Certain Circular Welded Carbon Quality Steel Line Pipe from the People's Republic of China: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 66012-66020 [E8-26503]

Download as PDF 66012 Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Notices Scope of the Review sroberts on PROD1PC70 with NOTICES Imports covered by the order are shipments of SSB. SSB means articles of stainless steel in straight lengths that have been either hot-rolled, forged, turned, cold-drawn, cold-rolled or otherwise cold-finished, or ground, having a uniform solid cross section along their whole length in the shape of circles, segments of circles, ovals, rectangles (including squares), triangles, hexagons, octagons, or other convex polygons. SSB includes cold-finished SSBs that are turned or ground in straight lengths, whether produced from hot-rolled bar or from straightened and cut rod or wire, and reinforcing bars that have indentations, ribs, grooves, or other deformations produced during the rolling process. Except as specified above, the term does not include stainless steel semifinished products, cut-to-length flatrolled products (i.e., cut-to-length rolled products which if less than 4.75 mm in thickness have a width measuring at least 10 times the thickness, or if 4.75 mm or more in thickness having a width which exceeds 150 mm and measures at least twice the thickness), wire (i.e., cold-formed products in coils, of any uniform solid cross section along their whole length, which do not conform to the definition of flat-rolled products), and angles, shapes, and sections. The SSB subject to these reviews is currently classifiable under subheadings 7222.11.00.05, 7222.11.00.50, 7222.19.00.05, 7222.19.00.50, 7222.20.00.05, 7222.20.00.45, 7222.20.00.75, and 7222.30.00.00 of the Harmonized Tariff Schedule of the United States (‘‘HTSUS’’). Although the HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of the order is dispositive. On May 23, 2005, the Department issued a final scope ruling that SSB manufactured in the United Arab Emirates out of stainless steel wire rod from India is not subject to the scope of this order. See Memorandum from Team to Barbara E. Tillman, ‘‘Antidumping Duty Orders on Stainless Steel Bar from India and Stainless Steel Wire Rod from India: Final Scope Ruling,’’ dated May 23, 2005, which is on file in the Central Records Unit in room 1117 of the main Department building. See also Notice of Scope Rulings, 70 FR 55110 (September 20, 2005). Final Results of Changed Circumstances Review For the reasons stated in the preliminary results, and because the Department did not receive any VerDate Aug<31>2005 19:11 Nov 05, 2008 Jkt 217001 comments following the preliminary results of this review, the Department continues to find that India Steel is the successor-in-interest to Isibars for antidumping duty cash deposit purposes. Instructions to U.S. Customs and Border Protection The Department will instruct CBP to suspend liquidation of all shipments of the subject merchandise produced and exported by India Steel entered, or withdrawn from warehouse, for consumption on or after the publication date of this notice at 2.01 percent (i.e., Isibars’s cash deposit rate). This deposit rate shall remain in effect until publication of the final results of the next administrative review in which India Steel participates. This notice also serves as a reminder to parties subject to administrative protective orders (‘‘APO’’) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.306. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation. This notice in accordance with sections 751(b) and 777(i)(1) of the Act, and sections 351.216(e) and 351.221(c)(3)(i) of the Department’s regulations. Dated: October 30, 2008. David M. Spooner, Assistant Secretary for Import Administration. [FR Doc. E8–26393 Filed 11–5–08; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration (A–570–935) Certain Circular Welded Carbon Quality Steel Line Pipe from the People’s Republic of China: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: November 6, 2008. SUMMARY: The Department of Commerce (‘‘Department’’) preliminarily determines that certain circular welded carbon quality steel welded line pipe (‘‘welded line pipe’’) from the People’s AGENCY: PO 00000 Frm 00003 Fmt 4703 Sfmt 4703 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 dumping margins are shown in the ‘‘Preliminary Determination’’ section of this notice. FOR FURTHER INFORMATION CONTACT: Jeff Pedersen or Rebecca Pandolph, AD/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) 482–2769 or 482–3627, respectively. SUPPLEMENTARY INFORMATION: Background On April 3, 2008, the Department received a petition concerning imports of welded line pipe from the PRC and the Republic of Korea (‘‘Korea’’) filed in proper form by United States Steel Corporation (‘‘U.S. Steel’’), Maverick Tube Corporation (‘‘Maverick’’), Tex– Tube Company (‘‘Tex–Tube’’), and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, and AFL–CIO-CLC (‘‘United Steelworkers’’) (collectively, ‘‘Petitioners’’). See Imposition of Antidumping and Countervailing Duties: Certain Circular Welded Carbon Quality Steel Line Pipe from the People’s Republic of China and the Republic of Korea, dated April 3, 2008 (in four volumes) (‘‘Petition’’). On April 23, 2008, the Department initiated antidumping duty investigations of welded line pipe from the above– mentioned countries. See Certain Circular Welded Carbon Quality Steel Line Pipe From the Republic of Korea and the People’s Republic of China: Initiation of Antidumping Duty Investigations, 73 FR 23188 (April 29, 2008) (‘‘Initiation Notice’’). Also, on April 23, 2008, the Department issued a quantity and value (‘‘Q&V’’) questionnaire to each of the 65 companies identified by the Petitioners as potential exporters or producers of welded line pipe from the PRC. See supplement to the petition at Exhibit II– Supp I, dated April 14, 2008. The Department received timely responses to its Q&V questionnaire from the following nine companies: Benxi Northern Steel Pipes Co., Ltd. (‘‘Benxi’’); Huludao Steel Pipe Industrial Co., Ltd.(‘‘Huludao Pipe’’); Pangang Group Behai Pipe Corporation (‘‘Pangang’’); Shanghai Metals & Minerals Import & Export Corp. d/b/a Shanghai Minmetals Materials & Products Corp. (‘‘Shanghai E:\FR\FM\06NON1.SGM 06NON1 sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Notices Metals’’); Tianjin Xingyuda Import and Export Company (‘‘Tianjin’’); Nanjing HuaDong Steel Pipes Manufacturing Co., Ltd. (‘‘Nanjing’’); Shashi Steel Pipe Works, SINOPEC (‘‘Shashi’’); Xuzhou Guanghuan Steel Tube Co., Ltd. (‘‘Xuzhou’’); and Jiangsu Yulong Steel Pipe Co., Ltd. (‘‘Jiangsu Yulong’’). On May 20, 2008, the Department rejected the Q&V responses submitted by Nanjing, Shashi, Xuzhou, and Jiangsu Yulong because they were improperly filed. The Department requested that Nanjing, Shashi, Xuzhou, and Jiangsu Yulong correct certain filing deficiencies. See Letters to Nanjing, Shashi, Xuzhou, and Jiangsu Yulong, dated May 20, 2008. The Department received information indicating that Nanjing, Shashi, and Xuzhou had received the Department’s May 20, 2008, letter, but Nanjing, Shashi, and Xuzhou did not refile their submissions. The Department did not have any information to whether Jiangsu Yulong had received the May 20, 2008, letter and on July 15, 2008, the Department sent a letter to Jiangsu Yulong requesting that it explain why it had failed to respond to the Department’s May 20, 2008, letter, in which the Department requested that the company properly refile its Q&V response. See Letter to Ms. Tang Wei–jun regarding, Circular Welded Carbon Quality Steel Line Pipe from the People’s Republic of China, dated July 15, 2008. On July 28, 2008, Jiangsu Yulong resubmitted its Q&V response and explained that it had not responded to the Department’s May 20, 2008, letter concerning its improperly filed Q&V response because it had not received the letter. See Letter to the Department from Jiangsu Yulong, dated July 28, 2008. On May 13, 2008, the Department received product matching comments from one of the Petitioners, Maverick, and scope comments from Wheatland Tube Company (‘‘Wheatland’’), a domestic producer. See the ‘‘Scope Comments’’ section of this notice for further details. On May 27, 2008, the Department received comments from Maverick on the record of this investigation rebutting model matching comments submitted in the Korean investigation of welded line pipe. On May 16, 2008, the International Trade Commission (‘‘ITC’’) preliminarily determined 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 welded line pipe from the PRC and Korea. See Certain Circular Welded Carbon Quality Steel Line Pipe from China and Korea, Investigation Nos. 701–TA–455 and VerDate Aug<31>2005 19:11 Nov 05, 2008 Jkt 217001 731–TA–1149–1150 (Preliminary), 73 FR 31712 (June 3, 2008). On May 27, 2008, the Department received comments from Maverick regarding respondent selection. No other party submitted comments regarding respondent selection. The Department received separate rate applications from Huludao Pipe on June 23, 2008, and from Benxi, Pangang, Shanghai Metals, Tianjin, and Jiangsu Yulong on June 30, 2008. On June 3, 2008, and July 9, 2008, the Department selected Huludao Pipe and Shanghai Metals, respectively, as mandatory respondents. See Memoranda to File: ‘‘Respondent Selection in the Antidumping Duty Investigation of Circular Welded Carbon Quality Steel Line Pipe (welded line pipe) from the People’s Republic of China (PRC),’’ from Rebecca Pandolph through Howard Smith and Abdelali Elouradia, dated June 3, 2008, and ‘‘Amendment to Respondent Selection in the Antidumping Duty Investigation of Circular Welded Carbon Quality Steel Line Pipe from the People’s Republic of China,’’ from Jeffrey Pedersen and Rebecca Pandolph through Howard Smith and Abdelali Elouradia, dated July 9, 2008. The Department issued its antidumping questionnaire to Huludao Pipe and Shanghai Metals on June 4, 2008, and July 9, 2008, respectively. The Department issued supplemental questionnaires to, and received responses from, the mandatory and separate rate respondents from July 2008 through October 2008. The Petitioners submitted comments to the Department regarding the questionnaire and supplemental questionnaire responses of the mandatory and separate rate respondents from July 2008 through September 2008. On July 29, 2008, the Department released to interested parties a memorandum which listed potential surrogate countries and invited interested parties to comment on surrogate country and factor value selection. See Letter to All Interested Parties from Howard Smith, Program Manager, Office 4, concerning ‘‘Antidumping Duty Investigation of Circular Welded Carbon Quality Steel Line Pipe from the People’s Republic of China,’’ dated July 29, 2008. On August 8, 2008, Maverick and U.S. Steel, two of the petitioning firms, submitted comments on surrogate country selection in which they both recommended selecting India as the surrogate country in this investigation. See Letter from Maverick, regarding Certain Circular Welded Carbon Quality Steel Line Pipe from the People’s PO 00000 Frm 00004 Fmt 4703 Sfmt 4703 66013 Republic of China: Comments on the Proper Surrogate Country, dated August 8, 2008, and Letter from U.S. Steel, regarding Circular Welded Carbon Quality Steel Line Pipe from the People’s Republic of China: Surrogate Country Selection, dated August 8, 2008. On August 12, 2008, Maverick and U.S. Steel requested postponement of the preliminary determination. On August 21, 2008, the Department extended this preliminary determination by fifty days. See Certain Circular Welded Carbon Quality Steel Line Pipe from the Republic of Korea and the People’s Republic of China: Postponement of Preliminary Determination of Antidumping Duty Investigation, 73 FR 50941 (August 29, 2008). On October 3, 2008, Shanghai Metals requested that the Department extend the final determination in this case. See the ‘‘Postponement of Final Determination and Extension of Provisional Measures’’ section of this notice below. On September 2 and September 9, 2008, the Petitioners and Huludao Pipe submitted comments on, and calculations for, the surrogate values. On September 15, 2008, Petitioners and Huludao Pipe submitted rebuttal comments regarding surrogate values. The submitted surrogate value data are from India. On September 30, 2008, the Petitioners and Huludao Pipe submitted comments to be considered in the Department’s preliminary determination. Period of Investigation The period of investigation (‘‘POI’’) is October 1, 2007, through March 31, 2008. This period comprises the two most recently completed fiscal quarters as of the month preceding the month in which the petition was filed (i.e., April 2008). See 19 CFR 351.204(b)(1). Scope of the Investigation The merchandise covered by this investigation is circular welded carbon quality steel pipe of a kind used for oil and gas pipelines (welded line pipe), not more than 406.4 mm (16 inches) in outside diameter, regardless of wall thickness, length, surface finish, end finish or stenciling. The term ‘‘carbon quality steel’’ includes both carbon steel and carbon steel mixed with small amounts of alloying elements that may exceed the individual weight limits for nonalloy steels imposed in the Harmonized Tariff Schedule of the United States (‘‘HTSUS’’). Specifically, the term E:\FR\FM\06NON1.SGM 06NON1 66014 Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Notices sroberts on PROD1PC70 with NOTICES ‘‘carbon quality’’ includes products in which (1) iron predominates by weight over each of the other contained elements, (2) the carbon content is 2 percent or less by weight and (3) none of the elements listed below exceeds the quantity by weight respectively indicated: (i) 2.00 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) 0.012 percent of boron, (xi) 0.50 percent of molybdenum, (xii) 0.15 percent of niobium, (xiii) 0.41 percent of titanium, (xiv) 0.15 percent of vanadium, or (xv) 0.15 percent of zirconium. Welded line pipe is normally produced to specifications published by the American Petroleum Institute (‘‘API’’) (or comparable foreign specifications) including API A–25, 5LA, 5LB, and X grades from 42 and above, and/or any other proprietary grades or non–graded material. Nevertheless, all pipe meeting the physical description set forth above that is of a kind used in oil and gas pipelines, including all multiple– stenciled pipe with an API welded line pipe stencil is covered by the scope of this investigation. Excluded from this scope are pipes of a kind used for oil and gas pipelines that are multiple–stenciled to a standard and/or structural specification and have 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 term ‘‘painted’’ does not include coatings to inhibit rust in transit, such as varnish, but includes coatings such as