[Federal Register Volume 69, Number 110 (Tuesday, June 8, 2004)]
[Notices]
[Pages 31958-31961]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-12940]



[[Page 31958]]

-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-008]


Circular Welded Carbon Steel Pipes and Tubes From Taiwan: 
Preliminary Results of Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

-----------------------------------------------------------------------

SUMMARY: On July 1, 2003, the Department of Commerce (the Department) 
published in the Federal Register (68 FR 39055) a notice announcing the 
initiation of the administrative review of the antidumping duty order 
on circular welded carbon steel pipes and tubes from Taiwan. The period 
of review (POR) is May 1, 2002 to April 30, 2003.
    We preliminarily determine that sales of circular welded carbon 
steel pipes and tubes from Taiwan have been made at prices below the 
normal value (NV) by the respondent, Yieh Hsing Enterprise Co, Ltd. 
(Yieh Hsing). If these preliminary results are adopted in the final 
results of this administrative review, we will instruct Customs and 
Border Protection (CBP) to assess antidumping duties based on all 
appropriate entries. Interested parties are invited to comment on these 
preliminary results. Parties who submit argument in these proceedings 
are requested to submit with the argument: (1) A statement of the 
issues, (2) a brief summary of the argument, and (3) a table of 
authorities.

DATES: Effective Date: June 8, 2004.

FOR FURTHER INFORMATION CONTACT: Angela Strom or Robert James, 
Enforcement Group III, Office 8, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Room 7866, Washington, DC 20230; telephone 
(202) 482-2704 or (202) 482-0649.

SUPPLEMENTARY INFORMATION:

Background

    On May 1, 2003, the Department published in the Federal Register a 
notice of ``Opportunity to Request Administrative Review'' of the 
antidumping duty order on circular welded carbon steel pipes and tubes 
from Taiwan. See Antidumping or Counterveiling Duty Order, Finding or 
Suspended Investigation, Opportunity to Request Administrative Review, 
68 FR at 23281. On July 1, 2003, in response to a request from 
petitioners, Allied Tube and Conduit Corporation, IPSCO Tubulars Inc. 
and Wheatland Tube Company, the Department published in the Federal 
Register our notice of initiation of this administrative review. See 
Initiation of Antidumping and Counterveiling Duty Administrative 
Reviews and Request for Revocation in Part, 68 FR at 39055. Petitioners 
requested the Department to conduct an administrative review of entries 
of subject merchandise made by Yieh Hsing. The period of review covers 
May 1, 2002 to April 30, 2003.
    On August 7, 2003, the Department issued its antidumping duty 
questionnaire to Yieh Hsing. Yieh Hsing submitted its response to 
section A of the questionnaire on September 11, 2003, its response to 
sections B and C on September 25, 2003, and its response to section D 
on October 2, 2003. On October 17, 2003, the Department issued a 
supplemental questionnaire for section A, to which Yieh Hsing responded 
on November 12, 2003. On November 17, 2003, the Department issued a 
supplemental questionnaire for section D of the questionnaire; Yieh 
Hsing submitted its response on December 8, 2003. On December 3, 2003, 
the Department issued a supplemental questionnaire for sections B and C 
of the questionnaire; Yieh Hsing filed its response on January 5, 2004. 
On January 16, 2004, the Department issued another supplemental 
questionnaire, to which Yieh Hsing responded on February 17, 2004. We 
verified Yieh Hsing's submitted data as discussed below in the 
``Verification'' section of this notice.
    Because it was not practicable to complete this review within the 
normal time frame, on December 16, 2003 the Department extended the 
time limit for the preliminary results of the administrative review to 
May 30, 2004. See Circular Welded Carbon Steel Pipes and Tubes from 
Taiwan: Notice of Extension of Time Limits, 68 FR at 69987 (December 
16, 2003). Due to the unexpected emergency closure of the main Commerce 
building on Tuesday, June, 1, 2004, the Department has tolled the 
deadline for these preliminary results by one day to June 2, 2004.

Period of Review

    The period of review (POR) is from May 1, 2002 to April 30, 2003.

Scope of the Review

    Imports covered by this review are shipments of certain circular 
welded carbon steel pipes and tubes. The Department defines such 
merchandise as welded carbon steel pipes and tubes of circular cross 
section, with walls not thinner than 0.065 inch and 0.375 inch or more 
but not over 4 \1/2\ inches in outside diameter. These products are 
commonly referred to in the industry as ``standard pipe'' and are 
produced to various American Society for Testing Materials 
specifications, most notably A-53, A-120 and A-135. Standard pipe is 
currently classified under Harmonized Tariff Schedule of the United 
States (HTSUS) item numbers 7306.30.5025, 7306.30.5032, 7306.30.5040, 
and 7306.30.5055. Although the HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the 
merchandise under review is dispositive.

