Drill Pipe from the People's Republic of China: Notice of Preliminary Affirmative Determination of Critical Circumstances, 49891-49893 [2010-20210]

Download as PDF Federal Register / Vol. 75, No. 157 / Monday, August 16, 2010 / Notices address ways in which the national economic accounts can be presented more effectively for current economic analysis and recent statistical developments in national accounting. DATES: Friday, November 5, 2010, the meeting will begin at 9 a.m. and adjourn at 3:30 p.m. ADDRESSES: The meeting will take place at the Bureau of Economic Analysis at 1441 L St., NW., Washington, DC. FOR FURTHER INFORMATION CONTACT: Dorothy Andrake, Bureau of Economic Analysis, U.S. Department of Commerce, Washington, DC 20230; telephone number: (202) 606–9630. Public Participation: This meeting is open to the public. Because of security procedures, anyone planning to attend the meeting must contact Dorothy Andrake of BEA at (202) 606–9630 in advance. The meeting is physically accessible to people with disabilities. Requests for foreign language interpretation or other auxiliary aids should be directed to Dorothy Andrake at (202) 606–9630. SUPPLEMENTARY INFORMATION: The Committee was established September 2, 1999. The Committee advises the Director of BEA on matters related to the development and improvement of BEA’s national, regional, industry, and international economic accounts, especially in areas of new and rapidly growing economic activities arising from innovative and advancing technologies, and provides recommendations from the perspectives of the economics profession, business, and government. This will be the Committee’s twenty-first meeting. Dated: August 10, 2010. Brian C. Moyer, Acting Deputy Director, Bureau of Economic Analysis. [FR Doc. 2010–20219 Filed 8–13–10; 8:45 am] BILLING CODE 3510–06–P DEPARTMENT OF COMMERCE International Trade Administration [C–570–966] sroberts on DSKD5P82C1PROD with NOTICES Drill Pipe from the People’s Republic of China: Notice of Preliminary Affirmative Determination of Critical Circumstances Import Administration, International Trade Administration, Department of Commerce. SUMMARY: The Department of Commerce (the Department) has preliminarily determined that critical circumstances exist with respect to imports of drill AGENCY: VerDate Mar<15>2010 18:51 Aug 13, 2010 Jkt 220001 pipe from the People’s Republic of China (PRC). EFFECTIVE DATE: August 16, 2010. FOR FURTHER INFORMATION CONTACT: Kristen Johnson or Eric Greynolds, AD/ CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, Room 4014, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: 202–482–4793 and 202–482–6071, respectively. SUPPLEMENTARY INFORMATION: Case History On December 31, 2009, the Department received the petition filed in proper form by the petitioners.1 This investigation was initiated on January 20, 2010. See Drill Pipe From the People’s Republic of China: Initiation of Countervailing Duty Investigation, 75 FR 4345 (January 27, 2010). The affirmative preliminary determination was published on June 11, 2010. See Drill Pipe From the People’s Republic of China: Preliminary Affirmative Countervailing Duty Determination, 75 FR 33245 (June 11, 2010) (Preliminary Determination). On July 8, 2010, petitioners alleged that critical circumstances exist with respect to imports of drill pipe from the PRC. See Petitioners’ Critical Circumstances Allegation (July 8, 2010).2 On July 12, 2010, the Department requested from the DP Master Group,3 the respondent, monthly shipment data of subject merchandise to the United States for the period August 2009 through May 2010. See Department’s Third Supplemental Questionnaire issued to the DP Master Group (July 12, 2010) at 2. On July 13, 2010, petitioners submitted U.S. Census Data in support of their allegation. See Petitioners’ Census Bureau Data submission (July 13, 2010). On July 21, 2010, the DP Master Group submitted to the Department its monthly shipment data, which included data covering the period January 2009 through July 2009. See DP Master Group’s Third 1 Petitioners are VAM Drilling USA, Inc., Texas Steel Conversions, Inc., Rotary Drilling Tools, TMK IPSCO, and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIOCLC. 2 This public document and all other public documents and public versions are available on the public file located in the Department’s Central Records Unit (CRU), Room 1117 of the main Commerce building. 3 The DP Master Group is DP Master Manufacturing Co., Ltd. (DP Master), Jiangyin Sanliang Petroleum Machinery Co., Ltd. (SPM), Jiangyin Liangda Drill Pipe Co., Ltd. (Liangda), Jiangyin Sanliang Steel Pipe Trading Co., Ltd. (SSP), and Jiangyin Chuangxin Oil Pipe Fittings Co., Ltd. (Chuangxin). PO 00000 Frm 00006 Fmt 4703 Sfmt 4703 49891 Supplemental Questionnaire Response (July 21, 2010) at Exhibit 68. In accordance with 19 CFR 351.206(c)(1), if the petitioner submits an allegation of critical circumstances 30 days or more before the scheduled date of the final determination, the Department will make a preliminary finding whether there is a reasonable basis to believe or suspect that critical circumstances exist. The Department will issue its preliminary finding of critical circumstances within 30 days after the petitioner submits the allegation. See 19 CFR 351.206(c)(2)(ii). Period of Investigation The period for which we are measuring subsidies, or the period of investigation (POI), is calendar year 2009. Scope of Investigation The