02-18041. Notice of Preliminary Results of Antidumping Duty New Shipper Review; Stainless Steel Butt-Weld Pipe Fittings From Korea

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Preliminary Results of Antidumping Duty New Shipper Review.

SUMMARY:

In response to a request from TK Corporation, the Department of Commerce (the Department) is conducting a new shipper review of the antidumping duty order on stainless steel butt-weld pipe fittings from Korea. This new shipper review covers imports of subject merchandise from TK Corporation. The period of review is February 1, 2001 through July 31, 2001.

EFFECTIVE DATE:

July 17, 2002.

FOR FURTHER INFORMATION CONTACT:

Fred Baker, Mike Heaney, or Robert James, AD/CVD Enforcement, Group III, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230, telephone: [phone], or [phone], respectively.

SUPPLEMENTARY INFORMATION:

Applicable statute and regulations:

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (the Tariff Act) are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department's regulations are to 19 CFR Part 351 (April 1, 2001).

Background

On February 23, 1993, the Department published the antidumping duty order on stainless steel butt-weld pipe fittings from Korea. See Antidumping Duty Order: Certain Welded Stainless Steel Butt-Weld Pipe Fittings from Korea, 58 FR 11029 (February 23, 1993). On August 31, 2001, TK Corporation, a producer and exporter of the subject merchandise during the period of review (POR), requested that the Department conduct an antidumping duty new shipper review of the antidumping duty order. TK Corporation certified it did not export subject merchandise to the United States during the period of the investigation (POI) (December 1, 1991 through May 30, 1992), and that it was not affiliated with any exporter or producer of the subject merchandise to the United States during the POI. TK Corporation also submitted documentation establishing the date on which it first shipped the subject merchandise for export to the United States, the volume shipped, and the date of the first sale to an unaffiliated customer in the United States. On October 5, 2001, the Department initiated a new shipper review of the antidumping duty order on stainless steel butt-weld pipe fittings from Korea. See Stainless Steel Butt-Weld Pipe Fittings from Korea: Notice of Initiation of New Shipper Antidumping Duty Review, 66 FR 51017 (October 5, 2001).

On October 12, 2001, the Department issued its antidumping duty questionnaire. On November 9, 2001, the Department received TK Corporation's Section A response to the questionnaire; TK Corporation filed its Sections B and C responses on November 30, 2001. On January 22, 2002, the Department issued a Sections A-C supplemental questionnaire, to which TK Corporation responded on Februry 6, 2002.

On April 3, 2002 the Department extended the time limit for completion of the preliminary results. See Notice of Extension of Time Limit of Preliminary Results of New Shipper Review: Stainless Steel Butt-Weld Pipe Fittings from Korea, 67 FR 15793 (April 3, 2002).

Period of Review

The POR is February 1, 2001 through July 31, 2001.

Scope of the Review

The products subject to this review are certain welded stainless steel butt-weld pipe fittings (pipe fittings), whether finished or unfinished, under 14 inches in inside diameter.

Pipe fittings are used to connect pipe sections in piping systems where conditions require welded connections. The subject merchandise can be 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, and the following five are the most basic: “elbows,” “tees,” “reducers,” “stub ends,” and “caps.” The edges of finished fittings are beveled. Threaded, grooved, and bolted fittings are excluded from this review. The pipe fittings subject to this review 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 this proceeding is dispositive.

Product Comparisons

In accordance with section 771(16) of the Tariff Act, we considered all stainless steel butt-weld pipe fittings covered by the “Scope of the Review” section of this notice, supra, which were produced and sold by TK Corporation in the home market during the POR to be foreign like products for the purpose of determining appropriate product comparisons to U.S. sales of stainless steel butt-weld pipe fittings.

We relied on six characteristics to match U.S. sales of subject merchandise to comparison sales of the foreign like product: type, grade, seam, size, schedule, and blank/finished. We did not need to perform a twenty-percent difference in merchandise (DIFMER) test or make a DIFMER adjustment because there were contemporaneous home market sales of identical merchandise, based on all six characteristics, to compare to TK Corporation's U.S. sales. We used only these contemporaneous identical home market sales in calculating the dumping margin.

Export Price

In accordance with section 772(a) of the Tariff Act, export price (EP) is the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside of the United States to an unaffiliated purchaser for export to the United States. In accordance with section 772(b) of the Tariff Act, constructed export price (CEP) is the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter, to an unaffiliated purchaser, as adjusted under sections 772(c) and (d) of the Tariff Act. For purposes of this review, TK Corporation has classified its sale(s) as EP sales. See November 20, 2001 sections B/C response, at page 106. TK Corporation identified one channel of distribution (direct sales to distributors) for its U.S. sales during the POR. See November 9, 2001 section A response at page 9. Based on TK Corporation's description of its U.S. sales process, that it sells the merchandise directly to unaffiliated distributors in the U.S. market, and did not sell in the United States through an affiliated U.S. importer, we preliminarily determine that TK Corporation's U.S. sales were EP sales. We calculated EP in accordance with section 772(a) of the Tariff Act. We based EP on packed prices for export to distributors in the U.S. market. We made deductions for foreign inland freight, international freight, marine insurance, and domestic brokerage.

