[Federal Register Volume 67, Number 69 (Wednesday, April 10, 2002)]
[Notices]
[Pages 17358-17361]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-8708]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-503]


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

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request from Canada Pipe Company Limited 
(Canada Pipe), the Department of Commerce (the Department) is 
conducting an administrative review of the antidumping duty order on 
iron construction castings (ICC) from Canada. The period of review 
(POR) is March 1, 2000 through February 28, 2001. This review covers 
imports of ICC from one producer, Canada Pipe.
    We have preliminarily determined the dumping margin for Canada Pipe 
to be 1.43 percent.

EFFECTIVE DATE: April 10, 2002.

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FOR FURTHER INFORMATION CONTACT: Karine Gziryan and Howard Smith, AD/
CVD Enforcement, Office IV, Group II, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone 
(202) 482-4081 and (202) 482-5193, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

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

Background

    On March 5, 1986, the Department published in the Federal Register 
(51 FR 7600) the antidumping duty order on ICC from Canada. On March 5, 
2001, the Department published in the Federal Register (66 FR 13283) a 
notice of opportunity to request an administrative review of this 
antidumping duty order. On March 30, 2001, in accordance with 19 CFR 
351.213(b)(1), the respondent, Canada Pipe, requested that the 
Department conduct an administrative review of its exports of subject 
merchandise to the United States. We published the notice of initiation 
of this review on April 30, 2001 (66 FR 21310).

Scope of the Review

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

Product Comparisons

    In accordance with section 771(16) of the Act, the Department 
considered all products within the scope of this review that Canada 
Pipe produced and sold in the comparison market during the POR to be 
foreign like products for purposes of determining appropriate product 
comparisons to ICC sold in the United States. The Department determined 
that the home market is the appropriate comparison market because the 
aggregate quantity of Canada Pipe's home market sales of foreign like 
product is more than five percent of the aggregate quantity of its U.S. 
sales of subject merchandise (see section 773(a)(1)(C) of the Act). The 
Department compared U.S. sales to sales made in the home market within 
the contemporaneous window period, which extends from three months 
prior to the month of the U.S. sale until two months after the month of 
the sale. Where there were no sales of identical merchandise made in 
the home market in the ordinary course of trade, the Department 
compared U.S. sales to sales of the most similar foreign like product 
made in the ordinary course of trade. In making product comparisons, 
the Department selected identical and most similar foreign like 
products based on the physical characteristics reported by Canada Pipe 
in the following order of importance: product type, components, shape 
of the product, weight band, locking mechanism, painted castings or 
not, machined castings or not.
    The POR is March 1, 2000 through February 28, 2001.

Export Price

    Section 772(a) of the Act defines export price (EP) as the price at 
which the subject merchandise is first sold before the date of 
importation by the exporter or producer outside the United States to an 
unaffiliated purchaser for exportation to the United States.
    Canada Pipe sells subject merchandise directly to its customers in 
the United States. Until July 1, 2000, Canada Pipe's U.S. affiliate, 
Bibby USA, was the importer of record for all of its U.S. sales. Bibby 
USA closed on July 1, 2000. Since July 1, 2000, Canada Pipe acted as 
the importer of record for its U.S. sales and invoiced Canada Pipe's 
U.S. customers directly. The sales documentation on the record in this 
proceeding indicates that Canada Pipe's U.S. sales occurred in Canada 
between Canada Pipe and the unaffiliated U.S. purchaser. Specifically, 
we have found the following facts: 1) Bibby USA, when it operated, did 
not contact the U.S. customers; 2) Canada Pipe's Division, Bibby Ste-
Croix Foundry, in Canada contacted the U.S. customers; 3) the U.S. 
customers send the purchase order directly to Canada Pipe; 4) Canada 
Pipe makes all arrangements for shipping and delivery to the U.S. 
customers in Canada; 5) Canada Pipe's invoices are issued and the U.S. 
customers pay Canada Pipe directly in Canada; and 6) Canada Pipe 
retains title to the merchandise until the point of delivery to the 
U.S. customers. Because Bibby USA merely acted as the importer of 
record, we preliminarily determine that these sales were made in Canada 
by Canada Pipe and, thus, should be treated as EP transactions. See 
Cold-Rolled and Corrosion-Resistant Carbon Steel Flat Products from 
Korea, Final Results of Administrative Review, 65 FR 13359 (March 13, 
2000) and accompanying Decision Memorandum at Comment 12; and 
Porcelain-on-Steel Cookware from Mexico, Final Results of 
Administrative Review, 65 FR 30068 (May 10, 2000) and accompanying 
Decision Memorandum at Comment 2.
    We calculated an EP for all Canada Pipe's sales because the 
merchandise was sold directly by Canada Pipe to the first unaffiliated 
purchaser in the United States prior to importation, and constructed 
export price (CEP) was not otherwise warranted based on the facts of 
record. We made deductions from the starting price for movement 
expenses in accordance with section 772(c)(2)(A) of the Act. These 
include foreign movement expense (inland freight), international 
freight, U.S. brokerage and U.S. duties.

