[Federal Register Volume 66, Number 134 (Thursday, July 12, 2001)]
[Notices]
[Pages 36555-36560]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17485]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-816]


Certain Stainless Steel Butt-Weld Pipe Fittings From Taiwan: 
Preliminary Results of Antidumping Duty Administrative Review

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

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

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SUMMARY: In response to a request from respondent Ta Chen Stainless 
Pipe Co., Ltd. (``Ta Chen'') and Markovitz Enterprises, Inc. (Flowline 
Division), Alloy Piping Products Inc., Gerlin, Inc., and Taylor Forge 
(``Petitioners''), the Department of Commerce (``Department'') is 
conducting an administrative review of the antidumping duty order on 
certain stainless steel butt-weld pipe fittings from Taiwan. This 
review covers one manufacturer and exporter of the subject merchandise. 
The period of review (``POR'') is June 1, 1999 through May 31, 2000. We 
preliminarily determine that sales have been made below normal value 
(``NV''). If these preliminary results are adopted in our final results 
of administrative review, we will instruct the U.S. Customs Service to 
assess antidumping duties on entries of Ta Chen's merchandise during 
the period of review, in accordance with the Department's regulations 
(19 CFR 351.106 and 351.212(b)). The preliminary results are listed in 
the section titled ``Preliminary Results of Review,'' infra.

EFFECTIVE DATE: July 12, 2001.

FOR FURTHER INFORMATION CONTACT: Alex Villanueva or James C. Doyle, 
Enforcement Group III--Office 9, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-
6412 and (202) 482-0159, respectively.

Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``the Act''), are to the provisions effective January 
1, 1995, the effective date of the amendments made to the Act by the 
Uruguay Round Agreements Act (``URAA''). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to 19 CFR 
Part 351 (1999).

Background

    On June 16, 1993, the Department published in the Federal Register 
the antidumping duty order on certain stainless steel butt-weld pipe 
fittings from Taiwan. See Amended Final Determination and Antidumping 
Duty Order: Certain Stainless Steel Butt-Weld Pipe and Tube Fittings 
from Taiwan 58 FR 33250 (June 16, 1993). On June 20, 2000, we published 
in the Federal Register a notice of opportunity to request an 
administrative review of the antidumping duty order on certain 
stainless steel butt-weld pipe fittings from Taiwan covering the period 
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). On 
June 20, 2000, respondent, Ta Chen, requested that the Department 
conduct an administrative review of Ta Chen for the period of June 1, 
1999 through May 31, 2001. On June 30, 2000, Petitioners requested that 
the Department conduct an administrative review of Ta Chen for the 
period of June 1, 1999 through May 31, 2000. On July 31, 2000, the 
Department published a notice of initiation of this antidumping duty 
administrative review for the period of June 1, 1999 through May 31, 
2000. See Notice of Initiation of Antidumping or Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part 65 FR 46687 
(July 31, 2000).
    On October 26, 2000, the Department issued its antidumping 
questionnaire to Ta Chen. On November 27, 2000, Ta Chen reported that 
it made sales of subject merchandise to the United States during the 
period of review (``POR'') in its response to Section A of the 
Department's questionnaire. On December 26, 2000, Ta Chen submitted its 
response to Sections B, C, and D of the Department's questionnaire. On 
January 2, 2001, Ta Chen submitted a page which was missing from its 
December 26, 2000 Sections B, C, and D of the Department's 
questionnaire. On January 8, 2001, the Department issued to Ta Chen a 
supplemental questionnaire to Section A of the Department's 
questionnaire. On February 5, 2001, the Department issued to Ta Chen a 
supplemental questionnaire on Sections B, C, and D of the Department's 
questionnaire. On February 6, 2001, Ta Chen submitted its supplemental 
response to Section A of the Department's questionnaire. On March 5, 
2001, Ta Chen submitted its supplemental responses to Sections B, C, 
and D of the Department's questionnaire. On March 8, 2001, Ta Chen 
submitted a corrected narrative to the Department's supplemental 
Sections B, C, and D questionnaire. On March 15, 2001, the Department 
issued to Ta Chen the second supplemental questionnaire to Section A of 
the Department's questionnaire. On April 6, 2001, Ta Chen submitted its 
response to the second supplemental questionnaire to Section A of the 
Department's questionnaire. On April 9, 2001, Ta Chen submitted 
additional information it claimed was inadvertently omitted from its 
response to the Department's second Section A supplemental 
questionnaire. On April 12, 2001, the Department issued a third Section 
A supplemental questionnaire. On April 23, 2001, Ta Chen submitted its 
response to the third supplemental Section A response of the 
Department's questionnaire. On May 4, 2001, the Department issued to Ta 
Chen a fourth supplemental questionnaire to Section

