Circular Welded Carbon Quality Steel Pipe from the People's Republic of China: Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 2445-2456 [E8-494]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 73, Number 10 (Tuesday, January 15, 2008)]
[Notices]
[Pages 2445-2456]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-494]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-910]


Circular Welded Carbon Quality Steel Pipe from the People's 
Republic of China: Notice of Preliminary Determination of Sales at Less 
Than Fair Value and Postponement of Final Determination

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: January 15, 2008.
SUMMARY: We preliminarily determine that circular welded carbon quality 
steel pipe (``CWP'') from the People's Republic of China (``PRC'') is 
being, or is likely to be, sold in the United States at less than fair 
value (``LTFV''), as provided in section 733 of the Tariff Act of 1930, 
as amended (the ``Act''). The estimated margins of sales at less than 
fair value (``LTFV'') are shown in the ``Preliminary Determination'' 
section of this notice. Pursuant to requests from interested parties, 
we are postponing for 60 days the final determination and extending 
provisional measures from a four-month period to not more than six 
months. Accordingly, we will make our final determination not later 
than 135 days after publication of the preliminary determination.

FOR FURTHER INFORMATION CONTACT: Thomas Martin or Maisha Cryor, AD/

[[Page 2446]]

CVD Operations, Office 4, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC, 20230; telephone: (202) 482-
3936 and (202) 482-5831, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On June 7, 2007, the Department of Commerce (the ``Department'') 
received a petition on imports of CWP from the PRC filed in proper form 
by Allied Tube & Conduit, Sharon Tube Company, IPSCO Tubulars, Inc., 
Western Tube & Conduit Corporation, Northwest Pipe Company, Wheatland 
Tube Co., i.e., the Ad Hoc Coalition For Fair Pipe Imports From China, 
and the United Steelworkers (collectively, the ``petitioners'') on 
behalf of the domestic industry producing CWP. The Department initiated 
this investigation on June 27, 2007. See Initiation of Antidumping Duty 
Investigation: Circular Welded Carbon Quality Steel Pipe from the 
People's Republic of China, 72 FR 36663 (July 5, 2007) (``Initiation 
Notice''). Additionally, in the Initiation Notice, the Department 
notified parties of the application process by which exporters and 
producers may obtain separate-rate status in non-market economy 
(``NME'') investigations. See Initiation Notice 72 FR at 36666. The 
process requires exporters and producers to submit a separate-rate 
status application. See Policy Bulletin 05.1: Separate-Rates Practice 
and Application of Combination Rates in Antidumping Investigations 
involving Non-Market Economy Countries, (April 5, 2005), (``Policy 
Bulletin 05.1'') available at https://ia.ita.doc.gov. However, the 
standard for eligibility for a separate rate (which is whether a firm 
can demonstrate an absence of both de jure and de facto governmental 
control over its export activities) has not changed.
    On July 31, 2007, the International Trade Commission (``ITC'') 
issued its affirmative preliminary determination that there is a 
reasonable indication that an industry in the United States is 
materially injured or threatened with material injury by reason of 
imports of CWP from the PRC. See Circular Welded Carbon-Quality Steel 
Pipe from the PRC, Investigation Nos. 701-TA-447 and 731-TA-1116, 72 FR 
43295 (Preliminary) (August 3, 2007). On October 2, 2007, the 
petitioners filed a timely request that the Department postpone the 
preliminary determination pursuant to section 733(c)(1)(B)(i) of the 
Act. We did so on October 31, 2007. See Postponement of Preliminary 
Determination of Antidumping Duty Investigation: Circular Welded Carbon 
Quality Steel Pipe from the People's Republic of China, 72 FR 62626 
(November 6, 2007).

Postponement of Final Determination and Extension of Provisional 
Measures

    Pursuant to section 735(a)(2) of the Act, on December 18, 2007, 
respondent Jiangsu Yulong Steel Pipe Co., Ltd. (``Yulong'') requested 
that in the event of an affirmative preliminary determination in this 
investigation, the Department postpone its final determination by 60 
days. In addition, Yulong requested that the Department extend the 
application of the provisional measures prescribed under 19 CFR 
351.210(e)(2) from a four-month period to not more than six-months. In 
accordance with section 733(d) of the Act and 19 CFR 351.210(b), 
because (1) our preliminary determination is affirmative, (2) the 
requesting exporter accounts for a significant proportion of exports of 
the subject merchandise, and (3) no compelling reasons for denial 
exist, we are granting this request and are postponing the final 
determination until no later than 135 days after the publication of 
this notice in the Federal Register. Suspension of liquidation will be 
extended accordingly.

Scope Comments

    In accordance with the preamble to the Department's regulations, we 
set aside a period of time in our Initiation Notice for parties to 
raise issues regarding product coverage, and encouraged all parties to 
submit comments within 20 calendar days of publication of that notice. 
See Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323, (May 
19, 1997) and Initiation Notice, 72 FR at 36669.On July 19, 2007, the 
petitioners submitted timely comments concerning the scope of the CWP 
antidumping and countervailing duty investigations. Man Ferrostaal 
Inc., Macsteel Service Centers USA, and Sunbelt Group L.P. 
(collectively, ``Ferrostaal''), U.S. interested parties, also submitted 
timely comments concerning the scope of these investigations on July 
19, 2007. The petitioners and Ferrostaal both submitted rebuttal 
comments on July 26, 2007.
    We analyzed the comments of the interested parties regarding the 
scope of this investigation and, based upon those comments, revised the 
scope language. See Memorandum to Stephen J. Claeys, Deputy Assistant 
Secretary for Import Administration, Re: Scope of the Antidumping and 
Countervailing Duty Investigations of Circular Welded Carbon Quality 
Steel Pipe from the People's Republic of China, ``Analysis of Comments 
and Recommendation for Scope of Investigations'' (November 5, 2007) 
(``Scope Memorandum'').
    In addition, on December 18, 2007, the petitioners submitted 
additional comments concerning the scope of the CWP antidumping and 
countervailing duty investigations. In their comments, the petitioners 
requested that the Department revise the scope of the investigations to 
define product coverage by end-use application. The petitioners also 
requested that the Department explicitly state that single-stenciled 
line pipe meeting certain product characteristics is covered by the 
scope of this investigation, to eliminate reference to the grade ``X-
42'' when referring to API stenciled pipe, and to define the length 
criterion for ``single random length'' CWP.
    Regarding end-use application, the petitioners provided an 
affidavit which states that substitutions of API 5L stenciled products 
for subject ASTM pipe have occurred. See the petitioners' December 18, 
2007, comments at Exhibit 2. The petitioners argue that the inclusion 
of end-use application to determine product coverage is necessary to 
distinguish between single-stenciled API 5L imports that are not 
intended to be covered by this investigation and pipe products that are 
intended to be covered. Next, the petitioners argue that the Department 
should revise the scope language to eliminate the reference to grade 
``X-42'' when referring to API stenciled pipe because they view this 
reference as unnecessary given that the grade is subsumed within the 
API 5L specification. In addition, to prevent evasion of any 
antidumping order issued in this proceeding, the petitioners urge the 
Department to define the length criterion for inclusion of imported API 
specification CWP to include any such pipe of 32 feet or less. Lastly, 
the petitioners urge the Department to state in the scope that imports 
of single-stenciled API 5L line pipe are covered by the scope if such 
imports have one or more of the following physical characteristics: (1) 
a length of 32 feet or less; (2) an outer diameter less than 2 inches; 
(3) a galvanized and/or painted surface; or (4) a threaded and/or 
coupled end finish.
    Upon review of the petitioner's December 18, 2007, submission, we 
have preliminarily adopted two of the petitioners' proposed changes. 
Specifically, we have preliminarily accepted the petitioners' request 
that single random length be defined as 32 feet in length or less. In 
addition, we

[[Page 2447]]

preliminarily accepted the petitioners' request to eliminate the 
reference to grade ``X-42'' when referring to API 5L stenciled pipe. 
These two changes are reflected in the ``Scope of Investigation'' 
section below.

