[Federal Register Volume 79, Number 138 (Friday, July 18, 2014)]
[Notices]
[Pages 41959-41964]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-16876]


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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-823-815]


Suspension of Antidumping Investigation: Certain Oil Country 
Tubular Goods From Ukraine

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

DATES: Effective Date: July 10, 2014.
SUMMARY: The Department of Commerce (``the Department'') has suspended 
the antidumping duty investigation on certain oil country tubular goods 
(``OCTG'') from Ukraine. The basis for this action is an agreement 
between the Department and Interpipe, the OCTG producer/exporter 
accounting for substantially all imports of OCTG from Ukraine, wherein 
Interpipe agrees to make any necessary price revisions to eliminate 
completely any amount by which the normal value (``NV'') of this 
merchandise exceeds the U.S. price of its merchandise subject to the 
agreement.

FOR FURTHER INFORMATION CONTACT: Sally Craig Gannon or Judith Wey 
Rudman at (202) 482-0162 or (202) 482-0192, respectively; Bilateral 
Agreements Unit, Office of Policy, Enforcement and Compliance, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street & Constitution Avenue NW., Washington, DC, 20230.

SUPPLEMENTARY INFORMATION:

Background

    On July 22, 2013, the Department initiated an antidumping duty 
investigation under section 732 of the Tariff Act of 1930, as amended 
(``the Act'') to determine whether imports of OCTG from Ukraine are 
being, or are likely to be, sold in the United States at less than fair 
value (``LTFV''). See Certain Oil Country Tubular Goods from India, the 
Republic of Korea, the Republic of the Philippines, Saudi Arabia, 
Taiwan, Thailand, the Republic of Turkey, Ukraine, and the Socialist 
Republic of Vietnam: Initiation of Antidumping Duty Investigations, 78 
FR 45505 (July 29, 2013). On August 16, 2013, the United States 
International Trade Commission (``ITC'') notified the Department of its 
affirmative preliminary injury determination in this case. See Certain 
Oil Country Tubular Goods From India, Korea, The Philippines, Saudi 
Arabia, Taiwan, Thailand, Turkey, Ukraine, and Vietnam, Inv. Nos. 701-
TA-499-500 and 731-TA-1215-1223 (Preliminary) USITC Pub. No. 4422, 78 
FR 52213 (August 22, 2013). On February 14, 2014, the Department 
preliminarily determined that OCTG is being, or is likely to be, sold 
in the United States at LTFV, as provided in section 733 of the Act. On 
this same date, the Department also preliminarily determined that there 
is not a reasonable basis to believe or suspect that critical 
circumstances exist with respect to OCTG from Ukraine and postponed the 
final determination in this investigation until no later than July 10, 
2014. See Certain Oil Country Tubular Goods From Ukraine: Preliminary 
Determination of Sales at Less Than Fair Value, Negative Preliminary 
Determination of Critical Circumstances, and Postponement of Final 
Determination, 79 FR 10482 (February 25, 2014) (``Preliminary 
Determination'').
    The Department and a representative of Interpipe initialed a 
proposed agreement suspending this investigation on June 10, 2014. On 
June 10, 2014, we invited interested parties to provide written 
comments on the proposed suspension agreement by no later than the 
close of business on June 17, 2014. In response to our request for 
comments, we received comments from Interpipe and from petitioners in 
this proceeding (i.e., Maverick Tube Corporation; United States Steel 
Corporation; Boomerang Tube LLC; EnergeX, division of JMC Steel Group; 
Northwest Pipe Company; Tejas Tubular Products, Inc.; TMK IPSCO; Welded 
Tube USA, Inc.; Wheatland Tube Company; and Vallourec Star L.P. 
(collectively, ``petitioners'')) on June 17, 2014. We have taken these 
comments into consideration for the final version of the suspension 
agreement.
    The Department and a representative of Interpipe signed the final 
suspension agreement on July 10, 2014. See Agreement Suspending the 
Antidumping Duty Investigation on Certain Oil Country Tubular Goods 
from Ukraine, signed on July 10, 2014 (``Suspension Agreement''), 
attached hereto in Annex I. Pursuant to section 734(g) of the Act, the 
investigation was continued based upon requests by Interpipe and 
petitioners. If the ITC's final injury determination is negative, the 
Suspension Agreement will have no force or effect and the investigation 
will be terminated, pursuant to section 734(f)(3)(A) of the Act.

