[Federal Register Volume 62, Number 92 (Tuesday, May 13, 1997)]
[Notices]
[Pages 26286-26289]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12507]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-489-501]
Certain Welded Carbon Steel Pipe and Tube From Turkey:
Preliminary Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Preliminary Results of Antidumping Duty
Administrative Review.
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SUMMARY: In response to a request by petitioner and one respondent, the
Department of Commerce (the Department) is conducting an administrative
review of the antidumping duty order on certain welded carbon steel
pipe and tube from Turkey(A-489-501). This review covers two
manufacturers/exporters of the subject merchandise to the United States
during the period of review (POR): May 1, 1993, through April 30, 1994.
We have preliminarily determined that sales have been made below
the foreign market value (FMV) for Borusan. We preliminarily determine
no dumping margin exists for Yucelboru during the POR. If these
preliminary results are adopted in our final results of administrative
review, we will instruct U.S. Customs to assess antidumping duties
equal to the difference between the United States price (USP) and the
FMV.
Interested parties are invited to comment on these preliminary
results. Parties who submit argument in this proceeding are requested
to submit with the argument: (1) A statement of the issue; and (2) a
brief summary of the argument.
EFFECTIVE DATE: May 13, 1997.
FOR FURTHER INFORMATION CONTACT: Ilissa Kabak, Nancy Decker, Robin Gray
or Linda Ludwig, Enforcement Group III-Office 8, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Room 7866, Washington, D.C.
20230; telephone (202) 482-0182 (Kabak), (202) 482-1324 (Decker), (202)
482-0196 (Gray), or (202) 482-3833 (Ludwig).
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute and to the
Department's regulations are references to the provisions as they
existed on December 31, 1994.
Background
The Department published an antidumping duty order on certain
welded carbon steel pipe and tube from Turkey on May 15, 1986 (51 FR
17784). The Department published a notice of ``Opportunity to Request
an Administrative Review'' of the antidumping duty order on May 4, 1994
(59 FR 23051). On May 31, 1994, the petitioners, Allied Tube & Conduit
Corporation (``Allied'') and Wheatland Tube Co. (``Wheatland'')
requested an administrative review of Borusan Group (``Borusan'') and
all related entities (including, but not limited to, Borusan Holding
A.S., Borusan Gemlik Boru Tesisleri A.S., Borusan Boru Sanayii A.S.,
Istikbal Ticaret A.S., Borusan Ihracat Ithalat ve Dagitim A.S., and
Tubeco Pipe and Steel Corporation) and of Mannesmann-Sumerbank Boru
Endustrisi T.A.S. (``Mannesmann''). On May 31, 1994, respondent
Yucelboru Ihracat, Ithalat ve Pazarlama A.S. (``Yucelboru'') requested
an administrative review. We initiated this review on June 15, 1994.
See 59 FR 30770. On April 20, 1995, Mannesmann stated that they did not
have any shipments during the POR.
The Department is conducting this administrative review in
accordance with section 751 of the Act.
Scope of the Review
Imports covered by this review are shipments of certain welded
carbon steel standard pipe and tube products with an outside diameter
of 0.375 inch or more but not over 16 inches, of any wall thickness,
currently classifiable under the following Harmonized Tariff Schedule
(HTS) subheadings: 7306.3010.00, 7306.30.50.25, 7306.30.50.32,
7306.30.50.40, 7306.30.50.55, 7306.30.50.85, and 7306.30.50.90. These
products commonly referred to in the industry as standard pipe and
tube, are produced to various American Society for Testing and
Materials (ASTM) specifications, most notably A-120, A-53 or A-135.
These HTS item numbers are provided for convenience and customs
purposes. The written descriptions remain dispositive.
The POR is May 1, 1993 through April 30, 1994. This review covers
sales of certain welded carbon steel pipe and tube by Borusan and
Yucelboru.
