10558 Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices

costs should reflect only those costs

attributable to seamless pipe used in

manufacturing the subject merchandise.

AST states that its pipe consumption

was calculated based on its normal

accounting inventory subledgers which

do not track welded and seamless pipe

separately. Furthermore, the Department

verified that welded pipe accounted for

a small percentage of total pipe costs

and the price of seamless pipe was not

always higher than welded pipe.

Therefore, AST argues that excluding

welded pipe would not materially alter

the weighted average cost of pipe used

to produce the subject merchandise.

DOC Position

In computing COP and CV, it is the

Departments’s practice to include only

those costs incurred in manufacturing

the subject merchandise. Therefore, we

adjusted AST’s reported material costs

to exclude the costs incurred for welded

pipe and pipe inputs that were used to

produce merchandise outside the scope

of this investigation.

Suspension of Liquidation

In accordance with section 733(d)(1)

of the Act, we are directing the U.S.

Customs Service to continue to suspend

liquidation of all entries of butt-weld

pipe fittings from Thailand, as defined

in the ‘‘Scope of Investigation’’ section

of this notice, that are produced and

sold by AST and that are entered, or

withdrawn from warehouse, for

consumption on or after October 4,

1994.

The Customs Service shall require a

cash deposit or the posting of a bond

equal to the estimated weighted-average

amount by which the foreign market

value of AST’s subject merchandise

exceeds the United States price as

shown below. The suspension of

liquidation will remain in effect until

further notice. The weighted-average

dumping margin is as follows:

Manufacturer/Producer/

Exporter

Margin

percent

Deposit

percent

Awaji Sangyo (Thailand)

Co., Ltd. ........................ 38.41 37.67

Adjustment of Deposit Rate for

Countervailing Duties

Article VI, paragraph 5 of the General

Agreement on Tariffs and Trade

provides that ‘‘[no] product . . . shall be

subject to both antidumping and

countervailing duties to compensate for

the same situation for dumping or

export subsidization.’’ This provision is

implemented by section 772(d)(1)(D) of

the Act. Because antidumping duties

cannot be assessed on the portion of the

margin attributable to export subsidies,

there is no basis to require a cash

deposit or bond for that amount.

Accordingly, the level of export

subsidies as determined in the most

recent administrative review of the

countervailing duty order, Carbon Steel

Butt-Weld Pipe Fittings From Thailand;

Final Results of Countervailing Duty

Administrative Review (57 FR 5248,

February 13, 1992), which was 0.74

percent, will be subtracted from the

margin for cash deposit or bonding

purposes. This results in a deposit rate

of 37.67 percent for AST. We did not

determine an ‘‘all others’’ rate in this

investigation, because all other

producers and exporters of butt-weld

pipe fittings from Thailand are already

subject to an antidumping duty order on

this merchandise, which was published

in the Federal Register on July 6, 1992

(57 FR 29702).

ITC Notification

In accordance with section 735(b) of

the Act, we have notified the ITC of our

determination.

Notice to Interested Parties

This notice also serves as the only

reminder to parties subject to

administrative protective order (APO) of

their responsibility concerning the

return or destruction of proprietary

information disclosed under APO in

accordance with 19 CFR 353.35(d).

Failure to comply is a violation of the

APO.

This determination is published

pursuant to section 735(d) of the Act (19

U.S.C. 1671(d)).

Dated: February 16, 1995.

Barbara R. Stafford,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 95–4727 Filed 2–24–95; 8:45 am]

BILLING CODE 3510–DS–P

[A–412–816]

Notice of Final Determination of Sales

at Less Than Fair Value: Certain

Carbon Steel Butt-Weld Pipe Fittings

From the United Kingdom

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: February 27, 1995.

FOR FURTHER INFORMATION CONTACT: Julie

Anne Osgood or Todd Hansen, Office of

Countervailing Investigations, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, NW, Washington, D.C. 20230;

telephone (202) 482–0167 or 482–1276,

respectively.

