Federal Register / Vol. 75, No. 176 / Monday, September 13, 2010 / Notices 55559 

1Petitioners include Atlas Tube, Bull Moose Tube 

Company, and Searing Industries, Inc. 

2These producers/exporters are Prolamsa, 

Maquilacero S.A. de C.V. (Maquilacero), 

Regiomontana de Perfiles y Tubos S.A. de C.V. 

(Regiopytsa), Nacional, Industrias Monterrey S.A. 

de C.V. (IMSA), Perfiles y Herrajes LM S.A. de C.V. 

(Perfiles y Herrajes), Galvak S.A. de C.V. (Galvak), 

Hylsa S.A. de C.V. (Hylsa), and Ternium. 

3As noted in the memorandum to Richard O. 

Weible, Director, AD/CVD Operations, Office 7, 

entitled, ‘‘Respondent Selection Memorandum,’’ 

dated October 15, 2009, there were spelling errors 

with respect to the names of certain companies for 

which we initiated reviews in our Initiation Notice 

at 74 FR 48225. We published a correction 

regarding these company names in the following 

month’s notice of initiation of antidumping and 

countervailing duty reviews and also correctly 

identified the POR as January 30, 2008, through July 

31, 2009, see Initiation of Antidumping and 

Countervailing Duty Administrative Reviews and 

Request for Revocation in Part, 74 FR 54958 

(October 26, 2009). 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–201–836] 

Light-Walled Rectangular Pipe and 

Tube From Mexico: Preliminary 

Results of Antidumping Duty 

Administrative Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: In response to requests from 

Productos Laminados de Monterrey S.A. 

de C.V. (Prolamsa), Nacional de Acero 

S.A de C.V (Nacional), Ternium S.A de 

C.V. (Ternium) and petitioners,1 the 

Department of Commerce (the 

Department) is conducting an 

administrative review of the 

antidumping duty order on light-walled 

rectangular pipe and tube (LWRPT) 

from Mexico. The review covers imports 

of subject merchandise from nine firms, 

two of which were selected as 

mandatory respondents (i.e., 

Maquilacero and Regiomontana de 

Perfiles y Tubos S.A. de C.V.). The 

period of review (POR) is January 30, 

2008, to July 31, 2009. 

We preliminarily determine that sales 

of LWRPT from Mexico have been made 

below normal value (NV) by 

Maquilacero and Regiopytsa during the 

POR. If these preliminary results are 

adopted in our final results of this 

administrative review, we will issue 

appropriate assessment instructions to 

U.S. Customs and Border Protection 

(CBP). Interested parties are invited to 

comment on these preliminary results. 

Parties who submit argument in these 

proceedings are requested to submit 

with the argument: (1) A statement of 

the issues; (2) a brief summary of the 

argument; and (3) a table of authorities. 

DATES: Effective Date: September 13, 

2010. 

FOR FURTHER INFORMATION CONTACT: 

Edythe Artman, Ericka Ukrow 

(Maquilacero), or John Drury, Brian 

Davis (Regiopytsa), AD/CVD Operations, 

Office 7, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230; telephone: (202) 

482–3931, (202) 482–0405, (202) 482– 

0195, or (202) 482–7924, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On August 5, 2008, the Department 

published in the Federal Register the 

antidumping duty order covering, inter 

alia, LWRPT from Mexico. See LightWalled Rectangular Pipe and Tube from 

Mexico, the People’s Republic of China, 

and the Republic of Korea: Antidumping 

Duty Orders; Light-Walled Rectangular 

Pipe and Tube from the Republic of 

Korea: Notice of Amended Final 

Determination of Sales at Less Than 

Fair Value, 73 FR 45403 (August 5, 

2008) (Order). On August 3, 2009, the 

Department published in the Federal 

Register its notice of opportunity to 

request an administrative review of this 

order entitled Antidumping or 

Countervailing Duty Order, Finding, or 

Suspended Investigation; Opportunity 

To Request Administrative Review, 74 

FR 38397 (August 3, 2009), covering, 

inter alia, LWRPT from Mexico for the 

POR (i.e., January 30, 2008, through July 

31, 2009). 

In response, on August 28, 2009, 

petitioners requested that the 

Department conduct an administrative 

review of entries of subject merchandise 

made by nine Mexican producers/ 

exporters 2 for the POR January 30, 

2008, through July 31, 2009. In addition, 

on August 31, 2009, the Department 

received requests for review from three 

Mexican exporters/producers and their 

affiliates included in the petitioner’s 

request (i.e., Prolamsa, Nacional, and 

Ternium). 

On September 22, 2009, the 

Department published in the Federal 

Register a notice of initiation of this 

antidumping duty administrative review 

covering the period January 30, 2008, 

through July 31, 2009. See Initiation of 

Antidumping and Countervailing Duty 

Administrative Reviews and Request for 

Revocation in Part, 74 FR 48224 

(September 22, 2009) (Initiation 

Notice).3

On September 22, 2009, Ternium S.A. 

de C.V., and its affiliates Hylsa S.A. de 

C.V.; Galvak S.A. de C.V.; and Industrias 

Monterrey S.A. de C.V. requested that 

the Department rescind the review of 

these companies and/or clarify that the 

administrative review of Ternium and 

its affiliates was initiated solely based 

on Ternium’s request for review. Based 

on 19 CFR 303(f)(3)(ii), Ternium alleged 

that petitioner’s request was invalid due 

to the fact that the certificate of service 

did not indicate that copies were served 

on counsel to Ternium and its affiliates 

or on these companies directly. In 

response, petitioner contended that 

domestic parties complied with the 

Department’s service regulations at 19 

CFR 303(f)(3)(ii) by serving a copy of the 

review request to all parties on the latest 

public service list for the proceeding, 

thus, using the list generated in the 

investigation of the present proceeding. 

Petitioners also argued that even if 

domestic parties did not technically 

comply with the Department’s notice 

regulation, service in accordance with 

the Department’s latest service list for 

the proceeding represents a good faith 

attempt to service. Petitioners re-filed 

their review request with a revised 

public service list and specifically 

served Ternium parties concurrent with 

the filing on September 25, 2009. In its 

response letter to Ternium’s request, on 

October 14, 2009, the Department 

clarified that the initiation of Ternium 

and its affiliates was based on both 

Ternium’s request for review, dated 

August 31, 2009, and petitioner’s review 

request, dated August 28, 2009. 

Moreover, as noted above, a request for 

review with corrected errors was served 

to all parties and filed on September 25, 

2009, demonstrating a good faith 

attempt to comply with the 

Department’s service requirements on 

behalf of petitioners. See Letter from 

petitioners titled, ‘‘Light-Walled 

Rectangular Pipe and Tube from 

Mexico: Administrative Review,’’ dated 

September 25, 2009. 

On September 28, 2009, the 

Department issued a letter to all 

interested parties indicating its 

intention to select mandatory 

respondents based on U.S. import data 

obtained from U.S. CBP and provided 

parties an opportunity to comment on 

the CBP data. See Letter from the 

Department titled, ‘‘To All Interested 

Parties,’’ dated September 28, 2009. 

Petitioners responded, on October 1, 

2009, and recommended the 

Department choose the largest exporters 

by volume as respondents. In addition, 

in its October 16, 2009, letter, Prolamsa 

requested to be selected as a mandatory 

respondent alleging that it is the largest 

Mexican producer and exporter of 

LWRPT to the United Sates, and also 

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55560 Federal Register / Vol. 75, No. 176 / Monday, September 13, 2010 / Notices 

4The companies not selected as mandatory 

respondents for this review are Prolamsa, Nacional, 

Industrias Monterrey S.A. de C.V., Perfiles y 

Herrajes LM S.A. de C.V., Galvak S.A. de C.V., 

Hylsa S.A. de C.V., and Ternium. 

because the number of valid, pending 

review requests is not large. 

On October 15, 2009, the Department 

determined that, because it was not 

feasible to examine all nine producers/ 

exporters of the subject merchandise; 

the most appropriate methodology for 

purposes of this review was to select the 

two largest producers/exporters by 

export volume. Accordingly, the 

Department selected Maquilacero and 

Regiopytsa as mandatory 

respondents.4See Memorandum to 

Richard O. Weible, Director, AD/CVD 

Operations, Office 7, ‘‘Respondent 

Selection Memorandum,’’ dated October 

15, 2009. 

The Department issued its standard 

antidumping duty questionnaire to 

Maquilacero and Regiopytsa on October 

16, 2009. 

Maquilacero 

Maquilacero submitted its response to 

section A of the questionnaire (AQR) on 

November 16, 2009, its response to 

sections B and C of the questionnaire 

(BQR, CQR, respectively) on December 

8, 2009, and section D response (DQR) 

on December 14, 2009. On January 19, 

2010, Maquilacero submitted cost data 

using quarterly averaging cost periods 

and requested that the Department rely 

on this quarterly cost data for purposes 

of calculating its margin. The 

Department issued a supplemental 

questionnaire to Maquilacero for 

sections A through C of the 

questionnaire on February 2, 2010. 