Normal Value

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

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (LOT) as the EP or CEP transaction. The NV LOT 
is that of the starting-price sales in the comparison market or, when 
NV is based on constructed value (CV), that of the sales from which we 
derive selling, general and administrative (SG&A) expenses and profit. 
With respect to

[[Page 17360]]

U.S. price when based on EP transactions, the LOT is the level of the 
sale to the unaffiliated customer.
    To determine whether NV sales are at a different LOT than EP or CEP 
transactions, we examine stages in the marketing process and selling 
functions along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we make a LOT adjustment under section 
773(a)(7)(A) of the Act.
    Canada Pipe reported that during the POR it sold subject 
merchandise through three channels of distribution in the home market: 
sales made by Canada Pipe directly to original equipment manufacturers 
(OEM) (Channel 1), sales from Canada Pipe directly to end-users 
(Channel 2), and sales from Canada Pipe to distributors (Channel 3). In 
examining the record, we found that Canada Pipe performs substantially 
different selling functions (e.g. sales planning, advertising, 
technical service, etc.) for all three reported channels of 
distribution. Due to the proprietary nature of the examined selling 
functions, see the Preliminary Results: Level of Trade Analysis 
(Preliminary LOT Memorandum), dated concurrently with this notice, on 
file in Room B-099 of the main Department of Commerce Building, the 
Central Records Unit (CRU), for the specifics of our analysis. Based 
upon an analysis of the information provided on the record, we conclude 
that there are significant differences in the selling functions 
performed by Canada Pipe in making sales through these three channels 
of distribution. Therefore, using the information on the record, the 
Department preliminarily determines that Canada Pipe makes sales to 
three distinct LOTs in the home market. See the Preliminary LOT 
Memorandum.
    Canada Pipe reported two channels of distribution (i.e. sales to 
OEMs and sales to distributors) in the United States during the POR. In 
examining the record, we found that Canada Pipe performs substantially 
different levels of selling functions for both reported channels of 
distribution. Due to the proprietary nature of the examined selling 
functions, see the Preliminary LOT Memorandum for the specifics of our 
analysis. Based upon an analysis of the information provided on the 
record, we conclude that there are significant differences in the 
selling functions performed by Canada Pipe in making sales through both 
channels of distribution. Therefore, the Department preliminarily 
determines that Canada Pipe makes sales to two distinct LOTs in the 
United States market. See the Preliminary LOT Memorandum.
    In order to determine whether sales in the United States are at a 
different LOT than sales in the home market, we reviewed the selling 
activities associated with each LOT in each market. We compared Canada 
Pipe's selling activities for U.S. EP transactions to OEMs and 
distributors to Canada Pipe's selling activities performed for sales to 
OEMs, distributors, and end-users in the home market. First, we found 
that there were no differences in selling functions performed for 
Canada Pipe's U.S. OEM sales as compared to home market OEM sales. 
Second, we found that there were no differences in selling functions 
performed for Canada Pipe's U.S. distributor sales as compared to home 
market distributor sales. Third, we found that there were significant 
differences in the selling functions performed for Canada Pipe's U.S. 
OEM sales as compared to home market distributor and end-user sales, 
sufficient to constitute differences in LOT. Finally, we found 
significant differences in the selling functions performed for Canada 
Pipe's U.S. distributor sales as compared to home market OEM and end-
user sales, sufficient to constitute differences in LOT. See the 
Preliminary LOT Memorandum.
    To the extent practicable the Department has compared EP sales with 
home market sales at the same LOT as that of the EP sales. However, 
where the Department was unable to match EP sales with home market 
sales at the same LOT, the Department compared the EP sales to home 
market sales at a different LOT. For such comparisons, we made a LOT 
adjustment in accordance with section 773(a)(7) of the Act and 19 CFR 
351.412. See the Preliminary LOT Memorandum.

