Certain Circular Welded Non-Alloy Steel Pipe From Mexico; Preliminary Results of Antidumping Duty Administrative Review, 64049-64054 [E9-29105]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 74, Number 233 (Monday, December 7, 2009)]
[Notices]
[Pages 64049-64054]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-29105]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-805]


Certain Circular Welded Non-Alloy Steel Pipe From Mexico; 
Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to requests by interested parties, the Department 
of Commerce (the Department) is conducting an administrative review of 
the antidumping duty order on certain circular welded non-alloy steel 
pipe from Mexico. This administrative review covers mandatory 
respondents Mueller Comercial de Mexico, S. de R.L. (Mueller) and 
Tuberia Nacional, S.A. de C.V. (TUNA). The Department also selected 
Hylsa S.A. de C.V. (Hylsa) as a mandatory respondent for this review. 
Hylsa was subject to a concurrent changed circumstances review of this 
order. In its changed circumstances review the Department determined 
Ternium Mexico, S.A. de C.V. (Ternium) is the successor-in-interest to 
Hylsa. See Final Results of Antidumping Duty Changed Circumstances 
Review: Certain Circular Welded Non-Alloy Steel Pipe and Tube from 
Mexico, 74 FR 41681 (August 18, 2009) (Final Results Changed 
Circumstances Review). Therefore, we are treating Ternium as the 
successor-in-interest to Hylsa for these preliminary results and 
consider them a single entity (see ``Background'' section of this 
notice for further explanation). The period of review (POR) is November 
1, 2007 through October 31, 2008.
    We preliminarily determine that sales of subject merchandise have 
been made at less than normal value (NV) because two of the three 
companies, Ternium and Mueller, refused to cooperate with the 
Department in the conduct of this administrative review. We also are 
preliminarily rescinding this administrative review in part with 
respect to respondent TUNA, which has claimed it made no shipments of 
subject merchandise during the POR. The Department's review of import 
data supported TUNA's claim (see ``TUNA's No-Shipment Claim'' section 
of this notice for further explanation). Interested parties are invited 
to comment on these preliminary results.

EFFECTIVE DATE: December 7, 2009.

FOR FURTHER INFORMATION CONTACT: Maryanne Burke or Robert James AD/CVD 
Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
5604 or (202) 482-0469, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On November 2, 1992, the Department published the antidumping duty 
order on certain circular welded non-alloy steel pipe from Mexico. See 
Notice of Antidumping Duty Orders: Certain Circular Welded Non-Alloy 
Steel Pipe from Brazil, the Republic of Korea (Korea), Mexico, and 
Venezuela and Amendment to Final Determination of Sales at Less Than 
Fair Value: Certain Welded Non-Alloy Steel Pipe from Korea, 57 FR 49453 
(November 2, 1992) (Antidumping Duty Order ). On November 3, 2008, the 
Department published the opportunity to request an administrative 
review of, inter alia, certain circular welded non-alloy steel pipe 
from Mexico for the period November 1, 2007 through October 31, 2008. 
See Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity to Request Administrative Review, 73 FR 
65288 (November 3, 2008). In response, on December 1, 2008, United 
States Steel Corporation (U.S. Steel)

[[Page 64050]]

