[Federal Register Volume 64, Number 248 (Tuesday, December 28, 1999)]
[Notices]
[Pages 72645-72649]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33654]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-810]
Certain Welded ASTM A-312 Stainless Steel Pipe from Korea:
Preliminary Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
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SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order on certain welded
ASTM A-312 stainless steel pipe (WSSP) from Korea in response to a
request by Avesta Sheffield Pipe Co.; Damascus Tube Division, Damascus-
Bishop Tube Co.; and the United Steelworkers of America (AFL-CIO/CLC),
herein referred to as ``the domestic industry.'' This review covers
exports of subject merchandise to the United States during the period
December 1, 1997, through November 30, 1998.
We have preliminarily determined that SeAH Steel Corporation Ltd.
(SeAH) has made sales below normal value (NV). If these preliminary
results are adopted in our final results of this administrative review,
we will instruct the U.S. Customs Service to assess antidumping duties
based on the difference between the constructed export price (CEP) and
the NV.
Interested parties are invited to comment on these preliminary
results. Parties who submit comments are requested to submit with each
comment a statement of the issue and a brief summary of the comment.
EFFECTIVE DATE: December 28, 1999.
FOR FURTHER INFORMATION CONTACT: Thomas Gilgunn, Mark Hoadley, or
Maureen Flannery, AD/CVD Enforcement, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington D.C. 20230: telephone:
(202) 482-0648, (202) 482-0666, and (202) 482-3020, respectively.
APPLICABLE STATUTE AND REGULATIONS: Unless otherwise stated, all
citations to the statute are references to the provisions effective
January 1, 1995, the effective date of the amendments made to the
Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act. In
addition, unless otherwise stated, all
[[Page 72646]]
citations to the Department's regulations are references to the
regulations as codified at 19 CFR Part 351 (1999).
SUPPLEMENTARY INFORMATION:
Background
The Department published in the Federal Register the antidumping
duty order on WSSP from Korea on December 30, 1992 (57 FR 62301). On
December 8, 1998, we published in the Federal Register (63 FR 67646) a
notice of opportunity to request an administrative review of the
antidumping duty order on WSSP from Korea covering the period December
1, 1998 through November 30, 1999.
In accordance with 19 CFR 351.213(b)(1), the domestic parties
requested that we conduct an administrative review of SeAH's sales. We
published a notice of initiation of this antidumping duty
administrative review on January 25, 1999 (64 FR 36821).
During this review, the Department conducted a verification of the
information provided by SeAH from November 11, 1999 through November
13, 1999. We used standard verification procedures, including the
examination of relevant sales and financial records. Our verification
results for SeAH are outlined in business proprietary and public
versions of the verification reports on file with the Central Records
Unit, in Room B-099 of the Herbert C. Hoover Building.
Scope of the Review
The merchandise subject to this administrative review, WSSP, is
austenitic stainless steel pipe 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. 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
these products are currently classifiable under the following United
States Harmonized Tariff Schedule (HTS) subheadings: 7306.40.5005,
7306.40.5015, 7306.40.5045, 7306.40.5060 and 7306.40.5075. Although
these subheadings include both pipes and tubes, the scope of this order
is limited to welded austenitic stainless steel pipes.
Although HTS subheadings are provided for convenience and Customs
purposes, the written description of the scope of this order remains
dispositive.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by SeAH covered by the description in the ``Scope of
Review'' section, above, and sold in the home market during the period
of review (POR) to be foreign like products for the purposes of
determining appropriate product comparisons with U.S. sales. In the
Product Characteristics section (B3.1-B3.n and C3.1-C3.n) of our
questionnaire, we provided the following hierarchy of product
characteristics to be used for reporting identical and most similar
comparisons of merchandise: (1) Specification/Alloy; (2) Size; (3) Hot
or Cold Finish; (4) Wall Thickness; (5) End Finish; (6) Pipe Length;
and (7) Other Characteristics.
Comparisons to Normal Value
To determine whether sales of subject merchandise to the United
States were made at less than NV, we compared the CEP to NV, as
described in the ``United States Price'' and ``Normal Value'' sections
of this notice. In accordance with section 777A(d)(2) of the Act, we
calculated monthly weighted-average home market prices for NV and
compared these to individual U.S. transaction prices.
United States Price
Because SeAH and Pusan Pipe of America (PPA) are affiliated, and
the subject merchandise was not sold to an unaffiliated purchaser until
after its importation into the United States, we used CEP as United
States Price. The starting price for CEP is the price from PPA to
unaffiliated customers in the United States.
The Department calculated CEP for SeAH based on the ``ex port duty
paid'' (net of discounts) price to PPA's customer in the United States.
