Stainless Steel Butt-Weld Pipe Fittings From Taiwan: Final Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-816]

Stainless Steel Butt-Weld Pipe Fittings From Taiwan: Final

Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of Final Results of Antidumping Duty Administrative

Review.

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SUMMARY: On June 5, 1998, the Department of Commerce (``the

Department'') published the preliminary results of the administrative

review of the antidumping duty order on certain stainless steel butt-

weld pipe fittings from Taiwan. This review covers one manufacturer and

exporter of the subject merchandise. The period of review (``POR'') is

June 1, 1996 through May 31, 1997. Based on our analysis of the

comments received, we have changed the results from those presented in

the preliminary results of review.

EFFECTIVE DATE: December 9, 1998.

FOR FURTHER INFORMATION CONTACT: Becky Hagen or Bob Bolling, AD/CVD

Enforcement Group III--Office 7, Import Administration, International

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

Constitution Avenue, NW, Room 7866, Washington, DC 20230; telephone

(202) 482-1102 or (202) 482-3434, respectively.

SUPPLEMENTARY INFORMATION:

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 19 CFR Part 353.

Background

On June 5, 1998, the Department published in the Federal Register

the preliminary results of the administrative review of the antidumping

duty order on certain stainless steel butt-weld pipe fittings from

Taiwan (63 FR 30710). On September 30, 1998, the Department extended

the time limit for the final results to December 2, 1998, in accordance

with the Act. See Butt-Weld Pipe Fittings from Taiwan; Extension of

Time Limits for Antidumping Duty Administrative Review (63 FR 54108,

October 8, 1998). The Department has now completed this administrative

review in accordance with section 751 of the Act.

Scope of the Review

The products subject to this review are certain stainless steel

butt-weld pipe fittings, whether finished or unfinished, under 14

inches inside diameter.

Certain stainless steel butt-weld pipe fittings (``pipe fittings'')

are used to connect pipe sections in piping systems where conditions

require welded connections. The subject merchandise is used where one

or more of the following conditions is a factor in designing the piping

system: (1) Corrosion of the piping system will occur if material other

than stainless steel is used; (2) contamination of the material in the

system by the system itself must be prevented; (3) high temperatures

are present; (4) extreme low temperatures are present; (5) high

pressures are contained within the system.

Pipe fittings come in a variety of shapes, with the following five

shapes the most basic: ``elbows,'' ``tees,'' ``reducers,'' ``stub

ends,'' and ``caps.'' The edges of finished pipe fittings are beveled.

Threaded, grooved, and bolted

[[Page 67856]]

fittings are excluded from this review. The pipe fittings subject to

this review are classifiable under subheading 7307.23.00 of the

Harmonized Tariff Schedule of the United States (``HTSUS''). These

HTSUS item numbers are provided for convenience and customs purposes.

The written descriptions remain dispositive.

Pipe fittings manufactured to American Society of Testing and

Materials specification A774 are included in the scope of this order.

The POR is June 1, 1996 through May 31, 1997. This review covers

sales of certain stainless steel butt-weld pipe fittings from Taiwan by

Ta Chen Stainless Pipe Co., Ltd. (``Ta Chen'').

Analysis of Comments Received

We gave interested parties an opportunity to comment on the

preliminary results. We received comments from Ta Chen, exporters of

the subject merchandise (``respondent'') and rebuttal comments from

petitioner, Flowline Division of Markovitz Enterprises Inc.

Comments

Comment 1: Ta Chen argues that the Department made a clerical

programming error in the margin calculation program by setting cost of

manufacture (``TOTCOMCV'') equal to Ta Chen's total constructed value

(``TOTCV''). Respondent argues that Ta Chen's cost of manufacture

(``TOTCOMCV'') should be set equal to Ta Chen's total cost of

manufacture (``TOTCOM''). The petitioner did not comment on this

argument.

Department's Position: We agree with respondent and have corrected

this error for the final results. The final margin program now sets the

cost of manufacture equal to total cost of manufacture. For a more

specific discussion of the change that the Department has made in its

final margin program, please see the Department's analysis memorandum

and final antidumping duty margin calculation program.

