[Federal Register Volume 66, Number 250 (Monday, December 31, 2001)]
[Notices]
[Pages 67500-67507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-32114]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-870]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Certain Circular Welded Carbon-Quality Steel Pipe From the 
People's Republic of China

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

EFFECTIVE DATE: December 31, 2001.

FOR FURTHER INFORMATION CONTACT: Amy Ryan, Alex Villanueva, and Robert 
Bolling, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-0961, (202) 482-6412, and 
(202) 482-3434, respectively.

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``the Act''), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Act by the Uruguay Round Agreements Act. In addition, unless 
otherwise indicated, all citations to the Department's regulations are 
to the regulations codified at 19 CFR part 351 (2001).

Preliminary Determination

    We preliminarily determine that certain circular welded carbon-
quality steel pipe (``pipe'') from the People's Republic of China 
(``PRC'') is being, or is likely to be, sold in the United States at 
less than fair value (``LTFV''), as provided in section 733 of the Act. 
The estimated margins of sales at LTFV are shown in the ``Suspension of 
Liquidation'' section of this notice.

Case History

    This investigation was initiated on June 13, 2001. See Notice of 
Initiation of Antidumping Duty Investigation: Certain Circular Welded 
Carbon-Quality Steel Pipe from the People's Republic of China, 66 FR 
33227 (June 21, 2001) (``Notice of Initiation''). The Department set 
aside a period for all interested parties to raise issues regarding 
product coverage. See Notice of Initiation at 33228. We did not receive 
comments regarding product coverage.
    On July 13, 2001, the United States International Trade Commission 
(``ITC'') issued its affirmative preliminary determination that there 
is a reasonable indication that an industry in the United States is 
materially injured by reason of imports of the subject merchandise from 
the PRC, which was published in the Federal Register on July 13, 2001. 
See Circular Welded Non-Alloy Steel Pipe from China, Indonesia, 
Malaysia, Romania, and South Africa, 66 FR 36801 (July 13, 2001).
    On June 22, 2001, the Department issued a questionnaire to numerous 
known producers/exporters of the subject merchandise requesting volume 
and value of U.S. sales information. On July 3, 2001, Tai Feng Qiao 
Metal Products Co., (``Tai Feng Qiao''); WeiFang East Steel Pipe Co., 
Ltd. (``WeiFang''); PanGang Group BeiHai Steel Pipe Corp.; Northern 
Steel Pipe Co., Ltd.,; ZheJiang JingZhou HuaLong Petroleum Corrosion-
Resistant Steel Pipe Co., Ltd.; Tianjin Shuang Jie Steel Pipe Co., Ltd. 
(``Tianjin Shuang Jie''); Walsall Steel Pipe Co., Ltd/China MinMetals 
ZhuHai Co., Ltd; XuZhou

[[Page 67501]]

