[Federal Register Volume 70, Number 172 (Wednesday, September 7, 2005)]
[Notices]
[Pages 53161-53164]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4864]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-588-835


Oil Country Tubular Goods from Japan: Preliminary Results of 
Antidumping Duty Administrative Review and Partial Recission of Review

AGENCY: Import Administration, International Trade Administration, U.S. 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on Oil Country 
Tubular Goods (OCTG) from Japan in response to requests by the United 
States Steel Corporation, a petitioner in the original investigation 
(petitioner). United States Steel Corporation requested administrative 
reviews of JFE Steel Corporation (JFE), Nippon Steel Corporation 
(Nippon), NKK Tubes (NKK) and Sumitomo Metal Industries, Ltd. (SMI). 
This review covers sales of subject merchandise to the United States 
during the period of August 1, 2003 through July 31, 2004.
    We have preliminarily determined that NKK and SMI had no reviewable 
sales of subject merchandise during the period of review (POR) and that 
the review of these two companies should be rescinded. We have also 
preliminarily determined that adverse facts available should be applied 
to the remaining respondents, neither of which participated in this 
administrative review. Interested parties are invited to comment on 
these preliminary results. See the Preliminary Results of Review 
section of this notice.

EFFECTIVE DATE: September 7, 2005.

FOR FURTHER INFORMATION CONTACT: Mark Hoadley or Kimberley Hunt, AD/CVD 
Operations, Office 6, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
3148 or (202) 482-1272, respectively.

SUPPLEMENTARY INFORMATION:

BACKGROUND

    On August 11, 1995, the Department published the antidumping duty 
order on OCTG from Japan in the Federal Register (60 FR 41058). On 
August 3, 2004, the Department published a notice of opportunity to 
request an administrative review of this order (69 FR 46496). On August 
31, 2004, the Department received a timely request for review from 
petitioner covering JFE, Nippon, NKK and SMI.\1\ On September 22, 2004, 
we published a notice initiating an administrative review of the 
antidumping order on OCTG from Japan. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Requests for Revocation 
in Part, 69 FR 56745.
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    \1\ The Department found SMI and Sumitomo Corporation (SC) to be 
affiliated in a previous review. See Oil Country Tubular Goods From 
Japan; Preliminary Results and Rescission in Part of Antidumping 
Duty Administrative Review, 64 FR 48589, 48591 (September 7, 1999). 
Neither SMI nor SC has placed information on the record of this 
review suggesting that the basis for this finding has changed.
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    The Department issued Sections A, B and C of its original 
questionnaire on November 12, 2004.\2\ On November 18,

[[Page 53162]]

2004, SMI responded that it did not export subject merchandise to the 
United States during the POR. On December 15 and 20, 2004, 
respectively, Nippon and JFE stated that they did not intend to 
participate in the administrative review and would not be submitting a 
response to the Department's questionnaire. On December 20, 2004, NKK 
submitted a no-shipment certification and asked for an expeditious 
rescission of the review.
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    \2\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under investigation that it sells, and the manner in 
which it sells that merchandise in all of its markets. Section B 
requests a complete listing of all home market sales, or, if the 
home market is not viable, of sales in the most appropriate third-
country market (this section is not applicable to respondents in 
non-market economy (NME) cases). Section C requests a complete 
listing of U.S. sales. Section D requests information on the cost of 
production (COP) of the foreign like product and the constructed 
value (CV) of the merchandise under investigation. Section E 
requests information on further manufacturing.
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    On May 5, 2005, the Department extended the deadline for the 
preliminary results of this antidumping duty administrative review 
until August 31, 2005. See Notice of Extension of Time Limit for 
Preliminary Results of Antidumping Duty Administrative Review: Oil 
Country Tubular Goods from Japan, 70 FR 23844 (May 5, 2005).

PERIOD OF REVIEW

    This review covers the period August 1, 2003, through July 31, 
2004.

