[Federal Register Volume 65, Number 122 (Friday, June 23, 2000)]
[Notices]
[Pages 39125-39128]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-15967]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-485-805]


Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Small Diameter Carbon and Alloy Seamless Standard, Line and 
Pressure Pipe From Romania

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

EFFECTIVE DATE: June 23, 2000.

FOR FURTHER INFORMATION CONTACT: Magd Zalok or Charles Riggle, Group 
II, Office 5, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
4162, (202) 482-0650, respectively.

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

FINAL DETERMINATION: We determine that certain small diameter carbon 
and alloy seamless standard, line and pressure pipe (small diameter 
seamless pipe) from Romania is being sold, or is likely to be sold, in 
the United States at less than fair value (LTFV), as provided in 
section 735 of the Act. The estimated margins of sales at LTFV are 
shown in the Suspension of Liquidation section of this notice.

Case History

    The preliminary determination in this investigation was issued on 
January 26, 2000. See Notice of Preliminary Determination of Sales at 
Less Than Fair Value and Postponement of Final Determination: Certain 
Small Diameter Carbon and Alloy Seamless Standard, Line and Pressure 
Pipe from Romania, 65 FR 5594 (February 4, 2000) (Preliminary 
Determination). On February 9, 2000, we received a letter from the 
Romanian Ministry of Commerce and Industry reiterating its earlier 
request that the Department grant the seamless pipe industry in Romania 
market-oriented industry (MOI) status. We conducted verifications of 
the questionnaire responses of the respondents Sota Communications 
Company (Sota) and Metal Business International S.R.L. (MBI), and their 
respective suppliers S.C. Silcotub, S.A. (Silcotub) and S.C. Petrotub, 
S.A. (Petrotub) from February 14 through February 29, 2000. On February 
7 and March 6, 2000, the respondents and the petitioners \1\ in this 
investigation requested a hearing, respectively. A hearing was held on 
April 18, 2000.
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    \1\ The petitioners in this investigation are Koppel Steel 
Corporation, Sharon Tube Company, U.S. Steel Group, Lorain Tubular 
Co. LLC (formally USS Kobe), Vision Metals, Inc. (Gulf States Tube 
Division) and the United Steel Workers of America.
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Scope of Investigation

    For purposes of this investigation, the products covered are 
seamless carbon and alloy (other than stainless) steel standard, line, 
and pressure pipes and redraw hollows produced, or equivalent, to the 
ASTM A-53, ASTM A-106, ASTM A-333, ASTM A-334, ASTM A-335, ASTM A-589, 
ASTM A-795, and the American Petroleum Institute (API) 5L 
specifications and meeting certain physical parameters, regardless of 
application. For a detailed description of the scope of this 
investigation, see the ``Scope of Investigation'' section of the Issues 
and Decision Memorandum for the Final Determination in the Antidumping 
Duty Investigation of Certain Small Diameter Carbon and Alloy Seamless 
Standard, Line and Pressure Pipe from Romania (Decision Memorandum), 
from Holly Kuga, Acting Deputy Assistant Secretary, Import 
Administration to Troy H. Cribb, Acting Assistant Secretary for Import 
Administration, dated June 19, 2000, which is on file in the Central 
Records Unit, room B-099 of the main Commerce Building and available on 
the Web at www.ita.doc.gov/import_admin/records/frn/. The scope of the

[[Page 39126]]

investigation has been amended since the preliminary determination.

Period of Investigation

    The period of this investigation (POI) comprises each exporter's 
two most recent fiscal quarters prior to the filing of the petition 
(i.e., October 1, 1998 through March 31, 1999).

Non-Market Economy Country

    The Department has treated Romania as a non-market-economy (NME) 
country in all past antidumping proceedings (see, e.g., Tapered Roller 
Bearings and Parts Thereof From Romania: Final Results of Antidumping 
Duty Administrative Review, 63 FR 36390 (July 6, 1998)). A designation 
as a NME remains in effect until it is revoked by the Department (see 
section 771(18)(C) of the Act). The respondents in this investigation 
have not requested a revocation of Romania's NME status and no further 
information has been provided that would lead to such a revocation. 
Therefore, we have continued to treat Romania as a NME in this 
investigation.
    When the Department is investigating imports from a NME, section 
773(c)(1) of the Act directs us to base normal value (NV) on the NME 
producer's factors of production, valued to the extent possible in a 
comparable market economy that is a significant producer of comparable 
merchandise. The sources of individual factor prices are discussed 
under the Normal Value section, below.