Period of Investigation

    The period of investigation (``POI'') is October 1, 2006, through 
March 31, 2007. This period corresponds to the two most recent fiscal 
quarters prior to the month of the filing of the petition, i.e., June 
2007. See 19 CFR 351.204(b)(1).

Scope of Investigation

    The scope of this investigation covers certain welded carbon 
quality steel pipes and tubes, of circular cross-section, and with an 
outside diameter of 0.372 inches (9.45 mm) or more, but not more than 
16 inches (406.4 mm), whether or not stenciled, regardless of wall 
thickness, surface finish (e.g., black, galvanized, or painted), end 
finish (e.g., plain end, beveled end, grooved, threaded, or threaded 
and coupled), or industry specification (e.g., ASTM, proprietary, or 
other), generally known as standard pipe and structural pipe (they may 
also be referred to as circular, structural, or mechanical tubing).
    Specifically, the term ``carbon quality'' includes products in 
which (a) iron predominates, by weight, over each of the other 
contained elements; (b) the carbon content is 2 percent or less, by 
weight; and (c) none of the elements listed below exceeds the quantity, 
by weight, as indicated:
(i) 1.80 percent of manganese;
(ii) 2.25 percent of silicon;
(iii) 1.00 percent of copper;
(iv) 0.50 percent of aluminum;
(v) 1.25 percent of chromium;
(vi) 0.30 percent of cobalt;
(vii) 0.40 percent of lead;
(viii) 1.25 percent of nickel;
(ix) 0.30 percent of tungsten;
(x) 0.15 percent of molybdenum;
(xi) 0.10 percent of niobium;
(xii) 0.41 percent of titanium;
(xiii) 0.15 percent of vanadium; or
(xiv) 0.15 percent of zirconium.
    Standard pipe is made primarily to American Society for Testing and 
Materials (``ASTM'') specifications, but can be made to other 
specifications. Standard pipe is made primarily to ASTM specifications 
A-53, A-135, and A-795. Structural pipe is made primarily to ASTM 
specifications A-252 and A-500. Standard and structural pipe may also 
be produced to proprietary specifications rather than to industry 
specifications. This is often the case, for example, with fence tubing. 
Pipe multiple-stenciled to a standard and/or structural specification 
and to any other specification, such as the American Petroleum 
Institute (``API'') API-5L specification, is also covered by the scope 
of this investigation when it meets the physical description set forth 
above and also has one or more of the following characteristics: is 32 
feet in length or less; is less than 2.0 inches (50 mm) in outside 
diameter; has a galvanized and/or painted surface finish; or has a 
threaded and/or coupled end finish.
    The scope of this investigation does not include: (a) pipe suitable 
for use in boilers, superheaters, heat exchangers, condensers, refining 
furnaces and feedwater heaters, whether or not cold drawn; (b) 
mechanical tubing, whether or not cold-drawn; (c) finished electrical 
conduit; (d) finished scaffolding; (e) tube and pipe hollows for 
redrawing; (f) oil country tubular goods produced to API 
specifications; and (g) line pipe produced to only API specifications.
    The pipe products that are the subject of this investigation are 
currently classifiable in HTSUS statistical reporting numbers 
7306.30.10.00, 7306.30.50.25, 7306.30.50.32, 7306.30.50.40, 
7306.30.50.55, 7306.30.50.85, 7306.30.50.90, 7306.50.10.00, 
7306.50.50.50, 7306.50.50.70, 7306.19.10.10, 7306.19.10.50, 
7306.19.51.10, and 7306.19.51.50. However, the product description, and 
not the harmonized tariff schedule of the United States (``HTSUS'') 
classification, is dispositive of whether merchandise imported into the 
United States falls within the scope of the investigation.

Respondent Selection

    On June 28 and 29, 2007, and July 2, 2007, the Department requested 
quantity and value (``Q&V'') information from a total of 53 companies 
identified by the petitioners as potential producers or exporters of 
CWP from the PRC. See Memorandum to The File, from Maisha Cryor, 
Analyst, Office 4, Regarding ``Circular Welded Carbon Quality Steel 
Pipe from the People's Republic of China: Summary of Issuance of 
Quantity and Value Questionnaires,'' dated July 2, 2007 (``Q&V 
Memorandum''). Also, on June 29, 2007, the Department sent a letter 
requesting Q&V information to the Ministry of Commerce (``MOFCOM'') and 
requested that MOFCOM transmit the letter to all companies who export 
subject merchandise to the United States, or produce the subject 
merchandise for the companies who were engaged in exporting the subject 
merchandise to the United States during the POI. Id. For a complete 
list of all parties from which the Department requested Q&V 
information, see Q&V Memorandum. The Department received timely Q&V 
responses from 32 interested parties. See Memorandum from Abdelali 
Elouaradia, Director, Office 4, to Stephen J. Claeys, Deputy Assistant 
Secretary for Import Administration, ``Selection of Respondents for the 
Antidumping Duty Investigation of Circular Welded Carbon Quality Steel 
Pipe from the People's Republic of China,'' dated August 2, 2007 
(``Respondent Selection Memorandum''). The Department did not receive 
any communication from MOFCOM regarding its request for Q&V 
information. In August and September 2007, the Department returned 
untimely Q&V responses submitted by Bazhou Dongsheng Hot Dip 
Galvanizing Steel Pipe Co., Ltd. (``Bazhou''); Shanxi Tianli Industries 
Co., Ltd. (``Shanxi''); and Zhejiang Kingland Pipeline and Technologies 
Co., Ltd. (``Kingland'').
    On August 2, 2007, the Department selected Tianjin Shuangjie Group 
(``Shuangjie'') and Yulong as mandatory respondents in this 
investigation. See Respondent Selection Memorandum at 4. On August 8 
and 15, 2007, Weifang East Steel Pipe Co., Ltd. (``Weifang''), 
submitted letters requesting that the Department select it as a 
mandatory respondent. In addition, in its August 15, 2007, letter, 
Weifang requested that, in the event it was not selected as a mandatory 
respondent, it be permitted to participate in the investigation as a 
voluntary respondent. On August 24, 2007, the Department informed 
Weifang that it would not be selected as a mandatory respondent. See 
Letter from Stephen J. Claeys, Deputy Assistant Secretary, to Weifang, 
Regarding ``Antidumping Duty Investigation of Circular Welded Carbon 
Quality Steel Pipe from the People's Republic of China; Respondent 
Selection,'' dated August 24, 2007. In addition, on November 17, 2007, 
the Department informed Weifang that it would not be selected as a 
voluntary respondent. See Letter from Stephen J. Claeys, Deputy 
Assistant Secretary, to Weifang, Regarding ``Antidumping Duty 
Investigation of Circular Welded Carbon Quality Steel Pipe from the 
People's Republic of China; Respondent Selection,'' dated November 17, 
2007.
    On December 26, 2007, Weifang again requested that it be selected 
as a mandatory respondent. If it is not selected as a mandatory 
respondent, Weifang also provided recommended methodologies that the 
Department should use in determining its separate rate. In addition, 
Weifang noted that the

[[Page 2448]]

Department calculated countervailing duty margins in the companion 
countervailing duty investigation on CWP from the PRC. According to 
Weifang, application of the NME methodology in conjunction with 
countervailing duty margins will result in double-remedy. Weifang 
argues that the Department is legally obligated to avoid such double-
remedy. As these comments were submitted five business days prior to 
this preliminary determination, the Department did not consider 
Weifang's arguments. However, the Department will consider them for the 
final determination.

