Preliminary Determination of Sales at Less Than Fair Value: Certain Carbon Steel Butt-Weld Pipe Fittings From Israel

DEPARTMENT OF COMMERCE

[A-508-807]

Preliminary Determination of Sales at Less Than Fair Value:

Certain Carbon Steel Butt-Weld Pipe Fittings From Israel

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: October 4, 1994.

FOR FURTHER INFORMATION CONTACT:Gary Bettger or Jennifer Yeske, Office

of Countervailing Investigations, Import Administration, International

Trade Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, NW., Washington, D.C. 20230; telephone (202) 482-

2239 or 482-0189, respectively.

PRELIMINARY DETERMINATION: We have preliminarily determined that

certain carbon steel butt-weld pipe fittings from Israel are being sold

in the United States at less than fair value, as provided in section

733 of the Tariff Act of 1930, as amended (the ``Act''). The estimated

margins of sales at less than fair value are shown in the ``Suspension

of Liquidation'' section of this notice.

Case History

Since the initiation of this investigation on March 21, 1994 (59 FR

14148, March 25, 1994), the following events have occurred:

On April 14, 1994, the United States International Trade Commission

(``ITC'') issued an affirmative preliminary injury determination (See

ITC Investigation No. 731-TA-690, 59 FR 18825 (April 20, 1994)).

In accordance with 19 CFR 353.42(b) (1994), the Department issued

its antidumping duty questionnaire to Pipe Fittings Carmiel, Ltd.

(``Carmiel'') on April 29, 1994, as it accounted for over 60 percent of

the merchandise sold in the United States during the POI. Carmiel was

the only exporter from Israel of the subject merchandise to the United

States during the POI.

On June 30, 1994, the petitioner requested a 50-day postponement of

the preliminary determination. The request was granted by the

Department of Commerce on July 19, 1994 (59 FR 37961, July 26, 1994).

On August 4, 1994, petitioner alleged critical circumstances with

regard to imports of certain carbon steel butt-weld pipe fittings from

Israel.

Scope of the Investigation

The products covered by this investigation are certain carbon steel

butt-weld pipe fittings having an inside diameter of less than fourteen

inches (355 millimeters), imported in either finished or unfinished

condition. Pipe fittings are formed or forged steel products used to

join pipe sections in piping systems where conditions require permanent

welded connections, as distinguished from fittings based on other

methods of fastening (e.g., threaded, grooved, or bolted fittings).

Butt-weld fittings come in a variety of shapes which include

``elbows,'' ``tees,'' ``caps,'' and ``reducers.'' The edges of finished

pipe fittings are beveled, so that while a fitting is placed against

the end of a pipe (the ends of which have also been beveled), a shallow

channel is created to accommodate the ``bead'' of the weld which joins

the fitting to the pipe. These pipe fittings are currently classifiable

under subheading 7307.93.3000 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

investigation is dispositive.

Period of Investigation

The period of investigation (``POI'') is September 1, 1993, through

February 28, 1994.

Product Comparisons

Carmiel sold identical products in both Israel and the United

States during the POI. Therefore, in making our fair value comparisons,

we compared sales of merchandise identical in all respects.

Fair Value Comparisons

To determine whether Carmiel's sales for export to the United

States were made at less than fair value, we compared the United States

price (``USP'') to the foreign market value (``FMV''), as specified in

the ``United States Price'' and ``Foreign Market Value'' sections of

this notice. In accordance with 19 CFR 353.58, we made comparisons at

the same level of trade.

United States Price

Because Carmiel's U.S. sales of certain carbon steel butt-weld pipe

fittings were made to unrelated purchasers in the United States prior

to importation, and the exporter's sales price methodology was not

indicated by other circumstances, we based USP on the purchase price

(``PP'') sales methodology in accordance with section 772(b) of the

Act.

We calculated Carmiel's PP sales based on packed C.I.f. prices to

unrelated customers in the United States. We made deductions to the

U.S. price, where appropriate, for marine insurance, ocean freight,

foreign inland freight, port fees, and customs agents fees and

expenses.

