Certain Small Diameter Seamless Carbon and Alloy Steel Standard, Line and Pressure Pipe from Brazil; Preliminary Results of Antidumping Duty Administrative Review, 37723-37728 [E7-13383]

Download as PDF Federal Register / Vol. 72, No. 132 / Wednesday, July 11, 2007 / Notices within five days of the date of publication of this notice. Any interested party may request a hearing within 30 days of the date of publication of this notice. See 19 CFR 351.310. Interested parties who wish to request a hearing or to participate in a hearing if a hearing is requested must submit a written request to the Assistant Secretary for Import Administration within 30 days of the date of publication of this notice. Requests should contain the following: (1) the party’s name, address, and telephone number; (2) the number of participants; (3) a list of issues to be discussed. See 19 CFR 351.310(c). Issues raised in the hearing will be limited to those raised in the case and rebuttal briefs. See 19 CFR 351.310(c). Case briefs from interested parties may be submitted not later than 30 days after the date of publication of this notice of preliminary results of review. See 19 CFR 351.309(c)(1)(ii). Rebuttal briefs from interested parties, limited to the issues raised in the case briefs, may be submitted not later than five days after the time limit for filing the case briefs or comments. See 19 CFR 351.309(d)(1) and 19 CFR 351.310(c). If requested, any hearing will be held two days after the scheduled date for submission of rebuttal briefs. See 19 CFR 351.310(d). Parties who submit case briefs or rebuttal briefs in this proceeding are requested to submit with each argument a statement of the issue, a summary of the arguments not exceeding five pages, and a table of statutes, regulations, and cases cited. See 19 CFR 351.309(c)(2). The Department will issue the final results of this administrative review, including the results of its analysis of issues raised in any such written briefs or at the hearing, if held, not later than 120 days after the date of publication of this notice. See section 751(a)(3)(A) of the Act. jlentini on PROD1PC65 with NOTICES Assessment Rates The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have calculated, whenever possible, an exporter/importer (or customer)-specific assessment rate or value for merchandise subject to this review. For the responsive companies which were not selected for individual review, we have calculated an assessment rate based on the weighted average of the weighted–average margins we calculated for the companies selected for individual review, excluding any which are de minimis or determined entirely on AFA. VerDate Aug<31>2005 17:56 Jul 10, 2007 Jkt 211001 The Department clarified its ‘‘automatic assessment’’ regulation on May 6, 2003. See Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003) (Assessment of Antidumping Duties). This clarification will apply to entries of subject merchandise during the POR produced by companies included in these preliminary results of review for which the reviewed companies did not know their merchandise was destined for the United States. In such instances, we will instruct CBP to liquidate unreviewed entries at the all–others rate if there is no rate for the intermediate company(ies) involved in the transaction. For a full discussion of this clarification, see Assessment of Antidumping Duties. We will issue liquidation instructions to CBP 15 days after publication of the final results of review. Export–Price Sales With respect to EP sales, for these preliminary results, we divided the total dumping margins (calculated as the difference between normal value and EP) for each exporter’s importer or customer by the total number of units the exporter sold to that importer or customer. We will direct CBP to assess the resulting per–unit dollar amount against each unit of merchandise in each of that importer’s/customer’s entries during the review period. Constructed Export–Price Sales For CEP sales, we divided the total dumping margins for the reviewed sales by the total entered value of those reviewed sales for each importer. We will direct CBP to assess the resulting percentage margin against the entered customs values for the subject merchandise on each of that importer’s entries during the review period. See 19 CFR 351.212(b). Cash–Deposit Requirements The following deposit requirements will be effective upon publication of the notice of final results of administrative review for all shipments of polyethylene retail carrier bags from Thailand entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(a)(1) of the Act: (1) the cash–deposit rates for the reviewed companies will be the rates established in the final results of this review except if the rate is less than 0.50 percent and, therefore, de minimis within the meaning of 19 CFR 351.106(c)(1), in which case the cash– deposit rate will be zero; (2) for previously reviewed or investigated PO 00000 Frm 00025 Fmt 4703 Sfmt 4703 37723 companies not listed above, the cash– deposit rate 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 prior review, or the less–than-fair–value 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; (4) if neither the exporter nor the manufacturer has its own rate, the cash–deposit rate will be 2.80 percent, the ‘‘all others’’ rate for this proceeding. These deposit requirements, when imposed, shall remain in effect until further notice. Notification to Importer 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 Department’s presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties. These preliminary results of administrative review are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act. Dated: July 2, 2007. David