Daily Rules, Proposed Rules, and Notices of the Federal Government
On November 2, 1992, the Department published an antidumping duty order on CWP from Korea.
On January 13, 2009, Wheatland and U.S. Steel withdrew their requests for a review of Husteel. On March 23, 2009, Wheatland withdrew its request for the following companies: Daewoo; Miju; Samsun; Kukje; MSteel Co., Ltd.; Histeel Co., Ltd.; Hyundai Corporation; Dong-A; Union Pipe; Huanbohai; Huludao Steel Pipe Industrial Co., Ltd.; Huludao City Steel Pipe; Benxi Northern; and Shuangjie. On March 24, 2009, U.S. Steel withdrew its request for a review of Samsun. The Department published a notice of partial rescission for the companies mentioned above on April 14, 2009.
In our initiation notice, we indicated that we would select mandatory respondents for review based upon CBP data, and that we would limit the respondents selected for individual review in accordance with section 777A(c)(2) of the Tariff Act of 1930, as amended (“the Act”).
On February 11, 2009, after considering the resources available to the Department, we determined that it was not practicable to examine all producers/exporters of subject merchandise for which a review was requested. As a result, we selected the two largest producers/exporters of CWP from Korea during the POR for individual review in this segment of this proceeding, pursuant to section 777A(c)(2)(B) of the Act. These mandatory respondents were SeAH and Kumkang.
On January 23, 2009, Wheatland submitted a request for a duty absorption determination for a number of producers or exporters subject to this review, including SeAH. The Court of Appeals for the Federal Circuit found that the Department lacks authority to conduct two-and four-year duty absorption inquiries for transitional orders (orders in effect before January 1, 1995).
On February 12, 2009, we issued the antidumping questionnaire to SeAH and Kumkang. We received section A responses from SeAH and Kumkang on March 5, 2009, and March 20, 2009, respectively. We received the sections B, C and D response from SeAH on April 7, 2009, and we received the
On April 29, 2009, Wheatland and U.S. Steel separately alleged that Kumkang made comparison home market sales of CWP at prices below the cost of production (“COP”) during the POR. We requested additional information from Wheatland, which we received on May 21, 2009. On June 11, 2009, the Department initiated an investigation to determine whether Kumkang's sales of CWP were made at prices below the COP during the POR.
On July 31, 2009, Wheatland withdrew its request for a review of Kumkang. Wheatland is the only party to have requested a review of Kumkang. Pursuant to 19 CFR 351.213(d)(l), the Department will rescind an administrative review, in whole or in part, if the party that requested a review withdraws the request within 90 days of the date of publication of the notice of initiation of the requested review. Although Wheatland withdrew its request for Kumkang after the 90-day period, the Department did not dedicate extensive time and resources to this review, only having issued a supplemental questionnaire to Kumkang. The Department published a notice of partial rescission for Kumkang on August 24, 2009.
On September 21, 2009, we issued a supplemental questionnaire for sections A, B and C to SeAH and received a response to our supplemental for section A on October 15, 2009 (“Supplemental A Response”), and a response to our supplemental on sections B and C on October 20, 2009. We sent supplemental questionnaires for section D to SeAH on May 27, July 30, and September 14, 2009, and received responses on June 24, August 26, and October 9, 2009.
On July 22, 2009, the Department published in the
On January 23, 2009, Hyundai HYSCO submitted a letter to the Department certifying that the company made no shipments or entries for consumption in the United States of the subject merchandise during the POR.
In response to the Department's query to CBP, CBP data showed POR entries for consumption of subject merchandise from Hyundai HYSCO may have entered U.S. customs territory during the POR.
On September 8, 2009, the Department asked Hyundai HYSCO to explain the apparent discrepancy between Hyundai HYSCO's claim that it did not export or sell any subject merchandise to the United States during the POR and the CBP information. Hyundai HYSCO responded on September 22, 2009, re-affirming that it did not export or sell subject merchandise to the United States during the POR, and that it did not know or have reason to know that such merchandise would be exported to the United States during the POR.
The Department has concluded that there is no evidence on the record that, at the time of sale, Hyundai HYSCO had knowledge that these entries were destined for the United States, nor is there evidence that Hyundai HYSCO had knowledge that any of these entries of subject merchandise entered the United States during the POR.