Comment 2: Ta Chen argues that inventory carrying costs associated

with time on the water should not be included in U.S. indirect selling

expenses deducted from U.S. price. It asserts that only indirect

selling expenses associated with economic activity occurring in the

United States should be deducted from U.S. price pursuant to

determining net price. Respondent states that the preliminary results

added the ocean time in transit between Ta Chen's plant in Tainan,

Taiwan and Ta Chen International's (``TCI'') warehouses in Long Beach,

California to Ta Chen's reported inventory carrying costs. It argues

that that inventory carrying cost is not associated with economic

activity in the United States, and therefore should not be included in

U.S. indirect selling expenses.

Petitioner argues that, while it is true that the amendments to the

dumping statute now only recognize those indirect selling expenses

associated with economic activity occurring in the United States, it is

not true that ``time on the water'' necessarily took place outside the

United States. Additionally, petitioner argues, the Department's

Antidumping Manual (``AD Manual'') notes that foreign inventory

carrying costs do not form part of the constructed export price

(``CEP'') deduction, and the AD Manual makes no mention of the costs

incurred once a product leaves the foreign country. Petitioner asserts

that Ta Chen revised its reported inventory carrying costs at

verification to include ``time on the water'' in the calculations,

which was accepted by the Department. They argue that the Department's

inclusion of ``time on the water'' is consistent with its past

practice, and does not constitute an unintentional error.

Department's Position: We agree with Ta Chen that the inventory

carrying costs incurred for the time on the water between Taiwan and

the United States should not be deducted from the price used to

calculate CEP. The Department has addressed this issue in the past in

Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts

Thereof From France, Germany, Italy, Japan, Romania, Singapore, Sweden,

and the United Kingdom; Final Results of Antidumping Duty

administrative Reviews, 63 FR 33320, 33344 (June 18, 1998) and Color

Picture Tubes From Japan; Final Results of Antidumping Duty

Administrative Review, 62 FR 34201, 34206 (June 25, 1997). In both

instances, the Department stated that it is clear from the Statement of

Administrative Action (``SAA'') that under section 772(d) of the Act we

should deduct from CEP only those expenses associated with commercial

activity in the United States which relate to the resale to an

unaffiliated purchaser. In Color Picture Tubes From Japan, we further

explained that the SAA indicates CEP ``is now calculated to be, as

closely as possible, a price corresponding to a price between non-

affiliated exporters and importers.'' 62 FR at 34207 (quoting SAA at

823). Section 351.402(b) of the Department's new regulations

1 codifies this principle, stating that we will make

adjustments under section 772(d) for expenses associated with

commercial activity in the United States, no matter where it was

incurred. Therefore, consistent with section 772(d) and the SAA, we

deduct only those expenses representing activities undertaken to make

the sale to the unaffiliated customer in the United States. We

ordinarily do not deduct indirect expenses incurred in selling to the

affiliated U.S. importer. See, e.g., Tapered Roller Bearings and Parts

Thereof, Finished and Unfinished, From Japan and Tapered Roller

Bearings, Four Inches or Less in Outside Diameter, and Components

Thereof, From Japan; Final Results of Antidumping Duty Administrative

Reviews and Termination in Part, 62 FR 11825, 11834 (March 13, 1997);

Gray Portland Cement and Clinker From Mexico; Final Results of

Antidumping Duty Administrative Review, 62 FR 17148, 17168 (April 9,

1997).

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\1\ Although this review was conducted under the Department's

old regulations at 19 CFR part 353, section 351.701 of the new

regulations states that the old regulations will apply to reviews

requested before the new regulations take effect to the extent the

old regulations ``were not invalidated by the URAA.'' Here, the old

regulations governing exporter sales price deductions are not in

conformity with the requirements of the URAA, therefore the new

regulations at 351.402(b) apply to this CEP deduction issue.

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We do not consider the portion of Ta Chen's inventory carrying

costs during the period of transit to be associated with commercial

activity in the United States. These expenses were incurred from the

date of exportation to the date the affiliated importer received the

subject merchandise in the United States and, therefore, relate to the

sale to Ta Chen's U.S. affiliate and not to the sale to the

unaffiliated customer. See Certain Stainless Wire Rods From France:

Amended Final Results of Antidumping Duty Administrative Review (Steel

Wire Rods), 62 FR 25915, 25916 (May 12, 1997). Accordingly, for these

final results we have not deducted such costs from the CEP.