[[Page 36556]]

A. On May 11, 2001, Ta Chen submitted its response to the fourth 
supplemental Section A of the Department's questionnaire.
    Pursuant to section 751(a)(3)(A) of the Act, the Department may 
extend the deadline for completion of an administrative review if it 
determines that it is not practicable to complete the review within the 
statutory time limit of 245 days. On January 9, 2001, the Department 
extended the time limits for these preliminary results by 90 days to 
June 1, 2001 in accordance with the Act. See Notice of Postponement of 
Preliminary Results of Antidumping Duty Administrative Review: Certain 
Stainless Steel Butt-Weld Pipe Fittings from Taiwan, 66 FR 1644 
(January 9, 2001). On March 15, 2001, the Department further extended 
the time limits for these preliminary results by 30 days to July 2, 
2001 in accordance with the Act. See Notice of Postponement of 
Preliminary Results of Antidumping Duty Administrative Review: Certain 
Stainless Steel Butt-Weld Pipe Fittings from Taiwan, 66 FR 15078 (March 
15, 2001).
    The Department is conducting this administrative review in 
accordance with section 751 of the Act.

Scope of the Review

    The products subject to this administrative review are certain 
stainless steel butt-weld pipe fittings, whether finished or 
unfinished, under 14 inches inside diameter. Certain welded stainless 
steel butt-weld pipe fittings (``pipe fittings'') are used to connect 
pipe sections in piping systems where conditions require welded 
connections. The subject merchandise is used where one or more of the 
following conditions is a factor in designing the piping system: (1) 
Corrosion of the piping system will occur if material other than 
stainless steel is used; (2) contamination of the material in the 
system by the system itself must be prevented; (3) high temperatures 
are present; (4) extreme low temperatures are present; and (5) high 
pressures are contained within the system.
    Pipe fittings come in a variety of shapes, with the following five 
shapes the most basic: ``elbows'', ``tees'', ``reducers'', ``stub 
ends'', and ``caps.'' The edges of finished pipe fittings are beveled. 
Threaded, grooved, and bolted fittings are excluded from this review. 
The pipe fittings subject to this review are classifiable under 
subheading 7307.23.00 of the Harmonized Tariff Schedule of the United 
States (``HTSUS'').
    Although the HTSUS subheading is provided for convenience and 
customs purposes, our written description of the scope of this review 
is dispositive. Pipe fittings manufactured to American Society of 
Testing and Materials specification A774 are included in the scope of 
this order.

Period of Review

    The POR for this administrative review is June 1, 1999 through May 
31, 2000.

Verification

    As provided in section 782(i) of the Act, from May 28, 2001 to June 
1, 2001, the Department verified sales, cost and production information 
provided by Ta Chen, using standard verification procedures, including 
an examination of relevant sales, financial and production records, and 
selection of original documentation containing relevant information. 
Our verification results are outlined in the public versions of the 
verification reports and are on file in the Central Records Unit 
(``CRU'') located in room B-099 of the main Department of Commerce 
Building, 14th Street and Constitution Avenue, NW., Washington, DC. For 
changes to Ta Chen's expenses based on verification findings, see Facts 
Available section below.

