[Federal Register Volume 66, Number 158 (Wednesday, August 15, 2001)]
[Notices]
[Pages 42841-42844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-20552]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-828]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Welded Large Diameter Line Pipe From Mexico

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

EFFECTIVE DATE: August 15, 2001.

FOR FURTHER INFORMATION CONTACT: Mesbah Motamed or Rick Johnson, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-1382 (Motamed) and (202) 482-3818 
(Johnson).

The Applicable Statute and Regulations

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

Preliminary Determination

    We preliminarily determine that welded large diameter line pipe 
(``LDLP'') from Mexico is being sold, or is likely to be sold, in the 
United States at less than fair value (``LTFV''), as provided in 
section 733(b) of the Act. The estimated margins of sales at LTFV are 
shown in the ``Suspension of Liquidation'' section of this notice.

Case History

    On January 10, 2001, the Department received a petition on LDLP 
from Mexico in proper form by American Steel Pipe Division of American 
Cast Iron Pipe Company, Berg Steel Pipe Corporation, and Stupp 
Corporation (collectively ``petitioners''). The Department received 
information from the petitioners supplementing the petition on January 
22, January 24, January 26, and January 29, 2001.
    On January 30, 2001, the Department initiated an antidumping 
investigation of LDLP from Mexico. See Notice of Initiation of 
Antidumping Duty Investigations: Welded Large Diameter Line Pipe from 
Mexico and Japan, 66 FR 11266 (February 23, 2001) (``Notice of 
Initiation''). Since the initiation of this investigation the following 
events have occurred.
    The Department set aside a period for all interested parties to 
raise issues regarding product coverage. See Notice of Initiation at 
11267. On February 20, 2001 an interested party, Tubesa, S.A. de C.V., 
submitted comments on product scope. See Memorandum from John Drury to 
Joseph Spetrini: Antidumping Duty Investigations on Certain Welded LDLP 
Japan and Mexico; Scope Issues, dated June 19, 2001. On July 18, 2001, 
the Department received comments from petitioners requesting the 
exclusion of certain products from the scope. See Memorandum from 
Mesbah Motamed to Joseph Spetrini: Antidumping Duty Investigations on 
Certain Welded LDLP Japan and Mexico; Scope Issues, dated August 8, 
2001.
    In response to comments by interested parties the Department has 
determined that certain welded large diameter line pipe products are 
excluded from the scope of this investigation. These excluded products 
are described below (see ``Scope of Investigation''). See also 
Memorandum from Richard Weible and Edward Yang to Joseph Spetrini, 
Scope Issues for Welded Large Diameter Line Pipe, June 19, 2001.
    On February 26, 2001, the United States International Trade 
Commission (``ITC'') informed the Department of its preliminarily 
determination that there is

[[Page 42842]]

a reasonable indication that imports of the products subject to this 
investigation are materially injuring an industry in the United States 
producing the domestic like product. See Certain Welded Large Diameter 
Line Pipe from Japan and Mexico, 66 FR 13568 (March 6, 2001).
    On February 26, 2001, the Department issued a letter seeking volume 
and value of sales information to Procarsa S.A. de C.V. (``Procarsa''), 
Productora Mexicana de Tuberia S.A. de C.V. (``PMT''), Tubacero S.A. de 
C.V. (``Tubacero''), Tuberia Laguna S.A. de C.V. (``Tuberia''), and 
Tubesa S.A. de C.V. (``Tubesa''). On March 8, Tubesa submitted its 
response. On March 9, Tubacero submitted its response. On March 12, 
2001, Procarsa and PMT submitted their responses. Tuberia did not 
respond to the Department's request for information regarding volume 
and value of sales. On March 20, 2001, the Department limited the 
respondents in the investigation to Productora Mexicana de Tuberia S.A. 
de C.V. (``PMT''). See ``Selection of Respondents'' discussion below; 
see also Respondent Selection Memorandum from Edward Yang to Joseph A. 
Spetrini, March 20, 2001.
    PMT filed its complete Section A response on March 29, 2001. PMT 
filed its Sections B and C responses on May 7, 2001. On May 22, 2001, 
Tubacero, an affiliated producer of subject merchandise, submitted its 
Section A response, and PMT submitted its supplemental Section A 
response. On June 12, 2001 Tubacero submitted a supplemental response 
to Section A. Additionally on June 12, 2001, PMT filed its supplemental 
response to Sections B and C. On June 15, 2001, Tubacero submitted its 
Sections B and C response. On June 15, 2001, a U.S. affiliate submitted 
a Section A response and, on June 18, 2001, submitted a Section C 
response. On June 20, 2001, the Department collapsed respondent PMT 
with its affiliate, Tubacero (hereinafter referred to as ``PMT-
Tubacero'') (see ``Collapsing PMT and Tubacero'' discussion below). 
PMT-Tubacero submitted additional supplemental Sections A, B, and C 
responses on July 23, 2001.
    On May 22, 2001, petitioners alleged that PMT made home market 
sales of LDLP at prices below the cost of production (``COP'') during 
the period of investigation and supplemented their allegation on May 
25, May 29, and June 19, 2001. On June 22, 2001, the Department found 
that petitioners' COP allegation was company-specific, made use of 
respondent's data, employs a reasonable methodology, provides evidence 
of below-cost sales, and covers merchandise representative of the LDLP 
sold by PMT-Tubacero in the United States. Therefore, the Department 
determined that petitioners' COP allegation provided a reasonable basis 
to initiate a COP investigation. See Memorandum from Rick Johnson to 
Edward Yang: Analysis of Petitioners' Allegation of Sales Below the 
Cost of Production for Productora Mexicana de Tuberia, S.A. de C.V. 
PMT-Tubacero submitted a Section D response on July 23, 2001. On July 
24, the Department sent a letter to PMT-Tubacero stating that its July 
23, 2001 response was grossly deficient and unusable and instructed it 
to resubmit the response by July 31, 2001.
    On June 11, 2001, the Department published in the Federal Register 
a notice postponing the preliminary determination until August 8, 2001. 
See Welded Large Diameter Line Pipe From Mexico: Postponement of 
Preliminary Determination of Antidumping Duty Investigation, 66 FR 
31211 (June 11, 2001).