M. Spooner, Assistant Secretary for Import Administration. [FR Doc. E7–13381 Filed 7–10–07; 8:45 am] BILLING CODE 3510–DS–S DEPARTMENT OF COMMERCE International Trade Administration [A–351–826] Certain Small Diameter Seamless Carbon and Alloy Steel Standard, Line and Pressure Pipe from Brazil; Preliminary Results of Antidumping Duty Administrative Review Import Administration, International Trade Administration, Department of Commerce. SUMMARY: In response to requests from V&M do Brasil, S.A. (VMB), the respondent, and United States Steel Corporation (U.S. Steel), the petitioner, the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on certain small diameter seamless carbon and alloy steel standard, line and pressure pipe (seamless pipe) from Brazil. This AGENCY: E:\FR\FM\11JYN1.SGM 11JYN1 37724 Federal Register / Vol. 72, No. 132 / Wednesday, July 11, 2007 / Notices administrative review covers imports of subject merchandise from VMB. The period of review is August 1, 2005, through July 16, 2006. We preliminarily determine that sales of seamless pipe by VMB have not been made at less than normal value (NV). If these preliminary results are adopted in the final results of this administrative review, we will instruct U.S. Customs and Border Protection (CBP) to liquidate appropriate entries without regard to antidumping duties. Interested parties are invited to comment on these preliminary results. Parties who submit argument in this proceeding are requested to submit: 1) a statement of the issues, 2) a brief summary of the argument, and 3) a table of authorities. EFFECTIVE DATE: July 11, 2007. FOR FURTHER INFORMATION CONTACT: Dena Crossland or Stephen Bailey, 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) 482–3362 or (202) 482– 0193, respectively. SUPPLEMENTARY INFORMATION: jlentini on PROD1PC65 with NOTICES Background On August 3, 1995, the Department published the antidumping duty order on seamless pipe from Brazil. See Notice of 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). On August 1, 2006, the Department published the opportunity to request administrative review of, inter alia, seamless pipe from Brazil for the period August 1, 2005, through July 31, 2006. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 71 FR 43441 (August 1, 2006). In accordance with section 351.213(b)(1) of the Department’s regulations, on August 31, 2006, the respondent VMB and the petitioner U.S. Steel requested that we conduct an administrative review of VMB’s sales of seamless pipe. On September 29, 2006, the Department published in the Federal Register a notice of initiation of this antidumping duty administrative review covering the period August 1, 2005, through July 31, 2006. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 71 FR 57465 (September 29, 2006). On October 10, 2006, the Department issued its antidumping duty VerDate Aug<31>2005 17:56 Jul 10, 2007 Jkt 211001 questionnaire to VMB. VMB submitted its response to section A of the questionnaire (section A response) on November 6, 2006, its responses to sections B and C (section B response and section C response) on November 28, 2006, and its response to section D of the questionnaire (section D response) on December 5, 2007. The Department issued a supplemental questionnaire for all four responses on January 25, 2007, and received VMB’s response on February 20, 2007 (first supplemental questionnaire response).1 On April 18, 2007, the Department issued a second supplemental questionnaire to VMB pertaining to VMB’s February 20, 2004, supplemental response for sections A through D, and received VMB’s response on May 10, 2007. On May 25, 2007, the Department issued a third supplemental questionnaire to VMB pertaining to VMB’s May 10, 2007, supplemental response for section D, and received VMB’s response on June 8, 2007. On May 2, 2007, the International Trade Commission determined revocation of the antidumping duty orders on seamless pipe from Argentina and Brazil would not likely lead to continuation or recurrence of material injury to an industry in the United States. See Certain Seamless Carbon and Alloy Steel Standard, Line, and Pressure Pipe from Argentina, Brazil, and Germany, 72 FR 26153 (May 8, 2007), and ITC Publication 3918 (May 2007), Investigation No. 731–TA–707– 709 (Second Review). Thus, the Department revoked the antidumping duty orders on seamless line pipe from Argentina and Brazil, pursuant to sections 751(c) and 751(d) of the Act. See Revocation Pursuant to Second Five–Year (‘‘Sunset’’) Reviews of Antidumping Duty Orders: Certain Small Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe from Argentina and Brazil, 72 FR 28027 (May 18, 2007) (Revocation of Seamless Pipe from Argentina and Brazil). The Department stated in the Revocation of Seamless Pipe from Argentina and Brazil that it will complete any pending administrative reviews of these orders and will conduct administrative reviews of subject merchandise entered prior to the effective date of revocation in response to appropriately filed requests for review. Pursuant to section 751(d)(2) of the Act and 19 CFR 351.222(i)(2)(i), the 1 VMB provided a quantity and value reconciliation, as required under section A of the Department’s antidumping question, in its first supplemental questionnaire response, dated February 20, 2007. PO 00000 Frm 00026 Fmt 4703 Sfmt 4703 effective date of revocation is July 16, 2006. As a result, the Department is completing the instant review of seamless pipe from Brazil. Accordingly, the period of review for this proceeding is from August 1, 2005, to July 16, 2006. Period of Review The period of review (POR) is August 1, 2005, through July 16, 2006. Scope of the Antidumping Duty Review The products covered by