[Federal Register: January 15, 2008 (Volume 73, Number 10)]
[Notices]
[Page 2445-2456]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15ja08-25]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-910]
Circular Welded Carbon Quality Steel Pipe from the People's
Republic of China: Notice of Preliminary Determination of Sales at Less
Than Fair Value and Postponement of Final Determination
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: January 15, 2008.
SUMMARY: We preliminarily determine that circular welded carbon quality
steel pipe (``CWP'') from the People's Republic of China (``PRC'') is
being, or is likely to be, sold in the United States at less than fair
value (``LTFV''), as provided in section 733 of the Tariff Act of 1930,
as amended (the ``Act''). The estimated margins of sales at less than
fair value (``LTFV'') are shown in the ``Preliminary Determination''
section of this notice. Pursuant to requests from interested parties,
we are postponing for 60 days the final determination and extending
provisional measures from a four-month period to not more than six
months. Accordingly, we will make our final determination not later
than 135 days after publication of the preliminary determination.
FOR FURTHER INFORMATION CONTACT: Thomas Martin or Maisha Cryor, AD/
[[Page 2446]]
CVD Operations, Office 4, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC, 20230; telephone: (202) 482-
3936 and (202) 482-5831, respectively.
SUPPLEMENTARY INFORMATION:
Background
On June 7, 2007, the Department of Commerce (the ``Department'')
received a petition on imports of CWP from the PRC filed in proper form
by Allied Tube & Conduit, Sharon Tube Company, IPSCO Tubulars, Inc.,
Western Tube & Conduit Corporation, Northwest Pipe Company, Wheatland
Tube Co., i.e., the Ad Hoc Coalition For Fair Pipe Imports From China,
and the United Steelworkers (collectively, the ``petitioners'') on
behalf of the domestic industry producing CWP. The Department initiated
this investigation on June 27, 2007. See Initiation of Antidumping Duty
Investigation: Circular Welded Carbon Quality Steel Pipe from the
People's Republic of China, 72 FR 36663 (July 5, 2007) (``Initiation
Notice''). Additionally, in the Initiation Notice, the Department
notified parties of the application process by which exporters and
producers may obtain separate-rate status in non-market economy
(``NME'') investigations. See Initiation Notice 72 FR at 36666. The
process requires exporters and producers to submit a separate-rate
status application. See Policy Bulletin 05.1: Separate-Rates Practice
and Application of Combination Rates in Antidumping Investigations
involving Non-Market Economy Countries, (April 5, 2005), (``Policy
Bulletin 05.1'') available at http://ia.ita.doc.gov. However, the
standard for eligibility for a separate rate (which is whether a firm
can demonstrate an absence of both de jure and de facto governmental
control over its export activities) has not changed.
On July 31, 2007, the International Trade Commission (``ITC'')
issued its affirmative preliminary determination that there is a
reasonable indication that an industry in the United States is
materially injured or threatened with material injury by reason of
imports of CWP from the PRC. See Circular Welded Carbon-Quality Steel
Pipe from the PRC, Investigation Nos. 701-TA-447 and 731-TA-1116, 72 FR
43295 (Preliminary) (August 3, 2007). On October 2, 2007, the
petitioners filed a timely request that the Department postpone the
preliminary determination pursuant to section 733(c)(1)(B)(i) of the
Act. We did so on October 31, 2007. See Postponement of Preliminary
Determination of Antidumping Duty Investigation: Circular Welded Carbon
Quality Steel Pipe from the People's Republic of China, 72 FR 62626
(November 6, 2007).
Postponement of Final Determination and Extension of Provisional
Measures
Pursuant to section 735(a)(2) of the Act, on December 18, 2007,
respondent Jiangsu Yulong Steel Pipe Co., Ltd. (``Yulong'') requested
that in the event of an affirmative preliminary determination in this
investigation, the Department postpone its final determination by 60
days. In addition, Yulong requested that the Department extend the
application of the provisional measures prescribed under 19 CFR
351.210(e)(2) from a four-month period to not more than six-months. In
accordance with section 733(d) of the Act and 19 CFR 351.210(b),
because (1) our preliminary determination is affirmative, (2) the
requesting exporter accounts for a significant proportion of exports of
the subject merchandise, and (3) no compelling reasons for denial
exist, we are granting this request and are postponing the final
determination until no later than 135 days after the publication of
this notice in the Federal Register. Suspension of liquidation will be
extended accordingly.
Scope Comments
In accordance with the preamble to the Department's regulations, we
set aside a period of time in our Initiation Notice for parties to
raise issues regarding product coverage, and encouraged all parties to
submit comments within 20 calendar days of publication of that notice.
See Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323, (May
19, 1997) and Initiation Notice, 72 FR at 36669.On July 19, 2007, the
petitioners submitted timely comments concerning the scope of the CWP
antidumping and countervailing duty investigations. Man Ferrostaal
Inc., Macsteel Service Centers USA, and Sunbelt Group L.P.
(collectively, ``Ferrostaal''), U.S. interested parties, also submitted
timely comments concerning the scope of these investigations on July
19, 2007. The petitioners and Ferrostaal both submitted rebuttal
comments on July 26, 2007.
We analyzed the comments of the interested parties regarding the
scope of this investigation and, based upon those comments, revised the
scope language. See Memorandum to Stephen J. Claeys, Deputy Assistant
Secretary for Import Administration, Re: Scope of the Antidumping and
Countervailing Duty Investigations of Circular Welded Carbon Quality
Steel Pipe from the People's Republic of China, ``Analysis of Comments
and Recommendation for Scope of Investigations'' (November 5, 2007)
(``Scope Memorandum'').
In addition, on December 18, 2007, the petitioners submitted
additional comments concerning the scope of the CWP antidumping and
countervailing duty investigations. In their comments, the petitioners
requested that the Department revise the scope of the investigations to
define product coverage by end-use application. The petitioners also
requested that the Department explicitly state that single-stenciled
line pipe meeting certain product characteristics is covered by the
scope of this investigation, to eliminate reference to the grade ``X-
42'' when referring to API stenciled pipe, and to define the length
criterion for ``single random length'' CWP.
Regarding end-use application, the petitioners provided an
affidavit which states that substitutions of API 5L stenciled products
for subject ASTM pipe have occurred. See the petitioners' December 18,
2007, comments at Exhibit 2. The petitioners argue that the inclusion
of end-use application to determine product coverage is necessary to
distinguish between single-stenciled API 5L imports that are not
intended to be covered by this investigation and pipe products that are
intended to be covered. Next, the petitioners argue that the Department
should revise the scope language to eliminate the reference to grade
``X-42'' when referring to API stenciled pipe because they view this
reference as unnecessary given that the grade is subsumed within the
API 5L specification. In addition, to prevent evasion of any
antidumping order issued in this proceeding, the petitioners urge the
Department to define the length criterion for inclusion of imported API
specification CWP to include any such pipe of 32 feet or less. Lastly,
the petitioners urge the Department to state in the scope that imports
of single-stenciled API 5L line pipe are covered by the scope if such
imports have one or more of the following physical characteristics: (1)
a length of 32 feet or less; (2) an outer diameter less than 2 inches;
(3) a galvanized and/or painted surface; or (4) a threaded and/or
coupled end finish.
Upon review of the petitioner's December 18, 2007, submission, we
have preliminarily adopted two of the petitioners' proposed changes.
Specifically, we have preliminarily accepted the petitioners' request
that single random length be defined as 32 feet in length or less. In
addition, we
[[Page 2447]]
preliminarily accepted the petitioners' request to eliminate the
reference to grade ``X-42'' when referring to API 5L stenciled pipe.
These two changes are reflected in the ``Scope of Investigation''
section below.
Period of Investigation
The period of investigation (``POI'') is October 1, 2006, through
March 31, 2007. This period corresponds to the two most recent fiscal
quarters prior to the month of the filing of the petition, i.e., June
2007. See 19 CFR 351.204(b)(1).
Scope of Investigation
The scope of this investigation covers certain welded carbon
quality steel pipes and tubes, of circular cross-section, and with an
outside diameter of 0.372 inches (9.45 mm) or more, but not more than
16 inches (406.4 mm), whether or not stenciled, regardless of wall
thickness, surface finish (e.g., black, galvanized, or painted), end
finish (e.g., plain end, beveled end, grooved, threaded, or threaded
and coupled), or industry specification (e.g., ASTM, proprietary, or
other), generally known as standard pipe and structural pipe (they may
also be referred to as circular, structural, or mechanical tubing).
