00-19548. Notice of Preliminary Determination of Sales at Less Than Fair Value: Stainless Steel Butt-Weld Pipe Fittings from Germany

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

EFFECTIVE DATE:

August 2, 2000.

FOR FURTHER INFORMATION CONTACT:

Carrie Blozy, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone: [phone].

The 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) by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations at 19 CFR part 351 (April 1999).

Preliminary Determination

We preliminarily determine that stainless steel butt-weld pipe fittings from Germany are being, or are likely to be, sold in the United States at less than fair value (“LTFV”), as provided in section 733 of the Act. The estimated margins of sales at LTFV are shown in the “Suspension of Liquidation” section of this notice.

Case History

On January 31, 2000, the Department initiated antidumping duty investigations of imports of stainless steel butt-weld pipe fittings from Germany, Italy, Malaysia, and the Philippines. See Initiation of Antidumping Duty Investigations: Stainless Steel Butt-Weld Pipe Fittings From Germany, Italy, Malaysia, and the Philippines, 65 FR 4595 (January 31, 2000) (“Notice of Initiation”). Since the initiation of this investigation the following events have occurred.

The Department set aside a period for all interested parties to raise issues regarding product coverage (see Notice of Initiation at 4596). A response was received from Coprosider S.p.A. (“Coprosider”) on February 1, 2000, agreeing with the scope of the investigation. On February 3, 2000, Wilh. Schulz GmbH and its affiliates (“Schulz”) submitted comments to the Department requesting that the scope be limited only to specification ASTM 403/403M fittings below 14 inches in diameter.

On January 21, 2000, the Department issued proposed product concordance criteria to all interested parties. On February 4, 2000, the following interested parties submitted comments on our proposed product concordance criteria: Kanzen Tetsu Sdn. Bhd. (“Kanzen”); Coprosider; and Alloy Piping Products, Inc.; Flowline Division of Markovitz Enterprises, Inc.; Gerlin, Inc.; and Taylor Forge Stainless, Inc. (“petitioners”). On February 8, 2000 and February 18, 2000, we received comments on our proposed product concordance criteria from Schulz.

On February 14, 2000, the United States International Trade Commission (“ITC”) notified the Department of its affirmative preliminary injury determination on imports of subject merchandise from Germany, Italy, Malaysia and the Philippines. On February 24, 2000, the ITC published its preliminary determination that there is a reasonable indication that an industry in the United States is materially injured by reason of imports of the subject merchandise from Germany, Italy, Malaysia and the Philippines (65 FR 9298).

On January 27, 2000, the Department issued Section A of its antidumping questionnaire to Schulz, Butting Edelstahlrohre GmbH (“Butting”), Hage Fittings GmbH (“Hage Fittings GmbH”), Kremo-Werke Hermanns GmbH (“Kremo-Werke”), Uhlig-Rohrbogen GmbH (“Uhlig-Rohrbogen”), and Nirobo Metalverarbeitungs GmbH (“Nirobo Metalverarbeitungs”). On February 7, 2000, the Department received a letter from Kremo-Werke stating that it has not sold, directly or indirectly, subject merchandise to the United States. Also, on February 7, 2000, the Department received a letter from Uhlig-Rohrbogen stating that it has at no time delivered, directly or indirectly, subject merchandise to the United States. On February 18, 2000, Schulz submitted its response to Section A of the questionnaire. On February 19, 2000, Butting submitted a letter to the Department stating that it does not produce the subject merchandise and did not supply the subject merchandise to the United States during the period of investigation (“POI”). On March 9, 2000, we issued Sections B, C, D, and E of the antidumping questionnaire to Schulz. On March 27, 2000, we issued a supplemental questionnaire on Section A. On April 10, 1999, Schulz submitted its supplemental questionnaire response for Section A. On May 8 and May 19, 2000, Schulz submitted its response to Sections B, C, and D of the antidumping questionnaire. On June 2, 2000 we issued a supplemental cost questionnaire and on June 6, 2000, we issued a supplemental sales questionnaire. Schulz submitted its response to the supplemental cost and sales questionnaires on June 20, 2000. On June 30, 2000, we issued a second supplemental questionnaire to Schulz, and on July 10, 2000, we received Schulz's response. On June 30, 2000, petitioners made a timely allegation that there is a reasonable basis to believe or suspect that critical circumstances exist with respect to imports of subject merchandise from Germany. On July 5, 2000, the Department sent a letter to Schulz requesting shipment data. On July 13, 2000, the Department issued a third supplemental questionnaire to Schulz. Petitioners submitted comments on Schulz's questionnaire responses in May, June, and July 2000. On July 21, 2000, Schulz submitted a letter withdrawing its participation in the investigation. Additionally, it requested that the Department return all business proprietary data submitted by Schulz during the course of the investigation.