Maquilacero filed its response on March 

4, 2010. On April 8, 2010, the 

Department issued a second 

supplemental questionnaire (SSQR) 

covering sections A through C of the 

Department’s antidumping duty 

questionnaire. On April 30, 2010, 

Maquilacero filed its response to the 

Department’s SSQR. On May 14, 2010, 

the Department issued its first 

supplemental questionnaire covering 

section D of the Department’s 

antidumping duty questionnaire. On 

June 14, 2010, Maquilacero filed its 

response to the Department’s May 14, 

2010, section D supplemental 

questionnaire (FDQR). Maquilacero 

submitted its response to the 

Department’s June 14, 2010, third 

supplemental questionnaire (TSQR) on 

June 30, 2010. On August 9, 2010, the 

Department issued a second 

supplemental section D questionnaire 

(SDQR), and on August 11, 2010, a 

fourth supplemental questionnaire 

covering sections A through C. 

Maquilacero submitted its response to 

the Department’s SDQR on August 17, 

2010, and its response to the fourth 

supplemental questionnaire on August 

23, 2010. 

The Department received no 

comments on any of Maquilacero’s 

questionnaire responses from 

petitioners. 

Regiopytsa 

Regiopytsa submitted its response to 

section A of the questionnaire (RAQR) 

on November 24, 2009, and its response 

to sections B and C of the questionnaire 

(RBQR, RCQR, respectively) on 

December 8, 2009. On December 22, 

2009, the Department received a 

company-specific allegation from 

petitioners that home market sales made 

by Regiopytsa were made at prices 

below the cost of production. On 

January 25, 2010, petitioners, at the 

Department’s request, revised their 

December 22, 2009 cost allegation. See 

Memo to the File titled, ‘‘Telephone Call 

with Petitioners’ Counsel Regarding 

Sales-Below-Cost Allegation for 

Regiomontana de Perfiles y Tubos S.A. 

de C.V.,’’ dated January 12, 2010 (Cost 

Allegation Memo), which explains that 

petitioners must submit a cost test 

comparing the net home market price 

with the cost of production rather than 

the cost of manufacture. On February 

16, 2010, the Department initiated a 

sales-below-cost of production 

investigation with respect to Regiopytsa. 

See Memorandum to the File titled, 

‘‘The Petitioners’ Allegation of Sales 

Below the Cost of Production for 

Regiomontana de Perfiles y Tubos S.A. 

de C.V.’’ 

On February 19, 2010, the Department 

issued a letter to Regiopytsa requesting 

that it respond to section D of the 

Department’s antidumping duty 

questionnaire. On March 3, 2010, the 

Department issued a supplemental 

questionnaire covering Regiopytsa’s 

RAQR, RBQR, and RCQRs. On March 

22, 2010, Regiopytsa submitted its 

response to section D of the 

Department’s antidumping duty 

questionnaire (RDQR). On March 31, 

2010, Regiopytsa submitted its response 

to the Department’s March 3, 2010 

supplemental questionnaire (RSQR). On 

April 16, 2010, petitioners submitted 

comments covering both Regiopytsa’s 

RDQR and RSQR. On April 30, 2010, 

Regiopytsa submitted an additional 

response containing supplemental 

information covering the Department’s 

March 3, 2010, supplemental 

questionnaire (RSSQR). On May 14, 

2010, the Department issued a 

supplemental questionnaire covering 

Regiopytsa’s RDQR. On May 17, 2010, 

the Department issued a supplemental 

questionnaire covering both 

Regiopytsa’s RSQR and RSSQRs. On 

June 11, 2010, Regiopytsa submitted its 

response to the Department’s May 14, 

2010 supplemental questionnaire 

(RSDQR). On June 18, 2010, Regiopytsa 

submitted its response to the 

Department’s May 17, 2010 

supplemental questionnaire as well as 

provided additional information related 

to the Department’s May 14, 2010, 

supplemental questionnaire covering 

Regiopytsa’s RDQR (collectively, 

RSSQR). 

On July 15, 2010, Regiopytsa 

submitted its minor corrections related 

to the sales verification (see letter titled, 

‘‘Light-Walled Rectangular Pipe and 

Tube from Mexico: Submission of Minor 

Corrections’’) and on July 21, 2010, it 

submitted the sales verification exhibits 

(see letter titled, ‘‘Light-Walled 

Rectangular Pipe and Tube from 

Mexico: Submission of Sales 

Verification Exhibits’’). On July 26, 

2010, Regiopytsa submitted is minor 

corrections related to the cost 

verification (see letter titled, ‘‘LightWalled Rectangular Pipe and Tube from 

Mexico: Submission of Minor 

Corrections’’) and on July 27, 2010, it 

submitted the cost verification exhibits 

(see letter titled, ‘‘Light-Walled 

Rectangular Pipe and Tube from 

Mexico: Submission of Cost Verification 

Exhibits’’). On August 30, 2010, the 

Department requested Regiopytsa revise 

its cost file presented during the 

Department’s July 19, 2010 through July 

23, 2010 cost verification. Additionally, 

on August 31, 2010, the Department 

requested Regiopytsa revise its home 

market and U.S. sales databases 

pursuant to the Department’s 

verification findings and the minor 

corrections presented by company 

officials at the start of the verifications. 

See Memorandum to the File titled, 

‘‘Telephone Call with Counsel to 

Regiomontana de Perfiles y Tubos S.A. 

de C.V. (‘‘Regiopytsa’’) Requesting 

Revised COP File Reflecting Certain 

Minor Corrections Presented at 

Verification,’’ dated August 30, 2010 and 

Letter to Regiopytsa from Angelica L. 

Mendoza, Program Manager, regarding 

Submission of Revised Sales Databases, 

dated August 31, 2010. Regiopytsa 

submitted its revised cost database on 

August 31, 2010, and its revised sales 

databases on September 2, 2010. 

Non-Selected Companies 

In situations where we cannot apply 

our normal methodology of calculating 

a weighted-average margin due to 

requests to protect business-proprietary 

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Federal Register / Vol. 75, No. 176 / Monday, September 13, 2010 / Notices 55561 

information but where use of a simple 

average does not yield the best proxy of 

the weighted-average margin relative to 

publicly available data, normally we 

will use the publicly available figures as 

a matter of practice. See Ball Bearings 

and Parts Thereof From France, et al.: 

Final Results of Antidumping Duty 

Administrative Reviews, Final Results of 

Changed-Circumstances Review, and 

Revocation of an Order in Part, 75 FR 

53,661 (September 1, 2010). See ‘‘Rates 

for Non-Selected Companies’’ below. 

Tolling of Deadlines 

As explained in the memorandum 

from the Deputy Assistant Secretary 

(DAS) for Import Administration, the 

Department 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 were extended by seven 

days. 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,’’ dated February 12, 

2010. Therefore, the deadline for the 

preliminary results of this review 

became May 17, 2010. 

Subsequently, on May 10, 2010, the 

Department published in the Federal 

Register a notice extending the time 

limits for the preliminary results of this 

review. See Light-Walled Rectangular 

Pipe and Tube from Mexico; Extension 

of Time Limit for Preliminary Results of 

Antidumping Duty Administrative 

Review, 75 FR 25841 (May 10, 2010). 

This extension established the deadline 

for these preliminary results as 

September 7, 2010, at 25842. 

Period of Review 

The POR is January 30, 2008, through 

July 31, 2009. 

Scope of the Order 

The merchandise that is the subject of 

this order is certain welded carbonquality light-walled steel pipe and tube, 

of rectangular (including square) cross 

section, having a wall thickness of less 

than 4 mm. 

The term carbon-quality steel 

includes both carbon steel and alloy 

steel which contains only small 

amounts of alloying elements. 

Specifically, the term carbon-quality 

includes products in which none of the 

elements listed below exceeds the 

quantity by weight respectively 

indicated: 1.80 percent of manganese, or 

2.25 percent of silicon, or 1.00 percent 

of copper, or 0.50 percent of aluminum, 

or 1.25 percent of chromium, or 0.30 

percent of cobalt, or 0.40 percent of 

lead, or 1.25 percent of nickel, or 0.30 

percent of tungsten, or 0.10 percent of 

molybdenum, or 0.10 percent of 

niobium, or 0.15 percent vanadium, or 

0.15 percent of zirconium. The 

description of carbon-quality is 

intended to identify carbon-quality 

products within the scope. The welded 

carbon-quality rectangular pipe and 

tube subject to this order is currently 

classified under the Harmonized Tariff 

Schedule of the United States (HTSUS) 

subheadings 7306.61.50.00 and 

7306.61.70.60. While HTSUS 

subheadings are provided for 

convenience and Customs purposes, our 

written description of the scope of this 

order is dispositive. 

