----------------------------------------------------------------------- DEPARTMENT OF COMMERCE International Trade Administration [A-583-815] Certain Welded Stainless Steel Pipe From Taiwan; Preliminary Results of Changed Circumstances Antidumping Duty Administrative Review AGENCY: Import Administration, International Trade Administration, Department of Commerce.
---- page 16983 ----ACTION: Notice of preliminary results of changed circumstances antidumping duty administrative review.
SUMMARY: Pursuant to a request from Chang Mien Industries Co., Ltd. (Chang Mien), the Department of Commerce (the Department) initiated a changed circumstances administrative review of the antidumping duty order on certain welded stainless steel pipe from Taiwan, 62 FR 30567, (June 4, 1997). Chang Mien requested that the Department determine that Chang Mien is the successor firm to Chang Tieh Industry, Co., Ltd. (Chang Tieh), a respondent excluded from the order in the less-than- fair-value (LTFV) investigation. See Notice of Amended Final Determination and Antidumping Duty Order; Certain Welded Stainless Steel Pipes From Taiwan, 59 FR 6619, (February 11, 1994); see also Amended Final Determination and Antidumping Duty Order; Certain Welded Stainless Steel Pipe From Taiwan, 57 FR 62300 (December 30, 1992). Based on the information Chang Mien provided in its responses to the Department's questionnaires and on the data obtained at verification, we have preliminarily determined that Chang Mien is the successor-in- interest to Chang Tieh. EFFECTIVE DATE: April 7, 1998. FOR FURTHER INFORMATION CONTACT: Maureen McPhillips at (202) 482-0193, or Linda Ludwig at (202) 482- 3383, AD/CVD Enforcement Group III, Office 8, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, 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. In addition, unless otherwise indicated, all references to the Department's regulations are to 19 CFR Part 353 (April 1, 1997). Verification As provided in section 776(b) of the Act, we verified information provided by Chang Mien using standard verification procedures, including the examination of relevant sales and financial records, and the selection of original source documentation containing relevant information. SUPPLEMENTARY INFORMATION: Background On September 11, 1996, Chang Mien requested that the Department conduct a changed circumstances administrative review pursuant to section 751(b) of the Act to determine whether Chang Mien should properly be considered the successor firm to Chang Tieh. In the LTFV investigation, the Department excluded Chang Tieh from the antidumping duty order on certain welded stainless steel pipe from Taiwan after calculating a margin of zero for Chang Tieh. Chang Mien maintains that, as Chang Mien and Chang Tieh were related at the time of the LTFV investigation, Chang Mien is entitled to Chang Tieh's exclusion from the order ab initio. Chang Mien further states that, since publication of the antidumping duty order on this product, Chang Mien has absorbed Chang Tieh, and asks that the Department issue a determination that Chang Mien is the successor firm to Chang Tieh and as such is entitled to Chang Tieh's exclusion from the antidumping duty order. Pursuant to Chang Mien's request, the Department initiated a changed circumstance review on June 4, 1997. See Certain Welded Stainless Steel Pipe from Taiwan; Invitation of Changed Circumstances Antidumping Duty Administrative Review, 62 FR 30567. Scope of the Review The merchandise subject to this antidumping duty order is welded austenitic stainless steel pipe (WSSP) that meets the standards and specifications set forth by the American Society for Testing and Materials (ASTM) for the welded form of chromium nickel pipe designated ASTM A-312. The merchandise covered by the scope of this order also includes austenitic welded stainless steel pipes made according to the standards of other nations which are comparable to ASTM A-312. WSSP is produced by forming stainless steel flat-rolled products into a tubular configuration and welding along the seam. WSSP is a commodity product generally used as a conduit to transmit liquids or gases. Major applications include, but are not limited to, digester brewery process and transport lines, general food processing lines, automotive paint lines and paper process machines. Imports of WSSP are currently classifiable under the following Harmonized Tariff Schedule of the United States (HTS) subheadings: 7306.40.5005, 7306.40.5015, 7306.40.5040, 7306.40.5065 and 7306.40.5085. Although these subheadings include both pipes and tubes, the scope of this antidumping duty order is limited to welded austenitic stainless steel pipes. Although the HTS subheadings are provided for convenience and Customs purposes, the written description of the scope of this order is dispositive. Preliminary Results of Changed Circumstances Antidumping Duty Administrative Review In accordance with section 751(b) of the Act, the Department initiated a changed circumstances administrative review on June 4, 1997, to determine whether Chang Mien is the successor company to Chang Tieh. In determining whether a merged company is the successor to another for purposes of the antidumping duty law, the Department examines a number of factors including, but not limited to, changes in (1) management, (2) production facilities, (3) supplier relationships, and (4) customer base. See e.g., Brass Sheet and Strip from Canada; Final Results of Antidumping Duty Administrative Review, 57 FR 20460 (May 13, 1992). While no one or several of these factors will necessarily provide a dispositive indication, the Department will generally consider the company that merged with another company to be a successor to the previous company if its resulting operation is