[Federal Register Volume 66, Number 46 (Thursday, March 8, 2001)]
[Notices]
[Pages 13893-13895]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5628]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-506]


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

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

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

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SUMMARY: In response to a request from the respondent, Atlas Tube, Inc. 
(Atlas), the Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on oil country 
tubular goods (OCTG) from Canada. This review covers one manufacturer/
exporter, Atlas, and the period June 1, 1999 through December 31, 1999. 
The period of review (POR) specified by the Department's opportunity to 
request administrative review was June 1, 1999 through May 31, 2000. 
See Notice of Opportunity to Request Administrative Review of 
Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation 65 FR 38242 (June 20, 2000). However, the Department 
revoked this antidumping duty order effective January 1, 2000; 
therefore, this administrative review only covers the period June 1, 
1999 through December 31, 1999. See Notice of Revocation of Antidumping 
Duty Orders: Circular Welded Non-Alloy Steel Pipe and Tube from 
Venezuela; Small Diameter Standard and Rectangular Pipe and Tube from 
Singapore; and Oil Country Tubular Goods from Canada and Taiwan 65 FR 
50954 (August 22, 2000).
    We have preliminarily determined the dumping margin for Atlas to be 
6.56 percent.

EFFECTIVE DATE: March 8, 2001.

FOR FURTHER INFORMATION CONTACT: Nithya Nagarajan or Michele Mire, 
Office 4, Group II, AD/CVD Enforcement, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone 
(202) 482-5253 or (202) 482-4711 respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
current regulations at 19 CFR part 351 (2000).

Background

    The Department published an antidumping duty order on OCTG from 
Canada on June 16, 1986 (51 FR 21782) and an amended order on August 
19, 1986 (51 FR 29579). On June 20, 2000, the Department published an 
Opportunity to Request Administrative Review (65 FR 38242). On July 9, 
2000, Atlas Tube, Inc. requested the Department to initiate an 
administrative review pursuant to section 751(a)(1) of the Act, and 19 
CFR 351.213(b)(2). We initiated this administrative review on July 31, 
2000 (65 FR 46687) for the period June 1, 1999, through May 31, 2000. 
On August 22, 2000, the Department revoked the antidumping duty order 
effective January 1, 2000 (65 FR 50954). Due to the revocation of the 
antidumping duty order, we analyzed sales of the subject merchandise 
for the period June 1, 1999, through December 31, 1999, rather than the 
entire POR specified by the Department's opportunity to request 
administrative review.
    The Department issued its questionnaire on August 28, 2000, and 
received Atlas' responses to Sections A, B, C, and D (corporate 
structure, home market sales, U.S. sales, and cost of production/
constructed value, respectively) on October 30, 2000, and supplemental 
responses on December 21, 2000.
    The Department is conducting this administrative review in 
accordance with section 751(a)(1) of the Act.

Scope of the Review

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

United States Price

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

Normal Value

    After testing (1) home market viability and (2) whether home market 
sales were made at below-cost prices, we calculated normal value (NV) 
as noted in the ``Price-to-Price Comparisons'' section of this notice.

[[Page 13894]]

1. Home Market Viability

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

2. Cost of Production Analysis

    Section 773(b)(2)(A)(ii) of the Act provides that there are 
reasonable grounds to believe or suspect that sales of the foreign like 
product were made at prices that are less than the cost of production 
(COP) of the product if we disregarded some or all of a specific 
exporter's sales below COP in the last completed administrative review 
of that exporter. In the last administrative review of this order which 
covered the period December 1, 1998, through May 31, 1999, we found 
sales below COP for Atlas which were disregarded. See Notice of 
Preliminary Results of Antidumping Duty Administrative Review 65 FR 
36407, 36409 (June 8, 2000). As a result, the respondent provided COP 
information in response to Section D of the Department's antidumping 
duty questionnaire, on which we based our COP analysis as described 
below.
A. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of Atlas' cost of materials and fabrication for the 
foreign like product, plus an amount for home market selling, general 
and administrative expenses (SG&A), including interest expenses, and 
packing costs.
B. Test of Home Market Sales Prices
    We compared the weighted-average COP figures to home market sales 
of the foreign like product as required under section 773(b) of the 
Act, in order to determine whether these sales had been made at prices 
below COP. In determining whether to disregard home market sales made 
at prices less than the COP, we examined whether (1) within an extended 
period of time, such sales were made in substantial quantities, and (2) 
such sales were made at prices which permitted the recovery of all 
costs within a reasonable period of time. On a product-specific basis, 
we compared the COP to the home market prices, less any applicable 
movement charges and rebates.
C. Results of the COP Test
    Pursuant to section 773(b)(2)(C), where less than 20 percent of 
respondent's sales of a given product were at prices less than the COP, 
we did not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of respondent's sales of a given 
product during the POR were at prices less than the COP, we determined 
such sales to be made in ``substantial quantities'' within an extended 
period of time in accordance with section 773(b)(1)(A) of the Act. In 
the instant case, we compared Atlas' home market prices to weighted-
average COPs for the POR, and therefore determined that below-cost 
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)(1)(B) of the Act. Therefore, we disregarded such below-cost 
sales.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (LOT) as the EP or CEP transaction. The NV LOT 
is that of the starting-price sales in the comparison market or, when 
NV is based on constructed value (CV), that of the sales from which we 
derive SG&A expenses and profit. With respect to U.S. price for EP 
transactions, the LOT is also the level of the starting-price sale, 
which is usually from the exporter to the importer.
    To determine whether NV sales are at a different LOT than the U.S. 
sales, we examined stages in the marketing process and selling 
functions along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and home market sales at the LOT of the 
export transaction, we make a LOT adjustment under section 773(a)(7)(A) 
of the Act. See Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 
62 FR 61731 (November 19, 1997).
    Atlas reported one customer category and one channel of 
distribution (i.e., sales to unaffiliated distributors) for its home 
market sales. For its EP sales, Atlas also reported one customer 
category and one channel of distribution (i.e., direct sales to 
unaffiliated distributors). Atlas claimed in its response that its EP 
sales were made at the same LOT as home market sales to unaffiliated 
distributors. For this reason, Atlas has not asked for a LOT adjustment 
to NV for comparison to its EP sales.
    In determining whether separate LOTs actually existed in the home 
market and U.S. market, we examined whether Atlas' sales involved 
different marketing stages (or their equivalent) based on the channel 
of distribution, customer categories and selling functions. Atlas 
reported that its selling functions for home market sales are arranging 
for freight, warehousing, and warranty service; however, we noted that 
Atlas did not report any warehouse or warranty expenses for home market 
sales during the POR. After reviewing the record evidence for this 
current review, we agree with Atlas that its home market sales comprise 
a single LOT.
    In analyzing Atlas' selling activities for its EP sales, we noted 
that the sales generally involved the same selling functions associated 
with the home market LOT described above. Atlas reported that these 
selling activities included arranging for freight, warehousing, and 
warranty services; however, Atlas reported that it did not incur any 
warehouse or warranty expenses for U.S. market sales during the POR. 
Based upon the record evidence for this current review, we have 
determined that there is one LOT for all EP sales and that it is the 
same LOT as in the home market. Therefore, because we find that the 
U.S. sales and home market sales are at the same LOT, we determine that 
a LOT adjustment under section 773(a)(7)(A) is not warranted.

