[Federal Register Volume 68, Number 32 (Tuesday, February 18, 2003)]
[Notices]
[Pages 7765-7768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3852]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-875]


Notice of Final Determination of Sales at Less Than Fair Value: 
Non-Malleable Cast Iron Pipe Fittings from the People's Republic of 
China

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

ACTION: Notice of Final Determination of Sales at Less Than Fair Value.

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EFFECTIVE DATE: February 18, 2003.

FOR FURTHER INFORMATION CONTACT: Ronald Trentham or Sam 
Zengotitabengoa, AD/CVD Enforcement, Group II, Office 4, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington, DC 
20230; telephone: (202) 482-6320, and (202) 482-4195, respectively.

SUPPLEMENTARY INFORMATION:

Final Determination

    We determine that non-malleable cast iron pipe fittings (pipe 
fittings) from the People's Republic of China (PRC) are

[[Page 7766]]

being sold, or are likely to be sold, in the United States at less than 
fair value (LTFV), as provided in section 735 of the Tariff Act of 
1930, as amended (the Act). The estimated margins of sales at LTFV are 
shown in the ``Final Determination of Investigation'' section of this 
notice.

Case History

    On September 25, 2002, the Department of Commerce (the Department) 
published the preliminary determination of sales at LTFV in the 
antidumping duty investigation of pipe fittings from the PRC. See 
Notice of Preliminary Determination of Sales at Less Than Fair Value 
and Postponement of Final Determination: Non-Malleable Cast Iron Pipe 
Fittings from the People's Republic of China, 67 FR 60,214 (September 
25, 2002) (Preliminary Determination). Since the preliminary 
determination, the following events have occurred.
    On September 30, 2002, and October 1, 2002, respectively, Jinan 
Meide Casting Co., Ltd. (JMC) and Shanghai Foreign Trade Enterprises 
Co., Ltd. (SFTEC) (the respondents) filed preliminary determination 
clerical error allegations. The Department concluded that certain 
allegations constituted ministerial errors, to be corrected in the 
final determination, but that the errors did not amount to significant 
ministerial errors for purposes of issuing an amended preliminary 
determination. See Ministerial Error Allegations Memorandum, from Holly 
A. Kuga to Bernard T. Carreau, dated November 4, 2002 (Ministerial 
Error Allegations Memorandum). From October 25, 2002, through November 
5, 2002, the Department conducted a sales and factors of production 
verification of JMC and SFTEC. See Memorandum to the File from the 
Team, Verification of Sales Information Reported by Jinan Meide Casting 
Co., Ltd., to the file, dated December 4, 2002; Memorandum to the File 
from the Team, Verification of Sales Information Reported by Shanghai 
Foreign Trade Enterprises Co., Ltd., to the file, dated December 4, 
2002; Memorandum to Neal M. Halper from the Team, Verification Report 
on the Factors of Production Data Submitted by Jinan Meide Casting Co., 
Ltd., dated December 11, 2002 (JMC FOP Verification Report); and 
Memorandum to Neal M. Halper from the Team, Verification Report on the 
Factors of Production Data Submitted by Shanghai Foreign Trade 
Enterprises, Ltd., and its Suppliers, dated December 11, 2002 (SFTEC 
FOP Verification Report). SFTEC filed surrogate value information and 
data on September 11, 2002, and November 25, 2002. JMC filed available 
surrogate value information and data on November 4, 2002, and the 
petitioners\1\ filed surrogate value information and data on November 
1, 2002. On October 25, 2002, SFTEC filed a request for a public 
hearing in this investigation, and JMC and the petitioners filed a 
request to appear and participate at a hearing if one was requested by 
another party. SFTEC withdrew its request for a hearing on January 7, 
2003. The respondents filed case briefs on December 23, 2002, and the 
petitioners filed a case brief on December 24, 2002. The respondents 
and the petitioners filed rebuttal briefs on January 3, 2003. In 
response to requests, we held meetings with the petitioners, on January 
14, 2003, JMC, on February 4, 2003, and SFTEC, on February 5, 2003, 
during which the party in question highlighted issues raised in its 
briefs.
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    \1\ The petitioners in this case are Anvil International, Inc. 
and Ward Manufacturing, Inc. (collectively referred to as the 
Petitioners).
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Scope of the Investigation