Final Determination

We determine that certain carbon

steel butt-weld pipe fittings from the

United Kingdom are being sold in the

United States at less than fair value, as

provided in section 735 of the Tariff Act

of 1930, as amended (the ‘‘Act’’). The

estimated margins are shown in the

‘‘Suspension of Liquidation’’ section of

this notice.

Case History

Since the publication of the

preliminary determination in the

Federal Register on October 4, 1994 (59

FR 50571), the following events have

occurred:

On October 3, 1994, pursuant to the

Department’s regulations (19 CFR

353.20(b)(1) (1994)), BKL Fittings, Ltd.

(‘‘BKL’’), requested that the final

determination in this case be postponed.

On November 14, 1994, the Department

published in the Federal Register a

notice postponing the final

determination in this case until

February 16, 1995 (59 FR 56461). From

November 21 through 23, and November

29 and 30, 1994, we verified the further

manufacturing operations and exporter’s

sales price information of BKL’s related

entity in Union, New Jersey. From

December 12 through 23, 1994, we

verified BKL’s responses to the

Department’s antidumping duty

questionnaire at company headquarters

in Redditch, England. On January 23

and 30, 1995, petitioner and respondent

submitted case and rebuttal briefs to the

Department. The Department held a

public hearing in this investigation on

February 2, 1995.

Scope of the Investigation

The products covered by this

investigation are certain carbon steel

butt-weld pipe fittings (‘‘pipe fittings’’)

having an inside diameter of less than

fourteen inches (355 millimeters),

imported in either finished or

unfinished condition. Pipe fittings are

formed or forged steel products used to

join pipe sections in piping systems

where conditions require permanent

welded connections, as distinguished

from fittings based on other methods of

fastening (e.g., threaded, grooved, or

bolted fittings). Butt-weld fittings come

in a variety of shapes which includes

‘‘elbows,’’ ‘‘tees,’’ ‘‘caps,’’ and

‘‘reducers.’’ The edges of finished pipe

fittings are beveled, so that when a

fitting is placed against the end of a pipe

(the ends of which have also been

beveled), a shallow channel is created to

accommodate the ‘‘bead’’ of the weld
Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices 10559

which joins the fitting to the pipe. These

pipe fittings are currently classifiable

under subheading 7307.93.3000 of the

Harmonized Tariff Schedule of the

United States (‘‘HTSUS’’). Although the

HTSUS subheading is provided for

convenience and Customs purposes, our

written description of the scope of this

investigation is dispositive.

Period of Investigation

The period of investigation (‘‘POI’’) is

September 1, 1993, through February

28, 1994.

Such or Similar Comparisons

In making our fair value comparisons,

we first compared sales of merchandise

identical in all respects, in accordance

with the Department’s standard

methodology. If no identical

merchandise was sold, we compared

sales of the most similar merchandise,

as determined by the model-matching

criteria contained in Appendix V of the

questionnaire (‘‘Appendix V’’) (on file

in Room B–099 of the main building of

the Department of Commerce (‘‘Public

File’’)).

Fair Value Comparisons

To determine whether BKL’s sales for

export to the United States were made

at less than fair value, we compared the

United States price (‘‘USP’’) to the

foreign market value (‘‘FMV’’), as

specified in the ‘‘United States Price’’

and ‘‘Foreign Market Value’’ sections of

this notice. For those U.S. sales

compared to sales of similar

merchandise, we made an adjustment,

pursuant to 19 CFR 353.57, for physical

differences in the merchandise.

We compared U.S. sales, where

possible, with sales in the home market

at the same level of trade, in accordance

with 19 CFR 353.58.

We made revisions to BKL’s reported

data, where appropriate, based on

verification findings.

United States Price

Where BKL’s U.S. sales of pipe

fittings were made to an unrelated

distributor in the United States prior to

importation, and the exporter’s sales

price (‘‘ESP’’) methodology was not

indicated by other circumstances, we

based USP on the purchase price sales

methodology in accordance with section

772(b) of the Act.

