[Federal Register Volume 59, Number 4 (Thursday, January 6, 1994)]
[Notices]
[Pages 740-742]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-280]
[[Page Unknown]]
[Federal Register: January 6, 1994]
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DEPARTMENT OF COMMERCE
[A-588-702]
Certain Stainless Steel Butt-Weld Pipe and Tube Fittings From
Japan, Preliminary Results of Antidumping Duty Administrative Review
AGENCY: International Trade Administration/Import Administration/
Department of Commerce.
ACTION: Notice of Preliminary Results of Antidumping Duty
Administrative Review.
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SUMMARY: In response to a request from the petitioner, Flowline
Division of Markovitz Enterprises, Inc. (Flowline), the Department of
Commerce (the Department) has conducted an administrative review of the
antidumping duty order on certain stainless steel butt-weld pipe and
tube fittings (SSPFs) from Japan. The review covers one manufacturer/
exporter, Benkan Corporation (Benkan), and exports of the subject
merchandise to the United States during the period from March 1, 1992,
through February 28, 1993. The review indicates the existence of
dumping margins for the period.
As a result of the review, the Department has preliminarily
determined to assess antidumping duties equal to the difference between
the United States price (USP) and foreign market value (FMV).
Interested parties are invited to comment on these preliminary results.
EFFECTIVE DATE: January 6, 1994.
FOR FURTHER INFORMATION CONTACT: David Genovese or Michael Heaney,
Office of Antidumping Compliance, International Trade Administration,
U.S. Department of Commerce, Washington, DC 20230; telephone (202) 482-
5254.
SUPPLEMENTARY INFORMATION:
Background
On March 12, 1993, the Department published a notice of
``Opportunity to Request an Administrative Review'' (58 FR 13583) of
the antidumping duty order on SSPFs from Japan (53 FR 9787). On March
29, 1993, Flowline requested an administrative review. The Department
initiated the review on May 6, 1993 (58 FR 26960), covering the period
March 1, 1992, through February 28, 1993. The Department has now
conducted this review in accordance with section 751 of the Tariff Act
of 1930, as amended (the Act).
Scope of the Review
The products covered by this review include certain stainless steel
butt-weld pipe and tube fittings. These fittings are used in piping
systems for chemical plants, pharmaceutical plants, food processing
facilities, waste treatment facilities, semiconductor equipment
applications, nuclear power plants, and other areas.
This merchandise is currently classifiable under the Harmonized
Tariff Schedules (HTS) item number 7307.23.0000. The HTS item number is
provided for convenience and Customs purposes. The written product
description remains dispositive.
This review covers sales and entries by Benkan of the subject
merchandise during the period March 1, 1992, through February 28, 1993.
Such or Similar Comparisons
For Benkan, pursuant to section 771(16) of the Act, the Department
established the following criteria for matching sales in the home and
U.S. markets: Type of fitting, seam condition, steel material grade,
unit product weight within 10 percent, nominal pipe size, and wall
thickness. An identical pipe is one that matches all of these criteria.
A similar pipe is one that has one or more differences in these
discrete criteria from the U.S. fitting other than the type of fitting,
seam condition, and unit product weight within 10 percent. The 10
percent variance in unit product weight reflects our prior practice in
this case which was based upon allowable deviations between Japanese
and U.S. industry standards. The Department established this hierarchy
of criteria after soliciting comments from Flowline and Benkan at the
beginning of the 1992-1993 review period. Both Flowline and Benkan
agreed on the criteria and their hierarchy.
United States Price
In calculating USP, the Department used purchase price, as defined
in section 772(b) of the Act, because the merchandise was sold to an
unrelated purchaser in the United States prior to its importation and
exporter's sales price was not indicated by other circumstances. The
Department based USP on the packed, delivered price to those unrelated
purchasers.
The Department has determined that the date of sale for this
merchandise is the invoice date because the invoice always sets forth
agreed prices and quantities and represents the first transactional
document which systematically records agreed prices. The Department
made deductions, where appropriate, for foreign inland freight, U.S.
inland freight, U.S. duties, U.S. brokerage fees, ocean freight, marine
insurance, foreign brokerage fees, and discounts.
On October 7, 1993, the United States Court of International Trade
(CIT), in Federal-Mogul Corporation and The Torrington Company v.
United States, Slip Op. 93-194 (CIT, October 7, 1993), rejected the
Department's methodology for calculating an addition to USP under
section 772(d)(1)(C) of the Act to account for taxes that the exporting
country would have assessed on the merchandise had it been sold in the
home market. The CIT held that the addition to USP under section
772(d)(1)(C) of the Act should be the result of applying the foreign
market tax rate to the price of the United States merchandise at the
same point in the chain of commerce that the foreign market tax was
applied to the foreign market sales. Federal-Mogul, Slip Op. 93-194 at
12.
The Department has changed its methodology in accordance with the
Federal-Mogul decision. The Department will add to USP the result of
multiplying the foreign market tax rate by the price of the merchandise
sold in the United States at the same point in the chain of commerce
that the foreign market tax was applied to foreign market sales. The
Department will also adjust the USP tax adjustments and the amount of
tax included in FMV. These adjustments will deduct the portions of the
foreign market tax and the USP tax adjustment that are the result of
expenses that are included in the foreign market price used to
calculate foreign market tax and are included in the United States
merchandise price used to calculate the USP tax adjustment and that are
later deducted to calculate FMV and USP. These adjustments to the
amount of the foreign market tax and the USP tax adjustment are
necessary to prevent our new methodology for calculating the USP tax
adjustment from creating antidumping duty margins where no margins
would exist if no taxes were levied upon foreign market sales.
