```

[Federal Register Volume 76, Number 62 (Thursday, March 31, 2011)]
[Notices]
[Pages 17819-17825]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-7621]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-930]

Circular Welded Austenitic Stainless Pressure Pipe From the 
People's Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

DATES: Effective Date: March 31, 2011.

SUMMARY: The Department of Commerce (``the Department'') is conducting 
the first administrative review of the

[[Page 17820]]

antidumping duty order on circular welded austenitic stainless pressure 
pipe (``austenitic pipe'') from the People's Republic of China 
(``PRC''). The period of review (``POR'') is September 5, 2008, through 
February 28, 2010. The Department has preliminarily determined that 
sales have not been made below normal value (``NV'') by the respondent 
during the POR. Interested parties are invited to comment on these 
preliminary results. We intend to issue the final results of this 
review no later than 120 days from the date of publication of this 
notice.

FOR FURTHER INFORMATION CONTACT: Brandon Farlander or Patrick O'Connor, 
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-
0182 or (202) 482-0989 respectively.

SUPPLEMENTARY INFORMATION:

Background

    On March 17, 2009, the Department published in the Federal Register 
the antidumping duty order on austenitic pipe from the PRC.\1\ On March 
1, 2010, the Department published a notice of opportunity to request an 
administrative review of the austenitic pipe order.\2\
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    \1\ See Antidumping Duty Order: Circular Welded Austenitic 
Stainless Pressure Pipe from the People's Republic of China, 74 FR 
11351 (March 17, 2009).
    \2\ See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity To Request Administrative 
Review, 75 FR 9162 (March 1, 2010).
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    The Department received a timely request for an administrative 
review of the austenitic pipe order from Zhejiang Jiuli Hi-Tech Metals 
Co., Ltd. (``Jiuli TC'') on March 31, 2010, in accordance with section 
751(a) of Tariff Act of 1930, as amended (the ``Act''). On April 27, 
2010, the Department published in the Federal Register a notice of 
initiation of an administrative review of the austenitic pipe order.\3\
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    \3\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 75 FR 
22107 (April 27, 2010).
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    The Department issued its initial and supplemental questionnaires 
to Jiuli TC from May to December 2010. The Department received 
questionnaire responses from June to December 2010. On July 30, 2010, 
Petitioners \4\ submitted comments to the Department regarding certain 
submissions and responses of Jiuli TC.
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    \4\ Petitioners are Bristol Metals, LLC; Felker Brothers 
Corporation; Marcegaglia U.S.A., Inc.; and Outokumpu Stainless 
Products.
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    On September 15, 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. Between August and October 2010, 
Petitioners and Jiuli TC submitted publicly available SV information, 
as well as 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.
    On November 19, 2010, pursuant to section 751(a)(3)(A) of the Act, 
the Department extended the time period for completing the preliminary 
results of review by 120 days.\5\
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    \5\ See Circular Welded Austenitic Stainless Pressure Pipe From 
the People's Republic of China: Extension of the Time Limit for the 
Preliminary Results of the Antidumping Duty Administrative Review, 
75 FR 70908 (November 19, 2010).
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    From January 10 to January 14, 2011, the Department conducted a 
verification of Jiuli TC in the PRC. On January 26 and 27, 2011, the 
Department verified Jiuli TC's U.S. affiliate in Houston, Texas.

Scope of the Order

    The merchandise covered by the order is circular welded austenitic 
stainless pressure pipe not greater than 14 inches in outside diameter. 
This merchandise includes, but is not limited to, the American Society 
for Testing and Materials (``ASTM'') A-312 or ASTM A-778 
specifications, or comparable domestic or foreign specifications. ASTM 
A-358 products are only included when they are produced to meet ASTM A-
312 or ASTM A-778 specifications, or comparable domestic or foreign 
specifications. Excluded from the scope are: (1) Welded stainless 
mechanical tubing, meeting ASTM A-554 or comparable domestic or foreign 
specifications; (2) boiler, heat exchanger, superheater, refining 
furnace, feedwater heater, and condenser tubing, meeting ASTM A-249, 
ASTM A-688 or comparable domestic or foreign specifications; and (3) 
specialized tubing, meeting ASTM A-269, ASTM A-270 or comparable 
domestic or foreign specifications.
