[Federal Register Volume 67, Number 81 (Friday, April 26, 2002)]
[Notices]
[Pages 20730-20739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10349]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-433-809, A-351-836, A-570-876, A-427-824, A-428-835, A-533-827, A-
560-816, A-485-808, A-791-816, A-469-813, A-489-811, A-423-813, A-307-
823]


Notice of Initiation of Antidumping Duty Investigations: Oil 
Country Tubular Goods from Austria, Brazil, the People's Republic of 
China, France, Germany, India, Indonesia, Romania, South Africa, Spain, 
Turkey, Ukraine, and Venezuela

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

ACTION: Initiation of Antidumping Duty Investigations.

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DATES: April 26, 2002.

FOR FURTHER INFORMATION CONTACT: George Callen (India, Romania) at 
(202) 482-0180, Brandon Farlander (Austria) at (202) 482-0182, Jarrod 
Goldfeder (Brazil, South Africa) at (202) 482-0189, Phyllis Hall 
(Spain) at (202) 482-1398, Davina Hashmi (France, Germany) at (202) 
482-4136, Minoo Hatten (Turkey) at (202) 482-1690, Michael Strollo 
(Indonesia, Venezuela) at (202) 482-0629, Alex Villanueva (PRC, 
Ukraine) at (202) 482-3208, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

INITIATION OF INVESTIGATIONS:

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's 
(``the Department's'') regulations are references to the provisions 
codified at 19 CFR Part 351 (2001).

The Petitions

    On March 29, 2002, the Department received petitions filed in 
proper form by IPSCO Tubulars, Inc., Koppel Steel Corporation, a 
division of NS Group, Lone Star Steel Company\1\, Maverick Tube 
Corporation, Newport Steel Corporation, a division of NS Group, and 
United States Steel Corporation (collectively, ``the petitioners''). 
The Department received supplemental information to the petitions on 
April 11, 12, 15, 16, 17, and 18, 2002.
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    \1\ Lone Star is not a petitioner in the antidumping duty 
investigation on Romania.
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    In accordance with section 732(b)(1) of the Act, the petitioners 
allege that imports of oil country tubular goods (``OCTG'') from 
Austria, Brazil, the People's Republic of China (``the PRC''), France, 
Germany, India, Indonesia, Romania, South Africa, Spain, Turkey, 
Ukraine, and Venezuela\2\ are, or are likely to be, sold in the United 
States at less than fair value within the meaning of section 731 of the 
Act, and that such imports are materially injuring, or threatening 
material injury to, an industry in the United States.
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    \2\ The original petition filed on March 29, 2002, also included 
a petition for the imposition of antidumping duties on OCTG from 
Colombia. On April 11, 2002, the petitioners withdrew the petition 
on Colombia.
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    The Department finds that the petitioners filed these petitions on 
behalf of the domestic industry because they are interested parties as 
defined in sections 771(9)(C) and (D) of the Act and they have 
demonstrated sufficient industry support with respect to each of the 
antidumping investigations that they are requesting the Department to 
initiate. See infra, ``Determination of Industry Support for the 
Petitions.''

Scope of Investigations

    For purposes of these investigations, the products covered are 
certain oil country tubular goods. Oil country tubular goods are hollow 
steel products of circular cross-section, including oil well casing, 
tubing, and drill pipe, of iron (other than cast iron) or steel (both 
carbon and alloy), whether seamless or welded, whether or not 
conforming to American Petroleum Institute (``API'') or non-API 
specifications, whether finished or unfinished (including green tubes 
and limited service OCTG products). The scope for these investigations 
does not cover casing, tubing, or drill pipe containing 10.5 percent or 
more of chromium or finished drill pipe with tool joint attached. The 
merchandise subject to these investigations is typically classified in 
the following Harmonized Tariff Schedule of the United States 
(``HTSUS'') subheadings: 7304.21.30.00, 7304.21.60.30, 7304.21.60.45, 
7304.21.60.60, 7304.29.10.10, 7304.29.10.20, 7304.29.10.30, 
7304.29.10.40, 7304.29.10.50, 7304.29.10.60, 7304.29.10.80, 
7304.29.20.10, 7304.29.20.20, 7304.29.20.30, 7304.29.20.40, 
7304.29.20.50, 7304.29.20.60, 7304.29.20.80, 7304.29.30.10, 
7304.29.30.20, 7304.29.30.30, 7304.29.30.40, 7304.29.30.50,

[[Page 20731]]

7304.29.30.60, 7304.29.30.80, 7304.29.40.10, 7304.29.40.20, 
7304.29.40.30, 7304.29.40.40, 7304.29.40.50, 7304.29.40.60, 
7304.29.40.80, 7304.29.50.15, 7304.29.50.30, 7304.29.50.45, 
7304.29.50.60, 7304.29.50.75, 7304.29.60.15, 7304.29.60.30, 
7304.29.60.45, 7304.29.60.60, 7304.29.60.75, 7305.20.20.00, 
7305.20.40.00, 7305.20.60.00, 7305.20.80.00, 7306.20.10.30, 
7306.20.10.90, 7306.20.20.00, 7306.20.30.00, 7306.20.40.00, 
7306.20.60.10, 7306.20.60.50, 7306.20.80.10, and 7306.20.80.50. 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, our written description of the scope of these proceedings is 
dispositive.
    As discussed in the preamble to the Department's regulations 
(Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 
27323 (May 19, 1997)), we are setting aside a period for parties to 
raise issues regarding product coverage. The Department encourages all 
parties to submit such comments within 20 calendar days of publication 
of this notice. Comments should be addressed to Import Administration's 
Central Records Unit, Room 1870, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230. The period of 
scope consultations is intended to provide the Department with ample 
opportunity to consider all comments and consult with parties prior to 
the issuance of the preliminary determinations.