Scope of Investigation

    For a complete description of the scope of the Suspension 
Agreement, see Suspension Agreement, at Appendix A.

Suspension of Investigation

    The Department consulted with the parties to the proceeding and, in 
accordance with section 734(b) of the Act, we have determined that the 
Suspension Agreement covers substantially all imports of the subject 
merchandise and will eliminate completely sales at LTFV of imported 
subject merchandise. Moreover, in accordance with section 734(d) of the 
Act, we find that the Suspension Agreement is in the public interest, 
and that the Suspension Agreement can be monitored effectively. See 
Percentage of Exports Memorandum and Public Interest and Effective 
Monitoring Assessment Memorandum, both dated July 10, 2014. We find, 
therefore, that the criteria for suspension of an investigation 
pursuant to sections 734(b) and (d) of the Act have been met. The terms 
and conditions of this Suspension Agreement, signed July 10, 2014, are 
set forth in Annex I to this notice.
    Pursuant to section 734(f)(2)(A) of the Act, the suspension of 
liquidation of all entries of OCTG from Ukraine entered, or withdrawn 
from warehouse, for consumption, as directed in the Preliminary 
Determination, is hereby

[[Page 41960]]

terminated. Any cash deposits on entries of OCTG from Ukraine posted 
pursuant to section 733(d)(1)(B) shall be refunded.

Administrative Protective Order Access

    The Administrative Protective Order (``APO'') the Department 
granted in the investigation segment of this proceeding remains in 
place. While the investigation is suspended, parties subject to the APO 
may retain, but may not use, information received under that APO. All 
parties wishing access to business proprietary information submitted 
during the administration of the Suspension Agreement must submit new 
APO applications in accordance with the Department's regulations 
currently in effect. See section 777(c)(1) of the Act; 19 CFR 351.103. 
An APO for the administration of the Suspension Agreement will be 
placed on the record within five days of the date of publication of 
this notice in the Federal Register.
    We are publishing this notice in accordance with section 
734(f)(1)(A) of the Act and 19 CFR 351.208(g)(2).

    Dated: July 10, 2014.
Ronald K. Lorentzen,
Acting Assistant Secretary for Enforcement and Compliance.

Attachment

ANNEX I

Agreement Suspending the Antidumping Duty Investigation on Certain Oil 
Country Tubular Goods from Ukraine

    Pursuant to section 734(b) of the Tariff Act of 1930, as amended 
(19 U.S.C. Sec.  1673c(b)) (``the Act''), and 19 CFR 351.208 (the 
``Regulations''), the U.S. Department of Commerce (the ``Department'') 
and the signatory producers/exporters of Certain Oil Country Tubular 
Goods from Ukraine (``Signatories'') enter into this suspension 
agreement (``Agreement''). On the basis of this Agreement, on the 
effective date of this Agreement, the Department shall suspend its 
antidumping duty investigation initiated on July 22, 2013 (78 FR 45505 
(July 29, 2013)) with respect to Certain Oil Country Tubular Goods 
(``OCTG'') from Ukraine, subject to the terms and provisions set forth 
below.
(A) Product Coverage
    For purposes of this Agreement, the merchandise covered is OCTG, as 
described in Appendix A.
(B) U.S. Import Coverage
    The signatory producers/exporters, collectively, are the producers 
and exporters in Ukraine that accounted for substantially all (not less 
than 85 percent) of the subject merchandise imported into the United 
States, as provided in the Department's regulations at 19 CFR 
351.208(c). The Department may, at anytime during the period of the 
Agreement, require additional producers/exporters in Ukraine to sign 
the Agreement in order to ensure that not less than substantially all 
imports of merchandise described in Appendix A into the United States 
are covered by the Agreement.
    In reviewing the operation of the Agreement for the purpose of 
determining whether this Agreement has been violated or is no longer in 
the public interest, the Department will consider imports into the 
United States from all sources of the merchandise described in Section 
A of the Agreement. For this purpose, the Department will consider 
factors including, but not limited to, the following: volume of trade, 
pattern of trade, whether or not the reseller is an original equipment 
manufacturer, and the reseller's export price (``EP'').
(C) Basis of the Agreement
    On and after the effective date of the Agreement, each signatory 
producer/exporter individually agrees to make any necessary price 
revisions to eliminate completely any amount by which the normal value 
(``NV'') of this merchandise exceeds the U.S. price of its merchandise 
subject to the Agreement. For this purpose, the Department will 
determine the NV in accordance with section 773(e) of the Act and U.S. 
price in accordance with section 772 of the Act. For details of the 
Department's calculation methodology under this Agreement, see Appendix 
B.
    (1) For the period from the effective date of this Agreement 
through the release of the first NVs, each signatory producer/exporter 
agrees not to sell its merchandise subject to this Agreement in the 
United States.
    (2) For all sales occurring on or after the date of issuance of the 
first NVs, through December 31, 2014 (``Interim Period''), each 
signatory producer/exporter issued NVs by the Department agrees not to 
sell its merchandise subject to this Agreement to any unaffiliated 
purchaser in the United States at prices that are less than the NVs of 
the merchandise, as determined by the Department on the basis of the 
sales and cost information submitted by the signatory producer/exporter 
in the course of the underlying antidumping duty investigation. The 
final NVs for a signatory producer/exporter during this Interim Period 
shall be issued within 15 days after the preliminary NVs are issued 
pursuant to Section E(2) of this Agreement (i.e., within 30 days after 
the effective date of the Agreement).\1\ See Appendix C for details on 
a special adjustment for the Interim Period NVs.
---------------------------------------------------------------------------

