[Federal Register Volume 63, Number 108 (Friday, June 5, 1998)]
[Notices]
[Pages 30710-30714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15041]
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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 antidumping duty
administrative review.
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SUMMARY: In response to a request from 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 from Taiwan. This
review covers one manufacturer and exporter of the subject merchandise.
The period of review (POR) is June 1, 1996, through May 31, 1997.
We preliminarily determine that sales have been made below normal
value (NV). If these preliminary results are adopted in our final
results of administrative review, we will instruct the U.S. Customs
Service to assess
[[Page 30711]]
antidumping duties based on the difference between export price (EP) or
constructed export price (CEP) and NV.
Interested parties are invited to comment on these preliminary
results. Parties who submit argument in this proceeding are requested
to submit with the argument: (1) A statement of the issue; and (2) a
brief summary of the argument.
EFFECTIVE DATE: June 5, 1998.
FOR FURTHER INFORMATION CONTACT: Robert James or John Kugelman,
Enforcement Group III--Office 8, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-
5222 and (202) 482-0649, respectively.
SUPPLEMENTARY INFORMATION:
Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act), as
amended by the Uruguay Round Agreements Act (URAA). In addition, unless
otherwise indicated, all citations to the Department of Commerce's (the
Department) regulations are to the provisions codified at 19 CFR part
353 (April 1997). Where appropriate, references may be made to the
Department's new regulations (62 FR 27296), not in effect for this
review, as a statement of current departmental practice.
Background
The Department published in the Federal Register the antidumping
duty order on certain stainless steel butt-weld pipe fittings from
Taiwan on June 16, 1993 (58 FR 33250). On June 11, 1997, we published
in the Federal Register (62 FR 31786) a notice of opportunity to
request an administrative review of the antidumping duty order on
certain stainless steel butt-weld pipe fittings from Taiwan covering
the period June 1, 1996, through May 31, 1997.
On June 30, 1997, in accordance with 19 CFR 353.22(a)(2), Ta Chen
requested that we conduct an administrative review for the
aforementioned period. On August 1, 1997, the Department published a
notice of ``Initiation of Antidumping Review'' (62 FR 41339). The
Department issued an antidumping questionnaire and supplemental
questionnaire to Ta Chen, which responded. No parties submitted
comments to the Department regarding questionnaire responses.
Under section 751(a)(3)(A) of the Act, the Department may extend
the deadline for completion of an administrative review if it
determines that it is not practicable to complete the review within the
statutory time limit of 245 days. On February 25, 1998, the Department
extended the time limits for these preliminary results to May 31, 1998
in accordance with the Act. See Certain Stainless Steel Butt-Weld Pipe
Fittings from Taiwan; Extension of Time Limits for Antidumping Duty
Administrative Review (63 FR 13031, March 17, 1998).
The Department is conducting this administrative review in
accordance with section 751 of the Act.
Scope of the Review
The products subject to this investigation 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 in designing
the piping system: (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 these
investigations. The pipe fittings subject to these investigations are
classifiable under subheading 7307.23.00 of the Harmonized Tariff
Schedule of the United States (HTSUS).
Although the HTSUS subheading is provided for convenience and
customs purposes, our written description of the scope of these
investigations is dispositive.
Pipe fittings manufactured to American Society of Testing and
Materials specification A774 are included in the scope of this order.
The POR is June 1, 1996 through May 31, 1997. This review covers
sales of certain stainless steel butt-weld pipe fittings from Taiwan by
Ta Chen.
Verification
As provided in section 782(i) of the Act, we verified information
provided by the respondent using standard verification procedures,
including on-site inspection of the manufacturer's facilities, the
examination of relevant sales and financial records, and selection of
original documentation containing relevant information. Our
verification results are outlined in public versions of the
verification reports, available to the public in Room B-099 of the main
Commerce Building.
Fair Value Comparisons
To determine whether sales of subject merchandise by respondent to
the United States were made at below NV, we compared, where
appropriate, the EP and CEP to the NV, as described below.
Pursuant to section 777A(d)(2), we compared the EPs or CEPs of
individual U.S. transactions to the monthly weighted-average NV of the
foreign like product where there were sales at prices above the cost of
production (COP), as discussed in the Cost of Production Analysis
section, below.
Export Price
We calculated the price of certain of Ta Chen's United States sales
based on EP, in accordance with section 772(a) of the Act, when the
subject merchandise was sold to unaffiliated purchasers in the United
States prior to the date of importation and CEP was not otherwise
warranted based on the facts of the record.
