[Federal Register Volume 60, Number 230 (Thursday, November 30, 1995)]
[Notices]
[Pages 61533-61536]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29269]
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DEPARTMENT OF COMMERCE
[A-791-803]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Circular Welded Non-
Alloy Steel Pipe From South Africa
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: November 30, 1995.
FOR FURTHER INFORMATION CONTACT: Jennifer Stagner or John Beck, Office
of Antidumping Investigations, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-1673 or (202) 482-3464, respectively.
The Applicable Statute: Unless otherwise indicated, all citations to
the Tariff Act of 1930, as amended (the Act) are references to the
provisions effective January 1, 1995, the effective date of the
amendments made to the Act by the Uruguay Rounds Agreements Act.
Preliminary Determination: Because of the federal government shutdown,
the deadline for this preliminary determination has been extended by
the number of days of the shutdown, six days, to Tuesday, November 21,
1995.
[[Page 61534]]
We preliminarily determine that circular welded non-alloy steel
pipe (pipe) from South Africa is being, or is likely to be, sold in the
United States at less than fair value (LTFV), as provided in section
733 of the Act. The estimated margins are shown in the ``Suspension of
Liquidation'' section of this notice.
Case History
Since the initiation of this investigation on May 16, 1995 (60 FR
27078 (May 22, 1995)), the following events have occurred:
On June 12, 1995, the United States International Trade Commission
(ITC) notified the Department of Commerce (the Department) of its
affirmative preliminary determination.
On June 30, 1995, we presented questionnaires to the South African
embassy, counsel for RIH, and Steel Pipe Industries. On July 5, 1995,
Steel Pipe Industries informed the Department that it does not export
pipe to the United States. Supplemental questionnaires were issued to
RIH in August, September, and October 1995. Responses to the original
and supplemental questionnaires were received in July through October
1995.
On September 14, 1995, the Department postponed the preliminary
determination to November 15, 1995. See Notice of Postponement of
Preliminary Determinations: Antidumping Duty Investigations of Circular
Welded Non-Alloy Steel Pipe From Romania and South Africa (60 FR 48690,
September 20, 1995).
Respondent Selection
The producers named in the petition were Brollo Africa, Robor
Industrial Holding (Pty) Ltd., Trident Steel, and Tosa; the trading
companies named in the petition were Dorbyl, Circle Freight, Extram,
Firestone, Hall Longmore Equipment Service, MacSteel, Protea
International, and TISCO International.
On June 8, 1995, a cable was sent to the U.S. embassy in South
Africa requesting the identification of South African producers and
exporters of pipe which was exported to the United States. We received
a response to our cable on July 17, 1995, identifying the following
additional companies as producers and sellers of the subject
merchandise to the United States during the period of the
investigation: (1) Bartons Precision (Pty) Ltd.; (2) Bosal Marketing
(Pty) Ltd.; (3) Steel Pipe Industries (Pty) Ltd.; and (4) Trident
Sterling Tube.
Based on the petition and information contained in Iron and Steel
Works of the World (1994), we determined to send questionnaires to
Brollo Africa, Robor Industrial Holdings, Steel Pipe Industries, and
Tosa. At the time of that determination, we had not received a response
from the U.S. Embassy in South Africa, but indicated that we were
running a data inquiry with the U.S. Customs database. See Memorandum
to the file regarding the appropriate questionnaire recipients, dated
June 30, 1995. Based on the U.S. Customs database and pursuant to
section 777A(c)(2)(B) of the Act, we found that we had sent
questionnaires to the exporters and producers accounting for the
largest volume of exports of the subject merchandise from South Africa
that could be reasonably examined. Thus, we did not send any additional
questionnaires.
Postponement of Final Determination
Pursuant to section 735(a)(2)(A) of the Act, on October 24, 1995,
the respondents requested that, in the event of an affirmative
preliminary determination in this investigation, the Department
postpone its final determination until 60 days after the date of the
scheduled final determination, which is equivalent to 135 days after
the publication of an affirmative preliminary determination in the
Federal Register. In accordance with 19 CFR 353.20(b), because our
preliminary determination is affirmative, the respondents account for a
significant proportion of exports of the subject merchandise, and no
compelling reasons for denial exist, we are granting respondents'
request and postponing the final determination.
