[Federal Register Volume 75, Number 91 (Wednesday, May 12, 2010)]
[Notices]
[Pages 26716-26726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-11344]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-964]
Seamless Refined Copper Pipe and Tube from the People's Republic
of China: Preliminary Determination of Sales at Less Than Fair Value
and Postponement of Final Determination
AGENCY: Import Administration, International Trade Administration,
Department of Commerce
DATES: Effective Date: May 12, 2010.
SUMMARY: The Department of Commerce (the ``Department'') has
preliminarily determined that seamless refined copper pipe and tube
(``copper pipe and tube'') from the People's Republic of China
(``PRC'') is being, or is likely to be, sold in the United States at
less than fair value (``LTFV''), as provided in section 733 of the
Tariff Act of 1930, as amended (the ``Act''). The estimated dumping
margins are shown in the ``Preliminary Determination'' section of this
notice. Interested parties are invited to comment on the preliminary
determination.
FOR FURTHER INFORMATION CONTACT: Karine Gziryan or Shawn Higgins, 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-
4081 and (202) 482-0679, respectively.
SUPPLEMENTARY INFORMATION:
Background
On September 30, 2009, the Department received a petition
concerning imports of copper pipe and tube from the PRC and Mexico
filed in
[[Page 26717]]
proper form by Cerro Flow Products, Inc., KobeWieland Copper Products,
LLC, Mueller Copper Tube Products, Inc., and Mueller Copper Tube
Company, Inc. (collectively, ``Petitioners'').\1\ The Department
initiated antidumping duty investigations of copper pipe and tube from
the PRC and Mexico on October 20, 2009.\2\
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\1\ See Petitions for the Imposition of Antidumping Duties on
Seamless Refined Copper Pipe and Tube from the People's Republic of
China and Mexico (September 30, 2009).
\2\ See Seamless Refined Copper Pipe and Tube from the People's
Republic of China and Mexico: Initiation of Antidumping Duty
Investigations, 74 FR 55194 (October 27, 2009) (``Initiation
Notice'').
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In the Initiation Notice, the Department stated that it intended to
select PRC respondents based on quantity and value (``Q&V'')
questionnaires.\3\ On October 21, 2009, the Department requested Q&V
information from the eight companies identified in the petition as
potential producers or exporters of copper pipe and tube from the
PRC.\4\ Additionally, the Department posted the Q&V questionnaire for
this investigation on its Web site at http://ia.ita.doc.gov/ia-highlights-and-news.html. The Department received timely responses to
its Q&V questionnaire from the following eleven companies: Golden
Dragon Precise Copper Tube Group, Inc. (``Golden Dragon''), Hong Kong
Hailiang Metal Trading Limited (``Hong Kong Hailiang''), Zhejiang
Hailiang Co., Ltd. (``Zhejiang Hailiang''), Sinochem Ningbo Ltd.
(``Sinochem''), Luvata Tube (Zhongshan) Ltd. (``Luvata Tube''), Foshan
Hua Hong Copper Tube Co., Ltd. (``Foshan Hua Hong''), Ningbo Jintian
Copper Tube Co. Ltd. (``Ningbo Jintian''), Zhejiang Naile Copper Co.,
Ltd. (``Zhejiang Naile''), Chinalco Luoyang Copper Co., Ltd.
(``Chinalco''), Zhejiang Jiahe Pipes Inc. (``Zhejiang Jiahe''), and
Luvata Alltop (Zhongshan) Ltd. (``Luvata Alltop'').\5\
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\3\ See Initiation Notice, 74 FR at 55198.
\4\ See Letter from Robert Bolling, Program Manager, AD/CVD
Operations, Office 4, to All Interested Parties, ``Antidumping Duty
Investigation of Seamless Refined Copper Pipe and Tube from the
People's Republic of China: Quantity and Value Questionnaire''
(October 21, 2009).
\5\ See Memorandum from Shawn Higgins, International Trade
Compliance Analyst, AD/CVD Operations, Office 4, to John M.
Andersen, Acting Deputy Assistant Secretary for Antidumping and
Countervailing Duty Operations, ``Respondent Selection in the
Antidumping Duty Investigation of Seamless Refined Copper Pipe and
Tube from the People's Republic of China'' (December 3, 2009)
(``Respondent Selection Memorandum'').
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On November 24, 2009, the International Trade Commission (``ITC'')
preliminarily determined that there is a reasonable indication that an
industry in the United States has been materially injured or threatened
with material injury by reason of imports of copper pipe and tube from
the PRC and Mexico.\6\
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\6\ See Seamless Refined Copper Pipe and Tube From China and
Mexico, Investigation Nos. 731-TA-1174-1175 (Preliminary), 74 FR
62595 (November 30, 2009).
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On December 3, 2009, the Department selected Golden Dragon, Hong
Kong Hailiang, and Zhejiang Hailiang as mandatory respondents.\7\ On
December 4, 2009, the Department issued antidumping questionnaires to
these three companies. In January and February 2010, Golden Dragon,
Hong Kong Hailiang, and Zhejiang Hailiang submitted timely responses to
sections A, C, and D of the Department's antidumping questionnaire.
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\7\ See Respondent Selection Memorandum at 5.
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In November and December 2009, the Department received timely filed
separate-rate applications from the following six companies: Luvata
Tube, Ningbo Jintian, Zhejiang Naile, Chinalco, Zhejiang Jiahe, and
Luvata Alltop.
The Department issued supplemental questionnaires to Golden Dragon,
Hong Kong Hailiang, Zhejiang Hailiang, Luvata Tube, Ningbo Jintian, and
Chinalco from January to April 2010. The Department received responses
to its supplemental questionnaires from Golden Dragon, Hong Kong
Hailiang, Zhejiang Hailiang, Luvata Tube, and Ningbo Jintian from
January to May 2010. From January to May 2010, Petitioners submitted
comments to the Department regarding the submissions and/or responses
of Golden Dragon, Hong Kong Hailiang, Zhejiang Hailiang, Ningbo
Jintian, and Chinalco.
On January 8, 2010, the Department released a letter to interested
parties which listed potential surrogate countries and invited
interested parties to comment on surrogate country and surrogate value
(``SV'') selection.\8\ Between February and March 2010, Petitioners,
Golden Dragon, Hong Kong Hailiang, and Zhejiang Hailiang submitted
publicly available SV information, comments, and rebuttal comments on
the selection of a surrogate country and SVs. For a discussion of the
selection of the surrogate country, see ``Surrogate Country'' section
below.
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\8\ See Letter from Robert Bolling, Program Manager, AD/CVD
Operations, Office 4, to All Interested Parties, ``Antidumping Duty
Investigation of Seamless Refined Copper Pipe and Tube from the
People's Republic of China'' (January 8, 2010).
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On February 12, 2010, Petitioners requested a 50-day postponement
of the preliminary determination. On February 25, 2010, pursuant to
section 733(c)(1)(A) of the Act and 19 CFR 351.205(e), the Department
postponed this preliminary determination by 50 days.\9\
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\9\ See Seamless Refined Copper Pipe and Tube From the People's
Republic of China and Mexico: Postponement of Preliminary
Determinations of Antidumping Duty Investigations, 75 FR 8677
(February 25, 2010).
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As explained in the memorandum from the Deputy Assistant Secretary
for Import Administration, the Department has exercised its discretion
to toll deadlines for the duration of the closure of the Federal
Government from February 5, through February 12, 2010. Thus, all
deadlines in this segment of the proceeding have been extended by seven
days. The revised deadline for the final determination of this
investigation is now May 5, 2010.\10\
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\10\ See Memorandum to the Record from Ronald Lorentzen, DAS for
Import Administration, regarding ``Tolling of Administrative
Deadlines As a Result of the Government Closure During the Recent
Snowstorm,'' (February 12, 2010).
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Period of Investigation
The period of investigation (``POI'') is January 1, 2009, through
June 30, 2009. This period corresponds to the two most recent fiscal
quarters prior to the month of the filing of the petition (i.e.,
September, 2009).\11\
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\11\ See 19 CFR 351.204(b)(1).