Separate Rates Applications

    Between August 2, 2007, and August 26, 2007, we received timely 
separate-rate applications from 27 non-mandatory respondent companies: 
Weifang; Shijiazhuang Zhongqing Imp & Exp Co., Ltd. (``Shijiazhuang''); 
Tianjin Baolai Int'l Trade Co., Ltd. (``Baolai''); Wai Ming (Tianjin) 
Int'l Trading Co., Ltd. (``Wai Ming''); Kunshan Lets Win Steel 
Machinery Co., Ltd. (``Kunshan Lets Win''); Shenyang BOYU M/E Co., Ltd. 
(``BOYU''); Dalian Brollo Steel Tubes Ltd. (``Dalian''); Benxi Northern 
Pipes Co., Ltd. (``Benxi''); Shanghai Metals & Minerals Import & Export 
Corp. (``Shanghai Metals''); Huludao Steel Pipe Industrial Co., Ltd. 
(``Huludao''); Tianjin Xingyuda Import & Export Co. Ltd. 
(``Xingyuda''); Jiangyin Jianye Metal Products Co., Ltd. (``Jianye''); 
Rizhao Xingye Import & Export Co., Ltd. (``Rizhao''); Tianjin No. 1 
Steel Rolled Co., Ltd. (``Tianjin No. 1''); Kunshan Hongyuan Machinery 
Manufacture Co., Ltd. (``Kunshan''); Qingdao Yongjie Import & Export 
Co., Ltd. (``Yongjie'');Wuxi Fastube Industry Co., Ltd. (``Fastube''); 
Jiangsu Guoqiang Zinc-Plating Company, Ltd. (``Jiangsu''); Wuxi Eric 
Steel Pipe Co., Ltd. (``Wuxi Eric''); Beijing Sai Lin Ke Hardware Co., 
Ltd. (``SLK''); Qingdao Xiangxing Steel Pipe Co., Ltd. (``Qingdao''); 
Wah Cit Enterprises (``Wah Cit''); Guangdong Walsall Steel Pipe 
Industrial Co., Ltd. (``Guangdong''); Hengshui Jinghua Steel Pipe Co., 
Ltd. (``Hengshui''); Zhangjiagang Zhongyuan Pipe-Making Co., Ltd. 
(``Zhongyuan''); Shandong Fubo Group Co. (``Fubo'') and Tianjin 
Youcheng Galvanized Steel Pipe Co., Ltd. (``Youcheng'').
    In August and September 2007, the Department informed Kingland and 
Bazhou that it would not consider their separate-rate applications 
because their Q&V submissions were untimely filed and returned. See 
Letter from Abdelali Elouaradia, Office Director, to Kingland, 
Regarding ``Antidumping Duty Investigation of Circular Welded Carbon 
Quality Steel Pipe From the People's Republic of China Submissions by 
Zhejiang Kingland Pipeline and Technologies Co., Ltd.,'' dated August 
24, 2007; see also Letter from Abdelali Elouaradia, Office Director, to 
Bazhou, Regarding ``Quantity and Value Information and Separate Rate 
Application,'' dated September 14, 2007.

Questionnaires

    On August 3, 2007, the Department issued to Shuangjie and Yulong 
sections A, C, D, and E \1\ of the antidumping duty questionnaire, 
which included draft product characteristics used in the designation of 
control numbers (``CONNUMs'') and assigned to the merchandise under 
consideration. On August 3, 2007, the Department also requested 
comments from all interested parties on the draft product 
characteristics included in the Department's questionnaire. The 
Department received comments from the petitioners and rebuttal comments 
from Shuangjie. On September 13, 2007, the Department issued the final 
product characteristics used in the designation of CONNUMs and assigned 
to the merchandise under consideration.
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    \1\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under investigation that it sells, and the manner in 
which it sells that merchandise in all of its markets. Section C 
requests a complete listing of U.S. sales. Section D requests 
information on factors of production, and Section E requests 
information on further manufacturing.
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    On September 4, 2007, Yulong submitted its response to Section A of 
the Department's questionnaire, and on September 10, 2007, Shuangjie 
submitted its response to section A of the Department's questionnaire. 
On September 24, 2007, Shuangjie submitted its responses to sections C 
and D of the Department's questionnaire. On September 24, 2007, Yulong 
submitted its responses to sections C and D of the Department's 
questionnaire. Weifang voluntarily submitted responses to section A of 
the Department's questionnaire on September 10, 2007, and to sections C 
and D of the Department's questionnaire on September 24, 2007.
    The Department issued supplemental questionnaires to Shuangjie in 
September and October 2007. However, Shuangjie did not submit responses 
to the Department's supplemental questionnaires because it withdrew 
from the investigation and requested that the Department return all of 
its proprietary filings. See Letter from Shuangjie, dated October 31, 
2007. On November 15, 2007, the Department returned Shuangjie's 
business proprietary information. See Letter from Abdelali Elouaradia, 
Office Director, to Shuangjie, Regarding ``Antidumping Duty 
Investigation: Circular Welded Carbon Quality Steel Pipe from the 
People's Republic of China,'' dated November 15, 2007.
    The Department issued supplemental questionnaires to Yulong between 
September 21, 2007, and November 28, 2007, and received responses 
between October 15, 2007, and December 10, 2007. On October 9, 2007 and 
November 13, 2007, the petitioners submitted comments on Shuangjie and 
Yulong's questionnaire responses.
    On October 10, 2007, the Department issued supplemental 
questionnaires to separate rate applicants Shanghai Metals and Huludao 
and received responses on October 19, 2007. On October 15, 2007, the 
Department issued supplemental questionnaires to separate rate 
applicants Benxi and Xingyuda and received responses on October 25, 
2007. On October 17, 2007, the Department issued a supplemental 
questionnaire to separate rate applicant Jianye and received a response 
on October 29, 2007. On October 25, 2007, the Department issued a 
supplemental questionnaire to separate rate applicant Weifang and 
received a response on November 8, 2007. On November 8, 2007, the 
Department issued supplemental questionnaires to separate rate 
applicants Fastube, Jiangsu, Wuxi Eric, SLK, Qingdao, Guangdong, 
Hengshui and Zhongyuan. Qingdao submitted its response on November 19, 
2007. Hengshui and SLK submitted their responses on November 21, 2007. 
Wuxi Eric, Jiangsu, Fastube, Guangdong, and Zhongyuan submitted their 
responses on November 26, 2007. On November 15, 2007, the Department 
issued a supplemental questionnaire to the separate rate applicants 
Fubo, Shijiazhuang, Baolai, Wai Ming, Kunshan Lets Win, BOYU, and 
Dalian, and received responses from Shijiazhuang on November 29, 2007, 
and from Baoli, Dalian, and Fubo from December 3-4, 2007. Wai Ming, 
Kunshan Lets Win, and BOYU submitted their responses on December 27, 
2007.