GuangHuan Steel Tube Co., Ltd.; and Guangzhou Pearl River Steel Pipe 
Factory submitted responses to the Department's questionnaire seeking 
volume and value of U.S. sales information. On July 9, 2001, Baosteel 
Group International Trade Corporation (``Baosteel International'') and 
Tianjin Shuang Jie, submitted responses to the Department's 
questionnaire seeking volume and value of U.S. sales information.
    On July 17, 2001, the Department issued its respondent selection 
memorandum, selecting Baosteel International, Tianjin Shuang Jie, and 
WeiFang to be investigated (see Selection of Respondents section 
below). On July 19, 2001, Tai Feng Qiao requested the Department to 
reconsider its respondent selection and include Tai Feng Qiao as a 
mandatory respondent. On July 23, 2001, China MinMetals ZhuHai Co. 
(``ZhuHai'') submitted its response to the Department's questionnaire 
seeking volume and value of U.S. sales information.
    On July 25, 2001, the Department issued a letter to interested 
parties providing an opportunity to comment on the Department's 
proposed product characteristics criteria. On August 1, 2001, we 
received comments from Tianjin Shuang Jie on the Department's proposed 
product characteristics criteria.
    On July 18, 2001, the Department issued its Section A antidumping 
duty questionnaire to Baosteel International, Tianjin Shuang Jie, and 
WeiFang. On August 7, 2001, the Department received extension requests 
from parties for responding to the Department's Section A antidumping 
duty questionnaire. Additionally, on August 7, 2001, the Department 
issued the remaining portion (i.e., Sections C & D) of its antidumping 
duty questionnaire to Baosteel International, Tianjin Shuang Jie, and 
WeiFang. On August 15, 2001, we received Section A responses from 
Baosteel International, Tianjin Shuang Jie, and WeiFang.
    On August 1, 2001, ZhuHai and Walsall Steel Pipe Industrial Co., 
Ltd (``Walsall'') requested the Department to reconsider its respondent 
selection and include ZhuHai and Walsall as mandatory respondents. On 
August 6, 2001, Zhejiang Kingland Group, Inc. (``Jinzhou'') requested 
to be included in the investigation as a voluntary respondent. On 
August 8, 2001, Tai Feng Qiao requested the Department to reconsider 
its respondent selection and include Tai Feng Qiao as a mandatory 
respondent. On August 16, 2001, ZhuHai and Walsall requested to be 
allowed to participate in this investigation as mandatory respondents.
    On August 8, 2001, the Department received a Section A response 
from Walsall. On August 15, 2001, the Department received Section A 
responses from Baosteel International, Tianjin Shuang Jie, WeiFang, Tai 
Feng Qiao, and ZhuHai. On August 22, 2001, the Department received 
Section A response from Pangang Group International Economic and Trade 
Corporation (``Pangang International''). On August 31, 2001, the 
Department received a Section A and volume and value response from 
Jinzhou.
    On August 24, 2001, the Department issued its supplemental Section 
A questionnaire to Baosteel International. On September 5, 2001, the 
Department received Baosteel International's Section C and D response. 
On September 7, 2001, the Department received Baosteel International's 
supplemental Section A response. On September 28, 2001, the Department 
issued its supplemental Section C and D questionnaire to Baosteel 
International. On October 12, 2001, the Department received Baosteel 
International's supplemental Section C and D response. On October 12, 
2001, the Department issued its second supplemental Section A 
questionnaire to Baosteel International. On October 19, 2001, the 
Department received Baosteel International's second supplemental 
Section A response. On October 29, 2001, the Department issued its 
second supplemental Section C and D questionnaire to Baosteel 
International. On November 5, 2001, the Department received Baosteel 
International's second supplemental Section C and D response. On 
November 14, 2001, the Department issued its third supplemental Section 
C and D questionnaire to Baosteel International. On November 20, 2001, 
the Department received Baosteel International's third supplemental 
Section C and D response. On November 28, 2001, the Department 
requested that Baosteel International provide answers to two additional 
questions. See Memorandum to the File from Robert Bolling, dated 
November 28, 2001. On November 29, 2001, the Department received 
Baosteel International's response to the two questions.
    On August 21, 2001, the Department issued its supplemental Section 
A questionnaire to Tianjin Shuang Jie. On September 5, 2001, the 
Department received Tianjin Shuang Jie's Section C and D questionnaire 
response and Tianjin Shuang Jie's Section A supplemental questionnaire 
response. On September 28, 2001, the Department issued its Section A, C 
and D supplemental questionnaire. On October 12, 2001, the Department 
received Tianjin Shuang Jie's supplemental Section A, C and D response. 
On October 29, 2001, the Department issued its second Section C and D 
supplemental questionnaire. On November 5, 2001, the Department 
received Tianjin Shuang Jie's second Section C and D supplemental 
questionnaire response. On November 7, 2001, the Department issued its 
third Section C and D supplemental questionnaire to Tianjin Shuang Jie. 
On November 8, 2001, the Department received Tianjin Shuang Jie's third 
Section C and D supplemental questionnaire response. On November 29, 
2001, the Department issued its fourth Section C and D questionnaire to 
Tianjin Shuang Jie. On December 1, 2001, the Department received 
Tianjin Shuang Jie's fourth Section C and D supplemental questionnaire 
response. On December 5, 2001, the Department received a submission 
from Tianjin Shuang Jie regarding the valuation of hot-rolled coil and 
others factors that it thought the Department should use in its 
preliminary determination. On December 17, 2001, Tianjin Shuang Jie, 
requested an extension of the Department's final determination.
    On August 22, 2001, the Department issued its supplemental Section 
A questionnaire to WeiFang. On September 5, 2001, the Department 
received WeiFang's supplemental Section A response. On September 17, 
2001, the Department issued its supplemental Sections A, C and D 
questionnaires to WeiFang. On October 12, 2001, the Department received 
WeiFang's supplemental Sections A, C and D responses. On November 8, 
2001, the Department issued its second supplemental Section C and D 
questionnaires to WeiFang.
    On October 26, 2001, the Department published a notice of 
postponement of its preliminary antidumping duty determination. See 
Notice of Postponement of Preliminary Antidumping Duty Investigation of 
Certain Circular Welded Carbon-Quality Steel Pipe from the People's 
Republic of China, 66 FR 54198, October 26, 2001.
    On November 7, 2001, the Department issued supplemental Section A 
questionnaires to Zhuhai, Pangang International, Tai Feng Qiao, 
Walsall, and Jinzhou, exporters of the subject merchandise requesting a 
separate rate. On November 13, 2001, Pangang International requested a 
two-day extension for filing its supplemental Section A response. On 
November 14, 2001, the Department received supplemental Section A 
responses from

[[Page 67502]]

Zhuhai, Tai Feng Qiao, Walsall, and Jinzhou. Additionally, on November 
16, 2001, the Department received a supplemental Section A response 
from Pangang International.
    On December 10, 2001, petitioners submitted preliminary 
determination comments to the Department regarding the valuation of 
hot-rolled coil and other factors. On December 13, 2001, Tianjin Shuang 
Jie responded to petitioners comments, however Baosteel International 
and WeiFang did not respond.

Period of Investigation

    The period of investigation (``POI'') is October 1, 2000 through 
March 31, 2001. This period corresponds to the two most recent fiscal 
quarters prior to the month of the filing of the petition (May 24, 
2001). See 19 CFR 351.204(b)(1).