This margin creation effect is due to the fact that the bases for
calculating both the amount of tax included in the price of the foreign
market merchandise and the amount of the USP tax adjustment include
many expenses that are later deducted when calculating USP and FMV.
After these deductions are made, the amount of tax included in FMV and
the USP tax adjustment still reflects the amounts of these expenses.
Thus, a margin may be created that is not dependent upon a difference
between USP and FMV, but is the result of the price of the United
States merchandise containing more expenses than the price of the
foreign market merchandise. The Department's policy to avoid the margin
creation effect is in accordance with the United States Court of
Appeals' holding that the application of the USP tax adjustment under
section 772(d)(1)(C) of the Act should not create an antidumping duty
margin if pre-tax FMV does not exceed USP. Zenith Electronics Corp. v.
United States, 988 F.2d 1573, 1581 (Fed. Cir. 1993). In addition, the
CIT has specifically held that an adjustment should be made to mitigate
the impact of expenses that are deducted from FMV and USP upon the USP
tax adjustment and the amount of tax included in FMV. Daewoo
Electronics Co., Ltd. v. United States, 760 F. Supp. 200, 208 (CIT,
1991). However, the mechanics of the Department's adjustments to the
USP tax adjustment and the foreign market tax amount as described above
are not identical to those suggested in Daewoo.
Foreign Market Value
In calculating FMV, we used home market price, as defined in
section 773(a) of the Act. Home market price was based on a packed,
delivered price to unrelated purchasers in the home market. In
accordance with section 353.45 of the Department's regulations, the
Department has excluded sales to related parties because the respondent
has failed to provide sufficient evidence to support its claim that
sales to related parties were at arm's-length. The Department made
adjustments, where applicable, for inland freight, discounts, rebates,
and for differences in packing material, packing labor, and credit.
The Department also made an adjustment to FMV for imputed
consumption taxes in accordance with the aforementioned Federal-Mogul
decision.
Additionally, where similar home market sales were used due to the
absence of an identical sale, we made a difference-in-merchandise
adjustment. The Department based the difference-in-merchandise
adjustment on differences in steel pipe materials cost between U.S. and
home market merchandise (see the Department's preliminary analysis memo
dated December 29, 1993). When there were no contemporaneous such or
similar sales, we based FMV on constructed value. Constructed value
data for specific models was provided by Benkan at the request of the
Department. Benkan did not provide constructed value information for
two models as requested by the Department. For these preliminary
results the Department has applied to applicable sales of these two
models an antidumping duty margin of 8.05967 percent which is the
weighted average margin for sales of SSPFs by Benkan for this review.
The Department will request for the final results of this review that
Benkan provide constructed value data for these two models.
Preliminary Results of Review
As a result of our comparison of USP to FMV, the Department
preliminarily determines that a margin of 8.06 percent exists for
Benkan for the period March 1, 1992, through February 28, 1993.
Interested parties may request disclosure within 5 days of the date
of publication of this notice and may request a hearing within 10 days
of publication. Any hearing, if requested, will be held 44 days after
the date of publication of this notice, or the first workday
thereafter. Case briefs and/or written comments from interested parties
may be submitted not later than 30 days after the date of publication.
Rebuttal briefs and rebuttals to written comments, limited to the
issues raised in the case briefs and comments, may be filed not later
than 37 days after the date of publication. The Department will publish
the final results of this administrative review, including the results
of its analysis of any such written comments or hearing.
The Department shall determine, and U.S. Customs shall assess,
antidumping duties on all appropriate entries. Individual differences
between USP and FMV may vary from the percentage stated above. The
Department will issue appraisement instructions directly to Customs.
Furthermore, the following deposit requirements will be effective
for all shipments of the subject merchandise, 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 that rate established in the final results of this
administrative review; (2) for merchandise exported by manufacturers or
exporters not covered in this review but covered in a previous review
or the original less-than-fair-value (LTFV) investigation, the cash
deposit rate will continue to be the rate published in the most recent
final results or determination for which the manufacturer or exporter
received a company-specific rate; (3) if the exporter is not a firm
covered in this review, earlier reviews, or the original investigation,
but the manufacturer is, the cash deposit rate will be that established
for the manufacturer of the merchandise in these final results of
review, earlier reviews, or the original investigation, whichever is
the most recent; and (4) the ``all others'' rate will be 49.31 percent,
as explained below.
On May 25, 1993, the CIT, in Floral Trade Council v. United States,
Slip Op. 93-79, and Federal-Mogul Corporation v. United States, Slip
Op. 93-83, decided that once an ``all others'' rate is established for
a company it can only be changed through an administrative review. The
Department has determined that in order to implement these decisions,
it is appropriate to reinstate the original ``all others'' rate from
the LTFV investigation (or that rate as amended for correction of
clerical errors or as a result of litigation) in proceedings governed
by antidumping duty orders. Accordingly, the cash deposit rate for any
future entries from all other manufacturers or exporters, who are not
covered in this or prior administrative reviews and who are unrelated
to the reviewed firms or any previously reviewed firm, will be the
``all others'' rate established in the original LTFV investigation
which is 49.31 percent.
These deposit requirements, when imposed, shall remain in effect
until publication of the final results of the next administrative
review.
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 353.26 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 in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: December 29, 1993.
Barbara R. Stafford,
Acting Assistant Secretary for Import Administration.
[FR Doc. 94-280 Filed 1-5-94; 8:45 am]
BILLING CODE 3510-DS-P