this antidumping duty review 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 review 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 review, 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 review are currently classifiable under subheadings 7304.19.10.20, 7304.19.50.20, 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 E:\FR\FM\11JYN1.SGM 11JYN1 jlentini on PROD1PC65 with NOTICES Federal Register / Vol. 72, No. 132 / Wednesday, July 11, 2007 / Notices 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 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 VerDate Aug<31>2005 17:56 Jul 10, 2007 Jkt 211001 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 review 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 review, 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 review are redraw hollows for cold–drawing when used in the production of cold–drawn pipe or tube. Excluded from this order are shipments of 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 or manufacturing process (hot–finished or cold–drawn) that 1) has been cut into lengths of six to 120 inches, 2) has had the inside bore ground to a smooth surface, 3) has had multiple layers of specially formulated corrosion resistant glass permanently baked on at temperatures of 1,440 to 1,700 degrees Fahrenheit in thicknesses from 0.032 to 0.085 inch (40 to 80 mils), and 4) has flanges or other forged stub ends welded on both ends of the pipe. The special corrosion resistant glass referred to in this definition may be glass containing by weight 1) 70 to 80 percent of an oxide of silicone, zirconium, titanium or cerium (Oxide Group RO2), 2) 10 to 15 percent of an oxide of sodium, potassium, or lithium (Oxide Group PO 00000 Frm 00027 Fmt 4703 Sfmt 4703 37725 RO), 3) from a trace amount to five percent of an oxide of either aluminum, cobalt, iron, vanadium, or boron (Oxide Group R2O3), or 4) from a trace amount to five percent of a fluorine compound in which fluorine replaces the oxygen in any one of the previously listed oxide groups. These glass–lined pressure pipes are commonly manufactured for use in glass–lined equipment systems for processing corrosive or reactive chemicals, including acrylates, alkanolamines, herbicides, pesticides, pharmaceuticals and solvents. The glass–lined pressure pipes excluded from this antidumping duty review are currently classifiable under subheadings 7304.39.0020, 7304.39.0024 and 7304.39.0028 of the HTSUS. 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 pipe to the United States at less than fair value, we compared the constructed export price (CEP) to the NV, as described below. Specifically, in accordance with section 777A(d)(2) of the Tariff Act of 1930, as amended (the Act), we compared the CEP of individual U.S. transactions to monthly weighted–average NV. 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 Antidumping Duty Review’’ section of this notice to be foreign like products for the purpose of determining appropriate product comparisons to VMB’s U.S. sales of seamless pipe. 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 (hot finished or cold drawn), outside diameter, wall thickness, 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 10, 2006, 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 E:\FR\FM\11JYN1.SGM 11JYN1 jlentini on PROD1PC65 with NOTICES 37726 Federal Register / Vol. 72, No. 132 / Wednesday, July 11, 2007 / Notices 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 (V&M Corp.) of Houston, Texas. VMB reported all of its U.S. sales of seamless pipe 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. 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 movement expenses 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, VerDate Aug<31>2005 17:56 Jul 10, 2007 Jkt 211001 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 seamless pipe to the volume of U.S. sales of seamless pipe, in accordance with section 773(a)(1)(B) of the Act. Because VMB’s aggregate volume of home market sales of seamless pipe was greater than five percent of its aggregate volume of U.S. sales of seamless pipe, 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 Certain Small Diameter Seamless Carbon and Alloy Steel Standard, Line and Pressure Pipe from Brazil: Notice of Final Results of Antidumping Duty Administrative Review, 71 FR 56473 (September 27, 2006). 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 recalculated VMB’s financial expense ratio (INTEX) calculation by excluding the offset for long– term interest income. For further details regarding this adjustment, see the Department’s ‘‘Cost of Production and Constructed Value PO 00000 Frm 00028 Fmt 4703 Sfmt 4703 Calculation Adjustments for the Preliminary Results - V&M do Brasil, S.A.’’ (COP Memorandum), on file in the Department’s Central Records Unit (CRU) located in Room B–099 of the main Department of Commerce Building, 14th Street and Constitution Avenue, NW, Washington, DC 20230, dated July 2, 2007. 