Scope of Investigation

    The products covered by this investigation are certain welded 
carbon-quality steel pipes and tubes, of circular cross-section, with 
an outside diameter of 0.372 inches (9.45 mm) or more, but not more 
than 16 inches (406.4 mm), regardless of wall thickness, surface finish 
(black, galvanized, or painted), end finish (plain end, beveled end, 
grooved, threaded, or threaded and coupled), or industry specification 
(ASTM, proprietary, or other), generally known as standard pipe and 
structural pipe.
    Standard pipes and tubes are intended for the low-pressure 
conveyance of water, steam, natural gas, air, and other liquids and 
gases in plumbing and heating systems, air conditioning units, 
automatic sprinkler systems, and other related uses. Standard pipe may 
carry liquids at elevated temperatures but may not be subject to the 
application of external heat. It may also be used for light load-
bearing and mechanical applications, such as for fence tubing, and for 
protection of electrical wiring, such as conduit shells, and for 
structural applications in general construction. It primarily is made 
to American Society for Testing and Materials (ASTM) A-53, A-135, and 
A-795 specifications, but can also be made to the British Standard 
(BS)-1387 specification.
    Structural pipe is intended for use in the construction of bridges 
and buildings, and general structural applications. It also can be used 
for making steel scaffolding and for piling applications. It primarily 
is made to ASTM A-500 and A-252 specifications.
    Hence, specifically included within the scope of these petitions 
are products stenciled to the ASTM standards A-53, A-135, A-795, A-120, 
A-500, A-252, or their equivalents. Standard and structural pipe 
products may also be produced to proprietary specifications rather than 
to industry standard. This is often the case with fence tubing, for 
example.
    The scope does not include boiler tubes, pressure tubing, 
mechanical tubing, finished conduit, oil country tubular goods (OCTG), 
and line pipe. However, with regard to these excluded products, if 
petitioners or other interested parties provide to the Department 
reasonable grounds to believe or suspect that the products are being 
used in a standard or structural application, the Department may 
instruct the U.S. Customs Service to require end-use certifications. In 
addition, line pipe meeting the American Petroleum Institute (API) line 
pipe is excluded from the scope of these investigations, and any 
resultant antidumping duty order, if covered by the scope of another 
antidumping duty order from the same country.
    The standard pipe products that are the subject of these 
investigations are currently classifiable in the Harmonized Tariff 
Schedule of the United States (HTSUS) subheadings 7306.30.10 and 
7306.30.50. This petition also covers dual-certified A-53/API or single 
certified pipe that enters the United States if its is used in, or 
intended for use in, standard pipe or structural pipe applications. 
Such certified pipe may include API-5L or API-5L X-42 pipe. Although 
the HTSUS subheadings are provided for convenience and U.S. Customs 
purposes, the written description of the merchandise under 
investigation 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 to the 
Department at the time of selection; or (2) exporters and producers 
accounting for the largest volume of the subject merchandise that can 
reasonably be examined. After consideration of the complexities 
expected to arise in this proceeding and the resources available to the 
Department, we determined that it was not practicable in this 
investigation to examine all known producers/exporters of subject 
merchandise. Instead, we limited our examination to the exporters and 
producers accounting for the largest volume of the subject merchandise 
pursuant to section 777A(c)(2)(B) of the Act. The three PRC producers/
exporters, Baosteel International, Tianjin Shuang Jie, WeiFang 
(collectively, ``respondents''), accounted for the majority of all 
exports of the subject merchandise from the PRC during the POI, and 
were therefore selected as mandatory respondents. See Memorandum from 
James Doyle to Edward Yang: Selection of Respondents: Antidumping Duty 
Investigation of Circular Welded Carbon Quality Steel Pipe from the 
People's Republic of China, July 17, 2001. We note that ZhuHai, 
Walsall, and Tai Feng Qiao requested that the Department consider each 
as mandatory respondents (see background section above). However, the 
respondents' submissions provided no new evidence that would convince 
the Department to reconsider its selection of respondents. Thus, we 
have continued to determine that due to the complexities of this 
investigation, the producers/exporters that the Department chose to 
investigate as mandatory respondents are appropriate.

Nonmarket Economy Country Status

    The Department has treated the PRC as a non-market economy 
(``NME'') country in all past antidumping investigations see, e.g., 
Notice of Final Determination of Sales at Less Than Fair Value: Bulk 
Aspirin From the People's Republic of China, 65 FR 33805 (May 25, 
2000); Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Non-Frozen Apple Juice Concentrate from the People's Republic 
of China, 65 FR 19873 (April 13, 2000) (``Apple Juice''). A designation 
as an NME remains in effect until it is revoked by the Department (see 
section 771(18)(C) of the Act). No party to this investigation has 
requested a revocation of the PRC's NME status. We have, therefore, 
preliminarily determined to continue to treat the PRC as an NME 
country. When the Department is investigating imports from an NME, 
section 773(c)(1) of the Act directs us to base the normal value 
(``NV'') on the NME producer's factors of production, valued in a 
comparable market economy that is a significant producer of comparable 
merchandise. The sources

[[Page 67503]]

of individual factor prices are discussed under the ``Factor 
Valuations'' section, below.
    Furthermore, no interested party has requested that the pipe 
industry in the PRC be treated as a market-oriented industry and no 
information has been provided that would lead to such a determination. 
Therefore, we have not treated the pipe industry in the PRC as a 
market-oriented industry in this investigation.

