Circular Welded Carbon Quality Steel Pipe from the People's Republic of China: Notice of Amended Final Affirmative Countervailing Duty Determination and Notice of Countervailing Duty Order

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

Based on affirmative final determinations by the Department of Commerce (the Department) and the International Trade Commission (ITC), the Department is issuing a countervailing duty order on circular welded carbon quality steel pipe (CWP) from the People's Republic of China (PRC). On July 15, 2008, the ITC notified the Department of its affirmative determination of material injury to a U.S. industry. See Circular Welded Carbon-Quality Steel Pipe from China, USITC Pub. 4019, Investigation Nos. 701-TA-447 and 731-TA-1116 (Final) (July 2008).

EFFECTIVE DATE:

July 22, 2008.

FOR FURTHER INFORMATION CONTACT:

Shane Subler and Damian Felton at (202) 482-0189 and (202) 482-0133, respectively, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230.

Background

On June 5, 2008, the Department published its final determination in the countervailing duty investigation of CWP from the PRC. See Circular Welded Carbon Quality Steel Pipe from the People's Republic of China: Final Affirmative Countervailing Duty Determination and Final Affirmative Determination of Critical Circumstances, 73 FR 31966 (June 5, 2008) (Final Determination).

On July 15, 2008, the ITC notified the Department of its final determination pursuant to sections 705(b)(1)(A)(i) and 735(b)(1)(A)(i) of the Tariff Act of 1930, as amended (the Act), that an industry in the United States is materially injured by reason of subsidized imports of subject merchandise the PRC. The ITC also determined that critical circumstances do not exist. See Circular Welded Carbon-Quality Steel Pipe from China (Investigation Nos. 701-TA-447 and 731-TA-1116 (Final), USITC Publication 4019, July 2008).

Scope of the Order

The scope of this order covers certain welded carbon quality steel pipes and tubes, of circular cross-section, and with an outside diameter of 0.372 inches (9.45 mm) or more, but not more than 16 inches (406.4 mm), whether or not stenciled, regardless of wall thickness, surface finish (e.g., black, galvanized, or painted), end finish (e.g., plain end, beveled end, grooved, threaded, or threaded and coupled), or industry specification (e.g., ASTM, proprietary, or other), generally known as standard pipe and structural pipe (they may also be referred to as circular, structural, or mechanical tubing).

Specifically, the term “carbon quality” includes products in which (a) iron predominates, by weight, over each of the other contained elements; (b) the carbon content is 2 percent or less, by weight; and (c) none of the elements listed below exceeds the quantity, by weight, as indicated:

(i) 1.80 percent of manganese;

(ii) 2.25 percent of silicon;

(iii) 1.00 percent of copper;

(iv) 0.50 percent of aluminum;

(v) 1.25 percent of chromium;

(vi) 0.30 percent of cobalt;

(vii) 0.40 percent of lead;

(viii) 1.25 percent of nickel;

(ix) 0.30 percent of tungsten;

(x) 0.15 percent of molybdenum;

(xi) 0.10 percent of niobium;

(xii) 0.41 percent of titanium;

(xiii) 0.15 percent of vanadium; or

(xiv) 0.15 percent of zirconium.

Standard pipe is made primarily to American Society for Testing and Materials (ASTM) specifications, but can be made to other specifications. Standard pipe is made primarily to ASTM specifications A-53, A-135, and A-795. Structural pipe is made primarily to ASTM specifications A-252 and A-500. Standard and structural pipe may also be produced to proprietary specifications rather than to industry specifications. This is often the case, for example, with fence tubing. Pipe multiple-stenciled to a standard and/or structural specification and to any other specification, such as the American Petroleum Institute (API) API-5L specification, is also covered by the scope of this investigation when it meets the physical description set forth above and also has one or more of the following characteristics: is 32 feet in length or less; is less than 2.0 inches (50 mm) in outside diameter; has a galvanized and/or painted surface finish; or has a threaded and/or coupled end finish. (The term “painted” does not include coatings to inhibit rust in transit, such as varnish, but includes coatings such as polyester.)

The scope of this order does not include: (a) pipe suitable for use in boilers, superheaters, heat exchangers, condensers, refining furnaces and feedwater heaters, whether or not cold drawn; (b) mechanical tubing, whether or not cold-drawn; (c) finished electrical conduit; (d) finished scaffolding; (e) tube and pipe hollows for redrawing; (f) oil country tubular goods produced to API specifications; and (g) line pipe produced to only API specifications.

The pipe products that are the subject of this order are currently classifiable in HTSUS statistical reporting numbers 7306.30.10.00, 7306.30.50.25, 7306.30.50.32, 7306.30.50.40, 7306.30.50.55, 7306.30.50.85, 7306.30.50.90, 7306.50.10.00, 7306.50.50.50, 7306.50.50.70, 7306.19.10.10, 7306.19.10.50, 7306.19.51.10, and 7306.19.51.50. However, the product description, and not the Harmonized Tariff Schedule of the United States (“HTSUS”) classification, is dispositive of whether merchandise imported into the United States falls within the scope of the order.

Amendment to the Final Determination

In accordance with sections 705(d) and 777(i)(1) of the Act, on June 5, 2008, the Department published its notice of final affirmative countervailing duty determination in the countervailing duty investigation of CWP from the PRC. See Final Determination, 73 FR 31966, and corresponding “Issues and Decision Memorandum” (May 29, 2008). On June 16, 2008, the petitioners¹ filed timely allegations stating that the Department made six ministerial errors in its final determination. No rebuttal comments were received.