SCOPE OF THE ORDER

    The merchandise covered by this order consists of oil country 
tubular goods, hollow steel products of circular cross-section, 
including oil well casing, tubing, and drill pipe, 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, tubing, or drill pipe containing 10.5 percent or more of 
chromium. The products subject to this order are currently classified 
in the Harmonized Tariff Schedule of the United States (HTSUS) under 
item numbers: 7304.21.30.00, 7304.21.60.30, 7304.21.60.45, 
7304.21.60.60, 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. 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, our written description of the scope of this order is 
dispositive.

ANALYSIS

Partial Rescission of Administrative Review for NKK and SMI

    In response to our original questionnaire of November 12, 2004, 
both SMI and NKK submitted no-shipment certifications. The petitioner 
did not comment on the no-shipment claim.
    In order to corroborate the no-shipment statement, the Department 
requested information from U.S. Customs and Border Protection (CBP). 
Such information showed entries of subject merchandise produced by both 
NKK and SMI during the POR. The Department issued letters to NKK and 
SMI asking for an explanation regarding these entries. NKK responded by 
stating that all shipments appearing in the CBP information were non-
subject merchandise. SMI responded that it and its affiliate Sumitomo 
Corporation (SC) had again reviewed their records and that, other than 
temporary importation under bond (TIB) entries, neither SMI nor SC sold 
any subject OCTG to customers in the United States during the POR.NKK 
submitted documentation demonstrating that the only entries for 
consumption in question involved OCTG specifically excluded from the 
scope of the order. Additionally, NKK included a general explanation of 
the steps it had followed to ensure the accuracy of the no-shipment 
certification previously submitted. The Department also asked NKK for 
additional information regarding imports from NKK Corporation, which 
the Department had previously found to be affiliated with NKK. In 
response, NKK stated that it had searched its sales database again and 
confirmed that it had no exports of subject merchandise to the United 
States during the POR. NKK also confirmed that it had no knowledge of 
or reason to know of any entries for consumption of subject merchandise 
manufactured by NKK Corporation during the POR.
    In accordance with section 351.213(d)(3) of the Department's 
regulations, we are preliminarily rescinding the administrative review 
of NKK. We have based our preliminary decision regarding NKK on the 
letters and documentation from NKK supporting its certification that it 
had no shipments of the subject merchandise during the POR, on our 
examination of the CBP database for imports of entered merchandise 
produced by NKK and NKK Corporation, and on our review of entry 
documentation. There is no information on the record to indicate that 
NKK or NKK Corporation had knowledge that its merchandise was being 
sold to the United States during the POR. As a result, we find that NKK 
had no sales of subject merchandise during the POR covered by this 
administrative review.
    SMI stated it did not sell any OCTG subject to the order for export 
to the United States during the POR. SMI further stated that it had 
reviewed its records and asked its affiliate, SC, to again review its 
records. SMI conclusively stated that it is not aware of any shipments 
of OCTG produced by SMI that may have been entered for consumption 
during the POR other than under TIB, which was subsequently exported 
from the United States.
    In response to the Department's request for additional information, 
SMI stated that OCTG is sold to the U.S. market exclusively through 
trading companies. SMI stated that it reviewed its records of OCTG 
shipments before and during the POR and concluded that it did not sell 
subject merchandise to any of the companies listed as importers in the 
CBP information. SMI claims that it has no information about these 
shipments and no way to get information about these shipments. Finally, 
SMI stated that it did sell non-subject merchandise directly to 
customers in the United States. SMI also asked SC to review once again 
its records and again stated that SMI did not sell OCTG covered by the 
antidumping order to the United States during the POR.
    In addition, SMI submitted a letter commenting on the information 
on the record of the review and stated that there is no evidence on the 
record that SMI knew, or had reason to believe, that any subject 
merchandise manufactured by SMI would be entered into the United States 
during the POR.
    In accordance with section 351.213(d)(3) of the Department's

[[Page 53163]]

regulations, we are preliminarily rescinding the administrative review 
with respect to both SMI and SC. We have based our preliminary 
determination regarding SMI on the letters and documentation from SMI 
and SC supporting their certification that they had no shipments of the 
subject merchandise during the POR, and on our examination of 
information obtained from CBP. There is no information on the record to 
indicate that SMI or SC had knowledge that its subject merchandise was 
being resold to the United States during the POR. As a result, we find 
that neither SMI nor SC had sales during the POR that are subject to 
this administrative review. The Department may still verify the 
information submitted by SMI and SC before the final results of this 
review.