Price-to-Price Comparisons

    We calculated NV based on delivered prices to unaffiliated 
customers. The NV price was reported on a Goods and Services Tax-
exclusive basis. We adjusted the starting price by the amount Atlas 
reported for billing adjustments. We made deductions from the starting 
price for rebates, inland freight, and inland freight insurance. We 
made adjustments for differences in merchandise in accordance with 
section 773(a)(6)(C)(ii) of the Act. We made further adjustments, under 
section 773(a)(6)(C)(iii) of the Act, for

[[Page 13895]]

differences in circumstances of sale for imputed credit expenses. 
Finally, we deducted home market packing costs and added U.S. packing 
costs in accordance with sections 773(a)(6)(A) and (B) of the Act.

Currency Conversion

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

Preliminary Results of Review

    As a result of this review, we preliminarily determine that a 6.56 
percent dumping margin exists for Atlas for the period June 1, 1999 
through December 31, 1999.
    The Department will disclose the calculations we performed within 
five days of the date of publication of this notice to the parties of 
this proceeding in accordance with 19 CFR 351.224(b). An interested 
party may request a hearing within thirty days of publication of these 
preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, 
will be held 44 days after the date of publication, or the first 
working day thereafter. Interested parties may submit case briefs and/
or written comments no later than 30 days after the date of publication 
of these preliminary results of review. Rebuttal briefs and rebuttals 
to written comments, limited to issues raised in such briefs or 
comments, may be filed no later than 37 days after the date of 
publication. The Department will issue the final results of this 
administrative review, which will include the results of its analysis 
of issues raised in any such comments, within 120 days of publication 
of these preliminary results. Interested parties are invited to comment 
on these preliminary results. Parties who submit argument in this 
proceeding are requested to submit with the argument: (1) A statement 
of the issue; and (2) a brief summary of the argument. Further, we 
would appreciate it if parties submitting written comments also provide 
the Department with an additional copy of the public version of those 
comments on diskette.
    Upon completion of this administrative review, the Department shall 
determine, and the U.S. Customs Service (Customs) shall assess, 
antidumping duties on all appropriate entries. There was only one 
importer during the POR for merchandise sold by Atlas. We have 
calculated an importer-specific duty assessment rate based on the ratio 
of the total amount of antidumping duties calculated for the examined 
sales to the total entered value of examined sales. Atlas reported 
entered value by subtracting discounts, freight, and brokerage and 
handling costs from the reported U.S. price. Where the importer-
specific rate is above de minimis, we will instruct Customs to assess 
duties on that importer's entries of subject merchandise. The 
Department will issue appraisement instructions directly to Customs.
    Pursuant to section 751(d)(2) of the Act, on August 22, 2000, the 
Department revoked the antidumping duty order on OCTG from Canada, 
effective January 1, 2000 (65 FR 50954). Therefore, we instructed 
Customs to liquidate all entries of subject merchandise made on or 
after January 1, 2000, without regard to antidumping duties. Therefore, 
we will not issue cash deposit instructions to Customs based on the 
results of this 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 in accordance with 
sections 751(a)(1) and 777(i)(1). Effective January 20, 2001, Bernard 
T. Carreau is fulfilling the duties of Assistant Secretary for Import 
Administration.

    Dated: February 28, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-5628 Filed 3-7-01; 8:45 am]
BILLING CODE 3510-DS-P