[Federal Register Volume 69, Number 193 (Wednesday, October 6, 2004)]
[Notices]
[Pages 59892-59897]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2524]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-833]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Certain Circular Welded 
Carbon-Quality Line Pipe From Mexico

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

EFFECTIVE DATE: October 6, 2004.

FOR FURTHER INFORMATION CONTACT: Shireen Pasha or John Drury, at (202) 
482-0193 or (202) 482-0195, respectively, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230.

Preliminary Determination

    We preliminarily determine that certain circular welded carbon 
quality line pipe (``LP'') from Mexico is being sold, or is likely to 
be sold, in the United States at less than fair value (``LTFV''), as 
provided in section 733 of the Act. The estimated margins of sales at 
LTFV are shown in the ``Suspension of Liquidation'' section of this 
notice.

Case History

    On March 24, 2004, the Department of Commerce (``the Department'') 
initiated antidumping investigations of LP from Mexico, The Republic of 
Korea, and the People's Republic of China. See Certain Circular Welded 
Carbon Quality Line Pipe From Mexico, The Republic of Korea, and the 
People's Republic of China; Initiation of Antidumping Duty 
Investigations, 69 FR 165211 (March 30, 2004) (``Initiation Notice''). 
The petitioners in this investigation are American Steel Pipe Division 
of American Cast Iron Pipe Company, IPSCO Tubulars Inc., Lone Star 
Steel Company, Maverick Tube Corporation, Northwest Pipe Company, and 
Stupp Corporation. Since the initiation of this investigation the 
following events have occurred.
    In accordance with the preamble to our regulations, the Department 
set aside a period of time for parties to raise issues regarding 
product coverage and encouraged all parties to submit comments within 
20 calendar days of publication of the Initiation Notice. (See 
Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 
27323 (May 19, 1997) and Initiation Notice at 69 FR 16521.)
    On April 19, 2004, Central Plastics Company (``CPC''), an 
interested party,

[[Page 59893]]

