Final Determination of Sales at Less Than Fair Value: Oil Country Tubular Goods from Spain

[A-469-806]

Final Determination of Sales at Less Than Fair Value: Oil Country

Tubular Goods from Spain

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: June 28, 1995.

FOR FURTHER INFORMATION CONTACT: Magd Zalok or William Crow, Office of

Antidumping Investigations, Import Administration, U.S. Department of

Commerce, 14th Street and Constitution Avenue NW., Washington, DC

20230; telephone (202) 482-4162 or 482-0116, respectively.

Final Determination

We determine that oil country tubular goods (OCTG) from Spain are

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

section 735 of the Tariff Act of 1930, as amended (``the Act''). The

estimated margins are shown in the ``Suspension of Liquidation''

section of this notice.

Case History

Since the preliminary determination of sales at less than fair

value in this investigation on January 26, 1995 (60 FR 6516, February

2, 1995), the following events have occurred. On February 8, 1995, (60

FR 8632, February 15, 1995) the Department postponed the final

determination in accordance with section 735(a)(2) of the Act and 19

CFR 353.20(b)(1).

In March 1995, the Department conducted its sales and cost

verifications of the respondent, Tubos Reunidos (``TR'') in Spain.

Verification reports were issued in April and May 1995.

On May 9, 1995, the petitioners and TR submitted case briefs.

Rebuttal briefs were submitted by both parties on May 16, 1995. On May

17, 1995, the Department held a public hearing.

Scope of the Investigation

For purposes of this investigation, OCTG are hollow steel products

of circular cross-section, including oil well casing, tubing, and drill

pipe, of iron (other than cast iron) or steel (both carbon and alloy),

whether seamless or welded, whether or not conforming to American

Petroleum Institute (API) or non-API specifications, whether finished

or unfinished (including green tubes and limited service OCTG

products). This scope does not cover casing, tubing, or drill pipe

containing 10.5 percent or more of chromium. The OCTG subject to this

investigation are currently classified in the Harmonized Tariff

Schedule of the United States (HTSUS) under item numbers:

7304.20.10.10, 7304.20.10.20, 7304.20.10.30, 7304.20.10.40,

7304.20.10.50, 7304.20.10.60, 7304.20.10.80, 7304.20.20.10,

7304.20.20.20, 7304.20.20.30, 7304.20.20.40, 7304.20.20.50,

7304.20.20.60, 7304.20.20.80, 7304.20.30.10, 7304.20.30.20,

7304.20.30.30, 7304.20.30.40, 7304.20.30.50, 7304.20.30.60,

7304.20.30.80, 7304.20.40.10, 7304.20.40.20, 7304.20.40.30,

7304.20.40.40, 7304.20.40.50, 7304.20.40.60, 7304.20.40.80,

7304.20.50.15, 7304.20.50.30, 7304.20.50.45, 7304.20.50.60,

7304.20.50.75, 7304.20.60.15, 7304.20.60.30, 7304.20.60.45,

7304.20.60.60, 7304.20.60.75, 7304.20.70.00, 7304.20.80.30,

7304.20.80.45, 7304.20.80.60, 7305.20.20.00, 7305.20.40.00,

7305.20.60.00, 7305.20.80.00, 7306.20.10.30, 7306.20.10.90,

7306.20.20.00, 7306.20.30.00, 7306.20.40.00, 7306.20.60.10,

7306.20.60.50, 7306.20.80.10, and 7306.20.80.50.

After the publication of the preliminary determination, we found

that HTSUS item numbers 7304.20.10.00, 7304.20.20.00, 7304.20.30.00,

7304.20.40.00, 7304.20.50.10, 7304.20.50.50, 7304.20.60.10,

7304.20.60.50, and 7304.20.80.00 were no longer valid HTSUS item

numbers. Accordingly, these numbers have been deleted from the scope

definition.

Although the HTSUS subheadings are 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 January 1, 1994, through June

30, 1994.

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Statute and to the

Department's regulations are in reference to the provisions as they

existed on December 31, 1994.

Best Information Available (BIA)

We have determined that TR's questionnaire responses provide an

inadequate basis for estimating dumping margins. At verification, we

discovered significant omissions, discrepancies, and a large number of

errors in TR's responses, as well as an overall lack of support for

certain of TR's sales data. Instead of reporting the actual prices

charged to the first unrelated U.S. customers, as requested by the

Department, TR incorrectly reported the U.S. prices invoiced to its

related subsidiary, and failed to provide adequate support

documentation at verification for the actual prices invoiced to the

U.S. customers. TR omitted reporting all charges in the U.S. market for

freight, guarantee and return credits and did not provide adequate

support documentation at verification for these charges. TR also

omitted reporting the sale of certain OCTG products, and provided no

evidence at verification that the sales of these products were not

covered by the scope of this investigation. In its responses, TR stated

that its home market was not viable with respect to the sale of the

[[Page 33576]] subject merchandise. However, the sales of certain OCTG

products discovered at verification indicate a viable home market,

thereby making the use of a third country market, instead of the home

market as a basis for determining foreign market value, questionable.

Finally, in addition to the significant omissions, the charges and

adjustments reported by TR were replete with discrepancies and errors,

making it impossible for the Department to conduct a complete

verification of TR's responses.

In order to determine whether sales are made in the United States

at less than fair value, it is critical that the Department be provided

with accurate and reliable sales information to be used in its

analysis. Because of the inaccuracies discovered in TR's submitted

information, the Department was unable to verify that information, as

required by section 776(1) of the Act. That section of the Act provides

that, if the Department is unable to verify, within the time specified,

the accuracy and completeness of the factual information submitted, it

shall use BIA as the basis for its determination. Consequently, we have

based this determination on BIA.

