[Federal Register Volume 81, Number 137 (Monday, July 18, 2016)]
[Notices]
[Pages 46645-46647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-16923]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-870]
Certain Oil Country Tubular Goods From the Republic of Korea:
Initiation and Expedited Preliminary Results of Changed Circumstances
Review
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
DATES: Effective Date: July 18, 2016.
SUMMARY: In response to a request from Hyundai Steel Co. Ltd. (Hyundai
Steel), a producer/exporter of certain oil country tubular goods (OCTG)
from the Republic of Korea (Korea), and pursuant to section 751(b) of
the Tariff Act of 1930, as amended (the Act), 19 CFR 351.216 and
351.221(c)(3)(ii), the Department is initiating a changed circumstances
review (CCR) and issuing this notice of preliminary results. We have
preliminarily determined that Hyundai Steel is the successor-in-
interest to the former Hyundai HYSCO and, as such, if the Department
upholds these preliminary results in the final results, Hyundai Steel
will be entitled to the antidumping duty deposit rate currently
assigned to Hyundai HYSCO with respect to the subject merchandise.
FOR FURTHER INFORMATION CONTACT: Victoria Cho, AD/CVD Operations,
Office VI, Enforcement and Compliance, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
5075.
SUPPLEMENTARY INFORMATION:
Background
On September 10, 2014, the Department published an antidumping duty
order on OCTG from Korea.\1\
---------------------------------------------------------------------------
\1\ See Certain Oil Country Tubular Goods From India, the
Republic of Korea, Taiwan, the Republic of Turkey, and the Socialist
Republic of Vietnam: Antidumping Duty Orders; and Certain Oil
Country Tubular Goods From the Socialist Republic of Vietnam:
Amended Final Determination of Sales at Less Than Fair Value, 74 FR
53691 (September 10, 2014).
---------------------------------------------------------------------------
On February 24, 2016,\2\ Hyundai Steel informed the Department that
effective July 1, 2015, it had merged with Hyundai HYSCO,\3\ and
requested that: (1) The Department conduct a CCR under 19 CFR
351.216(b) to determine that it is the successor-in-interest to Hyundai
HYSCO for purposes of determining Hyundai Steel's antidumping duty cash
deposits and liabilities; (2) the Department's successor-in-interest
determination be effective as of July 1, 2015, the date on which the
merger was completed; and (3) on an expedited basis under 19 CFR
351.221(c)(3)(ii).
---------------------------------------------------------------------------
\2\ See the February 24, 2016, letter from Hyundai Steel, ``Oil
Country Tubular Goods from the Republic of Korea: Request for a
Changed Circumstances Review,'' (CCR Request).
\3\ Hyundai HYSCO was a respondent in the investigation of OCTG
from Korea covering the period July 1, 2012-June 30, 2013. Hyundai
HYSCO received a 15.75 percent dumping margin. See Certain Oil
Country Tubular Goods From the Republic of Korea: Final
Determination of Sales at Less Than Fair Value and Negative Final
Determination of Critical Circumstances, 79 FR 41983 (July 18,
2014).
---------------------------------------------------------------------------
On May 18, 2016,\4\ the Department declined to initiate the CCR
that Hyundai Steel requested in its February 24, 2016, CCR Request. The
Department determined that it would not conduct a CCR of a final
determination in an investigation less than 24 months after the
publication of the final determination absent showing of good cause.\5\
The Department further found that Hyundai Steel ``did not reference or
attempt to show good cause'' in its February 24, 2016, request.\6\ On
May 31, 2016,\7\ Hyundai Steel filed its second request for a CCR, in
which it alleged that that good cause exists in this case and requested
that the Department initiate a CCR.
---------------------------------------------------------------------------
\4\ See the Department's May 18, 2016, letter to Hyundai Steel.
\5\ See the Department's May 18, 2016, letter to Hyundai Steel
(the Department's Rejection Letter); 19 CFR 351.216(c); and section
751(b)(4) of the Act.
\6\ See the CCR Request; and also see the Department's Rejection
Letter.
\7\ See the May 31, 2016, letter from Hyundai Steel to the
Department.
---------------------------------------------------------------------------
We received no comments from any other interested party.
Scope of the Review
The merchandise covered by this review is certain oil country
tubular goods (OCTG), which are hollow steel products of circular
cross-section, including oil well casing and tubing, of iron (other
than cast iron) or steel (both carbon and alloy), whether seamless or
welded, regardless of end finish (e.g., whether or not plain end,
threaded, or threaded and coupled) whether or not conforming to
American Petroleum Institute (API) or non-API specifications, whether
finished (including limited service OCTG products) or unfinished
(including green tubes and limited service OCTG products), whether or
not thread protectors are attached. The scope of the investigation also
covers OCTG coupling stock. For a complete description of the scope of
the investigation, see Appendix I to this notice.