    For purposes of this investigation, the products covered are 
finished and unfinished non-malleable cast iron pipe fittings with an 
inside diameter ranging from 1/4 inch to 6 inches, whether threaded or 
un-threaded, regardless of industry or proprietary specifications. The 
subject fittings include elbows, ells, tees, crosses, and reducers as 
well as flanged fittings. These pipe fittings are also known as ``cast 
iron pipe fittings'' or ``gray iron pipe fittings.'' These cast iron 
pipe fittings are normally produced to ASTM A-126 and ASME B.l6.4 
specifications and are threaded to ASME B1.20.1 specifications. Most 
building codes require that these products are Underwriters 
Laboratories (UL) certified. The scope does not include cast iron soil 
pipe fittings or grooved fittings or grooved couplings.
    Fittings that are made out of ductile iron that have the same 
physical characteristics as the gray or cast iron fittings subject to 
the scope above or which have the same physical characteristics and are 
produced to ASME B.16.3, ASME B.16.4, or ASTM A-395 specifications, 
threaded to ASME B1.20.1 specifications and UL certified, regardless of 
metallurgical differences between gray and ductile iron, are also 
included in the scope of this petition. These ductile fittings do not 
include grooved fittings or grooved couplings. Ductile cast iron 
fittings with mechanical joint ends (MJ), or push on ends (PO), or 
flanged ends and produced to the American Water Works Association 
(AWWA) specifications AWWA C110 or AWWA C153 are not included.
    Imports of covered merchandise are classifiable in the Harmonized 
Tariff Schedule of the United States (HTSUS) under item numbers 
7307.11.00.30, 7307.11.00.60, 7307.19.30.60 and 7307.19.30.85. HTSUS 
subheadings are provided for convenience and Customs purposes. The 
written description of the scope of this proceeding is dispositive.

Period of Investigation (POI)

    The POI is July 1, 2001, through December 31, 2001.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this proceeding and to which we have responded are listed in the 
Appendix to this notice and addressed in the Issues and Decision 
Memorandum from Bernard T. Carreau, Deputy Assistant Secretary, Import 
Administration, to Faryar Shirzad, Assistant Secretary for Import 
Administration (Decision Memorandum) dated February 7, 2003, which is 
hereby adopted by this notice. Parties can find a complete discussion 
of the issues raised in this investigation and the corresponding 
recommendations in this public memorandum which is on file in the 
Central Records Unit (CRU), room B-099 of the main Department building. 
In addition, a complete version of the Decision Memorandum can be 
accessed directly on the internet at http://ia.ita.doc.gov. The paper 
copy and electronic version of the Decision Memorandum are identical in 
content.

Non-Market Economy

    The Department has treated the PRC as a non-market economy (NME) 
country in all its past antidumping investigations. See Notice of Final 
Determination of Sales at Less Than Fair Value: Honey from the People's 
Republic of China, 66 FR 50608 (October 4, 2001); Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Folding Gift 
Boxes from the People's Republic of China, 66 FR 58115 (November 20, 
2001). An NME country designation remains in effect until it is revoked 
by the Department. See section 771(18)(C) of the Act. The respondents 
in this investigation have not requested a revocation of the PRC's NME 
status. Therefore, we have continued to treat the PRC as a NME country 
in this investigation. For further details, see the Preliminary 
Determination.

[[Page 7767]]

Separate Rates

    In our Preliminary Determination, we found that both responding 
companies, JMC and SFTEC, met the criteria for the application of 
separate, company-specific antidumping duty rates. We have not received 
any other information since the preliminary determination which would 
warrant reconsideration of our separates rates determination with 
respect to these companies. For a complete discussion of the 
Department's determination that the respondents are entitled to a 
separate rate, see the Preliminary Determination.

