[Federal Register Volume 69, Number 68 (Thursday, April 8, 2004)]
[Notices]
[Pages 18539-18542]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8011]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-502]


Certain Welded Carbon Steel Pipes and Tubes From Thailand: Notice 
of Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to requests by two domestic producers, Allied Tube 
and Conduit Corporation, and Wheatland Tube Company (collectively, the 
``petitioners''), the Department of Commerce (``the Department'') is 
conducting an administrative review of the antidumping duty order on 
certain welded carbon steel pipes and tubes from Thailand. This review 
covers Saha Thai Steel Company, Ltd. (``Saha Thai''), a Thai 
manufacturer and exporter of the subject merchandise to the United 
States. The period of review (POR) is March 1, 2002 through February 
28, 2003.
    We have preliminarily determined that the respondent sold the 
subject merchandise at less than normal value (``NV'') during the POR. 
For information on the weighted-average dumping margin, see the 
``Preliminary Results of Review'' section below. If these preliminary 
results are adopted in our final results, we will instruct U.S. Customs 
and Border Protection (CBP) to liquidate appropriate entries during the 
POR at the proper assessment rates.
    Interested parties are invited to comment on these preliminary 
results. Parties who submit argument in this proceeding should also 
submit with the argument (1) a statement of the issue, and (2) a brief 
summary of the argument.

EFFECTIVE DATE: April 8, 2004.

FOR FURTHER INFORMATION CONTACT: Javier Barrientos or Sally Gannon, 
Office of AD/CVD Enforcement VII, Room 7866, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-2243 and (202) 482-0162, respectively.

SUPPLEMENTARY INFORMATION

Background

    On March 11, 1986, the Department published in the Federal 
Register, an antidumping duty order on circular welded carbon steel 
pipes and tubes from Thailand. See Antidumping Duty Order: Circular 
Welded Carbon Steel Pipes and Tubes from Thailand, 51 FR 8341 (March 
11, 1986). On March 3, 2003, the Department published a notice of 
opportunity to request an administrative review of this order covering 
the period March 1, 2002 through February 28, 2003. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity To Request Administrative Review, 68 FR 9974 (March 3, 
2003). Timely requests for an administrative review of the antidumping 
order with respect to exports by Saha Thai during the POR were filed by 
the petitioners. The Department published a notice of initiation of 
this antidumping duty administrative review on April 21, 2003. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews, 68 FR 19498 (April 21, 2003).
    Because the Department determined that it was not practicable to 
complete this review within the statutory time limits, on November 7, 
2003, we issued a notice of extension of the time limit for this 
review. See Certain Welded Carbon Steel Pipes and Tubes From Thailand: 
Extension of Time Limit for Preliminary Results of Antidumping 
Administrative Review, 69 FR 4113

[[Page 18540]]

(January 28, 2004). As a result, we extended the deadline for these 
preliminary results to March 30, 2004. Unless extended, the deadline 
for the final results will be 120 days after publication of these 
preliminary results.

Period of Review

    The POR is March 1, 2002 through February 28, 2003.

Scope of the Antidumping Duty Order

    The products covered by this antidumping duty order are certain 
welded carbon steel pipes and tubes from Thailand. The subject 
merchandise has an outside diameter of 0.375 inches or more, but not 
exceeding 16 inches. These products, which are commonly referred to in 
the industry as ``standard pipe'' or ``structural tubing,'' are 
hereinafter designated as ``pipe and tube.'' The merchandise is 
classifiable under the Harmonized Tariff Schedule (HTS) item numbers 
7306.30.1000, 7306.30.5025, 7306.30.5032, 7306.30.5040, 7306.30.5055, 
7306.30.5085, and 7306.30.5090. Although the HTS subheadings are 
provided for convenience and CBP purposes, our written description of 
the scope of the order is dispositive.

Verification

    Pursuant to section 782(i) of the Act, the Department verified the 
information submitted by Saha Thai for use in our preliminary results. 
The Department used standard verification procedures including 
examination of relevant accounting and production records, and original 
source documents provided by the respondent.

Date of Sale

    Saha Thai reported contract date as the date of sale for U.S. 
sales. Invoice date is the Department's presumptive date for date of 
sale (see section 351.401(i) of the Department's regulations). For 
purposes of this review, however, we examined whether invoice date or 
some other date better represents the date on which the material terms 
of sale were established. The Department examined sales documentation, 
including contracts and invoices, provided by Saha Thai for its U.S. 
sales, and found that the material terms of sale are set at the 
contract date. Specifically, any changes in quantity were within the 
specified contract tolerances and as such were not material. Unit 
prices for the products themselves did not change between the contract 
and invoice on the sales examined. As such, we preliminarily determine 
that contract date is the appropriate date of sale for U.S. sales in 
this administrative review because it better represents the date upon 
which the material terms of sale were established. This is consistent 
with our decision in the last administrative review of this proceeding, 
where we determined that contract date better represented the date of 
sale because it better reflected the date on which the material terms 
of sale, i.e., price and quantity, were established. See Certain Welded 
Carbon Steel Pipes and Tubes From Thailand: Final Results of 
Antidumping Duty Administrative Review, 66 FR 53388 (October 22, 2001) 
(99-00 Final Results).
    With respect to home market sales, the invoice is the first written 
document that establishes the material terms of sale. Therefore, we are 
using the invoice date as the date of sale for home market sales, as 
reported by Saha Thai.