    The subject imports are normally classified in subheadings 
7306.40.5005; 7306.40.5040; 7306.40.5062; 7306.40.5064; and 
7306.40.5085 of the Harmonized Tariff Schedule of the United States 
(``HTSUS''). They may also enter under HTSUS subheadings 7306.40.1010; 
7306.40.1015; 7306.40.5042; 7306.40.5044; 7306.40.5080; and 
7306.40.5090. The HTSUS subheadings are provided for convenience and 
customs purposes only, the written description of the scope of the 
order is dispositive.

Verification

    As provided in section 782(i) of the Act, we verified the 
information provided by Jiuli TC using standard verification procedures 
including on-site inspection of the manufacturer's facilities and the 
examination of relevant sales and financial records. Our verification 
results are outlined in the PRC and U.S. verification reports,\6\ the 
public versions of which are available in the Central Records Unit, 
Room 7046 of the main Department building.
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    \6\ See memoranda to the file through Howard Smith, Program 
Manager, AD/CVD Operations, Office 4, entitled ``Verification of the 
Questionnaire Responses of Zhejiang Jiuli Hi-Tech Metals Co., Ltd.'' 
(``PRC verification report'') and ``Verification of the 
Questionnaire Responses of Zhejiang Jiuli Hi-Tech Metals Co., Ltd.'s 
(``Jiuli TC'') U.S. affiliate Jiuli USA, Inc.'', dated February 25, 
2011.
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Affiliation and Collapsing

    Based on the evidence presented in Jiuli TC's questionnaire 
responses and at verification, which is that Jiuli TC owns 75 percent 
of Huzhou Jiuli Welded Stainless Steel Pipe Co., Ltd. (``Jiuli SD 
Co.''), we preliminarily find affiliation between Jiuli TC and Jiuli SD 
Co. pursuant to section 771(33)(E) of the Act.
    In addition, pursuant to 19 CFR 351.401(f), the Department will 
treat affiliated producers as a single entity, or ``collapse'' them, 
where: (1) The producers have production facilities for producing 
similar or identical products that would not require substantial 
retooling of either facility in order to restructure manufacturing 
priorities; and (2) there is a significant potential for manipulation 
of price or production. In determining whether a significant potential 
for manipulation exists, 19 CFR 351.401(f)(2) states that the 
Department may consider various factors, including: (i) The level of 
common ownership; (ii) the extent to which managerial employees or 
board members of one firm sit on the board of directors of an 
affiliated firm; and (iii) whether the operations of the affiliated 
firms are intertwined through the sharing of sales information, 
involvement in production and pricing decisions, the sharing of 
facilities or employees, or significant transactions between the 
affiliated producers.
    The Department preliminarily concludes that the totality of the 
record evidence supports collapsing Jiuli TC and Jiuli SD Co. into a 
single entity, pursuant to 19 CFR 351.401(f)(1) and (2). Accordingly, 
the Department preliminarily based its margin

[[Page 17821]]

calculation on information submitted pertaining to Jiuli TC and Jiuli 
SD Co. For further discussion on the Department's decision to collapse 
Jiuli TC with Jiuli SD Co., see the memorandum to Abdelali Elouaradia, 
Office Director, ``Whether to Collapse Zhejiang Jiuli Hi-Tech Metals 
Co., Ltd. and Huzhou Jiuli Welded Stainless Steel Pipe Co., Ltd.'', 
dated concurrently with this notice.\7\
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    \7\ We are treating Zhejiang Jiuli Hi-Tech Metals Co., Ltd. and 
Huzhou Jiuli Welded Stainless Steel Pipe Co., Ltd. as the combined 
entity, ``Jiuli TC.''