Product Comparison

    In accordance with section 771(16) of the Act, we considered all 
pipe fittings produced by Ta Chen, covered by the description in the 
``Scope of Review'' section of this notice, supra, and sold in the home 
market during the POR to be foreign like products for the purpose of 
determining appropriate product comparisons to pipe fittings sold in 
the United States. In making the product comparisons, we matched 
foreign like products based on the physical characteristics reported by 
Ta Chen as follows (listed in order of preference): specification, 
seam, grade, size and schedule.
    As in the 1998-1999 administrative review (``98/99 review''), the 
record shows that Ta Chen both purchased from, and entered into tolling 
arrangements with, two unaffiliated Taiwanese manufacturers of subject 
merchandise. See Section A questionnaire response at 2. Also as in the 
98/99 review, there was no evidence on the record that either 
manufacturer had knowledge that these fittings would be sold into the 
United States market. See Certain Stainless Steel Butt-Weld Pipe 
Fittings from Taiwan: Final Results of the Antidumping Duty 
Administrative Review, (``98/99 Final'') 65 FR 81827 (December 27, 
2000). A final unchanged fact from the 98/99 review is that the 
Department was able to segregate purchased from tolled fittings for 
certain fittings, but not for others. Id. These two factors were the 
key considerations in the following precedents, which contained similar 
fact patterns: Dynamic Random Access Memory Semiconductors of One 
Megabit or Above from the Republic of Korea: Final Results of 
Antidumping Duty Administrative Review, Partial Rescission of 
Administrative Review and Notice of Determination Not to Revoke Order, 
63 FR 50867, 50876 (Sept. 23, 1998); Notice of Preliminary Results and 
Partial Rescission of Antidumping Duty Administrative Review: Certain 
Pasta From Italy, 64 FR 43152, 43154 (Aug. 9, 1999); Notice of Final 
Results of Antidumping Duty Administrative Review: Certain Pasta from 
Italy, 65 FR 7349, 7356-57 (Feb. 14, 2000); and 98/99 Final and 
accompanying Decision Memo at Comment 6. (``Issues and Decision 
Memo''). Therefore, although the Department is able to separate out a 
significant portion of the sales of purchased fittings, we have 
determined that it is not appropriate to extract such sales from Ta 
Chen's U.S. sales database because we have no evidence on the record 
that the outside producers had knowledge that their subject fittings 
were destined for sale by Ta Chen in the U.S. market. However, section 
771(16) of the Act defines ``foreign like product'' to be ``[t]he 
subject merchandise and other merchandise which is identical in 
physical characteristics with, and was produced in the same country by 
the same person as, that merchandise.'' Thus, consistent with the 
Department's past practice, we have restricted the matching of products 
which Ta Chen has identified with certainty that it purchased from an 
outside producer and resold in the U.S. market to identical or similar 
products purchased by Ta Chen from the same outside producer and resold 
in the home market. Id; and Analysis Memorandum for Certain Stainless 
Steel Butt-Weld Pipe Fittings from Taiwan: Preliminary Results of the 
1999-2000 Administrative Review of Certain Stainless Steel Butt-Weld 
Pipe Fittings from Taiwan (``Analysis Memo'') at 2-3. Finally, where 
there were no sales of identical merchandise in the home market to 
compare to U.S. sales, we compared U.S. sales to the next most similar 
foreign like product on the basis of the physical characteristics or to 
constructed value (``CV''), as appropriate.

Date of Sale

    The Department's regulations state that the Department will 
normally use

[[Page 36557]]

the date of invoice, as recorded in the exporter's or producer's 
records kept in the ordinary course of business, as the date of sale. 
See 19 CFR 351.401(i). If Commerce can establish ``a different date 
[that] better reflects the date on which the exporter or producer 
establishes the material terms of sale,'' Commerce may choose a 
different date. Id.
    In the present review, Ta Chen claimed that invoice date should be 
used as the date of sale in both the home market and U.S. market. See 
Ta Chen's Sections B, C, and D responses at 2-4 (December 26, 2000). 
Moreover, Ta Chen did not indicate any industry practice which would 
warrant the use of a date other than invoice date in determining date 
of sale.
    Accordingly, we have no information demonstrating that another date 
is more appropriate, and we preliminarily based date of sale on invoice 
date recorded in the ordinary course of business by the involved 
sellers and resellers of the subject merchandise in accordance with 19 
CFR 351.401(i).

Fair Value Comparisons

    To determine whether sales of subject merchandise by Ta Chen to the 
United States were made at below NV, we compared, where appropriate, 
the CEP to the NV, as described below. Pursuant to section 777A(d)(2) 
of the Act, we compared the CEPs of individual U.S. transactions to the 
monthly weighted-average NV of the foreign like product where there 
were sales at prices above the cost of production (``COP''), as 
discussed in the Cost of Production Analysis section, below. For a 
further discussion of the EP sales reclassification to CEP, see below.

