65 FR 12509, March 9, 2000 [A-588-851, A-791-808] Preliminary Determinations of Critical Circumstances: Certain Small Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe from Japan and South Africa AGENCY: Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: March 9, 2000. FOR FURTHER INFORMATION CONTACT: Constance Handley or Valerie Ellis at (202) 482-0631 or 482-2336, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Ave, NW, Washington, DC 20230. The Applicable Statute and Regulations Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department's regulations are references to the provisions codified at 19 CFR Part 351 (April 1999). Background On December 14, 1999, the Department published the preliminary affirmative determinations in the antidumping duty investigations on certain large diameter carbon and alloy seamless standard, line and pressure pipe from Japan and certain small diameter carbon and alloy seamless standard, line and pressure pipe from Japan and the Republic of South Africa, 64 FR 69718. On January 31, 2000, the petitioners alleged that there is a reasonable basis to believe or suspect that critical circumstances exist with respect to imports of small diameter carbon and alloy seamless standard, line and pressure pipe (seamless pipe) from Japan and South Africa. Critical Circumstances Section 733(e)(1) of 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)(i) There is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise, or (ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales, and (B) there have been massive imports of the subject merchandise over a relatively short period. Section 351.206(h)(1) of the Department's regulations provides that, in determining whether imports of the subject merchandise have been ``massive,'' 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, section 351.206(h)(2) of the Department's regulations provides that an increase in imports of 15 percent during the ``relatively short period'' of time may be considered ``massive.'' Section 351.206(i) of the Department's regulations defines ``relatively short period'' as normally being the period beginning on the date the proceeding begins (i.e., the date the petition is filed) and ending at least three months later. The regulations also provide, however, that if the Department finds that importers, or exporters or producers, had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely, the Department may consider a period of not less than three months from that earlier time. Japan Kawasaki, Nippon and Sumitomo Because we are not aware of any antidumping order in any country on seamless pipe from Japan, we do not find that a reasonable basis exists to believe or suspect that there is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise. Therefore, we must look to the second criterion for determining importer knowledge of dumping. In determining whether there is a reasonable basis to believe or suspect that an importer knew or should have known that the exporter was selling the seamless pipe at less than fair value, the Department's normal practice is to consider margins of 25 percent or more for export price (``EP'') sales sufficient to impute knowledge of dumping. See Certain Cut-to-Length Carbon Steel Plate From the People's Republic of China (PRC Plate), 62 FR 31972, 31978 (June 11, 1997). In the instant case, the mandatory respondents, Kawasaki Steel Corporation (Kawasaki), Nippon Steel Corporation (Nippon) and Sumitomo Metal Industries (Sumitomo) did not respond to the Department's questionnaire and we have applied, as adverse facts available, the highest of [[Page 12510]] the dumping margins presented in the petition and corroborated by the Department. This is consistent with section 776 of the Act and with Department practice (see Final Determination of Sales at Less Than Fair Value: Vector Supercomputers From Japan (Vector Supercomputers), 62 FR 45623 (August 28, 1997)). Kawasaki, Nippon and Sumitomo's assigned dumping margins of 106.07 percent are greater than 25 percent. Therefore, we have imputed knowledge of dumping to importers of subject merchandise from these companies. In determining whether there is a reasonable basis to believe or suspect that an importer knew or should have known that there was likely to be material injury by reason of dumped imports, the Department normally will look to the preliminary injury determination of the ITC. If the ITC finds a reasonable indication of present material injury to the relevant U.S. industry, the Department will determine that a reasonable basis exists to impute importer knowledge that there was likely to be material injury by reason of dumped imports. In this case, the ITC has found that a reasonable indication of present material injury due to dumping exists for all identified countries. See Certain Seamless Carbon and Alloy Steel Standard, Line and Pressure Pipe from the Czech Republic, Japan, Mexico, Romania and South Africa (ITC Preliminary Determination), 64 FR 46953 (August 27, 1999). As a result, the Department has determined that there is a reasonable basis to believe or suspect that importers knew or should have known that there was likely to be material injury by reason of dumped imports of subject merchandise from Japan. In determining whether there are ``massive imports'' over a ``relatively short period,'' the Department normally compares the import volume of the subject merchandise for three months immediately preceding and following the filing of the petition. Imports normally will be considered massive when imports have increased by 15 percent or more during this ``relatively short period.'' Because we do not have verifiable data from the three uncooperative Japanese companies, the Department must base its ``massive imports'' determination as to these companies on the facts available, pursuant to