[Federal Register Volume 65, Number 149 (Wednesday, August 2, 2000)]
[Notices]
[Pages 47398-47403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19551]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-557-809]


Notice of Preliminary Determination of Sales at Not Less Than 
Fair Value and Postponement of Final Determination: Stainless Steel 
Butt-Weld Pipe Fittings from Malaysia

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

EFFECTIVE DATE: August 2, 2000.

FOR FURTHER INFORMATION CONTACT: Becky Hagen or Rick Johnson, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230; telephone: (202) 482-3362 (Hagen) and (202) 482-3818 (Johnson).

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 
(``Department'') regulations are to the regulations at 19 CFR part 351 
(April 1999).

Preliminary Determination

    We preliminarily determine that stainless steel butt-weld pipe 
fittings (``pipe fittings'') from Malaysia are not being sold, nor are 
likely to be sold, in the United States at less than fair value 
(``LTFV''), as provided in section 733(b) of the Act.

Case History

    On January 18, 2000, the Department initiated antidumping 
investigations of stainless steel butt-weld pipe fittings from Germany, 
Italy, Malaysia and the Philippines. See Initiation of Antidumping Duty 
Investigation: Stainless Steel Butt-Weld Pipe Fittings from Germany, 
Italy, Malaysia and the Philippines, 65 FR 4595 (January 31, 2000) 
(``Notice of Initiation''). Since the initiation of this investigation 
the following events have occurred.
    The Department set aside a period for all interested parties to 
raise issues regarding product coverage (see Notice of Initiation at 
4596). A response was received from Coprosider S.p.A. (``Coprosider'') 
on February 1, 2000, agreeing with the scope of the investigation. On 
February 3, 2000, Wilh. Schulz GmbH and its affiliates (``Schulz'') 
submitted comments to the Department requesting that the scope be 
limited only to specification ASTM 403/403M fittings below 14 inches in 
diameter.
    On January 21, 2000, the Department issued proposed product 
concordance criteria to all interested parties. On February 4, 2000, 
the following interested parties submitted comments on our proposed 
product concordance criteria: Kanzen Tetsu Sdn. Bhd. (``Kanzen''); 
Coprosider; and Alloy Piping Products, Inc.; Flowline Division of 
Markovitz Enterprises, Inc.; Gerlin, Inc.; and Taylor Forge Stainless, 
Inc. (``petitioners''). On Feburary 8, 2000 and February 18, 2000, we 
received comments on our proposed product concordance criteria from 
Schulz.
    On February 14, 2000, the United States International Trade 
Commission (``ITC'') notified the Department of its affirmative 
preliminary injury determination on imports of subject merchandise from 
Germany, Italy, Malaysia and the Philippines. On February 24, 2000, the 
ITC published its preliminary determination that there is a reasonable 
indication that an industry in the United States is materially injured 
by reason of imports of the subject merchandise from Germany, Italy, 
Malaysia and the Philippines (65 FR 9298).
    On January 27, 2000, the Department issued Section A of its 
antidumping duty questionnaire to Kanzen, Schulz, and Amalgamated 
Industrial Stainless Steel Sdn. Bhd. (``AISS''). On February 10, 2000, 
the Department received responses to Question 1 of Section A from 
Kanzen and S.P. United Sdn. Bhd. (``SP United''). On February 14, 2000, 
the Department received a response to Question 1 of Section A from 
AISS, and on February 18, 2000, Schulz submitted a response to Question 
1 of Section A of the questionnaire. On February 24, 2000, Schulz, SP 
United, and Kanzen submitted responses to Section A of the 
questionnaire. On March 1, 2000, the Department determined that it 
would not be practicable to investigate all four Malaysian producers/
exporters, and therefore limited our examination to the largest 
producer/exporter, Kanzen (see ``Selection of Respondents'' section, 
below). On March 3, 2000, petitioners filed comments on Kanzen's 
Section A response. On March 8, 2000, the Department issued Sections B-
E of its antidumping duty questionnaire to Kanzen. On March 22, 2000, 
the Department issued a supplemental questionnaire for Kanzen's Section 
A response. Kanzen responded on April 5, 2000.
    On April 13, 2000, the Department published in the Federal Register 
a notice postponing the preliminary determination until July 26, 2000 
(Notice of Postponement of Preliminary Antidumping Duty Determinations: 
Stainless Steel Butt-weld Pipe Fittings from Germany, Italy, Malaysia 
and the Philippines (65 FR 19876)).
    Kanzen filed its Sections B and C response on May 1, 2000. On May 
15, 2000, petitioners filed comments on Kanzen's Section B and C and 
Section A supplemental questionnaire responses, and requested that the 
Department initiate a cost investigation. The Department issued a 
supplemental questionnaire on Sections B and C and initiated a cost 
investigation on May 26, 2000 (see Memorandum to Edward Yang, 
Petitioners' Allegation of Sales Below the Cost of Production for 
Kanzen Tetsu Sdn. Bhd., dated May 26, 2000). Kanzen submitted its 
Section B and C supplemental questionnaire responses on June 16, 2000. 
On June 23, 2000, Kanzen submitted its response to Section D of the 
questionnaire. Also, on June 23, 2000, petitioners submitted comments 
on Kanzen's June 16, 2000 Section B and C supplemental questionnaire 
responses. The Department issued a second supplemental questionnaire on 
Sections B and C on June 27, 2000. On June 30, 2000, petitioners 
submitted comments on Kanzen's Section D response. Also, on June 30, 
2000, petitioners alleged that critical circumstances exist with 
respect to imports of pipe fittings from Malaysia. On July 5, 2000, the 
Department requested that Kanzen report monthly U.S. shipment data 
(including total quantity and value figures) from 1998 through May 
2000. Kanzen submitted its responses to the second supplemental 
questionnaire on Sections B and C on July 10, 2000. On July 12, 2000, 
Kanzen submitted its monthly U.S. shipment data. On July 14, 2000, the 
Department issued a

