ITC determination would be the later of 120 days 
after the date of the preliminary determination or 45 days after the 
date of our final determination.

Public Comment

    Case briefs must be submitted no later than 30 days after the 
publication of this notice in the Federal Register. Rebuttal briefs 
must be filed within five business days after the deadline for 
submission of case briefs. A list of authorities used, a table of 
contents, and an executive summary of issues should accompany any 
briefs submitted to the Department. Executive summaries should be 
limited to five pages total, including footnotes.
    Section 774 of the Act provides that the Department will hold a 
hearing to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs, provided that such a 
hearing is requested by any interested party. If a request for a 
hearing is made in an investigation, the hearing will tentatively be 
held two days after the deadline for submission of the rebuttal briefs, 
at the U.S. Department of Commerce, 14th Street and Constitution 
Avenue, NW, Washington, DC 20230. Parties should confirm by telephone 
the time, date, and place of the hearing 48 hours before the scheduled 
time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request within 10 days of 
the publication of this notice. Requests should specify the number of 
participants and provide a list of the issues to be discussed. Oral 
presentations will be limited to issues raised in the briefs. If this 
investigation proceeds normally, we will make our final determination 
no later than 75 days after the date of issuance of this preliminary 
determination.
    This determination is published pursuant to sections 733(f) and 
777(i)(1) of the Act.

    Dated: April 21, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-10691 Filed 4-28-00; 8:45 am]
BILLING CODE 3510-DS-P