[Federal Register Volume 73, Number 67 (Monday, April 7, 2008)]
[Notices]
[Pages 18749-18753]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-7200]


-----------------------------------------------------------------------

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

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
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 
from Allied Tube and Conduit Corporation and Wheatland Tube Company 
(collectively, petitioners). This review covers the period March 1, 
2006 through February 28, 2007. We preliminarily determine that U.S. 
sales of subject merchandise have been made by Saha Thai Steel Pipe 
(Public) Company, Ltd. 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

[[Page 18750]]

comment on these preliminary results. See the ``Preliminary Results of 
Review'' section of this notice.

EFFECTIVE DATE: April 7, 2008

FOR FURTHER INFORMATION CONTACT: Jacqueline Arrowsmith or Myrna Lobo, 
AD/CVD Operations, Office 6, Import Administration, International Trade 
Administration, 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 2, 2007, the Department published a notice of opportunity to 
request an administrative review of this order covering the period 
March 1, 2006 through February 28, 2007. See Antidumping or 
Countervailing Duty Order, Finding or Suspended Investigation; 
Opportunity to Request Administrative Review 72 FR 9505 (March 2, 
2007). The petitioners filed a timely request for an administrative 
review of the antidumping order with respect to exports by Saha Thai 
Steel Pipe (Public) Company, Ltd. (Saha Thai) during the period of 
review (POR). The Department published a notice of initiation of this 
antidumping duty administrative review on April 27, 2007. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews, 72 FR 92086. We received timely responses to our 
questionnaires on July 23, 2007, February 19, 2008, and March 5, 2008. 
The Department intends to request further clarification from Saha Thai 
on a few minor issues for which the information on the record of this 
administrative review is not completely clear.

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 the convenience and purposes of CBP, our 
written description of the scope is dispositive.

Analysis

Date of Sale

    Saha Thai reported contract date as the date of sale for U.S. 
sales. The Department considers invoice date to be the presumptive date 
of sale (see section 351.401(i)) of the Department's regulations). For 
purposes of this review, we examined whether invoice date or another 
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 on the contract 
date and that there are no changes outside the parameters set forth in 
the contract between contract date and invoice date. 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 most recently completed administrative reviews of 
this order. See CircularWelded Carbon Steel Pipes and Tubes from 
Thailand: Final Results of Antidumping Duty Administrative Review, 71 
54266 FR (September 14, 2006) (2004-2005 AR Final Results).
    In the home market, the date of invoice is when the material terms 
of sale are established. Therefore, we are using the invoice date as 
the date of sale for home market sales.

Export Price

    In accordance with section 772(a) of the Tariff Act of 1930, as 
amended (the Act), export price is the price at which the subject 
merchandise is first sold (or agreed to be sold) by the producer or 
exporter of subject merchandise outside of the United States to an 
unaffiliated purchaser 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., 2004-2005 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, ocean freight, lighterage 
charges, bill of lading fees, U.S. brokerage and handling charges, and 
U.S. duties.
    Section 772(c)(1)(B) of the Act states that 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 inputs 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 its rebate or exemption be directly linked to, and dependent 
upon, one another; the second element is that the company must 
demonstrate that there were sufficient imports of the imported material 
to account for the duty drawback or exemption granted for the export of 
the manufactured product. See, e.g., 2004-2005 AR Final Results and 
Certain Welded Carbon Steel Pipes and Tubes from Thailand: Final 
Results of Antidumping Duty Administrative Review, 69 FR 61649 (October 
20, 2004); see also Mittal Steel USA Inc. v. United States, Slip Op. 
07-117 (CIT 2007); and Rajinder Pipes Ltd. v. United States, 70 F. 
Supp. 2d 1350, 1358 (CIT 1999).
    For these preliminary results, we are not making an upward 
adjustment to export price for duty drawback or exemption, because Saha 
Thai has not clearly demonstrated how it met the second prong of our 
``two-pronged'' test. While Saha Thai provided data regarding imports 
into its bonded warehouse, its questionnaire response did not 
demonstrate that this imported material was sufficient to account for 
the total of the import duties exempted for the export of the 
manufactured product. However, the Department intends to provide Saha 
Thai with an opportunity to explain why the documentation it has 
already provided satisfies the second prong of our ``two-pronged'' test 
and is sufficient to allow this adjustment for the final results of 
this review.

[[Page 18751]]

