[Federal Register Volume 70, Number 214 (Monday, November 7, 2005)]
[Notices]
[Pages 67444-67447]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-22139]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-580-813


Stainless Steel Butt-Weld Pipe Fittings from Korea: Preliminary 
Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request by Sungkwang Bend Company Ltd. 
(SKBC), the Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order of stainless steel 
butt-weld pipe fittings from Korea. The review covers one firm, SKBC. 
The period of review (POR) is February 1, 2004, through January 31, 
2005.
    We preliminarily determine that sales of stainless steel butt-weld 
pipe fittings from Korea have not been made below normal value (NV) for 
SKBC. If these preliminary results are adopted in our final results of 
administrative review, we will instruct Customs and Border Protection 
(CBP) to not assess antidumping duties based on the difference between 
constructed export price (CEP) and NV. Interested parties are invited 
to comment on these preliminary results. Parties who submit arguments 
in this proceeding are requested to also submit: 1) a statement of the 
issues, 2) a brief summary of the argument, and 3) a table of 
authorities.

EFFECTIVE DATE: November 7, 2005.

FOR FURTHER INFORMATION CONTACT: Michael J. Heaney or Robert James, AD/
CVD Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14\th\ Street and 
Constitution Avenue, NW, Room 7866, Washington, DC 20230; telephone: 
(202) 482-4475 or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 23, 1993, the Department published the antidumping duty 
order on stainless steel butt weld pipe fittings from Korea. See 
Antidumping Duty Order: Certain Stainless Steel Butt Weld Pipe Fittings 
from Korea, 58 FR 11029 (February 23, 1993). On February 28, 2005, SKBC 
requested an administrative review of the antidumping duty order on 
stainless steel butt- weld pipe fittings from Korea in response to the 
Department's notice of opportunity to request a review published in the 
Federal Register. The Department initiated the review for SKBC on March 
23, 2005. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part, 70 FR 14643 
(March 23, 2005).
    On March 31, 2005, the Department issued sections A, B, and C of 
the antidumping questionnaire to SKBC. SKBC filed its response to 
section A of our questionnaire on May 9, 2005. On May 27, 2005, SKBC 
filed its response to sections B and C of our questionnaire. The 
Department issued a supplemental questionnaire to SKBC on July 25, 
2005. SKBC filed its response to this questionnaire on August 16, 2005.

Scope of the Order

    The products covered by this order are certain welded stainless 
steel butt-weld pipe fittings (pipe fittings), whether finished or 
unfinished, under 14 inches in inside diameter.
    Pipe fittings are used to connect pipe sections in piping systems 
where conditions require welded connections. The subject merchandise 
can be used where one or more of the following conditions is a factor 
in designing the piping system: (1) corrosion of the piping system will 
occur if material other than stainless steel is used; (2) contamination 
of the material in the system by the system itself must be prevented; 
(3) high temperatures are present; (4) extreme low temperatures are 
present; (5) high pressures are contained within the system.
    Pipe fittings come in a variety of shapes, and the following five 
are the most basic: ``elbows,'' ``tees,'' ``reducers,'' ``stub ends,'' 
and ``caps.'' The edges of finished fittings are

[[Page 67445]]

beveled. Threaded, grooved, and bolted fittings are excluded from this 
review. The pipe fittings subject to this review are classifiable under 
subheading 7307.23.00 of the Harmonized Tariff Schedule of the United 
States (HTSUS). Although the HTSUS subheading is provided for 
convenience and customs purposes, our written description of the scope 
of this order is dispositive.

Product Comparison

    In accordance with section 771(16) of the Tariff Act of 1930, as 
amended (the Act), we considered all stainless steel butt-weld pipe 
fittings covered by the ``Scope of the Antidumping Duty Order'' section 
of this notice, supra, which were produced and sold by SKBC in the home 
market during the POR to be foreign like products for the purpose of 
determining appropriate product comparisons to U.S. sales of stainless 
steel butt-weld pipe fittings.
    We relied on five characteristics to match U.S. sales of subject 
merchandise to comparison sales of the foreign like product: type, 
grade, seam, size, and schedule. Where there were no sales of identical 
merchandise in the home market to compare to the U.S. sales, we 
compared U.S. sales to the next most similar foreign like product on 
the basis of the physical characteristics and reporting instructions 
listed in the antidumping questionnaire. We performed a difference in 
merchandise (DIFMER) test to ensure that all comparison matches had no 
more than a twenty percent difference in variable cost of manufacture 
to the merchandise sold in the United States. See 19 CFR Sec.  
351.411(b) and Import Administration Policy Bulletin, No., 92.2 (July 
29, 1992).