Initiation and Preliminary Results
Pursuant to section 751(b)(1) of the Act, the Department will
conduct a CCR upon receipt of a request from an interested party or
receipt of information concerning an antidumping duty order which shows
changed circumstances sufficient to warrant a review of the order.\8\
In addition, because the final determination was published less than 24
months prior to the date on which Hyundai Steel submitted its request
for a CCR (i.e., May 31, 2016), and pursuant to section 351.216(c) of
the Department's regulations, a CCR will not be initiated unless good
cause exists. We find that good cause exists in the instant CCR request
to initiate this CCR before the 24 month anniversary of the final
determination, as demonstrated by Hyundai Steel.\9\ Moreover, as noted
above in the ``Background'' section, we have received information
indicating that on July 1, 2015, Hyundai HYSCO merged with Hyundai
Steel, with the
[[Page 46646]]
latter assuming all operations for the production and sale of the
subject merchandise.\10\ This constitutes changed circumstances
warranting a review of this order.\11\
---------------------------------------------------------------------------
\8\ See 19 CFR 351.216(c); section 735(a) of the Act.
\9\ See the May 31, 2016, letter from Hyundai Steel to the
Department.
\10\ See the CCR request.
\11\ See 19 CFR 351.216(d).
---------------------------------------------------------------------------
Section 351.221(c)(3)(ii) of the Department's regulations permits
the Department to combine the notice of initiation of a CCR and the
notice of preliminary results if the Department concludes that
expedited action is warranted. In this instance, because we have on the
record the information necessary to make a preliminary finding and no
party has opposed expedited action, we find that expedited action is
warranted, and have combined the notice of initiation and the notice of
preliminary results.
In making a successor-in-interest determination, the Department
examines several factors, including but not limited to, changes in: (1)
Management; (2) production facilities; (3) supplier relationships; and
(4) customer base.\12\ 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.\13\ 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 antidumping
treatment as its predecessor.
---------------------------------------------------------------------------
\12\ See, e.g., Preliminary Results of Antidumping Duty Changed
Circumstances Review: Carbon and Certain Alloy Steel Wire Rod from
Canada, 71 FR 75229 (December 14, 2009) and unchanged in Notice of
Final Results of Antidumping Duty Changed Circumstances Review:
Carbon and Certain Alloy Steel Wire Rod from Canada, 72 FR 15102
(March 30, 2007) (Carbon and Certain Alloy Steel from Canada);
Certain Lined Paper Products From India: Preliminary Results of
Changed Circumstances Review, 79 FR 21897 (April 18, 2014) and
unchanged in Certain Lined Paper Products From India: Final Results
of Changed Circumstances Review, 79 FR 35726 (June 24, 2014).
\13\ See, e.g., Notice of Initiation and Preliminary Results of
Antidumping Duty Changed Circumstances Review: Carbon and Certain
Alloy Steel Wire Rod From Mexico, 75 FR 67685 (November 3, 2010) and
unchanged in Final Results of Antidumping Duty Changed Circumstances
Review: Carbon and Certain Alloy Steel Wire Rod From Mexico, 76 FR
45509 (July 29, 2011); Carbon and Certain Alloy Steel from Canada.
---------------------------------------------------------------------------
In its CCR Request, Hyundai Steel explained that effective July 1,
2015, Hyundai HYSCO merged with Hyundai Steel,\14\ with Hyundai Steel
effectively absorbing Hyundai HYSCO. On April 28, 2015, the board of
directors of Hyundai Steel and Hyundai HYSCO, both members of the
Hyundai Motor Group, decided to merge the two companies. The
absorption-type merger was conducted, through which Hyundai Steel
became the surviving company.\15\ Hyundai Steel claimed that since the
merger took effect, it is operating essentially the same business as
the former Hyundai HYSCO, and there has been no significant change in
management, production facilities, supplier relationships, or customer
base with respect to the production and sale of the subject
merchandise.\16\ Hyundai Steel submitted detailed documentation
relating to the merger of the two companies (e.g., major shareholders'
lists, board of directors' lists, executives' lists, meeting minutes
regarding the merger, business registration certificates, and a copy of
the merger corporate registration and announcement of the merger).\17\
---------------------------------------------------------------------------
\14\ See the CCR Request.
\15\ Id., at 3.
\16\ Id., at 4.
\17\ Id., at 3 and Exhibits 1 through 8.