Determination of Industry Support for the Petitions

    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that the Department's industry support determination, which is 
to be made before the initiation of the investigation, be based on 
whether a minimum percentage of the relevant industry supports the 
petition. A petition meets this requirement if the domestic producers 
or workers who support the petition account for: (1) at least 25 
percent of the total production of the domestic like product; and (2) 
more than 50 percent of the production of the domestic like product 
produced by that portion of the industry expressing support for, or 
opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act 
provides that, if the petition does not establish support of domestic 
producers or workers accounting for more than 50 percent of the total 
production of the domestic like product, the Department shall either 
poll the industry or rely on other information in order to determine if 
there is support for the petition.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to determine whether a 
petition has the requisite industry support, the statute directs the 
Department to look to producers and workers who produce the domestic 
like product. The International Trade Commission (``ITC''), which is 
responsible for determining whether ``the domestic industry'' has been 
injured, must also determine what constitutes a domestic like product 
in order to define the industry. While both the Department and the ITC 
must apply the same statutory definition regarding the domestic like 
product (section 771(10) of the Act), they do so for different purposes 
and pursuant to separate and distinct authority. In addition, the 
Department's determination is subject to limitations of time and 
information. Although this may result in different definitions of the 
like product, such differences do not render the decision of either 
agency contrary to the law.\3\
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    \3\ See Algoma Steel Corp. Ltd., v. United States, 688 F. 
Supp.639, 642-44 (CIT 1988); High Information Content Flat Panel 
Displays and Display Glass from Japan: Final Determination; 
Rescission of Investigation and Partial Dismissal of Petition, 56 FR 
32376, 32380-81 (July 16, 1991).
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    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this subtitle.'' Thus, the reference point from which the 
domestic like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition.
    We reviewed the description of the domestic like product presented 
in the petitions. Based upon our review of the petitioners' claims, we 
concur that there is a single domestic like product, which is defined 
in the ``Scope of Investigations'' section above. This is consistent 
with the Department's determinations in past investigations to treat 
all OCTG products as a single class or kind of merchandise. See, e.g., 
Oil Country Tubular Goods From Argentina, 60 FR 41055 (Aug. 11, 1995). 
We note that the ITC has previously determined that drill pipe was a 
separate like product from tubing and casing. See Oil Country Tubular 
Goods From Argentina, Italy, Japan, Korea, and Mexico, at I-9 (Inv. 
Nos. 701-TA-363-364 (Final) and 731-TA-711-717 (Final) (Publication 
2911; August 1995)). However, in previous investigations, the 
Department has considered casing, tubing and drill pipe to be one class 
or kind of merchandise. See, e.g., Oil Country Tubular Goods From 
Argentina, 60 FR 41055 (Aug. 11, 1995).
    The ITC's 1995 determination that drill pipe was a separate like 
product was based on a scope that included both unfinished drill pipe 
and finished drill pipe with attached tool joints. Id. at I-10. In that 
case, the ITC focused on the lack of interchangeability between 
finished drill pipe with attached tool joints and finished casing and 
tubing as a major determinant in its decision. This issue is not 
present in this investigation because only unfinished drill pipe is 
included in the scope. The ITC did state in its 1995 determination that 
there are ``certain distinctions between [unfinished] drill pipe and 
other OCTG products'' that also support including unfinished drill pipe 
in the same like product category as finished drill pipe with attached 
tool joints. Id. The ITC noted that drill pipe tends to be shorter and 
heavier than casing and tubing, drill pipe tends to be of low alloy 
steel, whereas casing and tubing are primarily of carbon steel, and the 
tensile strength of drill pipe is generally higher than that in casing 
and tubing. Id. However, the ITC report acknowledges that there is 
overlap between unfinished drill pipe and casing and tubing with 
respect to diameter, wall thickness, and length. Id. at I-11, fn. 17. 
Regarding the issue of alloy, various grades of casing and tubing are 
also low alloy steels, as evidenced by specific alloy designations in 
the Harmonized Tariff Schedules for these products. Finally, the 
strength requirements on many of the grades of casing and tubing can be 
higher than those for unfinished drill pipe. In fact, the final 
strength characteristics of all products will not be determined until 
the product has been subjected to certain heat treating operations. 
See, e.g., American Petroleum Institute, Specifications For High-
Strength Casing, Tubing, and Drill Pipe. Consequently, for purposes of 
this investigation, we conclude that casing, tubing, and unfinished 
drill pipe constitute one like product.
    Finally, the Department has determined that the petitions contain 
adequate evidence of industry support and, therefore, polling is 
unnecessary. See Import Administration Antidumping Investigations 
Initiation Checklist for each country-specific proceeding, Industry 
Support section and Attachment II, April 18, 2002 (collectively, the 
``Initiation Checklist''),

[[Page 20732]]

on file in the Central Records Unit, Room B-099 of the main Department 
of Commerce building.
    The Department received no opposition to the petitions except with 
respect to Austria and Romania. In the context of the Romanian 
petition, two Romanian producers of OCTG filed a letter claiming that 
the petitioners had failed to demonstrate sufficient industry support. 
In the context of the Austrian petitions, Grant Prideco, Inc., which is 
a domestic producer of the like product and is the majority owner of 
the Austrian OCTG producer, also asserted that the petitioners had 
failed to demonstrate that they account for a majority of the domestic 
industry.
    For all countries, we determined that the petitioners have 
demonstrated industry support representing over 50 percent of total 
production of the domestic like product. The Department also determined 
that it will disregard Grant Prideco's opposition to the petition 
because it is related to a foreign producer. See Attachment II to the 
Initiation Checklist for further explanation. Accordingly, we determine 
that these petitions are filed on behalf of the domestic industry 
within the meaning of section 732(b)(1) of the Act.

Initiation Standard for Cost Investigations

    Pursuant to section 773(b) of the Act, the petitioners provided 
information demonstrating reasonable grounds to believe or suspect that 
sales in the home markets of Brazil and France and the PRC third-
country market of Germany were made at prices below the cost of 
production (``COP'') and, accordingly, requested that the Department 
conduct country-wide sales-below-COP investigations in connection with 
these investigations. The Statement of Administrative Action (``SAA''), 
submitted to the Congress in connection with the interpretation and 
application of the URAA, states that an allegation of sales below COP 
need not be specific to individual exporters or producers. SAA, H.R. 
Doc. No. 316 at 833 (1994). The SAA, at 833, states that ``Commerce 
will consider allegations of below-cost sales in the aggregate for a 
foreign country, just as Commerce currently considers allegations of 
sales at less than fair value on a country-wide basis for purposes of 
initiating an antidumping investigation.''
    Further, the SAA provides that section 773(b)(2)(A) of the Act 
retains the requirement that the Department have ``reasonable grounds 
to believe or suspect'' that below-cost sales have occurred before 
initiating such an investigation. Reasonable grounds exist when an 
interested party provides specific factual information on costs and 
prices, observed or constructed, indicating that sales in the foreign 
market in question are at below-cost prices. Id. We have analyzed the 
country-specific allegations as described below.

Export Price (``EP''), Constructed Export Price (``CEP''), and 
Normal Value (``NV'')

    The following are descriptions of the allegations of sales at less 
than fair value upon which the Department based its decision to 
initiate these investigations. A more detailed description of these 
allegations is provided in each Initiation Checklist. Should the need 
arise to use any of this information as facts available under section 
776 of the Act in our preliminary or final determinations, we may re-
examine the information and revise the margin calculations, as 
appropriate.

