E7-7597. Certain Circular Welded Non-Alloy Steel Pipe and Tube from Mexico: Notice of Preliminary Intent to Rescind Antidumping Duty New Shipper Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to a request from Conduit S.A. de C.V. (Conduit), a Mexican producer of certain circular welded non-alloy steel pipe and tube (pipe and tube), the Department of Commerce (the Department) initiated a new shipper review of the antidumping duty order on pipe and tube from Mexico. The period of review covers November 1, 2005, through April 30, 2006. Based on our findings at verification, the Department preliminarily determines that the merchandise Conduit sold and entered into the United States was not subject merchandise. Because the respondent has consequently made no sales or shipments of the subject merchandise to the United States during the period of review, we preliminarily intend to rescind this new shipper review.

EFFECTIVE DATE:

April 20, 2007.

FOR FURTHER INFORMATION CONTACT:

John Drury or Patrick Edwards, AD/CVD Operations, Office 7, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

The Department published an antidumping duty order on pipe and tube from Mexico on November 2, 1992. See Notice of Antidumping Duty Order: Circular Welded Non-Alloy Steel Pipe from Mexico, 57 FR 49453 (November 2, 1992). On May 26, 2006, the Department received a timely request from Conduit, in accordance with 19 CFR § 351.214(c), to initiate a new shipper review of the antidumping duty order on pipe and tube from Mexico. Pursuant to 19 CFR § 351.214(b), Conduit certified that it is both the exporter and producer of the subject merchandise, that it did not export subject merchandise to the United States during the period of the investigation, and that since the investigation was initiated, it has never been affiliated with any exporter or producer who exported the subject merchandise to the United States. Conduit also submitted documentation establishing the date on which the shipment that was the basis for this new shipper review was first entered for consumption, the volume shipped, and the date of its first sale to an unaffiliated customer in the United States.

The Department published the initiation of the new shipper review of the antidumping duty order on pipe and tube from Mexico on July 10, 2006. See Circular Welded Non-Alloy Steel Pipe and Tube from Mexico: Initiation of New Shipper Antidumping Duty Review, 71 FR 38851 (July 10, 2006).

Scope of the Order

The merchandise under review is 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, beveled end, threaded, or threaded and coupled). These pipes and tubes are generally known as standard pipes and tubes and are intended for the low-pressure conveyance of water, steam, natural gas, and other liquids and gases in plumbing and heating systems, air conditioning units, automatic sprinkler systems, and other related uses, and generally meet ASTM A-53 specifications. Standard pipe may also be used for light load-bearing applications, such as for fence tubing, and as structural pipe tubing used for framing and support members for reconstruction or load-bearing purposes in the construction, shipbuilding, trucking, farm equipment, and related industries. Unfinished conduit pipe is also included in these orders. All carbon steel pipes and tubes within the physical description outlined above are included within the scope of these orders, 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 these orders.

Imports of the products covered by these orders are currently classifiable under the following Harmonized Tariff Schedule (HTS) 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, and 7306.30.50.90.

Although the HTS subheadings are provided for convenience and customs purposes, our written description of the scope of these proceedings is dispositive.

Preliminary Intent to Rescind New Shipper Review

The Department may rescind a new shipper review with respect to an exporter or producer if the Department concludes that there were no entries, exports, or sales of the subject merchandise to the United States during the period of review. See 19 CFR § 351.214(f)(2). In response to the Department's questionnaire, Conduit provided full and complete responses attesting to their qualification as a new shipper under the Department's regulations, and established that a completed transaction (a sale and entry) of subject merchandise pipe and tube was sold to an unaffiliated customer in the United States.

The Department conducted its verification of Conduit's responses in Mexico City from February 28, 2007, through March 2, 2007. The purpose of the Department's verification was to verify Conduit's one reported sale; however, during the verification, Conduit presented additional documentation of an unreported sale. Further examination of Conduit's quality certificates, production run data and additional sales documentation not presented to the Department during the questionnaire response period confirmed that the merchandise sold in the unreported sale was identical to the merchandise sold in the reported sale that is subject to this new shipper review. See Memorandum to the File from John Drury and Patrick Edwards, Analysts, through Angelica Mendoza, Program Manager regarding Verification of Sales Response of Conduit S.A. de C.V. in the Antidumping New Shipper Review of Certain Circular Welded Non-Alloy Steel Pipe and Tube from Mexico, dated March 23, 2007, on file in the Central Records Unit, room B-099 of the main Commerce building.

Additionally, the documentation examined by the Department concerning the unreported sale, which was made in November 2005, indicated that the merchandise was of a type of tubing made to the American Society for Testing and Materials (ASTM) standard of A-513, which is a mechanical tubing specification. The Department examined production documentation and quality certificates for the sale, confirming that, given its chemical composition and wall thickness, the pipe was indeed in conformance with the ASTM A-513 standard and not the product subject to this Order.

Previous rulings on the scope of the Order prescribe that pipe produced to the A-513 standard, or generally “mechanical tubing,” is specifically excluded from the scope of the antidumping duty order on pipe and tube from Mexico. See section on “Scope of the Order” above. See also, Third Determination on Remand, In the matter of: Final Scope Ruling - Antidumping Duty Order on Circular Welded Non-Alloy Steel Pipe from Mexico, Secretariat File No. USA-MEX_1998-1904-05 (February 19, 2004) (NAFTA Scope Decision). In its submission to the panel, during the NAFTA Scope Decision proceeding, the Department explained that, “ while mechanical tubing can comply with basic description of the pipe subject to this order, its removal from the order is based on its recognition by purchasers and producers as a specialized, made-to-order product. This denotes a product possessing unique chemical, physical, and mechanical characteristics, most notably the physical characteristics. It is a custom made, unique size product that is made to order, thereby differentiating it from the 'standard sizes' of pipe and fence tubing covered by the order. Non-standard pipe sizes generally would be considered to be outside the scope of the order the Department reiterates that mechanical tubing is outside of the scope of the Order.” The Panel affirmed this finding by the Department on June 7, 2004.

Therefore, since this product possesses unique physical characteristics that do not comply with the products subject to this order, and based on the NAFTA Scope Decision, the Department preliminarily determines that there is no sale or entry of subject merchandise to examine, as prescribed under 19 CFR § 351.214(f)(2) of the Department's regulations. Accordingly, the Department preliminarily intends to rescind this new shipper review.

Public Comment

Interested parties may submit case briefs no later than 15 days after the date of publication of this notice of intent to rescind. See 19 CFR § 351.309(c)(ii). Rebuttal briefs, limited to issues raised in case briefs, may be filed no later than five days after the time limit for filing the case briefs. See 19 CFR § 351.309(d). Parties who submit arguments are requested to submit with the argument (1) a statement of the issue, (2) a brief summary of the argument, and (3) a table of authorities. Further, parties submitting written comments should provide the Department with an additional copy of the public version of any such comments on diskette. An interested party may request a hearing within 15 days of publication of this notice of intent to rescind. See 19 CFR § 351.310(c). Any hearing, if requested, will be held two days after the scheduled date for submission rebuttal briefs, or the first working day thereafter. See 19 CFR § 351.310(d)(1). The Department will issue the final notice, which will include the results of its analysis of issues raised in any such comments, or at a hearing, if requested, within 120 days of publication of this notice of intent to rescind.

This notice is issued and published in accordance with sections 751(a)(2) and 777(i)(1) of the Tariff Act of 1930, as amended.

Dated: April 13, 2007.

David M. Spooner,

Assistant Secretary for Import Administration.