Verification
As provided in section 782(i)(3) of the Act, we verified
information provided by the respondents using standard verification
procedures, including on-site inspection of the manufacturer's
[[Page 26287]]
facilities, the examination of relevant sales, cost of production and
financial records, and selection of original documentation containing
relevant information. Our verification results are outlined in the
public versions of the verification reports.
Product Comparisons
In accordance with section 771(16) of the Act, we considered each
welded carbon steel pipe and tube product produced by Borusan or
Yucelboru, covered by the descriptions in the ``Scope of the Review''
section of this notice, supra, and sold in the home market during the
POR, to be a foreign like product for purposes of determining
appropriate product comparisons to U.S. sales of certain welded carbon
steel pipe and tube. For each of the products produced by Borusan or
Yucelboru within the scope of the A-489-501 order, we examined the
categories of merchandise listed in section 771 (16) of the Act for
purposes of model matching. Where there were no sales of identical
merchandise in the home market to compare to U.S. sales, we compared
U.S. sales to the next most similar foreign like product on the basis
of the characteristics listed in Appendix V of the Department's
February 24, 1995 antidumping questionnaire. In making the product
comparisons, we matched each foreign like product based on the physical
characteristics and level of trade reported by the respondent. For
Borusan, we determined that there is one U.S. level of trade and three
home market levels of trade: wholesaler/distributor, retailer, end-
user. Yucelboru had no level of trade distinctions in either market.
Where sales were made in the home market on a different weight
basis from the U.S. market (e.g., theoretical versus actual weight), we
converted all quantities to the same weight basis, using the conversion
factors supplied by the company, before making our fair-value
comparisons. We compared individual U.S. transactions to monthly
weighted average FMVs.
Date of Sale
For Borusan, in the home market we treated the date of invoice,
which is generally the same as the date of shipment, as the date of
sale. In the United States, Borusan reported the date of the purchase
order or sales contract, whenever the terms are firmly set, as date of
the sale. Yucelboru reported date of invoice (which is also date of
shipment) as the date of sale in both markets.
Fair Value Comparisons
To determine whether sales of pipe and tube to the United States
were made at less than fair value, we compared the U.S. price to the
FMV, as described in the ``United States Price'' and ``Foreign Market
Value'' sections of this notice.
Turkey experienced a significant inflation rate of over 125
percent, as measured by the wholesale price index published in the
International Financial Statistics, during the POR. In accordance with
our practice, to avoid the distortions caused by the effects of this
level of inflation on prices, we limited our comparisons to sales in
the same month. See Notice of Final Determination of Sales at Less Than
Fair Value: Certain Steel Concrete Reinforcing Bars from Turkey, 62 FR
9737,9738 (March 4, 1997) (``Steel Bars''). When the rate of home
market inflation is significant, as it is in this case, it is important
that we use as a basis for FMV home market prices that are as
contemporaneous as possible with the date of the U.S. sale. This is to
minimize the extent to which calculated dumping margins are overstated
or understated due solely to price inflation that occurred in the
intervening time period between the U.S. and home market sales. For
this reason, we have used the daily exchange rates for currency
conversion purposes.
The Department's preferred source for daily exchange rates is the
Federal Reserve Bank. However, the Federal Reserve Bank does not track
or publish exchange rates for the Turkish lira. Therefore, we made
currency conversions based on the daily exchange rates from the Dow
Jones Service, as published in the Wall Street Journal. (Steel Bars, at
9741).
United States Price
All of Borusan's sales were based on the price to the first
unrelated purchaser in the United States. The Department determined
that purchase price, as defined in section 772 of the Tariff Act, was
the appropriate basis for calculating USP. We made adjustments to
purchase price, where appropriate, for foreign inland freight and
insurance, international freight and charges, credit, and other direct
selling expenses including bank commissions. We added the amount of
countervailing duties related to export subsidies and the amount for
duty drawback. Additionally, we deducted payments made by Borusan to
its U.S. customers equal to the amount of countervailing duties. We
disallowed Borusan's claimed value-added tax drawback because no
statutory authority exists for such an adjustment.