requested that the Department conduct an administrative review of 
entries of subject merchandise made by seven Mexican producers, 
including, TUNA, Mueller, Hylsa, Niples del Norte, S.A. de C.V. (Niples 
del Norte), Productos Laminados de Aceros, S.A. de C.V. (Productos 
Laminados), Tuberias Procasa S.A. de C.V./Tuberias Procarsa S.A. de 
C.V. (Tuberias Procasa/Tuberias Procarsa) and PYTCO, S.A. de C.V. 
(PYTCO).\1\
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    \1\ On January, 16, 2009, U.S. Steel submitted clarification of 
its original request for review of Tuberias Procasa S.A. de C.V. 
U.S. Steel stated Tuberias Procasa S.A. de C.V. is also referred to 
as Tuberias Procarsa S.A. de C.V. and confirmed both spellings refer 
to the same company.
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    Also, on December 1, 2008, the Department received a request for 
review from Ternium to conduct an administrative review of its U.S. 
sales and those of its affiliates. In its request for review, counsel 
for Ternium indicated its predecessor was Hylsa. Ternium added it had 
provided information detailing its relationship with Hylsa on the 
record of the concurrent changed circumstances review of this order 
(see Initiation of Antidumping Duty Changed Circumstances Review: 
Circular Welded Non-Alloy Steel Pipe from Mexico, 73 FR 63682 (October 
27, 2008)). Additionally, on December 1, 2008, the Department received 
a request from Mueller and its affiliated importer, Southland Pipe 
Nipples Co., Inc. (Southland), to conduct an administrative review. 
Southland requested the Department conduct an administrative review of 
Southland's entries and imports of merchandise produced and/or exported 
by Mueller. On December 24, 2008, the Department initiated a review of 
the eight companies, including Hylsa and Ternium, that produced or 
exported subject merchandise for which an administrative review was 
requested. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 73 FR 79055 
(December 24, 2008).
    On January 21, 2009, the Department released U.S. Customs and 
Border Protection (CBP) data for entries of the subject merchandise 
during the POR to all parties granted access to business proprietary 
information under the Department's Administrative Protective Order 
(APO) in this segment of the proceeding and invited such parties to 
comment on these data for purposes of respondent selection in this 
review.
    On January 23, 2009, TUNA informed the Department that it had no 
shipments or entries of subject merchandise to the United States during 
the POR. Further, TUNA requested the Department rescind this 
administrative review with respect to TUNA because it did not have any 
reviewable entries, shipments or sales of subject merchandise to the 
United States during the POR.
    On January 28, 2009, U.S. Steel commented on the Department's CBP 
data and rebutted TUNA's claim that it had no shipments to the United 
States during the POR.
    On February 9, 2009, TUNA responded to U.S. Steel's arguments 
concerning the CBP data claiming it did not have knowledge the 
merchandise would be exported to the United States at the time of sale. 
Rather, TUNA explained that it sold pipe within the scope of this 
review to unaffiliated customers in the home market and that some of 
those customers exported such material. TUNA certified that it does not 
know the final destination or where the pipe will be exported at the 
time of sale and argued the Department has treated such home-market 
sales as ``co-export'' sales in prior administrative reviews of this 
order.
    On March 10, 2009, the Department determined it was not practicable 
to examine all eight producers of subject merchandise and issued a 
memorandum indicating its intention to limit the number of respondents 
selected for review to the three largest companies by export volume. 
These three respondents were TUNA, Hylsa and Mueller. See Memorandum to 
Richard O. Weible, ``Selection of Respondents,'' dated March 10, 2009. 
On March 18, 2009, the Department issued its antidumping duty 
questionnaire to all three companies chosen as mandatory respondents in 
this review.
    On March 24, 2009, U.S. Steel submitted a withdrawal of its request 
for reviews of Niples del Norte, Productos Laminados, Tuberias Procasa/
Tuberias Procarsa and PYTCO of which the review was originally 
initiated. On May 6, 2009, the Department rescinded the review with 
respect to these four firms. See Certain Circular Welded Non-Alloy 
Steel Pipe from Mexico: Notice of Partial Rescission of Antidumping 
Duty Administrative Review, 74 FR 20919 (May 6, 2009).
    With respect to the remaining mandatory respondents, the chronology 
of this review is as follows: On April 8, 2009, Hylsa jointly with 
Ternium submitted a letter to the Department indicating they would not 
be providing a response to the Department's March 18, 2009 antidumping 
questionnaire. At the same time, both entities withdrew Ternium's 
request for review and further asked the Department to extend the 
deadline described under 19 CFR 351.213(d)(1) and terminate the review 
with respect to Ternium and Hylsa.
    On July 17, 2009, the Department issued a letter to counsel for 
Ternium and Hylsa in response to its April 8, 2009 submission. The 
Department informed Ternium and Hylsa that where an interested party 
fails to cooperate by not acting to the best of its ability to comply 
with a request for information, the Department may resort to the use of 
facts available, including inferences adverse to the party, in 
determining that party's margin. See letter to Ternium and Hylsa, dated 
July 17, 2009.
    On April 22, 2009, TUNA stated it also would not be responding to 
the Department's antidumping questionnaire and reiterated it had no 
entries, exports or sales of subject merchandise to the United States 
during the POR. TUNA restated its position in its submission to the 
Department, dated November 10, 2009. (For a full discussion, see 
``TUNA's No-Shipment Claim'' section below.)
    On May 4, 2009, U.S. Steel submitted comments in response to 
Ternium's and Hylsa's joint letter, dated April 8, 2009. U.S. Steel 
argues there is no basis for withdrawal because it has not withdrawn 
its own request for review of Hylsa. (For a full discussion, see 
``Ternium'' section below.)
    We received Mueller's response to section A of the Department's 
questionnaire on April 22, 2009. On May 29, 2009, the deadline for the 
remainder of the questionnaire responses, Mueller and its affiliate 
Southland, informed the Department that they would not be providing any 
further questionnaire responses relevant to the instant administrative 
review. Mueller also requested the return of business proprietary 
information disclosed under the Department's APO, to which request the 
Department acceded in its October 6, 2009 letter to Mueller and 
Southland. See Letter from the Department to Mueller, dated October 6, 
2009; see also Memorandum to the File, dated October 6, 2009; and 
Letter from the Department to U.S. Steel and all parties privy to the 
APO, dated October 7, 2009.
    On June 15, 2009, U.S. Steel filed comments in response to the 
request for withdrawal from the review made by TUNA, Ternium and 
Mueller. On June 25, 2009, Mueller submitted comments in response to 
U.S. Steel's June 15, 2009 letter. On July 9, 2009, U.S. Steel 
submitted a response to Mueller's June 25, 2009 letter. On September 2, 
2009, Mueller replied to U.S. Steel's July 9, 2009 comments. For a full 
summary of all comments concerning application of adverse facts 
available (AFA) filed by

