[Federal Register Volume 62, Number 69 (Thursday, April 10, 1997)]
[Notices]
[Pages 17590-17596]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9260]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-549-502]
Certain Welded Carbon Steel Pipes and Tubes From Thailand:
Preliminary Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review; Certain welded carbon steel pipes and tubes from
Thailand.
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SUMMARY: In response to requests by Thai Union Steel Co., Ltd. (``Thai
Union''), Saha Thai Steel Pipe Co., Ltd. (``Saha Thai'') and its
affiliated exporter, S.A.F. Pipe Export Co., Ltd., (``SAF''),
respondents, and two importers, Ferro Union Inc. (``Ferro Union''), and
ASOMA Corp. (``ASOMA''), the Department of Commerce (``the
Department'') is conducting an administrative review of the antidumping
duty order on certain welded carbon steel pipes and tubes from
Thailand. This review covers the following manufacturers/exporters of
the subject merchandise to the United States: Saha Thai/SAF and Thai
Union. The period of review (POR) is March 1, 1995 through February 29,
1996.
We have preliminarily determined that respondents sold subject
merchandise at less than normal value (NV) during the POR. If these
preliminary results are adopted in our final results, we will instruct
U.S. Customs to assess antidumping duties equal to the differences
between the export price and NV.
[[Page 17591]]
Interested parties are invited to comment on these preliminary
results. Parties who submit argument in this proceeding should also
submit with the argument (1) a statement of the issue, and (2) a brief
summary of the argument.
EFFECTIVE DATE: April 1, 1997.
FOR FURTHER INFORMATION CONTACT: John Totaro or Dorothy Woster, AD/CVD
Enforcement Group III, Office VII, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
3362 or (202) 482-1398, respectively.
APPLICABLE STATUTE: Unless otherwise indicated, all citations to the
statute are references to the provisions effective January 1, 1995, the
effective date of the amendments made to the Tariff Act of 1930
(hereinafter, ``the Act'') by the Uruguay Round Agreements Act (URAA).
In addition, unless otherwise indicated, all citations to the
Department's regulations are to the current regulations, as amended by
the interim regulations published in the Federal Register on May 11,
1995 (60 FR 25130).
SUPPLEMENTARY INFORMATION:
Background
On March 11, 1986, the Department published in the Federal Register
an antidumping duty order on welded carbon steel pipes and tubes from
Thailand (51 FR 8341). On March 4, 1996, the Department published a
notice of opportunity to request an administrative review of this order
covering the period March 1, 1995 through February 29, 1996 (61 FR
8238). Timely requests for an administrative review of the antidumping
order with respect to sales by Saha Thai/SAF and Thai Union during the
POR were filed by Thai Union, and jointly by Saha Thai, SAF, Ferro
Union, and ASOMA. The Department published a notice of initiation of
this antidumping duty administrative review on April 25, 1996 (61 FR
18378).
On May 14, 1996, Saha Thai, SAF, Ferro Union, and ASOMA sought to
withdraw their request for review and requested that the Department
terminate the review with respect to sales by Saha Thai/SAF during the
POR. The domestic interested parties, Allied Tube & Conduit
Corporation, Laclede Steel Company, Sawhill Tubular Division of Armco,
Inc., and Wheatland Tube Company, (``petitioners''), objected to
partial termination of the review on the grounds that, on March 29,
1996, they had submitted to the Department a timely request for review
of sales by these companies and served Saha Thai with a copy of this
request. Although there is no official record of petitioners' request,
given the remedial nature of the antidumping law and the fact that Saha
Thai received notice of petitioners' request, the Department elected to
continue the ongoing review of these sales. See Memorandum to Robert S.
LaRussa from Stephen J. Powell, July 11, 1996.
On May 24, 1996, the petitioners requested that the Department
verify the responses of both Saha Thai and Thai Union.
Because the Department determined that it was not practicable to
complete this review within statutory time limits, on November 1, 1996,
we published in the Federal Register our notice of extension of time
limits for this review (61 FR 56512). As a result, we extended the
deadline for these preliminary results. The deadline for the final
results will continue to be 120 days after publication of these
preliminary results.
Scope of the Review
The products covered by this administrative review are certain
welded carbon steel pipes and tubes from Thailand. The subject
merchandise has an outside diameter of 0.375 inches or more, but not
exceeding 16 inches. These products, which are commonly referred to in
the industry as ``standard pipe'' or ``structural tubing,'' are
hereinafter designated as ``pipe and tube.'' The merchandise is
classifiable under the Harmonized Tariff Schedule (HTS) item numbers
7306.30.1000, 7306.30.5025, 7306.30.5032, 7306.30.5040, 7306.30.5055,
7306.30.5085 and 7306.30.5090. Although the HTS subheadings are
provided for convenience and Customs purposes, our written description
of the scope of the order is dispositive. This review covers sales by
Saha Thai/SAF and Thai Union, during the period March 1, 1995 through
February 29, 1996. In addition, based on our analysis, we have found
that Thai Tube Co. Ltd. (``Thai Tube''), a producer of subject
merchandise, for which we did not initiate an administrative review, is
affiliated to Saha Thai.
