[Federal Register Volume 81, Number 93 (Friday, May 13, 2016)]
[Notices]
[Pages 29840-29842]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11390]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-809]
Circular Welded Non-Alloy Steel Pipe From the Republic of Korea:
Initiation and Preliminary Results of Antidumping Duty Changed
Circumstances Review
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request from Hyundai Steel, a producer/
exporter of circular welded non-alloy steel pipe (CWP) from the
Republic of Korea, and pursuant to section 751(b) of the Tariff Act of
1930, as amended (the Act), and 19 CFR 351.216 and 351.221(c)(3)(ii),
the Department is initiating a changed circumstances review and issuing
this notice of preliminary results. We preliminarily determine that
Hyundai Steel is the successor-in-interest to Hyundai HYSCO (HYSCO).
DATES: Effective Date: May 13, 2016.
FOR FURTHER INFORMATION CONTACT: Joseph Shuler, AD/CVD Operations,
Office I, Enforcement and Compliance, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
1293.
SUPPLEMENTARY INFORMATION:
Background
On November 2, 1992, the Department published the antidumping duty
order for circular welded non-alloy steel pipe from the Republic of
Korea.\1\
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\1\ See Notice of Antidumping Duty Orders: Certain Circular
Welded Non-Alloy Steel Pipe from Brazil, the Republic of Korea
(Korea), Mexico, and Venezuela, and Amendment to Final Determination
of Sales at Less Than Fair Value: Certain Circular Welded Non-Alloy
Steel Pipe from Korea, 57 FR 49453 (November 2, 1992).
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On February 24, 2016, Hyundai Steel informed the Department that
effective July 1, 2015, it had merged with
[[Page 29841]]
HYSCO,\2\ and requested that: (1) The Department conduct a changed
circumstances review under 19 CFR 351.216(b) to determine that it is
the successor-in-interest to HYSCO for purposes of determining
antidumping duty cash deposits and liabilities; and (2) the Department
conduct the changed circumstances review on an expedited basis under 19
CFR 351.221(c)(3)(ii). No interested parties commented on Hyundai
Steel's request.
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\2\ See letter from Hyundai Steel to the Department, ``Certain
Circular Welded Non-Alloy Steel Pipe from the Republic of Korea:
Request for Changed Circumstances Review (CCR Request), dated
February 24, 2016.
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Scope of the Order
The merchandise subject to the order is circular welded non-alloy
steel pipe and tube, of circular cross-section, not more than 406.4
millimeters (16 inches) in outside diameter, regardless of wall
thickness, surface finish (black, galvanized, or painted), or end
finish (plain end, beveled end, threaded, or threaded and coupled).
These pipes and tubes are generally known as standard pipes and tubes
and are intended for the low-pressure conveyance of water, steam,
natural gas, air, and other liquids and gases in plumbing and heating
systems, air-conditioning units, automatic sprinkler systems, and other
related uses. Standard pipe may also be used for light load-bearing
applications, such as for fence tubing, and as structural pipe tubing
used for framing and as support members for reconstruction or load-
bearing purposes in the construction, shipbuilding, trucking, farm
equipment, and other related industries. Unfinished conduit pipe is
also included in the order.
All carbon-steel pipes and tubes within the physical description
outlined above are included within the scope of the order except line
pipe, oil-country tubular goods, boiler tubing, mechanical tubing, pipe
and tube hollows for redraws, finished scaffolding, and finished
conduit.\3\
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\3\ See Final Negative Determination of Scope Inquiry on Certain
Circular Welded Non-Alloy Steel Pipe and Tube from Brazil, the
Republic of Korea, Mexico, and Venezuela, 61 FR 11608 (March 21,
1996). In accordance with this determination, pipe certified to the
API 5L line-pipe specification and pipe certified to both the API 5L
line-pipe specifications and the less-stringent ASTM A-53 standard-
pipe specifications, which falls within the physical parameters as
outlined above, and entered as line pipe of a kind used for oil and
gas pipelines, is outside of the scope of the AD order.
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Imports of these products are currently classifiable under the
following Harmonized Tariff Schedule of the United States (HTSUS)
numbers: 7306.30.1000, 7306.30.5025, 7306.30.5032, 7306.30.5040,
7306.30.5055, 7306.30.5085, and 7306.30.5090. Although the HTSUS
numbers are provided for convenience and customs purposes, our written
description of the scope of the order is dispositive.
All carbon-steel pipes and tubes within the physical description
outlined above are included within the scope of the order except line
pipe, oil-country tubular goods, boiler tubing, mechanical tubing, pipe
and tube hollows for redraws, finished scaffolding, and finished
conduit.
