[Federal Register: September 11, 2007 (Volume 72, Number 175)]
[Notices]
[Page 51793-51798]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11se07-33]
[[Page 51793]]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-825]
Oil Country Tubular Goods, Other Than Drill Pipe, from Korea:
Preliminary Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration, U.S.
Department of Commerce.
SUMMARY: In response to requests filed by U.S. Steel Corporation (U.S.
Steel) (the ``petitioner''), SeAH Steel Corporation (``SeAH''), Husteel
Co, Ltd (``Husteel'') and Nexteel Co., Ltd (``Nexteel'') (collectively,
the ``respondents''), the U.S. Department of Commerce (``the
Department'') is conducting an administrative review of the antidumping
duty order on oil country tubular goods, other than drill pipe
(``OCTG''), from Korea. This review covers the following producers/
exporters: SeAH, Husteel, and Nexteel. The period of review (``POR'')
is August 1, 2005 through July 24, 2006.
We preliminarily find that Husteel made sales at less than normal
value (``NV''), and Nexteel and SeAH did not sell subject merchandise
at less than NV during the POR. If these preliminary results are
adopted in the final results of this administrative review, we will
instruct U.S. Customs and Border Protection (CBP) to assess antidumping
duties on Husteel's entries of merchandise during the POR, and to
liquidate Nexteel's and SeAH's entries during the POR without regard to
antidumping duties. The preliminary dumping margins are listed below in
the section entitled ``Preliminary Results of Review.''
EFFECTIVE DATE: September 11, 2007.
FOR FURTHER INFORMATION CONTACT: Scott Lindsay, AD/CVD Operations,
Office 6, Import Administration, International Trade Administration,
U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, DC 20230; telephone: (202) 482-0780.
SUPPLEMENTARY INFORMATION:
Background
On August 11, 1995, the Department published in the Federal
Register an antidumping duty order on OCTG from Korea (60 FR 41058). On
August 1, 2006, the Department published the notice of opportunity to
request an administrative review of the antidumping order on OCTG from
Korea. See Antidumping or Countervailing Duty Order, Finding, or
Suspended Investigation; Opportunity To Request Administrative Review,
70 FR 43441 (August 1, 2006). On August 31, 2006, the Department
received a properly filed, timely request for an administrative review
of Husteel and SeAH from petitioner and a request from SeAH, Husteel,
and Nexteel for a review of their sales. On September 29, 2006, the
Department published a notice of initiation for this antidumping duty
administrative review. See Notice of Initiation of Antidumping and
Countervailing Duty Administrative Reviews, 71 FR 57465 (September 29,
2006).
On October 26, 2006, the Department issued questionnaires\1\ to
Husteel, SeAH, and Nexteel. All three companies submitted Section A
responses on December 14, 2006, and submitted their Section B-D
responses on January 3, 2007. The Department issued supplemental
questionnaires to Husteel, SeAH, and Nexteel on April 11, 2007. The
Department received responses from Husteel and Nexteel on May 2. 2007,
and from SeAH on May 8, 2007.
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\1\ Section A of the questionnaire requests general information
concerning a company's corporate structure and business practices,
the merchandise under investigation that it sells, and the manner in
which it sells that merchandise in all of its markets. Section B
requests a complete listing of all home market sales, or, if the
home market is not viable, of sales in the most appropriate third-
country market (this section is not applicable to respondents in
non-market economy cases). Section C requests a complete listing of
U.S. sales. Section D requests information on the cost of production
of the foreign like product and the constructed value of the
merchandise under investigation. Section E requests information on
further manufacturing.
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On May 7, 2007, the Department published a notice extending the
deadline for the preliminary results of this administrative review from
May 3, 2007 until no later than August 31, 2007. See Oil Country
Tubular Goods, Other than Drill Pipe, from Korea: Extension of Time
Limit for Preliminary Results of Antidumping Duty Administrative
Review, 72 FR 25745 (May 11, 2007).