    \1\ The issuance of the NVs for any given signatory may be 
delayed for reasons including: (1) issues related to the underlying 
antidumping duty investigation, as applicable; (2) to allow 
sufficient time for signatories to respond to the Department's 
request for sales and cost data; and/or (3) to resolve issues raised 
in comments from interested parties or by the Department. In 
accordance with section 773(f) of the Act, the Department will 
examine relevant prices and costs and, for any sales period, may 
disregard or adjust particular prices or costs when the prices are 
not in the ordinary course of trade, the costs are not in accordance 
with the generally-accepted accounting principles, the costs do not 
reasonably reflect the costs associated with the production and sale 
of the merchandise, or in other situations provided for in the Act 
or the Department's regulations. Examples of possible areas in which 
adjustments may be necessary include, but are not limited to, costs 
related to energy, depreciation, transactions among affiliates, 
barter transactions, as well as items that are not recognized by the 
home country's generally accepted accounting principles.
---------------------------------------------------------------------------

    (3) For all sales occurring after the Interim Period, each 
signatory producer/exporter issued NVs by the Department agrees not to 
sell its merchandise subject to this Agreement to any unaffiliated 
purchaser in the United States at prices that are less than the NV of 
the merchandise, as determined by the Department on the basis of 
information submitted to the Department not later than the dates 
specified in Section D of this Agreement. Normally, preliminary NVs for 
the January through June semi-annual period will be provided to the 
parties by November 20, and the final NVs will be provided to the 
parties by December 20. Normally, the preliminary NVs for the July 
through December semi-annual period will be provided to the parties by 
May 20, and the final NVs will be provided to the parties by June 
20.\2\ These NVs shall apply to sales occurring during the semi-annual 
period (i.e., January through June or July through December, as 
applicable), beginning on the first day of the month following the date 
the Department provides the NVs. However, if the Department's issuance 
of the final NVs is delayed past the end of semi-annual period (i.e., 
June 30 or December 31, as applicable) for any reason, the NVs shall be 
effective immediately upon issuance.
---------------------------------------------------------------------------

    \2\ See Footnote 1.
---------------------------------------------------------------------------

(D) Data Reporting and Monitoring
    Each signatory producer/exporter will supply to the Department all 
information that the Department decides is necessary to ensure that the 
producer/exporter is in full compliance with the terms of the 
Agreement. As explained

[[Page 41961]]

