[Federal Register Volume 63, Number 25 (Friday, February 6, 1998)]
[Notices]
[Pages 6155-6159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3078]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-489-501]
Notice of Preliminary Results of Antidumping Duty Administrative
Review: Certain Welded Carbon Steel Pipe and Tube From Turkey
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request by Allied Tube & Conduit and
Wheatland Tube Company, the petitioners in this case, the Department of
Commerce is conducting an administrative review of the antidumping duty
order on certain welded carbon steel pipe and tube from Turkey. This
review covers one manufacturer/exporter.\1\ The period of review is May
1, 1996, through April 30, 1997.
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\1\ As noted below, we initiated a review of three companies.
However, two of these companies did not have shipments during the
period of review. Accordingly, we have not reviewed any shipments by
these companies.
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We preliminarily determine that, for the one company that had
shipments during the review period, sales have not been made below
normal value. If these preliminary results are adopted in the final
results, we will instruct the Customs Service not to assess antidumping
duties on the subject merchandise exported by this company.
Interested parties are invited to comment on the preliminary
results. Parties that submit arguments are requested to submit with
each argument: (1) A statement of the issue; and (2) a brief summary of
the argument.
EFFECTIVE DATE: February 6, 1998.
FOR FURTHER INFORMATION CONTACT: Charles Riggle or Kris Campbell, AD/
CVD Enforcement Group I, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-0650 or (202) 482-3813, respectively.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to
[[Page 6156]]
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 (URAA). In addition, unless otherwise indicated,
all citations to the Department of Commerce's (the Department's)
regulations are to the regulations last codified at 19 CFR Part 353
(April 1, 1997).
Background
On May 15, 1986, the Department published in the Federal Register
the antidumping duty order on certain welded carbon steel pipe and tube
from Turkey (51 FR 17784). On May 2, 1997 (62 FR 24081), we published
in the Federal Register the notice of ``Opportunity to Request an
Administrative Review'' of this order for the period May 1, 1996,
through April 30, 1997. In accordance with 19 CFR 353.22(a)(1), on May
30, 1997, the petitioners requested a review of the following producers
and exporters of certain welded carbon steel pipe and tube: (1) The
Borusan Group \2\ (Borusan); (2) Yucelboru Ihracat, Ithalat ve
Pazarlama A.S./Cayirova Boru Sanayii ve Ticaret A.S. (Yucelboru); and
(3) Erbosan Erviyas Boru Sanayii ve Ticaret A.S. (Erbosan). On June 30,
1997, we published the notice of initiation of this antidumping duty
administrative review (62 FR 35154).
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\2\ Borusan Birlesik Boru Fabrikalavi A.S., Kartal Boru Sanayii
ve Ticaret A.S., Bosas Boru Sanayii ve Ticaret A.S., and Borusan
Ihracat Ithalat ve Dagitim A.S.
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No Shipments
Yucelboru and Erbosan notified us that they had no shipments of
subject merchandise during the period of review (POR). We have
confirmed this with the Customs Service.
Scope of the Review
Imports covered by this review are shipments of certain welded
carbon steel pipe and tube products with an outside diameter of 0.375
inch or more but not over 16 inches, of any wall thickness. Imports of
subject merchandise are currently classifiable under the following
Harmonized Tariff Schedule of the United States (HTSUS) subheadings:
7306.30.10.00, 7306.30.50.25, 7306.30.50.32, 7306.30.50.40,
7306.30.50.55, 7306.30.50.85, 7306.30.50.90. These products, commonly
referred to in the industry as standard pipe and tube, are produced to
various American Society for Testing and Materials (ASTM)
specifications, most notably A-120, A-53 or A-135. Although the HTSUS
subheadings are provided for convenience and customs purposes, our
written description of the scope of this proceeding is dispositive.
Fair Value Comparisons
We compared the export price (EP) to the normal value (NV), as
described in the Export Price and Normal Value sections of this notice.
Because Turkey's economy experienced high inflation during the POR
(over 70 percent), we limited our comparisons to home market sales made
during the same month in which the U.S. sale occurred. This methodology
minimizes the extent to which calculated dumping margins are overstated
or understated due solely to price inflation that occurred in the
intervening time period between the U.S. and home market sales. We
first attempted to compare products sold in the U.S. and home markets
that were identical with respect to the following characteristics:
grade, diameter, wall thickness, finish, and end finish. We did not
find any appropriate home market sales of merchandise that was
identical in these respects to the merchandise sold in the United
States. Accordingly, we compared U.S. products with the most similar
merchandise sold in the home market based on the characteristics listed
above, in that order of priority. Where there were no appropriate home
market sales of comparable merchandise, we compared the merchandise
sold in the United States to constructed value (CV).
