Import Administration, International Trade Administration, Department of Commerce.
In response to a request from Canada Pipe Company Limited (Canada Pipe), the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on iron construction castings (ICC) from Canada. The period of review (POR) is March 1, 2000 through February 28, 2001. This review covers imports of ICC from one producer, Canada Pipe.
We have preliminarily determined the dumping margin for Canada Pipe to be 1.43 percent.
April 10, 2002.Start Further Info Start Printed Page 17359
FOR FURTHER INFORMATION CONTACT:
Karine Gziryan and Howard Smith, AD/CVD Enforcement, Office IV, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-4081 and (202) 482-5193, respectively.End Further Info End Preamble Start Supplemental Information
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's regulations are to the current regulations at 19 CFR Part 351 (2001).
On March 5, 1986, the Department published in the Federal Register (51 FR 7600) the antidumping duty order on ICC from Canada. On March 5, 2001, the Department published in the Federal Register (66 FR 13283) a notice of opportunity to request an administrative review of this antidumping duty order. On March 30, 2001, in accordance with 19 CFR 351.213(b)(1), the respondent, Canada Pipe, requested that the Department conduct an administrative review of its exports of subject merchandise to the United States. We published the notice of initiation of this review on April 30, 2001 (66 FR 21310).
Scope of the Review
The merchandise covered by the order consists of certain ICC from Canada, limited to manhole covers, rings, and frames, catch basin grates and frames, cleanout covers and frames used for drainage or access purposes for public utility, water and sanitary systems, classifiable as heavy castings under Harmonized Tariff Schedule (HTS) item numbers 7325.10.0010, 7325.10.0020, and 7325.10.0025. The HTS item number is provided for convenience and Customs purposes only. The written description remains dispositive.
In accordance with section 771(16) of the Act, the Department considered all products within the scope of this review that Canada Pipe produced and sold in the comparison market during the POR to be foreign like products for purposes of determining appropriate product comparisons to ICC sold in the United States. The Department determined that the home market is the appropriate comparison market because the aggregate quantity of Canada Pipe's home market sales of foreign like product is more than five percent of the aggregate quantity of its U.S. sales of subject merchandise (see section 773(a)(1)(C) of the Act). The Department compared U.S. sales to sales made in the home market within the contemporaneous window period, which extends from three months prior to the month of the U.S. sale until two months after the month of the sale. Where there were no sales of identical merchandise made in the home market in the ordinary course of trade, the Department compared U.S. sales to sales of the most similar foreign like product made in the ordinary course of trade. In making product comparisons, the Department selected identical and most similar foreign like products based on the physical characteristics reported by Canada Pipe in the following order of importance: product type, components, shape of the product, weight band, locking mechanism, painted castings or not, machined castings or not.
The POR is March 1, 2000 through February 28, 2001.
Section 772(a) of the Act defines export price (EP) as the price at which the subject merchandise is first sold before the date of importation by the exporter or producer outside the United States to an unaffiliated purchaser for exportation to the United States.
Canada Pipe sells subject merchandise directly to its customers in the United States. Until July 1, 2000, Canada Pipe's U.S. affiliate, Bibby USA, was the importer of record for all of its U.S. sales. Bibby USA closed on July 1, 2000. Since July 1, 2000, Canada Pipe acted as the importer of record for its U.S. sales and invoiced Canada Pipe's U.S. customers directly. The sales documentation on the record in this proceeding indicates that Canada Pipe's U.S. sales occurred in Canada between Canada Pipe and the unaffiliated U.S. purchaser. Specifically, we have found the following facts: 1) Bibby USA, when it operated, did not contact the U.S. customers; 2) Canada Pipe's Division, Bibby Ste-Croix Foundry, in Canada contacted the U.S. customers; 3) the U.S. customers send the purchase order directly to Canada Pipe; 4) Canada Pipe makes all arrangements for shipping and delivery to the U.S. customers in Canada; 5) Canada Pipe's invoices are issued and the U.S. customers pay Canada Pipe directly in Canada; and 6) Canada Pipe retains title to the merchandise until the point of delivery to the U.S. customers. Because Bibby USA merely acted as the importer of record, we preliminarily determine that these sales were made in Canada by Canada Pipe and, thus, should be treated as EP transactions. See Cold-Rolled and Corrosion-Resistant Carbon Steel Flat Products from Korea, Final Results of Administrative Review, 65 FR 13359 (March 13, 2000) and accompanying Decision Memorandum at Comment 12; and Porcelain-on-Steel Cookware from Mexico, Final Results of Administrative Review, 65 FR 30068 (May 10, 2000) and accompanying Decision Memorandum at Comment 2.
