Certain Small Diameter Carbon and Alloy Seamless Standard, Line, and Pressure Pipe from Romania: Preliminary Results of Antidumping Duty Administrative Review and Preliminary Determination Not to Revoke in Part

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to requests by S.C. Silcotub S.A. (Silcotub), a producer/exporter of subject merchandise and United States Steel Corporation (the petitioner), the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on certain small diameter carbon and alloy seamless standard, line, and pressure pipe (seamless pipe) from Romania. The period of review (POR) is August 1, 2003, through July 31, 2004.

Silcotub informed the Department that it would not be participating in the review. Accordingly, we preliminarily determine that the application of adverse facts available (AFA) is warranted with respect to Silcotub. In addition, because Silcotub did not satisfy the requirement of selling subject merchandise at not less than normal value for a period of three consecutive years, we also preliminarily determine not to revoke the order in part.

EFFECTIVE DATE:

May 10, 2005.

FOR FURTHER INFORMATION CONTACT:

Janis Kalnins at (202) 482-1392 or John Holman at (202) 482-3683, AD/CVD Operations, Office 5, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

On August 10, 2000, the Department published an antidumping duty order on seamless pipe from Romania. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Small Diameter Carbon and Alloy Seamless Standard, Line, and Pressure Pipe From Romania, 65 FR 48963 (August 10, 2000). On August 3, 2004, the Department published a notice of opportunity to request an administrative review of this order. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 69 FR 46496. In accordance with 19 CFR 351.213(b)(2), on August 31, 2004, Silcotub requested that the Department conduct an administrative review. In addition, in accordance with 19 CFR 351.222(e), Silcotub requested that the Department revoke the order with regard to Silcotub, pursuant to 19 CFR 351.222(b)(2). Silcotub subsequently withdrew its request for review on December 20, 2004. On August 31, 2004, the petitioner requested a review of Silcotub. On September 22, 2004, the Department published a notice of initiation of administrative review of the antidumping duty order on seamless pipe from Romania, covering the period August 1, 2003, through July 31, 2004. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 69 FR 56745.

On October 19, 2004, the Department issued its questionnaire to Silcotub¹. Responses to sections A through C of the questionnaire were received in December 2004.

On February 11, 2005, we published the final results in the most recently completed review, in which we disregarded below-cost sales by Silcotub. See Notice of Final Results of Antidumping Duty Administrative Review and Final Determination Not To Revoke Order in Part: Certain Small Diameter Carbon and Alloy Seamless Standard, Line, and Pressure Pipe From Romania, 70 FR 7237 (February 11, 2005) (Final Results) and Notice of Amended Final Results of Antidumping Duty Administrative Review: Certain Small Diameter Carbon and Alloy Seamless Standard, Line, and Pressure Pipe From Romania, 70 FR 14648 (March 23, 2005) (Amended Final). Therefore, on February 14, 2005, in accordance with section 773(b)(2)(A)(ii) of the Tariff Act of 1930, as amended (the Act), we requested that Silcotub complete section D of our October 19, 2004, questionnaire. On March 4, 2005, Silcotub informed the Department that it was withdrawing its participation in the administrative review and it withdrew its business-proprietary information from the record of the review.

Scope of the Order

The products covered by the order are seamless carbon and alloy (other than stainless) steel standard, line, and pressure pipes and redraw hollows produced, or equivalent, to the ASTM A-53, ASTM A-106, ASTM A-333, ASTM A-334, ASTM A-335, ASTM A-589, ASTM A-795, and the API 5L specifications and meeting the physical parameters described below, regardless of application. The scope of the order also includes all products used in standard, line, or pressure pipe applications and meeting the physical parameters described below, regardless of specification. Specifically included within the scope of the order are seamless pipes and redraw hollows, less than or equal to 4.5 inches (114.3 mm) in outside diameter, regardless of wall-thickness, manufacturing process (hot finished or cold-drawn), end finish (plain end, beveled end, upset end, threaded, or threaded and coupled), or surface finish.