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. E:\FR\FM\11JYN1.SGM 11JYN1 Federal Register / Vol. 72, No. 132 / Wednesday, July 11, 2007 / Notices 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 complementary 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 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.2 jlentini on PROD1PC65 with NOTICES Level of Trade In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we determined NV based on sales in the comparison market at the same level of trade (LOT) as the CEP 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. To determine whether NV sales are at a different LOT than CEP sales, we examine different 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, where possible, we make a LOT adjustment under section 773(a)(7)(A) of the Act. Finally, 2 See the Analysis Memorandum for the Preliminary Results of the Administrative Review of the Antidumping Duty Order on Certain Small Diameter Seamless Carbon and Alloy Steel Standard Line and Pressure Pipe from Brazil, dated July 2, 2007, for further discussion of date of sale and other details on the calculation of the antidumping duty weighted-average margin. A public version of the memorandum is available in the Department’s CRU. VerDate Aug<31>2005 17:56 Jul 10, 2007 Jkt 211001 for CEP sales for which we are unable to quantify a LOT adjustment, if the NV level is more remote from the factory than the CEP level and there is no basis for determining whether the difference in levels between NV and CEP sales affects price comparability, we adjust NV under section 773(a)(7)(B) of the Act (the CEP offset provision). 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 B response at VI–41 through VI–43. VMB reported two channels of distribution in the home market: one to unaffiliated distributors and one to end– users. See section A response at Exhibit 10. We examined the selling activities reported for each channel of distribution and organized the reported selling activities into the following four selling functions: 1) sales process and marketing support, 2) freight and delivery, 3) inventory maintenance and warehousing, and 4) warranty and technical services. 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, technical assistance, delivery of the merchandise, and provision for warranties. VMB also claimed packing as a selling function performed for all customers. ] first supplemental questionnaire response at Exhibit 1. 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: personnel training, sales promotion, distributor/dealer training, sales/marketing support, and market research are selling functions performed only in sales to distributors. In contrast, advertising and after–sales services are provided solely to end–users. See first supplemental questionnaire response at Exhibit 1. VMB also paid commissions on sales to some end–users. In addition, VMB reported the selling function of inventory maintenance with regard to sales to one end–user customer, for which a small percentage of VMB’s sales are transferred to unaffiliated warehouses from which this customer regularly extracts merchandise on a just–in-time basis. See section A Response at VI–18; see also section B response at VI–28. Based upon the above analysis, we preliminarily conclude that the selling functions for the reported home market channels of distribution are sufficiently different to consider them as two LOTs. PO 00000 Frm 00029 Fmt 4703 Sfmt 4703 37727 For CEP sales, we examined the selling activities related to each of the selling functions between VMB and its U.S. affiliate, V&M Corp. VMB reported that all of its sales to the United States are CEP sales made through V&M Corp., i.e., through one channel of distribution, and claimed that there is only one LOT. We examined VMB’s selling functions (&, sales forecasting, order processing, and freight and delivery) for sales to V&M Corp. and found that these selling functions are performed regardless of whether shipments are going to V&M Corp. or directly to the unaffiliated customer. See first supplemental questionnaire response at Exhibit 1. Therefore, we preliminary determine that VMB’s U.S. sales constitute a single LOT. We then compared the selling functions VMB provided in the home market LOTs with the selling functions provided for the U.S. LOT. While VMB provides a comparable level of assistance for freight and delivery in both the home and U.S. markets, VMB provides significantly more assistance for marketing support, and inventory maintenance and warehousing for the home market than the U.S. market. Additionally, VMB provides more technical services for the home market than the U.S. market. On this basis, we determined that the HM LOTs are not similar to VMB’s U.S. LOT. Based upon the above analysis, we preliminarily determine that there is no LOT in the home market comparable to the CEP LOT, and it is, therefore, not possible to determine whether the difference in LOT affects price comparability. Consequently, we examined whether a CEP offset may be appropriate pursuant to section 351.412(f) of the Department’s regulations. We find that the selling functions VMB performs for sales to its U.S. affiliate are fewer and less complex than the selling functions VMB performs for either LOT in the home market. Compared to U.S. sales, the chain of distribution in the home market is at a level much more advanced. For example, many sales to distributors go through unaffiliated warehouses and VMB provides after–sales services to end–users (e.g., surveys and repairs). In contrast, VMB’s selling functions for U.S. sales end with delivery at the port of entry. 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 E:\FR\FM\11JYN1.SGM 11JYN1 37728 Federal Register / Vol. 72, No. 132 / Wednesday, July 11, 2007 / Notices We will instruct CBP to assess antidumping duties on all appropriate entries covered by this review if any Currency Conversion importer–specific assessment rate We made currency conversions into calculated in the final results of this U.S. dollars, in accordance with section review is above de minimis (i.e., at or 773A(a) of the Act, based on the above 0.50 percent). Pursuant to 19 CFR exchange rates in effect on the dates of 351.106(c)(2), we will instruct CBP to the U.S. sales, as certified by Dow Jones liquidate without regard to antidumping Reuters Business Interactive LLC duties any entries for which the (trading as Factiva). assessment rate is de minimis (i.e., less than 0.50 percent). See 19 CFR Preliminary Results of Review 351.106(c)(1). The final results of this As a result of our review, we review shall be the basis for the preliminarily determine the weighted– assessment of antidumping duties on average dumping margin for the period entries of merchandise covered by the August 1, 2005, through July 16, 2006, final results of this review. to be as follows: The Department clarified its ‘‘automatic assessment’’ regulation on Manufacturer / Exporter Margin (percent) May 6, 2003. See Antidumping and V&M do Brasil, S.A. ...... 