We made an adjustment to U.S. price for the value-added tax

(`VAT'') assessed on comparison sales in Israel, in accordance with our

practice, pursuant to the court of International Trade (``CIT'')

decision in Federal-Mogul, et al v. United States, 834 F.Supp. 1391

(CIT 1993). (See Final determination of Sales at Less Than Fair Value:

Calcium Aluminate Cement, Cement Clinker and Flux from France, 59 FR

14136, March 25, 1994).

Foreign Market Value

Carmiel made sales only to the United States and Israel during the

POI. Based on the substantial quantity of home market sales in relation

to its U.S. sales, we determined that the home market was viable.

We have preliminarily determined that respondent's method for

determining date of sale is not consistent with the Department's

practice. According to the response, Carmiel makes most of its home

market sales over the telephone and does not document these orders.

Moreover, the company did not know the specific date of each sale, but

claimed to know the month in which the sale was made. Therefore,

Carmiel reported its home market sales as having occurred the first day

of the month in which the sale was made.

Our practice with respect to the date of sale is to use the date of

the first written document which sets the price and quantity for the

sale (see Certain Stainless Steel Butt-Weld Pipe and Tube fittings From

Japan; Final Results of Antidumping Duty Administrative Review (59 FR

12240, 12241; March 16, 1994) and Antifriction Bearings (Other Than

Tapered Rolling Bearings) and Parts Thereof From France, et al., (58 FR

39729,39783; July 26, 1993)). In Carmiel's case, the first written

document with this information is the invoice. Thus, according to

Commerce practice, Carmiel should have reported home market sales that

were invoiced during the POI.

For purposes of our preliminary determination, however, we have

used the sales reported by respondent. we will be requesting a better

explanation of whether the date of sale used by respondent can be

documented, or, in the absence of documentation, a new sales listing

before verification.

We have calculated FMV using the delivered prices reported by

Carmiel for its home market sales. We adjusted the prices for discounts

offered to home market customers. Also, in light of the decision of the

Court of Appeals for the Federal Circuit in Ad Hoc Committee of AZ-NM-

TX-FL Producers of Gray Portland Cement v. United States, 13 F.3d 398

(Fed. Cir., 1994), we deducted post-sale home market movement charges

from the FMV under the circumstances-of-sale provision of 19 U.S.C

1677b(a)(4)(B). This adjustment included home market inland freight.

We also made circumstance-of-sale-adjustments for differences in

credit expenses between the two markets, pursuant to 19 CFR

353.56(a)(2). In calculating U.S. credit expense, we used the borrowing

rate in Israel on short-term New Israeli Shekel (``NIS'') loans linked

to the dollar. In calculating the home market credit expense, we used

the borrowing rate on unliked short-term NIS loans. For a further

discussion of the Department's treatment of credit in this

investigation, please see Memorandum from Barbara R. Stafford to Susan

G. Esserman (September 26, 1994) on file in room B-099 of the U.S.

Department of Commerce.

We adjusted for VAT in accordance with our practice. (See the

``United States Price'' Section of this notice, above.)

Currency Conversion

we made currency conversions based on the official exchange rates

in effect on the dates of the U.S. sales, as published in the

International Monetary Fund's International Financial Statistics.

Critical Circumstances

Petitioner alleges that critical circumstances exist with respect

to imports of the subject merchandise from Israel. Section 733(e)(1) of

the Act Provides that the Department will determine that critical

circumstances exist if:

(A)(i) There is a history of dumping in the United States or

elsewhere of the class or kind of merchandise which is the subject of

this Investigation, 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

merchandise which is the subject of the investigation at less than its

fair value, and

(B) there have been massive imports of the class or kind of

merchandise which is the subject of this investigation over a

relatively short period.