---------------------------------------------------------------------------
With respect to management, Hyundai Steel asserts that the
management structure of the former Hyundai HYSCO has also remained
largely unchanged. Hyundai Steel retained most of its board of
directors. Mr. Heon-seok Lee, who was a board member and executive of
Hyundai HYSCO, remained as an executive of Hyundai Steel.\18\ In
addition, Hyundai Steel states that of the 17 executives of Hyundai
HYSCO, 12 have remained at Hyundai Steel after the merger, excluding
only four non-executive directors. Nine out of the 12 executives that
remained at Hyundai Steel have been assigned to departments and
divisions within Hyundai Steel.\19\
---------------------------------------------------------------------------
\18\ Id., at 8 and exhibit 2.
\19\ Id., at 8-9 and exhibit 3.
---------------------------------------------------------------------------
Hyundai Steel further explained that its current organizational
structure is substantially similar to that of Hyundai HYSCO. The only
change to the organizational structure is that HYSCO's Business
Management Division and Overseas Business Division in its Sales
Division were divided and integrated into Hyundai Steel's Business
Planning Department, Administrative Service Department, Accounting/
Monetary Department, Sales Department and R&D Center, according to the
function of each team. The other three divisions (i.e., the Sales
Division (excluding the Overseas Business sub-division), Pipe Plant,
and Automotive Parts Plant) were simply transferred over to Hyundai
Steel.\20\ Moreover, Hyundai Steel claims that the merger did not
affect the overall organizational structure in the production and sale
of OCTG.\21\
---------------------------------------------------------------------------
\20\ Id., at 7.
\21\ Id., at 7 and exhibit 9.
---------------------------------------------------------------------------
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 asserts that
all of the production facilities for Hyundai HYSCO and Hyundai Steel
have remained the same, after Hyundai Steel absorbed Hyundai HYSCO due
to the merger.\22\ Hyundai Steel provided copies of HYSCO's company
brochure and a screenshot of Hyundai Steel's official Web site, which
identifies the addresses and telephone numbers of the offices,
production facilities, and branch offices of Hyundai HYSCO and Hyundai
Steel.\23\ Hyundai Steel contends that none of these locations have
changed as a result of the merger, including the location of the
production facility for OCTG and the Steel Pipe Plant located in Ulsan,
South Korea. Based on this information, we preliminarily find that the
merger did not result in material changes to the production of the
subject merchandise.
---------------------------------------------------------------------------
\22\ See, e.g., Carbon and Certain Alloy Steel from Canada.
\23\ See the CCR Request at 9 and exhibit 10.
---------------------------------------------------------------------------
With respect to suppliers and customers, all of the supplier
relationships related to OCTG for Hyundai HYSCO and Hyundai Steel have
remained the same. Specifically, Hyundai Steel states that is was
Hyundai HYSCO's sole supplier of hot-rolled coil for OCTG production in
June 2015.\24\ After the merger, although the level of integration may
have changed, the coil used in the production of OCTG continues to be
supplied by Hyundai Steel.\25\ Hyundai Steel contends that it has also
maintained Hyundai HYSCO's OCTG customer base.\26\ Hyundai Steel
asserts that Hyundai HYSCO USA (HHU) was Hyundai HYSCO's sole U.S.
customer in June 2015, while Hyundai Steel America (HSA) was Hyundai
[[Page 46647]]
Steel's sole U.S. customer in July 2015.\27\ Hyundai Steel asserts that
its U.S. subsidiary, HSA, is the same company as Hyundai HYSCO's U.S.
subsidiary, HHU, which was renamed pursuant to the merger.\28\
---------------------------------------------------------------------------
\24\ Id., at 9 and exhibit 11.
\25\ Id., Hyundai Steel states that due to the time required to
integrate the systems of the two companies, the internal systems
relating to pipe products continued to operate separately after the
merger while Hyundai Steel worked to merge the two systems into a
single system. Therefore, during July 2015, Hyundai Steel is
recognized in the system as the hot-rolled supplier.
\26\ See the CCR Request at 9 and exhibit 12.
\27\ Id., at 9 and 10 and exhibit 12.
\28\ Id.
---------------------------------------------------------------------------
Based on the evidence reviewed, we preliminarily find that Hyundai
Steel is the successor-in-interest to the merger of Hyundai Steel and
Hyundai HYSCO. Specifically, we preliminarily find that the merger of
these two companies resulted in no significant changes to management,
production facilities, supplier relationships, and customers with
respect to the production and sale of the subject merchandise. Thus,
Hyundai Steel operates as the same business entity as Hyundai HYSCO
with respect to the subject merchandise. If the Department upholds
these preliminary results in the final results, Hyundai Steel will be
entitled to the antidumping duty deposit rate currently assigned to
Hyundai HYSCO with respect to the subject merchandise (i.e., 15.75
percent). If these preliminary results are adopted in the final results
of this CCR, we will instruct U.S. Customs and Border Protection to
suspend liquidation of entries of OCTG made by Hyundai Steel, effective
on the publication date 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.
