Circular Welded Carbon-Quality Steel Pipe From Pakistan: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Countervailing Duty Determination With Final Antidumping Duty Determination

AGENCY:

Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce.

SUMMARY:

The U.S. Department of Commerce (the Department) preliminarily determines that countervailable subsidies are being provided to exporters/producers of circular welded carbon-quality steel pipe (circular welded pipe) from Pakistan. The period of investigation (POI) is July 1, 2014, through June 30, 2015. Interested parties are invited to comment on this preliminary determination.

DATES:

Effective April 8, 2016.

FOR FURTHER INFORMATION CONTACT:

Kaitlin Wojnar, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-3857.

SUPPLEMENTARY INFORMATION:

Alignment of Final Countervailing Duty Determination With Final Antidumping Duty Determination

On the same day that the Department initiated this countervailing duty (CVD) investigation, the Department also initiated an antidumping duty (AD) investigation of circular welded pipe from Pakistan. The AD and CVD investigations cover the same class or kind of merchandise from the same country. On March 29, 2016, in accordance with section 705(a)(1) of the Tariff Act of 1930, as amended (the Act) and 19 CFR 351.210(b)(4), Bull Moose Tube Company, EXLTUBE, Wheatland Tube Company, and Western Tube and Conduit (collectively, Petitioners) requested alignment of the final CVD determination with the final AD determination regarding circular welded pipe from Paksitan. Therefore, in accordance with section 705(a)(1) of the Act and 19 CFR 351.210(b)(4), we are aligning the final CVD determination in this investigation with the final determination in the companion AD investigation of circular welded pipe from Pakistan. Consequently, the final CVD determination will be issued on the same date as the final AD determination, which is currently due no later than August 15, 2016.

Scope of the Investigation

The product covered by this investigation is circular welded pipe from Pakistan. Interested parties filed comments regarding the scope of the investigation, which resulted in one clarification to the scope language and are addressed, in detail, in the Department's Preliminary Scope Decision Memorandum. For a full description of the scope of the investigation, see Appendix I to this notice.

Methodology

The Department is conducting this countervailing duty investigation in accordance with section 701 of the Act. We preliminarily determine that, for each of the programs found countervailable, there is a subsidy (i.e., a financial contribution by an “authority,” giving rise to a benefit to the recipient) and that the subsidy is specific. For a full description of the methodology underlying the Department's preliminary conclusions, see the Preliminary Decision Memorandum. The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at http://access.trade.gov and to all parties in the Central Records Unit, Room B8024 of the main Department of Commerce building. In addition, a complete version of the Preliminary Decision Memorandum can be accessed directly at http://enforcement.trade.gov/frn/index.html . The signed Preliminary Decision Memorandum and the electronic versions of the Preliminary Decision Memorandum are identical in content.

For this preliminary determination, pursuant to section 776(a) of the Act, the Department relied on facts otherwise available because necessary information is not available on the record. Furthermore, the GOP and IIL failed to provide information requested by the Department. By refusing to participate as respondents, IIL and the GOP significantly impeded the Department's investigation. Because the GOP and IIL are uncooperative (i.e., they did not act to the best of their ability to respond to the Department's requests for necessary information), the Department has drawn an adverse inference in selecting information from facts otherwise available, in accordance with section 776(b) of the Act. Specifically, the Department applied an adverse inference to find that the programs on which the Department initiated the investigation are countervailable. The Department has also applied an adverse inference in its calculation of an estimated ad valorem countervailable subsidy rate for IIL. Additional information is provided in the “Use of Facts Otherwise Available and Adverse Inferences” section of the Preliminary Decision Memorandum.

A complete list of topics discussed in the Preliminary Decision Memorandum can be found at Appendix II to this notice.

Preliminary Determination and Suspension of Liquidation

In accordance with sections 776(a) and (b) of the Act, the Department applied facts otherwise available, with adverse inferences, to determine a countervailable subsidy rate for the non-cooperative mandatory respondent, IIL. With respect to the “all-others” rate, section 705(c)(5)(A)(ii) of the Act provides that, if the countervailable subsidy rates established for all individually-investigated exporters/producers are determined entirely under section 776 of the Act (i.e., based entirely on facts otherwise available), the Department may use any reasonable method to establish an all-others rate for exporters/producers not individually-examined. In this case, as noted above, the countervailable subsidy rate assigned to IIL is based entirely on facts otherwise available under section 776 of the Act. There is no other information on the record upon which to determine an all-others rate. As a result, under section 705(c)(5)(A)(ii) of the Act, we are assigning IIL's rate as the all-others rate. This method is consistent with the Department's established practice.

We preliminarily determine estimated countervailable subsidy rates as follows:

In accordance with sections 703(d)(1)(B) and (d)(2) of the Act, we are directing U.S. Customs and Border Protection to suspend liquidation of all entries of circular welded pipe from Pakistan, as described in the “Scope of the Investigation,” that are entered, or withdrawn from warehouse, for consumption on or after the date of the publication of this notice in the Federal Register, and to require a cash deposit for such entries of merchandise in the amounts indicated above.

Disclosure and Public Comment

Because the Department has reached its conclusions on the basis of adverse facts available, the calculations performed in connection with this preliminary determination are not proprietary in nature and are described in the Preliminary Decision Memorandum. Interested parties may submit case and rebuttal briefs, as well as request a hearing. For a schedule of the deadlines for filing case briefs, rebuttal briefs, and hearing requests for non-scope issues, see the Preliminary Decision Memorandum. For a schedule of the deadlines for filing case briefs, rebuttal briefs, and hearing request regarding scope issues, see the Preliminary Scope Decision Memorandum.