below, the Department will provide each signatory producer/exporter a 
detailed request for information and prescribe a required format and 
method of data compilation, not later than the beginning of each 
reporting period. As noted in Section C(2) of this Agreement, the first 
NVs issued for the signatory producer/exporter may be based on sales 
and cost information submitted by the signatory in the underlying 
antidumping duty investigation, and the resulting NVs issued will apply 
to sales occurring between the issuance date of the final NVs and 
December 31, 2014 (i.e., during the Interim Period).
(1) Sales Information
    The Department will require each producer/exporter to report each 
sale of the merchandise subject to the Agreement, either directly or 
indirectly to unaffiliated purchasers in the United States, as well as 
sales in the comparison market (home or third country market, as 
appropriate), including each adjustment applicable to each sale, as 
specified by the Department.
    The first report of sales data, pursuant to Section C(3) of this 
Agreement, shall be submitted to the Department, in the prescribed 
format and using the prescribed method of data compilation, not later 
than August 15, 2014, and shall contain the specified sales information 
covering the period January 1, 2014, through June 30, 2014. Subsequent 
reports of sales data shall be submitted to the Department not later 
than July 31 and January 31 of each year. Each July 31 report shall 
contain the specified information for the semi-annual period ending on 
June 30 of that year; each January 31 report shall contain the 
specified information for the semi-annual period ending on December 31 
of the prior year, except that if the Department receives information 
that a possible violation of the Agreement may have occurred, the 
Department may request sales data on a more frequent basis. All reports 
must be submitted to the Department in accordance with the requirements 
of the Department's electronic filing system, IA ACCESS.
(2) Cost Information
    Signatory producers/exporters must request NVs for all subject 
merchandise that will be sold in the United States. For those products 
which the producer/exporter is requesting NVs, the Department will 
require each producer/exporter to report, in the prescribed format and 
using the prescribed method of data compilation, the following: its 
actual cost of manufacturing; selling, general and administrative 
(``SG&A'') expenses; packing costs; and profit data on a semi-annual 
basis. As indicated in Appendix B to this Agreement, profit will be 
reported by the producers/exporters on a semi-annual basis. Each such 
producer/exporter also must report anticipated increases in production 
costs in the semi-annual period in which the information is submitted 
resulting from factors such as anticipated changes in production yield, 
changes in production process, changes in production quantities, or 
changes in production facilities.
    The first report of cost data, pursuant to Section C(3) of this 
Agreement, shall be submitted to the Department not later than 
September 2, 2014, and shall contain the specified cost data covering 
the period January 1, 2014, through June 30, 2014. Each subsequent 
report shall be submitted to the Department not later than August 15 
and February 15 of each year. Each August 15 report shall contain the 
specified information for the semi-annual period ending on June 30 of 
that year; each February 15 report shall contain the specified 
information for the semi-annual period ending on December 31 of the 
prior year. All reports must be submitted to the Department in 
accordance with the requirements of the Department's electronic filing 
system, IA ACCESS.
(3) Special Adjustment of Normal Value
    If the Department determines that the NV it determined for a 
previous semi-annual period was erroneous because the reported costs 
for that period were inaccurate or incomplete, or for any other reason, 
the Department may adjust NV in a subsequent period or periods, unless 
the Department determines that Section F of the Agreement applies.
(4) Verification
    Each producer/exporter agrees to permit full verification of all 
cost and sales information semi-annually, or more frequently, as the 
Department deems necessary.
(5) Bundling or Other Arrangements
    Producers/exporters agree not to circumvent the Agreement. In 
accordance with the dates set forth in Section D(1) of this Agreement, 
producers/exporters will submit a written statement to the Department 
certifying that the sales reported herein were not, or are not part of 
or related to, any bundling arrangement, on-site processing 
arrangement, discounts/free goods/financing package, swap or other 
exchange where such arrangement is designed to circumvent the basis of 
the Agreement.
    Where there is reason to believe that such an arrangement does 
circumvent the basis of the Agreement, the Department will request 
producers/exporters to provide within 15 days all particulars regarding 
any such arrangement, including, but not limited to, sales information 
pertaining to covered and non-covered merchandise that is manufactured 
or sold by producers/exporters. The Department will accept written 
comments, not to exceed 30 pages, from all parties no later than 15 
days after the date of receipt of such producer/exporter information.
    If the Department, after reviewing all submissions, determines that 
such an arrangement circumvents the basis of the Agreement, it may, as 
it deems most appropriate, utilize one of two options: (1) the amount 
of the effective price discount resulting from such arrangement shall 
be reflected in the NV in accordance with Section D(3) of this 
Agreement, or (2) the Department shall determine that the Agreement has 
been violated and take action according to the provisions under Section 
F of this Agreement.
(6) Rejection of Submissions
    The Department may reject any information submitted after the 
deadlines set forth in this section or any information which it is 
unable to verify to its satisfaction. If information is not submitted 
in a complete and timely fashion, or is not fully verifiable, the 
Department may calculate the NV, and/or U.S. price, based on facts 
otherwise available, as it determines appropriate, unless the 
Department determines that Section F of this Agreement applies.
(E) Disclosure and Comment
    (1) The Department may make available to representatives of each 
interested party to the proceeding, under appropriately drawn 
administrative protective orders, business proprietary information 
submitted to the Department during the reporting period as well as the 
results of its analysis under section 777 of the Act.
    (2) For sales during the Interim Period, the Department will 
disclose to each producer/exporter being issued NVs the preliminary 
results and methodology of the Department's calculations of the NVs 
within 15 days after the effective date of this Agreement, subject to 
the possible constraints noted in footnote 1 of Section C(2) 
of this Agreement. At that time, the Department may also make available 
such information to the interested parties to the proceeding in 
accordance with this section.

