[Federal Register Volume 67, Number 131 (Tuesday, July 9, 2002)]
[Notices]
[Pages 45467-45472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-17201]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-816]


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

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

ACTION: Notice of the preliminary results and rescission in part of 
antidumping duty administrative review.

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SUMMARY: In response to a request from respondent Ta Chen Stainless 
Pipe Co., Ltd. (``Ta Chen'') and from Markovitz Enterprises, Inc. 
(Flowline Division), Shaw Alloy Piping Products Inc., Gerlin, Inc., and 
Taylor Forge (``petitioners''), the Department of Commerce 
(``Department'') is conducting an administrative review of the 
antidumping duty order on certain stainless steel butt-weld pipe 
fittings from Taiwan. Specifically, the petitioners requested that the 
Department conduct the administrative review for Ta Chen Stainless Pipe 
Co., Ltd., Liang Feng Stainless Steel Fitting Co., Ltd. (``Liang 
Feng''), and Tru-Flow Industrial Co., Ltd. (``Tru-Flow''). This review 
covers Ta Chen, a manufacturer and exporter of the subject merchandise 
and Liang Feng and Tru-Flow, manufacturers of the subject merchandise. 
The period of review (``POR'') is June 1, 2000 through May 31, 2001. 
With regard to Ta Chen, we preliminarily determine that sales have been 
made below normal value (``NV''). With regard to Liang Feng and Tru-
Flow, we are preliminarily rescinding this review based on record 
evidence supporting the conclusion that there

[[Page 45468]]

were no entries into the United States of subject merchandise during 
the POR. For a discussion of the preliminary rescission as to Liang 
Feng and Tru-Flow, see the ``Preliminary Rescission of Review in Part'' 
section of this notice.
    If these preliminary results are adopted in our final results of 
administrative review, we will instruct the U.S. Customs Service to 
assess antidumping duties on entries of Ta Chen's merchandise during 
the period of review, in accordance with the Department's regulations 
(19 CFR 351.106 and 351.212(b)). The preliminary results are listed 
below in the section titled ``Preliminary Results of Review.''

EFFECTIVE DATE: July 9, 2002.

FOR FURTHER INFORMATION CONTACT: Amy Ryan or James C. Doyle, 
Enforcement Group III--Office 9, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
0961 and (202) 482-0159, respectively.

Applicable Statute

    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 (``URAA''). In addition, 
unless otherwise indicated, all citations to the Department's 
regulations are to 19 CFR part 351 (2001).

