[Federal Register Volume 65, Number 236 (Thursday, December 7, 2000)]
[Notices]
[Pages 76609-76611]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31236]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-503]


Notice of Preliminary Results of Antidumping Duty Administrative 
Review: Iron Construction Castings from Canada

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

SUMMARY: In response to a request from respondent Canada Pipe Company 
Limited (``Canada Pipe''), the Department of Commerce (``the 
Department'') is conducting an administrative review of the antidumping 
duty order on iron construction castings (``ICCs'') from Canada. The 
period of review (``POR'') is March 1, 1999, through February 28, 2000. 
This review covers imports of ICC from one producer, Canada Pipe.
    We have preliminarily determined the dumping margin for Canada Pipe 
to be 7.07 percent.

EFFECTIVE DATE: December 7, 2000.

FOR FURTHER INFORMATION CONTACT: Nithya Nagarajan, AD/CVD Enforcement, 
Office IV, Group II, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
4243.

SUPPLEMENTARY INFORMATION:

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's regulations are 
to the current regulations at 19 CFR part 351 (2000).

Background

    On March 5, 1986, the Department published in the Federal Register 
(51 FR 7600) the antidumping duty order on ICC from Canada. On March 
16, 2000, the Department published in the Federal Register (65 FR 
14242) a notice of opportunity to request an administrative review of 
this antidumping duty order. On March 31, 2000, in accordance with 19 
CFR 351.213(b)(1), the respondent Canada Pipe requested that the 
Department conduct an administrative review of its exports of subject 
merchandise to the United States. We published the notice of initiation 
of this review on May 1, 2000 (65 FR 25303).

Scope of the Review

    The merchandise covered by the order consists of certain iron 
construction castings from Canada, limited to manhole covers, rings, 
and frames, catch basin grates and frames, cleanout covers and frames 
used for drainage or access purposes for public utility, water and 
sanitary systems, classifiable as heavy castings under Harmonized 
Tariff Schedule (HTS) item numbers 7325.10.0010, 7325.10.0020, and 
7325.10.0025. The HTS item number is provided for convenience and 
Customs purposes only. The written description remains dispositive.

Product Comparisons

    The ICC exported by Canada Pipe to the United States includes 
manhole sets, catch basin sets, and trench gates and is the identical 
merchandise sold by Canada Pipe in its home market in Canada. 
Therefore, we have compared U.S. sales to contemporaneous sales of 
identical or similar merchandise in Canada.

Export Price

    Section 772(a) of the Act defines export price (``EP'') as the 
price at which the subject merchandise is first sold before the date of 
importation by the exporter or producer outside the United States to an 
unaffiliated purchaser for exportation to the United States.
    Canada Pipe sells subject merchandise directly to its customers in 
the United States and uses its affiliate Bibby USA as the importer of 
record. The sales documentation on the record in this proceeding 
indicates that Canada Pipe's U.S. sales occurred in Canada between 
Canada Pipe and the unaffiliated U.S. purchaser. Specifically, we have 
found the following facts: (1) Bibby USA does not contact the U.S. 
customers; (2) Bibby Ste-Croix in Canada contacts the U.S. customers; 
(3) the U.S. customers send the purchase

[[Page 76610]]

order to Canada Pipe; (4) Canada Pipe makes all arrangements for 
shipping and delivery to the U.S. customers directly in Canada; (5) 
Canada Pipe invoices are issued and the U.S. customers pay Canada Pipe 
directly in Canada; and (6) Canada Pipe retains title to the 
merchandise until the point of delivery to the U.S. customers. Given 
these facts, we preliminarily determine that these sales were made in 
Canada by Canada Pipe and, thus, should be treated as EP transactions 
(see Cold-Rolled and Corrosion-Resistant Carbon Steel Flat Products 
from Korea, Final Results of Administrative Review, 65 FR 13359 (March 
13, 2000) and accompanying Decision Memorandum at Comment 12; and 
Porcelain-on-Steel Cookware from Mexico, Final Results of 
Administrative Review, 65 FR 30068 (May 10, 2000) and accompanying 
Decision Memorandum at Comment 2).
    We calculated an EP for all of Canada Pipe's sales because the 
merchandise was sold directly by Canada Pipe to the first unaffiliated 
purchaser in the United States prior to importation, and constructed 
export price (``CEP'') was not otherwise warranted based on the facts 
of record. We made deductions from the starting price for movement 
expenses in accordance with section 772(c)(2)(A) of the Act. These 
include foreign movement expense (inland freight), international 
freight, U.S. brokerage and U.S. duties. We also deducted the amount 
for billing adjustments from the starting price and added duty 
drawback, in accordance with section 772(c)(1)(B) of the Act.