Period of Investigation

    The period of investigation (``POI'') is January 1, 2000 through 
December 31, 2000.

Scope of Investigation

    The product covered by this investigation is certain welded carbon 
and alloy line pipe, of circular cross section and with an outside 
diameter greater than 16 inches, but less than 64 inches, in diameter, 
whether or not stenciled. This product is normally produced according 
to American Petroleum Institute (API) specifications, including Grades 
A25, A, B, and X grades ranging from X42 to X80, but can also be 
produced to other specifications.
    Specifically not included within the scope of this investigation is 
American Water Works Association (AWWA) specification water and sewage 
pipe and the following size/grade combinations of line pipe:
     Having an outside diameter greater than or equal to 18 
inches and less than or equal to 22 inches, with a wall thickness 
measuring 0.750 inch or greater, regardless of grade.
     Having an outside diameter greater than or equal to 24 
inches and less than 30 inches, with wall thickness measuring greater 
than 0.875 inches in grades A, B, and X42, with wall thickness 
measuring greater than 0.750 inches in grades X52 through X56, and with 
wall thickness measuring greater than 0.688 inches in grades X60 or 
greater.
     Having an outside diameter greater than or equal to 30 
inches and less than 36 inches, with wall thickness measuring greater 
than 1.250 inches in grades A, B, and X42, with wall thickness 
measuring greater than 1.000 inches in grades X52 through X56, and with 
wall thickness measuring greater than 0.875 inches in grades X60 or 
greater.
     Having an outside diameter greater than or equal to 36 
inches and less than 42 inches, with wall thickness measuring greater 
than 1.375 inches in grades A, B, and X42, with wall thickness 
measuring greater than 1.250 inches in grades X52 through X56, and with 
wall thickness measuring greater than 1.125 inches in grades X60 or 
greater.
     Having an outside diameter greater than or equal to 42 
inches and less than 64 inches, with a wall thickness measuring greater 
than 1.500 inches in grades A, B, and X42, with wall thickness 
measuring greater than 1.375 inches in grades X52 through X56, and with 
wall thickness measuring greater than 1.250 inches in grades X60 or 
greater.
     Having an outside diameter equal to 48 inches, with a wall 
thickness measuring 1.0 inch or greater, in grades X-80 or greater.
    The product currently is classified under U.S. Harmonized Tariff 
Schedule (``HTSUS'') item numbers 7305.11.10.30, 7305.11.10.60, 
7305.11.50.00, 7305.12.10.30, 7305.12.10.60, 7305.12.50.00, 
7305.19.10.30, 7305.19.10.60, and 7305.19.50.00. Although the HTSUS 
item numbers are provided for convenience and customs purposes, the 
written description of the scope is dispositive.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual dumping margins for each known exporter and producer of the 
subject merchandise. However, section 777A(c)(2) of the Act gives the 
Department discretion, when faced with a large number of exporters/
producers, to limit its examination to a reasonable number of such 
companies if it is not practicable to examine all companies. Where it 
is not practicable to examine all known producers/exporters of subject 
merchandise, this provision permits the Department to investigate 
either: (1) A sample of exporters, producers, or types of products that 
is statistically valid based on the information available at the time 
of selection, or (2) exporters and producers accounting for the largest 
volume of the

