[Federal Register Volume 71, Number 67 (Friday, April 7, 2006)]
[Notices]
[Pages 17810-17813]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-5118]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-502]


Circular Welded Carbon Steel Pipes and Tubes from Thailand: 
Preliminary Results of Antidumping Duty Administrative Review

SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on circular welded 
carbon steel pipes and tubes from Thailand in response to a request by 
petitioners, Allied Tube & Conduit Corporation and Wheatland Tube 
Company. This review covers the period March 1, 2004 through February 
28, 2005.
    We preliminarily determine that U.S. sales of subject merchandise 
have been made by Saha Thai Steel Pipe Company, Ltd. (Saha Thai) below 
normal value (NV). If these preliminary results are adopted in our 
final results, we will instruct U.S. Customs and Border Protection 
(CBP) to assess antidumping duties based on the difference between the 
export price (EP) and the NV. Interested parties are invited to comment 
on these preliminary results. See the ``Preliminary Results of Review'' 
section of this notice.

EFFECTIVE DATE: April 7, 2006.

FOR FURTHER INFORMATION CONTACT: Jacqueline Arrowsmith or Myrna Lobo, 
AD/CVD Operations, Office 6, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-5255 or (202) 482-2371, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On March 11, 1986, the Department published in the Federal Register 
an antidumping duty order on circular welded carbon steel pipes and 
tubes from Thailand. See Antidumping Duty Order: Circular Welded Carbon 
Steel Pipes and Tubes from Thailand, 51 FR 8341 (March 11, 1986). On 
March 1, 2005, the Department published a notice of opportunity to 
request an administrative review of this order covering the period 
March 1, 2004 through February 28, 2005. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity To Request Administrative Review, 70 FR 9918 (March 1, 
2005). A timely request for an administrative review of the antidumping 
order with respect to exports by Saha Thai during the POR was filed by 
the petitioners. The Department published a notice of initiation of 
this antidumping duty administrative review on April 22, 2005. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews, 70 FR 20862 (April 22, 2005).
    In its June 27, 2005 questionnaire response, Saha Thai included a 
request for revocation in-part pursuant to section 351.222(e)(1) of the 
Department's regulations. On July 19, 2005, petitioners filed comments 
arguing that the Department should not consider Saha Thai's revocation 
request because it was untimely. The Department determined that Saha 
Thai's request was untimely filed, and denied its request because the 
Department found no good cause to extend the deadline for revocation. 
See ``Memorandum from Jacqueline Arrowsmith, International Compliance 
Analyst, Office 6, to Maria Mackay, Acting Director, AD/CVD Operations, 
Office 6: Certain Welded Carbon Steel Pipes and Tubes from Thailand: 
Untimely Request for Revocation,'' dated September 13, 2005. In 
addition to the comments filed on July 19, 2005, petitioner also filed 
comments on August 24, 2005 and on January 19, 2006.
    Because the Department determined that it was not practicable to 
complete this review within the statutory time limits, the Department 
extended the deadline for the preliminary results of this antidumping 
duty administrative review until March 31, 2006. See Circular Welded 
Carbon Steel Pipes & Tubes from Thailand: Extension of Time Limit for 
the Preliminary Results of the Antidumping Duty Administrative Review 
70 FR 70785 (November 23, 2005).

Scope of the Order

    The products covered by this antidumping order are certain welded 
carbon steel pipes and tubes from Thailand. The subject merchandise has 
an outside diameter of 0.375 inches or more, but not exceeding 16 
inches. These products, which are commonly referred to in the industry 
as ``standard pipe'' or ``structural tubing,'' are hereinafter 
designated as ``pipes and tubes.'' The merchandise is classifiable 
under the Harmonized Tariff Schedule of the United States (HTSUS) item 
numbers 7306.30.1000, 7306.30.5025, 7306.30.5032, 7306.30.5040, 
7306.30.5055, 7306.30.5085, and 7306.30.5090. Although the HTSUS 
subheadings are provided for convenience and purposes of U.S. Customs 
and Border Protection (CBP), our written description of the scope of 
the order is dispositive.