Austria

EP
    The petitioners stated that Voest-Alpine Stahlrohr Kindberg GmbH & 
Co KG (``Kindberg'') is the only Austrian producer and exporter of OCTG 
to the United States. However, we note that Kindberg changed its name 
to Voest-Alpine Tubulars GmbH & Co KG (``Voest-Alpine Tubulars'') 
during the anticipated period of investigation (``POI''). For the 
calculation of U.S. price, the petitioners used the average unit value 
(``AUV'') for OCTG from Austria, which is based on the Census Bureau's 
IM-145 import data for the anticipated POI. The petitioners used this 
AUV figure without adjustments as the basis for U.S. price. See 
Initiation Checklist.
NV

Price-to-Constructed Value (``CV'') Comparisons

    The petitioners stated that they were unable to obtain home-market 
or third-country prices for OCTG from Austria. The petitioners stated 
that they were unable to obtain home-market prices because their market 
researcher did not have the capability to perform such research in 
Austria. Moreover, as further support, the petitioners note that, in 
the 1994-95 investigation of OCTG from Austria, the Department 
determined that Austria's home market was not viable. For third-country 
prices, the petitioners stated that they used a market researcher to 
determine that Russia is the largest third-country market. See 
Attachment D of the April 11, 2002, petition amendment. However, the 
petitioners stated they were unable to obtain pricing information for 
sales to Russia. Hence, the petitioners state that, because Austria's 
home market is not viable and it was unable to obtain third-country 
prices from Russia, the petitioners determined that it was necessary to 
use CV. Based on the petitioners' information, we determine that 
Austria's home market is not viable and that the petitioners made a 
reasonable effort to obtain third-country market prices for Russia.
    Pursuant to section 773(e) of the Act, CV consists of the cost of 
manufacture (``COM''), selling, general, and administrative expenses 
(``SG&''), financial expenses, profit, and packing expenses. The 
petitioners calculated COM based on the production costs in the United 
States, adjusted to reflect known differences in the production costs 
in the home market (i.e., Austria). See Initiation Checklist. The 
petitioners utilized the costs of a like steel producer in the United 
States which manufactures seamless OCTG. The petitioners obtained 
certain unit factor costs incurred by an affiliate of Voest-Alpine 
Tubulars based on a proprietary report. The petitioners obtained 
natural gas prices from a European Union publication entitled ``Gas 
Prices for EU Industry on 1 January 2001,'' and used these cost values 
instead of those for the U.S. producer. The petitioners state that 
Voest-Alpine Tubulars and its affiliates' other unit factor costs are 
not reasonably available. Hence, for these costs, the petitioners used 
those of the U.S. producer. These operating costs were supported by an 
official of one of the petitioning firms. We examined the affidavit and 
found this official is in a position to know the inputs and costs of 
inputs for the production of the subject merchandise. Therefore, we 
found the costs calculated by the petitioners to be reasonable and 
accurate.
    The petitioners stated that Voest-Alpine Tubulars' and its 
affiliates' fixed overhead expenses (including depreciation) are not 
reasonably available. Hence, for these costs, the petitioners used 
those of the U.S. producer. The petitioners were unable to calculate 
SG&A based on the unconsolidated financial statements of Voest-Alpine 
Tubulars's affiliates (Voest-Alpine Stahl Linz GmbH, Voest-Alpine 
Schienen GmbH, and Voest-Alpine Stahl Donawitz GmhH). Hence, the 
petitioners used the consolidated financial statement of Voest-Alpine 
Tubulars' parent company, Voest-Alpine Stahl AG. For financial expense, 
the petitioners used Voest-Alpine Stahl AG's consolidated financial 
statements. For profit, the petitioners used Voest-

[[Page 20733]]

Alpine Tubulars's unconsolidated financial statements for 2001. The 
SG&A, interest expense, and profit that the petitioners calculated were 
derived from the financial statements of either the foreign producer or 
its affiliates. Because of this, we found that use of these companies' 
SG&A, interest expense, and profit was appropriate for initiation 
purposes and we relied on this information.
    The petitioners obtained exchange rates from the Federal Reserve. 
Because the source for these exchange rates is the same as we normally 
use in an antidumping investigation or review, we find it appropriate 
to rely on this information.
    Based upon the comparison of CV to EP, the petitioners calculated 
an estimated dumping margin of 39.36 percent.

Brazil

EP
    The petitioners identified five companies that produce and/or 
export subject merchandise in Brazil. The petitioners believe that 
these producers and/or exporters account for all OCTG sold in Brazil 
and exported to the United States from Brazil. The petitioners provided 
pricing and cost information for one of these five companies, V&M do 
Brasil S.A. (``V&M do Brasil''). According to the petitioners, V&M do 
Brasil made direct sales of the subject merchandise to unaffiliated 
U.S. customers. The petitioners based EP on offers for sale of OCTG by 
V&M do Brasil to an unaffiliated U.S. customer which were obtained 
through market research. To calculate EP, the petitioners deducted 
foreign inland freight from the price quote. The information supporting 
this deduction was obtained through market research. See Initiation 
Checklist.
NV

Price-to-Price Comparisons

    The petitioners provided home-market prices for V&M do Brasil based 
on several grades and sizes of OCTG sold to an unaffiliated home-market 
customer, which were obtained from foreign market research. These 
products are comparable to the products exported to the United States 
that served as the basis for EP. To calculate NV, the petitioners 
deducted inland freight, which was also obtained from foreign market 
research. See Initiation Checklist. To adjust for differences in 
packing expenses, the petitioners deducted home-market packing expenses 
and added U.S. packing expenses based on information obtained from 
foreign market research. See Initiation Checklist. The petitioners also 
adjusted home-market prices to reflect differences in the credit 
expenses between the U.S. and Brazilian markets, based on information 
obtained from market research and the International Monetary Fund. The 
petitioners made this adjustment by deducting home-market imputed 
credit expenses and adding U.S. imputed credit expenses. SeeInitiation 
Checklist. Finally, for comparisons to EP, the petitioners converted 
the net home-market prices to U.S. dollars based on the average Federal 
Reserve exchange rate for the fiscal quarters in which the U.S. price 
quotes were made.
    Based on EP price-to-price comparisons calculated in accordance 
with section 773(a) of the Act, the estimated dumping margins for OCTG 
from Brazil range from 6.01 percent to 8.97 percent.

Price-to-CV Comparisons

    The petitioners also provided information demonstrating reasonable 
grounds to believe or suspect that sales of OCTG in the home market 
were made at prices below the fully absorbed COP within the meaning of 
section 773(b) of the Act, and they requested that the Department 
conduct a country-wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of COM, SG&A 
expenses, financial expenses, and packing expenses. The petitioners 
calculated COM with the exception of the depreciation portion of fixed 
overhead based on their own production experience, adjusted for known 
differences between costs incurred to produce OCTG in the United States 
and Brazil. SeeInitiation Checklist. Specifically, the petitioners used 
consumption rates incurred by V&M do Brasil for raw materials, direct 
labor, electricity, and natural gas based on information obtained from 
publicly available data and an industry study. Where information on a 
specific variable consumption rate of V&M do Brasil was not reasonably 
available, the petitioners used those of a U.S. producer. To calculate 
the portions of fixed overhead other than depreciation, the petitioners 
relied upon the experience of a U.S. producer because V&M do Brasil's 
financial statements did not provide sufficient information. To 
calculate depreciation expense, SG&A, and financial expenses, the 
petitioners relied upon amounts reported in V&M do Brasil's fiscal year 
2000 financial statements. See Initiation Checklist. Based upon the 
comparison of the prices of the foreign like product in the home market 
to the calculated COP of the product, we find reasonable grounds to 
believe or suspect that sales of the foreign like product were made 
below the COP within the meaning of section 773(b)(2)(A)(i) of the Act. 
Accordingly, the Department is initiating a country-wide cost 
investigation.
    Pursuant to sections 773(a)(4), 773(b), and 773(e) of the Act, the 
petitioners also based NV for sales in Brazil on CV. The petitioners 
calculated CV using the same COM, SG&A, and financial expenses they 
used to compute Brazilian home-market costs. Consistent with section 
773(e)(2) of the Act, the petitioners included in CV an amount for 
profit. Because V&M do Brasil operated at a loss in the most recent 
fiscal year for which data was reasonably available, the petitioners 
used the profit experience of Usinas Siderurgicas de Minas Gerais S/A, 
a Brazilian steel producer with a production process similar to V&M do 
Brasil.
    Based upon the comparison of CV to EP, the petitioners calculated 
estimated dumping margins ranging from 51.35 to 67.07 percent.