substantially similar to that of the predecessor. See e.g., Industrial Phosphoric Acid from Israel; Final Results of Changed Circumstances Review, 59 FR 6944 (February 14, 1994). Thus, if evidence demonstrates that, with respect to the production and sale of the subject merchandise, the successor company operates as the same business entity as the former company, the Department will treat the successor company the same as the predecessor for purposes of antidumping duty liability. To determine whether Change Mien is the successor-in-interest to Chang Tieh, we examined Chang Mein's initial request for a changed circumstances review, and Chang Mien's responses to the Department's supplemental questionnaires of October 27, 1997, and December 5, 1997. In addition, from January 21 through January 23, 1997, we verified Chang Mien's responses at its facilities in Kaoshung, Taiwan. Chang Mien, founded in 1972, began sales operations in 1977, originally as a carbon steel coil center. In early 1984, Chang Mien formed a subsidiary, Chang Tieh, to produce and market stainless steel pipe. In 1989 Chang Mien acquired land adjacent to its steel coil centers for construction of its stainless steel pipe mill. Chang Tieh began producing non- ---- page 16984 ---- annealed pipe in 1990; the following year, Chang Tieh purchased and installed an annealing furnace permitting it to produce ASTM A312 heat- treated pipe, the subject merchandise of the antidumping duty order. While the non-annealed pipe was intended almost exclusively for domestic consumption, the addition of the annealing furnace allowed Chang Tieh to target export markets. In 1993 Chang Mien sought to merge Chang Tieh and another firm, Jumbo Stainless Steel Corporation (Jumbo), into a single entity bearing the Chang Mien name. The merger was prompted by Chang Mien's desire to become a publicly-traded company on Taiwain's stock exchange. The merger of the affiliated companies into one larger, consolidated entity would make Chang Mien more attractive to investors in the market. Chang Mien's 1991-1992 audited financial statements noted that a resolution to absorb Chang Tieh and Jumbo with Chang Mien was adopted by the stockholders on October 16, 1992. The Company (i.e. Chang Mien) would be the continuing company, while Chang Tieh and Jumbo would be the merged companies and cease to exist. The merger of Chang Tieh and Jumbo was approved by the Fair Trade Commission of the Executive Yuan on March 16, 1993. Chang Mien maintains that it was related to or affiliated with respondent Chang Tieh, since both companies were owned by the same individual. As such, Chang Mien asserts in its request for review that it should have been excluded from the antidumping duty order ab initio (see Chang Mien's Request for Sec. 751(b) Review, September 11, 1996, Public Version, p. 2). Therefore, Chang Mien maintains that when it absorbed Chang Tieh, it assumed Chang Tieh's exclusion from the antidumping duty order. Basing our analysis on the four criteria cited above and evidence on the record, we have preliminarily determined that Chang Mien is the successor-in-interest to Chang Tieh. First, during the LTFV investigation, the Department established Chang Tieh's relationship with Chang Mien by virtue of common ownership by the same individual. In addition, the management and organizational structure of the former Chang Tieh, while undergoing some changes since the Department's 1991 period of investigation, remained essentially intact in the time following the March 1993 merger. The production facilities, although upgraded to some extent, are virtually the same, maintaining the same production capacity. Although Chang Mien has recently added new suppliers as the business environment changed, for the years immediately following the merger, Chang Mien continued to deal with essentially the same steel suppliers as those used by Chang Tieh prior to the merger. Chang Mien's customer base has changed considerably from the customers served by Chang Tieh, due to customer name changes, bankruptcy, new customers, etc. However, given that Chang Mien absorbed Chang Tieh more than four years ago we would expect change in the customer base. Moreover, changes in the U.S. customer base are understandable, given that Chang Tieh was a first-time entrant into the U.S. pipe market during the 1991 POI. Therefore, factors other than the merger of Chang Tieh with Chang Mien, contributed to the evolution to customer base. As stated previously, we do not consider any one factor dispositive; our decision is based on the totality of the evidence. Our analysis of the evidence on the record leads us to preliminarily determine that Chang Mien is the successor-in-interest to Chang Tieh, since it essentially operates as the same entity as the former company, maintaining the same management, production facilities, and supplier relationships as did Chang Tieh prior to its merger with Chang Mien. Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of these preliminary results. Rebuttal briefs and rebuttals to written comments, limited to issues raise din such briefs or comments, may be filed no later than 37 days after the date of publication. The Department will publish the final results of this changed circumstances review which will include its analysis of any such written comments. This notice is in accordance with section 751(b) of the Act, as amended (19 U.S.C. 1675(b)), and section 353.22(f) of the Department's regulations. Dated: March 31, 1998. Robert S. LaRussa, Assistant Secretary for Import Administration. [FR Doc. 98-9099 Filed 4-6-98; 8:45 am] BILLING CODE 3510-DS-M
The Contents entry for this article reads as follows: International Trade Administration NOTICES Antidumping: Welded stainless steel pipe from-- Taiwan, 16982
