[Federal Register Volume 65, Number 111 (Thursday, June 8, 2000)]
[Notices]
[Pages 36407-36410]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14502]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-506]


Notice of Preliminary Results of Antidumping Duty Administrative 
Review: Oil Country Tubular Goods From Canada

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

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[[Page 36408]]

SUMMARY: In response to a request from the respondent, Atlas Tube, Inc. 
(``Atlas''), the Department of Commerce (the ``Department'') is 
conducting an administrative review of the antidumping duty order on 
oil country tubular goods (``OCTG'') from Canada. This review covers 
one manufacturer/exporter, Atlas, and the period December 1, 1998 
through May 31, 1999. The period of review specified by the 
Department's opportunity to request administrative review was June 1, 
1998 through May 31, 1999. However, due to the fact that the Department 
is conducting a concurrent new shipper review of the same manufacturer/
exporter for the period June 1, 1998 through November 30, 1998, this 
administrative review only covers the remainder of the period, December 
1, 1998 through May 31, 1999. See Notice of Initiation of 
Administrative Review 64 FR 47167 (August 30, 1999).
    We have preliminarily determined the dumping margin for Atlas to be 
4.41 percent during the period December 1, 1998 through May 31, 1999. 
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.

EFFECTIVE DATE: June 8, 2000.

FOR FURTHER INFORMATION CONTACT: Mark Manning or Nithya Nagarajan, AD/
CVD Enforcement Group II, Office IV, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone 
(202) 482-3936 or (202) 482-5253 respectively.

SUPPLEMENTARY INFORMATION:

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 the current regulations at 19 CFR part 351 (1999).

Background

    The Department published an antidumping duty order on OCTG from 
Canada on June 16, 1986 (51 FR 21782) and an amended order on August 
19, 1986 (51 FR 29579). On June 9, 1999, the Department published an 
Opportunity to Request Review (64 FR 30,962). On June 30, 1999, Atlas 
Tube Inc., requested the Department initiate an administrative review 
pursuant to section 751(a)(1) of the Act, and 19 CFR 351.213(b)(2). We 
initiated this administrative review on August 30, 1999, (64 FR 47167) 
for the period December 1, 1998 through May 31, 1999.
    The Department issued its questionnaire on September 1, 1999, and 
received Atlas' response to Section A on September 20, 1999, Sections B 
and C on November 5, 1999, and supplemental responses on January 31, 
2000. After an analysis of Atlas' Section A, B, and C responses, and 
upon receipt of an allegation of below-cost sales from petitioners, 
Lone Star Steel Company and Maverick Tube Corporation, the Department 
initiated on January 6, 2000, an investigation to determine whether 
Atlas made sales below the cost of production (``COP''). Respondent 
submitted its Section D response on January 31, 2000, and supplemental 
Section D response on February 10, 2000.
    The Department is conducting this administrative review in 
accordance with section 751(a)(1) of the Act. Concurrent with the 
instant administrative review, the Department is also conducting a new 
shipper review of Atlas under section 751(a)(2)(B) of the Act. Pursuant 
to respondent's request, due to the fact that the new shipper review 
covers shipments through November 30, 1999, the administrative review 
of Atlas (which would normally cover the period June 1, 1998 through 
May 31, 1999) is limited to the examination of shipments during the 
period December 1, 1998 through May 31, 1999. See 19 CFR 351.214(j).

Scope of the Review

    The products covered by this review include shipments of OCTG from 
Canada. This includes American Petroleum Institute (``API'') 
specification OCTG and all other pipe with the following 
characteristics except entries which the Department determined through 
its end-use certification procedure were not used in OCTG applications: 
Length of at least 16 feet; outside diameter of standard sizes 
published in the API or proprietary specifications for OCTG with 
tolerances of plus \1/8\ inch for diameters less than or equal to 8\5/
8\ inches and plus \1/4\ inch for diameters greater than 8\5/8\ inches, 
minimum wall thickness as identified for a given outer diameter as 
published in the API or proprietary specifications for OCTG; a minimum 
of 40,000 PSI yield strength and a minimum 60,000 PSI tensile strength; 
and if with seams, must be electric resistance welded. Furthermore, 
imports covered by this review include OCTG with non-standard size wall 
thickness greater than the minimum identified for a given outer 
diameter as published in the API or proprietary specifications for 
OCTG, with surface scabs or slivers, irregularly cut ends, ID or OD 
weld flash, or open seams; OCTG may be bent, flattened or oval, and may 
lack certification because the pipe has not been mechanically tested or 
has failed those tests. This merchandise is currently classifiable 
under the Harmonized Tariff Schedules (HTS) item numbers 7304.20, 
7305.20, and 7306.20. The HTS item numbers are provided for convenience 
and U.S. Customs purposes. The written description remains dispositive.