PRC

EP
    The petitioners identified Baoshan Iron and Steel Company 
(``Baoshan'') and Tianjin Pipe Company as major producers of OCTG in 
the PRC. The petitioners based EP on a price quote of PRC OCTG from 
Baoshan they received from an importer of PRC OCTG. The petitioners 
started with an average price in U.S. dollars per net ton and deducted 
an amount for numerous movement expenses and sales-specific 
adjustments. See Initiation Checklist.
    For purposes of this initiation, the data submitted by the 
petitioners provides grounds to suggest that EP is an appropriate basis 
for calculating the U.S. price. To determine EP, we relied on the data 
in the petition.
NV
    The petitioners provided a dumping margin calculation using the 
Department's non-market-economy (``NME'') methodology as required by 19 
CFR 351.202(b)(7)(i)(C). For the NV calculation, the petitioners based 
the factors of production (``FOP''), as defined by section 773(c)(3) of 
the Act (raw materials, labor and energy), for OCTG on information from 
PRC producers. See Initiation Checklist.
    The petitioners selected India as the surrogate country. The 
petitioners argued that, pursuant to section

[[Page 20734]]

773(c)(4) of the Act, India is an appropriate surrogate because it is a 
market-economy country that is at a comparable level of economic 
development to the NME and is a significant producer of comparable 
merchandise. Based on the information provided by the petitioners, we 
believe that the petitioners' use of India as a surrogate country is 
appropriate for purposes of initiation of this investigation. 
SeeInitiation Checklist.
    In accordance with section 773(c)(4) of the Act, the petitioners 
valued the FOP, where possible, on reasonably available, public 
surrogate country data. Where possible, the petitioners developed unit 
factor costs relying on surrogate values from the Directorate General 
of Commercial Intelligence & Statistics, Ministry of Commerce, 
Government of India, Monthly Statistics of the Foreign Trade (``MSFT'') 
from April 2001 to August 2001, the most contemporaneous data 
available, which captures two months of the anticipated POI. Where MSFT 
data was not available, the petitioners used actual unit factor costs 
purchased by The TATA Iron & Steel Company (``TATA''), Ltd., and the 
Steel Authority of India, Ltd. (``SAIL''). The petitioners argue that 
these companies were selected because, like Baoshan, they are also 
integrated steel producers. Specifically, ``where both TATA and SAIL 
reported information regarding an input, the petitioners calculated the 
unit factor costs based on the weighted average for the companies. 
Where only one of the companies reported information regarding an 
input, the petitioners relied on the information for that company 
alone.'' See petition at 3.
    Labor was valued using the regression-based wage rate for the PRC 
provided by Import Administration's website and in accordance with 19 
CFR 351.408(c)(3). The petitioners derived factory overhead, SG&A, 
interest, and profit from the 2000-2001 financial statements of TATA, 
an Indian producer of the subject merchandise. The petitioners 
calculated factory overhead, interest and profit ratios by extracting 
the appropriate items from TATA's financial statements. The petitioners 
note that these financial ratios were used by the Department in a 
recent antidumping duty investigation on products from the PRC. See 
Notice of Initiation of Antidumping Duty Investigation: Certain Cold-
Rolled Carbon Steel Flat Products from Argentina, Australia, Belgium, 
Brazil, France, Germany, India, Japan, Korea, the Netherlands, New 
Zealand, China, the Russian Federation, South Africa, Spain, Sweden, 
Taiwan, Thailand, Turkey, and Venezuela, 66 FR 54198 (October 26, 
2001).
    Based on comparisons of NV to EP, calculated in accordance with 
section 773(c) of the Act, the estimated dumping margin for OCTG from 
the PRC is 42.07 percent.

France

EP
    The petitioners identified one company, V&M France, that produces 
and/or exports subject merchandise in France. The petitioners believe 
that V&M France accounts for all OCTG sold in France and exported to 
the United States from France. The petitioners provided pricing and 
cost information for V&M France. According to the petitioners, V&M 
France made direct sales of the subject merchandise to unaffiliated 
U.S. customers. The petitioners based EP on offers for sale of OCTG by 
V&M France to unaffiliated U.S. customers, which were obtained from 
market research. To calculate EP, which was based on F.O.B. port of 
exportation U.S. prices of OCTG inclusive of foreign inland freight, 
the petitioners deducted foreign inland freight from the price quote. 
The information supporting this deduction was obtained from market 
research. See Initiation Checklist.
NV

Price-to-Price Comparisons

    The petitioners provided home-market prices for V&M France based on 
OCTG sold to unaffiliated home-market customers, which were obtained 
from foreign market research. These products are comparable to the 
products exported to the United States that served as the basis for EP. 
To calculate NV, the petitioners deducted inland freight, which was 
also obtained from foreign market research. See Initiation Checklist. 
To adjust for differences in packing expenses, the petitioners deducted 
home-market packing expenses and added U.S. packing expenses based on 
information obtained from foreign market research. See Initiation 
Checklist. The petitioners also adjusted home-market prices to reflect 
differences in the credit expenses between the U.S. and French markets, 
based on information obtained from market research and the 
International Financial Statistics published by the International 
Monetary Fund. The petitioners made this adjustment by deducting home-
market imputed credit expenses and adding U.S. imputed credit expenses. 
See Initiation Checklist. Finally, for comparisons to EP, the 
petitioners converted the net home-market prices to U.S. dollars based 
on the average Federal Reserve exchange rate for the fiscal quarters in 
which the U.S. price quotes were made.
    Based on EP price-to-price comparisons calculated in accordance 
with section 773(a) of the Act, the estimated dumping margins for OCTG 
from France range from 5.50 percent to 5.71 percent.

Price-to-CV Comparisons

    The petitioners also provided information demonstrating reasonable 
grounds to believe or suspect that sales of OCTG in the home market 
were made at prices below the fully absorbed COP within the meaning of 
section 773(b) of the Act, and they requested that the Department 
conduct a country-wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of COM, SG&A 
expenses, and packing. The petitioners calculated COM based on their 
own production experience, adjusted for known differences between costs 
incurred to produce OCTG products in the United States and France using 
publicly available data. See Initiation Checklist. To calculate SG&A, 
the petitioners relied upon amounts reported in a French steel 
producer's 2000 audited financial statements. For interest expense, the 
petitioners used the French OCTG producer's parent company's audited 
consolidated 2001 financial statements. Based upon a comparison of the 
prices of the foreign like product in the home market to the calculated 
COP of the product, we find reasonable grounds to believe or suspect 
that sales of the foreign like product were made below the COP within 
the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly, the 
Department is initiating a country-wide cost investigation.
    Pursuant to sections 773(a)(4), 773(b), and 773(e) of the Act, the 
petitioners also based NV for sales in France on CV. The petitioners 
calculated CV using the same COM, SG&A, and interest expense figures 
they used to compute French home-market costs. Consistent with 
773(e)(2) of the Act, the petitioners included in CV an amount for 
profit. For profit, the petitioners relied upon amounts reported in the 
French OCTG producer's parent company's audited consolidated 2001 
financial statements.
    Based upon the comparison of CV to EP, the petitioners calculated 
estimated dumping margins ranging from 27.86 to 37.91 percent.