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we determine NV based on sales in the home market 
at the same level of trade (LOT) as export price (EP) or the CEP. The 
NV LOT is that of the starting-price sales in the home market or, when 
NV is based on constructed value (CV), that of the sales from which we 
derive selling, general and administrative (SG&A) expenses and profit. 
For CEP, it is the level of the constructed sale from the exporter to 
an affiliated importer after the deductions required under section 
772(d) of the Act.
    To determine whether NV sales are at a different LOT than CEP, 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 
an LOT adjustment under section 773(a)(7)(A) of the Act. Finally, for 
CEP sales, if the NV level is more remote from the factory than the CEP 
level and there is no basis for determining whether the difference in 
the levels between NV and CEP affects price comparability, we adjust NV 
under section 773(a)(7)(B) of the Act (the CEP-offset provision). See 
Final Determination of Sales at Less Than Fair Value: Certain Cut-to-
Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732-33 
(November 19, 1997).
    SKBC reported one LOT in the home market, and contended that home 
market sales to distributors and end-users were made at the same LOT. 
(See SKC May 9, 2005, response, at appendix A-3.) In its May 9, 2005, 
response, SKBC indicated that it performed similar levels of sales 
support (i.e., customer correspondence, order review and approval, 
customer assistance, technical advice, and freight and delivery 
arrangement) on its home-market sales to distributors and to end-users. 
We analyzed the information submitted by SKBC and determined that one 
LOT exists for SKBC's sales in the home market. We also examined the 
CEP LOT (i.e., the constructed sale from SKBC to its U.S. affiliate, 
Sungkwang Bend America (SKBA)) and found that SKBC's U.S. sales were 
made at the same LOT.
    Moreover, the HM LOT is more advanced in the chain of distribution 
than the CEP LOT. In its May 9, 2005, response, SKBC indicated that 
SKBA performed many of the same selling functions on SKBC's CEP sales 
that SKBC performed on its home market sales. We compared the CEP LOT 
(after deductions made pursuant to section 772(d) of the Act) to the 
home market LOT. We determined that there were fewer services such as 
customer correspondence, order review and approval, post sales service/
warranties, technical advice, advertising, freight delivery 
arrangement, credit services and import document clearance, performed 
by SKBC on its CEP LOT than on SKBC's home market LOT. See id. In 
addition, the differences in selling functions performed for home 
market and CEP LOTs indicate that the home market LOT involved a more 
advanced stage of distribution than the CEP LOT. See id. In the home 
market LOT, SKBC provided marketing further down the chain of 
distribution by providing certain downstream selling functions that are 
normally performed by service centers in the U.S. market (e.g., 
technical advice, credit and collection, etc.). See id.
    Based on our analysis of the record evidence on selling functions 
performed for the CEP LOT and the home market LOT, we determined the 
CEP and the starting price of home market sales represent different 
stages in the marketing process, and are thus at different LOTs within 
the meaning of 19 CFR Sec.  351.412. Therefore, when we compared CEP 
sales to home market sales, we examined whether an LOT adjustment may 
be appropriate. In this case, SKBC sold at one LOT in the home market; 
thus, there is no basis upon which to determine whether there is a 
pattern of consistent price differences between LOTs. Thus, while SKBC 
cooperated to the best of its ability, the data available do not 
provide an appropriate basis to determine whether the difference in 
level of trade affected price comparability. Further, we do not have 
the information which would allow us to examine pricing patterns of 
SKBC's sales of other similar products, and there are no other 
respondents or other record evidence on which such an analysis could be 
based.
    Because the data available do not provide an appropriate basis for 
making an LOT adjustment and the LOT of home market sales is at a more 
advanced stage than the LOT of the CEP sales, a CEP offset is 
appropriate in accordance with section 773(a)(7)(B) of the Act, as 
claimed by SKBC. We based the amount of the CEP offset on the amount of 
home market indirect selling expenses, and limited the deduction for 
home market indirect selling expenses to the amount of indirect selling 
expenses deducted from CEP in accordance with section 772(d)(1)(D) of 
the Act. We applied the CEP offset to NV, whether based on home market 
prices or CV.