[[Page 64051]]

Mueller and U.S. Steel, see Memorandum ``Certain Circular Welded Non-
Alloy Steel Pipe from Mexico: Use of Facts Available for Ternium and 
Mueller and the Corroboration of Secondary Information,'' dated 
November 30, 2009 (Facts Available Memorandum).
    On July 21, 2009, the Department extended the deadline for the 
preliminary results of this review from August 2, 2009 to November 30, 
2009. See Certain Circular Welded Non-Alloy Steel Pipe from Mexico; 
Extension of Time Limit for Preliminary Results of Antidumping Duty 
Administrative Review, 74 FR 35844 (July 21, 2009).

Scope of the Order

    The products covered by this order are circular welded non-alloy 
steel pipes and tubes, of circular cross-section, not more than 406.4 
millimeters (16 inches) in outside diameter, regardless of wall 
thickness, surface finish (black, galvanized, or painted), or end 
finish (plain end, beveled end, threaded, or threaded and coupled). 
These pipes and tubes are generally known as standard pipes and tubes 
and are intended for the low pressure conveyance of water, steam, 
natural gas, and other liquids and gases in plumbing and heating 
systems, air conditioning units, automatic sprinkler systems, and other 
related uses, and generally meet ASTM A-53 specifications. Standard 
pipe may also be used for light load-bearing applications, such as for 
fence tubing, and as structural pipe tubing used for framing and 
support members for reconstruction or load-bearing purposes in the 
construction, shipbuilding, trucking, farm equipment, and related 
industries. Unfinished conduit pipe is also included in these orders. 
All carbon steel pipes and tubes within the physical description 
outlined above are included within the scope of this order, except line 
pipe, oil country tubular goods, boiler tubing, mechanical tubing, pipe 
and tube hollows for redraws, finished scaffolding, and finished 
conduit. Standard pipe that is dual or triple certified/stenciled that 
enters the U.S. as line pipe of a kind used for oil or gas pipelines is 
also not included in this order.
    The merchandise covered by the order and subject to this review are 
currently classified in the Harmonized Tariff Schedule of the United 
States (HTSUS) at subheadings: 7306.30.10.00, 7306.30.50.25, 
7306.30.50.32, 7306.30.50.40, 7306.30.50.55, 7306.30.50.85, and 
7306.30.50.90. Although the HTSUS subheadings are provided for 
convenience and customs purposes, our written description of the scope 
of these proceedings is dispositive.