Normal Value Comparisons

    To determine whether sales of the subject merchandise from Thailand 
to the United States were made at less than normal value, we compared 
the export prices to the normal values for Saha Thai as specified in 
the ``Export Price'' and ``Normal Value'' sections of this notice. In 
accordance with section 777A(d)(2) of the Act, we calculated monthly 
weighted-average prices for normal value and compared these to 
individual U.S. transactions.

Export Price

    Based upon our review of the record evidence, we classified all 
Saha Thai sales to U.S. customers as export price (EP) sales because, 
as in previous segments of this proceeding, we found that Saha Thai is 
not affiliated with its U.S. distributors, which are the first 
purchasers in the United States. See 99-00 Final Results. Therefore, we 
calculated the EP based on the price from Saha Thai to the first 
unaffiliated purchaser in the United States, in accordance with section 
772(a) of the Act.
    Where appropriate, in accordance with section 772(c)(2) of the Act, 
we made deductions from the gross unit price for foreign inland 
freight, foreign brokerage and handling, foreign inland insurance, bill 
of lading charges, ocean freight to the U.S. port, U.S. brokerage and 
handling charges, and, U.S. duty.
    Section 772(c)(1)(B) of the Act states that the EP should be 
increased by the amount of any import duties ``imposed by the country 
of exportation which have been rebated, or which have not been 
collected, by reason of the exportation of the merchandise to the 
United States.'' In this review, Saha Thai claimed an adjustment to EP 
for the amount of duties exempted on its imports of raw materials into 
a bonded warehouse.
    In determining whether or not an adjustment should be made to EP 
for this exemption, we look for a reasonable link between the duties 
imposed and those rebated or exempted. We do not require that the 
imported input be traced directly from importation through exportation. 
We do require, however, that the company meet the following elements in 
order for this addition to be made to EP. The first element is that the 
import duty and rebate or exemption be directly linked to, and 
dependent on, one another; and the second element is that the company 
must demonstrate that there were sufficient imports of the imported 
material to account for the duty drawback paid for the export of the 
manufactured product (the ``two pronged test''). See e.g., Rajinder 
Pipes Ltd. v. United States, 70 F. Supp. 2d 1350, 1358 (CIT 1999); see 
also Certain Welded Carbon Standard Steel Pipes and Tubes from India: 
Final Results of New Shippers Antidumping Duty Administrative Review, 
62 FR 47632 (September 10, 1997); Federal Mogul Corp. v. United States, 
862 F. Supp. 384, 409 (CIT 1994).
    The company started with the actual per unit amount of raw material 
input it imported. To this, Saha Thai added a raw material yield/loss 
credit constant, that was set by the Government of Thailand (GOT), in 
order to calculate the amount of duty exempted on raw material imports 
that were incorporated into exported products. See Memorandum to the 
File, from Javier Barrientos, AD/CVD Financial Analyst and Jaqueline 
Arrowsmith, Case Analyst, through Sally Gannon, Program Manager; 
Verification of Questionnaire Responses submitted by Saha Thai Steel 
Pipe Company, Ltd. (``Saha Thai''), March 26, 2004 (``Cost Verification 
Report'') at 16. At verification, we compared the GOT-set yield/loss 
credit constant on the raw material to the actual production loss rate 
the company experienced. We found that the GOT-set yield/loss credit 
constant was not a reasonable reflection of the company's experience 
because it overstates the yield/loss credit, thus not balancing yielded 
raw material imports to finished product exports. Id. at 14. Therefore, 
for these preliminary results, we have adjusted Saha Thai's claimed 
addition to EP to reflect the company's actual usage/yield experience 
during the period, based on the information found at verification. See 
Memorandum to the File, from Javier Barrientos, AD/CVD Financial 
Analyst, through Sally

[[Page 18541]]

Gannon, Program Manager; Analysis of Saha Thai Steel Pipe Company, Ltd. 
for the Preliminary Results (March 30, 2004).
    In addition, the company claimed an adjustment to EP for an 
exemption it received for antidumping duties on certain imports subject 
to antidumping duties imposed by the GOT. However, because the 
Department has not specifically addressed this unique issue of whether 
to allow an adjustment for exempted antidumping duties on raw material 
inputs, the Department is requesting interested parties to comment on 
this issue in their case and rebuttal briefs. Therefore, for purposes 
of these preliminary results, no adjustment has been made to EP with 
respect to these exempted antidumping duties.