Export Price/Constructed 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 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.* * *'' 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.* 
* *''
    In the instant case, all of the sales at issue were ``back-to-
back'' sales; that is, Ta Chen sold pipe fittings to Ta Chen's U.S. 
affiliate, TCI, and then TCI sold the pipe fittings to the unaffiliated 
U.S. customers at a marked-up price to account for TCI's commission and 
selling expenses. See Sections B, C, and D supplemental questionnaire 
response (February 6, 2001) at 5. In addition, the record evidence 
demonstrates that for sales reported by Ta Chen as EP sales, the sale 
to the first unaffiliated customer was made between TCI and the 
unaffiliated customer in the United States. See Sections B, C, and D 
supplemental questionnaire response database (February 6, 2001). TCI 
takes title to subject merchandise, invoices the U.S. customer, and 
receives payment from the U.S. customer. In addition, TCI incurs 
seller's risk, makes agreements with commission agents, relays orders 
and price requests from the U.S. customer to Ta Chen, and pays for 
containerization expenses, U.S. customs broker charges, U.S. 
antidumping duties and international freight. See Section A 
Supplemental Questionnaire Response (February 6, 2001) at 5-6. Ta Chen 
also stated that on occasion the U.S. customer will initiate the sale 
with TCI or TCI will initiate the sale with the customer. Id.
    Based on these facts, we have determined that these sales 
originally reported as EP by Ta Chen meet the standard for CEP since 
the first sale to an unaffiliated customer occurred in the United 
States and was between TCI and the U.S. purchaser. Therefore, the sales 
originally reported by Ta Chen as EP sales were reclassified by the 
Department as CEP sales.
    Having determined such sales are CEP, we calculated the price of Ta 
Chen's United States sales based on CEP in accordance with section 
772(b) of the Act. We calculated CEP based on FOB or delivered prices 
to unaffiliated purchasers in the United States. Where appropriate, we 
deducted discounts. Also where appropriate, in accordance with section 
772(d)(1), the Department deducted commissions, direct selling expenses 
and indirect selling expenses, including inventory carrying costs, 
which related to commercial activity in the United States. We also made 
deductions for movement expenses, which include foreign inland freight, 
foreign brokerage and handling, ocean freight, containerization 
expense, harbor construction tax, marine insurance, U.S. inland 
freight, U.S. brokerage and handling, and U.S. Customs duties. Finally, 
pursuant to section 772(d)(3) of the Act, we made an adjustment for CEP 
profit. In accordance with Department practice, we recalculated credit 
expenses for CEP sales by basing credit on Ta Chen's U.S. dollar-
denominated short-term borrowing rate, rather than on Ta Chen's home 
market currency-denominated short-term borrowing rate. See Import 
Administration Policy Bulletin, Imputed Credit Expenses and Interest 
rates (February 23, 1998); Analysis Memo at 7-9.

Normal Value

    After testing home market viability, as discussed below, we 
calculated normal value (``NV'') as noted in the ``Price-to-CV 
Comparisons'' and ``Price-to-Price Comparisons'' sections of this 
notice.

1. Home Market Viability

    In accordance with section 773(a)(1)(C) of the Act, to determine 
whether there was 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 greater than or 
equal to five percent of the aggregate volume of U.S. sales), we 
compared Ta Chen's volume of home market sales of the foreign like 
product to the volume of U.S. sales of the subject merchandise. In 
addition, Ta Chen stated that the home market is viable since sales to 
the home market are more than 5 percent by quantity of sales in the 
United States. See Sections A questionnaire response (November 27, 
2001) at 3. Because Ta Chen's 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. We, therefore, based NV on home market 
sales.