Scope of Investigation
The following scope language reflects certain modifications from
the notice of initiation. In the initiation notice, we indicated that
our scope language may change based on any final scope determination
regarding the antidumping duty orders on certain circular welded non-
alloy steel pipe from Brazil, the Republic of Korea, Mexico and
Venezuela. See Preliminary Affirmative Determination of Scope Inquiry
on Antidumping Duty Orders on Certain Circular Welded Non-Alloy Steel
Pipe From Brazil, the Republic of Korea, Mexico, and Venezuela (59 FR
1929, January 13, 1994). However, the final determination has not yet
been made. Consequently, we have modified our scope language in an
effort to eliminate the need for use certification at this time.
For purpose of this investigation, circular welded non-alloy steel
pipes (standard pipes) are all pipes and tubes, of circular cross-
section, not more than 406.4 mm (16 inches) in outside diameter,
regardless of wall thickness, surface finish (black, galvanized, or
painted), end finish (plain end, bevelled end, threaded, or threaded
and coupled), or industry specification (ASTM, proprietary, or other)
used in standard or structural pipe applications.
The scope specifically includes, but is not limited to, all pipe
produced to the ASTM A-53, ASTM A-135, ASTM A-795, and BS-1387
specifications. It also includes any pipe multiple-stencilled or
multiple-certified to one of the above-listed specifications and to any
other specification. Pipe which meets the above physical parameters and
which is produced to proprietary specifications, the API-5L, the API-5L
X-42, or to any other non-listed specification is included within the
scope of this investigation if used in a standard or structural pipe
application, regardless of the Harmonized Tariff Schedule of the United
States (HTSUS) category into which it was classified. If the pipe does
not meet any of the above identified specifications, although it is
within the identified physical parameters described in the second
paragraph of this section, our presumption is that it is not used in a
standard pipe application.
Standard pipe uses include the low-pressure conveyance of water,
steam, natural gas, air, and other liquids and gases in plumbing and
heating systems, air conditioning units, automatic sprinkler systems,
and other related uses. Standard pipe may carry liquids at elevated
temperatures but may not be subject to the application of external
heat. Standard pipe uses also include load-bearing applications in
construction and residential and industrial fence systems. Standard
pipe uses also include shells for the production of finished conduit
and pipe used for the production of scaffolding.
Specifically excluded from this investigation are mechanical
tubing, tube and pipe hollows for redrawing, and finished electrical
conduit if such products are not certified to ASTM A-53, ASTM A-120,
ASTM A-135, ASTM A-795, and BS-1387 specifications and are not used in
standard pipe applications. Additionally, pipe meeting the
specifications for oil country tubular goods is not covered by the
scope of this investigation, unless also certified to a listed standard
pipe specification or used in a standard pipe application.
The merchandise under investigation is currently classifiable under
items 7306.30.10.00, 7306.30.50.25, 7306.30.50.32, 7306.30.50.40,
7306.30.50.55, 7306.30.50.85, and 7306.30.50.90 of the HTSUS. Although
the HTSUS subheadings are provided
[[Page 61535]]
for convenience and customs purposes, our written description of the
scope of this investigation is dispositive.
Regarding implementation of the use provision of the scope of this
investigation, and any order which may be issued in this investigation,
we are well aware of the difficulty and burden associated with such
certifications. Therefore, in order to maintain the effectiveness of
any order that may be issued in light of actual substitution in the
future (which the use criterion is meant to achieve), yet administer
certification procedures in the least problematic manner, we have
developed an approach which simplifies these procedures to the greatest
extent possible.
First, we will not require use certification until such time as
petitioner or other interested parties provide the Department with a
reasonable basis to believe or suspect that substitution is occurring.