Section 201 Duties

    The Department notes that merchandise subject to this review is 
subject to duties imposed under section 201 of the Trade Act of 1974, 
as amended (section 201 duties). Because the Department has not 
previously addressed the appropriateness of deducting section 201 
duties from EP and CEP, on September 9, 2003, the Department published 
a request for public comments on this issue. See Antidumping 
Proceedings: Treatment of Section 201 Duties and Countervailing Duties, 
68 FR 53104 (September 9, 2003). Comments were received by October 9, 
2003, and rebuttal comments were received by November 7, 2003. As the 
Department is currently analyzing these comments, for purposes of these 
preliminary results, no adjustment has been made to EP.

Normal Value

    Home Market Viability: In order to determine whether there is a 
sufficient volume of sales in the home market to serve as a viable 
basis for calculating normal value (NV), we compared the volume of Saha 
Thai's home market sales of the foreign like product to the volume of 
U.S. sales of subject merchandise, in accordance with section 773(a)(1) 
of the Act. Based on this comparison, we determined that the aggregate 
volume of Saha Thai's home market sales of the foreign like product is 
greater than five percent of the aggregate volume of Saha Thai's U.S. 
sales. Thus, we determined that Saha Thai had a viable home market 
during the POR. Consequently, we based normal value on home market 
sales.
    COP Analysis: Pursuant to section 773(b)(2)(A)(ii) of the Act, 
there were reasonable grounds to believe or suspect that Saha Thai had 
made home market sales at prices below its cost of production (``COP'') 
in this review because the Department had disregarded Saha Thai sales 
that had failed the cost test in the 1999-2000 administrative review 
(i.e., the most recently completed review at the time we issued our 
antidumping questionnaire in the instant review). See 99-00 Final 
Results. As a result, the Department initiated an investigation to 
determine whether Saha Thai made home market sales during the 
contemporaneous period at prices below its COP. We calculated the COP 
based on the sum of respondent's cost of materials and fabrication for 
the foreign like product, plus an amount for selling, general and 
administrative expenses (``SG&A''), and packing, in accordance with 
section 773(b)(3) of the Act.
    Cost Test: For these preliminary results, we are using respondent's 
verified COP. Pursuant to section 773(b) of the Act, we compared the 
COP to the home market sale prices (less any applicable movement 
charges and discounts) of the foreign like product on a product 
specific basis, in order to determine whether home market sales had 
been made at prices below the COP.
    In determining whether to disregard home market sales made at 
prices below the COP, and in accordance with section 773(b)(1) of the 
Act, we examined whether: (1) Within an extended period of time, such 
sales were made in substantial quantities and, (2) whether such sales 
were made at prices which permitted the recovery of all costs within a 
reasonable period of time in the normal course of trade.
    Pursuant to section 773(b)(2)(C) of the Act, when less than 20 
percent of the respondent'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.'' When 20 percent or more of the 
respondent's sales of a given product during the contemporaneous period 
were at prices less than the COP, in accordance to with sections 
773(b)(2)(B) and (C) of the Act, we determined such sales to have been 
made in substantial quantities within an extended period of time. In 
such cases, based on comparisons of prices to weight-averaged costs in 
the cost reference period, we determined that these sales were made at 
prices which would not permit recovery of all costs within a reasonable 
period of time, in accordance with section 773(b)(2)(D) of the Act. 
Based on this test, we disregarded the below-cost sales.
    Constructed Value: In accordance with section 773(a)(4) of the Act, 
we used constructed value (CV) as the basis for NV when there were no 
contemporaneous sales of identical or similar merchandise in the 
comparison market that passed the cost test. We calculated CV, in 
accordance with section 773(e) of the Act, based on the sum of Saha 
Thai's cost of materials, fabrication, SG&A, profit, and packing. In 
accordance with section 773(e)(2)(A) of the Act, we based SG&A and 
profit on the actual amounts incurred and realized by Saha Thai 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 average of the selling expenses 
reported for home market sales that passed the cost test, weighted by 
the total quantity of those sales. For profit, we first calculated the 
difference between the home market sales value and its corresponding 
COP, and divided the difference by this COP. We then multiplied this 
percentage by the COP for the respective U.S. model to derive a profit 
amount.
    Home Market Price: To calculate Saha Thai's home market net price, 
we deducted discounts, home market credit expenses, and inland freight, 
where appropriate. In addition, in accordance with section 773(a)(6) of 
the Act, we deducted home market packing costs and added U.S. packing 
costs, U.S. imputed credit, bank charges, and penalty fees.