Verification

    As provided in section 782(i) of the Act, we conducted 
verifications of the information provided by Atlas. We used standard 
verification procedures including; on-site inspection of the 
manufacturers' facilities, examination of relevant sales and financial 
records, and selection of relevant source documentation as exhibits. 
Our verification findings are detailed in the memoranda dated March 8, 
2000, the public versions of which are on file in the Central Records 
Unit, Room B099 of the Main Commerce building (CRU--Public File).

United States Price

    Atlas reported all United States sales of subject merchandise, as 
export price (``EP'') transactions sold to unaffiliated U.S. customers 
prior to importation.
    We calculated EP, in accordance with section 772(a) of the Act, 
because the merchandise was sold in the exporting country to the first 
unaffiliated purchaser in the United States prior to importation and 
constructed export price (``CEP'') methodology was not otherwise 
warranted, based on the facts of record. We based EP on the delivered 
price to unaffiliated purchasers in the United States. We adjusted the 
starting price by the amount Atlas reported for billing adjustments and 
made deductions from the starting price for discounts. We also made 
deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act; these included foreign inland freight, U.S. 
inland freight, and U.S. brokerage and handling charges.

Normal Value

    After testing: (1) Home market viability and (2) whether home 
market sales were at below-cost prices, we calculated normal value 
(``NV'') as

[[Page 36409]]

noted in the ``Price-to-Price Comparisons'' section of this notice.

1. Home Market Viability

    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 (i.e., 
the aggregate volume of home market sales of the foreign like product 
is equal to or greater than five percent of the aggregate volume of 
U.S. sales), we compared Atlas' volume of home market sales of the 
foreign like product to the volume of U.S. sales of the subject 
merchandise, in accordance with section 773(a)(1) of the Act. Because 
Atlas' aggregate volume of home market sales of the foreign like 
product was greater than five percent of its aggregate volume of U.S. 
sales for the subject merchandise, we determined that the home market 
was viable for Atlas.

2. Cost of Production Analysis

    On November 24, 1999, petitioners filed an allegation that Atlas 
made home market sales at prices that were below the COP. Our analysis 
of the allegation indicated that there were reasonable grounds to 
believe or suspect that Atlas had sold OCTG in the home market at 
prices less than the COP. As a result, pursuant to section 773(b) of 
the Act, we initiated a COP investigation on January 6, 2000, with 
respect to Atlas to determine whether sales were made at prices below 
the COP.
    We conducted the COP analysis described below.
A. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of Atlas' cost of materials and fabrication for the 
foreign like product, plus an amount for home market selling, general 
and administrative expenses (``SG&A''), including interest expenses, 
and packing costs.
B. Test of Home Market Sales Prices
    We compared the weighted-average 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 COP. In determining whether to disregard home market sales made 
at prices less than the COP, we examined whether: (1) Within an 
extended period of time, such sales were made in substantial 
quantities; and (2) such sales were made at prices which permitted the 
recovery of all costs within a reasonable period of time. On a product-
specific basis, we compared the COP to the home market prices, less any 
applicable movement charges and rebates.
C. Results of the COP Test
    Pursuant to section 773(b)(2)(C), where less than 20 percent of 
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 respondent's sales of a given 
product during the POR were at prices less than the COP, we determined 
such sales to be made in ``substantial quantities'' within an extended 
period of time in accordance with section 773(b)(1)(A) of the Act. In 
the instant case, we compared Atlas' home market prices to weighted-
average COPs for the POR, and determined that such sales were below 
cost and 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 such below-cost 
sales.