The PRC-Wide Rate

    In the Preliminary Determination, we found that the use of adverse 
facts available (FA) for the PRC-wide rate was appropriate for other 
exporters in the PRC based on our presumption that those respondents 
who failed to demonstrate entitlement to a separate rate constitute a 
single enterprise under common control by the Chinese government. The 
PRC-wide rate applies to all entries of the merchandise under 
investigation except for entries from JMC and SFTEC.
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information in using facts otherwise available, it must, 
to the extent practicable, corroborate that information from 
independent sources that are reasonably at its disposal. At the 
preliminary determination, we corroborated the information contained in 
the petition regarding export price and normal value (NV). See 
Memorandum to Holly A. Kuga, Corroboration of Secondary Information, 
dated September 19, 2002 (Preliminary Corroboration Memorandum). In 
order to corroborate the petition information, we recalculated the 
petition margin to reflect new information placed on the record of the 
investigation after initiation and prior to the preliminary 
determination. Id., at page 6. We received no comments regarding our 
application of total adverse FA to the PRC-wide entity or our 
corroboration of petition information. As a result, we have continued 
to apply an adverse FA rate to the PRC-wide entity. For further 
discussion, see Preliminary Determination.
    For the Preliminary Determination, we derived overhead, selling, 
general, and administrative (SG&A) expenses, and profit ratios from the 
1999-2000 combined income, value of production, expenditure and 
appropriation account for a sample of 1,914 public companies in India 
that were reported in the June 2001 Reserve Bank of India Bulletin. 
Both JMC and SFTEC alleged that in the Preliminary Determination, the 
Department overstated SG&A expenses. After review, we agreed that the 
calculation of the SG&A ratio was in error. See Ministerial Error 
Allegations Memorandum. For the final determination, we recalculated 
the petition margin using the corrected SG&A ratio and corrected 
several other arithmetic errors. We also adjusted the surrogate value 
for electricity As a result of these recalculations, the PRC-wide rate 
is, for the final determination, 75.5 percent ad valorem. See 
Memorandum to the File from the Team, Corroboration of Secondary 
Information, dated February 7, 2003.

Surrogate Country

    For purposes of the final determination, we continue to find that 
India remains the appropriate surrogate country for the PRC. For 
further discussion and analysis regarding the surrogate country 
selection for the PRC, see the Preliminary Determination.

Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by the respondents for use in our final 
determination. We used standard verification procedures including 
examination of relevant accounting and production records, and original 
source documents provided by the respondents. For changes from the 
Preliminary Determination as a result of verification, see the 
``Changes Since the Preliminary Determination'' section below.

Changes Since the Preliminary Determination

    Based on our findings at verification and on our analysis of the 
comments received, we have made adjustments to the calculation 
methodologies used in the preliminary determination. These adjustments 
are listed below and discussed in detail in the (1) Decision 
Memorandum, (2) Memorandum to the File, Surrogate Country Values Used 
for the Final Determination of the Antidumping Duty Investigation of 
Non-Malleable Cast Iron Pipe Fittings from the People's Republic of 
China, dated February 7, 2003, (Surrogate Country Values Memorandum) 
and (3) Memorandum to the File from the Team, Final Calculation of 
Antidumping Duty Investigation of Non-Malleable Cast Iron Pipe Fittings 
From the People's Republic of China for Shanghai Foreign Trade 
Enterprises Co., Ltd., dated February 7, 2003 (SFTEC's Final 
Calculation Memorandum), and Memorandum to the File from the Team, 
Final Calculation of Antidumping Duty Investigation of Non-Malleable 
Cast Iron Pipe Fittings From the People's Republic of China for Jinan 
Meide Casting Co., Ltd., dated February 7, 2003 (JMC's Final 
Calculation Memorandum).
1. We corrected the SG&A and the plastic sheet surrogate value for JMC. 
See Ministerial Error Allegations Memorandum and JMC's Final 
Calculation Memorandum.
2. We corrected the SG&A and the wooden crates surrogate value for 
SFTEC. See Ministerial Error Allegations Memorandum and SFTEC's Final 
Calculation Memorandum.
3. We revised our calculation of freight costs for the factors of 
production to include the revised distances identified during 
verification. See JMC's Final Calculation Memorandum and SFTEC's Final 
Calculation Memorandum.
4. We adjusted the surrogate value for pig iron. See Decision 
Memorandum, at Comment 6.
5. We adjusted SFTEC's reported raw material consumption factors to 
reflect only the sales revenue received from scrap sales based on the 
surrogate value for cast iron scrap. See Decision Memorandum, at 
Comment 3, and SFTEC's Final Calculation Memorandum.
6. We adjusted the surrogate value for electricity. See Surrogate 
Country Values Memorandum.
7. As partial FA for JMC, we adjusted the conversion costs at the gray 
iron casting workshop to account for the difference between the highest 
product-specific yield loss and the average yield loss of all products 
in the gray iron casting workshop. See Decision Memorandum, at Comment 
1, and JMC's Final Calculation Memorandum.
8. We have allowed JMC's offset for scrap recovered. See Decision 
Memorandum, at Comment 5, and JMC's Final Calculation Memorandum.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B)(ii) of the Act, we are 
directing the Customs Service to continue suspension liquidation of 
entries of subject merchandise from the PRC that are entered, or 
withdrawn from warehouse, for consumption on or after September 25, 
2002 (the date of publication of the Preliminary Determination in the 
Federal Register). We will instruct the Customs Service to require a 
cash deposit or the posting of a bond equal to the weighted-average 
amount by which NV exceeds the U.S. price, as indicated in the chart 
below. These suspension-of-liquidation