polyester.) The welded line pipe products that are the subject of these investigations are currently classifiable in the HTSUS under subheadings 7306.19.10.10, 7306.19.10.50, 7306.19.51.10, and 7306.19.51.50. While HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of these investigations is dispositive. Scope Comments In the Initiation Notice, the Department stated that the scope of the welded line pipe investigations may cover certain merchandise potentially subject to the on–going antidumping VerDate Aug<31>2005 19:11 Nov 05, 2008 Jkt 217001 duty and countervailing duty investigations of circular welded pipe (‘‘CWP’’) from the PRC. The Department went on to note in the Initiation Notice that once certain scope issues in the CWP investigations have been resolved, it intended to reexamine the welded line pipe scope language to ensure that there was no overlap between the scope of the CWP and welded line pipe investigations. See Initiation Notice, 73 FR 23188, 23189. Moreover, in accordance with the preamble to the Department’s regulations, the Department stated in the Initiation Notice that it would set aside a period of time 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. The Department received scope comments from Wheatland, a domestic producer, requesting that the Department modify the welded line pipe scope to take into account the scope definition ultimately set out in the CWP investigations. See Letter from Wheatland, regarding Comments on Scope of Investigations, dated May 13, 2008. Given that the scope issue in the CWP investigation has been resolved, we have modified the scope of the welded line pipe investigations to eliminate the overlap that existed between the CWP and welded line pipe investigations. Specifically, we added the following language to the scope description:1 Excluded from this scope are pipes of a kind used for oil and gas pipelines that are multiple–stenciled to a standard and/or structural specification and have one or more of the following characteristics:2 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 term ‘‘painted’’ does not include coatings to inhibit rust in 1 See Memorandum to Stephen J. Claeys, Deputy Assistant Secretary for Import Administration, from Abdelali Elouaradia, Director, Office 4 Operations, regarding ‘‘Antidumping and Countervailing Duty Investigations of Circular Welded Carbon Quality Steel Line Pipe from the People’s Republic of China: Scope Modification,’’ dated August 29, 2008 (‘‘Scope Modification Memorandum’’). 2 This sentence differs from the language contained in the Scope Modification Memorandum’’. The language in the Scope Modification Memorandum is as follows: ‘‘Excluded from this scope are pipes that are multiple-stenciled to a standard and/or structural specification and to any other specification, such as the API-5L specification, when it also has one or more of the following characteristics.’’ PO 00000 Frm 00005 Fmt 4703 Sfmt 4703 transit, such as varnish, but includes coatings such as polyester.) Non–Market Economy Treatment The Department considers the PRC to be a non–market economy (‘‘NME’’) country. In accordance with section 771(18)(C)(i) of the Act, any determination that a country is an NME country shall remain in effect until revoked by the administering authority. See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People’s Republic of China: Preliminary Results of 2001–2002 Administrative Review and Partial Rescission of Review, 68 FR 7500 (February 14, 2003), unchanged in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People’s Republic of China: Final Results of 2001–2002 Administrative Review and Partial Rescission of Review, 68 FR 70488 (December 18, 2003). The Department has not revoked the PRC’s status as an NME country. Therefore, in this preliminary determination, we continued to treat the PRC as an NME country and apply our current NME methodology. Selection of a Surrogate Country In an investigation involving imports from NME countries, section 773(c)(1) of the Act directs the Department to generally base normal value (‘‘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. The Department has determined that Colombia, India, Indonesia, the Philippines, and Thailand are countries that are at a level of economic development comparable to that of the PRC. See Memorandum regarding ‘‘Antidumping Duty Investigation of Circular Welded Carbon Quality Steel Line Pipe from the People’s Republic of China: Request for a List of Surrogate Countries,’’ dated May 27, 2008 (‘‘Policy Memorandum’’). From among these economically comparable countries, the Department has preliminarily selected India as the surrogate country for this investigation because it determined that: (1) India is a significant producer of merchandise comparable to the subject merchandise and (2) reliable Indian data for valuing the factors of production are E:\FR\FM\06NON1.SGM 06NON1 Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Notices readily available. See Memorandum to Abdelali Elouaradia, Office Director, through Howard Smith, Program Manager, from Jeffrey Pedersen and Rebecca Pandolph, International Trade Compliance Specialists, concerning ‘‘Antidumping Duty Investigation of Circular Welded Carbon Quality Steel Line Pipe from the People’s Republic of China: Selection of a Surrogate Country,’’ dated September 22, 2008. sroberts on PROD1PC70 with NOTICES Separate Rates In the Initiation Notice, the Department notified parties of the recent application process by which exporters and producers may obtain separate–rate status in NME investigations. See Initiation Notice, 73 FR 23188, 23193. The process requires exporters and producers to submit a separate–rate status application. See also Policy Bulletin 05.1: Separate–Rates Practice and Application of Combination Rates in Antidumping Investigations involving Non–Market Economy Countries, (April 5, 2005), available at http:// ia.ita.doc.gov (Policy Bulletin 05.1).3 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. In proceedings involving NME countries, the Department has a rebuttable presumption that all companies within the country are subject to government control and thus should be assessed a single antidumping duty rate. It is the Department’s policy to assign all exporters of merchandise subject to investigation in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. Exporters can demonstrate this independence through the absence of both de jure and de facto governmental control over export 3 Policy Bulletin 05.1 states: ‘‘while continuing the practice of assigning separate rates only to exporters, all separate rates that the Department will now assign in its NME investigations will be specific to those producers that supplied the exporter during the period of investigation. Note, however, that one rate is calculated for the exporter and all of the producers which supplied subject merchandise to it during the period of investigation. This practice applied both to mandatory respondents receiving an individually calculated separate rate as well as the pool of non-investigated firms receiving the weighted-average of the individually calculated rates. This practice is referred to as the application of ‘‘combination rates’’ because such rates apply to specific combinations of exporters and one or more producers. The cashdeposit rate assigned to an exporter will apply only to merchandise both exported by the firm in question and produced by a firm that supplied the exporter during the period of investigation.’’ See Policy Bulletin 05.1 at 6. VerDate Aug<31>2005 19:11 Nov 05, 2008 Jkt 217001 activities. 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’’). However, if the Department determines that a company is wholly foreign– owned or located in a market economy, then a separate rate analysis is not necessary to determine whether it is independent from government control. A. Separate Rate Applicants Joint Ventures Between Chinese and Foreign Companies or Wholly ChineseOwned Companies All of the separate rate applicants in this investigation, including the mandatory respondents Huludao Pipe and Shanghai Metals, stated that they are either joint ventures between Chinese and foreign companies or are wholly Chinese–owned companies (collectively, ‘‘PRC SR Applicants’’). Therefore, the Department must analyze whether these respondents can demonstrate the absence of both de jure and de facto governmental control over export activities. a. 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 20589 at Comment 1. The evidence provided by Benxi, Huludao Pipe, Pangang, Shanghai Metals, Tianjin, and Jiangsu Yulong supports a preliminary finding of de jure absence of governmental control based on the following: (1) an absence of restrictive stipulations associated with the individual exporters’ business and export licenses; (2) there are applicable legislative enactments decentralizing control of the companies; and (3) and there are formal measures by the government decentralizing control of companies. See e.g. Huludao’s June 23, 2008 Separate Rate Application (‘‘Huludao SRA’’) and Benxi’s June 23, PO 00000 Frm 00006 Fmt 4703 Sfmt 4703 66015 2008 Separate Rate Application (‘‘Benxi SRA’’). b. 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 respondent has authority to negotiate and sign contracts and other agreements; (3) whether the respondent has autonomy from the government in making decisions regarding the selection of management; and (4) whether the respondent 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. The Petitioners argue that Shanghai Metals, Benxi, and Pangang are directly or indirectly controlled by the PRC government and should, therefore, not be granted separate rates. For example, the Petitioners maintain that Shanghai Metals was a state–owned enterprise during the POI and that two of its employees were former employees of the PRC government. See Letter from U.S. Steel regarding ‘‘Certain Circular Welded Carbon Quality Line Pipe From the People’s Republic of China,’’ dated August 15, 2008. Accordingly, the Petitioners argue that these three entities are ineligible for a separate rate. See Letters from Maverick and U.S. Steel, dated July 15, 2008, regarding Shanghai Metal’s, Benxi’s, and Pangang’s separate rate applications. However, the Department has previously granted separate rate status to both wholly state–owned producers and producers whose stock was partially owned by a government state assets management company when evidence of actual government control was not present. See Lightweight Thermal Paper From the People’s Republic of China: Final Determination of Sales at Less Than Fair Value, 73 FR 57329 (October 2, 2008) and the accompanying Issues and Decisions Memorandum at Comment 7. Absent evidence of de facto control over export E:\FR\FM\06NON1.SGM 06NON1 66016 Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Notices sroberts on PROD1PC70 with NOTICES activities, government ownership alone does not warrant denying a company a separate rate.4 The Petitioners have not provided any evidence of government participation in the export decisions of the directors and or managers of Shanghai Metals, Benxi, or Pangang. We preliminarily determine that the evidence placed on the record of this investigation by all of the PRC SR Applicants demonstrates an absence of de facto government control of exports of the merchandise under investigation, in accordance with the criteria identified in Sparklers and Silicon Carbide. Shanghai Metals, Benxi, and Pangang all certified that their export prices are not set by, subject to the approval of, or in any way controlled by a government entity at any level and that they have independent authority to negotiate and sign export contracts, providing price negotiation documents for their first U.S. sale. See, e.g., Shanghai Metals’ June 30, 2008, Separate Rate Application (‘‘Shanghai Metals SRA’’), Benxi SRA, dated June 30, 2008, and Pangang’s July 1, 2008, Separate Rate Application (‘‘Pangang SRA’’). Shanghai Metals also reported that according to its articles of association, the general assembly of employee representatives has the right to select the general manager and to decide how profits will be distributed. See Shanghai Metals SRA, dated June 30, 2008, at 14–16. Benxi reported that according to its articles of association, its board of directors has the right to appoint the general manager and to decide how profits will be distributed. See Benxi SRA, dated June 30, 2008, at 13–15. Pangang submitted a board resolution and an internal notice of a new appointment which demonstrates its independent selection of 4 See Notice of Preliminary Determination of Sales at Less than Fair Value and Postponement of Final Determination : Structural Steel Beams from the People’s Republic of China, 66 FR 67197 (December 28, 2008) (unchanged in Notice of Final Determination of Sales at Less than Fair Value : Structural Steel Beams from the People’s Republic of China, 67 FR 35479 (May 20, 2002)), stating ‘‘The petitioners in this case argue that, because Maanshan is 63 percent owned by a holding company which is, in turn, wholly owned by the Anhui provincial government, and because certain managers of the holding company also serve on the board of directors of Maanshan, the respondent is ineligible for a separate rate due to potential government control. However, the petitioners have not submitted any specific evidence indicating that the conditions for de facto control exist. As stated in the Silicon Carbide, 59 FR at 22587, ownership of the company by a state-owned enterprise does not require the application of a single rate. Therefore, based on the information provided, we preliminarily determine that there is an absence of de facto governmental control of Maanshan’s export functions. Consequently, we preliminarily determine that the respondent has met the criteria for the application of a separate rate.’’ VerDate Aug<31>2005 19:11 Nov 05, 2008 Jkt 217001 management. See Pangang SRA, dated July 1, 2008, at Exhibit 10. Moreover, Shanghai Metals reported that neither of the two employees named by the Petitioners worked for the PRC government and it provided the employment history for the two employees. See Letter from Shanghai Metals regarding ‘‘Circular Welded Carbon Quality Line Pipe from China– Response to Petitioners’ Allegations,’’ dated August 25, 2008. Additionally, the other PRC SR applicants all submitted evidence that supports a preliminary finding of de facto absence of governmental control. See, e.g., Huludao Pipe SRA, dated June 23, 2008, Jiangsu Yulong’s June 30, 2008, Separate Rate Application and Tianjin’s June 30, 2008 Separate Rate Application. Thus, we preliminarily determine that there is an absence of both de jure and de facto government control with respect to each of the PRC SR Applicants. Therefore, the Department has preliminarily granted separate rate status to the following companies: Benxi, Huludao Pipe, Pangang, Shanghai Metals, Tianjin, and Jiangsu Yulong. The Department has calculated company–specific dumping margins for the two mandatory respondents, Huludao Pipe and Shanghai Metals, and assigned the other companies that have been granted a separate rate a dumping margin equal to a simple average of the dumping margins calculated for the two mandatory respondents. B. Companies Not Receiving a Separate Rate The Department has determined that all parties applying for a separate rate in this segment of the proceeding have demonstrated an absence of government control both in law and in fact (see discussion above), and is, therefore, granting separate rate status to all applicants. The PRC–Wide Entity Although PRC exporters of subject merchandise to the United States were given an opportunity to provide Q&V information to the Department, not all exporters responded to the Department’s request for Q&V information.5 Based upon our knowledge of the volume of imports of subject merchandise from the PRC, we have concluded that the companies that responded to the Q&V questionnaire do not account for all U.S. imports of subject merchandise from the PRC made during the POI. We have treated the non–responsive PRC 5 The Department received only 9 timely responses to the requests for Q&V information that it sent to 65 potential exporters identified in the petition. PO 00000 Frm 00007 Fmt 4703 Sfmt 4703 producers/exporters as part of the PRC– wide entity because they did not qualify for a separate rate. Section 776(a)(2) of the Act provides that the Department shall, subject to subsection 782(d) of the Act, use facts otherwise available in reaching the applicable determination if an interested party: (A) withholds information that has been requested by the Department; (B) fails to provide such information in a timely manner or in the form or manner requested, subject to subsections 782(c)(1) and (e) of the Act; (C) significantly impedes a proceeding under the antidumping statute; or (D) provides such information but the information cannot be verified. As noted above, the PRC–wide entity withheld information requested by the Department. As a result, pursuant to section 776(a)(2)(A) of the Act, we find it appropriate to base the PRC–wide dumping margin on facts available. See Notice of 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 Notice of Final Antidumping Duty 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 Notice of 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); see also Statement of Administrative Action, accompanying the Uruguay Round Agreements Act , H.R. Rep. No. 103–316, Vol. I at 843 (1994) (‘‘SAA’’), reprinted in 1994 U.S.C.C.A.N. 4040 at 870. Because the PRC–wide entity did not respond to the Department’s request for information, the Department has concluded that the PRC–wide entity 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. Section 776(b) of the Act authorizes the Department to use, as adverse facts available (‘‘AFA’’): (1) information derived from the petition; (2) the final determination from the LTFV E:\FR\FM\06NON1.SGM 06NON1 Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Notices investigation; (3) a previous administrative review; or (4) 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 (February 23, 1998). It is the Department’s practice to select, as AFA, the higher of: (a) the 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 31, 2000) and accompanying Issues and Decisions Memorandum at Facts Available. Here, we assigned the PRC–wide entity the dumping margin calculated for Shanghai Metals, which exceeds the highest margin alleged in the petition and is the highest rate calculated in this investigation. Pursuant to section 776(c) of the Act, we do not need to corroborate this rate because it is based on information obtained during the course of this investigation rather than secondary information. See also SAA at 870. The PRC–wide dumping margin applies to all entries of the merchandise under investigation except for entries of subject merchandise from Benxi, Huludao Pipe, Pangang, Shanghai Metals, Tianjin, and Jiangsu Yulong. sroberts on PROD1PC70 with NOTICES Fair Value Comparisons To determine whether Huludao Pipe or Shanghai Metals sold welded line pipe to the United States at LTFV, we compared the weighted–average export price (‘‘EP’’) of the welded line pipe to the NV of welded line pipe, as described in the ‘‘U.S. Price’’ and ‘‘Normal Value’’ sections of this notice. U.S. Price In accordance with section 772(a) of the Act, for both Huludao Pipe and Shanghai Metals, we based the U.S. price of sales on EP because the first sale to unaffiliated purchasers was made prior to importation and the use of constructed export price was not otherwise warranted. In accordance with section 772(c) of the Act, we calculated EP for Huludao Pipe by deducting the following expenses from the starting price (gross unit price) charged to the first unaffiliated customer in the United States: foreign VerDate Aug<31>2005 19:11 Nov 05, 2008 Jkt 217001 movement expenses, international freight, foreign warehousing, and foreign brokerage and handling expenses. For Shanghai Metals, we calculated EP by deducting foreign movement expenses and foreign brokerage and handling expenses from the starting price charged to the first unaffiliated customer in the United States. We based these movement expenses on surrogate values where the service was purchased from a PRC company. For details regarding our EP calculation, see Analysis Memoranda for Huludao Pipe and Shanghai Metals, dated October 30, 2008. Normal Value In accordance with section 773(c) of the Act, we constructed NV from the factors of production employed by the respondents to manufacture subject merchandise during the POI. Specifically, we calculated NV by adding together the value of the factors of production, general expenses, profit, and packing costs. We valued the factors of production using prices and financial statements from the surrogate country, India. In selecting surrogate values, we followed, to the extent practicable, the Department’s practice of choosing values which are non–export average values, contemporaneous with, or closest in time to, the POI, product– specific, and tax–exclusive. See, e.g., Notice of Preliminary 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). We also considered the quality of the source of surrogate information in selecting surrogate values. 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 factor from Indian import statistics. In addition, we added freight costs to the surrogate costs that we calculated for material inputs. We calculated freight costs by multiplying surrogate freight rates by the shorter of the reported distance from the domestic supplier to the factory that produced the subject merchandise or the distance from the nearest seaport to the factory that produced the subject PO 00000 Frm 00008 Fmt 4703 Sfmt 4703 66017 merchandise, as 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, 1407–08 (Fed. Cir. 1997). Where we could only obtain surrogate values that were not contemporaneous with the POI, we inflated (or deflated) the surrogate values using the Indian Wholesale Price Index (‘‘WPI’’) as published in the International Financial Statistics of the International Monetary Fund. Further, in calculating surrogate values from Indian imports, we disregarded imports from Indonesia, South Korea, and Thailand because in other proceedings the Department found that these countries maintain broadly available, non–industry-specific export subsidies. 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 7.6 Thus, we have not used prices from these countries in calculating the Indian import–based surrogate values. We valued raw materials, scrap, and packing materials using Indian import statistics. See the memoranda to the File regarding ‘‘Investigation of Circular Welded Carbon Quality Steel Line Pipe from the People’s Republic of China: Surrogate Values Memorandum’’ for Huludao Pipe and Shanghai Metals, dated concurrently with this notice (‘‘Surrogate Values Memorandum’’). Although the Petitioners requested that the Department value the steel input using data from the India Joint Plant Committee (‘‘JPC’’)7 the Department has not used these data. The footnotes to the JPC price sheets that were provided by the petitioners state that ‘‘{a}ll prices are inclusive of Excise Duty & Sales/Vat Tax.’’8 As noted above, the Department prefers to value factors of production using tax–exclusive prices. While Petitioners have provided tax rates used by the Department in other antidumping cases to adjust JPC prices for wire rod, 6 In addition, we note that legislative history explains that the Department is not required to conduct a formal investigation to ensure that such prices are not subsidized. See H.R. Rep. 100-576 at 590 (1988). As such, it is the Department’s practice to base its decision on information that is available to it at the time it makes its determination. 7 The JPC is a joint industry/government board that monitors Indian steel prices. 8 See the submission from U.S. Steel and Maverick regarding surrogate values, dated September 2, 2008, at Exhibit 1. E:\FR\FM\06NON1.SGM 06NON1 66018 Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Notices sroberts on PROD1PC70 with NOTICES they have not provided information demonstrating that these rates apply to the steel products for which they submitted JPC prices. Moreover, the JPC data are not as detailed as the World Trade Atlas (‘‘WTA’’) data. The WTA data include steel prices for several width ranges that cover all of the widths of steel used by both respondents.9 On the other hand, there is no information in the JPC data regarding steel width. Thus, it is not clear whether the JPC prices cover all of the widths of steel used by the respondents. Also, the WTA data include steel prices for various thickness ranges that cover all of the steel thicknesses used by the respondents. JPC data, however, include prices for only a limited number of thicknesses of steel which do not include all of thicknesses of steel used by the respondents.10 Furthermore, the WTA data include separate prices for different types and forms of steel (e.g., stainless, clad, pickled, in coils, not in coils ), whereas it is not clear whether the hot–rolled steel coil and steel plate categories listed in JPC data exclude the types and forms of steel not used by the respondents. The additional details in the WTA data allow the Department to select surrogate values more specific to the steel input used by the respondents. Therefore, we valued the steel input using WTA data. For further detail, see Surrogate Values Memorandum. We valued electricity using price data for small, medium, and large industries, as published by the Central Electricity Authority of the Government of India in its publication titled Electricity Tariff & Duty and Average Rates of Electricity Supply in India, dated July 2006. These electricity rates represent actual country–wide, publicly–available information on tax–exclusive electricity rates charged to industries in India. Since the rates are not contemporaneous with the POI, we inflated the values using the WPI. See Surrogate Values Memorandum at Attachment IV. We valued water using data from the Maharashtra Industrial Development Corporation (www.midcindia.org) because it includes a wide range of industrial water tariffs. This source provides 386 industrial water rates within the Maharashtra province from June 2003, 193 for the ‘‘inside industrial 9 See Shanghai Metal’s September 8, 2008, response at 12 and 33 and Huludao Pipe’s August 27, 2008, response at 14 for the range of widths of the steel purchased. The WTA provides prices for steel of a width of 600mm or more and under 600 mm. 10 See Shanghai Metal’s October 27, 2008, response at 6 and Huludao Pipe’s October 27, 2008, response at 5 for a list of the thicknesses of the steel used by the respondents. VerDate Aug<31>2005 19:11 Nov 05, 2008 Jkt 217001 areas’’ usage category, and 193 for the ‘‘outside industrial areas’’ usage category. We averaged the 386 industrial water rates and because this averaged rate was not contemporaneous with the POI, we inflated the averaged rate using the WPI. See Surrogate Values Memorandum. Consistent with 19 CFR 351.408(c)(3), we valued direct, indirect, and packing labor, using the most recently calculated regression–based wage rate, which relies on 2005 data. This wage rate can be found on the Department’s website on Import Administration’s home page. See Expected Wages of Selected NME Countries (revised May 2008) (available at http://ia.ita.doc.gov/wages/ index.html). The source of these wage rate data is the International Labour Organization, Geneva, Labour Statistics Database Chapter 5B: Wages in Manufacturing. Since this regression– based wage rate does not separate the labor rates into different skill levels or types of labor, we have applied the same wage rate to all skill levels and types of labor reported by Huludao and Shanghai Metals. See Surrogate Values Memorandum. We valued truck freight expenses using a per–unit average rate calculated from data on the following web site: http://www.infobanc.com/logistics/ logtruck.htm. The logistics section of this website contains inland freight truck rates between many large Indian cities. Since this value is not contemporaneous with the POI, we deflated the rate using the WPI. See Surrogate Values Memorandum at Attachment VI. We valued brokerage and handling using a simple average of the brokerage and handling costs that were reported in public submissions that were filed in three antidumping duty cases. Specifically, we averaged the public brokerage and handling expenses reported by: (1) Agro Dutch Industries Ltd. in the antidumping duty administrative review of certain preserved mushrooms from India, (2) Kejirwal Paper Ltd. in the less than fair value investigation of certain lined paper products from India, and (3) Essar Steel in the antidumping duty administrative review of hot–rolled carbon steel flat products from India. See Certain Preserved Mushrooms From India: Final Results of Antidumping Duty Administrative Review, 71 FR 10646 (March 2, 2006); see also, 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 PO 00000 Frm 00009 Fmt 4703 Sfmt 4703 (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), and Certain Hot– Rolled Carbon Steel Flat Products From India: Preliminary Results of Antidumping Duty Administrative Review, 71 FR 2018, 2021 (January 12, 2006) (unchanged in Certain Hot–Rolled Carbon Steel Flat Products From India: Final Results of Antidumping Administrative Review, 71 FR 40694 (July 18, 2006). We inflated the brokerage and handling rate using the appropriate WPI inflator. See Surrogate Values Memorandum. We valued warehousing using rates obtained from the Board of Jawaharlal Nehru Port Trust’s website (http:// www.jnport.gov.in/ CMSPage.aspx?PageID=27), which is a source used in the antidumping duty investigation of pneumatic off–the-road tires from the PRC. See Certain New Pneumatic Off–the-Road Tires From the People’s Republic of China: Notice of Amended Final Affirmative Determination of Sales at Less Than Fair Value and Antidumping Duty Order, 73 FR 51624 (Sept. 4, 2008) and accompanying issues and decision memorandum at Comment 26. See also Surrogate Values Memorandum. We valued international freight using rate quotes from Maersk Sealand (‘‘Maersk’’), a market–economy shipper. See Surrogate Values Memorandum. We valued factory overhead, selling, general, and administrative (‘‘SG&A’’) expenses, and profit, using the financial statements of Jindal Saw Ltd. (‘‘Jindal SAW’’) and Bihar Tubes Limited (‘‘Bihar’’). See Surrogate Values Memorandum. Huludao Pipe submitted the 2006–2007 financial statements of Zenith Birla (India) Limited (‘‘Zenith’’) and Bihar while the Petitioners submitted the 2006–2007 financial statements of Jindal SAW and the 2007– 2008 financial statements TATA Steel Limited (‘‘TATA’’). The Department did not rely upon the financial statements for Zenith because the 2006–2007 statements identify receipt of subsidies under the Duty Entitlement Pass Book scheme, which has been found by the Department to provide a countervailable subsidy. See, e.g., Certain Iron–Metal Castings From India: Preliminary Results and Partial Rescission of Countervailing Duty Administrative Review, 64 FR 61592 (November 12, 1999) (unchanged in final results). In Crawfish from the PRC, the Department discussed its practice with E:\FR\FM\06NON1.SGM 06NON1 Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Notices respect to financial statements that contain evidence of subsidization: {T}he statute directs Commerce to base the valuation of the factors of production on ‘‘the best available information regarding the values of such factors in a market economy country or countries considered to be appropriate . . . .’’ Section 773(c)(1) of the Act. Moreover, in valuing such factors, Congress further directed Commerce to ‘‘avoid using any prices which it has reason to believe or suspect may be dumped or subsidized prices.’’ Omnibus Trade and Competitiveness Act of 1988, H.R. Rep. No. 576, 100 nth Cong., 2 nd Sess., at 590–91 (1988). The Department calculates the financial ratios based on financial statements of companies producing comparable merchandise from the surrogate country, some of which may contain evidence of subsidization. However, where the Department has a reason to believe or suspect that the company may have received subsidies, the Department may consider that the financial ratios derived from that company’s financial statements are less representative of the financial experience of that company or the relevant industry than the ratios derived from financial statements that do not contain evidence of subsidization. Consequently, {those statements that appear to reflect subsidies} do not constitute the best available information to value the surrogate financial ratios.11 Moreover, the Department did not rely upon the financial statements of TATA because TATA uses a production process different from those employed by the respondents. It is the Department’s practice not to use financial statements of a company using a production process different from that employed by a respondent, when other financial statements are available for companies employing a production process similar to that employed by a respondent. See Fresh Garlic from the People’s Republic of China: Final Results of Antidumping Duty Administrative Review, 70 FR 34082 (June 13, 2005) at Comment 5. Given the record information regarding Zenith’s receipt of subsidies, and TATA’s product process, as well as the fact that we have other acceptable financial statements to use as surrogates,12 we have not considered the financial data from these two companies in our financial ratio calculations. Moreover, given both the fact that we have not found either Bihar’s or Jindal SAW’s financial statements to be clearly preferable in this case, and the Department’s preference to use multiple financial statements when they are not distortive or otherwise unreliable, we have determined that these financial statements represent the best information on the record with which to value financial ratios.13 In accordance with 19 CFR 351.301(c)(3)(i), for the final determination in an antidumping duty investigation, interested parties may submit publicly available information with which to value factors of production within 40 days after the date of publication of the preliminary determination. Currency Conversion We made currency conversions into U.S. dollars, in accordance with section 773A(a) of the Act, based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank. Verification As provided in section 782(i)(1) of the Act, we intend to verify the information upon which we will rely in making our final determination. Combination Rates In the Initiation Notice, the Department stated that it would calculate combination rates for certain respondents that are eligible for a separate rate in this investigation. See Initiation Notice. This change in practice is described in Policy Bulletin 05.1: {w}hile continuing the practice of assigning separate rates only to exporters, all separate rates that the Department will now assign in its NME investigations will be specific to those producers that supplied the exporter during the period of investigation. Note, however, that one rate is calculated for the exporter and all of the producers which supplied subject merchandise to it during the period of investigation. This practice applies both to mandatory respondents receiving an individually calculated separate rate as well as the pool of non– investigated firms receiving the weighted–average of the individually calculated rates. This practice is referred to as the application of ‘‘combination rates’’ because such rates apply to specific combinations of exporters and one or more producers. The cash– deposit rate assigned to an exporter will apply only to merchandise both exported by the firm in question and produced by a firm that supplied the exporter during the period of investigation.See Policy Bulletin 05.1, ‘‘Separate Rates Practice and Application of Combination Rates in Antidumping Investigations Involving Non– Market Economy Countries,’’ available at http://ia.ita.doc.gov/. Preliminary Determination The weighted–average dumping margins are as follows: Exporter & Producer Weighted–Average Margin sroberts on PROD1PC70 with NOTICES Huludao Steel Pipe Industrial Co., Ltd./. Huludao City Steel Pipe Industrial Co., Ltd. .............................................................................................................. Produced by: Huludao Steel Pipe Industrial Co., Ltd./ Huludao City Steel Pipe Industrial Co., Ltd.. Shanghai Metals & Minerals Import & Export Corp. d/b/a Shanghai Minmetals Materials & Products Corp. ......... Produced by: Huludao Steel Pipe Industrial Co. Ltd.; Benxi Northern Pipes Co. Ltd.. Benxi Northern Pipes Co., Ltd. .................................................................................................................................. Produced by: Benxi Northern Pipes Co., Ltd.; Tianjin Lianzhong Steel Pipe Co., Ltd.. Pangang Group Beihai Steel Pipe Corporation ........................................................................................................ 11 See Freshwater Crawfish Tail Meat from the People’s Republic of China: Notice of Final Results and Rescission, In Part, of 2004/2005 Antidumping Duty Administrative and New Shipper Reviews, 72 FR 19174 (April 17, 2007) and the accompanying Issues and Decision Memorandum at Comment 1. 12 Although Jindal SAW Ltd.’s financial statement listed ‘‘export benefits/government grants VerDate Aug<31>2005 19:11 Nov 05, 2008 Jkt 217001 receivable,’’ the Department has insufficient information to determine whether these items relate to programs that have been countervailed. 13 See, e.g., Folding Metal Tables and Chairs from the People’s Republic of China: Final Results of Antidumping Duty Administrative Review, 72 FR 71355 (December 17, 2007) and accompanying Issues and Decision Memorandum at Comment 1c PO 00000 Frm 00010 Fmt 4703 66019 Sfmt 4703 67.83% 81.52% 74.68% 74.68% and Final Results of New Shipper Review: Certain Preserved Mushrooms From the People’s Republic of China, 66 FR 45006 (August 27, 2001), and accompanying Issues and Decision Memorandum at Comment 1. E:\FR\FM\06NON1.SGM 06NON1 66020 Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Notices Exporter & Producer Weighted–Average Margin Produced by: Pangang Group Beihai Steel Pipe Corporation. Jiangsu Yulong Steel Pipe Co., Ltd. ......................................................................................................................... Produced by: Jiangsu Yulong Steel Pipe Co., Ltd.. Tianjin Xingyuda Import and Export Co., Ltd. ........................................................................................................... Produced by: Tianjin Lifengyuanda Steel Pipe Group Co., Ltd.. PRC–Wide Rate ........................................................................................................................................................ Disclosure We will disclose the calculations performed within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b). sroberts on PROD1PC70 with NOTICES Suspension of Liquidation In accordance with section 733(d) of the Act, we will instruct U.S. Customs and Border protection (‘‘CBP’’) to suspend liquidation of all entries of welded line pipe from the PRC as described in the ‘‘Scope of Investigation’’ section, entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. We will instruct CBP to require a cash deposit or the posting of a bond equal to the weighted–average amount by which the normal value exceeds U.S. price, as follows: (1) the rate for the exporter/producer combinations listed in the chart above will be the rate we have determined in this preliminary determination; (2) for all PRC exporters of subject merchandise which have not received their own rate, the cash–deposit rate will be the PRC–wide rate; and (3) for all non–PRC exporters of subject merchandise which have not received their own rate, the cash–deposit rate will be the rate applicable to the PRC exporter/producer combination that supplied that non–PRC exporter. These suspension–of-liquidation instructions will remain in effect until further notice. International Trade Commission Notification In accordance with section 733(f) of the Act, we have notified the ITC of our preliminary affirmative determination of sales at LTFV. Section 735(b)(2) of the Act requires the ITC to make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of welded line pipe, or sales (or the likelihood of sales) for importation, of the subject merchandise within 45 days of our final determination. Public Comment Case briefs or other written comments may be submitted to the Assistant VerDate Aug<31>2005 19:11 Nov 05, 2008 Jkt 217001 Secretary for Import Administration no later than seven days after the date the final verification report is issued in this proceeding and rebuttal briefs, limited to issues raised in case briefs, no later than five days after the deadline for submitting case briefs. See 19 CFR 351.309(c)(1)(i) and 19 CFR 351.309(d)(1). A list of authorities used and an executive summary of issues should accompany any briefs submitted to the Department. This summary should be limited to five pages total, including footnotes. In accordance with section 774 of the Act, we will hold a public hearing, if requested, to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs. If a request for a hearing is made, we intend to hold the hearing three days after the deadline of submission of rebuttal briefs at the U.S. Department of Commerce, 14th Street and Constitution Ave, NW, Washington, DC 20230, at a time and location to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date. Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request to the Assistant Secretary for Import Administration, U.S. Department of Commerce, Room 1870, within 30 days after the date of publication of this notice. See 19 CFR 351.310(c). Requests should contain the party’s name, address, and telephone number, the number of participants, and a list of the issues to be discussed. At the hearing, each party may make an affirmative presentation only on issues raised in that party’s case brief and may make rebuttal presentations only on arguments included in that party’s rebuttal brief. Postponement of Final Determination and Extension of Provisional Measures Pursuant to section 735(a)(2) of the Act, on October 3, 2008, Shanghai Metals requested that in the event of an affirmative preliminary determination in this investigation, the Department postpone its final determination by 60 days. At the same time, Shanghai Metals agreed that the Department may extend the application of the provisional PO 00000 Frm 00011 Fmt 4703 Sfmt 4703 74.68% 74.68% 81.52% measures prescribed under 19 CFR 351.210(e)(2) from a 4-month period to a 6-month period. In accordance with section 733(d) of the Act and 19 CFR 351.210(b), we are granting the request and are postponing the final determination until no later than 135 days after the publication of this notice in the Federal Register because: (1) our preliminary determination is affirmative, (2) the requesting exporters account for a significant proportion of exports of the subject merchandise, and (3) no compelling reasons for denial exist. Suspension of liquidation will be extended accordingly. This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act. Dated: October 30, 2008. David M. Spooner, Assistant Secretary for Import Administration. [FR Doc. E8–26503 Filed 11–5–08; 8:45 am] BILLING CODE 3510–DS–S DEPARTMENT OF COMMERCE International Trade Administration (A–580–861) Preliminary Determination of Sales at Less Than Fair Value and Postponement of the Final Determination: Certain Circular Welded Carbon Quality Steel Line Pipe from the Republic of Korea Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: November 6, 2008. SUMMARY: The U.S. Department of Commerce (the Department) preliminarily determines that certain circular welded carbon quality steel line pipe (welded line pipe) from the Republic of Korea (Korea) is being, or is likely to be, sold in the United States at less than fair value (LTFV), as provided in section 733(b) of the Tariff Act of 1930, as amended (the Act). The estimated margins of sales at LTFV are listed in the ‘‘Suspension of Liquidation’’ section of this notice. Interested parties are invited to comment on this preliminary determination in accordance with the AGENCY: E:\FR\FM\06NON1.SGM 06NON1