We calculated purchase price based

on packed, c.i.f. import prices to an

unrelated customer in the United States.

We made deductions, where

appropriate, for foreign brokerage,

foreign inland freight, ocean freight,

marine insurance, U.S. brokerage and

U.S. duty.

Where sales to the first unrelated

purchaser took place after importation

of the subject merchandise into the

United States, we calculated USP using

the ESP methodology, in accordance

with section 772(c) of the Act.

For ESP sales, we made deductions,

where appropriate, for discounts,

foreign brokerage, foreign inland freight,

ocean freight, marine insurance, U.S.

duty, U.S. inland freight, and U.S.

brokerage and handling. In addition, we

deducted credit expense, indirect

selling expense, inventory carrying

costs, and commissions to an unrelated

agent.

We made an adjustment to USP for

value-added tax (‘‘VAT’’) assessed on

comparison sales in the U.K. in

accordance with our practice, pursuant

to the Court of International Trade

(‘‘CIT’’) decision in Federal-Mogul, et al

v. United States, 834 F. Supp. 1391. See

Preliminary Antidumping Duty

Determination: Color Negative

Photographic Paper and Chemical

Components from Japan, 59 FR 16177,

16179 (April 6, 1994), for an

explanation of this methodology.

For pipe fittings that were further

manufactured in the United States, we

deducted all value added in the United

States, pursuant to section 772(e)(3) of

the Act. The value added consists of the

cost of fabrication and general expenses

associated with the further

manufacturing operations, as well as a

proportional amount of profit or loss

attributable to the further manufacture.

(See, e.g., Notice of Final

Determinations of Sales at Less Than

Fair Value: Certain Hot-Rolled Carbon

Steel Flat Products, Certain Cold-Rolled

Carbon Steel Flat Products, Certain

Corrosion-Resistant Carbon Steel Flat

Products, and Certain Cut-to-Length

Carbon Steel Plate from France, 58 FR

37125 (July 9, 1993).) We calculated

profit or loss by deducting from the

sales price of the further manufactured

merchandise the related production

costs and selling expense incurred by

the company in both the U.K. and the

United States. We then allocated total

profit or loss proportionately to all

components of cost. We included only

the profit or loss allocated to the further

manufacturing portion of total cost in

our calculation of value added. We

adjusted BKL’s allocation of general and

administrative (‘‘G&A’’) expenses for

further manufactured sales to an

allocation based on cost of sales rather

than weight.

Foreign Market Value

In order to determine whether there

was a sufficient volume of sales in the

home market to serve as a viable basis

for calculating FMV, we compared the

volume of home market sales of subject

merchandise to the volume of third

country sales of subject merchandise, in

accordance with section 773(a)(1)(B) of

the Act. BKL’s volume of home market

sales was greater than five percent of the

aggregate volume of third country sales.

Therefore, we determined that the home

market constituted a viable basis for

calculating FMV, in accordance with 19

CFR 353.48(a).

For purposes of calculating FMV, we

used BKL’s sales to its home market

customers and constructed value

(‘‘CV’’), as described below. We

excluded from the home market

database any sales of fittings not

manufactured by BKL.

Cost of Production

Petitioner alleged that BKL made

home market sales during the POI at

prices below the cost of production

(‘‘COP’’). In the course of this

investigation, we gathered and verified

data on production costs.

In order to determine whether home

market prices were below the COP

within the meaning of section 773(b) of

the Act, we performed a productspecific cost test, in which we examined

whether each product sold in the home

market during the POI was priced below

the COP of that product. We calculated

COP based on the sum of BKL’s cost of

materials, fabrication, general expenses,

and packing, in accordance with 19 CFR

353.51(c). For each product, we

compared this sum to the home market

unit price, net of movement expenses

and rebates. We made changes, where

appropriate, to submitted COP data, as

discussed in the ‘‘Interested Party

Comments’’ section of this notice,

below.