submitted comments on the scope of this and the concurrent 
investigations of LP from South Korea and the People's Republic of 
China. Specifically, CPC requested an exclusion for line pipe having a 
nominal diameter of less than or equal to 1\1/4\ inches (1.660 inch 
actual outside diameter), regardless of grade, from this investigation 
for various reasons. On April 21, 2004, petitioners submitted comments 
on the scope of this investigation in response to CPC's comments. 
Petitioners concurred with CPC, that line pipe of a nominal diameter of 
1\1/4\ inch and smaller be excluded from the scope of this 
investigation, and that the scope be amended to state ``excluded from 
the scope of the investigation are line pipe in nominal size with outer 
diameters of 1\1/4\ inch or less.'' No other party submitted further 
comments on this request and no other party submitted scope comments. 
On May 4, 2004, the Department amended the scope of the investigation 
to include line pipe having an outside diameter greater than 32 mm 
(1\1/4\ inches) in nominal diameter (1.660 inch actual outside 
diameter) and not more than 406.4 mm (16 inches) in outside diameter. 
See Memorandum to Joseph A. Spetrini, Deputy Assistant Secretary, Group 
III, from Richard O. Weible, Office Director, Office 8, regarding 
Antidumping Duty Investigations on Certain Circular Welded Carbon 
Quality Line Pipe from China, Korea and Mexico; Scope Issues, dated May 
4, 2004.
    On April 19, 2004, the United States International Trade Commission 
(``ITC'') preliminarily determined that there is reasonable indication 
that imports of LP from Mexico, South Korea, and the People's Republic 
of China are materially injuring the United States industry. See ITC 
Investigation Nos. 731-TA-1073-1075 (Publication No. 3687).
    On May 3, 2004, the Department selected the producers accounting 
for the largest volume of the exports of subject merchandise from 
Mexico during the period of investigation (``POI'') as the mandatory 
respondents in this proceeding. See Memorandum to Joseph A. Spetrini, 
Deputy Assistant Secretary, Group III, from Richard O. Weible, Office 
Director, Office 8, regarding Selection of Respondents for the 
Antidumping Investigation of Certain Circular Welded Carbon Quality 
Line Pipe from Mexico, dated May 3, 2004. The Department subsequently 
issued antidumping questionnaires to Hylsa S.A. de C.V. (``Hylsa'') and 
Tuberia Nacional, S.A. de C.V. (``TUNA'') on May 4, 2004.
    On June 2, 2004, we received section A questionnaire responses from 
Hylsa and TUNA. On June 15, 2004, petitioners filed comments on Hylsa's 
and TUNA's section A responses.
    On June 22, 2004, the Department issued a supplemental 
questionnaire for deficiencies in Hylsa's and TUNA's section A 
responses.
    On June 23, 2004, TUNA submitted a letter stating that it would not 
respond to the remainder of the Department's questionnaires due to 
problems with its computer and accounting systems. Specifically, TUNA 
stated it was unable to provide the information requested in the 
sections B and C questionnaires, and that it would not respond to 
section D of the questionnaire. As a result, the Department is 
resorting to the use of facts available in order to calculate TUNA's 
margin. See the ``Use of Facts Available'' section of this notice for 
further discussion.
    On June 24, 2004, Hylsa submitted its response to sections B and C. 
On July 6, 2004, petitioners filed comments on Hylsa's section B and C 
responses. On July 9, 2004, Hylsa submitted its response to the 
supplemental section A questionnaire. On July 13, 2004, the Department 
issued a supplemental questionnaire for deficiencies in Hylsa's section 
B and C responses. On August 2, 2004, Hylsa filed its response to the 
supplemental sections B and C questionnaire. On August 24, 2004, the 
Department issued a second supplemental questionnaire for deficiencies 
remaining in any of the aforementioned responses from Hylsa. On 
September 3, 2004, Hylsa submitted its response to the Department's 
final supplemental questionnaire.
    On July 9, 2004, petitioners submitted allegations of sales below 
cost of production (``COP'') against Hylsa. On July 20, 2004, the 
Department requested petitioners to submit further information 
supporting their sales below cost allegation. On July 22, 2004, 
petitioners submitted their response to Department's request for more 
information on the sales below COP allegation. Upon a thorough review 
of petitioners' allegations, the Department initiated a sales below COP 
investigation on July 30, 2004. See ``Cost of Production Analysis'' 
section of this notice below.
    On August 23, 2004, Hylsa submitted its response to section D (cost 
of production). On September 1, 2004, petitioners submitted comments on 
Hylsa's August 23, 2004, submission. On September 3, 2004, the 
Department issued a supplemental questionnaire on section D. On 
September 16, 2004, the Department issued a second supplemental 
questionnaire on section D. On September 21, 2004, Hylsa submitted its 
response to the Department's September 3 and September 16 supplemental 
questionnaires.
    On July 21, 2004, due to the complexity of the case and pursuant to 
section 733(c)(1)(B) of the Tariff Act of 1930, the Department 
postponed the preliminary determinations in the antidumping duty 
investigations of certain circular carbon quality line pipe from Mexico 
and the Republic of Korea until not later than September 29, 2004. See 
Certain Circular Welded Carbon Quality Line Pipe from Mexico and the 
Republic of Korea; Postponement of Preliminary Determinations of 
Antidumping Duty Investigations, 69 FR 44641 (July 27, 2004).

Postponement of Final Determination

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise, or in the event of a negative 
preliminary determination, a request for such postponement is made by 
the petitioners. The Department's regulations, at 19 CFR 351.210(e)(2), 
require that requests by respondents for postponement of a final 
determination be accompanied by a request for an extension of the 
provisional measures from a four-month period to not more than six 
months. On September 17, 2004, Hylsa requested that, in the event of an 
affirmative preliminary determination in this investigation, the 
Department postpone its final determination until 135 days after the 
publication of the preliminary determination. In its request, Hylsa 
consented to the extension of provisional measures to no longer than 
two months. Since this preliminary determination is affirmative, the 
request for postponement is made by an exporter that accounts for a 
significant proportion of exports of the subject merchandise, and there 
is no compelling reason to deny the respondent's request, we have 
extended the deadline for issuance of the final determination until the 
135th day after the date of publication of this preliminary 
determination in the Federal Register and have extended provisional 
measures to no longer than two months.

