Antidumping: Oil country tubular goods from— Japan,


[Federal Register: September 7, 2005 (Volume 70, Number 172)]


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From the Federal Register Online via GPO Access []



International Trade Administration


Oil Country Tubular Goods from Japan: Preliminary Results of Antidumping Duty Administrative Review and Partial Recission of Review

AGENCY: Import Administration, International Trade Administration, U.S. Department of Commerce. SUMMARY: The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on Oil Country Tubular Goods (OCTG) from Japan in response to requests by the United States Steel Corporation, a petitioner in the original investigation (petitioner). United States Steel Corporation requested administrative reviews of JFE Steel Corporation (JFE), Nippon Steel Corporation (Nippon), NKK Tubes (NKK) and Sumitomo Metal Industries, Ltd. (SMI). This review covers sales of subject merchandise to the United States during the period of August 1, 2003 through July 31, 2004.

We have preliminarily determined that NKK and SMI had no reviewable sales of subject merchandise during the period of review (POR) and that the review of these two companies should be rescinded. We have also preliminarily determined that adverse facts available should be applied to the remaining respondents, neither of which participated in this administrative review. Interested parties are invited to comment on these preliminary results. See the Preliminary Results of Review section of this notice.

EFFECTIVE DATE: September 7, 2005.

FOR FURTHER INFORMATION CONTACT: Mark Hoadley or Kimberley Hunt, AD/CVD Operations, Office 6, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482- 3148 or (202) 482-1272, respectively.



On August 11, 1995, the Department published the antidumping duty order on OCTG from Japan in the Federal Register (60 FR 41058). On August 3, 2004, the Department published a notice of opportunity to request an administrative review of this order (69 FR 46496). On August 31, 2004, the Department received a timely request for review from petitioner covering JFE, Nippon, NKK and SMI.\1\ On September 22, 2004, we published a notice initiating an administrative review of the antidumping order on OCTG from Japan. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 69 FR 56745.

\1\ The Department found SMI and Sumitomo Corporation (SC) to be affiliated in a previous review. See Oil Country Tubular Goods From Japan; Preliminary Results and Rescission in Part of Antidumping Duty Administrative Review, 64 FR 48589, 48591 (September 7, 1999). Neither SMI nor SC has placed information on the record of this review suggesting that the basis for this finding has changed.

The Department issued Sections A, B and C of its original questionnaire on November 12, 2004.\2\ On November 18,

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2004, SMI responded that it did not export subject merchandise to the United States during the POR. On December 15 and 20, 2004, respectively, Nippon and JFE stated that they did not intend to participate in the administrative review and would not be submitting a response to the Department's questionnaire. On December 20, 2004, NKK submitted a no-shipment certification and asked for an expeditious rescission of the review.

\2\ Section A of the questionnaire requests general information concerning a company's corporate structure and business practices, the merchandise under investigation that it sells, and the manner in which it sells that merchandise in all of its markets. Section B requests a complete listing of all home market sales, or, if the home market is not viable, of sales in the most appropriate third- country market (this section is not applicable to respondents in non-market economy (NME) cases). Section C requests a complete listing of U.S. sales. Section D requests information on the cost of production (COP) of the foreign like product and the constructed value (CV) of the merchandise under investigation. Section E requests information on further manufacturing.

On May 5, 2005, the Department extended the deadline for the preliminary results of this antidumping duty administrative review until August 31, 2005. See Notice of Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review: Oil Country Tubular Goods from Japan, 70 FR 23844 (May 5, 2005).


This review covers the period August 1, 2003, through July 31, 2004.