Application of Facts Available

    Pursuant to sections 776(a)(1) and (2) of the Tariff Act of 1930, 
as amended (the Act), if necessary information is not available on the 
record, or if an interested party or any other person (A) withholds 
information that has been requested by the administering authority; (B) 
fails to provide such information by the deadlines for the submission 
of the information or in the form and manner requested; (C) 
significantly impedes a proceeding under the antidumping statute; or 
(D) provides such information but the information cannot be verified as 
provided in section 782(i) of the Act, the administering authority 
shall, subject to section 782(d) of the Act, use the facts otherwise 
available in reaching the applicable determination. In this case, JFE's 
and Nippon's stated decision not to participate in the review 
constitutes a refusal to provide the information necessary to conduct 
the Department's antidumping analysis, pursuant to section 776(a)(2)(A) 
of the Act. Moreover, respondents' non-participation significantly 
impedes the review process. See section 776(a)(2)(C) of the Act. 
Therefore, the Department must resort to facts otherwise available in 
reaching the applicable determination. Absent any response on the 
record from respondents, sections 782(d) and (e) do not apply.
    Section 776(b) of the Act further provides that, in selecting from 
among the facts otherwise available, the Department may use an 
inference adverse to the interests of a party that has failed to 
cooperate by not acting to the best of its ability to comply with a 
request for information. See also the Statement of Administrative 
Action (SAA), accompanying the Uruguay Round Agreements Act (URAA), H. 
Doc. No. 103-316 at 870, which specifically states that a failure to 
respond to the questionnaire may lead the Department to conclude that 
the company has not been responsive and to thus proceed on the basis of 
facts otherwise available. By refusing to respond to the Department's 
questionnaire, JFE and Nippon have failed to cooperate to the best of 
their ability. Neither JFE nor Nippon expressed concerns regarding the 
proposed deadlines, nor requested additional time. Without information 
from these two companies, the Department is unable to perform any 
company-specific analysis or calculate dumping margins for the POR. 
Therefore, pursuant to section 776(b) of the Act, the Department has 
determined that an adverse inference is warranted with respect to JFE 
and Nippon.
    We note that, in selecting an adverse facts available (AFA) rate, 
the Department's practice has been to assign respondents who fail to 
cooperate with the Department the highest margin determined for any 
party in the less-than-fair-value (LTFV) investigation or in any 
administrative review. See Sigma Corp. v. United States, 117 F.3d 1401, 
1411 (Fed. Cir. 1997). As AFA, the Department is assigning the rate of 
44.20 percent. This has been the only affirmative margin calculated in 
this proceeding since the investigation's preliminary determination. 
See Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Oil Country Tubular Goods from 
Japan, 60 FR 6506 (February 2, 1995). It is also the rate applied in 
the final determination of the investigation of sales at LTFV. In the 
LTFV investigation, respondents Nippon and SMI did not respond to the 
Department's questionnaire and did not otherwise cooperate to the best 
of their ability, therefore the Department applied best information 
available (BIA) (now referred to as FA). See LTFV investigation. This 
rate has been used as the AFA rate in the investigation and in 
subsequent reviews. We preliminarily determine that it is thus 
appropriate to apply the AFA rate of 44.20 to Nippon and JFE for 
purposes of these preliminary results.