[[Page 59894]]

Period of Investigation

    The POI is January 1, 2003, through December 31, 2003. This period 
corresponds to the four most recent fiscal quarters prior to the month 
of the filing of the petition, i.e., March 2004.

Scope of Investigation

    The scope of this investigation includes certain circular welded 
carbon quality steel line pipe of a kind used in oil and gas pipelines, 
over 32 mm (1\1/4\ inches) in nominal diameter (1.660 inch actual 
outside diameter) and not more than 406.4 mm (16 inches) in outside 
diameter, regardless of wall thickness, surface finish (black, or 
coated with any coatings compatible with line pipe), and regardless of 
end finish (plain end, beveled ends for welding, threaded ends or 
threaded and coupled, as well as any other special end finishes), and 
regardless of stenciling. The merchandise subject to this investigation 
may be classified in the Harmonized Tariff Schedule of the United 
States (``HTSUS'') at heading 7306 and subheadings 7306.10.10.10, 
7306.10.10.50, 7306.10.50.10, and 7306.10.50.50. The tariff 
classifications are provided for convenience and Customs purposes; 
however, the written description of the scope of the investigation is 
dispositive.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all LP 
produced and sold by the respondents in Mexico during the POI that fit 
the description in the ``Scope of Investigation'' section of this 
notice to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. We compared U.S. sales 
to sales made in the home market. Where there were no sales of 
identical merchandise in the home market in the ordinary course of 
trade to compare to U.S. sales, we compared U.S. sales to sales of the 
most similar foreign like product made in the ordinary course of trade. 
Where there were no sales of identical or similar merchandise made in 
the ordinary course of trade, we made product comparisons using 
constructed value (``CV'').
    In making the product comparisons, we matched foreign like products 
based on the physical characteristics reported by the respondents in 
the following order of importance: epoxy coating, grade, outside 
diameter, wall thickness, surface finish, and end finish.
    In response to the Department's solicitation of comments on product 
characteristics, petitioners submitted remarks on the draft model-match 
characteristics issued on April 30, 2004. In their request, petitioners 
urged the Department to revise the size ranges for the outer diameter, 
wall thickness characteristics, and the deletion of weld type 
characteristic. On May 12, 2004, Hylsa submitted its comments, in which 
it requested that the Department revise its product-matching 
characteristics to give the greatest weight to the existence or absence 
of an epoxy coating. Also on May 12, 2004, Korean respondent SeAH Steel 
Corp. (``SeAH'') submitted comments. SeAH noted that while the 
Department's proposed model-match of May 4, 2004 contemplated matching 
to specific sizes of wall thickness and outside diameter, petitioners' 
April 30, 2004 comments suggested matching for outside diameter and 
wall thickness using ranges. SeAH urged the Department not to provide 
arbitrary limitations on ranges.
    Upon careful analysis of comments from all parties, on May 21, 
2004, the Department made changes to the model-match criteria and asked 
both Hylsa and TUNA to use the revised model-match criteria in 
answering sections B and C of the Department's questionnaire. The 
Department accepted Hylsa's suggestion of giving the greatest weight to 
the existence or absence of an epoxy coating, as Hylsa demonstrated 
that such a coating can add substantially to the cost of a product. We 
accepted petitioners' proposed ranges for outside diameter and wall 
thickness as the Department's examination of industry specifications 
indicated that the ranges were a reasonable reflection of the 
production of the merchandise in question and were not arbitrary.

Fair Value Comparisons

    To determine whether sales of certain circular welded carbon-
quality line pipe from Mexico to the United States were made at LTFV, 
we compared the export price (``EP'') to the normal value (``NV''), as 
described in the ``Export Price'' and ``Normal Value'' sections of this 
notice. In accordance with section 777A(d)(1)(A)(i) of the Act, we 
compared POI weighted-average EPs to NVs, and where there were no 
similar product matches, we compared EP to CV.
    We used the date of invoice as the date of sale for all home market 
and U.S. sales made by Hylsa during the POI.
    As discussed below under ``Home Market Viability and Comparison 
Market Selection,'' we determined that Hylsa had a viable home market 
during the POI.