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Non-Market Economy Treatment

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (``NME'') country. 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 review. Accordingly, 
the Department calculated NV in accordance with section 773(c) of the 
Act, which applies to NME countries.

Surrogate Country

    When the Department reviews imports from an NME country, section 
773(c)(1) of the Act directs it to base 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: (A) At a level of economic development 
comparable to that of the NME country, and (B) significant producers of 
comparable merchandise. Further, pursuant to 19 CFR 351.408(c)(2), the 
Department will normally value all FOPs in a single country, except for 
labor.
    During this review, the Department identified India, the 
Philippines, Indonesia, Thailand, Ukraine, and Peru as a non-exhaustive 
list of countries that are at a level of economic development 
comparable to the PRC and for which good quality data is most likely 
available.\8\ 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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    \8\ See Memorandum from Carole Showers, Director, Office of 
Policy, to Howard Smith, Program Manager, AD/CVD Operations, Office 
4, ``Request for a List of Surrogate Countries for an Administrative 
Review of the Antidumping Duty Order on Circular Welded Austenitic 
Stainless Pressure Pipe'' (August 30, 2010).
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    The Department has preliminarily 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: (A) It is at a level of economic 
development comparable to the PRC; (B) it is a significant producer of 
comparable merchandise.\9\ Also, there is reliable data from India that 
can be used to value the FOPs. Thus, the Department calculated NV using 
publicly available Indian prices when available and appropriate to 
value the FOPs of Jiuli TC.\10\
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    \9\ See the financial statements of Ratnamani Metals & Tubes, 
Ltd. (``Ratnamani'') and Jindal SAW, Ltd. (``Jindal'') for the 
fiscal year January 1, 2009, through March 31, 2010, in Petitioners' 
October 12, 2010 SV submission at Exhibits 10 and 11. Ratnamani's 
and Jindal's financial statements at 2, 39, 41, 42, and 44 and at 
19, 26-29, 71, and 72, respectively, demonstrate that these 
companies produce merchandise both identical and comparable to 
subject merchandise. Hence, based on Ratnamani's and Jindal's 
production experience during the POR, we determine that India is a 
significant producer of identical and comparable merchandise.
    \10\ See Memorandum to the File from Brandon Farlander and 
Patrick O'Connor, International Trade Compliance Analysts, AD/CVD 
Operations, Office 4, ``Administrative Review of Circular Welded 
Austenitic Stainless Pressure Pipe from the People's Republic of 
China: Surrogate Value Memorandum,'' (March 25, 2011) (``Surrogate 
Value Memorandum'').
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    In accordance with 19 CFR 351.301(c)(3)(ii), interested parties may 
submit publicly-available information to value FOPs until 20 days after 
the date of publication of the preliminary results of this review.\11\
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    \11\ In accordance with 19 CFR 351.301(c)(1), for the final 
results of this administrative review, 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 placed on the record. The 
Department generally will not accept the submission of additional, 
previously absent-from-the-record alternative surrogate value 
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 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 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.\12\
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    \12\ See Notice of Final Determination of Sales at Less Than 
Fair Value: Creatine Monohydrate From the People's Republic of 
China, 64 FR 71104, 71105 (December 20, 1999) (where the respondent 
was wholly foreign-owned and thus qualified for a separate rate).
---------------------------------------------------------------------------

    Jiuli TC provided evidence that it is a publicly traded company on 
the Shenzhen Stock Exchange with Jiuli Group Joint Stock Ltd., a 
Chinese entity, as its primary shareholder.\13\
---------------------------------------------------------------------------

    \13\ See Jiuli TC's Section A response, dated June 7, 2010, at 
3-5 and PRC verification report at 5.
