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Notice of Final Determination of Sales at Less Than Fair Value: Certain Small Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe From Romania

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AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

EFFECTIVE DATE:

June 23, 2000.

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FOR FURTHER INFORMATION CONTACT:

Magd Zalok or Charles Riggle, Group II, Office 5, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-4162, (202) 482-0650, respectively.

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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 (URAA). In addition, unless otherwise indicated, all citations to the Department of Commerce (the Department) regulations refer to the regulations codified at 19 CFR Part 351 (April 1999).

FINAL DETERMINATION:

We determine that certain small diameter carbon and alloy seamless standard, line and pressure pipe (small diameter seamless pipe) from Romania is being sold, or is likely to be sold, in the United States at less than fair value (LTFV), as provided in section 735 of the Act. The estimated margins of sales at LTFV are shown in the Suspension of Liquidation section of this notice.

Case History

The preliminary determination in this investigation was issued on January 26, 2000. 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) (Preliminary Determination). On February 9, 2000, we received a letter from the Romanian Ministry of Commerce and Industry reiterating its earlier request that the Department grant the seamless pipe industry in Romania market-oriented industry (MOI) status. We conducted verifications of the questionnaire responses of the respondents Sota Communications Company (Sota) and Metal Business International S.R.L. (MBI), and their respective suppliers S.C. Silcotub, S.A. (Silcotub) and S.C. Petrotub, S.A. (Petrotub) from February 14 through February 29, 2000. On February 7 and March 6, 2000, the respondents and the petitioners [1] in this investigation requested a hearing, respectively. A hearing was held on April 18, 2000.

Scope of Investigation

For purposes of this investigation, the products covered 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 American Petroleum Institute (API) 5L specifications and meeting certain physical parameters, regardless of application. For a detailed description of the scope of this investigation, see the “Scope of Investigation” section of the Issues and Decision Memorandum for the Final Determination in the Antidumping Duty Investigation of Certain Small Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe from Romania (Decision Memorandum), from Holly Kuga, Acting Deputy Assistant Secretary, Import Administration to Troy H. Cribb, Acting Assistant Secretary for Import Administration, dated June 19, 2000, which is on file in the Central Records Unit, room B-099 of the main Commerce Building and available on the Web at www.ita.doc.gov/​import_​admin/​records/​frn/​. The scope of the Start Printed Page 39126investigation has been amended since the preliminary determination.

Period of Investigation

The period of this investigation (POI) comprises each exporter's two most recent fiscal quarters prior to the filing of the petition (i.e., October 1, 1998 through March 31, 1999).

Non-Market Economy Country

The Department has treated Romania as a non-market-economy (NME) country in all past antidumping proceedings (see, e.g., Tapered Roller Bearings and Parts Thereof From Romania: Final Results of Antidumping Duty Administrative Review, 63 FR 36390 (July 6, 1998)). A designation as a NME remains in effect until it is revoked by the Department (see section 771(18)(C) of the Act). The respondents in this investigation have not requested a revocation of Romania's NME status and no further information has been provided that would lead to such a revocation. Therefore, we have continued to treat Romania as a NME in this investigation.

When the Department is investigating imports from a NME, section 773(c)(1) of the Act directs us to base normal value (NV) on the NME producer's factors of production, valued to the extent possible in a comparable market economy that is a significant producer of comparable merchandise. The sources of individual factor prices are discussed under the Normal Value section, below.

Market-Oriented Industry

As stated in our preliminary determination, the two Romanian producers (i.e., Silcotub and Petrotub) and their respective trading companies (i.e., Sota and MBI), as well as the Romanian Ministry of Industry and Commerce, requested that the Department find the seamless pipe industry in Romania to be a MOI.

The criteria for determining whether a MOI exists are: (1) There must be virtually no government involvement in setting prices or amounts to be produced; (2) the industry producing the merchandise under review should be characterized by private or collective ownership; and (3) market determined prices must be paid for all significant inputs, whether material or non-material, and for all but an insignificant portion of all inputs accounting for the total value of the merchandise. See Chrome-Plated Lug Nuts from the People's Republic of China; Final Results of Administrative Review, 61 FR 58514, 58515-6 (November 15, 1996) (Lug Nuts). In addition, in order to make an affirmative determination that an industry in a NME country is a MOI, the Department requires information on virtually the entire industry. A MOI claim, and supporting evidence, must cover producers that collectively constitute the industry in question; otherwise, the MOI claim is dismissed. (See, e.g., Freshwater Crawfish Tailmeat from the People's Republic of China, Final Determination of Sales at Less than Fair Value, 62 FR 41347, 41353 (August 1, 1997) (Crawfish).)

