Carbon Steel Butt-Weld Pipe Fittings from Taiwan; Preliminary Results of Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-605]

Carbon Steel Butt-Weld Pipe Fittings from Taiwan; Preliminary

Results of 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 the U.S. Butt-Weld Fittings

Committee, petitioner in this proceeding, the Department of Commerce

(the Department) has conducted an administrative review of the

antidumping duty order on carbon steel butt-weld pipe fittings from

Taiwan. The review covers four manufacturers/exporters of the subject

merchandise to the United States for the period December 1, 1992,

through November 30, 1993.

We have preliminarily determined that sales have been made below

the foreign market value (FMV). If these preliminary results are

adopted in our final results of administrative review, we will instruct

U.S. Customs to assess antidumping duties equal to the difference

between the United States price (USP) and FMV.

Interested parties are invited to comment on these preliminary

results.

EFFECTIVE DATE: December 22, 1994.

FOR FURTHER INFORMATION CONTACT: Carlo G. Cavagna or Richard Rimlinger,

Office of Antidumping Compliance, Import Administration, International

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

Constitution Avenue, N.W., Washington, D.C. 20230, telephone: (202)

482-4733.

SUPPLEMENTARY INFORMATION:

Background

On December 17, 1986, the Department published in the Federal

Register (51 FR 45152) the antidumping duty order on carbon steel butt-

weld pipe fittings from Taiwan. On November 26, 1993, the Department

published (58 FR 62327) a notice of ``Opportunity to Request an

Administrative Review'' of the antidumping duty order for the period

December 1, 1992, through November 30, 1993. We received a timely

request from the petitioner, the U.S. Butt-Weld Fittings Committee, to

review C.M. Pipe Fitting Manufacturing Co., Ltd. (CM), Rigid Industries

Co., Ltd. (Rigid), Chup Hsin Enterprises (Chup Hsin), and Gei Bey

Corporation (Gei Bey). The period of review (POR) covers December 1,

1992, through November 30, 1993, and the administrative review was

initiated on January 18, 1994 (59 FR 2593). The Department is

conducting this review in accordance with section 751 of the Tariff Act

of 1930, as amended (the Act).

Scope of the Review

Imports covered by this review are shipments of carbon steel butt-

weld type pipe fittings, other than couplings, under 14 inches in

inside diameter, whether finished or unfinished, that have been formed

in the shape of elbows, tees, reducers, and caps, and if forged, have

been advanced after forging. These advancements may include one or more

of the following: coining, heat treatment, shot blasting, grinding, die

stamping, or painting.

Carbon steel butt-weld pipe fittings are currently classifiable

under Harmonized Tariff Schedule (HTS) item number 7307.93.3000. The

HTS subheading is provided for convenience and for U.S. Customs

purposes. The written description remains dispositive as to the scope

of the product coverage.

Best Information Available

In accordance with section 776(c) of the Act, we have preliminarily

determined that the use of best information otherwise available (BIA)

is appropriate for certain firms. The Department's regulations provide

that we may take into account whether a party refuses to provide

information (19 CFR 353.37(b)). For purposes of these reviews, we have

used the most adverse BIA--generally, the highest rate for any company

for this same class or kind of merchandise from this or any prior

segment of the proceeding--whenever a company refused to cooperate with

the Department or otherwise significantly impeded the proceeding. When

a company substantially cooperated with our requests for information,

but failed to provide all the information requested in a timely manner

or in the form requested, we used as BIA the higher of (1) the highest

rate (including the ``all others'' rate) ever applicable to the firm

for the same class or kind of merchandise from the same country from

either the less-than-fair-value (LTFV) investigation or a prior

administrative review; or (2) the highest calculated rate in this

review for any firm for the same class or kind of merchandise from the

same country. See Antifriction Bearings (Other Than Tapered Roller

Bearings) and Parts Thereof From the Federal Republic of Germany, et.

al.; Final Results of Antidumping Duty Administrative Review, 56 FR

31692, 31704 (July 11, 1991); see also Allied-Signal Aerospace Co. v.

United States 996 F.2d 1185 (Fed. Cir. 1993).