Verification

    As provided in section 782(i) of the Tariff Act, we verified the 
cost and sales information provided by Yieh Hsing using standard 
verification procedures, including on-site inspection of production and 
warehousing facilities and the examination of relevant sales and 
financial records. Our verification results are outlined in the public 
and proprietary versions of the verification reports, which are on file 
in the Central Records Unit of the Department. See ``Verification of 
Yieh Hsing Sales and Cost Responses'' dated May 11, 2004.

Affiliation

    In Hot-Rolled Steel from Taiwan, the Department found that China 
Steel and Yieh Loong were affiliated with Yieh Hsing and Yieh Phui (See 
Final Determination of Sales at Less Than Fair Value; Certain Hot-
Rolled Carbon Steel Flat Products from Taiwan 66 FR 49618 (September 
28, 2001) and accompanying Issues and Decision Memorandum at Comments 1 
and 2), and petitioners indicate that many of the determinative facts 
of that case continue into the present review. Petitioners also noted 
that the Court of International Trade upheld this decision on January 
26, 2004 in China Steel Corporation and Yieh Loong v. United States 
(China Steel), Slip Op. 04-6). Petitioners contend that this decision 
compels a finding that China Steel and Yieh Loong are affiliated with 
Yieh Hsing.
    Petitioners asked the Department to acquire information regarding 
ownership, common board members and any sales transactions between Yieh 
Hsing, China Steel and Yieh Loong. Yieh Hsing responded to these 
requests in their November 12, 2003, December 8, 2003 and February 17, 
2004

[[Page 31959]]

Supplemental Questionnaire Responses. In the investigation of Hot 
Rolled Steel from Taiwan, the Department determined that Yieh Hsing was 
affiliated with Yieh Loong and China Steel since Yieh Loong and Yieh 
Hsing shared a common chairman and maintained minority cross ownership 
between one another (see Memorandum to the File ``Certain Hot-Rolled 
Carbon Steel Flat Products from Taiwan-CSC, Yieh Loong and affiliated 
resellers'' (April 19, 2001)).
    From the information on the record provided at verification and in 
Yieh Hsing's questionnaire responses in the current review, we found 
that the previous common chairman had stepped down from both Yieh Hsing 
and Yieh Loong prior to this period of review and that Yieh Loong 
maintained only an insignificant percentage of ownership of Yieh Hsing. 
Because the determinative facts in Hot Rolled Steel from Taiwan 
involving Yieh Hsing and Yieh Loong do not exist in the current review, 
we find no basis for affiliation between Yieh Hsing and Yieh Loong and 
Yieh Hsing and China Steel. Accordingly, we need not address collapsing 
or the issues associated with collapsing.

Normal Value Comparisons

    To determine whether sales of circular welded carbon steel pipes 
and tubes from Taiwan to the United States were made at less than 
normal value (NV), we compared the export price (EP) to the NV, as 
described in the ``Export Price'' and ``Normal Value'' sections of this 
notice, below. In accordance with section 777A(d)(2) of the Tariff Act, 
we compared the EPs of individual U.S. transactions to monthly 
weighted-average NVs of the foreign like product where there were sales 
at prices above the cost of production (COP), as discussed in the 
``Cost of Production'' section below.

Product Comparisons

    In accordance with section 771(16) of the Tariff Act, we considered 
all products produced by the respondent, covered by the descriptions in 
the ``Scope of the Review'' section of this notice, to be foreign like 
products for the purpose of determining appropriate product comparisons 
to U.S. sales of circular welded carbon steel pipes and tubes from 
Taiwan.
    We have relied on the following five criteria to match U.S. sales 
of subject merchandise to home market sales of the foreign like 
product: pipe specification (SPECH/U), pipe diameter (DIAMH/U), wall 
thickness (WALLH/U), whether black or galvanized (COATH/U) and whether 
plain-end or threaded and coupled (ENDH/U). 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 five characteristics reported by Yieh Hsing.