We calculated an EP for all Canada Pipe's sales because the merchandise was sold directly by Canada Pipe to the first unaffiliated purchaser in the United States prior to importation, and constructed export price (CEP) was not otherwise warranted based on the facts of record. We made deductions from the starting price for movement expenses in accordance with section 772(c)(2)(A) of the Act. These include foreign movement expense (inland freight), international freight, U.S. brokerage and U.S. duties.
We compared the aggregate quantity of home market and U.S. sales and determined that the quantity of the company's sales in its home market was more than five percent of the quantity of its sales to the U.S. market. Consequently, in accordance with section 773(a)(1)(B) of the Act, we based normal value (“NV”) on home market sales, all of which were to unaffiliated customers.
We calculated monthly weighted-average NVs based on ex-works or delivered prices to unaffiliated customers. We made deductions, where appropriate, from the starting price for early payment discounts, inland insurance, and inland freight. We made circumstance of sale (“COS”) adjustments, in accordance with section 773(a)(6)(C)(iii) of the Act, for direct selling expenses, including credit expenses.
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 level of trade (LOT) as the EP or CEP transaction. The NV LOT is that of the starting-price sales in the comparison market or, when NV is based on constructed value (CV), that of the sales from which we derive selling, general and administrative (SG&A) expenses and profit. With respect to Start Printed Page 17360U.S. price when based on EP transactions, the LOT is the level of the sale to the unaffiliated customer.
To determine whether NV sales are at a different LOT than EP or CEP transactions, 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 a LOT adjustment under section 773(a)(7)(A) of the Act.
Canada Pipe reported that during the POR it sold subject merchandise through three channels of distribution in the home market: sales made by Canada Pipe directly to original equipment manufacturers (OEM) (Channel 1), sales from Canada Pipe directly to end-users (Channel 2), and sales from Canada Pipe to distributors (Channel 3). In examining the record, we found that Canada Pipe performs substantially different selling functions (e.g. sales planning, advertising, technical service, etc.) for all three reported channels of distribution. Due to the proprietary nature of the examined selling functions, see the Preliminary Results: Level of Trade Analysis (Preliminary LOT Memorandum), dated concurrently with this notice, on file in Room B-099 of the main Department of Commerce Building, the Central Records Unit (CRU), for the specifics of our analysis. Based upon an analysis of the information provided on the record, we conclude that there are significant differences in the selling functions performed by Canada Pipe in making sales through these three channels of distribution. Therefore, using the information on the record, the Department preliminarily determines that Canada Pipe makes sales to three distinct LOTs in the home market. See the Preliminary LOT Memorandum.
Canada Pipe reported two channels of distribution (i.e. sales to OEMs and sales to distributors) in the United States during the POR. In examining the record, we found that Canada Pipe performs substantially different levels of selling functions for both reported channels of distribution. Due to the proprietary nature of the examined selling functions, see the Preliminary LOT Memorandum for the specifics of our analysis. Based upon an analysis of the information provided on the record, we conclude that there are significant differences in the selling functions performed by Canada Pipe in making sales through both channels of distribution. Therefore, the Department preliminarily determines that Canada Pipe makes sales to two distinct LOTs in the United States market. See the Preliminary LOT Memorandum.