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    Thus, the Department has analyzed whether Jiuli TC has demonstrated 
the absence of de jure and de facto governmental control over its 
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.\14\
---------------------------------------------------------------------------

    \14\ See Sparklers, 56 FR at 20589.
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    The evidence provided by Jiuli TC 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 
exporter's business and export licenses; (2) the existence of 
applicable legislative enactments

[[Page 17822]]

decentralizing control of Chinese companies; and (3) the implementation 
of formal measures by the government decentralizing control of Chinese 
companies.\15\
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    \15\ See Jiuli TC's Section A response, dated June 7, 2010, at 
3-5 and PRC verification report at 5-7.
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b. Absence of De Facto Control

    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.\16\ 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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    \16\ 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 Jiuli TC supports a preliminary finding of 
de facto absence of governmental control based on statements and 
supporting documentation showing that the company: (1) Set its own 
export prices independent of the government and without the approval of 
a government authority; (2) has the authority to negotiate and sign 
contracts and other agreements; (3) maintains autonomy from the 
government in making decisions regarding the selection of management; 
and (4) retains the proceeds of its export sales and makes independent 
decisions regarding disposition of profits or financing of losses.\17\
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    \17\ See Jiuli TC's Section A response, dated June 7, 2010, at 
5-7 and PRC verification report at 7-9.
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    Therefore, the evidence placed on the record of this review by 
Jiuli TC 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 Jiuli TC separate 
rate status.\18\
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    \18\ See ``Preliminary Results of Review'' section below.
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Fair Value Comparison

    In accordance with section 777A(d)(2) of the Act, to determine 
whether sales of austenitic pipe to the United States by Jiuli TC were 
made at less than NV, the Department compared the weighted-average 
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 Jiuli TC's sales where the first 
sale to unaffiliated purchasers was made prior to importation. In 
accordance with section 772(c) of the Act, the Department calculated EP 
for Jiuli TC by deducting inland freight from the plant to the port, 
domestic brokerage and handling, international freight and marine 
insurance expenses from the starting price charged to the first 
unaffiliated customer in the United States.\19\ In accordance with 
section 772(b) of the Act, the Department used CEP as the basis for 
U.S. price for Jiuli TC's sales where Jiuli TC first sold subject 
merchandise to its affiliated company in the United States (Jiuli USA, 
Inc.), 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 subject merchandise 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 
Jiuli TC based on prices to unaffiliated purchasers in the United 
States and made deductions, where applicable, from the U.S. sales price 
for movement expenses (inland freight from the plant to the port and 
domestic brokerage and handling), in accordance with section 
772(c)(2)(A) of the Act.\20\ In accordance with section 772(d)(1) of 
the Act, the Department deducted early payment discounts, credit 
expenses and indirect selling expenses from the U.S. price, all of 
which relate to commercial activity in the United States. Also, the 
Department deducted CEP profit, in accordance with sections 772(d)(3) 
and 772(f) of the Act. Additionally, for the expenses that were either 
provided by an NME vendor or paid for using an NME currency, the 
Department based the expenses on SVs, as appropriate. For details 
regarding the CEP calculation, see Jiuli TC Analysis Memorandum.
---------------------------------------------------------------------------

    \19\ See memorandum from Brandon Farlander and Patrick O'Connor, 
International Trade Compliance Analysts, AD/CVD Operations, Office 
4, to the File, ``Administrative Review of Circular Welded 
Austenitic Stainless Pressure Pipe from the People's Republic of 
China: Preliminary Analysis Memorandum for Zhejiang Jiuli Hi-Tech 
Metals Co., Ltd.'' (March 25, 2011) (``Jiuli TC Analysis 
Memorandum'').
    \20\ See Jiuli TC Analysis Memorandum.
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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 country 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.\21\
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    \21\ 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).
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    Under section 773(c)(3) of the Act, FOPs include, but are not 
limited to: (1) Hours of labor required; (2) quantities of raw 
materials employed; (3) amounts of energy and other utilities consumed; 
and (4) representative capital costs, including depreciation. The 
Department based NV on FOPs and consumption quantities reported by 
Jiuli TC for materials, energy, labor and packing.