Verification
As provided in section 782(i) of the Act, we verified information
provided by the respondents, Saha Thai and Thai Union, using standard
verification procedures, including onsite inspection of the
manufacturers' facilities, examination of relevant financial records,
and analysis of original documentation used by Saha Thai and Thai Union
to prepare responses to requests for information from the Department.
Our verification results are outlined in the public versions of the
verification reports (Memorandum to Roland L. MacDonald from Theresa L.
Caherty, John B. Totaro and Dorothy A. Woster, March 31, 1997 (``Saha
Thai Verification Report''), Memorandum to Roland L. MacDonald from
Theresa L. Caherty, John B. Totaro and Dorothy A. Woster, March 31,
1997 (``Thai Union Verification Report''), and Memorandum to the File
from Steven Presing, January 30, 1997).
Duty Absorption
On May 24, 1996, the petitioners requested a duty absorption review
of Saha Thai/SAF and Thai Union pursuant to section 751(a)(4) of the
Act. Section 751(a)(4) requires the Department, if requested, to
determine during an administrative review initiated two years or four
years after publication of the order, whether antidumping duties have
been absorbed by a foreign producer or exporter subject to the order,
if the subject merchandise is sold in the United States through an
importer who is affiliated with such foreign producer or exporter. For
transition orders as defined in section 751(c)(6)(C) of the Tariff Act,
i.e., orders in effect as of January 1, 1995, section 351.213(j)(2) of
the Department's proposed antidumping regulations provide that the
Department will make a duty absorption determination, if requested, for
any administrative review initiated in 1996 or 1998. See Notice of
Proposed Rulemaking, 61 FR 7308, 7366 (February 27, 1996).
Because the order on certain welded carbon steel pipes and tubes
from Thailand has been in effect since 1986, this qualifies as a
transition order. Therefore, the Department will first consider a
request for an absorption determination during a review initiated in
1996. This being a review initiated in 1996, the Department considered
the petitioners' request.
The statute provides for a determination on duty absorption if the
subject merchandise is sold in the United States through an affiliated
importer. In the previous administrative review of sales by Saha Thai/
SAF, we determined that Saha Thai/SAF was not affiliated with its two
U.S. distributors. See Certain Welded Carbon Steel Pipes and Tubes From
Thailand: Preliminary Results of Antidumping Duty Administrative
Review, 61 FR 21159 (May 9, 1996); Certain Welded Carbon Steel Pipes
and Tubes From Thailand: Final Results of Antidumping Duty
Administrative Review, 61 FR 56515
[[Page 17592]]
(Nov. 1, 1996). Because we find no evidence on the record of this
review to change this previous determination we do not consider Saha
Thai/SAF to be affiliated with any U.S. importer. During the POR, Thai
Union made all U.S. sales through a trading company (July 10, 1996
Sect. A Quest., at 11). We find no evidence on the record that
demonstrates an affiliation between Thai Union and this company.
Therefore, because neither Saha Thai/SAF and Thai Union are making
sales in the United States through affiliated importers, we
preliminarily find that the statutory prerequisite for conducting a
duty absorption inquiry is not met.
Use of Facts Available
Saha Thai
We preliminarily determine that the use of total adverse facts
available is appropriate with respect to Saha Thai's submitted data in
accordance with section 776(a)(2)(C) and section 776(b) of the Act
because we find that Saha Thai has significantly impeded this review by
failing to comply with our requests for complete information on
affiliates. In response to the Department's requests that Saha Thai
list all affiliated companies pursuant to section 771(33), Saha Thai
failed to disclose its affiliation with Thai Tube, a producer of
subject merchandise, and two resellers of subject merchandise and
members of the Siam Steel Group. (See Memorandum to Robert S. LaRussa
from Joseph A. Spetrini, March 31, 1997 on file in the Central Records
Unit, Room B099 of the main Commerce Building)
On December 12, 1996, in advance of the scheduled cost verification
of Saha Thai, the Department issued a verification agenda. The agenda
stated that the Department would review Saha Thai's list of affiliated
parties from its questionnaire responses and would obtain a diagram
describing the relationship between these parties and Saha Thai.
(Verification Agenda at 4). The agenda also stated that the Department
would try to obtain a published list of affiliated parties to compare
with Saha Thai's submitted list, and would document any previously
unidentified affiliated companies.
At verification, the Department learned that members of Saha Thai's
board of directors, who are also shareholders of Saha Thai, have
ownership interests in two of Saha Thai's home market customers. We
also determined that these two customers are resellers of subject
merchandise. The information obtained at verification indicates an
affiliation between Saha Thai and these resellers under section
771(33)(F) through common control of the identified directors. Sales to
these resellers represent a significant portion of Saha Thai's home
market sales and the Department's analysis of Saha Thai's home market
sales data indicates that these sales failed the ``arm's length'' test.
