[Federal Register Volume 60, Number 117 (Monday, June 19, 1995)]
[Notices]
[Pages 31953-31960]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14936]
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DEPARTMENT OF COMMERCE
[A-357-809]
Notice of Final Determination of Sales at Less than Fair Value:
Small Diameter Circular Seamless Carbon and Alloy Steel Standard, Line,
and Pressure Pipe From Argentina
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: June 19, 1995.
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FOR FURTHER INFORMATION CONTACT: Irene Darzenta or Fabian Rivelis,
Office of Antidumping Investigations, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone
(202) 482-6320 or (202) 482-3853.
Final Determination
The Department of Commerce (the Department) determines that small
diameter circular seamless carbon and alloy steel standard, line, and
pressure pipe (seamless pipe) from Argentina is being, or is likely to
be, sold in the United States at less than fair value, as provided in
section 735 of the Tariff Act of 1930, as amended (the Act) (1994). The
estimated margins are shown in the ``Suspension of Liquidation''
section of this notice.
Case History
Since our preliminary determination on January 19, 1995 (60 FR
5348, January 27, 1994), the following events have occurred.
In response to a request from respondent Siderca S.A.I.C.
(Siderca), we postponed the final determination until June 12, 1995,
pursuant to section 735(a)(2)(A) of the Act (60 FR 9012, February 16,
1995).
In our notice of preliminary determination we stated that we would
solicit further information on various scope-related issues, including
class or kind of merchandise. On February 10, 1995, we issued a
questionnaire to interested parties to request further information on
whether the scope of the investigation constitutes more than one class
or kind of merchandise. Responses to this questionnaire were submitted
on March 27, 1995.
On April, 27, 1995, Koppel Steel Corporation, a U.S. producer of
subject merchandise which appeared as an interested party from the
outset of this investigation, requested co-petitioner status.
On May 5, 1995, respondent submitted its case brief. Petitioner
1 submitted its rebuttal brief on May 15, 1995. In its rebuttal
brief, petitioner requested that the Department reject ``substantial
portions'' of Siderca's case brief because it allegedly constituted a
``new submission of factual information.'' Siderca objected to this
request on May 19, 1995. Petitioner responded to this letter on May 26,
1995. However, we determined that Siderca's case brief did not contain
new factual information. (See Comment 1 in the ``Interested Party
Comment'' section [[Page 31954]] of this notice.) In addition, on June
1, 1995, the Department returned Siderca's May 19, 1995, letter, as
well as petitioner's letter of May 26, 1995, because they constituted
unsolicited submissions untimely filed after the briefing period.
\1\ All references to ``petitioner'' in this notice include
Koppel Steel Corporation.
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Scope of Investigation
The following scope language reflects certain modifications made
for purposes of the final determination, where appropriate, as
discussed in the ``Scope Issues'' section below.
The scope of this investigation includes seamless pipes produced to
the ASTM A-335, ASTM A-106, ASTM A-53 and API 5L specifications and
meeting the physical parameters described below, regardless of
application. The scope of this investigation also includes all products
used in standard, line, or pressure pipe applications and meeting the
physical parameters below, regardless of specification.
For purposes of this investigation, seamless pipes are seamless
carbon and alloy (other than stainless) steel pipes, of circular cross-
section, not more than 114.3 mm (4.5 inches) in outside diameter,
regardless of wall thickness, manufacturing process (hot-finished or
cold-drawn), end finish (plain end, bevelled end, upset end, threaded,
or threaded and coupled), or surface finish. These pipes are commonly
known as standard pipe, line pipe or pressure pipe, depending upon the
application. They may also be used in structural applications. Pipes
produced in non-standard wall thicknesses are commonly referred to as
tubes.
The seamless pipes subject to these investigations are currently
classifiable under subheadings 7304.10.10.20, 7304.10.50.20,
7304.31.60.50, 7304.39.00.16, 7304.39.00.20, 7304.39.00.24,
7304.39.00.28, 7304.39.00.32, 7304.51.50.05, 7304.51.50.60,
7304.59.60.00, 7304.59.80.10, 7304.59.80.15, 7304.59.80.20, and
7304.59.80.25 of the Harmonized Tariff Schedule of the United States
(HTSUS).
The following information further defines the scope of this
investigation, which covers pipes meeting the physical parameters
described above:
Specifications, Characteristics and Uses: Seamless pressure pipes
are intended for the conveyance of water, steam, petrochemicals,
chemicals, oil products, natural gas and other liquids and gasses in
industrial piping systems. They may carry these substances at elevated
pressures and temperatures and may be subject to the application of
external heat. Seamless carbon steel pressure pipe meeting the American
Society for Testing and Materials (ASTM) standard A-106 may be used in
temperatures of up to 1000 degrees fahrenheit, at various American
Society of Mechanical Engineers (ASME) code stress levels. Alloy pipes
made to ASTM standard A-335 must be used if temperatures and stress
levels exceed those allowed for A-106 and the ASME codes. Seamless
pressure pipes sold in the United States are commonly produced to the
ASTM A-106 standard.
Seamless standard pipes are most commonly produced to the ASTM A-53
specification and generally are not intended for high temperature
service. They are intended for the low temperature and pressure
conveyance of water, steam, natural gas, air and other liquids and
gasses in plumbing and heating systems, air conditioning units,
automatic sprinkler systems, and other related uses. Standard pipes
(depending on type and code) may carry liquids at elevated temperatures
but must not exceed relevant ASME code requirements.
