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Notice

Preliminary Determination of Critical Circumstances: Certain Small Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe From the Czech Republic

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Information about this document as published in the Federal Register.

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AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

EFFECTIVE DATE:

May 25, 2000.

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FOR FURTHER INFORMATION CONTACT:

John Brinkmann or Dennis McClure, AD/CVD Enforcement, Office 6, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Ave, NW, Washington, DC 20230; telephone: (202) 482-4126 or 482-0984, respectively.

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department's regulations are references to the provisions codified at 19 CFR part 351 (April 1999).

Background

On February 4, 2000, the Department published the preliminary affirmative determination in the antidumping duty investigation on certain small diameter carbon and alloy seamless standard, line and pressure pipe (seamless pipe) from the Czech Republic, 65 FR 5599. On April 18, 2000, the petitioners alleged that there is a reasonable basis to believe or suspect that critical circumstances exist with respect to imports of seamless pipe from the Czech Republic.

Critical Circumstances

Section 733(e)(1) of the Act provides that the Department will preliminarily determine that critical circumstances exist if there is a reasonable basis to believe or suspect that: (A)(i) There is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise, or (ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales, and (B) there have been massive imports of the subject merchandise over a relatively short period. Section 351.206(h)(1) of the Department's regulations provides that, in determining whether imports of the subject merchandise have been “massive,” the Department normally will examine: (i) The volume and value of the imports; (ii) seasonal trends; and (iii) the share of domestic consumption accounted for by the imports. In addition, section 351.206(h)(2) of the Department's regulations provides that an increase in imports of 15 percent during the “relatively short period” of time may be considered “massive.”

Section 351.206(i) of the Department's regulations defines “relatively short period” as normally being the period beginning on the date the proceeding begins (i.e., the date the petition is filed) and ending at least three months later. The regulations also provide, however, that if the Department finds that importers, or exporters or producers, had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely, the Department may consider a period of not less than three months from that earlier time.

History of Dumping and Importer Knowledge

Because we are aware of the European Union's (EU's) November 17, 1997, finding that the Czech Republic had sold similar products (e.g., seamless pipes, of iron or non-alloy steel) at less than fair value and had caused injury to the domestic industry, we find that a reasonable basis exists to believe or suspect that there is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise, pursuant to section 733(e)(1)(A)(i) of the Act. Although the products investigated by the EU are not all identical to those covered by the scope of this investigation, we do not require the scope of our proceedings to match exactly the scope of the foreign proceeding. See Notice of Final Determination of Sales at Less Than Fair Value: Disposable Pocket Lighters From the People's Republic of China, 60 FR 22359, 22368 (May 5, 1995). In addition, the Department may look to the second criterion for determining importer knowledge of dumping.

In determining whether there is a reasonable basis to believe or suspect that an importer knew or should have known that the exporter was selling the seamless pipe at less than fair value, pursuant to section 733(e)(1)(A)(ii) of the Act, the Department's normal practice is to consider margins of 25 percent or more for export price (EP) sales sufficient to impute knowledge of dumping. See Certain Cut-to-Length Carbon Steel Plate From the People's Republic of China, 62 FR 31972, 31978 (June 11, 1997). In the instant case, the respondent, Nova Hut, received a margin of 32.26 percent in the amended preliminary determination, 65 FR 12971. Therefore, we have imputed knowledge of dumping to importers of subject merchandise from Nova Hut.

In determining whether there is a reasonable basis to believe or suspect that an importer knew or should have known that there was likely to be material injury by reason of dumped imports, under section 733(e)(1)(A)(ii) of the Act, the Department normally will look to the preliminary injury determination of the International Trade Commission (ITC). If the ITC finds a reasonable indication of present material injury to the relevant U.S. industry, the Department will determine that a reasonable basis exists to impute importer knowledge that there was likely to be material injury by reason of dumped imports. In this case, the ITC has found that a reasonable indication of present material injury due to dumping exists for all imports of seamless pipe from the Czech Republic. See Certain Seamless Carbon and Alloy Steel Standard, Line and Pressure Pipe from the Czech Republic, Japan, Mexico, Romania and South Africa, 64 FR 46953 (August 27, 1999). As a result, the Department has determined that there is a reasonable basis to believe or suspect that importers knew or should have known that there was likely to be material injury by reason of dumped imports of subject merchandise from the Czech Republic.

Massive Imports

In determining whether there are “massive imports” over a “relatively short period,” pursuant to 733(e)(1)(B) of the Act, the Department normally compares the import volume of the subject merchandise for three months immediately preceding and following the filing of the petition. Imports normally will be considered massive Start Printed Page 33804when imports have increased by 15 percent or more during this “relatively short period.”