Imports of these products are currently classifiable under the
following Harmonized Tariff Schedule of the United States (HTSUS)
numbers: 7306.30.1000, 7306.30.5025, 7306.30.5032, 7306.30.5040,
7306.30.5055, 7306.30.5085, and 7306.30.5090. Although the HTSUS
numbers are provided for convenience and customs purposes, our written
description of the scope of the order is dispositive.
Initiation and Preliminary Results
Pursuant to section 751(b)(1) of the Act, the Department will
conduct a changed circumstances review upon receipt of a request from
an interested party or receipt of information concerning an antidumping
duty order which demonstrates changed circumstances sufficient to
warrant a review of the order. As noted above in the ``Background''
section, we received information indicating that on July 1, 2015,
Hyundai Steel merged with HYSCO. The information further indicates that
at that time, Hyundai Steel assumed all of HYSCO's operations for the
production and sale of subject merchandise. This constitutes changed
circumstances warranting a review of this order.\4\ Therefore, in
accordance with section 751(b)(1) of the Act, we are initiating a
changed circumstances review based upon the information contained in
Hyundai Steel's submission.\5\
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\4\ See 19 CFR 351.216(d).
\5\ See the CCR Request.
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Section 351.221(c)(3)(ii) of the Department's regulations permits
the Department to combine the notice of initiation of a changed
circumstances review and the preliminary results of review if the
Department concludes that expedited action is warranted. In this
instance, we find that expedited action is warranted, and are issuing a
combined notice of initiation and preliminary results based on the
information placed on the record by Hyundai Steel.
In making a successor-in-interest determination, the Department
examines several factors including, but not limited to, whether there
were changes in: (1) Management; (2) production facilities; (3)
supplier relationships; and (4) customer base.\6\ While no single
factor or combination of these factors will necessarily provide a
dispositive indication of a successor-in-interest relationship, the
Department will generally consider the new company to be the successor
to the previous company if the new company's resulting operation is not
materially dissimilar to that of its predecessor.\7\ Thus, if the
evidence demonstrates that, with respect to the production and sale of
the subject merchandise, the new company operates as the same business
entity as the former company, the Department will accord the new
company the same treatment under the antidumping duty order as its
predecessor.
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\6\ See, e.g., Pressure Sensitive Plastic Tape from Italy:
Preliminary Results of Antidumping Duty Changed Circumstances
Review, 75 FR 8925 (Feb. 26, 2010), unchanged in Pressure Sensitive
Plastic Tape From Italy: Final Results of Antidumping Duty Changed
Circumstances Review, 75 FR 27706 (May 18, 2010); Brake Rotors From
the People's Republic of China: Final Results of Changed
Circumstances Antidumping Duty Administrative Review, 70 FR 69941
(November 18, 2005) (Brake Rotors), citing Brass Sheet and Strip
from Canada; Final Results of Antidumping Duty Administrative
Review, 57 FR 2460 (May 13, 1992); and Structural Steel Beams from
Korea: Preliminary Results of Changed Circumstances Antidumping Duty
Administrative Review, 66 FR 15834 (March 21, 2001).
\7\ See, e.g., Brake Rotors.
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In its submission, Hyundai Steel explained that it merged with
HYSCO effective July 1, 2015. Hyundai Steel stated that the merger was
approved by shareholders of both companies, but procedurally, the
merger took the form of an ``absorption'' through which Hyundai Steel
``absorbed'' HYSCO, which no longer exists as a corporate entity.\8\
Hyundai Steel claimed that since the effective date of the merger,
Hyundai Steel is operating essentially the same business as HYSCO did,
and that there have been no significant changes in management or
production facilities, with only minimal impact on the company's
supplier relationships and its customer base with respect to the
production and sale of the subject merchandise.\9\ Hyundai Steel
submitted detailed documentation relating to the merger of the two
companies (e.g., shareholder meeting report, articles of incorporation,
and a copy of the merger announcement).\10\
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\8\ See CCR Request at 2.
\9\ See CCR Request at 3-4.
\10\ Id. at 3 and Exhibits 1 through 14.
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[[Page 29842]]
With respect to management, Hyundai Steel retained its board of
directors and discharged the board of directors of HYSCO, with the
exception of Mr. Heon-seok Lee, who was a board member and executive
(Chief Director of Pipe Factory Manufacturing Support Group) of HYSCO
and who remains with Hyundai Steel as a member of the board of
directors and an executive (Chief Director of Pipe Factory and Head of
Automotive Parts Production Office).\11\ In addition, 12 of 17 HYSCO
executives remain at Hyundai Steel, nine of whom continue to work in
business units similar to the HYSCO units where they were employed.
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\11\ Id. at 8 and Exhibit 3.