TUNA's No-Shipment Claim

    TUNA maintains that while the CBP data placed on the record 
indicate there were shipments of the subject merchandise manufactured 
by TUNA during the POR, in fact, it was not the exporter for any 
entries. TUNA emphasizes it made ``co-export sales'' of subject 
standard pipe to a home-market customer, but that it had no knowledge 
at the time of sale that any of its domestic sales would be exported to 
the United States. As such, TUNA asserts it is appropriate to treat 
these sales as home-market sales, and thus it is not necessary for TUNA 
to respond to the Department's questionnaire.
    TUNA originally submitted a ``no-shipment'' letter, dated January 
23, 2009, in which the company claimed it did not have exports, sales, 
or entries of subject merchandise to the United States during the POR. 
Rather, TUNA asserts it made sales of subject merchandise to 
unaffiliated companies in the Mexican home market and believes some of 
those home market customers export the subject merchandise to the 
United States. However, TUNA insists it did not know where the material 
was destined at the time of TUNA's sale to its customers. TUNA states 
that sales made under such type of an arrangement are ``co-export'' 
sales and have been treated as home market sales in prior segments of 
this proceeding. Therefore, pursuant to 19 CFR 351.213(d)(3), TUNA 
requests we rescind this administrative review with respect to TUNA.
    Meanwhile, on January 28, 2009, U.S. Steel submitted comments 
arguing TUNA's ``no-shipment'' claims are not supported by record 
evidence. With respect to ``co-export'' sales, U.S. Steel states the 
Department had in prior administrative reviews investigated sales by 
Ternium's predecessor, Hylsa, to home-market customers where the 
merchandise was exported to the United States. While U.S. Steel 
acknowledges such sales by Hylsa were determined to be home-market 
sales, U.S. Steel adds there is no evidence showing either that the 
Department investigated TUNA's sales of in-scope merchandise to home-
market customers for export, or that it made any determination to 
classify such sales made by TUNA as home-market sales. Consequently, 
U.S. Steel maintains TUNA's characterization of its sales as ``co-
export'' sales is unfounded and avers that the Department must 
investigate TUNA's claim it did not know, or have reason to know its 
merchandise was destined for the United States. See U.S. Steel's 
Comments, dated January 28, 2009 at 4 and 5.
    In its rebuttal comments, dated February 9, 2009, TUNA reiterates 
that it made ``co-export'' sales to home market customers in Mexico and 
argues the Department's long standing practice is to treat the first 
party in the chain of distribution that has knowledge of the U.S. 
destination of the merchandise as the proper party to be reviewed. 
Citing the Department's decision in Certain Cut-to-Length Carbon-
Quality Steel Plate Products From Italy: Final Results and Partial 
Rescission of Antidumping Duty Administrative Review, 71 FR 39299 (July 
5, 2006) and accompanying Issues and Decision Memorandum at Comment 1, 
TUNA states that knowledge is determined by considering such factors 
as:
    (1) whether that party prepared or signed any certificates, 
shipping documents, contracts or other papers stating that the 
destination of the merchandise was the United States; (2) whether that 
party used any packaging or labeling which stated that the merchandise 
was destined for the United States; (3) whether any unique features or 
specifications of the merchandise otherwise indicated that the 
destination was the United States; and (4) whether that party admitted 
to the Department that it knew that its shipments were destined for the 
United States.
See TUNA's Rebuttal Comments, dated February 9, 2009 at 2.
    In light of the Department's ``knowledge test'' as outlined above, 
TUNA described its sales process and provided sample sales 
documentation which included a purchase order, internal order and sales 
invoice. TUNA states these documents do not identify the United States 
as the final destination and thus demonstrate it did not have knowledge 
its merchandise was destined for the United States. Id. at 3. TUNA 
maintains it also did not package or label the product as destined for 
the United States, nor did it prepare or sign shipping documents 
identifying the United States as the destination. Additionally, TUNA 
states it did not produce merchandise to a unique specification 
destined for the United States and, pursuant to the Department's own 
criteria, did not have knowledge at the time of sale that its products 
were destined for the United States. Id.