2. Cost of Production Analysis

    Because we disregarded sales below the cost of production in the 
most-recently completed segment of this proceeding,\1\ we have 
reasonable grounds to believe or suspect that sales by Ta Chen in its 
home market were made at prices below the COP, pursuant to sections 
773(b)(1) and 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to 
section 773(b)(1) of the Act, we conducted a COP analysis of home 
market sales by Ta Chen.
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    \1\ See 98/99 Final, 65 FR at 81828.
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A. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP based on the sum of Ta Chen's cost of materials 
and fabrication for the foreign like product, plus amounts for general 
and administrative expenses (``G&A''), interest expenses, and packing 
costs. We relied on the COP

[[Page 36558]]

data submitted by Ta Chen in its original and supplemental cost 
questionnaire responses. For these preliminary results, we did not make 
any adjustments to Ta Chen's submitted costs.
B. Test of Home Market Prices
    We compared the weighted-average COP for Ta Chen 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 the COP. In determining whether to disregard home 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 section 773(b)(1)(A) and 
(B) of the Act. On a product-specific basis, we compared the COP to 
home market prices, less any movement charges, discounts, and direct 
and indirect selling expenses.
C. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of Ta Chen'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 Ta Chen's sales 
of a given product during the POR were at prices less than the COP, we 
determined that such sales have been made in ``substantial quantities'' 
within an extended period of time, in accordance with section 
773(b)(2)(B) of the Act. In such cases, because we use POR 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. Where all sales of a specific product 
were at prices below the COP, we disregarded all sales of that product.
D. Calculation of Constructed Value
    In accordance with section 773(e)(1) of the Act, we calculated CV 
based on the sum of Ta Chen's cost of materials, fabrication, G&A 
(including interest expenses), U.S. packing costs, direct and indirect 
selling expenses, and profit. In accordance with section 773(e)(2)(A) 
of the Act, we based SG&A and profit on the amounts incurred and 
realized by Ta Chen in connection with the production and sale of the 
foreign like product in the ordinary course of trade, for consumption 
in the foreign country. For selling expenses, we used the actual 
weighted-average home market direct and indirect selling expenses.

Price-to-Price Comparisons

    For those product comparisons for which there were sales at prices 
above the cost of production (``COP''), we based NV on prices to home 
market customers. We calculated NV based on prices to unaffiliated home 
market customers. Where appropriate, we deducted early payment 
discounts, credit expenses, and inland freight. We also made 
adjustments, where applicable, for home market indirect selling 
expenses to offset U.S. commissions in CEP comparisons. We made 
adjustments, where appropriate, for physical differences in the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act. 
Additionally, in accordance with section 773(a)(6) of the Act, we 
deducted home market packing costs and added U.S. packing costs. In 
accordance with the Department's practice, where there we no usable 
contemporaneous matches to a U.S. sale observation, we based NV on CV.

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 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 expenses 
and profit. For CEP, it is the level of the constructed sale from the 
exporter to the importer.
    To determine whether NV sales are at a different LOT than CEP, 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. 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 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, 61732 
(November 19, 1997).
    In reviewing the selling functions reported by the respondent, we 
examined all types of selling functions and activities reported in 
respondent's questionnaire response on LOT. In analyzing whether 
separate LOTs existed in this review, we found that no single selling 
function was sufficient to warrant a separate LOT in the home market. 
See Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296, 
27371 (May 19, 1997).
    Ta Chen reported one LOT in the home market based on two channels 
of distribution: trading companies and end-users. We examined the 
reported selling functions and found that Ta Chen's selling functions, 
to its home market customers regardless of channel of distribution, 
include inventory maintenance to date of shipment, incurring risk of 
non-payment, extension of credit terms, addresses customer complaints, 
research and development and technical assistance, after-sale services, 
and freight and delivery arrangement. See Section A supplemental 
questionnaire response at 6-8. We, therefore, preliminarily conclude 
that the selling functions for the reported channels of distribution 
are sufficiently similar to consider them as one LOT in the comparison 
market.
    Because Ta Chen reported that all of its U.S. CEP sales are made 
through TCI, Ta Chen is claiming that there is only one LOT in the U.S. 
market for its constructed export price sales and we preliminarily 
agree with Ta Chen that its U.S. sales constitute a single LOT. We 
examined the reported selling functions and found that Ta Chen's 
selling functions for sales to TCI include inventory maintenance to 
date of shipment, incurring risk of non-payment, extension of credit 
terms, research and development and technical assistance, after-sale 
services, and freight and delivery arrangement.
    When we compared the LOT of the CEP sales to Ta Chen's home market 
LOT, we noted that Ta Chen reported that it provided moderate-to-low 
technical assistance at its home market LOT, while providing very 
similar services at its CEP level. Therefore, the selling functions 
performed by Ta Chen in both markets leads us to conclude that any 
differences in selling activities are not significant. Accordingly, we 
preliminarily find that all sales in the home market and the U.S. 
market were made at the same LOT. Therefore, we have not made a LOT 
adjustment because all price comparisons are at the