Second, we will require use certification only for the product(s) (or
specification(s)) for which evidence is provided that substitution is
occurring. For example, if, based on evidence provided by petitioner,
the Department finds a reasonable basis to believe or suspect that pipe
produced to the API-5L specification is being used as standard pipe, we
will require use certifications for imports of API-5L specification
pipe. Third, normally we will require only the importer of record to
certify to the use of the imported merchandise. If it later proves
necessary for adequate implementation, we may also require producers
who export such products to the United States to provide such
certification on invoices accompanying shipments to the United States.
Period of Investigation
The period of investigation (POI) is April 1, 1994, through March
31, 1995.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products sold in the home market, fitting the description specified in
the ``Scope of Investigation'' section above, to be foreign like
products for purposes of determining appropriate product comparisons to
U.S. sales. Where there were no sales of identical merchandise in the
home market to compare to U.S. sales, we compared U.S. sales to the
next most similar foreign like product on the basis of the
characteristics listed in the Department's antidumping questionnaire.
RIH claimed that it sells to customers at two levels of trade in
the home market: distributors and end-users/fabricators. However, RIH
reported that there are no differences in the selling functions it
performed for the different customers. Thus, based on the absence of
distinct levels of trade, we did not make any distinctions between
levels of trade in our comparisons.
Fair Value Comparisons
To determine whether RIH's sales of pipe to the United States were
made at less than fair value, we compared Export Price (EP) to the
Normal Value (NV), as specified below.
Export Price
We calculated EP, in accordance with section 772(a) of the Act,
because the subject merchandise was sold to the first unaffiliated
purchaser in the United States prior to importation, and Constructed
Export Price (CEP) under section 772(b) is not otherwise warranted
based on the facts of this investigation.
We based EP on packed, FOB Port (U.S. or Durban, South Africa)
prices to unaffiliated customers in the United States. We made
deductions from the starting price (gross unit price), where
appropriate, for the following charges: inland freight in South Africa;
international freight; marine insurance; and brokerage and handling.
Normal 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 NV,
we compared the volume of RIH's home market sales of the subject
merchandise to the volume of RIH's U.S. sales of the subject
merchandise, in accordance with section 773(a)(1)(B) of the Act. Since
RIH's aggregate volume of home market sales of the subject merchandise
was greater than five percent of its aggregate volume of U.S. sales for
the foreign like product, we determined that the home market was
viable. Therefore, we have based NV on home market sales.
We based NV on FOB factory, delivered, or collected prices to
unaffiliated customers, or prices to affiliated customers which were
determined to be at arm's length (see discussion below regarding these
sales). We made deductions from the starting price for freight,
discounts, and rebates, and post-sale billing corrections. For certain
sales, we added freight revenue to the gross unit price. In accordance
with section 773(a)(6) of the Act, we deducted home market packing
costs and added U.S. packing costs.
In addition, we adjusted for differences in the circumstances of
sale, in accordance with section 773(a)(6)(C)(iii). These circumstances
included differences in imputed credit expenses and commissions. We
instructed RIH to report a sample of actual payment dates for purposes
of calculating credit expenses. Based on this sample, we have
calculated a weighted-average credit period to be used for those sales
without actual payment days. We then calculated credit expenses for all
home market sales using a POI-average interest rate.
RIH requested that we make a circumstance-of-sale adjustment for
rebates it receives from its steel suppliers for exported pipe. As
stated in Final Results of Antidumping Duty Administrative Review;
Light-Walled Welded Rectangular Carbon Steel Tubing from Taiwan (56 FR
26382, June 7, 1991) (Tubing from Taiwan), we will not make
circumstance of sale adjustments to account for differences in
production costs. In Tubing from Taiwan, the Department denied a
circumstance of sale adjustment for the same type of rebate involved
here. Although the rebate was paid on export, we found it to be a
delayed price adjustment on raw materials used in the production of the
exported merchandise. Thus, the rebate involved a difference in
production costs, not a difference in circumstances of sales, between
the exported and domestically consumed product. Similarly, as the
rebate received by RIH does not reflect a difference in the
circumstances of sales, we have made no adjustment for these rebates.