Critical Circumstances

    On September 17, 2007, the petitioners requested that the 
Department make an expedited finding that critical circumstances exist 
with respect to imports of CWP from the PRC. Shuangjie submitted 
comments responding to the petitioners' allegations of critical 
circumstances on

[[Page 2449]]

September 24, 2007. The petitioners responded to Shuangjie's comments 
on September 27, 2007. The Department issued questionnaires to 
Shuangjie and Yulong regarding the critical circumstances allegation on 
October 29, 2007. Yulong submitted its response on November 5, 2007. As 
explained further above, Shuangjie did not respond to the Department's 
request because it withdrew from the investigation on October 31, 2007.
    On December 11, 2007, the Department preliminarily found that there 
is reason to believe or suspect that critical circumstances exist for 
imports of subject merchandise from Yulong, the separate-rate 
companies, and the PRC-wide entity (including Shuangjie) because, A) in 
accordance with section 733(e)(1)(A)(i) of the Act, there is a history 
of dumped imports of subject merchandise and of material injury caused 
by such dumped imports, and B) in accordance with section 733(e)(1)(B) 
of the Act, Yulong, the separate-rate companies, and the PRC-wide 
entity had massive imports during a relatively short period. See 
Memorandum from Abdelali Elouaradia, Director, Office 4, ``Preliminary 
Affirmative Determination of Critical Circumstances,'' dated December 
11, 2007.

Non-Market Economy Country

    For purposes of initiation, the petitioners submitted LTFV analyses 
for the PRC as a non-market economy (``NME''). See Initiation Notice, 
72 FR at 36665. The Department considers the PRC to be a NME country. 
In accordance with section 771(18)(C)(i) of the Act, any determination 
that a foreign country is an NME country shall remain in effect until 
revoked by the administering authority. On December 26, 2007, Weifang 
argued that the PRC should be treated as a market economy. As these 
comments were submitted five business days prior to this preliminary 
determination, the Department did not consider Weifang's comments. 
However, the Department will consider them for the final determination. 
Therefore, we have treated the PRC as an NME country for purposes of 
this preliminary determination.

Separate Rates

    In proceedings involving NME countries, the Department has a 
rebuttable presumption that all companies within the NME country are 
subject to government control and thus should be assessed a single 
antidumping duty rate. It is the Department's standard policy to assign 
all exporters of the merchandise subject to review in NME countries a 
single rate unless an exporter can affirmatively demonstrate an absence 
of government control, both in law (de jure) and in fact (de facto), 
with respect to exports.
    We have considered whether each PRC company that submitted a 
complete and timely separate-rate application is eligible for a 
separate rate. The Department's separate-rate test is not concerned, in 
general, with macroeconomic/border-type controls, e.g., export 
licenses, quotas, and minimum export prices (``EPs''), particularly if 
these controls are imposed to prevent dumping. See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Preserved 
Mushrooms from the People's Republic of China, 63 FR 72255, 72256 
(December 31, 1998). The test focuses, rather, on controls over the 
investment, pricing, and output decision-making process at the 
individual firm level. See Certain Cut-to-Length Carbon Steel Plate 
from Ukraine: Final Determination of Sales at Less than Fair Value, 62 
FR 61754, 61758 (November 19, 1997), and Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, from the People's Republic of 
China: Final Results of Antidumping Duty Administrative Review, 62 FR 
61276, 61279 (November 17, 1997).
    To establish whether a firm is sufficiently independent from 
government control of its export activities to be entitled to a 
separate rate, the Department analyzes each entity exporting the 
subject merchandise under a test arising from the Notice of Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588 (May 6, 1991) (``Sparklers''), 
as further developed in Notice of Final Determination of Sales at Less 
Than Fair Value: Silicon Carbide from the People's Republic of China, 
59 FR 22585 (May 2, 1994) (``Silicon Carbide''). In accordance with the 
separate-rate criteria, the Department assigns separate rates in NME 
cases only if respondents can demonstrate the absence of both de jure 
and de facto governmental control over export activities.
    In this case, Shuangjie did not provide information we requested 
that is necessary to determine whether it is eligible for a separate 
rate. Specifically, on October 31, 2007, Shuangjie notified the 
Department of its decision to no longer participate in this 
investigation and withdrew all of its proprietary information from the 
record. As Shuangjie has decided to no longer participate in this 
investigation, and has withdrawn all of its responses from the record, 
the Department has no basis upon which to grant Shuangjie a separate 
rate. Although Shuangjie remains a mandatory respondent, the Department 
considers Shuangjie part of the PRC-wide entity because it failed to 
demonstrate that it qualifies for a separate rate.
    Wai Ming, Fastube, Wuxi Eric, SLK, Wah Cit, and Guangdong provided 
company-specific separate-rate information and stated that the 
standards for the assignment of separate rates have been met because 
they are privately owned trading companies incorporated and held by 
foreign ownership. Because each of these companies is foreign owned, it 
is not necessary to undertake additional separate-rates analysis for 
the Department to determine that the export activities of Wai Ming, 
Fastube, Wuxi Eric, SLK, Wah Cit, and Guangdong are independent from 
the PRC government's control. Accordingly, Wai Ming, Fastube, Wuxi 
Eric, SLK, Wah Cit, and Guangdong are eligible for separate rates. See, 
e.g., Brake Rotors From the People's Republic of China: Preliminary 
Results of the Tenth New Shipper Review, 69 FR 30875, 30876 (June 1, 
2004) (unchanged in the final results, Brake Rotors From the People's 
Republic of China: Final Results of the Tenth New Shipper Review, 69 FR 
52228 (August 25, 2004)) (``Brake Rotors 10th NSR''); Notice of Final 
Determination of Sales at Less Than Fair Value: Creatine Monohydrate 
From the People's Republic of China, 64 FR 71104 (December 20, 1999); 
and Notice of Final Determination of Sales at Less Than Fair Value: 
Bicycles From the People's Republic of China, 61 FR 19026, 19027 (April 
30, 1996). As a result, for the purposes of this preliminary 
determination, we have granted separate company-specific rates to Wai 
Ming, Fastube, Wuxi Eric, SLK, Wah Cit, and Guangdong. See Memorandum 
to Abdelali Elouaradia, Director, AD/CVD Operations, Office 4, through 
Mark Manning, Program Manager, AD/CVD Operations, Office 4, from Maisha 
Cryor, Senior International Trade Analyst, AD/CVD Operations, Office 4, 
Regarding ``Antidumping Duty Investigation of Circular Welded Carbon 
Quality Steel Pipe from the People's Republic of China: Separate Rates 
Memorandum,'' dated January 3, 2008 (``Separate Rates Memorandum'').
    Youcheng stated in its August 27, 2007, separate-rate application 
that it sold subject merchandise to a U.S. customer during the POI and, 
as evidence, presented a sales contract dated within the POI. This 
contract covers multiple sizes and types of subject merchandise. 
Section 351.401(i) of the Department's regulations states

