Certain Oil Country Tubular Goods From the Republic of Korea: Initiation and Expedited Preliminary Results of Changed Circumstances Review, 46645-46647 [2016-16923]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 81, Number 137 (Monday, July 18, 2016)]
[Notices]
[Pages 46645-46647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-16923]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-870]


Certain Oil Country Tubular Goods From the Republic of Korea: 
Initiation and Expedited Preliminary Results of Changed Circumstances 
Review

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

DATES: Effective Date: July 18, 2016.

SUMMARY: In response to a request from Hyundai Steel Co. Ltd. (Hyundai 
Steel), a producer/exporter of certain oil country tubular goods (OCTG) 
from the Republic of Korea (Korea), and pursuant to section 751(b) of 
the Tariff Act of 1930, as amended (the Act), 19 CFR 351.216 and 
351.221(c)(3)(ii), the Department is initiating a changed circumstances 
review (CCR) and issuing this notice of preliminary results. We have 
preliminarily determined that Hyundai Steel is the successor-in-
interest to the former Hyundai HYSCO and, as such, if the Department 
upholds these preliminary results in the final results, Hyundai Steel 
will be entitled to the antidumping duty deposit rate currently 
assigned to Hyundai HYSCO with respect to the subject merchandise.

FOR FURTHER INFORMATION CONTACT: Victoria Cho, AD/CVD Operations, 
Office VI, Enforcement and Compliance, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
5075.

SUPPLEMENTARY INFORMATION:

Background

    On September 10, 2014, the Department published an antidumping duty 
order on OCTG from Korea.\1\
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    \1\ See Certain Oil Country Tubular Goods From India, the 
Republic of Korea, Taiwan, the Republic of Turkey, and the Socialist 
Republic of Vietnam: Antidumping Duty Orders; and Certain Oil 
Country Tubular Goods From the Socialist Republic of Vietnam: 
Amended Final Determination of Sales at Less Than Fair Value, 74 FR 
53691 (September 10, 2014).
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    On February 24, 2016,\2\ Hyundai Steel informed the Department that 
effective July 1, 2015, it had merged with Hyundai HYSCO,\3\ and 
requested that: (1) The Department conduct a CCR under 19 CFR 
351.216(b) to determine that it is the successor-in-interest to Hyundai 
HYSCO for purposes of determining Hyundai Steel's antidumping duty cash 
deposits and liabilities; (2) the Department's successor-in-interest 
determination be effective as of July 1, 2015, the date on which the 
merger was completed; and (3) on an expedited basis under 19 CFR 
351.221(c)(3)(ii).
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    \2\ See the February 24, 2016, letter from Hyundai Steel, ``Oil 
Country Tubular Goods from the Republic of Korea: Request for a 
Changed Circumstances Review,'' (CCR Request).
    \3\ Hyundai HYSCO was a respondent in the investigation of OCTG 
from Korea covering the period July 1, 2012-June 30, 2013. Hyundai 
HYSCO received a 15.75 percent dumping margin. See Certain Oil 
Country Tubular Goods From the Republic of Korea: Final 
Determination of Sales at Less Than Fair Value and Negative Final 
Determination of Critical Circumstances, 79 FR 41983 (July 18, 
2014).
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    On May 18, 2016,\4\ the Department declined to initiate the CCR 
that Hyundai Steel requested in its February 24, 2016, CCR Request. The 
Department determined that it would not conduct a CCR of a final 
determination in an investigation less than 24 months after the 
publication of the final determination absent showing of good cause.\5\ 
The Department further found that Hyundai Steel ``did not reference or 
attempt to show good cause'' in its February 24, 2016, request.\6\ On 
May 31, 2016,\7\ Hyundai Steel filed its second request for a CCR, in 
which it alleged that that good cause exists in this case and requested 
that the Department initiate a CCR.
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    \4\ See the Department's May 18, 2016, letter to Hyundai Steel.
    \5\ See the Department's May 18, 2016, letter to Hyundai Steel 
(the Department's Rejection Letter); 19 CFR 351.216(c); and section 
751(b)(4) of the Act.
    \6\ See the CCR Request; and also see the Department's Rejection 
Letter.
    \7\ See the May 31, 2016, letter from Hyundai Steel to the 
Department.
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    We received no comments from any other interested party.

