[Federal Register: March 7, 2005 (Volume 70, Number 43)]
[Notices]
[Page 10982-10985]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07mr05-41]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-813]
Stainless Steel Butt Weld Pipe Fittings From Korea: Preliminary
Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request by Sungkwang Bend Company Ltd.,
(SKBC), the Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order of certain
stainless steel butt weld pipe fittings from Korea. The review covers
one firm, SKBC. The period of review (POR) is February 1, 2003, through
January 31, 2004.
We preliminarily determine that sales of stainless steel butt weld
pipe fittings from Korea have been made below the normal value (NV) for
SKBC. If these preliminary results are adopted in our final results of
administrative review, we will instruct Customs and Border Protection
(CBP) to assess antidumping duties based on the difference between the
export price (EP) or constructed export price (CEP) and NV. Interested
parties are invited to comment on these preliminary results. Parties
who submit argument in these proceedings 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.
DATES: Effective Date: March 7, 2005.
FOR FURTHER INFORMATION CONTACT: Michael J. Heaney, or Robert James,
AD/CVD Operations, Office 7, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Room 3520, Washington, DC 20230; telephone
(202) 482-4475 or (202) 482-0649.
SUPPLEMENTARY INFORMATION:
Background
On February 23, 1993, the Department published the antidumping duty
order on stainless steel butt weld pipe fittings from Korea. See
Antidumping Duty Order: Certain Stainless Steel Butt Weld Pipe Fittings
from Korea, 58 FR 11029. On February 27, 2004, SKBC requested an
administrative review of the antidumping duty order on stainless steel
butt weld pipe fittings from Korea in response to the Department's
notice of opportunity to request a review published in the Federal
Register. The Department initiated the review for SKBC on March 26,
2004. See Initiation of Antidumping and Countervailing Duty
Administrative Reviews and Request for Revocation in Part, 69 FR 15788
(March 26, 2004).
On April 7, 2004, the Department issued sections A, B, and C of the
antidumping questionnaire to SKBC. SKBC filed its response to section A
of our questionnaire on May 12, 2004. On May 23, 2004, SKBC filed its
response to sections B and C of our questionnaire.
The Department issued an additional supplemental questionnaire to
SKBC on August 7, 2004. SKBC filed its response to our August 7, 2004,
questionnaire on September 2, 2004.
On August 3, 2004, the Department extended the time limit for
issuance of the preliminary results of the administrative review to
February 28, 2005. See Stainless Steel Butt Weld Pipe Fittings from
Korea; Extension of Time Limit for Preliminary Results of
Administrative Review, 69 FR 46516 (August 3, 2004).
Scope of the Antidumping Duty Order
The products covered by this order are certain welded stainless
steel butt-weld pipe fittings (pipe fittings), whether finished or
unfinished, under 14 inches in inside diameter. Pipe fittings are used
to connect pipe sections in piping systems where conditions require
welded connections. The subject merchandise can be used where one or
more of the following conditions is a factor in designing the piping
system: (1) Corrosion of the piping system will occur if material other
than stainless steel is used; (2) contamination of the material in the
system by the system itself must be prevented; (3) high temperatures
are present; (4) extreme low temperatures are present; (5) high
pressures are contained within the system.
Pipe fittings come in a variety of shapes, and the following five
are the most basic: ``elbows,'' ``tees,'' ``reducers,'' ``stub ends,''
and ``caps.'' The edges of finished fittings are beveled. Threaded,
grooved, and bolted fittings are excluded from this review. The pipe
fittings subject to this review are classifiable under subheading
7307.23.00 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheading is provided for convenience and
customs purposes, our written description of the scope of this order is
dispositive.
Verification
As provided in section 782(i) of the Tariff Act of 1930, as amended
(the Act), we verified sales information provided
[[Page 10983]]
by SKBC, using standard verification procedures such as the examination
of relevant sales and financial records. Our verification results are
outlined in the public and proprietary versions of our verification
report, which is on file in the Central Records Unit (CRU) in room B-
099 of the main Department building. See SKBC Sales Verification
Report, dated February 7, 2005 (Verification Report).