All of Yucelboru's sales were based on the price to the first
unrelated purchaser in the United States. The Department determined
that purchase price, as defined in section 772 of the Tariff Act, was
the appropriate basis for calculating USP. We made adjustments to
purchase price, where appropriate, for foreign inland freight, foreign
and U.S. brokerage and handling, ocean freight, and U.S. duties. We
relied on Yucelboru's reported data except for foreign brokerage and
handling, which was revised as a result of verification.
Foreign Market Value
For both Borusan and Yucelboru we determined that the home market
was viable, based on a comparison of the volume of home market and
third country sales. Therefore, in accordance with section 773(a)(1)(A)
of the Tariff Act, we based FMV on the packed, delivered price to
unrelated purchasers in the home market.
We made adjustments to FMV for differences in cost attributable to
differences in physical characteristics of the merchandise, pursuant to
section 773(a)(6)(C)(ii) of the Act.
Cost-of-Production Analysis
Petitioners alleged, on January 11, 1996, that Borusan sold certain
welded carbon steel pipe and tube in the home market at prices below
COP. Based on this allegation, in accordance with section 773(b) of the
Act, the Department determined, on December 4, 1996, that it had
reasonable grounds to believe or suspect that Borusan had sold the
subject merchandise in the home market at prices below COP. See Letter
to Dickstein, Shapiro, Morin & Oshinsky and Decision Memorandum
(December 4, 1996). We therefore initiated a cost investigation with
regard to Borusan in order to determine whether the respondent made
home-market sales at prices below its COP within the meaning of section
773(b) of the Act.
We requested Yucelboru to respond to our cost questionnaire, dated
February 24, 1995, in order to determine whether the respondent made
home-market sales at prices below its COP within the meaning of section
773(b) of the Act.
In accordance with 19 CFR 353.51(c), we calculated COP for Borusan
and Yucelboru as the sum of reported cost of manufacturing (COM) and
general expenses. We compared COP to home market prices, net of price
adjustments, discounts and rebates, and movement expenses.
In accordance with section 773(b) of the Tariff Act, in determining
whether
[[Page 26288]]
to disregard home market sales made at prices below the COP, we
examined whether such sales were made in substantial quantities over an
extended period of time, and whether such sales were made at prices
which permitted recovery of all costs within a reasonable period of
time in the normal course of trade.
As noted above, we determined that the Turkish economy experienced
significant inflation during the POR. Therefore, in order to avoid the
distortive effect of inflation on our comparison of costs and prices,
in accordance with our practice in such cases we requested that Borusan
and Yucelboru submit monthly production costs incurred during each
month of the POR. Notice of Preliminary Results of Antidumping Duty
Administrative Review: Certain Welded Carbon Steel Pipe and Tube from
Turkey (61 FR 35188, 35191 (July 5, 1996)). We used the companies'
adjusted monthly COP amounts and the wholesale price index to calculate
a weighted-average cost for each product for each company. The
weighted-average COM was then restated in the currency value of each
respective month and used to calculate monthly COP and CV for each
product.
In accordance with our normal practice, for each model for which
less than 10 percent, by quantity, of the home market sales during the
POR were made at prices below COP, we included all sales of that model
in the computation of FMV. For each model for which 10 percent or more,
but less than 90 percent, of the home market sales during the POR were
priced below COP, we excluded those sales priced below COP, provided
that they were made over an extended period of time. For each model for
which 90 percent or more of the home market sales during the POR were
priced below COP and were made over an extended period of time, we
disregarded all sales of that model in our calculation and, in
accordance with section 773(b) of the Tariff Act, we used the
constructed value (CV) of those models, as described below. See, e.g.,
Mechanical Transfer Presses from Japan, Final Results of Antidumping
Duty Administrative Review, 59 FR 9958 (March 2, 1994).
