Circular Welded Carbon Steel Pipes and Tubes from Thailand: Preliminary Results of Antidumping Duty New Shipper Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (the Department) is conducting a semiannual new shipper review of the antidumping duty order on circular welded carbon steel pipes and tubes (Pipes and Tubes) from Thailand in response to a request from Pacific Pipe Public Company, Limited (Pacific Pipe). The period of review (POR) is March 1, 2008 through September 30, 2008. The domestic interested parties for this proceeding are Allied Tube & Conduit Corporation and Wheatland Tube Company (petitioners).

We preliminarily determine that the U.S. sale of subject merchandise made by Pacific Pipe is below normal value (NV). If these preliminary results are adopted in our final results, we will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties based on the difference between the export price (EP) and the NV. Interested parties are invited to comment on these preliminary results. See the “Preliminary Results of Review” section of this notice. The final results will be issued 90 days after the date of issuance of these preliminary results, unless extended.

EFFECTIVE DATE:

August 31, 2009.

FOR FURTHER INFORMATION CONTACT:

Myrna Lobo, AD/CVD Operations, Office 6, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-2371.

Background

The Department published the antidumping duty order on Pipes and Tubes from Thailand on March 11, 1986. See Notice of Antidumping Duty Order: Circular Welded Carbon Steel Pipes and Tubes from Thailand, 51 FR 8341 (March 11, 1986) (Antidumping Duty Order). On September 30, 2008, the Department received a timely request from Pacific Pipe, in accordance with 19 CFR 351.214(c), to conduct a semiannual new shipper review of the antidumping duty order on Pipes and Tubes from Thailand. The Department found the request for review met all of the requirements set forth in 19 CFR 351.214(b) and initiated the review on October 28, 2008. See Circular Welded Carbon Steel Pipes and Tubes from Thailand: Initiation of New Shipper Antidumping Duty Review, 73 FR 65290 (November 3, 2008) (NSR Initiation).¹

On November 7, 2008, the Department issued the initial questionnaire to Pacific Pipe.² On December 9, 2008, the Department received Pacific Pipe's section A response, the public version of which was revised due to bracketing deficiencies and resubmitted on December 15, 2008. On December 15, 2008, the Department also preliminarily granted Pacific Pipe's request to limit its reporting of home market sales data to the specific grades sold in the United States. See Letter to Pacific Pipe from Barbara E. Tillman, Director, AD/CVD Operations, Office 6, Import Administration, dated December 15, 2008. On January 6, 2009, the Department received Pacific Pipe's sections B and C questionnaire response. On March 10 and July 24, 2009, the Department issued supplemental questionnaires, and Pacific Pipe responded to the questionnaires on April 14 and August 3, 2009, respectively.

On May 8, 2009, petitioners urged the Department to rescind the new shipper review in favor of examining Pacific Pipe's sale in the concurrent administrative review, because the entry occurred outside the normal six-month new shipper review period (March 1, 2008 through August 31, 2008). Petitioners also questioned the bona fide nature of Pacific Pipe's sale. We note that at the time of initiation, in accordance with 19 CFR 351.214(f)(2)(ii), the Department extended the POR through September 30, 2008, to cover Pacific Pipe's entry. We have also analyzed all aspects of Pacific Pipe's U.S. sale and preliminarily found it to be bona fide. See “Bona Fides Analysis of U.S. Sale” section below.

On March 27, 2009, the Department published a notice extending the deadline for the preliminary results to August 24, 2009. See Circular Welded Carbon Steel Pipes and Tubes from Thailand: Extension of Time Limit for Preliminary Results of New Shipper Antidumping Duty Review, 74 FR 13414 (March 27, 2009).

Verification

The Department intends to conduct a sales verification of Pacific Pipe's responses following the preliminary results of this review.

Scope of the Order

The products covered by this antidumping order are certain welded carbon steel pipes and tubes from Thailand. The subject merchandise has an outside diameter of 0.375 inches or more, but not exceeding 16 inches. These products, which are commonly referred to in the industry as “standard pipe” or “structural tubing,” are hereinafter designated as “pipes and tubes.” The merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) item 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 subheadings are provided for convenience and purposes of U.S. Customs and Border Protection (CBP), our written description of the scope of the order is dispositive.