Scope of the Order
The products covered by this order are OCTG, hollow steel products
of circular cross-section, including only oil well casing and tubing,
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 or tubing pipe containing
10.5 percent or more of chromium, or drill pipe. The products subject
to this order are currently classified in the Harmonized Tariff
Schedule of the United States (``HTSUS'') under sub-headings:
7304.29.10.10, 7304.29.10.20, 7304.29.10.30, 7304.29.10.40,
7304.29.10.50, 7304.29.10.60, 7304.29.10.80, 7304.29.20.10,
7304.29.20.20, 7304.29.20.30, 7304.29.20.40, 7304.29.20.50,
7304.29.20.60, 7304.29.20.80, 7304.29.30.10, 7304.29.30.20,
7304.29.30.30, 7304.29.30.40, 7304.29.30.50, 7304.29.30.60,
7304.29.30.80, 7304.29.40.10, 7304.29.40.20, 7304.29.40.30,
7304.29.40.40, 7304.29.40.50, 7304.29.40.60, 7304.29.40.80,
7304.29.50.15, 7304.29.50.30, 7304.29.50.45, 7304.29.50.60,
7304.29.50.75, 7304.29.60.15, 7304.29.60.30, 7304.29.60.45,
7304.29.60.60, 7304.29.60.75, 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. The HTSUS sub-headings
are provided for convenience and customs purposes. The written
description remains dispositive of the scope of the order.
Analysis
Product Comparisons
In accordance with section 771(16) of the Tariff Act of 1930, as
amended (``the Act''), we considered all products manufactured by SeAH
and Nexteel that are covered by the description contained in the
``Scope of the Order'' section above and that were sold in the
comparison market during the POR, to be the foreign like product for
purposes of determining the appropriate product comparisons to U.S.
sales. See ``Selection of Comparison Market'' section below. Where SeAH
made no sales of identical merchandise in the comparison market to
compare to U.S. sales, we compared U.S. sales to the most similar
foreign like product on the basis of the characteristics listed in
Appendix V of the Department's October 26, 2005 antidumping
questionnaire. Nexteel's comparison market sales were identical to its
U.S. sales of subject merchandise during the POR, so we did not need to
match its U.S. sales to the most similar foreign like product..
Because neither Husteel's home market sales nor its third country
sales pass the viability test, we are using constructed value (``CV'')
as the basis for normal value (``NV'') for Husteel. See
[[Page 51794]]
``Selection of Comparison Market'' section, below.
Date of Sale
It is the Department's practice to use the invoice date as the date
of sale. However, 19 CFR 351.401(i) states that the Secretary may use a
date other than the date of invoice if the Secretary is satisfied that
a different date better reflects the date on which the exporter or
producer establishes the material terms of sale.'' See 19 CFR
351.401(i); see also Allied Tube and Conduit Corp. v. United States,
132 F. Supp. 2d 1087,1090-1093 (CIT 2001).
U.S. Sales: Husteel, SeAH, and Nexteel each reported that the
material terms of their respective U.S. sales are subject to change
until they issue the invoice to the unaffiliated U.S. customer.
However, we note that, for both HuSteel and SeAH, shipment date always
precedes the date that Husteel and SeAH issue their invoice to the U.S.
unaffiliated customer. We also find that for some of Nexteel's U.S.
sales, shipment dates precedes invoice date. Thus, to the extent that
shipment occurs prior to invoice date, we are following our practice of
using shipment date as date of sale. See, e.g., Magnesium Metal from
the Russian Federation: Notice of Final Determination of Sales at Less
Than Fair Value, 70 FR 9041 (February, 24, 2005), and accompanying
Magnesium Metal from the Russian Federation: Notice of Final
Determination of Sales at Less Than Fair Value Issues and Decisions
Memorandum at Comment 14. For Nexteel's sales where Nexteel issues the
invoice prior to shipping the merchandise, we will use invoice date as
the date of sale.
Comparison Market Sales: Since we are using CV for purposes of NV
for HuSteel, the issue of appropriate date of sale in the comparison
market is moot for HuSteel. For their respective sales to Canada,
Nexteel and SeAH reported that the material terms of sale are subject
to change until they issue the invoice to their respective unaffiliated
Canadian customers. We find that Nexteel issued its invoices to its
Canadian customers prior to shipment. As such we will us invoice date
as date of sale for Nexteel's Canadian sales. However, the Department
finds that SeAH's shipment date always precedes the date it issues its
invoice to the unaffiliated Canadian customer. Thus, because SeAH's
shipment occurs prior to invoice date, we are following our practice of
using shipment date as date of sale. See, e.g., Magnesium Metal from
the Russian Federation: Notice of Final Determination of Sales at Less
Than Fair Value, 70 FR 9041 (February, 24, 2005), and accompanying
Magnesium Metal from the Russian Federation: Notice of Final
Determination of Sales at Less Than Fair Value Issues and Decisions
Memorandum at Comment 14.