Factor Valuation Methodology

    In accordance with section 773(c) of the Act, the Department 
calculated NV based on FOP data reported by Jiuli TC. To obtain the 
input costs used to calculate NV, the Department multiplied the 
reported per-unit factor-consumption rates by publicly available Indian 
SVs. 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 
respondent's factory or the distance from the nearest seaport to the 
respondent's factory where appropriate. This adjustment is in 
accordance with the Court of Appeals for the Federal Circuit's decision 
in

[[Page 17823]]

Sigma Corp. v. United States, 117 F.3d 1401, 1407-08 (Fed. Cir. 1997). 
A detailed description of all SVs used for Jiuli TC can be found in the 
Surrogate Value Memorandum.
    In selecting SVs, the Department considered the quality, 
specificity, and contemporaneity of the data.\22\ Further, in 
accordance with section 773(c)(1) of the Act and Departmental practice, 
the Department selected, to the extent practicable, SVs which are non-
export average values, contemporaneous with the POR, product-specific, 
and tax-exclusive.\23\ In the instant review, the Department used 
Indian import statistics from the Global Trade Atlas (``GTA''), as 
published by Global Trade Information Services, and other publicly 
available Indian sources in order to calculate SVs for Jiuli TC's FOPs 
(i.e., direct materials, energy, packing materials) and certain 
movement expenses. The record shows that data in the GTA Indian import 
statistics, as well as those from the other Indian sources, are 
contemporaneous with the POR, product-specific, and tax-exclusive.\24\ 
In those instances where we could not obtain publicly available 
information contemporaneous to the POR with which to value factors, we 
adjusted the SVs using, where appropriate, the Indian Wholesale Price 
Index as published in the International Monetary Fund's International 
Financial Statistics.\25\
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    \22\ 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.
    \23\ 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).
    \24\ See Surrogate Value Memorandum at Exhibit 1.
    \25\ See, e.g., Certain Kitchen Appliance Shelving and Racks 
From the People's Republic of China: Preliminary Determination of 
Sales at Less Than Fair Value and Postponement of Final 
Determination, 74 FR 9591, 9600 (March 5, 2009), unchanged in 
Certain Kitchen Appliance Shelving and Racks From the People's 
Republic of China: Final Determination of Sales at Less than Fair 
Value, 74 FR 36656 (July 24, 2009).
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    Jiuli TC reported that one of its raw material inputs, steel, was 
sourced in part 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 only 
use the actual price paid by the respondent to value those inputs 
except when prices may have been distorted by findings of dumping by 
the PRC and/or subsidies.\26\ Where the facts developed in either U.S. 
or third-country countervailing duty findings include the existence of 
subsidies that appear to be used generally (in particular, broadly 
available, non-industry specific export subsidies), the Department will 
have reason to believe or suspect that prices of the inputs from the 
country granting the subsidies may be subsidized.\27\ Information 
reported by Jiuli TC demonstrates that it did not purchase significant 
quantities (i.e., 33 percent or more) of steel from market-economy 
suppliers. Thus, to value steel, the Department weight-averaged the 
market-economy purchase price and the appropriate surrogate value for 
steel using the market economy and NME percentages of the reported 
total volume of purchases.\28\ Where appropriate, we added freight to 
the market-economy purchase price of steel.
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    \26\ See Antidumping Duties; Countervailing Duties, 62 FR 27296, 
27366 (May 19, 1997); see also Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, From the People's Republic of 
China; Final Results of 1998-1999 Administrative Review, Partial 
Rescission of Review, and Determination Not To Revoke Order in Part, 
66 FR 1953 (January 10, 2001) (``TRBs 1998-1999''), and accompanying 
Issues and Decision Memorandum at Comment 1.
