[Federal Register Volume 63, Number 6 (Friday, January 9, 1998)]
[Notices]
[Pages 1437-1440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-489]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-583-815]
Certain Welded Stainless Steel Pipe From Taiwan; Preliminary
Results of Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of administrative review.
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SUMMARY: In response to requests by petitioners 1 and
respondent Ta Chen Stainless Pipe Co., Ltd. (Ta Chen), the Department
of Commerce (the Department) is conducting an administrative review of
the antidumping duty order on certain welded stainless steel pipe from
Taiwan (A-583-815). This review covers one manufacturer/exporter of the
subject merchandise to the United States during the period December 1,
1995 through November 30, 1996.
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\1\ Avesta Sheffield, Inc., Damascus Tube Division, Damascus-
Bishop Tube Co., Trent Tube Division, Crucible Materials
Corporation, and the United Steelworkers of America (AFL-CIO/CLC).
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We preliminarily determine that a de minimis dumping margin exists
for Ta Chen's sales of welded stainless steel pipe (WSSP) in the United
States. If these preliminary results are adopted in our final results
of administrative review, we will instruct the U.S. Customs Service to
assess antidumping duties on entries of Ta Chen merchandise during the
period of review, in accordance with the Department's regulations (19
CFR 353.6). Interested parties are invited to
[[Page 1438]]
comment on these preliminary results. Parties who submit comments are
requested to submit with the argument (1) a statement of the issues and
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(2) a brief summary of the argument.
EFFECTIVE DATE: January 9, 1998.
FOR FURTHER INFORMATION CONTACT: Robert James at (202) 482-5222 or John
Kugelman at (202) 482-0649, Antidumping and Countervailing Duty
Enforcement Group III, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230.
APPLICABLE STATUTE AND REGULATIONS: Unless otherwise indicated, all
citations to the Tariff Act of 1930, as amended (the Tariff Act), are
to the provisions effective January 1, 1995, the effective date of the
amendments made to the Tariff Act by the Uruguay Round Agreements Act.
In addition, unless otherwise indicated, all citations to the
Department's regulations are to the regulations codified at 19 CFR Part
353 (April 1, 1997).
SUPPLEMENTARY INFORMATION:
Background
On December 30, 1992, the Department published in the Federal
Register the antidumping duty order on WSSP from Taiwan (57 FR 62300).
On December 3, 1996, the Department published the notice of
``Opportunity to Request Administrative Review'' for the period
December 1, 1995 through November 30, 1996 (61 FR 64051). In accordance
with 19 CFR 353.22(a)(1) (1995), petitioners and Ta Chen requested that
we conduct a review of Ta Chen's sales. On January 17, 1997, we
published in the Federal Register a notice of initiation of this
antidumping duty administrative review covering the period December 1,
1995 through November 30, 1996 (62 FR 2647).
Because it was not practicable to complete this review within the
normal time frame, on July 24, 1997, we published in the Federal
Register our notice of extension of time limits for this review (62 FR
39824). As a result, we extended the deadline for these preliminary
results to December 31, 1997. The deadline for the final results of
this review will continue to be 120 days after publication of these
preliminary results.
Scope of the Review
The merchandise subject to this administrative review is certain
welded austenitic stainless steel pipe (WSSP) that meets the standards
and specifications set forth by the American Society for Testing and
Materials (ASTM) for the welded form of chromium-nickel pipe designated
ASTM A-312. The merchandise covered by the scope of the order also
includes austenitic welded stainless steel pipes made according to the
standards of other nations which are comparable to ASTM A-312.
WSSP is produced by forming stainless steel flat-rolled products
into a tubular configuration and welding along the seam. WSSP is a
commodity product generally used as a conduit to transmit liquids or
gases. Major applications for WSSP include, but are not limited to,
digester lines, blow lines, pharmaceutical lines, petrochemical stock
lines, brewery process and transport lines, general food processing
lines, automotive paint lines, and paper process machines.
Imports of WSSP are currently classifiable under the following
Harmonized Tariff Schedule of the United States (HTS) subheadings:
7306.40.5005, 7306.04.5015, 7306.40.5040, 7306.40.5065, and
7306.40.5085. Although these subheadings include both pipes and tubes,
the scope of this review is limited to welded austenitic stainless
steel pipes. Although the HTS subheadings are provided for convenience
and Customs purposes, our written description of the scope of this
order is dispositive.