[[Page 47399]]

supplemental questionnaire on Section D.

Postponement of Final Determination

    Pursuant to section 735(a)(2) of the Act, on May 24, 2000 Kanzen 
requested that, in the event of an affirmative preliminary 
determination in this investigation, the Department postpone its final 
determination until not later than 135 days after the date of the 
publication of an affirmative preliminary determination in the Federal 
Register. Kanzen also requested a two-month extension of the four-month 
limit on the imposition of provisional measures. Additionally, on May 
30, 2000, petitioners requested that, in the event of a negative 
preliminary determination in this investigation, the Department 
postpone its final determination until not later than 135 days after 
the date of the publication of an affirmative preliminary determination 
in the Federal Register. In accordance with Section 735(a)(2)(B) of the 
Act, because our preliminary determination is negative, we are granting 
petitioners' request and are postponing the final determination until 
no later than 135 days after the publication of this notice in the 
Federal Register. See also 19 CFR 351.210(b).

Scope of Investigation

    For purposes of this investigation, the product covered is certain 
stainless steel butt-weld pipe fittings. Certain stainless steel butt-
weld pipe fittings (``pipe fittings'') are under 14 inches in outside 
diameter (based on nominal pipe size), whether finished or unfinished. 
The product encompasses all grades of stainless steel and ``commodity'' 
and ``specialty'' fittings. Specifically excluded from the definition 
are threaded, grooved, and bolted fittings, and fittings made from any 
material other than stainless steel.
    The pipe fittings subject to this investigation are generally 
designated under specification ASTM A403/A403M, the standard 
specification for Wrought Austenitic Stainless Steel Piping Fittings, 
or its foreign equivalents (e.g., DIN or JIS specifications). This 
specification covers two general classes of fittings, WP and CR, of 
wrought austenitic stainless steel fittings of seamless and welded 
construction covered by the latest revision of ANSI B16.9, ANSI B16.11, 
and ANSI B16.28. Pipe fittings manufactured to specification ASTM A774, 
or its foreign equivalents, are also covered by these investigations.
    This investigation does not apply to cast fittings. Cast austenitic 
stainless steel pipe fittings are covered by specifications A351/A351M, 
A743/743M, and A744/A744M.
    The pipe fittings subject to this investigation are currently 
classifiable under subheading 7307.23.0000 of the Harmonized Tariff 
Schedule of the United States (HTSUS). Although the HTSUS subheadings 
are provided for convenience and customs purposes, the written 
description of the scope of this investigation is dispositive.

Period of Investigation

    The period of investigation (``POI'') is October 1, 1998 through 
September 30, 1999.

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 reasonable examined.
    We examined producer-specific data accounting for total POI exports 
of pipe fittings from Malaysia. We identified four companies who 
exported pipe fittings to the U.S. during the POI. Due to constraints 
on our time and resources, we found it impracticable to examine all 
four of them. Therefore, because its export volume accounted for the 
vast majority of all exports from Malaysia, we selected Kanzen as the 
mandatory respondent. For a more detailed discussion of respondent 
selection in this investigation, see Respondent Selection Memorandum, 
dated March 1, 2000.