    \27\ See TRBs 1998-1999 at Comment 1; see also Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished, From the 
People's Republic of China; Final Results of 1999-2000 
Administrative Review, Partial Rescission of Review, and 
Determination Not To Revoke Order in Part, 66 FR 57420 (November 15, 
2001), and accompanying Issues and Decision Memorandum at Comment 1; 
China National Machinery Imp. & Exp. Corp. v. United States, 293 F. 
Supp. 2d 1334, 1338-39 (Ct. Int'l Trade 2003).
    \28\ 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'').
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    In accordance with legislative history, the Department continues to 
apply its long-standing practice of disregarding SVs if it has a reason 
to believe or suspect the source data may be subsidized.\29\ In this 
regard, the Department has previously found that it is appropriate to 
disregard such prices from India, Indonesia, South Korea and Thailand 
because we have determined that these countries maintain broadly 
available, non-industry specific export subsidies.\30\ Based on the 
existence of these subsidy programs that were generally available to 
all exporters and producers in these countries at the time of the POR, 
the Department finds that it is reasonable to infer that all exporters 
from India, Indonesia, South Korea and Thailand may have benefitted 
from these subsidies. Therefore, the Department has not used prices 
from Indonesia, South Korea and Thailand in calculating the Indian 
import-based SVs.
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    \29\ Omnibus Trade and Competitiveness Act of 1988, Conf. Report 
to Accompany H.R. 3, H.R. Rep. No. 576, 100th Cong., 2nd Sess. 
(1988) at 590.
    \30\ See e.g., Carbazole Violet Pigment 23 from India: Final 
Results of the Expedited Five-year (Sunset) Review of the 
Countervailing Duty Order, 75 FR 13257 (March 19, 2010) and 
accompanying Issues and Decision Memorandum at 4-5; Certain Cut-to-
Length Carbon-Quality Steel Plate from Indonesia: Final Results of 
Expedited Sunset Review, 70 FR 45692 (August 8, 2005) and 
accompanying Issues and Decision Memorandum at 4; Corrosion-
Resistant Carbon Steel Flat Products from the Republic of Korea: 
Final Results of Countervailing Duty Administrative Review, 74 FR 
2512 (January 15, 2009) and accompanying Issues and Decision 
Memorandum at 17, 19-20; Final Affirmative Countervailing Duty 
Determination: Certain Hot-Rolled Carbon Steel Flat Products From 
Thailand, 66 FR 50410 (October 3, 2001) and accompanying Issues and 
Decision Memorandum at 23.
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    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.\31\
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    \31\ 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), 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).
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    On May 14, 2010, the Court of Appeals for the Federal Circuit 
(``CAFC'') in Dorbest Ltd. v. United States, 604 F.3d 1363, 1372 (CAFC 
2010), found that the {regression-based{time}  method for calculating 
wage rates, as stipulated by 19 CFR 351.408(c)(3), uses data not 
permitted by the statutory requirements laid out in section 773 of the 
Act (i.e., 19 U.S.C. 1677b(c)).
    The Department is continuing to evaluate options for determining 
labor values in light of the recent CAFC decision. However, for these 
preliminary results, we have calculated an hourly wage rate to use in 
valuing the respondent's reported labor input by averaging industry-
specific earnings and/or wages in countries that are economically 
comparable to the PRC and that are significant producers of comparable 
merchandise.
    For the preliminary results of this review, the Department is 
valuing labor

[[Page 17824]]

using a simple average industry-specific wage rate using earnings or 
wage data reported under Chapter 5B by the International Labor 
Organization (``ILO''). To achieve an industry-specific labor value, we 
relied on industry-specific labor data from the countries we determined 
to be both economically comparable to the PRC and significant producers 
of comparable merchandise. A full description of the industry-specific 
wage rate calculation methodology is provided in the Surrogate Value 
Memorandum. The Department calculated a simple average industry-
specific wage rate of $1.36 for these preliminary results. 