Bona Fides Analysis of U.S. Sale

On January 22, 2009, the petitioners submitted comments calling into question the bona fide nature of Pacific Pipe's U.S. sale. Pacific Pipe responded to the comments on January 29, 2009. We have analyzed the information on the record, and preliminarily determine that Pacific Pipe's U.S. sale is a bona fide transaction. Our analysis of Pacific Pipe's sale and of the parties' comments on the bona fides of Pacific Pipe's U.S. sale are detailed in the Memorandum to Dana Mermelstein, Program Manager, from Myrna Lobo, Case Analyst, regarding Bona Fide Nature of the Sale in the Antidumping Duty New Shipper Review of Circular Welded Carbon Steel Pipes and Tubes from Thailand: Pacific Pipe Public Company, Limited, dated concurrently with this notice (Bona Fides Memorandum) and on file in the Central Records Unit, room 1117 of the main Department of Commerce building (CRU). Therefore, we are preliminarily treating Pacific Pipe's sale to the United States as an appropriate transaction for review. See Am. Silicon Techs. V. United States, 110 F. Supp.2d 992,995 (Ct. Int'l Trade 2000)

Fair Value Comparisons

To determine whether Pacific Pipe's sale of subject merchandise from Thailand was made in the United States at less than NV, we compared the EP to the NV, as described in the “U.S. Price” and “Normal Value” section of this notice in accordance with section 777A(d)(2) of the Tariff Act of 1930, as amended (“the Act”).

Product Comparisons

Pursuant to section 771(16)(A) of the Act, for purposes of determining appropriate product comparisons to the U.S. sales, the Department considers all products sold in the comparison market as described in the “Scope of the Order” section of this notice, above, that were in the ordinary course of trade. In accordance with sections 771(16)(B) and (C) of the Act, where there are no sales of identical merchandise in the comparison market made in the ordinary course of trade, we compare U.S. sales to sales of the most similar foreign like product based on the characteristics listed in sections B and C of our antidumping questionnaire: grade, nominal pipe size, wall thickness, schedule of pipe, surface finish and end finish. We found that Pacific Pipe had sales of foreign like product that were identical in these respects to the merchandise sold in the United States, and therefore compared U.S. products with the identical merchandise sold in the comparison market based on the characteristics listed above, in that order of priority.

Date of Sale

Regarding date of sale, 19 CFR 351.401(i) states that the Department will normally use the date of invoice as the date of sale, unless a different date better reflects the date on which the material terms of sale are established. Pacific Pipe reported invoice date as the date of sale for its home market sales and the proforma invoice date as the date of sale for its U.S. sale. We have analyzed the data on the record and preliminarily determine that the dates reported are the appropriate dates of sale for the U.S. and comparison market sales under review.

U.S. Price

We used EP methodology for Pacific Pipe's U.S. sale, in accordance with section 772(a) of the Act, because the subject merchandise was sold directly to the first unaffiliated purchaser in the United States prior to importation, and constructed export price methodology was not otherwise warranted based on the facts of record. In accordance with sections 772(a) and (c) of the Act, we calculated EP using the price Pacific Pipe charged for packed subject merchandise shipped on a free on board (FOB) basis. We made deductions for movement expenses and brokerage expenses incurred in Thailand, including charges for service fees, document verification expenses, port passing charges, Customs formality expenses, Customs clearance charges, terminal handling charges and inland insurance.

In addition, in accordance with section 772(c)(1)(B) of the Act, we made an upward adjustment to export price for duty drawback Pacific Pipe received. See Analysis Memorandum for Pacific Pipe Public Company, Limited (Preliminary Analysis Memo) dated concurrently with this notice.

Normal Value

In accordance with section 773(a)(1)(B)(i) of the Act, we have based NV on the price at which the foreign like product was first sold for consumption in the comparison market, in the usual commercial quantities, in the ordinary course of trade, and, to the extent practicable, at the same level of trade (LOT) as the EP sale. See “Level of Trade” section below. After testing comparison market viability, we calculated NV for Pacific Pipe as discussed below.

Home Market Viability

In order to determine whether there is a sufficient volume of sales in the home market to serve as a viable basis for calculating NV (i.e., the aggregate volume of home market sales of the foreign like product is five percent or more of the aggregate volume of U.S. sales), we compared the volume of Pacific Pipe's home market sales of the foreign like product to the volume of its U.S. sales of subject merchandise, in accordance with section 773(a)(1)(B)(ii)(II) of the Act. Based on this comparison, we determined that Pacific Pipe's home market was viable during the POR.

Level of Trade

In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we determine NV based on sales in the comparison market at the same LOT as EP. The NV LOT is that of the starting-price sales in the comparison market or, when NV is based on constructed value, that of the sales from which we derive selling expenses, G&A expenses, and profit. For EP, the U.S. LOT is also the level of the starting-price sale, which is usually from the exporter to the unaffiliated U.S. customer.

To determine whether NV sales are at a different LOT than EP sales, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. If the comparison market sales are at a different LOT and the difference affects price comparability, as manifested in a pattern of consistent price differences between the sales on which NV is based and comparison market sales at the LOT of the export transaction, we make an LOT adjustment under section 773(a)(7)(A) of the Act.

In the home market, Pacific Pipe reported it sells to several customer categories through two channels of distribution: ex-factory, and direct shipments from Pacific Pipe to the customer. Further, Pacific Pipe reported that the selling functions in the home market do not differ between customer categories or channels of distribution. See Pacific Pipe's supplemental response dated April 14, 2009 at page 8.