Separate Rates

    In proceedings involving NME countries, the Department begins with 
a rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty deposit rate. It is the Department's policy to assign 
all exporters of merchandise subject to investigation in an NME country 
this single rate, unless an exporter can demonstrate that it is 
sufficiently independent so as to be entitled to a separate rate. The 
three companies that the Department selected to investigate (i.e., 
Baosteel International, Tianjin Shuang Jie, WeiFang), and the PRC 
companies that were not selected as mandatory respondents by the 
Department for this investigation, but which have submitted separate 
rates responses (i.e., Zhuhai, Tai Feng Qiao, Walsall, Pangang 
International, and Jinzhou) have provided company-specific separate 
rates information and have each stated that they met the standards for 
the assignment of separate rates.
    We considered whether each PRC company is eligible for a separate 
rate. The Department's separate rate test to determine whether the 
exporters are independent from government control does not consider, in 
general, macroeconomic/border-type controls, e.g., export licenses, 
quotas, and minimum export prices, particularly if these controls are 
imposed to prevent dumping. The test focuses, rather, on controls over 
the investment, pricing, and output decision-making process at the 
individual firm level. See, e.g., Certain Cut-to-Length Carbon Steel 
Plate from Ukraine: Final Determination of Sales at Less than Fair 
Value, 62 FR 61754, 61757 (November 19, 1997); Tapered Roller Bearings 
and Parts Thereof, Finished and Unfinished, from the People's Republic 
of China: Final Results of Antidumping Duty Administrative Review, 62 
FR 61276, 61279 (November 17, 1997).
    To establish whether a firm is sufficiently independent from 
government control of its export activities to be entitled to a 
separate rate, the Department analyzes each entity exporting the 
subject merchandise under a test arising out of the Final Determination 
of Sales at Less Than Fair Value: Sparklers from the People's Republic 
of China, 56 FR 20588 (May 6, 1991) (``Sparklers''), as amplified by, 
Final Determination of Sales at Less Than Fair Value: Silicon Carbide 
from the People's Republic of China, 59 FR 22585 (May 2,1994) 
(``Silicon Carbide''). In accordance with the separate rates criteria, 
the Department assigns separate rates in NME cases only if respondents 
can demonstrate the absence of both de jure and de facto governmental 
control over export activities.
1. Absence of De Jure Control
    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) An absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) any other 
formal measures by the government decentralizing control of companies. 
See Sparklers.
    All eight PRC companies seeking separate rates reported that the 
subject merchandise was not subject to any government list regarding 
export provisions or export licensing, and was not subject to export 
quotas during the POI. Each company also submitted a copy of its 
Certificate of Approval for the Establishment of Enterprises with 
Foreign Investment. We found no inconsistencies with the exporters' 
claims of the absence of restrictive stipulations associated with an 
individual exporter's business and export licenses. Each exporter also 
submitted copies of the legislation of the People's Republic of China 
or documentation demonstrating the statutory authority for establishing 
the de jure absence of government control over the companies. Thus, we 
believe that the evidence on the record supports a preliminary finding 
of de jure absence of governmental control based on: (1) An absence of 
restrictive stipulations associated with the individual exporter's 
business and export licenses; and (2) the applicable legislative 
enactments decentralizing control of the companies.
1. Absence of De Facto Control
    The Department typically considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) whether the export prices are set by or are 
subject to the approval of a governmental agency; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. See, Silicon Carbide, 59 FR at 22586-87; see, also 
Notice of Final Determination of Sales at Less Than Fair Value: 
Furfuryl Alcohol From the People's Republic of China, 60 FR 22544, 
22545 (May 8, 1995). As stated in previous cases, there is some 
evidence that certain enactments of the PRC central government have not 
been implemented uniformly among different sectors and/or jurisdictions 
in the PRC. See, Silicon Carbide, 56 FR at 22587. Therefore, the 
Department has determined that an analysis of de facto control is 
critical in determining whether respondents are, in fact, subject to a 
degree of governmental control which would preclude the Department from 
assigning separate rates.
    Regarding whether each exporter sets its own export prices 
independent of the government and without the approval of a government 
authority, each exporter reported that it determines its prices for 
sales of the subject merchandise. See, Memorandum from Robert Bolling 
to Edward Yang, Separate Rates Analysis for the Preliminary 
Determination, dated December 20, 2001 (``Separate Rates Memo''). Each 
exporter stated that it negotiates prices directly with its customers. 
Also, each exporter claimed that its prices are not subject to review 
or guidance from any governmental organization. Regarding whether each 
exporter has authority to negotiate and sign contracts and other 
agreements, our examination of the record indicates that each exporter 
reported that it has authority to negotiate and sign contracts and 
other agreements. Also, each exporter claimed that its negotiations are 
not subject to review or guidance from any governmental organization. 
There is no evidence on the record to suggest that there is any 
governmental involvement in the negotiation of contracts.
    Regarding whether each exporter has autonomy in making decisions 
regarding the selection of management, our examination of the record 
indicates that each exporter reported that it has autonomy in making 
decisions regarding the selection of management. Also, each exporter 
claimed that its selection of management is not subject