On April 13, 2000, the Department published in the Federal Register a notice postponing the preliminary determination until July 26, 2000 (see Notice of Postponement of Preliminary Antidumping Duty Determinations: Stainless Steel Butt-Weld Pipe Fittings from Germany, Italy, Malaysia, and the Philippines, 65 FR 19876 (April 13, 2000)).

Period of Investigation

The POI is October 1, 1998 through September 30, 1999.

Scope of Investigation

For purposes of this investigation, the product covered is certain stainless steel butt-weld pipe fittings. Certain stainless steel butt-weld pipe fittings are under 14 inches in outside diameter (based on nominal pipe size), whether finished or unfinished. The product encompasses all grades of stainless steel and “commodity” and “specialty” fittings. Specifically excluded from the definition are threaded, grooved, and bolted fittings, and fittings made from any material other than stainless steel.

The fittings subject to this investigation is generally designated under specification ASTM A403/A403M, the standard specification for Wrought Austenitic Stainless Steel Piping Fittings, or its foreign equivalents (e.g., DIN or JIS specifications). This specification covers two general classes of fittings, WP and CR, of wrought austenitic stainless steel fittings of seamless and welded construction covered by the latest revision of ANSI B16.9, ANSI B16.11, and ANSI B16.28. Pipe fittings manufactured to specification ASTM A774, or its foreign equivalents, are also covered by these investigations.

This investigation does not apply to cast fittings. Cast austenitic stainless steel pipe fittings are covered by specifications A351/A351M, A743/743M, and A744/A744M.

The stainless steel butt-weld pipe fittings subject to this investigation are currently classifiable under subheading 7307.23.0000 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.

Facts Available

Section 776(a)(2) of the Act provides that if an interested party or any other person (A) withholds information that has been requested by the administering authority; (B) fails to provide such information by the deadlines for the submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782; (C) significantly impedes a proceeding under this title; or (D) provides such information but the information cannot be verified as provided in section 782(i), the administering authority shall, subject to section 782(d), use the facts otherwise available in reaching the applicable determination under this title. In accordance with sections 776(a)(2)(A) and (C), because Hage Fittings and Nirobo Metalverarbeitungs failed to respond to our questionnaire and thus significantly impeded the investigation, and because subsection 782(d) of the Act therefore does not apply, we must use facts otherwise available to determine the dumping margin for Hage Fittings and Nirobo Metalverarbeitungs. Also, although Schulz initially responded to the Department's questionnaires, upon notification that it was withdrawing its participation from the investigation, Schulz requested that the Department return all business proprietary data that had been provided by Schulz during the course of the proceeding. Therefore, the Department has no data on the record for Schulz upon which to base its margin calculation, nor would the Department be able to verify the information received in any event. Accordingly, we have determined that use of facts available is also appropriate for Schulz in accordance with sections 776(a)(2)(A) and (C).

Section 776(b) of the Act provides that, in selecting from among the facts available, the Department may employ adverse inferences when an interested party has failed to cooperate by not acting to the best of its ability to comply with requests for information. See also Statement of Administrative Action (“SAA”) accompanying the URAA, H.R. Rep. No. 103-316, 870 (1994) . Based on Hage Fittings' and Nirobo Metalverarbeitungs' failure to respond to the Department's antidumping questionnaire and Schulz's subsequent withdrawal of its business proprietary data, we have determined that Hage Fittings, Nirobo Metalverarbeitung, and Schulz have not acted to the best of their ability to comply with the Department's information requests. Therefore, pursuant to 776(b) of the Act, we used an adverse inference in selecting a margin from the facts available. As adverse facts available, the Department has applied a margin of 76.24 percent, the highest margin alleged in the petition.

