[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: 94-24539]
[[Page Unknown]]
[Federal Register: October 4, 1994]
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DEPARTMENT OF COMMERCE
[A-549-809]
Notice of Preliminary Determination of Sales at Less Than Fair
Value: Certain Carbon Steel Butt-Weld Pipe Fittings From Thailand
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: October 4, 1994.
FOR FURTHER INFORMATION CONTACT:
Vincent Kane or Julie Anne Osgood, 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-
2815 or 482-0167, respectively.
Preliminary Determination: We have preliminary determined that
certain carbon steel butt-Weld pipe fittings from Thailand are being
sold in the United States at less than fair value, as provided in
section 733 of the Tariff Act of 1930, as amended (the ``Act''). The
estimated margin is 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-689, 59 FR 18825 (April 20, 1994)).
The Department issued its antidumping duty questionnaire to Asahi
Sangyo (Thailand) Co., Ltd. (AST), on April 29, 1994. AST was the only
Thai producer and exporter to be excluded from the antidumping duty
order on butt-weld pipe fittings from Thailand published on July 6,
1992 (57 FR 29702). All other producers and exporters of the subject
merchandise to the United States are subject to the antidumping duty
order currently in effect. AST was excluded from the original order
because we found its margin of sales at less than fair value at that
time to be de minimis.
On June 18, 1994, petitioner alleged that AST was selling the
subject merchandise in Thailand at less than its cost of production.
On August 12, 1994, we found, in accordance with section 773(b),
that reasonable grounds exist to believe or suspect that sales in the
home market were being made at less than the cost of production based
on information contained in the record, including petitioner's
allegation. On August 15, 1994, we issued a cost of production and
constructed value questionnaire to AST. We received a response from AST
on September 9, 1994.
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 period of investigation (``POI'') is September 1, 1993, through
February 28, 1994.
Such or Similar Comparisons
In making our fair value comparisons, in accordance with the
Department's standard methodology, we first compared sales of
merchandise identical in all respects. If no identical merchandise was
sold, we compared sales of the most similar merchandise, as determined
by the model-matching criteria contained in Appendix V of the
questionnaire (``Appendix V'') (on file in room B-099 of the main
building of the Department of Commerce (``Public File'')).
Regarding level of trade, AST reported that it sells to an
importer/distributor in the United States and directly to distributors,
end users, and a commissionaire agent in Thailand. AST negotiates
prices on a sale-by-sale basis and states that it is unable to discern
any correlation between selling prices and customer categories.
Further, AST states that its selling expenses do not vary by customer
category. Therefore, in keeping with past practice (see, e.g., Final
Results of Administrative Review: Antifriction Bearings and Parts
Thereof from the Federal Republic of Germany, et al. (56 FR 31692,
31709-11; July 11, 1991) and Import Administration Policy Bulletin 92/
1, Matching at Levels of Trade, issued on July 29, 1992)), and in
accordance with 19 CFR 353.58, we have compared AST's U.S. sales to its
home market sales to all customers.
Fair Value Comparisons
To determine whether AST's sales for export to the United 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 AST'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 PP based on packed, c.i.f. port of import prices to
an unrelated customer in the United States. We made deductions to the
U.S. price for foreign brokerage, foreign inland freight, ocean freight
and marine insurance.
We made an adjustment to U.S. price for the consumption tax paid on
the comparison sales in Thailand, in accordance with our practice,
pursuant to the Court of International Trade (CIT) decision in Federal-
Mogul, et al v. United States, 834 F. Supp. 1291. See Preliminary
Antidumping Duty Determination and Postponement of Final Determination;
Color Negative Photographic Paper and Chemical Components Thereof from
Japan, 59 FR 16177, 16179, April 6, 1994, for an explanation of this
tax methodology.
Foreign Market Value
In order to determine whether there was 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 AST's sales to its home market customers and CV, as
described below.
Cost of Production
In order to determine whether home market prices were below the COP
within the meaning of section 773(b) of the Act, we calculated COP
based on the sum of AST's cost of materials, fabrication, general
expenses and home market packing costs. We compared individual home
market prices net of inland freight and commission with model-specific
COPs.
We performed a product-specific COP test, in which we examined
whether each home market sale was priced below that product's COP. The
Department defines COP as the sum of direct material, direct labor,
variable and fixed factory overhead, general expenses, and packing. For
each product, we compared this sum to the home market unit price, net
of movement expenses and commission. In accordance with section 733(b)
of the Act, we also examined whether the home market sales of each
product were made at prices below their COP in substantial quantities
over an extended period of time, and whether such sales were made at
prices that would permit recovery of all costs within a reasonable
period of time in the normal course of trade.
For each product where less than ten percent, by quantity, of the
home market sales during the POI were made at prices below the COP, we
included all sales of that model for the computation of FMV. For each
product where ten percent of more, but less than 90 percent, of the
home market sales during the POI were prices below the COP, we excluded
from the calculation of FMV those home market sales which were prices
below the COP, provided that the below-cost sales of that product were
made over an extended period of time. Where we found that more than 90
percent of respondent's sales were at prices below the COP, and such
sales were over an extended period of time, we disregarded all sales of
that product and calculated FMV based on CV, in accordance with section
773(b) of the Act.