Comparisons

    To determine whether sales of subject merchandise made by SKBC were 
made at less than fair value, we compared the CEP to the NV as 
described below. Pursuant to section 777A(d)(2) of the Act, we compared 
the CEP of individual U.S. transactions to the monthly weight-averaged 
NV of the foreign like product.

Export Price and Constructed Export Price

    Section 772(b) of the Act defines CEP as ``the price at which the 
subject

[[Page 67446]]

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 subsections (c) and (d). 
For purposes of this administrative review, SKBC classified all of its 
U.S. sales as CEP transactions. Based on the record evidence, we 
preliminarily determine that SKBC's U.S. sales through its U.S. 
affiliate, SKBA, were made ``in the United States'' within the meaning 
of section 772(b) of the Act, and thus have been appropriately 
classified by SKBC as CEP transactions.
    We based CEP on packed prices to unaffiliated purchasers in the 
United States. We also made deductions for movement expenses in 
accordance with section 772(c)(2)(A) of the Act; these included foreign 
inland freight, international freight, marine insurance, brokerage 
charges, U.S. inland freight and U.S. customs duties. As further 
directed by section 772(d)(1) of the Act, we deducted those selling 
expenses associated with economic activities occurring in the United 
States, including billing adjustments and direct selling expenses 
(i.e., credit expenses, technical service expenses, and bank charges), 
inventory carrying costs, and other indirect selling expenses. We also 
made an adjustment for profit in accordance with section 772(d)(3) of 
the Act.

Normal Value

    In accordance with section 773(a)(1)(C) of the Act, to determine 
whether there was sufficient volume of sales in the home market to 
serve as a viable basis for calculating NV (i.e., the aggregate volume 
of home market sales of the foreign like product is greater than or 
equal to five percent of the aggregate volume of U.S. sales), we 
compared SKBC's volume of home market sales of the foreign like product 
to the volume of U.S. sales of the subject merchandise. Because SKBC's 
aggregate volume of home market sales of the foreign like product was 
greater than five percent of its aggregate volume of U.S. sales for the 
subject merchandise, we determined that the home market was viable. We 
therefore based NV on home market sales to unaffiliated purchasers made 
in the usual commercial quantities and in the normal course of trade.
    We made adjustments, where applicable, for movement expenses 
(consisting of inland freight) in accordance with section 773(a)(6)(B) 
of the Act. In accordance with section 773(a)(6)(C)(iii) of the Act and 
19 CFR Sec.  351.410, we made circumstance of sale adjustments for 
imputed credit, warranty, bank charges, and technical service expenses. 
In addition, we made adjustments for differences in cost attributable 
to differences in the physical characteristics of the merchandise 
(i.e., DIFMER adjustments) pursuant to section 773(a)(6)(C)(ii) of the 
Act and 19 CFR Sec.  351.410. We also made an adjustment, in accordance 
with 19 CFR Sec.  351.410(e), for indirect selling expenses incurred in 
the home market where commissions were granted on sales in the United 
States. As noted in the ``Level of Trade'' section of this notice, we 
also made an adjustment for the CEP offset in accordance with section 
773(a)(7)(B) of the Act. Finally, we deducted home market packing costs 
and added U.S. packing costs in accordance with section 773(a)(6) of 
the Act.