Specifically, the term ``carbon quality'' includes products in
which (a) iron predominates, by weight, over each of the other
contained elements; (b) the carbon content is 2 percent or less, by
weight; and (c) none of the elements listed below exceeds the quantity,
by weight, as indicated:
(i) 1.80 percent of manganese;
(ii) 2.25 percent of silicon;
(iii) 1.00 percent of copper;
(iv) 0.50 percent of aluminum;
(v) 1.25 percent of chromium;
(vi) 0.30 percent of cobalt;
(vii) 0.40 percent of lead;
(viii) 1.25 percent of nickel;
(ix) 0.30 percent of tungsten;
(x) 0.15 percent of molybdenum;
(xi) 0.10 percent of niobium;
(xii) 0.41 percent of titanium;
(xiii) 0.15 percent of vanadium; or
(xiv) 0.15 percent of zirconium.
Standard pipe is made primarily to American Society for Testing and
Materials (``ASTM'') specifications, but can be made to other
specifications. Standard pipe is made primarily to ASTM specifications
A-53, A-135, and A-795. Structural pipe is made primarily to ASTM
specifications A-252 and A-500. Standard and structural pipe may also
be produced to proprietary specifications rather than to industry
specifications. This is often the case, for example, with fence tubing.
Pipe multiple-stenciled to a standard and/or structural specification
and to any other specification, such as the American Petroleum
Institute (``API'') API-5L specification, is also covered by the scope
of this investigation when it meets the physical description set forth
above and also has one or more of the following characteristics: is 32
feet in length or less; is less than 2.0 inches (50 mm) in outside
diameter; has a galvanized and/or painted surface finish; or has a
threaded and/or coupled end finish.
The scope of this investigation does not include: (a) pipe suitable
for use in boilers, superheaters, heat exchangers, condensers, refining
furnaces and feedwater heaters, whether or not cold drawn; (b)
mechanical tubing, whether or not cold-drawn; (c) finished electrical
conduit; (d) finished scaffolding; (e) tube and pipe hollows for
redrawing; (f) oil country tubular goods produced to API
specifications; and (g) line pipe produced to only API specifications.
The pipe products that are the subject of this investigation are
currently classifiable in HTSUS statistical reporting numbers
7306.30.10.00, 7306.30.50.25, 7306.30.50.32, 7306.30.50.40,
7306.30.50.55, 7306.30.50.85, 7306.30.50.90, 7306.50.10.00,
7306.50.50.50, 7306.50.50.70, 7306.19.10.10, 7306.19.10.50,
7306.19.51.10, and 7306.19.51.50. However, the product description, and
not the harmonized tariff schedule of the United States (``HTSUS'')
classification, is dispositive of whether merchandise imported into the
United States falls within the scope of the investigation.
Respondent Selection
On June 28 and 29, 2007, and July 2, 2007, the Department requested
quantity and value (``Q&V'') information from a total of 53 companies
identified by the petitioners as potential producers or exporters of
CWP from the PRC. See Memorandum to The File, from Maisha Cryor,
Analyst, Office 4, Regarding ``Circular Welded Carbon Quality Steel
Pipe from the People's Republic of China: Summary of Issuance of
Quantity and Value Questionnaires,'' dated July 2, 2007 (``Q&V
Memorandum''). Also, on June 29, 2007, the Department sent a letter
requesting Q&V information to the Ministry of Commerce (``MOFCOM'') and
requested that MOFCOM transmit the letter to all companies who export
subject merchandise to the United States, or produce the subject
merchandise for the companies who were engaged in exporting the subject
merchandise to the United States during the POI. Id. For a complete
list of all parties from which the Department requested Q&V
information, see Q&V Memorandum. The Department received timely Q&V
responses from 32 interested parties. See Memorandum from Abdelali
Elouaradia, Director, Office 4, to Stephen J. Claeys, Deputy Assistant
Secretary for Import Administration, ``Selection of Respondents for the
Antidumping Duty Investigation of Circular Welded Carbon Quality Steel
Pipe from the People's Republic of China,'' dated August 2, 2007
(``Respondent Selection Memorandum''). The Department did not receive
any communication from MOFCOM regarding its request for Q&V
information. In August and September 2007, the Department returned
untimely Q&V responses submitted by Bazhou Dongsheng Hot Dip
Galvanizing Steel Pipe Co., Ltd. (``Bazhou''); Shanxi Tianli Industries
Co., Ltd. (``Shanxi''); and Zhejiang Kingland Pipeline and Technologies
Co., Ltd. (``Kingland'').
On August 2, 2007, the Department selected Tianjin Shuangjie Group
(``Shuangjie'') and Yulong as mandatory respondents in this
investigation. See Respondent Selection Memorandum at 4. On August 8
and 15, 2007, Weifang East Steel Pipe Co., Ltd. (``Weifang''),
submitted letters requesting that the Department select it as a
mandatory respondent. In addition, in its August 15, 2007, letter,
Weifang requested that, in the event it was not selected as a mandatory
respondent, it be permitted to participate in the investigation as a
voluntary respondent. On August 24, 2007, the Department informed
Weifang that it would not be selected as a mandatory respondent. See
Letter from Stephen J. Claeys, Deputy Assistant Secretary, to Weifang,
Regarding ``Antidumping Duty Investigation of Circular Welded Carbon
Quality Steel Pipe from the People's Republic of China; Respondent
Selection,'' dated August 24, 2007. In addition, on November 17, 2007,
the Department informed Weifang that it would not be selected as a
voluntary respondent. See Letter from Stephen J. Claeys, Deputy
Assistant Secretary, to Weifang, Regarding ``Antidumping Duty
Investigation of Circular Welded Carbon Quality Steel Pipe from the
People's Republic of China; Respondent Selection,'' dated November 17,
2007.
On December 26, 2007, Weifang again requested that it be selected
as a mandatory respondent. If it is not selected as a mandatory
respondent, Weifang also provided recommended methodologies that the
Department should use in determining its separate rate. In addition,
Weifang noted that the
[[Page 2448]]
Department calculated countervailing duty margins in the companion
countervailing duty investigation on CWP from the PRC. According to
Weifang, application of the NME methodology in conjunction with
countervailing duty margins will result in double-remedy. Weifang
argues that the Department is legally obligated to avoid such double-
remedy. As these comments were submitted five business days prior to
this preliminary determination, the Department did not consider
Weifang's arguments. However, the Department will consider them for the
final determination.
Separate Rates Applications
Between August 2, 2007, and August 26, 2007, we received timely
separate-rate applications from 27 non-mandatory respondent companies:
Weifang; Shijiazhuang Zhongqing Imp & Exp Co., Ltd. (``Shijiazhuang'');
Tianjin Baolai Int'l Trade Co., Ltd. (``Baolai''); Wai Ming (Tianjin)
Int'l Trading Co., Ltd. (``Wai Ming''); Kunshan Lets Win Steel
Machinery Co., Ltd. (``Kunshan Lets Win''); Shenyang BOYU M/E Co., Ltd.
(``BOYU''); Dalian Brollo Steel Tubes Ltd. (``Dalian''); Benxi Northern
Pipes Co., Ltd. (``Benxi''); Shanghai Metals & Minerals Import & Export
Corp. (``Shanghai Metals''); Huludao Steel Pipe Industrial Co., Ltd.
(``Huludao''); Tianjin Xingyuda Import & Export Co. Ltd.
(``Xingyuda''); Jiangyin Jianye Metal Products Co., Ltd. (``Jianye'');
Rizhao Xingye Import & Export Co., Ltd. (``Rizhao''); Tianjin No. 1
Steel Rolled Co., Ltd. (``Tianjin No. 1''); Kunshan Hongyuan Machinery
Manufacture Co., Ltd. (``Kunshan''); Qingdao Yongjie Import & Export
Co., Ltd. (``Yongjie'');Wuxi Fastube Industry Co., Ltd. (``Fastube'');
Jiangsu Guoqiang Zinc-Plating Company, Ltd. (``Jiangsu''); Wuxi Eric
Steel Pipe Co., Ltd. (``Wuxi Eric''); Beijing Sai Lin Ke Hardware Co.,
Ltd. (``SLK''); Qingdao Xiangxing Steel Pipe Co., Ltd. (``Qingdao'');
Wah Cit Enterprises (``Wah Cit''); Guangdong Walsall Steel Pipe
Industrial Co., Ltd. (``Guangdong''); Hengshui Jinghua Steel Pipe Co.,
Ltd. (``Hengshui''); Zhangjiagang Zhongyuan Pipe-Making Co., Ltd.
(``Zhongyuan''); Shandong Fubo Group Co. (``Fubo'') and Tianjin
Youcheng Galvanized Steel Pipe Co., Ltd. (``Youcheng'').
In August and September 2007, the Department informed Kingland and
Bazhou that it would not consider their separate-rate applications
because their Q&V submissions were untimely filed and returned. See
Letter from Abdelali Elouaradia, Office Director, to Kingland,
Regarding ``Antidumping Duty Investigation of Circular Welded Carbon
Quality Steel Pipe From the People's Republic of China Submissions by
Zhejiang Kingland Pipeline and Technologies Co., Ltd.,'' dated August
24, 2007; see also Letter from Abdelali Elouaradia, Office Director, to
Bazhou, Regarding ``Quantity and Value Information and Separate Rate
Application,'' dated September 14, 2007.