In accordance with section 773(b)(1) of the Tariff Act, to
determine whether sales below cost had been made over an extended
period of time, we compared the number of months in which sales below
cost occurred for a particular model to the number of months in which
that model was sold. If the model was sold in fewer than three months,
we did not disregard below-cost sales unless there were below-cost
sales of that model in each month. If a model was sold in three or more
months, we did not disregard below-cost sales unless there were sales
below cost in at least three of the months. 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-Final Results of Antidumping Duty
Administrative Reviews, 58 FR 64720, 64729 (December 8, 1993).
Because Borusan and Yucelboru provided no indication that their
below-cost sales of models within the ``greater than 90 percent'' and
the ``between 10 and 90 percent'' categories were at prices that would
permit recovery of all costs within a reasonable period of time and in
the normal course of trade, we disregarded those sales of models within
the ``10 to 90 percent'' category which were made below cost over an
extended period of time. In addition, as a result of our COP test for
home market sales of models within the ``greater than 90 percent''
category, we based FMV on CV for all U.S. sales for which more than 90
percent of sales of the comparison home market model occurred below
COP. Finally, where we found, for certain of Borusan's and Yucelboru's
models, home market sales for which less than 10 percent were made
below COP, we used all home market sales of these models in our
comparisons.
We also used CV as FMV for those U.S. sales for which there was no
sale of such or similar merchandise in the home market. In accordance
with section 773(e) of the Tariff Act, we calculated CV as the sum of
the COM, general expenses and profit. Where the general expenses were
less than the statutory minimum of 10 percent of COM, we calculated
general expenses as 10 percent of the COM. Where the actual profits
were less than the statutory minimum of 8 percent of the COM plus
general expenses, we calculated profit as 8 percent of the sum of COM
plus general expenses.
Based on our verification of Yucelboru's cost response, we adjusted
Yucelboru's reported COP and CV to reflect certain adjustments to
general and administrative expenses, indirect selling expenses, and
interest expenses. Based on our verification of Borusan's cost
response, we adjusted Borusan's reported COP and CV to reflect certain
adjustments to general and administrative expenses and interest
expenses.
In accordance with section 773 of the Tariff Act, for Borusan's
U.S. models for which we were able to find a home market such or
similar match that had sufficient above-cost sales, we calculated FMV
based on the packed, F.O.B., ex-factory, or delivered prices to
unrelated purchasers in the home market or prices to affiliated
customers which were determined to be at arm's length (See discussion
below regarding these sales). We made adjustments, where applicable,
for inland freight, pre-sale warehouse expense, discounts and rebates,
post-sale inland freight and for home market direct expenses. We added
collection of late payment charges. We also adjusted FMV for
differences in circumstances of sale, including physical
characteristics, direct selling expenses, credit, advertising,
warranty, packing costs, and the Turkish value added tax. Where
merchandise exported to the United States is exempt from home market
consumption tax, in comparing FMV to USP, we added to U.S. price the
absolute amount of such taxes charged on the comparison sales in the
home market.
For Yucelboru's U.S. models for which we were able to find a home
market such or similar match that had sufficient above-cost sales, we
calculated FMV based on the packed, F.O.B., ex-factory, or delivered
prices to unrelated purchasers in the home market. We made adjustments,
where applicable, for discounts and rebates. We disallowed Yucelboru's
claimed credit adjustment (See the Department's April 15, 1997,
Analysis Memorandum). We also adjusted FMV for differences in
circumstances of sale, including physical characteristics, packing
costs, and the Turkish value added tax. Where merchandise exported to
the United States is exempt from home market consumption tax, in
comparing FMV to USP, we added to U.S. price the absolute amount of
such taxes charged on the comparison sales in the home market.
In calculating for physical differences in merchandise we
calculated simple average variable and total costs of manufacturing by
product after indexing the reported monthly costs using the wholesale
price index for Turkey. We then indexed the average variable and total
costs of manufacturing to restate them in the currency value of each
respective month. The adjusted monthly variable costs of manufacturing
for U.S. and home market products were then compared to arrive at the
difference in merchandise adjustment.