Export Price
Because Borusan sold subject merchandise directly to the first
unaffiliated purchaser in the United States prior to importation, and a
constructed export price (CEP) methodology was not otherwise warranted
based on the facts of this review, we used an EP analysis for all of
Borusan's U.S. sales, in accordance with section 772(a) of the Act.
We calculated EP based on the packed, delivered price to
unaffiliated purchasers in the United States. In accordance with
section 772(c)(2)(A) of the Act, we deducted post-sale price
adjustments, domestic inland freight, domestic brokerage and handling,
and international freight. In accordance with sections 772(c)(1)(B) and
(C) of the Act, respectively, we added countervailing duties imposed on
the subject merchandise to offset export subsidies, and we added duty
drawback.
Normal Value
A. Selection of Comparison Market
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 Borusan's volume of home market sales of the foreign like
product to the volume of its U.S. sales of the subject merchandise.
Pursuant to sections 773(a)(1)(B) and (C) of the Act, because Borusan's
aggregate volume of home market sales of the foreign like product was
greater than five percent of its aggregate volume of U.S. sales of the
subject merchandise, we determined that the home market was viable.
B. Cost of Production Analysis
Because the Department disregarded sales below the cost of
production (COP) in the last completed review of Borusan (1993-94 POR),
we had reasonable grounds to believe or suspect that sales of the
foreign like product under consideration for the determination of NV in
this review may have been made at prices below the COP, as provided at
section 773(b)(2)(A)(ii) of the Act. See Notice of Final Results of
Antidumping Duty Administrative Review: Certain Welded Carbon Steel
Pipe and Tube From Turkey, 62 FR 51629 (October 2, 1997). Therefore, we
considered whether any home market sales by Borusan should be
disregarded from our analysis as below-cost sales within the meaning of
section 773(b) of the Act.
1. Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated the
COP based on the sum of Borusan's costs of materials and fabrication
employed in producing the foreign like product, plus general and
administrative expenses (G&A) and finance expenses.
As noted above, we determined that the Turkish economy experienced
high inflation during the POR. Therefore, in order to avoid the
distortive effect of inflation on our comparison of prices and costs,
we requested that Borusan submit the product-specific cost of
manufacturing (COM) incurred during each month of the POR. We
calculated a POR-average COM for each product after indexing the
reported monthly costs during the POR to an equivalent currency level
using the Turkish wholesale price index from International Financial
Statistics published by the International Monetary Fund (IMF). We then
restated the POR-average COM in the currency value of each respective
month. We multiplied Borusan's G&A and finance rates by the monthly
COMs and added these amounts to derive product-specific monthly COPs.
[[Page 6157]]
2. Test of Home Market Prices
We compared the product-specific monthly COPs to home market sales
of the foreign like product in order to determine whether these sales
had been made at prices below the COP. We determined the net home
market prices for the below-cost test by subtracting from the gross
unit price any applicable movement charges, discounts, rebates, direct
and indirect selling expenses, and packing expenses.
3. Results of COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of Borusan's sales of a given product were at prices less than
the COP, we did not disregard any below-cost sales of that product
because the below-cost sales were not made in ``substantial
quantities.'' Pursuant to sections 773(b)(2)(B)-(D) of the Act, where
20 percent or more of Borusan's sales of a given product were at prices
less than the COP, we disregarded the below-cost sales from our
analysis because they (1) were made over an extended period of time in
substantial quantities, and (2) were at prices which would not permit
the recovery of all costs within a reasonable period of time, based on
comparisons of prices to POR-average COPs.3 We used the
remaining sales in our margin analysis, in accordance with section
773(b)(1).
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\3\ As noted in Calculation of COP, above, although we used
monthly COPs in our analysis, these were based on POR-average costs,
as adjusted for inflation.
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C. Arm's-Length Test
Borusan made home-market sales to affiliated resellers during the
POR. In accordance with our questionnaire, Borusan reported these sales
to affiliated parties because the merchandise was not resold. We
included in our analysis Borusan's home market sales to affiliated
customers only where we determined that such sales were made at arm's-
length prices, i.e., at prices comparable to prices at which Borusan
sold identical merchandise to unaffiliated customers. See section
773(a)(1)(B) of the Act and 19 CFR 353.45. In order to determine the
arm's-length nature of Borusan's home market sales to affiliated
customers, we compared the prices, on a product-specific basis, of
sales to affiliated and unaffiliated customers net of all movement
charges, discounts, rebates, direct expenses, and packing. We added
interest revenue for late payments. See Certain Hot-Rolled Lead and
Bismuth Carbon Steel Products from the United Kingdom; Preliminary
Results of Antidumping Administrative Review, 62 FR 64803, 64804
(December 9, 1997).