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Postponement of Final Determination and Extension of Provisional
Measures
Pursuant to section 735(a)(2) of the Act, on April 22, 2010,
Zhejiang Hailiang and Hong Kong Hailiang requested that, in the event
of an affirmative preliminary determination in this investigation, the
Department postpone its final determination by 60 days. Golden Dragon
submitted an identical request on April 23, 2010. In these submissions,
Zhejiang Hailiang, Hong Kong Hailiang, and Golden Dragon agreed to the
application of the provisional measures prescribed under 19 CFR
351.210(e)(2) until the date of the final determination. Because our
preliminary determination is affirmative, the respondents requesting an
extension of the final determination and an extension of the
provisional measures accounts for a significant proportion of exports
of the merchandise under consideration, and no compelling reasons for
denial exist, the Department is extending the due date for the final
determination by 60 days. Suspension of liquidation will be extended
accordingly.
Scope of Investigation
For the purpose of this investigation, the products covered are all
seamless circular refined copper pipes and tubes,
[[Page 26718]]
including redraw hollows, greater than or equal to 6 inches (152.4 mm)
in length and measuring less than 12.130 inches (308.102 mm) (actual)
in outside diameter (``OD''), regardless of wall thickness, bore (e.g.,
smooth, enhanced with inner grooves or ridges), manufacturing process
(e.g., hot finished, cold-drawn, annealed), outer surface (e.g., plain
or enhanced with grooves, ridges, fins, or gills), end finish (e.g.,
plain end, swaged end, flared end, expanded end, crimped end,
threaded), coating (e.g., plastic, paint), insulation, attachments
(e.g., plain, capped, plugged, with compression or other fitting), or
physical configuration (e.g., straight, coiled, bent, wound on spools).
The scope of this investigation covers, but is not limited to,
seamless refined copper pipe and tube produced or comparable to the
American Society for Testing and Materials (``ASTM'') ASTM-B42, ASTM-
B68, ASTM-B75, ASTM-B88, ASTM-B88M, ASTM-B188, ASTM-B251, ASTM-B251M,
ASTM-B280, ASTM-B302, ASTM-B306, ASTM-359, ASTM-B743, ASTM-B819, and
ASTM-B903 specifications and meeting the physical parameters described
therein. Also included within the scope of this investigation are all
sets of covered products, including ``line sets'' of seamless refined
copper tubes (with or without fittings or insulation) suitable for
connecting an outdoor air conditioner or heat pump to an indoor
evaporator unit. The phrase ``all sets of covered products'' denotes
any combination of items put up for sale that is comprised of
merchandise subject to the scope.
``Refined copper'' is defined as: (1) Metal containing at least
99.85 percent by weight of copper; or (2) metal containing at least
97.5 percent by weight of copper, provided that the content by weight
of any other element does not exceed the following limits:
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Limiting content
Element percent by weight
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Ag--Silver.......................................... 0.25
As--Arsenic......................................... 0.5
Cd--Cadmium......................................... 1.3
Cr--Chromium........................................ 1.4
Mg--Magnesium....................................... 0.8
Pb--Lead............................................ 1.5
S--Sulfur........................................... 0.7
Sn--Tin............................................. 0.8
Te--Tellurium....................................... 0.8
Zn--Zinc............................................ 1.0
Zr--Zirconium....................................... 0.3
Other elements (each)............................... 0.3
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Excluded from the scope of this investigation are all seamless
circular hollows of refined copper less than 12 inches in length whose
OD (actual) exceeds its length. The products subject to this
investigation are currently classifiable under subheadings 7411.10.1030
and 7411.10.1090 of the Harmonized Tariff Schedule of the United States
(``HTSUS''). Products subject to this investigation may also enter
under HTSUS subheadings 7407.10.1500, 7419.99.5050, 8415.90.8065, and
8415.90.8085. Although the HTSUS subheadings are provided for
convenience and customs purposes, the written description of the scope
of this investigation is dispositive.
Scope Comments
In accordance with the preamble to the Department's
regulations,\12\ the Department's Initiation Notice set aside a period
of time for parties to raise issues regarding product coverage, and
encouraged all parties to submit comments within 20 calendar days of
publication of the Initiation Notice. The Department received comments
and scope exclusion requests from BrassCraft Manufacturing,\13\ Johnson
Controls, Inc.,\14\ and National de Cobre, S.A. de C.V.\15\ In a
memorandum dated concurrently with this notice, the Department
determined that the merchandise included in these scope exclusion
requests are subject to this investigation.\16\
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\12\ See Antidumping Duties; Countervailing Duties, 62 FR 27296,
27323 (May 19, 1997) (``Preamble'').
\13\ See Letter from BrassCraft Manufacturing to the Secretary
of Commerce, ``Comments Requesting Clarification of the Scope in the
Investigation of Seamless Refined Copper Pipe and Tube from the
People's Republic of China and Mexico'' (March 22, 2010).
\14\ See Letter from Johnson Controls, Inc. to the Secretary of
Commerce, ``Seamless Refined Copper Pipe and Tube from China and
Mexico; Comments of Johnson Controls, Inc.--Purchaser'' (November
10, 2009).
\15\ See Letter from Nacional de Cobre, S.A. de C.V. to the
Secretary of Commerce, ``Seamless Refined Copper Pipe and Tube from
Mexico: Comments on Scope of Investigation'' (March 29, 2010).
\16\ See Memorandum from George McMahon, Case Analyst, Office 3,
to Melissa Skinner, Director, Office 3, ``Seamless Refined Copper
Pipe and Tube from Mexico and the People's Republic of China: Scope
Exclusion Requests'' (May 5, 2010).
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Affiliation/Single Entity
Section 771(33) of the Act states that the Department considers the
following entities to be affiliated: (A) Members of a family, including
brothers and sisters (whether by whole or half blood), spouse,
ancestors, and lineal descendants; (B) any officer or director of an
organization and such organization; (C) partners; (D) employer and
employee; (E) any person directly or indirectly owning, controlling, or
holding with power to vote, 5 percent or more of the outstanding voting
stock or shares of any organization and such organization; (F) two or
more persons directly or indirectly controlling, controlled by, or
under common control with, any person; and (G) any person who controls
any other person and such other person. For purposes of affiliation,
section 771(33) of the Act states that a person shall be considered to
control another person if the person is legally or operationally in a
position to exercise restraint or direction over the other person. In
order to find affiliation between companies, the Department must find
that at least one of the criteria listed above is applicable to the
respondents. The Statement of Administrative Action accompanying the
Uruguay Round Agreements Act (``SAA''), H. Doc. No. 316, 103d Cong., 2d
Session at 838 (1994), indicates that stock ownership is not the only
evidentiary factor that the Department may consider to determine
whether a person is in a position to exercise restraint or direction
over another person (e.g., control may be established through corporate
or family groupings, or joint ventures and other means).\17\ To the
extent that the affiliation provisions in section 771(33) of the Act do
not conflict with the Department's application of separate rates and
the statutory NME provisions in section 773(c) of the Act, the
Department will determine that exporters and/or producers are
affiliated if the facts of the case support such a finding.\18\
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\17\ See Certain Fresh Cut Flowers From Colombia: Final Results
of Antidumping Duty Administrative Reviews, 61 FR 42833, 42853
(August 19, 1996); Certain Welded Carbon Steel Pipes and Tubes From
Thailand: Final Results of Antidumping Duty Administrative Review,
62 FR 53808, 53810 (October 16, 1997).
\18\ See Certain Preserved Mushrooms From the People's Republic
of China: Preliminary Results of Sixth New Shipper Review and
Preliminary Results and Partial Rescission of Fourth Antidumping
Duty Administrative Review, 69 FR 10410, 10413 (March 5, 2004),
unchanged in Certain Preserved Mushrooms From the People's Republic
of China: Final Results of Sixth Antidumping Duty New Shipper Review
and Final Results and Partial Rescission of the Fourth Antidumping
Duty Administrative Review, 69 FR 54635 (September 9, 2004).
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The Department preliminarily determines that two mandatory
respondents, Zhejiang Hailiang (a producer/exporter) and Hong Kong
Hailiang (an exporter), as well as an additional producer/exporter,
Shanghai Hailiang Copper Co., Ltd. (``Shanghai Hailiang'')
(collectively and hereinafter the ``Hailiang Group''), are affiliated
pursuant to section 771(33) of the Act. Based on the Department's
examination of the evidence presented in the questionnaire responses of
Zhejiang Hailiang and Hong Kong Hailiang, the
[[Page 26719]]
Department determines that Zhejiang Hailiang owns and controls both
Hong Kong Hailiang and Shanghai Hailiang. Accordingly, the Department
preliminarily determines that those parties are affiliated under
sections 771(33)(E), (F), and (G) of the Act.\19\
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\19\ See Memorandum from Shawn Higgins, International Trade
Compliance Analyst, AD/CVD Operations, Office 4, to Abdelali
Elouaradia, Director, AD/CVD Operations, Office 4, ``Antidumping
Duty Investigation of Seamless Refined Copper Pipe and Tube from the
People's Republic of China: Affiliation and Treatment as a Single
Entity of Zhejiang Hailiang Co., Ltd., Shanghai Hailiang Copper Co.,
Ltd., and Hong Kong Hailiang Metal Trading Limited'' (May 5, 2010)
at 3-5 (``Affiliation and Single Entity Memorandum'').