Export Price

    Section 772(a) of the 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 outside of the United 
States to an unaffiliated purchaser in the United States or to an 
unaffiliated purchaser for exportation to the United States, as 
adjusted under subsection 772(c) of the Act. We used EP methodology for 
Hylsa, in accordance with section 772(a) of the Act, because the 
subject merchandise was sold directly to the first unaffiliated 
purchaser in the United States before importation. We based EP on the 
prices of subject merchandise delivered and duty paid to unaffiliated 
purchasers in the United States.
    In accordance with section 772(c)(2) of the Act, we made deductions 
from the starting price for movement expenses, brokerage and duties, 
discounts, billing adjustments, and rebates, where appropriate. In the 
case of inland freight, the Department added to the gross unit price 
the difference of the amount Hylsa charged its customers, and the 
actual freight costs incurred by Hylsa. See Memorandum to the File, 
regarding Preliminary Determination Analysis Memo for Hylsa, S.A. de 
C.V. (``Hylsa'') in the Antidumping Investigation of Certain Circular 
Welded Carbon Quality Line Pipe from Mexico for the Period January 1, 
2003, through December 31, 2003, dated September 29, 2004.

Normal Value

A. Home Market Viability and Comparison Market Selection

    In order 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 equal to or greater than five percent of the aggregate volume of 
U.S. sales), we compared 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)(C) of the Act.
    In this investigation, we determined that Hylsa's aggregate volume 
of home market sales of the foreign like product was greater than five 
percent of the aggregate volume of U.S. sales of the subject 
merchandise. Therefore, we used home market sales as the basis for NV 
in accordance with section 773(a)(1)(B) of the Act. We also used CV as 
the basis for calculating NV, in accordance with section 773(a)(4) of 
the

[[Page 59895]]

Act, for those sales that did not have identical or similar product 
matches.

B. 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 EP transaction. The NV LOT is 
that of the starting-price sales in the comparison market. For EP 
sales, the U.S. LOT is also the level of the starting-price sale, which 
is usually from exporter to importer.
    To determine whether comparison-market sales are at a different LOT 
than EP transactions, 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 a LOT adjustment under section 
773(a)(7)(A) of the Act.
    In implementing these principles in this investigation, we obtained 
information from Hylsa about the marketing stages involved in the 
reported U.S. and home market sales, including a description of the 
selling activities performed by the respondent for each channel of 
distribution they may have. In identifying LOTs for EP and home market 
sales, we considered the selling functions reflected in the starting 
price before any adjustments.
    In conducting our LOT analysis for Hylsa, we examined the specific 
types of customers, the channels of distribution, and the selling 
practices of the respondent. Generally, if the reported LOTs are the 
same, the functions and activities of the seller should be similar. 
Conversely, if a party reports LOTs that are different for different 
categories of sales, the functions and activities should be dissimilar.
    Through our analysis, we found that Hylsa sold LP to two types of 
customers in the U.S. and home market: distributors and end users. In 
addition, Hylsa made sales of LP in the U.S. and home market through 
one channel of distribution: sales to unaffiliated customers. The 
selling activities in both markets were essentially identical. 
Therefore, we preliminarily find these sales channels at the same LOT. 
Accordingly, the Department did not find any differences sufficient 
enough to warrant an adjustment for LOT pursuant to section 
773(a)(7)(A).