Product Comparison
In accordance with section 771(16) of the Act, we considered all
stainless steel butt-weld pipe fittings covered by the ``Scope of the
Antidumping Duty Order'' section of this notice, supra, which were
produced and sold by SKBC in the home market during the POR to be
foreign like products for the purpose of determining appropriate
product comparisons to U.S. sales of stainless steel butt-weld pipe
fittings.
We relied on five characteristics to match U.S. sales of subject
merchandise to comparison sales of the foreign like product: type,
grade, seam, size, and schedule. Where there were no sales of identical
merchandise in the home market to compare to the U.S. sales, we
compared U.S. sales to the next most similar foreign like product on
the basis of the physical characteristics and reporting instructions
listed in the antidumping questionnaire. We performed a difference in
merchandise (DIFMER) test to ensure that all comparison matches had no
more than a 20% difference in variable cost of manufacture to the
merchandise sold in the United States.
Level of Trade
In accordance with section 773(a)(1)(B)(i) of the Act, to the
extent practicable, we determine NV based on sales in the home market
at the same level of trade (LOT) as EP or the CEP. The NV LOT is that
of the starting-price sales in the home market or, when NV is based on
constructed value (CV), that of the sales from which we derive selling,
general and administrative (SG&A) expenses and profit. For CEP, it is
the level of the constructed sale from the exporter to an affiliated
importer after the deductions required under section 772(d) of the Act.
To determine whether NV sales are at a different LOT than CEP, we
examine stages in the marketing process and selling functions along the
chain of distribution between the producer and the unaffiliated
customer. 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. Finally, 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
Final Determination of Sales at Less Than Fair Value: Certain Cut-to-
Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732-33
(November 19, 1997).
SKBC reported one LOT in the home market, explaining that home
market sales to distributors and end-users were made at the same level
of trade. SKBC further submitted that it provided substantially the
same level of customer support on its EP sales as it provided on its
home market sales to distributors and end-users. We found that the
selling functions (which included customer correspondence, order review
and approval, post sale service and warranties, technical advice and
services, advertising, freight and delivery arrangement, and
ascertaining credit worthiness) to be virtually identical for home
market sales to distributors and end-users. We also found that SKBC
provided virtually the same level of customer support services on its
U.S. EP sales as it did on its home market sales. (See Appendix S-2 of
SKBC September 2, 2004 Response to the Department's Supplemental
Questionnaire.) Therefore, we determine that there is only one LOT for
SKBC's EP sales.
In its May 26, 2004, response, SKBC indicated that its U.S.
subsidiary (Sungkwang Bend America (SKBA)) performed many of the same
selling functions on SKBC's CEP sales that SKBC performed on its home
market sales. SKBC also indicated that there was one LOT for CEP and
that the CEP LOT was different than the home market LOT. We compared
CEP sales (after deductions made pursuant to section 772(d) of the Act)
to home market sales. We determined there were fewer services such as
customer correspondence, order review and approval, post sales service/
warranties, technical advice, advertising, freight delivery
arrangement, credit services and import document clearance, performed
by SKBC on its CEP sales than on SKBC's home market sales. See id. In
addition, the differences in selling functions performed for home
market and CEP transactions indicate home market sales involved a more
advanced stage of distribution than CEP sales. See id. In the home
market, SKBC provided marketing further down the chain of distribution
by providing certain downstream selling functions that are normally
performed by service centers in the U.S. market (e.g., technical
advice, credit and collection, etc.). See id.
Based on our analysis of the record evidence on selling functions
performed for the CEP LOT and the home market LOT, we determined the
CEP and the starting price of home market sales represent different
stages in the marketing process, and are thus at different LOTs within
the meaning of 19 CFR 351.412. Therefore, when we compared CEP sales to
home market sales, we examined whether an LOT adjustment may be
appropriate. In this case, SKBC sold at one LOT in the home market;
thus, there is no basis upon which to determine whether there is a
pattern of consistent price differences between LOTs. Further, we do
not have the information which would allow us to examine pricing
patterns of SKBC's sales of other similar products, and there are no
other respondents or other record evidence on which such an analysis
could be based.
Because the data available do not provide an appropriate basis for
making an LOT adjustment and the LOT of home market sales is at a more
advanced stage than the LOT of the CEP sales, a CEP offset is
appropriate in accordance with section 773(a)(7)(B) of the Act, as
claimed by SKBC. We based the amount of the CEP offset on the amount of
home market indirect selling expenses, and limited the deduction for
home market indirect selling expenses to the amount of indirect selling
expenses deducted from CEP in accordance with section 772(d)(1)(D) of
the Act. We applied the CEP offset to NV, whether based on home market
prices or CV.