products covered by this investigation are steel drill pipe, and steel drill collars, whether or not conforming to American Petroleum Institute (API) or non–API specifications, whether finished or unfinished (including green tubes suitable for drill pipe), without regard to the specific chemistry of the steel (i.e., carbon, stainless steel, or other alloy steel), and without regard to length or outer diameter. The scope does not include tool joints not attached to the drill pipe, nor does it include unfinished tubes for casing or tubing covered by any other antidumping or countervailing duty order. The subject products are currently classified in the following Harmonized Tariff Schedule of the United States (HTSUS) categories: 7304.22.0030, 7304.22.0045, 7304.22.0060, 7304.23.3000, 7304.23.6030, 7304.23.6045, 7304.23.6060, 8431.43.8040 and may also enter under 8431.43.8060, 8431.43.4000, 7304.39.0028, 7304.39.0032, 7304.39.0036, 7304.39.0040, 7304.39.0044, 7304.39.0048, 7304.39.0052, 7304.39.0056, 7304.49.0015, 7304.49.0060, 7304.59.8020, 7304.59.8025, 7304.59.8030, 7304.59.8035, 7304.59.8040, 7304.59.8045, 7304.59.8050, and 7304.59.8055.4 While HTSUS subheadings are provided for convenience and Customs purposes, the written description of the scope of this investigation is dispositive. 4 Prior to February 2, 2007, these imports entered under different tariff classifications, including 7304.21.3000, 7304.21.6030, 7304.21.6045, and 7304.21.6060. E:\FR\FM\16AUN1.SGM 16AUN1 sroberts on DSKD5P82C1PROD with NOTICES 49892 Federal Register / Vol. 75, No. 157 / Monday, August 16, 2010 / Notices Comments of the Parties In their critical circumstances allegation, petitioners claim that there have been massive imports of drill pipe in the three months following the filing of the petition on December 31, 2009. Petitioners provided Census Bureau Data, which they contend demonstrate that imports of subject merchandise increased by more than the 15 percent required to be considered ‘‘massive’’ under section 351.206(h)(2) of the Department’s regulations. Petitioners submit that imports rose from $5.4 million in the last quarter of 2009, to $20 million in the first quarter of 2010, an increase of $14.6 million or 270 percent. See Petitioners’ Critical Circumstances Allegation at 3, and Petitioners’ Census Data submission. Petitioners also allege that there is a reasonable basis to believe that a subsidy in this investigation is inconsistent with the WTO Agreement on Subsidies and Countervailing Measures (Subsidies Agreement). With regard to the ‘‘Technology to Improve Trade R&D Fund’’ program, petitioners submit that the program is contingent on export performance. Petitioners state that the DP Master Group, in its second supplemental questionnaire response, reported that the program’s application form required the company to report export data from the prior year. See Petitioners’ Critical Circumstances Allegation at 2; see also DP Master Group’s Second Supplemental Questionnaire Response (July 7, 2010) at 1. Petitioners contend that there is no reason that an application form would request information regarding export performance unless it was relevant for approval of the subsidy. As such, petitioners argue that the DP Master Group received a subsidy contingent upon export performance, which is inconsistent with Article 3 of the Subsidies Agreement. In its July 21, 2010, questionnaire response, in addition to monthly shipment data, the DP Master Group submitted information attempting to show that importers, exporters, and producers had reason to believe that a countervailing duty (CVD) proceeding was likely in June 2009, and, therefore, the Department should use as its base period the first half of 2009, and as its comparison period the second half of 2009, to determine whether there were massive imports. See 19 CFR 351.206(h)(2)(i). Specifically, the DP Master Group submitted a declaration from the partner and owner of a company involved with drill pipe, drill collar, and other drilling equipment. See DP Master Group’s Third Supplemental VerDate Mar<15>2010 18:51 Aug 13, 2010 Jkt 220001 Questionnaire Response (July 21, 2010) at Exhibit 69. The declaration references conversations that this individual had with others in the industry regarding fundraising in order to pay for antidumping (AD) and CVD investigations. Analysis Section 703(e)(1) of the Tariff Act of 1930, as amended (the Act), provides that the Department will preliminarily determine that critical circumstances exist if there is a reasonable basis to believe or suspect that: (A) the alleged countervailable subsidy is inconsistent with the Subsidies Agreement, and (B) there have been massive imports of the subject merchandise over a relatively short period. When determining whether an alleged countervailable subsidy is inconsistent with the Subsidies Agreement, the Department limits its critical circumstances findings to those subsidies contingent on export performance or use of domestic over imported goods (i.e., those prohibited under Article 3 of the Subsidies Agreement).5 In the Preliminary Determination, we stated that additional information was required to fully analyze the ‘‘Technology to Improve Trade R&D Fund’’ program, under which the DP Master Group received assistance during the POI. See 75 FR at 33261. In its July 7, 2010, supplemental questionnaire response (at 1), the DP Master Group stated that the application for assistance under the program required the company to report information related to exports from the previous year. The Government of China (GOC), in its July 9, 2010, second supplemental response (at 1), reported that this program was established ‘‘for the purpose of inducing R&D activities relating to export products.’’6 Based on this evidence, we determine that there is a reasonable basis to believe or suspect that the assistance under the ‘‘Technology to Improve Trade R&D Fund’’ is export contingent and, therefore is inconsistent with the Subsidies Agreement. 