Analysis

Date of Sale

    Saha Thai reported contract date as the date of sale for U.S. 
sales. Invoice date is the Department's presumptive date for date of 
sale (see section 351.401(i) of the Department's regulations). For 
purposes of this review, however, we examined whether invoice date or 
some other date better represents the date on which the material terms 
of sale were established. The Department examined sales documentation 
including contracts and invoices, provided by Saha Thai for its U.S. 
sales, and found that the material terms of sale are set at the 
contract date. Specifically, any changes in quantity were within the 
specified contract tolerances and as such were not material. As such, 
we preliminarily determine that contract date is the appropriate date 
of sale for U.S. sales in this administrative review because it better 
represents the date upon which the material terms of sale were 
established. This is consistent with the last two completed 
administrative reviews of this proceeding. We made this determination 
in the 1999-2000 administrative review. See Certain Welded Carbon Steel 
Pipes and Tubes from Thailand: Final Results of Antidumping Duty 
Administrative Review 66 FR 53388 (October 22, 2001); see also Certain 
Welded Carbon Steel Pipes and Tubes from Thailand: Final Results of 
Antidumping Duty Administrative Review 69 FR 61649 (October 20, 2004) 
(2002-2003 AR Final Results).
    In the home market, the invoice is the first written document that 
establishes the material terms of sale. Therefore, we are using the 
invoice date as the date of sale for home market sales.

[[Page 17811]]

Export Price

    In accordance with section 772(a) of the Tariff Act of 1930, as 
amended (the Act), export price (EP) is the price at which the first 
sale of the subject merchandise is sold (or agreed to be sold) by the 
producer or exporter of subject merchandise outside of the United 
States market prior to the date of importation. We classified all of 
Saha Thai's sales to its U.S. customers as EP sales because, as in 
previous segments of the proceeding, we found that Saha Thai is not 
affiliated with its distributors, which are the first purchasers in the 
United States. See, e.g., 2002-2003 AR Final Results.
    In accordance with section 772(c)(2) of the Act, we made deductions 
from the gross unit price for foreign inland freight, foreign brokerage 
and handling, foreign inland insurance, bill of lading charges, 
international freight, lighterage charges, U.S. brokerage and handling 
charges, and U.S. duty.
    Section 772(c)(1)(B) of the Act states that the EP should be 
increased by the amount of any import duties ``imposed by the country 
of exportation which have been rebated, or which have not been 
collected, by reason of the exportation of the subject merchandise to 
the United States.'' Saha Thai claimed an adjustment to EP for the 
amount of duties exempted on its imports of hot rolled steel coil into 
a bonded warehouse. In determining whether an adjustment should be made 
to EP for this exemption, we look for a reasonable link between the 
duties imposed and those rebated or exempted. We do not require that 
the imported input be traced directly from importation through 
exportation. We do require, however, that the company meet our ``two-
pronged'' test in order for this addition to be made to EP. The first 
element is that the import duty and rebate or exemption be directly 
linked to, and dependent on, one another; and the second element is 
that the company must demonstrate that there were sufficient imports of 
the imported material to account for the duty drawback paid for the 
export of the manufactured product. See Wheatland Tube Company v. 
United States, Slip Op. 06-8 at 33 (CIT January 17, 2006); see also 
Allied Tube & Conduit Corp. v. United States, 374 F. Supp. 2d at 1261 
(CIT 2005); Rajinder Pipes Ltd. v. United States, 70 F. Supp. 2d 1350, 
1358 (CIT 1999).
    Saha Thai has met our ``two-pronged'' test to make this addition to 
EP. However, we are making a downward adjustment to the amount of this 
addition to reflect Saha Thai's own actual yield loss adjustment rate 
as we did in the last completed administrative review. See 2002-2003 AR 
Preliminary Results at 18540. For additional information, see the 
``Memorandum from Arrowsmith/Lobo, Case Analysts, through Dana 
Mermelstein, Program Manager; Analysis of Saha Thai Steel Pipe Company, 
Ltd. for the Preliminary Results,'' (``Preliminary Analysis 
Memorandum'') dated March 31, 2006.