We calculated EP based on packed FOB or delivered prices to
unaffiliated customers in the United States. Where appropriate, we made
deductions from the starting price for movement expenses, which
included foreign inland freight, foreign brokerage and handling,
international freight, marine insurance, U.S. inland freight, U.S.
brokerage and handling, and U.S. Customs duties. We also made
deductions for discounts. See Preliminary Analysis Memorandum (Analysis
Memo), June 1, 1998, at 6-7 and 8-9.
Constructed Export Price
We calculated the price of Ta Chen's remaining United States sales
based on CEP, in accordance with section 772(b) of the Act, when the
subject merchandise was sold in the United States to unaffiliated
customers. In this review all of Ta Chen's CEP sales were made after
importation (i.e., the sales were made from TCI's warehouse locations
in California and Texas).
We calculated CEP based on FOB or delivered prices to unaffiliated
purchasers in the United States. Where appropriate, we deducted
discounts. Also where appropriate, in accordance
[[Page 30712]]
with section 772(d)(1), the Department deducted commissions and direct
selling expenses from the starting price. We deducted those indirect
selling expenses, including inventory carrying costs, which related to
commercial activity in the United States. We also made deductions for
movement expenses, which include foreign inland freight, foreign
brokerage and handling, international freight, marine insurance, U.S.
inland freight, U.S. brokerage and handling, and U.S. Customs duties.
Finally, pursuant to section 772(d)(3) of the Act, we made an
adjustment for CEP profit. See Analysis Memo at 7-8 and 9-11.
Normal Value
Based on a comparison of the aggregate quantity of home-market and
U.S. sales, we determined that the home market is viable as a basis for
calculating NV. We determined that the quantity of the foreign like
product sold in the exporting country was sufficient to permit a proper
comparison with the sales of the subject merchandise to the United
States, pursuant to section 773(a)(1) of the Act because Ta Chen had
sales in Taiwan which were greater than five percent of its sales in
the U.S. market. Therefore, in accordance with section 773(a)(1)(B)(i)
of the Act, we based NV on the price at which the foreign like product
was first sold for consumption in the home market, in the usual
commercial quantities, in the ordinary course of trade, and, to the
extent practicable, at the same level of trade.
We calculated NV based on packed, FOB or delivered prices to
unaffiliated purchasers in Taiwan. We made adjustments for differences
in packing in accordance with section 773(a)(6)(A) of the Act. We also
made adjustments, where appropriate, for movement expenses consistent
with section 773(a)(6)(B) of the Act; these included inland freight
from plant to customer. In addition, we made adjustments for
differences in cost attributable to differences in physical
characteristics of the merchandise pursuant to section 773(a)(6)(C)(ii)
of the Act, as well as for differences in circumstances of sale (COS)
in accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR
353.56. We made COS adjustments by deducting direct selling expenses
incurred for home market sales (i.e. credit expenses) and adding U.S.
direct selling expenses (i.e. credit expenses and bank charges).
Cost of Production Analysis
In the original less-than-fair-value (LTFV) investigation of Ta
Chen (the most recently-completed segment of this proceeding at the
time of our initiation of this administrative review) we disregarded
sales found to be below the COP. Therefore, in accordance with section
773(b)(2)(A)(i) of the Act, the Department has reasonable grounds to
believe or suspect that sales below the COP may have occurred during
this review period. Thus, pursuant to section 773(b) of the Act, we
initiated a COP investigation of Ta Chen in the instant review.
Before making any fair value comparisons, we conducted the COP
analysis described below.
A. Calculation of COP
We calculated COP on a product specific basis, based on the sum of
the respondent's cost of materials and fabrication for the foreign like
product, plus amounts for home-market selling, general, and
administrative expenses (SG&A), and packing costs in accordance with
section 773(b)(3) of the Act.
B. Test of Home-Market Prices
We used the respondent's weighted-average COP for the period June
1996 to May 1997. We compared the weighted-average COP figures to home-
market prices of the foreign like product as required under section
773(b) of the Act. In determining whether to disregard home-market
sales made at prices below the COP, we examined whether such sales had
been made at prices below the COP within an extended period of time in
substantial quantities, and such sales were made at prices which
permitted the recovery of all costs within a reasonable period of time.
On a product-specific basis, we compared the COP to the home-market
prices (not including VAT), less any applicable movement charges and
discounts.
C. Results of COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of the respondent's sales of a given product were at prices
below the COP, we did not disregard any below-cost sales of that
product because we determined that the below-cost sales were not made
in substantial quantities. Where 20 percent or more of the respondent's
sales of a given product were at prices below the COP, we disregarded
the below-cost sales of that model because such sales were found to be
made within an extended period of time in substantial quantities, in
accordance with sections 773(b)(2)(B) and (C) of the Act, and because
the below cost sales of the product were at prices which would not
permit recovery of all costs within a reasonable period of time, in
accordance with section 773(b)(2)(D) of the Act. Where all
contemporaneous sales of comparable products were made at prices below
the COP, we calculated NV based on CV, in accordance with section
773(a)(4) of the Act.