[[Page 2450]]

that, ``in identifying the date of sale of the subject merchandise or 
foreign like product, the Secretary normally will use the date of 
invoice, as recorded in the exporter or producer's records kept in the 
normal course of business.'' However, the Secretary may use a date 
other than the date of invoice if the Secretary is satisfied that a 
different date better reflects the date on which the exporter or 
producer establishes the material terms of sale. See 19 CFR 351.401(i); 
see also Allied Tube and Conduit Corp. v. United States, 132 F. Supp. 
2d 1087, 1090-1093 (CIT 2001) (``Allied Tube''). In other words, the 
date of the invoice is the presumptive date of sale, although this 
presumption may be overcome. The date of sale is generally the date on 
which the parties finalize the substantive terms of the sale, such as 
the price, quantity, delivery terms, and payment terms.
    Youcheng claims that the appropriate date of sale should be the 
contract date. However, Youcheng acknowledges that the first shipment 
of subject merchandise pursuant to this contract did not take place 
until well after the POI. Because this contract covers multiple sizes 
and types of subject merchandise, and each different product is 
considered separately by the Department for purposes of its dumping 
analysis, the Department preliminarily finds that the contract does not 
include product-specific prices. Instead, it provides only the total 
value and total quantity of all products that will be shipped pursuant 
to this contract. In addition, Youcheng provided a memorandum between 
itself and the U.S. customer, dated well after the POI, in which 
Youcheng provided the customer a price reduction for all products 
shipped pursuant to the contract due to a change in the terms of 
delivery. Thus, even if the contract had product-specific prices, which 
it did not, such prices were not final, as they were reduced after the 
POI at time of shipment. For these reasons, the Department determines 
that the terms of sale were not finalized until the final commercial 
invoice was issued, after the POI. Therefore, the appropriate date of 
sale to use in analyzing Youcheng's separate-rate application is the 
invoice date. As the invoice date is outside the POI, the Department 
finds that Youcheng did not have a sale within the POI and is, 
therefore, not eligible to receive a separate rate.

1. Absence of De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) an absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) other formal 
measures by the government decentralizing control of companies. See 
Sparklers, 56 FR at 20588.
    The evidence provided by Yulong, Weifang, Shijiazhuang, Baolai, 
Dalian, Benxi, Shanghai Metals, Huludao, Xingyuda, Jianye, Rizhao, 
Tianjin No. 1, Yongjie, Hengshui, Zhongyuan, Kunshan Lets Win, and BOYU 
indicates that there are no restrictive stipulations associated with 
their exporter and/or business licenses and that there are legislative 
enactments decentralizing control of the companies. The Department's 
analysis of the record evidence supports a preliminary finding of 
absence of de jure control. See Separate Rates Memorandum.
    In its August 26, 2007, separate-rate application, Fubo reported 
that it was established and is completely owned by the Fushan Village 
Committee (``Fushan Committee''), and the Fushan Committee operates 
under the Village Committee Law. In Brake Rotors, the Department 
examined a village committee, which operated under the Village 
Committee Law, and found that the committee was a PRC government 
entity. See Brake Rotors From the People's Republic of China: Final 
Results and Partial Rescission of the Seventh Administrative Review; 
Final Results of the Eleventh New Shipper Review, 70 FR 69937 (November 
18, 2005) and accompanying Issues and Decision Memorandum at Comment 7 
(``Brake Rotors''). In analyzing the village committee, the Department 
found the Village Committee Law demonstrates that village committees 
are part of the PRC government. Specifically, the Department stated 
that ``Article 2 of the Village Committee Law indicates that a Village 
Committee is not an independent entity but operates under the 
leadership of the Chinese Communist Party. The party branch is in 
effect the core of the village power structure.'' Id. Fubo's 
description of the role of the Fushan Committee supports this analysis, 
as the Fushan Committee ``has an active role in implementing policy 
directives, expanding local commerce, and overseeing social welfare 
matters such as education, healthcare, and sanitation.'' See Fubo's 
December 4, 2007, supplemental questionnaire response at 1. 
Accordingly, we examined whether there is sufficient evidence of de 
facto absence of government control of Fubo's export activities.

2. Absence of De Facto Control

    Typically the Department considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) whether the export prices are set by or are 
subject to the approval of a governmental agency; (2) whether the 
exporter has authority to negotiate and sign contracts and other 
agreements; (3) whether the exporter has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the exporter retains the proceeds of its export sales and makes 
independent decisions regarding disposition of profits or financing of 
losses. See Silicon Carbide, 59 FR at 22586-87; see also Notice of 
Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol 
From the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995). 
The Department has determined that an analysis of de facto control is 
critical in determining whether respondents are, in fact, subject to a 
degree of governmental control which would preclude the Department from 
assigning separate rates.
    We determine that, for Yulong, Weifang, Shijiazhuang, Baolai, 
Dalian, Benxi, Shanghai Metals, Huludao, Xingyuda, Jianye, Rizhao, 
Tianjin No. 1, Kunshan, Yongjie, Jiangsu, Qingdao, Hengshui, Zhongyuan, 
Kunshan Lets Win, and BOYU, the evidence on the record supports a 
preliminary finding of an absence of de facto governmental control 
based on record statements and supporting documentation showing the 
following: 1) each exporter sets its own export prices independent of 
the government and without the approval of a government authority; 2) 
each exporter retains the proceeds from its sales and makes independent 
decisions regarding disposition of profits or financing of losses; 3) 
each exporter has the authority to negotiate and sign contracts and 
other agreements; and 4) each exporter has autonomy from the government 
regarding the selection of management. See Separate Rates Memorandum. 
Therefore, the Department has preliminarily found an absence of de 
facto government control over these companies' export activities.
     Regarding Fubo, the Fushan Committee appoints Fubo's board of 
directors and managers. During the POI, Fubo's directors and managers 
were also members of the Fushan Committee. In particular, Fubo reported 
that its general manager, chief financial supervisor, and sales manager 
were members of the Fushan Committee. Since these

[[Page 2451]]