The seamless pipes subject to the order are currently classifiable under the subheadings 7304.10.10.20, 7304.10.50.20, 7304.31.30.00, 7304.31.60.50, 7304.39.00.16, 7304.39.00.20, 7304.39.00.24, 7304.39.00.28, 7304.39.00.32, 7304.51.50.05, 7304.51.50.60, 7304.59.60.00, 7304.59.80.10, 7304.59.80.15, 7304.59.80.20, and 7304.59.80.25 of the Harmonized Tariff Schedule of the United States (HTSUS).

Specifications, Characteristics, and Uses: Seamless pressure pipes are intended for the conveyance of water, steam, petrochemicals, chemicals, oil products, natural gas and other liquids and gases in industrial piping systems. They may carry these substances at elevated pressures and temperatures and may be subject to the application of external heat. Seamless carbon steel pressure pipe meeting the ASTM A-106 standard may be used in temperatures of up to 1000 degrees Fahrenheit, at various ASME code stress levels. Alloy pipes made to ASTM A-335 standard must be used if temperatures and stress levels exceed those allowed for ASTM A-106. Seamless pressure pipes sold in the United States are commonly produced to the ASTM A-106 standard.

Seamless standard pipes are most commonly produced to the ASTM A-53 specification and generally are not intended for high temperature service. They are intended for the low temperature and pressure conveyance of water, steam, natural gas, air and other liquids and gasses in plumbing and heating systems, air conditioning units, automatic sprinkler systems, and other related uses. Standard pipes (depending on type and code) may carry liquids at elevated temperatures but must not exceed relevant ASME code requirements. If exceptionally low temperature uses or conditions are anticipated, standard pipe may be manufactured to ASTM

A-333 or ASTM A-334 specifications.

Seamless line pipes are intended for the conveyance of oil and natural gas or other fluids in pipe lines. Seamless line pipes are produced to the API 5L specification.

Seamless water well pipe (ASTM A-589) and seamless galvanized pipe for fire protection uses (ASTM A-795) are used for the conveyance of water.

Seamless pipes are commonly produced and certified to meet ASTM A-106, ASTM A-53, API 5L-B, and API 5L-X42 specifications. To avoid maintaining separate production runs and separate inventories, manufacturers typically triple or quadruple certify the pipes by meeting the metallurgical requirements and performing the required tests pursuant to the respective specifications. Since distributors sell the vast majority of this product, they can thereby maintain a single inventory to service all customers.

The primary application of ASTM A-106 pressure pipes and triple or quadruple certified pipes is use in pressure piping systems by refineries, petrochemical plants, and chemical plants. Other applications are in power generation plants (electrical-fossil fuel or nuclear), and in some oil field uses (on shore and off shore) such as for separator lines, gathering lines and metering runs. A minor application of this product is for use as oil and gas distribution lines for commercial applications. These applications constitute the majority of the market for the subject seamless pipes. However, ASTM A-106 pipes may be used in some boiler applications.

Redraw hollows are any unfinished pipe or “hollow profiles” of carbon or alloy steel transformed by hot rolling or cold drawing/hydrostatic testing or other methods to enable the material to be sold under ASTM A-53, ASTM A-106, ASTM A-333, ASTM A-334, ASTM

A-335, ASTM A-589, ASTM A-795, and API 5L specifications.

The scope of the order includes all seamless pipe meeting the physical parameters described above and produced to one of the specifications listed above, regardless of application, with the exception of the specific exclusions discussed below, and whether or not also certified to a non-covered specification. Standard, line, and pressure applications and the above-listed specifications are defining characteristics of the scope of the order. Therefore, seamless pipes meeting the physical description above, but not produced to the ASTM A-53, ASTM A-106, ASTM A-333, ASTM A-334, ASTM A-335, ASTM A-589, ASTM A-795, and API 5L specifications shall be covered if used in a standard, line, or pressure application, with the exception of the specific exclusions discussed below.

For example, there are certain other ASTM specifications of pipe which, because of overlapping characteristics, could potentially be used in ASTM A-106 applications. These specifications generally include ASTM A-161, ASTM A-192, ASTM A-210, ASTM A-252, ASTM A-501, ASTM A-523, ASTM A-524, and ASTM A-618. When such pipes are used in a standard, line, or pressure pipe application, with the exception of the specific exclusions discussed below, such products are covered by the scope of the order.