In our preliminary determination, we found that the Romanian seamless pipe industry does not meet the Department's criteria for an affirmative MOI finding because the information placed on the record shows that all of the known seamless pipe producers were owned primarily by the Romanian government during virtually the entire POI. Furthermore, we do not have sufficient information from S.C. Republica (Republica), a non-responding producer of the subject merchandise representing 20 percent of the seamless pipe industry in Romania. Therefore, we are unable to determine whether the Romanian government is involved in setting prices or amounts to be produced for a significant portion of the industry for which we have no information on the record. For a complete discussion of the Department's preliminary determination that the seamless pipe industry does not constitute a MOI, see the December 15, 1999, memorandum, Whether the Seamless Pipe Industry in Romania Should Be Treated as a Market-Oriented Industry, which is on file in B-099.

Since the preliminary determination, we received no new information from either members of the Romanian seamless pipe industry or the Romanian government with respect to the MOI issue. Moreover, the Department conducted verifications of Silcotub's and Petrotub's respective questionnaire responses, and was able to confirm that these two producers were in fact owned primarily by the Romanian government during virtually the entire POI. Consequently, we find no new evidence on the record to warrant a change to the Department's position to not grant MOI status to the Romanian seamless pipe industry for purposes of the final determination. See Decision Memorandum, Comment 3.

Separate Rates

It is the Department's policy to assign a single rate to all exporters of subject merchandise subject to investigation in a NME country unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. For purposes of this “separate rates” inquiry, the Department analyzes each exporting entity under the test established in the Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991) (Sparklers), as amplified in Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994) (Silicon Carbide). Under this test, exporters in NME countries are entitled to separate, company-specific margins when they can demonstrate an absence of government control over exports, both in law (de jure) and in fact (de facto).

In our preliminary determination, we found, according to the criteria identified in Sparklers and Silicon Carbide, that Sota and MBI had met the criteria for the application of separate antidumping duty rates. For a complete discussion of the Department's determination that Sota and MBI are entitled to separate rates, see the January 28, 2000, memorandum, Assignment of Separate Rates for Respondents in the Antidumping Duty Investigation of Certain Small Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe from Romania, which is on file in the CRU. At verification, we found no discrepancies with the information provided in the questionnaire responses of Sota and MBI. We have not received any other information since the preliminary determination which would warrant reconsideration of our separate rates determinations with respect to these companies. Therefore, we continue to find that the responding companies in this investigation should be assigned individual dumping margins.

Romania-Wide Rate

As in all NME cases, the Department implements a policy whereby there is a rebuttable presumption that all exporters or producers comprise a single exporter under common government control, the “NME entity.” The Department assigns a single NME rate to the NME entity, unless an exporter can demonstrate eligibility for a separate rate. Information on the record of this investigation indicates that Sota and MBI were the only Romanian exporters to the United States of the subject merchandise produced by Silcotub and Petrotub. Further, as noted above, although Republica produces the subject merchandise, we have confirmed with U.S. Customs that no subject merchandise produced by Republica was sold to the United States during the POI, either directly by Republica or through trading companies. Start Printed Page 39127

Consistent with our preliminary determination, since all exporters/producers of the subject merchandise sold to the United States during the POI responded to the Department's questionnaire, and we have no reason to believe that there are other non-responding exporters/producers of the subject merchandise during the POI, we calculated a Romania-wide rate based on the weighted-average margins determined for Sota and MBI.

Fair Value Comparisons

To determine whether sales of the subject merchandise by Sota and MBI to the United States were made at LTFV, we compared the export price (EP) to the NV, as described in the Export Price and Normal Value sections of this notice, below. In accordance with section 777A(d)(1)(A)(i) of the Act, we compared POI-wide weighted-average EPs to weighted-average NVs.

Export Price

We used EP methodology in accordance with section 772(a) of the Act, because Sota and MBI sold the subject merchandise directly to unaffiliated customers in the United States prior to importation, and CEP methodology was not otherwise appropriate.

1. Sota

We calculated EP based on packed C&F prices to the first unaffiliated purchaser in the United States. Where appropriate, we made deductions from the starting price (gross unit price) for inland freight from the plant/warehouse to the port of embarkation, brokerage and handling in Romania, and ocean freight. Because certain domestic inland freight and brokerage and handling were provided by NME companies, we based those charges on surrogate rates from Indonesia and Egypt. (See the Normal Value section for further discussion.)

2. MBI

We calculated EP based on packed FOB Romanian-port prices to the first unaffiliated purchaser in the United States. Where appropriate, we made deductions from the starting price (gross unit price) for inland freight from the plant/warehouse to the port of embarkation, and brokerage and handling in Romania. As with Sota, because certain domestic inland freight and brokerage and handling were provided by NME companies, we based those charges on surrogate rates from Indonesia and Egypt. (See the Normal Value section for further discussion.)