managers control the day-to-day operations of the company, it is clear 
that the Fushan Committee directly controls Fubo's sales negotiation 
and export pricing. In addition, Fubo acknowledges that its profits are 
distributed to the Fushan Committee. For these reasons, the Department 
preliminarily finds that Fubo has not demonstrated that there is an 
absence of de facto control by the PRC government.
    As stated above, because Wai Ming, Fastube, Wuxi Eric, SLK, Wah 
Cit, and Guangdong are wholly foreign-owned, we have determined that 
they are independent of the PRC government's control and are eligible 
for a separate rate. In addition, the evidence placed on the record of 
this investigation by Yulong, Weifang, Shijiazhuang, Baolai, Dalian, 
Benxi, Shanghai Metals, Huludao, Xingyuda, Jianye, Rizhao, Tianjin No. 
1, Kunshan, Yongjie, Jiangsu, Qingdao, Hengshui, Zhongyuan, Kunshan 
Lets Win, and BOYU demonstrates an absence of de jure and de facto 
government control with respect to each of the exporters' exports of 
the merchandise under investigation, in accordance with the criteria 
identified in Sparklers and Silicon Carbide. As a result, for the 
purposes of this preliminary determination, we have granted a separate 
company-specific rate to Wai Ming, Fastube, Wuxi Eric, SLK, Wah Cit, 
Guangdong, Yulong, Weifang, Shijiazhuang, Baolai, Dalian, Benxi, 
Shanghai Metals, Huludao, Xingyuda, Jianye, Rizhao, Tianjin No. 1, 
Kunshan, Yongjie, Jiangsu, Qingdao, Hengshui, Zhongyuan, Kunshan Lets 
Win, and BOYU.
    In determining what rate to assign companies receiving separate 
rates, the Department's normal practice is to weight-average the 
individually calculated margins from the mandatory respondents. In this 
investigation, Yulong is the only mandatory respondent receiving an 
individually calculated margin, and its margin is zero percent. 
Shuangjie, the other mandatory respondent, is receiving a rate based 
entirely on adverse facts available (``AFA'') as part of the PRC-wide 
entity for its failure to cooperate. See ``Adverse Facts Available'' 
section below. Therefore, in this case, we have assigned to the 
companies receiving separate rates the simple average of Yulong's zero 
percent margin and the AFA margin assigned to Shuangjie as part of the 
PRC-wide entity. Since the Department has selected 51.34 percent as the 
AFA rate (see ``Adverse Facts Available'' section below), the simple 
average of this rate and zero percent is 25.67 percent. Therefore, we 
have assigned 25.67 percent as the rate applicable to Wai Ming, 
Fastube, Wuxi Eric, SLK, Wah Cit, Guangdong, Weifang, Shijiazhuang, 
Baolai, Dalian, Benxi, Shanghai Metals, Huludao, Xingyuda, Jianye, 
Rizhao, Tianjin No. 1, Kunshan, Yongjie, Jiangsu, Qingdao, Hengshui, 
Zhongyuan, Kunshan Lets Win, and BOYU. See Separate Rates Memorandum.

Adverse Facts Available

    Sections 776(a)(1) and (2) of the Act provide that the Department 
shall apply ``facts otherwise available'' if, inter alia, necessary 
information is not on the record or an interested party or any other 
person: (A) withholds information that has been requested; (B) fails to 
provide information within the deadlines established, or in the form 
and manner requested by the Department, subject to subsections (c)(1) 
and (e) of section 782 of the Act; (C) significantly impedes a 
proceeding; or (D) provides information that cannot be verified as 
provided by section 782(i) of the Act.
    Where the Department determines that a response to a request for 
information does not comply with the request, section 782(d) of the Act 
provides that the Department will so inform the party submitting the 
response and will, to the extent practicable, provide that party the 
opportunity to remedy or explain the deficiency. If the party fails to 
remedy the deficiency within the applicable time limits and subject to 
section 782(e) of the Act, the Department may disregard all or part of 
the original and subsequent responses, as appropriate. Section 782(e) 
of the Act provides that the Department ``shall not decline to consider 
information that is submitted by an interested party and is necessary 
to the determination but does not meet all applicable requirements 
established by the administering authority'' if the information is 
timely, can be verified, is not so incomplete that it cannot be used, 
and if the interested party acted to the best of its ability in 
providing the information. Where all of these conditions are met, the 
statute requires the Department to use the information if it can do so 
without undue difficulties.
    In this case, all PRC exporters of subject merchandise to the 
United States were given an opportunity to provide Q&V information to 
the Department. However, not all exporters responded to the 
Department's request for Q&V information.\2\ Based upon our knowledge 
of the volume of imports of subject merchandise, we have concluded that 
the companies that responded to the Q&V questionnaire do not account 
for all U.S. imports during the POI of subject merchandise. We have 
treated the non-responsive PRC producers/exporters (including 
Shuangjie) as part of the PRC-wide entity because they did not qualify 
for a separate rate.
---------------------------------------------------------------------------

    \2\ The Department received only 32 timely responses to the 
requests for Q&V information that it sent to the 53 potential 
exporters identified in the petition. See Q&V Memorandum; see also 
Respondent Selection Memorandum.
---------------------------------------------------------------------------

    Since the PRC-wide entity (including Shuangjie) withheld 
information requested by the Department, we find that the use of facts 
available is appropriate to determine the PRC-wide rate, pursuant to 
section 776(a)(2)(A) of the Act. See Preliminary Determination of Sales 
at Less Than Fair Value, Affirmative Preliminary Determination of 
Critical Circumstances and Postponement of Final Determination: Certain 
Frozen Fish Fillets from the Socialist Republic of Vietnam, 68 FR 4986 
(January 31, 2003), unchanged in Final Determination of Sales at Less 
Than Fair Value and Affirmative Critical Circumstances: Certain Frozen 
Fish Fillets from the Socialist Republic of Vietnam, 68 FR 37116 (June 
23, 2003).
    Section 776(b) of the Act provides that, in selecting from among 
the facts otherwise available, the Department may employ an adverse 
inference if an interested party fails to cooperate by not acting to 
the best of its ability to comply with requests for information. See 
Final Determination of Sales at Less Than Fair Value: Certain Cold-
Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian 
Federation, 65 FR 5510, 5518 (February 4, 2000); Certain Welded Carbon 
Steel Pipes and Tubes From Thailand: Final Results of Antidumping Duty 
Administrative Review, 62 FR 53808, 53819-20 (October 16, 1997); 
Crawfish Processors Alliance v. United States, 343 F. Supp.2d 1242 (CIT 
2004) (approving use of AFA when respondent refused to participate in 
verification); see also Statement of Administrative Action, 
accompanying the Uruguay Round Agreements Act (``URAA''), H.R. Rep. No. 
103-316, 870 (1994) (``SAA''). Because the PRC-wide entity (including 
Shuangjie) did not respond to the Department's request for information, 
the Department has concluded it has failed to cooperate to the best of 
its ability. Therefore, the Department preliminarily finds that, in 
selecting from among the facts available, an adverse inference is 
appropriate.

[[Page 2452]]

    Section 776(b) of the Act authorizes the Department to use, as AFA, 
information derived from the petition, the final determination from the 
LTFV investigation, a previous administrative review, or any other 
information placed on the record. In selecting a rate for AFA, the 
Department selects one that is sufficiently adverse ``as to effectuate 
the purpose of the facts available rule to induce respondents to 
provide the Department with complete and accurate information in a 
timely manner.'' See Notice of Final Determination of Sales at Less 
Than Fair Value: Static Random Access Memory Semiconductors From 
Taiwan, 63 FR 8909, 8932 (February 23, 1998). It is the Department's 
practice to select, as AFA, the higher of the (a) highest margin 
alleged in the petition, or (b) the highest calculated rate for any 
respondent in the investigation. See Final Determination of Sales at 
Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon Quality 
Steel Products From the People's Republic of China, 65 FR 34660 (May 
21, 2000) and accompanying Issues and Decision Memorandum, at ``Facts 
Available''. Because the dumping margin derived from the petition is 
higher than the calculated weighted-average margin for the mandatory 
respondents, we examined whether it was appropriate to base the PRC-
wide dumping margin on the secondary information in the petition.
    When the Department relies on secondary information, rather than 
information obtained in the course of an investigation, section 776(c) 
of the Act requires it to corroborate that information, to the extent 
practicable, from independent sources reasonably at its disposal.\3\ 
The SAA also states that the independent sources may include published 
price lists, official import statistics and customs data, and 
information obtained from interested parties during the particular 
investigation. See SAA at 870.
---------------------------------------------------------------------------