5 See, e.g., Notice of Preliminary Negative Determination of Critical Circumstances: Certain New Pneumatic Off-the-Road Tires From the People’s Republic of China, 73 FR 21588, 21589-90 (April 22, 2008), unchanged in Final Affirmative Countervailing Duty Determination and Final Negative Critical Circumstances Determination: Carbon and Certain Alloy Steel Wire Rod From Germany, 67 FR 55808, 55809 (August 30, 2002). 6 At Exhibit 1 of the July 9, 2010, second supplemental questionnaire response, the Chinese government submitted a blank copy of the application form which requires information on ‘‘total export of the last fiscal year’’ and ‘‘percentage of total export of the last fiscal year.’’ PO 00000 Frm 00007 Fmt 4703 Sfmt 4703 In determining whether imports of the subject merchandise have been ‘‘massive,’’ section 351.206(h)(1) of the Department’s regulations provides that the Department normally will examine: (i) the volume and value of the imports; (ii) seasonal trends; and (iii) the share of domestic consumption accounted for by the imports. In addition, the Department will not consider imports to be massive unless imports during the ‘‘relatively short period’’ (comparison period) have increased by at least 15 percent compared to imports during an ‘‘immediately preceding period of comparable duration’’ (base period). See 19 CFR 351.206(h)(2). Section 351.206(i) of the Department’s regulations defines ‘‘relatively short period’’ as normally being the period beginning on the date the proceeding commences (i.e., the date the petition is filed) and ending at least three months later. For consideration of this allegation, we have used a five-month base (i.e., August 2009 through December 2009) and comparison period (i.e., January 2010 through May 2010), which is the maximum amount of data that can be examined prior to the preliminary determination of this investigation. Concerning the DP Master Group’s suggestion to compare shipment data of the first and second half of 2009, based on knowledge of the petition, we find that the evidence put forth by the DP Master Group is speculative and does not justify using that base and comparison period to determine whether there were massive imports. The single declaration submitted by the DP Master Group refers to fundraising that might result in the event of an investigation and does not demonstrate that any action was taken by the DP Master Group. In determining whether there were massive imports, we analyzed the evidence presented in the petitioners’ Critical Circumstances Allegation and the DP Master Group’s monthly shipment data for the period August 2009 through May 2010. The Department’s examination of these data demonstrates that there was a massive increase in shipments of subject merchandise by the DP Master Group during the period immediately following the filing of the petition on December 31, 2009. Specifically, shipments of subject merchandise increased by 220.56 percent in terms of volume. See the Memorandum to the File from Kristen Johnson, Trade Analyst, AD/CVD Operations Office 3, regarding ‘‘Critical Circumstances Shipment Data Analysis,’’ (Critical E:\FR\FM\16AUN1.SGM 16AUN1 Federal Register / Vol. 75, No. 157 / Monday, August 16, 2010 / Notices sroberts on DSKD5P82C1PROD with NOTICES Circumstances Memorandum) (August 9, 2010) at 2. With regard to whether imports of subject merchandise by the ‘‘all other’’ exporters of drill pipe in the PRC were massive, the Department normally relies on data sourced from the International Trade Commission’s (ITC’s) Dataweb, adjusted to remove shipments by the respondents participating in the investigation.7 In this case, however, use of data from the ITC’s Dataweb is not meaningful, because when the DP Master Group’s monthly shipments are subtracted from the monthly data generated by the ITC’s Dataweb for the main HTSUS categories (i.e., 7304.22 and 7304.23),8 the results for a number of months are a negative amount. See Critical Circumstances Memorandum at 3. This indicates that some of the DP Master Group’s shipments entered under the ‘‘may also enter under’’ HTSUS categories listed in the scope. We note that those numbers represent basket categories and, therefore, would not provide accurate data for use in our analysis. As such, we are basing our preliminary finding of critical circumstances for ‘‘all other’’ exporters of drill pipe from the PRC on the shipping experience of the DP Master Group. Regarding the preliminary conclusion to base our finding of critical circumstances for ‘‘all other’’ exporters of drill pipe from the PRC on the shipping experience of the DP Master Group, we note that the two firms initially identified by the Department in the Customs and Border Protection (CBP) Data Query Memorandum as the two largest shippers of drill pipe to the United States during the POI subsequently claimed that their shipments do not, in fact, reflect subject merchandise. Assuming that the non– shipment claims of these two firms are valid,9 then the share of the DP Master 7 See, e.g., Certain Oil Country Tubular Goods From the People’s Republic of China: Preliminary Affirmative Countervailing Duty Determination, Preliminary Negative Critical Circumstances Determination, 74 FR 47210,47212 (September 15, 2009), unchanged in Certain Oil Country Tubular Goods From the People’s Republic of China: Final Affirmative Countervailing Duty Determination: Final Negative Critical Circumstances Determination, 74 FR 64045 (December 7, 2009). 