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).
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    \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