Certain Circular Welded Carbon Steel Pipes and Tubes From Taiwan: Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-008]

Certain Circular Welded Carbon Steel Pipes and Tubes From Taiwan:

Preliminary Results of Antidumping Duty 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 petitioners, the Department

of Commerce (the Department) is conducting an administrative review of

the antidumping duty order on certain circular welded steel pipes and

tubes from Taiwan. The review covers one manufacturer/exporter of the

subject merchandise to the United States and the period May 1, 1995

through April 30, 1996. The review indicates the existence of sales

below normal value during the period of review.

If these preliminary results are adopted in our final results of

review, we will instruct the U.S. Customs Service to assess

antidumpting duties on all appropriate entries.

Interested parties are invited to comment on these preliminary

results. Parties who submit argument in this proceeding are requested

to submit with the argument (1) a statement of the issue and (2) a

brief summary of the argument (no longer than five pages, including

footnotes).

effective date: June 6, 1997.

for further information contact: Michael J. Heaney or Linda Ludwig,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone (202) 482-4475/3833.

Applicable Statute

Unless otherwise indicated, all citations to the Tariff Act of

1930, as amended (the Act) are references to the provisions effective

January 1, 1995, the effective date of the amendments made to the Act

by the Uruguay Round Agreements Act (URAA). In addition, unless

otherwise indicated, all citations to the Department's regulations are

to the current regulations, as amended by the interim regulations

published in the Federal Register on May 11, 1995 (60 FR 25130).

SUPPLEMENTARY INFORMATION:

Background

The Department published an antidumping duty order on certain

circular welded carbon steel pipes and tubes from Taiwan on May 7, 1984

(49 FR 19369). The Department published a notice of ``Opportunity To

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

1995/1996 review period on May 8, 1996 (61 FR 20791). On May 24, 1996,

the petitioners, Allied Tube & Conduit Corp., Wheatland Tube Company,

Sawhill Tubular Corp., Division of Armco Inc., and Laclede Steel Co.,

filed a request for review of Yieh Hsing Enterprise Co., Ltd. (Yieh

Hsing) on May 24, 1996. We initiated the review of

[[Page 31071]]

Yieh Hsing on June 25, 1996 (61 FR 32771).

Scope of the Review

Imports covered by this review are shipments of certain circular

welded carbon steel pipes and tubes. The Department defines such

merchandise as welded carbon steel pipes and tubes of circular cross

section, with walls not thinner than 0.065 inch and 0.375 inch or more

but not over 4\1/2\ inches in outside diameter. These products are

commonly referred to in the industry as ``standard pipe'' and are

produced to various American Society for Testing Materials

specifications, most notably A-53, A-120 or A-135. Standard pipe is

currently classified under Harmonized Tariff schedule of the United

States (HTSUS) item numbers 7306.30.5025, 7306.30.5032, 7306.30.5040,

and 7306.30.5055. Although the HSTUS subheading is provided for

convenience and customs purposes, the written description of the

merchandise under investigation is dispositive.

The review covers the period May 1, 1995 through April 30, 1996.

The Department is conducting this review in accordance with section 751

of the Act, as amended.

United States Price (USP)

In calculating USP, the Department treated Yieh Hsing's sales as

export price (EP) sales, as defined in section 772(a) of the Act,

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

to the date of importation and the constructed export price methodology

was not warranted by the facts of the record. EP was based on the

delivered, packed prices to unrelated purchasers in the United States.

We made adjustments, where applicable, for foreign inland freight,

foreign brokerage charges, and ocean freight in accordance with section

772(c) of the Act.

Normal Value

In order to determine whether there were sufficient sales of

certain circular welded carbon steel pipes and tubes in the home market

(HM) to serve as a viable basis for calculating normal value (NV), we

compared the volume of home market sales of subject merchandise to the

volume of subject merchandise sold in the United States, in accordance

with section 773(a)(1)(C) of the Act. Yieh Hsing's aggregate volume of

HM sales of the foreign like product was greater than five percent of

its respective aggregate volume of U.S. sales of the subject

merchandise. Therefore, we have based NV on HM sales.

In accordance with section 773(a)(6), we adjusted NV, where

appropriate, by deducting home market packing expenses and adding U.S.

packing expenses. We also made deductions to NV for HM inland freight,

and quantity discounts. Finally, we made an adjustment to NV for

differences in credit expenses pursuant to section 773(a)(6)(C) of the

Act.

Level of Trade

In accordance with section 773(a)(7)(A) of the Act, to the extent

practicable, the Department will calculate NV based on sales at the

same level of trade as the U.S. sale. When there are no sales in the

comparison market at the same level of trade as the U.S. sale(s), the

Department may compare sales in the U.S. and foreign markets at a

different level of trade. The NV level of trade is that of the

starting-price sales in the home market. For EP sales, the relevant

transaction for the level of trade analysis is the sale from the

exporter to the unaffiliated purchaser.

To determine whether home market sales are a different level of

trade than U.S. sales, we examine whether the home market sales are at

different stages in the marketing process than the U.S. sales. The

marketing process in both markets begins with goods being sold by the

producer and extends to the sale to the final user. We review and

compare the distribution systems in the home market and the United

States, including selling functions, class of customer, and the extent

and level of selling expenses for each claimed level of trade. Customer

categories such as distributor, retailers or end-users are commonly

used by respondents to describe levels of trade, but without

substantiation, they are insufficient to establish that a claimed level

of trade is valid. An analysis of the chain of distribution and of the

selling functions substantiates or invalidates the claimed customer

categorization levels. If the claimed levels are different, the selling

functions performed in selling to each level should also be different.