Verification 

As provided in section 782(i) of the 

Tariff Act of 1930, as amended (the Act), 

and 19 CFR 351.307, we conducted 

sales and cost verifications of the 

questionnaire responses of Regiopytsa 

from July 12, 2010, through July 16, 

2010 (sales) and July 19, 2010, through 

July 23, 2010 (cost). We used standard 

verification procedures, including onsite inspection of Regiopytsa’s 

production facility in Apodaca, Mexico. 

Our verification results are outlined in 

the following memoranda: (1) 

Memorandum to the File, through 

Angelica L. Mendoza, Program Manager, 

‘‘Verification of the Home Market and 

Export Price Sales Responses of 

Regiomontana de Perfiles y Tubos S.A. 

de C.V. in the Administrative Review of 

the Antidumping Duty Order on LightWalled Rectangular Pipe and Tube from 

Mexico,’’ dated September 7, 2010 (Sales 

Verification Report); and (2) 

Memorandum to File, through Neal 

Halper, ‘‘Verification of the Cost 

Response of Regiomontana de Perfiles y 

Tubos S.A. de C.V. in the Antidumping 

Duty Review of Light-Walled 

Rectangular Pipe and Tube from 

Mexico,’’ dated September 7, 2010 (Cost 

Verification Report). Public versions of 

these reports are on file in the Central 

Records Unit (CRU) located in room 

7046 of the main Department of 

Commerce Building, 14th Street and 

Constitution Avenue, NW., Washington, 

DC. 

Affiliated Respondents 

Under section 771(33)(E) of the Act, if 

one party owns, directly or indirectly, 

five percent or more of the other, such 

parties are considered to be affiliated for 

purposes of the antidumping law. 

Furthermore, pursuant to 19 CFR 

351.403, a respondent is required to 

report the downstream sales of its 

affiliate(s) to the first unaffiliated 

customer if the respondent’s sales to 

that affiliate, (1) account for greater than 

five percent of the respondent’s total 

home market sales of foreign like 

product, and (2) if those sales to the 

affiliate are determined to not be at 

arm’s length. 

Maquilacero 

In the final determination of the sales 

at less-than-fair-value investigation of 

LWRPT from Mexico, the Department 

determined that, pursuant to section 

771(33)(E), Maquilacero had one 

affiliated party and used the 

downstream sales reported by 

Maquilacero’s affiliate. See Notice of 

Final Determination of Sales at Less 

Than Fair Value: Light-Walled 

Rectangular Pipe and Tube From 

Mexico, 73 FR 35649 (June 24, 2008). 

For purposes of this administrative 

review, and pursuant to section 

771(33)(E) of the Act, we determined 

that Maquilacero owns, directly or 

indirectly, five percent or more of 

another party and, therefore, 

Maquilacero submitted its affiliate’s 

downstream sales as well as its POR 

sales of the foreign like product to this 

affiliate. 

Regiopytsa 

For purposes of this administrative 

review, and pursuant to section 

771(33)(E) of the Act, we determined 

that Regiopytsa owns, directly or 

indirectly, five percent or more of 

another party. See Regiopytsa’s RAQR at 

pages A–13 through A–18. However, at 

page 5 of its RSQR and page 3 of its 

RSSQR, Regiopytsa indicated that sales 

of merchandise that would constitute 

the foreign like product were made to its 

affiliate in the home market during the 

POR. Therefore, we asked that 

Regiopytsa report its downstream sales 

from the affiliate to unaffiliated 

customers. We also performed an arm’slength test. Due to the proprietary 

nature of the discussion, please see 

memorandum to the file titled, 

‘‘Analysis of Data Submitted by 

Regiomontana de Perfiles y Tubos S.A. 

de C.V. for the Preliminary Results of 

the Antidumping Duty Administrative 

Review of Light-Walled Rectangular 

Pipe and Tube from Mexico’’ (A–201– 

836) and dated September 7, 2010 

(Regiopytsa Preliminary Analysis Memo 

Memorandum), for a detailed 

explanation. 

Fair Value Comparisons 

To determine whether sales of subject 

merchandise were made in the United 

States at less than fair value, we 

compared the export price (EP) to the 

NV, as described in the ‘‘Export Price’’ 

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55562 Federal Register / Vol. 75, No. 176 / Monday, September 13, 2010 / Notices 

and ‘‘Normal Value’’ sections of this 

notice. In accordance with section 

777A(d)(2) of the Act, we compared the 

EP of sales within the POR to the 

monthly weighted-average normal value 

of the foreign like product where there 

were sales made in the ordinary course 

of trade, as discussed in the ‘‘Price-toPrice Comparisons’’ section below. 

Product Comparisons 

In accordance with section 771(16) of 

the Act, we considered all products 

produced by Maquilacero and 

Regiopytsa covered by the description 

in the ‘‘Scope of the Order’’ section 

above, and sold in the home market 

during the POR, to be foreign like 

product for purposes of determining 

appropriate product comparisons to 

U.S. sales. We relied on six 

characteristics to match U.S. sales of 

subject merchandise to home sales of 

the foreign like product: (1) Steel input 

type; (2) whether metallic coated or not; 

(3) whether painted or not; (4) 

perimeter; (5) wall thickness; and (6) 

shape. Where there were no sales of 

identical merchandise in the home 

market to compare to U.S. sales, we 

compared U.S. sales to the next most 

similar foreign like product on the basis 

of the characteristics and reporting 

instructions listed in the Department’s 

original October 16, 2009, 

questionnaire. 

Level of Trade 

In accordance with section 

773(a)(1)(B) of the Act, to the extent 

practicable, we determine NV based on 

sales made in the home market at the 

same level of trade (LOT) as EP or the 

constructed export price (CEP). The NV 

LOT is based on the starting price of 

sales in the home market or, when NV 

is based on constructed value (CV), that 

of the sales from which we derived 

selling, general, and administrative 

(SG&A) expenses and profit. See also 19 

CFR 351.412(c)(1)(iii). With respect to 

CEP transactions in the U.S. market, the 

CEP LOT is the level of the constructed 

sale from the exporter to an affiliated 

importer after the deductions required 

under section 772(d) of the Act. See 19 

CFR 351.412(c)(1)(ii). For EP, it is the 

starting price, which is usually from 

exporter to importer. See 19 CFR 

351.412(c)(1)(i). In this review, 

Maquilacero and Regiopytsa claimed 

their sales to the United States were 

entirely EP sales. 

To determine whether NV sales are at 

a different LOT than EP sales, we 

examine stages in the marketing process 

and selling functions along the chain of 

distribution between the producer and 

the unaffiliated customer. See 19 CFR 

351.412(c)(2). If the home market sales 

are at a different LOT and the difference 

affects price comparability, as 

manifested in a pattern of consistent 

price differences between the sales on 

which NV is based and home market 

sales at the LOT of the export 

transaction, we make a LOT adjustment 

under section 773(a)(7)(A) of the Act 

and 19 CFR 351.412. See, e.g., Notice of 

Final Determination of Sales at Less 

Than Fair Value: Certain Cut-to-Length 

Carbon Steel Plate from South Africa, 

62 FR 61731 (November 19, 1997). 

Maquilacero 

We obtained information from 

Maquilacero regarding the marketing 

stages involved in making their reported 

home market and U.S. sales to both 

unaffiliated customers. Maquilacero 

provided a description of all selling 

activities performed, along with a 

flowchart and description comparing 

the LOTs among each channel of 

distribution and customer category for 

both markets. See Maquilacero’s AQR at 

A–13 through A–16, Exhibit A–6, and 

FSQR at 15 through 18 and Exhibit SA– 

10. 

Maquilacero sold LWRPT to end-users 

and retailers/distributors in both the 

home and U.S. markets. 

For the U.S. market, Maquilacero 

reported one LOT, with one channel of 

distribution, for its EP sales. See FSQR 

at 17. Based on our analysis of 

Maquilacero’s selling functions for its 

sales to the United States, we determine 

that there was one LOT, i.e., the EP LOT 

(LOTU1), for its U.S. sales. 

For the home market, Maquilacero 

identified two channels of distribution 

described as follows: (1) Direct sales 

made by Maquilacero, and (2) indirect 

sales made by its affiliated reseller to 

the first unaffiliated customer. 

Maquilacero further reported that the 

downstream sales through its affiliated 

reseller were made at a distinct LOT, 

resulting in two LOTs in the home 

market. We reviewed the intensity at 

which Maquilacero performed each of 

the claimed selling functions with 

respect to each claimed channel of 

distribution. While we find small 

differences in the degree of selling 

functions that exist between 

Maquilacero and its affiliated reseller; 

such differences are not so significant 

that they would constitute a distinction 

in the performance of selling activities 

or have an effect on price comparability. 