    \3\ Secondary information is described in the SAA as 
``information derived from the petition that gave rise to the 
investigation or review, the final determination concerning subject 
merchandise, or any previous review under section 751 concerning the 
subject merchandise.'' See SAA at 870.
---------------------------------------------------------------------------

    The SAA also clarifies that ``corroborate'' means that the 
Department will satisfy itself that the secondary information to be 
used has probative value. See SAA at 870. To corroborate secondary 
information, the Department will, to the extent practicable, examine 
the reliability and relevance of the information used. See Tapered 
Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, 
and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, 
and Components Thereof, From Japan; Preliminary Results of Antidumping 
Duty Administrative Reviews and Partial Termination of Administrative 
Reviews, 61 FR 57391, 57392 (November 6, 1996), unchanged in Tapered 
Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, 
and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, 
and Components Thereof, From Japan: Final Results of Antidumping Duty 
Administrative Reviews and Termination in Part, 62 FR 11825 (March 13, 
1997).
    To corroborate the dumping margin alleged in the petition (as 
adjusted by the Department in initiating the instant investigation), we 
compared sales-specific dumping margins calculated for the preliminary 
determination to the dumping margins alleged in the petition. We found 
that Yulong's highest sales-specific dumping margin corroborates, to 
the extent practicable, the petition margin of 51.34 percent. See 
Initiation Notice, see also Memorandum from Maisha Cryor, Senior 
International Trade Compliance Analyst, to Abdelali Elouaradia, Office 
Director, ``Corroboration of the Facts Available Rate for the 
Preliminary Determination,'' dated January 3, 2008. We are assigning 
this rate, 51.34 percent, as AFA to the PRC-wide entity (including 
Shuangjie).

Fair Value Comparisons

    To determine whether sales of CWP to the United States by Yulong 
were made at less than fair value, we compared the export price 
(``EP'') to normal value (``NV''), as described in the ``U.S. Price,'' 
and ``Normal Value'' sections of this notice. We compared NV to 
weighted-average EPs in accordance with section 777A(d)(1) of the Act.

U.S. Price

    For Yulong, we based U.S. price on EP in accordance with section 
772(a) of the Act, because the first sale to an unaffiliated purchaser 
was made prior to importation, and CEP was not otherwise warranted by 
the facts on the record. We calculated EP based on the packed price 
from the exporter to the first unaffiliated customer in the United 
States. Where appropriate, we made deductions from the starting price 
(gross unit price) for foreign inland freight, brokerage and handling, 
international freight, and marine insurance, in accordance with section 
772(c) of the Act.
    Where foreign inland freight, brokerage and handling, or 
international ocean freight was provided by PRC service providers, or 
paid for in Renminbi (``RMB''), we analyzed the amount of service 
provided by PRC entities to determine the appropriate method of valuing 
the services. Yulong received foreign inland freight services, and 
brokerage and handling services, from PRC service providers. Yulong 
paid for international ocean freight services through a PRC freight 
forwarder. See Yulong's October 31, 2007, questionnaire response at 9. 
For a complete discussion of the calculations of the U.S. price for 
Yulong, see Memorandum to the File, through Mark Manning, Program 
Manager, AD/CVD Operations, Office 4, from Thomas Martin, Senior 
International Trade Analyst, AD/CVD Operations, Office 4, Regarding 
``Program Analysis for the Preliminary Determination of Antidumping 
Duty Investigation of Circular Welded Carbon Quality Steel Pipe from 
the People's Republic of China: Yulong,'' dated January 3, 2007 
(``Yulong Analysis Memorandum''). See also the ``Factors of 
Production'' section below.
    Yulong reported that all of its U.S. sales had foreign inland 
freight provided by NME freight providers. Therefore, we valued foreign 
inland freight using a surrogate value obtained from the web site of an 
Indian transportation company, InFreight Technologies India Limited. 
See https://www.infreight.com/. This average rate was used by the 
Department in the antidumping duty administrative review of Saccharin 
from the PRC. See Saccharin from the People's Republic of China; 
Preliminary Results of the 2005-2006 Antidumping Duty Administrative 
Review, 72 FR 25247 (May 4, 2007) (``Saccharin from the PRC''). Because 
this value is not contemporaneous with the POI, we adjusted it to 
account for inflation using the Indian Wholesale Price Index (``WPI''). 
See Memorandum to the File, from Thomas Martin, Senior International 
Trade Compliance Analyst, Office 4, AD/CVD Operations, Regarding 
``Less-Than-Fair-Value (``LTFV'') Investigation of Circular Welded 
Carbon Quality Steel Pipe (``CWP'') from the People's Republic of China 
(``PRC''): Surrogate Values for the Preliminary Determination - Jiangsu 
Yulong Steel Pipe Co., Ltd. (``Yulong''),'' dated January 3, 2008 
(``Factor Value Memorandum''), at Exhibit 7.
    For brokerage and handling, Yulong reported that all of its U.S. 
sales had foreign brokerage and handling provided by NME companies. We 
valued Yulong's use of foreign brokerage and handling using a simple 
average of the public version of the brokerage and handling expenses 
reported in an

[[Page 2453]]

administrative review of preserved mushrooms from India by Agro Dutch 
Industries Ltd., in its section A-D submission, dated May 24, 2005, at 
Exhibit B-1, (see Certain Preserved Mushrooms From India: Final Results 
of Antidumping Duty Administrative Review, 71 FR 10646 (March 2, 
2006)), and the section C submission from Kejriwal Paper Ltd., dated 
January 9, 2006, at Exhibit C-2, used in Notice of Preliminary 
Determination of Sales at Less Than Fair Value, Postponement of Final 
Determination, and Affirmative Preliminary Determination of Critical 
Circumstances in Part: Certain Lined Paper Products From India, 71 FR 
19706 (April 17, 2006) (unchanged in Notice of Final Determination of 
Sales at Less Than Fair Value, and Negative Determination of Critical 
Circumstances: Certain Lined Paper Products from India, 71 FR 45012 
(August 8, 2006)). Because these data were not contemporaneous to the 
POI, we adjusted them for inflation using the Indian WPI. See Factor 
Value Memorandum at Exhibit 8.
    Yulong also reported that all of its U.S. sales had international 
freight provided by NME companies. We valued international freight 
expenses using U.S. dollar freight quotes that the Department obtained 
from Maersk Sealand (``Maersk''), a market-economy shipper. We obtained 
quotes from Maersk for shipments from the PRC port of export and the 
U.S. port of import reported by Yulong for its U.S. sales. Because 
these data were not contemporaneous to the POI, we adjusted them for 
inflation using the U.S. WPI. See Factor Value Memorandum at Exhibit 9.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using a factors-of-production (``FOP'') methodology if 
the merchandise is exported from an NME country and the information 
does not permit the calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act. 
The Department bases NV on the FOP because the presence of government 
controls on various aspects of non-market economies renders price 
comparisons and the calculation of production costs invalid under the 
Department's normal methodologies.