Background

    On June 16, 1993, the Department published in the Federal Register 
the antidumping duty order on certain stainless steel butt-weld pipe 
fittings from Taiwan. See Amended Final Determination and Antidumping 
Duty Order: Certain Stainless Steel Butt-Weld Pipe and Tube Fittings 
from Taiwan, 58 FR 33250 (June 16, 1993). On June 11, 2001, we 
published in the Federal Register a notice of opportunity to request an 
administrative review of the antidumping duty order on certain 
stainless steel butt-weld pipe fittings from Taiwan covering the period 
June 1, 2000 through May 31, 2001. See Notice of Opportunity to Request 
Administrative Review of Antidumping or Countervailing Duty Order, 
Finding, or Suspended Investigation, 66 FR 31203 (June 11, 2001). On 
June 29, 2001, respondent, Ta Chen requested that the Department 
conduct an administrative for the period of June 1, 2000 to May 31, 
2001. Additionally, on June 29, 2001, the petitioners requested that 
the Department conduct an administrative review of Ta Chen, Liang Feng 
and Tru-Flow for the period of June 1, 2000 through May 31, 2001. On 
July 23, 2001, the Department published a notice of initiation of this 
antidumping duty administrative review for the period of June 1, 2000 
through May 31, 2001. See Notice of Initiation of Antidumping or 
Countervailing Duty Administrative Reviews and Requests for Revocation 
in Part, 66 FR 38252 (July 23, 2001).
    On July 25, 2001, the Department issued its antidumping 
questionnaire to Ta Chen, Liang Feng and Tru-Flow. On July 30, 2001, 
Liang Feng reported that it had no sales, entries or shipments of 
subject merchandise to the United States during the POR. Additionally, 
on July 31, 2001, Tru-Flow reported that it had no sales, entries or 
shipment of subject merchandise to the United States during the POR. On 
August 6, 2001, the petitioners opposed Liang Feng's and Tru-Flow's 
statements from their July 30 and July 31 letters, respectively.
    On August 15, 2001, Ta Chen reported that it made sales of subject 
merchandise to the United States during the period of review (``POR'') 
in its response to Section A of the Department's questionnaire. On 
September 7, 2001, Ta Chen submitted its response to Sections B, C, and 
D of the Department's questionnaire. On August 28, 2001, the Department 
issued to Ta Chen a supplemental questionnaire to Section A of the 
Department's questionnaire, for which Ta Chen submitted its response on 
September 25, 2001. On January 8, 2002, the Department issued to Ta 
Chen a supplemental questionnaire to Sections B, C, and D of the 
Department's questionnaire. On January 29, 2002, Ta Chen submitted its 
response to this supplemental questionnaire. On April 23, 2002, the 
Department issued to Ta Chen the second supplemental questionnaire to 
Sections A-D of the Department's questionnaire. On May 13, 2002, Ta 
Chen submitted its response to the second supplemental questionnaire 
for Sections A-D of the Department's questionnaire. On May 17, 2002, 
the Department asked Ta Chen to submit various pages that were missing 
from the exhibits in the May 13, 2002 submission. On May 17, 2002, Ta 
Chen submitted two sets of information, one of which contained the 
missing exhibit pages the Department requested. The larger submission 
Ta Chen submitted was additional information it claimed was 
inadvertently omitted from its response to the Department's second 
Sections A-D supplemental questionnaire. On June 12, 2002, the 
Department requested that Ta Chen resubmit its U.S. sales database to 
incorporate one of the minor corrections from verification. Ta Chen 
submitted the revised U.S. sales database on June 14, 2002. On June 13, 
2002, the Department asked Ta Chen an additional supplemental question 
regarding clarification of a specific home market sales observation.
    Additionally, the Department sent questionnaires to two of Ta 
Chen's subcontractors on January 28, 2002, to which they responded on 
February 18, 2002. On April 25, 2002, the Department issued a 
supplemental questionnaire to the same two subcontractors. They sent in 
their responses on May 23, 2002.
    Pursuant to section 751(a)(3)(A) of the Act, the Department may 
extend the deadline for conducting an administrative review if it 
determines that it is not practicable to complete the review within the 
statutory time limit of 245 days. On January 22, 2002, the Department 
extended the time limits for these preliminary results by 120 days to 
June 29, 2002 in accordance with the Act. However, because June 29, 
2002 falls on a weekend, the Department stated it would release its 
preliminary results on July 1, 2002. See Notice of Postponement of 
Preliminary Results of Antidumping Duty Administrative Review: Certain 
Stainless Steel Butt-Weld Pipe Fittings from Taiwan, 67 FR 2856 
(January 22, 2002).
    The Department is conducting this administrative review in 
accordance with section 751 of the Act.

Preliminary Rescission of Review in Part

    The Department preliminarily finds that Liang Feng and Tru-Flow had 
no entries during the POR. Thus, the Department is preliminarily 
rescinding this review.
    Pursuant to 19 CFR 351.213(d)(3), the Department may rescind an 
administrative review, in whole or with respect to a particular 
exporter or producer, if the Secretary concludes that, during the 
period covered by the review, there were no entries, exports, or sales 
of the subject merchandise. The Department explained this practice in 
the preamble to the Department's regulations. See Antidumping Duties; 
Countervailing Duties 62 FR 27296, 27317 (May 19, 1997) (``Preamble'').
    In July of 2001, both Liang Feng and Tru Flow provided letters on 
the record stating that they had no sales of subject merchandise during 
the POR. See Liang Feng's letter dated July 30, 2001 and Tru Flow's 
letter dated July 31, 2001. To confirm their statements, on August 14,

[[Page 45469]]

2001, the Department conducted a Customs inquiry and determined to its 
satisfaction on the record that there were no entries of subject 
merchandise during the POR. See the June 28, 2002 Memorandum to the 
File. See Notice of Preliminary Results and Rescission in Part of 
Antidumping Duty Administrative Review, 67 FR 5789, 5790 (February 7, 
2002) and Stainless Steel Plate in Coils from Taiwan: Final Rescission 
of Antidumping Duty Administrative Review, 66 FR 18610, (April 10, 
2001).
    Therefore, pursuant to 19 CFR 351.213(d)(3), the Department is 
preliminarily rescinding this review as to Liang Feng and Tru Flow 
because we find that there were no entries of subject merchandise 
during the POR.