In accordance with section 773(b) of

the Act, we also examined whether the

home market sales of each product were

made at prices below their COP in

substantial quantities over an extended

period of time, and whether such sales

were made at prices that would permit

recovery of all costs within a reasonable

period of time in the normal course of

trade.

For each product where less than ten

percent, by quantity, of the home market

sales during the POI were made at

prices below the COP, we included all

sales of that model for the computation

of FMV. For each product where ten

percent or more, but less than 90

percent, of the home market sales

during the POI were priced below the

COP, we did not include in the

calculation of FMV those home market

sales which were priced below the COP,

provided that the below-cost sales of
10560 Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices

that product were made over an

extended period of time. Where we

found that more than 90 percent of

respondent’s sales were at prices below

the COP, and such sales were over an

extended period of time, in accordance

with section 773(b) of the Act, we

disregarded all sales of that product and

instead based FMV on CV.

In order to determine whether belowcost sales had been made over an

extended period of time, in accordance

with section 773(b)(1) of the Act, we

compared the number of months in

which below-cost sales occurred for

each product to the number of months

in the POI in which that product was

sold. If a product was sold in three or

more months of the POI, we did not

exclude below-cost sales unless there

were below-cost sales in at least three

months during the POI. When we found

that sales of a product only occurred in

one or two months, the number of

months in which the sales occurred

constituted the extended period of time;

i.e., where sales of a product were made

in only two months, the extended

period of time was two months, where

sales of a product were made in only

one month, the extended period of time

was one month.

BKL provided no evidence that the

disregarded sales were at prices that

would permit recovery of all costs

within a reasonable period of time and

in the normal course of trade. (See

Section 773(b)(2); 19 U.S.C.

1677b(b)(2).)

Constructed Value

We calculated CV based on the sum

of the cost of materials, fabrication,

general expenses, U.S. packing costs

and profit. In accordance with section

773(e)(1)(B)(i) and (ii) of the Act we: (1)

included the greater of BKL’s reported

general expenses or the statutory

minimum of ten percent of the cost of

manufacture (‘‘COM’’), as appropriate;

and (2) used the greater of BKL’s actual

profit on sales in the home market or the

statutory minimum profit of eight

percent of the sum of COM and general

expenses.

Price-to-Price Comparisons

For price-to-price comparisons, we

calculated FMV based on ex-factory or

delivered prices, inclusive of packing to

home market customers. We deducted

rebates, where appropriate, on home

market sales. We deducted home market

packing costs and added U.S. packing

costs in accordance with section

773(a)(1) of the Act. We also made

adjustments, where appropriate, for

differences in the physical

characteristics of the merchandise in

accordance with section 773(a)(1) of the

Act.

In light of the Court of Appeals for the

Federal Circuit’s decision in Ad Hoc

Committee of AZ–NM–TX–FL Producers

of Gray Portland Cement v. United

States, 13 F.3d 398 (Fed. Cir., January 5,

1994), the Department can no longer

deduct home market movement charges

from FMV pursuant to its inherent

power to fill in gaps in the antidumping

statute. Instead, we adjust for those

expenses under the circumstance-of-sale

provision of 19 CFR 353.56(a) and the

exporter’s sales price offset provision of

19 CFR 353.56(b)(2), as appropriate.

Accordingly, in the present case, we

deducted post-sale home market

movement charges from the FMV under

the circumstance-of-sale provision of 19

CFR 353.56(a). This adjustment

included home market inland freight.

For both price-to-price comparisons

and comparisons to CV, we also made

circumstance-of-sale adjustments, where

appropriate, for differences in credit

expenses, pursuant to 19 CFR

353.56(a)(2).

We adjusted for VAT in the home

market in accordance with our practice.

(See the ‘‘United States Price’’ section of

this notice, above.)