C. Cost of Production Analysis

    Based on allegations by the petitioners, and in accordance with 
section 773(b)(2)(A)(i) of the Act, we found reasonable grounds to 
believe or suspect that LP sales were made in Mexico at prices below 
COP. See Memorandum from John Drury and Shireen Pasha, Case Analysts, 
to Richard Weible, Office Director, regarding Petitioners' Allegation 
of Sales Below the Cost of Production for Hylsa S.A. de C.V., dated 
July 30, 2004. As a result, the Department has conducted an 
investigation to determine whether Hylsa made home market sales at 
prices below their respective COPs during the POI within the meaning of 
section 773(b) of the Act. We conducted the COP analysis described 
below.
1. Calculation of Cost of Production
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP based on the sum of the cost of materials and 
fabrication for the foreign like product, plus amounts for G&A 
expenses, and interest expenses.
    In its section D response, Hylsa explained that its cost accounting 
system does not distinguish cost differences between individual 
products within production stages. Hylsa stated that its normal cost 
calculations do not track cost differences due to the use of different 
raw materials or different production times. Thus, Hylsa's reported 
costs did not represent product- or CONNUM-specific costs. Product-
specific costs are necessary in order to calculate the difference-in-
merchandise adjustment, and thus, are a requirement for a proper price-
to-price comparison when comparing non-identical products. Product 
specific costs are also necessary in order to perform a sales below 
cost test.
    We requested that Hylsa identify the cost and production 
differences that give rise to each physical characteristic and, 
starting from the costs per their normal records, to use other 
available accounting and production data to differentiate product 
costs. Further, we requested an explanation for little or no associated 
cost differences due to physical characteristics. In response, Hylsa 
revised their reported costs and have accounted for cost differences 
associated with steel grades, pipe wall thickness and diameter, as well 
as end finishing, coating, and surface finishing. Thus, we used the COP 
data submitted by Hylsa in its supplemental cost questionnaire 
responses.
2. Test of Home Market Sales Prices
    We compared the weighted-average COP for Hylsa to its home market 
sales prices of the foreign like product, as required under section 
773(b) of the Act, to determine whether these sales had been made at 
prices below the COP within an extended period of time (i.e., a period 
of one year) in substantial quantities and whether such prices were 
sufficient to permit the recovery of all costs within a reasonable 
period of time.
    On a model-specific basis, we compared the revised COP to the home 
market prices, less any applicable movement charges, discounts, 
rebates, and direct and indirect selling expenses.
3. Results of the COP Test
    We disregarded below-cost sales where (1) 20 percent or more of 
Hylsa's sales of a given product during the POI were made at prices 
below the COP, and thus such sales were made within an extended period 
of time in substantial quantities in accordance with sections 
773(b)(2)(B) and (C) of the Act, and (2) based on comparisons of price 
to weighted-average COPs for the POI, we determined that the below-cost 
sales of the product were at prices which would not permit recovery of 
all costs within a reasonable time period, in accordance with section 
773(b)(2)(D) of the Act. We found that Hylsa made sales below cost as 
described above and we disregarded such sales where appropriate.

D. Calculation of Normal Value Based on Comparison Market Prices

    We calculated Hylsa's NV based on delivered prices to unaffiliated 
customers. We made deductions for movement expenses, including inland 
freight, and brokerage and handling under section 773(a)(6)(B)(ii) of 
the Act, by deducting the actual costs incurred by Hylsa and adding the 
revenue earned. In addition, we made adjustments under section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in 
circumstances of sale for discounts and rebates and other direct 
selling expenses. We also deducted home market packing costs and added 
U.S. packing costs to the starting price in accordance with section 
773(a)6(A) and (B) of the Act.

E. Calculation of Normal Value Based on Constructed Value

    In accordance with section 773(a)(4) of the Act, we based Hylsa's 
NV on CV where there were no comparable sales in the home market made 
in the ordinary course of trade, or where all sales of comparable 
merchandise failed the cost test.

[[Page 59896]]

    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of Hylsa's cost of materials and fabrication for the 
foreign like product, plus amounts for SG&A, profit, and U.S. packing 
costs. We calculated the cost of materials and fabrication, G&A and 
interest based on the methodology described in the ``Calculation of 
COP'' section of this notice. We made adjustments to CV for differences 
in circumstances of sale in accordance with section 773(a) of the Act 
and 19 CFR 351.410.