Scope of the Review

    The merchandise covered by this review is certain oil country 
tubular goods (OCTG), which are hollow steel products of circular 
cross-section, including oil well casing and tubing, of iron (other 
than cast iron) or steel (both carbon and alloy), whether seamless or 
welded, regardless of end finish (e.g., whether or not plain end, 
threaded, or threaded and coupled) whether or not conforming to 
American Petroleum Institute (API) or non-API specifications, whether 
finished (including limited service OCTG products) or unfinished 
(including green tubes and limited service OCTG products), whether or 
not thread protectors are attached. The scope of the investigation also 
covers OCTG coupling stock. For a complete description of the scope of 
the investigation, see Appendix I to this notice.

Initiation and Preliminary Results

    Pursuant to section 751(b)(1) of the Act, the Department will 
conduct a CCR upon receipt of a request from an interested party or 
receipt of information concerning an antidumping duty order which shows 
changed circumstances sufficient to warrant a review of the order.\8\ 
In addition, because the final determination was published less than 24 
months prior to the date on which Hyundai Steel submitted its request 
for a CCR (i.e., May 31, 2016), and pursuant to section 351.216(c) of 
the Department's regulations, a CCR will not be initiated unless good 
cause exists. We find that good cause exists in the instant CCR request 
to initiate this CCR before the 24 month anniversary of the final 
determination, as demonstrated by Hyundai Steel.\9\ Moreover, as noted 
above in the ``Background'' section, we have received information 
indicating that on July 1, 2015, Hyundai HYSCO merged with Hyundai 
Steel, with the

[[Page 46646]]