The period for this review is December 1, 1995 through November 30,
1996. This review covers one manufacturer/exporter, Ta Chen.
Export Price
Ta Chen reported in its initial and supplemental questionnaire
responses that all of its U.S. sales were first sold to unaffiliated
purchasers prior to importation into the United States. Each of these
sales was made through Ta Chen's wholly-owned U.S. subsidiary, TCI. Ta
Chen claims that it ``sold'' the merchandise to TCI, which immediately
transferred the WSSP to the first unaffiliated U.S. customer. For each
of these sales, Ta Chen claims that TCI acted merely as a
``facilitator,'' handling sales- and Customs-related paper work; Ta
Chen states that at no time did TCI take physical possession of the
merchandise or enter it into TCI's warehouse. In each instance,
according to Ta Chen, the price and quantity of the U.S. sale to the
unaffiliated customer were determined prior to importation into the
United States. Therefore, in calculating U.S. price we used export
price (EP), as defined in section 772(a) of the Tariff Act, for all of
Ta Chen's sales. We calculated EP as the packed, delivered or ex-U.S.
port price to unaffiliated purchasers in the United States. In
accordance with section 772(c)(2)(A) of the Tariff Act, we reduced this
price by Taiwanese pre-sale inland freight, international ocean
freight, marine insurance, Taiwanese brokerage and handling, U.S.
brokerage and handling, U.S. duty, and U.S. inland freight. Where
appropriate, we also reduced the EP by Taiwanese and U.S. bank charges.
Normal Value
A. Viability
Based upon (i) our comparison of the aggregate quantity of home
market and U.S. sales, (ii) the absence of any information that a
particular market situation in Taiwan does not permit a proper
comparison, and (iii) the fact that Ta Chen's quantity of sales in the
home market exceeded five percent of its sales to the U.S. market, we
determined that the quantity of foreign like product Ta Chen sold in
Taiwan was sufficient to permit a proper comparison with the sales of
subject merchandise to the United States pursuant to section 773(a) of
the Tariff Act. Therefore, in accordance with section 773(a)(1)(B)(i)
of the Tariff Act, we based NV on the prices at which the foreign like
products were first sold for consumption in the exporting market, i.e.,
Taiwan.
B. Cost-of-Production Analysis
Because we disregarded sales below the cost of production in the
less-than-fair-value (LTFV) investigation (at the time of our
initiation of this administrative review, the most-recently completed
segment of these proceedings), we have reasonable grounds to believe or
suspect that sales of the foreign like product under consideration for
determining NV in this review may have been at prices below the cost of
production (COP), as provided in section 773(b)(2)(A)(ii) of the Tariff
Act (see Final Determination of Sales at Less Than Fair Value; Certain
Welded Stainless Steel Pipe from Taiwan, 57 FR 53705 (November 12,
1992)). Therefore, pursuant to section 773(b)(1) of the Tariff Act, we
initiated a COP investigation of sales by Ta Chen (see Memorandum to
the File, dated February 11, 1997, available in Room B-099 of the Main
Commerce Building).
In accordance with section 773(b)(3) of the Tariff Act, we
calculated COP based on the sum of materials and fabrication employed
in producing the foreign like product, plus selling, general, and
administrative expenses (SG&A) and the cost of all expenses incidental
to placing the foreign like product in condition packed ready for
[[Page 1439]]
shipment. We relied on the home market sales and COP information Ta
Chen provided in its questionnaire responses.
After calculating COP, we tested whether home market sales of
subject WSSP were made at prices below COP within an extended period of
time in substantial quantities, and whether such prices permitted the
recovery of all costs within a reasonable period of time. We compared
model-specific COPs to the reported home market prices less any
applicable movement charges and post-sale price adjustments (reported
as discounts).
Pursuant to section 773(b)(2)(C) of the Tariff Act, where less than
twenty percent of Ta Chen's home market sales for a model were at
prices less than the COP, we did not disregard any below-cost sales of
that model because we determined that the below-cost sales were not
made within an extended period of time in ``substantial quantities.''
Where twenty percent or more of Ta Chen's home market sales were at
prices less than the COP, we determined that such sales were made
within an extended period of time in substantial quantities in
accordance with section 773(b)(2) (B) and (C) of the Tariff Act. To
determine whether such sales were at prices which would not permit the
full recovery of all costs within a reasonable period of time, in
accordance with section 773(b)(2)(D) of the Tariff Act, we compared
home market prices to the weighted-average COPs for the POR.
The results of our cost test for Ta Chen indicated that for certain
home market models less than twenty percent of the sales of the model
were at prices below COP. We therefore retained all sales of these
models in our analysis and used them as the basis for determining NV.
Our cost test for Ta Chen also indicated that for certain other home
market models more than twenty percent of the home market sales within
an extended period of time were at prices below COP and would not
permit the full recovery of all costs within a reasonable period of
time. In accordance with section 773(b)(1) of the Tariff Act, we
therefore excluded the below-cost sales of these models from our
analysis and used the remaining above-cost sales as the basis for
determining NV.
