[Federal Register Volume 59, Number 76 (Wednesday, April 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9552]
[[Page Unknown]]
[Federal Register: April 20, 1994]
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DEPARTMENT OF COMMERCE
[A-122-506]
Oil Country Tubular Goods From Canada Preliminary Results of
Antidumping Duty Administrative Review
AGENCY: International Trade Administration/Import Administration/
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
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SUMMARY: In response to a request from the respondent, IPSCO Inc.
(IPSCO), the Department of Commerce (the Department) has conducted an
administrative review of the antidumping duty order on oil country
tubular goods (OCTG) from Canada. The review covers one manufacturer/
exporter, IPSCO, and exports of the subject merchandise to the United
States during the period June 1, 1992, through May 31, 1993.
We preliminarily determine the dumping margins for IPSCO to be zero
during this period. Interested parties are invited to comment on these
preliminary results.
EFFECTIVE DATE: April 20, 1994.
FOR FURTHER INFORMATION CONTACT: David Genovese or Michael Heaney,
Office of Antidumping Compliance, International Trade Administration,
U.S. Department of Commerce, Washington, DC 20230; telephone (202)482-
5254.
SUPPLEMENTARY INFORMATION:
Background
On June 7, 1993, the Department published a notice of ``Opportunity
to Request an Administrative Review'' (58 FR 31941) of the antidumping
duty order on OCTG from Canada (51 FR 21782; June 16, 1986). On June
25, 1993, IPSCO requested an administrative review. The Department
initiated the review on July 21, 1993 (58 FR 39007), covering the
period June 1, 1992, through May 31, 1993. The Department is conducting
this review in accordance with section 751 of the Tariff Act of 1930,
as amended (the Act).
Scope of the Review
The products covered by this review include shipments of OCTG from
Canada. This includes American Petroleum Institute (API) specification
OCTG and all other pipe with the following characteristics except
entries which the Department determined through its end use
certification procedure were not used in OCTG applications: Length of
at least 16 feet; outside diameter of standard sizes published in the
API or proprietary specifications for OCTG with tolerances of plus \1/
8\ inch for diameters less than or equal to 8\5/8\ inches and plus \1/
4\ inch for diameters greater than 8\5/8\ inches, minimum wall
thickness as identified for a given outer diameter as published in the
API or proprietary specifications for OCTG; a minimum of 40,000 PSI
yield strength and a minimum 60,000 PSI tensile strength; and if with
seams, must be electric resistance welded. Furthermore, imports covered
by this review include OCTG with non-standard size wall thickness
greater than the minimum identified for a given outer diameter as
published in the API or proprietary specifications for OCTG, with
surface scabs or slivers, irregularly cut ends, ID or OD weld flash, or
open seams; OCTG may be bent, flattened or oval, and may lack
certification because the pipe has not been mechanically tested or has
failed those tests.
This merchandise is currently classifiable under the Harmonized
Tariff Schedules (HTS) item numbers 7304.20, 7305.20, and 7306.20. The
HTS item numbers are provided for convenience and Customs purposes. The
written description remains dispositive.
United States Price
In calculating United States Price (USP), the Department used
purchase price, as defined in section 772(b) of the Act, because the
merchandise was sold to an unrelated purchaser in the United States
prior to its importation. The Department based USP on the packed,
delivered price to those unrelated purchasers.
The Department made deductions, where appropriate, for foreign
inland freight, U.S. duties, and U.S. brokerage fees.
On October 7, 1993, the United States Court of International Trade
(CIT), in Federal-Mogul Corporation and The Torrington Company v.
United States, Slip Op. 93-194 (CIT, October 7, 1993), rejected the
Department's methodology for calculating an addition to USP under
section 772(d)(1)(C) of the Act to account for taxes that the exporting
country would have assessed on the merchandise had it been sold in the
home market. The CIT held that the addition to USP under section
772(d)(1)(C) of the Act should be the result of applying the foreign
market tax rate to the price of the United States merchandise at the
same point in the chain of commerce that the foreign market tax was
applied to the foreign market sales. Federal-Mogul, Slip Op. 93-194 at
12.
The Department has changed its methodology in accordance with the
Federal-Mogul decision. The Department has added to USP the result of
multiplying the foreign market tax rate by the price of the merchandise
sold in the United States at the same point in the chain of commerce
that the foreign market tax was applied to foreign market sales. The
Department has also adjusted the USP tax adjustments and the amount of
tax included in FMV. These adjustments deduct the portions of the
foreign market tax and the USP tax adjustment that are the result of
expenses that are included in the foreign market price used to
calculate foreign market tax and are included in the United States
merchandise price used to calculate the USP tax adjustment and that are
later deducted to calculate FMV and USP. These adjustments to the
amount of the foreign market tax and the USP tax adjustment are
necessary to prevent our new methodology for calculating the USP tax
adjustment from creating antidumping duty margins where no margins
would exist if no taxes were levied upon foreign market sales.
This margin creation effect is due to the fact that the bases for
calculating both the amount of tax included in the price of the foreign
market merchandise and the amount of the USP tax adjustment include
many expenses that are later deducted when calculating USP and FMV.
After these deductions are made, the amount of tax included in FMV and
the USP tax adjustment still reflects the amounts of these expenses.