Currency Conversion

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

Preliminary Results of Review

    As a result of our review, we preliminarily find the weighted-
average dumping margin for the period February 1, 2004, through January 
31, 2005, to be as follows:

------------------------------------------------------------------------
                                                              Weighted
                                                               Average
                  Manufacturer / Exporter                      Margin
                                                            (percentage)
------------------------------------------------------------------------
Sungkwang Bend Company Ltd. (SKBC)........................         0.17
------------------------------------------------------------------------

Public Comment

    The Department will disclose calculations performed within five 
days of the date of publication of this notice in accordance with 19 
CFR Sec.  351.224(b). An interested party may request a hearing within 
30 days of publication. See 19 CFR Sec.  351.310(c). Any hearing, if 
requested, will be held 37 days after the date of publication, or the 
first business day thereafter, unless the Department alters the date 
pursuant to 19 CFR Sec.  351.310(d). Interested parties may submit case 
briefs or written comments no later than 30 days after the date of 
publication of these preliminary results of review. Rebuttal briefs and 
rebuttals to written comments, limited to issues raised in the case 
briefs and comments, may be filed no later than 35 days after the date 
of publication of this notice. See 19 CFR Sec.  351.309(d)(2). Parties 
who submit arguments in these proceedings are requested to submit with 
the argument: 1) a statement of the issue, 2) a brief summary of the 
argument, and 3) a table of authorities. Further, parties submitting 
case briefs, rebuttal briefs, and written comments are requested to 
provide the Department with an additional copy of the public version of 
any such argument on diskette. The Department will issue final results 
of this administrative review, including the results of our analysis of 
the issues in any such case briefs, rebuttal briefs, and written 
comments, or at a hearing, within 120 days of publication of these 
preliminary results.

Assessment Rates and Cash Deposit Requirements

    Pursuant to 19 CFR 351.212(b), the Department calculates an 
assessment rate for each importer of the subject merchandise for each 
respondent. Upon issuance of the final results of this administrative 
review, if any importer-specific assessment rates calculated in the 
final results are above de minimis (i.e., at or above 0.5 percent), the 
Department will issue appraisement instructions directly to U.S. 
Customs and Border Protection (CBP) to assess antidumping duties on 
appropriate entries.
    To determine whether the duty assessment rates covering the period 
were de minimis, in accordance with the requirement set forth in 19 CFR 
Sec.  351.106(c)(2), for each respondent we calculate importer (or 
customer)-specific ad valorem rates by aggregating the dumping margins 
calculated for all U.S. sales to that importer (or customer) and 
dividing this amount by the total value of the sales to that importer 
(or customer). Where an importer (or customer)-specific ad valorem rate 
is greater than de minimis, and the respondent has reported reliable 
entered values, we apply the assessment rate to the entered value of 
the importer's/customer's entries during the review period. Where an 
importer (or customer)- specific ad valorem rate is greater than de 
minimis and we do not have entered values, we calculate a per-unit 
assessment rate by aggregating the dumping duties due for all U.S. 
sales to each importer (or customer) and dividing this amount by the 
total quantity sold to the importer (or customer).
    The Department will issue appropriate assessment instructions 
directly to CBP within 15 days of publication of the final results of 
this review. Furthermore, the following

[[Page 67447]]

deposit requirements will be effective upon completion of the final 
results of this administrative review for all shipments of stainless 
steel butt-weld pipe fittings from Korea 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 for the reviewed company will be the rate 
established in the final results of review except if a rate is less 
than 0.50 percent, and therefore de minimis within the meaning of 19 
CFR 351.106(c)(1) in which case the cash deposit rate will be zero;
    2) For any previously reviewed or investigated company not listed 
above, the cash deposit rate will continue to be the company-specific 
rate published in the most recent period;
    3) If the exporter is not a firm covered in this review, a prior 
review, or the less than fair value (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 merchandise; and
    4) If neither the exporter nor the manufacturer is a firm covered 
in this or any previous review conducted by the Department, the cash 
deposit rate will be the ``all others'' rate from the LTFV 
investigation (21.2 percent). See Notice of Final Determination of 
Sales at Less Than Fair Value; Certain Welded Stainless Steel Butt-Weld 
Pipe Fittings From Korea, 58 FR 11029 (February 23, 1993).

Notice to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR Sec.  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.

    Dated: October 31, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 05-22139 Filed 11-4-05; 8:45 am]
BILLING CODE 3510-DS-S