Therefore, based on our analysis of all 

of Maquilacero’s home market selling 

functions, we preliminary find that the 

selling functions for the reported 

channels of distribution constitute one 

LOT in the home market, the NV LOT. 

For further discussion, see the ‘‘Level of 

Trade’’ section in the Memorandum to 

the File, through Angelica L. Mendoza, 

Program Manager, Office 7, entitled 

‘‘Analysis of Data Submitted by 

Maquilacero S.A. de C.V. for the 

Preliminary Results of the Antidumping 

Duty Administrative Review on LightWalled Rectangular Pipe and Tube from 

Mexico,’’ dated September 7, 2010. 

(Maquilacero Preliminary Analysis 

Memo). 

We then compared the NV LOT, based 

on the selling functions associated with 

the transactions between Maquilacero 

and its affiliated reseller in the home 

market, to the EP LOT, which is based 

on the selling functions associated with 

the transaction between Maquilacero 

and its customers, based on our analysis 

of record evidence, we find that the 

degree to which Maquilacero provides 

the selling functions for its customers in 

both markets to be similar (i.e., sales 

forecasting, strategic/economic 

planning, advertising and promotion, 

packing, order input/processing, market 

research, cash and early payment 

discounts, warranty service, sales and 

marketing support, technical assistance, 

and after-sales services). Therefore, we 

matched EP sales to sales at the same 

LOT in the home market and did not 

make a LOT adjustment. See section 

773(a)(7)(A) of the Act. A complete and 

detailed explanation of our level of 

trade analysis can be found in the ‘‘Level 

of Trade’’ section of Maquilacero’s 

Preliminary Analysis Memo. 

Regiopytsa 

We obtained information from 

Regiopytsa regarding the marketing 

stages involved in making sales in both 

the reported home and U.S. markets. 

Regiopytsa provided a description of all 

selling activities performed among each 

channel of distribution and customer 

category for both markets, along with a 

flowchart and description comparing 

the LOTs. See Regiopytsa’s RAQR at A– 

18 through A–23, and Exhibit A–4. 

For both the home market and U.S. 

market, Regiopytsa sold LWRPT to endusers and retailers/distributors. 

In the U.S. market, Regiopytsa made 

only EP sales. The company reported 

one LOT, with one channel of 

distribution to two classes of customers, 

which were distributors and steel 

service centers. See RAQR at A–19 

through A–20 and Exhibit A–4. Based 

on our analysis of Regiopytsa’s selling 

functions for its sales to the United 

States, we determine that there was one 

LOT for its U.S. sales. 

For sales in the home market, 

Regiopytsa reported one channel of 

distribution to two classes of customers, 

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which were distributors and end-users. 

Id. Certain home market customers were 

affiliated parties. For all sales to its 

affiliates, the merchandise was resold to 

unaffiliated customers. However, 

Regiopytsa reported a single level of 

trade in the home market. Based on our 

analysis of all of Regiopytsa’s home 

market selling functions, we 

preliminary find that the selling 

functions for the reported channel of 

distribution constitute one LOT in the 

home market, the NV LOT. For further 

discussion, see the ‘‘Level of Trade’’ 

section in the Memorandum to the File, 

from John Drury and Brian Davis, 

International Trade Compliance 

Analysts, entitled, ‘‘Analysis of Data 

Submitted by Regiomontana de Perfiles 

S.A. de C.V. for the Preliminary Results 

of the Antidumping Duty 

Administrative Review on Light-Walled 

Rectangular Pipe and Tube from 

Mexico,’’ dated September 7, 2010 

(Regiopytsa Preliminary Analysis 

Memo). 

We then compared the NV LOT, based 

on the selling functions associated with 

the sales at the NV LOT, to the EP LOT. 

Based on our analysis of record 

evidence, we preliminarily find that the 

degree to which Regiopytsa provides the 

selling functions for its customers in the 

home market to be greater than those 

provided in the U.S. market. While both 

markets had many similar selling 

functions (i.e., sales promotion, packing, 

inventory maintenance, and after-sales 

services), Regiopytsa provided certain 

selling functions in the home market 

that it did not provide in the U.S. 

market (i.e., providing discounts, 

commissions to selling agents, and postsale warehousing). However, we 

preliminarily find that we are unable to 

quantify the differences in levels of 

trade because we have found a single 

level of trade in Regiopytsa’s home 

market. Therefore, we matched the EP 

sales to HM sales without making an 

adjustment for LOT. See section 

773(a)(7)(A) of the Act. A complete and 

detailed explanation of our level of 

trade analysis can be found in the ‘‘Level 

of Trade’’ section of the Regiopytsa’s 

Preliminary Analysis Memo. 

Date of Sale 

The Department will normally use 

invoice date, as recorded in the 

exporter’s or producer’s records kept in 

the ordinary course of business, as the 

date of sale, but may use a date other 

than the invoice date if it better reflects 

the date on which the material terms of 

sale are established. See 19 CFR 

351.401(i). 

Maquilacero 

Maquilacero reported the invoice date 

as the date of sale for all sales made in 

each channel of distribution for both the 

home and U.S. markets. See 

Maquilacero’s BQR at page B–25, CQR 

at C–20, First Supplemental 

Questionnaire Response (FSQR) at 27 

and 49, and the Affiliate’s Section B 

Questionnaire Response (AFBQR) at B– 

23. Pursuant to 19 CFR 351.401(i), the 

Department will normally use the 

invoice date as the date of sale unless 

an interested party submits information 

that supports the use of a different date. 

For purposes of this review, we 

examined whether invoice date or 

another date better represents the date 

on which the material terms of sale were 

established. In its FSQR at page 29, 

Maquilacero states that sales are 

invoiced at the price in effect at the time 

of shipment; therefore, changes in the 

material terms of sale, such as price, can 

occur until the issuance of the invoice 

on the date of shipment. The 

Department examined sales 

documentation, including order 

confirmations and invoices, provided by 

Maquilacero for its U.S. market sales 

(e.g., FSQR at 30 thorough 31, Exhibits 

SA–3 and SA–4) and found that the 

material terms of sale were set on the 

date on which the invoice is issued, 

which is coincident with the date of 

shipment. Therefore, we preliminarily 

determine that invoice date is the 

appropriate date of sale for the U.S. 

market sales in this administrative 

review because it better represents the 

date upon which the material terms 

were established. See Maquilacero’s 

FSQR at 27, 30 through 31 and exhibit 

SA–3 for a sample sale. 

With respect to Maquilacero’s home 

market sales, there were small 

differences in quantity between 

purchase order, order confirmation, and 

invoice date. Based on record evidence, 

the purchase order is subject to 

cancellation, and all material terms of 

sale are subject to change up until the 

merchandise is released for shipment at 

the date of the invoice. See FSQR at 27, 

31 and exhibit SA–4 for a sample sale. 

Therefore, for Maquilacero’s home 

market sales, we have preliminarily 

used invoice date as the date of sale. See 

Maquilacero’s Preliminary Analysis 

Memo for a further discussion of this 

issue. 

Regiopytsa 

Regiopytsa reported the invoice date 

as the date of sale for all sales made in 

each channel of distribution for both the 

home (except where noted below) and 

U.S. markets. See Regiopytsa’s RAQR at 

page A–32, RBQR at page B–16, and 

RCQR at C–14. For purposes of this 

review, we examined whether invoice 

date or another date better represents 

the date on which the material terms of 

sale were established for Regiopytsa’s 

home market and U.S. sales. The 

Department examined sales 

documentation, including order 

confirmations and invoices, provided by 

Regiopytsa for both its home market and 

U.S. sales and found that the material 

terms of sale were set on the date on 

which the invoice is issued. See 

Regiopytsa’s RAQR at attachment 6 for 

sample home market sales documents 

(i.e., purchase order, invoice, credit 

notice, and weight slip) and at 

attachment 7 for sample U.S. sales 

documents (i.e., purchase order, internal 

order (export), invoice, packing list, and 

U.S. Customs Entry Summary Form 

7501). 

With respect to its home market, 

Regiopytsa explained that certain sales 

involved ‘‘special invoicing.’’ See 

Regiopytsa’s RAQR at pages 32 through 

33, RSQR at pages 15 through 17, and 

RSSQR at attachment 1. Based on our 

analysis of these sales, the Department 

has determined that material terms of 

sale are subject to change up until the 

merchandise is released for shipment, 

which occurs after the invoice date. 

Therefore, for these preliminary results, 

the Department finds that the shipment 

date is the appropriate date of sale for 

such sales. For the remainder of 

Regiopytsa’s home market sales, we 

have preliminarily used invoice date as 

the date of sale as we have preliminarily 

found that materials terms of sale are 

subject to change up until the date upon 

which the invoice is issued. See 

Regiopytsa’s Preliminary Analysis 

Memo for a further discussion of this 

issue. 