Fair Value Comparisons

    To determine whether sales of pipe fittings from Malaysia to the 
United States were made at less than fair value, we compared the export 
price (``EP'') to the normal value (``NV''), as described in the 
``Export Price'' and ``Normal Value'' sections of this notice. In 
accordance with section 777A(d)(1)(A)(i) of the Act, we calculated 
weighted-average EPs for comparison to weighted-average NVs.

Transactions Investigated

A. 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 the respondent's 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. Since 
Kanzen's aggregate volume of home market sales of the foreign like 
product was less than five percent of its aggregate volume of U.S. 
sales for the subject merchandise, we determined that the home market 
was not viable. Therefore, we have based NV on third country (the 
United Kingdom) market (``foreign market'') sales in the usual 
commercial quantities and in the ordinary course of trade, since 
Kanzen's aggregate volume of sales of the foreign like product in the 
United Kingdom were more than five percent of its aggregate volume of 
U.S. sales of the subject merchandise, and as such, considered viable.

B. Date of Sale

    For both foreign market and U.S. transactions, Kanzen reported the 
date of the contract (i.e., order confirmation) as the date of sale, 
i.e., the date when price, quantity, and material specifications are 
finalized, because Kanzen stated that the contract confirms all major 
terms of sale--price, quantity, and product specification--as agreed to 
by Kanzen and the customer. Because the frequency of changes in price 
and quantity between contract and invoice date indicate that the 
essential terms of sale are fixed at the contract date, the Department 
preliminarily determines that the contract date is the most appropriate 
date to use for the date of sale.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondent covered by the description in the 
``Scope of the Investigation'' section, above, and sold in the foreign 
market during the POI, to be foreign like products for purposes of 
determining appropriate product comparisons to U.S. sales. Where there 
were no sales of identical merchandise in the foreign market to compare 
to U.S.

[[Page 47400]]

sales, we compared U.S. sales to the next most similar foreign like 
product on the basis of the characteristics and reporting instructions 
listed in the Department's March 9, 2000 questionnaire.

Export Price

    Section 772(a) of the Act defines export price as the price at 
which the subject merchandise is first sold (or agreed to be sold) 
before the date of importation by the producer or exporter of the 
subject merchandise outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States, as adjusted under subsection (c). 
Section 772(b) of the Act defines constructed export price as the price 
at which the subject merchandise is first sold (or agreed to be sold) 
in the United States before or after the date of importation by or for 
the account of the producer or exporter of such merchandise or by a 
seller affiliated with the producer or exporter, to a purchaser not 
affiliated with the producer or exporter, as adjusted under subsections 
(c) and (d). For purposes of this investigation, Kanzen has classified 
its sales as EP sales.
    We based our calculation on EP, in accordance with section 772(a) 
of the Act, because the subject merchandise was sold by the producer or 
exporter directly to the first unaffiliated purchaser in the United 
States prior to importation. We based EP on CIF U.S. port prices to 
unaffiliated purchasers in the United States. We made deductions from 
the starting price, where appropriate, for foreign inland freight 
(plant to port of exportation), brokerage and handling, credit, 
international freight, bank charges incurred by Kanzen, fumigation 
service charges, and marine insurance, in accordance with section 
772(c)(2)(A) of the Act.

Normal Value

    After testing whether the foreign market sales were made at below-
cost prices, we calculated NV as noted in the ``Price-to-Price 
Comparisons'' and ``Price-to-Constructed Value Comparison'' sections of 
this notice.

