Small Diameter Seamless Carbon and Alloy Steel Standard, Line and Pressure Pipe from Brazil; Preliminary Results of Antidumping Duty Administrative Review, 24524-24528 [E5-2297]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 70, Number 89 (Tuesday, May 10, 2005)]
[Notices]
[Pages 24524-24528]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-2297]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

A-351-826


Small Diameter Seamless Carbon and Alloy Steel Standard, Line and 
Pressure Pipe from Brazil; Preliminary Results of Antidumping Duty 
Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request from V&M do Brasil, S.A., the 
Department of Commerce (the Department) is conducting an administrative 
review of the antidumping duty order on small diameter seamless carbon 
and alloy steel standard, line and pressure pipe from Brazil (A-351-
826). This administrative review covers imports of subject merchandise 
from V&M do Brasil, S.A. (VMB). The period of review (POR) is August 1, 
2003, through July 31, 2004.
    We preliminarily determine that sales of subject merchandise by VMB 
have been made at less than 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 on appropriate 
entries based on the difference between the constructed export price 
(CEP) and the NV. Interested parties are invited to comment on these 
preliminary results. Parties who submit argument in this proceeding are 
requested to submit with the argument: 1) a statement of the issues, 2) 
a brief summary of the argument, and 3) a table of authorities.

EFFECTIVE DATE: May 10, 2005.

FOR FURTHER INFORMATION CONTACT: Stephen Bailey or Patrick Edwards, AD/
CVD Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230, telephone: (202) 482-
0193 or (202) 482-8029, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 3, 1995, the Department published the antidumping duty 
order on small diameter seamless carbon and alloy steel standard, line 
and pressure pipe (seamless line and pressure pipe) from Brazil. See 
Notice of Antidumping Duty Order: Small Diameter Seamless Carbon and 
Alloy Steel Standard, Line and Pressure Pipe from Brazil, 60 FR 39707 
(August 3, 1995). On August 1, 2004, the Department published the 
opportunity to request administrative review of, inter alia, seamless 
line and pressure pipe from Brazil for the period August 1, 2003, 
through July 31, 2004. See Antidumping or Countervailing Duty Order, 
Finding, or Suspended Investigation; Opportunity to Request 
Administrative Review, 69 FR 46496 (August 3, 2004).
    In accordance with 19 CFR 351.213(b)(1), on August 31, 2004, both 
VMB and United States Steel Corporation (US Steel), the petitioner, 
requested that we conduct an administrative review of VMB's sales of 
the subject merchandise. On September 22, 2004, the Department 
published in the Federal Register a notice of initiation of this 
antidumping duty administrative review covering the period August 1, 
2003, through July 31, 2004. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Request for Revocation 
in Part, 69 FR 56745 (September 22, 2004).
    On October 2, 2004, the Department issued its antidumping duty 
questionnaire to VMB. VMB submitted its response to Section A of the 
questionnaire (Section A Response) on November 5, 2004, and the 
responses to Sections B and C (Sections B and C Response) on November 
19, 2004. The Department issued a supplemental questionnaire for all 
three responses on January 13, 2005 and received VMB's response on 
February 7, 2005. VMB submitted its response to Section D of the 
questionnaire on December 6, 2004, along with supplemental information 
on December 9, 2004. On March 18, 2005, the Department issued a 
supplemental questionnaire regarding VMB's Section D response. On March 
23, 2005, the Department issued a second supplemental questionnaire to 
VMB pertaining to VMB's February 7, 2004, supplemental response for 
Sections A, B, and C. The Department issued a third supplemental 
questionnaire to VMB regarding the company's reported home market 
interest revenue on March 31, 2005. VMB submitted its responses to 
these three supplemental questionnaires on April 11, 2005.

Period of Review

    The period of review is August 1, 2003, through July 31, 2004.