Normal Value Comparisons
To determine whether Husteel's, SeAH's, or Nexteel's sales of
subject merchandise to the United States were made at less than NV, we
compared each company's constructed export price (CEP), or export price
(EP) to the NV, as described in theConstructed Export
Price'' or ``Export Price'' and ``Normal Value'' sections of this
notice, in accordance with section 777A(d)(2) of the Act.
Selection of Comparison Market
The Department determines the viability of a comparison market by
comparing the aggregate quantity of comparison market sales to U.S.
sales. A home market is not considered a viable comparison market if
the aggregate quantity of sales of the foreign like product in that
market amounts to less than five percent of the quantity of sales of
subject merchandise to the United States during the POR. See section
773(a)(1)(C)(ii) of the Act; see also 19 CFR 351.404(b). Husteel, SeAH,
and Nexteel each reported that the aggregate quantity of sales of the
foreign like product in Korea during the POR amounted to less than five
percent of the quantity of each company's sales of subject merchandise
to the United States during the POR.
Husteel: In its January 3, 2007 questionnaire response, Husteel
reported having no sales of OCTG to any other countries besides the
United States during the POR. Since Husteel has no third country sales
of foreign-like product during the POR, the Department is using CV for
Husteel as the basis for NV for this review based on Husteel's cost of
production (``COP''), in accordance with section 773(a)(4) of the Act.
SeAH: In its January 3, 2007 questionnaire response, SeAH reported
no home market sales of OCTG during the POR. It reported sales of OCTG
to Canada, Indonesia, and China during the POR. Since the quantity of
foreign like product sold by SeAH to Canada was more than five percent
and the quantities sold to Indonesia and China were less than five
percent of the quantity of subject merchandise sold to the United
States, the Department determined that only Canada qualified as a
viable comparison market in accordance with section 773(a)(1) of the
Act. Therefore, we are basing NV on sales to Canada except where there
were no usable product matches. In those instances, in accordance with
section 773(a)(4) of the Act, the Department used CV as the basis for
NV.
Nexteel: In its January 9, 2007 questionnaire response, Nexteel
reported sales of OCTG to Canada and the United States during the POR.
Since the quantity of foreign like product sold by Nexteel to Canada
was more than five percent of the quantity of subject merchandise sold
to the United States, the Department determined that only Canada
qualified as a viable comparison market based on the criterion
established in section 773(a)(1) of the Act. Because these sales to
Canada were identical to all U.S. sales we are basing NV on sales to
Canada.
United States Price/Constructed Export Price and Export Price
In accordance with section 772(b) of the Act, CEP is the price at
which the subject merchandise is first sold (or agreed to be sold) in
the United States before or after the date of importation by or for the
account of the producer or exporter of such merchandise, or by a seller
affiliated with the producer or exporter, to a purchaser not affiliated
with the producer or exporter, as adjusted under sections 772(c) and
(d) of the Act. In Husteel's and SeAH's questionnaire responses, both
companies classified their export sales of OCTG to the United States as
CEP sales. In accordance with section 772(a) of the Act, EP is defined
as ``the price at which the subject merchandise is first sold (or
agreed to be sold) before the date of importation by the producer or
exporter of subject merchandise outside of the United States to an
unaffiliated purchaser in the United States or to an unaffiliated
purchaser for exportation to the United States . . . ,'' as adjusted
under subsection (c). For purposes of this review, Nexteel classified
all of its U.S. sales as EP sales.
Husteel: We preliminarily determine that all of Husteel's export
sales of OCTG to the United States are properly classified as CEP sales
because they were made for the account of Husteel by its affiliate in
the U.S., Husteel USA. Husteel reported one channel of distribution in
the U.S. market: ``produced to order'' sales, shipped directly from
Korea to the unaffiliated U.S. customers.
The Department calculated Husteel's starting price as its gross
unit price to its unaffiliated U.S. customers, taking into account,
where necessary, billing adjustments and discounts, pursuant to section
772(c)(1) of the Act. The
[[Page 51795]]
Department made deductions from the starting price for movement
expenses, including foreign inland freight, foreign and U.S. brokerage
and handling, international freight, marine insurance and U.S. customs
duties in accordance with section 772(c)(2) of the Act. See Memorandum
from Scott Lindsay, Case Analyst, to the File: Analysis of Husteel Co.,
Ltd. (``Husteel'') for the Preliminary Results of the Administrative
Review of Oil Country Tubular Goods, Other Than Drill Pipe from Korea,
dated August 31, 2007 (``Husteel's Preliminary Analysis Memo''), on
file in the Central Records Unit (``CRU''), which can also be accessed
directly on the Web at http://ia.ita.doc.gov. In accordance with
section 772(d)(1) of the Act, the Department also deducted U.S. credit
expenses, inventory carrying costs, and indirect selling expenses to
derive Husteel's net U.S. price. We also deducted CEP profit in
accordance with section 772(d)(3) of the Act.