0.00 Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 The Department will disclose FR 23954 (May 6, 2003) (Assessment calculations performed in connection Policy Notice). This clarification will with these preliminary results of review apply to entries of subject merchandise within five days of the date of during the POR produced by companies publication of this notice in accordance included in these final results of review with 19 CFR 351.224(b). Interested for which the reviewed companies did parties may submit case briefs and/or not know that the merchandise they written comments no later than 30 days sold to the intermediary (e.g., a reseller, after the date of publication of these trading company, or exporter) was preliminary results of review. Rebuttal destined for the United States. In such briefs and rebuttals to written instances, we will instruct CBP to comments, limited to issues raised in liquidate unreviewed entries at the ‘‘All the case briefs and comments, may be Others’’ rate if there is no rate for the filed no later than 35 days after the date intermediary involved in the of publication of this notice. Parties who transaction. See Assessment Policy submit argument in these proceedings Notice for a full discussion of this are requested to submit with the clarification. argument: 1) a statement of the issue, 2) a brief summary of the argument, and 3) Cash Deposit Requirements a table of authorities. An interested The Department notified CBP to party may request a hearing within 30 discontinue suspension of liquidation days of publication. See 19 CFR and collection of cash deposits on 351.310(c). Any hearing, if requested, entries of the subject merchandise will be held 2 days after the scheduled entered or withdrawn from warehouse date for the submission of rebuttal on or after July 16, 2006, the effective briefs. See 19 CFR 351.310(d). The date of revocation of the antidumping Department will issue the final results duty order. of these preliminary results, including Notification to Importers the results of our analysis of the issues raised in any such written comments or This notice also serves as a at a hearing, within 120 days of publication of these preliminary results, preliminary reminder to importers of their responsibility under 19 CFR pursuant to section 751(a)(3)(A) of the 351.402(f) to file a certificate regarding Act. the reimbursement of antidumping Assessment Rates duties prior to liquidation of the relevant entries during this review Upon completion of the period. Failure to comply with this administrative review, the Department requirement could result in the shall determine, and U.S. Customs and Secretary’s presumption that Border Protection (CBP) shall assess, reimbursement of antidumping duties antidumping duties on all appropriate occurred and the subsequent assessment entries, in accordance with 19 CFR of double antidumping duties. 351.212. The Department intends to issue assessment instructions to CBP 15 We are issuing and publishing this days after the date of publication of the notice in accordance with sections final results of this review. 751(a)(1) and 777(i)(1) of the Act. jlentini on PROD1PC65 with NOTICES accordance with section 773(a)(7)(B) of the Act. VerDate Aug<31>2005 17:56 Jul 10, 2007 Jkt 211001 PO 00000 Frm 00030 Fmt 4703 Sfmt 4703 Dated: July 2, 2007. David M. Spooner, Assistant Secretary for Import Administration. [FR Doc. E7–13383 Filed 7–10–07; 8:45 am] BILLING CODE 3510–DS–S DEPARTMENT OF COMMERCE International Trade Administration [A–570–908] Postponement of Preliminary Determination of Antidumping Duty Investigation: Sodium Hexametaphosphate from the People’s Republic of China Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: July 11, 2007. FOR FURTHER INFORMATION CONTACT: Erin Begnal or Kristina Horgan, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, DC 20230; telephone: (202) 482–1442 or (202) 482– 8173, respectively. SUPPLEMENTARY INFORMATION: AGENCY: Postponement of Preliminary Determination On February 28, 2007, the Department of Commerce (‘‘Department’’) initiated the antidumping duty investigation of sodium hexametaphosphate from the People’s Republic of China. See Initiation of Antidumping Duty Investigation: Sodium Hexametaphosphate From the People’s Republic of China, 72 FR 9926 (March 6, 2007) (‘‘Initiation Notice’’); see also Notice of Correction of Initiation of Antidumping Duty Investigation: Sodium Hexametaphosphate from the People’s Republic of China, 72 FR 11325 (March 13, 2007). The notice of initiation stated that the Department would make its preliminary determination for this antidumping duty investigation no later than 140 days after the date of issuance of the initiation. On June 25, 2007, ICL Performance Products, LP and Innophos, Inc. (‘‘Petitioners’’) made a timely request pursuant to 19 CFR 351.205(e) and section 733(c)(1)(A) of the Tariff Act of 1930, as amended (‘‘the Act’’) for a postponement of the preliminary determination. Petitioners requested postponement of the preliminary determination to allow the Department additional time in which to review the complex questionnaire responses and E:\FR\FM\11JYN1.SGM 11JYN1