[[Page 36559]]

same LOT and an adjustment pursuant to section 773(a)(7)(A) of the Act 
is not appropriate. Additionally, because we found that the LOT in the 
home market matched the LOT of the CEP transactions, we did not make a 
CEP offset by adjusting normal value under section 777(a)(7)(B) of the 
Act.

Reimbursement

    We found reimbursement in the most-recently completed segment of 
this proceeding. Therefore, we have analyzed the evidence on the record 
of this proceeding regarding reimbursement. See 98/99 Final, 65 FR at 
81829. Unlike the prior review, information exists on the record which 
makes clear that the agreement to reimburse antidumping duties, when 
signed, was limited solely to the 1992-1994 PORs. See Section A 
Questionnaire Response (November 27, 2000) at 346. Because the 
agreement is clearly limited to those PORs, and therefore did not apply 
to any antidumping duties incurred during later periods, the rebuttable 
presumption that there is continuing reimbursement is overcome.\2\ 
Therefore, the Department has preliminary determined that an agreement 
to reimburse is not in effect for this POR.
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    \2\ Note that Ta Chen submitted a letter signed by Robert Shieh, 
President of Ta Chen on February 1, 2001 which indicated that the 
agreement has been terminated. See Section A Supplemental 
Questionnaire Response (February 6, 2001) at Attachment 19. However, 
the letter was written after the last date of the POR, is not 
related to the issue of the rebuttable presumption of reimbursement 
and, therefore, is not dispositive.
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Facts Available

    In accordance with section 776(a)(2)(A) of the Act, we 
preliminarily determine that the use of facts available is appropriate 
for one element of Ta Chen's dumping margin calculation. Section 
776(a)(2) of the Act provides that if an 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, subject to subsections 782(c)(1) and (e) of the Act; 
(C) significantly impedes a determination under the antidumping 
statute; or (D) provides such information but the information cannot be 
verified, the Department shall, subject to subsection 782(d) of the 
Act, use facts otherwise available in reaching the applicable 
determination.
    In this case, section 776(a)(2)(A) of the Act applies because, at 
the verification of Ta Chen and TCI on May 28, 2001 through June 1, 
2001, we discovered that TCI failed to report expenses incurred to move 
inventory among its warehouses, which should properly have been 
reported in its calculation of U.S. indirect selling expenses 
(``ISE''). See U.S. Verification in the Administrative Review of the 
Antidumping Duty Order on Certain Stainless Steel Butt-Weld Pipe 
Fittings from Taiwan for the Period 6/1/99-5/31/00 (``U.S. Verification 
Report'') at 6.
    In selecting from among the facts otherwise available, section 
776(b) of the Act authorizes the Department to use an adverse inference 
if the Department finds that a party has failed to cooperate by not 
acting to the best of its ability to comply with requests for 
information. See The Statement of Administrative Action to the URAA at 
870 (``SAA''). In this instance, the use of an adverse inference is 
appropriate because Ta Chen failed to act to the best of its ability in 
providing the data it had about these expenses in advance of 
verification because Ta Chen, without consulting with the Department, 
determined that the expenses were too small. See U.S. Verification 
Report at 6.
    Consistent with Department practice in cases where a respondent 
fails to cooperate to the best of its ability, and in keeping with 
section 776(b) of the Act, we have preliminarily determined that the 
use of partial adverse facts available is warranted. As adverse facts 
available, the Department recalculated Ta Chen's reported U.S. ISE 
expenses by adding a certain percentage to the reported U.S. ISE 
percentage. The Department calculated the certain percentage by first 
taking the sum of the unreported expenses as listed in the U.S. 
Verification Report at Exhibit TCI-12, and deducting from that total 
the amount which is clearly attributable to non-subject merchandise. 
The Department subtracted the non-subject merchandise-related expenses 
in order to ensure that the numerator and denominator of the certain 
percentage were both calculated on the same basis to the extent 
possible, given the data collected at verification. The Department then 
divided the resulting figure by the total value of TCI's U.S. sales of 
subject merchandise as reported in its U.S. sales database, rather than 
TCI's total sales, to arrive at the certain percentage to be added to 
the reported U.S. ISE percentage as adverse facts available.

