[Federal Register Volume 59, Number 191 (Tuesday, October 4, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-24535]
[[Page Unknown]]
[Federal Register: October 4, 1994]
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DEPARTMENT OF COMMERCE
[A-427-813]
Preliminary Determination of Sales at Less Than Fair Value:
Certain Carbon Steel Butt-Weld Pipe Fittings From France
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: October 4, 1994.
FOR FURTHER INFORMATION CONTACT:
Gary Bettger or Penelope Naas, Office of Countervailing Investigations,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW,
Washington, DC 20230; telephone (202) 482-2239 or 482-3534,
respectively.
Preliminary Determination: We have preliminarily determined that
certain carbon steel butt-weld pipe fittings from France are being sold
in the United States at less than fair value, as provided in section
733 of the Tariff Act of 1930 (``the Act''), as amended. The estimated
margins of sales at less than fair value are shown in the ``Suspension
of Liquidation'' section of this notice.
Case History
Since the initiation of this investigation on March 21, 1994 (59 FR
14148, March 25, 1994), the following events have occurred:
On April 11, 1994, the United States International Trade Commission
(``ITC'') issued an affirmative preliminary injury determination (see,
ITC Investigation No. 731-TA-688, 59 FR 18825 (April 20, 1994)).
In accordance with 19 CFR 353.42(b), the Department of Commerce
(``the Department'') issued its antidumping duty questionnaire to
Interfit, S.A. (``interfit'') and its related U.S. company, Vallourec,
Inc. (``Vallourec''), on April 29, 1994. Interfit is the only company
named in the petition as a producer and exporter to the United States
of the subject merchandise.
On June 14, 1994, petitioner alleged that Interfit was selling the
subject merchandise in France at less than its cost of production
(``COP''). We found reasonable grounds to believe or suspect that sales
in the home market were being made at less than COP and thus initiated
a COP investigation.
On June 30, 1994, petitioner requested a 50-day postponement of the
preliminary determination. The request was granted by the Department on
July 19, 1994 (59 FR 37961, July 26, 1994).
On August 4, 1994, petitioner alleged critical circumstances with
regard to imports of certain carbon steel butt-weld pipe fittings from
France.
On September 6, 1994, Interfit submitted constructed value (``CV'')
data for models reflecting a large percentage of sales made in the
United States during the period of investigation (``POI''). On
September 23, 1994, Interfit provided CV information for the remaining
models sold in the United States.
Scope of the Investigation
The products covered by this investigation are certain carbon steel
butt-weld pipe fittings having an inside diameter of less than fourteen
inches (355 millimeters), imported in either finished or unfinished
condition. Pipe fittings are formed or forged steel products used to
join pipe sections in piping systems where conditions require permanent
welded connections, as distinguished from fittings based on other
methods of fastening (e.g. threaded, grooved, or bolted fittings).
Butt-weld fittings come in a variety of shapes which include
``elbows,'' ``tees,'' ``caps,'' and ``reducers.'' The edges of finished
pipe fittings are beveled, so that when a fitting is placed against the
end of a pipe (the ends of which have also been beveled), a shallow
channel is created to accommodate the ``bead'' of the weld which joins
the fitting to the pipe. These pipe fittings are currently classifiable
under subheading 7307.93.3000 of the Harmonized Tariff Schedule of the
United States (``HTSUS'').
Although the HTSUS subheading is provided for convenience and
customs purposes, our written description of the scope of this
investigation is dispositive.
Period of Investigation
The POI is September 1, 1993, through February 28, 1994.
Fair Value Comparisons
To determine whether Interfit's sales for export to the Untied
States were made at less than fair value, we compared the United States
price (``USP'') to the foreign market value (``FMV''), as specified in
the ``United States Price'' and ``Foreign Market Value'' sections of
this notice.
United States Price
Because Interfit's U.S. sales of certain carbon steel butt-weld
pipe fittings were made to an unrelated distributor in the United
States prior to importation, and the exporter's sales price methodology
was not indicated by other circumstances, we based USP on the purchase
price (``PP'') sales methodology in accordance with section 772(b) of
the Act.