SeAH: We preliminarily determine that all of SeAH's export sales of
OCTG to the United States are properly classified as CEP sales because
they were made for the account of SeAH by SeaAH's affiliate in the
U.S., PPA. SeAH reported one channel of distribution in the U.S.
market: merchandise was shipped by SeAH to PPA, then sold out of
inventory by PPA to the unaffiliated customers. Many of SeAH's sales to
the United States are further manufactured by an affiliated U.S.
company.
The Department calculated SeAH's starting price as its gross unit
price to its unaffiliated U.S. customers, taking into account, where
necessary, billing adjustments and early payment discounts, pursuant to
section 772(c)(1) of the Act. Where applicable, the Department made
deductions from the starting price for movement expenses, including
foreign inland freight, foreign and U.S. brokerage and handling,
international freight, marine insurance and U.S. customs duties in
accordance with section 772(c)(2) of the Act. See Memorandum from Scott
Lindsay, Case Analyst, to the File: Analysis of SeaH Steel Corporation
(``SeAH'') for the Preliminary Results of the Administrative Review of
Oil Country Tubular Goods, Other Than Drill Pipe from Korea, dated
August 31, 2007 (``SeAH's Preliminary Analysis Memo''), on the record
of this review and on file in the CRU. In accordance with section
772(d)(1) of the Act, the Department also deducted U.S. credit
expenses, inventory carrying costs, and indirect selling expenses
incurred in the United States. We also deducted the cost of further
manufacturing, where applicable, in accordance with section 772(d)(2)
of the Act. In addition, we deducted CEP profit in accordance with
section 772(d)(3) of the Act.
Nexteel: Nexteel has reported that it sold subject merchandise to
importers directly to unaffiliated customers in the U.S. and to
unaffiliated resellers, and that it did not make any U.S. sales through
an affiliated U.S. importer. Therefore, we preliminarily determine that
Nexteel's transactions were EP sales.
We calculated EP in accordance with section 772(a) of the Act. We
based EP on Nexteel's CNF price to its unaffiliated U.S. customers. We
then made appropriate deductions for domestic inland freight from
warehouse to port, domestic brokerage and handling, and international
freight pursuant to section 772(c) of the Act. See Memorandum from
Scott Lindsay, Case Analyst, to the File: Analysis of Nexteel Co., Ltd.
(``Nexteel'') for the Preliminary Results of the Administrative Review
of Oil Country Tubular Goods, Other Than Drill Pipe from Korea, dated
August 31, 2007 (``Nexteel's Preliminary Analysis Memo''), on the
record of this review and on file in the CRU.
Normal Value
SeAH: Where appropriate, we made adjustments to NV in accordance
with section 773(a)(6) of the Act. From the starting price, we deducted
movement expenses, including foreign inland freight, third country
brokerage, international freight, and marine insurance as well as
direct selling expenses, such as credit expenses, and comparison market
packing expenses. We made further adjustments for differences in costs
attributable to differences in physical characteristics of merchandise
in accordance with section 773(a)(6)(C)(ii) of the Act. We also made a
CEP offset in accordance with section 773(a)(7)(B) of the Act (see
``Level of Trade/CEP Offset'' section below).\2\ Finally, the
Department added U.S. packing expenses to calculate the foreign unit
price in dollars (``FUPDOL'') to use as the NV.
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\2\ The CEP offset is equal to the lesser of the total weighted
average comparison market inventory carrying costs and indirect
selling expenses or the sum of indirect selling expenses and
inventory carrying costs for U.S. sales.
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Nexteel: Where appropriate, we made adjustments to NV in accordance
with section 773(a)(6) of the Act. From the starting price, we deducted
movement expenses, including inland freight from plant to port of
export; international freight; and domestic brokerage and handling,
direct selling expenses such as credit expenses and bank charges, as
well as comparison market packing expenses. Finally, the Department
added U.S. packing expenses to calculate the foreign unit price in
dollars (``FUPDOL'') to use as the NV.