Agencies

[Federal Register Volume 72, Number 132 (Wednesday, July 11, 2007)]
[Notices]
[Pages 37723-37728]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-13383]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-826]


Certain 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 requests from V&M do Brasil, S.A. (VMB), the 
respondent, and United States Steel Corporation (U.S. Steel), the 
petitioner, the Department of Commerce (the Department) is conducting 
an administrative review of the antidumping duty order on certain small 
diameter seamless carbon and alloy steel standard, line and pressure 
pipe (seamless pipe) from Brazil. This

[[Page 37724]]

administrative review covers imports of subject merchandise from VMB. 
The period of review is August 1, 2005, through July 16, 2006.
    We preliminarily determine that sales of seamless pipe by VMB have 
not been made at less than normal value (NV). If these preliminary 
results are adopted in the final results of this administrative review, 
we will instruct U.S. Customs and Border Protection (CBP) to liquidate 
appropriate entries without regard to antidumping duties. Interested 
parties are invited to comment on these preliminary results. Parties 
who submit argument in this proceeding are requested to submit: 1) a 
statement of the issues, 2) a brief summary of the argument, and 3) a 
table of authorities.

EFFECTIVE DATE:  July 11, 2007.

FOR FURTHER INFORMATION CONTACT: Dena Crossland or Stephen Bailey, 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-
3362 or (202) 482-0193, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 3, 1995, the Department published the antidumping duty 
order on seamless pipe from Brazil. See Notice of 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). On August 1, 2006, the Department published 
the opportunity to request administrative review of, inter alia, 
seamless pipe from Brazil for the period August 1, 2005, through July 
31, 2006. See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity to Request Administrative Review, 
71 FR 43441 (August 1, 2006).
    In accordance with section 351.213(b)(1) of the Department's 
regulations, on August 31, 2006, the respondent VMB and the petitioner 
U.S. Steel requested that we conduct an administrative review of VMB's 
sales of seamless pipe. On September 29, 2006, the Department published 
in the Federal Register a notice of initiation of this antidumping duty 
administrative review covering the period August 1, 2005, through July 
31, 2006. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews, 71 FR 57465 (September 29, 2006).
    On October 10, 2006, the Department issued its antidumping duty 
questionnaire to VMB. VMB submitted its response to section A of the 
questionnaire (section A response) on November 6, 2006, its responses 
to sections B and C (section B response and section C response) on 
November 28, 2006, and its response to section D of the questionnaire 
(section D response) on December 5, 2007. The Department issued a 
supplemental questionnaire for all four responses on January 25, 2007, 
and received VMB's response on February 20, 2007 (first supplemental 
questionnaire response).\1\ On April 18, 2007, the Department issued a 
second supplemental questionnaire to VMB pertaining to VMB's February 
20, 2004, supplemental response for sections A through D, and received 
VMB's response on May 10, 2007. On May 25, 2007, the Department issued 
a third supplemental questionnaire to VMB pertaining to VMB's May 10, 
2007, supplemental response for section D, and received VMB's response 
on June 8, 2007.
---------------------------------------------------------------------------

    \1\ VMB provided a quantity and value reconciliation, as 
required under section A of the Department's antidumping question, 
in its first supplemental questionnaire response, dated February 20, 
2007.
---------------------------------------------------------------------------

    On May 2, 2007, the International Trade Commission determined 
revocation of the antidumping duty orders on seamless pipe from 
Argentina and Brazil would not likely lead to continuation or 
recurrence of material injury to an industry in the United States. See 
Certain Seamless Carbon and Alloy Steel Standard, Line, and Pressure 
Pipe from Argentina, Brazil, and Germany, 72 FR 26153 (May 8, 2007), 
and ITC Publication 3918 (May 2007), Investigation No. 731-TA-707-709 
(Second Review). Thus, the Department revoked the antidumping duty 
orders on seamless line pipe from Argentina and Brazil, pursuant to 
sections 751(c) and 751(d) of the Act. See Revocation Pursuant to 
Second Five-Year (``Sunset'') Reviews of Antidumping Duty Orders: 
Certain Small Diameter Carbon and Alloy Seamless Standard, Line and 
Pressure Pipe from Argentina and Brazil, 72 FR 28027 (May 18, 2007) 
(Revocation of Seamless Pipe from Argentina and Brazil). The Department 
stated in the Revocation of Seamless Pipe from Argentina and Brazil 
that it will complete any pending administrative reviews of these 
orders and will conduct administrative reviews of subject merchandise 
entered prior to the effective date of revocation in response to 
appropriately filed requests for review. Pursuant to section 751(d)(2) 
of the Act and 19 CFR 351.222(i)(2)(i), the effective date of 
revocation is July 16, 2006. As a result, the Department is completing 
the instant review of seamless pipe from Brazil. Accordingly, the 
period of review for this proceeding is from August 1, 2005, to July 
16, 2006.

Period of Review

    The period of review (POR) is August 1, 2005, through July 16, 
2006.