[[Page 42843]]

subject merchandise that can be reasonably examined.
    We examined producer-specific data accounting for total POI exports 
of LDLP from Mexico. We identified five companies which exported LDLP 
to the United States during the POI. Due to constraints on our time and 
resources, we found it impracticable to examine all five companies. 
Therefore, because its export volume accounted for a significant 
portion of all exports from Mexico, we selected PMT as the mandatory 
respondent. For a more detailed discussion of respondent selection in 
this investigation, see Respondent Selection Memorandum from Edward 
Yang and Rich Weible to Joseph A. Spetrini, March 20, 2001.

Collapsing PMT and Tubacero

    Through PMT's March 29, 2001 Section A response and its response to 
subsequent questionnaires, the Department determined that PMT is 
affiliated with another Mexican producer of subject merchandise, 
Tubacero, under section 771(33)(E) of the Act. See, Letter from Rick 
Johnson to PMT dated May 18, 2001. Based on the evidence on the record, 
the Department also found that both producers have production 
facilities for similar or identical products that would not require 
substantial retooling of either facility in order to restructure 
manufacturing priorities. The Department conducted an analysis of the 
potential for the manipulation of price or production under the 
criteria set out in section 351.401(f)(2) of the Department's 
regulations. We concluded that a significant potential for the 
manipulation of price or production exists. Therefore, the Department 
has collapsed PMT and Tubacero for the purposes of determining whether 
dumping has occurred. See Memorandum from Edward Yang to Joseph A. 
Spetrini: Whether to Collapse Affiliated Parties Productora Mexicana de 
Tuberia, S.A. de C.V. and Tubacero, S.A. de C.V. (``Collapsing Memo'') 
dated June 20, 2001.

Facts Available

    Section 776(a)(2)(B) of the Act provides that if necessary 
information is not available on the record, or an interested party or 
any other person fails to provide such information by the deadlines for 
submission of the information or in the form and manner requested, the 
administering authority shall, subject to section 782(d) of the Act, 
use the facts otherwise available in reaching the applicable 
determination.
    Under section 782(d) of the Act, if the Department:

determines that a response to a request for information under this 
title does not comply with the request, the administering authority 
* * * shall promptly inform the person submitting the response of 
the nature of the deficiency and shall, to the extent practicable, 
provide that person with an opportunity to remedy or explain the 
deficiency in light of the time limits established for the 
completion of investigations or reviews under this title.

    On July 23, 2001, the PMT-Tubacero submitted a Section D response 
which was deficient and unusable. In short, respondents failed to 
provide complete, combined cost information for both companies, did not 
supply adequate narrative responses, and provided unreliable cost data. 
The Department therefore determines that, due to the deficient nature 
of the July 23, 2001 Section D response, no comparison of cost of 
production to normal value can be properly made, nor can we rely upon 
the underlying variable and total cost of manufacturing data reported 
in the home market and United States sales databases. This consequently 
prohibits the Department from accurately selecting HM sales to compare 
to U.S. sales. Therefore, in light of PMT-Tubacero's failure to provide 
requested information necessary to calculate dumping margins in this 
case, in accordance with section 776(a) of the Act, we are forced to 
resort to total facts available for this preliminary determination. See 
Total Facts Available and Corroboration Memorandum for PMT-Tubacero.
    On July 24, 2001, the Department afforded PMT-Tubacero another 
opportunity to remedy its Section D response by July 31, 2001. See 
Letter from Edward Yang to PMT-Tubacero, dated July 24, 2001. However, 
because the time limit for this preliminary determination makes it 
impracticable for the Department to analyze and incorporate the data 
submitted on July 31, and because the information in the July 23 
response was not in the form and manner requested by the Department, 
the Department has applied the facts otherwise available to determine 
the preliminary dumping margin. As facts available, we used the rate 
from initiation of 49.86 percent. This rate was based on information 
provided in the petition to calculate normal value and publicly 
available U.S. Customs import statistics to calculate export price. See 
Notice of Initiation.
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information in using the facts otherwise available, it 
must, to the extent practicable, corroborate that information from 
independent sources that are reasonably at its disposal. The Statement 
of Administrative Action accompanying the URAA, H.R. Doc. No. 316, 103d 
Cong., 2d Sess. 870 (1994) (``SAA'') clarifies that ``corroborate'' 
means that the Department will satisfy itself that the secondary 
information to be used has probative value (see SAA at 870). Secondary 
information is described in the SAA, as ``information derived from the 
petition that gave rise to the investigation or review, the final 
determination concerning subject merchandise, or any previous review 
under section 751 concerning the subject merchandise.'' See SAA at 870.
    The Department finds that the estimated margin set forth in the 
notice of initiation has probative value. In this proceeding, we 
considered the initiation margin as the most appropriate information on 
the record upon which to base the dumping calculation. In accordance 
with section 776(c) of the Act, we sought to corroborate the data 
contained in the initiation. We reviewed the adequacy and accuracy of 
the information in the initiation, to the extent appropriate 
information was available for this purpose. For purposes of the 
preliminary determination, we attempted to further corroboate the 
information in the initiation. To the extent practicable, we reexamined 
the export price and home market price provided in the margin 
calculations in the initiation in light of information obtained during 
the investigation and found that it has probative value. See 
Preliminary Determination in the Antidumping Investigation of Welded 
Large Diameter Line Pipe from Mexico: Total Facts Available 
Corroboration Memorandum for PMT-Tubacero, dated August 8, 2001.