Questionnaires
On August 3, 2007, the Department issued to Shuangjie and Yulong
sections A, C, D, and E \1\ of the antidumping duty questionnaire,
which included draft product characteristics used in the designation of
control numbers (``CONNUMs'') and assigned to the merchandise under
consideration. On August 3, 2007, the Department also requested
comments from all interested parties on the draft product
characteristics included in the Department's questionnaire. The
Department received comments from the petitioners and rebuttal comments
from Shuangjie. On September 13, 2007, the Department issued the final
product characteristics used in the designation of CONNUMs and assigned
to the merchandise under consideration.
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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 C
requests a complete listing of U.S. sales. Section D requests
information on factors of production, and Section E requests
information on further manufacturing.
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On September 4, 2007, Yulong submitted its response to Section A of
the Department's questionnaire, and on September 10, 2007, Shuangjie
submitted its response to section A of the Department's questionnaire.
On September 24, 2007, Shuangjie submitted its responses to sections C
and D of the Department's questionnaire. On September 24, 2007, Yulong
submitted its responses to sections C and D of the Department's
questionnaire. Weifang voluntarily submitted responses to section A of
the Department's questionnaire on September 10, 2007, and to sections C
and D of the Department's questionnaire on September 24, 2007.
The Department issued supplemental questionnaires to Shuangjie in
September and October 2007. However, Shuangjie did not submit responses
to the Department's supplemental questionnaires because it withdrew
from the investigation and requested that the Department return all of
its proprietary filings. See Letter from Shuangjie, dated October 31,
2007. On November 15, 2007, the Department returned Shuangjie's
business proprietary information. See Letter from Abdelali Elouaradia,
Office Director, to Shuangjie, Regarding ``Antidumping Duty
Investigation: Circular Welded Carbon Quality Steel Pipe from the
People's Republic of China,'' dated November 15, 2007.
The Department issued supplemental questionnaires to Yulong between
September 21, 2007, and November 28, 2007, and received responses
between October 15, 2007, and December 10, 2007. On October 9, 2007 and
November 13, 2007, the petitioners submitted comments on Shuangjie and
Yulong's questionnaire responses.
On October 10, 2007, the Department issued supplemental
questionnaires to separate rate applicants Shanghai Metals and Huludao
and received responses on October 19, 2007. On October 15, 2007, the
Department issued supplemental questionnaires to separate rate
applicants Benxi and Xingyuda and received responses on October 25,
2007. On October 17, 2007, the Department issued a supplemental
questionnaire to separate rate applicant Jianye and received a response
on October 29, 2007. On October 25, 2007, the Department issued a
supplemental questionnaire to separate rate applicant Weifang and
received a response on November 8, 2007. On November 8, 2007, the
Department issued supplemental questionnaires to separate rate
applicants Fastube, Jiangsu, Wuxi Eric, SLK, Qingdao, Guangdong,
Hengshui and Zhongyuan. Qingdao submitted its response on November 19,
2007. Hengshui and SLK submitted their responses on November 21, 2007.
Wuxi Eric, Jiangsu, Fastube, Guangdong, and Zhongyuan submitted their
responses on November 26, 2007. On November 15, 2007, the Department
issued a supplemental questionnaire to the separate rate applicants
Fubo, Shijiazhuang, Baolai, Wai Ming, Kunshan Lets Win, BOYU, and
Dalian, and received responses from Shijiazhuang on November 29, 2007,
and from Baoli, Dalian, and Fubo from December 3-4, 2007. Wai Ming,
Kunshan Lets Win, and BOYU submitted their responses on December 27,
2007.
Critical Circumstances
On September 17, 2007, the petitioners requested that the
Department make an expedited finding that critical circumstances exist
with respect to imports of CWP from the PRC. Shuangjie submitted
comments responding to the petitioners' allegations of critical
circumstances on
[[Page 2449]]
September 24, 2007. The petitioners responded to Shuangjie's comments
on September 27, 2007. The Department issued questionnaires to
Shuangjie and Yulong regarding the critical circumstances allegation on
October 29, 2007. Yulong submitted its response on November 5, 2007. As
explained further above, Shuangjie did not respond to the Department's
request because it withdrew from the investigation on October 31, 2007.
On December 11, 2007, the Department preliminarily found that there
is reason to believe or suspect that critical circumstances exist for
imports of subject merchandise from Yulong, the separate-rate
companies, and the PRC-wide entity (including Shuangjie) because, A) in
accordance with section 733(e)(1)(A)(i) of the Act, there is a history
of dumped imports of subject merchandise and of material injury caused
by such dumped imports, and B) in accordance with section 733(e)(1)(B)
of the Act, Yulong, the separate-rate companies, and the PRC-wide
entity had massive imports during a relatively short period. See
Memorandum from Abdelali Elouaradia, Director, Office 4, ``Preliminary
Affirmative Determination of Critical Circumstances,'' dated December
11, 2007.
Non-Market Economy Country
For purposes of initiation, the petitioners submitted LTFV analyses
for the PRC as a non-market economy (``NME''). See Initiation Notice,
72 FR at 36665. The Department considers the PRC to be a NME country.
In accordance with section 771(18)(C)(i) of the Act, any determination
that a foreign country is an NME country shall remain in effect until
revoked by the administering authority. On December 26, 2007, Weifang
argued that the PRC should be treated as a market economy. As these
comments were submitted five business days prior to this preliminary
determination, the Department did not consider Weifang's comments.
However, the Department will consider them for the final determination.
Therefore, we have treated the PRC as an NME country for purposes of
this preliminary determination.
Separate Rates
In proceedings involving NME countries, the Department has a
rebuttable presumption that all companies within the NME country are
subject to government control and thus should be assessed a single
antidumping duty rate. It is the Department's standard policy to assign
all exporters of the merchandise subject to review in NME countries a
single rate unless an exporter can affirmatively demonstrate an absence
of government control, both in law (de jure) and in fact (de facto),
with respect to exports.
We have considered whether each PRC company that submitted a
complete and timely separate-rate application is eligible for a
separate rate. The Department's separate-rate test is not concerned, in
general, with macroeconomic/border-type controls, e.g., export
licenses, quotas, and minimum export prices (``EPs''), particularly if
these controls are imposed to prevent dumping. See Notice of Final
Determination of Sales at Less Than Fair Value: Certain Preserved
Mushrooms from the People's Republic of China, 63 FR 72255, 72256
(December 31, 1998). The test focuses, rather, on controls over the
investment, pricing, and output decision-making process at the
individual firm level. See Certain Cut-to-Length Carbon Steel Plate
from Ukraine: Final Determination of Sales at Less than Fair Value, 62
FR 61754, 61758 (November 19, 1997), and Tapered Roller Bearings and
Parts Thereof, Finished and Unfinished, from the People's Republic of
China: Final Results of Antidumping Duty Administrative Review, 62 FR
61276, 61279 (November 17, 1997).
To establish whether a firm is sufficiently independent from
government control of its export activities to be entitled to a
separate rate, the Department analyzes each entity exporting the
subject merchandise under a test arising from the Notice of Final
Determination of Sales at Less Than Fair Value: Sparklers from the
People's Republic of China, 56 FR 20588 (May 6, 1991) (``Sparklers''),
as further developed in Notice of Final Determination of Sales at Less
Than Fair Value: Silicon Carbide from the People's Republic of China,
59 FR 22585 (May 2, 1994) (``Silicon Carbide''). In accordance with the
separate-rate criteria, the Department assigns separate rates in NME
cases only if respondents can demonstrate the absence of both de jure
and de facto governmental control over export activities.
In this case, Shuangjie did not provide information we requested
that is necessary to determine whether it is eligible for a separate
rate. Specifically, on October 31, 2007, Shuangjie notified the
Department of its decision to no longer participate in this
investigation and withdrew all of its proprietary information from the
record. As Shuangjie has decided to no longer participate in this
investigation, and has withdrawn all of its responses from the record,
the Department has no basis upon which to grant Shuangjie a separate
rate. Although Shuangjie remains a mandatory respondent, the Department
considers Shuangjie part of the PRC-wide entity because it failed to
demonstrate that it qualifies for a separate rate.