latter assuming all operations for the production and sale of the 
subject merchandise.\10\ This constitutes changed circumstances 
warranting a review of this order.\11\
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    \8\ See 19 CFR 351.216(c); section 735(a) of the Act.
    \9\ See the May 31, 2016, letter from Hyundai Steel to the 
Department.
    \10\ See the CCR request.
    \11\ See 19 CFR 351.216(d).
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    Section 351.221(c)(3)(ii) of the Department's regulations permits 
the Department to combine the notice of initiation of a CCR and the 
notice of preliminary results if the Department concludes that 
expedited action is warranted. In this instance, because we have on the 
record the information necessary to make a preliminary finding and no 
party has opposed expedited action, we find that expedited action is 
warranted, and have combined the notice of initiation and the notice of 
preliminary results.
    In making a successor-in-interest determination, the Department 
examines several factors, including but not limited to, changes in: (1) 
Management; (2) production facilities; (3) supplier relationships; and 
(4) customer base.\12\ While no single factor or combination of these 
factors will necessarily provide a dispositive indication of a 
successor-in-interest relationship, the Department will generally 
consider the new company to be the successor to the previous company if 
the new company's resulting operation is not materially dissimilar to 
that of its predecessor.\13\ Thus, if the evidence demonstrates that, 
with respect to the production and sale of the subject merchandise, the 
new company operates as the same business entity as the former company, 
the Department will accord the new company the same antidumping 
treatment as its predecessor.
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    \12\ See, e.g., Preliminary Results of Antidumping Duty Changed 
Circumstances Review: Carbon and Certain Alloy Steel Wire Rod from 
Canada, 71 FR 75229 (December 14, 2009) and unchanged in Notice of 
Final Results of Antidumping Duty Changed Circumstances Review: 
Carbon and Certain Alloy Steel Wire Rod from Canada, 72 FR 15102 
(March 30, 2007) (Carbon and Certain Alloy Steel from Canada); 
Certain Lined Paper Products From India: Preliminary Results of 
Changed Circumstances Review, 79 FR 21897 (April 18, 2014) and 
unchanged in Certain Lined Paper Products From India: Final Results 
of Changed Circumstances Review, 79 FR 35726 (June 24, 2014).
    \13\ See, e.g., Notice of Initiation and Preliminary Results of 
Antidumping Duty Changed Circumstances Review: Carbon and Certain 
Alloy Steel Wire Rod From Mexico, 75 FR 67685 (November 3, 2010) and 
unchanged in Final Results of Antidumping Duty Changed Circumstances 
Review: Carbon and Certain Alloy Steel Wire Rod From Mexico, 76 FR 
45509 (July 29, 2011); Carbon and Certain Alloy Steel from Canada.
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    In its CCR Request, Hyundai Steel explained that effective July 1, 
2015, Hyundai HYSCO merged with Hyundai Steel,\14\ with Hyundai Steel 
effectively absorbing Hyundai HYSCO. On April 28, 2015, the board of 
directors of Hyundai Steel and Hyundai HYSCO, both members of the 
Hyundai Motor Group, decided to merge the two companies. The 
absorption-type merger was conducted, through which Hyundai Steel 
became the surviving company.\15\ Hyundai Steel claimed that since the 
merger took effect, it is operating essentially the same business as 
the former Hyundai HYSCO, and there has been no significant change in 
management, production facilities, supplier relationships, or customer 
base with respect to the production and sale of the subject 
merchandise.\16\ Hyundai Steel submitted detailed documentation 
relating to the merger of the two companies (e.g., major shareholders' 
lists, board of directors' lists, executives' lists, meeting minutes 
regarding the merger, business registration certificates, and a copy of 
the merger corporate registration and announcement of the merger).\17\
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    \14\ See the CCR Request.
    \15\ Id., at 3.
    \16\ Id., at 4.
    \17\ Id., at 3 and Exhibits 1 through 8.
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    With respect to management, Hyundai Steel asserts that the 
management structure of the former Hyundai HYSCO has also remained 
largely unchanged. Hyundai Steel retained most of its board of 
directors. Mr. Heon-seok Lee, who was a board member and executive of 
Hyundai HYSCO, remained as an executive of Hyundai Steel.\18\ In 
addition, Hyundai Steel states that of the 17 executives of Hyundai 
HYSCO, 12 have remained at Hyundai Steel after the merger, excluding 
only four non-executive directors. Nine out of the 12 executives that 
remained at Hyundai Steel have been assigned to departments and 
divisions within Hyundai Steel.\19\
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    \18\ Id., at 8 and exhibit 2.
    \19\ Id., at 8-9 and exhibit 3.
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    Hyundai Steel further explained that its current organizational 
structure is substantially similar to that of Hyundai HYSCO. The only 
change to the organizational structure is that HYSCO's Business 
Management Division and Overseas Business Division in its Sales 
Division were divided and integrated into Hyundai Steel's Business 
Planning Department, Administrative Service Department, Accounting/
Monetary Department, Sales Department and R&D Center, according to the 
function of each team. The other three divisions (i.e., the Sales 
Division (excluding the Overseas Business sub-division), Pipe Plant, 
and Automotive Parts Plant) were simply transferred over to Hyundai 
Steel.\20\ Moreover, Hyundai Steel claims that the merger did not 
affect the overall organizational structure in the production and sale 
of OCTG.\21\
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    \20\ Id., at 7.
    \21\ Id., at 7 and exhibit 9.
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    Based on this information, and in particular, based on the fact 
that Hyundai Steel's management team continues to include the majority 
of the former HYSCO managers, we preliminarily find that the 
reorganization resulting from the merger of the two companies did not 
result in management that was materially dissimilar with respect to the 
subject merchandise.
    With respect to production facilities, Hyundai Steel asserts that 
all of the production facilities for Hyundai HYSCO and Hyundai Steel 
have remained the same, after Hyundai Steel absorbed Hyundai HYSCO due 
to the merger.\22\ Hyundai Steel provided copies of HYSCO's company 
brochure and a screenshot of Hyundai Steel's official Web site, which 
identifies the addresses and telephone numbers of the offices, 
production facilities, and branch offices of Hyundai HYSCO and Hyundai 
Steel.\23\ Hyundai Steel contends that none of these locations have 
changed as a result of the merger, including the location of the 
production facility for OCTG and the Steel Pipe Plant located in Ulsan, 
South Korea. Based on this information, we preliminarily find that the 
merger did not result in material changes to the production of the 
subject merchandise.
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    \22\ See, e.g., Carbon and Certain Alloy Steel from Canada.
    \23\ See the CCR Request at 9 and exhibit 10.
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    With respect to suppliers and customers, all of the supplier 
relationships related to OCTG for Hyundai HYSCO and Hyundai Steel have 
remained the same. Specifically, Hyundai Steel states that is was 
Hyundai HYSCO's sole supplier of hot-rolled coil for OCTG production in 
June 2015.\24\ After the merger, although the level of integration may 
have changed, the coil used in the production of OCTG continues to be 
supplied by Hyundai Steel.\25\ Hyundai Steel contends that it has also 
maintained Hyundai HYSCO's OCTG customer base.\26\ Hyundai Steel 
asserts that Hyundai HYSCO USA (HHU) was Hyundai HYSCO's sole U.S. 
customer in June 2015, while Hyundai Steel America (HSA) was Hyundai

