[Federal Register Volume 62, Number 94 (Thursday, May 15, 1997)]
[Notices]
[Pages 26773-26775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12799]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-583-816]
Certain Stainless Steel Butt-Weld Pipe Fittings From Taiwan;
Preliminary Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of administrative review.
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SUMMARY: In response to a request by respondent Ta Chen Stainless Pipe
Co., Ltd. (Ta Chen), the Department of Commerce (the Department) is
conducting an administrative review of the antidumping duty order on
certain stainless steel butt-weld pipe fittings (pipe fittings) from
Taiwan. This review covers one manufacturer/exporter of the subject
merchandise to the United States during the period December 23, 1992
through May 31, 1994.
We preliminarily determine that Ta Chen made sales of pipe fittings
below the foreign market value (FMV) for this period of review (POR).
If these preliminary results are adopted in our final results of
administrative review, we will instruct the U.S. Customs Service to
assess antidumping duties equal to the difference between United States
price (USP) and the FMV.
We invite interested parties to comment on these preliminary
results. Parties who submit comments are requested to submit with the
argument (1) a statement of the issues and (2) a brief summary of the
argument.
EFFECTIVE DATE: May 15, 1997.
FOR FURTHER INFORMATION CONTACT: Robert James at (202) 482-5222 or John
Kugelman at (202) 483-0649, Antidumping and Countervailing Duty
Enforcement Group III, Import Administration, International Trade
Administration, U.S. Department of
[[Page 26774]]
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC
20230.
APPLICABLE STATUTE AND REGULATIONS: Unless otherwise indicated, all
citations to 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.
SUPPLEMENTARY INFORMATION:
Background
On June 16, 1993, the Department published in the Federal Register
the antidumping duty order on pipe fittings from Taiwan (58 FR 33250).
On June 7, 1994, the Department published the notice of ``Opportunity
to Request Administrative Review'' for the period December 23, 1992
through May 31, 1994 (59 FR 29411). In accordance with 19 CFR
353.22(a)(1), Ta Chen requested that we conduct a review of its sales
for this period. On July 15, 1994, we published in the Federal Register
a notice of initiation of an antidumping duty administrative review
covering the period December 23, 1992 through May 31, 1994 (59 FR
36160). The Department is now conducting this administrative review in
accordance with section 751 of the Tariff Act.
Scope of the Review
The products subject to this antidumping duty order are certain
stainless steel butt-weld pipe fittings, whether finished or
unfinished, under 14 inches inside diameter.
Certain welded stainless steel butt-weld pipe fittings (pipe
fittings) are used to connect pipe sections in piping systems where
conditions require welded connections. The subject merchandise is used
where one or more of the following conditions is a factor: (1)
corrosion of the piping system will occur if material other than
stainless steel is used; (2) contamination of the material in the
system by the system itself must be prevented; (3) high temperatures
are present; (4) extreme low temperatures are present; (5) high
pressures are contained within the system.
Pipe fittings come in a variety of shapes, with the following five
shapes the most basic: ``elbows,'' ``tees,'' ``reducers,'' ``stub
ends,'' and ``caps.'' The edges of finished pipe fittings are beveled.
Threaded, grooved, and bolted fittings are excluded from this
antidumping duty order. The pipe fittings subject to this order are
classifiable under subheading 7307.23.00 of the Harmonized Tariff
Schedule of the United States (HTS).
Although the HTS subheading is provided for convenience and Customs
purposes, our written description of the scope of this order remains
dispositive.
Use of Best Information Available
We preliminarily determine that the use of best information
otherwise available (BIA), in accordance with section 776(c) of the
Tariff Act, is appropriate for Ta Chen for the period December 23, 1992
through May 31, 1994. We find that in this review Ta Chen
mischaracterized and failed to fully disclose its relationships with
certain U.S. customers and, as a result, did not report its first U.S.
sale to an unrelated party. Therefore, Ta Chen failed to provide the
Department with the U.S. sales data necessary to calculate margins in
this review. Although the bases for this determination are discussed
below, much of the relevant information is proprietary in nature and
cannot be discussed in this public notice. A more detailed analysis is
found in the Department's proprietary Analysis Memorandum, on file in
Room B-099 of the Main Commerce Building.