Department Position

    Pursuant to 19 CFR 351.213(d)(3), the Department may rescind an 
administrative review with respect to a

[[Page 64052]]

particular exporter or producer if the Secretary concludes that, during 
the period covered by the review, there were no entries, exports, or 
sales of the subject merchandise to the United States by that producer. 
On June 9, 2009, the Department investigated TUNA's ``no shipment'' 
claim by requesting further documentation from CBP (e.g., customs entry 
form CBP-7501, manufacturer certificates) using U.S. import data we 
released to interested parties on January 21, 2009. In particular, we 
selected certain entries listed in the import data which had identified 
TUNA as the manufacturer of subject merchandise. On June 19, 2009, and 
August 18, 2009, we received the requested information from CBP. On 
November 30, 2009, we placed these customs documents on the record of 
this proceeding.
    From our examination of the customs entry documentation, we saw no 
evidence to suggest TUNA had made entries of subject merchandise to the 
United States. Rather, the documentation indicated sales were made to a 
certain home market customer and showed no indication that the 
merchandise's final destination would be the United States. Therefore, 
we did not receive any information from CBP that contradicted TUNA's 
claim that it did not have knowledge its merchandise would be exported 
to the United States during the POR. As a result, we preliminarily find 
TUNA had no knowledge its merchandise entered the United States and 
thus, we intend to rescind the administrative review with respect to 
TUNA. If we continue to find at the time of our final results that TUNA 
had no knowledge and made no shipments of subject merchandise during 
the POR, we will rescind the administrative review with respect to 
TUNA.

Ternium and Hylsa

    On May 4, 2009, U.S. Steel submitted comments in response to 
Ternium and Hylsa's joint letter, dated April 8, 2009, requesting their 
rescission from the instant review. U.S. Steel argues the Department 
should continue its review with respect to Hylsa, because U.S. Steel 
did not withdraw its request. U.S. Steel argues the Department should 
establish Ternium as the successor-in-interest to Hylsa in the instant 
review, as determined in Notice of Preliminary Results of Antidumping 
Duty Changed Circumstances Review: Carbon and Certain Alloy Steel Wire 
Rod From Mexico, 74 FR 14957 (April 2, 2009) (Wire Rod From Mexico). 
U.S. Steel argues that in Wire Rod From Mexico the Department found 
``there was little to no change in management structure, supplier 
relationships, production facilities, or customer base'' between Hylsa 
and Ternium. See U.S. Steel Comments, dated May 4, 2009 at 4. 
Referencing 19 CFR 351.401(f)(1), U.S. Steel asserts the Department 
will treat two or more producers as a single entity when three criteria 
are satisfied:
    (1) the producers are affiliated; (2) the producers have production 
facilities for similar or identical products that would not require 
substantial retooling of either facility in order to restructure 
manufacturing priorities; and (3) there is a significant potential for 
the manipulation of price or costs of production.
See U.S. Steel Comments, dated May 4, 2009 at 5.
    U.S. Steel argues that each criteria is met in this review. U.S. 
Steel argues that Ternium and Hylsa are ``affiliated persons'' within 
the statutory definition at section 771(33)(E) of the Act which states 
``{a{time} ny person directly owning, controlling, or holding power to 
vote, 5 percent or more of the outstanding voting stock or shares of 
any organization and such organization''. See U.S. Steel Comments, 
dated May 4, 2009 at 5. According to U.S. Steel, Hylsa has demonstrated 
in its submissions placed on the record of the changed circumstances 
review of this order that it is a wholly owned subsidiary of Ternium 
and operates under the corporate framework of Ternium. Id. at 6 and 7. 
Additionally, U.S. Steel maintains Ternium and Hylsa use the same 
production facilities to produce subject merchandise. U.S. Steel 
maintains that on April 1, 2008, Hylsa's production and sales 
operations were transferred to Ternium and consequently, Ternium now 
produces subject merchandise at those facilities previously owned and 
operated by Hylsa. Id. at 6. Futher, U.S. Steel states 19 CFR 
351.401(f)(2) provides factors to consider in determining whether a 
significant potential for manipulation exists which include, inter 
alia, the level of common ownership and the extent to which the 
companies' operations are intertwined. See U.S. Steel Comments, dated 
May 4, 2009 at 6. Finally, U.S. Steel asserts that because Hylsa is 
wholly owned and operated by Ternium, both companies are intertwined 
and represent a significant potential for manipulation.