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Additionally, under its affiliated single entity regulation, 19 CFR
351.401(f), the Department may collapse affiliated producers where it
finds that producers have production facilities for similar or
identical products, and that a significant potential for manipulation
of price or production exists. The regulation addresses the specific
situation of affiliated producers. However, the regulation is not
exhaustive of the situations that may call for collapsing of affiliated
entities, and the Department has developed a practice of collapsing
entities that do not qualify as producers, such as Hong Kong Hailiang,
which is an exporter.\20\
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\20\ See Notice of Final Determination of Sales at Less Than
Fair Value: Certain Frozen and Canned Warmwater Shrimp From Brazil,
69 FR 76910 (December 23, 2004) and accompanying Issues and Decision
Memorandum at Comment 5.
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Based on the Department's examination of the evidence presented in
the questionnaire responses of Zhejiang Hailiang and Hong Kong
Hailiang, the Department preliminarily determines that Zhejiang
Hailiang and Shanghai Hailiang have similar production facilities such
that retooling would not be required to shift production from one
company to another.\21\ The Department further determines that Zhejiang
Hailiang, Hong Kong Hailiang, and Shanghai Hailiang have a significant
potential for manipulation of prices and production because Zhejiang
Hailiang owns and controls Hong Kong Hailiang and Shanghai Hailiang and
because Zhejiang Hailiang, Hong Kong Hailiang, and Shanghai Hailiang
have overlapping managers and directors.\22\ The Department, therefore,
preliminarily determines that Zhejiang Hailiang, Hong Kong Hailiang,
and Shanghai Hailiang should be treated as a single entity for purposes
of the antidumping investigation of copper pipe and tube from the PRC.
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\21\ See Affiliation and Single Entity Memorandum at 3-4.
\22\ See Affiliation and Single Entity Memorandum at 3-5.
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Non-Market Economy Treatment
The Department considers the PRC to be a non-market economy
(``NME'') country.\23\ In accordance with section 771(18)(C)(i) of the
Act, any determination that a foreign country is an NME country shall
remain in effect until revoked by the administering authority. No party
has challenged the designation of the PRC as an NME country in this
investigation. Therefore, the Department continues to treat the PRC as
an NME country for purposes of this preliminary determination.
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\23\ See, e.g., Preliminary Determination of Sales at Less Than
Fair Value and Postponement of Final Determination: Coated Free
Sheet Paper from the People's Republic of China, 72 FR 30758, 30760
(June 4, 2007), unchanged in Final Determination of Sales at Less
Than Fair Value: Coated Free Sheet Paper from the People's Republic
of China, 72 FR 60632 (October 25, 2007).
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Surrogate Country
When the Department is investigating imports from an NME country,
section 773(c)(1) of the Act directs it to base normal value (``NV''),
in most circumstances, on the NME producer's factors of production
(``FOPs'') valued in a surrogate market-economy country or countries
considered to be appropriate by the Department. In accordance with
section 773(c)(4) of the Act, in valuing the FOPs, the Department shall
utilize, to the extent possible, the prices or costs of FOPs in one or
more market-economy countries that are at a level of economic
development comparable to that of the NME country and are significant
producers of comparable merchandise. The sources of the SVs that the
Department has used in this investigation are discussed under the
``Normal Value'' section below.
The Department determined that India, the Philippines, Indonesia,
Thailand, Ukraine, and Peru are countries comparable to the PRC in
terms of economic development.\24\ Once the countries that are
economically comparable to the PRC have been identified, the Department
selects an appropriate surrogate country by determining whether an
economically comparable country is a significant producer of comparable
merchandise and whether the data for valuing FOPs are both available
and reliable.
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\24\ See Memorandum from Kelly Parkhill, Acting Director, Office
of Policy, to Robert Bolling, Program Manager, AD/CVD Operations,
Office 4, ``Request for a List of Surrogate Countries for an
Investigation of Copper Pipe and Tube from the People's Republic of
China'' (January 7, 2010).
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On March 23, 2010, the Department determined that it is appropriate
to use India as a surrogate country pursuant to section 773(c)(4) of
the Act based on the following: (1) it is at a similar level of
economic development to the PRC pursuant to section 773(c)(4) of the
Act; (2) it is a significant producer of comparable merchandise; and
(3) the Department has reliable data from India that it can use to
value the FOPs.\25\ Thus, the Department calculated NV using Indian
prices when available and appropriate to the FOPs of Golden Dragon and
the Hailiang Group. The Department obtained and relied upon publicly
available information wherever possible.\26\ In accordance with 19 CFR
351.301(c)(3)(i), for the final determination in an antidumping
investigation, interested parties may submit publicly available
information to value the FOPs within 40 days after the date of
publication of the preliminary determination.\27\
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\25\ See Memorandum from Shawn Higgins, International Trade
Compliance Analyst, AD/CVD Operations, Office 4, to Abdelali
Elouaradia, Director, AD/CVD Operations, Office 4, ``Antidumping
Duty Investigation of Seamless Refined Copper Pipe and Tube from the
People's Republic of China: Selection of a Surrogate Country''
(March 23, 2010).
\26\ See Memorandum to the File from Shawn Higgins,
International Trade Compliance Analyst, AD/CVD Operations, Office 4,
``Investigation of Seamless Refined Copper Pipe and Tube from the
People's Republic of China: Surrogate Value Memorandum,'' (May 5,
2010) (``Surrogate Value Memorandum'').
\27\ In accordance with 19 CFR 351.301(c)(1), for the final
determination of this investigation, interested parties may submit
factual information to rebut, clarify, or correct factual
information submitted by an interested party less than ten days
before, on, or after, the applicable deadline for submission of such
factual information. However, the Department notes that 19 CFR
351.301(c)(1) permits new information only insofar as it rebuts,
clarifies, or corrects information recently placed on the record.
The Department generally will not accept the submission of
additional, previously absent-from-the-record alternative SV
information pursuant to 19 CFR 351.301(c)(1). See Glycine from the
People's Republic of China: Final Results of Antidumping Duty
Administrative Review and Final Rescission, in Part, 72 FR 58809
(October 17, 2007) and accompanying Issues and Decision Memorandum
at Comment 2.
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Separate Rates
In the Initiation Notice, the Department notified parties of the
application process by which exporters and producers may obtain
separate rate status in NME investigations.\28\ The process requires
exporters and producers to submit a separate rate application.\29\
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\28\ See Initiation Notice, 74 FR at 55198-99.
\29\ See Policy Bulletin 05.1: Separate-Rate Practice and
Application of Combination Rates in Antidumping Investigations
involving Non-Market Economy Countries (April 5, 2005), at 6,
available at http://ia.ita.doc.gov/policy/bull05-1.pdf (``Policy
Bulletin 05.1''). Policy Bulletin 05.1 states, in relevant part,
``While continuing the practice of assigning separate rates only to
exporters, all separate rates that the Department will now assign in
its NME investigations will be specific to those producers that
supplied the exporter during the period of investigation. Note,
however, that one rate is calculated for the exporter and all of the
producers which supplied subject merchandise to it during the period
of investigation. This practice applied both to mandatory
respondents receiving an individually calculated separate rate as
well as the pool of non-investigated firms receiving the weighted-
average of the individually calculated rates. This practice is
referred to as the application of ``combination rates'' because such
rates apply to specific combinations of exporters and one or more
producers. The cash-deposit rate assigned to an exporter will apply
only to merchandise both exported by the firm in question and
produced by a firm that supplied the exporter during the period of
investigation.''