Cost of Production (``COP'') Analysis

    Based on the cost allegation submitted by petitioners on May 15, 
2000, and in accordance with section 773(b)(2)(A)(i) of the Act, the 
Department found reasonable grounds to believe or suspect that Kanzen 
had made sales in the foreign market at prices below the cost of 
producing the merchandise, in accordance with section 773(b)(1) of the 
Act. See Memorandum to Edward Yang, Petitioners' Allegation of Sales 
Below the Cost of Production for Kanzen Tetsu Sdn. Bhd., dated May 26, 
2000. As a result, the Department initiated an investigation to 
determine whether Kanzen made foreign market sales during the POI at 
prices below its COP within the meaning of section 773(b) of the Act. 
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 Kanzen's cost of materials and fabrication 
(``COM'') for the foreign like product, plus amounts for selling, 
general, and administrative expenses (``SG&A''), financial expense, and 
packing costs. For the preliminary results, we relied on Kanzen's 
submitted COM without adjustment. However, we did adjust the reported 
general and administrative (``G&A'') and financial expenses because we 
excluded certain offsets and expenses used to calculate the reported 
G&A and financial expense ratios. To calculate our revised G&A ratio, 
we excluded certain items from the reported numerator. In addition, we 
excluded packing and transportation expenses from the amount used as 
the denominator. To calculate each control number's (CONNUM's) G&A 
expense, we applied our revised G&A expense ratio to each CONNUM's 
reported cost of manufacturing. As for the calculation of our revised 
financial expense ratio, we disallowed the interest income offset that 
Kanzen had included in the reported numerator. In addition, we excluded 
packing and transportation expenses from the amount used as the 
denominator. To calculate each CONNUM's financial expense, we applied 
the revised financial expense ratio to each CONNUM's reported cost of 
manufacturing.

B. Test of Foreign Market Sales Prices

    We compared COP to foreign market sale prices 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. In 
determining whether to disregard foreign market sales made at prices 
below the COP, we examined whether such sales were made (1) within an 
extended period of time in substantial quantities, and (2) at prices 
which permitted the recovery of all costs within a reasonable period of 
time, in accordance with sections 773(b)(1)(A) and (B) of the Act. On a 
product-specific basis, we compared the COP to foreign market prices, 
less any applicable movement charges, discounts and rebates, and 
selling expenses.

C. Results of the COP Test

    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 POI 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)(2)(B) of the Act. Because we compared prices to POI or 
fiscal year average costs, 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)(2)(D) of 
the Act. Therefore, we disregarded the below-cost sales.

D. Calculation of Constructed Value (``CV'')

    In accordance with section 773(e)(1) of the Act, we calculated CV 
based on the sum of Kanzen's COM, SG&A, financial expense, packing and 
profit. As noted in the above COP section, we relied on Kanzen's 
submitted COM without adjustment. However, we did make adjustments to 
the reported G&A and financial expenses. In accordance with section 
773(e)(2)(A) of the Act, we based SG&A and profit on the amounts 
incurred and realized by Kanzen in connection with the production and 
sale of the foreign like product in the ordinary course of trade, for 
consumption in the foreign country.

Price-to-Price Comparisons

    For those product comparisons for which there were sales at prices 
above the COP, we based NV on prices to foreign market customers. We 
calculated NV based on FOB port of export prices to unaffiliated 
foreign market customers. We made adjustments to starting price, where 
appropriate, for billing adjustments. We made deductions for inland 
freight from the plant to the customer in accordance with section 
773(a)(6)(B) of the Act and bank charges incurred by Kanzen, in 
accordance with section 773(a)(6)(C)(iii) of the Act. Normally, we 
deduct foreign market packing costs and add U.S. packing costs, in 
accordance with section 773(a)(6); however, in the instant case, we did 
not deduct foreign market packing costs nor add U.S. packing costs 
because Kanzen has stated that there is

[[Page 47401]]

no difference between its foreign market and U.S. packing costs.

Price-to-CV Comparisons

    In accordance with section 773(a)(4) of the Act, we based NV on CV 
if we were unable to find a match of the foreign like product. We made 
adjustments to CV in accordance with section 773(a)(8) of the Act. For 
comparisons to EP, we made COS adjustments by deducting foreign market 
direct selling expenses and adding U.S. direct selling expense, in 
accordance with section 773(a)(6)(C)(iii) of the Act.

