[Federal Register Volume 67, Number 171 (Wednesday, September 4, 2002)]
[Notices]
[Pages 56531-56534]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-22537]


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DEPARTMENT OF COMMERCE

International Trade Administration

A201827


Certain Large Diameter Carbon and Alloy Seamless Standard, Line 
and Pressure Pipe from Mexico: Preliminary Notice of Intent to Rescind 
Administrative Review

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

ACTION: Preliminary Notice of Intent to Rescind Administrative Review.

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SUMMARY: On October 1, 2001, we published the notice of initiation of 
this antidumping duty review with respect to Tubos de Acero de Mexico, 
S.A. (``TAMSA''). See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part, 66 FR 49924 
(October 1, 2001). We have preliminarily determined that the review of 
TAMSA should be rescinded.

EFFECTIVE DATE: September 4, 2002.

FOR FURTHER INFORMATION CONTACT: James Terpstra or David Salkeld, AD/
CVD Enforcement, Office 6, Group II, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230; telephone: 
(202) 4823965 or (202) 4821168, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations:

    Unless otherwise indicated, all citations to the statute are 
references to 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 regulations refer to the 
regulations codified at 19 CFR part 351 (2001).

Case History

    On August 1, 2001, the Department of Commerce (``the Department'') 
published in the Federal Register the notice of ``Opportunity to 
Request an Administrative Review'' of the antidumping duty order on 
certain large diameter carbon and alloy seamless standard, line, and 
pressure pipe (``SLP'') from Mexico, for the period February 4, 2000 
through July 31, 2001 (66 FR 39729). On August 31, 2001, we received a 
request from the petitioner\1\ to review TAMSA. On October 1, 2001, we 
published the notice of initiation of this antidumping duty 
administrative review with respect to TAMSA. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews and Requests 
for Revocation in Part, 66 FR 49924 (October 1, 2001).
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    \1\ The petitioner is United States Steel Corporation.
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    TAMSA submitted an October 4, 2001 letter certifying that neither 
TAMSA, nor its U.S. affiliate, Siderca Corp., entered for consumption, 
or sold, exported, or shipped for entry for consumption in the United 
States subject merchandise during the period of review (``POR''). On 
May 8, 2002, we published a notice extending the preliminary results 
until no later than June 3, 2002. See Certain Large Diameter Carbon and 
Alloy Seamless Standard, Line and Pressure Pipe from Mexico: Extension 
of Preliminary Results of Antidumping Duty Administrative Review, 67 FR 
30873 (May 8, 2002). On May 29, 2002, petitioner in this case made a 
submission arguing that the review should not be rescinded. Because it 
was not practicable to address the issues raised by June 3, 2002, we 
postponed the preliminary determination an additional 90 days, until 
September 3, 2002, in accordance with 751(a)((3)(A) of the Act. See 
Certain Large Diameter Carbon and Alloy Seamless Standard, Line and 
Pressure Pipe from Mexico: Extension of Preliminary Results of 
Antidumping Duty Administrative Review, 67 FR 39349 (June 7, 2002).

[[Page 56532]]