[[Page 7768]]

instructions will remain in effect until further notice.

Final Determination of Investigation

    We determine that the following weighted-average percentage margins 
exist for the period July 1, 2001, through December 31, 2001:

------------------------------------------------------------------------
                                               Weighted-Average Margin
           Manufacturer/exporter                      (percent)
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Jinan Meide Casting Co., Ltd..............                          7.08
Shanghai Foreign Trade Enterprises Co.,                             6.34
 Ltd......................................
PRC-Wide Rate.............................                         75.50
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    The PRC-wide rate applies to all entries of the subject merchandise 
except for entries from JMC and SFTEC.

International Trade Commission Notification

    In accordance with section 735(d) of the Act, we have notified the 
International Trade Commission (ITC) of our determination. As our final 
determination is affirmative, the ITC will determine, within 45 days, 
whether these imports are materially injuring, or threaten material 
injury to, the U.S. industry. If the ITC determines that material 
injury, or threat of material injury does not exist, the proceeding 
will be terminated and all securities posted will be refunded or 
cancelled. If the ITC determines that such injury does exist, the 
Department will issue an antidumping duty order directing Customs 
officials to assess antidumping duties on all imports of subject 
merchandise entered for consumption on or after the effective date of 
the suspension of liquidation.

Notification Regarding Administrative Protective Order (APO)

    This notice also serves as a reminder to parties subject to APO of 
their responsibility concerning the disposition of proprietary 
information disclosed under APO in accordance with 19 CFR 351.305. 
Timely notification of return/destruction of APO materials or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and the terms of an APO is a sanctionable 
violation.
    This determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Act.

    Dated: February 7, 2003.
Faryar Shirzad,
Assistant Secretaryfor Import Administration.

Appendix Issues in Decision Memorandum

Comment 1: Whether Respondents Properly Reported the Necessary 
Information to the Department
Comment 2: Whether the Department Correctly Calculated the Distance for 
the NME Inland Freight Charge
Comment 3: Whether the Department Should Correct the Treatment of Scrap 
and Coke Offset Reported by SFTEC
Comment 4: Whether the Department Correctly Derived Surrogate Financial 
Ratios
Comment 5: Whether the Department Should Credit JMC with the Recovery 
of Scrap from the Smoothing and Threading Workshops
Comment 6: Whether the Department Erred in Valuing the Surrogate Value 
for Pig Iron
Comment 7: Whether the Department Should Adjust SFTEC's Coke Usage
Comment 8: Whether the Department Properly Calculated the Surrogate 
Brokerage and Handling Value
Comment 9: Whether the Department will Correct the Ministerial Errors 
from the Preliminary Determination
[FR Doc. 03-3852 Filed 2-14-03; 8:45 am]
BILLING CODE 3510-DS-S