Normal Value

    We compared the aggregate quantity of home market and U.S. sales 
and determined that the quantity of the company's sales in its home 
market was more than five percent of the quantity of its sales to the 
U.S. market. Consequently, in accordance with section 773(a)(1)(B) of 
the Act, we based normal value (``NV'') on home market sales, all of 
which were to unaffiliated customers.
    We calculated monthly weighted-average NVs based on ex-works or 
delivered prices to unaffiliated customers. We made adjustments to the 
starting price, where appropriate, for billing adjustments. We made 
deductions, where appropriate, from the starting price for early 
payment discounts, inland insurance, and inland freight. We made 
circumstance of sale (``COS'') adjustments, in accordance with section 
773(a)(6)(C)(iii) of the Act, for direct selling expenses, including 
credit expenses.

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 selling, general and administrative (``SG&A'') expenses 
and profit. With respect to U.S. price and EP transactions, the LOT is 
the level of the sale to the unaffiliated customer, and with respect to 
CEP transactions, the LOT is the level of the constructed sale from the 
exporter to the importer.
    To determine whether NV sales are at a different LOT than EP or CEP 
transactions, 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 a LOT adjustment under section 
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is 
more remote from the factory than the CEP level, and there is no basis 
for determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV under section 773(a)(7)(B) of 
the Act (the CEP-offset provision). 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).
    Canada Pipe reported that during the POR it sold subject 
merchandise through three channels of distribution in the home market: 
sales made by Canada Pipe directly to original equipment manufacturers 
(OEM) (Channel 1), sales from Canada Pipe directly to end-users 
(Channel 2), and sales from Canada Pipe to distributors (Channel 3). In 
examining the record, we found that Canada Pipe performs substantially 
similar selling functions (e.g. sales planning, advertising, technical 
service, etc.) for all three reported channels of distribution. Due to 
the proprietary nature of the examined selling functions, see 
Preliminary Determination: Level of Trade Analysis (Preliminary LOT 
Memorandum), dated concurrently with this notice, on file in Room B-099 
of the main Department of Commerce Building, the Central Records Unit 
(``CRU''). Based upon an analysis of the information provided on the 
record, we conclude that there is no difference in the selling 
functions performed by Canada Pipe in making sales through these three 
channels of distribution. Therefore, using the information on the 
record, the Department preliminarily determines that Canada Pipe makes 
all sales at the same LOT in the home market.

See Preliminary LOT Memorandum

    Canada Pipe reported two channels of distribution (i.e. sales to 
OEMs and sales to distributors) in the United States during the POR. In 
examining the record, we found that Canada Pipe performs substantially 
similar selling functions (e.g. sales planning, advertising, technical 
service, etc.) for both reported channels of distribution. Due to the 
proprietary nature of the examined selling functions, see Preliminary 
LOT Memorandum. Based upon an analysis of the information provided on 
the record, we conclude that there is no significant difference in the 
selling functions performed by Canada Pipe in making sales through both 
channels of distribution. Therefore, the Department preliminarily 
determines that Canada Pipe makes all sales at the same LOT in the 
United States market. See Preliminary LOT Memorandum.
    In order to determine whether sales in the United States are at a 
different LOT than sales in the home market, we reviewed the selling 
activities associated with the LOT in each market. We compared Canada 
Pipe's selling activities for U.S. EP transactions to the selling 
activities performed for the home market LOT sales by Canada Pipe (e.g. 
sales planning, advertising, technical service, etc.). We found that 
there was no significant difference in the selling functions performed 
for Canada Pipe's EP sales than for sales at the home market LOT, 
sufficient to constitute a difference in LOT. See Preliminary LOT 
Memorandum.
    As such, we have preliminarily determined that a LOT adjustment is 
not appropriate. See Preliminary LOT Memorandum.

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 the Review

    As a result of this review, we preliminarily determine that a 7.07

[[Page 76611]]

percent dumping margin exists for Canada Pipe for the period March 1, 
1999, through February 29, 2000. 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 30 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. Interested parties are invited to 
comment on these preliminary results. Parties who submit arguments are 
requested to submit with the argument (1) a statement of the issue and 
(2) a brief summary of the argument. Further, we would appreciate it if 
parties submitting written comments would also provide the Department 
with an additional copy of the public versions of those comments on 
diskette. 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. We have calculated importer specific duty 
assessment rates based on the ratio of the total amount of antidumping 
duties calculated for the examined sales to the total entered value of 
examined sales. Where the importer-specific assessment rate is above de 
minimus, we will instruct Customs to assess duties on that importer's 
entries of subject merchandise. 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 ICC 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 Canada Pipe 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 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 14.67 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) of the Act.

    Dated: December 1, 2000.
Troy H. Cribb,
Assistant Secretary for Import Administration.
[FR Doc. 00-31236 Filed 12-6-00; 8:45 am]
BILLING CODE 3510-DS-P