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 CEP transaction. The NV 
LOT 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 SG&A expenses and profit. With respect to U.S. price 
for EP transactions, the 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 the U.S. 
sales, we examined 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 home market sales at the LOT of the 
export transaction, we make a 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 (November 19, 1997).
    Atlas reported one customer category and one channel of 
distribution (i.e., sales to unaffiliated distributors) for its home 
market sales. For its EP sales, Atlas also reported one customer 
category and one channel of distribution (i.e., direct sales to 
unaffiliated distributors). Atlas claimed in its response that its EP 
sales were made at the same LOT as home market sales to unaffiliated 
distributors. For this reason, Atlas has not asked for a LOT adjustment 
to NV for comparison to its EP sales.
    In determining whether separate LOTs actually existed in the home 
market and U.S. market, we examined whether Atlas' sales involved 
different marketing stages (or their equivalent) based on the channel 
of distribution, customer categories and selling functions. Atlas 
reported that its selling functions for home market sales are arranging 
for freight, warehousing, and warranty service; however, we noted that 
Atlas did not report any warehouse or warranty expenses for home market 
sales during the POR. After reviewing the record evidence, we agree 
with Atlas that its home market sales comprise a single LOT.
    In analyzing Atlas' selling activities for its EP sales, we noted 
that the sales generally involved the same selling functions associated 
with the home market LOT described above. Atlas reported that these 
selling activities included arranging for freight, warehousing, and 
warranty services; however, we noted that Atlas did not report any 
warehouse or warranty expenses for U.S. market sales during the POR. 
Based upon the record evidence, we have determined that there is one 
LOT for all EP sales and that it is the same LOT as in the home market. 
Therefore, because we find the U.S. sales and home market sales are at 
the same LOT, we determine that a LOT adjustment under section 
773(a)(7)(A) is not warranted.

Price-to-Price Comparisons

    We calculated NV based on delivered prices to unaffiliated 
customers. The NV price was reported on a Goods and Services Tax-
exclusive basis. We adjusted the starting price by the amount Atlas 
reported for billing adjustments. We made deductions from the starting 
price for rebates, inland freight, and inland freight insurance. We 
made adjustments for differences in merchandise in accordance with 
section 773(a)(6)(C)(ii) of the Act. We made further adjustments, under 
section 773(a)(6)(C)(iii) of the Act, for differences in circumstances 
of sale for imputed credit expenses. Finally, we deducted home market 
packing costs and added U.S. packing costs in accordance with sections 
773(a)(6)(A) and (B) of the Act.

[[Page 36410]]

Currency Conversion

    Pursuant to section 773A(a) of the Act, we made currency 
conversions into U.S. dollars based on the exchange rates in effect on 
the dates of the U.S. sales as certified by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that a 4.41 
percent dumping margin exists for Atlas for the period December 1, 
1998, through May 31, 1999.
    The Department will disclose calculations performed within five 
days of the date of publication of this notice to the parties of this 
proceeding in accordance with 19 CFR 351.224(b). An interested party 
may request a hearing within thirty days of publication of these 
preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, 
will be held 44 days after the date of publication, or the first 
working day thereafter. Interested parties may submit case briefs and/
or written comments no later than 30 days after the date of publication 
of these preliminary results of review. Rebuttal briefs and rebuttals 
to written comments, limited to issues raised in such briefs or 
comments, may be filed no later than 37 days after the date of 
publication. The Department will issue 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 of publication 
of these preliminary results.
    Upon completion of this administrative review, the Department shall 
determine, and the Customs Service shall assess, antidumping duties on 
all appropriate entries. There was only one importer during the POR for 
merchandise sold by Atlas. We have calculated an importer-specific duty 
assessment rate based on the ratio of the total amount of antidumping 
duties calculated for the examined sales to the total entered value of 
examined sales. Atlas reported entered value by subtracting discounts, 
freight, and brokerage and handling costs from the its reported U.S. 
price. This rate will be assessed uniformly on all entries made during 
the POR. The Department will issue appraisement instructions directly 
to Customs.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of OCTG from Canada 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: (1) The cash deposit rate for Atlas will be the rate established 
in the final results of this administrative review; (2) for merchandise 
exported by manufacturers or 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 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; and (4) if neither the exporter nor the manufacturer 
is a firm covered in this or any previous review, the cash deposit rate 
will be 16.65 percent, 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 administrative review for a 
subsequent review period.
    This notice also 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).

    Dated: June 1, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-14502 Filed 6-7-00; 8:45 am]
BILLING CODE 3510-DS-P