Section 776(c) of the Act provides that, when the Department relies on secondary information, such as the petition, as facts available, it must, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. The SAA clarifies that “corroborate” means that the Department will satisfy itself that the secondary information to be used has probative value (see SAA at 870). The SAA also states that independent sources used to corroborate may include, for example, published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation Id.; see also 19 CFR Sec 351.308(d).

We reviewed the adequacy and accuracy of the information in the petition during our pre-initiation analysis of the petition, to the extent appropriate information was available for this purpose (e.g., data from U.S. producers, foreign market research reports, and import statistics). See Initiation Checklist: Stainless Steel Butt-Weld Pipe Fittings from Germany, Italy, Malaysia, and the Philippines (January 18, 2000), which is on file in the Central Records Unit (“CRU”) of the Main Commerce Department Building. In order to determine the probative value of the petition margin for use as adverse facts available in this preliminary determination, we have re-examined evidence supporting the petition calculation. In accordance with section 776(c) of the Act, to the extent practicable, we examined the key elements of the U.S. price and normal value calculations on which the petition margin was based and found that the information has probative value (see the July 26, 2000 memorandum to the file regarding Facts Available Corroboration, which is on file in the CRU of the Main Commerce Department building). Moreover, we note that, because no information is available for any respondent in this investigation, the issues of relevance addressed by the Court of Appeals in DeCecco v. United States, App. No. 99-1318 (Fed. Cir. June 20, 2000) are not present in this case.

Critical Circumstances

On June 30, 2000, petitioners made a timely allegation that there is a reasonable basis to believe or suspect that critical circumstances exist with respect to imports of subject merchandise from Germany. According to section 733(e)(1) of the Act, if critical circumstances are alleged under section 733(e) of the Act, the Department must examine whether there is a reasonable basis to believe or suspect that: (A)(i) There is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise, or (ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and there was likely to be material injury by reason of such sales, and (B) there have been massive imports of the subject merchandise over a relatively short period. Section 351.206(h)(1) of the Department's regulations provides that, in determining whether imports of the subject merchandise have been “massive,” the Department normally will examine: (i) The volume and value of the imports; (ii) seasonal trends; and (iii) the share of domestic consumption accounted for by the imports. In addition, section 351.206(h)(2) of the Department's regulations provides that an increase in imports during the “relatively short period” described in section 351.206(i) of over 15 percent may be considered “massive.” Section 351.206(i) of the Department's regulations defines “relatively short period” normally as the period beginning on the date the proceeding begins (i.e., the date the petition is filed) and ending at least three months later. Because we are not aware of and there is no record evidence of any antidumping order in any country on stainless steel butt-weld pipe fittings from Germany, we find that there is no reasonable basis to believe or suspect that there is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise. Therefore, we must look to whether there was importer knowledge under section 733(e)(1)(A)(ii).

In determining whether there is a reasonable basis to believe or suspect that an importer knew or should have known that the exporter was selling the stainless steel butt-weld pipe fittings at less than fair value, the Department's normal practice is to consider for EP sales margins of 25 percent or more sufficient to impute knowledge of dumping. See Certain Cut-to-Length Carbon Steel Plate From the People's Republic of China, 62 FR 31972, 31978 (June 11, 1997). As discussed above, we have applied, as adverse facts available for Hage Fittings, Nirobo Metalverarbetiungs, and Schulz the highest of the dumping margins presented in the petition and corroborated by the Department. These margins are in excess of 25 percent. Therefore, we impute knowledge of dumping in regard to exports by these companies.

Moreover, in determining whether there is a reasonable basis to believe or suspect that an importer knew or should have known that there was likely to be material injury by reason of dumped imports, the Department may look to the preliminary injury determination of the ITC. If the ITC finds a reasonable indication of present material injury to the relevant U.S. industry, the Department normally determines that a reasonable basis exists to impute importer knowledge that there was likely to be material injury by reason of dumped imports. Id. The ITC has found that a reasonable indication of present material injury exists in regard to Germany. See ITC Preliminary Determination. As a result, the Department has determined that there is a reasonable basis to believe or suspect that importers knew or should have known that there was likely to be material injury by reason of dumped imports in this case.