Department Position

    The Department determines it is not necessary to conduct a 
successor-in-interest analysis in the context of the instant review. 
Rather, the Department already made this determination in the changed 
circumstances review of this order, finding that Ternium is the 
successor-in-interest to Hylsa. See Final Results Changed Circumstances 
Review. Therefore, for purposes of the instant review we also consider 
Ternium the successor-in-interest to Hylsa. In the Department's letter 
to Ternium and Hylsa, dated July 17, 2009, we cited our findings in the 
preliminary results of the changed circumstances review of this order 
which found Ternium is the successor-in-interest to Hylsa for purposes 
of antidumping duty liability.\2\ See Preliminary Results of 
Antidumping Duty Changed Circumstances Review: Certain Circular Welded 
Non-Alloy Steel Pipe and Tube from Mexico, 74 FR 28883 (June 18, 2009) 
(Preliminary Results Changed Circumstances Review). The Department 
further stated that if the preliminary results of the changed 
circumstances review were affirmed in the final results of the changed 
circumstances review, we would apply Hylsa's antidumping duty rate 
determined in the instant review to its successor-in-interest, Ternium, 
both for cash deposit and assessment purposes. Ternium/Hylsa did not 
respond to the Department's letter. The Preliminary Results Changed 
Circumstances Review remained unchanged for the final results and the 
Department upheld its preliminary findings that Ternium is the 
successor-in-interest to Hylsa for antidumping duty cash deposit 
purposes. See Final Results Changed Circumstances Review.
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    \2\ The Final Results Changed Circumstances Review had not been 
published when the Department issued its July 17, 2009 letter. The 
final results were later published on August 18, 2009.
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    Under 19 CFR 351.213(d)(1) the Department will rescind an 
administrative review, in whole or in part, if a party that requested a 
review withdraws the request within 90 days of the date of publication 
of the notice of initiation of the requested review. Although Ternium 
withdrew its own request for review, we are not in a position to 
rescind this review. As noted, we have deemed Ternium is the successor-
in-interest to Hylsa. Accordingly, Ternium remains subject to review 
because U.S. Steel did not withdraw its request for an administrative 
review of Hylsa. As such, the Department preliminarily determines this 
review should not be rescinded with respect to Ternium.

Use of Facts Available

    Section 776(a)(2) of the Act, provides that if an interested party 
withholds

[[Page 64053]]

information requested by the administering authority, fails to provide 
such information by the deadlines for submission of the information and 
in the form or manner requested, subject to subsections (c)(1) and (e) 
of section 782 of the Act, significantly impedes a proceeding under 
this title, or provides such information but the information cannot be 
verified as provided in section 782(i) of the Act, the administering 
authority shall use, subject to section 782(d) of the Act, facts 
otherwise available in reaching the applicable determination. Section 
782(d) of the Act provides that if the administering authority 
determines that a response to a request for information does not comply 
with the request, the administering authority shall promptly inform the 
responding party and provide an opportunity to remedy the deficient 
submission. Section 782(e) of the Act states further that the 
Department shall not decline to consider submitted information if all 
of the following requirements are met: (1) the information is submitted 
by the established deadline; (2) the information can be verified; (3) 
the information is not so incomplete that it cannot serve as a reliable 
basis for reaching the applicable determination; (4) the interested 
party has demonstrated that it acted to the best of its ability; and 
(5) the information can be used without undue difficulties.
    Because both Ternium and Mueller have not responded to the 
Department's original questionnaire in the instant administrative 
review, their actions constitute a refusal to provide information 
necessary to conduct the Department's antidumping analysis under 
sections 776(a)(2)(A) and (B) of the Act. Due to its refusal to 
participate in this review, Mueller has not responded to sections B, C 
and E of the Department's original questionnaire.\3\ Similarly, because 
of Ternium's refusal to participate in the review it has not responded 
to sections A through E of the Department's original questionnaire. 
Thus, Mueller and Ternium withheld information requested by the 
Department's original questionnaire, and significantly impeded the 
administrative review. See section 776(a)(2)(A) and (C) of the Act. 
Therefore, we preliminarily determine to base the margin for Mueller 
and Ternium on facts otherwise available, pursuant to sections 
776(a)(2)(A) and (C) of the Act.
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    \3\ Mueller was subject to its first administrative review and 
was not required to respond to section D (Cost of Production/
Constructed Value). Section E of the questionnaire requests 
information of products covered by this review which underwent 
additional processing in the United States before they were 
delivered to unaffiliated customers.
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Application of Adverse Inferences for Facts Available