Calculation of Normal Value

Home Market Viability: In accordance with sections 773(a)(1)(B) and (C) 
of the Act, to determine whether there was sufficient volume of sales 
in the home market and/or in third country markets to serve as a viable 
basis for calculating normal value (NV), we compared Saha Thai's volume 
of home market sales of foreign like product to the volume of U.S. 
sales of subject merchandise. Pursuant to sections 773(a)(1)(B) and (C) 
of the Act and section 351.404(b) of the Department's regulations, 
because the volume of Saha Thai's home market sales of foreign like 
product was greater than five percent of the volume of U.S. sales of 
the subject merchandise, we determine the home market to be viable.
Affiliated-Party Transactions and Arm's-Length Test: The Department's 
practice with respect to the use of home market sales to affiliated 
parties for NV is to determine whether such sales are at arm's-length 
prices. See 19 CFR 351.403(c). Saha Thai made sales in the home market 
to affiliated and unaffiliated customers. To test whether the sales to 
affiliates were made at arm's-length prices, we compared the starting 
prices of sales to affiliated and unaffiliated customers net of all 
movement charges, direct selling expenses, discounts, and packing. 
Where the price to the affiliated party was, on average, within a range 
of 98 to 102 percent of the price of the same or comparable merchandise 
to the unaffiliated parties, we determined that the sales made to the 
affiliated party were at arm's length. See Antidumping Proceedings: 
Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186 
(November 15, 2002). In accordance with the Department's practice, in 
our margin analysis, we only included those sales to affiliated parties 
that were made at arm's length. We did not include in our analysis 
sales made to affiliated parties when they failed the arm's length 
test. Where the affiliated party transactions did not pass the arm's-
length test, these sales have been excluded from the NV calculation and 
we instructed Saha Thai to report, for each reseller, the first sale to 
an unaffiliated customer.
COP Analysis: In accordance with section 773(b)(2)(A)(ii) of the Act, 
there were reasonable grounds to suspect that Saha Thai had made home 
market sales at prices below its cost of production (COP) in this 
review because the Department disregarded Saha Thai sales that failed 
the cost test in the 2002-2003 administrative review (the most recently 
completed administrative review at the time we issued our antidumping 
duty questionnaire in the instant review). See 2002-2003 AR Preliminary 
Results and 2002-2003 AR Final Results.
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of Saha Thai's cost of materials and fabrication for 
the foreign like product, plus amounts for general and administrative 
expenses, and interest expenses. We relied on the COP information as 
reported by Saha Thai in the December 9, 2005 supplemental Section D 
questionnaire response.
Cost Test: In accordance with section 773(b) of the Act, we compared 
the COP to the home market sales price (less any applicable movement 
charges and discounts) of the foreign like product on a product-
specific basis in order to determine whether home market sales had been 
made at prices below COP.
    In determining whether to disregard sales below the COP, and in 
accordance with section 773(b)(1) of the Act, we examined whether (1) 
such sales were made within an extended period of time in substantial 
quantities and (2) were not at prices which permitted the recovery of 
all costs within a reasonable period of time in the normal course of 
trade.
    In accordance with section 773(b)(2)(C) of the Act, when less than 
20 percent of the respondent's sales of a given product were at prices 
less than the COP, we did not disregard any below-cost sales of that 
product because we determined that the below-cost sales of that product 
were not made in ``substantial quantities.'' When 20 percent or more of 
the respondent's sales of a given product during the period of review 
were at prices less than the COP, in accordance with sections 
773(b)(2)(B) and (C) of the Act, we determined such sales to have been 
made in substantial quantities within an extended period of time. In 
such cases, based on weighted average costs in the cost reference 
period, we determined that these sales were made at prices which would 
not permit recovery of all costs within a reasonable period of time, in 
accordance with section 773(b)(2)(D) of the Act. Based on this test, we 
disregarded sales below cost.
Constructed Value: In accordance with section 773(a)(4) of the Act, we 
used

[[Page 17812]]

constructed value (CV) as the basis for NV when there were no 
contemporaneous sales of identical or similar merchandise in the 
comparison market that passed the cost test and for a very small 
quantity of U.S. sales of a particular type of subject merchandise, 
where there were no appropriate identical or similar matches. We 
calculated CV in accordance with section 773(e) of the Act, based on 
the sum of Saha Thai's cost of materials, fabrication, selling, general 
and administrative expenses (SG&A), profit, and packing. In accordance 
with section 773(e)(2)(A) of the Act, we based SG&A and profit on the 
actual amounts incurred and realized by Saha Thai in connection with 
the production and sale of the foreign like product in the ordinary 
course of trade, for consumption in the foreign country. For selling 
expenses, we used the average of the selling expenses reported for home 
market sales that passed the cost test, weighted by the total quantity 
of those sales. For profit, we first calculated the difference between 
the home market sales value and its corresponding COP, and divided the 
difference by this COP. We then multiplied this percentage by the COP 
for the respective U.S. model to derive a profit amount.
Home Market Price: To calculate Saha Thai's home market net price, we 
deducted billing adjustments, discounts, home market credit expenses, 
warehousing, and inland freight, where appropriate. In addition, 
pursuant to section 773(a)(6) of the Act, we deducted home market 
packing costs and added U.S. packing costs, U.S. credit expenses, and 
U.S. bank charges.