The merchandise subject to this review is circular welded non-alloy steel pipe and tube, of circular cross-section, not more than 406.4mm (16 inches) in outside diameter, regardless of wall thickness, surface finish (black, galvanized, or painted), or end finish (plain end, beveled end, threaded, or threaded and coupled). These pipes and tubes are generally known as standard pipes and tubes and are intended for the low-pressure conveyance of water, steam, natural gas, air, and other liquids and gases in plumbing and heating systems, air-conditioning units, automatic sprinkler systems, and other related uses. Standard pipe may also be used for light load-bearing applications, such as for fence tubing, and as structural pipe tubing used for framing and as support members for reconstruction or load-bearing purposes in the construction, shipbuilding, trucking, farm equipment, and other related industries. Unfinished conduit pipe is also included in this review.
All carbon-steel pipes and tubes within the physical description outlined above are included within the scope of this review except line pipe, oil-country tubular goods, boiler tubing, mechanical tubing, pipe and tube hollows for redraws, finished scaffolding, and finished conduit. In accordance with the Department's
Imports of these products are currently classifiable under the following Harmonized Tariff Schedule (“HTS”) subheadings: 7306.30.10.00, 7306.30.50.25, 7306.30.50.32, 7306.30.50.40, 7306.30.50.55, 7306.30.50.85, and 7306.30.50.90. Although the HTS subheadings are provided for convenience and customs purposes, our written description of the scope of this proceeding is dispositive.
Section 776(a)(1) and (2) of the Act provides that the Department shall
In section D, part IV of the February 12, 2009, questionnaire, the Department requested that SeAH provide one computer data file reporting the costs incurred to produce the merchandise sold in the U.S. market or the comparison market. On October 27, 2009, SeAH submitted its response to the Department's section D supplemental questionnaire, in which the Department requested SeAH report costs on a quarterly basis. The Department subsequently has discovered that there are 23 control numbers (“CONNUMs”) for which no costs has been reported in the latest COP database submitted by SeAH. Costs for these CONNUMs had previously been reported (on a POR basis) in the original COP database SeAH submitted on April 7, 2009.
Because SeAH failed to report the quarterly cost data for certain CONNUMs, the Department has preliminary determined to apply facts available for these COPs, pursuant to section 776(a)(2)(A) and (B) of the Act. As partial facts available, the Department will use the cost of the next most similar CONNUM as a surrogate for the missing COP information. The Department will issue a supplemental questionnaire to SeAH seeking the COP data for these CONNUMs after the issuance of the preliminary results.
The Department normally will use the date of invoice, as recorded in the producer's or exporter's records kept in the ordinary course of business, as the date of sale, but may use a date other than the invoice date if the Department is satisfied that a different date better reflects the date on which the material terms of sale are established.
For its home market sales, SeAH has reported the date the billing document is created in its accounting system as the date of sale. This is the date when the final price and quantity are set and is, in most cases, the same as the date of the shipping invoice.
For its U.S. sales, SeAH reported the date of shipment from Korea as the date of sale because all U.S. sales are produced to order and the quantity ordered is subject to change between order and shipment. In addition, the shipment date from Korea always precedes the date of the invoice to the unaffiliated U.S. customer because SeAH's U.S. affiliate, Pusan Pipe America Inc. (“PPA”), does not invoice the unaffiliated U.S. customer until shortly after the subject merchandise enters into the United States. Because quantity is not finalized until shipment and the shipment date always precedes the invoice date to the U.S. customer, we are relying on the date of shipment from Korea as the U.S. date of sale.
To determine whether SeAH's sales of CWP from Korea to the United States were made at less than normal value (“NV”), we compared constructed export price (“CEP”) to NV, as described in the “Constructed Export Price” and “Normal Value” sections of this notice below.
Pursuant to section 777A(d)(2) of the Act, we compared the CEP of individual U.S. transactions to monthly weighted-average NVs of the foreign-like product, where there were sales made in the ordinary course of trade, as discussed in the “Cost of Production Analysis” section below.
We are using a quarterly costing approach, as described in the “Normal Value” section below and, therefore, we have not made price-to-price comparisons outside of a quarter to lessen the distortive effect of comparing non-contemporaneous sales prices during a period of significantly changing costs.
In accordance with section 771(16) of the Act, we considered all products produced by SeAH that are covered by the description contained in the “Scope of the Order” section above and were sold in the home market during the POR to be the foreign like product for purposes of determining appropriate product comparisons to U.S. sales.