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[[Page 26720]]
In proceedings involving NME countries, the Department holds a
rebuttable presumption that all companies within the country are
subject to government control and thus should be assessed a single
antidumping duty rate. It is the Department's policy to assign all
exporters of subject merchandise in an NME country this single rate
unless an exporter can demonstrate that it is sufficiently independent
so as to be entitled to a separate rate. Exporters can demonstrate this
independence through the absence of both de jure and de facto
governmental control over export activities. The Department analyzes
each entity exporting the subject merchandise under the test announced
in the Notice of Final Determination of Sales at Less Than Fair Value:
Sparklers from the People's Republic of China, 56 FR 20588 (May 6,
1991) (``Sparklers''), as further developed in Notice of Final
Determination of Sales at Less Than Fair Value: Silicon Carbide from
the People's Republic of China, 59 FR 22585 (May 2, 1994) (``Silicon
Carbide''). However, if the Department determines that a company is
wholly foreign-owned or located in a market economy, then a separate
rate analysis is not necessary to determine whether it is independent
from government control.
Separate Rate Recipients
1. Joint Ventures Between Chinese and Foreign Companies or Wholly
Chinese-Owned Companies
Three separate rate applicants in this investigation, Ningbo
Jintian, Zhejiang Naile, and Zhejiang Jiahe (collectively, ``Chinese SR
Applicants'') and the mandatory respondents Golden Dragon and the
Hailiang Group, provided evidence that they are either joint ventures
between Chinese and foreign companies or wholly Chinese-owned
companies. The Department has analyzed whether each of the three
Chinese SR Applicants and the mandatory respondents have demonstrated
the absence of de jure and de facto governmental control over their
respective export activities.
a. Absence of De Jure Control
The Department considers the following de jure criteria in
determining whether an individual company may be granted a separate
rate: (1) An absence of restrictive stipulations associated with an
individual exporter's business and export license; (2) legislative
enactments decentralizing control of companies; and (3) other formal
measures by the government decentralizing control of companies.\30\ The
evidence provided by the three Chinese SR Applicants and the mandatory
respondents supports a preliminary finding that all of the above
criteria have been satisfied.
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\30\ See Sparklers, 56 FR at 20589.
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The evidence provided by the three Chinese SR Applicants and the
mandatory respondents supports a preliminary finding of de jure absence
of governmental control based on the following: (1) An absence of
restrictive stipulations associated with the individual exporters'
business and export licenses; (2) the existence of applicable
legislative enactments decentralizing control of Chinese companies; and
(3) the implementation of formal measures by the government
decentralizing control of Chinese companies.
b. Absence of De Facto Control
Typically, the Department considers four factors in evaluating
whether each respondent is subject to de facto governmental control of
its export functions: (1) Whether the export prices are set by or are
subject to the approval of a governmental agency; (2) whether the
respondent has authority to negotiate and sign contracts and other
agreements; (3) whether the respondent has autonomy from the government
in making decisions regarding the selection of management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding disposition of profits or
financing of losses.\31\ The Department has determined that an analysis
of de facto control is critical in determining whether respondents are,
in fact, subject to a degree of governmental control which would
preclude the Department from assigning separate rates.
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\31\ See Silicon Carbide, 59 FR at 22586-87; see also Notice of
Final Determination of Sales at Less Than Fair Value: Furfuryl
Alcohol From the People's Republic of China, 60 FR 22544, 22545 (May
8, 1995).
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The evidence provided by the three Chinese SR Applicants and the
mandatory respondents supports a preliminary finding of de facto
absence of governmental control based on record statements and
supporting documentation showing that the companies: (1) Set their own
export prices independent of the government and without the approval of
a government authority; (2) have the authority to negotiate and sign
contracts and other agreements; (3) maintain autonomy from the
government in making decisions regarding the selection of management;
and (4) retain the proceeds of their respective export sales and make
independent decisions regarding disposition of profits or financing of
losses.
Therefore, the evidence placed on the record of this investigation
by the three Chinese SR Applicants and the mandatory respondents
demonstrates an absence of de jure and de facto government control
under the criteria identified in Sparklers and Silicon Carbide.
Accordingly, the Department has preliminarily granted a separate rate
to the Chinese SR Applicants.\32\
---------------------------------------------------------------------------
\32\ See ``Preliminary Determination'' section below.
---------------------------------------------------------------------------
2. Wholly Foreign-Owned
Two separate rate applicants in this investigation, Luvata Alltop
and Luvata Tube, (``Foreign-Owned SR Applicants''), provided evidence
that they are wholly owned by individuals or companies located in
market economies in their separate rate applications. Therefore,
because they are wholly foreign-owned and the Department has no
evidence indicating that they are under the control of the government
of the PRC, a separate rates analysis is not necessary to determine
whether these companies are independent from government control.\33\
Accordingly, the Department has preliminarily granted a separate rate
to these Foreign-Owned SR Applicants.\34\
---------------------------------------------------------------------------
\33\ See Notice of Final Determination of Sales at Less Than
Fair Value: Creatine Monohydrate From the People's Republic of
China, 64 FR 71104 (December 20, 1999) (determining that the
respondent was wholly foreign-owned and, thus, qualified for a
separate rate).
\34\ See ``Preliminary Determination'' section below.
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Companies Not Receiving a Separate Rate
On February 22, 2010, the Department issued Chinalco a supplemental
questionnaire that requested that Chinalco correct certain deficiencies
in its January 21, 2010, separate rate
[[Page 26721]]
application.\35\ The Department stated that Chinalco did not provide
(1) documentation of its first sale by invoice date of merchandise
under consideration to an unaffiliated customer in the United States
during the POI, (2) documentation in support of Chinalco's
certifications that it conducts independent price negotiations and has
autonomy from the government in making decisions regarding the
selection of management, (3) capital verification reports, (4)
consolidated financial statements, (5) share transfer agreements, (6)
articles of incorporation, and (7) an export certificate of approval.
On February 26, 2010, Chinalco informed the Department that it cannot
provide the missing documentation.\36\ Therefore, because Chinalco did
not comply with the Department's February 22, 2010, request for
information, the Department has determined that Chinalco has failed to
demonstrate an absence of de jure and de facto government control under
the criteria identified in Sparklers and Silicon Carbide. Accordingly,
the Department has preliminarily determined not to grant Chinalco a
separate rate.
---------------------------------------------------------------------------
\35\ See Letter from Robert Bolling, Program Manager, AD/CVD
Operations, Office 4, to Chinalco Luoyang Copper Co., Ltd.,
``Separate Rate Application Supplemental Questionnaire'' (February
22, 2010).
\36\ See Memorandum from Shawn Higgins, International Trade
Compliance Analyst, AD/CVD Operations, Office 4, to the File,
``Antidumping Investigation of Seamless Refined Copper Pipe and Tube
from the People's Republic of China: Email from Chinalco Luoyang
Copper Co., Ltd.'' (April 16, 2010).
---------------------------------------------------------------------------
Additionally, in the Initiation Notice, the Department requested
that all companies wishing to qualify for separate rate status in this
investigation submit a separate rate application.\37\ Sinochem and
Foshan Hua Hong submitted timely responses to the Department's Q&V
questionnaire but did not provide separate rate applications. Therefore
Sinochem and Foshan Hua Hong have not demonstrated their eligibility
for separate rate status in this investigation. As a result, the
Department is treating Sinochem and Foshan Hua Hong as part of the PRC-
wide entity.
---------------------------------------------------------------------------
\37\ See Initiation Notice, 74 FR at 55198-99.
---------------------------------------------------------------------------
Margins for Separate Rate Recipients
Through the evidence in their applications, the Chinese SR
Applicants and the Foreign-Owned SR Applicants have demonstrated their
eligibility for a separate rate. See the ``Separate Rates'' section
above. The separate rate is determined based on the estimated weighted-
average dumping margins established for exporters and producers
individually investigated, excluding zero and de minimis margins or
margins based entirely on adverse facts available (``AFA'').\38\ In
this investigation both mandatory respondents, Golden Dragon and the
Hailiang Group, have estimated weighted-average dumping margins which
are above de minimis and which are not based on total AFA. Therefore,
because there are only two relevant weighted-average dumping margins
for this preliminary determination, the separate rate is a simple-
average of these two values, which is 34.48 percent.\39\
---------------------------------------------------------------------------
\38\ See section 735(c)(5)(A) of the Act.
\39\ See section 735(c)(5)(B) of the Act.
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Use of Facts Available and Adverse Facts Available
Section 776(a) of the Act provides that the Department shall apply
``facts otherwise available'' (``FA'') if (1) necessary information is
not on the record, or (2) an interested party or any other person (A)
withholds information that has been requested, (B) fails to provide
information within the deadlines established, or in the form and manner
requested by the Department, subject to subsections (c)(1) and (e) of
section 782 of the Act, (C) significantly impedes a proceeding, or (D)
provides information that cannot be verified as provided by section
782(i) of the Act.