[[Page 20735]]

Germany

EP
    The petitioners identified V&M Deutschland GmbH (``V&M Germany'') 
and Benteler Stahl/Rorh GmbH as companies which produce and/or export 
subject merchandise in Germany. The petitioners believe that one of 
these two companies, V&M Germany, accounts for the largest share of 
imports of OCTG from Germany by volume and value. The petitioners 
provided pricing and CV information for V&M Germany. According to the 
petitioners, V&M Germany made direct sales of the subject merchandise 
to an unaffiliated U.S. customer. The petitioners based EP on offers 
for sale of OCTG by V&M Germany to an unaffiliated U.S. customer, which 
were obtained from market research. The prices provided by the 
petitioners were based on F.O.B. port of exportation prices inclusive 
of foreign inland freight. To arrive at an ex-factory price, the 
petitioners deducted foreign inland freight from the price quote 
adjusted on a net-ton basis and converted to U.S. dollars using 
exchange rates provided by the Federal Reserve. No other adjustments 
were made to EP. SeeInitiation Checklist.
NV

Price-to-CV Comparisons

    The petitioners found that the quantity of home-market sales was 
insufficient to serve as the basis for NV and, thus, concluded that the 
German market was not viable. In its original petition, the petitioners 
found that OCTG export prices to third countries were not reasonably 
available. Therefore, the petitioners based the NV of V&M Germany on 
CV. The petitioners calculated CV based on the COM, SG&A, and financial 
expenses. Consistent with section 773(e)(2) of the Act, the petitioners 
included in CV an amount for profit. On April 16, 2002, the petitioners 
supplemented the petition by providing information demonstrating 
reasonable grounds to believe or suspect that sales of OCTG in the PRC 
third-country market were made at prices below the fully absorbed COP 
within the meaning of section 773(b) of the Act, and requested that the 
Department conduct a country-wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of COM, SG&A 
expenses, and packing. The petitioners calculated COM based on their 
own production experience, adjusted for known differences between costs 
incurred to produce OCTG in the United States and Germany using 
publicly available data. To calculate SG&A and interest expense, the 
petitioners relied upon amounts reported in a German OCTG producer's 
2000 and 2001 financial statements. See Initiation Checklist. Based 
upon a comparison of the prices of the foreign like product in the 
third country market to the calculated COP of the product, we find 
reasonable grounds to believe or suspect that sales of the foreign like 
product were made below the COP within the meaning of section 
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a 
country-wide cost investigation with respect to sales to the PRC.
    Based on the cost data discussed above, the petitioners found that 
the third-country market selling prices were below the COP. Therefore, 
pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners based NV on CV. The petitioners calculated CV using the 
same COM, depreciation, SG&A and interest expense figures used to 
compute the third- country market costs. Consistent with section 
773(e)(2) of the Act, the petitioners included in CV an amount for 
profit. For profit, the petitioners relied upon amounts reported in the 
German OCTG producer's 2000 financial statements.
    Based upon the comparison of CV to EP, the petitioners calculated 
estimated dumping margins ranging from 32.70 to 32.72 percent.

India

CEP
    The petitioners identified two companies that produce OCTG in 
India. The petitioners state that these producers account for all the 
subject merchandise imported into the United States from India. The 
petitioners state that one of these, Maharashtra Seamless Ltd. 
(``Maharashtra''), produced more than two-thirds of the OCTG imported 
into the United States from India. They also state that a U.S. firm, 
Exploreco Energy (``Exploreco''), is the exclusive distributor for 
Maharashtra in the United States and, therefore, that CEP is the proper 
basis on which to calculate an ex-factory price. Although we found the 
CEP price quote to be an acceptable U.S. price, we are not finding that 
any of the parties are affiliated at this stage of the proceeding. The 
petitioners based CEP on an affidavit from an employee of a firm that 
purchases OCTG. This employee obtained information concerning a price 
quote received by another firm that received a price quote during the 
anticipated POI for subject merchandise produced by Maharashtra. In 
order to obtain an ex-factory price, the petitioners deducted from 
gross U.S. price early-payment discounts, distributor mark-ups, 
threading and coupling costs incurred in the United States, U.S. port 
charges, international shipping charges, U.S. Customs duties, and 
foreign inland freight expenses.
    For purposes of initiation, we recalculated the U.S. price that the 
petitioners used in their calculation. We continued to deduct from U.S. 
price threading and coupling costs incurred in the United States. We 
also deducted early-payment discounts and movement expenses. We did not 
deduct distributor mark-ups from the starting price. While it may be 
necessary to deduct a distributor mark-up from the gross unit price to 
arrive at a CEP, in this case it appears that such expenses have 
already been accounted for, at least to some extent, in the other 
deductions made. Accordingly, to determine CEP, we relied on the data 
in the petition, except that we did not deduct the distributor mark-
ups. See Initiation Checklist.
NV

Price-to-Price Comparisons

    The petitioners based NV on prices of OCTG in India comparable to 
the products exported during the anticipated POI. The petitioners used 
a price that they obtained from a market-research report for a recent 
sale by one of the exporting firms to an unaffiliated customer in India 
as the starting point in calculating NV. The petitioners adjusted this 
price by adding fees for export packing expenses and by subtracting 
foreign inland freight charges, domestic packaging expenses, and Indian 
credit expense. We determined that the information the petitioners used 
for the calculation of home-market price is adequate and accurate and 
represents information reasonably available to them.
    Based on CEP price-to-price comparisons calculated in accordance 
with section 773(a) of the Act, the estimated dumping margin for OCTG 
from India is 17.43 percent.

Indonesia

EP
    The petitioners used import values declared to U.S. Customs (IM-145 
data) to determine the AUV during January through December 2001 for 
HTSUS category 7304.29.30.40, which accounted for the largest volume of 
subject imports from Indonesia during the anticipated POI. The 
petitioners made no deductions to U.S. price.

