[Federal Register Volume 61, Number 56 (Thursday, March 21, 1996)]
[Notices]
[Pages 11608-11613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6862]
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DEPARTMENT OF COMMERCE
[A-351-809, A-580-809, A-201-805, A-307-805]
Final Negative Determination of Scope Inquiry on Certain Circular
Welded Non-Alloy Steel Pipe and Tube From Brazil, the Republic of
Korea, Mexico and Venezuela
AGENCY: Import Administration, International Trade Administration
Commerce.
ACTION: Notice of Final Negative Determination of Scope Inquiry.
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SUMMARY: On January 13, 1994, we preliminarily determined that (i) pipe
certified to American Petroleum Institute (API) 5L line pipe
specifications (API 5L line pipe or line pipe) and (ii) pipe certified
to both the API 5L line pipe specifications and the less-stringent
American Society for Testing and Materials (ASTM) A-53 standard pipe
specifications (dual-certified pipe,1) when actually used as
certain circular welded non-alloy steel pipe (standard pipe), and
falling within the physical parameters outlined in the scope of the
orders, are within the scope of the antidumping duty orders on standard
pipe from Brazil, the Republic of Korea, Mexico and Venezuela. See
Preliminary Affirmative Determination of Scope Inquiry, 59 FR 1929
(January 13, 1994) (Preliminary). We gave interested parties an
opportunity to comment.
\1\ This merchandise, sometimes referred to as ``dual-
stenciled,'' may also include ``multiple-stenciled'' pipe.
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After a thorough analysis of the comments received from the
parties, as well as a review of the record evidence from the less-than-
fair-value (LTFV) investigations which gave rise to these antidumping
duty orders, we determine that (i) pipe certified to the API 5L line
pipe specification, and (ii) pipe certified to both the API 5L line
pipe specifications and the less-stringent ASTM A-53 standard pipe
specifications which fall within the physical parameters outlined in
the scope of the orders and enter as line pipe of a kind used for oil
and gas pipelines are outside the scope of the antidumping duty orders
on certain welded carbon steel non-alloy pipe from Brazil, Korea,
Mexico and Venezuela, irrespective of end use.
EFFECTIVE DATE: March 21, 1996.
FOR FURTHER INFORMATION CONTACT: Robert M. James at (202) 482-5222 or
Zev Primor at (202) 482-5253, Office of Antidumping Compliance, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C.
20230.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute (the
Tariff Act of 1930, as amended (the Tariff Act)) and to the
Department's regulations are in reference to the provisions as they
existed on December 31, 1994.
Background
On April 22, 1993, Allied Tube & Conduit Corporation, Sawhill
Tubular Division, Tex-Tube Division American Tube Company, Century Tube
Corporation, Laclede Steel Company, LTV Tubular Products Company,
Sharon Tube Company, Western Tube & Conduit Corporation, Wheatland Tube
Company, and CSI Tubular Products, Inc., petitioners in these cases,
requested that the Department of
[[Page 11609]]
Commerce (the Department) conduct an anticircumvention inquiry.
Petitioners argued pursuant to section 781(c) of the Tariff Act and 19
CFR 353.29(g)(1993), that certain exports from Brazil, Korea and Mexico
of API 5L line pipe and dual-certified pipe were circumventing the
antidumping duty orders on standard pipe because they were actually
used in a standard pipe application. The Department concluded that a
scope inquiry pursuant to 19 CFR 353.29(i) was the appropriate avenue
for addressing the issues raised by petitioners.
The Department initiated its scope inquiry on June 7, 1993 and
granted interested parties the opportunity to comment on whether API 5L
line pipe and dual-certified pipe, when used in standard pipe
applications, are within the scope of the orders. We received comments
from petitioners and six respondents on July 6, 1993 and rebuttal
comments on July 19, 1993. Petitioners and five respondents also met
separately with the Acting Assistant Secretary for Import
Administration to voice their concerns on this issue.
Exports of standard pipe from Venezuela were the subject of a
concurrent antidumping investigation. The scope of the resulting order
is identical to that of the orders covering Brazil, Korea and Mexico.