Cost Of Production Analysis
Because we are using CV for Husteel's NV, and there has been no
cost allegation for Nexteel, we are only examining whether SeAH's sales
to its comparison third country market are below the cost of
production.
Pursuant to section 773(b)(1) of the Act, we examined whether
SeAH's sales in the comparison market were made at prices below the
COP. We compared sales of the foreign like product in the comparison
market with model-specific COP figures in the POR. In accordance with
section 773(b)(3) of the Act, we calculated COP based on the sum of the
costs of materials and fabrication employed in producing the foreign
like product, plus selling, general and administrative (SG&A) expenses,
and financial expenses and packing. In our sales-below-cost analysis,
we used comparison market sales and COP information provided by SeAH in
its questionnaire responses. See SeAH's January 3, 2007 section D
Questionnaire Response.
We compared the weighted-average COPs to third country sales of the
foreign like product, as required under section 773(b) of the Act, in
order to determine whether these sales had been made at prices below
the COP. In determining whether to disregard third-country sales made
at prices below the COP, we examined whether such sales were made (1)
within an extended period of time in substantial quantities, and (2) at
prices which permitted the recovery of all costs within a reasonable
period of time in the normal course of trade, in accordance with
sections 773(b)(1)(A) and (B) of the Act.\3\ On a product-specific
basis, we compared the COP to third-country prices, less any movement
charges, discounts and rebates, and direct and indirect selling
expenses. See Treatment of Adjustments and Selling Expenses in
Calculating the Cost of Production and Constructed
[[Page 51796]]
Value Import Policy Bulletin (March 25, 1994).
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\3\ Section 773(b)(2)(ii)(B-C) of the Act defines extended
period of time as a period that is normally 1 year, but not less
than 6 months, and substantial quantities as sales made at prices
below the cost of production that have been made in substantial
quantities if (i) the volume of such sales represents 20 percent or
more of the volume of sales under consideration for the
determination of normal value, or (ii) the weighted average per unit
price of the sales under consideration for the determination of
normal value is less than the weighted average per unit cost of
production for such sales.
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Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of a respondent's sales of a given model were at prices less
than the COP, we did not disregard any below-cost sales of that model
because the below-cost sales were not made in substantial quantities
within an extended period of time. Where 20 percent or more of a
respondent's sales of a given model were at prices less than the COP,
we disregarded the below-cost sales because they were made in
substantial quantities within an extended period of time, in accordance
with sections 773(b)(2)(B) and (C) of the Act. Because we compared
prices to average costs in the POR, we also determined that the below-
cost prices did not permit the recovery of costs within a reasonable
period of time, in accordance with section 773(b)(1)(B) of the Act.
In certain instances, we found that more than 20 percent of SeAH's
third country sales of a given model(s) during the POR were at prices
below the COP, and, in addition, the below-cost sales of the product
were at prices which would not permit recovery of all costs within a
reasonable time period, in accordance with section 773(b)(2)(D) of the
Act. We therefore excluded the below-cost sales and used the remaining
sales, if any, or went to CV, as the basis for determining NV, in
accordance with section 773(b)(1) of the Act.
Constructed Value
Husteel: We used CV as the basis for NV for all sales because, as
discussed above, Husteel had no viable comparison market in accordance
with section 773(a)(4) of the Act. We calculated CV in accordance with
section 773(e) of the Act. We added the costs of materials, labor, and
factory overhead to calculate the cost of manufacturing (``COM'') in
accordance with section 773(e)(1) of the Act. We then added interest
expenses; selling, general and administrative expenses (``SG&A'');
profit; and U.S. packing expenses to COM to calculate the CV in
accordance with sections 773(e)(2) and (3) of the Act. In accordance
with section 773(e)(2)(B)(iii) of the Act, we calculated profit and
selling expenses based on SeAH's 2005 public financial statements. See,
e.g., Oil Country Tubular Goods, Other Than Drill Pipe, from Korea:
Final Results of Antidumping Duty Administrative Review, 72 FR 9924
(March 6, 2007).