In order to determine whether below-cost sales had been made over
an extended period of time, we compared the number of months in which
below-cost sales occurred for each product to the number of months in
the POI in which that product was sold. If a product was sold in fewer
than three months during the POI, we did not exclude sales unless there
were below cost sales in each month of sale. If a product was sold in
three or more months, we did not exclude the below-cost sales unless
there were below-cost sales in at least three months during the POI.
If sales below cost occurred in three or more months of the POI,
they are considered to be made over an extended period of time. When
items are sold in just two or three months of the POI, we would
consider below cost sales of these items to be over an extended period
of time, if they occurred in at least two months of the three months.
When items are sold in just one month of the POI, we would consider any
below cost sales of these items to be over an extended period of time.
AST provided no indication that the disregarded sales were at
prices that would permit recovery of all costs within a reasonable
period of time and in the normal course of trade. (See, Section
773(b)(2); 19 U.S.C. 1677b(b)(2)).
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 AST's reported general expenses or the
statutory minimum of ten percent of the cost of manufacture (COM), as
appropriate and; 2) for profit, we used the statutory minimum of eight
percent of the sum of COM and general expenses.
Price-to-Price Comparisons
For price-to-price comparisons, we calculated FMV based on ex-
factory or delivered prices, inclusive of packing to home market
customers. From these prices, we deducted commission, where
appropriate. We deducted home market packing costs and added U.S.
packing costs in accordance with section 773(a)(1) of the Act. We also
made adjustments, where appropriate, for differences in the physical
characteristics of the merchandise in accordance with section 773(a)(1)
of the Act.
In light of the Court of Appeals for the Federal Circuit's decision
in Ad Hoc Committee of AZ-NM-TX-FL Producers of Gray Portland Cement v.
United States, 13 F. 3d 398 (Fed. Cir., January 5, 1994), the
Department no longer can deduct home market movement charges from FMV
pursuant to its inherent power to fill in gaps in the antidumping
statute. Instead, we adjust for those expenses under the circumstance-
of-sale provision of 19 CFR 353.56(a) and the exporter's sales price
offset provision of 19 CFR 353.56(b)(2), as appropriate. Accordingly,
in the present case, we deducted post-sale home market movement charges
from the FMV under the circumstance-of-sale provision of 19 CFR
353.56(a). This adjustment included home market inland freight.
For both price-to-price comparisons and comparisons to CV, we also
made circumstance-of-sale adjustments, where appropriate, for
differences in credit expenses, pursuant to 19 CFR 353.56(a)(2). For
U.S. sales with unreported payment dates, we based AST's credit expense
on the average number of days outstanding between shipment and payment
for AST's U.S. sales with reported payment dates. For a discussion of
the Department's treatment of credit in this investigation, please see
Memorandum from Barbara R. Stafford to Susan G. Esserman (September 26,
1994) on file in room B-099 of the U.S. Department of Commerce. In
accordance with 19 CFR 353.56(b)(1), we added U.S. indirect selling
expenses as an offset to the home market commission, but capped this
addition by the amount of the home market commission.
We adjusted for a consumption tax collected in the Thai home
market. (See, the United States Price section of this notice, above.)
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.
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 Customs Service to suspend liquidation of all entries of butt-weld
pipe fittings from Thailand, as defined in the ``Scope of
Investigation'' section of this notice, that are produced and sold by
AST and 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 the posting of
a bond equal to the estimated preliminary dumping margins, as shown
below. The suspension of liquidation will remain in effect until
further notice. The weighted-average dumping margins are as follows:
------------------------------------------------------------------------
Margin
Manufacturer/Producer/Exporter percent
------------------------------------------------------------------------
Asahi Sangyo (Thailand) Co., Ltd............................. 10.37
------------------------------------------------------------------------
Adjustment of Deposit Rate for Countervailing Duties
Article VI, paragraph 5 of the General Agreement on Tariffs and
Trade provides that ``[no] product . . . shall be subject to both
antidumping and countervailing duties to compensate for the same
situation for dumping or export subsidization.'' This provision is
implemented by section 772(d)(1)(D) of the Act. Since antidumping
duties cannot be assessed on the portion of the margin attributable to
export subsidies, there is no basis to require a cash deposit or bond
for that amount.
Accordingly, the level of export subsidies as determined in the
most recent administrative review of the countervailing duty order,
Carbon Steel Butt-Weld Pipe Fittings From Thailand; Final Results of
Countervailing Duty Administrative Review, (57 FR 5248, February 13,
1992), which was 0.74 percent, will be subtracted from the margin for
cash deposit or bonding purposes. This results in a deposit rate of
9.63 percent for AST. We did not determine an ``all others'' rate in
this investigation, because all other producers and exporters of butt-
weld pipe fittings from Thailand are already subject to an antidumpting
duty order on this merchandise, which was published in the Federal
Register on July 6, 1992 (57 FR 29702).
ITC Notification
In accordance with section 733(f) of the 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 U.S. 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 day. In accordance with 19 CFR
353.38(b), oral presentations will be limited to issues raised in the
briefs.
We will make our final determination not later than 75 days after
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. 94-24539 Filed 10-3-94; 8:45 am]
BILLING CODE 3510-DS-M