As a result, we determined that it was appropriate to include imports
from Venezuela in the present scope inquiry. See Memorandum from
Director, Office of Antidumping Compliance, to Deputy Assistant
Secretary for Compliance, October 25, 1993 (hereafter, October 25
Memorandum). In this memorandum we also determined that the record
evidence regarding the scope of the orders contained sufficient
ambiguity to necessitate further comments by the parties. Accordingly,
we asked that interested parties comment on the so-called ``Diversified
Products'' criteria (see below). Petitioners and four respondents filed
comments on November 22, 1993 and rebuttals on December 3, 1993.
On January 13, 1994, the Department published in the Federal
Register its preliminary affirmative scope determination. We concluded
that sufficient ambiguity existed in the record to necessitate
consideration of the ``Diversified Products'' criteria found at 19 CFR
353.29(i)(2). We further determined that the meaning of certain
exclusionary language in the scope of the orders was unclear and,
further, that petitioners had predicated this exclusionary language
upon the ``actual end use'' of the subject merchandise (as opposed to
the ``chief'' or ``primary end use,'' as respondents argue). We further
determined that the scope language ``does not clearly include or
exclude line pipe or dual certified pipe . . . which is actually used
in standard pipe applications.'' Preliminary at 1930. As a result of
our Diversified Products analysis, we determined that line pipe and
dual-certified pipe, when actually used in a standard pipe application
and falling within the physical parameters outlined in the orders, are
within the scope of these orders. See Preliminary at 1933.
Since publication of our preliminary determination we received
comments and rebuttal comments from the following parties: petitioners;
Mannesmann Pipe & Steel Corporation (Mannesmann); Korea Iron and Steel
Association, Dongbu Steel Company, Ltd., Hyundai Steel Pipe Company,
Ltd., Korea Steel Pipe Company, Ltd., Pusan Steel Pipe Company, Ltd.,
and Union Steel Manufacturing Company, Ltd. (collectively, the Korean
respondents); Hyundai Pipe Co., Ltd. (Hyundai); Villacero and Tuberia
Nacional (Villacero); Hylsa, S.A. de C.V. (Hylsa); and Western American
Manufacturing, Inc. (Western). The Governments of Korea and Mexico also
submitted comments.
On April 13, 1994, the Department issued a draft end-use
certificate and requested comments from the interested parties
regarding implementation of end-use certification procedures in the
event of a final affirmative determination. Petitioners, respondents,
and the Government of Mexico commented on the draft end-use
certificate, as did a number of U.S. pipe importers and distributors.
In light of our negative final determination, however, the issue of
end-use certification is moot, so we have not addressed these comments.
Analysis
The regulations governing the Department's antidumping scope
determinations can be found at 19 CFR 353.29. Our criteria for
determining whether a product is included in the scope of an order are
set forth in section 353.29(i)(1). These criteria are the descriptions
of the merchandise contained in the order, the petition, the initial
LTFV investigation, and the determinations of the Department and the
International Trade Commission (ITC). If these descriptions are not
dispositive of the issue, the Department will further consider the
factors provided for under 19 CFR 353.29(i)(2), commonly referred to as
the ``Diversified Products'' criteria (see Diversified Products Corp.
v. United States, 572 F. Supp. 883 (CIT 1983)). These factors are as
follows: (i) the physical characteristics of the product subject to the
scope inquiry; (ii) the expectations of the ultimate purchasers; (iii)
the ultimate use of the product; and (iv) the channels of trade.
However, if the record of the Department's and ITC's proceedings is
dispositive of the issue, then the Department will issue a final scope
determination without reference to the ``Diversified Products''
criteria.
After careful consideration of the comments by the interested
parties, and based upon our review of the record for purposes of this
final determination, we have determined that the scope language adopted
by the Department in the antidumping duty orders excludes line pipe and
dual-certified pipe. This conclusion is supported by the record of the
Department's original investigations. We will address each of the
relevant aspects of the original investigations in turn, below.2
\2\ Because in this final scope determination we have found the
scope language to be dispositive, we have not addressed the
``Diversified Products'' criteria found in section 353.29(i)(2), nor
have we specifically addressed comments by the parties on these
criteria.
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The Language of the Petitions Did Not Address Line or Dual-
Certified Pipe
The original antidumping duty petitions defined the subject
merchandise as ``welded non-alloy steel pipes, of circular cross-
section, not more than 406.4 mm (16 inches) in outside diameter
regardless of wall thickness, surface finish . . . or end finish . . .