Market-Oriented Industry

    As stated in our preliminary determination, the two Romanian 
producers (i.e., Silcotub and Petrotub) and their respective trading 
companies (i.e., Sota and MBI), as well as the Romanian Ministry of 
Industry and Commerce, requested that the Department find the seamless 
pipe industry in Romania to be a MOI.
    The criteria for determining whether a MOI exists are: (1) There 
must be virtually no government involvement in setting prices or 
amounts to be produced; (2) the industry producing the merchandise 
under review should be characterized by private or collective 
ownership; and (3) market determined prices must be paid for all 
significant inputs, whether material or non-material, and for all but 
an insignificant portion of all inputs accounting for the total value 
of the merchandise. See Chrome-Plated Lug Nuts from the People's 
Republic of China; Final Results of Administrative Review, 61 FR 58514, 
58515-6 (November 15, 1996) (Lug Nuts). In addition, in order to make 
an affirmative determination that an industry in a NME country is a 
MOI, the Department requires information on virtually the entire 
industry. A MOI claim, and supporting evidence, must cover producers 
that collectively constitute the industry in question; otherwise, the 
MOI claim is dismissed. (See, e.g., Freshwater Crawfish Tailmeat from 
the People's Republic of China, Final Determination of Sales at Less 
than Fair Value, 62 FR 41347, 41353 (August 1, 1997) (Crawfish).)
    In our preliminary determination, we found that the Romanian 
seamless pipe industry does not meet the Department's criteria for an 
affirmative MOI finding because the information placed on the record 
shows that all of the known seamless pipe producers were owned 
primarily by the Romanian government during virtually the entire POI. 
Furthermore, we do not have sufficient information from S.C. Republica 
(Republica), a non-responding producer of the subject merchandise 
representing 20 percent of the seamless pipe industry in Romania. 
Therefore, we are unable to determine whether the Romanian government 
is involved in setting prices or amounts to be produced for a 
significant portion of the industry for which we have no information on 
the record. For a complete discussion of the Department's preliminary 
determination that the seamless pipe industry does not constitute a 
MOI, see the December 15, 1999, memorandum, Whether the Seamless Pipe 
Industry in Romania Should Be Treated as a Market-Oriented Industry, 
which is on file in B-099.
    Since the preliminary determination, we received no new information 
from either members of the Romanian seamless pipe industry or the 
Romanian government with respect to the MOI issue. Moreover, the 
Department conducted verifications of Silcotub's and Petrotub's 
respective questionnaire responses, and was able to confirm that these 
two producers were in fact owned primarily by the Romanian government 
during virtually the entire POI. Consequently, we find no new evidence 
on the record to warrant a change to the Department's position to not 
grant MOI status to the Romanian seamless pipe industry for purposes of 
the final determination. See Decision Memorandum, Comment 3.

Separate Rates

    It is the Department's policy to assign a single rate to all 
exporters of subject merchandise subject to investigation in a NME 
country unless an exporter can demonstrate that it is sufficiently 
independent so as to be entitled to a separate rate. For purposes of 
this ``separate rates'' inquiry, the Department analyzes each exporting 
entity under the test established in the Final Determination of Sales 
at Less Than Fair Value: Sparklers from the People's Republic of China, 
56 FR 20588 (May 6, 1991) (Sparklers), as amplified in Final 
Determination of Sales at Less Than Fair Value: Silicon Carbide from 
the People's Republic of China, 59 FR 22585 (May 2, 1994) (Silicon 
Carbide). Under this test, exporters in NME countries are entitled to 
separate, company-specific margins when they can demonstrate an absence 
of government control over exports, both in law (de jure) and in fact 
(de facto).
    In our preliminary determination, we found, according to the 
criteria identified in Sparklers and Silicon Carbide, that Sota and MBI 
had met the criteria for the application of separate antidumping duty 
rates. For a complete discussion of the Department's determination that 
Sota and MBI are entitled to separate rates, see the January 28, 2000, 
memorandum, Assignment of Separate Rates for Respondents in the 
Antidumping Duty Investigation of Certain Small Diameter Carbon and 
Alloy Seamless Standard, Line and Pressure Pipe from Romania, which is 
on file in the CRU. At verification, we found no discrepancies with the 
information provided in the questionnaire responses of Sota and MBI. We 
have not received any other information since the preliminary 
determination which would warrant reconsideration of our separate rates 
determinations with respect to these companies. Therefore, we continue 
to find that the responding companies in this investigation should be 
assigned individual dumping margins.