C. Product Comparisons
We compared Ta Chen's U.S. sales with contemporaneous sales of the
foreign like product in the home market. We considered pipe identical
based on product nomenclature and considered specifications/alloy,
nominal pipe size, and wall thickness in determining the most similar
types of pipe. We used a twenty percent cap in reported differences in
merchandise as the maximum difference in cost allowable for similar
merchandise. For purposes of these preliminary results, we have used
the difference-in-merchandise information Ta Chen submitted with its
supplemental questionnaire response of October 30, 1997.
D. Level of Trade
As set forth in section 773(a)(1)(B)(i) of the Tariff Act, to the
extent practicable, the Department will calculate NV based on sales in
the comparison market at the same level of trade (LOT) as the EP
transaction. The NV LOT is that of the starting-price sales in the
comparison market or, when NV is based on constructed value, that of
the sales from which we derive SG&A expenses and profit. For EP, the
U.S. LOT is also the level of the starting-price sale, which is usually
from exporter to importer. In cases involving constructed export price
(CEP) sales, it is the level of the constructed sale from the exporter
to the importer.
To determine whether NV sales are at a different LOT than EP
transactions, we examine stages in the marketing process and selling
functions along the chain of distribution between the producer and the
unaffiliated customer. If the comparison-market sales are at a
different LOT, and the difference affects price comparability, as
manifested in a pattern of consistent price differences between the
sales on which NV is based and the comparison-market sales at the LOT
of the export transaction, we make an LOT adjustment under section
773(a)(7)(A) of the Tariff Act. Finally, for CEP sales, if the NV level
is more remote from the factory than the CEP level and there is no
basis for determining whether the difference in the levels between NV
and CEP affects price comparability, we adjust NV pursuant to section
773(a)(7)(B) of the Tariff Act (the CEP offset provision). 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).
In its questionnaire responses Ta Chen stated that there were few
differences in its selling activities by customer categories within
each market. In order to confirm independently the absence of separate
levels of trade within or between the U.S. and home markets, we
examined Ta Chen's questionnaire responses for indications that Ta
Chen's functions as a seller differed qualitatively or quantitatively
among customer categories. Where possible, we further examined whether
each selling function was performed on a substantial portion of sales.
Ta Chen sold to distributors in the U.S. market. In the home
market, Ta Chen sold to local distributors and end users. With respect
to the home market, Ta Chen claimed that its two customer categories
constituted a single level of trade. Base upon our examination of
information supplied by Ta Chen in its original and supplemental
questionnaire responses, we agree that only one level of trade existed
for Ta Chen in the home market. According to Ta Chen, it provided no
strategic or economic planning services, market research, business-
development services, personnel training, engineering, advertising,
procurement services, inventory maintenance, or post-sale warehousing
for customers in either category. Customers in both categories received
the same degree of packing, after-sales services, and freight and
delivery arrangements. End-user customers did receive slightly higher
levels of research and development and technical assistance than did
distributors; however this one difference is not sufficient to
establish discrete levels of trade.
For its U.S. sales, Ta Chen reported a single customer category,
i.e., distributors. In determining whether, in fact, a single stage of
marketing existed, we examined the selling functions as reflected in
the starting price to the unaffiliated U.S. customer. TCI processed
paperwork and provided certain selling functions for all of Ta Chen's
U.S. sales which, in every instance, were to pipe distributors in the
United States. We find preliminarily that TCI provided very limited
selling functions for these sales and, therefore, find that no
significant differences in the selling functions between sales to
different customers. As a result, we preliminarily agree with Ta Chen
that Ta Chen's EP sales constitute a single level of trade.
When we compared Ta Chen's sales at its EP level of trade to its
home market level of trade, we found that Ta Chen provided little or no
strategic or economic planning, market research, engineering services,
advertising, after-sales services, or post-sale warehousing at either
the EP or home market level of trade. Ta Chen reported that it provided
moderate-to-low technical assistance at its home market level of trade,
while providing none at the EP level. All packing expenses at either
level of trade were borne by Ta Chen; freight and delivery arrangements
varied between the two markets in that U.S. movement
[[Page 1440]]
expenses on certain U.S. sales were incurred by TCI, while other sales
were made on ``FOB U.S. port'' terms. Our analysis of the selling
functions performed by Ta Chen in both markets leads us to conclude
that sales within or between each market are not made at different
levels of trade. Accordingly, we preliminarily find that all sales in
the home market and the U.S. market were made at the same level of
trade. We have not, therefore, made a level-of-trade adjustment because
all price comparisons are at the same level of trade and an adjustment
pursuant to section 773(a)(7)(A) of the Tariff Act is not appropriate.
E. Home Market Price
While we found below-cost home market sales for Ta Chen in this
review, Ta Chen's remaining home market sales at or above cost were
sufficient to serve as the basis for NV.