Normal Value

In accordance with section 773(a)(1)(C) of the Tariff Act, to determine whether there was sufficient volume of sales in the home market to serve as a viable basis for calculating NV (i.e., the aggregate volume of home market sales of the foreign like product is greater than or equal to five percent of the aggregate volume of U.S. sales), we compared TK Corporation's volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise. Because TK Corporation's aggregate volume of home market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales for the subject merchandise, we determined that the home market was viable. We therefore based NV on home market sales to unaffiliated purchasers made in the usual commercial quantities and in the normal course of trade.

Since no information on the record indicates any comparison market sales to affiliates, we did not use an arm's-length test for comparison market sales.

We made adjustments, where applicable, for movement expenses (consisting of inland freight) in accordance with section 773(a)(6)(B) of the Tariff Act. In accordance with section 773(a)(6)(C)(iii) of the Tariff Act and 19 CFR 351.410, we made a circumstance-of-sale adjustment for imputed credit. We also deducted home market packing costs and added U.S. packing costs in accordance with section 773(a)(6) of the Tariff Act. Because TK Corporation failed to include packing overhead in its packing calculation, we made an addition to its packing costs to account for overhead using the overhead ratio TK Corporation used in its computation of variable cost of manufacturing. See TK Corporation's February 6, 2002 submission at 19.

Level of Trade

In accordance with section 773(a)(1)(B) of the Tariff 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 LOT in the comparison market is that of the starting-price sales in the comparison market or, when NV is based on CV, that of the sales from which we derive SG&A expenses and profit. With respect to U.S. price for EP transactions, the LOT is also that of the starting-price sale, which is usually from the exporter to the importer. For CEP, the LOT is that of the sale from the exporter to the importer.

To determine whether comparison market sales are at a different level of trade than U.S. sales, we examined stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. In analyzing the selling activities of the respondents, we did not note any significant differences in functions provided in any of the markets. Based upon the record evidence, we have determined that there is one LOT for all EP sales and the same LOT as for all comparison market sales. Accordingly, because we find the U.S. sales and comparison market sales to be at the same LOT, no LOT adjustment under section 773(a)(7)(A) is warranted.

Currency Conversion

We made currency conversions into U.S. dollars based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank, in accordance with section 773A(a) of the Tariff Act.

Preliminary Results of Review

As a result of our review, we preliminarily determine the weighted-average dumping margin for the period February 1, 2001, through July 31, 2001, to be as follows:

Manufacturer / Exporter	Margin (percent)
TK Corporation	0.00

The Department will disclose calculations performed in connection with these preliminary results of review within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of these preliminary results of review. Rebuttal briefs and rebuttals to written comments, limited to issues raised in the case briefs and comments, may be filed no later than 35 days after the date of publication of this notice. Parties who submit argument in these proceedings are requested to submit with the argument 1) a statement of the issue, 2) a brief summary of the argument and (3) a table of authorities. An interested party may request a hearing within 30 days of publication. See CFR 351.310(c). Any hearing, if requested, will be held 37 days after the date of publication, or the first business day thereafter, unless the Department alters the date per 19 CFR 351.310(d). The Department will issue the final results of this new shipper review, including the results of our analysis of the issues raised in any such written comments or at a hearing, within 120 days of publication of these preliminary results.

Assessment

The Department shall determine, and the U.S. Customs Service shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we will calculate assessment rates for the merchandise based on the ratio of the total amount of antidumping duties calculated for the examined sales made during the POR to the total quantity (in kilograms) of the sales used to calculate those duties. This rate will be assessed uniformly on all entries of merchandise of that manufacturer/exporter made during the POR. The Department will issue appropriate appraisement instructions directly to the Customs Service upon completion of the review.

Furthermore, the following deposit requirements will be effective upon completion of the final results of this new shipper review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this new shipper review, as provided by section 751(a)(1) of the Tariff Act: (1) the cash deposit rates for the reviewed company will be the rate established in the final results of the new shipper review (except that no deposit will be required if the rate is zero or de minimis, i.e., less than 0.5 percent); (2) for merchandise exported by manufacturers or exporters not covered in this review but covered in the original less-than-fair-value (LTFV) investigation or a previous review, the cash deposit will continue to be the most recent rate published in the final determination or final results for which the manufacturer or exporter received a company-specific rate; (3) if the exporter is not a firm covered in this review, or the original investigation, but the manufacturer is, the cash deposit rate will be that 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 review, any previous reviews, or the LTFV investigation, the cash deposit rate will be 21.2 percent, the “all others” rate established in the LTFV investigation (58 FR 11029) (February 23, 1993).

This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) 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.

We are issuing and publishing this notice in accordance with sections 751(a)(2)(B) and 777(i)(1) of the Tariff Act.

Dated: July 10, 2002.

Faryar Shirzad,

Assistant Secretary for Import Administration.