We do not have verifiable data from Nova Hut because it withdrew from verification. Therefore, the Department must base its “massive imports” determination as to the company on the facts available, pursuant to section 776(a) of the Act.[1] Accordingly, we first examined U.S. Customs data [2] on imports of seamless pipe from the Czech Republic for January through June 1999 (the six months preceding the June 30, 1999, filing of the petition) and from July through December 1999 (the six months following the filing of the petition).[3] We found that the total volume of imports of small diameter seamless pipe from the Czech Republic increased by 45.75 percent in the six-month period following the filing of the petition (July through December 1999), as compared to the total volume of such imports from January through June 1999. Second, we considered that Nova Hut, the sole respondent in the investigation, was the only company identified by both the petitioner and the Government of the Czech Republic as a Czech producer of merchandise under investigation. From this we infer that Nova Hut is a significant producer of the merchandise under investigation. As facts available, then, we also infer that a significant portion of the 45.75 percent increase in imports is attributable to Nova Hut. We recognize that some of the HTS categories analyzed to derive the 45.75 percent increase in imports are basket categories that may include non-scope merchandise. However, given that Nova Hut's refusal to supply verifiable data prevents the Department from doing a company-specific massive imports analysis, we are, pursuant to section 776(b) of the Act, making the adverse inference that the country-wide import data is representative of Nova Hut's import data. Moreover, the Department's practice has been to make an adverse inference concerning massive imports with respect to an uncooperative respondent even when country-wide data was not available or not considered. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Collated Roofing Nails from Taiwan, 62 FR 51427, 51437 (October 1, 1997). We, therefore, find that Nova Hut had massive imports of the subject merchandise over a relatively short period of time, under section 733(e)(1)(B) of the Act and 19 CFR 351.206(h)(2).

Based on our determination that there is a reasonable basis to believe or suspect that there is a history of dumping and material injury by reason of dumped imports of the subject merchandise in the EU, as well as importer knowledge of dumping, and that there have been massive imports of seamless pipe from this producer over a relatively short period, we preliminarily determine that critical circumstances exist for imports from the Czech Republic of seamless pipe produced by Nova Hut.

All Other Exporters

In regard to the “all others” category, it is the Department's normal practice to conduct its critical circumstances analysis based on the experience of investigated companies. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Steel Concrete Reinforcing Bars from Turkey (Rebars from Turkey), 62 FR 9737, 9741 (March 4, 1997). In Rebars from Turkey, the Department determined that because it found critical circumstances existed for three out of the four companies investigated, critical circumstances also existed for companies covered by the “all others” rate. However, in Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Sheet and Strip in Coils from Japan (Stainless Steel from Japan), 64 FR 30574 (June 8, 1999), the Department did not extend its affirmative critical circumstances findings to the “all others” categories while finding affirmative critical circumstances for four of the five respondents, because the affirmative determinations were based on adverse facts available.

In the instant case, in our critical circumstances analysis for the one investigated company, Nova Hut, we determined that the EU's finding that the Czech Republic had sold similar products at less than fair value and had caused injury to the domestic industry provides reasonable basis to believe or suspect that there is a history of dumping and material injury by reason of dumped imports in this case. Consistent with our practice, we similarly extend this finding to the “all others” category.

With respect to massive imports, however, we are unable to rely on our import level analysis for Nova Hut because it is based upon adverse facts available, and we have no verified data upon which to base a massive imports analysis. Instead, consistent with the approach taken in Notice of Final Determination of Sales at Less Than Fair Value: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan, 64 FR 24239 (May 6, 1999) and Notice of Final Determinations of Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From Argentina, Japan and Thailand 65 FR 5220, 5227 (February 4, 2000), we examined U.S. Customs data on overall imports from the Czech Republic for the six months preceding and the six months following the filing of the petition in order to see if we could ascertain whether an increase in shipments of greater than 15 percent or more occurred within a relatively short period following the point at which importers had reason to believe that a proceeding was likely. Information on the record indicates that there was a 45.75 percent increase in overall imports from the Czech Republic for the six months following the filing of the petition, as compared to the six months preceding the filing of the petition. However, these data cover numerous HTS categories that may include merchandise other than subject merchandise. Although we made an adverse inference based on this data with respect to Nova Hut, it is not appropriate to make a similar inference with respect to “all others.” Because we have no reliable data upon which to determine whether there were massive imports of seamless pipe from the producers included in the “all others” category, a necessary criterion for determining affirmative critical circumstances has not been met. Therefore, we have preliminarily determined that critical circumstances do not exist for imports from the Czech Republic of seamless pipe for companies in the “all others” category.

Suspension of Liquidation

In accordance with section 733(e)(2) of the Act, the Department will direct the Customs Service to suspend liquidation of all entries of seamless pipe from the Czech Republic produced by Nova Hut, that are entered, or withdrawn from warehouse, for consumption on or after November 6, 1999, which is 90 days prior to the date of publication in the Federal Register of our preliminary determination of sales at less than fair value. The Customs Service shall require a cash deposit or posting of a bond equal to the estimated preliminary dumping margin reflected Start Printed Page 33805in the preliminary determination of sales at less than fair value published in the Federal Register. This suspension of liquidation will remain in effect until further notice. The margin in the preliminary determination is as follows:

Nova Hut—32.26 percent.

Final Critical Circumstances Determination

We will make final critical circumstances determinations when we issue our final determination in the less-than-fair-value investigation, which is due to be made no later than June 19, 2000.

ITC Notification

In accordance with section 733(f) of the Act, we have notified the ITC of our determination.

This notice is published pursuant to section 777(i) of the Act.

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Dated: May 17, 2000.

Troy H. Cribb,

Acting Assistant Secretary for Import Administration.

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Footnotes

1.  Because the respondent withdrew from verification, we considered the company non-cooperating and did not request monthly shipment data from the company.

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2.  IM-145 import statistics on HTS numbers included within the scope of the investigation.

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3.  As stated in Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon-Quality Steel Plate from Indonesia (64 FR 73164, December 29, 1999), the Department's practice is to use the longest period for which information is available from the month that the petition was submitted through the date of the preliminary determination.

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[FR Doc. 00-13097 Filed 5-24-00; 8:45 am]

BILLING CODE 3510-DS-P