[Federal Register Volume 70, Number 89 (Tuesday, May 10, 2005)]
[Notices]
[Pages 24517-24520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-2288]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-201-817


Certain Oil Country Tubular Goods from Mexico; Preliminary 
Results of Antidumping Duty Administrative Review and Partial 
Rescission

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request from United States Steel Corporation, 
the Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on certain oil 
country tubular goods (OCTG) from Mexico. The period of review (POR) is 
August 1, 2003, through July 31, 2004.
    We preliminarily find that Hylsa, S.A. de C.V (Hylsa) made sales of 
the subject merchandise at less than normal value (NV). In addition, we 
are preliminarily rescinding this review with respect to Tubos de Acero 
de Mexico, S.A. (Tamsa) because Tamsa reported, and we confirmed, that 
it made no shipments of subject merchandise to the United States during 
the POR. If these preliminary results are adopted in the final results 
of this administrative review, we will instruct U.S. Customs and Border 
Protection (CBP) to assess antidumping duties based on the difference 
between constructed value (CV) and the NV for Hylsa.
    Interested parties are invited to comment on these preliminary 
results. Parties who submit argument in this proceeding 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.

EFFECTIVE DATE: May 10, 2005.

FOR FURTHER INFORMATION CONTACT: Stephen Bailey, AD/CVD Operations, 
Office 7, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230, telephone: (202) 482-0193.

SUPPLEMENTARY INFORMATION:

Background

    On August 11, 1995, the Department published the antidumping duty 
order on OCTG from Mexico. See Antidumping Duty Order: Oil Country 
Tubular Goods From Mexico, 60 FR 41056 (August 11, 1995) (AD Order). On 
August 3, 2004, the Department published the opportunity to request 
administrative review of, inter alia, OCTG from Mexico for the period 
August 1, 2003, through July 31, 2004. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity to Request Administrative Review, 69 FR 46496 (August 3, 
2004).
    In accordance with 19 CFR 351.213(b)(2), on August 31, 2004, United 
States Steel Corporation requested that we conduct an administrative 
review of the sales of subject merchandise of Tamsa and Hylsa. On 
September 22, 2004, the Department published in the Federal Register a 
notice of initiation of this antidumping duty administrative review 
covering the period August 1, 2003, through July 31, 2004. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Request for Revocation in Part, 69 FR 183 (September 22, 
2004).
    On October 6, 2004, the Department issued its antidumping duty 
questionnaire to Hylsa and Tamsa. On October 25, 2004, Tamsa submitted 
a no-shipment certification letter to the Department explaining that it 
had no sales of subject merchandise during the POR and requested a 
rescission of the administrative review with respect to Tamsa. See 
Partial Rescission of Administrative Review below for a discussion of 
this issue.
    Hylsa submitted its response to section A of the Department's 
questionnaire on November 9, 2004, and its response to section C on 
November 23, 2004. In its section A response, Hylsa informed the 
Department that it had no viable home market or third country sales to 
use as normal value and was therefore reporting constructed value data. 
The Department issued a supplemental sections A and C questionnaire to 
Hylsa on December 29, 2004. Hylsa submitted its response to the 
Department's sections A and C

[[Page 24518]]

questionnaire on January 19, 2005. The Department issued a second 
supplemental sections A and C questionnaire on February 18, 2005 and on 
February 25, 2005 Hylsa submitted its response. The Department issued a 
third supplemental questionnaire on April 13, 2005 and on April 14, 
2005 Hylsa submitted its response.
    Because Hylsa did not have home market or third country sales of 
subject merchandise during the POR, Hylsa submitted a section D 
response on December 6, 2004. We issued a supplemental questionnaire 
regarding Hylsa's response to section D on March 9, 2005 and on April 
4, 2005 Hylsa submitted its response.

Period of Review

    The POR is August 1, 2003, through July 31, 2004.