Comparisons
To determine whether sales of subject merchandise made by SKBC were
made at less than fair value, we compared the EP or CEP, to the NV, as
described below. Pursuant to section 777A(d)(2) of the Act, we compared
the EP or CEP of individual U.S. transactions to the monthly weight-
averaged NV of the foreign like product.
Transactions Investigated
Section 351.401(i) of the Department's regulations states that the
Department normally will use date of invoice, as recorded in the
exporter's or producer's records kept in the ordinary course of
[[Page 10984]]
business, as the date of sale, but may use a date other than the date
of invoice if it better reflects the date on which material terms of
sale are established. For SKBC, the Department, consistent with its
practice, used the invoice date since the invoice date represented the
first point at which the home market and U.S. terms of sale were set.
(See e.g., Stainless Steel Sheet and Strip in Coils from Mexico,
Preliminary Results of Antidumping Duty Administrative Review, August
6, 2004 (69 FR 47905, 47908). See also Verification Report at pages 5-
6.)
Export Price and Constructed Export Price
Section 772(a) of the Act defines EP 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). Section 772(b) of
the Act defines CEP as ``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 subsections (c) and (d). For
purposes of this administrative review, SKBC classified all of the U.S.
sales that it shipped directly from Korea to the United States as EP
sales. SKBC reported all sales that were invoiced through its U.S.
subsidiary SKBA as CEP transactions. For these preliminary results, we
have accepted these classifications. The merchandise shipped directly
to unaffiliated distributors in the U.S. market was not sold through an
affiliated U.S. importer. We, therefore, preliminarily determine that
these transactions were EP sales. We have classified as CEP
transactions the merchandise invoiced through SKBA because these sales
were ``sold in the United States'' within the meaning of the Act.
Export Price
We calculated EP in accordance with section 772(a) of the Act. We
based EP on packed prices to customers in the United States. We made
deductions for billing adjustments and rebates. We also made
adjustments for the following movement expenses: foreign inland
freight, international freight, marine insurance, brokerage charges,
U.S. inland freight, and U.S. Customs duties.
Constructed Export Price
We calculated CEP in accordance with section 772(b) of the Act for
those sales to the first unaffiliated purchaser that took place after
importation into the United States. We based CEP on packed prices to
unaffiliated purchasers in the United States. We also made deductions
for movement expenses in accordance with section 772(c)(2)(A) of the
Act; these included foreign inland freight, international freight,
marine insurance, brokerage charges, U.S. inland freight and U.S.
customs duties. As further directed by section 772(d)(1) of the Act, we
deducted those selling expenses associated with economic activities
occurring in the United States, including direct selling expenses
(i.e., billing adjustments, rebates, credit expenses, technical service
expenses, and bank charges) inventory carrying costs, and other
indirect selling expenses. We recalculated indirect selling expenses
based upon SKBC's revised calculation of those expenses. (See
Verification Report, at page 36.) We also made an adjustment for profit
in accordance with section 772(d)(3) of the Act.
Normal Value
In accordance with section 773(a)(1)(C) of the Act, to determine
whether there was sufficient volume of sales in the home market to
serve as a viable basis for calculating NV (i.e., the aggregate volume
of home market sales of the foreign like product is greater than or
equal to five percent of the aggregate volume of U.S. sales), we
compared SKBC's volume of home market sales of the foreign like product
to the volume of U.S. sales of the subject merchandise. Because SKBC's
aggregate volume of home market sales of the foreign like product was
greater than five percent of its aggregate volume of U.S. sales for the
subject merchandise, we determined that the home market was viable. We
therefore based NV on home market sales to unaffiliated purchasers made
in the usual commercial quantities and in the normal course of trade.