section 776(a) of the Act \1\. Accordingly, we examined U.S. Customs data \2\ on imports of seamless pipe from Japan for February through June 1999 ( the five months preceding the June 30, 1999, filing of the petition) and from July through November (the five months following the filing of the petition). \3\ We found, however, that these data are not producer specific and do not permit the Department to ascertain the import volumes for any individual company that failed to respond to the Department's questionnaire. Because these companies' failed to cooperate by not acting to the best of their ability to respond to the Department's questionnaires, we may make an adverse inference in selecting the facts available. Therefore, consistent with Department practice, we have adversely inferred, as facts available, that there were massive imports from Kawasaki, Nippon and Sumitomo over a relatively short period. See Notice of Final Determination of Sales at Less Than Fair Value: Collated Roofing Nails from Taiwan (Collated Roofing Nails From Taiwan), 62 FR 51427 (October 1, 1997). --------------------------------------------------------------------------- \1\ Because the three respondents did not respond to the questionnaire, we considered them non-cooperating respondents and did not request monthly shipment data from these companies. \2\ IM-145 import statistics. \3\ As stated in Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon-Quality Steel Plate from Indonesia (64 FR 73164, December 29, 1999), the Department's practice is to use the longest period for which information is available from the month that the petition was submitted through the date of the preliminary determination. --------------------------------------------------------------------------- Based on our determination that there is a reasonable basis to believe or suspect that importers knew or should have known that exporters Kawasaki, Nippon and Sumitomo were selling seamless pipe from Japan at less than fair value, that there was likely to be material injury by reason of such dumped imports, and that there have been massive imports of seamless pipe from these producers over a relatively short period, we preliminarily determine that critical circumstances exist for imports from Japan of seamless pipe produced by Kawasaki, Nippon and Sumitomo. All Other Exporters from Japan In regard to the ``all others'' category, it is the Department's normal practice to conduct its critical circumstances analysis based on the experience of investigated companies. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Steel Concrete Reinforcing Bars from Turkey (Rebars from Turkey), 62 FR 9737, 9741 (March 4, 1997). In Rebars from Turkey, the Department determined that because it found critical circumstances existed for three out of the four companies investigated, critical circumstances also existed for companies covered by the ``all others'' rate. However, in Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Sheet and Strip in Coils from Japan (Stainless Steel from Japan), 64 FR 30574 (June 8, 1999), the Department did not extend its affirmative critical circumstances findings to the ``all others'' categories while finding affirmative critical circumstances for four of the five respondents, because the affirmative determinations were based on adverse facts available. Consistent with Stainless Steel from Japan, we believe it is appropriate to apply the traditional critical circumstances criteria to the ``all others'' category. Id. First, in determining whether there is a reasonable basis to believe or suspect that an importer knew or should have known that the exporter was selling the seamless pipe at less than fair value, we look to the ``all others'' rate, which is based, in the instant case, on facts available. The dumping margin for the ``all others'' category in the instant case, 70.43 percent, exceeds the 25 percent threshold necessary to impute knowledge of dumping. Second, based on the ITC's preliminary material injury determination, we also find that importers knew or should have known that there would be material injury from the dumped merchandise. Finally, with respect to massive imports, we are unable to base our determination on our findings for the mandatory respondents, because our determinations for all of the respondents were based on facts available. We have not inferred, as facts available, that massive imports exist for ``all others'' because, unlike Kawasaki, Nippon and Sumitomo, the ``all others'' companies have not failed to cooperate in this investigation. Therefore, an adverse inference with respect to shipment levels by the ``all others'' companies is not appropriate. Instead, consistent with the approach taken in Notice of Final Determination of Sales at Less Than Fair Value: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan (Hot-Rolled Steel from Japan), 64 FR 24239 (May 6, 1999) and Notice of Final Determinations of Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From Argentina, Japan and Thailand (Cold-Rolled Steel from Japan) 65 FR 5220, 5227 (February 4, 2000), we examined U.S. Customs data on overall imports from Japan for the five months preceding and the five months following the filing of the petition in order to see if we could ascertain whether an increase in [[Page 12511]] shipments of greater than 15 percent or more occurred within a relatively short period following the point at which importers had reason to believe that a proceeding was likely. Information on the record indicates that these data cover numerous HTS categories that include merchandise other than subject merchandise. Therefore, we cannot rely on these data in determining whether there were massive imports for the ``all others'' category. Based on our determination that massive imports of seamless pipe from the producers included