Romania-Wide Rate

    As in all NME cases, the Department implements a policy whereby 
there is a rebuttable presumption that all exporters or producers 
comprise a single exporter under common government control, the ``NME 
entity.'' The Department assigns a single NME rate to the NME entity, 
unless an exporter can demonstrate eligibility for a separate rate. 
Information on the record of this investigation indicates that Sota and 
MBI were the only Romanian exporters to the United States of the 
subject merchandise produced by Silcotub and Petrotub. Further, as 
noted above, although Republica produces the subject merchandise, we 
have confirmed with U.S. Customs that no subject merchandise produced 
by Republica was sold to the United States during the POI, either 
directly by Republica or through trading companies.

[[Page 39127]]

    Consistent with our preliminary determination, since all exporters/
producers of the subject merchandise sold to the United States during 
the POI responded to the Department's questionnaire, and we have no 
reason to believe that there are other non-responding exporters/
producers of the subject merchandise during the POI, we calculated a 
Romania-wide rate based on the weighted-average margins determined for 
Sota and MBI.

Fair Value Comparisons

    To determine whether sales of the subject merchandise by Sota and 
MBI to the United States were made at LTFV, we compared the export 
price (EP) to the NV, as described in the Export Price and Normal Value 
sections of this notice, below. In accordance with section 
777A(d)(1)(A)(i) of the Act, we compared POI-wide weighted-average EPs 
to weighted-average NVs.

Export Price

    We used EP methodology in accordance with section 772(a) of the 
Act, because Sota and MBI sold the subject merchandise directly to 
unaffiliated customers in the United States prior to importation, and 
CEP methodology was not otherwise appropriate.

1. Sota

    We calculated EP based on packed C&F prices to the first 
unaffiliated purchaser in the United States. Where appropriate, we made 
deductions from the starting price (gross unit price) for inland 
freight from the plant/warehouse to the port of embarkation, brokerage 
and handling in Romania, and ocean freight. Because certain domestic 
inland freight and brokerage and handling were provided by NME 
companies, we based those charges on surrogate rates from Indonesia and 
Egypt. (See the Normal Value section for further discussion.)

2. MBI

    We calculated EP based on packed FOB Romanian-port prices to the 
first unaffiliated purchaser in the United States. Where appropriate, 
we made deductions from the starting price (gross unit price) for 
inland freight from the plant/warehouse to the port of embarkation, and 
brokerage and handling in Romania. As with Sota, because certain 
domestic inland freight and brokerage and handling were provided by NME 
companies, we based those charges on surrogate rates from Indonesia and 
Egypt. (See the Normal Value section for further discussion.)

Normal Value

A. Surrogate Country

    Section 773(c)(4) of the Act requires the Department to value the 
NME producer's factors of production, to the extent possible, in one or 
more market economy countries that: (1) are at a level of economic 
development comparable to that of the NME country; and (2) are 
significant producers of comparable merchandise.
    For purposes of the final determination, we find that Indonesia 
remains the most appropriate surrogate country for Romania. Consistent 
with the Department's preliminary determination, we continue to use 
Indonesia as the surrogate country for Romania for purposes of the 
final determination because Indonesia is a significant producer of 
merchandise comparable to the subject merchandise and, contrary to 
other potential surrogate countries, provides reliable surrogate values 
for virtually all factors of production. For discussion and analysis 
regarding the surrogate country selection for Romania, see Comment 1 in 
the Decision Memorandum.