Scope of the Order

    The merchandise covered by this order are oil country tubular goods 
(OCTG), hollow steel products of circular cross-section, including oil 
well casing and tubing of iron (other than cast iron) or steel (both 
carbon and alloy), whether seamless or welded, whether or not 
conforming to American Petroleum Institute (API) or non-API 
specifications, whether finished or unfinished (including green tubes 
and limited-service OCTG products). This scope does not cover casing or 
tubing pipe containing 10.5 percent or more of chromium, or drill pipe. 
The OCTG subject to this order are currently classified in the HTSUS 
under item numbers: 7304.29.10.10, 7304.29.10.20, 7304.29.10.30, 
7304.29.10.40, 7304.29.10.50, 7304.29.10.60, 7304.29.10.80, 
7304.29.20.10, 7304.29.20.20, 7304.29.20.30, 7304.29.20.40, 
7304.29.20.50, 7304.29.20.60, 7304.29.20.80, 7304.29.30.10, 
7304.29.30.20, 7304.29.30.30, 7304.29.30.40, 7304.29.30.50, 
7304.29.30.60, 7304.29.30.80, 7304.29.40.10, 7304.29.40.20, 
7304.29.40.30, 7304.29.40.40, 7304.29.40.50, 7304.29.40.60, 
7304.29.40.80, 7304.29.50.15, 7304.29.50.30, 7304.29.50.45, 
7304.29.50.60, 7304.29.50.75, 7304.29.60.15, 7304.29.60.30, 
7304.29.60.45, 7304.29.60.60, 7304.29.60.75, 7305.20.20.00, 
7305.20.40.00, 7305.20.60.00, 7305.20.80.00, 7306.20.10.30, 
7306.20.10.90, 7306.20.20.00, 7306.20.30.00, 7306.20.40.00, 
7306.20.60.10, 7306.20.60.50, 7306.20.80.10, and 7306.20.80.50. The 
Department has determined that couplings, and coupling stock, are not 
within the scope of the antidumping order on OCTG from Mexico. See 
Letter to Interested Parties; Final Affirmative Scope Decision, August 
27, 1998. The HTSUS subheadings are provided for convenience and 
customs purposes. Our written description of the scope of this order is 
dispositive.

Partial Rescission of Administrative Review

    In response to our October 6, 2004 original questionnaire, Tamsa 
submitted an October 25, 2004 letter claiming they made no exports of 
the subject merchandise during the POR. We examined CBP data to confirm 
that Tamsa was not listed as a manufacturer or exporter of the subject 
merchandise on entries during the POR. We requested and received from 
CPB entry documents that showed Tamsa was the manufacturer of the 
entered merchandise. After reviewing the information, we determined 
that the entries in question were exported from third countries without 
Tamsa's knowledge and properly identified Mexico as the country of 
origin.
    In addition, there is no information on the record to indicate that 
Tamsa had U.S. sales or exports of subject merchandise during the POR. 
As a result, we find that Tamsa made no entries, exports, or sales of 
the subject merchandise during the POR that are subject to the 
administrative review. Therefore, in accordance with 19 CFR 
351.213(d)(3), we are preliminarily rescinding our review with respect 
to Tamsa.

Product Comparisons

    Because Hylsa had no sales of identical or similar merchandise in 
the home market or any third country comparison market during the POR, 
we compared U.S. sales to CV in accordance with section 773(a)(4) of 
the Act.

Fair Value Comparisons

    To determine whether Hylsa made sales of OCTG to the United States 
at less than fair value, we compared EP to NV, as described in the 
``Export Price'' and ``Normal Value'' sections of this notice. Because 
Hylsa had no sales of subject merchandise either in the home market or 
to third countries during the POR, in accordance with section 773(a)(4) 
of the Act, we compared the EP of U.S. transactions falling within the 
period of review to CV.

Export Price

    Section 772(a) of the Act defines export price (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 in the United States or to an unaffiliated purchaser for 
exportation to the United States, as adjusted under subsection (c). In 
contrast, section 772(b) of the Act defines constructed export price 
(CEP) as the price at which the subject merchandise is first sold (or 
agreed to be sold) in the United States before or after the date of 
importation by, or for the account of, the producer or exporter of such 
merchandise, or by a seller affiliated with the producer or exporter, 
to a purchaser not affiliated with the producer or exporter, as 
adjusted under sections 772(c) and (d).
    For sales to the United States, we have used EP in accordance with 
section 772(a) of the Act because the subject merchandise was sold 
directly to an unaffiliated purchaser prior to importation.
    We calculated EP based on the prices charged to the first 
unaffiliated customer in the United States. We used the date of invoice 
as the date of sale. We based EP on the packed delivered duty paid 
prices to the first unaffiliated purchasers in the United States. We 
made deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Tariff Act, including: foreign inland freight, 
foreign brokerage and handling, U.S. inland freight and U.S. brokerage 
and handling.

Calculation of Constructed Value

    Hylsa reported that it had no viable home or third country market 
during the POR. Therefore, in accordance with section 773(a)(4) of the 
Act, we based NV for Hylsa on CV. In accordance with section 773(e)(1) 
of the Act, we calculated CV based on the sum of the costs of 
materials, labor, overhead, selling, general and administrative (SG&A), 
profit, interest expenses, and U.S. packing costs. Section 773(e)(2)(A) 
states that SG&A and profit are to be based on the actual amounts 
incurred in connection with sales of a foreign like product. In the 
event such data is not available, section 773(e)(2)(B) of the Act sets 
forth three alternatives for computing profit and SG&A without 
establishing a hierarchy or preference among the alternative methods. 
The alternative methods are: (1) Calculate SG&A and profit incurred by 
the producer based on the sale of merchandise of the same general type 
as the exports in question; (2) average SG&A and profit of other 
producers of the foreign like product for sales in the home market; or 
(3) any other reasonable method, capped by the