Agencies

[Federal Register Volume 73, Number 216 (Thursday, November 6, 2008)]
[Notices]
[Pages 66012-66020]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-26503]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-570-935)


Certain Circular Welded Carbon Quality Steel Line Pipe from the 
People's Republic of China: 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: November 6, 2008.
SUMMARY: The Department of Commerce (``Department'') preliminarily 
determines that certain circular welded carbon quality steel welded 
line pipe (``welded line pipe'') 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 dumping 
margins are shown in the ``Preliminary Determination'' section of this 
notice.

FOR FURTHER INFORMATION CONTACT: Jeff Pedersen or Rebecca Pandolph, AD/
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-
2769 or 482-3627, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On April 3, 2008, the Department received a petition concerning 
imports of welded line pipe from the PRC and the Republic of Korea 
(``Korea'') filed in proper form by United States Steel Corporation 
(``U.S. Steel''), Maverick Tube Corporation (``Maverick''), Tex-Tube 
Company (``Tex-Tube''), and the United Steel, Paper and Forestry, 
Rubber, Manufacturing, Energy, Allied Industrial and Service Workers 
International Union, and AFL-CIO-CLC (``United Steelworkers'') 
(collectively, ``Petitioners''). See Imposition of Antidumping and 
Countervailing Duties: Certain Circular Welded Carbon Quality Steel 
Line Pipe from the People's Republic of China and the Republic of 
Korea, dated April 3, 2008 (in four volumes) (``Petition''). On April 
23, 2008, the Department initiated antidumping duty investigations of 
welded line pipe from the above-mentioned countries. See Certain 
Circular Welded Carbon Quality Steel Line Pipe From the Republic of 
Korea and the People's Republic of China: Initiation of Antidumping 
Duty Investigations, 73 FR 23188 (April 29, 2008) (``Initiation 
Notice'').
    Also, on April 23, 2008, the Department issued a quantity and value 
(``Q&V'') questionnaire to each of the 65 companies identified by the 
Petitioners as potential exporters or producers of welded line pipe 
from the PRC. See supplement to the petition at Exhibit II-Supp I, 
dated April 14, 2008. The Department received timely responses to its 
Q&V questionnaire from the following nine companies: Benxi Northern 
Steel Pipes Co., Ltd. (``Benxi''); Huludao Steel Pipe Industrial Co., 
Ltd.(``Huludao Pipe''); Pangang Group Behai Pipe Corporation 
(``Pangang''); Shanghai Metals & Minerals Import & Export Corp. d/b/a 
Shanghai Minmetals Materials & Products Corp. (``Shanghai

[[Page 66013]]

Metals''); Tianjin Xingyuda Import and Export Company (``Tianjin''); 
Nanjing HuaDong Steel Pipes Manufacturing Co., Ltd. (``Nanjing''); 
Shashi Steel Pipe Works, SINOPEC (``Shashi''); Xuzhou Guanghuan Steel 
Tube Co., Ltd. (``Xuzhou''); and Jiangsu Yulong Steel Pipe Co., Ltd. 
(``Jiangsu Yulong''). On May 20, 2008, the Department rejected the Q&V 
responses submitted by Nanjing, Shashi, Xuzhou, and Jiangsu Yulong 
because they were improperly filed. The Department requested that 
Nanjing, Shashi, Xuzhou, and Jiangsu Yulong correct certain filing 
deficiencies. See Letters to Nanjing, Shashi, Xuzhou, and Jiangsu 
Yulong, dated May 20, 2008. The Department received information 
indicating that Nanjing, Shashi, and Xuzhou had received the 
Department's May 20, 2008, letter, but Nanjing, Shashi, and Xuzhou did 
not refile their submissions. The Department did not have any 
information to whether Jiangsu Yulong had received the May 20, 2008, 
letter and on July 15, 2008, the Department sent a letter to Jiangsu 
Yulong requesting that it explain why it had failed to respond to the 
Department's May 20, 2008, letter, in which the Department requested 
that the company properly refile its Q&V response. See Letter to Ms. 
Tang Wei-jun regarding, Circular Welded Carbon Quality Steel Line Pipe 
from the People's Republic of China, dated July 15, 2008. On July 28, 
2008, Jiangsu Yulong resubmitted its Q&V response and explained that it 
had not responded to the Department's May 20, 2008, letter concerning 
its improperly filed Q&V response because it had not received the 
letter. See Letter to the Department from Jiangsu Yulong, dated July 
28, 2008.
    On May 13, 2008, the Department received product matching comments 
from one of the Petitioners, Maverick, and scope comments from 
Wheatland Tube Company (``Wheatland''), a domestic producer. See the 
``Scope Comments'' section of this notice for further details. On May 
27, 2008, the Department received comments from Maverick on the record 
of this investigation rebutting model matching comments submitted in 
the Korean investigation of welded line pipe.
    On May 16, 2008, the International Trade Commission (``ITC'') 
preliminarily determined 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 welded line pipe from the PRC 
and Korea. See Certain Circular Welded Carbon Quality Steel Line Pipe 
from China and Korea, Investigation Nos. 701-TA-455 and 731-TA-1149-
1150 (Preliminary), 73 FR 31712 (June 3, 2008).
    On May 27, 2008, the Department received comments from Maverick 
regarding respondent selection. No other party submitted comments 
regarding respondent selection.
    The Department received separate rate applications from Huludao 
Pipe on June 23, 2008, and from Benxi, Pangang, Shanghai Metals, 
Tianjin, and Jiangsu Yulong on June 30, 2008.
    On June 3, 2008, and July 9, 2008, the Department selected Huludao 
Pipe and Shanghai Metals, respectively, as mandatory respondents. See 
Memoranda to File: ``Respondent Selection in the Antidumping Duty 
Investigation of Circular Welded Carbon Quality Steel Line Pipe (welded 
line pipe) from the People's Republic of China (PRC),'' from Rebecca 
Pandolph through Howard Smith and Abdelali Elouradia, dated June 3, 
2008, and ``Amendment to Respondent Selection in the Antidumping Duty 
Investigation of Circular Welded Carbon Quality Steel Line Pipe from 
the People's Republic of China,'' from Jeffrey Pedersen and Rebecca 
Pandolph through Howard Smith and Abdelali Elouradia, dated July 9, 
2008.
    The Department issued its antidumping questionnaire to Huludao Pipe 
and Shanghai Metals on June 4, 2008, and July 9, 2008, respectively. 
The Department issued supplemental questionnaires to, and received 
responses from, the mandatory and separate rate respondents from July 
2008 through October 2008. The Petitioners submitted comments to the 
Department regarding the questionnaire and supplemental questionnaire 
responses of the mandatory and separate rate respondents from July 2008 
through September 2008.
    On July 29, 2008, the Department released to interested parties a 
memorandum which listed potential surrogate countries and invited 
interested parties to comment on surrogate country and factor value 
selection. See Letter to All Interested Parties from Howard Smith, 
Program Manager, Office 4, concerning ``Antidumping Duty Investigation 
of Circular Welded Carbon Quality Steel Line Pipe from the People's 
Republic of China,'' dated July 29, 2008.
    On August 8, 2008, Maverick and U.S. Steel, two of the petitioning 
firms, submitted comments on surrogate country selection in which they 
both recommended selecting India as the surrogate country in this 
investigation. See Letter from Maverick, regarding Certain Circular 
Welded Carbon Quality Steel Line Pipe from the People's Republic of 
China: Comments on the Proper Surrogate Country, dated August 8, 2008, 
and Letter from U.S. Steel, regarding Circular Welded Carbon Quality 
Steel Line Pipe from the People's Republic of China: Surrogate Country 
Selection, dated August 8, 2008.
    On August 12, 2008, Maverick and U.S. Steel requested postponement 
of the preliminary determination. On August 21, 2008, the Department 
extended this preliminary determination by fifty days. See Certain 
Circular Welded Carbon Quality Steel Line Pipe from the Republic of 
Korea and the People's Republic of China: Postponement of Preliminary 
Determination of Antidumping Duty Investigation, 73 FR 50941 (August 
29, 2008).
    On October 3, 2008, Shanghai Metals requested that the Department 
extend the final determination in this case. See the ``Postponement of 
Final Determination and Extension of Provisional Measures'' section of 
this notice below.
    On September 2 and September 9, 2008, the Petitioners and Huludao 
Pipe submitted comments on, and calculations for, the surrogate values. 
On September 15, 2008, Petitioners and Huludao Pipe submitted rebuttal 
comments regarding surrogate values. The submitted surrogate value data 
are from India.
    On September 30, 2008, the Petitioners and Huludao Pipe submitted 
comments to be considered in the Department's preliminary 
determination.

Period of Investigation

    The period of investigation (``POI'') is October 1, 2007, through 
March 31, 2008. This period comprises the two most recently completed 
fiscal quarters as of the month preceding the month in which the 
petition was filed (i.e., April 2008). See 19 CFR 351.204(b)(1).

Scope of the Investigation

    The merchandise covered by this investigation is circular welded 
carbon quality steel pipe of a kind used for oil and gas pipelines 
(welded line pipe), not more than 406.4 mm (16 inches) in outside 
diameter, regardless of wall thickness, length, surface finish, end 
finish or stenciling.
    The term ``carbon quality steel'' includes both carbon steel and 
carbon steel mixed with small amounts of alloying elements that may 
exceed the individual weight limits for nonalloy steels imposed in the 
Harmonized Tariff Schedule of the United States (``HTSUS''). 
Specifically, the term

[[Page 66014]]

``carbon quality'' includes products in which (1) iron predominates by 
weight over each of the other contained elements, (2) the carbon 
content is 2 percent or less by weight and (3) none of the elements 
listed below exceeds the quantity by weight respectively indicated:
(i) 2.00 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) 0.012 percent of boron,
(xi) 0.50 percent of molybdenum,
(xii) 0.15 percent of niobium,
(xiii) 0.41 percent of titanium,
(xiv) 0.15 percent of vanadium, or
(xv) 0.15 percent of zirconium.
    Welded line pipe is normally produced to specifications published 
by the American Petroleum Institute (``API'') (or comparable foreign 
specifications) including API A-25, 5LA, 5LB, and X grades from 42 and 
above, and/or any other proprietary grades or non-graded material. 
Nevertheless, all pipe meeting the physical description set forth above 
that is of a kind used in oil and gas pipelines, including all 
multiple-stenciled pipe with an API welded line pipe stencil is covered 
by the scope of this investigation.
    Excluded from this scope are pipes of a kind used for oil and gas 
pipelines that are multiple-stenciled to a standard and/or structural 
specification and have 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 term ``painted'' does not 
include coatings to inhibit rust in transit, such as varnish, but 
includes coatings such as polyester.)
    The welded line pipe products that are the subject of these 
investigations are currently classifiable in the HTSUS under 
subheadings 7306.19.10.10, 7306.19.10.50, 7306.19.51.10, and 
7306.19.51.50. While HTSUS subheadings are provided for convenience and 
customs purposes, the written description of the scope of these 
investigations is dispositive.