[[Page 67504]]

to review or guidance from any governmental organization. There is no 
evidence on the record to suggest that there is any governmental 
involvement in the selection of management by the exporters.
    Regarding whether each exporter retains the proceeds from its sales 
and makes independent decisions regarding its disposition of profits or 
financing of losses, our examination of the record indicates that each 
exporter reported that it retains the proceeds of its export sales, 
using profits according to its business needs. Also, each exporter 
reported that the allocation of profits is determined by its top 
management. There is no evidence on the record to suggest that there is 
any governmental involvement in the decisions regarding disposition of 
profits or financing of losses.
    Therefore, we determine that the evidence on the record supports a 
preliminary finding of de facto absence of governmental control based 
on record statements and supporting documentation showing that: (1) 
Each exporter sets its own export prices independent of the government 
and without the approval of a government authority; (2) Each exporter 
retains the proceeds from its sales and makes independent decisions 
regarding disposition of profits or financing of losses; (3) Each 
exporter has the authority to negotiate and sign contracts and other 
agreements; and (4) Each exporter has autonomy from the government 
regarding the selection of management.
    The evidence placed on the record of this investigation by Baosteel 
International, Tianjin Shuang Jie, WeiFang, Zhuhai, Tai Feng Qiao, 
Walsall, Pangang International, and Jinzhou demonstrates an absence of 
government control, both in law and in fact, with respect to each of 
the exporter's exports of the merchandise under investigation, in 
accordance with the criteria identified in Sparklers and Silicon 
Carbide. Therefore, for the purposes of this preliminary determination, 
we are granting separate, company-specific rates to each of the eight 
responding exporters which shipped pipe to the United States during the 
POI. For a full discussion of this issue, see the memorandum from 
Robert Bolling to Edward Yang, Separate Rates Analysis for the 
Preliminary Determination, dated December 20, 2001 (``Separate Rates 
Memo'').

PRC-Wide Rate

    As discussed above (see ``Separate Rates''), all PRC producers/
exporters that do not qualify for a separate rate are treated as a 
single enterprise. As noted above in ``Case History,'' all producers/
exporters were given the opportunity to respond to the Department's 
questionnaire regarding volume and value of U.S. sales. As explained 
above, we received timely responses from Baosteel International; 
Tianjin Shuang Jie; WeiFang; Tai Feng Qiao; WeiFang, PanGang Group 
BeiHai Steel Pipe Corp.; Northern Steel Pipe Co., Ltd.,; ZheJiang 
JingZhou HuaLong Petroleum Corrosion-Resistant Steel Pipe Co., Ltd.; 
Walsall; ZhuHai; XuZhou GuangHuan Steel Tube Co., Ltd.; and Guangzhou 
Pearl River Steel Pipe Factory. The Department did not receive 
responses from the following companies: Anshan Iron & Steel (Group) 
Co.; Benxi Iron & Steel Co.; Dalian Steel Mill Pipe Plant; Zhongshan 
Huari Steel Pipe Co. Ltd./Wah Chit Ent Co. Ltd.; Hengyang Steel Tube 
Group Co. Ltd.; Hubei Hanchuan County Steel Tube Factory; Hubei 
Province Xianning District Galvanized Steel Plant; Hunan Province Linli 
County Steel Pipe Plant; Jilin Tonghua Iron & Steel Group--Jilin 
Tonghua Xianxin Enterprise Gourp; Jinxi (ASP) Steel Pipe Co.,; Shanghai 
Just-Huahai Metal Products Co. Ltd.; Shanghai Laodong Steel Pipe Plant; 
Shoudu Iron & Steel Co.; Sichuan Chuanton Changcheng Special Steel 
Group; Sichuan Daduhe Iron & Steel Co., Ltd.; Sichuan Province 
Chongxian Hi-FQ ERW Plant; Sichuan Province Jiangyou City Hi-FQ Welding 
Pipe Plant; Sichuan Province Shenfang Welding Pipe Plant; Suyang City 
Iron & Steel Plant; Wuhan Changlong Steel Pipe Plant; and Yangqun Steel 
Pipe Plant. The Department notes that import data from the United 
States Customs Service shows that imports of pipe from the PRC during 
the POI are higher than the volume and value of U.S. sales reported by 
exporters that responded to our request for this information (see 
Respondent Selection Memorandum from James Doyle to Edward Yang, July 
17, 2001). Therefore, the Department preliminarily determines that 
there were exports of the merchandise under investigation from the 
single PRC entity, and that the single entity failed to respond to the 
Department's request for information.
    As set forth above, section 776(b) of the Act provides that, in 
selecting from among the facts available, the Department may employ 
adverse inferences if an interested party fails to cooperate by not 
acting to the best of its ability to comply with requests for 
information. See also ``Statement of Administrative Action'' 
accompanying the URAA, H.R. Rep. No. 103-316, 870 (1994) (``SAA''). The 
Department finds that exporters (i.e., the single PRC entity) who did 
not respond to our request for information have failed to cooperate to 
the best of their ability. Therefore, the Department preliminarily 
finds that, in selecting from among the facts available, an adverse 
inference is appropriate. Consistent with Department practice in cases 
where a respondent is considered uncooperative, as adverse facts 
available, we have applied 124.50 percent, the highest rate calculated 
in the initiation stage of the investigation from information provided 
in the petition (as adjusted by the Department). See, e.g., Notice of 
Preliminary Determination of Sales at Less Than Fair Value: Stainless 
Steel Wire Rod From Germany, 63 FR 10847 (March 5, 1998).
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation as facts available, it must, to the extent 
practicable, corroborate that information from independent sources 
reasonably at its disposal. 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 SAA provides that to 
``corroborate'' means simply that the Department will satisfy itself 
that the secondary information to be used has probative value. See id. 
The SAA also states that independent sources used to corroborate may 
include, for example, published price lists, official import statistics 
and customs data, and information obtained from interested parties 
during the particular investigation. Id. As noted in Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished, from Japan, and 
Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and 
Components Thereof, from Japan; Preliminary Results of Antidumping Duty 
Administrative Reviews and Partial Termination of Administrative 
Reviews, 61 FR 57391, 57392 (November 6, 1996) (``TRBs''), to 
corroborate secondary information, the Department will, to the extent 
practicable, examine the reliability and relevance of the information 
used.
    In order to determine the probative value of the initiation margin 
for use as facts otherwise available for the purposes of this 
determination, we examined evidence supporting the initiation 
calculations. We have now