These pipes and tubes are generally known as standard pipe, though they
may also be called structural or mechanical tubing in certain
applications.'' Antidumping Petition, September 24, 1991 at 4. The
product descriptions continued, as required by our regulations,3
with an illustrative listing of typical uses for standard pipe, and
observed that the subject merchandise is most commonly produced to the
ASTM A-53 specification for standard pipe. The petitions did not
mention either line pipe or dual-certified pipe.
\3\ 19 CFR 353.12(b)(4) directs petitioners to include ``[a]
detailed description of the merchandise that defines the requested
scope of the investigation including technical characteristics and
uses of the merchandise, and its current U.S. Tariff classification
number.'' (Emphasis added.)
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In its initiation notice, the Department adopted petitioners'
language to define the merchandise covered by the six concurrent
investigations and also did not mention either line pipe or dual-
certified pipe. See Initiation of Antidumping Duty Investigations:
Circular Welded Non-Alloy Steel Pipe
[[Page 11610]]
from Brazil, the Republic of Korea, Mexico, Romania, Taiwan and
Venezuela, 56 FR 52528 (October 21, 1991). The petitions and the
Department's notice of initiation do not indicate that actual end use
was a consideration in crafting the scope of the investigations. To the
extent that uses of the subject merchandise are noted, this was in
accordance with the Department's regulations. These materials support
the conclusion that physical characteristics, not actual end uses,
defined the scope of the petitions and the initial investigations.
However, the petitions and the initiation notice do not address and,
therefore, do not definitively resolve the treatment of line pipe or
dual-certified pipe.
The Final Scope Language Adopted by the Department Excludes Line
and Dual-Certified Pipe
While the record reflects some initial uncertainty at least as to
whether multiple-stenciled pipe was covered by the Department's
investigations, this uncertainty was resolved early in the proceedings.
Prior to submitting their questionnaire responses, respondents
requested clarification as to whether triple-certified pipe was
included in the scope of the investigations. See Memoranda, Case
Analyst to the File, November 15, 1991. In their comments of November
19, 1991, petitioners recognized that an importer could sell dual-
certified pipe entered under the HTS line pipe item into either the
line pipe or standard pipe market after it entered the United
States.4 Indeed, the purpose of dual-certifying a product is to
alert potential consumers of that product's suitability for use in
either line pipe or standard pipe applications. Petitioners did not tie
treatment of dual-certified pipe to the market in which it was sold.
Instead, petitioners stated that ``[d]ual or triple certified standard
pipe should be covered by these investigations only if they enter the
United States under one of the tariff numbers listed in section I.D.3
of the petitions.'' These tariff numbers, under heading 7306.30 of the
HTS, cover standard pipe, and not line or dual-certified pipe. See
Petitioners' November 19, 1991 submission at 1. Petitioners further
stated that ``[a]ny pipe entered under [HTS] item 7306.10.10 [i.e., the
item heading for line pipe] would be line pipe outside the scope of the
petitions.'' This statement indicates that in the petitioners' view,
the inclusion or exclusion of line pipe is tied to the HTS category.
\4\ Petitioners reiterated this knowledge in their April 22,
1993 anticircumvention petitions: ``[E]nd users of dual-certified
pipe knew that such pipe could be used as either line pipe or
standard pipe . . . End users in the plumbing and building trade,
for example, purchase it for use as standard pipe while energy
companies and utilities purchase it for use as line pipe.''
Anticircumvention Petitions at 13.
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With regard to dual-certified pipe, petitioners noted that this
pipe ``generally enters the United States under the separate tariff
item H[T]S 7306.10.10 while other standard pipe enters into tariff
items H[T]S 7306.30.10 or 7306.30.50.'' Petitioners explained that:
``General Rules of Interpretation 6 and 3(a) of the [HTS]
provide that goods that are classifiable under two or more tariff
subheadings are to be classified under the subheading providing the
most specific description. Subheading 7306.10 which covers `line
pipe of a kind used for oil and gas pipelines' is more specific
than, and therefore takes precedence over, subheading 7306.30,
`other, welded, of circular cross-section, of iron or non-alloy
steel'.'' 5
\5\ Petitioners' November 19, 1991 Letter at 1 and 2.
Here, petitioners recognized that dual-certified pipe was entering
the United States under the HTS item for line pipe because the proper
Customs classification for dual-certified pipe is under this item.