In determining whether there are “massive imports” over a “relatively short period,” the Department ordinarily bases its analysis on import data for at least the three months preceding (the base period) and following (the comparison period) the filing of the petition. See 19 CFR 351.206(i). Imports normally will be considered massive when imports during the comparison period have increased by 15 percent or more compared to imports during the base period. See 19 CFR 351.206(h). Since there is no verifiable information on the record with respect to Hage Fittings’, Nirobo Metalverarbeitungs’, and Schulz's import volumes, we must use the facts available in accordance with section 776(a) of the Act. Accordingly, we examined U.S. Customs data on imports of stainless steel butt-weld pipe fittings from Germany in order to determine whether these data reasonably preclude an increase in shipments of 15 percent or more within a relatively short period for any of these companies. However, these statistics, in the case of stainless steel butt-weld pipe fittings from Germany, cover an HTS category (HTS no. 730723000 “Stainless Steel Tube or Pipe Butt Welding Fittings”) that includes merchandise other than subject merchandise. Therefore, we cannot rely on this data in determining if massive shipments of stainless steel butt-weld pipe fittings from Germany occurred over a relatively short time. See Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Sheet and Strip in Coils from Japan (“Stainless Steel from Japan”), 64 FR 30574, 30586 (June 8, 1999). Moreover, these data do not permit the Department to ascertain the import volumes for any individual company that failed to provide verifiable information. Nevertheless, in accordance with section 776(b) of the Act, the Department may used an adverse inference in applying facts available for non-responsive companies; thus we determine, as adverse facts available, that there were massive imports from Hage Fittings, Nirobo Metalverarbeitungs, and Schulz during a relatively short period. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Collated Roofing Nails from Taiwan (“Roofing Nails from Taiwan”), 62 FR 51427 (October 1, 1997) and Notice of Final Determination of Sales at Less Than Fair Value and Final Affirmative Finding of Critical Circumstances: Elastic Rubber Tape from India (“Elastic Rubber Tape from India”), 64 FR 19123 (April 19, 1999). Because all of the necessary criteria have been met, in accordance with section 733(e)(1) of the Act, the Department preliminarily finds that critical circumstances exist with respect to stainless steel butt-weld pipe fittings imported from Hage Fittings, Nirobo Metalverarbeitungs, and Schulz.

It is the Department's normal practice to conduct its critical circumstances analysis of companies in the “all others” group based on the experience of investigated companies. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Steel Concrete Reinforcing Bars from Turkey (“Rebars from Turkey”), 62 FR 9737, 9741 (March 4, 1997) (the Department found that critical circumstances existed for the majority of the companies investigated, and therefore concluded that critical circumstances also existed for companies covered by the “all others” rate). However, the Department does not automatically extend an affirmative critical circumstances determination to companies covered by the “all others” rate. See Stainless Steel from Japan 64 FR at 30585. Instead, the Department considers the traditional critical circumstances criteria with respect to the companies covered by the “all others”' rate. Consistent with Stainless Steel from Japan, the Department has, in this case, applied the traditional critical circumstances criteria to the “all others” category for the antidumping investigation of stainless steel butt-weld pipe fittings from Germany. First, the dumping margin for the “all others” category, 51.34 percent, exceeds the 25 percent threshold necessary to impute knowledge of dumping. Second, based on the ITC's preliminary material injury determination, we also find that importers knew or should have known that there would be material injury from sales of the dumped merchandise by respondents other than Hage Fittings, Nirobo Metalverarbeitungs, and Schulz. See Critical Circumstances Determination: Honey from the People's Republic of China, 60 FR 29824, (June 6, 1995). However, the Department has not found that there are massive imports for the “all others” companies in this investigation. First, we have not used adverse facts available concerning massive imports. Unlike the companies that refused to provide information upon request at the outset of the case or withdrew their information from the record, the “all others” companies have not failed to act to the best of their ability. The Department does not use adverse inferences with respect to firms whose individual data have not been analyzed (as far as the Department has been able to determine, there were only the three producers/exporters of subject merchandise from Germany during the POI). Second, there is no evidence of massive imports from “all others” companies in this investigation. While we normally rely on our findings for the selected mandatory respondents, in this case our determinations with respect to all of the mandatory respondents were based on adverse facts available. Therefore, we have not used these findings as a basis for our determination with respect to all other companies. Further, in accordance with Notice of Final Determination of Sales at Less Than Fair Value: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan, 64 FR 24329, 24338 (May 6, 1999), the Department considered whether U.S. Customs data on imports of stainless steel butt-weld pipe fittings from Germany could be used to make a determination regarding the “all others” category. In this case, however, these statistics cover an HTS category that includes merchandise other than subject merchandise. Therefore, we cannot rely on these data in determining if there were massive imports for the “all others” category. See Stainless Steel from Japan. The Department does not have any other data indicating massive imports from the any other exporter/producer of stainless steel butt-weld pipe fittings from Germany. Therefore, the Department does not find massive imports with regard to the “all others” category in this case. Because the massive imports criterion necessary to find critical circumstances has not been met with respect to firms other than Hage Fittings, Nirobo Metalverarbeitungs, and Schulz, the Department preliminarily finds that critical circumstances do not exist for the “all others” category in this case.

