[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:

------------------------------------------------------------------------
                                                       Limiting content
                       Element                         percent by weight
------------------------------------------------------------------------
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
------------------------------------------------------------------------

    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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \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