Wai Ming, Fastube, Wuxi Eric, SLK, Wah Cit, and Guangdong provided
company-specific separate-rate information and stated that the
standards for the assignment of separate rates have been met because
they are privately owned trading companies incorporated and held by
foreign ownership. Because each of these companies is foreign owned, it
is not necessary to undertake additional separate-rates analysis for
the Department to determine that the export activities of Wai Ming,
Fastube, Wuxi Eric, SLK, Wah Cit, and Guangdong are independent from
the PRC government's control. Accordingly, Wai Ming, Fastube, Wuxi
Eric, SLK, Wah Cit, and Guangdong are eligible for separate rates. See,
e.g., Brake Rotors From the People's Republic of China: Preliminary
Results of the Tenth New Shipper Review, 69 FR 30875, 30876 (June 1,
2004) (unchanged in the final results, Brake Rotors From the People's
Republic of China: Final Results of the Tenth New Shipper Review, 69 FR
52228 (August 25, 2004)) (``Brake Rotors 10th NSR''); Notice of Final
Determination of Sales at Less Than Fair Value: Creatine Monohydrate
From the People's Republic of China, 64 FR 71104 (December 20, 1999);
and Notice of Final Determination of Sales at Less Than Fair Value:
Bicycles From the People's Republic of China, 61 FR 19026, 19027 (April
30, 1996). As a result, for the purposes of this preliminary
determination, we have granted separate company-specific rates to Wai
Ming, Fastube, Wuxi Eric, SLK, Wah Cit, and Guangdong. See Memorandum
to Abdelali Elouaradia, Director, AD/CVD Operations, Office 4, through
Mark Manning, Program Manager, AD/CVD Operations, Office 4, from Maisha
Cryor, Senior International Trade Analyst, AD/CVD Operations, Office 4,
Regarding ``Antidumping Duty Investigation of Circular Welded Carbon
Quality Steel Pipe from the People's Republic of China: Separate Rates
Memorandum,'' dated January 3, 2008 (``Separate Rates Memorandum'').
Youcheng stated in its August 27, 2007, separate-rate application
that it sold subject merchandise to a U.S. customer during the POI and,
as evidence, presented a sales contract dated within the POI. This
contract covers multiple sizes and types of subject merchandise.
Section 351.401(i) of the Department's regulations states
[[Page 2450]]
that, ``in identifying the date of sale of the subject merchandise or
foreign like product, the Secretary normally will use the date of
invoice, as recorded in the exporter or producer's records kept in the
normal course of business.'' However, 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) (``Allied Tube''). In other words, the
date of the invoice is the presumptive date of sale, although this
presumption may be overcome. The date of sale is generally the date on
which the parties finalize the substantive terms of the sale, such as
the price, quantity, delivery terms, and payment terms.
Youcheng claims that the appropriate date of sale should be the
contract date. However, Youcheng acknowledges that the first shipment
of subject merchandise pursuant to this contract did not take place
until well after the POI. Because this contract covers multiple sizes
and types of subject merchandise, and each different product is
considered separately by the Department for purposes of its dumping
analysis, the Department preliminarily finds that the contract does not
include product-specific prices. Instead, it provides only the total
value and total quantity of all products that will be shipped pursuant
to this contract. In addition, Youcheng provided a memorandum between
itself and the U.S. customer, dated well after the POI, in which
Youcheng provided the customer a price reduction for all products
shipped pursuant to the contract due to a change in the terms of
delivery. Thus, even if the contract had product-specific prices, which
it did not, such prices were not final, as they were reduced after the
POI at time of shipment. For these reasons, the Department determines
that the terms of sale were not finalized until the final commercial
invoice was issued, after the POI. Therefore, the appropriate date of
sale to use in analyzing Youcheng's separate-rate application is the
invoice date. As the invoice date is outside the POI, the Department
finds that Youcheng did not have a sale within the POI and is,
therefore, not eligible to receive a separate rate.
1. Absence of De Jure Control
The Department considers the following de jure criteria in
determining whether an individual company may be granted a separate
rate: (1) an absence of restrictive stipulations associated with an
individual exporter's business and export licenses; (2) any legislative
enactments decentralizing control of companies; and (3) other formal
measures by the government decentralizing control of companies. See
Sparklers, 56 FR at 20588.
The evidence provided by Yulong, Weifang, Shijiazhuang, Baolai,
Dalian, Benxi, Shanghai Metals, Huludao, Xingyuda, Jianye, Rizhao,
Tianjin No. 1, Yongjie, Hengshui, Zhongyuan, Kunshan Lets Win, and BOYU
indicates that there are no restrictive stipulations associated with
their exporter and/or business licenses and that there are legislative
enactments decentralizing control of the companies. The Department's
analysis of the record evidence supports a preliminary finding of
absence of de jure control. See Separate Rates Memorandum.
In its August 26, 2007, separate-rate application, Fubo reported
that it was established and is completely owned by the Fushan Village
Committee (``Fushan Committee''), and the Fushan Committee operates
under the Village Committee Law. In Brake Rotors, the Department
examined a village committee, which operated under the Village
Committee Law, and found that the committee was a PRC government
entity. See Brake Rotors From the People's Republic of China: Final
Results and Partial Rescission of the Seventh Administrative Review;
Final Results of the Eleventh New Shipper Review, 70 FR 69937 (November
18, 2005) and accompanying Issues and Decision Memorandum at Comment 7
(``Brake Rotors''). In analyzing the village committee, the Department
found the Village Committee Law demonstrates that village committees
are part of the PRC government. Specifically, the Department stated
that ``Article 2 of the Village Committee Law indicates that a Village
Committee is not an independent entity but operates under the
leadership of the Chinese Communist Party. The party branch is in
effect the core of the village power structure.'' Id. Fubo's
description of the role of the Fushan Committee supports this analysis,
as the Fushan Committee ``has an active role in implementing policy
directives, expanding local commerce, and overseeing social welfare
matters such as education, healthcare, and sanitation.'' See Fubo's
December 4, 2007, supplemental questionnaire response at 1.
Accordingly, we examined whether there is sufficient evidence of de
facto absence of government control of Fubo's export activities.
2. Absence of De Facto Control
Typically the Department considers four factors in evaluating
whether each respondent is subject to de facto governmental control of
its export functions: (1) whether the export prices are set by or are
subject to the approval of a governmental agency; (2) whether the
exporter has authority to negotiate and sign contracts and other
agreements; (3) whether the exporter has autonomy from the government
in making decisions regarding the selection of management; and (4)
whether the exporter retains the proceeds of its export sales and makes
independent decisions regarding disposition of profits or financing of
losses. See Silicon Carbide, 59 FR at 22586-87; see also Notice of
Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol
From the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995).
The Department has determined that an analysis of de facto control is
critical in determining whether respondents are, in fact, subject to a
degree of governmental control which would preclude the Department from
assigning separate rates.
We determine that, for Yulong, Weifang, Shijiazhuang, Baolai,
Dalian, Benxi, Shanghai Metals, Huludao, Xingyuda, Jianye, Rizhao,
Tianjin No. 1, Kunshan, Yongjie, Jiangsu, Qingdao, Hengshui, Zhongyuan,
Kunshan Lets Win, and BOYU, the evidence on the record supports a
preliminary finding of an absence of de facto governmental control
based on record statements and supporting documentation showing the
following: 1) each exporter sets its own export prices independent of
the government and without the approval of a government authority; 2)
each exporter retains the proceeds from its sales and makes independent
decisions regarding disposition of profits or financing of losses; 3)
each exporter has the authority to negotiate and sign contracts and
other agreements; and 4) each exporter has autonomy from the government
regarding the selection of management. See Separate Rates Memorandum.
Therefore, the Department has preliminarily found an absence of de
facto government control over these companies' export activities.
Regarding Fubo, the Fushan Committee appoints Fubo's board of
directors and managers. During the POI, Fubo's directors and managers
were also members of the Fushan Committee. In particular, Fubo reported
that its general manager, chief financial supervisor, and sales manager
were members of the Fushan Committee. Since these
[[Page 2451]]
managers control the day-to-day operations of the company, it is clear
that the Fushan Committee directly controls Fubo's sales negotiation
and export pricing. In addition, Fubo acknowledges that its profits are
distributed to the Fushan Committee. For these reasons, the Department
preliminarily finds that Fubo has not demonstrated that there is an
absence of de facto control by the PRC government.
As stated above, because Wai Ming, Fastube, Wuxi Eric, SLK, Wah
Cit, and Guangdong are wholly foreign-owned, we have determined that
they are independent of the PRC government's control and are eligible
for a separate rate. In addition, the evidence placed on the record of
this investigation by Yulong, Weifang, Shijiazhuang, Baolai, Dalian,
Benxi, Shanghai Metals, Huludao, Xingyuda, Jianye, Rizhao, Tianjin No.
1, Kunshan, Yongjie, Jiangsu, Qingdao, Hengshui, Zhongyuan, Kunshan
Lets Win, and BOYU demonstrates an absence of de jure and de facto
government control with respect to each of the exporters' exports of
the merchandise under investigation, in accordance with the criteria
identified in Sparklers and Silicon Carbide. As a result, for the
purposes of this preliminary determination, we have granted a separate
company-specific rate to Wai Ming, Fastube, Wuxi Eric, SLK, Wah Cit,
Guangdong, Yulong, Weifang, Shijiazhuang, Baolai, Dalian, Benxi,
Shanghai Metals, Huludao, Xingyuda, Jianye, Rizhao, Tianjin No. 1,
Kunshan, Yongjie, Jiangsu, Qingdao, Hengshui, Zhongyuan, Kunshan Lets
Win, and BOYU.