[[Page 46647]]

Steel's sole U.S. customer in July 2015.\27\ Hyundai Steel asserts that 
its U.S. subsidiary, HSA, is the same company as Hyundai HYSCO's U.S. 
subsidiary, HHU, which was renamed pursuant to the merger.\28\
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    \24\ Id., at 9 and exhibit 11.
    \25\ Id., Hyundai Steel states that due to the time required to 
integrate the systems of the two companies, the internal systems 
relating to pipe products continued to operate separately after the 
merger while Hyundai Steel worked to merge the two systems into a 
single system. Therefore, during July 2015, Hyundai Steel is 
recognized in the system as the hot-rolled supplier.
    \26\ See the CCR Request at 9 and exhibit 12.
    \27\ Id., at 9 and 10 and exhibit 12.
    \28\ Id.
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    Based on the evidence reviewed, we preliminarily find that Hyundai 
Steel is the successor-in-interest to the merger of Hyundai Steel and 
Hyundai HYSCO. Specifically, we preliminarily find that the merger of 
these two companies resulted in no significant changes to management, 
production facilities, supplier relationships, and customers with 
respect to the production and sale of the subject merchandise. Thus, 
Hyundai Steel operates as the same business entity as Hyundai HYSCO 
with respect to the subject merchandise. If the Department upholds 
these preliminary results in the final results, Hyundai Steel will be 
entitled to the antidumping duty deposit rate currently assigned to 
Hyundai HYSCO with respect to the subject merchandise (i.e., 15.75 
percent). If these preliminary results are adopted in the final results 
of this CCR, we will instruct U.S. Customs and Border Protection to 
suspend liquidation of entries of OCTG made by Hyundai Steel, effective 
on the publication date of the final results.

Public Comment

    Interested parties may submit case briefs and/or written comments 
not later than 14 days after the date of publication of this notice. 
Rebuttal briefs and rebuttals to written comments, which must be 
limited to issues raised in such briefs or comments, may be filed not 
later than 21 days after the date of publication of this notice. 
Parties who submit case or rebuttal briefs are encouraged to submit 
with each argument: (1) A statement of the issue; (2) a brief summary 
of the argument; and (3) a table of authorities. All comments are to be 
filed electronically using Enforcement and Compliance's Antidumping and 
Countervailing Duty Centralized Electronic Service System (ACCESS) 
available to registered users at https://iaaccess.trade.gov and in the 
Central Records Unit, Room B8024 of the main Department of Commerce 
building, and must also be served on interested parties.\29\ An 
electronically filed document must be received successfully in its 
entirety by ACCESS by 5:00 p.m. Eastern Time on the day it is due.\30\
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    \29\ See 19 CFR 351.303(f).
    \30\ See 19 CFR 351.303(b).
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    Consistent with 19 CFR 351.216(e), we will issue the final results 
of this CCR no later than 270 days after the date on which this review 
was initiated, or within 45 days if all parties agree to our 
preliminary finding. We are issuing and publishing this finding and 
notice in accordance with sections 751(b)(1) and 777(i)(l) of the Act 
and 19 CFR 351.216.