1. Factors of Production

    Yulong reported that it does not have complete, product-specific 
POI records that track the consumption of hot-rolled steel in coils on 
a product-specific basis, and, therefore, it allocated the same 
quantity of steel to all subject merchandise products. However, the 
Department finds that a single steel consumption rate for all products 
is not reasonable. Therefore, on the basis of the production data 
submitted by Yulong, which the Department intends to verify, the 
Department has adjusted Yulong's reported consumption rate for hot-
rolled steel in coils to be product-specific on the basis of steel coil 
and pipe thickness. See Yulong Analysis Memorandum. An amount for yield 
loss was added to the reported consumption rate per metric ton of CWP 
produced.

2. Surrogate Country Selection

    In antidumping proceedings involving NME countries, the Department, 
pursuant to section 773(c)(1) of the Act, will generally base NV on the 
value of the NME producer's factors of production. In accordance with 
section 773(c)(4) of the Act, in valuing the factors of production, the 
Department shall utilize, to the extent possible, the prices or costs 
of factors of production in one or more market-economy countries that 
are at a level of economic development comparable to that of the NME 
country and are significant producers of merchandise comparable to the 
subject merchandise.
    On November 5, 2007, the Department determined that India, 
Indonesia, Sri Lanka, the Philippines, and Egypt are countries 
comparable to the PRC in terms of economic development. See Letter to 
All Interested Parties, from Mark Manning, Program Manager, Office 4, 
AD/CVD Operations, Regarding ``Antidumping Duty Investigation of 
Circular Welded Carbon Quality Steel Pipe from the People's Republic of 
China (``PRC''),'' dated November 5, 2007, attaching Memorandum to Mark 
Manning, Program Manager, Office 4, AD/CVD Operations, from Ron 
Lorentzen, Director, Office of Policy, Regarding ``Investigation of 
Circular Welded Carbon Quality Steel Pipe (``Pipe'') from the People's 
Republic of China from the People's Republic of China (PRC): Request 
for List of Surrogate Countries,'' dated October 29, 2007.
    On November 5, 2007, the Department requested comments on surrogate 
country selection, and on surrogate values, from the interested parties 
in this investigation. No interested party commented on the selection 
of a surrogate country. However, on November 15, 2007, Yulong submitted 
surrogate value information, i.e., surrogate financial statements, for 
use in this investigation.\4\
---------------------------------------------------------------------------

    \4\The petitioners submitted surrogate value information, 
including surrogate financial statements, in their June 7, 2007, 
petition.
---------------------------------------------------------------------------

    As detailed in the Surrogate Country Memorandum, the Department has 
preliminarily selected India as the surrogate country because: (1) it 
is a significant producer of comparable merchandise; (2) it is at a 
similar level of economic development pursuant to 773(c)(4) of the Act; 
and (3) we have reliable data from India that we can use to value the 
factors of production. For a detailed discussion of the selection of 
the surrogate country, see Memorandum to the File, through Abdelali 
Elouaradia, Director, Office 4, AD/CVD Operations, from Maisha Cryor, 
Analyst, Office 4, AD/CVD Operations, Regarding ``Antidumping Duty 
Investigation of Circular Welded Carbon Quality Steel Pipe from the 
People's Republic of China: Selection of a Surrogate Country,'' dated 
December 14, 2007 (``Surrogate Country Memorandum''). Thus, we have 
calculated NV using Indian prices when available and appropriate to 
value Yulong's factors of production. See Factor Value Memorandum.
    In accordance with 19 CFR 351.301(c)(3)(i), for the final 
determination in an antidumping investigation, interested parties may 
submit publicly available information to value the factors of 
production within 40 days after the date of publication of the 
preliminary determination.

3. Factor Value Methodology

    In accordance with section 773(c) of the Act, we calculated NV 
based on FOP data reported by Yulong for the POI. The FOPs for subject 
merchandise include: (1) quantities of raw materials consumed; (2) 
hours of labor required; (3) amounts of energy and other utilities 
consumed; (4) representative capital and selling costs; and (5) packing 
materials. We valued the reported FOPs by multiplying the reported per-
unit factor-consumption rates by publicly available prices and 
financial statements from the surrogate country, India, or, where 
appropriate, the market economy prices paid for the factor (see further 
discussion below).
    In selecting the surrogate values, we considered the quality of the 
source of surrogate information, the specificity of the surrogate value 
to the FOP being valued, and contemporaneity of the data to the POI. To 
the extent practicable, we selected values that are non-export average 
values and tax-exclusive. See, e.g., Notice of Preliminary

[[Page 2454]]

Determination of Sales at Less Than Fair Value, Negative Preliminary 
Determination of Critical Circumstances and Postponement of Final 
Determination: Certain Frozen and Canned Warmwater Shrimp From the 
Socialist Republic of Vietnam, 69 FR 42672, 42682 (July 16, 2004), 
unchanged in Final Determination of Sales at Less Than Fair Value: 
Certain Frozen and Canned Warmwater Shrimp from the Socialist Republic 
of Vietnam, 69 FR 71005 (December 8, 2004) (``Shrimp from Vietnam'').
    We valued material inputs and packing by multiplying the amount of 
the factor consumed in producing subject merchandise by the average 
unit value of the factor. We derived the average unit value of the 
factors from Indian import statistics. As appropriate, we added to the 
surrogate values a cost for inland freight to make them delivered 
prices. Specifically, we calculated the inland freight cost by 
multiplying a surrogate freight rate by the shorter of the reported 
distance from the PRC domestic supplier to the respondent's factory or 
the distance from the nearest seaport to the respondent's factory, 
where appropriate. This adjustment is in accordance with the Court of 
Appeals for the Federal Circuit's decision in Sigma Corp. v. United 
States, 117 F. 3d 1401, 1407-1408 (Fed. Cir. 1997). A detailed 
description of all surrogate values used for respondents can be found 
in the Factor Value Memorandum.
    Where we could not obtain publicly available information 
contemporaneous to the POI with which to value factors, we adjusted the 
surrogate values, where appropriate, using the WPI as published in the 
International Financial Statistics of the International Monetary Fund. 
See Factor Value Memorandum at Exhibit 2.
    Furthermore, with regard to the Indian import-based surrogate 
values, we disregarded import prices that we have reason to believe or 
suspect may be subsidized. We have reason to believe or suspect that 
prices of inputs from Indonesia, South Korea, and Thailand may have 
been subsidized. We have found in other proceedings that these 
countries maintain broadly available, non-industry-specific export 
subsidies and, therefore, it is reasonable to infer that all exports to 
all markets from these countries may be subsidized. See, e.g., Notice 
of Final Determination of Sales at Less Than Fair Value and Negative 
Final Determination of Critical Circumstances: Certain Color Television 
Receivers From the People's Republic of China, 69 FR 20594 (April 16, 
2004) and accompanying Issues and Decision Memorandum at Comment 7 
(``CTVs from the PRC''). We are also directed by legislative history 
not to conduct a formal investigation to ensure that such prices are 
not subsidized. See H.R. Rep. 100-576 at 590 (1988). Rather, Congress 
directed the Department to base its decision on information that is 
available to it at the time it makes its determination. Therefore, we 
have not used prices from these countries either in calculating the 
Indian import-based surrogate values or in calculating market-economy 
input values. In instances where a market-economy input was obtained 
solely from suppliers located in these countries, we used Indian 
import-based surrogate values to value the input. See Final 
Determination of Sales at Less Than Fair Value: Certain Automotive 
Replacement Glass Windshields From The Peop