Scope of the Review

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

Period of Review

    The POR for this administrative review is June 1, 2000 through May 
31, 2001.

Verification

    As provided in section 782(i) of the Act, from May 20-23, 2002, the 
Department verified sales, cost and production information of Ta Chen's 
U.S. affiliate, Ta Chen International (CA) Corp., using standard 
verification procedures, including an examination of relevant sales, 
financial and production records, and selection of original 
documentation containing relevant information. Our verification results 
are outlined in the public versions of the verification reports and are 
on file in the Central Records Unit (``CRU'') located in room 1870 of 
the main Department of Commerce Building, 14th Street and Constitution 
Avenue, NW., Washington, DC. For changes to Ta Chen's expenses based on 
verification findings, see ``Facts Available'' section below.

Product Comparison

    In accordance with section 771(16) of the Act, we considered all 
pipe fittings produced by Ta Chen, covered by the description in the 
``Scope of Review'' section of this notice and sold in the home market 
during the POR to be foreign like products for the purpose of 
determining appropriate product comparisons to pipe fittings sold in 
the United States. In making the product comparisons, we matched 
foreign like products based on the physical characteristics reported by 
Ta Chen as follows (listed in order of preference): specification, 
seam, grade, size and schedule.
    As in the 1999-2000 administrative review (``99/00 review''), the 
record shows that Ta Chen both purchased from, and entered into tolling 
arrangements with, two unaffiliated Taiwanese manufacturers of subject 
merchandise. See Ta Chen's August 15, 2001 Section A questionnaire 
response at 2. Also, as in the 99/00 review there is no evidence on the 
record that either manufacturer had knowledge that the subject 
merchandise would be sold into the United States market. See both 
subcontractors' questionnaire responses dated February 19, 2002 and 
their supplemental responses dated May 23, 2002. According to Ta Chen's 
August 15, 2001 Section A response, for subcontracted fittings, it 
labels itself as the manufacturer. Regarding these sales for which Ta 
Chen can identify with certainty which of the two unaffiliated 
Taiwanese companies was the producer, we have preliminarily determined 
that it is not appropriate to extract such sales from Ta Chen's U.S. 
sales database because we have no evidence on the record that the 
unaffiliated producers had knowledge that their subject fittings were 
destined for sale by Ta Chen in the U.S. market. However, section 
771(16) of the Act defines ``foreign like product'' to be ``(t)he 
subject merchandise and other merchandise which is identical in 
physical characteristics with, and was produced in the same country by 
the same person as, that merchandise.'' Thus, consistent with the 
Department's past practice, we have restricted the matching of products 
which Ta Chen has identified with certainty that it purchased from a 
particular unaffiliated producer and resold in the U.S. market, to 
identical or similar products purchased by Ta Chen from the same 
unaffiliated producer and resold in the home market. Finally, where 
there were no sales of identical merchandise in the home market to 
compare to U.S. sales, we compared U.S. sales to the next most similar 
foreign like product on the basis of the physical characteristics or to 
constructed value (``CV''), as appropriate.

Date of Sale

    The Department's regulations state that the Department will 
normally use the date of invoice, as recorded in the exporter's or 
producer's records kept in the ordinary course of business, as the date 
of sale. See 19 CFR 351.401(i). If Commerce can establish ``a different 
date (that) better reflects the date on which the exporter or producer 
establishes the material terms of sale,'' Commerce may choose a 
different date. Id.
    In the present review, Ta Chen claimed that invoice date should be 
used as the date of sale in both the home market and U.S. market. See 
Ta Chen's Sections B and C responses. (September 10, 2001). Moreover, 
Ta Chen did not indicate any industry practice which would warrant the 
use of a date other than invoice date in determining date of sale.
    Accordingly, as we have no information demonstrating that another 
date is more appropriate, we preliminarily based date of sale on 
invoice date recorded in the ordinary course of business by the 
involved sellers and resellers of the subject merchandise in accordance 
with 19 CFR 351.401(i).

