[Federal Register Volume 70, Number 199 (Monday, October 17, 2005)]
[Notices]
[Pages 60279-60280]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-5712]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-008]


Certain Circular Welded Carbon Steel Pipes and Tubes from Taiwan: 
Preliminary Results of Antidumping Duty Changed Circumstance Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On April 4, 2005, the Department of Commerce (the Department) 
published a notice of initiation of changed circumstance review of the 
antidumping order on certain circular welded carbon steel pipes and 
tubes from Taiwan to determine whether Yieh Phui is a successor-in-
interest to Yieh Hsing. See Certain Circular Welded Carbon Steel Pipes 
and Tubes From Taiwan: Initiation of Antidumping Duty Changed 
Circumstance Review, 70 FR 17063 (April 4, 2005) (Initiation Notice). 
We have preliminarily concluded that Yieh Phui Enterprise, Ltd. (Yieh 
Phui) is the successor-in-interest to Yieh Hsing Enterprise, Ltd. (Yieh 
Hsing) for purposes of determining antidumping duty liability in this 
proceeding. Interested parties are invited to comment on these 
preliminary results.

EFFECTIVE DATE: October 17, 2005.

FOR FURTHER INFORMATION CONTACT: Angela Strom or Robert James at (202) 
482-2704 or (202) 482-0649, respectively; AD/CVD Operations, Office 7, 
Import Administration, International Trade Administration, Department 
of Commerce, 14th Street and Constitution Ave. NW, Washington DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On February 15, 2005, Yieh Phui requested that the Department 
conduct an expedited changed circumstances review of the order on 
certain circular welded carbon steel pipes and tubes from Taiwan. The 
Department determined that the information submitted by Yieh Phui was 
sufficient to warrant initiation of a changed circumstance review and, 
on April 4, 2005, the Department published the Initiation Notice for 
this review. On April 6, 2005, the Department issued Yieh Phui a 
questionnaire requesting further details on the acquisition of Yieh 
Hsing's pipe facilities. Yieh Phui responded on April 29, 2005. On May 
17, 2005, the Department issued a second supplemental questionnaire, to 
which Yieh Phui responded on June 13, 2005.

Scope of the Order

    Imports covered by this order 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 4.5 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 the order is dispositive.

Analysis

    In the context of the 2002 - 2003 administrative review, Yieh Hsing 
had notified the Department that one its affiliated companies, Yieh 
Phui, had acquired its pipe production facilities in March of 2003. See 
Buy/Sell Agreement at Exhibit 1 of Yieh Hsing's September 11, 2003 
submission. Yieh Phui also indicated in its official request for the 
changed circumstance review and its subsequent supplemental 
questionnaire responses (SQR) that, as of March 1, 2003, it assumed 
control with respect to both sales and production of Yieh Hsing's steel 
pipe operations. According to Yieh Phui, since the sale of the 
production facilities to Yieh Phui in March of 2003, Yieh Hsing has 
been engaged only in the production and sales of stainless steel wire 
rod. After reviewing information received from U.S. Customs and Border 
Patrol, it appears that Yieh Phui, after March of 2003 and Yieh Hsing 
were exporting subject merchandise to the United States under their 
appropriate cash deposit rates. See Memorandum for Robert James from 
Angela Strom dated September 26, 2005.
    In making a successor-in-interest determination, the Department 
examines several factors, including, but not limited to, changes in: 
(1) management; (2) production facilities; (3) supplier relationships; 
and (4) customer base. See Notice of Final Results of Changed 
Circumstances Review: Polychloroprene Rubber from Japan, 69 FR 67890 
(November 22, 2004) citing, Brass Sheet and Strip from Canada: Notice 
of Final Results of Antidumping Duty Administrative Review, 57 FR 20460 
(May 13, 1992) (Canadian Brass). While no single factor or a 
combination of these factors will necessarily provide a dispositive 
indication, the Department will generally consider the new company to 
be the successor to the previous company if its resulting operation is 
not materially dissimilar to that of its predecessor. See e.g., 
Industrial Phosphoric Acid from Israel: Final Results of Changed 
Circumstances Review, 59 FR 6944 (February 14, 1994), Canadian Brass, 
and Certain Preserved Mushrooms from India: Final Results of Changed-
Circumstances Review, 68 FR 6884 (February 11, 2003). If evidence 
demonstrates that, with respect to the production and sale of the 
subject merchandise, the new company operates as the same entity as the 
former company, the Department will treat the successor company the 
same as the predecessor for antidumping purposes. See Fresh and Chilled 
Atlantic Salmon from Norway: Final Results of Changed Circumstance 
Antidumping Administrative Review, 64 FR 9979 (March 1, 1999).
    In terms of the overall legal structure and management, Yieh Phui 
is virtually identical to Yieh Hsing. Since the same family serves as a 
controlling party and primary shareholder for both companies, Yieh Phui 
states that the