[[Page 67505]]

corroborated the information in the petition, with some small changes. 
See Memorandum from Edward Yang to Joseph Spetrini: Preliminary 
Determination in the Antidumping Investigation of Circular Welded 
Carbon Quality Steel Pipe (``pipe'') from the People's Republic of 
China: Total Facts Available Corroboration Memorandum for All Others 
Rate, dated December 20, 2001.
    Consequently, we are applying a single antidumping rate--the PRC-
wide rate--to all other exporters in the PRC based on our presumption 
that those respondents who failed to demonstrate entitlement to a 
separate rate constitute a single enterprise under common control by 
the Chinese government. See, e.g., Final Determination of Sales at Less 
Than Fair Value: Synthetic Indigo from the People's Republic of China, 
65 FR 25706, 25707 (May 3, 2000) (``Synthetic Indigo''). The PRC-wide 
rate applies to all entries of the merchandise under investigation 
except for entries from Baosteel International, Tianjin Shuang Jie, 
WeiFang, Zhuhai, Tai Feng Qiao, Walsall, Pangang International, and 
Jinzhou.
    Because this is a preliminary margin, the Department will consider 
all margins on the record at the time of the final determination for 
the purpose of determining the most appropriate final PRC-wide margin. 
See Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Solid Fertilizer Grade Ammonium Nitrate From the Russian 
Federation, 65 FR 1139(January 7, 2000).

Margins for Cooperative Exporters Not Selected

    The exporters who responded to Section A of the Department's 
antidumping questionnaire but were not selected as respondents in this 
investigation (Zhuhai, Tai Feng Qiao, Walsall, Pangang International, 
and Jinzhou) have applied for separate rates, and provided information 
for the Department to consider for this purpose. Although the 
Department is unable, due to administrative constraints (see Respondent 
Selection Memo), to calculate for each of these named parties who are 
exporters a rate based on their own data, these companies cooperated in 
providing all the information that the Department requested of them. 
For Zhuhai, Tai Feng Qiao, Walsall, Pangang International, and Jinzhou, 
we have calculated a weighted-average margin based on the rates 
calculated for those exporters that were selected to respond in this 
investigation, excluding any rates that are zero, de minimis or based 
entirely on adverse facts available. Companies receiving this rate are 
identified by name in the ``Suspension of Liquidation'' section of this 
notice. See Notice of Preliminary Determination of Sales at Less Than 
Fair Value; Honey from the People's Republic of China, 64 FR 24101 (May 
11, 2001).

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base NV, in most 
circumstances, on the NME producer's factors of production, valued in a 
surrogate market economy country or countries considered to be 
appropriate by the Department. In accordance with section 773(c)(4) of 
the Act, the Department, in valuing the factors of production, shall 
utilize, to the extent possible, the prices or costs of factors of 
production in one or more market economy countries that: (1) Are at a 
level of economic development comparable to that of the NME country; 
and (2) are significant producers of comparable merchandise. The 
sources of the surrogate factor values are discussed under the NV 
section below.
    The Department has determined that India, Pakistan, Indonesia, Sri 
Lanka and the Philippines are countries comparable to the PRC in terms 
of economic development. See Memorandum from Jeffrey May to James 
Doyle: Antidumping Duty Investigation on Antidumping Duty Investigation 
of Circular Welded Carbon Quality Steel Pipe from the People's Republic 
of China, dated September 19, 2001. Customarily, we select an 
appropriate surrogate country based on the availability and reliability 
of data from the countries. For PRC cases, the primary surrogate 
country has often been India if it is a significant producer of 
comparable merchandise. In this case, we have found that India is a 
significant producer of comparable merchandise. See Surrogate Country 
Selection Memorandum to The File from Robert Bolling, dated December 
20, 2001, (``Surrogate Country Memorandum'').
    We used India as the primary surrogate country and, accordingly, we 
have calculated NV using Indian prices to value the PRC producers' 
factors of production, when available and appropriate. See Surrogate 
Country Memorandum. We have obtained and relied upon publicly available 
information wherever possible. See Factor Valuation Memorandum to The 
File from Case Analysts, dated December 20, 2001 (``Factor Valuation 
Memorandum'').
    In accordance with section 351.301(c)(3)(i) of the Department's 
regulations, for the final determination in an antidumping 
investigation, interested parties may submit publicly available 
information to value factors of production within 40 days after the 
date of publication of this preliminary determination.