Scope of the Antidumping Duty Review

    The products covered by this antidumping duty review 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 review 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 review, 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 review are 
currently classifiable under subheadings 7304.19.10.20, 7304.19.50.20, 
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

[[Page 37725]]

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 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 review 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 review, 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 review are redraw hollows for cold-drawing when used in the 
production of cold-drawn pipe or tube.
    Excluded from this order are shipments of 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 or manufacturing process (hot-finished or cold-drawn) that 1) 
has been cut into lengths of six to 120 inches, 2) has had the inside 
bore ground to a smooth surface, 3) has had multiple layers of 
specially formulated corrosion resistant glass permanently baked on at 
temperatures of 1,440 to 1,700 degrees Fahrenheit in thicknesses from 
0.032 to 0.085 inch (40 to 80 mils), and 4) has flanges or other forged 
stub ends welded on both ends of the pipe. The special corrosion 
resistant glass referred to in this definition may be glass containing 
by weight 1) 70 to 80 percent of an oxide of silicone, zirconium, 
titanium or cerium (Oxide Group RO[bdi2]), 2) 10 to 15 percent of an 
oxide of sodium, potassium, or lithium (Oxide Group RO), 3) from a 
trace amount to five percent of an oxide of either aluminum, cobalt, 
iron, vanadium, or boron (Oxide Group R[bdi2]O[bdi3]), or 4) from a 
trace amount to five percent of a fluorine compound in which fluorine 
replaces the oxygen in any one of the previously listed oxide groups. 
These glass-lined pressure pipes are commonly manufactured for use in 
glass-lined equipment systems for processing corrosive or reactive 
chemicals, including acrylates, alkanolamines, herbicides, pesticides, 
pharmaceuticals and solvents. The glass-lined pressure pipes excluded 
from this antidumping duty review are currently classifiable under 
subheadings 7304.39.0020, 7304.39.0024 and 7304.39.0028 of the HTSUS.
    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 pipe to the United 
States at less than fair value, we compared the constructed export 
price (CEP) to the NV, as described below. Specifically, in accordance 
with section 777A(d)(2) of the Tariff Act of 1930, as amended (the 
Act), we compared the CEP of individual U.S. transactions to monthly 
weighted-average NV.

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 Antidumping Duty Review'' section of this notice to be foreign like 
products for the purpose of determining appropriate product comparisons 
to VMB's U.S. sales of seamless pipe.
    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 (hot finished or cold 
drawn), outside diameter, wall thickness, 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 10, 2006, 
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

[[Page 37726]]

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 (V&M 
Corp.) of Houston, Texas. VMB reported all of its U.S. sales of 
seamless pipe 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.
    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 movement expenses 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 seamless pipe to the volume of 
U.S. sales of seamless pipe, in accordance with section 773(a)(1)(B) of 
the Act. Because VMB's aggregate volume of home market sales of 
seamless pipe was greater than five percent of its aggregate volume of 
U.S. sales of seamless pipe, 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 Certain Small Diameter Seamless Carbon and Alloy 
Steel Standard, Line and Pressure Pipe from Brazil: Notice of Final 
Results of Antidumping Duty Administrative Review, 71 FR 56473 
(September 27, 2006). 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 recalculated VMB's financial expense ratio (INTEX) 
calculation by excluding the offset for long-term interest income.
    For further details regarding this adjustment, see the Department's 
``Cost of Production and Constructed Value Calculation Adjustments for 
the Preliminary Results - V&M do Brasil, S.A.'' (COP Memorandum), on 
file in the Department's Central Records Unit (CRU) located in Room B-
099 of the main Department of Commerce Building, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230, dated July 2, 2007.
    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.

[[Page 37727]]

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 complementary 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 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.\2\
---------------------------------------------------------------------------

    \2\ See the Analysis Memorandum for the Preliminary Results of 
the Administrative Review of the Antidumping Duty Order on Certain 
Small Diameter Seamless Carbon and Alloy Steel Standard Line and 
Pressure Pipe from Brazil, dated July 2, 2007, for further 
discussion of date of sale and other details on the calculation of 
the antidumping duty weighted-average margin. A public version of 
the memorandum is available in the Department's CRU.
---------------------------------------------------------------------------