We calculated Interfit's PP sales based on packed, c.i.f., duty
paid, landed prices to unrelated customers in the United States. We
made deductions to the U.S. price, where appropriate, for foreign
inland freight, foreign brokerage, marine insurance, ocean freight,
U.S. brokerage, U.S. duties, and rebates.
No commissions were paid to unrelated distributors in the United
States or home market, and we do not have an appropriate benchmark
against which to test whether the commission arrangements between
Interfit and its related party are at arm's length. Therefore, we did
not make an adjustment for commissions claimed by Interfit that were
paid to its U.S. subsidiary for various charges incurred in selling the
subject merchandise. (See Final Determination of Sales at Less than
Fair Value: Coated Groundwood Paper from Belgium, Finland, France,
Germany and the United Kingdom, 56 FR 56359, November 4, 1992.)
Foreign Market Value
In order to determine whether Interfit had a sufficient volume of
sales in the home market to serve as a viable basis for calculating
FMV, we compared the volume of home market sales of subject merchandise
to the volume of third country sales of subject merchandise, in
accordance with section 773(a)(1)(B) of the Act. On this basis, we
determined that the home market was viable. For purposes of calculating
FMV, we used reported CV for products sold by Interfit in the United
States during the POI.
Cost of Production
Interfit provided incomplete and inappropriate cost data for home
market sales. Specifically, Interfit did not provide COP information
for all comparison models sold in France during the POI. Furthermore,
Interfit provided transfer prices for the main input into its pipe
fittings. As this input was purchased from related parties, it is the
Department's practice to use the cost of producing the input, rather
than the transfer price. See Final Determination of Sales at Less than
Fair Value: Ferrosilicon from Venezuela (58 FR 27522; 1993). Finally,
the costs reported by Interfit did not reflect the specific time period
requested by the Department.
Accordingly, we do not have the information necessary to make a
determination whether Interfit's home market sales are being sold below
the COP. In accordance with section 776(c) of the Act as best
information available (``BIA'') we have determined that all sales in
the home market were made at less than the COP and, in accordance with
section 773(b) of the Act, we have based foreign market value on CV.
Constructed Value
We calculated CV based on the sum of the cost of materials,
fabrication, general expenses, U.S. packing costs and profit. In
accordance with section 773(e)(1)(B)(i) and (ii) of the Act, we (1)
included the greater of Interfit's reported general expenses or the
statutory minimum of ten percent of the COM, as appropriate, and (2)
used the statutory minimum of eight percent of the sum of COM and
general expenses for profit.
For comparisons to CV, we made circumstance-of-sale adjustments for
differences in credit expenses between the two markets, pursuant to 19
CFR 353.56(a)(2). In calculating U.S. credit expense, we used the rate
respondent reported at which it could borrow in U.S. dollars during the
POI. (For further discussions regarding the Department's treatment of
credit in this investigation, please see September 26, 1994, Memorandum
to Susan G. Esserman from Barbara R. Stafford on file in Room B-099 of
the Department of Commerce.) We have not made a deduction for the
direct selling expenses reported by respondent. We have determined that
these expenses (product liability premiums and inventory carrying
costs) are, in fact, indirect selling expenses.
Because of the deficiencies in the cost data described above, we
are requesting further information from Interfit. We also intend to
verify that the prices paid by Interfit to its related suppliers are,
in fact, at arms-length.
The CV data originally provided by Interfit did not cover all of
the models sold by the company in the United States during the POI. On
September 23, 1994, Interfit supplied the CV data for the remaining
models. Because this information was not received in time to be used in
this preliminary determination, we have used BIA for sales involving
these models. As BIA, we have imputed the highest non-aberrational
margin calculated from the CV information that Interfit submitted on
September 6, 1994. (See Final Determination of Sales at Less than Fair
Value: Certain Hot-Rolled Carbon Steel Flat Products and Certain Cold-
Rolled Carbon Steel Flat Products from the Netherlands, 58 FR 37199;
July 9, 1993). In our final determination, we intend to use all the CV
data submitted by Interfit so long as it can be verified.
Currency Conversion
We made currency conversions based on the official exchange rates
in effect on the dates of the U.S. sales as certified by the Federal
Reserve Bank of New York.