Export Price

    Section 772(a) of the Tariff Act defines EP 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 the subject 
merchandise outside of the United States to an unaffiliated purchaser 
for exportation to the United States, as adjusted under subsection 
(c).'' We calculated the price of U.S. sales based on EP for the 
subject merchandise sold to unaffiliated purchasers in the United 
States prior to importation. We made deductions for movement expenses 
in accordance with section 772(c)(2)(A) of the Tariff Act; these 
included, where appropriate, foreign inland freight, foreign 
warehousing, foreign brokerage and handling, international freight, 
cargo loading and marine insurance.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Tariff Act, to 
the extent practicable, we determine NV based on sales in the home 
market at the same level of trade (LOT) as the EP. For EP, the LOT is 
the level of the starting sale price, which is usually from the 
exporter to the importer. When NV is based on CV, we derive the level 
of trade from the sales upon which selling, general and administrative 
(SG&A) expenses and profit are based. To determine whether NV sales are 
at a different level of trade than EP, we examine stages in the 
marketing process and selling functions along the chain of distribution 
between the producer and the unaffiliated customer. If the home market 
sales are at a different level of trade and the difference affects 
price comparability, as manifested in a pattern of consistent price 
differences between the sales on which NV is based and home market 
sales at the level of trade of the export transaction, we make a level-
of-trade adjustment under section 773(a)(7)(A) of the Tariff Act. In 
identifying LOTs for U.S. EP sales, we considered the selling functions 
reflected in the starting price after any adjustments under section 
772(c) of the Tariff Act.
    In implementing these principles in this administrative review, we 
obtained information from Yieh Hsing about the marketing stages 
involved in its reported U.S. and home market sales, including a 
description of the selling activities performed by Yieh Hsing and the 
level to which each selling activity was performed for each channel of 
distribution. In the home market, Yieh Hsing sold to distributors and 
end-users while in the U.S. market, Yieh Hsing sold to trading 
companies. Yieh Hsing did not claim a level of trade adjustment and 
noted the overall sales process was similar for all sales to both 
markets. We did not find a significant variation in selling functions 
provided to home market and U.S. customers; thus, we have determined 
there is only one level of trade for Yieh Hsing's sales to all markets.

Normal Value

A. Selection of Comparison Market

    To determine whether there is 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 five percent of the aggregate volume of U.S. sales), we 
compared the respondent's volume of home market sales of the foreign 
like product to the volume of U.S. sales of the subject merchandise, in 
accordance with section 773(a)(1)(B) of the Tariff Act. Because the 
respondent'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 determined the home market was 
viable. See Yieh Hsing's November 12, 2003 response at Attachment 5.

B. Affiliated Party Transactions and Arm's-Length Test

    Yieh Hsing reported that it made a small portion of sales in the 
home market to affiliated parties. Sales to affiliated customers in the 
home market not made at arm's-length prices are excluded from our 
analysis because we consider them to be outside the ordinary course of 
trade. See 19 CFR 351.102(b). Prior to performing the arm's-length 
test, we aggregated the applicable customer codes reported for 
individual affiliates in order to treat them as single entities. See 
Antidumping Proceedings: Affiliated Party Sales in the Ordinary Course 
of Trade, 67 FR 69186, 69194 (November 15, 2002) (Modification to 
Affiliated Party Sales). To test whether the sales to affiliates were 
made at arm's-length prices, we compared on a model-specific basis the 
starting prices of sales to affiliated and unaffiliated customers net 
of all direct selling

[[Page 31960]]

expenses, discounts and rebates, movement charges, and packing. Where 
prices to the affiliated party were, on average, within a range of 98 
to 102 percent of the price of identical or comparable merchandise to 
the unaffiliated parties, we determined that the sales made to the 
affiliated party were at arm's length. See Modification to Affiliated 
Party Sales at 69187-88. In accordance with the Department's practice, 
we only included in our margin analysis those sales to affiliated 
parties that were made at arm's length.