We have relied on five criteria to match U.S. sales of subject merchandise to comparison market sales of the foreign like product: 1) grade; 2) actual pipe size in millimeters; 3) wall thickness; 4) surface finish; and 5) end-finish. Where there were no sales of identical merchandise in the comparison market made in the ordinary course of trade to compare to U.S. sales, we compared U.S. sales to the next most similar foreign like product on the basis of the characteristics listed above.
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 LOT in the comparison market is the LOT of the starting-price sales or, when NV is based on CV, the LOT of the sales from which we derive selling, general and administrative (“SGA”) expenses and profit. For CEP, the LOT is that of the constructed sale from the exporter to the affiliated importer.
Where it is not possible to make comparisons at the same LOT, the statute permits the Department to account for the different levels.
To determine whether sales are made at different LOTs, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer.
SeAH reported two channels of distribution in the comparison market, Korea): 1) direct sales to unaffiliated end-users and distributors; and 2) sales to affiliated companies. In the U.S. market, SeAH reported one LOT and one channel of distribution for the CEP sales made through its affiliated company in the United States, PPA. SeAH stated that its U.S. sales were made at a different, less advanced LOT than its comparison market sales. SeAH is not seeking a LOT adjustment, however, because it had no comparison market sales that were at the same LOT as the U.S. CEP sales. Instead, it claims that a CEP offset is warranted.
In evaluating SeAH's claim, we examined its activities in each channel of distribution relating to four different types of selling functions: sales process and marketing support, freight and delivery, inventory maintenance and warehousing, and warranty and technical services. Based on our analysis, we preliminarily determine that SeAH's selling activities in the comparison market did not vary significantly by channel of distribution.
We then compared the selling functions performed by SeAH for its U.S. sales to the selling functions performed for the single LOT in the comparison market. Record evidence indicates that SeAH undertakes significant activities in the comparison market related to the sales process and marketing support, as well as warehousing, that it does not undertake for its U.S. CEP sales.
As discussed above, the Department will make a LOT adjustment in these circumstances when the information exists to do so. In this case, because SeAH sold at one LOT in the comparison market, there is no basis upon which to determine whether there is a pattern of consistent price differences between LOTs. Further, we do not have the information that would allow us to examine the price patterns of SeAH's sales of other similar products, and there is no other record evidence upon which a LOT adjustment could be based. Therefore, we have not made a LOT adjustment.
Instead, in accordance with section 773(a)(7)(B) of the Act, we preliminarily determine that a CEP offset is appropriate to reflect that SeAH's comparison market sales are at a more advanced stage than the LOT of SeAH's CEP sales. We based the amount of the CEP offset on comparison market indirect selling expenses and limited the deduction to the amount of the indirect selling expenses deducted from CEP under section 772(d)(1)(D) of the Act. We applied the CEP offset to the NV-CEP comparisons. For a detailed discussion,
In accordance with section 772(b) of the Act, CEP is the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise, or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter.
For purposes of this review, SeAH classified all of its export sales of CWP to the United States as CEP sales. During the POR, SeAH made sales in the United States through its U.S. affiliate, PPA, which then resold the merchandise to unaffiliated customers in the United States. The Department calculated CEP based on the packed, delivered prices to unaffiliated purchasers in the United States, net of early payment discounts and other discounts. We adjusted these prices for movement expenses, including foreign inland freight, international freight, marine insurance, foreign and U.S. brokerage and handling, and U.S. customs duties, in accordance with section 772(c)(2)(A) of the Act.
In accordance with section 772(d)(1) of the Act, we deducted from the starting price those selling expenses that were incurred in selling the subject merchandise in the United States, including imputed credit expenses, warranty expenses, inventory carrying costs, and indirect selling expenses. We also made an adjustment for profit in accordance with section 772(d)(3) of the Act. We used the expenses reported by SeAH in connection with its U.S. sales.
The Department's normal practice is to calculate an annual weighted-average cost for the entire POR.
In prior cases, the Department established 25 percent as the threshold (the difference between the high and low quarterly COM divided by the low quarterly COM) for determining that the changes in COM are significant enough to warrant a departure from our standard annual costing approach.