The merchandise covered by this order consists of oil country tubular goods, hollow steel products of circular cross-section, including oil well casing, tubing, and drill pipe, of iron (other than cast iron) or steel (both carbon and alloy), whether seamless or welded, whether or not conforming to American Petroleum Institute (API) or non-API specifications, whether finished or unfinished (including green tubes and limited service OCTG products). This scope does not cover casing, tubing, or drill pipe containing 10.5 percent or more of chromium. The products subject to this order are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7304.21.30.00, 7304.21.60.30, 7304.21.60.45, 7304.21.60.60, 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, 7304.29.30.10, 7304.29.30.20, 7304.29.30.30, 7304.29.30.40, 7304.29.30.50, 7304.29.30.60, 7304.29.30.80, 7304.29.40.10, 7304.29.40.20, 7304.29.40.30, 7304.29.40.40, 7304.29.40.50, 7304.29.40.60, 7304.29.40.80, 7304.29.50.15, 7304.29.50.30, 7304.29.50.45, 7304.29.50.60, 7304.29.50.75, 7304.29.60.15, 7304.29.60.30, 7304.29.60.45, 7304.29.60.60, 7304.29.60.75, 7305.20.20.00, 7305.20.40.00, 7305.20.60.00, 7305.20.80.00, 7306.20.10.30, 7306.20.10.90, 7306.20.20.00, 7306.20.30.00, 7306.20.40.00, 7306.20.60.10, 7306.20.60.50, 7306.20.80.10, and 7306.20.80.50. Although the HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of this order is dispositive.


Partial Rescission of Administrative Review for NKK and SMI

In response to our original questionnaire of November 12, 2004, both SMI and NKK submitted no-shipment certifications. The petitioner did not comment on the no-shipment claim.

In order to corroborate the no-shipment statement, the Department requested information from U.S. Customs and Border Protection (CBP). Such information showed entries of subject merchandise produced by both NKK and SMI during the POR. The Department issued letters to NKK and SMI asking for an explanation regarding these entries. NKK responded by stating that all shipments appearing in the CBP information were non- subject merchandise. SMI responded that it and its affiliate Sumitomo Corporation (SC) had again reviewed their records and that, other than temporary importation under bond (TIB) entries, neither SMI nor SC sold any subject OCTG to customers in the United States during the POR.NKK submitted documentation demonstrating that the only entries for consumption in question involved OCTG specifically excluded from the scope of the order. Additionally, NKK included a general explanation of the steps it had followed to ensure the accuracy of the no-shipment certification previously submitted. The Department also asked NKK for additional information regarding imports from NKK Corporation, which the Department had previously found to be affiliated with NKK. In response, NKK stated that it had searched its sales database again and confirmed that it had no exports of subject merchandise to the United States during the POR. NKK also confirmed that it had no knowledge of or reason to know of any entries for consumption of subject merchandise manufactured by NKK Corporation during the POR.

In accordance with section 351.213(d)(3) of the Department's regulations, we are preliminarily rescinding the administrative review of NKK. We have based our preliminary decision regarding NKK on the letters and documentation from NKK supporting its certification that it had no shipments of the subject merchandise during the POR, on our examination of the CBP database for imports of entered merchandise produced by NKK and NKK Corporation, and on our review of entry documentation. There is no information on the record to indicate that NKK or NKK Corporation had knowledge that its merchandise was being sold to the United States during the POR. As a result, we find that NKK had no sales of subject merchandise during the POR covered by this administrative review.

SMI stated it did not sell any OCTG subject to the order for export to the United States during the POR. SMI further stated that it had reviewed its records and asked its affiliate, SC, to again review its records. SMI conclusively stated that it is not aware of any shipments of OCTG produced by SMI that may have been entered for consumption during the POR other than under TIB, which was subsequently exported from the United States.

In response to the Department's request for additional information, SMI stated that OCTG is sold to the U.S. market exclusively through trading companies. SMI stated that it reviewed its records of OCTG shipments before and during the POR and concluded that it did not sell subject merchandise to any of the companies listed as importers in the CBP information. SMI claims that it has no information about these shipments and no way to get information about these shipments. Finally, SMI stated that it did sell non-subject merchandise directly to customers in the United States. SMI also asked SC to review once again its records and again stated that SMI did not sell OCTG covered by the antidumping order to the United States during the POR.

In addition, SMI submitted a letter commenting on the information on the record of the review and stated that there is no evidence on the record that SMI knew, or had reason to believe, that any subject merchandise manufactured by SMI would be entered into the United States during the POR.

In accordance with section 351.213(d)(3) of the Department's

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regulations, we are preliminarily rescinding the administrative review with respect to both SMI and SC. We have based our preliminary determination regarding SMI on the letters and documentation from SMI and SC supporting their certification that they had no shipments of the subject merchandise during the POR, and on our examination of information obtained from CBP. There is no information on the record to indicate that SMI or SC had knowledge that its subject merchandise was being resold to the United States during the POR. As a result, we find that neither SMI nor SC had sales during the POR that are subject to this administrative review. The Department may still verify the information submitted by SMI and SC before the final results of this review.