In determining what rate to assign companies receiving separate
rates, the Department's normal practice is to weight-average the
individually calculated margins from the mandatory respondents. In this
investigation, Yulong is the only mandatory respondent receiving an
individually calculated margin, and its margin is zero percent.
Shuangjie, the other mandatory respondent, is receiving a rate based
entirely on adverse facts available (``AFA'') as part of the PRC-wide
entity for its failure to cooperate. See ``Adverse Facts Available''
section below. Therefore, in this case, we have assigned to the
companies receiving separate rates the simple average of Yulong's zero
percent margin and the AFA margin assigned to Shuangjie as part of the
PRC-wide entity. Since the Department has selected 51.34 percent as the
AFA rate (see ``Adverse Facts Available'' section below), the simple
average of this rate and zero percent is 25.67 percent. Therefore, we
have assigned 25.67 percent as the rate applicable to Wai Ming,
Fastube, Wuxi Eric, SLK, Wah Cit, Guangdong, Weifang, Shijiazhuang,
Baolai, Dalian, Benxi, Shanghai Metals, Huludao, Xingyuda, Jianye,
Rizhao, Tianjin No. 1, Kunshan, Yongjie, Jiangsu, Qingdao, Hengshui,
Zhongyuan, Kunshan Lets Win, and BOYU. See Separate Rates Memorandum.
Adverse Facts Available
Sections 776(a)(1) and (2) of the Act provide that the Department
shall apply ``facts otherwise available'' if, inter alia, necessary
information is not on the record or an interested party or any other
person: (A) withholds information that has been requested; (B) fails to
provide information within the deadlines established, or in the form
and manner requested by the Department, subject to subsections (c)(1)
and (e) of section 782 of the Act; (C) significantly impedes a
proceeding; or (D) provides information that cannot be verified as
provided by section 782(i) of the Act.
Where the Department determines that a response to a request for
information does not comply with the request, section 782(d) of the Act
provides that the Department will so inform the party submitting the
response and will, to the extent practicable, provide that party the
opportunity to remedy or explain the deficiency. If the party fails to
remedy the deficiency within the applicable time limits and subject to
section 782(e) of the Act, the Department may disregard all or part of
the original and subsequent responses, as appropriate. Section 782(e)
of the Act provides that the Department ``shall not decline to consider
information that is submitted by an interested party and is necessary
to the determination but does not meet all applicable requirements
established by the administering authority'' if the information is
timely, can be verified, is not so incomplete that it cannot be used,
and if the interested party acted to the best of its ability in
providing the information. Where all of these conditions are met, the
statute requires the Department to use the information if it can do so
without undue difficulties.
In this case, all PRC exporters of subject merchandise to the
United States were given an opportunity to provide Q&V information to
the Department. However, not all exporters responded to the
Department's request for Q&V information.\2\ Based upon our knowledge
of the volume of imports of subject merchandise, we have concluded that
the companies that responded to the Q&V questionnaire do not account
for all U.S. imports during the POI of subject merchandise. We have
treated the non-responsive PRC producers/exporters (including
Shuangjie) as part of the PRC-wide entity because they did not qualify
for a separate rate.
---------------------------------------------------------------------------
\2\ The Department received only 32 timely responses to the
requests for Q&V information that it sent to the 53 potential
exporters identified in the petition. See Q&V Memorandum; see also
Respondent Selection Memorandum.
---------------------------------------------------------------------------
Since the PRC-wide entity (including Shuangjie) withheld
information requested by the Department, we find that the use of facts
available is appropriate to determine the PRC-wide rate, pursuant to
section 776(a)(2)(A) of the Act. See Preliminary Determination of Sales
at Less Than Fair Value, Affirmative Preliminary Determination of
Critical Circumstances and Postponement of Final Determination: Certain
Frozen Fish Fillets from the Socialist Republic of Vietnam, 68 FR 4986
(January 31, 2003), unchanged in Final Determination of Sales at Less
Than Fair Value and Affirmative Critical Circumstances: Certain Frozen
Fish Fillets from the Socialist Republic of Vietnam, 68 FR 37116 (June
23, 2003).
Section 776(b) of the Act provides that, in selecting from among
the facts otherwise available, the Department may employ an adverse
inference if an interested party fails to cooperate by not acting to
the best of its ability to comply with requests for information. See
Final Determination of Sales at Less Than Fair Value: Certain Cold-
Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian
Federation, 65 FR 5510, 5518 (February 4, 2000); Certain Welded Carbon
Steel Pipes and Tubes From Thailand: Final Results of Antidumping Duty
Administrative Review, 62 FR 53808, 53819-20 (October 16, 1997);
Crawfish Processors Alliance v. United States, 343 F. Supp.2d 1242 (CIT
2004) (approving use of AFA when respondent refused to participate in
verification); see also Statement of Administrative Action,
accompanying the Uruguay Round Agreements Act (``URAA''), H.R. Rep. No.
103-316, 870 (1994) (``SAA''). Because the PRC-wide entity (including
Shuangjie) did not respond to the Department's request for information,
the Department has concluded it has failed to cooperate to the best of
its ability. Therefore, the Department preliminarily finds that, in
selecting from among the facts available, an adverse inference is
appropriate.
[[Page 2452]]
Section 776(b) of the Act authorizes the Department to use, as AFA,
information derived from the petition, the final determination from the
LTFV investigation, a previous administrative review, or any other
information placed on the record. In selecting a rate for AFA, the
Department selects one that is sufficiently adverse ``as to effectuate
the purpose of the facts available rule to induce respondents to
provide the Department with complete and accurate information in a
timely manner.'' See Notice of Final Determination of Sales at Less
Than Fair Value: Static Random Access Memory Semiconductors From
Taiwan, 63 FR 8909, 8932 (February 23, 1998). It is the Department's
practice to select, as AFA, the higher of the (a) highest margin
alleged in the petition, or (b) the highest calculated rate for any
respondent in the investigation. See Final Determination of Sales at
Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon Quality
Steel Products From the People's Republic of China, 65 FR 34660 (May
21, 2000) and accompanying Issues and Decision Memorandum, at ``Facts
Available''. Because the dumping margin derived from the petition is
higher than the calculated weighted-average margin for the mandatory
respondents, we examined whether it was appropriate to base the PRC-
wide dumping margin on the secondary information in the petition.
When the Department relies on secondary information, rather than
information obtained in the course of an investigation, section 776(c)
of the Act requires it to corroborate that information, to the extent
practicable, from independent sources reasonably at its disposal.\3\
The SAA also states that the independent sources may include published
price lists, official import statistics and customs data, and
information obtained from interested parties during the particular
investigation. See SAA at 870.
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\3\ Secondary information is described in the SAA as
``information derived from the petition that gave rise to the
investigation or review, the final determination concerning subject
merchandise, or any previous review under section 751 concerning the
subject merchandise.'' See SAA at 870.
---------------------------------------------------------------------------
The SAA also clarifies that ``corroborate'' means that the
Department will satisfy itself that the secondary information to be
used has probative value. See SAA at 870. To corroborate secondary
information, the Department will, to the extent practicable, examine
the reliability and relevance of the information used. See 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; Preliminary Results of Antidumping
Duty Administrative Reviews and Partial Termination of Administrative
Reviews, 61 FR 57391, 57392 (November 6, 1996), unchanged in 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 (March 13,
1997).
To corroborate the dumping margin alleged in the petition (as
adjusted by the Department in initiating the instant investigation), we
compared sales-specific dumping margins calculated for the preliminary
determination to the dumping margins alleged in the petition. We found
that Yulong's highest sales-specific dumping margin corroborates, to
the extent practicable, the petition margin of 51.34 percent. See
Initiation Notice, see also Memorandum from Maisha Cryor, Senior
International Trade Compliance Analyst, to Abdelali Elouaradia, Office
Director, ``Corroboration of the Facts Available Rate for the
Preliminary Determination,'' dated January 3, 2008. We are assigning
this rate, 51.34 percent, as AFA to the PRC-wide entity (including
Shuangjie).
Fair Value Comparisons
To determine whether sales of CWP to the United States by Yulong
were made at less than fair value, we compared the export price
(``EP'') to normal value (``NV''), as described in the ``U.S. Price,''
and ``Normal Value'' sections of this notice. We compared NV to
weighted-average EPs in accordance with section 777A(d)(1) of the Act.