    In applying the facts otherwise available, section 776(b) of the 
Act provides that, if the Department finds an interested party has 
failed to cooperate by not acting to the best of its ability to comply 
with a request for information, in reaching the applicable 
determination under this title the Department may use an inference 
adverse to the interests of that party in selecting from among the 
facts otherwise available.
    Adverse inferences are appropriate ``to ensure that the party does 
not obtain a more favorable result by failing to cooperate than if it 
had cooperated fully.'' See Statement of Administrative Action 
accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, 
vol. 1 (1994) at 870 (SAA). Further, ``affirmative evidence of bad 
faith on the part of a respondent is not required before the Department 
may make an adverse inference.'' See Antidumping Duties; Countervailing 
Duties, 62 FR 27296, 27340 (May 19, 1997).
    Mueller failed to cooperate to the best of its ability by failing 
to answer sections B, C and E of the Department's questionnaire, and by 
withdrawing its previously submitted proprietary information from the 
record. Similarly, Ternium failed to cooperate to the best of its 
ability by failing to answer sections A through E of the Department's 
questionnaire. As a result, we determine that both Mueller and Ternium 
failed to cooperate by not acting to the best of their ability to 
comply with the Department's request for information. Therefore, 
pursuant to section 776(b) of the Act, the Department has preliminarily 
determined that in selecting from among the facts otherwise available, 
an adverse inference is warranted. See, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value: Circular Seamless 
Stainless Steel Hollow Products From Japan, 65 FR 42985, 42986 (July 
12, 2000) (the Department applied total AFA where a respondent failed 
to respond to subsequent antidumping questionnaires).

Selection and Corroboration of Information Used as Facts Available

    Section 776(b) of the Act provides that the Department may use as 
AFA information derived from the petition, the final determination in 
the investigation, any previous review, or any other information placed 
on the record. When selecting an AFA rate from among the possible 
sources of information, the Department's practice has been to ensure 
the margin is sufficiently adverse to induce respondents to provide the 
Department with complete and accurate information in a timely manner. 
See e.g., Certain Steel Concrete Reinforcing Bars From Turkey; Final 
Results and Rescission of Antidumping Duty Administrative Review in 
Part, 71 FR 65082, 65084 (November 7, 2006).
    Accordingly, as total AFA, we have assigned Mueller and Ternium the 
rate of 48.33 percent, which is the highest calculated transaction-
specific margin from the most recently completed administrative review 
of this antidumping duty order. See Circular Welded Non-Alloy Steel 
Pipe From Mexico: Amended Final Results of Antidumping Duty 
Administrative Review, 66 FR 37454 (July 18, 2001); see also Magnesium 
Metal From the Russian Federation: Final Results and Partial Rescission 
of Antidumping Duty Administrative Review, 74 FR 39919 (August 10, 
2009) (single-highest transaction margin assigned as AFA to respondent 
AVISMA); and Facts Available Memorandum. We find this rate is 
sufficiently adverse to serve the purpose of facts available and is 
appropriate, as it is the highest transaction-specific margin 
determined in the most recently completed review.
    Section 776(c) of the Act provides that, to the extent practicable, 
the Department shall corroborate secondary information used for facts 
available by reviewing independent sources reasonably at its disposal. 
Information from a prior segment of the proceeding constitutes 
secondary information. See SAA at 870; Antifriction Bearings and Parts 
Thereof From France, et al.: Final Results of Antidumping Duty 
Administrative Reviews, Rescission of Administrative Reviews in Part, 
and Determination To Revoke Order in Part, 69 FR 55574, 55577 
(September 15, 2004). The word ``corroborate'' means the Department 
will satisfy itself that the secondary information to be used has 
probative value. See SAA at 870; see also Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, From Japan, and Tapered Roller 
Bearings, Four Inches or Less in Outside Diameter, and Components 
Thereof, From Japan; Preliminary Results of Antidumping Duty 
Administrative Reviews and Partial Termination of Administrative 
Reviews, 61 FR 57391, 57392 (November 6, 1996). To corroborate 
secondary information, the Department will examine, to the extent