Scope of the Review

    The products covered are large diameter seamless carbon and alloy 
(other than stainless) steel standard, line, and pressure pipes 
produced, or equivalent, to the American Society for Testing and 
Materials (``ASTM'') A53, ASTM A106, ASTM A333, ASTM A334, ASTM A589, 
ASTM A795, and the American Petroleum Institute (``API'') 5L 
specifications and meeting the physical parameters described below, 
regardless of application, with the exception of the exclusions 
discussed below. The scope of this review also includes all other 
products used in standard, line, or pressure pipe applications and 
meeting the physical parameters described below, regardless of 
specification, with the exception of the exclusions discussed below. 
Specifically included within the scope of this review are seamless 
pipes greater than 4.5 inches (114.3 mm) up to and including 16 inches 
(406.4 mm) in outside diameter, regardless of wall-thickness, 
manufacturing process (hot finished or cold-drawn), end finish (plain 
end, beveled end, upset end, threaded, or threaded and coupled), or 
surface finish.
    The seamless pipes subject to this review are currently 
classifiable under the subheadings 7304.10.10.30, 7304.10.10.45, 
7304.10.10.60, 7304.10.50.50, 7304.31.60.50, 7304.39.00.36 
7304.39.00.40, 7304.39.00.44, 7304.39.00.48, 7304.39.00.52, 
7304.39.00.56, 7304.39.00.62, 7304.39.00.68, 7304.39.00.72, 
7304.51.50.60, 7304.59.60.00, 7304.59.80.30, 7304.59.80.35, 
7304.59.80.40, 7304.59.80.45, 7304.59.80.50, 7304.59.80.55, 
7304.59.80.60, 7304.59.80.65, and 7304.59.80.70 of the Harmonized 
Tariff Schedule of the United States (``HTSUS'').
    Specifications, Characteristics, and Uses: Large diameter seamless 
pipe is used primarily for line applications such as oil, gas, or water 
pipeline, or utility distribution systems. Seamless pressure pipes are 
intended for the conveyance of water, steam, petrochemicals, chemicals, 
oil products, natural gas and other liquids and gasses in industrial 
piping systems. They may carry these substances at elevated pressures 
and temperatures and may be subject to the application of external 
heat. Seamless carbon steel pressure pipe meeting the ASTM A106 
standard may be used in temperatures of up to 1000 degrees Fahrenheit, 
at various American Society of Mechanical Engineers (``ASME'') code 
stress levels. Alloy pipes made to ASTM A335 standard must be used if 
temperatures and stress levels exceed those allowed for ASTM A106. 
Seamless pressure pipes sold in the United States are commonly produced 
to the ASTM A106 standard.
    Seamless standard pipes are most commonly produced to the ASTM A53 
specification and generally are not intended for high temperature 
service. They are intended for the low temperature and pressure 
conveyance of water, steam, natural gas, air and other liquids and 
gasses in plumbing and heating systems, air conditioning units, 
automatic sprinkler systems, and other related uses. Standard pipes 
(depending on type and code) may carry liquids at elevated temperatures 
but must not exceed relevant ASME code requirements. If exceptionally 
low temperature uses or conditions are anticipated, standard pipe may 
be manufactured to ASTM A333 or ASTM A334 specifications.
    Seamless line pipes are intended for the conveyance of oil and 
natural gas or other fluids in pipe lines. Seamless line pipes are 
produced to the API 5L specification.
    Seamless water well pipe (ASTM A589) and seamless galvanized pipe 
for fire protection uses (ASTM A795) are used for the conveyance of 
water.
    Seamless pipes are commonly produced and certified to meet ASTM 
A106, ASTM A53, API 5L-B, and API 5L-X42 specifications. To avoid 
maintaining separate production runs and separate inventories, 
manufacturers typically triple or quadruple certify the pipes by 
meeting the metallurgical requirements and performing the required 
tests pursuant to the respective specifications. Since distributors 
sell the vast majority of this product, they can thereby maintain a 
single inventory to service all customers.
    The primary application of ASTM A106 pressure pipes and triple or 
quadruple certified pipes in large diameters is for use as oil and gas 
distribution lines for commercial applications. A more minor 
application for large diameter seamless pipes is for use in pressure 
piping systems by refineries, petrochemical plants, and chemical 
plants, as well as in power generation plants and in some oil field 
uses (on shore and off shore) such as for separator lines, gathering 
lines and metering runs. These applications constitute the majority of 
the market for the subject seamless pipes. However, ASTM A106 pipes may 
be used in some boiler applications.
    The scope of this review includes all seamless pipe meeting the 
physical parameters described above and produced to one of the 
specifications listed above, regardless of application, with the 
exception of the exclusions discussed below, whether or not also 
certified to a non-covered specification. Standard, line, and pressure 
applications and the above-listed specifications are defining 
characteristics of the scope of this investigation. Therefore, seamless 
pipes meeting the physical description above, but not produced to the 
ASTM A53, ASTM A106, ASTM A333, ASTM A334, ASTM A589, ASTM A795, and 
API 5L specifications shall be covered if used in a standard, line, or 
pressure application, with the exception of the specific exclusions 
discussed below.
    For example, there are certain other ASTM specifications of pipe 
which, because of overlapping characteristics, could potentially be 
used in ASTM A106 applications. These specifications generally include 
ASTM A161, ASTM A192, ASTM A210, ASTM A252, ASTM A501, ASTM A523, ASTM 
A524, and ASTM A618. When such pipes are used in a standard, line, or 
pressure pipe application, such products are covered by the scope of 
this review.
    Specifically excluded from the scope of this review are:
A. Boiler tubing and mechanical tubing, if such products are not 
produced to ASTM A53, ASTM A106, ASTM A333, ASTM A334, ASTM A589, ASTM 
A795, and API 5L specifications and are not used in standard, line, or 
pressure pipe applications.
B. Finished and unfinished oil country tubular goods (``OCTG''), if 
covered by the scope of another antidumping duty order from the same 
country. If not covered by such an OCTG order, finished and unfinished 
OCTG are included in this scope when used in standard, line or pressure 
applications.
C. Products produced to the A335 specification unless they are used in 
an application that would normally utilize ASTM A53, ASTM A106, ASTM 
A333, ASTM A334, ASTM A589, ASTM A795, and API 5L specifications.
D. Line and riser pipe for deepwater application, i.e., line and riser 
pipe that is (1) used in a deepwater application, which means for use 
in water depths of 1,500 feet or more; (2) intended for use in and is 
actually used for a specific deepwater project; (3) rated for a 
specified minimum yield strength of not less than 60,000 psi; and (4) 
not identified or certified through the use of a monogram, stencil, or 
otherwise marked with an API specification (e.g., ``API 5L'').