After analyzing all petitioners' comments, we have determined, in accordance with 19 CFR 351.224(e), that we made four ministerial errors in our calculations performed for the final determination. In addition, the Department itself discovered it made two additional ministerial errors.²

In summary, the petitioners contended that the Department erred in making its Final Determination by making two distinct clerical errors in calculating the benefit from the provision of hot-rolled steel (HRS) at less than adequate remuneration when it did not adjust the SteelBenchmarker to include delivery charges and import duties and did not adjust the benchmark for a certain type³ of HRS to include Chinese import duties. The Department did not make either of the adjustments requested because they did not involve ministerial errors. See Ministerial Error Allegations Memo at pages 2-3.

Second, the petitioners contended that the Department made several errors in the calculation of benefit from East Pipe's policy loans including using an incorrect amount of reported interest for one loan, incorrectly calculating the number of days outstanding for another loan, and impermissibly offsetting the benefit from the specific loans where the Department found a benefit in accordance with 19 CFR 351.505(a). The Department agreed with the petitioners that these three ministerial errors were committed with respect to East Pipe's policy loans and corrected each of the errors accordingly. See Ministerial Error Allegations Memo at pages 3-5.

Third, the petitioners contended that with respect to Kingland, the Department did not use the correct sales denominator to account for the collapsing of Kingland companies.⁴ The Department agreed, in part, with the petitioners that some ministerial errors were committed with respect to Kingland's sales denominator. However, other requested adjustments were not ministerial errors, because, for example, there was not enough information on the record to make these other adjustments. Therefore, the Department only corrected those errors it found to be ministerial errors. See Ministerial Error Allegations Memo at page 6.

Finally, the Department itself found two additional ministerial errors. In our calculation to measure the adequacy of remuneration from government-provided HRS we inadvertently did not use the actual import price paid as a benchmark in the month(s) of purchase, and we did not average that actual import price with the SteelBenchmarker price for the month(s), and have made corrections accordingly. See Ministerial Error Allegations Memo at pages 6-7. Additionally, we failed to make a minor correction presented at verification regarding East Pipe's interest paid on one loan (separate from the loan noted above). See Ministerial Error Allegations Memo at pages 3-4.

As a result of correcting these errors, the countervailing duty calculated for Weifang East Steel Pipe Co., Ltd. (“East Pipe”) has changed from 29.57 percent to 29.62 percent, the countervailing duty calculated for Zhejiang Kingland Pipeline and Technologies Co., Ltd. (“Kingland Pipeline”), and affiliated companies (collectively, “Kingland,” or “Kingland Companies”) has changed from 44.86 percent to 44.93 percent, the countervailing duty calculated for Tianjin Shuangjie Steel Pipe Co., Ltd.; Tianjin Shuangjie Steel Pipe Group Co., Ltd.; Tianjin Wa Song Imp. & Exp. Co., Ltd.; and Tianjin Shuanglian Galvanizing Products Co., Ltd. (collectively, “Shuangjie”) has changed from 615.92 percent to 616.83 percent, and the countervailing duty calculated for “All Others” has changed from 37.22 percent to 37.28 percent. Therefore, in accordance with 19 CFR 351.224(e), we are amending the final determination in the countervailing duty investigation of CWP from the PRC.

Countervailing Duty Order

On July 15, 2008, in accordance with section 705(d) of the Act, the ITC notified the Department of its final determination that the industry in the United States producing CWP is materially injured within the meaning of section 705(b)(1)(A)(i) of the Act by reason of subsidized imports of CWP from the PRC.

Therefore, countervailing duties will be assessed on all unliquidated entries of CWP from the PRC entered, or withdrawn from warehouse, for consumption on or after November 13, 2007, the date on which the Department published its preliminary affirmative countervailing duty determination in the Federal Register,⁵ and before March 12, 2008, the date the Department instructed the U.S. Customs and Border Protection (CBP) to discontinue the suspension of liquidation in accordance with section 703(d) of the Act. Section 703(d) states that the suspension of liquidation pursuant to a preliminary determination may not remain in effect for more than four months. Therefore, entries of CWP made on or after March 12, 2008, and prior to the date of publication of the ITC's final determination in the Federal Register are not liable for the assessment of countervailing duties due to the Department's discontinuation, effective March 12, 2008, of the suspension of liquidation.

With regard to the ITC's negative critical circumstances determination, we will instruct CBP to lift suspension, release any bond or other security, and refund any cash deposit made to secure the payment of antidumping duties with respect to entries of the merchandise entered, or withdrawn from warehouse, for consumption on or after August 15, 2007, but before November 13, 2007 (i.e., the 90 days prior to the date of publication of the Preliminary Determination).

In accordance with section 706 of the Act, the Department will direct CBP to reinstitute the suspension of liquidation for CWP from the PRC, effective the date of publication of the ITC's notice of final determination in the Federal Register and to assess, upon further advice by the Department pursuant to section 706(a)(1) of the Act, countervailing duties for each entry of the subject merchandise in an amount based on the net countervailable subsidy rates for the subject merchandise as noted below.

This notice constitutes the countervailing duty order with respect to CWP from the PRC, pursuant to section 706(a) of the Act. Interested parties may contact the Department's CRU, Room 1117 of the Main Commerce Building, for copies of an updated list of countervailing duty orders currently in effect.

This order is issued and published in accordance with section 706(a) of Act, 19 CFR 351.224(e), and 19 CFR 351.211(b).