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 CV, that of the sales from which we derive SG&A and 
profit. For EP, 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 EP or CEP 
sales, 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 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 comparison-market sales at the LOT of 
the export transaction, we make an LOT adjustment under section 
773(a)(7)(A) of the Act.
    Kanzen did not request a LOT adjustment. To ensure that no such 
adjustment was necessary, in accordance with the principles discussed 
above, we examined information regarding the distribution systems in 
both the United States and foreign markets, including the selling 
functions, classes of customer, and selling expenses. Kanzen stated 
that both U.S. and foreign market customers' products are made to order 
and that it did not maintain inventory. Technical advice and warranty 
services were not provided to either the U.S. or foreign market 
customers. Kanzen also stated that it did not incur any advertising 
expenses during the POI for its sales to the U.S. and the foreign 
market.
    Regarding sales process, Kanzen stated that both the U.S. and 
foreign market customers normally solicited price quotations and 
available production capacity from Kanzen, via telephone or facsimile. 
Kanzen and the U.S. or foreign market customer then negotiated the 
terms of sales, after which the customer (U.S. or U.K.) would issue a 
purchase order to Kanzen based on the negotiated sales terms. If there 
were no discrepancies with the negotiated terms, Kanzen would then 
issue a contract, confirming the order. Kanzen did not use selling 
agents or pay commissions for its sales to the U.S. and foreign market. 
After production of the made-to-order fittings, they are shipped to the 
port near Kanzen's factory, loaded onto a vessel, and delivered 
directly to the United States or foreign market customer. At the time 
of shipment, Kanzen invoices both the United States and foreign market 
customer. Kanzen paid for freight and insurance for all its U.S. sales, 
while the foreign market customer paid for ocean freight and insurance. 
Additionally, while the foreign market customer takes title to the 
merchandise upon loading it onto the vessel, the U.S. customer takes 
title to the merchandise upon arrival at the U.S. port.
    In both the U.S. and foreign market, Kanzen reported one sales 
channel, to unaffiliated distributors. Therefore, we preliminarily 
conclude that sales to unaffiliated distributors constitute one LOT in 
the foreign market. Further, we preliminarily conclude that because the 
U.S. LOT and the foreign market LOT included similar selling functions, 
as described above, these sales are made at the same LOT. Therefore, a 
LOT adjustment for Kanzen is not appropriate.

Currency Conversion

    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.
    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. Further, section 773A(b) of the Act directs the Department to 
allow a 60-day adjustment period when a currency has undergone a 
sustained movement. A sustained movement has occurred when the weekly 
average of actual daily rates exceeds the weekly average of benchmark 
rates by more than five percent for eight consecutive weeks. (For an 
explanation of this method, see Policy Bulletin 96-1: Currency 
Conversions (61 FR 9434, March 8, 1996).)

Verification

    As provided in section 782(i) of the Act, we will verify all 
information relied upon in making our final determination.

Critical Circumstances

    On June 30, 2000, petitioners made a timely allegation that there 
is a reasonable basis to believe or suspect that critical circumstances 
exist with respect to imports of subject merchandise from Malaysia. 
According to section 733(e)(1) of the Act, if critical circumstances 
are alleged under section 733(e) of the Act, the Department must 
examine whether there is a reasonable basis to believe or suspect that: 
(A)(i) there is a history of dumping and material injury by reason of 
dumped imports in the United States or elsewhere of the subject 
merchandise, or (ii) the person by whom, or for whose account, the 
merchandise was imported knew or should have known that the exporter 
was selling the subject merchandise at less than its fair value and 
there was likely to be material injury by reason of such sales, and (B) 
there have been massive imports of the subject merchandise over a 
relatively short period. Section 351.206(h)(1) of the Department's 
regulations provides that, in determining whether imports of the 
subject merchandise have been ``massive,'' the Department normally will 
examine: (i) The volume and value of the imports; (ii) seasonal trends; 
and (iii) the share of domestic consumption accounted for by the 
imports. In addition, 19 CFR 351.206(h)(2) provides that an increase in 
imports of over 15 percent may be considered ``massive'' during the 
``relatively short period'' described in 19 CFR 351.206(i). Section 
351.206(i) of the Department's regulations defines ``relatively short 
period'' normally as the period beginning on the date the proceeding 
begins (i.e., the date the petition is filed) and ending at least three 
months later. Because we are not aware of any antidumping order in any 
country on pipe fittings from Malaysia, we find that there is no 
reasonable basis to believe or suspect that there is a history of 
dumping and material injury by reason of dumped imports in the United 
States or elsewhere of the subject merchandise. Therefore, we must look 
to whether there was importer knowledge under section 733(e)(1)(A)(ii) 
of the Act.

[[Page 47402]]