We made adjustments, where applicable, for movement expenses
(consisting of inland freight) in accordance with section 773(a)(6)(B)
of the Act. In accordance with section 773(a)(6)(C)(iii) of the Act and
19 CFR 351.410, we made circumstance-of-sale adjustment for imputed
credit, warranty, bank charges, and technical service expenses. We made
deductions for billing adjustments and rebates. In addition, we made
adjustments for differences in cost attributable to differences in the
physical characteristics of the merchandise (i.e., Difmer) pursuant to
section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.410. We also made an
adjustment, in accordance with 19 CFR 351.410(e), for indirect selling
expenses incurred in the home market where commissions were granted on
sales in the United States. As noted in the ``Level of Trade'' section
of this notice, we also made an adjustment for the CEP offset in
accordance with section 773(a)(7)(B) of the Act. Finally, we deducted
home market packing costs and added U.S. packing costs in accordance
with section 773(a)(6) of the Act. Because SKBC failed to include labor
costs in its original packing calculation, we made additions to both
U.S. and home market packing costs to account for the labor component
of packing expense. See SKBC Verification Report at 37.
Currency Conversion
We made currency conversions into U.S. dollars based on the
exchange rates in effect on the dates of the U.S. sales as certified by
the Federal Reserve Bank, in accordance with section 773A(a) of the
Act.
Preliminary Results of Review
As a result of our review, we preliminarily find the weighted-
average dumping margin for the period February 1, 2003, through January
31, 2004, to be as follows:
------------------------------------------------------------------------
Margin
Manufacturer/ exporter (percent)
------------------------------------------------------------------------
Sungkwang Bend Company Ltd................................. 1.36
------------------------------------------------------------------------
The Department will disclose calculations performed within five
days of the date of publication of this notice in accordance with 19
CFR 351.224(b). An interested party may request a hearing within 30
days of publication. See 19 CFR 351.310(c). Any hearing, if requested,
will be held 37 days after the date of publication, or the first
business day thereafter, unless the Department alters the date pursuant
to 19 CFR 351.310(d). Interested parties may submit case briefs or
written comments no later than 30 days after the date of publication of
these preliminary results of review. Rebuttal briefs and rebuttals to
written comments, limited to issues raised in the case briefs and
comments, may be filed no later than 35 days after the date of
publication of this notice. Parties who submit arguments in these
proceedings are requested to submit with the argument: (1) A statement
of
[[Page 10985]]
the issue, (2) a brief summary of the argument, and (3) a table of
authorities. Further, we would appreciate it if parties submitting case
briefs, rebuttal briefs, and written comments would provide the
Department with an additional copy of the public version of any such
argument on diskette. The Department will issue final results of this
administrative review, including the results of our analysis of the
issues in any such case briefs, rebuttal briefs, and written comments
or at a hearing, within 120 days of publication of these preliminary
results.
The Department shall determine, and CBP shall assess, antidumping
duties on all appropriate entries. In accordance with 19 CFR
351.212(b)(1), we calculated importer-specific ad valorem assessment
rates for the merchandise based on the ratio of the total amount of
antidumping duties calculated for the examined sales made during the
POR to the total customs value of the sales used to calculate those
duties. This rate will be assessed uniformly on all entries of that
particular importer made during the POR. The Department will issue
appropriate appraisement instructions directly to CBP upon completion
of the review.
Furthermore, the following deposit requirements will be effective
upon completion of the final results of this administrative review for
all shipments of stainless steel butt weld pipe fittings from Korea
entered, or withdrawn from warehouse, for consumption on or after the
publication date of the final results of this administrative review, as
provided by section 751(a)(1) of the Act:
(1) The cash deposit rate for the reviewed company will be the rate
established in the final results of review;
(2) For any previously reviewed or investigated company not listed
above, the cash deposit rate will continue to be the company-specific
rate published in the most recent period;
(3) If the exporter is not a firm covered in this review or the
LTFV investigation, but the manufacturer is, the cash deposit rate will
be the rate established for the most recent period for the manufacturer
of the merchandise; and
(4) If neither the exporter nor the manufacturer is a firm covered
in this or any previous review conducted by the Department, the cash
deposit rate will be the ``all others'' rate from the investigation
(21.2 percent). See Notice of Final Determination of Sales at Less Than
Fair Value; Certain Welded Stainless Steel Butt Weld Pipe Fittings From
Korea, 58 FR 11029 (February 23, 1993).
This notice also 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.
We are issuing and publishing this notice in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: February 28, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-917 Filed 3-4-05; 8:45 am]