Currency Conversion

    For purposes of the preliminary results, we made currency 
conversions based on the exchange rates in effect on the dates of the 
U.S. sales as published by the Federal Reserve Bank of New York. 
Section 773A(a) of the Act directs the Department to use a daily 
exchange rate in effect on the date of sale of subject merchandise in 
order to convert foreign currencies into U.S. dollars, unless the daily 
rate involves a ``fluctuation.'' In accordance with the Department's 
practice, we have determined, as a general matter, that a fluctuation 
exists when the daily exchange rate differs from a benchmark by 2.25 
percent. See, e.g., Certain Stainless Steel Wire Rods from France: 
Preliminary Results of Antidumping Duty Administrative Review, 61 FR 
8915, 8918 (March 6, 1996) and Policy Bulletin 96-1: Currency 
Conversions, 61 FR 9434, March 8, 1996. As indicated in these 
precedents, the benchmark is defined as the rolling average of rates 
for the past 40 business days. When we determined a fluctuation 
existed, we substituted the benchmark for the daily rate.

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that the 
following weighted-average dumping margin exists for the period June 1, 
1999, through May 31, 2000:

       Certain Stainless Steel Butt-Weld Pipe Fittings From Taiwan
------------------------------------------------------------------------
                                                              Weighted-
                                                               average
               Producer/manufacturer/exporter                   margin
                                                              (percent)
------------------------------------------------------------------------
Ta Chen....................................................         5.24
------------------------------------------------------------------------

    The Department will disclose to any party to the proceeding, within 
five days of publication of this notice, the calculations performed (19 
CFR 351.224(b)). Any interested party may request a hearing within 30 
days of publication. Any hearing, if requested, will be held 37 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. Rebuttal briefs and 
rebuttals to written comments, limited to issues raised in such briefs 
or comments, may be filed no later than 35 days after the date of 
publication. Parties who submit arguments are requested to submit with 
the argument: (1) A statement of the issue, (2) a brief summary of the 
argument and (3) a table of authorities. Further, the Department 
requests that parties submitting written comments provide the 
Department with an additional copy of the public version of any such 
comments on diskette. The Department will publish the final results of 
this administrative review,

[[Page 36560]]

which will include the results of its analysis of issues raised in any 
such written comments or at a hearing, within 120 days after the 
publication of this notice.
    Upon issuance of the final results of review, the Department shall 
determine, and Customs shall assess, antidumping duties on all 
appropriate entries. The Department will issue appraisement 
instructions directly to Customs. The final results of this review 
shall be the basis for the assessment of antidumping duties on entries 
of merchandise covered by the results and for future deposits of 
estimated duties. For duty assessment purposes, we calculated an 
importer-specific assessment rate by dividing the total dumping margins 
calculated for the U.S. sales to the importer by the total entered 
value of these sales. This rate will be used for the assessment of 
antidumping duties on all entries of the subject merchandise by that 
importer during the POR.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication of the final 
results of this administrative review, as provided in section 751(a)(1) 
of the Act: (1) The cash deposit rate for Ta Chen, the only reviewed 
company, will be that established in the final results of this review; 
(2) for previously reviewed or investigated companies not covered in 
this review, the cash deposit rate 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, a prior review, or the original 
LTFV investigation, but the manufacturer is, the cash deposit rate will 
be the rate established in 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 conducted 
by the Department, the cash deposit rate will continue to be the ``all 
other'' rate established in the LTFV investigation, which was 51.01 
percent.
    This notice 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 published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: July 2, 2001.
Faryar Shirzad,
 Assistant Secretary for Import Administration.
[FR Doc. 01-17485 Filed 7-11-01; 8:45 am]
BILLING CODE 3510-DS-P