The results of our cost test for Ta Chen indicated that for certain
home market models less than twenty percent of the sales of the model
were at prices below COP. We therefore retained all sales of these
models in our analysis and used them as the basis for determining NV.
Our cost test for Ta Chen also indicated that for certain other home
market models more than twenty percent of the home market sales within
an extended period of time were at prices below COP and would not
permit the full recovery of all costs within a reasonable period of
time. In accordance with section 773(b)(1) of the Act, we therefore
excluded the below-cost sales of these models from our analysis and
used the remaining above-cost sales as the basis for determining NV.
Constructed Value
For Ta Chen's products for which we could not determine the NV
based on comparison market sales because there were no contemporaneous
sales of a comparable product, we compared U.S. prices to constructed
value (CV), in accordance with Cemex v. United States, 133 F.3d 897
(Fed. Cir. 1998) (Cemex), as discussed below.
On January 8, 1998, the Court of Appeals for the Federal Circuit
(the Court) issued its decision in Cemex. In that case, which involved
a determination by the Department under pre-URAA law, the Court
discussed the appropriateness of using CV as the basis for foreign
market value when the Department finds home market sales to be outside
the ordinary course of trade. However, the URAA amended the definition
of sales outside the ordinary course of trade to include sales below
cost. See section 771(15) of the Act. Consequently, the Department has
reconsidered its practice in light of this court decision and has
determined that it would be inappropriate to resort directly to CV, in
lieu of foreign market sales, as the basis for NV when the Department
finds foreign market sales of merchandise identical or most similar to
that sold in the United States to be outside the ordinary course of
trade. Instead, the Department will use sales of similar merchandise,
if such sales exist. The Department will use CV as the basis for NV
only when there are no above-cost sales that are otherwise suitable for
comparison. Therefore, in this
[[Page 30713]]
proceeding, when making comparisons we considered all products sold in
the home market, in accordance with section 771(16) of the Act that
were in the ordinary course of trade for purposes of determining
appropriate product comparisons to U.S. sales. Where there were no
sales of identical merchandise in the home market made in the ordinary
course of trade to compare to U.S. sales, we compared U.S. sales to
sales of the most similar foreign like product made in the ordinary
course of trade, based on the model-matching characteristics listed in
Sections B and C of our antidumping questionnaire. Therefore, we have
implemented the Court's decision in this case, to the extent that the
data on the record permitted.
In accordance with section 773(e)(1) of the Act, we calculated CV
based on the sum of the COM of the product sold in the United States,
plus amounts for home market SG&A expenses, and profit and U.S. packing
costs. We calculated CV based on the methodology described in the
``Calculation of COP'' section of this notice, above, plus an amount
for profit. In accordance with section 773(e)(2)(A), we used the actual
amounts incurred and realized by Ta Chen in connection with the
production and sale of the foreign like product, in the ordinary course
of trade, for consumption in the foreign country to calculate SG&A
expenses and profit.
For price-to-CV comparisons, we made adjustments to CV in
accordance with section 773(a)(8) of the Act and 19 CFR 353.56 for COS
differences. For comparisons to EP, we made COS adjustments by
deducting direct selling expenses incurred on home market sales and
adding U.S. direct selling expenses. For comparisons to CEP, we made
deductions for direct selling expenses incurred on home market sales.
Differences in Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same level of trade (LOT) as the EP or CEP transaction. The NV LOT
is that of the starting-price sales in the comparison market or, when
NV is based on constructed value, that of the sales from which we
derive selling, general and administrative expenses and profit. For EP,
the LOT is also the level of the starting-price sale, which is usually
from exporter to importer. For CEP, it is the level of the constructed
sale from the exporter to the importer.
To determine whether NV sales are at a different LOT than EP or
CEP, we examine stages in the marketing process and selling functions
along the chain of distribution between the producer and the
unaffiliated customer. If the comparison-market sales are at a
different LOT, and the difference affects price comparability, as
manifested in a pattern of consistent price differences between the
sales on which NV is based and comparison-market sales at the LOT of
the export transaction, we make a LOT adjustment under section
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is
more remote from the factory than the CEP level and there is no basis
for determining whether the difference in the levels between NV and CEP
affects price comparability, we adjust NV under section 773(a)(7)(B) of
the Act (the CEP offset provision). See, Notice of Final Determination
of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel
Plate from South Africa, 62 FR 61731 (November 19, 1997).