Application of Facts Available

Pursuant to sections 776(a)(1) and (2) of the Tariff Act of 1930, as amended (the Act), if necessary information is not available on the record, or if an interested party or any other person (A) withholds information that has been requested by the administering authority; (B) fails to provide such information by the deadlines for the submission of the information or in the form and manner requested; (C) significantly impedes a proceeding under the antidumping statute; or (D) provides such information but the information cannot be verified as provided in section 782(i) of the Act, the administering authority shall, subject to section 782(d) of the Act, use the facts otherwise available in reaching the applicable determination. In this case, JFE's and Nippon's stated decision not to participate in the review constitutes a refusal to provide the information necessary to conduct the Department's antidumping analysis, pursuant to section 776(a)(2)(A) of the Act. Moreover, respondents' non-participation significantly impedes the review process. See section 776(a)(2)(C) of the Act. Therefore, the Department must resort to facts otherwise available in reaching the applicable determination. Absent any response on the record from respondents, sections 782(d) and (e) do not apply.

Section 776(b) of the Act further provides that, in selecting from among the facts otherwise available, the Department may use an inference adverse to the interests of a party that has failed to cooperate by not acting to the best of its ability to comply with a request for information. See also the Statement of Administrative Action (SAA), accompanying the Uruguay Round Agreements Act (URAA), H. Doc. No. 103-316 at 870, which specifically states that a failure to respond to the questionnaire may lead the Department to conclude that the company has not been responsive and to thus proceed on the basis of facts otherwise available. By refusing to respond to the Department's questionnaire, JFE and Nippon have failed to cooperate to the best of their ability. Neither JFE nor Nippon expressed concerns regarding the proposed deadlines, nor requested additional time. Without information from these two companies, the Department is unable to perform any company-specific analysis or calculate dumping margins for the POR. Therefore, pursuant to section 776(b) of the Act, the Department has determined that an adverse inference is warranted with respect to JFE and Nippon.

We note that, in selecting an adverse facts available (AFA) rate, the Department's practice has been to assign respondents who fail to cooperate with the Department the highest margin determined for any party in the less-than-fair-value (LTFV) investigation or in any administrative review. See Sigma Corp. v. United States, 117 F.3d 1401, 1411 (Fed. Cir. 1997). As AFA, the Department is assigning the rate of 44.20 percent. This has been the only affirmative margin calculated in this proceeding since the investigation's preliminary determination. See Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Oil Country Tubular Goods from Japan, 60 FR 6506 (February 2, 1995). It is also the rate applied in the final determination of the investigation of sales at LTFV. In the LTFV investigation, respondents Nippon and SMI did not respond to the Department's questionnaire and did not otherwise cooperate to the best of their ability, therefore the Department applied best information available (BIA) (now referred to as FA). See LTFV investigation. This rate has been used as the AFA rate in the investigation and in subsequent reviews. We preliminarily determine that it is thus appropriate to apply the AFA rate of 44.20 to Nippon and JFE for purposes of these preliminary results.


Section 776(c) of the Act provides that, when the Department applies facts otherwise available and relies on ``secondary information,'' the Department shall, to the extent practicable, corroborate that information from independent sources reasonably at the Department's disposal. The SAA clarifies that the petition is ``secondary information,'' and states that ``corroborate'' means to determine that the information used has probative value. See SAA at 870. To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information to be used. We have previously examined the reliability of the 44.20 percent rate and found it to be reliable. This rate was originally taken from the petition; it was based upon the difference between the U.S. price of a representative OCTG product sold by a Japanese company and the constructed value for that product.

The Department considers information reasonably at its disposal to determine whether a margin continues to have relevance. Where circumstances indicate that the selected margin is not appropriate as AFA, the Department will disregard the margin and determine an appropriate margin. For example, in Fresh Cut Flowers from Mexico: Final Results of Antidumping Administrative Review, 61 FR 6812 (February 22, 1996), the Department disregarded the highest margin in that case as best information available (the predecessor to facts available) because the margin was based on another company's aberrational business expense that resulted in an unusually high margin. Similarly, the Department does not apply a margin that has been discredited. See D & L Supply Co. v. United States, 113 F.3d 1220, 1221 (Fed. Cir. 1997) (the Department will not use a margin that has been judicially invalidated). None of these unusual circumstances are present here.