Comment 3: Ta Chen argues that the CEP profit calculation

erroneously imputes a profit on TCI's direct expenses and commission

payments in the United States. It states that the CEP profit

calculation should only be an imputed profit on Ta Chen's indirect

selling expenses occurring in the United States, not on U.S. direct

selling expenses and commissions.

Petitioner argues that it is the Department's policy to use total

U.S. selling expenses, including direct selling expenses and

commission, in the derivation of CEP profit.

[[Page 67857]]

Department's Position: The Department agrees with petitioner. Ta

Chen argues that the Department should not impute a CEP profit on Ta

Chen's U.S. direct selling expenses and commissions. Instead, Ta Chen

asserts that the Department should only impute CEP profit on Ta Chen's

indirect selling expenses occurring in the United States. Respondent's

proposed methodology is directly contrary to the plain language of

Section 772(d)(3) of the Act. Section 772(d)(3) provides that the

Department shall reduce the starting price used to establish CEP by the

profit allocated to the expenses described in section 772(d)(1)&(2).

Section 772(d)(1) lists the following expenses:

(A) Commissions for selling the subject merchandise in the United

States;

(B) Expenses that result from, and bear a direct relationship to,

the sale, such as credit expenses, guarantees and warranties;

(C) Any selling expenses that the seller pays on behalf of the

purchaser; and

(D) Any selling expenses not deducted under * * * (A), (B), or (C)

[above].

Further, for purposes of calculating the applicable percentage,

section 772(f)(2)(B) defines total U.S. expenses as those expenses

deducted under section 772(d)(1)&(2). Therefore, contrary to Ta Chen's

argument, the plain language of the statute directs the Department to

deduct from CEP the profit allocated to all U.S. expenses, including

U.S. direct selling expenses and commissions. Thus, the Department has

not changed the CEP profit methodology used in the Preliminary Results.

Final Results of Review

As a result of this review, we determine that the following margin

exists for the period June 1, 1996 through May 31, 1997:

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

Weighted-

average

Producer/manufacturer/exporter margin

(percent)

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Ta Chen.................................................... 0.34

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The Department shall determine, and the U.S. Customs Service shall

assess, antidumping duties on all appropriate entries. The Department

shall issue appraisement instructions directly to the Customs Service.

For assessment purposes, we have calculated importer-specific duty

assessment rates for the merchandise based on the ratio of the total

amount of antidumping duties calculated for the examined sales during

the POR to the total entered value of sales examined during the POR. As

a result of this review, we have determined that the importer-specific

duty assessment rate is necessary.

Furthermore, the following deposit requirements shall be effective

upon publication of this notice of final results of review for all

shipments of certain stainless steel butt-weld pipe fittings from

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

after the publication date, as provided for by section 751(a)(1) of the

Tariff Act: (1) No cash deposit will be required for the reviewed

company because its rate, stated above, is de minimis; (2) for

previously investigated or reviewed 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, or the original LTFV investigations, but the

manufacturer is, the cash deposit rate will be the rate established for

the most recent period for the manufacturer of the merchandise; and (4)

if neither the exporter nor the manufacturer is a firm covered in these

reviews, the cash deposit rate for this case will continue to be 51.03

percent, the ``All Others'' rate made effective by the LTFV

investigation. These deposit requirements shall remain in effect until

publication of the final results of the next administrative review.

This notice serves as a final 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 the subsequent

assessment of double antidumping duties.

This notice also serves as a reminder to parties subject to

administrative protective order (``APO'') of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with section 353.34(d) of the Department's

regulations. Timely notification of return/destruction of APO materials

or conversion to judicial protective order is hereby requested. Failure

to comply with the regulations and the terms of an APO is a

sanctionable violation.

This administrative review and notice are in accordance with

sections 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 1675(a)(1) and

1677(f)(i)(1)).

Dated: December 2, 1998.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 98-32728 Filed 12-8-98; 8:45 am]

BILLING CODE 3510-DS-P