Conversely, if customer levels are nominally the same, the selling

functions performed should also be the same. Different levels of trade

necessarily involve differences in selling functions, but differences

in selling functions, even substantial ones, are not alone sufficient

to establish a difference in the levels of trade. Differences in levels

of trade are characterized by purchasers at different stages in the

chain of distribution and sellers performing qualitatively different

functions in selling to them.

When we compare U.S. sales to home market sales at a different

level of trade, we make a level-of-trade adjustment if the difference

in level of trade affects price comparability. We determine any effect

on price comparability by examining sales at different levels of trade

in a single market, the home market. Any price effect must be

manifested in a pattern of consistent price differences between home

market sales used for comparison and sales at the equivalent level of

trade of the export transaction. To quantify the price differences, we

calculate the difference in the average of the net prices of the same

models sold at different levels of trade. We use the average percentage

difference between these net prices to adjust NV when the level of

trade of NV is different from that of the export sale. If there is a

pattern of no price differences, then the difference in level of trade

does not have a price effect and, therefore, no adjustment is

necessary.

In this review, Yieh Hsing provided information with respect to its

selling activities associated with home market and EP sales. We

determined that there is no difference in selling functions between

Yieh Hsing's three classes of HM customers. Each of the three classes

of customers (distributors, retailers, and end-users) are offered the

same degree of nominal sales support, such as immediate delivery and

the opportunity to either purchase merchandise out of inventory, or

have it made to order. We, therefore, determined that Yieh Hsing sells

to one level of trade in the home market.

Yieh Hsing contended that EP sales were at a different level of

trade than its home market sales. Each of Yieh Hsing's EP sales were

made to one trading company. That trading company purchased large

quantities of pipe on a made-to-order basis. The long lead-times

associated with shipments from Taiwan to the U.S. make it impossible

for the trading company to avail itself of the immediate delivery and

inventory-maintenance services that Yieh Hsing provided to some of its

home market customers. Based on this distinction, Yieh Hsing argued

that EP sales were at a different level of trade than its home market

sales.

While Yieh Hsing was able to provide a greater degree of inventory

maintenance services on its home market sales than on its EP sales, we

disagree with Yieh Hsing's contention that EP sales were at a different

level of trade than were home market sales. The levels of customer

assistance and sales support provided by Yieh Hsing on its home market

and U.S. sales were not significantly different. Moreover, Yieh

[[Page 31072]]

Hsing conducted made-to-order sales in both the home market and the

United States. The fact that Yieh Hsing had a greater concentration of

made-to-order sales in the United States than in the home market does

not distinguish its EP sales as being at a separate level of trade than

its home market sales. Accordingly, for purposes of this review, we

determined that EP sales were at the same level of trade as Yieh

Hsing's home market sales.

Sales Comparisons

To determine whether sales of certain circular welded carbon steel

pipes and tubes in the United States were made at less than NV, we

compared USP to the NV, as described in the ``United States Price'' and

``Normal Value'' sections of this notice. In accordance with section

777(A) of the Act, we calculated monthly weighted-average prices for NV

and compared these to individual U.S. transactions.

Preliminary Results of Review

We preliminarily determine that a margin of 0.67 percent exists for

Yieh Hsing for the period June 1, 1995 through May 31, 1996.

Parties to this proceeding may request disclosure within five days

of publication of this notice and any interested party may request a

hearing within 10 days of publication. Any hearing, if requested, will

be held 44 days after the date of publication, or the first working day

thereafter. Interested parties may submit case briefs and/or written

comments no later than 30 days after the date of publication. Rebuttal

briefs and rebuttals to written comments, limited to issues raised in

such briefs or comments, may be filed no later than 37 days after the

date of publication. The Department will publish the final results of

this administrative review, which will include the results of its

analysis of issues raised in any such written comments or at a hearing,

within 120 days after the publication of this notice.

The Department shall determine, and Customs shall assess,

antidumping duties on all appropriate entries. Because the inability to

link sales with specific entries prevents calculation of duties on an

entry-by-entry basis, we have calculated an importer specific ad

valorem duty assessment rate 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 customs value of the sales used

to calculate these duties. This rate will be assessed uniformly on all

entries of that particular importer made during the POR. (This is

equivalent to dividing the total amount of antidumping duties, which

are calculated by taking the difference between NV and U.S. Price, by

the total U.S. value of the sales compared, and adjusting the result by

the average difference between U.S. price and customs value for all

merchandise examined during the POR.) The Department will issue

appraisement instructions directly to Customs. The final results of

this review shall be the basis for the assessment of antidumping duties

on entries of merchandise covered by the determination and for future

deposits of estimated duties.

Furthermore, the following deposit requirements will be effective

upon completion of the final results of these administrative reviews

for all shipments of certain circular welded carbon steel pipes and

tubes from Taiwan entered, or withdrawn from warehouse, for consumption

on or after the publication date of the final results of these

administrative reviews, as provided by section 751(a)(1) of the Act:

(1) The cash deposit rate for reviewed firms will be the rate

established in the final results of administrative review, except if

the rate is less than 0.50 percent, and therefore, de minimis within

the meaning of 19 CFR 353.6, in which case the cash deposit rate will

be zero; (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

manufacturer of the merchandise in the final results of these reviews,

or the LTFV investigation; and (4) if neither the exporter nor the

manufacturer is a firm covered in this or any previous reviews or the

original fair value investigation, the cash deposit rate will be 9.7%,

the ``all others'' rate established in the LTFV investigation.

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 353.26(b) to file a certificate

regarding the reimbursement of antidumping duties prior to liquidation

of the relevant entries during these review periods. 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.

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: June 8, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-14874 Filed 6-5-97; 8:45 am]

BILLING CODE 3510-DS-M