8 Query of the 7304.22 and 7304.23 HTSUS categories is in keeping with the data analysis conducted for respondent selection where the Department relied solely on Customs and Border Protection data of 7304.22 and 7304.23 for selecting respondents. See Memorandum to the File from Eric G. Greynolds, Program Manager, AD/CVD Operations, Office 3, regarding ‘‘Release of Initial Customs and Border Protection Data,’’ (January 22, 2010) (CBP Data Query Memorandum). 9 The Department has requested entry documents from CBP to verify the companies’ claim of nonshipment of subject merchandise. VerDate Mar<15>2010 18:51 Aug 13, 2010 Jkt 220001 Group’s exports of drill pipe to the United States during the POI is larger than is indicated in the CBP Data Query Memorandum and, thus, constitutes an additional basis for the Department to base its finding of critical circumstances for ‘‘all other’’ exporters of drill pipe from the PRC on the shipping experience of the DP Master Group. Conclusion Based on the analysis above, we preliminarily determine critical circumstances exist for imports of drill pipe from the DP Master Group. We also preliminary determine, based on the shipment experience of the DP Master Group, that critical circumstances exist as well for imports of drill pipe from ‘‘all other’’ exporters from the PRC. We will make a final determination concerning critical circumstances for drill pipe from the PRC when we make our final countervailable subsidy determination in this investigation. Suspension of Liquidation In accordance with section 703(e)(2)(A) of the Act, we are directing CBP to suspend liquidation of any unliquidated entries of subject merchandise from the PRC entered, or withdrawn from warehouse for consumption, on or after March 13, 2010, which is 90 days prior to the date of publication of the Preliminary Determination in the Federal Register. ITC Notification In accordance with section 703(f) of the Act, we will notify the ITC of our determination. This determination is issued and published pursuant to sections 703(f) and 777(i)(1) of the Act. Dated: August 9, 2010. Ronald K. Lorentzen, Deputy Assistant Secretary for Import Administration. [FR Doc. 2010–20210 Filed 8–13–10; 8:45 am] BILLING CODE 3510–DS–S DEPARTMENT OF COMMERCE International Trade Administration [A–570–924] Polyethylene Terephthalate Film, Sheet, and Strip From the People’s Republic of China: Preliminary Results and Preliminary Rescission, in Part, of Antidumping Duty Administrative Review Import Administration, International Trade Administration, Department of Commerce. AGENCY: PO 00000 Frm 00008 Fmt 4703 Sfmt 4703 49893 In response to requests from interested parties, the Department of Commerce (‘‘the Department’’) is conducting an administrative review of the antidumping duty order on polyethylene terephthalate film, sheet, and strip (‘‘PET film’’) from the People’s Republic of China (‘‘PRC’’). The period of review (‘‘POR’’) is November 6, 2008, through October 31, 2009. This administrative review covers two mandatory respondents, and four separate rate respondents (i.e., one separate rate respondent that filed a separate rate certification, one separate rate respondent that claimed it did not ship or sell subject merchandise to the United States during the POR, and two separate rate respondents who currently have a separate rate, but that failed to either recertify the separate rate, or, in the alternative, make a claim that they did not ship or sell subject merchandise to the United States during the POR). We have preliminarily determined that sales have been made below normal value (‘‘NV’’) by certain companies subject to this review. If these preliminary results are adopted in our final results of this review, we will instruct U.S. Customs and Border Protection (‘‘CBP’’) to assess antidumping duties on entries of subject merchandise during the POR for which the importer-specific assessment rates are above de minimis. We invite interested parties to comment on these preliminary results of review. Parties who submit comments are requested to submit with each argument a statement of the issue and a brief summary of the argument. We intend to issue the final results of this review no later than 120 days from the date of publication of this notice. FOR FURTHER INFORMATION CONTACT: Thomas Martin, 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) 482–3936. SUPPLEMENTARY INFORMATION: The Department received a timely request from DuPont Teijin Films, Mitsubishi Polyester Film, Inc., SKC, Inc., and Toray Plastics (America), Inc. (collectively, ‘‘Petitioners’’), in accordance with 19 CFR 351.213(b)(1), for an administrative review of the antidumping duty order on PET film from the PRC for six companies: Fuwei Films (Shandong) Co., Ltd. (‘‘Fuwei Films’’), Shaoxing Xiangyu Green Packing Co., Ltd. (‘‘Green Packing’’), Tianjin Wanhua Co., Ltd. (‘‘Wanhua’’), Sichuan Dongfang Insulating Material SUMMARY: E:\FR\FM\16AUN1.SGM 16AUN1