Thus, a margin may be created that is not dependent upon a difference
between USP and FMV, but is the result of the price of the United
States merchandise containing more expenses than the price of the
foreign market merchandise. The Department's policy to avoid the margin
creation effect is in accordance with the United States Court of
Appeals' holding that the application of the USP tax adjustment under
section 772(d)(1)(C) of the Act should not create an antidumping duty
margin if pre-tax FMV does not exceed USP. Zenith Electronics Corp. v.
United States, 988 F.2d 1573, 1581 (Fed. Cir. 1993). In addition, the
CIT has specifically held that an adjustment should be made to mitigate
the impact of expenses that are deducted from FMV and USP upon the USP
tax adjustment and the amount of tax included in FMV. Daewoo
Electronics Co., Ltd. v. United States, 760 F. Supp. 200, 208 (CIT,
1991). However, the mechanics of the Department's adjustments to the
USP tax adjustment and the foreign market tax amount as described above
are not identical to those suggested in Daewoo.
There were no other adjustments claimed or allowed.
Foreign Market Value
In calculating foreign market value (FMV), we used home market
price, as defined in section 773(a) of the Act, since sufficient
quantities of merchandise were sold in the home market to provide a
reasonable basis for comparison. Home market price was based on the FOB
stockyard or FOB mill price to unrelated purchasers in the home market.
Due to the existence of sales below the cost of production (COP) in
the original investigation, which is the last segment of the proceeding
on OCTG with which IPSCO has been involved, the Department had
reasonable grounds to believe or suspect that sales below the COP may
have occurred during this review. Accordingly, the Department initiated
a COP investigation for this review in accordance with section 773(b)
of the act. Because IPSCO had home market sales of models which were
identical to models it sold in the United States, we conducted our cost
test only on those identical models. We calculated COP based on IPSCO's
cost of materials, fabrications, and general expenses. The results of
our cost test showed that no sales of merchandise were made below the
COP during the period of review. Therefore, we have based FMV on sales
of merchandise in the home market.
The Department made adjustments, where applicable, for discounts,
rebates, warranty and servicing expenses, royalty fees, fees for
outside inspectors, and for differences in packing material and credit.
In addition, in accordance with the United States Court of Appeals for
the Federal Circuit's ruling in The Ad Hoc Committee of AZ-NM-TX-FL
Producers of Gray Portland Cement v. United States, Slip Op. 93-1239
(CAFC, January 5, 1994), the Department did not deduct pre-sale
transportation costs. The Department also made an adjustment to FMV for
imputed consumption taxes in accordance with the aforementioned
Federal-Mogul decision.
There were no other adjustments claimed or allowed.
Preliminary Results of Review
As a result of our comparison of USP to FMV, the Department
preliminarily determines that a margin of zero percent exists for IPSCO
for the period June 1, 1992, through May 31, 1993.
Interested parties may request disclosure within 5 days of the date
of publication of this notice and may request a hearing within 10 days
of publication. Any hearing, if requested, will be held 44 days after
the date of publication of this notice, or the first workday
thereafter. Case briefs and/or written comments from interested parties
may be submitted not later than 30 days after the date of publication.
Rebuttal briefs and rebuttals to written comments, limited to the
issues raised in the case briefs and comments, may be filed not later
than 37 days after the date of publication. The Department will publish
the final results of this administrative review, including the results
of its analysis of any such written comments or hearing.
The Department shall determine, and U.S. Customs shall assess,
antidumping duties on all appropriate entries. Individual differences
between USP and FMV may vary from the percentage stated above. The
Department will issue appraisement instructions directly to Customs.
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 of the
final results of this administrative review, as provided by section
751(a)(1) of the Act: (1) The cash deposit rate for the reviewed
company will be that rate established in the final results of this
administrative review; (2) for merchandise exported by manufacturers or
exporters not covered in this review but covered in a previous review
or the original less-than-fair-value (LTFV) investigation, the cash
deposit rate will continue to be the rate published in the most recent
final results or determination for which the manufacturer or exporter
received a company-specific rate; (3) if the exporter is not a firm
covered in this review, earlier reviews, or the original investigation,
but the manufacturer is, the cash deposit rate will be that established
for the manufacturer of the merchandise in these final results of
review, earlier reviews, or the original investigation, whichever is
the most recent; and (4) the ``all others'' rate will be 16.65 percent,
as explained below.
On May 25, 1993, the CIT, in Floral Trade Council v. United States,
Slip Op. 93-79, and Federal-Mogul Corporation v. United States, Slip
Op. 93-83, decided that once an ``all others'' rate is established for
a company it can only be changed through an administrative review. The
Department has determined that in order to implement these decisions,
it is appropriate to reinstate the original ``all others'' rate from
the LTFV investigation (or that rate as amended for correction of
clerical errors or as a result of litigation) in proceedings governed
by antidumping duty orders. Accordingly, the cash deposit rate for any
future entries from all other manufacturers or exporters, who are not
covered in this or prior administrative reviews and who are unrelated
to the reviewed firm or any previously reviewed firm, will be the ``all
others'' rate established in the original LTFV investigation which is
16.65 percent.
These deposit requirements, when imposed, shall remain in effect
until publication of the final results of the next administrative
review.
This notice also 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: April 14, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-9552 Filed 4-19-94; 8:45 am]
BILLING CODE 3510-DS-P