    In determining whether there is a reasonable basis to believe or 
suspect that an importer knew or should have known that the exporter 
was selling the pipe fittings at less than fair value, the Department's 
normal practice is to consider EP sales margins of 25 percent or more 
sufficient to impute knowledge of dumping. See Final Determination of 
Sales at Less Than Fair Value: Brake and Brake Rotors From the People's 
Republic of China, 62 FR 9160, 9164 (February 28, 1997). Since the 
company-specific margin for EP sales in our preliminary determination 
for pipe fittings is less than 25 percent for Kanzen, we have not 
imputed knowledge of dumping based on this margin. However, in 
determining whether there is a reasonable basis to believe or suspect 
that an importer knew or should have known that there was likely to be 
material injury by reason of dumped imports, the Department may look to 
the preliminary injury determination of the ITC. See Id. at 9164. If 
the ITC finds a reasonable indication of present material injury to the 
relevant U.S. industry, the Department normally determines that a 
reasonable basis exists to impute importer knowledge that there was 
likely to be material injury by reason of dumped imports. See Id. The 
ITC has found that a reasonable indication of present material injury 
exists in regard to Malaysia. See ITC Preliminary Determination. As a 
result, the Department has determined that there is a reasonable basis 
to believe or suspect that importers knew or should have known that 
there was likely to be material injury by reason of dumped imports in 
this case.
    In determining whether there are ``massive imports'' over a 
``relatively short period,'' the Department ordinarily bases its 
analysis on import data for at least the three months preceding (the 
``base period'') and following (the ``comparison period'') the filing 
of the petition. See 19 CFR 351.206(i). Imports normally will be 
considered massive when imports during the comparison period have 
increased by 15 percent or more compared to imports during the base 
period. See 19 CFR 351.206(h). On July 12, 2000, Kanzen submitted 
shipment information which shows that its imports did not increase by 
15 percent or more than during the comparison period (January-May, 
2000) from the level of the preceding five months. See Preliminary 
Determination Analysis Memorandum, dated July 26, 2000 (``Analysis 
Memorandum''). Therefore, we do not find that critical circumstances 
exist for Kanzen, since it did not have massive imports nor did it have 
a margin high enough to impute importer knowledge of dumping.
    Next, in accordance with the Department's practice, we have 
evaluated whether critical circumstances exist for the ``all others'' 
companies. We are unaware of any antidumping order against Malaysia on 
pipe fittings worldwide. Therefore, the Department must examine part 
(ii) of the first prong of the critical circumstances test for the 
``all others'' companies. Since the ``all others'' rate in our 
preliminary determination for pipe fittings is less than 25 percent, we 
have not imputed knowledge of dumping based on this margin.
    Finally, we have evaluated whether there are ``massive imports'' 
for the ``all others'' companies in terms of both the imports of the 
investigated company and country-specific import data. See Final 
Determination of Sales at Less Than Fair Value: Stainless Steel Sheet 
and Strip in Coils from Japan, 64 FR 30574, 30585 (June 8, 1999). As 
discussed above, an evaluation of Kanzen's shipment data did not show 
an increase of fifteen percent or more during the relevant comparison 
periods, and we therefore found that Kanzen's data provided no evidence 
of massive imports. In accordance with our decision in the Final 
Determination of Sales at Less Than Fair Value: Hot-Rolled Steel from 
Japan, 64 FR 24329 (May 6, 1999), we also considered U.S. customs data 
on overall imports from Malaysia of the products at issue. These 
statistics, however, include merchandise other than subject 
merchandise. As such, we have not relied on this data in making our 
``massive imports'' determination for ``all others.'' Based on our 
review of Kanzen's data on massive imports, we find that imports from 
uninvestigated exporters (e.g., ``all others'') were also not massive 
during the relevant comparison periods. Therefore, the Department 
determines that there are no critical circumstances with regard to 
``all other'' imports of pipe fittings from Malaysia.

Suspension of Liquidation

    Since the estimated weighted-average dumping margin for the 
examined company is 0.59 percent and therefore is de minimis, we are 
directing the Customs Service not to suspend liquidation of entries of 
stainless steel butt-weld pipe fittings from Malaysia. These 
instructions not suspending liquidation will remain in effect until 
further notice.

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our negative preliminary determination. If our final 
determination is affirmative, the ITC will determine within 75 days 
after the date of our final determination, whether these imports are 
materially injuring, or threaten material injury to, the U.S. industry.

Public Comment

    Case briefs for this investigation must be submitted no later than 
one week after the issuance of the verification reports. Rebuttal 
briefs must be filed within five 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. Further, we would appreciate it if parties 
submitting written comments would provide the Department with an 
additional copy of the public version of any such comments on diskette.
    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. In the event that the Department 
receives requests for hearings from parties to several stainless steel 
butt-weld pipe fittings cases, the Department may schedule a single 
hearing to encompass all those cases. 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 
participate if one is requested, must submit a written request within 
30 days of the publication of this notice. 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 135 days 
after the date of publication of this preliminary determination.
    This determination is issued and published in accordance with 
sections 733(d) and 777(i)(1) of the Act.


[[Page 47403]]


    Dated: July 26, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-19551 Filed 8-1-00; 8:45 am]
BILLING CODE 3510-DS-P