Currency Conversion

We made currency conversions based

on the official exchange rates in effect

on the dates of the U.S. sales as certified

by the Federal Reserve Bank of New

York (19 CFR 353.60).

Final Affirmative Determination of

Critical Circumstances

Petitioner alleged that critical

circumstances exist with respect to

imports of pipe fittings from the U.K. In

our preliminary determination,

pursuant to section 733(e)(1) of the Act

and 19 CFR 353.16, we analyzed the

allegations using the Department’s

standard methodology. Because no

additional information has been

submitted since the preliminary

determination, the Department is using

the same analysis as explained in its

preliminary determination and finds, in

accordance with section 735(a)(3) of the

Act, that critical circumstances exist

with respect to imports of certain carbon

steel butt-weld pipe fittings from the

U.K.

Verification

As provided in section 776(b) of the

Act, we verified information provided

by the respondent using standard

verification procedures, including the

examination of relevant sales, cost and

financial records, and selection of

original source documentation. Our

verification results are outlined in detail

in the public version of the verification

report (Public File).

Interested Party Comments

Comment 1: BKL contends that the

methodology used for the preliminary

determination where sales made below

the cost of production were excluded in

calculating profit for CV is not in

accordance with law. According to BKL,

Section 773(e)(1)(B) of the Tariff Act of

1930, as amended, provides that profit

will be ‘‘equal to that usually reflected

in sales of merchandise of the same

general class or kind as the merchandise

under consideration which are made by

producers in the country of exportation,

in the usual commercial quantities and

in the ordinary course of trade***’’ BKL

claims that the statute neither explicitly

nor implicitly authorizes CV profit to be

calculated solely upon above-cost sales.

Further, BKL cites to Antifriction

Bearings (Other Than Tapered Roller

Bearings) and Parts Thereof From

France; et al.; Final Results of

Antidumping Duty Administrative

Reviews, 57 FR 28360, 28374 (June 24,

1992) (‘‘AFBs from France’’) where the

Department rejected the argument that

the calculation of profit should be based

only on sales at prices above the cost of

production. BKL contends that

excluding below-cost sales would be

contrary to law because the Department

would be excluding a portion of sales

‘‘of the same class or kind of

merchandise.’’

Petitioner maintains that the law

leaves the decision of whether to

include below-cost home market sales

in calculating the profit element of CV

to the discretion of the Department.

While the statute does state that profit

is to be calculated based on home

market sales of the same general class or

kind of merchandise, it also states that

such sales must be made ‘‘in the

ordinary course of trade.’’ According to

petitioner, it is entirely consistent with

the purpose of the statutory provision to

determine that below-cost sales are

made outside the ordinary course of

trade. Petitioner asserts that this

approach advances the statute’s purpose

by preventing a foreign exporter from

indirectly reducing FMV through below

cost sales. Finally, petitioner argues that

the fact that Commerce has included

below-cost sales in the profit

calculations in other proceedings does

not dictate that the Department must do

so in this investigation.

Department’s Position: We agree with

respondent. The Department’s practice

has been to calculate profit for

constructed value using above- and

below-cost home market sales. (See
Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices 10561

AFBs from France.) Therefore, we have

included below-cost sales in our

calculation of profit for constructed

value in the final determination, and

used the greater of the average profit on

both above- and below-cost sales or the

statutory eight percent minimum profit.

Comment 2: BKL maintains that sales

made below cost in one month of the

POI do not constitute sales made below

cost over an extended period of time.

BKL cites to Tapered Roller Bearings,

and Parts Thereof, Finished and

Unfinished, From Japan; Final Results

of Antidumping Duty Administrative

Review, 57 FR 4960, 4965 (February 11,

1992) (‘‘TRBs from Japan’’) where the

Department stated: ‘‘[W]e use a period

of three months to define extended

period of time since three months is

commonly used to measure corporate,

financial, and economic performance.’’

According to BKL, this rationale is

inconsistent with defining a single

month as an ‘‘extended period of time.’’