C. Cost of Production Analysis

    Because we disregarded sales of certain products made at prices 
below the cost of production (COP) in the previous review of circular 
welded carbon steel pipes and tubes from Taiwan (see Certain Circular 
Welded Carbon Steel Pipes and Tubes From Taiwan: Final Results of 
Antidumping Duty Administrative Review, 65 FR 60613 (October 12, 
2000)), we have reasonable grounds to believe or suspect that Yieh 
Hsing made sales of the foreign like product at prices below the COP, 
as provided by section 773(b)(2)(A)(ii) of the Tariff Act. Therefore, 
pursuant to section 773(b)(1) of the Tariff Act, we initiated a COP 
investigation of sales by Yieh Hsing.
    In accordance with section 773(b)(3) of the Tariff Act, we 
calculated the weighted-average COP for each model based on the sum of 
Yieh Hsing's material and fabrication costs for the foreign like 
product, plus amounts for selling expenses, general and administrative 
(GNA) expenses, interest expenses and packing costs. With one 
exception, the Department relied on the COP data reported by Yieh 
Hsing. We revised the overall GNA expense total to recalculate the GNA 
ratio used for COP purposes by deducting a revised figure for 
commercial paper handling charge and adding certain unreported 
depreciation expenses (see the Department's Preliminary Analysis 
Memorandum dated June 2, 2004).
    In determining whether to disregard home market sales made at 
prices below the COP, we examined, in accordance with sections 
773(b)(1)(A) and (B) of the Tariff Act whether, within an extended 
period of time, such sales were made in substantial quantities, and 
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 Tariff Act, where less 
than 20 percent of the respondent's home market sales of a given model 
were at prices below the COP, we did not disregard any below-cost sales 
of that model because we determined that the below-cost sales were not 
made within an extended period of time in ``substantial quantities.'' 
Where 20 percent or more of the respondent's home market sales of a 
given model were at prices less than COP, we disregarded the below-cost 
sales because: (1) They were made within an extended period of time in 
``substantial quantities,'' in accordance with sections 773(b)(2)(B) 
and (C) of the Tariff Act, and (2) based on our comparison of prices to 
the weighted-average COPs for the POR, they were at prices which would 
not permit the recovery of all costs within a reasonable period of 
time, in accordance with section 773(b)(2)(D) of the Tariff Act.
    To determine whether Yieh Hsing made sales at prices below COP, we 
compared the product-specific COP figures to home market prices net of 
discounts and rebates and any applicable movement charges of the 
foreign like product as required under section 773(b) of the Tariff 
Act.
    Our cost test for Yieh Hsing revealed that for home market sales of 
certain models, less than 20 percent of the sales volume (by weight) of 
those models were at prices below the COP. We therefore retained all 
such sale observations in our analysis and used them in the calculation 
of NV. Our cost test also indicated that for certain models, 20 percent 
or more of the home market sales volume (by weight) were sold at prices 
below COP within an extended period of time and were at prices which 
would not permit the recovery of all costs within a reasonable period 
of time. Thus, in accordance with section 773(b)(1) of the Tariff Act, 
we excluded these below-cost sales from our analysis and used the 
remaining above-cost sales in the calculation of NV (see Preliminary 
Analysis Memo).

D. Constructed Value

    In accordance with section 773(e) of the Tariff Act, we calculated 
CV based on the sum of Yieh Hsing's material and fabrication costs, 
SG&A expenses, profit, and U.S. packing costs. We calculated the COP 
component of CV as described above in the ``Cost of Production 
Analysis'' section of this notice. In accordance with section 
773(e)(2)(A) of the Tariff Act, we based SG&A expenses and profit on 
the amounts incurred and realized by the respondent 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 weighted-average home market direct and 
those indirect selling expenses adjusted based on findings at 
verification.

E. Price-to-Price Comparisons

    We calculated NV based on prices to unaffiliated customers or 
prices to affiliated customers we determined to be at arm's length for 
home market sale observations that passed the cost test. We adjusted 
gross unit price for rebates and made deductions, where appropriate, 
for foreign inland freight and packing, pursuant to section 
773(a)(6)(B) of the Tariff Act. We made adjustments for differences in 
circumstances of sale which included home market and U.S. imputed 
credit expenses, bank charges, and other direct selling expenses 
incurred on U.S. sales in accordance with section 773(a)(6)(C)(iii) of 
the Tariff Act. The Department relied on the sales database figures 
reported by Yieh Hsing, except as noted below:

--Based on the findings at verification, we adjusted certain rebate 
amounts for sales to a specific customer in a defined time period and 
recalculated imputed credit expenses for all home market sales (see 
Preliminary Analysis Memorandum).
--Based on findings at verification, we adjusted NV to account for 
certain unreported direct selling expenses associated with U.S. sales 
(see Application of Adverse Facts Available Section and Preliminary 
Analysis Memorandum).
--We added two missing observations to the U.S. sales database that 
Yieh Hsing stated had been inadvertently omitted in the most recently 
submitted U.S. sales database.