We based home market prices on the packed, ex-factory or delivered
prices to unaffiliated purchasers in the home market. We made
adjustments for differences in packing and for movement expenses in
accordance with sections 773(a)(6)(A) and (B) of the Tariff Act. In
addition, we made adjustments for differences in cost attributable to
differences in physical characteristics of the merchandise pursuant to
section 773(a)(6)(C)(ii) of the Tariff Act, and for differences in
circumstances of sale (COS) in accordance with section
773(a)(6)(C)(iii) of the Tariff Act and 19 CFR 353.56. We made COS
adjustments by deducting home market direct selling expenses and adding
U.S. direct selling expenses. Finally, where the comparison EP sale
involved a commission, we increased home market price by the amount of
this commission and subtracted home market indirect selling expenses up
to the amount of the U.S. commission, as provided at 19 CFR 353.56(b).
In accordance with section 773(a)(4) of the Tariff Act, we based NV
on constructed value (CV) if (i) a sale of a U.S. model matched to a
home market model for which no sales were above cost, or (ii) we were
unable to find a contemporaneous home market match for the U.S. sale.
We calculated CV based on the costs of materials and fabrication
employed in producing the subject merchandise, SG&A, and profit. In
accordance with section 773(e)(2)(A) of the Tariff Act, we based SG&A
expenses and profit on the amounts incurred and realized by the
respondent in connection with the production and sale of the foreign
like product in the ordinary course of trade for consumption in Taiwan.
For selling expenses, we used the weighted-average home market selling
expenses. Where appropriate, we made adjustments to CV in accordance
with section 773(a)(8) of the Tariff Act and 19 CFR 353.56 for COS
adjustments. For comparisons to EP, we made COS adjustments by
deducting home market direct selling expenses and adding U.S. direct
selling expenses. We also made adjustments, where applicable, for home
market indirect selling expenses to offset U.S. commissions.
Fair-Value Comparisons
To determine whether Ta Chen made sales of subject WSSP in the
United States at prices that were less than fair value, we compared the
EP to NV, as described in the ``Export Price'' and ``Normal Value''
sections of this notice. In accordance with section 777A(d)(2) of the
Tariff Act, we calculated monthly weighted-average prices for NV and
compared these monthly averages to individual U.S. sales transactions.
Preliminary Results of Review
As a result of our review, we preliminarily determine the weighted-
average margin for Ta Chen for the period December 1, 1995 through
November 30, 1996 is 0.07 percent.
Parties to these proceedings may request disclosure within five
days of the date of publication of this notice and may request a
hearing within ten days of publication. Any hearing, if requested, will
be held 44 days after the date of publication, or the first business
day thereafter. Case briefs and/or written comments from interested
parties may be submitted no later than 30 days after the date of
publication. Rebuttal briefs and rebuttals to written comments, limited
to issues raised in the case briefs and comments, may be submitted no
later than 37 days after the date of publication of this notice.
Parties who submit arguments in these proceedings are requested to
submit with the argument (1) a statement of the issues and (2) a brief
summary of the argument. The Department will issue final results of
this administrative review, including the results of our analysis of
the issues in any such written comments or at a hearing, within 120
days of publication of these preliminary results.
The Department shall determine, and the U.S. Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between U.S. price and NV may vary from the percentage
stated above. The Department will issue appraisement instructions
directly to Customs. The final results of this review shall be the
basis for the assessment of antidumping duties on entries of
merchandise during this period of review, and for future deposits of
estimated duties.
Furthermore, the following deposit requirements will be effective
upon completion of the final results of this administrative review for
all shipments of WSSP from Taiwan entered, or withdrawn from warehouse,
for consumption on or after the publication of the final results of
this administrative review, as provided in section 751(a)(1) of the
Tariff Act:
(1) The cash deposit rate for Ta Chen will be zero percent, in
light of its de minimis weighted-average margin;
(2) For previously reviewed or investigated companies other than Ta
Chen, the cash deposit rate will continue to be the company-specific
rate published 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 merchandise; and
(4) If neither the exporter nor the manufacturer is a firm covered
in this or any previous review conducted by the Department, the cash
deposit rate will be 19.84 percent. See Amended Final Determination and
Antidumping Duty Order; Certain Welded Stainless Steel Pipe From
Taiwan, 57 FR 62300 (December 30, 1992).
This notice serves as preliminary reminder to importers of their
responsibility 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 the
antidumping duties occurred and the subsequent assessment of double
antidumping duties.
This administrative review and this notice are in accordance with
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR
353.22.
Dated: December 30, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-489 Filed 1-8-98; 8:45 am]
BILLING CODE 3510-DS-P