Critical Circumstances
Petitioner alleges that critical circumstances exist with respect
to imports of the subject merchandise from France. Section 733(e)(1) of
the Act provides that the Department will determine that critical
circumstances exist if:
(A)(i) There is a history of dumping in the United States or
elsewhere of the class or kind of merchandise which is the subject of
this investigation, or
(ii) The person by whom, or for whose account, the merchandise was
imported knew or should have known that the exporter was selling the
merchandise which is the subject of the investigation at less than its
fair value, and
(B) There have been massive imports of the class or kind of
merchandise which is the subject of this investigation over a
relatively short period.
Regarding A(i) above, in determining whether there has been a
history of dumping, we normally consider whether there has been an
antidumping order in the United States or elsewhere on such or similar
merchandise. Regarding (A)(ii) above, we normally consider margins of
25 percent or more for purchase price sales sufficient to impute
knowledge of dumping. (See, Final Determination of Sales at Less Than
Fair Value; Tapered Roller Bearings and Parts Thereof, Finished or
Unfinished, from Italy, 52 FR 24198, June 29, 1987.)
Pursuant to section 733(e)(1)(B), we generally consider the
following factors in determining whether imports have been massive over
a short period of time: (1) The volume and value of the imports; (2)
seasonal trends (if applicable); and (3) the share of domestic
consumption accounted for by imports. If imports during the period
immediately following the filing of the petition increase by at least
fifteen percent over imports during a comparable period immediately
preceding the filing of a petition, we normally consider them massive.
In order to determine whether imports have been massive over a
relatively short period of time, we compared the reported shipments of
butt-weld pipe fittings by Interfit to the United States in the seven
months after the petition was filed to the seven months immediately
before this period. Our analysis showed that the volume of imports of
subject merchandise to the United States by Interfit had actually
decreased over that period of time. (See, 19 CFR 353.16(f)(2).) Based
on this analysis, we determine that imports of butt-weld pipe fittings
from Interfit were not massive over a relatively short period of time.
Accordingly, as one of the criteria enumerated in Section 733(A)(3) of
the Act is not met, we preliminarily determine that critical
circumstances does not exist for imports of butt-weld pipe fittings
from France.
Verification
As provided in section 776(b) of the Act, we will verify
information used in making our final determination.
Suspension of Liquidation
In accordance with section 733(d)(1) of the Act, we are directing
the U.S. Customs Service to suspend liquidation of all entries of
certain carbon steel butt-weld pipe fittings from France, as defined in
the ``Scope of Investigation'' section of this notice, that are
entered, or withdrawn from warehouse, for consumption on or after the
date of publication of this notice in the Federal Register. The Customs
Service shall require a cash deposit or posting of a bond equal to the
estimated dumping margin, as shown below. This suspension of
liquidation will remain in effect until further notice. The weighted-
average dumping margins are as follows:
------------------------------------------------------------------------
Margin
Manufacturer/producer/exporter percent
------------------------------------------------------------------------
Interfit..................................................... 12.04
All others................................................... 12.04
------------------------------------------------------------------------
ITC Notification
In accordance with section 733(f) of this Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine whether these imports are materially injuring,
or threaten material injury to, the U.S. industry within 75 days after
our final determination.
Public Comment
Interested parties who wish to request a hearing must submit a
written request to the Assistant Secretary for Import Administration,
U.S. Department of Commerce, Room B-099, within ten days of the
publication of this notice. Requests should contain: (1) The party's
name, address, and telephone number; (2) the number of participants;
and (3) a list of the issues to be discussed.
In accordance with 19 CFR 353.38, case briefs or other written
comments in at least ten copies must be submitted to the Assistant
Secretary no later than November 16, 1994, and rebuttal briefs no later
than November 23, 1994. A hearing, if requested, will be held on
November 28, 1994, at the Department of Commerce in Room 1414. Parties
should confirm by telephone the time, date, and place of the hearing 48
hours prior to the scheduled time. In accordance with 19 CFR 353.3(b),
oral presentations will be limited to issues raised in the briefs.
We will make our final determination not later than 75 days after
of this preliminary determination.
This determination is published pursuant to section 733(f) of the
Act and 19 CFR 353.15(a)(4).
Dated: September 26, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-24535 Filed 10-3-94; 8:45 am]
BILLING CODE 3510-DS-M