    Dated: July 8, 2016.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.

Appendix I--Scope of the Review

    The merchandise covered by the investigation is certain oil 
country tubular goods (OCTG), which are hollow steel products of 
circular cross-section, including oil well casing and tubing, of 
iron (other than cast iron) or steel (both carbon and alloy), 
whether seamless or welded, regardless of end finish (e.g., whether 
or not plain end, threaded, or threaded and coupled) whether or not 
conforming to American Petroleum Institute (API) or non-API 
specifications, whether finished (including limited service OCTG 
products) or unfinished (including green tubes and limited service 
OCTG products), whether or not thread protectors are attached. The 
scope of the investigation also covers OCTG coupling stock.
    Excluded from the scope of the investigation are: Casing or 
tubing containing 10.5 percent or more by weight of chromium; drill 
pipe; unattached couplings; and unattached thread protectors.
    The merchandise subject to the investigation is currently 
classified in the Harmonized Tariff Schedule of the United States 
(HTSUS) under item numbers: 7304.29.10.10, 7304.29.10.20, 
7304.29.10.30, 7304.29.10.40, 7304.29.10.50, 7304.29.10.60, 
7304.29.10.80, 7304.29.20.10, 7304.29.20.20, 7304.29.20.30, 
7304.29.20.40, 7304.29.20.50, 7304.29.20.60, 7304.29.20.80, 
7304.29.31.10, 7304.29.31.20, 7304.29.31.30, 7304.29.31.40, 
7304.29.31.50, 7304.29.31.60, 7304.29.31.80, 7304.29.41.10, 
7304.29.41.20, 7304.29.41.30, 7304.29.41.40, 7304.29.41.50, 
7304.29.41.60, 7304.29.41.80, 7304.29.50.15, 7304.29.50.30, 
7304.29.50.45, 7304.29.50.60, 7304.29.50.75, 7304.29.61.15, 
7304.29.61.30, 7304.29.61.45, 7304.29.61.60, 7304.29.61.75, 
7305.20.20.00, 7305.20.40.00, 7305.20.60.00, 7305.20.80.00, 
7306.29.10.30, 7306.29.10.90, 7306.29.20.00, 7306.29.31.00, 
7306.29.41.00, 7306.29.60.10, 7306.29.60.50, 7306.29.81.10, and 
7306.29.81.50.
    The merchandise subject to the investigation may also enter 
under the following HTSUS item numbers: 7304.39.00.24, 
7304.39.00.28, 7304.39.00.32, 7304.39.00.36, 7304.39.00.40, 
7304.39.00.44, 7304.39.00.48, 7304.39.00.52, 7304.39.00.56, 
7304.39.00.62, 7304.39.00.68, 7304.39.00.72, 7304.39.00.76, 
7304.39.00.80, 7304.59.60.00, 7304.59.80.15, 7304.59.80.20, 
7304.59.80.25, 7304.59.80.30, 7304.59.80.35, 7304.59.80.40, 
7304.59.80.45, 7304.59.80.50, 7304.59.80.55, 7304.59.80.60, 
7304.59.80.65, 7304.59.80.70, 7304.59.80.80, 7305.31.40.00, 
7305.31.60.90, 7306.30.50.55, 7306.30.50.90, 7306.50.50.50, and 
7306.50.50.70.
    The HTSUS subheadings above are provided for convenience and 
customs purposes only. The written description of the scope of the 
investigation is dispositive.

[FR Doc. 2016-16923 Filed 7-15-16; 8:45 am]
 BILLING CODE 3510-DS-P