Use of Facts Otherwise Available

    For the reasons discussed below, we determine that the use of total 
adverse facts available is appropriate for the preliminary 
determination with respect to TUNA.
    Section 776(a)(1) of the Act mandates that the Department use the 
facts available if necessary information is not available on the record 
of the proceeding. In addition, section 776(a)(2) of the Act provides 
that, if an interested party withholds information that has been 
requested by the Department, fails to provide such information in a 
timely manner or in the form or manner requested, significantly impedes 
a proceeding under the antidumping statute, or provides such 
information but the information cannot be verified, the Department 
shall, subject to sections 782(d) and (e) of the Act, use facts 
otherwise available in reaching the applicable determination.
    Section 782(d) of the Act provides that if the Department 
determines that a response to a request for information does not comply 
with the Department's request, the Department shall promptly inform the 
responding party and provide an opportunity to remedy the deficient 
submission. If the party fails to remedy the deficiency within the 
applicable time limits, the Department may, subject to section 782(e) 
of the Act, disregard all or part of the original and subsequent 
responses, as appropriate. Section 782(e) of the Act further states 
that the Department shall not decline to consider submitted information 
if all of the following requirements are met: (1) The information is 
submitted by the established deadline; (2) the information can be 
verified; (3) the information is not so incomplete that it cannot serve 
as a reliable basis for reaching the applicable determination; (4) the 
interested party has demonstrated that it acted to the best of its 
ability; and (5) the information can be used without undue 
difficulties.
    In this case, TUNA has failed to provide information requested by 
the Department that is necessary to calculate dumping margins. As 
explained above, TUNA refused to respond to sections B (home market 
sales & adjustments) and C (U.S. sales & adjustments), and supplemental 
section A questionnaires. TUNA also indicated it would not respond to 
section D of the questionnaire covering cost of production data. We 
note that we cannot perform an antidumping analysis solely on the basis 
of the section A response provided by TUNA. This limited information is 
so incomplete that it cannot, for purposes of section 782(e)(3), 
``serve as a reliable basis for reaching the applicable 
determination.'' Therefore, we are unable to use this information and 
must resort to facts otherwise available. Pursuant to section 776(a) of 
the Act, in reaching our preliminary determination, we have used total 
facts available for TUNA because it did not provide the data we needed 
to determine whether it had sold subject merchandise to the United 
States at LTFV.
    In applying facts otherwise available, section 776(b) of the Act 
further provides that the Department may use an inference that is 
adverse to the interests of that party, if the Department 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.'' Because TUNA 
failed to respond to our repeated requests for information, and 
informed the Department it would not respond to all questionnaires, we 
have found that it failed to cooperate to the best of its ability. 
Therefore, pursuant to section 776(b) of the Act, we have used an 
adverse inference in selecting from the facts available for the margin 
for TUNA.
    An adverse inference may include reliance on information derived 
from the petition, or any other information placed on the record. See 
section 776(b). As adverse facts available, we used the EP and NV 
alleged by petitioners in their March 19, 2003, amendment to the 
petition. See Preliminary Determination in the Antidumping 
Investigation of Certain Circular Welded Carbon Quality Line Pipe: 
Total Adverse Facts Available Corroboration Memorandum, from John Drury 
and Shireen Pasha, Case Analysts, to Abdelali Elouaradia, Program 
Manager, dated September 14, 2004 (``Corroboration Memo'').
    We note that information from the petition constitutes ``secondary 
information.'' See Statement of Administrative Action accompanying the 
Uruguay Round Agreements Act, H.R. Rep. No. 103-316, at 870 (1994) 
(SAA). Section 776(c) of the Act provides that the Department shall, to 
the extent practicable, corroborate secondary information used for 
facts available by reviewing independent sources reasonably at its 
disposal. The Statement of Administrative Action accompanying the 
Uruguay Round Agreements Act, H.R. Doc. 103-316, at 870 (1994) (SAA), 
provides that the word ``corroborate'' means that the Department will 
satisfy itself that the secondary information used has probative value. 
As explained in Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, from Japan, and Tapered Roller Bearings Four Inches or Less 
in Outside Diameter, and Components Thereof, from Japan: Preliminary 
Results of Antidumping Duty Administrative Reviews and Partial 
Termination of Administrative Review, 61 FR 57391, 57392 (November 6, 
1996) (``TRBs''), in order to corroborate secondary information, the 
Department will examine, to the extent practicable, the reliability and 
relevance of the information used.
    The petitioners' methodology for calculating the EP and normal 
value in the petition is discussed in the initiation notice. See 
Initiation Notice at 16523. To corroborate the petitioners' EP and 
normal-value calculations, we compared the prices and expenses in the 
petition to the prices and expenses submitted by the other responding 
company, Hylsa, for comparable products where appropriate. We were able 
to corroborate petitioners' allegations of EP and NV. Specifically, and 
as further discussed in our Corroboration Memo, we find that the 
petition information is reliable when compared to Hylsa's prices and 
expenses. See Corroboration Memo.
    We further note that, with respect to the relevance aspect of 
corroboration, the Department stated in TRBs that it will ``consider 
information reasonably at its disposal as to whether there are 
circumstances that would render a margin irrelevant. Where 
circumstances indicate that the selected margin is not appropriate as 
adverse facts available, the Department will disregard the margin and 
determine an appropriate margin.'' See TRBs at 61 FR 57392. See also 
Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty 
Administrative Review, 61 FR 6812, 6814 (February 22, 1996) 
(disregarding the highest margin in the case as best information 
available because the margin was based on another company's 
uncharacteristic business expense resulting in an extremely high 
margin).
    In this case, there is no information on the record that 
demonstrates that the rate we have selected is an inappropriate total 
adverse facts-