Scope Comments

    In the Initiation Notice, the Department stated that the scope of 
the welded line pipe investigations may cover certain merchandise 
potentially subject to the on-going antidumping duty and countervailing 
duty investigations of circular welded pipe (``CWP'') from the PRC. The 
Department went on to note in the Initiation Notice that once certain 
scope issues in the CWP investigations have been resolved, it intended 
to reexamine the welded line pipe scope language to ensure that there 
was no overlap between the scope of the CWP and welded line pipe 
investigations. See Initiation Notice, 73 FR 23188, 23189. Moreover, in 
accordance with the preamble to the Department's regulations, the 
Department stated in the Initiation Notice that it would set aside a 
period of time 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. The 
Department received scope comments from Wheatland, a domestic producer, 
requesting that the Department modify the welded line pipe scope to 
take into account the scope definition ultimately set out in the CWP 
investigations. See Letter from Wheatland, regarding Comments on Scope 
of Investigations, dated May 13, 2008.
    Given that the scope issue in the CWP investigation has been 
resolved, we have modified the scope of the welded line pipe 
investigations to eliminate the overlap that existed between the CWP 
and welded line pipe investigations. Specifically, we added the 
following language to the scope description:\1\
---------------------------------------------------------------------------

    \1\ See Memorandum to Stephen J. Claeys, Deputy Assistant 
Secretary for Import Administration, from Abdelali Elouaradia, 
Director, Office 4 Operations, regarding ``Antidumping and 
Countervailing Duty Investigations of Circular Welded Carbon Quality 
Steel Line Pipe from the People's Republic of China: Scope 
Modification,'' dated August 29, 2008 (``Scope Modification 
Memorandum'').
---------------------------------------------------------------------------

    Excluded from this scope are pipes of a kind used for oil and gas 
pipelines that are multiple-stenciled to a standard and/or structural 
specification and have one or more of the following characteristics:\2\ 
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 term ``painted'' does 
not include coatings to inhibit rust in transit, such as varnish, but 
includes coatings such as polyester.)
---------------------------------------------------------------------------

    \2\ This sentence differs from the language contained in the 
Scope Modification Memorandum''. The language in the Scope 
Modification Memorandum is as follows: ``Excluded from this scope 
are pipes that are multiple-stenciled to a standard and/or 
structural specification and to any other specification, such as the 
API-5L specification, when it also has one or more of the following 
characteristics.''
---------------------------------------------------------------------------

Non-Market Economy Treatment

    The Department considers the PRC to be a non-market economy 
(``NME'') country. In accordance with section 771(18)(C)(i) of the Act, 
any determination that a country is an NME country shall remain in 
effect until revoked by the administering authority. See Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished, From the People's 
Republic of China: Preliminary Results of 2001-2002 Administrative 
Review and Partial Rescission of Review, 68 FR 7500 (February 14, 
2003), unchanged in Tapered Roller Bearings and Parts Thereof, Finished 
and Unfinished, from the People's Republic of China: Final Results of 
2001-2002 Administrative Review and Partial Rescission of Review, 68 FR 
70488 (December 18, 2003). The Department has not revoked the PRC's 
status as an NME country. Therefore, in this preliminary determination, 
we continued to treat the PRC as an NME country and apply our current 
NME methodology.

Selection of a Surrogate Country

    In an investigation involving imports from NME countries, section 
773(c)(1) of the Act directs the Department to generally base normal 
value (``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.
    The Department has determined that Colombia, India, Indonesia, the 
Philippines, and Thailand are countries that are at a level of economic 
development comparable to that of the PRC. See Memorandum regarding 
``Antidumping Duty Investigation of Circular Welded Carbon Quality 
Steel Line Pipe from the People's Republic of China: Request for a List 
of Surrogate Countries,'' dated May 27, 2008 (``Policy Memorandum''). 
From among these economically comparable countries, the Department has 
preliminarily selected India as the surrogate country for this 
investigation because it determined that: (1) India is a significant 
producer of merchandise comparable to the subject merchandise and (2) 
reliable Indian data for valuing the factors of production are

[[Page 66015]]

readily available. See Memorandum to Abdelali Elouaradia, Office 
Director, through Howard Smith, Program Manager, from Jeffrey Pedersen 
and Rebecca Pandolph, International Trade Compliance Specialists, 
concerning ``Antidumping Duty Investigation of Circular Welded Carbon 
Quality Steel Line Pipe from the People's Republic of China: Selection 
of a Surrogate Country,'' dated September 22, 2008.

Separate Rates

    In the Initiation Notice, the Department notified parties of the 
recent application process by which exporters and producers may obtain 
separate-rate status in NME investigations. See Initiation Notice, 73 
FR 23188, 23193. The process requires exporters and producers to submit 
a separate-rate status application. See also Policy Bulletin 05.1: 
Separate-Rates Practice and Application of Combination Rates in 
Antidumping Investigations involving Non-Market Economy Countries, 
(April 5, 2005), available at http://ia.ita.doc.gov (Policy Bulletin 
05.1).\3\ 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.
---------------------------------------------------------------------------

    \3\ Policy Bulletin 05.1 states: ``while continuing the practice 
of assigning separate rates only to exporters, all separate rates 
that the Department will now assign in its NME investigations will 
be specific to those producers that supplied the exporter during the 
period of investigation. Note, however, that one rate is calculated 
for the exporter and all of the producers which supplied subject 
merchandise to it during the period of investigation. This practice 
applied both to mandatory respondents receiving an individually 
calculated separate rate as well as the pool of non-investigated 
firms receiving the weighted-average of the individually calculated 
rates. This practice is referred to as the application of 
``combination rates'' because such rates apply to specific 
combinations of exporters and one or more producers. The cash-
deposit rate assigned to an exporter will apply only to merchandise 
both exported by the firm in question and produced by a firm that 
supplied the exporter during the period of investigation.'' See 
Policy Bulletin 05.1 at 6.
---------------------------------------------------------------------------

    In proceedings involving NME countries, the Department has a 
rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty rate. It is the Department's policy to assign all 
exporters of merchandise subject to investigation in an NME country 
this single rate unless an exporter can demonstrate that it is 
sufficiently independent so as to be entitled to a separate rate. 
Exporters can demonstrate this independence through the absence of both 
de jure and de facto governmental control over export activities. 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''). However, if the Department determines that a 
company is wholly foreign-owned or located in a market economy, then a 
separate rate analysis is not necessary to determine whether it is 
independent from government control.

A. Separate Rate Applicants

Joint Ventures Between Chinese and Foreign Companies or Wholly Chinese-
Owned Companies
    All of the separate rate applicants in this investigation, 
including the mandatory respondents Huludao Pipe and Shanghai Metals, 
stated that they are either joint ventures between Chinese and foreign 
companies or are wholly Chinese-owned companies (collectively, ``PRC SR 
Applicants''). Therefore, the Department must analyze whether these 
respondents can demonstrate the absence of both de jure and de facto 
governmental control over export activities.
a. 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 20589 at Comment 1.
    The evidence provided by Benxi, Huludao Pipe, Pangang, Shanghai 
Metals, Tianjin, and Jiangsu Yulong supports a preliminary finding of 
de jure absence of governmental control based on the following: (1) an 
absence of restrictive stipulations associated with the individual 
exporters' business and export licenses; (2) there are applicable 
legislative enactments decentralizing control of the companies; and (3) 
and there are formal measures by the government decentralizing control 
of companies. See e.g. Huludao's June 23, 2008 Separate Rate 
Application (``Huludao SRA'') and Benxi's June 23, 2008 Separate Rate 
Application (``Benxi SRA'').
b. 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 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent 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.
    The Petitioners argue that Shanghai Metals, Benxi, and Pangang are 
directly or indirectly controlled by the PRC government and should, 
therefore, not be granted separate rates. For example, the Petitioners 
maintain that Shanghai Metals was a state-owned enterprise during the 
POI and that two of its employees were former employees of the PRC 
government. See Letter from U.S. Steel regarding ``Certain Circular 
Welded Carbon Quality Line Pipe From the People's Republic of China,'' 
dated August 15, 2008. Accordingly, the Petitioners argue that these 
three entities are ineligible for a separate rate. See Letters from 
Maverick and U.S. Steel, dated July 15, 2008, regarding Shanghai 
Metal's, Benxi's, and Pangang's separate rate applications. However, 
the Department has previously granted separate rate status to both 
wholly state-owned producers and producers whose stock was partially 
owned by a government state assets management company when evidence of 
actual government control was not present. See Lightweight Thermal 
Paper From the People's Republic of China: Final Determination of Sales 
at Less Than Fair Value, 73 FR 57329 (October 2, 2008) and the 
accompanying Issues and Decisions Memorandum at Comment 7. Absent 
evidence of de facto control over export

[[Page 66016]]

activities, government ownership alone does not warrant denying a 
company a separate rate.\4\ The Petitioners have not provided any 
evidence of government participation in the export decisions of the 
directors and or managers of Shanghai Metals, Benxi, or Pangang.
---------------------------------------------------------------------------

    \4\ See Notice of Preliminary Determination of Sales at Less 
than Fair Value and Postponement of Final Determination : Structural 
Steel Beams from the People's Republic of China, 66 FR 67197 
(December 28, 2008) (unchanged in Notice of Final Determination of 
Sales at Less than Fair Value : Structural Steel Beams from the 
People's Republic of China, 67 FR 35479 (May 20, 2002)), stating 
``The petitioners in this case argue that, because Maanshan is 63 
percent owned by a holding company which is, in turn, wholly owned 
by the Anhui provincial government, and because certain managers of 
the holding company also serve on the board of directors of 
Maanshan, the respondent is ineligible for a separate rate due to 
potential government control. However, the petitioners have not 
submitted any specific evidence indicating that the conditions for 
de facto control exist. As stated in the Silicon Carbide, 59 FR at 
22587, ownership of the company by a state-owned enterprise does not 
require the application of a single rate. Therefore, based on the 
information provided, we preliminarily determine that there is an 
absence of de facto governmental control of Maanshan's export 
functions. Consequently, we preliminarily determine that the 
respondent has met the criteria for the application of a separate 
rate.''
---------------------------------------------------------------------------

    We preliminarily determine that the evidence placed on the record 
of this investigation by all of the PRC SR Applicants demonstrates an 
absence of de facto government control of exports of the merchandise 
under investigation, in accordance with the criteria identified in 
Sparklers and Silicon Carbide. Shanghai Metals, Benxi, and Pangang all 
certified that their export prices are not set by, subject to the 
approval of, or in any way controlled by a government entity at any 
level and that they have independent authority to negotiate and sign 
export contracts, providing price negotiation documents for their first 
U.S. sale. See, e.g., Shanghai Metals' June 30, 2008, Separate Rate 
Application (``Shanghai Metals SRA''), Benxi SRA, dated June 30, 2008, 
and Pangang's July 1, 2008, Separate Rate Application (``Pangang 
SRA''). Shanghai Metals also reported that according to its articles of 
association, the general assembly of employee representatives has the 
right to select the general manager and to decide how profits will be 
distributed. See Shanghai Metals SRA, dated June 30, 2008, at 14-16. 
Benxi reported that according to its articles of association, its board 
of directors has the right to appoint the general manager and to decide 
how profits will be distributed. See Benxi SRA, dated June 30, 2008, at 
13-15. Pangang submitted a board resolution and an internal notice of a 
new appointment which demonstrates its independent selection of 
management. See Pangang SRA, dated July 1, 2008, at Exhibit 10. 
Moreover, Shanghai Metals reported that neither of the two employees 
named by the Petitioners worked for the PRC government and it provided 
the employment history for the two employees. See Letter from Shanghai 
Metals regarding ``Circular Welded Carbon Quality Line Pipe from China-
Response to Petitioners' Allegations,'' dated August 25, 2008. 
Additionally, the other PRC SR applicants all submitted evidence that 
supports a preliminary finding of de facto absence of governmental 
control. See, e.g., Huludao Pipe SRA, dated June 23, 2008, Jiangsu 
Yulong's June 30, 2008, Separate Rate Application and Tianjin's June 
30, 2008 Separate Rate Application. Thus, we preliminarily determine 
that there is an absence of both de jure and de facto government 
control with respect to each of the PRC SR Applicants.
    Therefore, the Department has preliminarily granted separate rate 
status to the following companies: Benxi, Huludao Pipe, Pangang, 
Shanghai Metals, Tianjin, and Jiangsu Yulong. The Department has 
calculated company-specific dumping margins for the two mandatory 
respondents, Huludao Pipe and Shanghai Metals, and assigned the other 
companies that have been granted a separate rate a dumping margin equal 
to a simple average of the dumping margins calculated for the two 
mandatory respondents.

