[Federal Register Volume 65, Number 176 (Monday, September 11, 2000)]
[Notices]
[Pages 54838-54840]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23255]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-835]


Oil Country Tubular Goods From Japan: Preliminary Results of 
Antidumping Duty Administrative Review and Final Partial Rescission of 
Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review and final partial rescission of antidumping duty 
administrative review.

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SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on oil country 
tubular goods (OCTGs) from Japan in response to requests by U.S. Steel 
Group (petitioner), respondent Sumitomo Metal Industries, Ltd. (SMI), 
and Dril-Quip Inc. (Dril-Quip), an importer of OCTGs. This review, 
initiated on September 24, 1999, covers exports of subject merchandise 
to the United States during the period August 1, 1998 through July 31, 
1999 and five respondents: Hallmark Tubulars Ltd. (Hallmark), Itochu 
Corp. (Itochu), Itochu Project Management Corp. (IPM), Nippon Steel 
Corp. (Nippon), and SMI (64 FR 53318; October 1, 1999).
    We have determined that SMI had no reviewable sales of subject 
merchandise during the period of review (POR) and that the review of 
SMI should therefore be rescinded. We also preliminarily determine that 
adverse facts available should be applied to the remaining respondents, 
which did not respond to our questionnaires. Interested parties are 
invited to comment on these preliminary results.

EFFECTIVE DATE: September 11, 2000.

FOR FURTHER INFORMATION CONTACT: Mark Hoadley, (202) 482-0666, or 
Thomas Gilgunn, (202) 482-0648, AD/CVD Enforcement, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington DC 
20230.
    Applicable Statute and Regulations: Unless otherwise stated, 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. In 
addition, unless otherwise stated, all citations to the Department's 
regulations are references to the regulations as codified at 19 CFR 
Part 351 (April 1999).

SUPPLEMENTARY INFORMATION:

Background

    On August 11, 1995, the Department published in the Federal 
Register (60 FR 41058) the antidumping duty order on OCTGs from Japan. 
On August 26, 1999, Dril-Quip, an importer of OCTGs, requested an 
administrative review of Hallmark, Itochu, IPM, and Nippon. On August 
31, 1999, petitioner and SMI requested that the Department conduct a 
review of SMI. The Department initiated this antidumping administrative 
review on September 24, 1999 (64 FR 53318; October 1, 1999). On October 
13, 1999, petitioner requested a duty absorption determination for SMI 
and its exporter, Sumitomo Corporation (SC). On November 30, 1999, the 
Department issued its antidumping duty questionnaire to all five 
respondents. On December 30, 1999, Nippon informed the Department that 
it would not participate in the review. After receiving the 
Department's antidumping questionnaires, Nippon, Itochu, IPM, and 
Hallmark failed to respond. The Department is conducting this review in 
accordance with section 751(a) of the Act.

Scope of Review

    The products covered by this order are OCTG, hollow steel products 
of circular cross-section, including oil well casing, tubing, and drill 
pipe, of iron (other than cast iron) or steel (both carbon and alloy), 
whether seamless or welded, whether or not conforming to American 
Petroleum Institute (API) or non-API specifications, whether finished 
or unfinished (including green tubes and limited service OCTG 
products). This scope does not cover casing, tubing, or drill pipe 
containing 10.5 percent or more of chromium. The products subject to 
this order are currently classified in the Harmonized Tariff Schedule 
of the United States (HTSUS) under item numbers: 7304.21.30.00, 
7304.21.60.30, 7304.21.60.45, 7304.21.60.60, 7304.29.10.10, 
7304.29.10.20, 7304.29.10.30, 7304.29.10.40, 7304.29.10.50, 
7304.29.10.60, 7304.29.10.80, 7304.29.20.10, 7304.29.20.20, 
7304.29.20.30, 7304.29.20.40, 7304.29.20.50, 7304.29.20.60, 
7304.29.20.80, 7304.29.30.10, 7304.29.30.20, 7304.29.30.30, 
7304.29.30.40, 7304.29.30.50, 7304.29.30.60, 7304.29.30.80, 
7304.29.40.10, 7304.29.40.20, 7304.29.40.30, 7304.29.40.40, 
7304.29.40.50, 7304.29.40.60, 7304.29.40.80, 7304.29.50.15, 
7304.29.50.30, 7304.29.50.45, 7304.29.50.60, 7304.29.50.75, 
7304.29.60.15, 7304.29.60.30, 7304.29.60.45, 7304.29.60.60, 
7304.29.60.75, 7305.20.20.00, 7305.20.40.00, 7305.20.60.00, 
7305.20.80.00, 7306.20.10.30, 7306.20.10.90, 7306.20.20.00, 
7306.20.30.00, 7306.20.40.00, 7306.20.60.10, 7306.20.60.50, 
7306.20.80.10, and 7306.20.80.50. Although the HTSUS subheadings are 
provided for convenience and customs purposes, our written description 
of the scope of this order is dispositive.