SeAH: We used CV as the basis for NV for sales in which there were
no usable contemporaneous sales of the foreign like product in the
comparison market, in accordance with section 773(a)(4) of the Act. We
calculated CV in accordance with section 773(e) of the Act. We added
reported materials, labor, and factory overhead costs to derive the
COM, in accordance with 773(e)(1) of the Act. We then added interest
expenses, SG&A, profit, and U.S. packing expenses to derive the CV, in
accordance with sections 773(e)(2) and (3) of the Act. We calculated
profit based on the total value of sales and total COP reported by SeAH
in its questionnaire response, in accordance with section 773(e)(2)(A)
of the Act. Finally, we deducted comparison market credit expenses from
CV to calculate the FUPDOL, pursuant to section 773(e)(2)(b) of the
Act.
Level of Trade/CEP Offset
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determined NV based on sales made in the comparison
market at the same level of trade (``LOT'') as the CEP sales. The NV
LOT is based on the starting price of the sales in the comparison
market. In Micron Technology, Inc. v. United States, 243 F.3d 1301,
1315 (Fed. Cir. 2001) (``Micron Technology''), the Court of Appeals for
the Federal Circuit held that the statute unambiguously requires
Commerce to remove the selling activities set forth in section 772(d)
of the Act from the CEP starting price prior to performing its LOT
analysis. As such, for CEP sales, the U.S. LOT is based on the starting
price of the sales, as adjusted under section 772(d) of the Act.
To determine whether NV sales are at a different LOT than the CEP
sales, we examine stages in the marketing process and selling functions
along the chain of distribution between the producer and the customer.
If the comparison market sales are at different levels of trade, and
the difference in levels of trade affects price comparability, as
manifested in a pattern of consistent price differences, we make an LOT
adjustment under section 773(a)(7)(A) of the Act. For CEP sales, if the
NV level is more remote from the factory than the CEP level and there
is no basis for determining whether the difference in the levels
between NV and CEP affects price comparability, we adjust NV under
section 773(A)(7)(B) of the Act (the CEP offset provision). See, e.g.,
Notice of Final Determination of Sales at Less Than Fair Value: Certain
Cut-to-Length Carbon Steel Plate From South Africa, 62 FR 61731, 61732
(November 19, 1997) (``South African Plate Final'').
Sales are made at different LOTs if they are made at different
marketing stages (or their equivalent). See 19 CFR 351.412(c)(2).
Substantial differences in selling activities are a necessary, but not
sufficient, condition for determining that there is a difference in the
stages of marketing. Id. In order to determine whether the comparison
sales were at different stages in the marketing process than the U.S.
sales, we reviewed the distribution system in each market (i.e., the
channel of distribution),\4\ including selling functions,\5\ class of
customer (customer category), and the level of selling expenses for
each type of sale.
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\4\ The marketing process in the United States and in the
comparison markets begins with the producer and extends to the sale
to the final user or consumer. The chain of distribution between the
two may have many or few links, and the respondents' sales occur
somewhere along this chain. In performing this evaluation, we
considered the narrative responses of each respondent to properly
determine where in the chain of distribution the sale occurs.
\5\ Selling functions associated with a particular chain of
distribution help us to evaluate the level(s) of trade in a
particular market. For purposes of this preliminary determination,
we have organized the common selling functions into four major
categories: sales process and marketing support, technical service,
freight and delivery, and inventory maintenance.
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Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying
levels of trade for CEP and comparison market sales (i.e., NV based on
either home market or third country prices), we consider the starting
prices before any adjustments. Consistent with Micron Technology, 243
F.3d at 1315, the Department will adjust the U.S. LOT, pursuant to
section 772(d) of the Act, prior to performing the LOT analysis, as
articulated by 19 CFR 351.412.
When the Department is unable to match U.S. sales to sales of the
foreign like product in the comparison market at the same LOT as the
CEP sales, the Department may compare the U.S. sale to sales at a
different LOT in the comparison market. In comparing CEP sales to sales
at a different LOT in the comparison market, where available data make
it practicable, we make an LOT adjustment under section 773(a)(7)(A) of
the Act.
In determining whether separate LOTs exist, we obtained information
from SeAH regarding the marketing stages for the reported U.S. and
comparison market sales, including a description of the selling
activities performed for each channel of distribution. Generally, if
the reported LOTs are the same, the functions and activities of the
seller at each level should be similar. Conversely, if a party reports
that LOTs are different for different groups of sales, the selling
functions and activities of the seller for each group should be
dissimilar.