In accordance with section 772(c)(2) of the Act, we reduced CEP by
movement expenses (foreign inland freight, foreign brokerage, ocean
freight, marine insurance, U.S. brokerage, and U.S. duties). In
accordance with section 772(d)(1) of the Act, we deducted direct
selling expenses (credit and warranty expenses) and indirect selling
expenses, including inventory carrying costs. Finally, we added Korean
duty drawback and made an adjustment for an amount of profit allocated
to selling expenses incurred in the United States, in accordance with
section 772(c) and (d) of the Act.
Date of Sale
Under the Department's current practice, the invoice date is
normally the date of sale. We may, however, use a date other than the
invoice date if we are satisfied that a different date better reflects
the date on which the exporter or producer establishes the material
terms of sale. See 19 CFR 351.401(i); Preamble to the Antidumping Duty
Regs., 62 FR at 27411.
SeAH reported PPA's date of invoice as its U.S. date of sale. The
domestic industry argued that the Department should deny SeAH's
reported date of sale. The domestic industry asserts that both price
and quantity are established before the date that PPA issues its
invoice and that PPA is ``not responsible for the establishment of the
terms of sale.''
After examination of SeAH's and PPA's respective roles in sales
process, we determined that one of the material terms (i.e. quantity)
of SeAH's sales to unaffiliated customers are not fixed until PPA's
invoice date. Thus, we used the date of PPA's invoice to its
unaffiliated customer as the date of sale.
Because most of the information on which we relied to perform our
analysis is proprietary, it cannot be discussed in this notice.
However, a memorandum detailing our analysis has been prepared. (See
the proprietary version of the Memo from Thomas Gilgunn to Barbara E.
Tillman regarding ``Date of Sale for SeAH Steel Corporation and Pusan
Pipe America'' (Decision Memo), dated December 17, 1999.)
Normal Value
The Department determines the viability of the home market as the
comparison market by comparing the aggregate quantity of home market
and U.S. sales. We found that SeAH's quantity of sales in its home
market exceeded five percent of its sales to the United States. We
therefore have determined that SeAH's home market sales are viable for
purposes of comparison with sales of the subject merchandise to the
United States, pursuant to section 773(a)(1)(C) of the Act and section
351.404 of our regulations. Therefore, in accordance with section
773(a)(1)(B)(i) of the Act, we based NV on the price, net of discounts,
at which the foreign like product was first sold for consumption in the
home market, in the usual commercial quantities and in the ordinary
course of trade and, to the extent practicable, at the same level of
trade as the CEP sales. See the ``Level of
[[Page 72647]]
Trade section'' below. We determined what home market merchandise was
most similar to the merchandise sold in the United States on the basis
of product characteristics set forth in sections B and C of the
Department's questionnaire.
For comparisons to CEP, we made COS adjustments by deducting home
market direct selling expenses (credit expenses) pursuant to section
773(a)(6)(C)(iii) of the Act. We also made adjustments, where
applicable, for movement expenses, in accordance with sections
773(a)(6)(A) and (a)(6)(B) of the Act. We also made adjustments for
differences in the costs of manufacture for subject merchandise and
matching foreign like products, attributable to their differing
physical characteristics, pursuant to section 773(a)(6)(C)(ii) of the
Act, and, based upon our level of trade analysis, discussed below, for
home market indirect selling expenses up to the amount of U.S. indirect
selling expenses, in accordance with section 773(a)(7)(B) of the Act
and section 351.412(f) of the Department's regulations. See Analysis
Memorandum (December 17, 1999).
Cost of Production
In the last completed segment of this proceeding, the Department
disregarded sales below the cost of production (COP). See Final
Determination of Sales at Less Than Fair Value: Certain Welded
Stainless Steel Pipe From The Republic of Korea, 57 FR 53693, (November
12, 1992). We therefore have reasonable grounds to believe or suspect,
pursuant to section 773(b)(2)(A)(ii) of the Act, that sales of the
foreign like product under consideration for the determination of NV in
this review may have been made at prices below COP. Pursuant to section
773(b)(1) of the Act, we initiated a COP investigation of sales in the
home market. Using market sales and COP information provided by the
respondent, we compared sales of the foreign like product in the
comparison market with the model-specific COP figure for the POR. In
accordance with section 773(b)(3) of the Act, we calculated the COP
based on the sum of the costs of materials and fabrication employed in
producing the foreign like product, plus selling, general and
administrative (SG&A) expenses, including all costs and expenses
incidental to placing the foreign like product in condition packed and
ready for shipment.