[[Page 64054]]

practicable, the reliability and relevance of the information used.
    As fully explained in the Facts Available Memorandum, the 
Department finds the rate of 48.33 percent to be reliable and relevant 
for use as AFA. As such, the Department finds this rate to be 
corroborated to the extent practicable consistent with section 776(c) 
of Act. We have, therefore, selected the rate of 48.33 percent to apply 
as an AFA rate to Mueller and Ternium and consider it to be 
sufficiently high so as to encourage participation in future segments 
of this proceeding. See Facts Available Memorandum.

Preliminary Results of Review

    As a result of our review, we preliminarily determine the following 
weighted-average dumping margins exist for the period November 1, 2007, 
through October 31, 2008:

------------------------------------------------------------------------
                                                       Weighted-Average
                Manufacturer/Exporter                       Margin
                                                         (percentage)
------------------------------------------------------------------------
Ternium (formerly known as Hylsa)...................       48.33 percent
Mueller.............................................       48.33 percent
------------------------------------------------------------------------

Disclosure and Public Comment

    We will disclose pertinent memoranda concerning these preliminary 
results to parties in this review within five days of the date of 
publication of this notice in accordance with 19 CFR 351.224(b). Any 
interested party may request a hearing within 30 days of the 
publication of this notice in the Federal Register. See 19 CFR 
351.310(c). If a hearing is requested, the Department will notify 
interested parties of the hearing schedule.
    Interested parties are invited to comment on the preliminary 
results of this review. The Department will consider case briefs filed 
by interested parties within 30 days after the date of publication of 
this notice in the Federal Register. See 19 CFR 351.309(c). Interested 
parties may file rebuttal briefs, limited to issues raised in the case 
briefs. See 19 CFR 351.309(d). Any hearing, if requested, will be held 
two days after the deadline for submission of rebuttal briefs. See 19 
CFR 351.310(d). Parties who submit arguments are requested to submit 
with each argument: (1) a statement of the issue, (2) a brief summary 
of the argument, and (3) a table of authorities cited. Further, we 
request that parties submitting written comments provide the Department 
with a diskette containing an electronic copy of the public version of 
such comments.
    We intend to issue the final results of this administrative review, 
including the results of our analysis of issues in any such case 
briefs, rebuttal briefs, and written comments or at a hearing, within 
120 days of publication of these preliminary results in the Federal 
Register.

Assessment

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. Because we are relying on total AFA 
to establish Mueller's and Ternium's dumping margin, we will instruct 
CBP to apply a dumping margin of 48.33 percent ad valorem to all 
entries of subject merchandise during the POR that was produced and/or 
exported by Mueller and Ternium. The Department intends to issue 
instructions to CBP 41 days after the publication of the final results 
of review.

Cash Deposit Requirements

    If these preliminary results are adopted in the final results of 
review, the following deposit requirements will be effective upon 
completion of the final results of this administrative review for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication of the final 
results of this administrative review, as provided in section 751(a)(1) 
of the Act: (1) the cash-deposit rate for Mueller and Ternium (formerly 
known as Hylsa) will be the rate established in the final results of 
this review; (2) for previously reviewed or investigated companies not 
covered in this review, the cash-deposit rate will continue to be the 
company-specific rate published for the most recent period; (3) if the 
exporter is not a firm covered in this review, a prior review, or the 
less-than-fair-value (LTFV) investigation but the manufacturer is, the 
cash-deposit rate will be the rate established for the most recent 
period for the manufacturer of the subject merchandise; (4) if neither 
the exporter nor the manufacturer is a firm covered in this or any 
previous segment of the proceeding, the cash-deposit rate will continue 
to be the all-others rate established in the LTFV investigation which 
is 32.62 percent. See Antidumping Duty Order. These cash-deposit 
requirements, when imposed, shall remain in effect until further 
notice.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    The preliminary results of administrative review and this notice 
are issued and published in accordance with sections 751(a)(1) and 
777(i)(1) of the Act.

    Dated: November 30, 2009.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. E9-29105 Filed 12-4-09; 8:45 am]
BILLING CODE 3510-DS-S