Level of Trade

    As set forth in section 773(a)(1)(B)(i) of the Act and in the 
Statement of Administrative Action, to the extent practicable, we 
determine NV based on sales in the comparison market at the same level 
of trade (``LOT'') as the EP. The NV LOT is that of the starting-price 
sale in the comparison market or, when NV is based on CV, that of the 
sales from which we derive selling, general and administrative expenses 
and profit. For EP, the U.S. LOT is the level of the starting-price 
sale, which is usually from exporter to importer. To determine whether 
NV sales are at a different LOT than EP sales, 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. See Notice of Final

[[Page 18542]]

Determination of Sales at Less Than Fair Value: Certain Cut-to-Length 
Carbon Steel Plate from South Africa, 62 FR 61731 (November 19, 1997).
    For the U.S. market, Saha Thai reported only one LOT for its EP 
sales. This single LOT represents large volume sales to unaffiliated 
distributors in the United States. In the home market, Saha Thai 
reported that it made sales at one LOT. These sales were made to 
unaffiliated end-users and distributors. We have examined the selling 
functions in each market and find that there are no significant 
differences in the selling functions Saha Thai performs for its 
customers in the home market from those it performs in the United 
States. Therefore, we conclude that EP and NV sales are made at the 
same LOT and no adjustment is warranted.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A of the Act, based on exchange rates in effect on the dates 
of the U.S. sales as certified by the Federal Reserve Bank.

Preliminary Results of Review

    We preliminarily determine that the following weighted-average 
dumping margin exists:

------------------------------------------------------------------------
          Manufacturer/Exporter                  Period          Margin
------------------------------------------------------------------------
Saha Thai Steel Pipe Company, Ltd........      3/1/02-2/28/03      2.00%
------------------------------------------------------------------------

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. For Saha Thai the assessment rate 
will be based on the margin above. The Department will issue 
appropriate appraisement instructions directly to CBP within 15 days of 
publication of the final results of review. We will direct CBP to 
assess the resulting assessment rates against the entered customs 
values for the subject merchandise on each of the entries during the 
period of review.

Cash Deposit Requirements

    The following deposit rates will be effective with respect to all 
shipments of certain welded carbon steel pipes and tubes from Thailand 
entered, or withdrawn from warehouse, for consumption on or after the 
publication date of the final results as provided for by section 
751(a)(2)(C) of the Act: (1) For Saha Thai, the cash deposit rate will 
be the company-specific rate established in the final results of this 
review; (2) for previously reviewed or investigated companies not 
listed above, the cash deposit rate will be the company-specific rate 
established for the most recent period; (3) if the exporter is not a 
firm covered in this review, a prior review, or the LTFV investigation, 
but the manufacturer is, the cash deposit rate will be the rate 
established for the most recent period for the manufacturer of the 
subject merchandise; and (4) for all other producers and/or exporters 
of this merchandise, the cash deposit rate shall be the ``all others'' 
rate established in the LTFV investigation, which is 15.67 percent. See 
Order. These deposit rates, when imposed, shall remain in effect until 
the publication of the next administrative review.

Public Comment

    Pursuant to section 351.224(b) of the Department's regulations, the 
Department will disclose to parties to the proceeding any calculations 
performed in connection with these preliminary results within five days 
after the date of publication of this notice. Pursuant to section 
351.309 of the Department's regulations, interested parties may submit 
written comments in response to these preliminary results. Case briefs 
are to be submitted within 30 days after the date of publication of 
this notice, and rebuttal briefs, limited to arguments raised in case 
briefs, are to be submitted no later than five days after the time 
limit for filing case briefs. Parties who submit arguments in this 
proceeding are requested to submit with the argument: (1) A statement 
of the issues, and (2) a brief summary of the argument. Case and 
rebuttal briefs must be served on interested parties in accordance with 
section 351.303(f) of the Department's regulations.Also, pursuant to 
section 351.310 of the Department's regulations, within 30 days of the 
date of publication of this notice, interested parties may request a 
public hearing on arguments to be raised in the case and rebuttal 
briefs. Unless the Secretary specifies otherwise, the hearing, if 
requested, will be held two days after the date for submission of 
rebuttal briefs. Parties will be notified of the time and location. The 
Department will publish the final results of this administrative 
review, including the results of its analysis of issues raised in any 
case or rebuttal brief, not later than 120 days after publication of 
these preliminary results, unless extended.

Notice to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under section 351.402(f) of the Department's regulations 
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.
    These preliminary results of review and notice are issued in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 
1675(a)(1) and 19 U.S.C 1677f(i)(1)).

    Dated: March 30, 2004.
Jeffrey May,
Acting Assistant Secretary for Import Administration.
[FR Doc. 04-8011 Filed 4-7-04; 8:45 am]
BILLING CODE 3510-DS-P