Because Chup Hsin and Gei Bey failed to respond to the Department's

questionnaire, we have used the highest rate ever found in this

proceeding to establish their margins. This rate is 87.30 percent,

which was also used for these two firms in the LTFV investigation when

they failed to respond in that stage of the proceeding.

United States Price

In calculating USP, the Department treated respondents' sales as

purchase price (PP) transactions, as defined in section 772 of the Act,

because the merchandise was sold to unrelated U.S. purchasers prior to

importation.

PP was based on c.i.f. U.S. port prices to unrelated purchasers in,

or for exportation to, the United States. We made deductions from PP,

as appropriate, for domestic inland freight, brokerage and handling

charges, assorted port and trade development taxes in Taiwan, ocean

freight, marine insurance, imputed credit expenses, assorted bank and

interest charges, and commissions.

We adjusted USP for taxes in accordance with our practice as

outlined in Silicomanganese from Venezuela, Preliminary Determination

of Sales at Less Than Fair Value, 59 FR 31204 (June 17, 1994).

No other adjustments were claimed or allowed.

Foreign Market Value

In order to determine whether there were sufficient sales of carbon

steel butt-weld pipe fittings in the home market to serve as a viable

basis for calculating FMV, we compared the volume of home market sales

of carbon steel butt-weld pipe fittings to the volume of third country

sales, in accordance with section 773(a)(1) of the Act. CM and Rigid

had viable home markets with respect to sales of carbon steel butt-weld

pipe fittings.

Because 20 percent of Rigid's foreign market sales were determined

to have been made below the cost of production (COP) during the last

administrative review (56 FR 20187, 20188), we concluded that

reasonable grounds existed to believe or suspect that home market sales

during the POR were made at prices below COP. Therefore, pursuant to

section 773(b) of the Act, the Department initiated a COP investigation

of Rigid for purposes of this administrative review. See Antifriction

Bearings (Other Than Tapered Roller Bearings) and Parts Thereof from

Eight Countries; Preliminary Results of Antidumping Duty Administrative

Reviews, 59 FR 9463, 9467 (February 28, 1994). Furthermore, based on an

allegation by petitioner, we also determined that reasonable grounds

existed to believe or suspect that sales below cost of carbon steel

butt-weld pipe fittings had been made by CM. Thus, we initiated a COP

investigation with respect to CM.

We performed a model-specific COP test, in which we examined

whether each home market sale was priced below the merchandise's COP.

The Department defines the COP as the sum of direct material, direct

labor, variable and fixed factory overhead, general expenses, and

packing. For each model, we compared this sum to the reported home

market unit price, net of price adjustments and movement expenses. In

accordance with section 773(b) of the Act, we also examined whether the

home market sales of each model were made at prices below their COP in

substantial quantities over an extended period of time, and whether

such sales were made at prices which would permit recovery of all costs

within a reasonable period of time in the normal course of trade.

For each model where less than 10 percent, by quantity, of the home

market sales during the POR were made at prices below the COP, we

included all sales of that model in the computation of FMV. For each

model where 10 percent or more, but not more than 90 percent, of the

home market sales during the POR were priced below the merchandise's

COP, we excluded from the calculation of FMV those home market sales

which were priced below the merchandise's COP, provided that these

below-cost sales were made over an extended period of time. For each

model where 90 percent or more of the home market sales during the POR

were priced below the COP, we disregarded all sales of that model from

our calculation of FMV and used the constructed value (CV) of those

models as described below. See Antifriction Bearings (Other Than

Tapered Roller Bearings) and Parts Thereof from Eight Countries;

Preliminary Results of Antidumping Duty Administrative Reviews, 59 FR

9463, 9467 (February 28, 1994).

In order to determine if sales below cost had been made over an

extended period of time, we compared the number of months in which

below-cost sales occurred for each model to the number of months during

the POR in which each model was sold. If a model was sold in fewer than

three months, we did not exclude the below-cost sales unless there were

below-cost sales in each month of sale. If a model was sold in three or

more months, we did not exclude the below-cost sales unless there were

below-cost sales in at least three months during the POR. See

Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts

Thereof from Nine Countries; Final Results of Antidumping Duty

Administrative Reviews, 58 FR 39729, 39751 (July 26, 1993). Based on

this test, we found it necessary to disregard certain home market sales

made by CM and Rigid.