Section 776(b) of the Act further provides that the Department may
use an adverse inference in applying the facts otherwise available when
a party has failed to cooperate by not acting to the best of its
ability to comply with a request for information.\40\ Such an adverse
inference may include reliance on information derived from the
petitions, the final determination, a previous administrative review,
or other information placed on the record.
---------------------------------------------------------------------------
\40\ See SAA at 870.
---------------------------------------------------------------------------
Hailiang Group
The Department requested on several occasions that the Hailiang
Group provide its FOPs on a more specific basis (i.e., control number
(``CONNUM'') specific, plant/division specific, or product-group
specific).\41\ On March 18, 2010, and April 12, 2010, the Hailiang
Group stated that it is not able to provide the requested information
to the Department. However, the Hailiang Group's own information on the
record indicates that it has the ability to report its FOPs on a
product-group specific basis.\42\ Because the Hailiang Group continued
to report FOP values that are identical for all CONNUMs, despite the
Department's multiple requests to provide this data on a more specific
basis, all the information necessary for the Department to calculate an
accurate dumping margin for the Hailiang Group is not on the record and
available for use in the preliminary determination. Since the Hailiang
Group did not provide the requested FOPs on a product-group specific
basis, this necessary information was not available on the record and,
therefore, we have determined, pursuant to section 776(a)(1) and (2)(B)
of the Act, that it is appropriate to base the Hailiang Group's
preliminary dumping margin, in part, on FA.
---------------------------------------------------------------------------
\41\ See Letter from Robert Bolling, Program Manager, AD/CVD
Operations, Office 4, to the Hailiang Group, ``Sections C&D Third
Supplemental Questionnaire'' (April 28, 2010) at 2-3; Letter from
Robert Bolling, Program Manager, AD/CVD Operations, Office 4, to the
Hailiang Group, ``Sections C&D Second Supplemental Questionnaire''
(March 29, 2010) at 5; Letter from Robert Bolling, Program Manager,
AD/CVD Operations, Office 4, to the Hailiang Group, ``Sections C&D
Supplemental Questionnaire'' (February 26, 2010) at 8-9; Letter from
Robert Bolling, Program Manager, AD/CVD Operations, Office 4, to
Zhejiang Hailiang, ``Antidumping Duty Investigation of Seamless
Refined Copper Pipe and Tube from the People's Republic of China:
Request for Information'' (December 4, 2010) at D-2.
\42\ See Letter from the Hailiang Group to the Secretary of
Commerce, ``Certain Seamless Refined Copper Pipe & Tube from the
People's Republic of China: Supplemental Section D Questionnaire
Response of Hailiang Group'' (March 19, 2010) at Exhibit 6; Letter
from the Hailiang Group to the Secretary of Commerce, ``Certain
Seamless Refined Copper Pipe & Tube from the People's Republic of
China: Supplemental Section D Questionnaire Response of Hailiang
Group'' (April 12, 2010) at Exhibit 12.
---------------------------------------------------------------------------
The Hailiang Group's response to the Department's initial request
for CONNUM-specific FOPs simply stated that it reported FOPs on a
CONNUM-specific basis.\43\ However, in its original section D response,
Hailiang reported FOP values that are identical for all CONNUMs.\44\
These values were calculated as the total consumption of each input
divided by the total production quantity. On February 25, 2010, the
Department again requested that the Hailiang Group provide its FOPs on
a more specific basis. Once again, the Hailiang Group responded to the
Department's request by stating that it was unable to provide the
requested data.\45\ Based on the Hailiang Group's April 12, 2010
submission, the record
[[Page 26722]]
indicates that the Hailiang Group has the ability to report its FOPs on
a product-group specific basis. The Hailiang Group's failure to provide
the requested information has prevented the Department from calculating
an accurate margin for the Hailiang Group. Accordingly, the Department
has preliminarily determined that necessary information is not on the
record and that the Hailiang Group has not provided requested
information. Therefore, for the preliminary determination, as partial
FA, the Department recalculated the FOPs reported by the Hailiang Group
to reflect product-group specific production steps and the
corresponding processing yields at each stage using information from
the Hailiang Group's April 12, 2010 submission.\46\ On April 29, 2010,
the Department again requested that the Hailiang Group provide its FOPs
on a product-group specific basis. The Department will analyze this
data for the final determination.
---------------------------------------------------------------------------
\43\ See Letter from the Hailiang Group to the Secretary of
Commerce, ``Certain Seamless Refined Copper Pipe & Tube from the
People's Republic of China: Section D Questionnaire Response of
Hailiang Group'' (January 25, 2010) (``Hailiang Group Section D
Response'') at 4.
\44\ See Hailiang Group Section D Response at Exhibit 1.
\45\ See Letter from the Hailiang Group to the Secretary of
Commerce, ``Certain Seamless Refined Copper Pipe & Tube from the
People's Republic of China: Supplemental Section D Questionnaire
Response of Hailiang Group'' (March 19, 2010) at 4.
\46\ See Memorandum from Karine Gziryan, International Trade
Compliance Analyst, AD/CVD Operations, Office 4, to the File,
``Seamless Refined Copper Pipe and Tube from the People's Republic
of China: Preliminary Analysis Memorandum for the Hailiang Group''
(May 5, 2010) (``Hailiang Group Analysis Memo'').
---------------------------------------------------------------------------
PRC-Wide Entity
On October 21, 2009, the Department requested Q&V information from
the eight companies that Petitioners identified as potential exporters
or producers of copper pipe and tube from the PRC. Additionally, the
Department's Initiation Notice informed all potential PRC exporters/
manufacturers of subject merchandise of the requirements to respond to
both the Department's Q&V questionnaire and the separate rate
application in order to receive consideration for separate rate
status.\47\
---------------------------------------------------------------------------
\47\ See Initiation Notice, 74 FR at 55198-99.
---------------------------------------------------------------------------
Two of the potential exporters/manufacturers identified in the
petition, Qingdao Hongtai International Trading Co., Ltd. and Zhejiang
Hongtian Copper Co., Ltd., did not respond to the Department's requests
for Q&V information. Furthermore, two exporters/manufacturers, Sinochem
and Foshan Hua Hong, that submitted Q&V information did not submit a
separate rate application. In addition, a third exporter/manufacturer,
Chinalco, who submitted Q&V information as well as a separate rate
application, failed to provide additional information requested by the
Department in order for the Department to determine its separate rate
eligibility.
Therefore, the Department preliminarily determines that there were
exports of merchandise under investigation from PRC exporters/
manufacturers that did not respond to the Department's Q&V
questionnaire, and/or subsequently did not demonstrate their
eligibility for separate rate status. As a result, the Department is
treating these PRC exporters/manufacturers (``non-responsive
companies'') as part of the PRC-wide entity.
Application of Total Adverse Facts Available
As noted above, the Department has determined that the companies
that did not submit Q&V information or who failed to demonstrate that
they operate free of government control, are part of the PRC-wide
entity. Pursuant to section 776(a) of the Act, the Department finds
that the PRC-wide entity has failed to respond to the Department's
questionnaires, withheld required information, and/or submitted
information that cannot be verified, thus significantly impeding the
proceeding.\48\ Accordingly, the Department has preliminarily
determined to base the PRC-wide entity's margin on FA.\49\ Further,
because the PRC-wide entity failed to cooperate by not acting to the
best of its ability to comply with the Department's request for
information, the Department preliminarily determines that, when
selecting from among the FA, an adverse inference is warranted for the
PRC-wide entity pursuant to section 776(b) of the Act.
---------------------------------------------------------------------------
\48\ See, e.g., Preliminary Determination of Sales at Less Than
Fair Value, Postponement of Final Determination, and Preliminary
Partial Determination of Critical Circumstances: Diamond Sawblades
and Parts Thereof from the People's Republic of China, 70 FR 77121,
77128 (December 29, 2005), unchanged in Final Determination of Sales
at Less Than Fair Value and Final Partial Affirmative Determination
of Critical Circumstances: Diamond Sawblades and Parts Thereof from
the People's Republic of China, 71 FR 29303 (May 22, 2006).
\49\ See section 776(a) of the Act.