[[Page 56533]]

    With regard to the excluded products listed above, the Department 
will not instruct Customs to require end-use certification until such 
time as petitioner or other interested parties provide to the 
Department a reasonable basis to believe or suspect that the products 
are being utilized in a covered application. If such information is 
provided, the Department will require end-use certification only for 
the product(s) (or specification(s)) for which evidence is provided 
that such products are being used in a covered application as described 
above. For example, if, based on evidence provided by petitioner, the 
Department finds a reasonable basis to believe or suspect that seamless 
pipe produced to the A335 specification is being used in an A106 
application, it will require end-use certifications for imports of that 
specification. Normally the Department will require only the importer 
of record to certify to the end-use of the imported merchandise. If it 
later proves necessary for adequate implementation, the Department may 
also require producers who export such products to the United States to 
provide such certification on invoices accompanying shipments to the 
United States.
    Although the HTSUS subheadings are provided for convenience and 
U.S. Customs Service (``Customs'') purposes, the written description of 
the merchandise subject to this scope is dispositive.

Rescission of First Administrative Review

    TAMSA submitted an October 4, 2001 letter certifying that neither 
TAMSA, nor its U.S. affiliate, Siderca Corp., entered for consumption, 
or sold, exported, or shipped for entry for consumption in the United 
States subject merchandise during the period of review (``POR''). See 
Memorandum from James Terpstra through Melissa Skinner to Holly A. 
Kuga, ``Certain Large Diameter Carbon and Alloy Seamless Standard, 
Line, and Pressure Pipe from Mexico: Preliminary Notice of Intent to 
Rescind Administrative Review,'' (Preliminary Rescission Memo) dated 
September 3, 2002, located in the case file in the Central Records Unit 
(``CRU''), main Commerce Building, room B099. We conducted a shipment 
data query on SLP produced by TAMSA during the POR. To further confirm 
TAMSA's claim that it did not export subject merchandise to the United 
States during the POR, we requested entry documentation from Customs 
related to 14 entries. See Memorandum from Geoffrey Craig to Lee 
Kramer, dated October 10, 2001, in the CRU.
    On January 17, 2002, we stated that based on our shipment data 
query and examination of entry documents, we should treat TAMSA as a 
non-shipper and, in accordance with section 351.213(d)(3) of the 
Department's regulations, rescind this review. See Memorandum from 
James Terpstra through Melissa Skinner to the File, ``Certain Large 
Diameter Carbon and Alloy Seamless Standard, Line, and Pressure Pipe 
from Mexico: Rescission of First Administrative Review, dated January 
17, 2002, on file in the CRU. We allowed parties to comment on our 
intent to rescind the review. Id. On January 28, 2002, petitioner 
submitted a letter objecting to the Department's intent to rescind 
because the Department did not disclose the documentation or 
methodology it used to reach its initial decision. Petitioner also 
asserted that the Department must investigate those entries of subject 
merchandise that fell within the exclusion clause of the scope (i.e., 
SLP used for deepwater applications) and demonstrate that those entries 
were, in fact, used in a deepwater application.
    TAMSA responded in a February 1, 2002 letter stating that the 
Department need not require that exporters and U.S. importers prove the 
end use of the imported product. TAMSA cites the Department's final 
determination in the antidumping duty investigation, which states that 
``{T{time} he Department will not instruct Customs to require end-use 
certificates until such time as petitioner or other interested parties 
provide to the Department a reasonable basis to believe or suspect that 
the products are being utilized in a covered application.'' Large 
Diameter Carbon and Alloy Seamless Standard, Line, and Pressure Pipe 
from Mexico, 65 FR 39358, 39359 (June 26, 2000)(Issues and Decision 
Memorandum, Scope of Investigation). TAMSA also noted that Customs is 
capable of making informed decisions in terms of evaluating whether an 