The Department's definition of related parties is found at section
771(13) of the Tariff Act. Section 771(13) states, inter alia, that:
for purposes of determining United States price, the term
``exporter'' includes the person by whom or for whose account the
merchandise is imported into the United States if--
* * * * *
(B) Such person owns or controls, directly or indirectly,
through stock ownership or control or otherwise, any interest in the
business of the exporter, manufacturer, or producer;
(C) The exporter, manufacturer, or producer owns or controls,
directly or indirectly, through stock ownership or control or
otherwise, any interest in the business conducted by such person * *
*
See Section 771(13) of the Tariff Act (emphasis added).
Throughout this administrative review Ta Chen insisted that it was
not related to any U.S. customer. However, in a supplemental
questionnaire response submitted in a companion case 1
(relevant portions of which have been incorporated into the record of
this review), Ta Chen for the first time disclosed considerable new
information concerning the instant review period which indicates that
Ta Chen was related to two U.S. customers within the meaning of section
771(13) of the Tariff Act. Section 771(13)(C) holds that the term
``exporter'' includes the person by whom or for whose account the
merchandise is imported into the United States if the exporter
``controls, directly or indirectly, through stock ownership or control
or otherwise, any interest in the business conducted by such person.''
The record evidence leads us to conclude that Ta Chen exercised de
facto operational control over these U.S. customers.
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\1\ This document is Ta Chen's November 12, 1996 supplemental
questionnaire response submitted in the 1994--1995 administrative
review of welded stainless steel pipe from Taiwan, case number A-
583-815.
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Our discussion below focuses on two parties, referred to here as
Company A and Company B, which Ta Chen reported as unrelated customers.
Prior to June, 1992 Ta Chen had sold pipe from the U.S. inventory of
its wholly-owned subsidiary, Ta Chen International (TCI). In June 1992,
after Ta Chen decided to stop selling its products from TCI's
inventory, TCI and Company A (a U.S. company established in 1988 by the
president of a Taiwanese firm), signed an agreement whereby Company A
would purchase all of TCI's considerable U.S. inventory and would
effectively replace TCI as the principal distributor of Ta Chen pipe
products in the United States. In a separate June 1992 agreement
between Ta Chen and Company A, Company A also committed itself to
purchasing very substantial, and rapidly increasing, dollar values of
Ta Chen products over the following two years. In September 1993, a
member of Ta Chen's board of directors sold all of his stock in Ta
Chen, allegedly severed all ties with Ta Chen, and incorporated a new
entity, Company B. This new Company B purchased all of Company A's
assets, including inventory, and assumed all of Company A's obligations
regarding its lease of space from Ta Chen's president, purchase
commitments, credit arrangements, etc.
During the instant period of review Ta Chen controlled both Company
A's and then Company B's disbursements through physical custody of
their signature stamps, whereby officials of TCI were authorized to
execute checks and other instruments on behalf of Company A and Company
B. Ta Chen also shared common sales department personnel and office
equipment with Company A and Company B. Furthermore, Ta Chen's sales
manager also served as sales manager for both Company A and Company B.
Ta Chen also had full and unrestricted access, via a dedicated
telephone connection, to Company A's and Company B's computer
accounting systems, including their accounts receivable, accounts
payable, payroll, and other company books. Ta Chen indicated that it
was the sole supplier of stainless steel pipe and
[[Page 26775]]
pipe fittings to Company A and Company B and, further, that its
president participated directly in negotiating the terms of certain
sales Company A and Company B made to subsequent purchasers of pipe
fittings in the United States. Finally, first Company A and, later,
Company B, pledged their accounts receivable and inventory as security
for a sizable line of credit obtained from a local bank by TCI. These
companies also pledged their full cooperation in enforcing this lien in
the event Ta Chen defaulted on its debt.
In addition, we note that for the instant period of review, record
evidence strongly indicates that Ta Chen and Company B were related
parties as defined by section 771(13)(B) of the Tariff Act. At least
for some portion of 1992 until the end of September 1993 (i.e., during
the first POR), Ta Chen's board member simultaneously owned Company B
and held equity interest in Ta Chen. Petitioners in the stainless steel
pipe case have supplied a Dun & Bradstreet report on Company B and a
supporting affidavit which indicates that while Company B was
incorporated in 1993, the board member actually founded the company and
made sales in 1992.