U.S. Price
For Yulong, we based U.S. price on EP in accordance with section
772(a) of the Act, because the first sale to an unaffiliated purchaser
was made prior to importation, and CEP was not otherwise warranted by
the facts on the record. We calculated EP based on the packed price
from the exporter to the first unaffiliated customer in the United
States. Where appropriate, we made deductions from the starting price
(gross unit price) for foreign inland freight, brokerage and handling,
international freight, and marine insurance, in accordance with section
772(c) of the Act.
Where foreign inland freight, brokerage and handling, or
international ocean freight was provided by PRC service providers, or
paid for in Renminbi (``RMB''), we analyzed the amount of service
provided by PRC entities to determine the appropriate method of valuing
the services. Yulong received foreign inland freight services, and
brokerage and handling services, from PRC service providers. Yulong
paid for international ocean freight services through a PRC freight
forwarder. See Yulong's October 31, 2007, questionnaire response at 9.
For a complete discussion of the calculations of the U.S. price for
Yulong, see Memorandum to the File, through Mark Manning, Program
Manager, AD/CVD Operations, Office 4, from Thomas Martin, Senior
International Trade Analyst, AD/CVD Operations, Office 4, Regarding
``Program Analysis for the Preliminary Determination of Antidumping
Duty Investigation of Circular Welded Carbon Quality Steel Pipe from
the People's Republic of China: Yulong,'' dated January 3, 2007
(``Yulong Analysis Memorandum''). See also the ``Factors of
Production'' section below.
Yulong reported that all of its U.S. sales had foreign inland
freight provided by NME freight providers. Therefore, we valued foreign
inland freight using a surrogate value obtained from the web site of an
Indian transportation company, InFreight Technologies India Limited.
See http://www.infreight.com/. This average rate was used by the
Department in the antidumping duty administrative review of Saccharin
from the PRC. See Saccharin from the People's Republic of China;
Preliminary Results of the 2005-2006 Antidumping Duty Administrative
Review, 72 FR 25247 (May 4, 2007) (``Saccharin from the PRC''). Because
this value is not contemporaneous with the POI, we adjusted it to
account for inflation using the Indian Wholesale Price Index (``WPI'').
See Memorandum to the File, from Thomas Martin, Senior International
Trade Compliance Analyst, Office 4, AD/CVD Operations, Regarding
``Less-Than-Fair-Value (``LTFV'') Investigation of Circular Welded
Carbon Quality Steel Pipe (``CWP'') from the People's Republic of China
(``PRC''): Surrogate Values for the Preliminary Determination - Jiangsu
Yulong Steel Pipe Co., Ltd. (``Yulong''),'' dated January 3, 2008
(``Factor Value Memorandum''), at Exhibit 7.
For brokerage and handling, Yulong reported that all of its U.S.
sales had foreign brokerage and handling provided by NME companies. We
valued Yulong's use of foreign brokerage and handling using a simple
average of the public version of the brokerage and handling expenses
reported in an
[[Page 2453]]
administrative review of preserved mushrooms from India by Agro Dutch
Industries Ltd., in its section A-D submission, dated May 24, 2005, at
Exhibit B-1, (see Certain Preserved Mushrooms From India: Final Results
of Antidumping Duty Administrative Review, 71 FR 10646 (March 2,
2006)), and the section C submission from Kejriwal Paper Ltd., dated
January 9, 2006, at Exhibit C-2, used in Notice of Preliminary
Determination of Sales at Less Than Fair Value, Postponement of Final
Determination, and Affirmative Preliminary Determination of Critical
Circumstances in Part: Certain Lined Paper Products From India, 71 FR
19706 (April 17, 2006) (unchanged in Notice of Final Determination of
Sales at Less Than Fair Value, and Negative Determination of Critical
Circumstances: Certain Lined Paper Products from India, 71 FR 45012
(August 8, 2006)). Because these data were not contemporaneous to the
POI, we adjusted them for inflation using the Indian WPI. See Factor
Value Memorandum at Exhibit 8.
Yulong also reported that all of its U.S. sales had international
freight provided by NME companies. We valued international freight
expenses using U.S. dollar freight quotes that the Department obtained
from Maersk Sealand (``Maersk''), a market-economy shipper. We obtained
quotes from Maersk for shipments from the PRC port of export and the
U.S. port of import reported by Yulong for its U.S. sales. Because
these data were not contemporaneous to the POI, we adjusted them for
inflation using the U.S. WPI. See Factor Value Memorandum at Exhibit 9.
Normal Value
Section 773(c)(1) of the Act provides that the Department shall
determine the NV using a factors-of-production (``FOP'') methodology if
the merchandise is exported from an NME country and the information
does not permit the calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act.
The Department bases NV on the FOP because the presence of government
controls on various aspects of non-market economies renders price
comparisons and the calculation of production costs invalid under the
Department's normal methodologies.
1. Factors of Production
Yulong reported that it does not have complete, product-specific
POI records that track the consumption of hot-rolled steel in coils on
a product-specific basis, and, therefore, it allocated the same
quantity of steel to all subject merchandise products. However, the
Department finds that a single steel consumption rate for all products
is not reasonable. Therefore, on the basis of the production data
submitted by Yulong, which the Department intends to verify, the
Department has adjusted Yulong's reported consumption rate for hot-
rolled steel in coils to be product-specific on the basis of steel coil
and pipe thickness. See Yulong Analysis Memorandum. An amount for yield
loss was added to the reported consumption rate per metric ton of CWP
produced.
2. Surrogate Country Selection
In antidumping proceedings involving NME countries, the Department,
pursuant to section 773(c)(1) of the Act, will generally base NV on the
value of the NME producer's factors of production. In accordance with
section 773(c)(4) of the Act, in valuing the factors of production, the
Department shall utilize, to the extent possible, the prices or costs
of factors of production in one or more market-economy countries that
are at a level of economic development comparable to that of the NME
country and are significant producers of merchandise comparable to the
subject merchandise.
On November 5, 2007, the Department determined that India,
Indonesia, Sri Lanka, the Philippines, and Egypt are countries
comparable to the PRC in terms of economic development. See Letter to
All Interested Parties, from Mark Manning, Program Manager, Office 4,
AD/CVD Operations, Regarding ``Antidumping Duty Investigation of
Circular Welded Carbon Quality Steel Pipe from the People's Republic of
China (``PRC''),'' dated November 5, 2007, attaching Memorandum to Mark
Manning, Program Manager, Office 4, AD/CVD Operations, from Ron
Lorentzen, Director, Office of Policy, Regarding ``Investigation of
Circular Welded Carbon Quality Steel Pipe (``Pipe'') from the People's
Republic of China from the People's Republic of China (PRC): Request
for List of Surrogate Countries,'' dated October 29, 2007.
On November 5, 2007, the Department requested comments on surrogate
country selection, and on surrogate values, from the interested parties
in this investigation. No interested party commented on the selection
of a surrogate country. However, on November 15, 2007, Yulong submitted
surrogate value information, i.e., surrogate financial statements, for
use in this investigation.\4\
---------------------------------------------------------------------------
\4\The petitioners submitted surrogate value information,
including surrogate financial statements, in their June 7, 2007,
petition.
---------------------------------------------------------------------------
As detailed in the Surrogate Country Memorandum, the Department has
preliminarily selected India as the surrogate country because: (1) it
is a significant producer of comparable merchandise; (2) it is at a
similar level of economic development pursuant to 773(c)(4) of the Act;
and (3) we have reliable data from India that we can use to value the
factors of production. For a detailed discussion of the selection of
the surrogate country, see Memorandum to the File, through Abdelali
Elouaradia, Director, Office 4, AD/CVD Operations, from Maisha Cryor,
Analyst, Office 4, AD/CVD Operations, Regarding ``Antidumping Duty
Investigation of Circular Welded Carbon Quality Steel Pipe from the
People's Republic of China: Selection of a Surrogate Country,'' dated
December 14, 2007 (``Surrogate Country Memorandum''). Thus, we have
calculated NV using Indian prices when available and appropriate to
value Yulong's factors of production. See Factor Value Memorandum.
In accordance with 19 CFR 351.301(c)(3)(i), for the final
determination in an antidumping investigation, interested parties may
submit publicly available information to value the factors of
production within 40 days after the date of publication of the
preliminary determination.
3. Factor Value Methodology
In accordance with section 773(c) of the Act, we calculated NV
based on FOP data reported by Yulong for the POI. The FOPs for subject
merchandise include: (1) quantities of raw materials consumed; (2)
hours of labor required; (3) amounts of energy and other utilities
consumed; (4) representative capital and selling costs; and (5) packing
materials. We valued the reported FOPs by multiplying the reported per-
unit factor-consumption rates by publicly available prices and
financial statements from the surrogate country, India, or, where
appropriate, the market economy prices paid for the factor (see further
discussion below).