D. Calculation of NV Based on Home Market Prices
For those comparison products for which there were above-cost sales
in the same month as the U.S. sale, we based NV on home market prices.
We calculated NV based on FOB mill/warehouse or delivered prices. We
made deductions from the starting price, where appropriate, for inland
freight, pre-sale warehouse expenses, discounts, and rebates. We added
interest revenue for late payments. In accordance with section
773(a)(6) of the Act, we deducted home market packing costs and added
U.S. packing costs.
In accordance with section 773(a)(6)(C)(iii) of the Act, we
adjusted for differences in the circumstances of sale. These
circumstances included differences in imputed credit expenses,
advertising, warranty, and bank charges. We recalculated credit
expenses to correct for missing payment dates on sales for which
Borusan had not received payment as of the date of its supplemental
response.
We also made adjustments, when comparing U.S. sales with home
market sales of similar, but not identical, merchandise, for physical
differences in the merchandise in accordance with section
773(a)(6)(C)(ii) of the Act. We based this adjustment on the difference
in the variable costs of manufacturing the foreign like product and
subject merchandise, using POR-average costs as adjusted for inflation
for each month of the POR, as described in Calculation of COP, above.
We used a 20-percent difference-in-merchandise (difmer) cost deviation
cap, which we calculated as the absolute value of the difference
between the U.S. and the home market monthly variable costs of
manufacturing divided by the U.S. total cost of manufacturing, as the
maximum difference in cost allowable for similar merchandise. We note
that Borusan reported its home market and U.S. variable costs of
manufacturing based on the month of the date of shipment. For certain
U.S. sales, the shipment date occurred in the month following the sale
date. For these observations, we have adjusted the U.S. variable cost
of manufacturing by deflating it to the month of the U.S. date of sale.
This did not occur for any home market observations.
E. Calculation of NV Based on CV
For those comparison products for which there were no sales in the
same month as the U.S. sale, made in the ordinary course of trade at
prices above the COP, we based NV on CV. On January 8, 1998, the Court
of Appeals of the Federal Circuit issued a decision in Cemex v. United
States, 1998 WL 3626 (Fed. Cir.). In that case, based on the pre-URAA
version of the Act, the Court discussed the appropriateness of using CV
as the basis for foreign market value (normal value) when the
Department finds home market sales to be outside the ordinary course of
trade. This issue was not raised by any party in this review. However,
the URAA amended the definition of sales outside the ``ordinary course
of trade'' to include sales below cost. See Section 771(15) of the Act.
Because the Court's decision was issued so close to the deadline for
completing these preliminary results, we have not had sufficient time
to evaluate and apply (if appropriate and if there are adequate facts
on the record) the decision to the facts of this ``post-URAA'' case.
For these reasons, we have determined to continue to apply our policy
regarding the use of CV when we have disregarded below-cost sales from
the calculation of normal value; however, we invite interested parties
to comment, in their case briefs, on the applicability of the Cemex
decision to this review.
In accordance with section 773(e)(1) of the Act, we calculated CV
based on the sum of Borusan's costs of materials, fabrication, SG&A,
finance expenses, profit and U.S. packing costs. In accordance with
section 773(e)(2)(A), we based SG&A and profit on the actual amounts
incurred and realized by Borusan in connection with the production and
sale of the foreign like product in the ordinary course of trade, for
consumption in Turkey. For selling expenses, we used the weighted-
average home market selling expenses. We calculated monthly CVs based
on the indexing methodology described in Calculation of COP, above.
In comparing CV to export price, we deducted from CV the weighted-
average home market direct selling expenses and added the U.S. product-
specific direct selling expenses. See section 773(a)(8) of the Act.
Level of Trade
As set forth in section 773(a)(1)(B)(i) of the Act, to the extent
practicable, we calculate NV based on sales in the comparison market at
the same level of trade as the U.S. sale. The NV level of trade is that
of the starting-price sales in the comparison market or, when NV is
based on CV, that of the sales from which we derive SG&A expenses and
profit. For EP sales, such as those made by Borusan in this review, the
U.S. level of trade is also the level of the starting-
[[Page 6158]]
price sale, i.e., the price from Borusan to the unaffiliated U.S.
importer.
To determine whether NV sales are at a different level of trade
than that of the U.S. sale, 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 level of trade, 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 level of trade of the export transaction, we make a
level-of-trade adjustment under section 773(a)(7)(A) of the Act. 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).
In implementing these principles in this review, we obtained
information from Borusan about the marketing stage involved in the
reported U.S. and home market sales, including a description of the
selling activities performed by Borusan for each channel of
distribution. In identifying levels of trade for EP and home market
sales, we considered the selling functions reflected in the starting
price before any adjustments. We expect that, if claimed levels of
trade are the same, the functions and activities of the seller should
be similar. Conversely, if a party claims that levels of trade are
different for different groups of sales, the functions and activities
of the seller should be dissimilar.