Scope of the Order

    The products covered by the order are seamless pipes produced to 
the ASTM A-335, ASTM A-106, ASTM A-53 and API 5L specifications and 
meeting the physical parameters described below, regardless of 
application. The scope of this order also includes all products used in 
standard, line, or pressure pipe applications and meeting the physical 
parameters below, regardless of specification.
    For purposes of this order, seamless pipes are seamless carbon and 
alloy (other than stainless) steel pipes, of circular cross-section, 
not more than 114.3 mm (4.5 inches) in outside diameter, regardless of 
wall thickness, manufacturing process (hot-finished or cold-drawn), end 
finish (plain end, beveled end, upset end, threaded, or threaded and 
coupled), or surface finish. These pipes are commonly known as standard 
pipe, line pipe or pressure pipe, depending upon the application. They 
may also be used in structural applications. Pipes produced in non-
standard wall thickness are commonly referred to as tubes.
    The seamless pipes subject to this antidumping duty order are 
currently classifiable under subheadings 7304.10.10.20, 7304.10.50.20, 
7304.31.60.50, 7304.39.00.16, 7304.39.00.20, 7304.39.00.24, 
7304.39.00.28, 7304.39.00.32, 7304.51.50.05, 7304.51.50.60, 
7304.59.60.00, 7304.59.80.10, 7304.59.80.15, 7304.59.80.20, and 
7304.59.80.25 of the Harmonized Tariff Schedule of the United States 
(HTSUS). The following information further defines the scope of this 
order, which covers pipes meeting the physical parameters described 
above:
    Specifications, Characteristics and Uses: Seamless pressure pipes 
are intended for the conveyance of water, steam, petrochemicals, 
chemicals, oil products, natural gas, and other liquids and gasses in 
industrial piping systems. They may carry these substances at elevated 
pressures and temperatures and may be subject to the application of 
external heat. Seamless carbon steel pressure pipe meeting the ASTM 
standard A-106 may be used in temperatures of up to 1000 degrees 
Fahrenheit, at various American Society of Mechanical Engineers 
(``ASME'') code stress levels. Alloy pipes made to ASTM standard A-335 
must be used if temperatures and stress levels exceed those allowed for 
A-106 and the ASME

[[Page 24525]]

codes. Seamless pressure pipes sold in the United States are commonly 
produced to the ASTM A-106 standard.
    Seamless standard pipes are most commonly produced to the ASTM A-53 
specification and generally are not intended for high temperature 
service. They are intended for the low temperature and pressure 
conveyance of water, steam, natural gas, air and other liquids and 
gasses in plumbing and heating systems, air conditioning units, 
automatic sprinkler systems, and other related uses. Standard pipes 
(depending on type and code) may carry liquids at elevated temperatures 
but must not exceed relevant ASME code requirements.
    Seamless line pipes are intended for the conveyance of oil and 
natural gas or other fluids in pipelines. Seamless line pipes are 
produced to the API 5L specification.
    Seamless pipes are commonly produced and certified to meet ASTM A-
106, ASTM A-53 and API 5L specifications. Such triple certification of 
pipes is common because all pipes meeting the stringent ASTM A-106 
specification necessarily meet the API 5L and ASTM A-53 specifications. 
Pipes meeting the API 5L specification necessarily meet the ASTM A-53 
specification. However, pipes meeting the A-53 or API 5L specifications 
do not necessarily meet the A-106 specification. To avoid maintaining 
separate production runs and separate inventories, manufacturers 
triple-certify the pipes. Since distributors sell the vast majority of 
this product, they can thereby maintain a single inventory to service 
all customers.
    The primary application of ASTM A-106 pressure pipes and triple-
certified pipes is in pressure piping systems by refineries, 
petrochemical plants and chemical plants. Other applications are in 
power generation plants (electrical-fossil fuel or nuclear), and in 
some oil field uses (on shore and off shore) such as for separator 
lines, gathering lines and metering runs. A minor application of this 
product is for use as oil and gas distribution lines for commercial 
applications. These applications constitute the majority of the market 
for the subject seamless pipes. However, A-106 pipes may be used in 
some boiler applications.
    The scope of this order includes all seamless pipe meeting the 
physical parameters described above and produced to one of the 
specifications listed above, regardless of application, and whether or 
not also certified to a non-covered specification. Standard, line and 
pressure applications and the above-listed specifications are defining 
characteristics of the scope of this order. Therefore, seamless pipes 
meeting the physical description above, but not produced to the ASTM A-
335, ASTM A-106, ASTM A-53, or API 5L standards shall be covered if 
used in a standard, line or pressure application.
    For example, there are certain other ASTM specifications of pipe 
which, because of overlapping characteristics, could potentially be 
used in A-106 applications. These specifications generally include A-
162, A-192, A-210, A-333, and A-524. When such pipes are used in a 
standard, line or pressure pipe application, such products are covered 
by the scope of this order.
    Specifically excluded from this order are boiler tubing and 
mechanical tubing, if such products are not produced to ASTM A-335, 
ASTM A-106, ASTM A-53 or API 5L specifications and are not used in 
standard, line or pressure applications. In addition, finished and 
unfinished oil country tubular goods (``OCTG'') are excluded from the 
scope of this order, if covered by the scope of another antidumping 
duty order from the same country. If not covered by such an OCTG order, 
finished and unfinished OCTG are included in this scope when used in 
standard, line or pressure applications. Finally, also excluded from 
this order are redraw hollows for cold-drawing when used in the 
production of cold-drawn pipe or tube.
    Although the HTSUS subheadings are provided for convenience and 
customs purposes, our written description of the scope of this order is 
dispositive.