Normal Value

A. Surrogate Country

Section 773(c)(4) of the Act requires the Department to value the NME producer's factors of production, to the extent possible, in one or more market economy countries that: (1) are at a level of economic development comparable to that of the NME country; and (2) are significant producers of comparable merchandise.

For purposes of the final determination, we find that Indonesia remains the most appropriate surrogate country for Romania. Consistent with the Department's preliminary determination, we continue to use Indonesia as the surrogate country for Romania for purposes of the final determination because Indonesia is a significant producer of merchandise comparable to the subject merchandise and, contrary to other potential surrogate countries, provides reliable surrogate values for virtually all factors of production. For discussion and analysis regarding the surrogate country selection for Romania, see Comment 1 in the Decision Memorandum.

B. Factors of Production

In accordance with section 773(c) of the Act, we calculated NV based on factors of production reported by the companies in Romania which produced seamless pipes for the exporters that sold seamless pipes to the United States during the POI. We calculated NV based on the same methodology used in the preliminary determination. For Sota, based on verification findings, we made corrections with respect to billets, scrap, lacquer, freight distance, and labor. For MBI, we made corrections based on our findings at verification with respect to strap, electricity, gas, and labor. For the preliminary determination, we used the financial statements of three Indonesian steel companies in order to determine the factory overhead, SG&A, and profit rates for the Romanian respondents. For the final determination, we have relied exclusively on the financial statements of one of the three companies, P.T. Krakatau. For a complete analysis of surrogate values, see the June 19, 2000, memorandum, Factors of Production Valuation for Final Determination, (Valuation Memorandum) on file in B-099.

We valued labor using the method described in 19 CFR 351.408(c)(3).

Verification

As provided in section 782(i) of the Act, we verified the information submitted by the respondents for use in our final determination. We used standard verification procedures including examination of relevant accounting and production records, and original source documents provided by the respondents.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this investigation are addressed in the June 19, 2000, Decision Memorandum which is hereby adopted by this notice. Attached to this notice as an appendix is a list of the issues which parties have raised and to which we have responded in the Decision Memorandum. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in B-099. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at www.ita.doc.gov/​import_​admin/​records/​frn. The paper copy and electronic version of the Decision Memorandum are identical in content.

Suspension of Liquidation

Pursuant to section 735(c)(1)(B) of the Act, we are instructing the Customs Service to continue to suspend liquidation of all entries of certain small diameter carbon and alloy seamless standard, line and pressure pipe from Romania that are entered, or withdrawn from warehouse, for consumption on or after February 4, 2000, the date of publication of the Preliminary Determination. The Customs Service shall continue to require a cash deposit or the posting of a bond based on the estimated weighted-average dumping margins shown below. The suspension of liquidation instructions will remain in effect until further notice.

We determine that the following weighted-average dumping margins exist for the period April 1, 1998 through March 31, 1999:

Exporter/manufacturerWeighted-average margin percentage
Sota Communication Co19.11
Metal Business International S.R.L.11.08
Romania-wide rate14.99
The Romania-wide rate applies to all entries of the subject merchandise except for entries from exporters/producers that are identified individually above.

ITC Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (ITC) of our determination. As our final Start Printed Page 39128determination is affirmative, the ITC will determine, within 45 days, whether these imports are causing material injury, or threat of material injury, to an industry in the United States. If the ITC determines that material injury or threat of injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing Customs officials to assess antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

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Dated: June 19, 2000.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration,

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Appendix

List of Comments in the Issues and Decision Memorandum

I. General Issues

Comment 1: Surrogate Country Selection and Sources of Surrogate Values

Comment 2: SG&A, Profit and Overhead Calculation

Comment 3: Market-Oriented Industry Issue

Comment 4: Assignment of Dumping Margins to the Producers Instead of the Trading Companies

Comment 5: Surrogate Value for Billets

Comment 6: Surrogate Value for Labor

Comment 7: Surrogate Value for Electricity

Comment 8: Surrogate Value for Rail Freight

II. Issues Specific to S.C. Silcotub S.A.

Comment 9: Scrap Factor Calculation

Comment 10: Lacquer Factor Calculation

III. Issue Specific to S.C. Petrotub S.A.

Comment 11: Electricity and Gas Factors Calculation

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Footnotes

1.  The petitioners in this investigation are Koppel Steel Corporation, Sharon Tube Company, U.S. Steel Group, Lorain Tubular Co. LLC (formally USS Kobe), Vision Metals, Inc. (Gulf States Tube Division) and the United Steel Workers of America.

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[FR Doc. 00-15967 Filed 6-22-00; 8:45 am]

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