In addition, BKL contends that the

Department’s position that a single

month comprises an ‘‘extended period

of time’’ is inconsistent with the

Department’s definition of the term

‘‘relatively short period’’ in connection

with critical circumstances. BKL argues

that for critical circumstances the

Department defines the term ‘‘relatively

short period’’ as covering at least three

months.

BKL also contends that if the

frequency of below-cost sales is limited

to one month of the period of

investigation, then that is prima facie

evidence of sporadic or possibly

seasonal sales. Hence, according to the

legislative history of the COP provision,

these sales should not be disregarded.

Petitioner maintains that the

Department’s position is clear that if

sales are made in less than three months

of the POI, then an extended period is

the number of months in which sales

occur. In support of this argument,

petitioner also cites to TRBs from Japan.

In addition, petitioner argues that

respondent has provided no evidence

that the sales that occurred in only one

month of the POI involved obsolete

products or end-of-year sales.

Department’s Position: In determining

whether sales below cost were made

over an extended period of time in

accordance with section 773(b)(1) of the

Act, the Department has consistently

considered an extended period of time

to be the lesser of the number of months

during the POI in which sales occur or

three months for the reason stated in

TRBs from Japan: ‘‘[T]he use of only a

three month time measurement is

incomplete since it excludes models

that were only sold in one or two

months of the review period.’’

BKL’s contention that the Department

is inconsistent in defining a ‘‘relatively

short period’’ is misguided. It ignores

the Department’s rationale of needing to

preserve the possibility of disregarding

below-cost sales in cases where such

sales have occurred in only one or two

months. This is not a consideration that

applies to critical circumstances.

Comment 3: Petitioner contends that

by not reporting a portion of its parent’s

G&A, BKL has understated its total G&A

expense for the subject merchandise.

Additionally, petitioner argues that the

Department should adjust reported G&A

expense for the further manufacturing

operations to include the other

operating expenses which are related to

the activities of the company as a whole.

BKL disagrees that any of the G&A

expense of its parent company should

be allocated to BKL because BKL’s

entire manufacturing, sales, and R&D

activities are conducted without

assistance from its parent. The parent

company receives periodic operational

reports from BKL only for the purpose

of evaluating its investment in its

capacity as a shareholder. BKL states

that allocating its parent company’s

G&A to subsidiaries when the books and

records are not consolidated is

inconsistent with the Department’s

professed policy of relying upon

respondent’s cost and financial records

in COP investigations.

Department’s Position: We agree with

petitioner that a portion of the G&A

expense of BKL’s parent company

should be allocated to BKL. It is clear

from the information on the record of

this case that BKL’s parent company’s

involvement in BKL is more than that of

a passive investor. The parent

company’s Overseas Department

monitors the operations of BKL through

monthly reports from BKL and provides

strategic planning and management

services to BKL. Accordingly, we have

allocated to BKL a proportionate share

of the expenses from the Overseas

Department of the parent company

based on the cost of sales of its overseas

affiliates.

Additionally, we have increased the

further manufacturing G&A cost to

include other operating expenses

incurred that had not been included in

the reported costs.

Comment 4: Petitioner maintains that

the Department should allocate total

G&A for the further manufacturing

operations based on cost of sales rather

than weight of finished fittings because

an allocation of G&A based on weight is

contrary to the Department’s longstanding practice.

Department’s Position: For

calculations used in our final

determination, we have allocated G&A

expense based on cost of sales rather

than weight. Allocating the G&A costs of

the further manufacturing operations

based on weight of finished fittings

produces a less representative result

than allocating based on cost. The

weight of fittings varies markedly for

fittings of different thicknesses, but the

process of finishing the fittings does not

vary proportionately to weight. (See

Final Determination of Sales at Less

Than Fair Value: Certain All-Terrain

Vehicles from Japan, 54 FR 4864, 4867

(January 31, 1989).)