Fair Value Comparisons

    To determine whether sales of subject merchandise by Ta Chen to the 
United States were made at prices below normal value (``NV''), we 
compared, where appropriate, the constructed export price (``CEP'') to 
the NV, as described below. Pursuant to section 777A(d)(2) of the Act, 
we compared the CEPs of individual U.S. transactions to

[[Page 45470]]

the monthly weight-averaged NV of the foreign like product where there 
were sales at prices above the cost of production (``COP''), as 
discussed in the ``Cost of Production Analysis'' section below. For a 
further discussion of the EP sales reclassification to CEP, see below.

Export Price/Constructed Export Price

    Section 772(a) of the Act defines export price as ``the price at 
which the subject merchandise is first sold (or agreed to be sold) 
before the date of importation by the producer or exporter of subject 
merchandise outside of the United States to an unaffiliated purchaser 
in the United States or to an unaffiliated purchaser for exportation to 
the United States. * * *'' Section 772(b) of the Act defines 
constructed export price as ``the price at which the subject 
merchandise is first sold (or agreed to be sold) in the United States 
before or after the date of importation by or for the account of the 
producer or exporter of such merchandise or by a seller affiliated with 
the producer or exporter, to a purchaser not affiliated with the 
producer or exporter. * * *''
    Consistent with recent past reviews, all of the sales at issue are 
being considered CEP sales because the sale to the first unaffiliated 
customer was made between Ta Chen International (CA) Corp. (``TCI''), 
located in the United States, and the unaffiliated customer in the 
United States. See Analysis Memorandum for Certain Stainless Steel 
Butt-Weld Pipe Fittings from Taiwan: Preliminary Results of the 2000-
2001 Administrative Review of Certain Stainless Steel Butt-weld Pipe 
Fittings from Taiwan (July 1, 2002) (``Analysis Memo''). See also 
Sections B-D supplemental questionnaire response (January 29, 2002). 
TCI takes title to subject merchandise, invoices the U.S. customer, and 
receives payment from the U.S. customer. In addition, TCI incurs 
seller's risk, relays orders and price requests from the U.S. customer 
to Ta Chen, and pays for U.S. Customs brokerage charges, U.S. 
antidumping duties, ocean freight and U.S. inland freight. See Section 
A Supplemental Questionnaire Response (September 5, 2001).
    Having determined such sales are CEP, we calculated the price of Ta 
Chen's sales based on CEP in accordance with section 772(b) of the Act. 
We calculated CEP based on FOB or delivered prices to unaffiliated 
purchasers in the United States and, where appropriate, we deducted 
discounts. In addition, in accordance with section 772(d)(1), the 
Department deducted commissions, direct selling expenses and indirect 
selling expenses, including inventory carrying costs, which related to 
commercial activity in the United States. With respect to inventory 
carrying costs, we note that certain of Ta Chen's sales do not enter 
TCI's inventory prior to shipment to U.S. customers, but are shipped 
directly to the end user. Therefore, we removed the cost of goods sold 
for those sales used in the calculation of Ta Chen's reported inventory 
turnover ratio. We also made deductions for movement expenses, which 
include foreign inland freight, foreign brokerage and handling, ocean 
freight, containerization expense, harbor construction tax, marine 
insurance, U.S. inland freight, U.S. brokerage and handling, and U.S. 
Customs duties. We also deducted U.S. freight cost that TCI incurred 
when moving merchandise among its warehouses, in addition to freight 
expenses that TCI incurred on behalf of a customer returning 
merchandise. Finally, where appropriate, in accordance with sections 
772(d)(3) and 772(f) of the Act, we deducted CEP profit.

Normal Value

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

1. Home Market Viability

    In accordance with section 773(a)(1)(C) of the Act, to determine 
whether there was a sufficient volume of sales in the home market to 
serve as a viable basis for calculating NV (i.e., the aggregate volume 
of home market sales of the foreign like product is greater than or 
equal to five percent of the aggregate volume of U.S. sales), we 
compared Ta Chen's volume of home market sales of the foreign like 
product to the volume of U.S. sales of the subject merchandise. In 
addition, Ta Chen stated that the home market is viable since sales to 
the home market are more than five percent by quantity of sales in the 
United States. See Section A questionnaire response (August 15, 2001) 
at 3. Because Ta Chen's aggregate volume of home market sales of the 
foreign like product was greater than five percent of its aggregate 
volume of U.S. sales for the subject merchandise, we preliminarily 
determine that the home market was viable. We, therefore, based NV on 
home market sales.