After calculating COP, we tested whether comparison market sales of
the foreign like product were made at prices below COP and, if so,
whether the below-cost sales were made within an extended period of
time in substantial quantities, and at prices that did not permit
recovery of all costs within a reasonable period of time. Because each
individual price was compared to the POR-long average COP, any sales
that were below cost were also determined not to be at prices which
permitted cost recovery within a reasonable period of time. We compared
model-specific COPs to the reported comparison market prices less any
applicable movement charges, discounts, and rebates.
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of a respondent's sales of a given model were at prices less
than COP, we did not disregard any below-cost sales of that model
because the below-cost sales were not made in substantial quantities
within an extended period of time. Where 20 percent or more of a
respondent's sales of a given model during the POR were at prices less
than the weighted-average COPs for the POR, we disregarded the below-
cost sales because they were made over an extended period of time in
substantial quantities in accordance with sections 773(b)(2) (B) and
(C) of the Act, and were at prices which would not permit recovery of
all costs within a reasonable period of time in accordance with section
773(b)(2)(D) of the Act.
Constructed Value
In accordance with section 773(a)(4) of the Act, we used
constructed value (CV) as the basis for NV when there were no above-
cost contemporaneous sales of identical or similar merchandise in the
comparison market. We calculated CV in accordance with section 773(e)
of the Act. We included the cost of materials and fabrication, selling,
general and administrative expenses (SG&A), and profit. In accordance
with section 773(e)(2)(A) of the Act, we based SG&A expenses and profit
on the amounts incurred and realized by the respondents in connection
with the production and sale of the foreign like product in the
ordinary course of trade for consumption in the foreign country. For
selling expenses, we used the weighted-average home market selling
expenses.
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the home market at the
same level of trade (LOT) as U.S. sales. The NV LOT is the level of the
starting-price sale in the home market or, when NV is based on
constructed value, the level of the sales from which we derive selling,
general, and administrative expenses (SG&A) and profit. For export
price, the U.S. LOT is also the level of the starting-price sale, which
is usually from exporter to importer. For CEP, 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 export price or CEP, 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 comparison-market sales at the LOT of the export transaction, we
make a LOT adjustment under section 773(a)(7)(A) of the 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 under section 773(a)(7)(B) of the 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).
For merchandise sold in the home market during this POR, SeAH
claimed two distribution channels and one LOT. Regardless of the
distribution channel, the selling functions performed by SeAH were
substantially the same. Therefore, we concluded all sales in the home
market were made at one LOT. Further, because all U.S. sales were CEP
sales made in the same distribution channel and SeAH performed the same
selling functions for all customers, we concluded that all sales in the
U.S. market were made at one LOT.
We then compared the selling functions in the U.S. and home
markets. At the level of CEP sales to the United States, i.e., after
eliminating from consideration the selling functions associated with
deductions made under section 772 of the Act, we found that the CEP
sales were made at a different and less advanced level of trade than
home market sales.
Because there are no sales in the home market made at the same LOT
as sales in the United States, we were not able to determine whether
the difference in LOT affects price comparability. Therefore, we made a
CEP offset adjustment. In accordance with 19 CFR 351.412(f)(2), we
deducted indirect selling expenses from NV to the extent of U.S.
indirect selling expenses deducted in calculating CEP. For a further
discussion of the Department's
[[Page 72648]]
LOT analysis with respect to SeAH, see Analysis Memorandum (December
17, 1999).
Currency Conversion
We made currency conversions in accordance with section 773A of the
Act. Section 773A(a) of the Act directs the Department to use a daily
exchange rate to convert foreign currencies into U.S. dollars unless
the daily rate involves a fluctuation. The Department considers a
``fluctuation'' to exist when the daily exchange rate differs from the
benchmark rate by 2.25 percent or more. The benchmark is defined as the
moving average of rates for the past 40 business days. When we
determine a fluctuation to have existed, we generally substitute the
benchmark rate for the daily rate, in accordance with established
practice. (An exception to this rule is described below.) (For an
explanation of this method, see Policy Bulletin 96-1: Currency
Conversions (61 FR 9434, March 8, 1996).)
Our analysis of the U.S. dollar/Korean won exchange rates
demonstrates that the Korean won declined rapidly in November and
December 1997. Specifically, the won declined more than 40 percent over
this two-month period. The decline was, in both speed and magnitude,
many times more severe than any change in the dollar-won exchange rate
during recent years, and it did not rebound significantly in a short
time. As such, we determine that the decline in the won during November
and December 1997 was of such magnitude that the dollar-won exchange
rate cannot reasonably be viewed as having simply fluctuated at that
time, i.e., as having experienced only a momentary drop in value
relative to the normal benchmark. Accordingly, the Department used
actual daily exchange rates exclusively in November and December 1997.