---------------------------------------------------------------------------
Selection of the Adverse Facts Available Rate
In deciding which facts to use as AFA, section 776(b) of the Act
and 19 CFR 351.308(c)(1) provide that the Department may rely on
information derived from (1) The petition, (2) a final determination in
the investigation, (3) any previous review or determination, or (4) any
information placed on the record. In selecting a rate for AFA, the
Department selects a rate that is sufficiently adverse ``as to
effectuate the purpose of the facts available rule to induce
respondents to provide the Department with complete and accurate
information in a timely manner.'' \50\ Further, it is the Department's
practice to select a rate that ensures ``that the party does not obtain
a more favorable result by failing to cooperate than if it had
cooperated fully.'' \51\ It is the Department's practice to select, as
AFA, the higher of the (a) highest margin alleged in the petition, or
(b) the highest calculated rate of any respondent in the
investigation.\52\ In the instant investigation, as AFA, the Department
has preliminarily assigned to the PRC-wide entity, including companies
that did not respond to the Department's Q&V questionnaire or establish
their eligibility for a separate rate, the highest rate on the record
of this proceeding, which is the 60.50 percent margin from the
petition.\53\ The Department preliminarily determines that this
information is the most appropriate from the available sources to
effectuate the purposes of AFA. The Department will consider all
margins on the record at the time of the final determination for the
purpose of determining the most appropriate AFA rate for the PRC-wide
entity.
---------------------------------------------------------------------------
\50\ See Notice of Final Determination of Sales at Less Than
Fair Value: Static Random Access Memory Semiconductors From Taiwan,
63 FR 8909, 8932 (February 23, 1998).
\51\ See Brake Rotors From the People's Republic of China: Final
Results and Partial Rescission of the Seventh Administrative Review;
Final Results of the Eleventh New Shipper Review, 70 FR 69937, 69939
(November 18, 2005) (quoting SAA accompanying the Uruguay Round
Agreements Act, H. Doc. No. 316, 103d Cong., 2d Session at 870
(1994)).
\52\ See Final Determination of Sales at Less Than Fair Value:
Certain Cold-Rolled Flat-Rolled Carbon Quality Steel Products From
The People's Republic of China, 65 FR 34660 (May 31, 2000) and
accompanying Issues and Decision Memorandum at ``Facts Available.''
\53\ See Initiation Notice, 74 FR at 55198.
---------------------------------------------------------------------------
The dumping margin for the PRC-wide entity applies to all entries
of the merchandise under investigation except for entries of
merchandise under investigation from the exporter/manufacturer
combinations listed in the chart in the ``Preliminary Determination''
section below.
Corroboration of Information
Section 776(c) of the Act provides that, when the Department relies
on secondary information rather than on information obtained in the
course of an investigation as FA, it must, to the extent practicable,
corroborate that information from independent sources reasonably at its
disposal. Secondary information is described as ``information derived
from the petition that gave rise to the investigation or review, the
final determination concerning merchandise subject to this
investigation, or any previous review under section 751
[[Page 26723]]
concerning the merchandise under investigation.'' \54\ To
``corroborate'' means that the Department will satisfy itself that the
secondary information to be used has probative value. Independent
sources used to corroborate may include, for example, published price
lists, official import statistics and customs data, and information
obtained from interested parties during the particular investigation.
To corroborate secondary information, the Department will, to the
extent practicable, examine the reliability and relevance of the
information used.\55\
---------------------------------------------------------------------------
\54\ See SAA at 870.
\55\ See Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or
Less in Outside Diameter, and Components Thereof, From Japan;
Preliminary Results of Antidumping Duty Administrative Reviews and
Partial Termination of Administrative Reviews, 61 FR 57391, 57392
(November 6, 1996), unchanged in Tapered Roller Bearings and Parts
Thereof, Finished and Unfinished, From Japan, and Tapered Roller
Bearings, Four Inches or Less in Outside Diameter, and Components
Thereof, From Japan; Final Results of Antidumping Duty
Administrative Reviews and Termination in Part, 62 FR 11825 (March
13, 1997).
---------------------------------------------------------------------------
The AFA rate that the Department used is the 60.50 percent rate
from the petition. Petitioners' methodology for calculating the United
States price and NV in the petition is discussed in the Initiation
Notice.\56\ To corroborate the AFA margin that the Department selected,
the Department compared this margin to the margins found for the
mandatory respondents, Golden Dragon and the Hailiang Group. The
Department found that the margin of 60.50 percent has probative value
because it is in the range of the model-specific margins that the
Department found for the Hailiang Group.\57\ Accordingly, the
Department finds that the rate of 60.50 percent is corroborated within
the meaning of section 776(c) of the Act.
---------------------------------------------------------------------------
\56\ See Initiation Notice, 74 FR at 55198.
\57\ See Hailiang Group Analysis Memo.
---------------------------------------------------------------------------
Fair Value Comparison
To determine whether sales of copper pipe and tube to the United
States by Golden Dragon and the Hailiang Group were made at LTFV, the
Department compared export price (``EP'') and constructed export price
(``CEP'') to NV, as described in the ``U.S. Price'' and ``Normal
Value'' sections of this notice.
U.S. Price
In accordance with section 772(a) of the Act, the Department used
EP as the basis for U.S. price for Golden Dragon's and the Hailiang
Group's sales where the first sale to unaffiliated purchasers was made
prior to importation and the use of CEP was not otherwise warranted. In
accordance with section 772(c) of the Act, the Department calculated EP
for Golden Dragon and the Hailiang Group by deducting the following
expenses from the starting price (gross unit price) charged to the
first unaffiliated customer in the United States: foreign inland
freight from the plant to the port of exportation, foreign brokerage
and handling, international freight, and marine insurance.
Additionally, the Department based movement expenses on SVs where the
service was purchased from a PRC company.\58\ For details regarding our
EP calculations, see Golden Dragon Analysis Memo and the Hailiang Group
Analysis Memo.
---------------------------------------------------------------------------
\58\ See Memorandum from Shawn Higgins, International Trade
Compliance Analyst, AD/CVD Operations, Office 4, to the File,
``Seamless Refined Copper Pipe and Tube from the People's Republic
of China: Preliminary Analysis Memorandum for Golden Dragon Precise
Copper Tube Group, Inc.'' (May 5, 2010) (``Golden Dragon Analysis
Memo''); Hailiang Group Analysis Memo.
---------------------------------------------------------------------------
In accordance with section 772(b) of the Act, the Department used
CEP as the basis for U.S. price for Golden Dragon's sales where Golden
Dragon first sold subject merchandise to its affiliated company in the
United States, which in turn sold subject merchandise to unaffiliated
U.S. customers. In accordance with section 772(b) of the Act, CEP is
the price at which the merchandise under investigation is first sold
(or agreed to be sold) in the United States before or after the date of
importation by or for the account of the producer or exporter of such
merchandise or by a seller affiliated with the producer or exporter, to
a purchaser not affiliated with the producer or exporter, as adjusted
under sections 772(c) and (d) of the Act. The Department calculated CEP
for Golden Dragon based on delivered prices to unaffiliated purchasers
in the United States and made deductions, where applicable, from the
U.S. sales price for movement expenses in accordance with section
772(c)(2)(A) of the Act. These movement expenses included foreign
inland freight from the plant to the port of exportation, international
freight, marine insurance, U.S. customs duty, U.S. inland freight from
port to the warehouse, and U.S. inland freight from the warehouse to
the customer. In accordance with section 772(d)(1) of the Act, the
Department deducted credit expenses and indirect selling expenses from
the U.S. price, all of which relate to commercial activity in the
United States. Finally, the Department deducted CEP profit, in
accordance with sections 772(d)(3) and 772(f) of the Act. For details
regarding the CEP calculation, see Golden Dragon Analysis Memo.
Normal Value
Section 773(c)(1) of the Act provides that the Department shall
determine NV using an FOP methodology if the merchandise is exported
from an NME and the information does not permit the calculation of NV
using home-market prices, third-country prices, or constructed value
under section 773(a) of the Act. The Department bases NV on FOPs
because the presence of government controls on various aspects of NMEs
renders price comparisons and the calculation of production costs
invalid under the Department's normal methodologies.\59\
---------------------------------------------------------------------------
\59\ See, e.g., Preliminary Determination of Sales at Less Than
Fair Value, Affirmative Critical Circumstances, In Part, and
Postponement of Final Determination: Certain Lined Paper Products
from the People's Republic of China, 71 FR 19695, 19703 (April 17,
2006), unchanged in Notice of Final Determination of Sales at Less
Than Fair Value, and Affirmative Critical Circumstances, In Part:
Certain Lined Paper Products From the People's Republic of China, 71
FR 53079 (September 8, 2006).