Agencies

[Federal Register Volume 75, Number 157 (Monday, August 16, 2010)]
[Notices]
[Pages 49891-49893]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-20210]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-966]


Drill Pipe from the People's Republic of China: Notice of 
Preliminary Affirmative Determination of Critical Circumstances

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) has preliminarily 
determined that critical circumstances exist with respect to imports of 
drill pipe from the People's Republic of China (PRC).

EFFECTIVE DATE: August 16, 2010.

FOR FURTHER INFORMATION CONTACT: Kristen Johnson or Eric Greynolds, AD/
CVD Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, Room 4014, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: 202-482-4793 
and 202-482-6071, respectively.

SUPPLEMENTARY INFORMATION:

Case History

    On December 31, 2009, the Department received the petition filed in 
proper form by the petitioners.\1\ This investigation was initiated on 
January 20, 2010. See Drill Pipe From the People's Republic of China: 
Initiation of Countervailing Duty Investigation, 75 FR 4345 (January 
27, 2010). The affirmative preliminary determination was published on 
June 11, 2010. See Drill Pipe From the People's Republic of China: 
Preliminary Affirmative Countervailing Duty Determination, 75 FR 33245 
(June 11, 2010) (Preliminary Determination). On July 8, 2010, 
petitioners alleged that critical circumstances exist with respect to 
imports of drill pipe from the PRC. See Petitioners' Critical 
Circumstances Allegation (July 8, 2010).\2\ On July 12, 2010, the 
Department requested from the DP Master Group,\3\ the respondent, 
monthly shipment data of subject merchandise to the United States for 
the period August 2009 through May 2010. See Department's Third 
Supplemental Questionnaire issued to the DP Master Group (July 12, 
2010) at 2. On July 13, 2010, petitioners submitted U.S. Census Data in 
support of their allegation. See Petitioners' Census Bureau Data 
submission (July 13, 2010). On July 21, 2010, the DP Master Group 
submitted to the Department its monthly shipment data, which included 
data covering the period January 2009 through July 2009. See DP Master 
Group's Third Supplemental Questionnaire Response (July 21, 2010) at 
Exhibit 68.
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    \1\ Petitioners are VAM Drilling USA, Inc., Texas Steel 
Conversions, Inc., Rotary Drilling Tools, TMK IPSCO, and United 
Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied 
Industrial and Service Workers International Union, AFL-CIO-CLC.
    \2\ This public document and all other public documents and 
public versions are available on the public file located in the 
Department's Central Records Unit (CRU), Room 1117 of the main 
Commerce building.
    \3\ The DP Master Group is DP Master Manufacturing Co., Ltd. (DP 
Master), Jiangyin Sanliang Petroleum Machinery Co., Ltd. (SPM), 
Jiangyin Liangda Drill Pipe Co., Ltd. (Liangda), Jiangyin Sanliang 
Steel Pipe Trading Co., Ltd. (SSP), and Jiangyin Chuangxin Oil Pipe 
Fittings Co., Ltd. (Chuangxin).
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    In accordance with 19 CFR 351.206(c)(1), if the petitioner submits 
an allegation of critical circumstances 30 days or more before the 
scheduled date of the final determination, the Department will make a 
preliminary finding whether there is a reasonable basis to believe or 
suspect that critical circumstances exist. The Department will issue 
its preliminary finding of critical circumstances within 30 days after 
the petitioner submits the allegation. See 19 CFR 351.206(c)(2)(ii).