Specifically excluded from the scope of the order is boiler tubing and mechanical tubing, if such products are not produced to ASTM A-53, ASTM A-106, ASTM A-333, ASTM A-334, ASTM A-335, ASTM A-589, ASTM A-795, and API 5L specifications and are not used in standard, line, or pressure pipe applications. In addition, finished and unfinished OCTG are excluded from the scope of the order, if covered by the scope of another antidumping duty order from the same country. If not covered by such an OCTG order, finished and unfinished OCTG are included in this scope when used in standard, line or pressure applications.

With regard to the excluded products listed above, the Department will not instruct Customs and Border Protection (CBP) to require end-use certification until such time as the petitioner or other interested parties provide to the Department a reasonable basis to believe or suspect that the products are being used in a covered application. If such information is provided, we will require end-use certification only for the product(s) (or specification(s)) for which evidence is provided that such products are being used in covered applications as described above. For example, if, based on evidence provided by petitioner, we find a reasonable basis to believe or suspect that seamless pipe produced to the A-161 specification is being used in a standard, line or pressure application, we will require end-use certifications for imports of that specification. Normally we will require only the importer of record to certify to the end use of the imported merchandise. If it later proves necessary for adequate implementation, we may also require producers who export such products to the United States to provide such certification on invoices accompanying shipments to the United States.

Although the HTSUS subheadings are provided for convenience and CBP purposes, our written description of the merchandise subject to the scope of this order is dispositive.

Use of Facts Available

Pursuant to sections 776(a)(1) and (2) of the Act, if necessary information is not available on the record or if an interested party or any other person (A) withholds information that has been requested by the administering authority, (B) fails to provide such information by the deadlines for the submission of the information or in the form and manner requested, (C) significantly impedes a proceeding under the antidumping statute, or (D) provides such information but the information cannot be verified as provided in section 782(i) of the Act, the administering authority shall use, subject to section 782(d) of the Act, the facts otherwise available in reaching the applicable determination. In this case, Silcotub's decision not to participate in the review constitutes a withholding of information requested by the Department, pursuant to section 776(a)(2)(A) of the Act (i.e., its business-proprietary sales and cost-of-production information), necessary for the Department to conduct an accurate antidumping analysis. Without Silcotub's business-proprietary sale-specific information and, in a review such as this where the Department has reasonable grounds to believe or suspect that sales of the foreign like product were made at prices at less than the cost of production (see Final Results), the Department is unable to determine the reliability of sales prices in the home market and whether they form an appropriate basis for determining normal value. As a result of Silcotub's March 4, 2005, withdrawal of its business-proprietary sales information and its failure to report its actual cost of production for the foreign like product and the constructed-value information for subject merchandise, the Department is unable to calculate an accurate dumping margin.

By withdrawing from the review and failing to provide the information requested, Silcotub has also impeded the review process because the Department has insufficient information upon which it can conduct its review. See section 776(a)(2)(C) of the Act. Therefore, the Department must resort to facts otherwise available in reaching the applicable determination. Absent a sufficient response on the record from the respondent, sections 782(d) and (e) do not apply.

Section 776(b) of the Act provides that, in selecting from among the facts otherwise available, the Department may use an inference adverse to the interests of a party that has failed to cooperate by not acting to the best of its ability to comply with a request for information (see also the Statement of Administrative Action (SAA), accompanying the Uruguay Round Agreements Act (URAA), H. Doc. No. 103-316 at 870). By refusing to provide its cost-of-production information and withdrawing its business-proprietary sales information, Silcotub has failed to cooperate to the best of its ability. Therefore, pursuant to section 776(b) of the Act, the Department has determined that an adverse inference is warranted with respect to Silcotub.

In selecting an AFA rate, the Department's practice has been to assign respondents which fail to cooperate with the Department the highest margin determined for any party in the less-than-fair-value (LTFV) investigation or in any administrative review. See Sigma Corp. v. United States, 117 F.3d 1401,1411 (Fed. Cir. 1997). As such, we have preliminarily assigned Silcotub an AFA rate of 15.15 percent which is the LTFV weighted-average margin calculated for Silcotub during the original investigation. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Small Diameter Carbon and Alloy Seamless Standard, Line, and Pressure Pipe from Romania, 65 FR 48963 (August 10, 2000).