---------------------------------------------------------------------------
As the basis for NV, Golden Dragon and the Hailiang Group provided
FOPs used in each stage for producing copper pipe and tube. Consistent
with section 773(c)(1)(B) of the Act, it is the Department's practice
to value the FOPs that a respondent uses to produce the merchandise
under consideration.
Factor Valuation Methodology
In accordance with section 773(c) of the Act, the Department
calculated NV based on FOP data reported by Golden Dragon and the
Hailiang Group. To calculate NV, the Department multiplied the reported
per-unit factor-consumption rates by publicly available Indian SVs. In
selecting the SVs, the Department considered the quality, specificity,
and contemporaneity of the data.\60\ As appropriate, the Department
adjusted input prices by including freight costs to make them delivered
prices. Specifically, the Department added to Indian import SVs a
surrogate freight cost using the shorter of the reported distance from
the domestic supplier to the factory or the distance from the nearest
seaport to the factory where appropriate. This adjustment is in
accordance with the Court of Appeals
[[Page 26724]]
for the Federal Circuit's decision in Sigma Corp. v. United States, 117
F.3d 1401, 1407-08 (Fed. Cir. 1997). A detailed description of all SVs
used for Golden Dragon and the Hailiang Group can be found in the
Surrogate Value Memorandum.\61\
---------------------------------------------------------------------------
\60\ See, e.g., Fresh Garlic From the People's Republic of
China: Final Results of Antidumping Duty New Shipper Review, 67 FR
72139 (December 4, 2002) and accompanying Issues and Decision
Memorandum at Comment 6; Final Results of First New Shipper Review
and First Antidumping Duty Administrative Review: Certain Preserved
Mushrooms From the People's Republic of China, 66 FR 31204 (June 11,
2001) and accompanying Issues and Decision Memorandum at Comment 5.
\61\ See Surrogate Value Memorandum at Exhibits 1 and 2.
---------------------------------------------------------------------------
Golden Dragon and the Hailiang Group each reported that one of
their raw material inputs (i.e., copper) was sourced from market
economy countries and paid for in market economy currencies. Pursuant
to 19 CFR 351.408(c)(1), when a respondent sources inputs from a market
economy supplier in meaningful quantities (i.e., not insignificant
quantities), the Department normally will use the actual price paid by
the respondent for those inputs.\62\ Because information reported by
Golden Dragon and the Hailiang Group demonstrates that they each
purchased significant quantities (i.e., 33 percent or more) of copper
from market economy suppliers, the Department used each respondent's
actual market economy purchase prices of copper to value each of their
FOPs for this input.\63\ Where appropriate, freight expenses were added
to the market economy prices of this input. When Golden Dragon or the
Hailiang Group made market economy copper purchases that may have been
dumped or subsidized, are not bona fide, or are otherwise not
acceptable for use in a dumping calculation, the Department excluded
them from the numerator of the ratio to ensure a fair determination of
whether valid market economy purchases meet the 33-percent
threshold.\64\
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\62\ See Preamble, 62 FR at 27366.
\63\ See Antidumping Methodologies: Market Economy Inputs,
Expected Non-Market Economy Wages, Duty Drawback; and Request for
Comments, 71 FR 61716, 61717 (October 19, 2006) (``Antidumping
Methodologies'').
\64\ See Antidumping Methodologies, 71 FR at 61717-18.
---------------------------------------------------------------------------
In accordance with the Department's practice, the Department used
data from the Indian import statistics in the World Trade Atlas
(``WTA'') and other publicly available Indian sources in order to
calculate SVs for Golden Dragon and the Hailiang Group's FOPs (i.e.,
direct materials, energy, packing materials) and certain movement
expenses. In selecting the best available information for valuing FOPs
in accordance with section 773(c)(1) of the Act, the Department's
practice is to select, to the extent practicable, SVs which are non-
export average values, most contemporaneous with the POI, product-
specific, and tax-exclusive.\65\ The record shows that data in the WTA
Indian import statistics, as well as those from the other Indian
sources, are contemporaneous with the POI, product-specific, and tax-
exclusive.\66\ In those instances where the Department could not obtain
publicly available information contemporaneous to the POI with which to
value factors, the Department adjusted the SVs using, where
appropriate, the Indian Wholesale Price Index as published in the
International Financial Statistics of the International Monetary
Fund.\67\
---------------------------------------------------------------------------
\65\ See, e.g., Notice of Preliminary Determination of Sales at
Less Than Fair Value, Negative Preliminary Determination of Critical
Circumstances and Postponement of Final Determination: Certain
Frozen and Canned Warmwater Shrimp From the Socialist Republic of
Vietnam, 69 FR 42672, 42682 (July 16, 2004), unchanged in Final
Determination of Sales at Less Than Fair Value: Certain Frozen and
Canned Warmwater Shrimp From the Socialist Republic of Vietnam, 69
FR 71005 (December 8, 2004).
\66\ See Surrogate Value Memorandum at Exhibits 1 and 2.
\67\ See Surrogate Value Memorandum at Exhibit 3.
---------------------------------------------------------------------------
Furthermore, with regard to the Indian import-based SVs, the
Department disregarded import prices that it has reason to believe or
suspect may be subsidized. The Department has reason to believe or
suspect that prices of inputs from Indonesia, South Korea, and Thailand
may have been subsidized. The Department has found in other proceedings
that these countries maintain broadly available, non-industry-specific
export subsidies and, therefore, it is reasonable to infer that all
exports to all markets from these countries may be subsidized.\68\
Further, guided by the legislative history, it is the Department's
practice not to conduct a formal investigation to ensure that such
prices are not subsidized.\69\ Rather, the Department bases its
decision on information that is available to it at the time it makes
its determination.\70\ Therefore, the Department has not used prices
from these countries in calculating the Indian import-based SVs.
Additionally, the Department disregarded prices from NME countries.
Finally, imports that were labeled as originating from an
``unspecified'' country were excluded from the average value, because
the Department could not be certain that they were not from either an
NME country or a country with general export subsidies.\71\
---------------------------------------------------------------------------
\68\ See Notice of Final Determination of Sales at Less Than
Fair Value and Negative Final Determination of Critical
Circumstances: Certain Color Television Receivers From the People's
Republic of China, 69 FR 20594 (April 16, 2004) and accompanying
Issues and Decision Memorandum at Comment 7.
\69\ See Omnibus Trade and Competitiveness Act of 1988,
Conference Report to accompany H.R. Rep. 100-576 at 590 (1988),
reprinted in 1988 U.S.C.C.A.N. 1547, 1623-24.
\70\ See Polyethylene Terephthalate Film, Sheet, and Strip from
the People's Republic of China: Preliminary Determination of Sales
at Less Than Fair Value, 73 FR 24552, 24559 (May 5, 2008) (``PET
Film from China''), unchanged in Polyethylene Terephthalate Film,
Sheet, and Strip from the People's Republic of China: Final
Determination of Sales at Less Than Fair Value, 73 FR 55039
(September 24, 2008).
\71\ See PET Film from China, 73 FR at 24559.
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For direct, indirect, and packing labor, consistent with 19 CFR
351.408(c)(3), the Department used the PRC regression-based wage rate
as reported on Import Administration's home page, http://ia.ita.doc.gov/wages/index.html, 2007 Income Data (Revised: Dec 2009),
``Expected Wages Of Selected Non-Market Economy Countries, Expected
Wage Calculation; 2007 GNI Data, Regression Analysis: 2007 GNI Data.''
Because this regression-based wage rate does not separate the labor
rates into different skill levels or types of labor, the Department
applied the same wage rate to all skill levels and types of labor
reported by the respondent.\72\
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\72\ See Surrogate Value Memorandum at Exhibit 8.
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The Department valued truck freight expenses using a per-unit
average rate calculated from data on the infobanc Web site: http://www.infobanc.com/logistics/logtruck.htm>. The logistics section of this
Web site contains inland freight truck rates between many large Indian
cities. The value is contemporaneous with the POI.\73\
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\73\ See Surrogate Value Memorandum at Exhibit 11.