We used CV as FMV for those U.S. sales for which there were

insufficient sales of the comparison home-market model at or above the

COP. We calculated CV, in accordance with section 773(e) of the Act, as

the sum of the cost of manufacturing of the product sold in the United

States, home market selling, general and administrative (SG&A)

expenses, home market profit, and U.S. packing. For home market SG&A

expenses, we used the larger of the actual SG&A expenses reported by

the respondents or 10 percent of the COM, the statutory minimum for

foreign SG&A expenses. For home market profit, we used the larger of

the actual profit reported by the respondents or the statutory minimum

of eight percent of the sum of COM and SG&A expenses.

For those models that had sufficient above-cost sales, we

calculated FMV based on delivered prices to unrelated customers in the

home market. In calculating FMV, we made adjustments, where

appropriate, for inland freight and imputed credit expenses. We

adjusted for the Taiwan consumption tax in accordance with our decision

in Silicomanganese from Venezuela, Preliminary Determination of Sales

at Less Than Fair Value, 59 FR 31204 (June 17, 1994). We deducted home

market packing costs from the home market price and added U.S. packing

costs to the FMV. Pursuant to 19 CFR 353.56, we also made, where

applicable, adjustments for differences in the physical characteristics

of merchandise. Furthermore, where commissions were paid on U.S. sales

and not paid on home market sales, we allowed an offset to FMV

amounting to the lesser of the weighted-average home market indirect

selling expenses or the U.S. commissions, in accordance with 19 CFR

353.56(b) of the regulations.

No other adjustments were claimed or allowed.

Preliminary Results of Review

As a result of this review, we preliminary determine that the

following margins exist for the period December 1, 1992, through

November 30, 1993:

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

Percent

Manufacturer/exporter margin

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

Chup Hsin Enterprises...................................... 87.30

C.M. Pipe Fittings......................................... 12.24

Gei Bey Corporation........................................ 87.30

Rigid Industries........................................... 2.53

All Others................................................. 49.46

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Upon completion of the final results of this review, the Department

shall determine, and the Customs Service shall assess, antidumping

duties on all appropriate entries. Individual differences between USP

and FMV may vary from the percentages stated above. Upon completion of

the review the Department will issue appraisement instructions with

respect to each exporter directly to the U.S. Customs Service.

Furthermore, the following deposit requirements will be effective

for all shipments of carbon steel butt-weld pipe fittings entered, or

withdrawn from warehouse, for consumption on or after the publication

date of the final results of this administrative review, as provided by

section 751(a)(1) of the Act: (1) The cash deposit rate for the

reviewed companies will be those rates established in the final results

of this review; (2) For previously reviewed or investigated companies

not listed above, the cash deposit rate will continue to be the

company-specific rate published for the most recent period; (3) If the

exporter is not a firm covered in this review, but the manufacturer is,

the cash deposit rate will be the rate established in this review for

the manufacturer of the merchandise; and (4) If neither the exporter

nor the manufacturer is a firm covered in this or any previous review

conducted by the Department, the cash deposit rates will be 49.46%, the

all other rate established in the LTFV investigation (51 FR 37772).

These deposit requirements will remain in effect until publication

of the final results of the next administrative review.

Interested parties may request disclosure within five days of the

date of publication of this notice, and may request a hearing within 10

days of the date of publication. Any hearing, if requested, will be

held as early as convenient for the parties but not later than 44 days

after the date of publication or the first work day thereafter. Case

briefs or other written comments from interested parties may be

submitted not later than 30 days after the date of publication of this

notice. Rebuttal briefs and rebuttal comments, limited to issues in the

case briefs, may be filed not later than 37 days after the date of

publication. The Department will publish the final results of this

administrative review, including the results of its analysis of issues

raised in any such written comments.

This notice 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 subsequent assessment

of double antidumping duties.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

Dated: December 7, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-31502 Filed 12-21-94; 8:45 am]

BILLING CODE 3510-DS-P