entry will indeed be used for deepwater applications.
    On March 11, 2002, we asked TAMSA to elaborate and provide 
documentation on one of the 14 entries during the POR that we requested 
from Customs because the entry was subject to antidumping duties. Based 
on the fact that we were aware of at least one entry of subject 
merchandise, we issued a sales questionnaire to TAMSA on March 11, 
2002.
    On March 25, 2002, TAMSA placed on the record documentation related 
to this entry showing that the entry was for testing purposes. For 
further discussion, see the Preliminary Rescission Memo. Although TAMSA 
did not formally respond to the questionnaire, its March 25, 2002, 
letter essentially reiterated TAMSA's earlier statement that it did not 
have any shipments of subject merchandise because the sole entry of 
subject merchandise was for testing purposes and did not meet other 
criteria that would be necessary for the entry to be deemed a sale.
    Consistent with the Court of Appeals for the Federal Circuit's 
decision in NSK Ltd. v. United States, 115 F.3d 965, 975 (Fed. Cir. 
1997), we determine that TAMSA's sole entry does not constitute a 
``sale'' for the purposes of our proceeding. With respect to the other 
13 entries, we disagree with petitioner's contention that the burden is 
on the Department to prove that entries excluded from the order (e.g., 
SLP used for deepwater application) are used for that purpose. As 
stated in the scope, until petitioner presents evidence suggesting that 
entries are being used in a covered application, we will not require an 
end-use certificate. Petitioner has not provided any evidence to 
suggest that the entries are being used in a covered application. Thus, 
there were no sales of subject merchandise by TAMSA during the POR.
    Further, we have satisfied petitioner's request that all 
documentation related to our analysis be placed on the record. On April 
25, 2002, we asked TAMSA to place on the record the remaining 13 entry 
documents that were collected from Customs and analyzed by the 
Department. On April 29, 2002, TAMSA submitted the 13 entry documents. 
In comments submitted on May 29, 2002, petitioner argued that the 
documents did not sufficiently show that the entries were used in a 
deepwater application.
    Based on our shipment data query and examination of entry 
documents, we are treating TAMSA as a non-shipper for the purpose of 
this review. Therefore, in accordance with section 351.213(d)(3) of the 
Department's regulations, and consistent with our practice, we 
preliminarily determine to rescind this review. See e.g., Stainless 
Steel Bar from India; Preliminary Results of Antidumping Duty 
Administrative Review and New Shipper Review, and Partial Rescission of 
Administrative Review, 65 FR 12209 (March 8, 2000); Persulfates From 
the People's Republic of China; Preliminary Results of Antidumping Duty 
Administrative Review and Partial Rescission of Administrative Review, 
65 FR 18963 (April 10, 2000).
    An interested party may request a hearing within 30 days of 
publication of

[[Page 56534]]

this preliminary notice. See 19 CFR 351.309. Any hearing, if requested, 
will be held 44 days after the date of publication, or the first 
working day thereafter. Interested parties may submit case briefs no 
later than 30 days after the date of publication of this preliminary 
notice. Rebuttal briefs, limited to issues raised in such briefs, may 
be filed no later than 37 days after the date of publication. Parties 
who submit arguments are requested to submit with the argument (1) a 
statement of the issue, (2) a brief summary of the argument and (3) a 
table of authorities. Further, parties submitting written comments 
should provide the Department with an additional copy of the public 
version of any such comments on diskette. The Department will issue the 
final notice, which will include the results of its analysis of issues 
raised in any such comments, or at a hearing, if requested, within 120 
days of publication of this preliminary notice.
    This notice is in accordance with section 751(a)(1) of the Act and 
section 351.213(d) of the Department's regulations.

    Dated: August 27, 2002.
Holly A. Kuga,
Acting Deputy Assistant Secretary for Import Administration.
[FR Doc. 02-22537 Filed 9302; 8:45 am]
BILLING CODE 3510DSS