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The Department valued electricity using price data for small,
medium, and large industries, as published by the Central Electricity
Authority of the Government of India in its publication entitled
``Electricity Tariff & Duty and Average Rates of Electricity Supply in
India,'' dated March 2008. These electricity rates represent actual
country-wide, publicly available information on tax-exclusive
electricity rates charged to industries in India. As the rates listed
in this source became effective on a variety of different dates, the
Department is not adjusting the average value for inflation.\74\
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\74\ See Surrogate Value Memorandum at Exhibit 11.
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The Department calculated the SV for natural gas based upon the
2008-2009 annual report of GAIL (India) Limited.\75\
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\75\ See Surrogate Value Memorandum at Exhibit 7.
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The Department valued water using data from the Maharashtra
Industrial Development Corporation http://midcindia.org as it includes
a wide range of industrial water tariffs. This source provides
industrial water rates
[[Page 26725]]
within the Maharashtra province for April 2009 through June 2009.\76\
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\76\ See Surrogate Value Memorandum at Exhibit 6.
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The Department valued brokerage and handling using a simple average
of the brokerage and handling costs reported in public submissions
filed in three antidumping duty cases. Specifically, the Department
averaged the public brokerage and handling expenses reported by Navneet
Publications (India) Ltd. in the 2007-2008 administrative review of
certain lined paper products from India, Essar Steel Limited in the
2006-2007 antidumping duty administrative review of hot-rolled carbon
steel flat products from India, and Himalya International Ltd. in the
2005-2006 administrative review of certain preserved mushrooms from
India. The Department adjusted the average brokerage and handling rate
for inflation.\77\
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\77\ See Surrogate Value Memorandum at Exhibit 10.
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To value factory overhead, selling, general, and administrative
expenses, and profit, the Department used the factory overhead,
selling, general and administrative expenses, and profit data from
three Indian companies, Mehta Tubes Limited, Multimetals Limited, and
Nissan Copper Limited, producers of merchandise comparable to the
merchandise under consideration, for the fiscal year April 1, 2008,
through March 31, 2009. The Department did not rely on two companies'
financial statements on the record, namely the financial statements of
Vaishali Metals Private Limited (``Vaishali Metals'') and Mukesh Metal
Industries Pvt. Ltd.(``Mukesh Metals'').\78\ The Department did not
rely on the financial statements of Vaishali Metals because certain
schedules in the financial statements of Vaishali Metals are incomplete
and/or not provided. The Department has an established practice of
rejecting financial statements of surrogate producers whose financial
statements are incomplete.\79\ Additionally, the Department did not
rely on the financial statements of Mukesh Metals because the
Department has determined that Mukesh Metals' financial statements do
not provide sufficient information to determine whether Mukesh Metals'
``job work'' income is an offset to direct labor, manufacturing income,
or simply a revenue item. Therefore, the Department cannot determine
whether it is appropriate to classify ``job work'' income as an offset
to manufacturing, labor, and energy, manufacturing overhead, or to
totally exclude it.\80\
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\78\ See Surrogate Value Memorandum at Exhibit 9.
\79\ See Certain Tissue Paper Products From the People's
Republic of China: Final Results and Partial Rescission of the 2007-
2008 Antidumping Duty Administrative Review and Determination Not To
Revoke in Part, 74 FR 52176 (October 9, 2009) and accompanying
Issues and Decision Memorandum at Comment 5.
\80\ See Amended Final Results of Antidumping Duty
Administrative Review and New Shipper Reviews: Wooden Bedroom
Furniture From the People's Republic of China, 72 FR 46957 (August
22, 2007) and accompanying Issues and Decision Memorandum at Comment
23.
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Currency Conversion
The Department made currency conversions into U.S. dollars, in
accordance with section 773A(a) of the Act, based on the exchange rates
in effect on the dates of the U.S. sales as certified by the Federal
Reserve Bank.
Verification
As provided in section 782(i)(1) of the Act, the Department intends
to verify the information upon which it will rely in making its final
determination.
Combination Rates
In the Initiation Notice, the Department stated that it would
calculate combination rates for certain respondents that are eligible
for a separate rate in this investigation.\81\ This practice is
described in Policy Bulletin 05.1, available at http://www.trade.gov/ia.
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\81\ See Initiation Notice, 74 FR at 55199.
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Preliminary Determination
The Department preliminarily determines that the following dumping
margins exist for the period January 2009 through June 2009:
------------------------------------------------------------------------
Weighted-
Exporter Producer average percent
margin
------------------------------------------------------------------------
Golden Dragon Precise Copper Golden Dragon Precise 10.26
Tube Group, Inc. Copper Tube Group,
Inc.
Zhejiang Hailiang Co., Ltd.; Zhejiang Hailiang Co., 58.69
Hong Kong Hailiang Metal Ltd.; Shanghai
Trading Limited; Shanghai Hailiang Copper Co.,
Hailiang Copper Co., Ltd. Ltd.
Zhejiang Naile Copper Co., Ltd Zhejiang Naile Copper 34.48
Co., Ltd.
Zhejiang Jiahe Pipes Inc...... Zhejiang Jiahe Pipes 34.48
Inc.
Luvata Tube (Zhongshan) Ltd... Luvata Tube 34.48
(Zhongshan) Ltd.
Luvata Tube (Zhongshan) Ltd... Luvata Alltop 34.48
(Zhongshan) Ltd.
Luvata Alltop (Zhongshan) Ltd. Luvata Alltop 34.48
(Zhongshan) Ltd.
Ningbo Jintian Copper Tube Co. Ningbo Jintian Copper 34.48
Ltd. Tube Co. Ltd.
PRC-Wide Entity............... PRC-Wide Entity....... 60.50
------------------------------------------------------------------------
Disclosure
The Department will disclose the calculations performed within five
days of the date of publication of this notice to parties in this
proceeding in accordance with 19 CFR 351.224(b).
Suspension of Liquidation
In accordance with section 733(d) of the Act, the Department will
instruct U.S. Customs and Border Protection (``CBP'') to suspend
liquidation of all entries of copper pipe and tube from the PRC as
described in the ``Scope of Investigation'' section, entered, or
withdrawn from warehouse, for consumption on or after the date of
publication of this notice in the Federal Register. The Department will
instruct CBP to require a cash deposit or the posting of a bond equal
to the weighted-average amount by which the normal value exceeds U.S.
price, as indicated above.
International Trade Commission Notification
In accordance with section 733(f) of the Act, the Department has
notified the ITC of our preliminary affirmative determination of sales
at LTFV. If the Department's final determination is affirmative, the
ITC will determine before the later of 120 days after the date of this
preliminary determination or 45 days after our final determination
whether imports of copper pipe and tube from the PRC are materially
injuring, or threatening material injury
[[Page 26726]]
to, the U.S. industry.\82\ As the Department is postponing the deadline
for our final determination to 135 days from the date of the
publication of this preliminary determination, the ITC will make its
final determination no later than 45 days after our final
determination.
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\82\ See section 735(b)(2) of the Act.
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Public Comment
Case briefs or other written comments may be submitted to the
Assistant Secretary for Import Administration no later than seven days
after the date on which the final verification report is issued in this
proceeding and rebuttal briefs limited to issues raised in case briefs
and must be received no later than five days after the deadline date
for case briefs.\83\ A list of authorities used and an executive
summary of issues should accompany any briefs submitted to the
Department. This summary should be limited to five pages total,
including footnotes.
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\83\ See 19 CFR 351.309(c)(1)(i) and (d).
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In accordance with section 774 of the Act, and if timely requested,
the Department will hold a public hearing, to afford interested parties
an opportunity to comment on arguments raised in case or rebuttal
briefs. If a request for a hearing is made, the Department intends to
hold the hearing two days after the deadline of submission of rebuttal
briefs at the U.S. Department of Commerce, 14th Street and Constitution
Avenue, NW., Washington, DC 20230, at a time and location to be
determined. Parties should confirm by telephone the date, time, and
location of the hearing two days before the scheduled date.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
1870, within 30 days after the date of publication of this notice.\84\
Requests should contain the party's name, address, and telephone
number, the number of participants, and a list of the issues to be
discussed. At the hearing, each party may make an affirmative
presentation only on issues raised in that party's case brief and may
make rebuttal presentations only on arguments included in that party's
rebuttal brief.
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\84\ See 19 CFR 351.310(c).
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This determination is issued and published in accordance with
sections 733(f) and 777(i)(1) of the Act.
Dated: May 5, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-11344 Filed 5-11-10; 8:45 am]
BILLING CODE 3510-DS-P