See Notice of Final Determination of Sales at Less Than Fair Value:
Stainless Steel Sheet and Strip from the Republic of Korea, 64 FR
30664, 30670 (June 8, 1999) (``SSSS from Korea''). We note, however,
that we have refined our methodology somewhat from that applied in SSSS
from Korea. We recognize that, following a large and precipitous
decline in the value of a currency, a period may exist wherein it is
unclear whether further declines are a continuation of the large and
precipitous decline or merely fluctuations. Under the circumstances of
this case, such uncertainty may have existed following the large,
precipitous drop in November and December 1997. Thus, we devised a
methodology for identifying the point following a precipitous drop at
which it is reasonable to presume that rates, more than 2.25 percent
from the benchmark, were merely fluctuating. Following the precipitous
drop in November and December 1997, we continued to use only actual
daily rates until the daily rates were not more than 2.25 percent below
the average of the 20 previous daily rates for five consecutive days.
At that point, we determined that the pattern of daily rates no longer
reasonably precluded the possibility that they were merely
``fluctuating.'' Using a 20-day average for this purpose provides a
reasonable indication that it is no longer necessary to refrain from
using the normal methodology, while avoiding the use of daily rates
exclusively for an excessive period of time. Accordingly, from the
first of these five days, we resumed classifying daily rates as
``fluctuating'' or ``normal'' in accordance with our standard practice,
except that we began with a 20-day benchmark and on each succeeding day
added a daily rate to the average until the normal 40-day average was
restored as the benchmark. See Notice of Final Results of Antidumping
Duty Administrative Review: Certain Welded Carbon Steel Pipes and Tubes
from Thailand, 64 FR 56759, 56763 (October 21, 1999). See also
Polyethylene Terephthalate Film, Sheet and Strip From Korea: Final
Results of Antidumping Duty Administrative Review and Notice of Intent
Not To Revoke in Part, 64 FR 62648, 62649 (November 17, 1999).
Applying this methodology in the instant case, we used daily rates
from November 3, 1997, through January 13, 1998. We then resumed the
use of our normal methodology, starting with a benchmark based on the
average of the 20 reported daily rates from January 14, 1998. We used
the normal 40-day benchmark from February 12, 1998 to the close of the
review period.
Preliminary Results of Review
As a result of our review, we preliminarily determine the weighted-
average dumping margin for the period December 1, 1997 through November
30, 1998 to be as follows:
------------------------------------------------------------------------
Margin
Manufacturer/exporter percentage
------------------------------------------------------------------------
SeAH....................................................... 2.44
------------------------------------------------------------------------
The Department will disclose to the parties to the proceeding
calculations performed in connection with these preliminary results of
review within five days after the date of publication of these
preliminary results of review.
Any interested party may request a hearing within 30 days of
publication. Any hearing, if requested, will be held 2 days after the
date of filing of rebuttal briefs or the first business day thereafter.
Case briefs from interested parties may be submitted not later than 30
days after publication. Rebuttal briefs, limited to issues raised in
case briefs, may be filed not later than five days after the date of
filing of case briefs. The Department will publish the final results of
this administrative review, including its analysis of issues raised in
the case and rebuttal briefs, not later than 120 days after the date of
publication of this notice.
Upon issuance of the final results of review, the Department shall
determine, and the U.S. Customs Service shall assess, antidumping
duties on all appropriate entries. In accordance with 19 CFR
351.202(b), we calculated an importer-specific ad valorem duty
assessment rate based on the ratio of the total amount of antidumping
duties calculated for the examined sales to the total customs value of
the sales used to calculate those duties. This rate will be assessed
uniformly on all entries of that particular importer made during the
POR.
Furthermore, the following deposit requirements will be effective
for all shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided by section 751(a) of the Act: (1) The cash deposit rate for
each reviewed company will be that established in the final results of
review (except that no deposit will be required for firms with de
minimis margins, i.e., margins less than 0.5 percent); (2) for
exporters not covered in this review, but covered in the less than fair
value (LTFV) investigation or a previous review, 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 previous 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; (4) the
cash deposit rate for all other manufacturers or exporters will
continue to be the ``all others'' rate established in the LTFV
investigation, which was 6.83 percent. These requirements, when
imposed, shall remain in effect until publication of the final results
of the next administrative review.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 351.402(f) to file a certificate regarding
the
[[Page 72649]]
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 antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review and notice are issued in accordance with
sections 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 1675(a)(1) and
19 U.S.C 1677f(i)(1)).
Dated: December 17, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-33654 Filed 12-27-99; 8:45 am]
BILLING CODE 3510-DS-P