Seamless line pipes are intended for the conveyance of oil and
natural gas or other fluids in pipe lines. Seamless line pipes are
produced to the API 5L specification.
Seamless pipes are commonly produced and certified to meet ASTM A-
106, ASTM A-53 and API 5L specifications. Such triple certification of
pipes is common because all pipes meeting the stringent A-106
specification necessarily meet the API 5L and ASTM A-53 specifications.
Pipes meeting the API 5L specification necessarily meet the ASTM A-53
specification. However, pipes meeting the A-53 or API 5L specifications
do not necessarily meet the A-106 specification. To avoid maintaining
separate production runs and separate inventories, manufacturers triple
certify the pipes. Since distributors sell the vast majority of this
product, they can thereby maintain a single inventory to service all
customers.
The primary application of ASTM A-106 pressure pipes and triple
certified pipes is in pressure piping systems by refineries,
petrochemical plants and chemical plants. Other applications are in
power generation plants (electrical-fossil fuel or nuclear), and in
some oil field uses (on shore and off shore) such as for separator
lines, gathering lines and metering runs. A minor application of this
product is for use as oil and gas distribution lines for commercial
applications. These applications constitute the majority of the market
for the subject seamless pipes. However, A-106 pipes may be used in
some boiler applications.
The scope of this investigation includes all seamless pipe meeting
the physical parameters described above and produced to one of the
specifications listed above, regardless of application, and whether or
not also certified to a non-covered specification. Standard, line and
pressure applications and the above-listed specifications are defining
characteristics of the scope of this investigation. Therefore, seamless
pipes meeting the physical description above, but not produced to the
A-335, A-106, A-53, or API 5L standards shall be covered if used in a
standard, line or pressure application.
For example, there are certain other ASTM specifications of pipe
which, because of overlapping characteristics, could potentially be
used in A-106 applications. These specifications generally include A-
162, A-192, A-210, A-333, and A-524. When such pipes are used in a
standard, line or pressure pipe application, such products are covered
by the scope of this investigation.
Specifically excluded from this investigation are boiler tubing and
mechanical tubing, if such products are not produced to A-335, A-106,
A-53 or API 5L specifications and are not used in standard, line or
pressure applications. In addition, finished and unfinished OCTG are
excluded from the scope of this investigation, if covered by the scope
of another antidumping duty order from the same country. If not covered
by such an OCTG order, finished and unfinished OCTG are included in
this scope when used in standard, line or pressure applications.
Finally, also excluded from this investigation are redraw hollows for
cold-drawing when used in the production of cold-drawn pipe or tube.
Although the HTSUS subheadings are provided for convenience and
customs purposes, our written description of the scope of this
investigation is dispositive.
Scope Issues
Interested parties in these investigations have raised several
issues related to the scope. We considered these issues in our
preliminary determination and invited additional comments from the
parties. These issues, which are discussed below, are: (A) Whether to
continue to include end use as a factor in defining the scope of these
investigations; (B) whether the seamless pipe subject to these
investigations constitutes more than one class or kind of merchandise;
and (C) miscellaneous scope clarification issues and scope exclusion
requests.
[[Page 31955]]
A. End Use
We stated in our preliminary determination that we agreed with
petitioner that pipe products identified as potential substitutes used
in the same applications as the four standard, line, and pressure pipe
specifications listed in the scope would fall within the class or kind
of subject merchandise and, therefore, within the scope of any orders
issued in these investigations. However, we acknowledged the
difficulties involved with requiring end-use certifications,
particularly the burdens placed on the Department, the U.S. Customs
Service, and the parties, and stated that we would strive to simplify
any procedures in this regard.
For purposes of these final determinations, we have considered
carefully additional comments submitted by the parties and have
determined that it is appropriate to continue to employ end use to
define the scope of these cases with respect to non-listed
specifications. We find that the generally accepted definition of
standard, line and pressure seamless pipes is based largely on end use,
and that end use is implicit in the description of the subject
merchandise. Thus, end use must be considered a significant defining
characteristic of the subject merchandise. Given our past experience
with substitution after the imposition of antidumping orders on steel
pipe products,2 we agree with petitioner that if products produced
to a non-listed specification (e.g., seamless pipe produced to A-162, a
non-listed specification in the scope) were actually used as standard,
line, or pressure pipe, then such product would fall within the same
class or kind of merchandise subject to these investigations.
\2\ See Preliminary Affirmative Determination of Scope Inquiry
on Antidumping Duty Orders on Certain Welded Non-Alloy Steel Pipes
from Brazil, the Republic of Korea, Mexico and Venezuela, 59 FR
1929, January 13, 1994.
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Furthermore, we disagree with respondents' general contention that
using end use for the scope of an antidumping case is beyond the
purview of the U.S. antidumping law. The Department has interpreted
scope language in other cases as including an end-use specification.
See Ipsco Inc. v. United States, 715 F.Supp. 1104 (CIT 1989) (Ipsco).
In Ipsco, the Department had clarified the scope of certain orders, in
particular the phrase, ``intended for use in drilling for oil and
gas,'' as covering not only API specification OCTG pipe but, `` `all
other pipe with [certain specified] characteristics used in OCTG
applications * * *.' '' Ipsco at 1105. In reaching this determination,
the Department also provided an additional description of the covered
merchandise, and initiated an end-use certification procedure.