[[Page 51797]]
In the current review, SeAH reported one channel of distribution in
the Canadian comparison market. All sales to the Canadian market were
made between PPA and the unaffiliated customer and shipped directly to
the customer from Korea. The selling functions performed by SeAH and
PPA for the Canadian market were identical for each customer. As such,
we preliminarily find that all of SeAH's sales in the Canadian market
were made at one LOT.
SeAH reported one channel of distribution for its sales to the
United States. We examined the selling functions performed by SeAH and
PPA for the U.S. sales and found that all sales of the subject
merchandise were inventoried and most were further manufactured by PPA
in the United States before being sold to the unaffiliated customer.
The selling functions performed by SeAH and PPA in the U.S. market were
identical for each customer. Therefore, we preliminarily find that SeAH
made its U.S. sales at one LOT. SeAH claimed that once adjustments for
PPA's activities for U.S. sales are made, pursuant to section 772(d) of
the Act, the LOT in the U.S. market is less advanced than the Canadian
LOT.
To determine whether NV is at a different LOT than the U.S.
transactions, the Department compared SeAH's selling activities for the
Canadian market with those for the U.S. market. We grouped SeAH's
selling activities for the Canadian market and U.S. market into the
following categories: selling and marketing, technical service,
freight, and inventory. See SeAH's Section A questionnaire response at
Exhibit A-15. In accordance with Micron Technology, we removed the
selling activities set forth in section 772(d) of the Act from the U.S.
LOT prior to performing the LOT analysis. See SeAH's Preliminary
Analysis Memo. After removing the appropriate selling activities, we
compared the U.S. LOT to the Canadian LOT. Based on our analysis, we
find that the U.S. sales are at a less advanced LOT than the Canadian
sales. See SeAH's Preliminary Analysis Memo.
Therefore, because the sales in Canada are being made at a more
advanced LOT than the sales to the United States, an LOT adjustment is
appropriate for the Canadian sales in this review. However, as SeAH
sold only through one channel of distribution to Canada, there is not
sufficient data to evaluate whether an LOT adjustment is warranted.
Therefore, we made a CEP offset in accordance with section 773(a)(7)(B)
of the Act and 19 CFR 351.412(f). This offset is equal to the amount of
indirect selling expenses and inventory carrying costs incurred in the
comparison market up to but not exceeding the sum of indirect selling
expenses and inventory carrying costs from the U.S. price in accordance
with section 772(d)(1)(D) of the Act.
Level of Trade/EP Sales
To determine whether NV sales are at a different LOT than EP sales,
we examine stages in the marketing process and selling functions along
the chain of distribution between the producer and the unaffiliated
customer in the comparison market. If the comparison market sales are
at a different LOT, and the difference affects price comparability, as
manifested in a pattern of consistent price differences between the
sales on which NV is based and comparison-market sales at the LOT of
the export transaction, we make an LOT adjustment under section
773(a)(7)(A) of the Act.
In this current review, Nexteel claims a single LOT in the
comparison market and a single LOT in the U.S. market. In our original
questionnaire, we asked Nexteel to provide a complete list of all the
selling activities performed and services offered in the U.S. market
and the comparison market for each claimed LOT. Pursuant to 19 CFR
351.412(c)(2), substantial differences in selling activities are a
necessary condition for determining there is a difference in the stage
of marketing. While Nexteel reported two U.S. distribution channels, we
find that there are not significant differences in selling functions
offered in the two U.S. distribution channels. As such, we find that a
single LOT exists in the United States. See Nexteel's Preliminary
Analysis Memo.
Currency Conversions
We made currency conversions in accordance with section 773A of the
Act based on the exchange rates in effect on the dates of the U.S.
sales as certified by the Federal Reserve Bank of New York.
Preliminary Results of Review
As a result of this review, we preliminarily find that the
following weighted average dumping margins exist:
------------------------------------------------------------------------
Manufacturer/Exporter Margin
------------------------------------------------------------------------
SeAH Steel Corporation.............................. 0.30% (de minimis)
Husteel Co., Ltd.................................... 0.64%
Nexteel Co., Ltd.................................... 0.00%
------------------------------------------------------------------------
Cash Deposit Requirements
Pursuant to section 751(d)(2) of the Act and 19 CFR
351.222(i)(2)(i), the Department revoked this order and notified U.S.
Customs and Border Protection (CBP) to discontinue suspension of
liquidation and collection of cash deposits on entries of the subject
merchandise entered or withdrawn from warehouse on or after July 25,
2006, the effective date of revocation of this antidumping duty AD
order. See Oil Country Tubular Goods from Argentina, Italy, Japan,
Korea, and Mexico; Revocation of Antidumping Duty Orders Pursuant to
Second Five-year (Sunset) Reviews, 72 FR 34442-34443 (June 22, 2007).