Corroboration

    Section 776(c) of the Act provides that, when the Department 
applies facts otherwise available and relies on ``secondary 
information,'' the Department shall, to the extent practicable, 
corroborate that information from independent sources reasonably at the 
Department's disposal. The SAA clarifies that the petition is 
``secondary information,'' and states that ``corroborate'' means to 
determine that the information used has probative value. See SAA at 
870. To corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information to be used. We have previously examined the reliability of 
the 44.20 percent rate and found it to be reliable. This rate was 
originally taken from the petition; it was based upon the difference 
between the U.S. price of a representative OCTG product sold by a 
Japanese company and the constructed value for that product.
    The Department considers information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department will disregard the margin and determine an 
appropriate margin. For example, in Fresh Cut Flowers from Mexico: 
Final Results of Antidumping Administrative Review, 61 FR 6812 
(February 22, 1996), the Department disregarded the highest margin in 
that case as best information available (the predecessor to facts 
available) because the margin was based on another company's 
aberrational business expense that resulted in an unusually high 
margin. Similarly, the Department does not apply a margin that has been 
discredited. See D & L Supply Co. v. United States, 113 F.3d 1220, 1221 
(Fed. Cir. 1997) (the Department will not use a margin that has been 
judicially invalidated). None of these unusual circumstances are 
present here.
    Our review of the information in the original petition pertaining 
to the price of the product and the major inputs and processes used for 
the production of the final merchandise did not indicate that the 
analysis of the OCTG market in the petition is no longer appropriate to 
use as a basis for facts available. Furthermore, nothing on the record 
of this review supports the determination that the highest margin rate 
from the petition in the underlying investigation does not represent 
reliable and relevant information for AFA purposes. Therefore, in this 
proceeding, the highest margin from the petition is the most 
appropriate information on which to base a margin for these 
uncooperative respondents. See Oil Country Tubular Goods from Japan; 
Preliminary Results of Antidumping Duty Administrative Review and Final 
Partial Rescission of Antidumping Duty Administrative Review, 65 FR 
54838 (September 11, 2000).
    Accordingly, we determine that the highest rate from any previous 
segment of this administrative proceeding (i.e.,

[[Page 53164]]

the rate of 44.20 percent from the original investigation) is in accord 
with the requirement of section 776(c) of the Act that secondary 
information be corroborated (i.e., that it be shown to have probative 
value).

PRELIMINARY RESULTS OF REVIEW

    We preliminarily determine that the following dumping margins 
exist:

------------------------------------------------------------------------
                                                                Margin
                    Manufacturer/Exporter                      (percent)
------------------------------------------------------------------------
JFE Steel Corporation.......................................       44.20
Nippon Steel Corporation....................................       44.20
------------------------------------------------------------------------

PUBLIC COMMENT

    Pursuant to section 351.309 of the Department's regulations, 
interested parties may submit written comments in response to these 
preliminary results. Unless the deadline is 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 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(c) 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 Department 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, no later than 120 days after 
publication of these preliminary results, unless extended. See section 
351.213(h) of the Department's regulations.

DUTY ASSESSMENT

    Pursuant to section 351.212(b) of the Department's regulations, the 
Department calculates an assessment rate for each importer or customer 
of the subject merchandise. The Department will issue appropriate 
assessment instructions directly to CBP within 15 days of publication 
of the final results of this review. Upon issuance of the final results 
of this administrative review, if any importer- or customer-specific 
assessment rates calculated in the final results are above de minimis 
(i.e., at or above 0.5 percent), the Department will instruct CBP to 
assess antidumping duties on appropriate entries by applying the 
assessment rate to the entered value of the merchandise. For assessment 
purposes, if the Department's final results include the rescission of 
this review with respect to SMI and NKK, the Department will instruct 
CBP to liquidate all entries from SMI and NKK at the rate applicable at 
the time of entry.

CASH DEPOSIT REQUIREMENTS

    The following cash deposit rates will be effective with respect to 
all shipments of OCTG from Japan entered, or withdrawn from warehouse, 
for consumption on or after the publication date of the final results, 
as provided for by section 751(a)(1) of the Act: (1) for JFE and 
Nippon, 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, including NKK and SMI (if this review is 
rescinded), 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 by this review, a prior review, or the 
LTFV investigation, the cash deposit rate shall be the all others rate 
established in the LTFV investigation, which is 44.20 percent. See 
Notice of Amended Final Determination of Sales at Less Than Fair Value 
and Antidumping Duty Order: Oil Country Tubular Goods from Japan, 60 FR 
155 (August 11, 1995). 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 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.
    This administrative review and notice are issued and published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: August 30, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-4864 Filed 9-6-05; 8:45 am]
BILLING CODE 3510-DS-S