In order to determine whether sales in the United States are at a different LOT than sales in the home market, we reviewed the selling activities associated with each LOT in each market. We compared Canada Pipe's selling activities for U.S. EP transactions to OEMs and distributors to Canada Pipe's selling activities performed for sales to OEMs, distributors, and end-users in the home market. First, we found that there were no differences in selling functions performed for Canada Pipe's U.S. OEM sales as compared to home market OEM sales. Second, we found that there were no differences in selling functions performed for Canada Pipe's U.S. distributor sales as compared to home market distributor sales. Third, we found that there were significant differences in the selling functions performed for Canada Pipe's U.S. OEM sales as compared to home market distributor and end-user sales, sufficient to constitute differences in LOT. Finally, we found significant differences in the selling functions performed for Canada Pipe's U.S. distributor sales as compared to home market OEM and end-user sales, sufficient to constitute differences in LOT. See the Preliminary LOT Memorandum.
To the extent practicable the Department has compared EP sales with home market sales at the same LOT as that of the EP sales. However, where the Department was unable to match EP sales with home market sales at the same LOT, the Department compared the EP sales to home market sales at a different LOT. For such comparisons, we made a LOT adjustment in accordance with section 773(a)(7) of the Act and 19 CFR 351.412. See the Preliminary LOT Memorandum.
Pursuant to section 773A(a) of the Act, we made currency conversions into U.S. dollars based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank.
Preliminary Results of the Review
As a result of this review, we preliminarily determine that a 1.43 percent dumping margin exists for Canada Pipe for the period March 1, 2000, through February 28, 2001. The Department will disclose calculations performed within five days of the date of publication of this notice to the parties to this proceeding in accordance with 19 CFR 351.224(b). An interested party may request a hearing within 30 days of publication of these preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, will be held 44 days after the date of publication, or the first working day thereafter. Interested parties are invited to comment on these preliminary results. Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of these preliminary results of review. Rebuttal briefs and rebuttals to written comments, limited to issues raised in such briefs or comments, may be filed no later than 37 days after the date of publication. Parties who submit arguments are requested to submit with the argument (1) a statement of the issue and (2) a brief summary of the argument. Further, we would appreciate it if parties submitting written comments would also provide the Department with an additional copy of the public version of those comments on diskette. The Department will issue the final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, within 120 days of publication of these preliminary results.
Upon completion of this administrative review, the Department shall determine, and the Customs Service shall assess, antidumping duties on all appropriate entries. We have calculated importer-specific duty assessment rates based on the ratio of the total amount of antidumping duties calculated for the examined sales to the total entered value of examined sales. Where the importer-specific assessment rate is above de minimis, we will instruct Customs to assess duties on that importer's entries of subject merchandise. The Department will issue appraisement instructions directly to Customs.
Furthermore, the following deposit requirements will be effective upon completion of the final results of this administrative review for all shipments of subject merchandise from Canada entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(1) of the Act: (1) the cash deposit rate for Canada Pipe will be the rate established in the final results of this administrative review; (2) for merchandise exported by manufacturers or exporters not covered in this review but covered in the original less-than-fair-value (“LTFV”) investigation or a previous review, the Start Printed Page 17361cash deposit 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) if neither the exporter nor the manufacturer is a firm covered in this review, a previous review, or the original LTFV investigation, the cash deposit rate will be 14.67 percent, the “all-others'' rate established in the LTFV segment of this proceeding.
These deposit requirements, when imposed, shall remain in effect until publication of the final results of administrative review for a subsequent review period.
This notice also 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 administrative review and notice are in accordance with sections 751(a)(1) and 777(i)(1) of the Act.Start Signature
Dated: April 1, 2002
Assistant Secretary for Import Administration.
[FR Doc. 02-8708 Filed 4-9-02; 8:45 am]
BILLING CODE 3510-DS-S