B. Factors of Production

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by the companies in Romania 
which produced seamless pipes for the exporters that sold seamless 
pipes to the United States during the POI. We calculated NV based on 
the same methodology used in the preliminary determination. For Sota, 
based on verification findings, we made corrections with respect to 
billets, scrap, lacquer, freight distance, and labor. For MBI, we made 
corrections based on our findings at verification with respect to 
strap, electricity, gas, and labor. For the preliminary determination, 
we used the financial statements of three Indonesian steel companies in 
order to determine the factory overhead, SG&A, and profit rates for the 
Romanian respondents. For the final determination, we have relied 
exclusively on the financial statements of one of the three companies, 
P.T. Krakatau. For a complete analysis of surrogate values, see the 
June 19, 2000, memorandum, Factors of Production Valuation for Final 
Determination, (Valuation Memorandum) on file in B-099.
    We valued labor using the method described in 19 CFR 351.408(c)(3).

Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by the respondents for use in our final 
determination. We used standard verification procedures including 
examination of relevant accounting and production records, and original 
source documents provided by the respondents.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this investigation are addressed in the June 19, 2000, Decision 
Memorandum which is hereby adopted by this notice. Attached to this 
notice as an appendix is a list of the issues which parties have raised 
and to which we have responded in the Decision Memorandum. Parties can 
find a complete discussion of all issues raised in this investigation 
and the corresponding recommendations in this public memorandum which 
is on file in B-099. In addition, a complete version of the Decision 
Memorandum can be accessed directly on the Web at www.ita.doc.gov/import_admin/records/frn. The paper copy and electronic version of the 
Decision Memorandum are identical in content.

Suspension of Liquidation

    Pursuant to section 735(c)(1)(B) of the Act, we are instructing the 
Customs Service to continue to suspend liquidation of all entries of 
certain small diameter carbon and alloy seamless standard, line and 
pressure pipe from Romania that are entered, or withdrawn from 
warehouse, for consumption on or after February 4, 2000, the date of 
publication of the Preliminary Determination. The Customs Service shall 
continue to require a cash deposit or the posting of a bond based on 
the estimated weighted-average dumping margins shown below. The 
suspension of liquidation instructions will remain in effect until 
further notice.
    We determine that the following weighted-average dumping margins 
exist for the period April 1, 1998 through March 31, 1999:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                        margin
                                                              percentage
------------------------------------------------------------------------
Sota Communication Co......................................        19.11
Metal Business International S.R.L.........................        11.08
Romania-wide rate..........................................       14.99
------------------------------------------------------------------------
The Romania-wide rate applies to all entries of the subject merchandise
  except for entries from exporters/producers that are identified
  individually above.

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
International Trade Commission (ITC) of our determination. As our final

[[Page 39128]]

determination is affirmative, the ITC will determine, within 45 days, 
whether these imports are causing material injury, or threat of 
material injury, to an industry in the United States. If the ITC 
determines that material injury or threat of injury does not exist, the 
proceeding will be terminated and all securities posted will be 
refunded or canceled. If the ITC determines that such injury does 
exist, the Department will issue an antidumping duty order directing 
Customs officials to assess antidumping duties on all imports of the 
subject merchandise entered, or withdrawn from warehouse, for 
consumption on or after the effective date of the suspension of 
liquidation.
    This determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Act.

    Dated: June 19, 2000.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration,

Appendix

List of Comments in the Issues and Decision Memorandum

I. General Issues
    Comment 1: Surrogate Country Selection and Sources of Surrogate 
Values
    Comment 2: SG&A, Profit and Overhead Calculation
    Comment 3: Market-Oriented Industry Issue
    Comment 4: Assignment of Dumping Margins to the Producers 
Instead of the Trading Companies
    Comment 5: Surrogate Value for Billets
    Comment 6: Surrogate Value for Labor
    Comment 7: Surrogate Value for Electricity
    Comment 8: Surrogate Value for Rail Freight
II. Issues Specific to S.C. Silcotub S.A.
    Comment 9: Scrap Factor Calculation
    Comment 10: Lacquer Factor Calculation
III. Issue Specific to S.C. Petrotub S.A.
    Comment 11: Electricity and Gas Factors Calculation

[FR Doc. 00-15967 Filed 6-22-00; 8:45 am]
BILLING CODE 3510-DS-P