[[Page 60280]]

transfer of pipe facilities did not change the ultimate ownership of 
the two entities. One family member in particular served and currently 
serves as a chairman for Yieh Phui and a board member for Yieh Hsing; 
thus, all major company strategy and policy decisions are primarily 
set, influenced and approved by the same person for both companies. The 
management for the sales and marketing divisions are also similar. This 
is evidenced by Yieh Hsing's previous deputy manager of ``Pipe, Plate 
and Sheet'' serving as the section manager of ``Pipe Marketing and 
Sales'' for Yieh Phui. Furthermore, Yieh Phui maintains the same order 
processing, distribution channels and sales correspondence as Yieh 
Hsing did prior to the transfer of the pipe facilities. See SQR dated 
April 29, 2005, at pages 4-11 and Exhibits 3-6.
    The record evidence establishes that the pipe production facilities 
under Yieh Phui's control have remained largely unchanged since the 
transfer of assets from Yieh Hsing. Although Yieh Phui appointed a new 
general manager of its pipe operations, Yieh Phui hired the vast 
majority of former Yieh Hsing employees and supervisors to operate the 
facility. The Buy/Sell Agreement between Yieh Hsing and Yieh Phui 
provides a detailed description of the production facilities that were 
transferred to Yieh Phui, indicating that the identical processes and 
facilities were used to produce steel pipe products prior to and after 
the transfer. See SQR dated February 15, 2005, at 3 and Exhibits 1 and 
3.
    Regarding suppliers, Yieh Phui and Yieh Hsing did not purchase 
major raw material inputs (i.e. hot rolled coils) from identical 
suppliers. Prior to the transfer of the pipe facilities in 2003, Yieh 
Hsing had purchased hot rolled coils from certain suppliers at a fixed 
price pursuant to an annual purchase agreement. This annual purchase 
agreement expired at the end of 2002 and the associated suppliers 
refused to renew the agreement as a result of the rapid variation of 
market prices at that time. Yieh Phui provided price statistics 
published by the Taiwan Steel and Iron Industrial Association to 
illustrate this upward market trend in hot rolled coil prices 
throughout 2002 and early 2003. See questionnaire response (QR) dated 
April 29, 2005, at Exhibit 7. Since Yieh Hsing's suppliers refused to 
renew the purchase agreement, Yieh Phui opted to purchase the hot 
rolled coils necessary for its newly-acquired pipe operations through 
one of its established supplier lines. As Yieh Phui had already been 
purchasing hot rolled coils for its galvanizing operations prior to 
2003, it sought to maintain its business relationships with its major 
supplier of hot rolled coils at that time. Thus, the record shows that 
Yieh Phui was not in a position to establish the same supply channels 
as Yieh Hsing and reasonably maintained its relationship with an 
existing supplier. The difference in suppliers, therefore, does not 
demonstrate that the companies are materially dissimilar in this 
particular case.
    With respect to customers, Yieh Phui indicated it assumed the same 
customer base and sales practices that Yieh Hsing had maintained prior 
to the transfer of assets. Yieh Phui provided charts and sale 
documentation illustrating that the same customers, importers and 
negotiating parties were involved in the sales of pipes as when Yieh 
Hsing was selling subject pipes. See SQR dated April 29, 2005, at 17-19 
and Exhibits 9-10 and SQR dated June 13, 2005, at Exhibits 2 and 3. The 
majority of the persons responsible for negotiating sales of pipe and 
tubes for Yieh Hsing were hired and assigned such tasks by Yieh Phui 
after the transfer took place. See SQR dated April 29, 2005, at 7-8.

Preliminary Results of the Review

    In analyzing the totality of the factors on the record, we 
preliminarily conclude that Yieh Phui operates in essentially the same 
manner in terms of production, management, and customer base as Yieh 
Hsing prior to the transfer of Yieh Hsing's pipe facilities to Yieh 
Phui. The change in supplier relationships does not demonstrate that 
the companies are materially dissimilar in this case. Morever, the 
current structure of Yieh Phui and the previous structure of Yieh Hsing 
are sufficiently similar to support a finding that Yieh Phui is the 
successor-in-interest to Yieh Hsing. As a result, we have preliminarily 
determined, in fact, that Yieh Phui is the successor-in-interest to 
Yieh Hsing and ought to be accorded the same antidumping duty treatment 
as its predecessor. Should these preliminary results be adopted in our 
final results of this changed circumstance review, Yieh Hsing's cash 
deposit rate (i.e., 1.61 percent) will be applied to Yieh Phui's 
entries of subject merchandise entered, or withdrawn from warehouse, 
for consumption on or after the date of publication of the final 
results. Until that time, the cash deposit rate assigned to Yieh Phui's 
entries is the rate in effect at the time of entry (i.e., the ``all-
others'' rate).

Public Comment

    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 issue, (2) a brief 
summary of the argument. Any interested party may request a hearing 
within 10 days of the date of publication of this notice. Any hearing, 
if requested, will be held no later than 25 days after the date of 
publication of this notice, or the first workday thereafter. Case 
briefs may be submitted by interested parties not later than 15 days 
after the date of publication of this notice. Rebuttal briefs, limited 
to the issues raised in the case briefs, may be filed not later than 20 
days after the date of publication of this notice. All written comments 
shall be submitted in accordance with 19 CFR Sec.  351.303.
    Consistent with 19 CFR Sec.  351.216(e), the Department will 
publish the final results of this changed circumstance review, 
including its analysis of issues raised in any written comments, no 
later than 270 days after the date of publication of the Initiation 
Notice. This notice is in accordance with sections 751(b) and 777(i)(1) 
of the Tariff Act of 1930, as amended, and 19 C.F.R. Sec.  
351.221(c)(3)(i) of the Department's regulations.

    Dated: October 3, 2005.
Joseph A. Spetrini,
Acting Assistant Secretaryfor Import Administration.
[FR Doc. E5-5712 Filed 10-14-05; 8:45 am]
BILLING CODE 3510-DS-S