In determining what rate to use as BIA, the Department follows a

two-tiered BIA methodology, whereby the Department may impose the most

adverse rate upon those respondents who refuse to cooperate or

otherwise impede the proceeding, or assign a lower rate for those

respondents who have cooperated in an investigation. When a company is

determined to be uncooperative, it has been the Department's practice

to apply the highest rate alleged in the petition as BIA. When a

company is determined to be cooperative, it has been the Department's

practice to apply as BIA the higher of: (1) The average of the margins

in the petition; or (2) the calculated margin for another firm for the

same class or kind of merchandise from the same country. This

methodology for assigning BIA has been upheld by the U.S. Court of

Appeals for the Federal Circuit. (See Allied-Signal Aerospace Co. v.

the United States, Slip Op. 93-1049 (Fed Cir. June 22, 1993); see also

Krupp Stahl AG. et al v. the United States, Slip Op. 93-84 (CIT May 26,

1993).)

In spite of the numerous errors in its response, we have determined

that TR was cooperative during this proceeding and have assigned to it

a cooperative BIA margin of 11.95 percent, based on the average of the

margins alleged in the petition. For further information on the use of

a cooperative BIA margin, see the ``DOC Position'' section of this

notice.

Verification

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

TR's information for purposes of the final determination. However,

given the significant discrepancies encountered at verification, the

use of the respondent's information in the final determination was not

possible.

Interested Party Comments

Comment 1--Use of Total Uncooperative BIA

The petitioners maintain that because of the gravity of the

mistakes made by TR, the Department should assign to TR an

uncooperative BIA margin of 18.6 percent. They point to the

verification report which shows that TR failed to report the actual

price as invoiced to the first unrelated U.S. customer, and note that

many other discrepancies and omissions were found by the Department at

verification.

TR maintains that the record clearly reflects that it has

cooperated fully with the Department in this investigation, submitting

hundreds of pages of responses to the Department questionnaires and

supplemental questionnaires within the time allowed. According to the

respondent, due to the tight time constraints of antidumping

investigations, a number of errors have been made, many of which came

to light in preparing documentation for verification. TR maintains that

it promptly and fully disclosed the errors to the Department as soon as

the respondent became aware of such errors.

Moreover, TR contends that only following receipt of the

verification outline on March 7, 1995, did TR's officials, in the

course of preparing the payment documentation for verification, see the

need to refer to the actual invoices re-issued by TR America, inclusive

of the inland freight. TR maintains that, even if it had realized the

need earlier to report to the Department the actual invoiced prices

inclusive of the U.S. inland freight expenses, it would not have

changed the way in which the sales listing was ultimately prepared. TR

states that, in order to be able to provide a timely response to the

Department's questionnaire, it was necessary to report sales data as it

was reflected in TR's computer in Spain. Furthermore, TR argues that it

was appropriate not to report sales of class ``C'' OCTG and couplings

stock because these products are not covered in the scope of the

investigation. Finally, TR claims that the errors and discrepancies

discovered for the remaining sales data are insignificant and offset

each other. Therefore, the respondent requests that the Department use

the information gathered at verification as a basis for TR's margin

calculation in the final determination.

DOC Position

As discussed in the BIA section of this notice, the discrepancies

found in TR's response render it unusable. The Department, however,

disagrees with the petitioners on assigning TR a non-cooperative BIA

margin. Although much of the information found to be deficient could

not be remedied at verification, TR made a good faith effort by

responding to the Department's questionnaire, by submitting a

verifiable cost of production questionnaire response, and by attempting

to cooperate at the sales verification. We also believe that the

inaccuracy of TR's responses is the result of inadvertent errors in its

reporting, and poor verification preparation, not a lack of cooperation

on the part of the respondent. Thus, we believe that assigning TR a

cooperative BIA margin is appropriate.

Because this final determination is based on BIA, all other

comments are moot.

Suspension of Liquidation

Pursuant to the results of this final determination, we will

instruct the Customs Service to require a cash deposit or posting of a

bond equal to the estimated final dumping margin, as shown below for

entries of OCTG from Spain that are entered, or withdrawn from

warehouse, for consumption from the date of publication of this notice

in the Federal Register. The suspension of liquidation will remain in

effect until further notice.

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

Margin

Producer/manufacturer/exporter percentage

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

Tubos Reunidos S.A.......................................... 11.95

All Others.................................................. 11.95

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

ITC Notification

In accordance with section 735(d) of the Act, we have notified the

ITC of our determination. The ITC will make its determination whether

these imports materially injure, or threaten injury to, a U.S. industry

within 75 days of the publication of this notice, in accordance with

section 735(b)(3) of the Act. If the ITC determines that material

injury or threat of material injury does not exist, [[Page 33577]] the

proceeding will be terminated and all securities posted as a result of

the suspension of liquidation will be refunded or canceled. However, if

the ITC determines that such injury does exist, the Department will

issue an antidumping duty order.

Notification to Interested Parties

This notice serves as the only reminder to parties subject to

administrative protective order (APO) in this investigation of their

responsibility covering the return or destruction of proprietary

information disclosed under APO in accordance with 19 CFR 353.34(d).

Failure to comply is a violation of the APO.

This determination is published pursuant to section 735(d) of the

Act (19 U.S.C. 1673(d)) and 19 CFR 353.20.

Dated: June 19, 1995.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 95-15622 Filed 6-27-95; 8:45 am]

BILLING CODE 3510-DS-P