Section 776(c) of the Act provides that, when the Department relies on the facts otherwise available and relies on “secondary information,” the Department shall, to the extent practicable, corroborate that information from independent sources reasonably at the Department's disposal. The SAA clarifies that the final determination concerning the subject merchandise is “secondary information” and states that “corroborate” means to determine that the information used has probative value. See SAA at 870. To corroborate secondary information, the Department will examine, to the extent practicable, the reliability and relevance of the information to be used.

As discussed 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; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews, 61 FR 57391, 57392 (November 6, 1996), to corroborate secondary information, the Department will examine, to the extent practicable, the reliability and relevance of the information used. Unlike other types of information, such as input costs or selling expenses, there are no independent sources from which the Department can derive calculated dumping margins; the only source for margins is administrative determinations. Thus, in an administrative review, if the Department chooses as AFA a calculated dumping margin from a prior segment of the proceeding, it is not necessary to question the reliability of the margin for that time period. We also find that this rate, calculated from a prior segment of the proceeding, is relevant. The data upon which the Department relied in calculating the 15.15 rate in the LTFV investigation was that of Silcotub and Sota Communication Company. During the period of investigation, Silcotub produced the product which Sota Communication Company sold to the United States. Therefore, we examined for the LTFV investigation Silcotub's factor-of-production information in our calculation of the 15.15 percent rate. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Small Diameter Carbon and Alloy Seamless Standard, Line, and Pressure Pipe from Romania, 65 FR 5594 (February 4, 2000).

Furthermore, there is no information on the record that calls into question the validity of this rate. Therefore, we find that this rate is corroborated to the extent practicable. Also, we find that this rate is sufficiently high as to reasonably ensure that Silcotub does not obtain a more favorable result by failing to cooperate. Accordingly, we determine that the rate of 15.15 percent, the highest weighted-average margin determined for any firm during any segment of this proceeding, is in accordance with the requirements of section 776(c) of the Act.

No Revocation in Part

In accordance with 19 CFR 351.222(e)(1), on August 31, 2004, Silcotub submitted a request that the Department revoke the order in part on seamless pipe from Romania with respect to its sales. We preliminarily determine that the request from Silcotub does not meet all of the criteria under 19 CFR 351.222(e)(1). In the immediately preceding review, Silcotub did not receive a zero or de minimis margin. See Amended Final. Therefore, Silcotub did not meet the requirement of selling the subject merchandise at not less than normal value for a period of three consecutive years. See 19 CFR 351.222(b)(1)(i)(A). Thus, Silcotub is not eligible for consideration for revocation, and we preliminarily determine not to revoke the order with respect to Silcotub's sales of seamless pipe to the United States.

Preliminary Results of Review

As a result of our review, covering the period August 1, 2003, through July 31, 2004, we preliminarily determine the dumping margin for Silcotub to be as follows:

Any interested party may request a hearing within 30 days of the date of publication of this notice. Any hearing, if requested, will be held approximately 37 days after the publication of this notice. Issues raised in hearings will be limited to those raised in the case and rebuttal briefs. Interested parties may submit case briefs within 30 days of the date of publication of this notice. Rebuttal briefs, which must be limited to issues raised in the case briefs, may be filed not later than 35 days after the date of publication of this notice. Parties who submit case briefs or rebuttal briefs in this review are requested 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 are also requested to submit such arguments, and public versions thereof, with an electronic version on a diskette.

Upon publication of the final results of this review, the Department will instruct CBP to assess antidumping duties on all appropriate entries. Because we are applying AFA to all exports of subject merchandise produced or exported by Silcotub, we will instruct CBP to assess the final percentage margin against the entered customs values on all applicable entries during the period of review.

Further, the following deposit requirements will be effective upon completion of the final results of this administrative review for all shipments of seamless pipe from Romania entered, or withdrawn, from warehouse, for consumption on or after the publication date of the final results, as provided for by section 751(a)(2)(C) of the Act: (1) The cash-deposit rate for Silcotub will be the rate established in the final results of this review; (2) for previously reviewed or investigated companies not covered by this review, 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 by this review, a prior 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; (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 13.06 percent, the all-others rate established in the prior administrative review. See Final Results at 70 FR 7239. These cash-deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.

This notice also serves as a preliminary reminder to importers of their responsibility 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.

This administrative review and notice are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.