E8-25554. Initiation of Antidumping Duty Changed Circumstances Review: Light-Walled Rectangular Pipe and Tube from Mexico

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to a request from Ternium México, S.A. de C.V. (“Ternium Mexico”), and pursuant to section 751(b) of the Tariff Act of 1930, as amended (“the Act”) and 19 CFR 351.216 and 351.221(c)(3), the Department is initiating a changed circumstances review of the antidumping duty order on light-walled rectangular pipe and tube (“LWRPT”) from Mexico. This review will determine whether Ternium Mexico is the successor-in-interest to Hylsa, S.A. de C.V. (“Hylsa”).

EFFECTIVE DATE:

October 27, 2008.

FOR FURTHER INFORMATION CONTACT:

John Drury or Angelica Mendoza, AD/CVD Operations, Office 7, Import Administration, International Trade Administration, U.S. Department of Commerce, 14^th Street and Constitution Avenue, NW, Room 7866, Washington, DC 20230; telephone: [phone] or [phone], respectively.

Background

The Department published the antidumping duty order on LWRPT from Mexico on August 5, 2008. See Light-Walled Rectangular Pipe and Tube from Mexico, the People's Republic of China, and the Republic of Korea: Antidumping Duty Orders; Light-Walled Rectangular Pipe and Tube from the Republic of Korea: Notice of Amended Final Determination of Sales at Less Than Fair Value, 73 FR 45403 (August 5, 2008).

On September 3, 2008, Ternium Mexico filed a request for a changed circumstances review of the antidumping duty order on LWRPT from Mexico, claiming that Hylsa, a Mexican producer of LWRPT, has changed its name to Ternium Mexico. Ternium Mexico requested that the Department determine whether it is the successor-in-interest to Hylsa, in accordance with section 751(b) of the Act, and 19 CFR 351.216. In addition, Ternium Mexico submitted documentation in support of its claim. In response to Ternium Mexico's request, the Department is initiating a changed circumstances review of this order.

Scope of the Order

The merchandise that is covered by this order are certain welded carbon quality light walled steel pipe and tube, of rectangular (including square) cross section, having a wall thickness of less than 4 mm.

The term carbon quality steel includes both carbon steel and alloy steel which contains only small amounts of alloying elements. Specifically, the term carbon quality includes products in which none of the elements listed below exceeds the quantity by weight respectively indicated: 1.80 percent of manganese, or 2.25 percent of silicon, or 1.00 percent of copper, or 0.50 percent of aluminum, or 1.25 percent of chromium, or 0.30 percent of cobalt, or 0.40 percent of lead, or 1.25 percent of nickel, or 0.30 percent of tungsten, or 0.10 percent of molybdenum, or 0.10 percent of niobium, or 0.15 percent vanadium, or 0.15 percent of zirconium.

The description of carbon quality is intended to identify carbon quality products within the scope. The welded carbon quality rectangular pipe and tube subject to this order is currently classified under the Harmonized Tariff Schedule of the United States (“HTSUS”) subheadings 7306.61.50.00 and 7306.61.70.60. While HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of this order is dispositive.

Initiation of Antidumping Duty Changed Circumstances Review

Pursuant to section 751(b)(1) of the Act, the Department will conduct a changed circumstances review upon receipt of a request from an interested party or receipt of information concerning an antidumping duty order which shows changed circumstances sufficient to warrant a review of the order. On September 3, 2008, Ternium Mexico submitted its request for a changed circumstances review. With this request, Ternium Mexico submitted certain information related to its claim that Hylsa changed its name to Ternium Mexico, including information describing the acquisition of Hylsa by Ternium Luxembourg and the changes in Hylsa's operating and corporate structure immediately following that acquisition. Based on the information Ternium Mexico submitted regarding a name change, the Department has determined that changed circumstances sufficient to warrant a review exist. See 19 CFR 351.216(d). In antidumping duty changed circumstances reviews involving a successor-in-interest determination, the Department typically examines several factors including, but not limited to: (1) management; (2) production facilities; (3) supplier relationships; and (4) customer base. See Brass Sheet and Strip From Canada: Final Results of Antidumping Duty Administrative Review, 57 FR 20460, 20462 (May 13, 1992) and Certain Cut-to-Length Carbon Steel Plate from Romania: Initiation and Preliminary Results of Changed Circumstances Antidumping Duty Administrative Review, 70 FR 22847 (May 3, 2005) (“Plate from Romania”). While no single factor or combination of factors will necessarily be dispositive, the Department generally will consider the new company to be the successor to the predecessor if the resulting operations are essentially the same as those of the predecessor company. See, e.g., Industrial Phosphoric Acid from Israel: Final Results of Antidumping Duty Changed Circumstances Review, 59 FR 6944, 6945 (February 14, 1994), and Plate from Romania, 70 FR 22847. Thus, if the record evidence demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the predecessor company, the Department may assign the new company the cash deposit rate of its predecessor. See, e.g., Fresh and Chilled Atlantic Salmon from Norway: Final Results of Changed Circumstances Antidumping Duty Administrative Review, 64 FR 9979, 9980 (March 1, 1999). Although Ternium Mexico submitted documentation related to its name change and some limited information regarding the four factors that the Department considers in its successor-in-interest analysis, it failed to provide complete supporting documentation for the four elements listed above that is sufficient for making the successor-in-interest determination without requesting additional information. Accordingly, the Department has determined that it would be inappropriate to expedite this action by combining the preliminary results of review with this notice of initiation, as permitted under 19 CFR 351.221(c)(3)(ii). Therefore, the Department is not issuing the preliminary results of its antidumping duty changed circumstances review at this time.

The Department will issue questionnaires requesting additional information for the review, and will publish in the Federal Register a notice of the preliminary results of the antidumping duty changed circumstances review, in accordance with 19 CFR 351.221(b)(2) and (4), and 19 CFR 351.221(c)(3)(i). The notice will set forth the factual and legal conclusions upon which our preliminary results are based and a description of any action proposed based on those results. Pursuant to 19 CFR 351.221(b)(4)(ii), interested parties will have an opportunity to comment on the preliminary results of review. In accordance with 19 CFR 351.216(e), the Department will issue the final results of its antidumping duty changed circumstances review not later than 270 days after the date on which the review is initiated.

During the course of this antidumping duty changed circumstances review, the cash deposit requirements for the subject merchandise exported and manufactured by Ternium Mexico will continue to be the rate established in the amended final results of the investigation for all other manufacturers and exporters not previously reviewed. See Notice of Amended Final Determination of Sales at Less Than Fair Value: Light-Walled Rectangular Pipe and Tube From Mexico, 73 FR 45400 (August 5, 2008). The cash deposit will be altered, if warranted, pursuant only to the final results of this review.

This notice of initiation is in accordance with section 751(b)(1) of the Act, 19 CFR 351.216(b) and (d), and 19 CFR 351.221(b)(1).

Dated: October 20, 2008.

Stephen J. Claeys,

Deputy Assistant Secretary for Import Administration.