To determine whether Borusan and Yucelboru's sales were made at
arm's length, we compared the gross unit prices of sales to related and
unrelated customers net of all movement charges, direct and indirect
selling expenses, and
[[Page 26289]]
packing (See Final Determination of Sales at Less Than Fair Value:
Certain Cold-Rolled Carbon Steel Flat Products from Argentina (58 FR
37062, 37077, July 9, 1993)). We included those sales that passed the
arm's length test in our analysis (see 19 CFR 353.45(a)).
Reimbursement
Section 353.26 of the regulations states that ``[I]n calculating
the United States price, the Secretary will deduct the amount of any
antidumping duty which the producer or reseller: (i) Paid directly on
behalf of the importer; or (ii) reimbursed to the importer.'' The
Statement of Administrative Action of the Uruguay Round Agreements Act,
in addressing the issue of reimbursement, states that ``[C]ommerce has
the full authority under its current regulations (19 CFR 353.26) to
increase the duty when an exporter directly pays the duties due, or
reimburses the importer, whether independent or affiliated, for the
importer's payment of duties.'' In Color Television Receivers from the
Republic of Korea: Final Results of Antidumping Duty Administrative
Reviews, 61 FR 4408, 4410 (February 6, 1996), Commerce stated the
following:
In effect, antidumping duties raise prices of subject
merchandise to importers, thereby providing a level playing field
upon which injured U.S. industries can compete. The remedial effect
of the law is defeated, however, where exporters themselves pay
antidumping duties, or reimburse importers for such duties.
Since we found no evidence that the conditions mentioned above
exist with respect to these companies, we did not apply Sec. 353.26 of
our regulations.
Preliminary Results of Review
As a result of our comparison of USP to FMV we preliminarily
determine that the following margin exists:
Certain Welded Carbon Steel Pipe and Tube from Turkey
------------------------------------------------------------------------
Weighted-
Producer/manufacturer/exporter average
margin
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Borusan.................................................... 8.55%
Yucelboru.................................................. 0%
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Interested parties may request disclosure within 5 days of the date
of publication of this notice and may request a hearing within 10 days
of publication. Any hearing, if requested, will be held 44 days after
the date of publication or the first business day thereafter. Case
briefs and/or written comments from interested parties may be submitted
no later than 30 days after the date of publication. Rebuttal briefs
and rebuttals to written comments, limited to issues raised in those
comments, may be filed not later than 37 days after the date of
publication of this notice. The Department will publish the final
results of these administrative reviews including the results of its
analysis of issues raised in any such written comments or at a hearing.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between the USP and FMV may vary from the percentages
stated above.
Furthermore, the following deposit requirements will be effective
for all of Yucelboru's shipments of the subject merchandise entered, or
withdrawn from warehouse, for consumption on or after the publication
date of the final results of this administrative review, as provided
for by section 751(a)(1) of the Tariff Act. A cash deposit of estimated
antidumping duties shall be required on shipments of review of the
antidumping duty order on certain welded carbon steel pipe and tube
from Turkey as follows: (1) The cash deposit rate for Yucelboru will be
the rate established in the final results of this review; (2) for
Borusan and previously reviewed or investigated companies not listed
above, the cash deposit rate will continue to be the company-specific
rate published for the most recent period; (3) if the exporter is not a
firm covered in this review, or the original 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 review, the cash deposit rate will be 14.74 percent. This is the
``all others'' rate from the LTFV investigation. See Antidumping Duty
Order; Welded Carbon Steel Standard Pipe and Tube from Turkey, 51 FR
17784 (May 15, 1986).
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 353.26 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 Department's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review and this notice are in accordance with
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR
353.22.
Dated: May 5, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-12507 Filed 5-12-97; 8:45 am]
BILLING CODE 3510-DS-P