With respect to Regiopytsa’s U.S. 

sales, in its RSQR at page 33, Regiopytsa 

explained that there are, ‘‘generally no 

changes in the material terms of sale 

between the order date and the date of 

invoice.’’ Regiopytsa also explained that 

in some instances, ‘‘such as when steel 

prices change substantially, a price 

increase or decrease will occur during 

this period,’’ and that, ‘‘if there is a 

change in quantity or type of product 

ordered, the purchase order is cancelled 

and a new order is issued.’’ See 

verification exhibit (VE) 16 

(‘‘Completeness’’) at pages 0375–0377 for 

an example of a cancelled sale; see also 

VE–4 (‘‘Home Market Sales Process’’) at 

pages 0422 (the initial invoice) and 0429 

(credit note adjusting price). Therefore, 

we preliminarily determine that invoice 

date is the appropriate date of sale for 

Regiopytsa’s U.S. sales in this 

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administrative review because it best 

represents the date upon which the 

material terms were established. 

Export Price 

Section 772(a) of the Act defines EP 

as ‘‘the price at which the subject 

merchandise is first sold (or agreed to be 

sold) before the date of importation by 

the producer or exporter of subject 

merchandise outside of the United 

States to an unaffiliated purchaser in the 

United States or to an unaffiliated 

purchaser for exportation to the United 

States, as adjusted under subsection (c).’’ 

Section 772(b) of the Act defines CEP as 

‘‘the price at which the subject 

merchandise is first sold (or agreed to be 

sold) in the United States before or after 

the date of importation by or for the 

account of the producer or exporter of 

such merchandise or by a seller 

affiliated with the producer or exporter, 

to a purchaser not affiliated with the 

producer or exporter,’’ as adjusted under 

sections 772(c) and (d). 

Maquilacero 

Maquilacero has classified all its U.S. 

sales as EP sales; see CQR at C–16. For 

purposes of these preliminary results, 

we accepted this classification and 

calculated EP in accordance with 

section 772(a) of the Act because the 

merchandise was sold prior to 

importation by the exporter or producer 

outside the United States to the first 

unaffiliated purchaser in the United 

States and because CEP was not 

otherwise warranted. We calculated EP 

based on the packed price charged to 

the first unaffiliated U.S. customer. We 

made deductions for movement 

expenses, where appropriate, in 

accordance with section 772(c)(2)(A) of 

the Act, including foreign inland freight 

from the plant to the port of exportation, 

brokerage and handling expenses 

incurred in the home market, 

international freight and warehousing 

expenses, where appropriate. 

Regiopytsa 

Regiopytsa has classified all their U.S. 

sales as EP sales; see RCQR at C–14. For 

purposes of these preliminary results, 

we accepted this classification and 

calculated EP in accordance with 

section 772(a) of the Act because the 

merchandise was sold prior to 

importation by the exporter or producer 

outside the United States to the first 

unaffiliated purchaser in the United 

States and because CEP was not 

otherwise warranted. We calculated EP 

based on the packed price charged to 

the first unaffiliated U.S. customer. We 

made deductions for movement 

expenses in accordance with section 

772(c)(2)(A) of the Act, including inland 

freight (plant/warehouse to port of 

exportation), country of manufacture 

inland insurance, brokerage and 

handling expenses, and inland freight 

(warehouse to the unaffiliated 

customer), where appropriate. 

Normal Value 

A. Selection of Home Market 

To determine whether there is a 

sufficient volume of sales of LWRPT in 

the home market to serve as a viable 

basis for calculating NV, we compared 

Maquilacero’s and Regiopytsa’s volume 

of home market sales of the foreign like 

product to the volume of each 

company’s respective U.S. sales of the 

subject merchandise, in accordance 

with section 773(a) of the Act. 

Pursuant to section 773(a)(1)(B) of the 

Act, because both Maquilacero’s and 

Regiopytsa’s aggregate volume of home 

market sales of the foreign like product 

was greater than five percent of its 

aggregate volume of U.S. sales for 

subject merchandise, we determined 

that the home market was viable for 

comparison purposes for both 

companies. 

B. Affiliated Party Transactions and 

Arm’s Length Test 

Sales to affiliated customers in the 

home market not made at arm’s length 

prices are excluded from our analysis 

because we consider them to be outside 

the ordinary course of trade. See section 

773(f)(2) of the Act; see also 19 CFR 

351.102(b). Consistent with 19 CFR 

351.403(c) and (d) and agency practice, 

‘‘the Department may calculate NV 

based on sales to affiliates if satisfied 

that the transactions were made at arm’s 

length.’’ See China Steel Corp. v. United 

States, 264 F. Supp. 2d 1339, 1365 (CIT 

2003). To test whether the sales to 

affiliates were made at arm’s length 

prices, we compared, on a modelspecific basis, the starting prices of sales 

to affiliated and unaffiliated customers, 

net of all direct selling expenses, billing 

adjustments, discounts, rebates, 

movement charges, and packing. Where 

prices to the affiliated party are, on 

average, within a range of 98 to 102 

percent of the price of identical or 

comparable merchandise to the 

unaffiliated parties, we determine that 

the sales made to the affiliated party are 

at arm’s length. See Antidumping 

Proceedings: Affiliated Party Sales in 

the Ordinary Course of Trade, 67 FR 

69186, 69194 (November 15, 2002). 

Maquilacero 

Maquilacero reported that it made 

sales in the home market to one 

affiliated reseller and to unaffiliated 

customers and reported the downstream 

sales from its affiliated reseller to the 

first unaffiliated customers. With 

respect to Maquilacero, we found that 

prices to its affiliate were, on average, 

within the 98 to 102 percent of the price 

of identical or comparable subject 

merchandise sold to unaffiliated parties. 

Therefore, we determined that all sales 

to the affiliated party were made at 

arm’s-length; thus we included these 

sales in our analysis. See Maquilacero’s 

Preliminary Analysis Memo for a further 

discussion of this issue. 

Regiopytsa 

Regiopytsa reported that it made sales 

of the foreign like product to two 

affiliated parties during the POR. One 

affiliate purchased the foreign like 

product for consumption, while the 

second affiliate resold the foreign like 

product and non-prime merchandise in 

the home market. See Regiopytsa’s 

December 7, 2009, response at pages B– 

14 through B–15. We performed the 

arm’s-length test on Regiopytsa’s sales 

to affiliates and found that prices to its 

affiliates were, on average, within the 98 

to 102 percent of the price of identical 

or comparable subject merchandise sold 

to unaffiliated parties. Therefore, we 

determined that all sales to the affiliated 

parties were made at arm’s-length; thus 

we included these sales in our analysis. 

See Regiopytsa’s Preliminary Analysis 

Memo for a further discussion of this 

issue. 

C. Cost-Averaging Methodology 

The Department’s normal practice is 

to calculate an annual weighted-average 

cost for the POR. See, e.g.,Certain Pasta 

From Italy: Final Results of 

Antidumping Duty Administrative 

Review, 65 FR 77852 (December 13, 

2000), and accompanying Issues and 

Decision Memorandum at Comment 18, 

and Notice of Final Results of 

Antidumping Duty Administrative 

Review: Carbon and Certain Alloy Steel 

Wire Rod from Canada, 71 FR 3822 

(January 24, 2006), and accompanying 

Issues and Decision Memorandum at 

Comment 5 (explaining the 

Department’s practice of computing a 

single weighted-average cost for the 

entire period). We recognize that 

possible distortions may result if we use 

our normal annual-average cost method 

during a period of significant cost 

changes. In determining whether to 

deviate from our normal methodology of 

calculating an annual weighted-average 

cost, we evaluate the case-specific 

record evidence using two primary 

factors: (1) The change in the cost of 

manufacturing (COM) recognized by the 

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5We also found that prices for cold rolled steel 

coil (a major input consumed to produce certain 

LWRPT) changed significantly throughout the POR 

and, as a result, directly affected the cost of the 

material inputs consumed by Regiopytsa. See 

Regiopytsa Cost Calculation Memorandum for 

further details. 

respondent during the POR must be 

deemed significant; and (2) the record 

evidence must indicate that sales prices 

during the shorter averaging periods 

could be reasonably linked with the 

COP or CV during the same shorter 

averaging periods. See, e.g.,Stainless 

Steel Sheet and Strip in Coils From 

Mexico; Final Results of Antidumping 

Duty Administrative Review, 75 FR 6627 

(February 10, 2010) (SSSS from Mexico), 

and accompanying Issues and Decision 

Memorandum at Comment 6 and 

Stainless Steel Plate in Coils From 

Belgium: Final Results of Antidumping 

Duty Administrative Review, 73 FR 

75398 (December 11, 2008), and 

accompanying Issues and Decision 

Memorandum at Comment 4 (SSPC 

from Belgium). 