Fair Value Comparisons

    To determine whether sales of pipe to the United States by Baosteel 
International, Tianjin Shuang Jie, and WeiFang were made at less than 
fair value, we compared export price (``EP'') to normal value (``NV''), 
as described in the ``Export Price and ``Normal Value'' sections of 
this notice. In accordance with section 777A(d)(1)(A)(i) of the Act, we 
calculated weighted-average EPs.

Export Price

    In accordance with section 772(a) of the Act, EP is 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 the 
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, as adjusted under subsection (c).
    We calculated EP for Baosteel International, Tianjin Shuang Jie, 
and WeiFang based on delivered prices to unaffiliated purchasers in the 
United States. We made deductions for movement expenses in accordance 
with section 772(c)(2)(A) of the Act. These included foreign inland 
freight from the plant to the port of exportation, and brokerage and 
handling.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using a factors-of-production methodology if: (1) The 
merchandise is exported from an NME country; and (2) the information 
does not permit the calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act.
    Factors of production include: (1) Hours of labor required; (2) 
quantities of raw materials employed; (3) amounts of energy and other 
utilities consumed; and (4) representative capital costs. We calculated 
NV based on factors of production, reported by each respondent, for 
materials, energy, labor, by-products, and packing. Where applicable, 
we deducted from each respondent's normal value the cost of by-products 
sold during the POI. For a further discussion, see the Analysis Memo 
for each respondent. We valued the majority of input factors using

[[Page 67506]]

publicly available published information as discussed in the 
``Surrogate Country'' and ``Factor Valuations'' sections of this 
notice.

Factor Valuations

    The Department will normally use publicly available information to 
value factors of production. However, in accordance with 19 CFR 
351.408(c)(1), the Department's regulations also provide that where a 
producer sources an input from a market economy and pays for it in 
market economy currency, the Department employs the actual price paid 
for the input to calculate the factors-based NV. Id.; see also, Lasko 
Metal Products v. United States, 43 F. 3d 1442, 1445-1446 (Fed. Cir. 
1994) (``Lasko''). Respondents Baosteel International and WeiFang 
reported that some of their inputs were sourced from market economies 
and paid for in a market economy currency. See Factor Valuation 
Memorandum, dated December 20, 2001 for a listing of these inputs.
    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by respondents for the POI. To 
calculate NV, the reported per-unit factor quantities were multiplied 
by publicly available Indian surrogate values (except as noted below). 
In selecting the surrogate values, we considered the quality, 
specificity, and contemporaneity of the data. As appropriate, we 
adjusted input prices by including freight costs to make them delivered 
prices. Specifically, we added surrogate freight costs to Indian import 
surrogate values using the shorter of the reported distance from the 
domestic supplier to the factory or the distance from the nearest 
seaport to the factory. This adjustment is in accordance with the Court 
of Appeals for the Federal Circuit's decision in Sigma Corp. v. United 
States, 117 F. 3d 1401 (Fed. Cir. 1997). For a detailed description of 
all surrogate values used for respondents, see Factor Valuation 
Memorandum.
    Except as noted below, we valued raw material inputs using the 
weighted-average unit import values derived from the Monthly Trade 
Statistics of Foreign Trade of India--Volume II--Imports (``Indian 
Import Statistics'') for the time period April 2000-February 2001. As 
appropriate, we adjusted rupee-denominated values for inflation using 
wholesale price indices published in the International Monetary Fund's 
International Financial Statistics and excluded taxes. We valued 
Baosteel International's hot-rolled steel sheet and hot-rolled steel 
strip at market-economy prices, because the PRC producers, Company A 
and Company B, of the subject merchandise purchased their hot-rolled 
steel sheet and hot-rolled steel strip from a market-economy country 
(Country Y). Although one of the producers also purchases certain hot-
rolled steel sheet from another market-economy country (i.e., Country 
X), we have disregarded these prices because that country's hot-rolled 
steel exporters have benefitted from countervailable subsidies. Thus, 
for this preliminary determination, we have used the market-economy 
prices that Company A and Company B paid to suppliers in Country Y only 
to value the hot-rolled sheet. We recognize that the hot-rolled sheet 
from Country Y was purchased by Company A outside of the POI. However, 
these prices are the appropriate market-economy prices to use to value 
hot-rolled coil in this investigation because evidence on the record 
indicates that the majority of Company A's pipe production during the 
POI was based on the hot-rolled sheet obtained from Country Y. For 
further discussion, please see the Memorandum from Robert Bolling to 
the File: Analysis for the Preliminary Determination of Certain 
Circular Welded Carbon Quality Steel Pipe from the People's Republic of 
China: Baosteel International, dated December 20, 2001. WeiFang 
reported that it purchased a significant portion of its major input of 
hot-rolled steel coil from a market economy, and the remainder from a 
company within the PRC. In those instances where a significant portion 
of the factor is purchased from a market economy supplier and the 
remainder from a non-market economy supplier, the Department normally 
will value the factor using the price paid to the market economy 
supplier. Therefore, pursuant to section 351.408(c)(1) of our 
regulations, we used a simple average of the prices paid by WeiFang for 
the market-economy purchases of hot-rolled coil. See Factor Valuation 
Memorandum at page 2.
    To value electricity, we used data reported as the average Indian 
domestic prices within the category ``Electricity for Industry,'' 
published in the International Energy Agency's publication, Energy 
Prices and Taxes, Second Quarter, 2000. Because the data from this 
source was not contemporaneous with the POI, we adjusted the rate for 
inflation. See Factor Valuation Memorandum at page 5.
    To value water, we used data reported as the average water tariff 
rate as reported in the Asian Development Bank's Second Water Utilities 
Data Book: Asian and Pacific Region published in 1997. Because the data 
from this source was not contemporaneous with the POI, we adjusted the 
rate for inflation. See Factor Valuation Memorandum at page 5.
    We used Indian transport information to value transport for raw 
materials. For domestic inland freight (truck), we used a price quote 
from an Indian trucking company (from Financial Express), adjusted for 
inflation through the POI. For domestic inland freight (rail), we used 
rail rates as quoted from Indian Railway Conference Association price 
lists, adjusted for inflation through the POI. See Factor Valuation 
Memorandum at page 3.
    To value factory overhead, selling, general and administrative 
expenses (``SG&A''), and profit, we calculated simple-average rates 
based on financial information from five Indian pipe producers. See 
Factor Valuation Memorandum at page 6.
    For labor, consistent with section 351.408(c)(3) of the 
Department's regulations, we used the PRC regression-based wage rate at 
Import Administration's home page, Import Library, Expected Wages of 
Selected NME Countries, revised in September 2001 (see http://ia.ita.doc.gov/wages). The source of the wage rate data on the Import 
Administration's Web site can be found in the Yearbook of Labour 
Statistics 2000, International Labor Office (Geneva: 2000), Chapter 5B: 
Wages in Manufacturing.