Taken together, these statements establish that petitioners understood
that HTS classification of pipe products was based upon the specificity
of the category, not actual use, and that dual-certified pipe would be
placed in the line pipe category and, thus, excluded from the order.
Petitioners reiterated their intention to exclude any pipe entered
as line pipe in a March 5, 1992 letter to the Department (addressing
structural tubing and mechanical tubing). In this submission,
petitioners stated that ``[t]he scope, as defined by the petition, the
Department and the Commission, clearly excludes both imports of line
pipe entering the United States in [HTS] category 7306.10 and oil
country tubular goods . . .''.
Accordingly, the Department did not require respondents to report
API 5L line pipe and dual-certified pipe as part of its investigations,
and our preliminary and final determinations of sales at less-than-
fair-value adopted the exclusionary language suggested by petitioners
in defining the scope of the orders:
. . . circular welded non-alloy steel pipes and tubes, of
circular cross-section, not more than 406.4 millimeters (16 inches)
in outside diameter, regardless of wall thickness, surface finish
(black, galvanized, or painted), or end finish (plain end, bevelled
end, threaded, or threaded and coupled). These pipes and tubes are
generally known as standard pipe, though they may also be called
structural or mechanical tubing in certain applications. Standard
pipes and tubes are intended for 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 also be
used for light load-bearing and mechanical applications, such as for
fence tubing, and for protection of electrical wiring, such as
conduit shells.
The scope is not limited to standard pipe and tube fencing or
those types of mechanical and structural pipe that are used in
standard pipe applications. All carbon steel pipes and tubes within
the physical description outlined above are included within the
scope of this investigation, except line pipe, oil country tubular
goods, boiler tubing, mechanical tubing, pipe and tube hollows for
redraws, finished scaffolding, and finished conduit. Standard pipe
that is dual or triple certified/stenciled that enters the U.S. as
line pipe of a kind used for oil or gas pipelines is also not
included in this investigation.6
\6\ Final Determination of Sales at Less Than Fair Value, 57 FR
42940 (September 17, 1992); see also Preliminary Determination of
Sales at Less Than Fair Value, 57 FR 17883 (April 28, 1992)
(emphasis added).
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In keeping with the petition and petitioners' November 19, 1991
letter, the scope language adopted by the Department does not make
actual end use a principal consideration in defining the products
covered by the investigations. The first paragraph of the scope
language merely describes the physical characteristics of the subject
merchandise and offers, as do many antidumping duty orders, an
illustrative list of its typical uses. The second paragraph states that
``[a]ll carbon steel pipes and tubes within the physical description
outlined above are included within the scope of these orders . . .''.
Therefore, the language of the scope of the orders relies on physical
characteristics, not on actual or potential end uses.
The scope language goes on to specifically exclude certain types of
pipe that fit the physical description, including ``line pipe, oil
country tubular goods, pipe and tube hollows for redraws, finished
scaffolding, and finished conduit.'' The scope language excludes these
separate categories of pipe, based upon industry classifications,
without discussion of actual end uses. It follows that line pipe is not
covered by the order regardless of how it is finally used.
As to dual-certified pipe, the same analysis of the order's
language holds. The scope provides that ``[s]tandard pipe that is dual
or triple certified/
[[Page 11611]]
stenciled that enters the U.S. as line pipe of a kind used for oil or
gas pipelines is also not included in these orders.'' The emphasis on
pipe ``that enters the U.S. as line pipe,'' language suggested by
petitioners, underscores that the key factors the Department used in
determining the scope of the investigations were the physical
characteristics and the classification of the merchandise as it passed
through U.S. Customs (i.e., ``enters the U.S.''), and not on its
disposition at some later point in the stream of commerce. This
conclusion is supported by the fact that the phrase ``line pipe of a
kind used for oil and gas pipelines'' is taken verbatim from HTS item
7306.10.10. The phrase ``of a kind used for'' is commonly used by
Customs to signify the chief, or principal, use of a product and not
its actual use. See Group Italglass U.S.A., Inc. v. United States, Slip
Op. 93-46 at 6 (CIT March 29, 1993) (``The language in heading 7010 `of
a kind' preceding `used for' simply buttresses the interpretative rule
for use provisions that it is the use of the class or kind of goods
imported that is controlling rather than the use to which the specific
imports were put.''). Therefore, by the language of the scope, if pipe
enters the United States as pipe ``of a kind used for oil and gas
pipelines'' (i.e., is classified by Customs under HTS item 7306.10.10),
it is excluded from the scope of the orders.