Comment 5: Petitioner claims that

BKL understated its costs through

incorrect reporting of its financing

expenses. According to petitioner, the

finance expense ratios reported by BKL

understate the total cost of subject

merchandise because, where BKL

combined its interest expense with its

parent, it did not reduce the cost of sales

for the combined group by the

intercompany transactions. As a result,

the denominator of the calculation (total

cost of sales) was inflated. Similarly,

petitioner contends that the Department

should adjust respondent’s financing

costs to include its other borrowing not

reported, and that interest expense for

the further manufacturing operations

should be allocated on the basis of cost

of sales rather than weight.

BKL claims it has correctly calculated

financing expense by combining BKL’s

financing expense with that of its parent

company and dividing by the combined

cost of sales. BKL suggests that for

purposes of computing net interest

expense for CV, the Department should

adjust the parent company’s interest

expense to account for finished goods

inventory and trade accounts receivable.

Department’s Position: We agree with

petitioner that combining the financing

expense and cost of sales of BKL and its

parent creates a distorted financial

expense ratio unless intercompany

transactions are eliminated from the

calculation. The Department generally

calculates net financing expense from

the financial statements of the

consolidated entity because of the

fungible nature of capital. (See Final

Determination of Sales at Less Than

Fair Value: Certain Carbon Steel ButtWeld Pipe Fittings from Thailand, 57 FR

21065, 21069 (May 18, 1992).) In this

investigation, however, the parent

company and its subsidiaries do not

prepare consolidated financial

statements. Additionally, we cannot

consolidate the financial data of BKL

and its parent company because we are

unable to quantify all intercompany
10562 Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices

transactions. Since the parent company

ultimately controls the capital of all

affiliates in which it holds a controlling

interest, and due to the nature of certain

intercompany transactions, we have

used the parent company’s financing

expense rate as a reasonable surrogate

for purposes of our final determination.

We have also adjusted the parent

company’s CV financing expense rate to

allow an offset for credit expenses and

inventory carrying cost as is our normal

practice.

For purposes of our final

determination, we have allocated

financing expense of the further

manufacturing operations based on cost

of sales rather than weight. (See Final

Determinations of Sales at Less than

Fair Value: Antifriction Bearings (Other

Than Tapered Roller Bearings) and

Parts Thereof From the Federal Republic

of Germany, 54 FR 18992, 19076, May

3, 1989.)

Comment 6: Petitioner contends that

BKL understated total cost through the

incorrect reporting of pension costs.

Petitioner argues that BKL excluded

certain pension costs in reporting its

cost for the subject merchandise,

claiming that the pension costs do not

reflect the actual costs that will be

incurred. According to petitioner,

because generally accepted accounting

principles (‘‘GAAP’’) in the U.K.

required BKL to include an additional

amount for pension costs in its audited

financial statements, such costs must be

included in the COP and CV of subject

merchandise in order to accurately

reflect BKL’s fully absorbed cost for

subject merchandise.

Department’s Position: We agree with

petitioner, and have adjusted labor costs

to reflect pension expense in conformity

with U.K. GAAP for purposes of our

final determination. To be in conformity

with U.K. GAAP, an entity is required

to perform an annual recalculation of

pension expense to account for

fluctuations in investment performance.

The purpose of this recalculation is to

more accurately reflect an entity’s yearend pension liability. Not adjusting the

pension liability to conform with U.K.

GAAP would result in an

understatement of per-unit costs of

production. (See Calculation

Memorandum from Theresa L. Caherty

and Peter S. Scholl to Christian B.

Marsh, dated February 9, 1995,

(‘‘Proprietary Document’’).)

Comment 7: Petitioner states that the

Department may not have properly

adjusted FMV to account for VAT for

any calculations where FMV is based on

CV. As a result, petitioner maintains

that USP was overstated and BKL’s

dumping margin was understated.