2. Cost of Production Analysis

    Because we disregarded sales below the cost of production in the 
most-recently completed segment of this proceeding,\1\ we have 
reasonable grounds to believe or suspect that sales by Ta Chen in its 
home market were made at prices below the COP, pursuant to sections 
773(b)(1) and 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to 
section 773(b)(1) of the Act, we conducted a COP analysis of home 
market sales by Ta Chen.
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    \1\ See Notice of Final Results in the Antidumping Duty 
Administrative Review of Certain Stainless Steel Butt-Weld Pipe 
Fittings From Taiwan, 66 FR 66899, (December 21, 2001).
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A. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated a 
weight-averaged COP based on the sum of Ta Chen's cost of materials and 
fabrication for the foreign like product, plus amounts for general and 
administrative expenses (``G&A''), interest expenses, and packing 
costs. We relied on the COP data submitted by Ta Chen in its original 
and supplemental cost questionnaire responses. For these preliminary 
results, we did not make any adjustments to Ta Chen's submitted costs.
B. Test of Home Market Prices
    We compared the weight-averaged COP for Ta Chen to home market 
sales of the foreign like product, as required under section 773(b) of 
the Act, in order to determine whether these sales had been made at 
prices below the COP. In determining whether to disregard home market 
sales made at prices below the COP, we examined whether such sales were 
made: (1) Within an extended period of time in substantial quantities, 
and (2) at prices which permitted the recovery of all costs within a 
reasonable period of time, in accordance with section 773(b)(1)(A) and 
(B) of the Act. On a product-specific basis, we compared the COP to 
home market prices, less any movement charges, discounts, and direct 
and indirect selling expenses.
C. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of Ta Chen's sales of a given product were at prices less than 
the COP, we did not disregard any below-cost sales of that product 
because we determined that the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of Ta Chen's sales 
of a given product during the POR were at prices less than the COP, we 
determined that such sales have been made in ``substantial quantities'' 
within an extended period of time, in accordance with section 
773(b)(2)(B) of the Act. In such cases, because we use POR average

[[Page 45471]]