Fair Value Comparisons

    To determine whether VMB made sales of seamless standard, line and 
pressure pipe to the United States at less than fair value, we compared 
the CEP to the NV, as described in the ``Constructed Export Price'' and 
``Normal Value'' sections of this notice, below. In accordance with 
section 777A(d)(2) of the Act, we compared the CEPs of individual U.S. 
transactions to monthly weighted-average NVs.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by VMB covered by the descriptions in the ``Scope of 
the Order'' section of this notice to be foreign like products for the 
purpose of determining appropriate product comparisons to VMB's U.S. 
sales of the subject merchandise.
    We have relied on the following six criteria to match U.S. sales of 
the subject merchandise to sales in Brazil of the foreign like product: 
product specification, manufacturing process (cold-finished or hot-
rolled), outside diameter, schedule, surface finish and end finish.
    Where there were no sales of identical merchandise in the home 
market 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 
and reporting instructions listed in the Department's October 2, 2004, 
questionnaire.

Constructed Export Price

    Section 772(b) of the Act defines CEP as 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, as adjusted under sections 772(c) and 
(d).
    In the instant review, VMB sold subject merchandise through an 
affiliated company, Vallourec & Mannesmann Tubes Corporation (VM Corp.) 
of Houston, Texas. VMB reported all of its U.S. sales of subject 
merchandise as CEP transactions. After reviewing the evidence on the 
record of this review, we have preliminarily determined that VMB's 
transactions are classified properly as CEP sales because these sales 
occurred in the United States and were made through its U.S. affiliate 
to an unaffiliated buyer. Such a determination is consistent with 
section 772(b) of the Act and the U.S. Court of Appeals for the Federal 
Circuit's decision in AK Steel Corp. et al. v. United States, 226 F.3d 
1361, 1374 (Fed. Cir. 2000) (AK Steel). In AK Steel, the Court of 
Appeals examined the definitions of EP and CEP, noting ``the plain 
meaning of the language enacted by Congress in 1994, focuses on where 
the sale takes place and whether the foreign producer or exporter and 
the U.S. importer are affiliated, making these two factors dispositive 
of the choice between the two classifications.'' AK Steel at 1369. The 
court declared, ``... the critical differences between EP and CEP sales 
are whether the sale or transaction takes place inside or outside the 
United States and whether it is made by an affiliate,'' and noted the 
phrase ``outside the United States'' had been added to the 1994 
statutory definition of EP. AK Steel at 1368-70. Thus, the 
classification of a sale as either EP or CEP depends upon where the 
contract for sale was concluded (i.e., in or outside the United States) 
and whether the foreign producer or exporter is affiliated with the 
U.S. importer.

[[Page 24526]]

    For these CEP sales transactions, we calculated price in conformity 
with section 772(b) of the Act. We based CEP on the packed, delivered 
duty-paid prices to an unaffiliated purchaser in the United States. We 
also made deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act; these included foreign inland freight, foreign 
inland insurance, foreign brokerage and handling, international 
freight, marine insurance, U.S. brokerage and handling and U.S. customs 
duties. In accordance with section 772(d)(1) of the Act, we deducted 
those selling expenses associated with economic activities occurring in 
the United States, including imputed credit expenses and indirect 
selling expenses. We also made an adjustment for profit in accordance 
with section 772(d)(3) of the Act.