Respondent cites to Federal-Mogul

Corp. v. U.S., 813 F. Supp 856 (CIT

1993), stating the Department is

authorized to ‘‘add only the amount of

tax actually paid on each home market

sale.’’ Respondent states that CV is not

associated with an amount of VAT

actually paid, because CV is not based

on actual sales. Thus, an imputed

amount for VAT cannot be included in

CV.

Department’s Position: In accordance

with the statute, our practice is to

exclude indirect taxes on component

materials from CV if the taxes are

rebated upon export. Once we have

excluded the VAT on component

materials from the constructed value,

we cannot add the VAT to USP because

section 772(d)(1)(C) of the Act requires

that we add internal taxes to USP only

to the extent that those taxes are

included in the FMV.

Suspension of Liquidation

We are directing the U.S. Customs

Service to continue to suspend

liquidation of all entries of butt-weld

pipe fittings from the U.K., as defined in

the ‘‘Scope of Investigation’’ section of

this notice, that are entered or

withdrawn from warehouse for

consumption on or after July 6, 1994,

the date 90 days prior to the date of

publication of our preliminary

determination, pursuant to section

735(c)(4)(A) of the Act.

The Customs Service shall require a

cash deposit or the posting of a bond

equal to the estimated weighted-average

amount by which the foreign market

value of the subject merchandise

exceeds the U.S. price as shown below.

This suspension of liquidation will

remain in effect until further notice. The

weighted-average dumping margins are

as follows:

Manufacturer/producer/exporter Margin

(percent)

BKL Industries, Ltd ................... 48.85

All other producers/exporters ... 48.85

ITC Notification

In accordance with section 735(d) of

the Act, we have notified the ITC of our

determination.

Notice to Interested Parties

This notice also serves as the only

reminder to parties subject to

administrative protective order (APO) of

their responsibility concerning the

return or destruction of proprietary

information disclosed under APO in

accordance with 19 CFR 353.34(d).

Failure to comply is a violation of the

APO.

This determination is published

pursuant to section 735(d) of the Act (19

U.S. C. 1671(d)).

Dated: February 16, 1995.

Barbara R. Stafford,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 95–4726 Filed 2–24–95; 8:45 am]

BILLING CODE 3510–DS–P

[A–307–812]

Notice of Final Determination of Sales

at Less Than Fair Value: Certain

Carbon Steel Butt-Weld Pipe Fittings

From Venezuela

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: February 27, 1995.

FOR FURTHER INFORMATION CONTACT: Sue

Strumbel, Office of Countervailing

Investigations, Import Administration,

International Trade Administration,

U.S. Department of Commerce, 14th

Street and Constitution Avenue, NW.,

Washington, DC. 20230; telephone (202)

482–1442.

Final Determination

The Department of Commerce (the

Department) determines that certain

carbon steel butt-weld pipe fittings

(pipe fittings) are being, or are likely to

be, sold in the United States at less than

fair value, as provided in section 733 of

the Tariff Act of 1930, as amended (the

Act) (19 U.S.C. 1673b). The estimated

margins are shown in the ‘‘Suspension

of Liquidation’’ section of this notice.

Scope of the Investigation

The products covered by this

investigation are certain carbon steel

butt-weld pipe fittings having an inside

diameter of less than fourteen inches

(355 millimeters), imported in either

finished or unfinished condition. Pipe

fittings are formed or forged steel

products used to join pipe sections in

piping systems where conditions

require permanent welded connections,

as distinguished from fittings based on

other methods of fastening (e.g.,

threaded, grooved, or bolted fittings).

Butt-weld fittings come in a variety of

shapes which include ‘‘elbows,’’ ‘‘tees,’’

‘‘caps,’’ and ‘‘reducers.’’ The edges of

finished pipe fittings are beveled, so

that when a fitting is placed against the

end of a pipe (the ends of which have

also been beveled), a shallow channel is

created to accommodate the ‘‘bead’’ of

the weld which joins the fitting to the

pipe. These pipe fittings are currently

classifiable under subheading

7307.93.3000 of the Harmonized Tariff