Period of Investigation

    The period for which we are measuring subsidies, or the period of 
investigation (POI), is calendar year 2009.

Scope of Investigation

    The products covered by this investigation are steel drill pipe, 
and steel drill collars, whether or not conforming to American 
Petroleum Institute (API) or non-API specifications, whether finished 
or unfinished (including green tubes suitable for drill pipe), without 
regard to the specific chemistry of the steel (i.e., carbon, stainless 
steel, or other alloy steel), and without regard to length or outer 
diameter. The scope does not include tool joints not attached to the 
drill pipe, nor does it include unfinished tubes for casing or tubing 
covered by any other antidumping or countervailing duty order.
    The subject products are currently classified in the following 
Harmonized Tariff Schedule of the United States (HTSUS) categories: 
7304.22.0030, 7304.22.0045, 7304.22.0060, 7304.23.3000, 7304.23.6030, 
7304.23.6045, 7304.23.6060, 8431.43.8040 and may also enter under 
8431.43.8060, 8431.43.4000, 7304.39.0028, 7304.39.0032, 7304.39.0036, 
7304.39.0040, 7304.39.0044, 7304.39.0048, 7304.39.0052, 7304.39.0056, 
7304.49.0015, 7304.49.0060, 7304.59.8020, 7304.59.8025, 7304.59.8030, 
7304.59.8035, 7304.59.8040, 7304.59.8045, 7304.59.8050, and 
7304.59.8055.\4\
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    \4\ Prior to February 2, 2007, these imports entered under 
different tariff classifications, including 7304.21.3000, 
7304.21.6030, 7304.21.6045, and 7304.21.6060.
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    While HTSUS subheadings are provided for convenience and Customs 
purposes, the written description of the scope of this investigation is 
dispositive.

[[Page 49892]]

Comments of the Parties

    In their critical circumstances allegation, petitioners claim that 
there have been massive imports of drill pipe in the three months 
following the filing of the petition on December 31, 2009. Petitioners 
provided Census Bureau Data, which they contend demonstrate that 
imports of subject merchandise increased by more than the 15 percent 
required to be considered ``massive'' under section 351.206(h)(2) of 
the Department's regulations. Petitioners submit that imports rose from 
$5.4 million in the last quarter of 2009, to $20 million in the first 
quarter of 2010, an increase of $14.6 million or 270 percent. See 
Petitioners' Critical Circumstances Allegation at 3, and Petitioners' 
Census Data submission.
    Petitioners also allege that there is a reasonable basis to believe 
that a subsidy in this investigation is inconsistent with the WTO 
Agreement on Subsidies and Countervailing Measures (Subsidies 
Agreement). With regard to the ``Technology to Improve Trade R&D Fund'' 
program, petitioners submit that the program is contingent on export 
performance. Petitioners state that the DP Master Group, in its second 
supplemental questionnaire response, reported that the program's 
application form required the company to report export data from the 
prior year. See Petitioners' Critical Circumstances Allegation at 2; 
see also DP Master Group's Second Supplemental Questionnaire Response 
(July 7, 2010) at 1. Petitioners contend that there is no reason that 
an application form would request information regarding export 
performance unless it was relevant for approval of the subsidy. As 
such, petitioners argue that the DP Master Group received a subsidy 
contingent upon export performance, which is inconsistent with Article 
3 of the Subsidies Agreement.
    In its July 21, 2010, questionnaire response, in addition to 
monthly shipment data, the DP Master Group submitted information 
attempting to show that importers, exporters, and producers had reason 
to believe that a countervailing duty (CVD) proceeding was likely in 
June 2009, and, therefore, the Department should use as its base period 
the first half of 2009, and as its comparison period the second half of 
2009, to determine whether there were massive imports. See 19 CFR 
351.206(h)(2)(i). Specifically, the DP Master Group submitted a 
declaration from the partner and owner of a company involved with drill 
pipe, drill collar, and other drilling equipment. See DP Master Group's 
Third Supplemental Questionnaire Response (July 21, 2010) at Exhibit 
69. The declaration references conversations that this individual had 
with others in the industry regarding fundraising in order to pay for 
antidumping (AD) and CVD investigations.