RIH paid commissions on some U.S. sales, but paid no commissions on
any home market sales. Thus, we deducted the lesser of either (1) the
amount of the weighted-average commission paid on the U.S. sales of a
product; or (2) the sum of the weighted average indirect selling
expenses paid on the home market sales, and then added the weighted-
averaged amount of the commission paid on the U.S. sales to NV in
accordance with 19 CFR 353.56(b)(1).
RIH reported that its sales to its affiliated resellers are made at
arm's length. In our October 13, 1995, supplemental questionnaire, we
instructed RIH to report all sales to the final customer, rather than
to its affiliated resellers. In its questionnaire response, RIH stated
that it was too burdensome to report this information due to the
difficulties involved in tracing these sales to the first unaffiliated
customer.
For purposes of the preliminary determination, we have accepted
RIH's argument regarding this burden. RIH has not, however, adequately
demonstrated
[[Page 61536]]
that the sales to the first unaffiliated customer would not provide
appropriate matches to U.S. sales for reasons of differences in product
characteristics, differences in level of trade, or other criteria
relevant to our analysis. Therefore, for purposes of our final
determination, we believe it is appropriate to require further
reporting of the sales to the first unaffiliated customer unless RIH
can provide additional reasoning to show that these sales are not
appropriate to use in our analysis. Thus, we will send an additional
questionnaire regarding these sales to RIH.
Accordingly, for purposes of the preliminary determination, we have
included only those sales to affiliated parties that passed the arm's
length test. See 19 CFR 353.45(a). To test whether these sales were
made at arm's length, we compared the gross unit prices of sales to
affiliated and unaffiliated customers net of all movement charges,
direct and indirect selling expenses, and packing. See Final
Determination of Sales at Less Than Fair Value; Certain Cold-Rolled
Carbon Steel Flat Products from Argentina (58 FR 37062, 37077, July 9,
1993).
Comparison Methodology
In accordance with section 777A(d)(1)(A)(i), we calculated
weighted-average EPs for comparisons to weighted average NVs. The
weighted-averages were calculated and compared by product
characteristics.
Currency Conversion
For the purpose of the preliminary determination, 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. We were
unable to obtain the official daily exchange rates as certified by the
Federal Reserve Bank of Chicago, according to section 773A(a) of the
Act, in time to use for the preliminary determination. However, we are
expecting to receive these rates in time to use for the final
determination.
Verification
As provided in section 782(i) of the Act, we will verify all
information used in making our final determination.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing the
Customs Service to suspend liquidation of all entries of circular
welded non-alloy steel pipe from South Africa, 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
will require a cash deposit or posting of a bond equal to the estimated
amount by which the normal value exceeds the export price as shown
below. These suspension of liquidation instructions will remain in
effect until further notice.
The weighted-average dumping margins are as follows:
------------------------------------------------------------------------
Weighted-
average
Exporter/manufacturer margin
percentage
------------------------------------------------------------------------
RIH Group, including Brollo Africa and Tosa................. 135.36
All Others.................................................. 135.36
------------------------------------------------------------------------
The all others rate applies to all entries of subject merchandise
except for entries of merchandise produced by RIH Group and its
divisions: Brollo Africa and Tosa.
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 before the later of 120 days after the date of
this preliminary determination or 45 days after our final determination
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry.
Public Comment
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 for Import Administration no later than February 27, 1996,
and rebuttal briefs, no later than March 5, 1996. A list of authorities
used and an executive summary of issues should accompany any briefs
submitted to the Department. Such summary should be limited to five
pages total, including footnotes. In accordance with 19 CFR 353.38, we
will hold a public hearing, if requested, to afford interested parties
an opportunity to comment on arguments raised in case or rebuttal
briefs. Tentatively, the hearing will be held on March 8, 1996, time
and place to be determined, at the U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230. Parties
should confirm by telephone the time, date, and place of the hearing 48
hours before the scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, 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(b), oral presentations will
be limited to issues raised in the briefs. If this investigation
proceeds normally, we will make our final determination by 135 days
after the publication of this notice in the Federal Register.
This determination is published pursuant to section 733(f) of the
Act.
Dated: November 21, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-29269 Filed 11-29-95; 8:45 am]
BILLING CODE 3510-DS-P