[[Page 59897]]

available rate for TUNA. On the contrary, the record supports the use 
of this rate as the best indication of the EP, and the dumping margin 
for TUNA. Therefore, we consider the selected rate to have probative 
value with respect to the firm in question and to reflect the 
appropriate adverse inference.
    Accordingly, for the preliminary determination, the margin for TUNA 
is 31.34 percent, which is the highest estimated dumping margin set 
forth in the notice of initiation. See Initiation Notice, 69 FR 16523. 
Because this is a preliminary margin, the Department will consider all 
margins on the record at the time of the final determination for the 
purpose of determining the most appropriate final margin for this 
company.

Verification

    As provided in section 782(i) of the Act, we will verify all 
information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing 
U.S. Customs and Border Protection (CBP) to suspend liquidation of all 
imports of subject merchandise that are entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register. We will instruct CBP to require a cash 
deposit or the posting of a bond equal to the weighted-average amount 
by which NV exceeds EP, as indicated in the chart below. These 
suspension-of-liquidation instructions will remain in effect until 
further notice. The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                              Weighted-
                   Exporter/manufacturer                       average
                                                              margin (%)
------------------------------------------------------------------------
Hylsa, S.A. de C.V.........................................        14.93
Tuberia Nacional, S.A. de C.V..............................        31.34
All Others.................................................        14.93
------------------------------------------------------------------------

    The All Others rate is derived exclusive of all de minimis margins 
and margins based entirely on adverse facts available.

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our preliminary affirmative determination. If our final 
determination is affirmative, the ITC will determine before the later 
of 120 days after the date of this preliminary determination or 45 days 
after our final determination whether these imports are materially 
injuring, or threaten material injury to, the U.S. industry.

Disclosure

    We will disclose the calculations used in our analysis to parties 
in this proceeding in accordance with 19 CFR 351.224(b).

Public Comment

    Case briefs for this investigation must be submitted to the 
Department no later than seven days after the date of the final 
verification report is issued in this proceeding. Rebuttal briefs must 
be filed five days from the deadline date for case briefs. A list of 
authorities used, a table of contents, and an executive summary of 
issues should accompany any briefs submitted to the Department. 
Executive summaries should be limited to five pages total, including 
footnotes. Section 774 of the Act provides that the Department will 
hold a public hearing to afford interested parties an opportunity to 
comment on arguments raised in case or rebuttal briefs, provided that 
such a hearing is requested by an interested party. If a request for a 
hearing is made in this investigation, the hearing will tentatively be 
held two days after the rebuttal brief deadline date at the U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230. Parties should confirm by telephone the time, 
date, and place of the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the publication of this notice. Requests should 
contain: (1) The party's name, address, and telephone number; (2) the 
number of participants; and (3) a list of the issues to be discussed. 
Oral presentations will be limited to issues raised in the briefs.
    We will make our final determination no later than 135 days after 
the publication of this notice in the Federal Register.
    This determination is published pursuant to sections 733(f) and 
777(i) of the Act.

    Dated: September 29, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
 [FR Doc. E4-2524 Filed 10-5-04; 8:45 am]
BILLING CODE 3510-DS-P