B. Companies Not Receiving a Separate Rate

    The Department has determined that all parties applying for a 
separate rate in this segment of the proceeding have demonstrated an 
absence of government control both in law and in fact (see discussion 
above), and is, therefore, granting separate rate status to all 
applicants.

The PRC-Wide Entity

    Although PRC exporters of subject merchandise to the United States 
were given an opportunity to provide Q&V information to the Department, 
not all exporters responded to the Department's request for Q&V 
information.\5\ Based upon our knowledge of the volume of imports of 
subject merchandise from the PRC, we have concluded that the companies 
that responded to the Q&V questionnaire do not account for all U.S. 
imports of subject merchandise from the PRC made during the POI. We 
have treated the non-responsive PRC producers/exporters as part of the 
PRC-wide entity because they did not qualify for a separate rate.
---------------------------------------------------------------------------

    \5\ The Department received only 9 timely responses to the 
requests for Q&V information that it sent to 65 potential exporters 
identified in the petition.
---------------------------------------------------------------------------

    Section 776(a)(2) of the Act provides that the Department shall, 
subject to subsection 782(d) of the Act, use facts otherwise available 
in reaching the applicable determination if an interested party: (A) 
withholds information that has been requested by the Department; (B) 
fails to provide such information in a timely manner or in the form or 
manner requested, subject to subsections 782(c)(1) and (e) of the Act; 
(C) significantly impedes a proceeding under the antidumping statute; 
or (D) provides such information but the information cannot be 
verified.
    As noted above, the PRC-wide entity withheld information requested 
by the Department. As a result, pursuant to section 776(a)(2)(A) of the 
Act, we find it appropriate to base the PRC-wide dumping margin on 
facts available. See Notice of 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 Notice of Final Antidumping Duty 
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 
Notice of 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); see also Statement of 
Administrative Action, accompanying the Uruguay Round Agreements Act , 
H.R. Rep. No. 103-316, Vol. I at 843 (1994) (``SAA''), reprinted in 
1994 U.S.C.C.A.N. 4040 at 870. Because the PRC-wide entity did not 
respond to the Department's request for information, the Department has 
concluded that the PRC-wide entity 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.
    Section 776(b) of the Act authorizes the Department to use, as 
adverse facts available (``AFA''): (1) information derived from the 
petition; (2) the final determination from the LTFV

[[Page 66017]]

investigation; (3) a previous administrative review; or (4) 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 (February 23, 1998). It is the Department's practice 
to select, as AFA, the higher of: (a) the 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 31, 2000) and 
accompanying Issues and Decisions Memorandum at Facts Available. Here, 
we assigned the PRC-wide entity the dumping margin calculated for 
Shanghai Metals, which exceeds the highest margin alleged in the 
petition and is the highest rate calculated in this investigation. 
Pursuant to section 776(c) of the Act, we do not need to corroborate 
this rate because it is based on information obtained during the course 
of this investigation rather than secondary information. See also SAA 
at 870. The PRC-wide dumping margin applies to all entries of the 
merchandise under investigation except for entries of subject 
merchandise from Benxi, Huludao Pipe, Pangang, Shanghai Metals, 
Tianjin, and Jiangsu Yulong.

Fair Value Comparisons

    To determine whether Huludao Pipe or Shanghai Metals sold welded 
line pipe to the United States at LTFV, we compared the weighted-
average export price (``EP'') of the welded line pipe to the NV of 
welded line pipe, as described in the ``U.S. Price'' and ``Normal 
Value'' sections of this notice.

U.S. Price

    In accordance with section 772(a) of the Act, for both Huludao Pipe 
and Shanghai Metals, we based the U.S. price of sales on EP because the 
first sale to unaffiliated purchasers was made prior to importation and 
the use of constructed export price was not otherwise warranted. In 
accordance with section 772(c) of the Act, we calculated EP for Huludao 
Pipe by deducting the following expenses from the starting price (gross 
unit price) charged to the first unaffiliated customer in the United 
States: foreign movement expenses, international freight, foreign 
warehousing, and foreign brokerage and handling expenses. For Shanghai 
Metals, we calculated EP by deducting foreign movement expenses and 
foreign brokerage and handling expenses from the starting price charged 
to the first unaffiliated customer in the United States.
    We based these movement expenses on surrogate values where the 
service was purchased from a PRC company. For details regarding our EP 
calculation, see Analysis Memoranda for Huludao Pipe and Shanghai 
Metals, dated October 30, 2008.

Normal Value

    In accordance with section 773(c) of the Act, we constructed NV 
from the factors of production employed by the respondents to 
manufacture subject merchandise during the POI. Specifically, we 
calculated NV by adding together the value of the factors of 
production, general expenses, profit, and packing costs. We valued the 
factors of production using prices and financial statements from the 
surrogate country, India. In selecting surrogate values, we followed, 
to the extent practicable, the Department's practice of choosing values 
which are non-export average values, contemporaneous with, or closest 
in time to, the POI, product-specific, and tax-exclusive. See, e.g., 
Notice of Preliminary 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). We 
also considered the quality of the source of surrogate information in 
selecting surrogate values.
    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 
factor from Indian import statistics. In addition, we added freight 
costs to the surrogate costs that we calculated for material inputs. We 
calculated freight costs by multiplying surrogate freight rates by the 
shorter of the reported distance from the domestic supplier to the 
factory that produced the subject merchandise or the distance from the 
nearest seaport to the factory that produced the subject merchandise, 
as 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, 1407-08 (Fed. Cir. 1997). Where we could only 
obtain surrogate values that were not contemporaneous with the POI, we 
inflated (or deflated) the surrogate values using the Indian Wholesale 
Price Index (``WPI'') as published in the International Financial 
Statistics of the International Monetary Fund.
    Further, in calculating surrogate values from Indian imports, we 
disregarded imports from Indonesia, South Korea, and Thailand because 
in other proceedings the Department found that these countries maintain 
broadly available, non-industry-specific export subsidies. 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.\6\ Thus, we 
have not used prices from these countries in calculating the Indian 
import-based surrogate values.
---------------------------------------------------------------------------

    \6\ In addition, we note that legislative history explains that 
the Department is not required to conduct a formal investigation to 
ensure that such prices are not subsidized. See H.R. Rep. 100-576 at 
590 (1988). As such, it is the Department's practice to base its 
decision on information that is available to it at the time it makes 
its determination.
---------------------------------------------------------------------------

    We valued raw materials, scrap, and packing materials using Indian 
import statistics. See the memoranda to the File regarding 
``Investigation of Circular Welded Carbon Quality Steel Line Pipe from 
the People's Republic of China: Surrogate Values Memorandum'' for 
Huludao Pipe and Shanghai Metals, dated concurrently with this notice 
(``Surrogate Values Memorandum''). Although the Petitioners requested 
that the Department value the steel input using data from the India 
Joint Plant Committee (``JPC'')\7\ the Department has not used these 
data. The footnotes to the JPC price sheets that were provided by the 
petitioners state that ``{a{time} ll prices are inclusive of Excise 
Duty & Sales/Vat Tax.''\8\ As noted above, the Department prefers to 
value factors of production using tax-exclusive prices. While 
Petitioners have provided tax rates used by the Department in other 
antidumping cases to adjust JPC prices for wire rod,

[[Page 66018]]

they have not provided information demonstrating that these rates apply 
to the steel products for which they submitted JPC prices. Moreover, 
the JPC data are not as detailed as the World Trade Atlas (``WTA'') 
data. The WTA data include steel prices for several width ranges that 
cover all of the widths of steel used by both respondents.\9\ On the 
other hand, there is no information in the JPC data regarding steel 
width. Thus, it is not clear whether the JPC prices cover all of the 
widths of steel used by the respondents. Also, the WTA data include 
steel prices for various thickness ranges that cover all of the steel 
thicknesses used by the respondents. JPC data, however, include prices 
for only a limited number of thicknesses of steel which do not include 
all of thicknesses of steel used by the respondents.\10\ Furthermore, 
the WTA data include separate prices for different types and forms of 
steel (e.g., stainless, clad, pickled, in coils, not in coils ), 
whereas it is not clear whether the hot-rolled steel coil and steel 
plate categories listed in JPC data exclude the types and forms of 
steel not used by the respondents. The additional details in the WTA 
data allow the Department to select surrogate values more specific to 
the steel input used by the respondents. Therefore, we valued the steel 
input using WTA data. For further detail, see Surrogate Values 
Memorandum.
---------------------------------------------------------------------------

    \7\ The JPC is a joint industry/government board that monitors 
Indian steel prices.
    \8\ See the submission from U.S. Steel and Maverick regarding 
surrogate values, dated September 2, 2008, at Exhibit 1.
    \9\ See Shanghai Metal's September 8, 2008, response at 12 and 
33 and Huludao Pipe's August 27, 2008, response at 14 for the range 
of widths of the steel purchased. The WTA provides prices for steel 
of a width of 600mm or more and under 600 mm.
    \10\ See Shanghai Metal's October 27, 2008, response at 6 and 
Huludao Pipe's October 27, 2008, response at 5 for a list of the 
thicknesses of the steel used by the respondents.
---------------------------------------------------------------------------

    We valued electricity using price data for small, medium, and large 
industries, as published by the Central Electricity Authority of the 
Government of India in its publication titled Electricity Tariff & Duty 
and Average Rates of Electricity Supply in India, dated July 2006. 
These electricity rates represent actual country-wide, publicly-
available information on tax-exclusive electricity rates charged to 
industries in India. Since the rates are not contemporaneous with the 
POI, we inflated the values using the WPI. See Surrogate Values 
Memorandum at Attachment IV.
    We valued water using data from the Maharashtra Industrial 
Development Corporation (www.midcindia.org) because it includes a wide 
range of industrial water tariffs. This source provides 386 industrial 
water rates within the Maharashtra province from June 2003, 193 for the 
``inside industrial areas'' usage category, and 193 for the ``outside 
industrial areas'' usage category. We averaged the 386 industrial water 
rates and because this averaged rate was not contemporaneous with the 
POI, we inflated the averaged rate using the WPI. See Surrogate Values 
Memorandum.
    Consistent with 19 CFR 351.408(c)(3), we valued direct, indirect, 
and packing labor, using the most recently calculated regression-based 
wage rate, which relies on 2005 data. This wage rate can be found on 
the Department's website on Import Administration's home page. See 
Expected Wages of Selected NME Countries (revised May 2008) (available 
at http://ia.ita.doc.gov/wages/index.html). The source of these wage 
rate data is the International Labour Organization, Geneva, Labour 
Statistics Database Chapter 5B: Wages in Manufacturing. Since this 
regression-based wage rate does not separate the labor rates into 
different skill levels or types of labor, we have applied the same wage 
rate to all skill levels and types of labor reported by Huludao and 
Shanghai Metals. See Surrogate Values Memorandum.
    We valued truck freight expenses using a per-unit average rate 
calculated from data on the following web site: http://
www.infobanc.com/logistics/logtruck.htm. The logistics section of this 
website contains inland freight truck rates between many large Indian 
cities. Since this value is not contemporaneous with the POI, we 
deflated the rate using the WPI. See Surrogate Values Memorandum at 
Attachment VI.
    We valued brokerage and handling using a simple average of the 
brokerage and handling costs that were reported in public submissions 
that were filed in three antidumping duty cases. Specifically, we 
averaged the public brokerage and handling expenses reported by: (1) 
Agro Dutch Industries Ltd. in the antidumping duty administrative 
review of certain preserved mushrooms from India, (2) Kejirwal Paper 
Ltd. in the less than fair value investigation of certain lined paper 
products from India, and (3) Essar Steel in the antidumping duty 
administrative review of hot-rolled carbon steel flat products from 
India. See Certain Preserved Mushrooms From India: Final Results of 
Antidumping Duty Administrative Review, 71 FR 10646 (March 2, 2006); 
see also, 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), and 
Certain Hot-Rolled Carbon Steel Flat Products From India: Preliminary 
Results of Antidumping Duty Administrative Review, 71 FR 2018, 2021 
(January 12, 2006) (unchanged in Certain Hot-Rolled Carbon Steel Flat 
Products From India: Final Results of Antidumping Administrative 
Review, 71 FR 40694 (July 18, 2006). We inflated the brokerage and 
handling rate using the appropriate WPI inflator. See Surrogate Values 
Memorandum.
    We valued warehousing using rates obtained from the Board of 
Jawaharlal Nehru Port Trust's website (http://www.jnport.gov.in/
CMSPage.aspx?PageID=27), which is a source used in the antidumping duty 
investigation of pneumatic off-the-road tires from the PRC. See Certain 
New Pneumatic Off-the-Road Tires From the People's Republic of China: 
Notice of Amended Final Affirmative Determination of Sales at Less Than 
Fair Value and Antidumping Duty Order, 73 FR 51624 (Sept. 4, 2008) and 
accompanying issues and decision memorandum at Comment 26. See also 
Surrogate Values Memorandum.
    We valued international freight using rate quotes from Maersk 
Sealand (``Maersk''), a market-economy shipper. See Surrogate Values 
Memorandum.
    We valued factory overhead, selling, general, and administrative 
(``SG&A'') expenses, and profit, using the financial statements of 
Jindal Saw Ltd. (``Jindal SAW'') and Bihar Tubes Limited (``Bihar''). 
See Surrogate Values Memorandum. Huludao Pipe submitted the 2006-2007 
financial statements of Zenith Birla (India) Limited (``Zenith'') and 
Bihar while the Petitioners submitted the 2006-2007 financial 
statements of Jindal SAW and the 2007-2008 financial statements TATA 
Steel Limited (``TATA'').
    The Department did not rely upon the financial statements for 
Zenith because the 2006-2007 statements identify receipt of subsidies 
under the Duty Entitlement Pass Book scheme, which has been found by 
the Department to provide a countervailable subsidy. See, e.g., Certain 
Iron-Metal Castings From India: Preliminary Results and Partial 
Rescission of Countervailing Duty Administrative Review, 64 FR 61592 
(November 12, 1999) (unchanged in final results).
    In Crawfish from the PRC, the Department discussed its practice 
with