Regarding implementation of the end use provision of the scope of
these investigations, and any orders which may be issued in these
investigations, we are well aware of the difficulty and burden
associated with such certifications. Therefore, in order to maintain
the effectiveness of any order that may be issued in light of actual
substitution in the future (which the end-use criterion is meant to
achieve), yet administer certification procedures in the least
problematic manner, we have developed an approach which simplifies
these procedures to the greatest extent possible.
First, we will not require end-use certification until such time as
petitioner or other interested parties provide a reasonable basis to
believe or suspect that substitution is occurring.3 Second, we
will require end-use certification only for the product(s) (or
specification(s)) for which evidence is provided that substitution is
occurring. For example, if, based on evidence provided by petitioner,
the Department finds a reasonable basis to believe or suspect that
seamless pipe produced to A-162 specification is being used as pressure
pipe, we will require end-use certifications for imports of A-162
specification. Third, normally we will require only the importer of
record to certify to the end use of the imported merchandise. If it
later proves necessary for adequate implementation, we may also require
producers who export such products to the United States to provide such
certification on invoices accompanying shipments to the United States.
For a complete discussion of interested party comments and the
Department's analysis on this topic, see June 12, 1995, End Use
Decision Memorandum from Deputy Assistant Secretary Barbara Stafford
(DAS) to Assistant Secretary Susan Esserman (AS).
\3\ This approach is consistent with petitioner's request.
B. Class or Kind
In the course of these investigations, certain respondents have
argued that the scope of the investigations should be divided into two
classes or kinds. Siderca S.A.I.C., the Argentine respondent, has
argued that the scope should be divided according to size: seamless
pipe with an outside diameter of 2 inches or less and pipe with an
outside diameter of greater than 2 inches constitute two classes or
kinds. Mannesmann S.A., the Brazilian respondent, and Mannesmannrohren-
Werke, A.G., the German respondent, argued that the scope should be
divided based upon material composition: carbon and alloy steel
seamless pipe constitute two classes or kinds.
In our preliminary determinations, we found insufficient evidence
on the record that the merchandise subject to these investigations
constitutes more than one class or kind. We also indicated that there
were a number of areas where clarification and additional comment were
needed. For purposes of the final determination, we considered a
significant amount of additional information submitted by the parties
on this issue, as well as information from other sources. This
information strongly supports a finding of one class or kind of
merchandise. As detailed in the June 12, 1995, Class or Kind Decision
Memorandum from DAS to AS, we analyzed this issue based on the criteria
set forth by the Court of International Trade in Diversified Products
v. United States, 6 CIT 155, 572 F. Supp. 883 (1983). These criteria
are as follows: (1) The general physical characteristics of the
merchandise; (2) expectations of the ultimate purchaser; (3) the
ultimate use of the merchandise; (4) the channels of trade in which the
merchandise moves; and (5) the cost of that merchandise.
In the past, the Department has divided a single class or kind in a
petition into multiple classes or kinds where analysis of the
Diversified Products criteria indicates that the subject merchandise
constitutes more than one class or kind. See, for example, Final
Determination of Sales at Less than Fair Value; Anti-Friction Bearings
(Apart from Tapered Roller Bearings) from Germany, 54 FR 18992, 18998
(May 3, 1989) (``AFBs from Germany''); Pure and Alloy Magnesium from
Canada: Final Affirmative Determination; Rescission of Investigation
and Partial Dismissal of Petition, 57 FR 30939 (July 13, 1992).
1. Physical Characteristics
We find little meaningful difference in physical characteristics
between seamless pipe above and below two inches. Both are covered by
the same technical specifications, which contains detailed
requirements.\4\ While we recognize that carbon and alloy pipe do have
some important physical [[Page 31956]] differences (primarily the
enhanced heat and pressure tolerances associated with alloy grade
steels), it is difficult to say where carbon steel ends and alloy steel
begins. As we have discussed in our Class or Kind Decision Memorandum
of June 12, 1995, carbon steel products themselves contain alloys, and
there is a range of percentages of alloy content present in merchandise
made of carbon steel. We find that alloy grade steels, and pipes made
therefrom, represent the upper end of a single continuum of steel
grades and associated attributes.\5\
\4\ The relevant ASTM specifications, as well as product
definitions from other independent sources (e.g., American Iron and
Steel Institute (AISI)), describe the sizes for standard, line, and
pressure pipe, as ranging from \1/2\ inch to 60 inches (depending on
application). None of these descriptions suggest a break point at
two inches.
\5\ The Department has had numerous cases where steel products
including carbon and alloy grades were considered to be within the
same class or kind. See, e.g., Preliminary Determination of Sales at
Less than Fair Value: Oil Country Tubular Goods from Austria, et
al., 60 FR 6512 (February 2, 1995); Final Determination of Sales at
Less than Fair Value: Certain Alloy and Carbon Hot-Rolled Bars,
Rods, and Semi-Finished Products of Special Bar Quality Engineered
Steel from Brazil, 58 FR 31496 (June 3, 1993); Final Determination
of Sales at Less than Fair Value: Forged Steel Crankshafts from the
United Kingdom, 60 FR 22045 (May 9, 1995).