costs, we also determined that such sales were not made at prices which 
would permit recovery of all costs within a reasonable period of time, 
in accordance with section 773(b)(2)(D) of the Act. Therefore, we 
disregarded the below-cost sales. Where all sales of a specific product 
were at prices below the COP, we disregarded all sales of that product.
D. Calculation of Constructed Value
    In accordance with section 773(e)(1) of the Act, we calculated CV 
based on the sum of Ta Chen's cost of materials, fabrication, G&A 
(including interest expenses), U.S. packing costs, direct and indirect 
selling expenses, and profit. In accordance with section 773(e)(2)(A) 
of the Act, we based SG&A and profit on the amounts incurred and 
realized by Ta Chen in connection with the production and sale of the 
foreign like product in the ordinary course of trade, for consumption 
in the foreign country. For selling expenses, we used the actual 
weight-averaged home market direct and indirect selling expenses.
Price-to-Price Comparisons
    For those product comparisons for which there were sales at prices 
above the cost of production (``COP''), we based NV on prices to home 
market customers. We calculated NV based on prices to unaffiliated home 
market customers. Where appropriate, we deducted early payment 
discounts, credit expenses, and inland freight. We also made 
adjustments, where applicable, for home market indirect selling 
expenses to offset U.S. commissions in CEP comparisons. We made 
adjustments, where appropriate, for physical differences in the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act. 
Additionally, in accordance with section 773(a)(6) of the Act, we 
deducted home market packing costs and added U.S. packing costs. In 
accordance with section 773(b)(1) of the Act, where there were no 
usable contemporaneous matches to a U.S. sale observation, we based NV 
on CV.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (``LOT'') as the CEP transaction. The NV LOT is 
that of the starting-price sales in the comparison market, or when NV 
is based on CV, that of the sales from which we derive SG&A expenses 
and profit. For CEP, it is the level of the constructed sale from the 
exporter to the importer.
    To determine whether NV sales are at a different LOT than CEP, we 
examine stages in the marketing process and selling functions along the 
chain of distribution between the producer and the unaffiliated 
customer. If the comparison market sales are at a different LOT, and 
the difference affects price comparability as manifested in a pattern 
of consistent price differences between the sales on which NV is based 
and comparison market sales at the LOT of the export transaction, we 
make an LOT adjustment under section 773(a)(7)(A) of the Act. Finally, 
for CEP sales, if the NV level is more remote from the factory than the 
CEP level and there is no basis for determining whether the difference 
in levels between NV and CEP affects price comparability, we adjust NV 
under section 773(a)(7)(B) of the Act (the CEP offset provision). See 
Notice of Final Determination of Sales at Less Than Fair Value: Certain 
Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732 
(November 19, 1997).
    In reviewing a respondent's request for a LOT adjustment, we 
examine all types of selling functions and activities reported in 
respondent's questionnaire response on LOT. In analyzing differences in 
selling functions, we determine whether LOT's identified by the 
respondent are meaningful. See Antidumping Duties; Countervailing 
Duties, Final Rule, 62 FR 27296, 27371 (May 19, 1997).
    Ta Chen reported one LOT in the home market based on two channels 
of distribution: trading companies and end-users. We examined the 
reported selling functions and found that Ta Chen's selling functions 
to its home market customers, regardless of channel of distribution, 
include inventory maintenance, technical services, packing, after-sales 
services, freight and delivery arrangements, general selling functions, 
some research and development, and customer service. See Ta Chen's 
September 25, 2002 Section A supplemental questionnaire response at 7-
9. We, therefore, preliminarily conclude that the selling functions for 
the reported channels of distribution are sufficiently similar to 
consider them as one LOT in the comparison market.
    Because Ta Chen reported that all of its U.S. CEP sales are made 
through TCI, Ta Chen is claiming that there is only one LOT in the U.S. 
market for its constructed export price sales and we preliminarily 
agree with Ta Chen that its U.S. sales constitute a single LOT. We 
examined the reported selling functions and found that Ta Chen's 
selling functions for sales to TCI include order processing, payment of 
marine insurance and packing for shipment to the United States. TCI 
handles the remaining selling functions for U.S. sales, such as: 
Communicating with U.S. customers; handling customer orders; dealing 
with U.S. Customs duties, brokerage, inland freight and U.S. 
warehousing; taking seller's risk; and, incurring inventory carrying 
costs on the water and ocean freight. Accordingly, for these U.S. 
sales, we preliminarily find that Ta Chen performed fewer selling 
functions than it did in the home market. Ta Chen requested a CEP 
offset due to differences in level of trade between its home market and 
U.S. sales (see Ta Chen's August 15, 2001 Section A questionnaire 
response). When, as here, the NV is established at a LOT that is at a 
more advanced stage of distribution than the LOT of the CEP 
transactions, the Department's practice is to adjust NV to account for 
this difference. However, we were unable to quantify the LOT adjustment 
in accordance with section 773(a)(7)(A) of the Act. Therefore, we 
applied a CEP offset to the NV-CEP comparisons, in accordance with 
section 773(a)(7)(B) of the Act.

Facts Available

    We preliminarily determine that the use of facts available is 
appropriate for two elements of Ta Chen's dumping margin calculation. 
Section 776(a)(2) of the Act provides that if an interested party: (A) 
Withholds information that has been requested by the Department; (B) 
fails to provide such information in a timely manner or in the form or 
manner requested, subject to subsections 782(c)(1) and (e) of the Act; 
(C) significantly impedes a determination under the antidumping 
statute; or (D) provides such information but the information cannot be 
verified, the Department shall, subject to subsection 782(d) of the 
Act, use facts otherwise available in reaching the applicable 
determination.
    In this case, at the verification of TCI from May 20-23, 2002, TCI 
presented as a minor correction a very small number of previously 
unreported U.S. sales from one of its U.S. warehouses. The information 
TCI supplied to the Department included the POR warehouse expenses, the 
total sales value, the total weight in kilograms and the total number 
of pieces. See U.S. Verification Report of Ta Chen International (CA) 
Corp.: Certain Stainless Steel Butt-Weld Pipe Fittings from Taiwan 
(July 1, 2002) at page 2 and Exhibit 1.
    Consistent with section 776(a)(2)(B) of the Act, we have 
preliminarily