As explained above, the Department preliminarily found cost changes to be significant in this administrative review; thus the Department has evaluated whether there is evidence of linkage between the cost changes and the sales prices during the POR. The Department's definition of linkage does not require direct traceability between specific sales and their specific production cost, but rather relies on whether there are elements that would indicate a reasonable correlation between the underlying costs and the final sales prices charged by the company.
Unlike the situation in
In summary, the facts of this case show a significant change in COM during the POR and that there is a reasonable linkage between costs and sales during the shorter cost periods. Accordingly, we have preliminarily determined that a quarterly costing approach would lead to more appropriate comparisons in our antidumping duty calculations for CWP. Therefore, for the preliminary results, we used indexed annual average direct material costs and annual weighted-average conversion costs to each quarter in the POR for inclusion in the COP and CV calculations for CWP.
To determine whether there was a sufficient volume of sales in the comparison market, Korea, to serve as a viable basis for calculating NV, we compared SeAH's volume of home market sales of the foreign like product to the volume of its U.S. sales of the subject merchandise, in accordance with section 773(a)(1)(B) of the Act. Because the aggregate volume of SeAH's home market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales of the subject merchandise, we determine that the home market was viable for comparison purposes.
SeAH reported sales of the foreign like product to affiliated and unaffiliated customers in the comparison market. The Department calculates NV based on a sale to an affiliated party only if it is satisfied that the price to the affiliated party is comparable to the price at which sales are made to parties not affiliated with the producer or exporter,
We found that SeAH made sales below the COP in the most recently completed segment of this proceeding in which SeAH was examined, and such sales were disregarded. Thus, in accordance with section 773(b)(2)(A)(ii) of the Act, there are reasonable grounds to believe or suspect that SeAH made sales of the subject merchandise in its comparison market at prices below the COP in the current review period. Pursuant to section 773(b)(1) of the Act, we initiated a COP investigation of sales by SeAH.
In accordance with section 773(b)(3) of the Act, we calculated SeAH's COP based on the sum of its costs of materials and conversion for the foreign like product, plus an amount for home market SGA expenses, interest expenses, and packing costs.
a. During the POR, SeAH purchased carbon steel hot-rolled coil inputs from a home market affiliated company, Pohang Iron and Steel Company (“POSCO”). Carbon steel hot-rolled coil is considered a major input to the production of CWP. Section 773(f)(3) of the Act (the major input rule) states:
If in the case of a transaction between affiliated persons involving the production by one of such persons of a major input to the merchandise, the administering authority has reasonable grounds to believe or suspect that an amount represented as the value of such input is less than the cost of production of such input, then the administering authority may determine the value of the major input on the basis of the information available regarding such cost of production, if such cost is greater than the amount that would be determined for such input under paragraph (2).
A transaction directly or indirectly between affiliated persons may be disregarded if, in the case of any element of value required to be considered, the amount representing that element does not fairly reflect the amount usually reflected in sales of merchandise under consideration in the market under consideration. If a transaction is disregarded under the preceding sentence and no other transactions are available for consideration, the determination of the amount shall be based on the information available as to what the amount would have been if the transaction had occurred between persons who are not affiliated.
b. We revised SeAH's general and administrative (“GA”) expenses to include inventory valuation losses.
c. We excluded the long-term interest income generated from retirement and severance deposits from the calculation of interest expense ratio.
d. We adjusted the cost of goods sold denominator used in the GA expense ratio to reflect our major input and inventory valuation loss adjustments. We also adjusted the cost of goods sold denominator used in the financial expense ratio to reflect our major input adjustment.
In determining whether to disregard home market sales made at prices below the COP, we examined, in accordance with sections 773(b)(1)(A) and (B) of the Act, whether, within an extended period of time, such sales were made in substantial quantities, and whether such sales were made at prices which permitted the recovery of all costs within a reasonable period of time in the normal course of trade. As noted in section 773(b)(2)(D) of the Act, prices are considered to provide for recovery of costs if such prices are above the weighted average per-unit COP for the period of investigation or review.
As discussed above, we have relied on a quarterly costing approach in this review. Similar to that used by the Department in cases of high-inflation (
Where less than 20 percent of the respondent's home market sales of a given model were made at prices below the COP, we did not disregard any below-cost sales of that model because we determined that the below-cost sales were not made within an extended period of time and in “substantial quantities.” Where 20 percent or more of the respondent's home market sales of a given model were made at prices less than the COP, we disregarded the below-cost sales because: (1) they were made within an extended period of time in “substantial quantities,” in accordance with sections 773(b)(2)(B) and (C) of the Act; and (2) based on our comparison of prices to the weighted-average COPs for the POR, they were at prices which would not permit the recovery of all costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Act.