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In those prior determinations where the Department divided a single
class or kind, the Department emphasized that differences in physical
characteristics also affected the capabilities of the merchandise
(either the mechanical capabilities, as in AFBs from Germany, 54 FR at
18999, 19002-03, or the chemical capabilities, as in Pure and Alloy
Magnesium from Canada, 57 FR at 30939), which in turn established the
boundaries of the ultimate use and customer expectations of the
products involved.
As the Department said in AFBs from Germany,
[t]he real question is whether the physical differences are so
material as to alter the essential nature of the product, and,
therefore, rise to the level of class or kind distinctions. We
believe that the physical differences between the five classes or
kinds of the subject merchandise are fundamental and are more than
simply minor variations on a theme.
54 FR at 19002. In the present cases, there is insufficient evidence to
conclude that the differences between pipe over 2 inches in outside
diameter and 2 inches or less in outside diameter, rise to the level of
a class or kind distinction.
Furthermore, with regard to Siderca's allegation that a two-inch
breakpoint is widely recognized in the U.S. market for seamless pipe,
the Department has found only one technical source of U.S. market data
for seamless pipe, the Preston Pipe Report. The Preston Pipe Report,
which routinely collects and publishes U.S. market data for this
merchandise, publishes shipment data for the size ranges \1/2\ to 4\1/
2\ inches: it does not recognize a break point at 2 inches.
Accordingly, the Department does not agree with Siderca that ``the U.S.
market'' recognizes 2 inches as a physical boundary line for the
subject merchandise.
In these present cases, therefore, the Department finds that there
is insufficient evidence that any physical differences between pipe
over 2 inches in outside diameter and 2 inches or less in outside
diameter, or between carbon and alloy steel, rise to the level of class
or kind distinctions.
2. Ultimate Use and Purchaser Expectations
We find no evidence that pipe above and below two inches is used
exclusively in any specific applications. Rather, the record indicates
that there are overlapping applications. For example, pipe above and
below two inches may both be used as line and pressure pipe. The
technical definitions for line and pressure pipe provided by ASTM,
AISI, and a variety of other sources do not recognize a distinction
between pipe over and under two inches.
Likewise, despite the fact that alloy grade steels are associated
with enhanced heat and pressure tolerances, there is no evidence that
the carbon or alloy content of the subject merchandise can be
differentiated in the ultimate use or expectations of the ultimate
purchaser of seamless pipe.
3. Channels of Trade
Based on information supplied by the parties, we determine that the
vast majority of the subject merchandise is sold through the same
channel of distribution in the United States and is triple-stenciled in
order to meet the greatest number of applications.
Accordingly, the channels of trade offer no basis for dividing the
subject merchandise into multiple classes or kinds based on either the
size of the outside diameter or on pipe having a carbon or alloy
content.
4. Cost
Based on the evidence on the record, we find that cost differences
between the various products do exist. However, the parties varied
considerably in the factors which they characterized as most
significant in terms of affecting cost. There is no evidence that the
size ranges above and below two inches, and the difference between
carbon and alloy grade steels, form a break point in cost which would
support a finding of separate classes or kinds.
In conclusion, while we recognize that certain differences do exist
between the products in the proposed class or kind of merchandise, we
find that the similarities significantly outweigh any differences.
Therefore, for purposes of the final determination, we will continue to
consider the scope as constituting one class or kind of merchandise.
C. Miscellaneous Scope Clarification Issues and Exclusion Requests
The miscellaneous scope issues include: (1) Whether OCTG and
unfinished OCTG are excluded from the scope of these investigations;
(2) whether pipes produced to non-standard wall thicknesses (commonly
referred to as ``tubes'') are covered by the scope; (3) whether certain
merchandise (e.g., boiler tubing, mechanical tubing) produced to a
specification listed in the scope but used in an application excluded
from the scope is covered by the scope; and (4) whether redraw hollows
used for cold drawing are excluded from the scope. For a complete
discussion of interested party comments and the Department's analysis
on these topics, see June 12, 1995, Additional Scope Clarifications
Decision Memorandum from DAS to AS.
Regarding OCTG, petitioner requested that OCTG and unfinished OCTG
be included within the scope of these investigations if used in a
standard, line or pressure pipe application. However, OCTG and
unfinished OCTG, even when used in a standard, line or pressure pipe
application, may come within the scope of certain separate, concurrent
investigations. We intend that merchandise from a particular country
not be classified simultaneously as subject to both an OCTG order and a
seamless pipe order. Thus, to eliminate any confusion, we have revised
the scope language above to exclude finished and unfinished OCTG, if
covered by the scope of another antidumping duty order from the same
country. If not covered by such an OCTG order, finished and unfinished
OCTG are included in this scope when used in a standard, line or
pressure pipe application, and, as with other non-listed
specifications, may be subject to end-use certification if there is
evidence of substitution.
Regarding pipe produced in non-standard wall thicknesses, we
determine that these products are clearly within the parameters of the
scope of these investigations. For clarification purposes, we note that
the physical parameters of the scope include all seamless carbon and
alloy steel pipes, of circular cross-section, not more than 4.5 inches
in outside diameter, regardless of [[Page 31957]] wall thickness.
Therefore, the fact that such products may be referred to as tubes by
some parties, and may be multiple-stenciled, does not render them
outside the scope.