Regiopytsa provided pertinent 

information for control numbers with 

the five highest volumes sold in the 

comparison market and the United 

States over the POR in its June 11, 2010, 

response to the Department’s RSDQR at 

exhibit 6 and Maquilacero provided the 

same information in its June 14, 2010 

response to the Department’s FDQR at 

exhibit 34. 

1. Significance of Cost Changes 

In prior cases, we established 25 

percent as the threshold (between the 

highest cost and lowest costs quarter by 

COM) for determining that the changes 

in COM are significant enough to 

warrant a departure from our standard 

annual-cost approach. See SSPC from 

Belgium at Comment 4. In the instant 

case, record evidence shows that 

Regiopytsa and Maquilacero 

experienced significant changes (i.e., 

changes that exceeded 25 percent) 

between the highest cost and lowest cost 

quarterly COM divided by the lowest 

quarterly COM during the POR. This 

change in COM is attributable primarily 

to the price volatility for hot rolled steel 

coil used in the manufacture of LWRPT. 

Hot rolled steel coil is the major input 

consumed in the production of LWRPT. 

See ‘‘Cost of Production and CV 

Calculation Adjustment for the 

Preliminary Results—Regiomontana de 

Perfiles y Tubos S.A. de C.V.’’ from 

Stephanie C. Arthur to Neal M. Halper, 

dated September 7, 2010 (Regiopytsa 

Cost Calculation Memorandum) at page 

1 and ‘‘Cost of Production and CV 

Calculation Adjustment for the 

Preliminary Results—Maquilacero S.A. 

de C.V.’’ from Frederick W. Mines to 

Neal M. Halper, dated September 7, 

2010 (Maquilacero Cost Calculation 

Memorandum) at pages 1 and 2. We 

found that prices for hot rolled steel coil 

changed significantly throughout the 

POR and, as a result, directly affected 

the cost of the material inputs 

consumed by Regiopytsa and 

Maquilacero.5 See Regiopytsa Cost 

Calculation Memorandum at attachment 

3 and Maquilacero Cost Calculation 

Memorandum at attachment 1. 

2. Linkage Between Cost and Sales 

Information 

Consistent with past precedent, 

because we found the changes in costs 

to be significant, we evaluated whether 

there is evidence of a linkage between 

the cost changes and the sales prices 

during the POR. The Department’s 

definition of ‘‘linkage’’ does not require 

direct traceability between specific sales 

and their specific production costs but, 

rather, relies on whether there are 

elements that would indicate a 

reasonable correlation between the 

underlying costs and the final sales 

prices levied by the company. See SSPC 

from Belgium at Comment 4. These 

correlative elements may be measured 

and defined in a number of ways 

depending on the associated industry 

and the overall production and sales 

processes. To determine whether a 

reasonable correlation existed between 

the sales prices and their underlying 

costs during the POR, we compared 

weighted-average quarterly net sales 

prices to the corresponding quarterly 

COM for the five control numbers with 

the highest volume of sales in the 

comparison market and the five control 

numbers with the highest sales volume 

to the United States. After reviewing 

this information, we determined that 

sales prices and costs were generally 

trending in a consistent manner, and 

therefore, showed evidence of linkage. 

See Regiopytsa Cost Calculation 

Memorandum at attachments 1 and 2 

and Maquilacero Cost Calculation 

Memorandum at attachments 3 and 4. 

Because we have found significant 

cost changes in COM as well as 

reasonable linkage between costs and 

sales prices, we have preliminarily 

determined that a quarterly costing 

approach leads to more appropriate 

comparisons in our antidumping duty 

calculations for Regiopytsa and 

Maquilacero. 

D. Cost of Production Analysis 

Maquilacero 

In the previous segment of this 

proceeding, the Department disregarded 

sales made by Maquilacero that were 

found to be below its cost of production 

(COP). See Notice of Preliminary 

Determination of Sales at Less Than 

Fair Value: Light-Walled Rectangular 

Pipe and Tube From Mexico, 73 FR 

5521 (January 30, 2008). Therefore, 

pursuant to section 773(b)(2)(A)(ii) of 

the Act, there were reasonable grounds 

to believe or suspect that the respondent 

made sales of the foreign like product in 

the home market at prices below the 

COP within the meaning of section 

773(b) of the Act, as below cost sales 

made by Maquilacero were disregarded 

in the most recently completed 

investigation. Accordingly, on October 

16, 2009, the Department requested that 

Maquilacero respond to section D (Cost 

of Production/Constructed Value) of the 

Department’s antidumping duty 

questionnaire. 

Regiopytsa 

Based on petitioners’ cost allegation 

(see Cost Allegation Memo), the 

Department had reasonable grounds to 

believe or suspect that Regiopytsa had 

made below-cost sales of foreign like 

product. See section 773(b)(2)(A)(i) of 

the Act. Therefore, the Department 

initiated a cost investigation of 

Regiopytsa on February 19, 2010, and 

requested that Regiopytsa file a response 

to section D of the Department’s 

antidumping duty questionnaire. 

For Maquilacero and Regiopytsa, we 

calculated the COP on a productspecific basis, based on the sum of costs 

of materials and fabrication for the 

foreign like product plus amounts for 

general and administrative (G&A) 

expenses, interest expenses, and the 

costs of all expenses incidental to 

preparing the foreign like product for 

shipment in accordance with section 

773(b)(3) of the Act. 

We relied on the COP information 

provided by Maquilacero and 

Regiopytsa except for the following 

adjustments: 

Maquilacero 

1. Using Maquilacero’s hot rolled coil 

inventory movement data from the 

August 16, 2010, response, we measured 

the cost changes in terms of a 

percentage, to develop the direct 

material indices for each quarter. We 

used these indices to calculate an 

annual weighted-average material cost 

for the POR and then restate that annual 

average material cost to each respective 

quarter on an equivalent basis. 

2. We made two adjustments to 

Maquilacero’s G&A expense: (1) By 

offsetting project revenue against the 

G&A expense up to the amount of the 

expenses related to producing the 

project revenue which is included in the 

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reported costs, and (2) by including 

Corporacion Maquilacero S.A. de C.V.’s 

(Maquilacero’s affiliate) net results. See 

Maquilacero Cost Calculation 

Memorandum. 

Regiopytsa 

1. Using Regiopytsa’s inventory 

movement data for hot-rolled and coldrolled coil we obtained during our 

verification of the company’s cost 

response, we measured the cost changes 

throughout the period, in terms of a 

percentage, to develop the direct 

material indices for each quarter. We 

used these indices to calculate an 

indexed annual weighted-average 

material cost for the POR, and then 

restated that annual average material 

cost to each respective quarter on an 

equivalent basis. 

2. We made an upward adjustment to 

Regiopytsa’s reported COM to account 

for an un-reconciled cost difference. 

3. We deducted certain freight-in 

expenses from Regiopytsa’s reported 

direct materials costs because we 

discovered during our cost verification 

that these charges had been doublecounted in the reported costs. 

4. During the POR, Regiopytsa 

purchased hot-rolled steel coils from an 

affiliate. For each quarter, we have 

analyzed these transactions within the 

context of section 773(f)(2) of the Act 

(the ‘‘transactions disregarded’’ 

provision) and have made an 

adjustment to Regiopytsa’s reported 

direct material costs to account for the 

difference between transfer and market 

price for these inputs. 

5. We excluded the value of 

purchased scrap from Regiopytsa’s 

calculation of its direct materials scrap 

offset ratio. 

For further details regarding these 

adjustments for Maquilacero and 

Regiopytsa, see Maquilacero’s and 

Regiopytsa’s Cost Calculation Memos, 

which are on file in the CRU of the main 

Commerce Department building. 

On a product-specific basis, we 

compared the adjusted weightedaverage COP figures to the home market 

sales of the foreign like product, as 

required under section 773(b) of the Act, 

to determine whether these sales were 

made at prices below the COP. The 

prices were exclusive of any applicable 

movement charges, packing expenses, 

warranties, and indirect selling 

expenses. In determining whether to 

disregard home market sales made at 

prices below their COP and in 

accordance with sections 773(b)(2)(B), 

(C), and (D) of the Act, we examined 

whether such sales were made within 

an extended period of time in 

substantial quantities and at prices 

which permitted the recovery of all 

costs within a reasonable period of time. 

We found that, for certain products, 

more than 20 percent of respondents’ 

home market sales were at prices below 

the COP and these below-cost sales were 

made within an extended period of time 

in substantial quantities. In addition, 

these sales were made at prices that did 

not permit the recovery of costs within 

a reasonable period of time. Therefore, 

we disregarded these sales and used the 

remaining sales of the same product as 

the basis for determining normal value 

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

the Act. 