After analyzing the information on the record with respect to these selling functions, we find that in the home market there were not sufficient differences in the selling functions performed for the different channels of trade to conclude that there is more than one level of trade in the home market. We therefore find a single level of trade exists for all of Pacific Pipe's sales to the home market. Since there is only one LOT in the home market we find there is no basis for an LOT adjustment. See Preliminary Analysis Memorandum.

Calculation of Normal Value

We based NV on the starting prices of Pacific Pipe's sales to the home market adjusting for billing adjustments where applicable, pursuant to section 773(a)(1)(A) of the Act. Pursuant to section 773(a)(6)(B)(ii) of the Act, we made deductions for discounts and movement expenses (i.e., inland freight and warehousing expenses) where appropriate. In accordance with sections 773(a)(6)(A) and (B) of the Act, we deducted comparison market packing costs and added U.S. packing costs. In accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c), we deducted comparison market direct selling expenses (i.e., credit expenses) and added U.S. direct selling expenses. We made the appropriate adjustment for commissions paid in the home market pursuant to 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c). We made adjustments, in accordance with 19 CFR 351.410(e), for indirect selling expenses incurred on comparison market or U.S. sales where commissions were granted on sales in one market but not in the other, i.e., the “commission offset.” Specifically, where commissions are incurred in one market, but not in the other, we limit the amount of such allowance to the amount of either the selling expenses incurred in the one market or the commissions allowed in the other market, whichever is less. See Preliminary Analysis Memo.

Currency Conversion

In accordance with sections 773A(a) of the Act, we made currency conversions based on the official exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank of New York. See also 19 CFR 351.415.

Preliminary Results of New Shipper Review

As a result of our review, we preliminarily determine in accordance with 19 CFR 351.214(i)(1) that the following percentage margin exists for Pacific Pipe for the period March 1, 2008, through September 30, 2008:

Cash Deposit Requirements

The following cash deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this new shipper review, as provided by section 751(a)(2)(C) of the Act: (1) the cash deposit rate for subject merchandise manufactured and exported by Pacific Pipe will be the rate established in the final results of this new shipper review, except no cash deposit will be required if its weighted-average margin is de minimis (i.e., less than 0.5 percent); (2) if the exporter is not a firm covered in this review, but was covered in a previous review or the original less-than-fair-value (LTFV) investigation, 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, a previous 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) the cash deposit rate for all other manufacturers and/or exporters of this merchandise, shall be 15.67 percent, the all-others rate established in the LTFV investigation. These requirements, when imposed, shall remain in effect until further notice.

Assessment Rate

Upon completion of the new shipper review, the Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries, in accordance with 19 CFR 351.212(b). The Department intends to issue assessment instructions for Pacific Pipe directly to CBP 15 days after the date of publication of the final results of this new shipper review.

Pursuant to 19 CFR 351.212(b)(1), we will calculate an importer-specific assessment rate on the basis of the ratio of the total amount of antidumping duties calculated for the examined sales and the total entered value of the examined sales. We will instruct CBP to assess antidumping duties on all appropriate entries covered by this review if the importer-specific assessment rate calculated in the final results of this review is above de minimis (i.e., at or above 0.50 percent). Pursuant to 19 CFR 351.106(c)(2), we will instruct CBP to liquidate without regard to antidumping duties any entries for which the assessment rate is zero or de minimis (i.e., less than 0.50 percent). See 19 CFR 351.106(c)(1).

The final results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the final results of this review.

Disclosure and Public Hearing

The Department will disclose to parties the calculations performed in connection with these preliminary results within five days of the date of publication of this notice. See 19 CFR 351.224(b). Unless notified by the Department, pursuant to 19 CFR 351.309(c), interested parties may submit cases briefs not later than 30 days after the date of publication of this notice. Rebuttal briefs, limited to issues raised in the case briefs, may be filed not later than five days after the deadline for filing the case briefs. See 19 CFR 351.309(d). Parties who submit case briefs or rebuttal briefs in this proceeding 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. Additionally, parties are requested to provide their case briefs and rebuttal briefs in electronic format (e.g., WordPerfect, Microsoft Word, Adobe Acrobat, etc.).

Interested parties who wish to request a hearing or to participate if one is requested must submit a written request to the Assistant Secretary for Import Administration, Room B-099, within 30 days of the date of publication of this notice. Requests should contain: 1) the party's name, address and telephone number; 2) the number of participants; and 3) a list of issues to be discussed. See 19 CFR 351.310(c). Issues raised in the hearing will be limited to those raised in the case and rebuttal briefs.

The Department will issue the final results of this review, including the results of its analysis of issues raised in any written briefs, within 90 days of publication of these preliminary results, unless the final results are extended. See section 751(a)(3)(A) of the Act and 19 CFR 351.214(i)(2).

Notification to Importers

This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) 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 new shipper review is issued and published in accordance with sections 751(a)(2)(B)(iv) and 777(i)(1) of the Act, as well as 19 CFR 351.214(i).