In its questionnaire responses Ta Chen stated that there were no
differences in its selling functions by channels of marketing within
each market. In order to confirm independently the absence of separate
levels of trade within or between the U.S. and home markets, we
examined Ta Chen's questionnaire responses for indications that its
functions as a seller differed qualitatively and quantitatively among
customer categories. See commentary to section 351.412 of the
Department's new regulations (62 FR 27371).
Ta Chen reported two channels of distribution in the home market
(to distributors and to end-users) and a single channel of distribution
in the United States (to distributors). Upon review, we have determined
preliminarily that Ta Chen performed the same selling functions for its
home market and U.S. customers, irrespective of distribution channel.
Pursuant to section 773(a)(1)(B)(i) of the Act, we consider the selling
functions reflected in the starting price of home-market and EP sales,
and those reflected in the CEP after the deductions pursuant to section
772(d) of the Act. Our analysis of the questionnaire responses leads us
to conclude that sales within or between each market are not made at
different levels of trade. Accordingly, we preliminarily find that all
sales in the home market and the U.S. market were made at the same
level of trade. Therefore, all price comparisons are at the same level
of trade and an adjustment pursuant to section 773(a)(7)(A) of the Act
is not warranted.
Currency Conversion
For purposes of the preliminary results, we made currency
conversions based on the official exchange rates in effect on the dates
of the U.S. sales as published by the Federal Reserve Bank of New York.
Section 773A(a) of the Act directs the Department to use a daily
exchange rate in effect on the date of sale of subject merchandise in
order to convert foreign currencies into U.S. dollars, unless the daily
rate involves a ``fluctuation.'' In accordance with the Department's
practice, we have determined, as a general matter, that a fluctuation
exists when the daily exchange rate differs from a benchmark by 2.25
percent. See, e.g., Certain Stainless Steel Wire Rods from France:
Preliminary Results of Antidumping Duty Administrative Review (61 FR
8915, 8918, March 6, 1996) and Policy Bulletin 96-1: Currency
Conversions, 61 FR 9434, March 8, 1996. The benchmark is defined as the
rolling average of rates for the past 40 business days. When we
determined a fluctuation existed, we substituted the benchmark for the
daily rate.
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the
following weighted-average dumping margin exists for the period June 1,
1996, through May 30, 1997:
Certain Stainless Steel Butt-Weld Pipe Fittings From Taiwan
------------------------------------------------------------------------
Weighted-
average
Producer/manufacturer/exporter margin
(percent)
------------------------------------------------------------------------
Ta Chen.................................................... 1.19
------------------------------------------------------------------------
Parties to this proceeding may request disclosure within five days
of publication of this notice and any interested party may request a
hearing within 10 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 and/or
written comments no later than 30 days after the date of publication.
Rebuttal briefs and rebuttals to written comments, limited to issues
raised in such briefs or comments, may be filed no later than 37 days
after the date of publication of this notice. Parties who submit case
briefs or rebuttal briefs in this proceeding are requested to submit
with each argument (1) a statement of the issue and (2) a brief summary
of the argument.
[[Page 30714]]
The Department will publish a notice of the final results of the
administrative review, including its analysis of issues raised in any
such written briefs or at a hearing, if held, not later than 120 days
after the date of publication of this notice.
The Department shall determine and the Customs Service shall assess
antidumping duties on all appropriate entries. The Department will
issue appropriate appraisement instructions directly to the Customs
Service upon completion of this review. The final results of this
review shall be the basis for the assessment of antidumping duties on
entries of merchandise covered by this review and for future deposits
of estimated duties. For duty assessment purposes, we calculated an
importer-specific assessment rate by aggregating the dumping margins
calculated for all U.S. sales to each importer and dividing this amount
by the total entered value of subject merchandise entered during the
POR for each importer.
The following cash deposit requirements will be effective upon
publication of the final results of this administrative review for all
shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided for by section 751(a)(1) of the Act: (1) The cash deposit rate
for Ta Chen will be the rate established in the final results of this
administrative review; (2) for merchandise exported by manufacturers or
exporters not covered in these reviews but covered in a previous
segment of this proceeding, the cash deposit rate will be the company-
specific rate published for the most recent segment; (3) if the
exporter is not a firm covered in this review, a prior 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 prior review, the cash
deposit rate will be 51.01 percent, the ``all others'' rate established
in the LTFV investigation. 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 determination is issued
and published in accordance with section 751(a)(1) of the Act (19
U.S.C. 1675(a)(1)) and 19 CFR 353.22(c)(5).
Dated: June 1, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-15041 Filed 6-4-98; 8:45 am]
BILLING CODE 3510-DS-P