Specifically, for this review, the Department has calculated the wage 
rate using a simple average of the data provided to the ILO under Sub-
Classification 28 of the ISIC--Revision 3 standard by countries 
determined to be both economically comparable to the PRC and 
significant producers of comparable merchandise. The Department finds 
the two-digit description under International Standard Industrial 
Classification--Revision 3 (``Manufacture of fabricated metal products, 
except machinery and equipment'') to be the best available wage rate 
surrogate value on the record because it is specific and derived from 
industries that produce merchandise comparable to the subject 
merchandise. Consequently, we averaged the ILO industry-specific wage 
rate data or earnings data available from the following countries found 
to be economically comparable to the PRC and significant producers of 
comparable merchandise: Ecuador, Egypt, Indonesia, Jordan, Peru, the 
Philippines, Thailand, and Ukraine.\32\ For further information on the 
calculation of the wage rate, see Surrogate Value Memorandum.
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    \32\ Because India (the primary surrogate country) did not 
report wage data in ISIC-Revision 3, which was relied upon for 
industry-specific wage rates in these preliminary results, it is not 
among the countries that the Department considered for inclusion in 
the average.
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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 POR.\33\
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    \33\ 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 small, medium, and large industries in 
India. We did not inflate this value because utility rates represent 
current rates, as indicated by the effective dates listed for each of 
the rates provided.\34\ We valued water using the revised Maharashtra 
Industrial Development Corporation water rates available at http://www.midcindia.com/water-supply.
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    \34\ See Surrogate Value Memorandum at Exhibit 7.
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    At verification, we obtained records from one month of the POR 
which allow us to calculate a scrap offset that is more specific to 
subject merchandise than Jiuli TC's reported scrap offset. We do not, 
however, have these records for the entire POR. Because necessary 
information is not on the record for the entire POR, pursuant to 
section 776(a) of the Act, as facts available, we are basing Jiuli TC's 
POR scrap offset for subject merchandise on record information obtained 
at verification for one month of the POR. See Surrogate Value 
Memorandum.
    The Department valued brokerage and handling expenses using a price 
list for procedures necessary to export a standardized cargo of goods 
in India. The price list is compiled based on a survey of the 
procedural requirements for trading a standard shipment of goods by 
ocean freight in India that is published in Doing Business 2009: India 
by the World Bank. Because these data were current throughout the POR, 
we did not inflate the value for brokerage and handling.\35\
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    \35\ See Surrogate Value Memorandum at Exhibit 13.
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    The Department valued factory overhead, selling, general, and 
administrative expenses, and profit using data from two Indian 
companies, Ratnamani and Jindal, producers of merchandise both 
identical and comparable to the subject merchandise, for the fiscal 
year January 1, 2009, through March 31, 2010.\36\
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    \36\ See Surrogate Value Memorandum at Exhibit 9. Also note that 
Jindal changed its financial reporting period from the calendar year 
(January 1 to December 31) to the Indian fiscal calendar year (April 
1 to March 31). As a result, Jindal's 2009-2010 financial statement 
shows a 15 month period (January 1, 2009, to March 31, 2010) because 
it reflects this transition.
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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. These exchange rates are available on Import 
Administration's Web site at http://ia.ita.doc.gov/exchange/index.html.

Preliminary Results of Review

    The Department preliminarily determines that the following 
weighted-average dumping margin exists:

------------------------------------------------------------------------
                                                     Weighted-average
                    Exporter                          percent margin
------------------------------------------------------------------------
Zhejiang Jiuli Hi-Tech Metals Co., Ltd./Huzhou                      0.01
 Jiuli Welded Stainless Steel Pipe Co., Ltd....
------------------------------------------------------------------------

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).