[[Page 24519]]

amount normally realized on sales in the foreign country of the general 
category of the products. In addition, the Statement of Administrative 
Action (``SAA'') states that, if the Department does not have the data 
to determine amounts for profit under alternatives one and two, or a 
profit cap under alternative three, it still may apply alternative 
three (without the cap) on the basis of the ``facts available.'' SAA at 
841.
    In this case, because Hylsa did not have a viable home market or 
third country market for this product, we based Hylsa's profit and 
indirect selling expenses on the following methodology. In accordance 
with section 773(e)(2)(B)(iii) of the Act, we calculated indirect 
selling expenses incurred and profit realized by the producer based on 
the sale of merchandise of the same general types as the exports in 
question. Specifically, we based our profit calculations and indirect 
selling expenses on the income statement of Hylsa's tubular products 
division, a general pipe division that produces OCTG and like products. 
We calculated a CV profit using Hylsa's tubular division financial 
statements for 2003 (i.e., tubular division profit 2003 divided by 
tubular division 2003 cost of goods sold). We deducted packing expenses 
allocated to Hylsa's tubular products division from the COGS 
denominator when we calculated CV profit.
    For the preliminary results we recalculated Hylsa's SG&A expense by 
deducting packing expenses from the cost of goods sold denominator. We 
used the financial statements of Alfa, S.A. de C.V., Hylsa's parent 
company, to calculate financial expenses. See Analysis Memorandum from 
Stephen Bailey to the File and Accounting Cost Memorandum from Margaret 
Pusey to the File, both dated May 3, 2005, for further discussion.
    There were no allegations of below-cost sales for Hylsa during this 
POR. Consequently, we did not initiate a cost of production (COP) 
analysis for Hylsa.

Price-to-CV Comparisons

    For price-to-CV comparisons, we made circumstance-of-sale 
adjustments by deducting from CV the weighted-average home market 
indirect selling expenses and adding U.S. direct selling expenses 
(i.e., imputed credit, warranty, and other direct selling expenses) in 
accordance with section 773(a)(8) of the Act and section 19 CFR 
351.401(c). For computing credit expenses, it is the Department's 
normal practice to use an interest rate applicable to loans in the same 
currency as that in which the sales are denominated (see, e.g., 
Analysis for the preliminary determination in the investigation of 
stainless steel plate in coils from Korea--Pohang Iron & Steel Company, 
63 FR 59535 (November 4, 1998)). Because Hylsa had no short-term 
borrowings in U.S. dollars, the credit expense for Hylsa's U.S. sales 
was calculated using the average U.S. prime rate during the POR. See 
Hylsa's Section C response at exhibit 7.

Currency Conversion

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

Preliminary Results of Review

    As a result of our review, we preliminarily find the weighted-
average dumping margin for the period August 1, 2003, through July 31, 
2004, to be as follows:

------------------------------------------------------------------------
               Manufacturer / Exporter                 Margin (percent)
------------------------------------------------------------------------
Hylsa, S.A. de C.V..................................                1.36
------------------------------------------------------------------------

    The Department will disclose calculations performed in connection 
with these preliminary results of review within five days of the date 
of publication of this notice in accordance with 19 CFR 351.224(b). 
Pursuant to section 351.309 of the Department's regulations, interested 
parties may submit written comments in response to these preliminary 
results. Unless extended by the Department, 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 submitting arguments in this proceeding 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. 
Case and rebuttal briefs and comments must be served on interested 
parties in accordance with section 351.303(f) of the Department's 
regulations.
    Also, an interested party may request a hearing within 30 days of 
the date of publication of this notice. See section 351.310(c) of the 
Department's regulations. Unless otherwise specified, the hearing, if 
requested, will be held two days after the date for submission of 
rebuttal briefs, or the first business day thereafter. The Department 
will issue the final results of this administrative review, including 
the results of its analysis of the issues raised in any briefs or 
comments at a hearing, within 120 days of publication of these 
preliminary results.Assessment Rates
    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. Pursuant to section 351.212(b) of 
the Department's regulations, the Department calculates an assessment 
rate for each importer of the subject merchandise for each respondent. 
The Department will issue appropriate assessment instructions directly 
to CBP within 15 days of publication of the final results of review.

Cash Deposit Requirements

    The following deposit requirements will be effective upon 
completion of the final results of this administrative review for all 
shipments of the subject merchandise 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 Act: (1) The cash deposit rate will be the 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) if 
neither the exporter nor the manufacturer is a firm covered in this 
review, any previous reviews, or the LTFV investigation, the cash 
deposit rate will be 23.79 percent, the ``all others'' rate established 
in the LTFV investigation. See AD Order, 60 FR at 41056. These deposit 
rates, when imposed, shall remain in effect until publication of the 
final results of the next administrative review.

Notification to Importers

    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 Act.


[[Page 24520]]


    Dated: May 3, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-2288 Filed 5-9-05; 8:45 am]
BILLING CODE 3510-DS-S