Regarding pipe produced to a covered specification but used in a
non-covered application, we determine that these products are within
the scope. We agree with the petitioner that the scope of this
investigation includes all merchandise produced to the covered
specifications and meeting the physical parameters of the scope,
regardless of application. The end-use criteria included in the scope
is only applicable to products which can be substituted in the
applications to which the covered specifications are put i.e. standard,
line, and pressure applications.
It is apparent that at least one party in this case interpreted the
scope incorrectly. Therefore, we have clarified the scope to make it
more explicit that all products made to ASTM A-335, ASTM A-106, ASTM A-
53 and API 5L are covered, regardless of end use.
With respect to redraw hollows for cold drawing, the scope language
excludes such products specifically when used in the production of
cold-drawn pipe or tube. We understand that petitioner included this
exclusion language expressly and intentionally to ensure that hollows
imported into the United States are sold as intermediate products, not
as merchandise to be used in a covered application.
Standing
The Argentine, Brazilian, and German respondents have challenged
the standing of Gulf States Tube to file the petition with respect to
pipe and tube between 2.0 and 4.5 inches in outside diameter, arguing
that Gulf States Tube does not produce these products.
Pursuant to section 732(b)(1) of the Act, an interested party as
defined in section 771(9)(C) of the Act has standing to file a
petition. (See also 19 CFR 353.12(a).) Section 771(9)(C) of the Act
defines ``interested party,'' inter alia, as a producer of the like
product. For the reasons outlined in the ``Scope Issues'' section
above, we have determined that the subject merchandise constitutes a
single class or kind of merchandise. The International Trade Commission
(ITC) has also preliminarily determined that there is a single like
product consisting of circular seamless carbon and alloy steel
standard, line, and pressure pipe, and tubes not more than 4.5 inches
in outside diameter, and including redraw hollows. (See USITC
Publication 2734, August 1994 at 18). For purposes of determining
standing, the Department has determined to accept the ITC's definition
of like product, for the reasons set forth in the ITC's preliminary
determination. Because Gulf States is a producer of the like product,
it has standing to file a petition with respect to the class or kind of
merchandise under investigation. Further, as noted in the ``Case
History'' section of this notice, on April 27, 1995, Koppel, a U.S.
producer of the product size range at issue, filed a request for co-
petitioner status, which the Department granted. As a producer of the
like product, Koppel also has standing.
The Argentine respondent argues that Koppel's request was filed too
late to confer legality on the initiation of these proceedings with
regard to the products at issue. Gulf States Tube maintains that the
Department has discretion to permit the amendment of a petition for
purposes of adding co-petitioners who produce the domestic like
product, at such time and upon such circumstances as deemed appropriate
by the Department.
The Court of International Trade (CIT) has upheld in very broad
terms the Department's ability to allow amendments to petitions. For
example, in Citrosuco Paulista, S.A. v. United States, 704 F. Supp.
1075 (Ct. Int'l Trade 1988), the Court sustained the Department's
granting of requests for co-petitioner status filed by six domestic
producers on five different dates during an investigation. The Court
held that the addition of the co-petitioners cured any defect in the
petition, and that allowing the petition to be amended was within
Commerce's discretion:
[S]ince Commerce has statutory discretion to allow amendment of
a dumping petition at any time, and since Commerce may self-initiate
a dumping petition, any defect in a petition filed by [a domestic
party is] cured when domestic producers of the like product [are]
added as co-petitioners and Commerce [is] not required to start a
new investigation.
Citrosuco, 704 F. Supp. at 1079 (emphasis added). The Court reasoned
that if Commerce were to have dismissed the petition for lack of
standing, and to have required the co-petitioners to refile at a later
date, it ``would have elevated form over substance and fruitlessly
delayed the antidumping investigation * * * when Congress clearly
intended these cases to proceed expeditiously.'' Id. at 1083-84.
Koppel has been an interested party and a participant in these
investigations from the outset. The timing of Koppel's request for co-
petitioner status and the fact that it made its request in response to
Siderca's challenge to Gulf States's Tube's standing does not render
its request invalid. See Final Affirmative Countervailing Duty
Determination; Live Swine and Fresh, Chilled, and Frozen Pork Products
from Canada, 50 FR 25097 (June 17, 1985). The Department has rejected a
request to add a co-petitioner based on the untimeliness of the request
only where the Department determined that there was not adequate time
for opposing parties to submit comments and for the Department to
consider the relevant arguments. See Final Affirmative Countervailing
Duty Determination: Certain Stainless Steel Hollow Products from
Sweden, 52 FR 5794, 5795, 5803 (February 26, 1987). In this
investigation, the respondents have had an opportunity to comment on
Koppel's request for co-petitioner status, and the Argentine respondent
has done so in its case brief. Therefore, we have determined that,
because respondents would not be prejudiced or unduly burdened,
amendment of the petition to add Koppel as co-petitioner is
appropriate.
Period of Investigation
The period of investigation (POI) is January 1, through June 30,
1994.
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute and to the
Department's regulations are in reference to the provisions as they
existed on December 31, 1994.
Best Information Available
In accordance with section 776(c) of the Act, we have determined
that the use of best information available (BIA) is appropriate for
Siderca, the only named respondent in this investigation. As stated in
our notice of preliminary determination, on September 12, 1994, Siderca
notified the Department that it would not participate in this
investigation. Because Siderca refused to answer the Department's
questionnaire, we find that it has not cooperated in this
investigation.