Preliminary Rescission of Review for SMI

    Based on SMI and SC's joint ownership in several corporations, we 
have found the two companies to be affiliated.\1\ Because of this 
finding, we

[[Page 54839]]

consider the relevant U.S. sales date to be the date of sale from SC's 
U.S. affiliate to the first unaffiliated U.S. customer, which is the 
U.S. affiliate's date of shipment.\2\ None of the U.S. sales reported 
by SC, however, has a sale date within the POR. Therefore, we are 
rescinding our review of sales of merchandise produced by SMI. We will 
instruct Customs to liquidate entries made during this POR of 
merchandise produced by SMI at the rate entered. For more detailed 
analysis, see Memorandum to the File, U.S. Sales by SC (August 30, 
2000).
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    \1\ The Department found SMI and SC to be affiliated in the 
previous review on this basis. Oil Country Tubular Goods From Japan; 
Preliminary Results and Rescission in Part of Antidumping Duty 
Administrative Review, 64 FR 48589, 48591 (Sept. 7, 1999); see also 
Memorandum from Barbara E. Tillman to Robert S. LaRussa, Affiliation 
of Sumitomo Metal Industries Ltd. and Sumitomo Corporation (Aug. 31, 
1999) (proprietary version). Neither SMI nor SC has placed 
information on the record of this review suggesting that the basis 
for this finding has changed. Petitioner, however, placed 
information on the record (Jan. 18, 2000) of this review indicating 
that SMI and SC's joint involvement has increased. Cf. Certain 
Welded Carbon Steel Pipes and Tubes from Thailand; Preliminary 
Results of Antidumping Duty Administrative Review, 62 FR 17590 
(April 10, 1997) (``Because we find no evidence on the record of 
this review to change this previous determination we do not consider 
Saha Thai/SAF to be affiliated with any U.S. importer.'').
    \2\ Invoicing takes place after the date of shipment. In 
accordance with Department policy, when invoice date falls after 
ship date, we use ship date as the date of sale. See, e.g., 
Structural Steel Beams from South Korea; Preliminary Determination 
of Sales at Less Than Fair Value and Postponement of Final 
Determination, 65 FR 6984, 6985 (Feb. 11, 2000); and, Certain Hot-
Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil; Final 
Determination of Sales at Less Than Fair Value, 64 FR 38756, 38768 
(July 19, 1999).
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Duty Absorption

    On October 13, 1999, petitioner requested that the Department 
determine whether antidumping duties had been absorbed during the POR 
by SMI or its exporter SC. Section 751(a)(4) of the Act provides that, 
during a review initiated two or four years after publication of the 
order, the Department, if requested, shall determine whether 
antidumping duties have been absorbed by a foreign producer or 
exporter, if the subject merchandise is sold in the United States 
through an affiliated importer. Because we have preliminarily 
determined to rescind the review of merchandise produced by SMI because 
of the absence of reviewable sales, the issue of duty absorption is 
moot.