E. Price-to-Price Comparisons 

Maquilacero 

We calculated NV based on prices to 

unaffiliated and affiliated customers 

that passed the arm’s length and cost 

tests, where appropriate. We accounted 

for billing adjustments, discounts, and 

rebates, where appropriate. We also 

made deductions, where applicable, for 

inland freight, insurance, handling, and 

warehousing, pursuant to section 

773(a)(6)(B) of the Act. We also made 

adjustments for differences in 

circumstances of sale (COS) in 

accordance with section 773(a)(6)(C)(iii) 

of the Act. In particular, we made COS 

adjustments for imputed credit 

expenses, warranty expenses, and 

commissions. Finally, we deducted 

home market packing costs and added 

U.S. packing costs in accordance with 

sections 773(a)(6)(A) and (B) of the Act. 

For more information, see Maquilacero’s 

Preliminary Analysis Memo. 

Regiopytsa 

We calculated NV based on prices to 

unaffiliated customers that passed the 

cost test. We accounted for billing 

adjustments, discounts, and rebates, 

where appropriate. We also made 

deductions, where applicable, for inland 

freight, insurance, handling, and 

warehousing, pursuant to section 

773(a)(6)(B) of the Act. We also made 

adjustments for differences in COS in 

accordance with section 773(a)(6)(C)(iii) 

of the Act and 19 CFR 351.410. In 

particular, we made COS adjustments 

for warranty, commission, and certain 

direct selling expenses. Finally, we 

deducted home market packing costs 

and added U.S. packing costs in 

accordance with sections 773(a)(6)(A) 

and (B) of the Act. See Regiopytsa’s 

Preliminary Analysis Memo for a 

detailed explanation of these 

adjustments. 

Use of Adverse Facts Available 

For the reasons discussed below, we 

determine that the use of adverse facts 

available is appropriate for the 

preliminary results with respect to 

certain unreported expenses incurred by 

Regiopytsa on U.S. sales and unreported 

sales in the U.S. market. 

A. Use of Facts Available 

Section 776(a)(2) of the Act provides 

that, if an interested party withholds 

information requested by the 

administering authority, fails to provide 

such information by the deadlines for 

submission of the information and in 

the form or manner requested, 

significantly impedes a proceeding 

under this title, or provides such 

information but the information cannot 

be verified as provided in section 782(i) 

of the Act, the administering authority 

shall use facts otherwise available in 

reaching the applicable determination. 

During verification, we discovered 

that certain U.S. sales had incurred 

unreported direct selling expenses. In 

light of this fact, we carefully examined 

all pre-selected and surprise U.S. sales 

in order to determine if any had these 

unreported direct selling expenses. 

While examining the documentation for 

the ten U.S. pre-selected and surprise 

sales, we found that some sales had 

certain direct selling expenses that were 

incurred by Regiopytsa but were not 

reported to the Department. Also during 

verification, company officials 

explained that in gathering the sales 

documentation for a U.S. surprise sale, 

Regiopytsa discovered that a sale, 

originally reported as subject 

merchandise in the U.S. sales file, was 

in fact non-subject merchandise. As a 

result of this discovery, Regiopytsa 

conducted a manual review of the U.S. 

sales file in order to determine whether 

or not other sales were improperly 

reported as subject or non-subject. 

Company officials explained that as a 

result of this manual review, Regiopytsa 

uncovered additional sales which were 

reported as subject merchandise but 

were in fact non-subject in nature. 

Additionally, company officials 

explained that one sale was subject 

merchandise, but was originally 

considered non-subject merchandise, 

was inadvertently not reported to the 

Department. See Sales Verification 

Report for additional details. 

Pursuant to section 776(a)(2) of the 

Act, because Regiopytsa failed to report 

certain direct selling expenses incurred 

on U.S. sales and did not correctly 

identify all U.S. sales of subject 

merchandise prior to the start of 

verification (i.e., before the deadline to 

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Federal Register / Vol. 75, No. 176 / Monday, September 13, 2010 / Notices 55567 

6We note that in a letter dated August 31, 2010, 

we requested that Regiopytsa provide us with a 

revised database (inclusive of revisions that 

occurred as a result of minor corrections and 

findings during verification). The remaining sales 

(i.e., those reported as subject when they were nonsubject) were removed from consideration for these 

preliminary results. 

7Because Regiopytsa reported public, indexed 

quantity and value sales information (while 

Maquilacero reported public, ranged quantity and 

value sales information), we were unable to perform 

the analysis articulated in AFBs Final in this 

review. See AFBs Final, 75 FR at 53662–3. 

8On August 18, 2009, the Department determined 

that Ternium is the successor-in-interest to Hylsa 

S.A. de C.V. and should be treated as such for 

antidumping duty cash deposit purposes. See Final 

Results of Antidumping Duty Changed 

Circumstances Review: Light-Walled Rectangular 

Pipe and Tube From Mexico, 74 FR 41680 (August 

18, 2009). 

submit new factual information) it is 

appropriate to use facts available. 

B. Application of Adverse Inference for 

Facts Available 

Section 776(b) of the Act provides 

that, if the Department finds that an 

interested party has failed to cooperate 

by not acting to the best of its ability to 

comply with a request for information, 

the Department may use an inference 

adverse to the interests of that party in 

selecting the facts otherwise available. 

In addition, the Statement of 

Administrative Action accompanying 

the Uruguay Round Agreements Act, 

H.R. Rep. 103–316, Vol. 1, 103d Cong. 

(1994) (SAA), explains that the 

Department may employ an adverse 

inference ‘‘to ensure that the party does 

not obtain a more favorable result by 

failing to cooperate than if it had 

cooperated fully.’’ See SAA at 870. It is 

the Department’s practice to consider, in 

employing adverse inferences, the 

extent to which a party may benefit 

from its own lack of cooperation. See, 

e.g., Id. 

Furthermore, ‘‘affirmative evidence of 

bad faith on the part of a respondent is 

not required before the Department may 

make an adverse inference.’’ See 

Antidumping Duties; Countervailing 

Duties, Final Rule, 62 FR 27296, 27340 

(May 19, 1997) (Preamble). We find that, 

by failing to report the expenses 

associated with certain U.S. sales prior 

to verification, Regiopytsa failed to 

cooperate to the best of its ability. In 

addition, with regard to Regiopytsa’s 

failure to report all EP sales of LWRPT 

to the United States during the POR, we 

find that Regiopytsa failed to cooperate 

by not acting to the best of its ability to 

comply with a request for information. 

In particular, in section A of the 

Department’s antidumping duty 

questionnaire, dated October 16, 2009, 

we explicitly requested that Regiopytsa 

report the total quantity and value of the 

merchandise, under review, it sold 

during the POR in (or to) the United 

States. Therefore, the Department has 

preliminarily determined that in 

selecting from among the facts 

otherwise available, an adverse 

inference is warranted. 

The Federal Circuit has stated that, 

‘‘{w}hile the * * * adverse facts 

available * * * standard does not 

require perfection and recognizes that 

mistakes sometimes occur, it does not 

condone inattentiveness, carelessness, 

or inadequate record keeping.’’ See 

Nippon Steel Corporation v. United 

States, 337 F.3d 1373, 1382 (Fed. Cir. 

2003). The AFA standard, moreover, 

assumes that because respondents are in 

control of their own information, they 

are required to take reasonable steps to 

present information that reflects its 

experience for reporting purposes before 

the Department. Therefore, we find it 

appropriate to use an inference that is 

adverse to the company’s interests in 

selecting from among the facts 

otherwise available. 

As partial adverse facts available, and 

to account for the unreported direct 

selling expenses, we applied the 

highest, verified per MT unreported 

direct selling expense to all of 

Regiopysta’s U.S. sales (except for the 

sales of subject merchandise reviewed 

during verification). Also as partial 

adverse facts available, and in order to 

account for an unreported U.S. sale of 

subject merchandise, we applied the 

highest calculated margin to the 

quantity and value of that sale.6

Moreover, because we are relying on the 

company’s own information, there is no 

need to corroborate the chosen facts 

available under section 776(c) of the 

Act. For a detailed discussion on the 

Department’s application of adverse 

facts available, see the ‘‘Issues’’ section 

of Regiopytsa’s Preliminary Analysis 

Memorandum. 

Currency Conversion 

The Department’s preferred source for 

daily exchange rates is the Federal 

Reserve Bank. See Preliminary Results 

of Antidumping Duty Administrative 

Review: Stainless Steel Sheet and Strip 

in Coils from France, 68 FR 47049, 

47055 (August 7, 2003), unchanged in 

Notice of Final Results of Antidumping 

Duty Administrative Review: Stainless 

Steel Sheet and Strip in Coils From 

France, 68 FR 69379 (December 12, 

2003). However, the Federal Reserve 

Bank does not track or publish exchange 

rates for the Mexican peso. Therefore, 

pursuant to section 773A(a) of the Act, 

we made currency conversions from 

Mexican pesos to U.S. dollars based on 

the daily exchange rates from Factiva, a 

Dow Jones & Reuters Retrieval Service. 