Normal Value

    A. Home Market Viability
    To determine whether there is a sufficient volume of sales in the 
home market to serve as a viable basis for calculating NV, we compared 
VMB's volume of home market sales of the foreign like product to the 
volume of U.S. sales of the subject merchandise, in accordance with 
section 773(a)(1)(B) of the Act. Because VMB's aggregate volume of home 
market sales of the foreign like product was greater than five percent 
of its aggregate volume of U.S. sales for the subject merchandise, we 
determined the home market was viable. See Section A Response, at 
Exhibit 1.
    B. Cost of Production Analysis
    In the most recently completed segment, the Department determined 
that VMB made sales in the home market at prices below its cost of 
production (COP) and, therefore, excluded such sales from its 
calculation of NV. See Preliminary Results of Antidumping Duty 
Administrative Review: Small Diameter Seamless Carbon and Alloy Steel 
Standard, Line and Pressure Pipe from Brazil, 69 FR 54125 (September 7, 
2004). The Department's affirmative findings of sales-below-cost in the 
preliminary results of the prior period review did not change in the 
final results. Therefore, the Department has reasonable grounds to 
believe or suspect, pursuant to section 773(b)(2)(A)(ii) of the Act, 
that VMB made sales in the home market at prices below the COP for this 
POR. As a result, in accordance with section 773(b)(1) of the Act, we 
examined whether VMB's sales in the home market were made at prices 
below the COP.
    In accordance with section 773(b)(3) of the Act, we calculated the 
weighted-average COP for each model based on the sum of VMB's material 
and fabrication costs for the foreign like product, plus amounts for 
selling expenses, general and administrative expenses (G&A), interest 
expenses and packing costs. The Department relied on the COP data 
reported by VMB, except as noted below:
    1. We revised the total cost of manufacturing (TOTCOM) to reflect 
the higher market price of charcoal, provided by a home market 
affiliate, rather than the transfer price or COP in accordance with 
section 773(f)(3) of the Act.
    2. We revised VMB's reported TOTCOM by recalculating the correction 
factor (i.e., INDCOR) by allocating certain costs related to subject 
merchandise over the cost of goods sold (COGS) of subject merchandise 
and allocating costs related to both subject and non-subject over the 
COGS of all products.
    3. We revised the G&A expense ratio to exclude dividends received 
and the reversal of a provision for depreciation relating to prior 
periods.
    For further details regarding these adjustments, see the 
Department's ``Cost of Production and Constructed Value Calculation 
Adjustments for the Preliminary Results V&M do Brasil, S.A.'' (COP 
Memorandum), dated May 3, 2005.
    We compared the weighted-average COP figures to the home market 
sales prices of the foreign like product, as required under section 
773(b) of the Act, to determine whether these sales had been made at 
prices below COP. On a product-specific basis, we compared the COP to 
home market prices net of any applicable billing adjustments, indirect 
taxes (ICMS, IPI, COFINS and PIS), and any applicable movement charges.
    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 such sales were made in 
substantial quantities within an extended period of time, 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. 
Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent 
of VMB's home market sales of a given model were 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 in ``substantial quantities.'' Where 20 percent or more 
of VMB's home market sales of a given model were at prices less than 
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 VMB revealed that for home market sales of 
certain models, less than 20 percent of the sales of those models were 
at prices below the COP. We therefore retained all such sales in our 
analysis and used them as the basis for determining NV. Our cost test 
also indicated that for certain models, more than 20 percent of the 
home market sales of those models were sold at prices below COP within 
an extended period of time and were at prices which would not permit 
the recovery of all costs within a reasonable period of time. Thus, in 
accordance with section 773(b)(1) of the Act, we excluded these below-
cost sales from our analysis and used the remaining above-cost sales as 
the basis for determining NV.
    C. Price-to-Price Comparisons
    We matched all U.S. sales to NV. We calculated NV based on prices 
to unaffiliated customers. We adjusted gross unit price for billing 
adjustments, interest revenue, indirect taxes, and the per-unit value 
of any post-transaction complimentary invoices (or credit notes) that 
were issued to adjust for any errors in the originating invoice. We 
made deductions, where appropriate, for foreign inland freight, 
insurance and warehousing, pursuant to section 773(a)(6)(B) of the Act. 
In addition, we made adjustments for differences in cost attributable 
to differences in physical characteristics of the merchandise, pursuant 
to section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411, as well as 
for differences in circumstances of sale (COS), in accordance with 
section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. We made COS 
adjustments for imputed credit expenses, warranty expenses, and 
commissions. Finally, we deducted home market packing costs and added 
U.S. packing costs in accordance with sections 773(a)(6)(A) and (B) of 
the Act.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent

[[Page 24527]]

practicable, we determine NV based on sales in the home market at the 
same level of trade (LOT) as the export transaction. The NV LOT is that 
of the starting-price sales in the comparison market. For CEP, it is 
the level of the constructed sale from the exporter to the importer. We 
consider only the selling activities reflected in the U.S. price after 
the deduction of expenses incurred in the United States and CEP profit 
under section 772(d) of the Act. See Micron Technology Inc. v. United 
States, 243 F.3d 1301, 1314-1315 (Fed. Cir. 2001).
    To determine whether NV sales are at a different LOT than CEP 
sales, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. We analyze whether different selling activities 
are performed, and whether any price differences (other than those for 
which other allowances are made under the Act) are shown to be wholly 
or partly due to a difference in LOT between the CEP and NV. Under 
section 773(a)(7)(A) of the Act, we make an upward or downward 
adjustment to NV for LOT if the difference in LOT involves the 
performance of different selling activities and is demonstrated to 
affect price comparability, based on a pattern of consistent price 
differences between sales at different LOTs in the country in which NV 
is determined. Finally, if the NV LOT is at a more advanced stage of 
distribution than the LOT of the CEP, but the data available do not 
provide an appropriate basis to determine a LOT adjustment, we reduce 
NV by the amount of indirect selling expenses incurred in the foreign 
comparison market on sales of the foreign like product, but by no more 
than the amount of the indirect selling expenses incurred for CEP 
sales. See section 773(a)(7)(B) of the Act (the CEP offset provision).
    In analyzing differences in selling functions, we determine whether 
the LOTs identified by the respondent are meaningful. See Antidumping 
Duties; Countervailing Duties, Final Rule, 62 FR 27296, 27371 (May 19, 
1997). If the claimed LOTs are the same, we expect that the functions 
and activities of the seller should be similar. Conversely, if a party 
claims that LOTs are different for different groups of sales, the 
functions and activities of the seller should be dissimilar. See 
Porcelain-on-Steel Cookware from Mexico: Final Results of 
Administrative Review, 65 FR 30068 (May 10, 2000). In the present 
review, VMB claimed that there was no LOT in the home market comparable 
to the LOT of the CEP sales, and requested a CEP offset. See Section A 
Response at A-25.
    VMB claimed two LOTs in the home market based on distinct channels 
of distribution to two categories of customers: distributors and end-
users. We examined the reported selling functions and found that VMB's 
home market selling functions for all customers include sales 
forecasting, planning, order processing, general selling functions 
performed by VMB sales personnel, sales and marketing support, 
technical assistance and provision for warranties. VMB also claimed 
packing as a selling function performed for all customers. See Section 
A Response at Exhibit 11. However, we make a separate COS adjustment 
for packing and do not consider this to be a selling function relevant 
to LOT.
    VMB further reported several selling functions unique to each 
channel of distribution: sales and marketing support, personnel 
training, sales promotion and research are functions involved only in 
sales to distributors. In addition, we recognize warehousing as a 
necessary step in VMB's sales process to distributors evidenced by 
VMB's home market sales listing, which shows that warehousing was 
predominantly provided on sales to distributors. In contrast, 
advertising in trade magazines, procurement services and after-sales 
services are provided solely to end-users. VMB also reported the 
selling function of inventory maintenance with regard to sales to one 
end-user customer, for which a small percentage of VMB sales are 
transferred to unaffiliated warehouses from which this customer 
regularly extracts merchandise on a just-in-time (JIT) basis, resulting 
in an inventory maintenance expense for VMB. See Section A Response at 
A-20. See also Section B Response at B-51. VMB also claimed the payment 
of commissions on sales to some end-users as a selling function. 
However, we make a separate COS adjustment for commissions and do not 
consider this as a selling function in our LOT analysis. In addition, 
the record demonstrates that VMB acts as a service center in some of 
its sales transactions with end-users (i.e., after-sales services). 
Such was the case noted by the Department in the prior review of 
seamless line and pressure pipe from Brazil. See Section A Response at 
Exhibits 9 and 11; see also Notice of Final Results of Antidumping Duty 
Administrative Review: Small Diameter Circular Seamless Carbon and 
Alloy Steel Standard, Line and Pressure Pipe from Brazil, 70 FR 7243 
(February 11, 2005), and attached Decision Memorandum at comment 2. 
Based upon the above analysis, we preliminarily conclude that the 
selling functions for the reported home market channels of distribution 
are sufficiently dissimilar to consider them as two LOTs.
    Because VMB reported that all of its U.S. sales are CEP sales made 
through one channel of distribution to its U.S. affiliate, we 
preliminarily agree with VMB's claim that there is only one LOT in the 
U.S. market. We examined the claimed selling functions for VMB's CEP 
sales, (i.e., the selling functions performed for the sale to VM Corp.) 
which include sales forecasting, order processing, delivery of the 
merchandise, and warranties. See Section A Response at Exhibit 11; see 
also VMB's Supplemental A-C Questionnaire Response dated February 7, 
2005, at page 35. VM Corp. handles the remaining selling functions of 
strategic planning, sales negotiations and promotion, and customer 
service involved in the CEP sales to the unaffiliated customer in the 
United States.
    Pursuant to 19 CFR 351.412(f) of the Department's regulations, we 
may determine that sales in the home and export markets were not made 
at the same LOT, and that it is not possible to determine whether the 
difference affects price comparability. We compared VMB's selling 
functions in the home market with the selling functions for U.S. sales 
to its affiliate, VM Corp., and carefully considered the evidence on 
the record. We preliminarily find that VMB's selling functions for 
sales to the United States, namely, sales forecasting, order 
processing, delivery and warranties, are less numerous than VMB's 
selling functions for either level of trade of its home market sales.
    Furthermore, in the home market, the chain of distribution is 
further from the factory. For example, many sales are made to 
distributors and may go through unaffiliated warehouses; in contrast, 
the CEP LOT is determined by the selling function performed at the 
point of sale to the affiliated importer and, thus, the CEP LOT is at a 
less advanced stage of distribution.
    We therefore examined whether a LOT adjustment or CEP offset may be 
appropriate. We preliminarily find that VMB's home market sales to 
distributors are at a more advanced stage of marketing than its CEP 
sales and, further, that there is no LOT in the home market comparable 
to the CEP LOT. Additionally, we do not have record information that 
would allow us to examine pricing patterns based on VMB's sales of non-
subject merchandise, and there are no other respondents or other record 
information