Based on this evidence of Ta Chen's connections with Company A and
Company B, in particular its control over operational functions such as
disbursements, sales personnel, and Ta Chen's involvement in Company
A's and Company B's sales activities, we preliminarily determine that
Ta Chen had a substantial interest in Company A and Company B during
the 1992-1994 POR. Therefore, Ta Chen was related to Company A and
Company B within the meaning of section 771(13) of the Tariff Act.
Because Ta Chen reported U.S. sales to Company A and Company B instead
of the first sale to an unrelated party, the use of best information
otherwise available is warranted.
In selecting BIA, the Department has established a ``two-tier''
hierarchy:
1. When a company refuses to cooperate with the Department or
otherwise significantly impedes the proceedings we use as BIA the
higher of (a) the highest of the rates found for any firm for the same
class or kind of merchandise in the same country of origin in the LTFV
investigation or a prior administrative review, or (b) the highest rate
found in this review for any firm for the same class or kind of
merchandise in the same country of origin.
2. When a company substantially cooperated with our requests for
information, but failed to provide the information in a timely manner
or in the form required, we use as BIA the higher of (a) the highest
rate (including the ``all others'' rate) ever applicable to the firm
for the same class or kind of merchandise from either the LTFV
investigation or a prior administrative review, or (b) the highest rate
calculated in this review for any firm for the class or kind of
merchandise in the same country of origin. See Antifriction Bearings
(Other Than Tapered Roller Bearings) and Parts Thereof From France, et
al.; Final Results of Antidumping Duty Administrative Reviews 57 FR
28360, 28379 (June 24, 1992); see also Allied Signal v. United States,
996 F.2d 1195 (Fed. Cir. 1993).
We find that because Ta Chen failed to provide accurate information
on its relationships to other companies and misreported its sales in
this administrative review, Ta Chen failed to cooperate with the
Department and has significantly impeded these proceedings.
Accordingly, we are assigning Ta Chen a margin based on ``first-tier,''
or uncooperative, BIA.
Preliminary Results of Review
As a result of our review, we preliminarily determine the weighted-
average margin for Ta Chen for the period December 23, 1992 through May
31, 1994 to be 76.20 percent, i.e., the highest margin found for any
respondent in the LTFV investigation. See Amended Final Determination
and Antidumping Duty Order; Certain Welded Stainless Steel Butt-Weld
Pipe Fittings From Taiwan, 58 FR 33250 (June 16, 1993).
Parties to these proceedings may request disclosure within five
days of publication of this notice and may request a hearing within ten
days of publication. Any hearing, if requested, will be held 44 days
after the date of publication, or the first business day thereafter.
Interested parties may submit case briefs or written comments, or both,
no later than 30 days after the date of publication. Rebuttal briefs
and rebuttals to written comments, limited to issues raised in the case
briefs and comments, may be submitted no later than 37 days after the
date of publication of this notice. Parties who submit arguments in
these proceedings are requested to submit with the argument (1) a
statement of the issues and (2) a brief summary of the argument. The
Department will issue final results of these administrative reviews,
including the results of our analysis of the issues in any such written
comments or at a hearing.
The Department shall determine, and the U.S. Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between U.S. price and FMV may vary from the percentage
stated above. The Department will issue appraisement instructions
directly to the Customs Service.
Furthermore, the following deposit requirements will be effective
upon completion of the final results of this administrative review for
all shipments of welded stainless steel pipe fittings from Taiwan
entered, or withdrawn from warehouse, for consumption on or after the
publication of the final results of this administrative review, as
provided in section 751(a)(1) of the Tariff Act:
(1) The cash deposit rate for Ta Chen will be the rate established
in the final results of this administrative review;
(2) For previously reviewed or investigated companies other than Ta
Chen, 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, 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; and
(4) If neither the exporter nor the manufacturer is a firm covered
in this or any other review conducted by the Department, the cash
deposit rate will be 51.01 percent. See Amended Final Determination and
Antidumping Duty Order; Certain Welded Stainless Steel Butt-Weld Pipe
Fittings From Taiwan, 58 FR 33250 (June 16, 1993).
This notice serves as a preliminary reminder to importers of their
responsibility to file a certificate regarding the reimbursement of
antidumping duties prior to liquidation of the relevant entries during
each 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 this notice are in accordance with
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR
353.22.
Dated: May 8, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-12799 Filed 5-14-97; 8:45 am]
BILLING CODE 3510-DS-P