Duty Assessment
Upon publication of the final results of this review, the
Department shall determine and CBP shall assess antidumping duties on
all appropriate entries made prior to the effective date of the
revocation, July 25, 2006. Pursuant to 19 CFR 351.212(b)(1), the
Department calculates an assessment rate for each importer of the
subject merchandise for each respondent. HuSteel and SeAH each made all
their sales to the United States through an affiliated importer.
HuSteel and SeAH have reported entered values for all of their
respective sales of subject merchandise to the United States during the
POR. We have compared the entered values reported by HuSteel and SeAH
with the entered values that they reported to CBP on their customs
entries and preliminarily find that HuSteel's and SeAH's reported
entered values are reliable. See Husteel's Preliminary Analysis Memo
and SeAH's Preliminary Analysis Memo. Therefore, for Husteel, in
accordance with 19 CFR 351.212(b)(1), we will calculate importer-
specific duty assessment rates on the basis of the ratio of the total
amount of antidumping duties calculated for the examined sales and the
total entered value of the examined sales. These rates will be assessed
uniformly on all entries the respective importers made during the POR
if these preliminary results are adopted in the final results of
review. For SeAH, if the preliminary results remain unchanged in the
final results, we will instruct CBP to liquidate SeAH's entries of
subject merchandise during the POR without regard to antidumping
duties.
Nexteel did not act as importer of record on its sales to the
United States and thus did not report the entered value for any of
their respective sales of subject merchandise to the United States
during the POR. Therefore, for Nexteel we have calculated an entered
value. In accordance with 19 CFR 351.106(c)(s), if the preliminary
results remain unchanged in the final results,
[[Page 51798]]
we will instruct CBP to liquidate Nexteel's entries of subject
merchandise during the POR without regard to antidumping duties. See
Nexteel's Preliminary Analysis Memo. The Department intends to issue
assessment instructions to CBP 15 days after the date of publication of
the final results of review.
The Department clarified its ``automatic assessment'' regulation on
May 6, 2003. See Notice of Policy Concerning Assessment of Antidumping
Duties, 68 FR 23954 (May 6, 2003) (Assessment Policy Notice). This
clarification will apply to entries of subject merchandise during the
period of review produced by companies included in these final results
of reviews for which the reviewed companies did not know that the
merchandise it sold to the intermediary (e.g., a reseller, trading
company, or exporter) was destined for the United States. In such
instances, we will instruct CBP to liquidate unreviewed entries at the
all-others rate if there is no rate for the intermediary involved in
the transaction. See the Assessment Policy Notice for a full discussion
of this clarification.
Public Comment
Pursuant to 19 CFR 351.224(b), the Department will disclose to any
party to the proceeding the calculations performed in connection with
these preliminary results within five days after the date of
publication of this notice. Pursuant to 19 CFR 351.309, interested
parties may submit written comments in response to these preliminary
results. Unless extended by the Department, case briefs are to be
submitted within 30 days after the date of publication of this notice.
Rebuttal briefs, limited to arguments raised in case briefs, may be
submitted no later than five days after the time limit for filing case
briefs. Parties who submit arguments in this proceeding are requested
to submit with the argument: 1) a statement of the issues; 2) a brief
summary of the argument; and 3) a table of authorities. Case and
rebuttal briefs must be served on interested parties in accordance with
19 CFR 351.303(f).
Also, pursuant to 19 CFR 351.310(c), within 30 days of the date of
publication of this notice, interested parties may request a public
hearing on arguments to be raised in the case and rebuttal briefs.
Unless the Secretary specifies otherwise, the hearing, if requested,
will be held two days after the date for submission of rebuttal briefs.
Parties will be notified of the time and location. The Department will
publish the final results of this administrative review, including the
results of its analysis of issues raised in any case brief, rebuttal
brief, or hearing no later than 120 days after publication of these
preliminary results, unless extended. See 19 CFR 351.213(h).
Notification to Importers
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 351.402(f) 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.
These preliminary results of administrative review and this notice
are issued and published in accordance with sections 751(a)(1) and
777(I)(1) of the Act.
Dated: August 31, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-17850 Filed 9-10-07; 8:45 am]
BILLING CODE 3510-DS-S