Currency Conversion

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

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that a 1.43 
percent dumping margin exists for Canada Pipe for the period March 1, 
2000, through February 28, 2001. The Department will disclose 
calculations performed within five days of the date of publication of 
this notice to the parties to this proceeding in accordance with 19 CFR 
351.224(b). An interested party may request a hearing within 30 days of 
publication of these preliminary results. See 19 CFR 351.310(c). Any 
hearing, if requested, will be held 44 days after the date of 
publication, or the first working day thereafter. Interested parties 
are invited to comment on these preliminary results. Interested parties 
may submit case briefs and/or written comments no later than 30 days 
after the date of publication of these preliminary results of review. 
Rebuttal briefs and rebuttals to written comments, limited to issues 
raised in such briefs or comments, may be filed no later than 37 days 
after the date of publication. Parties who submit arguments are 
requested to submit with the argument (1) a statement of the issue and 
(2) a brief summary of the argument. Further, we would appreciate it if 
parties submitting written comments would also provide the Department 
with an additional copy of the public version of those comments on 
diskette. The Department will issue the final results of this 
administrative review, which will include the results of its analysis 
of issues raised in any such comments, within 120 days of publication 
of these preliminary results.
    Upon completion of this administrative review, the Department shall 
determine, and the Customs Service shall assess, antidumping duties on 
all appropriate entries. We have calculated importer-specific duty 
assessment rates based on the ratio of the total amount of antidumping 
duties calculated for the examined sales to the total entered value of 
examined sales. Where the importer-specific assessment rate is above de 
minimis, we will instruct Customs to assess duties on that importer's 
entries of subject merchandise. The Department will issue appraisement 
instructions directly to Customs.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of subject merchandise from Canada entered, or withdrawn 
from warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act: (1) the cash deposit rate for Canada Pipe will be 
the rate established in the final results of this administrative 
review; (2) for merchandise exported by manufacturers or exporters not 
covered in this review but covered in the original less-than-fair-value 
(``LTFV'') investigation or a previous review, the

[[Page 17361]]

cash deposit will continue to be the company-specific rate published 
for the most recent period; (3) if the exporter is not a firm covered 
in this review, a previous review, or the original LTFV investigation, 
but the manufacturer is, the cash deposit rate will be the rate 
established for the most recent period for the manufacturer of the 
merchandise; and (4) if neither the exporter nor the manufacturer is a 
firm covered in this review, a previous review, or the original LTFV 
investigation, the cash deposit rate will be 14.67 percent, the ``all-
others'' rate established in the LTFV segment of this proceeding.
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of administrative review for a 
subsequent review period.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: April 1, 2002
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-8708 Filed 4-9-02; 8:45 am]
BILLING CODE 3510-DS-S