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determined NV based on sales in the comparison market 
at the same level of trade (LOT) as the CEP 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. 
To determine whether NV sales are at a different LOT than CEP sales, we 
examine different 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, where possible, we 
make a LOT adjustment under section 773(a)(7)(A) of the Act. Finally, 
for CEP sales for which we are unable to quantify a LOT adjustment, if 
the NV level is more remote from the factory than the CEP level and 
there is no basis for determining whether the difference in levels 
between NV and CEP sales affects price comparability, we adjust NV 
under section 773(a)(7)(B) of the Act (the CEP offset provision). 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 B response at VI-41 through VI-43.
    VMB reported two channels of distribution in the home market: one 
to unaffiliated distributors and one to end-users. See section A 
response at Exhibit 10. We examined the selling activities reported for 
each channel of distribution and organized the reported selling 
activities into the following four selling functions: 1) sales process 
and marketing support, 2) freight and delivery, 3) inventory 
maintenance and warehousing, and 4) warranty and technical services. 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, technical assistance, delivery of the merchandise, and 
provision for warranties. VMB also claimed packing as a selling 
function performed for all customers. ] first supplemental 
questionnaire response at Exhibit 1. 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: personnel training, sales promotion, 
distributor/dealer training, sales/marketing support, and market 
research are selling functions performed only in sales to distributors. 
In contrast, advertising and after-sales services are provided solely 
to end-users. See first supplemental questionnaire response at Exhibit 
1. VMB also paid commissions on sales to some end-users. In addition, 
VMB reported the selling function of inventory maintenance with regard 
to sales to one end-user customer, for which a small percentage of 
VMB's sales are transferred to unaffiliated warehouses from which this 
customer regularly extracts merchandise on a just-in-time basis. See 
section A Response at VI-18; see also section B response at VI-28. 
Based upon the above analysis, we preliminarily conclude that the 
selling functions for the reported home market channels of distribution 
are sufficiently different to consider them as two LOTs.
    For CEP sales, we examined the selling activities related to each 
of the selling functions between VMB and its U.S. affiliate, V&M Corp. 
VMB reported that all of its sales to the United States are CEP sales 
made through V&M Corp., i.e., through one channel of distribution, and 
claimed that there is only one LOT. We examined VMB's selling functions 
(&, sales forecasting, order processing, and freight and delivery) for 
sales to V&M Corp. and found that these selling functions are performed 
regardless of whether shipments are going to V&M Corp. or directly to 
the unaffiliated customer. See first supplemental questionnaire 
response at Exhibit 1. Therefore, we preliminary determine that VMB's 
U.S. sales constitute a single LOT.
    We then compared the selling functions VMB provided in the home 
market LOTs with the selling functions provided for the U.S. LOT. While 
VMB provides a comparable level of assistance for freight and delivery 
in both the home and U.S. markets, VMB provides significantly more 
assistance for marketing support, and inventory maintenance and 
warehousing for the home market than the U.S. market. Additionally, VMB 
provides more technical services for the home market than the U.S. 
market. On this basis, we determined that the HM LOTs are not similar 
to VMB's U.S. LOT.
    Based upon the above analysis, we preliminarily determine that 
there is no LOT in the home market comparable to the CEP LOT, and it 
is, therefore, not possible to determine whether the difference in LOT 
affects price comparability. Consequently, we examined whether a CEP 
offset may be appropriate pursuant to section 351.412(f) of the 
Department's regulations. We find that the selling functions VMB 
performs for sales to its U.S. affiliate are fewer and less complex 
than the selling functions VMB performs for either LOT in the home 
market. Compared to U.S. sales, the chain of distribution in the home 
market is at a level much more advanced. For example, many sales to 
distributors go through unaffiliated warehouses and VMB provides after-
sales services to end-users (e.g., surveys and repairs). In contrast, 
VMB's selling functions for U.S. sales end with delivery at the port of 
entry.
    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

[[Page 37728]]

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 Dow Jones Reuters Business 
Interactive LLC (trading as Factiva).

Preliminary Results of Review

    As a result of our review, we preliminarily determine the weighted-
average dumping margin for the period August 1, 2005, through July 16, 
2006, to be as follows:

------------------------------------------------------------------------
               Manufacturer / Exporter                 Margin (percent)
------------------------------------------------------------------------
V&M do Brasil, S.A..................................                0.00
------------------------------------------------------------------------

    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 19 CFR 
351.310(c). Any hearing, if requested, will be held 2 days after the 
scheduled date for the submission of rebuttal briefs. See 19 CFR 
351.310(d). 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, pursuant to section 
751(a)(3)(A) of the Act.

Assessment Rates

    Upon completion of the administrative review, the Department shall 
determine, and U.S. Customs and Border Protection (CBP) shall assess, 
antidumping duties on all appropriate entries, in accordance with 19 
CFR 351.212. The Department intends to issue assessment instructions to 
CBP 15 days after the date of publication of the final results of this 
review.
    We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer-specific 
assessment rate calculated in the final results of this review is above 
de minimis (i.e., at or above 0.50 percent). 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 de 
minimis (i.e., less than 0.50 percent). See 19 CFR 351.106(c)(1). The 
final results of this review shall be the basis for the assessment of 
antidumping duties on entries of merchandise covered by the final 
results of this review.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003) (Assessment 
Policy Notice). This clarification will apply to entries of subject 
merchandise during the POR produced by companies included in these 
final results of review for which the reviewed companies did not know 
that the merchandise they sold to the intermediary (e.g., a reseller, 
trading company, or exporter) was destined for the United States. In 
such instances, we will instruct CBP to liquidate unreviewed entries at 
the ``All Others'' rate if there is no rate for the intermediary 
involved in the transaction. See Assessment Policy Notice for a full 
discussion of this clarification.

Cash Deposit Requirements

    The Department notified CBP to discontinue suspension of 
liquidation and collection of cash deposits on entries of the subject 
merchandise entered or withdrawn from warehouse on or after July 16, 
2006, the effective date of revocation of the antidumping duty order.

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: July 2, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-13383 Filed 7-10-07; 8:45 am]
BILLING CODE 3510-DS-S