Analysis

    Section 703(e)(1) of the Tariff Act of 1930, as amended (the Act), 
provides that the Department will preliminarily determine that critical 
circumstances exist if there is a reasonable basis to believe or 
suspect that: (A) the alleged countervailable subsidy is inconsistent 
with the Subsidies Agreement, and (B) there have been massive imports 
of the subject merchandise over a relatively short period.
    When determining whether an alleged countervailable subsidy is 
inconsistent with the Subsidies Agreement, the Department limits its 
critical circumstances findings to those subsidies contingent on export 
performance or use of domestic over imported goods (i.e., those 
prohibited under Article 3 of the Subsidies Agreement).\5\ In the 
Preliminary Determination, we stated that additional information was 
required to fully analyze the ``Technology to Improve Trade R&D Fund'' 
program, under which the DP Master Group received assistance during the 
POI. See 75 FR at 33261. In its July 7, 2010, supplemental 
questionnaire response (at 1), the DP Master Group stated that the 
application for assistance under the program required the company to 
report information related to exports from the previous year. The 
Government of China (GOC), in its July 9, 2010, second supplemental 
response (at 1), reported that this program was established ``for the 
purpose of inducing R&D activities relating to export products.''\6\ 
Based on this evidence, we determine that there is a reasonable basis 
to believe or suspect that the assistance under the ``Technology to 
Improve Trade R&D Fund'' is export contingent and, therefore is 
inconsistent with the Subsidies Agreement.
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    \5\ See, e.g., Notice of Preliminary Negative Determination of 
Critical Circumstances: Certain New Pneumatic Off-the-Road Tires 
From the People's Republic of China, 73 FR 21588, 21589-90 (April 
22, 2008), unchanged in Final Affirmative Countervailing Duty 
Determination and Final Negative Critical Circumstances 
Determination: Carbon and Certain Alloy Steel Wire Rod From Germany, 
67 FR 55808, 55809 (August 30, 2002).
    \6\ At Exhibit 1 of the July 9, 2010, second supplemental 
questionnaire response, the Chinese government submitted a blank 
copy of the application form which requires information on ``total 
export of the last fiscal year'' and ``percentage of total export of 
the last fiscal year.''
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    In determining whether imports of the subject merchandise have been 
``massive,'' section 351.206(h)(1) of the Department's regulations 
provides that the Department normally will examine: (i) the volume and 
value of the imports; (ii) seasonal trends; and (iii) the share of 
domestic consumption accounted for by the imports. In addition, the 
Department will not consider imports to be massive unless imports 
during the ``relatively short period'' (comparison period) have 
increased by at least 15 percent compared to imports during an 
``immediately preceding period of comparable duration'' (base period). 
See 19 CFR 351.206(h)(2).
    Section 351.206(i) of the Department's regulations defines 
``relatively short period'' as normally being the period beginning on 
the date the proceeding commences (i.e., the date the petition is 
filed) and ending at least three months later. For consideration of 
this allegation, we have used a five-month base (i.e., August 2009 
through December 2009) and comparison period (i.e., January 2010 
through May 2010), which is the maximum amount of data that can be 
examined prior to the preliminary determination of this investigation.
    Concerning the DP Master Group's suggestion to compare shipment 
data of the first and second half of 2009, based on knowledge of the 
petition, we find that the evidence put forth by the DP Master Group is 
speculative and does not justify using that base and comparison period 
to determine whether there were massive imports. The single declaration 
submitted by the DP Master Group refers to fundraising that might 
result in the event of an investigation and does not demonstrate that 
any action was taken by the DP Master Group.
    In determining whether there were massive imports, we analyzed the 
evidence presented in the petitioners' Critical Circumstances 
Allegation and the DP Master Group's monthly shipment data for the 
period August 2009 through May 2010. The Department's examination of 
these data demonstrates that there was a massive increase in shipments 
of subject merchandise by the DP Master Group during the period 
immediately following the filing of the petition on December 31, 2009. 
Specifically, shipments of subject merchandise increased by 220.56 
percent in terms of volume. See the Memorandum to the File from Kristen 
Johnson, Trade Analyst, AD/CVD Operations Office 3, regarding 
``Critical Circumstances Shipment Data Analysis,'' (Critical