In determining what rate to use as BIA, the Department follows a
two-tiered BIA methodology, whereby the Department may impose the most
adverse rate upon those respondents who refuse to cooperate or
otherwise significantly impede the proceeding, or assign a lower rate
for those respondents who have cooperated in an investigation. The
Department's BIA methodology for uncooperative respondents is to assign
the higher of the highest margin alleged in the petition or the highest
rate calculated for another respondent. The Department's practice for
applying BIA to cooperative respondents is to use the higher of the
average of the margins alleged in the petition or the calculated
[[Page 31958]] margin for another firm for the same class or kind of
merchandise from the same country. See Final Determination of Sales at
Less than Fair Value: Antifriction Bearings (Other Than Tapered Roller
Bearings) and Parts Thereof From the Federal Republic of Germany, 54 FR
18992, 19033 (May 3, 1989). The Department's two-tier methodology for
assigning BIA based on the degree of respondents' cooperation has been
upheld by the U.S. Court of Appeals for the Federal Circuit. (See
Allied-Signal Aerospace Co. v. the United States, 996 F2d 1185 (Fed
Cir. 1993); see also Krupp Stahl AG. et al v. the United States, 822 F.
Supp. 789 (CIT 1993).) Because there are no other respondents in this
investigation we are assigning to Siderca, as BIA, the highest margin
among the margins alleged in the petition.
Fair Value Comparisons
To determine whether sales of subject merchandise from Germany to
the United States were made at less than fair value, we compared United
States price (USP) to foreign market value (FMV) as reported in the
petition. See Initiation of Antidumping Duty Investigation of Small
Diameter Circular Seamless Carbon and Alloy Steel Standard, Line and
Pressure Pipe from Argentina, Brazil, Germany, and Italy (59 FR 37025,
July 20, 1994).
Interested Party Comments
Comment 1
Petitioner contends that Siderca's submissions of factual
information made after its September 12, 1994, letter indicating that
it would not participate in the investigation, are untimely. As such,
they must be stricken from the record and not considered by the
Department in its final determination. In addition, petitioner states
that none of the factual information upon which Siderca relies in its
case brief has been verified by the Department, which is required under
the antidumping statute if it is to be utilized by the Department in
making a final determination. Also, petitioner states that some of
Siderca's later submissions (e.g., submissions on October 12, 1994, and
March 27, 1995) related to standing and class or kind issues did not
contain certifications of factual information.
DOC Position
We disagree with petitioner. Despite the fact that Siderca chose
not to respond to the Department's questionnaire, and thus not to
participate in this investigation, the Department cannot preclude it
from commenting as an interested party in this investigation.
Furthermore, all of the information contained in Siderca's brief was
submitted previously on the record, so that its case brief contained no
new factual information. In addition, the omission of certification
from earlier submissions was a clerical oversight which was cured
without prejudicing petitioner.
Comment 2
Siderca maintains that Gulf States is not a producer of standard,
line and pressure pipe between 2.0 and 4.5 inches in outer diameter
(OD) and, therefore, lacks standing as an ``interested party'' under
section 771(9)(C) of the Act to petition on behalf the U.S. industry
which produces this merchandise. Siderca also asserts that the request
of Koppel Steel Corporation for co-petitioner status does not remedy
Gulf States' lack of standing or cure the petitioner's defects.
Consequently, Siderca urges the Department to rescind the initiation of
the investigation with respect to seamless pipe in the OD size range
between 2.0 and 4.5.
Specifically, respondent states that Gulf States openly admits in
the petition that it neither manufactures or sells seamless pipe
greater than or equal to 2\3/8\ inches in OD, and that publicly
available evidence shows that Gulf States neither manufactures or sells
seamless pipe between 1.9 and 2\3/8\ inches in OD. Respondent also
maintains that Gulf States fails to meet the statutory test for
interested party status to file a petition under Section 771(9)(C) of
the Act, and has no legally-recognizable stake in the market for pipe
greater than 2.0 inches in OD, as provided for in the legislative
history of the standing requirement.
Furthermore, Siderca asserts that the ITC's one like product
preliminary determination does not change this analysis because the
like product determination made by the ITC when it considers the issue
of material injury is different from the like product determination
made by the Commerce Department when it considers the issue of
standing. The Commerce Department is not required to adopt the ITC's
like product definition for purposes of determining petitioner's
standing. Siderca adds that seamless carbon and alloy pipe is produced
in a continuum of sizes at least up to 36 inches in OD; there is no
``bright line'' at any point on that continuum above 2.0 inches, other
than a line that may be drawn where the facilities of producers impose
physical limitations. Thus, if the Department concludes that a producer
of seamless pipe up to 2.0 inches is an interested party with regard to
seamless pipe of greater OD, then there is no more of a justification
for a producer such as Gulf States to petition on pipe up to 4.5 inches
than there is for it to petition up to 36 inches. Once the Department
determines that a petitioner is an interested party for sizes beyond
its production capability, there is no reason for drawing the line at
4.5 inches or any other point along the continuum.