[[Page 20736]]

NV

Price-to-CV Comparisons

    The petitioners were unable to obtain Indonesian market prices on 
which to base NV. Therefore, pursuant to sections 773(a)(4), 773(b), 
and 773(e) of the Act, the petitioners based NV for sales in Indonesia 
on CV. The petitioners calculated CV for a seamless casing OCTG 
product, which corresponds to the HTSUS category which accounted for 
the largest volume of subject imports from Indonesia during the 
anticipated POI. The petitioners first constructed a value of the green 
tube produced by V&M France since, according to sources provided in the 
amendment to the petition, V&M France is PT Citra Tubindo's (``Citra'') 
main source of green tube. Green tube is used as the primary input into 
the finished OCTG product produced by Citra. See the petitioners' April 
11, 2002, amendment to the petition, at 3 and Exhibit 2.
    Specifically, the petitioners obtained unit factor costs for coal, 
scrap, iron ore, labor, and electricity by relying on publicly 
available data and an industry study. For the unit factor cost for 
natural gas, the petitioners relied upon natural gas prices reported by 
the European Union's statistical agency, Eurostat. Where information on 
a specific variable consumption rate of V&M France was not reasonably 
available, the petitioners used those of a surrogate U.S. producer. 
Because the financial statements of V&M France, V&M Tube, or the parent 
company of V&M France and V&M Tube, Vallourec, were not reasonably 
available to the petitioners, the petitioners calculated portions of 
fixed overhead other than depreciation and general and administrative 
expense (``G&A'') using the consolidated financial statements of Usinor 
SA, another integrated steel producer in France. To G&A the petitioners 
added the estimated cost of transporting green tube from France to 
Indonesia.
    Next, the petitioners calculated Citra's variable costs using usage 
rates of the U.S. surrogate producer for quenching and tempering and 
threading and coupling. To this, the petitioners applied a percentage 
of fixed overhead to variable COM to calculate total COM, SG&A to the 
total COM to calculate total COP, and profit to the total COP to 
calculate CV. These percentages were based on Citra's fiscal year 2000 
financial statements.
    Based upon the comparison of CV to EP, the petitioners calculated 
an estimated dumping margin of 133.73 percent.

Romania

EP
    The petitioners identified four companies that produce and/or 
export subject merchandise in Romania. The petitioners believe that 
these producers and/or exporters account for the majority of all OCTG 
produced in Romania and exported to the United States from Romania. 
They obtained an offer for a U.S. sale of OCTG from Romania which 
documents the sales terms for the subject merchandise. The petitioners 
stated in the petition that they believe this offer is for sale of a 
product that entered with plain ends but, in a subsequent submission, 
they indicated that they could not state with certainty whether the 
product in the offer was threaded or coupled in the United States or in 
Romania. They also stated that they were not certain whether the U.S. 
seller was affiliated with a Romanian producer. Because significant 
quantities of imports of both finished and unfinished subject 
merchandise entered the United States from Romania during the 
anticipated POI and the petitioners are unable to determine with 
certainty whether the threading and coupling took place in the United 
States or Romania, for initiation purposes, we did not use the 
petitioners' price offer. Instead, we used U.S. import statistics 
(i.e., AUVs) for the U.S. price and did not make any adjustments.
NV
    The petitioners state that Romania is an NME country and in all 
previous investigations the Department has determined that Romania is 
an NME. See, e.g., Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Small Diameter Carbon and Alloy Seamless Standard, 
Line and Pressure Pipe From Romania, 65 FR 39125 (June 23, 2000). 
Romania will be treated as an NME unless and until its NME status is 
revoked. Pursuant to section 771(18)(C)(i) of the Act, because 
Romania's status as an NME remains in effect, the petitioners 
determined the dumping margin using an FOP analysis.
    For NV the petitioners based the FOP, as defined by section 
773(c)(3) of the Act, on the consumption rates of a U.S. OCTG producer 
since information regarding the quantities of various inputs consumed 
by the Romanian producers is not reasonably available to the 
petitioners. The petitioners used Algeria as the most appropriate 
surrogate country for Romania because Algeria is: (1) at a comparable 
stage of economic development as Romania, in terms of per-capita gross 
national income, total gross domestic product growth, etc.; (2) a 
significant producer of comparable merchandise; and (3) the only 
available source of an accurate factor value for the type of principal 
material input used in the production of seamless OCTG.
    The petitioners valued FOP, where possible, on reasonably 
available, public surrogate data from Algeria. The principal material 
input was based on the AUVs of such material imported into Algeria as 
published in the United Nations import data. For steel scrap, the 
petitioners stated that import figures for Algeria were not available. 
They used instead the United Nations import data for steel scrap for El 
Salvador. For labor, the petitioners used the regression-based wage 
rate for Romania on Import Administration's website. The petitioners 
calculated prices for electricity and natural gas in Algeria using 
information available on the website of an Algerian electric and gas 
company. For factory overhead, the petitioners applied rates derived 
from the 2000-2001 financial statements of an Indian producer of 
seamless OCTG. The petitioners adjusted all surrogate values which fell 
outside the anticipated POI using the Algerian consumer price index or 
the U.S. Producer Price Index, as published by the International 
Monetary Fund's International Financial Statistics.
    Based on comparisons of NV to EP, calculated in accordance with 
section 773(c) of the Act, the estimated dumping margin for OCTG from 
Romania is 36.7 percent.

South Africa

CEP
    The petitioners identified one company, Iscor Limited (``Iscor''), 
that produces the subject merchandise in South Africa. The petitioners 
state that this one producer accounts for all of the OCTG production in 
South Africa and that the producer also accounts for all of the exports 
of subject merchandise to the United States. According to the 
petitioners, Iscor sells subject merchandise through an affiliated U.S. 
importer to unaffiliated U.S. purchasers. The petitioners based CEP on 
a price quote given to an unaffiliated U.S. distributor. To calculate 
CEP, which was based on a loaded-truck, duty-paid price from Iscor to 
the unaffiliated U.S. customer, the petitioners deducted early-payment 
discounts, port charges (unloading and wharfage), threading and 
coupling costs incurred in the United States, international shipping 
charges, and foreign inland freight from the price quote. See 
Initiation Checklist.

[[Page 20737]]

NV

Price-to-CV Comparisons

    The petitioners stated that, to their knowledge, Iscor has no 
viable comparison market for OCTG and, therefore, they were unable to 
obtain price information for sales in the home market or any third-
country market. The petitioners based this conclusion on an affidavit 
provided in the petition and from an examination of South African 
Export Statistics from the year 2000 for all HTS codes covered in the 
petition. See Initiation Checklist. Therefore, the petitioners based 
their calculation of NV on CV for purposes of the margin calculations.
    The petitioners calculated CV based on their own production 
experience, adjusted for known differences between costs incurred to 
produce OCTG in the United States and South Africa using publicly 
available data. Specifically, the petitioners used the U.S. producers' 
own consumption rates for raw materials, direct labor, electricity, and 
natural gas. To adjust the U.S. producers' costs associated with raw 
materials, direct labor, and electricity, the petitioners relied upon 
average market prices supplied by publicly available data. To adjust 
the U.S. producers' costs associated with natural gas, the petitioners 
relied upon the experience of a large energy company with operations in 
South Africa. To calculate fixed overhead, SG&A, and financial expense, 
the petitioners relied upon amounts reported in Iscor's fiscal year 
2001 financial statements. Consistent with section 773(e)(2) of the 
Act, the petitioners included in CV an amount for profit. For profit, 
the petitioners relied upon the profit of Iscor. See Initiation 
Checklist.
    Based on the comparison of CV to CEP, the petitioners calculated 
estimated dumping margins ranging from 24.09 to 50.71 percent.