International Trade Commission Notification

In accordance with section 703(f) of the Act, we will notify the U.S. International Trade Commission (ITC) of our determination. In addition, we are making all non-privileged and non-proprietary information relating to this investigation available to the ITC. We will allow the ITC access to all privileged and business proprietary information in our files, provided that the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order, without the written consent of the Assistant Secretary for Enforcement and Compliance.

In accordance with section 705(b)(2) of the Act, if our final determination is affirmative, the ITC will make its final determination no more than 45 days after the Department makes its final determination.

This determination is issued and published pursuant to sections 703(f) and 777(i) of the Act and 19 CFR 351.205(c).

Appendix I—Scope of the Investigation

This investigation covers welded carbon-quality steel pipes and tube, of circular cross-section, with an outside diameter (O.D.) not more than nominal 16 inches (406.4 mm), regardless of wall thickness, surface finish (e.g., black, galvanized, or painted), end finish (plain end, beveled end, grooved, threaded, or threaded and coupled), or industry specification (e.g., American Society for Testing and Materials International (ASTM), proprietary, or other), generally known as standard pipe, fence pipe and tube, sprinkler pipe, and structural pipe (although subject product may also be referred to as mechanical tubing). Specifically, the term “carbon quality” includes products in which:

(a) Iron predominates, by weight, over each of the other contained elements;

(b) the carbon content is 2 percent or less, by weight; and

(c) none of the elements listed below exceeds the quantity, by weight, as indicated:

(i) 1.80 percent of manganese;

(ii) 2.25 percent of silicon;

(iii) 1.00 percent of copper;

(iv) 0.50 percent of aluminum;

(v) 1.25 percent of chromium;

(vi) 0.30 percent of cobalt;

(vii) 0.40 percent of lead;

(viii) 1.25 percent of nickel;

(ix) 0.30 percent of tungsten;

(x) 0.15 percent of molybdenum;

(xi) 0.10 percent of niobium;

(xii) 0.41 percent of titanium;

(xiii) 0.15 percent of vanadium; or

(xiv) 0.15 percent of zirconium.

Covered products are generally made to standard O.D. and wall thickness combinations. Pipe multi-stenciled to a standard and/or structural specification and to other specifications, such as American Petroleum Institute (API) API-5L specification, may also be covered by the scope of these investigations. In particular, such multi-stenciled merchandise is covered when it meets the physical description set forth above, and also has one or more of the following characteristics: is 32 feet in length or less; is less than 2.0 inches (50 mm) in outside diameter; has a galvanized and/or painted (e.g., polyester coated) surface finish; or has a threaded and/or coupled end finish.

Standard pipe is ordinarily made to ASTM specifications A53, A135, and A795, but can also be made to other specifications. Structural pipe is made primarily to ASTM specifications A252 and A500. Standard and structural pipe may also be produced to proprietary specifications rather than to industry specifications.

Sprinkler pipe is designed for sprinkler fire suppression systems and may be made to industry specifications such as ASTM A53 or to proprietary specifications.

Fence tubing is included in the scope regardless of certification to a specification listed in the exclusions below, and can also be made to the ASTM A513 specification. Products that meet the physical description set forth above but are made to the following nominal outside diameter and wall thickness combinations, which are recognized by the industry as typical for fence tubing, are included despite being certified to ASTM mechanical tubing specifications:

The scope of this investigation does not include:

(a) Pipe suitable for use in boilers, superheaters, heat exchangers, refining furnaces and feedwater heaters, whether or not cold drawn, which are defined by standards such as ASTM A178 or ASTM A192;

(b) finished electrical conduit, i.e., Electrical Rigid Steel Conduit (also known as Electrical Rigid Metal Conduit and Electrical Rigid Metal Steel Conduit), Finished Electrical Metallic Tubing, and Electrical Intermediate Metal Conduit, which are defined by specifications such as American National Standard (ANSI) C80.1-2005, ANSI C80.3-2005, or ANSI C80.6-2005, and Underwriters Laboratories Inc. (UL) UL-6, UL-797, or UL-1242;

(c) finished scaffolding, i.e., component parts of final, finished scaffolding that enter the United States unassembled as a “kit.” A kit is understood to mean a packaged combination of component parts that contains, at the time of importation, all of the necessary component parts to fully assemble final, finished scaffolding;

(d) tube and pipe hollows for redrawing;

(e) oil country tubular goods produced to API specifications;

(f) line pipe produced to only API specifications, such as API 5L, and not multi-stenciled; and

(g) mechanical tubing, whether or not cold-drawn, other than what is included in the above paragraphs.

The products subject to this investigation are currently classifiable in Harmonized Tariff Schedule of the United States (HTSUS) statistical reporting numbers 7306.19.1010, 7306.19.1050, 7306.19.5110, 7306.19.5150, 7306.30.1000, 7306.30.5015, 7306.30.5020, 7306.30.5025, 7306.30.5032, 7306.30.5040, 7306.30.5055, 7306.30.5085, 7306.30.5090, 7306.50.1000, 7306.50.5030, 7306.50.5050, and 7306.50.5070. The HTSUS subheadings above are provided for convenience and U.S. Customs purposes only. The written description of the scope of the investigation is dispositive.

Appendix II—

List of Topics Discussed in the Preliminary Decision Memorandum

I. Summary

II. Background

III. Alignment

IV. Scope Comments

V. Scope of the Investigation

VI. Respondent Selection

VII. Injury Test

VIII. Use of Facts Otherwise Available and Adverse Inferences

IX. Calculation of the All-Others Rate

X. ITC Notification

XI. Disclosure and Public Comment

XII. Conclusion