[[Page 49893]]

Circumstances Memorandum) (August 9, 2010) at 2.
    With regard to whether imports of subject merchandise by the ``all 
other'' exporters of drill pipe in the PRC were massive, the Department 
normally relies on data sourced from the International Trade 
Commission's (ITC's) Dataweb, adjusted to remove shipments by the 
respondents participating in the investigation.\7\ In this case, 
however, use of data from the ITC's Dataweb is not meaningful, because 
when the DP Master Group's monthly shipments are subtracted from the 
monthly data generated by the ITC's Dataweb for the main HTSUS 
categories (i.e., 7304.22 and 7304.23),\8\ the results for a number of 
months are a negative amount. See Critical Circumstances Memorandum at 
3. This indicates that some of the DP Master Group's shipments entered 
under the ``may also enter under'' HTSUS categories listed in the 
scope. We note that those numbers represent basket categories and, 
therefore, would not provide accurate data for use in our analysis. As 
such, we are basing our preliminary finding of critical circumstances 
for ``all other'' exporters of drill pipe from the PRC on the shipping 
experience of the DP Master Group.
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    \7\ See, e.g., Certain Oil Country Tubular Goods From the 
People's Republic of China: Preliminary Affirmative Countervailing 
Duty Determination, Preliminary Negative Critical Circumstances 
Determination, 74 FR 47210,47212 (September 15, 2009), unchanged in 
Certain Oil Country Tubular Goods From the People's Republic of 
China: Final Affirmative Countervailing Duty Determination: Final 
Negative Critical Circumstances Determination, 74 FR 64045 (December 
7, 2009).
    \8\ Query of the 7304.22 and 7304.23 HTSUS categories is in 
keeping with the data analysis conducted for respondent selection 
where the Department relied solely on Customs and Border Protection 
data of 7304.22 and 7304.23 for selecting respondents. See 
Memorandum to the File from Eric G. Greynolds, Program Manager, AD/
CVD Operations, Office 3, regarding ``Release of Initial Customs and 
Border Protection Data,'' (January 22, 2010) (CBP Data Query 
Memorandum).
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    Regarding the preliminary conclusion to base our finding of 
critical circumstances for ``all other'' exporters of drill pipe from 
the PRC on the shipping experience of the DP Master Group, we note that 
the two firms initially identified by the Department in the Customs and 
Border Protection (CBP) Data Query Memorandum as the two largest 
shippers of drill pipe to the United States during the POI subsequently 
claimed that their shipments do not, in fact, reflect subject 
merchandise. Assuming that the non-shipment claims of these two firms 
are valid,\9\ then the share of the DP Master Group's exports of drill 
pipe to the United States during the POI is larger than is indicated in 
the CBP Data Query Memorandum and, thus, constitutes an additional 
basis for the Department to base its finding of critical circumstances 
for ``all other'' exporters of drill pipe from the PRC on the shipping 
experience of the DP Master Group.
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    \9\ The Department has requested entry documents from CBP to 
verify the companies' claim of non-shipment of subject merchandise.
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Conclusion

    Based on the analysis above, we preliminarily determine critical 
circumstances exist for imports of drill pipe from the DP Master Group. 
We also preliminary determine, based on the shipment experience of the 
DP Master Group, that critical circumstances exist as well for imports 
of drill pipe from ``all other'' exporters from the PRC. We will make a 
final determination concerning critical circumstances for drill pipe 
from the PRC when we make our final countervailable subsidy 
determination in this investigation.

Suspension of Liquidation

    In accordance with section 703(e)(2)(A) of the Act, we are 
directing CBP to suspend liquidation of any unliquidated entries of 
subject merchandise from the PRC entered, or withdrawn from warehouse 
for consumption, on or after March 13, 2010, which is 90 days prior to 
the date of publication of the Preliminary Determination in the Federal 
Register.

ITC Notification

    In accordance with section 703(f) of the Act, we will notify the 
ITC of our determination.
    This determination is issued and published pursuant to sections 
703(f) and 777(i)(1) of the Act.

    Dated: August 9, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-20210 Filed 8-13-10; 8:45 am]
BILLING CODE 3510-DS-S