[[Page 41962]]

    (3) Normally, by November 20 and May 20 of each ensuing semi-annual 
sales period, the Department will disclose to each producer/exporter 
being issued NVs the preliminary results and methodology of the 
Department's calculations of the NVs. At that time, the Department may 
also make available such information to the interested parties to the 
proceeding, in accordance with this section.
    (4) Not later than five days after the dates of disclosure under 
Sections E(2) and E(3), respectively, of this Agreement, the parties to 
the proceeding may submit written comments to the Department, not to 
exceed 15 pages. Not later than three days after written comments are 
due, the parties to the proceeding may submit written rebuttal comments 
to the Department, not to exceed 15 pages. After reviewing these 
submissions, the Department will provide to each producer/exporter its 
final NVs, as provided in Sections C(2) and C(3), respectively, of this 
Agreement. In addition, the Department may provide such information to 
interested parties, as specified in this section.
(F) Violations of the Agreement
    If the Department determines that the Agreement is being or has 
been violated or no longer meets the requirements of sections 734(b) or 
(d) of the Act, the Department shall take action it determines 
appropriate under section 734(i) of the Act and the Regulations.
(G) Other provisions
    In entering into the Agreement, the signatory producers/exporters 
do not admit that any sales of merchandise subject to the Agreement 
have been made at less than fair value.
(H) Termination or Withdrawal
    This Agreement shall terminate three years after the effective date 
of this Agreement, on July 10, 2017. At that time, in the event the 
antidumping duty investigation with respect to OCTG from Ukraine is 
continued pursuant to section 734(g) of the Act and results in 
affirmative determinations, as referenced in sections 735(a)(1) and 
(b)(1) of the Act, by the Department and the International Trade 
Commission respectively, the Department shall issue an antidumping duty 
order and order the suspension of liquidation on entries of OCTG from 
Ukraine in accordance with section 735(c) of the Act. Alternatively, at 
that time, in the event there was no such continuation, the Department 
shall resume the investigation.
    Before such termination described above, the Department or any of 
the Signatories may withdraw from the Agreement at any time upon 
notice, respectively, to the Signatories or the Department. Withdrawal 
shall be effective 60 days after such notice is given to the 
Department.
    Upon withdrawal, the Department shall follow the procedures 
outlined in section 734(i)(1) of the Act.
(I) Definitions
    For purposes of the Agreement, the following definitions apply:
    (1) ``U.S. price'' means the export price or constructed export 
price at which merchandise is sold by the producer or exporter to the 
first unaffiliated purchaser in the United States, including the amount 
of any discounts, rebates, price protection or ship and debit 
adjustments, and other adjustments affecting the net amount paid or to 
be paid by the unaffiliated purchaser, as determined by the Department 
under section 772 of the Act.
    (2) ``Normal value'' means the constructed value (``CV'') of the 
merchandise, as determined by the Department under section 773 of the 
Act and the corresponding sections of the Department's regulations, and 
as adjusted in accordance with Appendix B to this Agreement.
    (3) ``Producer/Exporter'' means (1) the foreign manufacturer or 
producer, (2) the foreign producer or reseller which also exports, and 
(3) the affiliated person by whom or for whose account the merchandise 
is imported into the United States, as defined in section 771(28) of 
the Act.
    (3) ``Date of sale'' means the date of the invoice as recorded in 
the exporter's or producer's records kept in the ordinary course of 
business, unless the Department determines that a different date better 
reflects the date on which the exporter or producer establishes the 
material terms of sale, as determined by the Department under its 
regulations.
    The effective date of this Agreement is July 10, 2014.