Our review of the information in the original petition pertaining to the price of the product and the major inputs and processes used for the production of the final merchandise did not indicate that the analysis of the OCTG market in the petition is no longer appropriate to use as a basis for facts available. Furthermore, nothing on the record of this review supports the determination that the highest margin rate from the petition in the underlying investigation does not represent reliable and relevant information for AFA purposes. Therefore, in this proceeding, the highest margin from the petition is the most appropriate information on which to base a margin for these uncooperative respondents. See Oil Country Tubular Goods from Japan; Preliminary Results of Antidumping Duty Administrative Review and Final Partial Rescission of Antidumping Duty Administrative Review, 65 FR 54838 (September 11, 2000).

Accordingly, we determine that the highest rate from any previous segment of this administrative proceeding (i.e.,

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the rate of 44.20 percent from the original investigation) is in accord with the requirement of section 776(c) of the Act that secondary information be corroborated (i.e., that it be shown to have probative value).


We preliminarily determine that the following dumping margins exist:

Margin Manufacturer/Exporter


JFE Steel Corporation....................................... 44.20 Nippon Steel Corporation.................................... 44.20


Pursuant to section 351.309 of the Department's regulations, interested parties may submit written comments in response to these preliminary results. Unless the deadline is extended by the Department, case briefs are to be submitted within 30 days after the date of publication of this notice, and rebuttal briefs, limited to arguments raised in case briefs, are to be submitted no later than five days after the time limit for filing case briefs. Parties who submit arguments in this proceeding are requested to submit with the argument: (1) a statement of the issues, and (2) a brief summary of the argument. Case and rebuttal briefs must be served on interested parties in accordance with section 351.303(f) of the Department's regulations.

Also, pursuant to section 351.310(c) of the Department's regulations, within 30 days of the date of publication of this notice, interested parties may request a public hearing on arguments to be raised in the case and rebuttal briefs. Unless the Department specifies otherwise, the hearing, if requested, will be held two days after the date for submission of rebuttal briefs. Parties will be notified of the time and location.

The Department will publish the final results of this administrative review, including the results of its analysis of issues raised in any case or rebuttal brief, no later than 120 days after publication of these preliminary results, unless extended. See section 351.213(h) of the Department's regulations.


Pursuant to section 351.212(b) of the Department's regulations, the Department calculates an assessment rate for each importer or customer of the subject merchandise. The Department will issue appropriate assessment instructions directly to CBP within 15 days of publication of the final results of this review. Upon issuance of the final results of this administrative review, if any importer- or customer-specific assessment rates calculated in the final results are above de minimis (i.e., at or above 0.5 percent), the Department will instruct CBP to assess antidumping duties on appropriate entries by applying the assessment rate to the entered value of the merchandise. For assessment purposes, if the Department's final results include the rescission of this review with respect to SMI and NKK, the Department will instruct CBP to liquidate all entries from SMI and NKK at the rate applicable at the time of entry.


The following cash deposit rates will be effective with respect to all shipments of OCTG from Japan entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results, as provided for by section 751(a)(1) of the Act: (1) for JFE and Nippon, the cash deposit rate will be the rate established in the final results of this review; (2) for previously reviewed or investigated companies not listed above, including NKK and SMI (if this review is rescinded), the cash deposit rate will be the company-specific rate established for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the 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; and (4) if neither the exporter nor the manufacturer is a firm covered by this review, a prior review, or the LTFV investigation, the cash deposit rate shall be the all others rate established in the LTFV investigation, which is 44.20 percent. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Oil Country Tubular Goods from Japan, 60 FR 155 (August 11, 1995). These deposit rates, when imposed, shall remain in effect until publication of the final results of the next administrative review.


This notice serves as a preliminary reminder to importers of their responsibility under section 351.402(f) of the Department's regulations 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.

This administrative review and notice are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: August 30, 2005. Joseph A. Spetrini, Acting Assistant Secretary for Import Administration.

[FR Doc. E5-4864 Filed 9-6-05; 8:45 am]