In selecting the surrogate values, we considered the quality of the
source of surrogate information, the specificity of the surrogate value
to the FOP being valued, and contemporaneity of the data to the POI. To
the extent practicable, we selected values that are non-export average
values and tax-exclusive. See, e.g., Notice of Preliminary
[[Page 2454]]
Determination of Sales at Less Than Fair Value, Negative Preliminary
Determination of Critical Circumstances and Postponement of Final
Determination: Certain Frozen and Canned Warmwater Shrimp From the
Socialist Republic of Vietnam, 69 FR 42672, 42682 (July 16, 2004),
unchanged in Final Determination of Sales at Less Than Fair Value:
Certain Frozen and Canned Warmwater Shrimp from the Socialist Republic
of Vietnam, 69 FR 71005 (December 8, 2004) (``Shrimp from Vietnam'').
We valued material inputs and packing by multiplying the amount of
the factor consumed in producing subject merchandise by the average
unit value of the factor. We derived the average unit value of the
factors from Indian import statistics. As appropriate, we added to the
surrogate values a cost for inland freight to make them delivered
prices. Specifically, we calculated the inland freight cost by
multiplying a surrogate freight rate by the shorter of the reported
distance from the PRC domestic supplier to the respondent's factory or
the distance from the nearest seaport to the respondent's factory,
where appropriate. This adjustment is in accordance with the Court of
Appeals for the Federal Circuit's decision in Sigma Corp. v. United
States, 117 F. 3d 1401, 1407-1408 (Fed. Cir. 1997). A detailed
description of all surrogate values used for respondents can be found
in the Factor Value Memorandum.
Where we could not obtain publicly available information
contemporaneous to the POI with which to value factors, we adjusted the
surrogate values, where appropriate, using the WPI as published in the
International Financial Statistics of the International Monetary Fund.
See Factor Value Memorandum at Exhibit 2.
Furthermore, with regard to the Indian import-based surrogate
values, we disregarded import prices that we have reason to believe or
suspect may be subsidized. We have reason to believe or suspect that
prices of inputs from Indonesia, South Korea, and Thailand may have
been subsidized. We have found in other proceedings that these
countries maintain broadly available, non-industry-specific export
subsidies and, therefore, it is reasonable to infer that all exports to
all markets from these countries may be subsidized. See, e.g., Notice
of Final Determination of Sales at Less Than Fair Value and Negative
Final Determination of Critical Circumstances: Certain Color Television
Receivers From the People's Republic of China, 69 FR 20594 (April 16,
2004) and accompanying Issues and Decision Memorandum at Comment 7
(``CTVs from the PRC''). We are also directed by legislative history
not to conduct a formal investigation to ensure that such prices are
not subsidized. See H.R. Rep. 100-576 at 590 (1988). Rather, Congress
directed the Department to base its decision on information that is
available to it at the time it makes its determination. Therefore, we
have not used prices from these countries either in calculating the
Indian import-based surrogate values or in calculating market-economy
input values. In instances where a market-economy input was obtained
solely from suppliers located in these countries, we used Indian
import-based surrogate values to value the input. See Final
Determination of Sales at Less Than Fair Value: Certain Automotive
Replacement Glass Windshields From The People's Republic of China, 67
FR 6482 (February 12, 2002), and accompanying Issues and Decision
Memorandum at Comment 1.
Yulong purchased certain inputs into the production of the
merchandise under investigation from market economy suppliers and paid
for such purchases in market economy currencies. The Department has
instituted a rebuttable presumption that market economy input prices
are the best available information for valuing an input when the total
volume of the input purchased from all market economy sources during
the POI or period of review is 33 percent or greater of the total
volume of the input purchased from all sources during the period.\5\ In
these cases, unless case-specific facts provide adequate grounds to
rebut the Department's presumption, the Department will use the
weighted-average market economy purchase price to value the input.
Alternatively, when the volume of an NME firm's purchases of an input
from market economy suppliers during the period is below 33 percent of
its total volume of purchases of the input during the period, but where
these purchases are otherwise valid and there is no reason to disregard
the prices, the Department will weight-average the weighted-average
market economy purchase price with an appropriate surrogate value
according to their respective shares of the total volume of purchases,
unless case-specific facts provide adequate grounds to rebut the
presumption. When a firm has made market economy input purchases that
may have been dumped or subsidized, are not bona fide, or are otherwise
not acceptable for use in a dumping calculation, the Department will
exclude them from the numerator of the ratio to ensure a fair
determination of whether valid market economy purchases meet the 33
percent threshold. See Antidumping Methodologies: Market Economy
Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request
for Comments, 71 FR 61716 (October 19, 2006) (``Notice for Antidumping
Methodologies'').
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\5\ Notwithstanding the determination the Department reached in
Shrimp from Vietnam, at Comment 8, the Department will examine if
and when the inputs were used in the production process when case-
specific conditions demand it. Unless there are case-specific
reasons to examine other criteria, the Department will base its
decision on whether to accept market economy input purchases to
value the input on the relative share of market economy purchases
during the POI or period of review to total purchases during that
period.
---------------------------------------------------------------------------
In accordance with this policy, we valued Yulong's inputs using the
market economy prices paid for in market economy currencies where
appropriate. Alternatively, when the volume of Yulong's purchases of an
input from market economy suppliers during the POI was below 33 percent
of the company's total volume of purchases of the input during the POI,
we weight-averaged the weighted-average market economy purchase price
with an appropriate surrogate value according to their respective
shares of the total volume of purchases. See Yulong's September 24,
2007, section D response at Exhibit D-3.
4. Surrogate Values
The Department valued direct materials and packing materials using
publicly available import prices reported in the Monthly Statistics of
the Foreign Trade of India for the POI, as published by the Directorate
General of Commercial Intelligence and Statistics of the Ministry of
Commerce and Industry, Government of India. The same import prices are
also available from the World Trade Atlas (``WTA''), published by
Global Trade Information Services, Inc., which is a secondary
electronic source based upon the publication Monthly Statistics of the
Foreign Trade of India. Volume II: Imports. See http://www.gtis.com/wta.htm
.
To value electricity, we used the 2000 electricity price in India
of 3.602 Rs. per kilowatt hour from Energy Prices & Taxes, Second
Quarter 2003 published by the International Energy Agency. Because
these data were not contemporaneous to the POI, we adjusted for
inflation using WPI. See Factor Value Memorandum at Exhibit 5.
To value water, the Department used data from the Maharastra
Industrial Development Corporation (http://www.midcindia.org) to be the best
[[Page 2455]]
available information since it includes a wide range of industrial
water rates. This source provides 386 industrial water rates within the
Maharashtra province from June 2003: 193 for the ``inside industrial
areas'' usage category and 193 for the ``outside industrial areas''
usage category. The data was averaged accordingly. Because these data
were not contemporaneous to the POI, we adjusted for inflation using
WPI. See Factor Value Memorandum at Exhibit 6.
Consistent with 19 CFR 351.408(c)(3), we valued direct, indirect,
and packing labor using the most recently calculated regression-based
wage rate, which relies on 2004 data. This wage rate can currently be
found on the Department's website on Import Administration's home page,
Import Library, Expected Wages of Selected NME Countries, revised in
January 2007, http://ia.ita.doc.gov/wages/index.html. The source of
these wage-rate data on the Import Administration's web site is the
Yearbook of Labour Statistics 2002, ILO (Geneva: 2002), Chapter 5B:
Wages in Manufacturing. Because this regression-based wage rate does
not separate the labor rates into different skill levels or types of
labor, we have applied the same wage rate to all skill levels and types
of labor reported by Yulong.
As we did in valuing foreign inland freight for U.S. sales, we
valued truck freight expenses using a per kilometer per kilogram
average rate from data obtained from the web site of an Indian
transportation company, InFreight Technologies India Limited. See
http://www.infreight.com/. Because this value is not contemporaneous
with the POI, we adjusted to account for inflation using the WPI. See
Factor Value Memorandum at Exhibit 7.
To value factory overhead, selling, general and administrative
(``SG&A'') expenses, and profit values, we used the financial
statements from the following Indian companies for the fiscal year
ending March 31, 2006: Zenith Birla (India) Limited; Surya Roshni
Limited; Bhawani Industries Limited; and Bihar Tubes Limited. From this
information, we were able to determine factory overhead as a percentage
of the total raw materials, labor, and energy (``ML&E'') costs; SG&A as
a percentage of ML&E plus overhead (i.e., cost of manufacture); and
profit as a percentage of the cost of manufacture plus SG&A. See Factor
Value Memorandum at Exhibit 10.
Currency Conversion
We made currency conversions into U.S. dollars, in accordance with
section 773A(a) 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.
Verification
As provided in section 782(i)(1) of the Act, we intend to verify
all information relied upon in making our final determination.
Combination Rates
In the Initiation Notice, the Department stated that it would
calculate combination rates for respondents that are eligible for a
separate rate in this investigation. See Initiation Notice. This change
in practice is described in Policy Bulletin 05.1, available at http://ia.ita.doc.gov/.