[[Page 66019]]

respect to financial statements that contain evidence of subsidization:
    {T{time} he statute directs Commerce to base the valuation of the 
factors of production on ``the best available information regarding the 
values of such factors in a market economy country or countries 
considered to be appropriate . . . .'' Section 773(c)(1) of the Act. 
Moreover, in valuing such factors, Congress further directed Commerce 
to ``avoid using any prices which it has reason to believe or suspect 
may be dumped or subsidized prices.'' Omnibus Trade and Competitiveness 
Act of 1988, H.R. Rep. No. 576, 100 nth Cong., 2 nd Sess., at 590-91 
(1988). The Department calculates the financial ratios based on 
financial statements of companies producing comparable merchandise from 
the surrogate country, some of which may contain evidence of 
subsidization. However, where the Department has a reason to believe or 
suspect that the company may have received subsidies, the Department 
may consider that the financial ratios derived from that company's 
financial statements are less representative of the financial 
experience of that company or the relevant industry than the ratios 
derived from financial statements that do not contain evidence of 
subsidization. Consequently, {those statements that appear to reflect 
subsidies{time}  do not constitute the best available information to 
value the surrogate financial ratios.\11\
---------------------------------------------------------------------------

    \11\ See Freshwater Crawfish Tail Meat from the People's 
Republic of China: Notice of Final Results and Rescission, In Part, 
of 2004/2005 Antidumping Duty Administrative and New Shipper 
Reviews, 72 FR 19174 (April 17, 2007) and the accompanying Issues 
and Decision Memorandum at Comment 1.
---------------------------------------------------------------------------

    Moreover, the Department did not rely upon the financial statements 
of TATA because TATA uses a production process different from those 
employed by the respondents. It is the Department's practice not to use 
financial statements of a company using a production process different 
from that employed by a respondent, when other financial statements are 
available for companies employing a production process similar to that 
employed by a respondent. See Fresh Garlic from the People's Republic 
of China: Final Results of Antidumping Duty Administrative Review, 70 
FR 34082 (June 13, 2005) at Comment 5.
    Given the record information regarding Zenith's receipt of 
subsidies, and TATA's product process, as well as the fact that we have 
other acceptable financial statements to use as surrogates,\12\ we have 
not considered the financial data from these two companies in our 
financial ratio calculations. Moreover, given both the fact that we 
have not found either Bihar's or Jindal SAW's financial statements to 
be clearly preferable in this case, and the Department's preference to 
use multiple financial statements when they are not distortive or 
otherwise unreliable, we have determined that these financial 
statements represent the best information on the record with which to 
value financial ratios.\13\
---------------------------------------------------------------------------

    \12\ Although Jindal SAW Ltd.'s financial statement listed 
``export benefits/government grants receivable,'' the Department has 
insufficient information to determine whether these items relate to 
programs that have been countervailed.
    \13\ See, e.g., Folding Metal Tables and Chairs from the 
People's Republic of China: Final Results of Antidumping Duty 
Administrative Review, 72 FR 71355 (December 17, 2007) and 
accompanying Issues and Decision Memorandum at Comment 1c and Final 
Results of New Shipper Review: Certain Preserved Mushrooms From the 
People's Republic of China, 66 FR 45006 (August 27, 2001), and 
accompanying Issues and Decision Memorandum at Comment 1.
---------------------------------------------------------------------------

    In accordance with 19 CFR 351.301(c)(3)(i), for the final 
determination in an antidumping duty investigation, interested parties 
may submit publicly available information with which to value factors 
of production within 40 days after the date of publication of the 
preliminary determination.

Currency Conversion

    We made currency conversions into U.S. dollars, in accordance with 
section 773A(a) of the Act, based on the exchange rates in effect on 
the dates of the U.S. sales as certified by the Federal Reserve Bank.

Verification

    As provided in section 782(i)(1) of the Act, we intend to verify 
the information upon which we will rely in making our final 
determination.

Combination Rates

    In the Initiation Notice, the Department stated that it would 
calculate combination rates for certain respondents that are eligible 
for a separate rate in this investigation. See Initiation Notice. This 
change in practice is described in Policy Bulletin 05.1:
    {w{time} hile continuing the practice of assigning separate rates 
only to exporters, all separate rates that the Department will now 
assign in its NME investigations will be specific to those producers 
that supplied the exporter during the period of investigation. Note, 
however, that one rate is calculated for the exporter and all of the 
producers which supplied subject merchandise to it during the period of 
investigation. This practice applies both to mandatory respondents 
receiving an individually calculated separate rate as well as the pool 
of non-investigated firms receiving the weighted-average of the 
individually calculated rates. This practice is referred to as the 
application of ``combination rates'' because such rates apply to 
specific combinations of exporters and one or more producers. The cash-
deposit rate assigned to an exporter will apply only to merchandise 
both exported by the firm in question and produced by a firm that 
supplied the exporter during the period of investigation.See Policy 
Bulletin 05.1, ``Separate Rates Practice and Application of Combination 
Rates in Antidumping Investigations Involving Non-Market Economy 
Countries,'' available at http://ia.ita.doc.gov/.

Preliminary Determination

    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
            Exporter & Producer                Weighted-Average Margin
------------------------------------------------------------------------
Huludao Steel Pipe Industrial Co., Ltd./..
Huludao City Steel Pipe Industrial Co.,                           67.83%
 Ltd......................................
        Produced by: Huludao Steel Pipe
         Industrial Co., Ltd./ Huludao
         City Steel Pipe Industrial Co.,
         Ltd..............................
Shanghai Metals & Minerals Import & Export                        81.52%
 Corp. d/b/a Shanghai Minmetals Materials
 & Products Corp..........................
        Produced by: Huludao Steel Pipe
         Industrial Co. Ltd.; Benxi
         Northern Pipes Co. Ltd...........
Benxi Northern Pipes Co., Ltd.............                        74.68%
        Produced by: Benxi Northern Pipes
         Co., Ltd.; Tianjin Lianzhong
         Steel Pipe Co., Ltd..............
Pangang Group Beihai Steel Pipe                                   74.68%
 Corporation..............................

[[Page 66020]]

 
        Produced by: Pangang Group Beihai
         Steel Pipe Corporation...........
Jiangsu Yulong Steel Pipe Co., Ltd........                        74.68%
        Produced by: Jiangsu Yulong Steel
         Pipe Co., Ltd....................
Tianjin Xingyuda Import and Export Co.,                           74.68%
 Ltd......................................
        Produced by: Tianjin Lifengyuanda
         Steel Pipe Group Co., Ltd........
PRC-Wide Rate.............................                        81.52%
------------------------------------------------------------------------

Disclosure

    We will disclose the calculations performed within five days of the 
date of publication of this notice to parties in this proceeding in 
accordance with 19 CFR 351.224(b).

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we will instruct U.S. 
Customs and Border protection (``CBP'') to suspend liquidation of all 
entries of welded line pipe from the PRC as described in the ``Scope of 
Investigation'' section, entered, or withdrawn from warehouse, for 
consumption on or after the date of publication of this notice in the 
Federal Register. We will instruct CBP to require a cash deposit or the 
posting of a bond equal to the weighted-average amount by which the 
normal value exceeds U.S. price, as follows: (1) the rate for the 
exporter/producer combinations listed in the chart above will be the 
rate we have determined in this preliminary determination; (2) for all 
PRC exporters of subject merchandise which have not received their own 
rate, the cash-deposit rate will be the PRC-wide rate; and (3) for all 
non-PRC exporters of subject merchandise which have not received their 
own rate, the cash-deposit rate will be the rate applicable to the PRC 
exporter/producer combination that supplied that non-PRC exporter. 
These suspension-of-liquidation instructions will remain in effect 
until further notice.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our preliminary affirmative determination of sales at LTFV. 
Section 735(b)(2) of the Act requires the ITC to make its final 
determination as to whether the domestic industry in the United States 
is materially injured, or threatened with material injury, by reason of 
imports of welded line pipe, or sales (or the likelihood of sales) for 
importation, of the subject merchandise within 45 days of our final 
determination.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than seven days 
after the date the final verification report is issued in this 
proceeding and rebuttal briefs, limited to issues raised in case 
briefs, no later than five days after the deadline for submitting case 
briefs. See 19 CFR 351.309(c)(1)(i) and 19 CFR 351.309(d)(1). A list of 
authorities used and an executive summary of issues should accompany 
any briefs submitted to the Department. This summary should be limited 
to five pages total, including footnotes.
    In accordance with section 774 of the Act, we will hold a public 
hearing, if requested, to afford interested parties an opportunity to 
comment on arguments raised in case or rebuttal briefs. If a request 
for a hearing is made, we intend to hold the hearing three days after 
the deadline of submission of rebuttal briefs at the U.S. Department of 
Commerce, 14th Street and Constitution Ave, NW, Washington, DC 20230, 
at a time and location to be determined. Parties should confirm by 
telephone the date, time, and location of the hearing two days before 
the scheduled date.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days after the date of publication of this notice. See 
19 CFR 351.310(c). Requests should contain the party's name, address, 
and telephone number, the number of participants, and a list of the 
issues to be discussed. At the hearing, each party may make an 
affirmative presentation only on issues raised in that party's case 
brief and may make rebuttal presentations only on arguments included in 
that party's rebuttal brief.

Postponement of Final Determination and Extension of Provisional 
Measures

    Pursuant to section 735(a)(2) of the Act, on October 3, 2008, 
Shanghai Metals requested that in the event of an affirmative 
preliminary determination in this investigation, the Department 
postpone its final determination by 60 days. At the same time, Shanghai 
Metals agreed that the Department may extend the application of the 
provisional measures prescribed under 19 CFR 351.210(e)(2) from a 4-
month period to a 6-month period. In accordance with section 733(d) of 
the Act and 19 CFR 351.210(b), we are granting the request and are 
postponing the final determination until no later than 135 days after 
the publication of this notice in the Federal Register because: (1) our 
preliminary determination is affirmative, (2) the requesting exporters 
account for a significant proportion of exports of the subject 
merchandise, and (3) no compelling reasons for denial exist. Suspension 
of liquidation will be extended accordingly.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: October 30, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-26503 Filed 11-5-08; 8:45 am]
BILLING CODE 3510-DS-S