Verification

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

All-Others Rate

    Section 735(c)(5)(B) of the Act provides that, where the estimated 
weighted-average dumping margins established for all exporters and 
producers individually investigated are zero or de minimis margins, or 
are determined entirely under section 776 of the Act, the Department 
may use any reasonable method to establish the estimated ``all-others'' 
rate for exporters and producers not individually investigated. This 
provision contemplates that we weight-average margins other than facts 
available margins to establish the ``all others'' rate. Where the data 
do not permit

[[Page 42844]]

weight-averaging such rates, the SAA, at 873, provides that we may use 
other reasonable methods. Because the petition contained only an 
estimated price-to-price dumping margin, which the Department adjusted 
for purposes of initiation, there are no additional estimated margins 
available with which to create the ``all others'' rate. Therefore, we 
applied the published margin of 49.86 percent as the ``all others'' 
rate.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing 
Customs to suspend liquidation of all entries of welded large diameter 
line pipe from Mexico that are entered, or withdrawn from warehouse, 
for consumption on or after the date of publication of this notice in 
the Federal Register. We will instruct Customs to require a cash 
deposit or the posting of a bond equal to the amount by which the NV 
exceeds the EP, as indicated below. These suspension-of-liquidation 
instructions will remain in effect until further notice. The dumping 
margins are as follows:

------------------------------------------------------------------------
                                                                Margin
                     Producer/exporter                        (percent)
------------------------------------------------------------------------
PMT-Tubacero...............................................        49.86
All Others.................................................        49.86
------------------------------------------------------------------------

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final determination is affirmative, 
the ITC will determine before the later of 120 days after the date of 
this preliminary determination, or 45 days after our final 
determination, whether these imports are materially injuring, or 
threaten material injury to, the U.S. industry.

Public Comment

    Case briefs must be submitted no later than 50 days after the 
publication of this notice in the Federal Register. Rebuttal briefs 
must be filed within five days after the deadline for submission of 
case briefs. A list of authorities used, a table of contents, and an 
executive summary of issues should accompany any briefs submitted to 
the Department. Executive summaries should be limited to five pages 
total, including footnotes. Public versions of all comments and 
rebuttals should be provided to the Department and made available on 
diskette. Section 774 of the Act provides that the Department will hold 
a hearing to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs, provided that such a 
hearing is requested by any interested party. If a request for a 
hearing is made in an investigation, the hearing will tentatively be 
scheduled for two days after the deadline for submission of the 
rebuttal briefs, at the U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230. In the event that the 
Department receives requests for hearings from parties to more than one 
large diameter line pipe case, the Department may schedule a single 
hearing to encompass all cases. Parties should confirm by telephone the 
time, date, and place of the hearing 48 hours before the scheduled 
time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request within 30 days of 
the publication of this notice. Requests should specify the number of 
participants and provide a list of the issues to be discussed. Oral 
presentations will be limited to issues raised in the briefs.
    If this investigation proceeds normally, we will make our final 
determination in this investigation no later than 75 days after the 
date of this preliminary determination.
    This determination is published pursuant to sections 733(f) and 
777(i)(1) of the Act.

    Dated: August 8, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-20552 Filed 8-14-01; 8:45 am]
BILLING CODE 3510-DS-P