[[Page 24528]]

on which such an analysis could be based.
    Accordingly, because the data available do not provide an 
appropriate basis for making a LOT adjustment, but the LOT in the home 
market is at a more advanced stage of distribution than the LOT of the 
CEP transactions, we preliminarily determine that a CEP offset 
adjustment is appropriate, in accordance with section 773(a)(7)(B) of 
the Act.

Currency Conversion

    We made currency conversions into U.S. dollars, in accordance with 
section 773A(a) of the Act, 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 Review
    As a result of our review, we preliminarily determine the weighted-
average dumping margin for the period August 1, 2003, through July 31, 
2004, to be as follows:

------------------------------------------------------------------------
               Manufacturer / Exporter                 Margin (percent)
------------------------------------------------------------------------
V&M do Brasil, S.A..................................               18.68
------------------------------------------------------------------------

    The Department will disclose calculations performed in connection 
with these preliminary results of review within five days of the date 
of publication of this notice in accordance with 19 CFR 351.224(b). 
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 the case briefs and comments, may be filed 
no later than 35 days after the date of publication of this notice. 
Parties who submit argument in these proceedings 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. An interested 
party may request a hearing within 30 days of publication. See section 
351.310(c) of the Department's regulations. Any hearing, if requested, 
will be held 37 days after the date of publication, or the first 
business day thereafter, unless the Department alters the date. The 
Department will issue the final results of these preliminary results, 
including the results of our analysis of the issues raised in any such 
written comments or at a hearing, within 120 days of publication of 
these preliminary results.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. Pursuant to section 351.212(b) of 
the Department's regulations, the Department calculates an assessment 
rate for each importer of the subject merchandise for each respondent. 
The Department will issue appropriate assessment instructions directly 
to CBP within 15 days of publication of the final results of review.

Cash Deposit Requirements

    The following deposit requirements will be effective upon 
completion of the final results of this administrative review 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 administrative review, as provided by section 
751(a)(1) of the Act: (1) The cash deposit rate will be the rate 
established in the final results of this review; (2) for previously 
reviewed or investigated companies not listed above, the cash deposit 
rate will be the company-specific rate established for the most recent 
period; (3) if the exporter is not a firm covered in this review, a 
prior review, or the 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 subject merchandise; and (4) if 
neither the exporter nor the manufacturer is a firm covered in this 
review, any previous reviews, or the LTFV investigation, the cash 
deposit rate will be 124.94 percent, the ``all others'' rate 
established in the LTFV investigation. See Antidumping Duty Order and 
Amended Final Determination: Certain Small Diameter Seamless Carbon and 
Alloy Steel Standard, Line and Pressure Pipe from Brazil, 60 FR 39707 
(August 3, 1995). These deposit rates, when imposed, shall remain in 
effect until publication of the final results of the next 
administrative review.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) 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.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: May 3, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-2297 Filed 5-9-05; 8:45 am]
BILLING CODE 3510-DS-S