The Determinations of the ITC Did Not Cover Line Pipe
The ITC, in defining the like product for purposes of its injury
investigations, followed the language adopted by the Department in the
notice of initiation. In its preliminary determination, the ITC first
discussed the products ``subject to these investigations;'' the ITC
later defined line pipe and dual-certified pipe under the separate
heading ``Other Pipe and Tube Products,'' stating that line pipe is
``produced to meet different specifications than `standard' pipes, and
a large percentage of line pipes are made to larger diameters than the
pipes and tubes subject to these investigations.'' Determinations of
the Commission (Preliminary), USITC Publication 2454 (November 1991) at
A-9. The ITC continued to draw a distinction between line and dual-
certified pipe in its final determination and did not include producers
of line pipe in its definition of the U.S. industry for purposes of its
affirmative injury determination. The ITC did not, therefore, examine
the impact of imports of line pipe upon the domestic industry. See
Determinations of the Commission (Final), USITC Publication 2564
(October 1992) at I-7 through I-13. Under U.S. law, the Department
cannot cover within the scope of an order merchandise which has not
first been subject to an affirmative injury determination. See Section
731 of the Tariff Act.
The record with respect to dual-certified pipe is less clear. The
ITC's ``Producers' Questionnaire'' requested data on domestic
production of pipes ``that were single or multiple stenciled to meet
standard pipe specifications.'' ITC Producers' Questionnaire at 14
(original emphasis; submitted as Exhibit 10 to Petitioners' July 6,
1993 Comments). The ITC noted that 15.5 percent of the reported
domestic shipments comprised dual-certified pipe and that ``the
products in question were not sold as standard pipe.'' USITC
Publication 2564 at I-12, note 20 and I-21, note 48. However, the ITC
did not indicate whether or not these shipments were included in its
injury analysis. Furthermore, as petitioners have acknowledged, the ITC
did not include dual-certified pipe in its purchasers' or importers'
questionnaires. See Petitioners' February 23, 1994 Comments at 16.
Therefore, while the ITC's determinations support the conclusion that
line pipe is not covered, the record with respect to the ITC's
treatment of dual-certified pipe is inconclusive, but cannot be read to
conflict with the Department's scope language excluding dual-certified
pipe.
In light of the language of the scope and the underlying record of
the investigations, the Department has concluded that an affirmative
scope ruling would be contrary to the scope language as written and
would represent an impermissable expansion of the scope of the orders.
Accordingly, we have concluded that API 5L line pipe and dual-certified
pipe do not fall within the scope of the orders.
Comments by the Parties
Petitioners maintain that our preliminary affirmative scope
determination is correct, is supported by substantial record evidence
and is in accordance with law. According to petitioners, the ``plain
language'' of the scope includes all pipe meeting the published
physical description of the subject merchandise which is used as, or
intended for use as, standard pipe ``without regard to the tariff
number or industry specifications.'' Petitioners' February 16, 1994
Comments at 2. In light of the Department's preliminary determination
that the scope is not dispositive of this issue, petitioners aver that
the Department's analysis of the ``Diversified Products'' criteria
leads properly to the same affirmative determination. Id. at 3.
Petitioners support the Department's preliminary conclusion (as
outlined in its October 25 Memorandum) that petitioners relied upon HTS
item numbers to identify merchandise covered by the investigations
because they presumed incorrectly that these tariff classifications
were based upon the actual and not the principal end use of the
merchandise. Petitioners February 23, 1994 Rebuttal Comments at 9 and
10. Further, petitioners suggest, the Department's statements in the
orders' scope that standard pipes ``are intended for [specific uses]''
and that ``line pipe of a kind used for oil and gas pipelines is
excluded'' constitute an ``actual'' end-use test and that the
merchandise covered by the scope of the orders is, in fact, defined in
terms of actual end use. Thus, the Department must conduct an analysis
of whether the merchandise is actually used in a standard- or line-pipe
application. See, e.g., Petitioners' Rebuttal Comments, February 23,
1994 at 7 through 9, and 12 through 13. Petitioners further argue that
the Court of International Trade (CIT), in Ipsco, Inc. v. United
States, 715 F. Supp. 1104 (CIT 1989) (Ipsco), held that the
Department's use of the phrase ``intended for use'' permits an inquiry
into how the API 5L and dual-certified pipes at issue here are actually
used. Id. at 14.