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. All comments are to be
filed electronically using Enforcement and Compliance's Antidumping and
Countervailing Duty Centralized Electronic Service System (ACCESS)
available to registered users at http://iaaccess.trade.gov and in the
Central Records Unit, Room B8024 of the main Department of Commerce
building, and must also be served on interested parties.\29\ An
electronically filed document must be received successfully in its
entirety by ACCESS by 5:00 p.m. Eastern Time on the day it is due.\30\
---------------------------------------------------------------------------
\29\ See 19 CFR 351.303(f).
\30\ See 19 CFR 351.303(b).
---------------------------------------------------------------------------
Consistent with 19 CFR 351.216(e), we will issue the final results
of this CCR 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. We are issuing and publishing this finding and
notice in accordance with sections 751(b)(1) and 777(i)(l) of the Act
and 19 CFR 351.216.
Dated: July 8, 2016.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.
Appendix I--Scope of the Review
The merchandise covered by the investigation is certain oil
country tubular goods (OCTG), which are hollow steel products of
circular cross-section, including oil well casing and tubing, of
iron (other than cast iron) or steel (both carbon and alloy),
whether seamless or welded, regardless of end finish (e.g., whether
or not plain end, threaded, or threaded and coupled) whether or not
conforming to American Petroleum Institute (API) or non-API
specifications, whether finished (including limited service OCTG
products) or unfinished (including green tubes and limited service
OCTG products), whether or not thread protectors are attached. The
scope of the investigation also covers OCTG coupling stock.
Excluded from the scope of the investigation are: Casing or
tubing containing 10.5 percent or more by weight of chromium; drill
pipe; unattached couplings; and unattached thread protectors.
The merchandise subject to the investigation is currently
classified in the Harmonized Tariff Schedule of the United States
(HTSUS) under item numbers: 7304.29.10.10, 7304.29.10.20,
7304.29.10.30, 7304.29.10.40, 7304.29.10.50, 7304.29.10.60,
7304.29.10.80, 7304.29.20.10, 7304.29.20.20, 7304.29.20.30,
7304.29.20.40, 7304.29.20.50, 7304.29.20.60, 7304.29.20.80,
7304.29.31.10, 7304.29.31.20, 7304.29.31.30, 7304.29.31.40,
7304.29.31.50, 7304.29.31.60, 7304.29.31.80, 7304.29.41.10,
7304.29.41.20, 7304.29.41.30, 7304.29.41.40, 7304.29.41.50,
7304.29.41.60, 7304.29.41.80, 7304.29.50.15, 7304.29.50.30,
7304.29.50.45, 7304.29.50.60, 7304.29.50.75, 7304.29.61.15,
7304.29.61.30, 7304.29.61.45, 7304.29.61.60, 7304.29.61.75,
7305.20.20.00, 7305.20.40.00, 7305.20.60.00, 7305.20.80.00,
7306.29.10.30, 7306.29.10.90, 7306.29.20.00, 7306.29.31.00,
7306.29.41.00, 7306.29.60.10, 7306.29.60.50, 7306.29.81.10, and
7306.29.81.50.
The merchandise subject to the investigation may also enter
under the following HTSUS item numbers: 7304.39.00.24,
7304.39.00.28, 7304.39.00.32, 7304.39.00.36, 7304.39.00.40,
7304.39.00.44, 7304.39.00.48, 7304.39.00.52, 7304.39.00.56,
7304.39.00.62, 7304.39.00.68, 7304.39.00.72, 7304.39.00.76,
7304.39.00.80, 7304.59.60.00, 7304.59.80.15, 7304.59.80.20,
7304.59.80.25, 7304.59.80.30, 7304.59.80.35, 7304.59.80.40,
7304.59.80.45, 7304.59.80.50, 7304.59.80.55, 7304.59.80.60,
7304.59.80.65, 7304.59.80.70, 7304.59.80.80, 7305.31.40.00,
7305.31.60.90, 7306.30.50.55, 7306.30.50.90, 7306.50.50.50, and
7306.50.50.70.
The HTSUS subheadings above are provided for convenience and
customs purposes only. The written description of the scope of the
investigation is dispositive.
[FR Doc. 2016-16923 Filed 7-15-16; 8:45 am]
BILLING CODE 3510-DS-P