Factiva publishes exchange rates for 

Monday through Friday only. We used 

the rate of exchange on the most recent 

Friday for conversion dates involving 

Saturday through Sunday where 

necessary. See Import Administration 

Web site at: http://ia.ita.doc.gov/ 

exchange/index.html. 

Rates for Non-Selected Companies 

Based on our analysis of the responses 

and our available resources, we selected 

certain companies for individual 

examination of their sales of the subject 

merchandise to the United States during 

the POR as permitted under section 

777A(c)(2) of the Act. For responding 

companies under review of the 

antidumping duty order on LWRPT 

from Mexico that were not individually 

examined, we have assigned the simpleaverage margin of the two selected 

respondents, i.e., Maquilacero and 

Regiopytsa, in this review.7 Therefore, 

we have applied, for these preliminary 

results, the rate of 16.05 percent to the 

firms not individually examined in this 

review. 

Preliminary Results of Review 

As a result of our review, we 

preliminarily determine the following 

weighted-average dumping margin 

exists for the period January 30, 2008, 

through July 31, 2009: 

Manufacturer/Exporter 

Weightedaverage 

margin 

(percent) 

Maquilacero S.A. de C.V. ........... 22.62. 

Regiomontana de Perfiles y 

Tubos S.A. de C.V. ................. 9.48. 

Industrias Monterrey S.A. de 

C.V. ......................................... 16.05. 

Perfiles y Herrajes LM S.A. de 

C.V. ......................................... 16.05. 

Galvak S.A. de C.V. ................... 16.05. 

Nacional de Acero S.A. de C.V. 16.05. 

Productos Laminados de 

Monterrey S.A. de C.V. ........... 16.05. 

Ternium Mexico S.A. de C.V.8 ... 16.05. 

Disclosure and Public Comments 

The Department will disclose 

calculations performed within five days 

of the date of publication of this notice 

in accordance with 19 CFR 351.224(b). 

An interested party may request a 

hearing within 30 days of publication of 

these preliminary results. See 19 CFR 

351.310(c). Any hearing, if requested, 

will be held 37 days after the date of 

publication, or the first business day 

thereafter, unless the Department alters 

the date per 19 CFR 351.310(d). 

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55568 Federal Register / Vol. 75, No. 176 / Monday, September 13, 2010 / Notices 

Interested parties may submit case briefs 

no later than 30 days after the date of 

publication of these preliminary results 

of review. See 19 CFR 351.309(c). 

Rebuttal briefs limited to issues raised 

in the case briefs may be filed no later 

than five days after the time limit for 

submitting the case briefs. See 19 CFR 

351.309(d). Parties who submit 

argument in these proceedings are 

requested to submit with the argument: 

(1) A statement of the issue; (2) a brief 

summary of the argument; and (3) a 

table of authorities. Further, parties 

submitting case briefs and/or rebuttal 

briefs are requested to provide the 

Department with an additional copy of 

the public version of any such argument 

on diskette. The Department will issue 

final results of this administrative 

review, including the results of our 

analysis of the issues in any such 

argument or at a hearing, within 120 

days of publication of these preliminary 

results, unless extended. See section 

751(a)(3)(A) of the Act and 19 CFR 

351.213(h). 

Duty Assessment 

Upon completion of this 

administrative review, the Department 

shall determine, and CBP shall assess, 

antidumping duties on all appropriate 

entries. In accordance with 19 CFR 

351.212(b)(1), we will calculate 

importer or customer-specific ad 

valorem assessment rates for the 

merchandise based on the ratio of the 

total amount of antidumping duties 

calculated for the examined sales made 

during the POR to the total customs 

value of the sales used to calculate those 

duties. See 19 CFR 351.212(b). Where 

the duty assessment rates are above de 

minimis, we will instruct CBP to assess 

duties on all entries of subject 

merchandise by that importer in 

accordance with the requirements set 

forth in 19 CFR 351.106(c)(2). The 

Department will instruct CBP to assess 

antidumping duties at the lesser of the 

cash deposit rate in effect on the date of 

entry or the final assessment rate, for 

entries during the period January 30, 

2008, through July 27, 2008. See section 

703(d) of the Act. Pursuant to section 

703(d) of the Act, suspension of 

liquidation was discontinued on July 

28, 2008, and no antidumping duties 

will be assessed on entries made on or 

after July 28, 2008, through August 3, 

2008. For entries made on or after 

August 4, 2008, through July 31, 2009, 

if the amount of duties that would be 

assessed by applying importer or 

customer specific assessment rates 

determined herein (‘‘final duties’’) is 

different from the amount of duties that 

would be assessed by applying the 

estimated duties rate applied to these 

entries (‘‘provisional duties’’), the 

Secretary will instruct the Customs 

Service to disregard the difference to the 

extent that the provisional duties are 

less than the final duties, and to assess 

antidumping or countervailing duties at 

the assessment rate if the provisional 

duties exceed the final duties. See 19 

CFR 351.212(d). In accordance with 19 

CFR 356.8(a), the Department intends to 

issue assessment instructions to CBP on 

or after 41 days following the 

publication of the final results of this 

review. 

The Department clarified its 

‘‘automatic assessment’’ regulation on 

May 6, 2003. See Antidumping and 

Countervailing Duty Proceedings: 

Assessment of Antidumping Duties, 68 

FR 23954 (May 6, 2003). This 

clarification will apply to entries of 

subject merchandise during the POR 

produced by the company included in 

these preliminary results for which the 

reviewed company did not know its 

merchandise was destined for the 

United States. In such instances, we will 

instruct CBP to liquidate unreviewed 

entries at the all-others rate if there is no 

rate for the intermediate company or 

company(ies) involved in the 

transaction. 

Cash Deposit Requirements 

Furthermore, the following cash 

deposit requirements will be effective 

upon completion of the final results of 

this administrative review, for all 

shipments of LWRPT from Mexico 

entered, or withdrawn from warehouse, 

for consumption on or after the 

publication date of the final results of 

this administrative review, as provided 

by section 751(a)(1) of the Act: (1) The 

cash deposit rate for the companies 

covered by this review (i.e., 

Maquilacero, Regiopytsa, IMSA, Perfiles 

y Herrajes, Galvak, Hylsa, Nacional, 

Prolamsa, and Ternium) will be the rate 

established in the final results of this 

review, except if the rate is less than 

0.50 percent (de minimis within the 

meaning of 19 CFR 351.106(c)(1)), the 

cash deposit will be zero; (2) for 

previously reviewed or investigated 

companies not listed above, the cash 

deposit rate will continue to be the 

company-specific rate published for the 

most recent period; (3) if the exporter is 

not a firm covered in this review, or the 

original less-than-fair-value (LTFV) 

investigation, but the manufacturer is, 

the cash deposit rate will be the rate 

established for the most recent period 

for the manufacturer of the 

merchandise; and (4) if neither the 

exporter nor the manufacturer is a firm 

covered in this or any previous review 

conducted by the Department, the cash 

deposit rate will be the all-others rate of 

3.76 percent, which is the all-others rate 

established in the LTFV investigation. 

See Order at 73 FR 45405. These deposit 

requirements, when imposed, shall 

remain in effect until further notice. 

Notification to Importers 

This notice serves as a preliminary 

reminder to importers of their 

responsibility under 19 CFR 

351.402(f)(2) to file a certificate 

regarding the reimbursement of 

antidumping duties prior to liquidation 

of the relevant entries during this 

review period. Failure to comply with 

this requirement could result in the 

Secretary’s presumption that 

reimbursement of antidumping duties 

occurred and the subsequent assessment 

of double antidumping duties. 

We are issuing and publishing this 

notice in accordance with sections 

751(a)(1) and 777(i)(1) of the Act. 

Dated: September 7, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. 2010–22777 Filed 9–10–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–916] 

Laminated Woven Sacks From the 

People’s Republic of China: 

Preliminary Results of Antidumping 

Duty Administrative Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: September 13, 

2010. 

SUMMARY: The Department of Commerce 

(‘‘the Department’’) is conducting the 

first administrative review of the 

antidumping duty order on laminated 

woven sacks (‘‘woven sacks’’) from the 

People’s Republic of China (‘‘PRC’’) for 

the period of review (‘‘POR’’) January 31, 

2008, through July 31, 2009. The 

Department has preliminarily 

determined that sales have been made 

below normal value (‘‘NV’’) by the 

respondent. If these preliminary results 

are adopted in our final results of this 

review, the Department will instruct 

U.S. Customs and Border Protection 

(‘‘CBP’’) to assess antidumping duties on 

all appropriate entries of subject 

merchandise during the POR. Interested 

parties are invited to comment on these 

preliminary results. We intend to issue 

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