Our cost test for SeAH revealed that, for home market sales of certain models, less than 20 percent of the sales of those models were made at prices below the COP. Therefore, we retained all such sales in our analysis and included them in determining NV. Our cost test also indicated that for home market sales of other models, more than 20 percent were sold at prices below the COP within an extended period of time and were at prices which would not permit the recovery of all costs within a
In accordance with section 773(e) of the Act, we calculated CV based on the sum of SeAH's material and fabrication costs, SGA expenses, profit, and U.S. packing costs. We calculated the COP component of CV as described above in the “Cost of Production Analysis” section of this notice. In accordance with section 773(e)(2)(A) of the Act, we based SGA expenses and profit on the amounts incurred and realized by the respondent in connection with the production and sale of the foreign like product in the ordinary course of trade, for consumption in the foreign country.
We calculated NV based on packed prices to unaffiliated customers in Korea. We adjusted the starting price by deducting for foreign inland freight, pursuant to section 773(a)(6)(B)(ii) of the Act. We made adjustments for differences in packing, in accordance with sections 773(a)(6)(A) and 773(a)(6)(B)(i) of the Act, and in circumstances of sale (for imputed credit expenses), under section 773(a)(6)(c)(iii) of the Act and 19 CFR 315.410.
When comparing U.S. sales with comparison market sales of similar, but not identical, merchandise, we also made adjustments for physical differences in the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We based this adjustment on the difference in the variable cost of manufacturing for the foreign like product and subject merchandise.
Where we were unable to find a home market match of such or similar merchandise, in accordance with section 773(a)(4) of the Act, we based NV on CV. Where appropriate, we made adjustments to CV in accordance with section 773(a)(8) of the Act.
Pursuant to 19 CFR 351.415 and section 773A of the Act, we made currency conversions based on the exchange rates in effect on the date of the U.S. sale, as certified by the Federal Reserve Bank.
We preliminarily determine that a weighted-average dumping margin exists for the respondent for the period November 1, 2007, through October 31, 2008. Respondents other than mandatory respondents normally receive the weighted-average of the margins calculated for those companies selected for individual review (
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). We plan on conducting verification of sales and cost data after these preliminary results. As a result, case briefs for this review will be due no later than one week after the issuance of the last verification report. Rebuttal briefs will be due five days after the deadline for submission of case briefs, pursuant to 19 CFR 351.309(d)(1). Any requests for a hearing must be filed at the time case briefs are due. A hearing, if requested, will be held two days after the rebuttal briefs are due. Issues raised in the hearing will be limited to those raised in the case briefs. Parties submitting arguments in this proceeding are requested to submit with the argument: 1) a statement of the issue, 2) a brief summary of the argument, and 3) a table of authorities, in accordance with 19 CFR 351.309(d)(2). Further, parties submitting case and/or rebuttal briefs are requested to provide the Department with an additional electronic copy of the public version of any such comments on a computer diskette. Case and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f).
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, or at a hearing, if requested, within 120 days of publication of these preliminary results, unless extended.
Upon completion of the administrative review, the Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries, in accordance with 19 CFR 351.212(b)(1). The Department will issue appropriate appraisement instructions for the companies subject to this review directly to CBP 15 days after the date of publication of the final results of this review.
For SeAH, we will calculate importer-specific
For the companies which were not selected for individual review, we will use SeAH's cash deposit rate as the assessment rate.
We will instruct CBP to assess antidumping duties on all appropriate entries covered by this review. 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
The Department clarified its “automatic assessment” regulation on May 6, 2003.
For Hyundai HYSCO, for which this administrative review is rescinded, the Department will issue appropriate assessment instructions to CBP 15 days after the publication of this notice. We will instruct CBP to liquidate as entered any entries of subject merchandise produced by Hyundai HYSCO.
The following deposit rates will be effective upon publication of the final results of this administrative review for all shipments of CWP from Korea entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rates for the companies listed above will be the rates established in the final results of this review, except if the rate is less than 0.5 percent and, therefore,
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.
These preliminary results of review are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.