[[Page 45472]]

determined that the use of partial facts available is warranted for 
these unreported U.S. sales. This U.S. sales information should have 
been reported in respondent's questionnaire responses. By failing to 
report the information until verification, respondent prevented the 
Department from gathering and verifying further information that was 
necessary to calculate an actual margin for those sales. Therefore, the 
Department finds it necessary to apply partial facts available for 
these sales. As facts available, the Department applied the average 
positive margin to the total value of the sales that TCI failed to 
report. See Analysis Memo.
    Also, at verification, the Department found that in TCI's POR third 
country export sales of subject merchandise, it had included some sales 
to a location that is considered a U.S. territory. Because this 
location is a U.S. territory, the Department considers sales to that 
territory as U.S. sales. Consistent with section 776(a)(2)(B) of the 
Act, we preliminarily determine that use of partial facts available is 
warranted, because respondent failed to report the U.S. sales 
information in the form or manner requested. As with the above 
mentioned unreported U.S. sales, the Department has applied the average 
positive margin to the total sales value of the unreported sales to the 
U.S. territory. See the proprietary version of the Analysis Memo for 
the identification of the U.S. territory.

Currency Conversion

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

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that the 
following weight-averaged dumping margin exists for the period June 1, 
2000 through May 31, 2001: Certain Stainless Steel Butt-Weld Pipe 
Fittings From Taiwan

------------------------------------------------------------------------
                                                               Weight-
                                                               averaged
               Producer/manufacturer/exporter                margin  (in
                                                               percent)
------------------------------------------------------------------------
Ta Chen....................................................         2.63
------------------------------------------------------------------------

    The Department will disclose to any party to the proceeding, within 
five days of publication of this notice, the calculations performed (19 
CFR 351.224(b)). Any interested party may request a hearing within 30 
days of publication. Any hearing, if requested, will be held 37 days 
after the date of publication, or the first working day thereafter. 
Interested parties may submit case briefs and/or written comments no 
later than 30 days after the date of publication. Rebuttal briefs and 
rebuttals to written comments, limited to issues raised in such briefs 
or comments, may be filed no later than 35 days after the date of 
publication. Parties who submit arguments are requested to submit with 
the argument: (1) A statement of the issue, (2) a brief summary of the 
argument and (3) a table of authorities. Further, the Department 
requests that parties submitting written comments provide the 
Department with an additional copy of the public version of any such 
comments on diskette. The Department will publish the final results of 
this administrative review, which will include the results of its 
analysis of issues raised in any such written comments or at a hearing, 
within 120 days after the publication of this notice.
    Upon issuance of the final results of review, the Department shall 
determine, and Customs shall assess, antidumping duties on all 
appropriate entries. The Department will issue appraisement 
instructions directly to Customs. The final results of this review 
shall be the basis for the assessment of antidumping duties on entries 
of merchandise covered by the results and for future deposits of 
estimated duties. For duty assessment purposes, we calculated an 
importer-specific assessment rate by dividing the total dumping margins 
calculated for the U.S. sales to the importer by the total entered 
value of these sales. This rate will be used for the assessment of 
antidumping duties on all entries of the subject merchandise by that 
importer during the POR.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication of the final 
results of this administrative review, as provided in section 751(a)(1) 
of the Act: (1) The cash deposit rate for Ta Chen, the only reviewed 
company, will be that established in the final results of this review; 
(2) for previously reviewed or investigated companies not covered in 
this review, the cash deposit rate will continue to be the company-
specific rate published for the most recent period; (3) if the exporter 
is not a firm covered in this review, a prior review, or the original 
less than fair value (``LTFV'') investigation, but the manufacturer is, 
the cash deposit rate will be the rate established in the most recent 
period for the manufacturer of the merchandise; and (4) if neither the 
exporter nor the manufacturer is a firm covered in this or any previous 
review conducted by the Department, the cash deposit rate will continue 
to be the ``all other'' rate established in the LTFV investigation, 
which was 51.01 percent.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: July 1, 2002.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 02-17201 Filed 7-8-02; 8:45 am]
BILLING CODE 3510-DS-P