Application of Adverse Facts Available

    Section 776(a)(2) of the Tariff Act provides: If an interested 
party (A) withholds information that has been requested by the 
administrating authority; (B) fails to provide such information by the 
deadlines for the submission of the information or in the form and the 
manner requested, subject to subsections (c)(1) and (e) of section 782; 
(C) significantly impedes a proceeding under this title; or (D) 
provides such information but the information cannot be verified as 
provided in section 782(i), the administering authority shall, subject 
to section 782(d), use the facts otherwise available in reaching the 
applicable determination under this title.
    Moreover, section 776(b) of the Tariff Act provides that: If the 
administering authority finds that an interested party has failed to 
cooperate by not acting to the best of its ability to comply with a 
request for information from the

[[Page 31961]]

administering authority, the administering authority, in reaching the 
applicable determination under this title, may use an inference that is 
adverse to the interests of the party in selecting from among the facts 
otherwise available.
    At verification of Yieh Hsing's sales and cost responses, the 
Department found certain expenses identified in Yieh Hsing's 
``commission expense'' accounting ledger, with references to various 
U.S. commercial invoice numbers for particular U.S. customers. Yieh 
Hsing had not identified these sales-specific expenses in its 
questionnaire responses, and the full nature and extent of these 
selling expenses is unclear due to Yieh Hsing's failure to report them 
to the Department.
    Pursuant to section 776(a)(2)(B) of the Tariff Act, we have 
determined that Yieh Hsing's failure to report certain direct selling 
expenses relating to sales of subject merchandise to the United States 
warrants the use of facts otherwise available. Because the Department 
finds that Yieh Hsing failed to cooperate by not acting to the best of 
its ability in complying with the Department's requests for reporting 
of all expenses associated with sales of subject merchandise to the 
United States, the Department is using an inference that is adverse to 
Yieh Hsing (see Preliminary Analysis Memo for explanation of the facts 
available selected).

Currency Conversion

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

Preliminary Results of Review

    As a result of our review, we preliminarily determine the weighted-
average dumping margin for the period May 1, 2002 through April 30, 
2003, to be as follows:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Yieh Hsing Enterprise Co. Ltd..............................         1.61
------------------------------------------------------------------------

    The Department will disclose calculations performed within five 
days of the date of publication of this notice in accordance with 19 
CFR 351.224(b). An interested party may request a hearing within thirty 
days of publication of these preliminary results. See 19 CFR 
351.310(c). Any hearing, if requested, will be held 37 days after the 
date of publication, or the first business day thereafter, unless the 
Department alters the date per 19 CFR 351.310(d). Interested parties 
may submit case briefs or written comments no later than 30 days after 
the date of publication of these preliminary results of review. Briefs 
and rebuttals to written comments, limited to issues raised in the case 
briefs and comments, may be filed no later than 35 days after the date 
of publication of this notice. Parties who submit arguments in these 
proceedings 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, we would appreciate it if parties submitting case 
briefs, rebuttal briefs, and written comments would provide the 
Department with an additional copy of the public version of any such 
argument on diskette. The Department will issue final results of this 
administrative review, including the results of our analysis of the 
issues in any such case briefs, rebuttal briefs, and written comments 
or at a hearing, within 120 days of publication of these preliminary 
results.
    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. The Department will issue 
appropriate appraisement instructions directly to CBP upon completion 
of the review. For the preliminary results, we calculated an importer-
specific assessment rates based upon importer information provided by 
Yieh Hsing in its January 6, 2004 response and its most recent U.S. 
sales database. Furthermore, the following deposit requirements will be 
effective upon completion of the final results of this administrative 
review for all shipments of circular welded carbon steel pipes and 
tubes from Taiwan entered, or withdrawn from warehouse, for consumption 
on or after the publication date of the final results of this 
administrative review, as provided by section 751(a)(1) of the Tariff 
Act:
    (1) The cash deposit rates for the company reviewed will be the 
rate established in the final results of review;
    (2) For any previously reviewed or investigated company not listed 
above, 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 or 
previous review, but the manufacturer is, the cash deposit rate will be 
the rate established for 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 be the ``all others'' rate of 9.70 percent from the 
investigation; see Certain Welded Carbon Steel Pipes and Tubes from 
Taiwan: Final Determination of Sales at Less Than Fair Value 49 FR 
9931-01 (March 16, 1984).
    This notice also 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.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Tariff Act.

    Dated: June 2, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-12940 Filed 6-7-04; 8:45 am]
BILLING CODE 3510-DS-P