We determined that for Borusan there were two home market levels of
trade and one U.S. level of trade (i.e., the EP level of trade). We
also determined that Borusan's EP level of trade was equivalent to one
of its levels of trade in the home market. See Memorandum from Analyst
to File: Preliminary Results of 1996-97 Administrative Review of Pipe
and Tube from Turkey (February 2, 1998). We first attempted to compare
sales at the U.S. level of trade to sales at the identical home market
level of trade. If no match was available at the same level of trade,
we attempted to compare sales at the U.S. level of trade to sales at
the second home market level of trade. We examined whether a level of
trade adjustment was appropriate for Borusan when comparing sales at
its U.S. level of trade to sales at the second, non-identical, home
market level of trade.
To determine whether a level-of-trade adjustment was warranted, we
examined, on a monthly and product-specific basis, the prices, net of
all adjustments, between sales at the two home market levels of trade.
We found that the monthly average prices were higher at one level of
trade for virtually all models and months as well as for virtually all
sales based on quantities sold. We determined that this demonstrated a
pattern of consistent price differences. Therefore, when comparing U.S.
sales to home market sales at the non-identical level-of-trade, we
adjusted NV for the difference in level of trade.
With respect to the level of trade for comparisons involving CV, it
is the Department's practice to calculate, to the extent possible, a CV
by level of trade, using the selling expenses and profit determined for
each level of trade in the comparison market. See Antifriction Bearings
(Other Than Tapered Roller Bearings) and Parts Thereof From France,
Germany, Italy, Japan, Romania, Singapore, Thailand and the United
Kingdom; Final Results of Antidumping Duty Administrative Reviews,
Termination of Administrative Reviews, and Partial Termination of
Administrative Reviews, 62 FR 54043, 54055 (October 17, 1997).
Accordingly, we have calculated CV using the level-of-trade specific
selling expenses and profit at the home market level of trade that is
identical to the single U.S. level of trade.
Currency Conversion
Because this proceeding involves a high-inflation economy, we
limited our comparison of U.S. and home market sales to those occurring
in the same month (as described above) and only used daily exchange
rates. See Certain Porcelain on Steel Cookware from Mexico: Final
Results of Antidumping Duty Administrative Review, 62 FR 42496, 42503-
03 (August 7, 1997) and Notice of Final Determination of Sales at Less
Than Fair Value: Certain Pasta from Turkey, 61 FR 30309 (June 14,
1996).
The Department's preferred source for daily exchange rates is the
Federal Reserve Bank. However, the Federal Reserve Bank does not track
or publish exchange rates for the Turkish Lira. Therefore, we made
currency conversions based on the daily exchange rates from the Dow
Jones Service, as published in the Wall Street Journal.
Preliminary Results of Review
As a result of our review, we preliminarily determine that the
following margin exists for the period May 1, 1996 through April 30,
1997:
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Margin
Manufacturer/exporter (percent)
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Borusan..................................................... 0.04
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Parties to the proceeding may request disclosure within five days
of publication of this notice. Any interested party may request a
hearing within 10 days of the date of publication. Any hearing, if
requested, will be held 44 days after the date of publication, or the
first workday thereafter. Interested parties may submit case briefs
within 30 days of the date of publication. Rebuttal briefs, limited to
issues raised in the case briefs, may be filed not later than 37 days
after the date of publication. The Department will publish a notice of
the final results of this administrative review, which will include the
results of its analysis of issues raised in any such written comments.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. If these
preliminary results are adopted in our final results, we will instruct
the Customs Service not to assess antidumping duties on the merchandise
subject to review. Upon completion of this review, the Department will
issue appraisement instructions directly to the Customs Service.
Furthermore, the following deposit rates will be effective upon
publication of the final results of this administrative review for all
shipments of pipe and tube from Turkey entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided by section 751(a)(2)(c) of the Act: (1) The cash deposit rate
for Borusan will be the rate established in the final results of this
review, except if the rate is less than 0.5 percent and, therefore, de
minimis, the cash deposit will be zero; (2) for previously reviewed or
investigated companies not listed above, 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
prior review, or the original less-than-fair-value (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; and (4) if neither the exporter nor the manufacturer
is a firm covered in this or any previous review conducted by the
Department, the cash deposit rate will be 14.74 percent, the ``All
Others'' rate established in the LTFV investigation.
[[Page 6159]]
These cash deposit 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 353.26 to file a certificate regarding the
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 in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: February 2, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-3078 Filed 2-5-98; 8:45 am]
BILLING CODE 3510-DS-P