Spain

CEP
    The petitioners identified Tubos Reunidos and Productos Tubulares 
as major producers of OCTG in Spain. The petitioners based CEP on a 
price quote for Spanish OCTG produced by Tubos Reunidos they received 
from a U.S. distributor. The petitioners provided evidence, including 
detailed import statistics, showing that Tubos Reunidos USA (``TRA'') 
is identified as the consignee for nearly all shipments by Tubos 
Reunidos. As TRA is a wholly owned subsidiary of Tubos Reunidos, the 
petitioners calculated the U.S. price using a CEP analysis. The 
petitioners calculated CEP based on the gross unit price from the U.S. 
price offering. The petitioners started with a gross unit price in U.S. 
dollars per net ton and deducted an amount for various movement 
expenses, sales-specific adjustments, and the cost of the threading and 
coupling performed in the United States after importation because the 
OCTG from Spain entered into the United States has plain ends but the 
price offering reflected the price of OCTG which was threaded and 
coupled.
    For purposes of this initiation, the data submitted by the 
petitioners provides grounds to suggest that CEP is an appropriate 
basis for calculating the U.S. price. To determine CEP, we relied on 
the data in the petition.
NV

Price-to-Price Comparisons

    The petitioners provided a dumping margin calculation by comparing 
third-country prices with U.S. price. The petitioners state during the 
anticipated POI the quantity of subject merchandise sold in Spain fell 
below the five-percent threshold and, thus, Spain is not a viable 
market for the purpose of determining NV. The petitioners stated that 
they were unable to obtain home-market prices because their market 
researcher did not have the capability to perform such research in 
Spain.
    The petitioners used a market researcher to obtain third-country 
prices based upon exports from Spain of OCTG to a third country (i.e., 
France). The quoted price was given in Euros per metric ton. To 
calculate NV, the petitioners deducted Spanish inland freight. To 
adjust for differences in packing expenses, the petitioners deducted 
packing expenses incurred by Tubos Reunidos for its third-country sales 
to France based on market research and added U.S. packing expenses. As 
the market-research report did not include packing costs for the U.S. 
sales, the petitioners assumed that packing costs would be the same for 
both markets since the same type of vessel is used for both. See 
Initiation Checklist. The petitioners also adjusted third-country 
prices to reflect differences in the credit expenses between the U.S. 
and third-country markets. The petitioners made this adjustment to the 
third-country prices by deducting third-country imputed credit expenses 
and adding U.S. imputed credit expenses. See Initiation Checklist. For 
the credit period, the market-research report provides information 
regarding Tubos Reunidos' payment terms for sales to the third-country 
market. For purposes of adjusting for differences in credit, the 
petitioners used the maximum number of days. For sales to the United 
States, the petitioners assumed the U.S. credit period to be zero days. 
To determine credit expenses on the third-country sales to France, the 
petitioners utilized a French Euro-denominated interest rate published 
by the International Monetary Fund.
    Based on CEP price-to-price comparisons calculated in accordance 
with section 773(a) of the Act, the estimated dumping margin for OCTG 
from Spain is 22.44 percent.

Turkey

EP
    The petitioners identified three companies that produce and/or 
export subject merchandise in Turkey. The petitioners believe that 
these producers and/or exporters account for all OCTG sold in Turkey 
and exported to the United States from Turkey. The petitioners provided 
pricing and cost information for one of these three companies, Borusan 
Birlesik Boru Fabrikalari A.S. (``Borusan''). According to the 
petitioners, Borusan made direct sales of the subject merchandise to 
unaffiliated U.S. customers. For the calculation of U.S. price, the 
petitioners provided a price quote and AUV data. The AUV data is based 
on the U.S. Census Bureau's IM-145 import data for the anticipated POI 
and is equivalent to an EP. We used the AUV data for the margin 
calculation. We made no adjustments to the EP. See Initiation 
Checklist.
NV

Price-to-CV Comparisons

    The petitioners were unable to obtain home-market or third-country 
price data. Therefore, the petitioners based NV on CV.
    Pursuant to sections 773(a)(4), 773(b), and 773(e) of the Act, CV 
consists of COM, SG&A expenses, financial expenses, profit, and packing 
expenses. The petitioners calculated COM based on their own production 
experience, adjusted for known differences between costs incurred to 
produce OCTG in the United States and Turkey. See Initiation Checklist. 
Specifically, the petitioners used consumption rates incurred by a U.S. 
producer of OCTG for raw materials, direct labor, and electricity based 
on an affidavit from an employee of a U.S. producer of OCTG. The 
petitioners valued steel raw-material inputs using import statistics 
from the World Trade Atlas. The petitioners valued other raw-material 
inputs based on their own experience because no

[[Page 20738]]

data relating to the value of these products in Turkey was available. 
The petitioners valued labor based on rates found in the Import 
Administration website. The petitioners valued energy based on data 
published by the OECD International Energy Agency in the Fourth 
Quarter, 2001, issue of Energy Prices and Taxes. The petitioners 
calculated packing expenses using a methodology similar to the one they 
used to calculate the expense for raw materials other than steel.
    To calculate the portions of fixed overhead, the petitioners relied 
upon the experience of a U.S. producer because Borusan's financial 
statements did not provide sufficient information with which to 
calculate a factory-overhead rate. We recalculated the factory-overhead 
percentage because the petitioners used the U.S. producer's COP as the 
denominator. Because the percentage is applied to only the sum of 
direct materials, direct labor, and energy, we recalculated the 
factory-overhead percentage using the sum of direct materials, direct 
labor, and energy for the U.S. producer as the denominator. See 
Initiation Checklist.
    To calculate SG&A, financial expenses, and profit, the petitioners 
relied upon amounts reported in Borusan's fiscal year 2000 financial 
statements. We recalculated the SG&A to include other income and 
expenses and we revised the profit to reflect our change to SG&A and to 
exclude income taxes. See Initiation Checklist.
    Based upon the comparison of CV to EP after our recalculations, the 
petitioners calculated an estimated dumping margin of 9.94 percent.