Public Comment

    Interested parties may submit written comments no later than 30 
days after the date of publication of these preliminary results of 
review.\37\ Parties that submit comments are requested to submit with 
each argument a statement of the issue and a brief summary of the 
argument. Rebuttal comments must be limited to the issues raised in the 
written comments and may be filed no later than five days after the 
deadline for filing case briefs.\38\ Parties submitting written 
comments or rebuttals are requested to provide the Department with an 
additional copy of those comments on CD-ROM. Any interested party may 
request a hearing within 30 days of publication of these preliminary 
results.\39\ Any hearing, if requested, ordinarily will be held two 
days after the scheduled date for submission of rebuttal briefs.\40\ 
Parties should confirm

[[Page 17825]]

by telephone the date, time, and location of the hearing two days 
before the scheduled date.
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    \37\ See 19 CFR 351.309(c)(1)(ii).
    \38\ See 19 CFR 351.309(d).
    \39\ See 19 CFR 351.310(c).
    \40\ See 19 CFR 351.310(d).
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    The Department will issue the final results of the administrative 
review, which will include the results of its analysis of issues raised 
in the briefs, within 120 days of publication of these preliminary 
results, in accordance with 19 CFR 351.213(h)(1) unless the time limit 
is extended.

Assessment Rates

    Pursuant to 19 CFR 351.212, the Department will determine, and U.S. 
Customs and Border Protection (``CBP'') shall assess, antidumping 
duties on all appropriate entries of subject merchandise in accordance 
with the final results of this review. For assessment purposes, in 
accordance with 19 CFR 351.212(b)(1), the Department calculated 
exporter/importer (or customer)-specific assessment rates for 
merchandise subject to this review. Where the respondent has reported 
reliable entered values, the Department calculated importer (or 
customer)-specific ad valorem rates by aggregating the dumping margins 
calculated for all U.S. sales to each importer (or customer) and 
dividing this amount by the total entered value of the sales to each 
importer (or customer). See 19 CFR 351.212(b)(1). Where an importer (or 
customer)-specific ad valorem rate is greater than de minimis, we will 
apply the assessment rate to the entered value of the importer's/
customer's entries during the POR. See 19 CFR 351.212(b)(1). Where an 
importer (or customer)-specific ad valorem rate is zero or de minimis 
(i.e., less than 0.50 percent), the Department will instruct CBP to 
liquidate that importer's (or customer's) entries of subject 
merchandise without regard to antidumping duties. See 19 CFR 
351.106(c)(2).
    The Department intends to issue appropriate assessment instructions 
directly to CBP 15 days after publication of the final results of this 
review. The Department intends to instruct CBP to liquidate entries 
containing subject merchandise exported by the PRC-wide entity at the 
PRC-wide rate in the final results of this review.

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of the final results of this review for all shipments of 
subject merchandise from the PRC entered, or withdrawn from warehouse, 
for consumption on or after the publication date, as provided for by 
section 751(a)(2)(C) of the Act: (1) For the exporter listed above, the 
cash deposit rate will be that established in the final results of this 
review (except, if the rate is zero or de minimis, i.e., less than 0.5 
percent, a zero cash deposit rate will be required for that company); 
(2) for previously investigated or reviewed PRC and non-PRC exporters 
not listed above that have separate rates, the cash deposit rate will 
continue to be the exporter-specific rate published for the most recent 
period; (3) for all PRC exporters of subject merchandise which have not 
been found to be entitled to a separate rate, the cash deposit rate 
will be the PRC-wide rate of 55.21 percent; and (4) for all non-PRC 
exporters of subject merchandise which have not received their own 
rate, the cash deposit rate will be the rate applicable to the PRC 
exporters that supplied that non-PRC exporter. These deposit 
requirements, when imposed, shall remain in effect until further 
notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    The Department is issuing and publishing these preliminary results 
of administrative review in accordance with section 777(i)(1) of the 
Act, and 19 CFR 351.221(b)(4).

    Dated: March 25, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2011-7621 Filed 3-30-11; 8:45 am]
BILLING CODE 3510-DS-P
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