    For Ukraine Producers/Exporters:

-----------------------------------------------------------------------
Mark S. McConnell
Counsel for Interpipe \3\
---------------------------------------------------------------------------

    \3\ Interpipe Europe S.A.; Interpipe Ukraine LLC; PJSC Interpipe 
Niznedneprovsky Tube Rolling Plant (aka Interpipe NTRP); LLC 
Interpipe Niko Tube; North American Interpipe, Inc. (collectively, 
Interpipe).
---------------------------------------------------------------------------

Date:------------------------------------------------------------------

    For U.S. Department of Commerce:

-----------------------------------------------------------------------
Ronald K. Lorentzen,
Acting Assistant Secretary for, Enforcement and Compliance.
Date:------------------------------------------------------------------

Appendix A: Product Coverage

Agreement Suspending the Antidumping Investigation on Certain Oil 
Country Tubular Goods from Ukraine

    The merchandise subject to this Agreement is certain OCTG from 
Ukraine, which are hollow steel products of circular cross-section, 
including oil well casing and tubing, of iron (other than cast iron) 
or steel (both carbon and alloy), whether seamless or welded, 
regardless of end finish (e.g., whether or not plain end, threaded, 
or threaded and coupled) whether or not conforming to American 
Petroleum Institute (``API'') or non-API specifications, whether 
finished (including limited service OCTG products) or unfinished 
(including green tubes and limited service OCTG products), whether 
or not thread protectors are attached. The scope of the 
investigations also covers OCTG coupling stock.
    Excluded from the scope of this Agreement are: casing or tubing 
containing 10.5 percent or more by weight of chromium; drill pipe; 
unattached couplings; and unattached thread protectors. The 
merchandise subject to this Agreement is currently classified in the 
Harmonized Tariff Schedule of the United States (``HTSUS'') under 
item numbers: 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, 7304.29.31.10, 
7304.29.31.20, 7304.29.31.30, 7304.29.31.40, 7304.29.31.50, 
7304.29.31.60, 7304.29.31.80, 7304.29.41.10, 7304.29.41.20, 
7304.29.41.30, 7304.29.41.40, 7304.29.41.50, 7304.29.41.60, 
7304.29.41.80, 7304.29.50.15, 7304.29.50.30, 7304.29.50.45, 
7304.29.50.60, 7304.29.50.75, 7304.29.61.15, 7304.29.61.30, 
7304.29.61.45, 7304.29.61.60, 7304.29.61.75, 7305.20.20.00, 
7305.20.40.00, 7305.20.60.00, 7305.20.80.00, 7306.29.10.30, 
7306.29.10.90, 7306.29.20.00, 7306.29.31.00, 7306.29.41.00, 
7306.29.60.10, 7306.29.60.50, 7306.29.81.10, and 7306.29.81.50.
    The merchandise subject to this Agreement may also enter under 
the following HTSUS item numbers: 7304.39.00.24, 7304.39.00.28, 
7304.39.00.32, 7304.39.00.36, 7304.39.00.40, 7304.39.00.44, 
7304.39.00.48, 7304.39.00.52, 7304.39.00.56, 7304.39.00.62, 
7304.39.00.68, 7304.39.00.72, 7304.39.00.76, 7304.39.00.80, 
7304.59.60.00, 7304.59.80.15, 7304.59.80.20, 7304.59.80.25, 
7304.59.80.30, 7304.59.80.35, 7304.59.80.40, 7304.59.80.45, 
7304.59.80.50, 7304.59.80.55, 7304.59.80.60, 7304.59.80.65, 
7304.59.80.70, 7304.59.80.80, 7305.31.40.00, 7305.31.60.90, 
7306.30.50.55, 7306.30.50.90, 7306.50.50.50, and 7306.50.50.70.
    The HTSUS subheadings above are provided for convenience and 
customs purposes only. The written description of the scope of the 
product coverage is dispositive.

Appendix B: Principles of Cost

General Framework

    The cost information reported to the Department that will form 
the basis of the

[[Page 41963]]

normal value (``NV'') calculations for purposes of the Agreement 
must be: \4\
---------------------------------------------------------------------------

    \4\ See Footnote 1 in Section C(2) of this Agreement.
---------------------------------------------------------------------------

     Comprehensive in nature and based on a reliable 
accounting system (i.e., a system based on well-established 
standards that can be tied to the audited financial statements);
     Calculated on a semi-annual weighted-average basis of 
the plants or cost centers manufacturing the product;
     Based on fully-absorbed costs of production, including 
any downtime;
     Valued in accordance with generally-accepted accounting 
principles; and
     Reflective of appropriately allocated common costs so 
that the costs necessary for the manufacturing of the product are 
not absorbed by other products.
    Additionally, a separate figure should be reported for each 
major cost component making up the cost of production.