in the ``all others'' category did not occur and, consequently, that the third criterion necessary for determining affirmative critical circumstances has not been met, we have preliminarily determined that critical circumstances do not exist for imports from Japan of seamless pipe for companies in the ``all- others'' category. South Africa Iscor We are not aware of any antidumping order in any country on seamless pipe from South Africa. Therefore, we do not find that a reasonable basis exists to believe or suspect that there is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise. As a result, we must look to the second criterion for determining importer knowledge of dumping. As explained in PRC Plate, the Department's normal practice is to consider margins of 25 percent or more on EP sales sufficient to impute knowledge of dumping. In this case, for the sole mandatory respondent, Iscor, which did not respond to the Department's questionnaire, we have applied, as adverse facts available, the highest of the dumping margins presented in the petition and corroborated by the Department. This is consistent with section 776 of the Act and with our practice as outlined in Vector Supercomputers. Because Iscor's assigned dumping margin of 43.51 percent is greater than 25 percent, we have imputed knowledge of dumping to importers of subject merchandise from Iscor. Regarding the likelihood of material injury, for the same reasons stated above for Japan, the Department has determined that there is a reasonable basis to believe or suspect that importers knew or should have known that there was likely to be material injury by reason of dumped imports of subject merchandise from Iscor. See ITC Preliminary Determination. Finally, regarding ``massive imports'', because we had no company- specific data, we examined U.S. Customs data on imports of seamless pipe from South Africa in order to determine whether the data reasonably precludes a finding of an increase in shipments of 15 percent or more within a relatively short period for this company. Because Iscor is the only known producer of the subject merchandise, it can be inferred that any increase shown in the Customs data reflects an increase in Iscor's shipments. We examined the same five-month periods described above for Japan and found that there was an increase in shipments of 18.6 percent. Consistent with Department practice, because the Customs data does not preclude the existence of a massive increase in shipments by Iscor (and indeed suggests such an increase), we have inferred, as facts available, that there were massive imports from Iscor over a relatively short period. See, e.g., Collated Roofing Nails From Taiwan. Based on our determination that there is a reasonable basis to believe or suspect that importers knew or should have known that Iscor was selling seamless pipe from South Africa at less than fair value, that there was likely to be material injury by reason of such dumped imports, and that there have been massive imports of seamless pipe from this producer over a relatively short period, we have preliminarily determined that critical circumstances exist for imports from South Africa of seamless pipe produced by Iscor. All Other Exporters From South Africa In regard to the ``all others''' category, we have followed the same analysis outlined above in the discussion for the ``All Others Exporters from Japan.'' However, since Iscor is currently the only known exporter of seamless pipe in South Africa, we have determined that the Customs information available indicates no massive imports for the ``all others'' category. As a result, because the massive imports criterion necessary to find critical circumstances has not been met with respect to firms other than Iscor, the Department finds that critical circumstances do not exist for the ``all others'' category in the South African investigation. Suspension of Liquidation In accordance with section 733(e)(2) of the Act, the Department will direct the Customs Service to suspend liquidation of all entries of seamless pipe from the Japan produced by Kawasaki, Nippon and Sumitomo and all entries of seamless pipe from South Africa produced by Iscor, that are entered, or withdrawn from warehouse, for consumption on or after September 15, 1999, which is 90 days prior to the date of publication in the Federal Register of our preliminary determinations of sales at less than fair value. The Customs Service shall require a cash deposit or posting of a bond equal to the estimated preliminary dumping margins reflected in the preliminary determinations of sales at less than fair value published in the Federal Register. This suspension of liquidation will remain in effect until further notice. The margins in the preliminary determinations are as follows: ------------------------------------------------------------------------ Percent ------------------------------------------------------------------------ Japan: Nippon Steel Corporation................................. 106.07 Kawasaki Steel Corporation............................... 106.07 Sumitomo Metal Industries................................ 106.07 South Africa: Iscor Ltd.................................... 43.51 ------------------------------------------------------------------------ Final Critical Circumstances Determinations We will make final critical circumstances determinations when we issue our final determinations in the less-than-fair-value investigations, which are due to be made no later than April 27, 2000. ITC Notification In accordance with section 733(f) of the Act, we have notified the ITC of our determinations. This notice is published pursuant to section 777(i) of the Act. Dated: March 1, 2000. Joseph A. Spetrini, Acting Assistant Secretary for Import Administration. [FR Doc. 00-5803 Filed 3-8-00; 8:45 am] BILLING CODE 3510-DS-P