Finally, Petitioners suggest that, because the ITC included in its
analysis dual-certified pipe used as standard pipe, a final affirmative
determination would be fully consonant with the requirement, pursuant
to the statute and the General Agreement on Tariffs and Trade (GATT),
that products be subject to an affirmative injury finding prior to the
imposition of antidumping duties. Id. at 15.
Hylsa, the Korean Respondents, Mannesmann, Villacero and Western
agree that the plain language of the scope of these orders is
dispositive of this issue in that this language expressly excludes the
subject products. Respondents further argue that use, actual or
otherwise, played no role in the Department's determination of the
scope of the orders. Respondents suggest that the phrase ``of a kind
used for'' is a Customs ``term of art'' which imposes a chief- or
primary-use test, not an actual end-use test. See, e.g., Villacero's
Comments, February 11, 1994 at 7; Korean Respondents' Comments,
February 16, 1994 at 6 and 7, and 8 through 17, and Hylsa's Comments,
February 16, 1994 at 4 through 9. Respondents also find the Ipsco
decision inapposite here,
[[Page 11612]]
contending that the issue before the CIT in Ipsco involved an order
where ``end use was the defining characteristic'' of that order's
scope. Hyundai's Comments, February 15, 1994 at 7 (original emphasis).
In contrast, argue respondents, the scope of the standard pipe orders
includes ``express exclusionary language;'' therefore, respondents
contend, ``the list of end uses is, as the Department itself concedes,
`illustrative'.'' Korean Respondents' Comments, February 16, 1994 at 25
(original emphasis).
Hylsa, Hyundai, the Korean Respondents, Mannesmann and Villacero
also argue that, contrary to the statute and the GATT, inclusion of API
5L line pipe and dual-certified pipe would subject merchandise to
antidumping duties without the requisite affirmative determination of
material injury to the domestic industry. Citing to these and previous
investigations of standard and line pipe, respondents contend that the
ITC has consistently identified line pipe as a separate like product.
See, e.g., Korean Respondents' February 16, 1994 Comments at 35 and 36.
In these investigations, respondents continue, the ITC limited its
injury analysis to the domestic standard pipe industry and, therefore,
did not include line or dual-certified pipe in its investigations.
The Department's Response
For the reasons cited in the analysis section above, the Department
disagrees with petitioners. After further review of the record
evidence, we find that the language of the orders excludes API 5L line
pipe and dual-certified pipe irrespective of actual end use. While
there may be uncertainty over why these products were excluded from the
orders, as suggested in our October 25 Memorandum, the descriptions of
the merchandise contained in the petition, the initial investigations,
and the determinations of the Department and the ITC, plus the record
compiled during this scope inquiry, indicate that it is correct to
conclude that API 5L line pipe and dual-certified pipe were excluded
from these proceedings from their inception. Further, these documents
indicate that at the time the petition was filed and during the
investigations, the actual end use of the imported merchandise was not
a determinative factor in the formulating the scope description which
was, rather, based upon physical characteristics coupled with product
classifications under the Harmonized Tariff Schedule of the United
States.\7\
\7\ Petitioners also suggest that the order provides HTS numbers
``for convenience and customs purposes'' and the written
descriptions of the merchandise are dispositive. See Petitioners'
February 23, 1994 Rebuttal Comments at 5 and note 13. While the
Department typically includes this disclaimer in its published
notices, here, petitioners explicitly based the product coverage
upon HTS classifications, and quoted directly from the applicable
Customs language to further buttress this emphasis on tariff
classifications. The Department's adoption of petitioners language
and reliance upon Customs classifications is, in fact, part of the
written description of the scope and is, therefore, controlling.