The All-Others Rate

All known foreign manufacturers/exporters in this investigation are being assigned dumping margins on the basis of facts otherwise available. Section 735(c)(5)(B) of the Act provides that, where the dumping margins established for all exporters and producers individually investigated are determined entirely under section 776 of the Act, the Department may use any reasonable method to establish the estimated all-others rate for exporters and producers not individually investigated, including averaging the estimated dumping margins determined for the exporters and producers individually investigated. In this case, the margins assigned to the only companies investigated are based on adverse facts available. Therefore, consistent with the statute and the SAA at 873, we are using an alternative method. As our alternative, we are basing the all-others rate on a weighted-average of all the margins alleged in the petition. As a result, the all-others rate is 51.34 percent.

Suspension of Liquidation

In accordance with section 733(d) of the Act, for Hage Fittings, Nirobo Metalverarbeitungs, and Schulz we are directing the Customs Service to suspend liquidation of all entries of subject merchandise from Germany that are entered, or withdrawn from warehouse, for consumption on or after the date 90 days prior date of publication of this notice in the Federal Register. For all other companies, we are directing the Customs Service to suspend liquidation of entries of subject merchandise from Germany that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. We will instruct the Customs Service to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds the constructed export price, as indicated in the chart below. These suspension-of-liquidation instructions will remain in effect until further notice. The weighted-average dumping margins are as follows:

Exporter/manufacturer	Weighted-average margin (In percent)
Hage Fittings	76.24
Nirobo Metalverarbeitungs	76.24
Schulz	76.24
All-Others	51.34

ITC Notification

In accordance with section 733(f) of the Act, we are notifying the ITC of our determination. If our final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after our final determination whether these imports are materially injuring, or threaten material injury to, the U.S. industry.

Public Comment

Case briefs for this investigation must be submitted no later than one week after the issuance of the verification reports. Rebuttal briefs must be filed within five days after the deadline for submission of case briefs. See 19 CFR Sec. 351.309(d). A list of authorities used, a table of contents, and an executive summary of issues should accompany any briefs submitted to the Department. Executive summaries should be limited to five pages total, including footnotes. 19 CFR Sec. 351.309(c) and (d). Further, we would appreciate it if parties submitting written comments would provide the Department with an additional copy of the public version of any such comments on diskette.

Section 774 of the Act provides that the Department will hold a hearing to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs, provided that such a hearing is requested by any interested party. If a request for a hearing is made in an investigation, the hearing will tentatively be scheduled to be held two days after the deadline for submission of the rebuttal briefs, at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230. In the event that the Department receives requests for hearings from parties to several stainless steel butt-weld pipe fittings cases, the Department may schedule a single hearing to encompass all those cases. Parties should confirm by telephone the time, date, and place of the hearing 48 hours before the scheduled time. Interested parties who wish to request a hearing, or participate if one is requested, must submit a written request within 30 days of the publication of this notice. 19 Sec. CFR 351.310(c). Requests should specify the number of participants and provide a list of the issues to be discussed. Oral presentations will be limited to issues raised in the briefs. If this investigation proceeds normally, we will make our final determination no later than 75 days after the date of this preliminary determination. 19 CFR Sec. 351.210(b)(1).

This determination is issued and published in accordance with sections 733(d) and 777(i)(1) of the Act.

Dated: July 26, 2000.

Troy H. Cribb,

Acting Assistant Secretary for Import Administration.