Imports by Dril-Quip

    On January 14, 2000, Dril-Quip made a submission, with supporting 
documentation, arguing that the OCTGs it imported under temporary 
import bond (TIB), which were produced by Nippon and exported to the 
United States by Hallmark, were not entered for consumption in the 
United States and, therefore, not subject to antidumping duties. Dril-
Quip had, however, paid the cash deposit required by the Customs 
Service. Dril-Quip argued that its situation was analogous to that of 
Okura & Company, an importer of OCTGs from Japan involved in a previous 
review. See Oil Country Tubular Goods From Japan; Preliminary Results 
and Rescission in Part of Antidumping Duty Administrative Review, 64 FR 
48589 (Sept. 7, 1999) (presenting the facts of the Okura transaction 
and the Department's preliminary analysis and conclusions, unmodified 
in Oil Country Tubular Goods From Japan; Final Results of Antidumping 
Duty Administrative Review, 65 FR 15305 (March 22, 2000)).
    Section 632 of the Act and section 203 of the North American Free 
Trade Agreement (NAFTA) Act, 19 U.S.C. 1313 and 3333, respectively, 
implement Article 303 of the NAFTA, which addresses restrictions on 
drawback and duty deferral programs. See Statement of Administrative 
Action (NAFTA Act), H. Doc. No. 103-159, Vol. 1, 103d Cong., 1st 
Sess.476 (1993). Article 303.3 of the NAFTA requires that merchandise 
imported into a NAFTA country under a duty deferral program, such as 
TIB, and subsequently reexported to another NAFTA country shall be 
treated by the first NAFTA country as if it were entered for 
consumption at the time of reexportation. For this reason, Dril-Quip 
was correctly required by Customs to pay a cash deposit on its 
importation of OCTGs. Because Dril-Quip had consumption entries, they 
are subject to antidumping review and, if warranted, the assessment of 
antidumping duties. As part of such review, we must calculate the 
export price or constructed export price of the subject merchandise, in 
accordance with section 772 of the Act, if the parties under review 
sell subject merchandise to either an unaffiliated U.S. purchaser or an 
unaffiliated purchaser for export to the United States. Evidence on the 
record shows that Nippon's sale of the OCTG in question to Itochu was 
the first sale to an unaffiliated party for export to the United 
States. Furthermore, evidence on the record indicates that Itochu and 
IPM's subsequent sale to Hallmark was also a sale to an unaffiliated 
party for export to the United States. See business proprietary version 
of Memorandum from Joseph A. Spetrini to Troy H. Cribb, Applicability 
of Antidumping Duties to Dril-Quip, Inc.'s Temporary Import Bond 
Entries (August 30, 2000). However, as noted above, Nippon, Itochu, 
IPM, and Hallmark failed to respond to the Department's questionnaires. 
Consequently, as discussed below, the Department had no alternative but 
to apply an adverse facts available rate.

Application of Facts Available

    Section 776(a)(2) of the Act provides that if any 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; (C) significantly impedes an antidumping 
proceeding; or (D) provides such information but the information cannot 
be verified, the Department shall use the facts otherwise available 
(FA) in reaching the applicable determination under this title.
    As noted above, Nippon, Itochu, IPM, and Hallmark received 
questionnaires but did not respond to them, thereby withholding 
information requested by the Department. As such, consistent with 
sections 776(a)(2)(A) and (C) of the Act, we are forced to rely upon 
FA. Because these respondents have provided no information, sections 
782(d) and (e) are inapplicable. Furthermore, we determine that these 
respondents did not cooperate to the best of their abilities to our 
requests for information, and that, pursuant to section 776(b) of the 
Act, the use of adverse FA is appropriate. While only Nippon explicitly 
stated that they would not participate in this review, the other three 
non-responding companies did not answer our questionnaire. We have made 
similar findings earlier in this proceeding. See, e.g., Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination: Oil Country Tubular Goods From Japan, 60 FR 6506 
(Feb. 2, 1995) (``Given that neither Nippon nor Sumitomo responded to 
the Department's questionnaire, we find that they have not cooperated 
in this investigation''); and, Oil Country Tubular Goods From Japan; 
Notice of Partial Rescission of Antidumping Duty Administrative Review 
and Preliminary Results of Antidumping Administrative Review, 62 FR 
25889 (May 12, 1997) (OCTG Review 1) (using adverse FA with respect to 
NKK Corporation of Japan (NKK), which did not respond to our 
questionnaire after claiming that it had no sales during the POR).
    Under section 776(b) of the Act, adverse FA may include reliance on 
information derived from: (1) the petition, (2) a final determination 
in the investigation, (3) any previous review