Policy Bulletin 05.1, states:
{w{time} hile continuing the practice of assigning separate rates
only to exporters, all separate rates that the Department will now
assign in its NME investigations will be specific to those producers
that supplied the exporter during the period of investigation. Note,
however, that one rate is calculated for the exporter and all of the
producers which supplied subject merchandise to it during the period of
investigation. This practice applies both to mandatory respondents
receiving an individually calculated separate rate as well as the pool
of non-investigated firms receiving the weighted-average of the
individually calculated rates. This practice is referred to as the
application of ``combination rates'' because such rates apply to
specific combinations of exporters and one or more producers. The cash-
deposit rate assigned to an exporter will apply only to merchandise
both exported by the firm in question and produced by a firm that
supplied the exporter during the period of investigation.
See Policy Bulletin 05.1, ``Separate Rates Practice and Application of
Combination Rates in Antidumping Investigations Involving Non-Market
Economy Countries.''
Preliminary Determination
The Department has determined that the following preliminary
weighted-average dumping margins exist:
----------------------------------------------------------------------------------------------------------------
Exporter Producer Weighted-Average Margin
----------------------------------------------------------------------------------------------------------------
Beijing Sai Lin Ke Hardware Co., Xuzhou Guang Huan Steel Tube Products Co, 25.67
Ltd............................... Ltd.
Wuxi Fastube Industry Co., Ltd..... Wuxi Fastube Industry Co., Ltd. 25.67
Jiangsu Guoqiang Zinc-Plating Co., Jiangsu Guoqiang Zinc-Plating Co., Ltd. 25.67
Ltd...............................
Wuxi Eric Steel Pipe Co., Ltd...... Wuxi Eric Steel Pipe Co., Ltd. 25.67
Qingdao Xiangxing Steel Pipe Co., Qingdao Xiangxing Steel Pipe Co., Ltd. 25.67
Ltd...............................
Wah Cit Enterprises................ Guangdong Walsall Steel Pipe Industrial Co., 25.67
Ltd.
Guangdong Walsall Steel Pipe Guangdong Walsall Steel Pipe Industrial Co., 25.67
Industrial Co., Ltd............... Ltd.
Hengshui Jinghua Steel Pipe Co., Hengshui Jinghua Steel Pipe Co., Ltd. 25.67
Ltd...............................
Zhangjiagang Zhongyuan Pipe-Making Zhangjiagang Zhongyuan Pipe-Making Co, Ltd. 25.67
Co., Ltd..........................
Weifang East Steel Pipe Co., Ltd... Weifang East Steel Pipe Co., Ltd. 25.67
Shijiazhuang Zhongqing Imp & Exp Bazhou Zhuofa Steel Pipe Co., Ltd. 25.67
Co., Ltd..........................
Tianjin Baolai Int'l Trade Co., Tianjin Jinghai County Baolai Business and 25.67
Ltd............................... Industry Co., Ltd.
Wai Ming (Tianjin) Int'l Trading Bazhou Dong Sheng Hot-dipped Galvanized Steel 25.67
Co., Ltd.......................... Pipes Co., Ltd.
Kunshan Lets Win Steel Kunshan Lets Win Steel Machinery Co., Ltd. 25.67
MachineryCo., Ltd.................
Shenyang Boyu M/E Co., Ltd......... Bazhou Dong Sheng Hot-dipped Galvanized Steel 25.67
Pipes Co., Ltd.
Dalian Brollo Steel Tubes Ltd...... Dalian Brollo Steel Tubes Ltd. 25.67
Benxi Northern Pipes Co., Ltd...... Benxi Northern Pipes Co., Ltd. 25.67
Shanghai Metals & Minerals Import & Huludao Steel Pipe Industrial Co. 25.67
Export Corp.......................
Shanghai Metals & Minerals Import & Benxi Northern Pipes Co., Ltd. 25.67
Export Corp.......................
Huludao Steel Pipe Industrial Co... Huludao Steel Pipe Industrial Co. 25.67
Tianjin Xingyuda Import & Export Tianjin Lifengyuanda Steel Group 25.67
Co., Ltd..........................
[[Page 2456]]
Tianjin Xingyuda Import & Export Tianjin Xingyunda Steel Pipe Co. 25.67
Co., Ltd..........................
Tianjin Xingyuda Import & Export Tianjin Lituo Steel Products Co. 25.67
Co., Ltd..........................
Tianjin Xingyuda Import & Export Tangshan Fengnan District Xinlida Steel Pipe 25.6
Co., Ltd.......................... Co., Ltd.
Jiangyin Jianye Metal Products Co., Jiangyin Jianye Metal Products Co., Ltd. 25.67
Ltd...............................
Rizhao Xingye Import & Export Co., Shandong Xinyuan Group Co., Ltd. 25.67
Ltd...............................
Tianjin No. 1 Steel Rolled Co., Tianjin Hexing Steel Co., Ltd. 25.67
Ltd...............................
Tianjin No. 1 Steel Rolled Co., Tianjin Ruitong Steel Co., Ltd. 25.67
Ltd...............................
Tianjin No. 1 Steel Rolled Co., Tianjin Yayi Industrial Co. 25.67
Ltd...............................
Kunshan Hongyuan Machinery Kunshan Hongyuan Machinery Manufacture Co., 25.67
Manufacture Co., Ltd.............. Ltd.
Qingdao Yongjie Import & Export Shandong Xinyuan Group Co., Ltd. 25.67
Co., Ltd..........................
Jiangsu Yulong Steel Pipe Co. Ltd.. Jiangsu Yulong Steel Pipe Co. Ltd. 0.00
PRC-Wide Entity (Including ............................................. 51.34
Shuangjie)........................
----------------------------------------------------------------------------------------------------------------
Disclosure
We will disclose the calculations performed within five days of the
date of publication of this notice to parties in this proceeding in
accordance with 19 CFR 351.224(b).
Suspension of Liquidation
As noted above, the Department has found that critical
circumstances exist with respect to imports of subject merchandise from
the PRC. Therefore, in accordance with section 733(d) of the Act, we
will instruct U.S. Customs and Border Protection (``CBP'') to suspend
liquidation of all entries of CWP from the PRC as described in the
``Scope of Investigation'' section, entered, or withdrawn from
warehouse, for consumption from the separate rate companies and the
PRC-wide entity (including Shuangjie) on or after 90 days prior to the
date of publication in the Federal Register of our preliminary
determination. We will instruct CBP to require a cash deposit or the
posting of a bond equal to the weighted-average amount by which the NV
exceeds U.S. price, as indicated above. The suspension of liquidation
will remain in effect until further notice.
In accordance with section 733(d)(2) of the Act, we are directing
CBP not to suspend liquidation of imports of certain CWP from the PRC
produced and exported by Yulong, and entered, or withdrawn from
warehouse, for consumption on or after the date of publication of this
preliminary determination in the Federal Register. CBP shall not
require a cash deposit or the posting of a bond, as indicated above,
because we have calculated a margin of zero percent for Yulong.
International Trade Commission Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our preliminary affirmative determination of sales at less than
fair value. Section 735(b)(2) of the Act requires the ITC to make its
final determination as to whether the domestic industry in the United
States is materially injured, or threatened with material injury, by
reason of imports of CWP, or sales (or the likelihood of sales) for
importation, of the subject merchandise within 45 days of our final
determination.
Public Comment
Case briefs or other written comments may be submitted to the
Assistant Secretary for Import Administration no later than seven days
after the date of the final verification report is issued in this
proceeding and rebuttal briefs limited to issues raised in case briefs
no later than five days after the deadline date for case briefs. A list
of authorities used and an executive summary of issues should accompany
any briefs submitted to the Department. This summary should be limited
to five pages total, including footnotes.
In accordance with section 774 of the Act, we will hold a public
hearing, if requested, to afford interested parties an opportunity to
comment on arguments raised in case or rebuttal briefs. If a request
for a hearing is made, we intend to hold the hearing three days after
the deadline of submission of rebuttal briefs at the U.S. Department of
Commerce, 14th Street and Constitution Ave, NW, Washington, DC 20230,
at a time and location to be determined. Parties should confirm by
telephone the date, time, and location of the hearing two days before
the scheduled date.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
1870, within 30 days after the date of publication of this notice. See
19 CFR 351.310(c). Requests should contain the party's name, address,
and telephone number, the number of participants, and a list of the
issues to be discussed. At the hearing, each party may make an
affirmative presentation only on issues raised in that party's case
brief and may make rebuttal presentations only on arguments included in
that party's rebuttal brief.
This determination is issued and published in accordance with
sections 733(f) and 777(i)(1) of the Act.
Dated: January 3, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-494 Filed 1-14-08; 8:45 am]
BILLING CODE 3510-DS-S