Verification

    As provided in section 782(i)(1) of the Act, we intend to verify 
all company information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
U.S. Customs Service to suspend liquidation of all imports of subject 
merchandise, except for merchandise produced and exported by Baosteel 
International or WeiFang, entered, or withdrawn from warehouse, for 
consumption on or after the date of publication of this notice in the 
Federal Register. We will instruct the U.S. Customs Service to require 
a cash deposit or the posting of a bond equal to the weighted-average 
amount by which the NV exceeds the EP, as indicated below. These 
suspension-of-liquidation instructions will remain in effect until 
further notice. The weighted-average dumping margins are as follows:

[[Page 67507]]



            Certain Circular Welded Carbon-Quality Steel Pipe
------------------------------------------------------------------------
                                                              Weighted-
                                                               average
               Producer/manufacturer/exporter                   margin
                                                              (percent)
------------------------------------------------------------------------
Baosteel International.....................................            0
Tianjin Shuang Jie.........................................        16.65
WeiFang....................................................            0
Tai Feng Qiao..............................................        16.65
ZhuHai.....................................................        16.65
Pangang International......................................        16.65
Jinzhou....................................................        16.65
Walsall....................................................        16.65
PRC-Wide...................................................        36.42
------------------------------------------------------------------------

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination of sales at LTFV. 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 the domestic industry in the United States 
is materially injured, or threatened with material injury, by reason of 
imports, or sales (or the likelihood of sales) for importation, of the 
subject merchandise.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than fifty days 
after the date of publication of this notice, and rebuttal briefs, 
limited to issues raised in case briefs, no later than fifty-five days 
after the date of publication of this preliminary determination. See 19 
CFR 351.309(c)(1)(i); 19 CFR 351.309(d)(1). A list of authorities used 
and an executive summary of issues should accompany any briefs 
submitted to the Department. This summary should be limited to five 
pages total, including footnotes. In accordance with section 774 of the 
Act, we will hold a public hearing, if requested, to afford interested 
parties an opportunity to comment on arguments raised in case or 
rebuttal briefs. Tentatively, any hearing will be held fifty-seven days 
after publication of this notice at the U.S. Department of Commerce, 
14th Street and Constitution Avenue, N.W., Washington, D.C. 20230, at a 
time and location to be determined. Parties should confirm by telephone 
the date, time, and location of the hearing two days before the 
scheduled date. Interested parties who wish to request a hearing, or to 
participate if one is requested, must submit a written request to the 
Assistant Secretary for Import Administration, U.S. Department of 
Commerce, Room 1870, within 30 days of the date of publication of this 
notice. See 19 CFR 351.310(c). Requests should contain: (1) The party's 
name, address, and telephone number; (2) the number of participants; 
and (3) a list of the issues to be discussed. At the hearing, each 
party may make an affirmative presentation only on issues raised in 
that party's case brief, and may make rebuttal presentations only on 
arguments included in that party's rebuttal brief. See 19 CFR 
351.310(c).
    If this investigation proceeds normally, we will make our final 
determination no later than 75 days after the date of the preliminary 
determination.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: December 20, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-32114 Filed 12-28-01; 8:45 am]
BILLING CODE 3510-DS-P