[[Page 54840]]

under section 751 of the Act or determination under section 753 of the 
Act, or (4) any other information placed on the record. We have 
determined to use the highest rate determined in any segment of the 
proceeding, 44.20 percent.
    Section 776(c) of the Act provides that the Department shall, to 
the extent practicable, corroborate secondary information using 
independent sources reasonably at its disposal. The Statement of 
Administrative Action, H.R. Doc. No. 103-316, 870 (1994) (SAA) provides 
that ``corroborate'' means simply that the Department will satisfy 
itself that the secondary information to be used has probative value. 
See SAA, at 870.
    In accordance with section 776(c) of the Act, to corroborate 
secondary information the Department will, to the extent practicable, 
examine the reliability and relevance of the information to be used. In 
this case, we have chosen to use the highest rate from any segment of 
the proceeding, which has been the ``all others rate'' throughout this 
proceeding, was used as the best information available rate for Nippon 
and Sumitomo in the investigation, and was used as the adverse FA rate 
for NKK in a previous review of this order (see OCTG Review 1). We 
corroborated the rate, which was originally taken from the petition, in 
OCTG Review 1, explaining: ``That rate was based upon the difference 
between U.S. price of a representative OCTG product sold by one 
Japanese company and constructed value for that product. Our review of 
the information in the original petition pertaining to the price of the 
product and to the major inputs (e.g., iron ore, coke, scrap) and 
processes (ironmaking, steelmaking, and bloom and pipe production) used 
for the production of the final merchandise did not indicate that the 
analysis of the OCTG market in the petition is no longer appropriate to 
use as a basis for facts available.'' 62 FR at 25890. Nothing on the 
record of this review suggests that the rate we have selected does not 
represent reliable and relevant information. Moreover, because these 
four non-responding companies did not answer our questionnaire, we have 
no basis for comparing the circumstances of their sales, if they had 
any, to those facts submitted in the petition to ensure that the 
selected adverse FA rate is relevant. Furthermore, as this is the rate 
currently applicable to these respondents, we presume that if any of 
them could have demonstrated that its margin is lower, it would have 
participated and attempted to do so. Thus, in accordance with section 
776(c), we have corroborated this rate ``to the extent practicable.''

Preliminary Results of the Review

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

------------------------------------------------------------------------
                    Exporter/manufacturer                       Percent
------------------------------------------------------------------\1\---
Hallmark Tubulars Ltd.......................................      44.20
Itochu Corp.................................................      44.20
Itochu Project Management Corp..............................      44.20
Nippon Steel Corp...........................................     44.20
------------------------------------------------------------------------
\1\ Weighted-average margin percentage.

    Any interested party may request a hearing within 30 days of 
publication of this notice. Pursuant to 19 CFR 351.310(d), any hearing, 
if requested, will be held 44 days after the publication of this 
notice, or the first workday thereafter. Interested parties may submit 
case briefs within 30 days of the date of publication of this notice. 
Rebuttal briefs, which must be limited to issues raised in the case 
briefs, may be filed not later than 37 days after the date of 
publication. The Department will publish a notice of final results of 
this administrative review, which will include the results of its 
analysis of issues raised in any such comments, not later than 120 days 
after the date of publication of this notice.
    Upon issuance of the final results of review, the Department shall 
determine, and the Customs Service shall assess, antidumping duties on 
all appropriate entries. Upon completion of this review, the Department 
will issue appraisement instructions directly to the Customs Service.
    Furthermore, the following deposit rates will be effective upon 
publication of the final results of these reviews for all shipments of 
OCTGs from Japan entered, or withdrawn from warehouse, for consumption 
on or after the publication date, as provided for by section 
751(a)(2)(C) of the Act: (1) The cash deposit rate for the reviewed 
companies will be the rates established in the final results of these 
reviews; (2) for merchandise exported by manufacturers or exporters not 
covered in these reviews but covered in the original investigation of 
sales at less than fair value (LTFV) or a previous review, the cash 
deposit 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 
or a previous 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) 
for all other producers and/or exporters of this merchandise, the cash 
deposit rate shall be 44.20 percent, the ``all others'' rate 
established in the LTFV investigation (58 FR 7531, February 8, 1993).
    These deposit rates, when imposed, shall remain in effect until 
publication of the final results of the next administrative review. 
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 issued and published in 
accordance with sections 751(a)(1) and (a)(2)(C) of the Act (19 USC 
1675(a)(1) and (a)(2)(C)), and 19 CFR 351.221(b)(4).

    Dated: August 30, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-23255 Filed 9-8-00; 8:45 am]
BILLING CODE 3510-DS-P