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Hyundai Steel further explained that its current organizational
structure is substantially similar to that of HYSCO; the only
difference is that the management team of the former company is now
integrated into the larger management structure of Hyundai Steel.\12\
Hyundai Steel explained that the only changes within the organizational
structure are that certain business units (of HYSCO) were divided and
integrated into Hyundai Steel's business units.\13\ The documentation
submitted in the CCR Request demonstrates that the units specifically
related to the production and sale of the subject merchandise by
Hyundai Steel remain the same, other than changes in the names of the
plants and divisions, as they were for HYSCO.\14\
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\12\ Id. at 7.
\13\ Id. at 7.
\14\ See CCR Request at 7-8.
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Based on this information, and in particular, based on the fact
that Hyundai Steel's management team continues to include the majority
of the former HYSCO managers, we preliminarily find that the
reorganization resulting from the merger of the two companies did not
result in management that was materially dissimilar with respect to the
subject merchandise.
With respect to production facilities, Hyundai Steel reported that
there have been no changes.\15\ Hyundai Steel provided copies of
HYSCO's company brochure and noted that the location of the production
facility, in Ulsan, Korea, also remains unchanged.\16\ Based on this
information, we preliminarily find that the merger did not result in
material changes to the production of the subject merchandise.
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\15\ Id. at 9.
\16\ Id.
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With respect to suppliers and customers, Hyundai Steel provided
information that demonstrates that there are only marginal differences
to its supplier relationships. Specifically, prior to the merger,
Hyundai Steel was HYSCO's largest supplier of hot-rolled coil; after
the merger, Hyundai Steel continues to be the largest supplier of this
input to the production of the subject merchandise. Although other
suppliers of hot-rolled coil to HYSCO prior to the merger are no longer
providing hot-rolled coil, Hyundai Steel explained that these suppliers
provided only a small portion of the input to HYSCO before the
merger.\17\ Hyundai Steel explained that the merger had no effect on
the customers or sales practices in the U.S. (other than a short
interruption in sales) or domestic markets because Hyundai Steel is now
selling the subject merchandise to the same customers in exactly the
same manner as HYSCO did. Hyundai Steel elaborated that the same
customers accounted for 98 percent of the customer base following the
merger.
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\17\ Id. at 8-9.
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Based on our consideration of the totality of the evidence provided
by Hyundai Steel, we preliminarily determine that Hyundai Steel is the
successor-in-interest to HYSCO, for purposes of the application of the
antidumping duty order. Specifically, with respect to the production
and sale of the subject merchandise, we find that the merger of these
two companies resulted in no significant changes to management or
production facilities. Additionally, the minor changes in supplier
relationships and customers that Hyundai Steel identified indicate that
there had been no material change in suppliers of inputs or services
related to the production, sale and distribution of the subject
merchandise, and thus do not weigh against finding that Hyundai Steel
is the successor-in-interest to HYSCO. Thus, Hyundai Steel operates as
the same business entity as HYSCO with respect to the subject
merchandise. If the Department upholds this preliminary determination
in the final results, Hyundai Steel will retain the antidumping duty
deposit rate currently assigned to HYSCO with respect to the subject
merchandise (i.e., 3.69 percent). If these preliminary results are
adopted in the final results of this changed circumstances review, we
will instruct U.S. Customs and Border Protection to suspend liquidation
of entries of CWP made by Hyundai Steel, effective the date of
publication of the final results.
Public Comment
Interested parties may submit case briefs and/or written comments
not later than 14 days after the date of publication of this notice.
Rebuttal briefs and rebuttals to written comments, which must be
limited to issues raised in such briefs or comments, may be filed not
later than 21 days after the date of publication of this notice.\18\
Parties who submit case or rebuttal briefs are encouraged to submit
with each argument: (1) A statement of the issue; (2) a brief summary
of the argument; and (3) a table of authorities. Parties submitting
briefs should do so pursuant to the Department's electronic filing
system, ACCESS.\19\ Electronically-filed documents must be received
successfully in their entirety by 5:00 p.m. Eastern Time on the due
dates established above.\20\
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\18\ See 19 CFR 351.309(d).
\19\ See 19 CFR 351.303(f).
\20\ See 19 CFR 351.303(b)(1).
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Any interested party may request a hearing within 14 days of
publication of this notice.\21\ Parties will be notified of the time
and date of any hearing if requested.\22\
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\21\ See 19 CFR 351.310(c).
\22\ See 19 CFR 351.310(d).
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Consistent with 19 CFR 351.216(e), we will issue the final results
of this changed circumstances review no later than 270 days after the
date on which this review was initiated, or within 45 days if all
parties agree to our preliminary finding. This initiation and
preliminary results of review notice is published in accordance with
sections 751(b)(l) and 777(i)(l) of the Act and 19 CFR 351.216, 19 CFR
351.221(b)(l), (4), and 19 CFR 351.222(g).
Dated: May 9, 2016.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2016-11390 Filed 5-12-16; 8:45 am]
BILLING CODE 3510-DS-P