With respect to Koppel's request for co-petitioner status,
respondent states that this request was filed too late (almost 10
months after the June 23, 1994, filing of the petition) to confer
legality on the initiation of this proceeding with regard to seamless
pipe between 2.0 and 4.5 inches in OD. According to Siderca, this
action is unprecedented, and was precipitated by Gulf States' and
Koppel's realization that the petition and Department's subsequent
initiation are legally deficient with respect to seamless pipe over 2.0
inches. Siderca also points out that all of the information on which
the Department relied in making its initiation determination came from
Gulf States, not Koppel. If Koppel is not accepted as co-petitioner,
the initiation of these investigations with regard to pipe between 2.0
and 4.5 inches in OD must be rescinded because Gulf States is not an
interested party with respect to merchandise of this size range.
Siderca also asserts that if the Department does not reject the
petition or rescind the initiation with respect to seamless pipe of
this size range, it should determine that there are two classes or
kinds of merchandise, i.e., 2.0 inches and below; and between 2.0 and
4.5 inches, because these pipe size ranges differ in terms of physical
characteristics, purchaser expectations, end use and cost.
Gulf States contends that Siderca's objection to its standing is
without merit because: (1) There is no basis in law or in fact for
treating pipe larger than 2.0 inches in OD as a separate class or kind
of merchandise; and (2) in any event, Gulf States produces pipe in the
categories of merchandise proposed by Siderca. Contrary to respondent's
claim, petitioner points out that in its March 27, 1995, submission, it
provided extensive factual information concerning the stencilling,
sale, distribution, and cost of production for all sizes of subject
merchandise produced by Gulf States, including seamless pipe larger
than 2.0 inches in OD. Therefore, petitioner asserts that even if pipe
over 2.0 inches in OD were to constitute a separate class or kind of
merchandise, Gulf States would nonetheless have standing as a
[[Page 31959]] petitioner. Additionally, Gulf States maintains that
Siderca's claim that Koppel cannot be added as a co-petitioner at the
time it made its request on April 27, 1995, is legally incorrect.
Citing Citrosuco Paulista, S.A. v. United States (704 F. Supp. 1075
(CIT 1988)), petitioner asserts that the Department has discretion to
permit the amendment of a petition for the purposes of adding co-
petitioners who produce the like product, at such time and upon such
circumstances as deemed appropriate by the Department.
DOC Position
We agree with petitioner for reasons explained in our section on
``Standing'' in this notice.
Comment 3
Siderca argues that the Department should reject petitioner's end
use language in the scope of this investigation which includes products
not subject to this investigation if they are used in standard line
pipe applications.
Respondent maintains that such an end use requirement would result
in a disparate treatment between imported goods that have crossed the
border and domestic goods once they are competing in the U.S.
marketplace, which is contrary to Article III of the General Agreement
on Tariffs and Trade (GATT).
Respondent also argues that if an end use certification program
were implemented, it would be virtually unadministerable because
importers and producers normally do not know the end use of their
product. Moreover, respondent cites the Oil Country Tubular Goods from
Canada investigation, in which the Department abandoned its end use
program after two years, because the program was cumbersome and
difficult to administer.
Petitioner states that end use is an appropriate element of the
scope and that the Department has included end use has included end use
as an element of scope in other investigations. Furthermore, petitioner
maintains that because of overlapping properties, it is possible that
pipe made to other specifications than A-53, A-106, A-335, and API-5L
may be applied to uses for which those specifications are normally
used, creating the likelihood of substitution. Petitioner recognizes
that defining scope by end use presents more complications for the
enforcement of an order, but, for simplification, has suggested that
the Department employ a rebuttable presumption that specification is an
indication of use for pipe in non-listed specifications. Finally,
petitioner counters Siderca's assertion that an end use element in the
scope is contrary to GATT by stating that the GATT is not violated
unless the country imposing the duties has disregarded its obligations
under Article VI of the Antidumping Code; and that Siderca does not
allege that any provisions of relevant GATT antidumping law would be
violated if the Department, following established U.S. practice
continues to consider end use as a scope criterion.
DOC Position
We agree with petitioner for the reasons outlined in the ``Scope
Issues'' section of this notice.
Comment 4
Siderca argues that there are two classes or kinds of merchandise:
standard line pipe 2.0 inches in outside diameter and below; and
between 2.0 and 4.5 inches in outside diameter. Respondent maintains
that the criteria articulated in Diversified Products support its
assertion of two classes of kinds. Specifically, respondent argues that
the distinct size differences between steel pipe below 2.0 inches in
outside diameter and steel pipe between 2.0 and 4.5 inches are
recognized in the industry as differentiating physical characteristics.
Respondent maintains that line capacity, operating pressure,
temperature, stress level, and structural integrity will determine the
size of the pipe, and in turn, will determine the particular
application.
With respect to customer expectations, Siderca argues that
customers purchase pipe in specific sizes knowing that different sizes
have different applications. Respondent states that pipe under 2.0
inches is used almost exclusively as pressure pipe because of the
unique characteristics of pipe that size. Moreover, respondent claims
that a purchaser will expect pipe above 2.0 inches to be suitable for
line pipe applications.
Regarding channels of trade, respondent argues that although pipe
below 2.0 inches and pipe between 2.0 and 4.5 inches are sold though
distributors, this fact does not make these two groups a single class
or kind.
Siderca argues that the ultimate use of the product depends on the
size. Respondent states that pipe under 2.0 inches is used almost
exclusively as pressure pipe and most pipes between 2.0 and 4.5 inches
are sold as line pipe. Furthermore, respondent claims that seamless
pipe is almost never used in standard pipe applications.