Ukraine

CEP
    The petitioners identified Nizhnedneprovsky Tube Rolling Plant 
(``NTRP'') and Joint Stock Co Nikopol Pivdennotrubny Works as major 
producers of OCTG in Ukraine. The petitioners based CEP on a price 
quote for Ukrainian OCTG from NTRP they received from an importer of 
Ukranian OCTG. The petitioners assert that the importer is affiliated 
under section 771(33)(G) of the Act. See Initiation Checklist. 
Therefore, the petitioners calculated the U.S. price using a CEP 
analysis. The petitioners calculated CEP based on the average price for 
two sample threaded and coupled products. The petitioners started with 
an average price in U.S. dollars per net ton and deducted an amount for 
numerous movement expenses, sales-specific adjustments, and the cost of 
threading and coupling. The petitioners deducted the cost of threading 
and coupling as a further manufacturing cost for this CEP analysis 
because they allege that OCTG from Ukraine entered the United States 
with plain ends and was threaded and coupled in the United States. 
SeeInitiation Checklist.
    For purposes of initiation, we recalculated the U.S. price that the 
petitioners used in their calculation. We continued to deduct from U.S. 
price threading and coupling costs incurred in the United States. We 
also deducted early-payment discounts and movement expenses. See Notice 
of Final Determination at Sales at Less Than Fair Value: Bicycles from 
the People's Republic of China, 61 FR 19026 (April 30, 1996). We did 
not deduct distributor and trading company mark-ups from the starting 
price. While it may be necessary to deduct a distributor and trading 
company mark-up from the gross unit price to arrive at a CEP, in this 
case it appears that such expenses have already been accounted for, at 
least to some extent, in the other deductions made. Accordingly, to 
determine CEP, we relied on the data in the petition, except that we 
did not deduct the distributor mark-ups. See Initiation Checklist.
NV
    The petitioners provided a dumping margin calculation using the 
Department's NME methodology as required by 19 CFR 351.202(b)(7)(i)(C). 
For the NV calculation, the petitioners based the FOP, as defined by 
section 773(c)(3) of the Act (raw materials, labor and energy), for 
OCTG on information from Ukrainian producers. See Initiation Checklist.
    The petitioners selected Indonesia as their surrogate country. The 
petitioners argued that, pursuant to 773(c)(4) of the Act, Indonesia is 
an appropriate surrogate because it is a market-economy country that is 
at a comparable level of economic development to the NME and is a 
significant producer of comparable merchandise. Based on the 
information provided by the petitioners, we believe that the 
petitioners' use of Indonesia as a surrogate country is appropriate for 
purposes of initiation of this investigation. See Initiation Checklist.
    In accordance with section 773(c)(4) of the Act, the petitioners 
valued FOP, where possible, on reasonably available, public surrogate 
country data. Where possible, the petitioners developed unit factor 
costs relying on surrogate values from the Government of Indonesia's 
Trade Statistics (``GITS'') for the period of January 2001 through 
October 2001, the most contemporaneous data available, which captures 
four months of the anticipated POI. The petitioners note that GITS did 
not have information for coking coal. Therefore, the petitioners 
calculated a surrogate value for coking coal using information from 
Coal Week International, an industry publication, dated January 7, 
2002.
    Labor was valued using the regression-based wage rate for Ukraine 
available on the Import Administration website and in accordance with 
19 CFR 351.408(c)(3). Factory overhead, SG&A, and profit were derived 
from the 1999-2000 financial statements of PT Krakatau Steel, an 
Indonesian producer of the subject merchandise.
    Based on comparisons of NV to CEP, calculated in accordance with 
section 773(c) of the Act, the estimated dumping margin for OCTG from 
Ukraine is 22.38 percent.

Venezuela

EP
    To calculate EP, the petitioners obtained one U.S. price quote for 
OCTG produced in Venezuela for export to the United States, FOB 
Houston. The Venezuelan producer quoted a price for OCTG product to a 
distributor in the United States. The petitioners stated that the price 
quotes for NV and EP were obtained for products that would reflect 
similar finishing and permit closer comparison. The petitioners made no 
deductions from U.S. price.
NV

Price-to-Price Comparisons

    The petitioners determined NV by relying on an ordinary-course-of-
business price quote offered to an unaffiliated Venezuelan home-market 
customer contemporaneous with the offer for sale in the United States 
of a similar OCTG product. The Venezuelan home-market price quote uses 
U.S. dollars as the currency of sale so no currency conversion is 
necessary for comparison of NV and EP. The petitioners calculated NV in 
U.S. dollars per net ton for the product quoted. Exhibit I-9 of the 
petition demonstrates the petitioners' calculation of NV and the 
estimated dumping margin. No adjustments were made to NV.
    Based upon the comparison of NV to EP, calculated in accordance 
with section 773(a) of the Act, the estimated dumping margin for OCTG 
from Venezuela is 55.60 percent.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of OCTG from Austria, Brazil, the PRC, France, 
Germany, India, Indonesia, Romania, South Africa,

[[Page 20739]]

Spain, Turkey, Ukraine, and Venezuela are being, or are likely to be, 
sold at less than fair value.

Allegations and Evidence of Material Injury and Causation

    The petitioners allege that the U.S. industry producing the 
domestic like product is being materially injured, or is threatened 
with material injury, by reason of the individual and cumulated imports 
of the subject merchandise sold at less than NV. The volume of imports 
from Austria, Brazil, the PRC, France, Germany, India, Indonesia, 
Romania, South Africa, Spain, Turkey, Ukraine, and Venezuela, using the 
latest available data, exceed the statutory threshold of seven percent 
for a negligibility exclusion. See section 771(24)(A)(ii) of the Act.
    The petitioners contend that the industry's injured condition is 
evident in the declining trends in net operating profits, net sales 
volumes, profit-to-sales ratios, production employment, and capacity 
utilization. The allegations of injury and causation are supported by 
relevant evidence including U.S. Customs import data, lost sales, and 
pricing information. We have assessed the allegations and supporting 
evidence regarding material injury and causation, and we have 
determined that these allegations are properly supported by accurate 
and adequate evidence and meet the statutory requirements for 
initiation. See Initiation Checklist.

Initiation of Antidumping Investigations

    Based upon our examination of the petitions on OCTG, we have found 
that they meet the requirements of section 732 of the Act. Therefore, 
we are initiating antidumping duty investigations to determine whether 
imports of OCTG from Austria, Brazil, the PRC, France, Germany, India, 
Indonesia, Romania, South Africa, Spain, Turkey, Ukraine, and Venezuela 
are being, or are likely to be, sold in the United States at less than 
fair value. Unless this deadline is extended pursuant to section 
733(b)(1)(A) of the Act, we will make our preliminary determinations no 
later than 140 days after the date of this initiation.

Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of each petition has been provided to the 
representatives of the governments of Austria, Brazil, the PRC, France, 
Germany, India, Indonesia, Romania, South Africa, Spain, Turkey, 
Ukraine, and Venezuela. We will attempt to provide a copy of the public 
version of each petition to each exporter named in the petitions, as 
provided for under 19 CFR 351.203(c)(2).

ITC Notification

    We have notified the ITC of our initiations as required by section 
732(d) of the Act.

Preliminary Determinations by the ITC

    The ITC will determine no later than May 13, 2002, whether there is 
a reasonable indication that imports of OCTG from Austria, Brazil, the 
PRC, France, Germany, India, Indonesia, Romania, South Africa, Spain, 
Turkey, Ukraine, and Venezuela are causing material injury, or 
threatening to cause material injury, to a U.S. industry. A negative 
ITC determination for any country will result in the investigation 
being terminated with respect to that country; otherwise, 
theseinvestigations will proceed according to statutory and regulatory 
time limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    DATED: April 18, 2002
Bernard T. Carreau,
Acting Assistant Secretary for Import Administration.
[FR Doc. 02-10349 Filed 4-25-02; 8:45 am]
BILLING CODE 3510-DS-S