Cost of Manufacturing

    Costs of manufacturing (``COM'') are reported by major cost 
category and for major stages of production. Weighted-average costs 
are used for a product that is produced at more than one facility, 
based on the product's cost at each facility and relative production 
quantities.
    Direct materials costs include the acquisition costs of all 
materials that are identified as part of the finished product and 
may be traced to the finished product in an economically feasible 
way. In contrast to indirect materials, direct materials are applied 
and assigned directly to a finished product. Direct materials costs 
should include transportation charges, import duties, and other 
expenses normally associated with obtaining the materials that 
become an integral part of the finished product.
    Direct labor costs are the labor costs identified with a 
specific product. These costs are not allocated among products 
except when two or more products are produced at the same cost 
center. Direct labor costs should include salary, bonus and overtime 
pay, training expenses, and all fringe benefits. Any contracted-
labor expense should reflect the actual billed cost.
    Variable manufacturing overhead costs include those production 
costs, other than direct materials or direct labor, that generally 
vary in total with changes in the volume of merchandise produced at 
a given level of operations. Variable manufacturing overhead costs 
may include indirect materials (e.g., supplies used in the 
manufacturing process), indirect labor (e.g. supervisory labor paid 
on an hourly basis), utilities (e.g., energy), and other variable 
overhead costs. Because variable overhead costs are typically 
incurred for an entire production line or factory, the costs must be 
allocated to the products produced using a reasonable basis.
    Fixed manufacturing overhead costs include those production 
costs that generally do not vary in total with changes in the volume 
of merchandise produced at a given level of operations. Fixed 
manufacturing overhead costs may include the costs incurred for 
building or equipment rental, depreciation, supervisory labor paid 
on a salary basis, plant property taxes, and factory administrative 
costs. In addition, fixed manufacturing overhead costs include 
research and development (``R&D'') costs which relate specifically 
to the subject merchandise.

Cost of Production

    Cost of production (``COP'') is equal to the cost of materials 
and fabrication or other processing of any kind employed in 
producing the merchandise plus an amount for selling, general and 
administrative expenses (``SG&A''), and the cost of all containers 
and coverings, in the home market (``HM'').\5\
---------------------------------------------------------------------------

    \5\ If for some reason the home market is not viable, for part 
or all of the applicable costs and expenses references to home 
market costs and/or expenses in this Appendix B are understood to 
refer to third-country market costs and/or expenses.
---------------------------------------------------------------------------

    SG&A expenses are those expenses incurred for the operation of 
the corporation as a whole and not directly related to the 
manufacture of a particular product. They include corporate general 
and administrative expenses, financing expenses, and general 
research and development expenses. Additionally, direct and indirect 
selling expenses incurred in the HM for sales of the product under 
investigation are included. Such expenses are allocated to COM using 
a ratio of SG&A costs.

Constructed Value

    Constructed value (``CV'') is equal to the cost of materials and 
fabrication or other processing of any kind employed in producing 
the merchandise plus an amount for SG&A, the cost of all containers 
and coverings for exportation to the United States, plus an amount 
for profit.

Calculation of Suspension Agreement Normal Values

    NVs (for purposes of the Agreement) are calculated by adjusting 
the CV and are provided for both EP and CEP transactions. In effect, 
expenses uniquely associated with the covered products sold in the 
HM are subtracted from the CV, and such expenses uniquely associated 
with the covered products sold in the United States are added to the 
CV to calculate the NV.
    ``Export Price''--Generally, a U.S. sale is classified as an 
export price sale when the first sale to an unaffiliated person 
occurs before the goods are imported into the United States. In 
cases where the foreign manufacturer knows or has reason to believe 
that the merchandise is ultimately destined for the United States, 
the manufacturer's sale is the sale subject to review. If, on the 
other hand, the manufacturer sold the merchandise to a foreign 
trader without knowledge of the trader's intention to export the 
merchandise to the United States, then the trader's first sale to an 
unaffiliated person is the sale subject to review. For EP NVs, the 
CV is adjusted for movement costs and differences in direct selling 
expenses such as commissions, credit, warranties, technical 
services, advertising, and sales promotion.
    ``Constructed Export Price''--Generally, a U.S. sale is 
classified as a constructed export price sale when the first sale to 
an unaffiliated person occurs after importation. However, if the 
first sale to an unaffiliated person is made by a person in the 
United States affiliated with the foreign exporter, constructed 
export price applies even if the sale occurs prior to importation, 
unless the U.S. affiliate performs only clerical functions in 
connection with the sale. For CEP NVs, the CV is adjusted similar to 
EP sales, with differences for adjustment to U.S. and HM indirect 
selling expenses.
    HM direct selling expenses are expenses that are incurred as a 
direct result of a sale. These include such expenses as commissions, 
advertising, discounts and rebates, credit, warranty expenses, 
freight costs, etc. Certain direct selling expenses are treated 
individually, including:

--Commission expenses, i.e., payments to unaffiliated parties for 
sales in the HM.
--Credit expenses, i.e., expenses incurred for the extension of 
credit to HM customers.
--Movement expenses, e.g., foreign inland freight and insurance 
expenses, warehousing, and foreign brokerage, handling and port 
charges.

    U.S. direct selling expenses are the same as HM direct selling 
expenses except that they are incurred for sales in the United 
States. Movement expenses are additional expenses associated with 
importation into the United States, which typically include: U.S. 
inland freight and insurance expenses; U.S. brokerage, handling and 
port charges; U.S. Customs duties, U.S. warehousing; and 
international freight and insurance.
    U.S. indirect selling expenses include general fixed expenses 
incurred by the U.S. sales subsidiary or affiliated exporter for 
sales to the United States and may also include a portion of 
indirect expenses incurred in the HM for export sales.
    The EP and CEP NVs are calculated as follows:

For EP Transactions

+ Direct Materials
+ Direct Labor
+ Factory Overhead
= Cost of Manufacturing (COM)
+ Home Market SG&A
= Cost of Production (COP)
+ U.S. Packing
+ Profit
= Constructed Value
+ U.S. Direct Selling Expense
+ U.S. Commission Expense
+ U.S. Movement Expense
+ U.S. Credit Expense
- HM Direct Selling Expense
- HM Commission Expense [1]
- HM Credit Expense
= NV for EP Sales
    [1] If the company does not have HM commissions, HM indirect 
expenses are subtracted only up to the amount of the U.S. 
commissions.

For CEP Transactions

+ Direct Materials
+ Direct Labor
+ Factory Overhead
= Cost of Manufacturing (COM)
+ Home Market SG&A
= Cost of Production (COP)

[[Page 41964]]

+ U.S. Packing
+ Profit
= Constructed Value
+ U.S. Direct Selling Expense
+ U.S. Indirect Selling Expense
+ U.S. Commission Expense
+ U.S. Movement Expense
+ U.S. Credit Expense
+ U.S. Further-Manufacturing Expenses (if any)
+ CEP Profit
- HM Direct Selling Expense
- HM Commission Expense [1]
- HM Credit Expense
= NV for CEP Sales
    [1] If the company does not have HM commissions, HM indirect 
expenses are subtracted only up to the amount of the U.S. 
commissions.

Appendix C: Special Adjustment for Interim Period Normal Values

    Unique events occurred in Ukraine in the first half of 2014, 
including the National Bank of Ukraine abandoning its de facto 
exchange rate peg and switching to a flexible exchange rate regime 
in February 2014. Due to this fundamental shift in the exchange rate 
regime, as well as to other unique circumstances occurring 
throughout the period, the Department and the signatory producer/
exporter, Interpipe, agree that, for purposes of the calculation and 
issuance of Interpipe's NVs for the Interim Period (see Section C(2) 
of the Agreement), a special adjustment is appropriate to address 
the disconnect between the costs that were reported before the 
events described above and the current exchange rate.
    In order to calculate the Interim Period NVs from the period of 
investigation (``POI'') costs and expenses reported in the 
underlying investigation, the Department intends to adjust 
Interpipe's Ukrainian Hryvnia (``UAH'')-denominated costs and 
selling expenses to make them as contemporaneous as possible with 
the exchange rate that will be used to convert the UAH-denominated 
NVs to U.S. dollar-denominated NVs upon issuance. The Department 
will apply to the POI costs and expenses an adjustment factor that 
accounts for the movement in the Producer Price Index (``PPI'') 
between the average for the POI and the latest month for which there 
is data reported in the International Monetary Fund's International 
Financial Statistics. If a time gap exists between the latest month 
of PPI data available and the exchange rate to be used to convert 
the UAH-denominated NVs to U.S. dollar-denominated NVs, however, the 
Department may consider whether further adjustments are appropriate 
for this Interim Period.

[FR Doc. 2014-16876 Filed 7-17-14; 8:45 am]
BILLING CODE 3510-DS-P