Level of Trade

    Pursuant to section 773(a)(1)(B)(i) of the Act and the Statement of 
Administrative Action, to the extent practicable, we determine NV based 
on sales in the comparison market at the same level of trade (LOT) as 
the EP. The NV LOT is that of the starting-price sale in the comparison 
market or, when NV is based on CV, that of the sales from which we 
derive selling, general and administrative expenses and profit. For EP, 
the U.S. LOT is the level of the starting-price sale, which is usually 
from exporter to importer. To determine whether NV sales are at a 
different LOT than EP sales, we examine stages in the marketing process 
and selling functions along the chain of distribution between the 
producer and unaffiliated customer. If the comparison market sales are 
at a different LOT, and the difference affects the price comparability, 
as manifested in a pattern of consistent price differences between 
sales at different levels of trade in the country in which NV is 
determined, we make an LOT adjustment under section 773(a)(7)(A) of the 
Act. See Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 
FR 61731 (November 19, 1997).
    For the U.S. market, Saha Thai reported only one LOT for its EP 
sales. For its home market sales, Saha Thai reported that its sales to 
unaffiliated customers were at the same level of trade as its U.S. 
sales. However, Saha Thai reported that, if the Department used the 
downstream sales of its affiliated resellers for the preliminary 
results, these sales were made at a distinct level of trade, and Saha 
Thai's home market would consist of two levels of trade. While Saha 
Thai provided some information on the differences between its own 
selling functions and those of its affiliated resellers, Saha Thai did 
not provide sufficient information to justify the Department 
determining that there were two levels of trade in the home market. For 
these preliminary results the Department is treating all home market 
sales as being at a single level of trade, which is the same level of 
trade as the U.S. sales. However, the Department intends to request 
further information from Saha Thai to allow it to demonstrate that 
there are two distinct levels of trade in the home market. See 
``Preliminary Analysis Memorandum.''

Currency Conversion

    We made currency conversions pursuant to section 351.415 of the 
Department's regulations based on rates certified by the Federal 
Reserve.

Preliminary Results of Review

------------------------------------------------------------------------
                                                                Margin
                    Manufacturer/Exporter                      (percent)
------------------------------------------------------------------------
Saha Thai Steel Pipe Company, Ltd...........................        2.95
------------------------------------------------------------------------

Duty Assessment

    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.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003 (68 FR 23954). This clarification will apply to entries of 
subject merchandise during the POR produced by companies included in 
these final results of review for which the reviewed companies did not 
know their merchandise was destined for the United States. In such 
instances, we will instruct CBP to liquidate unreviewed entries at the 
all-others rate if there is no rate for any intermediate company 
involved in the transaction. For a full discussion of this 
clarification, see Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 239254 (May 6, 2003).

Cash Deposit Requirements

    The following cash deposit rates will be effective with respect to 
all shipments of Saha Thai from Thailand 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 
Saha Thai, 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 
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 other'' rate established in the LTFV 
investigation, which is 15.67 percent. These deposit rates, when 
imposed, shall remain in effect until publication of the final results 
of the next administrative review.

Public Comment

    Pursuant to section 351.224(b) of the Department's regulations, the 
Department will disclose to parties to the proceeding any calculations 
performed in connection with these preliminary results within five days 
after the date of publication of this notice. 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

[[Page 17813]]

the time limit for filing case briefs. Parties who submit arguments in 
this proceeding are requested to submit with the argument: (1) 
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 raised in 
the case and rebuttal briefs. Unless the Secretary 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 the preliminary results, unless extended. See section 
351.213(h) of the Department's regulations.

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: March 31, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E6-5118 Filed 4-6-06; 8:45 am]
BILLING CODE 3510-DS-S