Normal Value

Home Market Viability: In accordance with section 773(a)(1) of the Act, 
to determine whether there was sufficient volume of sales in the home 
market and/or a third country market to serve as a viable basis for 
calculating 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 section 773(a)(1) 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 that the home market is viable. Therefore, we used home 
market sales as the basis for NV in accordance with section 773(a)(1).
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. To examine whether home market sales were made at arm's length, 
we compared the starting price of sales to affiliated customers to the 
starting price of sales to 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 same or comparable merchandise to the unaffiliated 
parties, we determined that the sales made to the affiliated parties 
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 included only those sales to affiliated parties that were made at 
arm's length. Where the affiliated party transactions did not pass the 
arm's-length test, these sales were excluded from the NV calculation.
    For each affiliated reseller, we requested Saha Thai to report the 
first sale to an unaffiliated customer. When the affiliated reseller 
did not pass the arm's-length test, we included the sale by the 
affiliated reseller to the first unaffiliated customer in our margin 
analysis instead of the Saha Thai sales to the affiliated reseller that 
were not made at arm's-length.
COP Analysis: In accordance with section 773(b)(2)(A)(ii) of the Act, 
in this POR, there were reasonable grounds to believe or suspect that 
Saha Thai had made home market sales at prices below its cost of 
production (COP) because in the 2004-2005 administrative review (the 
most recently completed administrative review) there were sufficient 
Saha Thai sales that failed the cost test that the Department 
disregarded them in accordance with section 773(b)(1) of the Act. See 
2004-2005 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 administrative expenses, and interest 
expenses. We made some minor adjustments to Saha Thai's COP data as 
reported in its March 3, 2008 section D supplemental questionnaire 
response. For our complete analysis, see ``Analysis Memorandum of Saha 
Thai Steel Pipe (Public) Company, Ltd. for the Preliminary Results of 
the Antidumping Duty Administrative Review of Circular Welded Carbon 
Steel Pipes and Tubes from Thailand for the period 03/01/2006 through 
02/28/2007,'' (Preliminary Analysis Memorandum) dated concurrently with 
this notice.
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 COP, the Department 
examined whether such sales were (1) in substantial quantities and (2) 
not at prices which permitted the recovery of all costs within a 
reasonable period of time in the ordinary 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 
below the COP, we do not disregard any below-cost sales of that product 
that 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 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.
Home Market Price: To calculate Saha Thai's home market net price, we 
deducted discounts, inland freight, and warehousing where appropriate. 
Pursuant to section 773(a)(6)(C)(iii) and section 351.410(c) of the 
Department's regulations, we made a circumstance of sale adjustment for 
home market and U.S. credit expenses, as well as U.S. bank fees. In 
addition, pursuant to section 773(a)(6)(A) of the Act, we deducted home 
market packing costs and added U.S. packing costs. In addition, where 
applicable, we made adjustments for differences in costs attributable 
to physical characteristics pursuant to section 773(a)(6)(C)(ii) of the 
Act and section 351.410 of the Department's regulations.

Level of Trade

    Pursuant to section 773(a)(1)(B)(i) of the Act, 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 SG&A 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 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 and 
under section 351.410(c) of the Department's regulations. See, e.g., 
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 any of its affiliated resellers, these sales were 
made at a distinct level of trade, and Saha Thai's home market would 
consist of two levels of trade.
    For Saha Thai's sales made through affiliated resellers, we 
consider the relevant functions to be the selling functions of both the 
producer and the reseller (i.e., the cumulative selling functions along 
the chain of

[[Page 18752]]

distribution) for purposes of comparing the selling activities related 
to each affiliate's sale with those related to the producer's sale to 
its unaffiliated customers. If the reseller performs selling functions 
that add substantial selling activity in making the sale, we may find 
that sales by the reseller are made at a different LOT than the sales 
made by the producer.
    Saha Thai provided information about the affiliated resellers' 
marketing and selling functions performed for its sales to unaffiliated 
customers. This information is sufficient to conduct an analysis of 
whether Saha Thai's sales in the home market were made at more than one 
LOT. For those affiliated resellers whose sales did not pass the arm's 
length test, we have analyzed the information that Saha Thai provided 
regarding the marketing and selling functions for both Saha Thai and 
the affiliated resellers. Based on this analysis, we have concluded 
that Saha Thai's home market sales were made at two distinct levels of 
trade: sales directly from Saha Thai to its unaffiliated customers and 
sales from Saha Thai through its affiliated resellers to unaffiliated 
customers. For our complete analysis, see Preliminary Analysis 
Memorandum; see also Circular Welded Steel Pipes and Tubes from 
Thailand: Notice of Final Results of Antidumping Duty Administrative 
Review, 71 FR 54266 (September 14, 2006).
    We also find that all U.S. sales are made at one LOT. Furthermore, 
we find that the U.S. sales are at the same LOT as Saha Thai's home 
market sales to unaffiliated customers. See ``Level of Trade'' section 
in the Preliminary Analysis Memorandum.
    Because we have preliminarily determined that there are two 
distinct levels of trade in the home market (LOT 1 and LOT 2) and that 
the LOT in the U.S. market matches LOT 1 in the home market, we 
examined whether an LOT adjustment is warranted for those U.S. sales 
for which there might not be a match in the home market at LOT 1. In 
accordance with section 773(a)(7)(ii) of the Act, such an adjustment is 
warranted when the difference in LOT is demonstrated to affect price 
comparability, based on a pattern of consistent price differences 
between sales at different levels of trade in the home market (the 
basis for NV). Our comparison of the prices at the two LOTs in the home 
market (the basis for NV) shows that there is a pattern of price 
differences and an LOT adjustment is warranted where there are no 
matches for U.S. sales at the same LOT in the home market. See id. 
Therefore, we made an LOT adjustment in instances when U.S. sales are 
being matched with home market sales at LOT 2.

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

------------------------------------------------------------------------
                Manufacturer/Exporter                  Margin (percent)
------------------------------------------------------------------------
Saha Thai Steel Pipe (Public) Company, Ltd..........                3.87
------------------------------------------------------------------------

Assessment

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries in accordance with section 351.212 of 
the Department's regulations. The Department intends to issue 
assessment instructions for Saha Thai directly to CBP 15 days after the 
date of publication of the final results of this administrative 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 subject merchandise from Saha Thai 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 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 of the subject merchandise 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 investigated, 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 those 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 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 the 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

[[Page 18753]]

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, 2008.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.
[FR Doc. E8-7200 Filed 4-4-08; 8:45 am]
BILLING CODE 3510-DS-S