Respondent contends that the cost of seamless pipe differs
significantly depending on size. Respondent states that smaller pipe
also costs more to manufacture because it requires more manufacturing
time, on a kilogram basis, than larger pipe. Furthermore, respondent
maintains that pipe in sizes under 2.0 inches is usually cold-drawn, a
more costly process than hot-finishing, which is the most common
production process for pipe above 2.0 inches.
Petitioner argues that an analysis of the five factors used in the
diversified products analysis supports a single class or kind of
merchandise. Regarding the physical characteristics, petitioner argues
that seamless standard, line, and pressure pipe each meet the same
physical characteristics described in the petition. Petitioner argues
that the use of different production facilities to make physically
identical merchandise does not constitute a difference in physical
characteristics. Petitioner also states the respondent's argument that
cold-drawn merchandise (pipe below 2.0 inches) and hot-finished
merchandise (pipe above 2.0 inches) indicated two classes or kinds is
contrary to the Department's decision not to create separate classes of
kinds based on cold-drawn and hot-rolled products in Stainless Steel
Bar from Italy. Petitioner asserts that respondent's suggestions that
end users have different expectations for pipe below 2.0 inches is
unfounded. Petitioner contends that the physical characteristics of
pipe are set forth in the ASTM and API specifications, which apply to
all subject pipe regardless of size. Petitioners contend that the sales
subject seamless pipes are made through the same channels of trade.
Petitioner maintains that the ultimate end use of the product is
largely dictated by the specification to which the pipe is produced.
Petitioner argues that since the majority of imported subject pipe is
triple certified, the pipe may be put to use in any of the uses that
either A-106, A-53, or API 5L may be applied.
Petitioner argues that all subject seamless pipe has sufficiently
similar costs to be considered a single class or kind of merchandise.
Petitioner contends that since the majority of the subject pipe is
triple certified, it has basically identical costs regardless of the
customer to whom it is sold and that there are only minimal differences
in production costs between pipe over 2.0 inches and pipe under 2.0
inches.
DOC Position
We agree with petitioner for the reasons outlined in the ``Scope
Issues'' section of this notice. [[Page 31960]]
Comment 5
In order to eliminate confusion and uncertainty of the scope,
respondent argues that the Department should clarify the language of
the scope and explicitly exclude products that are not intended to be
part of the investigation. Specifically, respondent argues that the
Department exclude unfinished oil country tubular goods and tubing
products made in non-pipe sizes. Furthermore, respondent contends that
language in the scope concerning ``redraw hollows for cold-drawing when
used in the production of cold-drawn pipe or tube,'' is confusing.
Respondent suggests the Department revise this language to simply state
that the scope excludes hollows for cold-drawing. This would eliminate
confusion, while not changing the intended scope of the exclusion.
Petitioner asserts that a modification of the scope to Siderca's
requests would be unsupported by substantial evidence on the record.
With respect to OCTG, petitioner notes that the scope explicitly
excludes OCTG when it is not used or intended for use in one of the
listed applications and that no further clarification is necessary.
Petitioner states that tubing in ``non-pipe'' sizes is expressly
covered by the scope of the investigation when produced to one of the
listed specifications or when used in a listed application. Petitioner
maintains that the language in the scope with respect to redraw hollows
was included expressly to ensure that hollows are actually cold-drawn
and not sold directly as A-106 pipe.
DOC Position
We agree with petitioner for the reasons outlined in the ``Scope
Issues'' section of this notice.
Continuation of Suspension of Liquidation
In accordance with section 733(d)(1) of the Act 19 USC 1673b(d)(1),
we directed the Customs Service to suspend liquidation of all entries
of seamless pipe from Argentina, as defined in the ``Scope of
Investigation'' section of this notice, that are entered, or withdrawn
from warehouse, for consumption on or after January 27, 1995.
Pursuant to the results of this final determination, we will
instruct the Customs Service to require a cash deposit or posting of a
bond equal to the estimated final dumping margin, as shown below, for
entries of seamless pipe from Argentina that are entered, or withdrawn
from warehouse, for consumption from the date of publication of this
notice in the Federal Register. The suspension of liquidation will
remain in effect until further notice.
------------------------------------------------------------------------
Weighted
Manufacturer/producer/exporter average margin
percent
------------------------------------------------------------------------
Siderca S.A.I.C......................................... 108.13
All Others.............................................. 108.13
------------------------------------------------------------------------
ITC Notification
In accordance with section 735(d) of the Act, we have notified the
ITC of our determination. The ITC will makes its determination whether
these imports materially injure, or threaten injury to, a U.S. industry
within 45 days of the publication of this notice. If the ITC determines
that material injury or threat of material injury does not exist, the
proceeding will be terminated and all securities posted as a result of
the suspension of liquidation will be refunded or cancelled. However,
if the ITC determines that material injury or threat of material injury
does exist, the Department will issue an antidumping duty order.
Notification to Interested Parties
This notice serves as the only reminder to parties subject to
administrative protective order (APO) in these investigations of their
responsibility covering the return or destruction of proprietary
information disclosed under APO in accordance with 19 CFR 353.34(d).
Failure to comply is a violation of the APO.
This determination is published pursuant to section 735(d) of the
Act (19 U.S.C. 1673d(d)) and 19 CFR 353.20(a)(4).
Dated: June 12, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-14936 Filed 6-16-95; 8:45 am]
BILLING CODE 3510-DS-P