Regarding A(i) above, in determining whether there has been a

history of dumping, we normally look to see whether there has been an

antidumping order in the United States or elsewhere on such or similar

merchandise. Regarding (A)(ii) above, we normally consider margins of

25 percent or more for purchase price sales sufficient to impute

knowledge of dumping. (See Final Determination of Sales at Less Than

Fair Value; Tapered Roller Bearings and Parts Thereof, Finished or

Unfinished, from Italy, 52 FR 24198, June 29, 1987.)

Since the calculated preliminary margin for butt-weld pipe fittings

from Israel is below 25 percent and there have been no antidumping

orders in the United States or elsewhere pertaining to butt-weld pipe

fittings from Israel, the requirements of section 733(e) have not been

met. Therefore, we have determined that critical circumstances do not

exist with respect to imports of butt-weld pipe fittings from Israel.

Verification

As provided in section 776(b) of the Act, we will verify

information used in making our final determination.

Suspension of Liquidation

In accordance with section 733(d)(1) of the Act, we are directing

the Customs Service to suspend liquidation of all entries of certain

carbon steel butt-weld pipe fittings from Israel, as defined in the

``Scope of Investigation'' section of this notice, that are entered, or

withdrawn from warehouse, for consumption on or after the date of

publication of this notice in the Federal Register. The Customs Service

shall require a cash deposit or posting of a bond equal to the

estimated dumping margins, as shown below. This suspension of

liquidation will remain in effect until further notice. The weighted-

average dumping margins are as follows:

------------------------------------------------------------------------

Margin

Manufacturer/producer/exporter percent

------------------------------------------------------------------------

Carmiel...................................................... 7.33

All others................................................... 7.33

------------------------------------------------------------------------

Adjustment of Deposit Rate for Countervailing Duties

Article VI, paragraph 5 of the General Agreement on Tariffs and

Trade provides that ``[no] product * * * shall be subject to both

antidumping and countervailing duties to compensate for the same

situation for dumping or export subsidization.'' This provision is

implemented by section 772(d)(1)(D) or the Act. Since antidumping

duties cannot be assessed on the portion of the margin attributable to

export subsidies, there is no basis to require a cash deposit or bond

for that amount.

Accordingly, the level of export subsidies as determined in the

Preliminary Affirmative Countervailing Duty Determination: Certain

Carbon Steel Butt-Weld Pipe Fittings from Israel, FR 59 28340, June 1,

1994) which was 0.25 percent ad valorem, will be subtracted from the

respective margins for cash deposit or bonding purposes. This results

in a deposit rate of 7.08 percent for Carmiel and all other exporters

of carbon steel butt-weld pipe fittings from Israel.

ITC Notification

In accordance with section 733(f) of the Act, we have notified the

ITC of our determination. If our final determination is affirmative,

the ITC will determine whether these imports are materially injuring,

or threaten material injury to, the U.S. industry within 75 days after

our final determination.

Public Comment

Interested parties who wish to request a hearing must submit a

written request to the Assistant Secretary for Import Administration,

U.S. Department of Commerce, Room B-099, within ten days of the

publication of this notice. Requests should contain: (1) The party's

name, address, and telephone number; (2) the number of participants;

and (3) a list of the issues to be discussed.

In accordance with 19 CFR 353.38, case briefs or other written

comments in at least ten copies must be submitted to the Assistant

Secretary no later than November 16, 1994, and rebuttal briefs no later

than November 23, 1994. A hearing, if requested, will be held on

November 28, 1994, at the U.S. Department of Commerce in Room 1414.

Parties should confirm by telephone the time, date, and place of the

hearing two days prior to the scheduled date. In accordance with 19 CFR

353.38(b), oral presentations will be limited to issues raised in the

briefs.

We will make our final determination not later than 75 days after

of this preliminary determination.

This determination is published pursuant to section 733(f) of the

Act and 19 CFR 353.15(a)(4).

Dated: September 26, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-24536 Filed 10-3-94; 8:45 am]

BILLING CODE 3510-05-M