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With respect to petitioners' argument that they misunderstood the
underlying principles of the HTS tariff classifications, as stated in
the analysis section above, petitioners' November 19, 1991 letter
recognizes that the classification system is based on the specificity
of the HTS category, and that dual-certified pipe entered as line pipe
could be sold and actually used as either standard or line pipe
following importation. Further, petitioners state in their July 6, 1993
scope comments that their position with respect to pipe entered under
HTS item 7306.10.10 was based not on the actual use of the pipe but,
rather, on petitioners' lack of interest in pursuing the small quantity
of dual-certified pipe entered under HTS item 7306.10.10 which might
later be used as standard pipe. Petitioners noted their ``belief that
little imported dual stencilled pipe entered as line pipe was going
into standard pipe applications'' and suggested that the quantity of
dual-certified pipe actually used in standard pipe applications ``would
have little or no impact on the operation of a dumping order.''
Petitioners July 6, 1993 Scope Comments at 10.\8\
\8\ In their April 22, 1993 request for an anticircumvention
inquiry (which gave rise to the instant scope inquiry), petitioners
maintained that the scope ``specifically excludes'' API 5L line and
dual-certified pipe. Petitioners quoted the Department's scope
language that ``pipe that is dual or triple certified-stenciled that
enters the U.S. as line pipe of a kind used for oil and gas
pipelines is also not included in this investigation,'' and stated
that ``[l]ine pipe is also specifically excluded'' from the scope of
the orders. See Petitioners' April 22, 1993 Anticircumvention
Petition at 3 and 25. Petitioners included these statements as part
of their explanation of why anticircumvention proceedings, and not a
scope inquiry, were necessary to address petitioners' concerns.
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Even if it were the case, as we suggested in our October 25
Memorandum, that petitioners operated under the ``incorrect
presumption'' that HTS tariff numbers were based upon actual end use,
and that the subject merchandise would be so classified (see October 25
Memorandum at 5, note 5 and 8), the Department does not now have the
discretion to ``correct'' this misapprehension within the context of a
scope inquiry. It is well established that the Department has the
authority to clarify the scope of an antidumping duty order. The
Department may not, however, modify or expand the scope of an order
``in a way contrary to its terms.'' See, e.g., Smith Corona Corp. v.
United States, 915 F.2d 683 (Fed. Cir. 1990); Alsthom Atlantique v.
United States, 787 F.2d 565 (Fed. Cir. 1986); Royal Business Machines
v. United States, 669 F.2d 692 (Fed. Cir. 1982).\9\ Moreover,
regardless of petitioners' intentions, the fact remains that, as a
result of the scope language suggested repeatedly by petitioners and
adopted by the Department in its initiation of these investigations,
the ITC did not consider whether the domestic industry was injured by
imports of line pipe; with respect to dual-certified pipe, the record
is unclear.
\9\ This does not, however, preclude the Department's addressing
the types of concerns raised here by petitioners at the
investigation stage of a proceeding in formulating the scope
language. In fact, the Department has addressed these same concerns
in several recent pipe investigations. See, e.g., Final
Determination of Sales at Less Than Fair Value: Certain Small
Diameter Seamless Carbon and Alloy Steel Standard, Line and Pressure
Pipe from Brazil, 60 FR 31960 (June 19, 1995).
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As to the decision in Ipsco, it is inapposite to the instant scope
inquiry. In Oil Country Tubular Goods from Canada (which gave rise to
the Ipsco decision) the actual end use of the merchandise was an
explicit part of the scope of the order which contains no exclusionary
provisions whatever. See Antidumping Duty Order: Oil Country Tubular
Goods (OCTG) from Canada 51 FR 21782 (June 16, 1986). In contrast to
that case, here the scope of the order is driven by physical
characteristics and tariff classification of the merchandise, not
actual end use, and specifically excludes certain categories of pipe,
including line and dual-stenciled pipe, without reference to intended
or actual uses.
Conclusion
For the reasons cited above, the Department determines that: (i)
pipe certified to the API 5L line pipe specification, and (ii) pipe
certified to both the API 5L line pipe specifications and the less-
stringent ASTM A-53 standard pipe specifications which fall within the
physical parameters outlined in the scope of the orders and enter as
line pipe of a kind used for oil and gas pipelines are outside the
scope of the antidumping duty orders on certain welded carbon steel
non-alloy pipe from Brazil, Korea, Mexico and Venezuela, irrespective
of end use. We will notify
[[Page 11613]]
directly the U.S. Customs Service of this determination.
Dated: March 14, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-6862 Filed 3-20-96; 8:45 am]
BILLING CODE 3510-DS-P