However, because the information that identified this potential
affiliation was received late in the proceeding, we were unable to
fully explore the nature of the affiliation between Saha Thai and the
two resellers and to make a timely determination of whether Saha Thai
is affiliated with these two resellers. If Saha Thai had properly
disclosed this information during the information gathering phase of
this proceeding, the Department would have requested downstream sales
data of these resellers and calculated normal value for these sales
based on downstream prices pursuant to section 773(a)(5).
In response to the Department's inquiries into Saha Thai's
affiliation with the Siam Steel Group, an organization of Thai steel
companies of which Saha Thai is a member, Saha Thai provided the
Department with additional information concerning affiliations and
affiliated party transactions. Saha Thai informed the Department that
Siam Steel International, a member of the Siam Steel Group, had become
Saha Thai's largest shareholder. Saha Thai's managing director is also
chairman of Siam Steel International. By virtue of Siam Steel's equity
interest and common management, Saha Thai and Siam Steel International
are affiliated under section 771(33) (E) and (F). Saha Thai also
provided the Department with information demonstrating that Siam Steel
International had a substantial ownership interest in one of Saha
Thai's home market customers.
The Department also found evidence that, contrary to Saha Thai's
statement, one of the members of the Siam Steel Group may be a producer
of subject merchandise. Moreover, this information indicated additional
potential affiliations among the members of the Siam Steel Group by
virtue of common management by two related families. Saha Thai had
failed to disclose this information in response to the Department's
questionnaires. Because complete information regarding the Siam Steel
Group was not disclosed in a timely manner, the Department was
prevented from further exploring the nature of the interrelationships
and sales transactions between members of the Siam Steel Group. (For a
more detailed discussion of issues raised at verification, See the Cost
Verification Reports.)
At verification, Saha Thai confirmed the identity of the chairman
of Saha Thai's board of directors. (Saha Thai Verification Report at
3). Following verification of Saha Thai, the Department obtained public
information which indicated that members of the chairman's family
manage Thai Tube, another Thai producer of welded carbon steel pipes
and tubes, and that a family member is the managing director of Thai
Tube. The existence of this familial relationship between Saha Thai's
Chairman and Thai Tube's managing director, as indicated in a March 27,
1997 letter from Saha Thai's counsel, is a strong indication of
affiliation between Saha Thai and Thai Tube under section 771(33)(F).
(A complete discussion of post-verification findings, some of which is
proprietary, is contained in Memorandum from Joseph A. Spetrini to
Robert S. LaRussa, March 31, 1997.) We were unable to pursue the issue
of affiliation in a timely manner because the Department did not
receive the information indicating affiliation between Saha Thai and
Thai Tube until a few weeks before the deadline for the preliminary
results. Therefore, because Saha Thai impeded our investigation of this
issue by failing to provide complete information on affiliat4d parties
as requested by the Department, an adverse inference is warranted under
section 776(b). As adverse facts available, we determine that Saha Thai
and Thai Tube are affiliated.
Under Department practice, the affiliation between Saha Thai and
Thai Tube, both producers of subject merchandise, would invoke an
inquiry to determine whether they should be treated as a single entity
for purposes of calculating a dumping margin. See section 351.401(f) of
the Proposed Regulations, 61 FR 7308, 7381 (Feb. 27, 1996); Certain
Fresh Cut Flowers From Colombia; Final Results of Antidumping Duty
Administrative Reviews, 61 FR 42833, 42853 (Aug. 19, 1996). However,
because Saha Thai failed to identify its affiliation with Thai Tube in
response to the Department's questionnaires, the Department did not
learn of this affiliation until shortly before the deadline for the
preliminary results. Therefore, the Department was prevented from
requesting additional information from both Saha Thai and Thai Tube
necessary to complete the collapsing analysis in a timely manner.
Therefore, as adverse facts available, we preliminarily find that Saha
Thai and Thai Tube constitute a single enterprise for margin
calculation purposes.
[[Page 17593]]
Saha Thai's failure to report complete information on affiliated
parties prevented the Department from: (1) further exploring the nature
of the affiliation with the resellers to determine whether it was
necessary to receive downstream sales data; (2) further exploring the
nature of affiliations and affiliated party transactions between
members of the Siam Steel Group; and (3) determining whether Saha Thai
and Thai Tube should be treated as a single entity for purposes of
calculating a dumping margin. We must therefore consider whether Saha
Thai's submitted sales and cost data is usable under section 782(e) of
the Act.
Section 782(e) provides that the Department shall not decline to
consider information that is submitted by an interested party and is
necessary to the determination but does not meet the applicable
requirements established by the Department if: (1) The information is
submitted by the deadline established for its submission; (2) the
information can be verified; (3) the information is not so incomplete
that it cannot serve as a reliable basis for reaching the applicable
determination; (4) the interested party has demonstrated that it acted
to the best of its ability in providing the information and meeting the
requirements established by the Department with respect to the
information; and (5) can be used without undue difficulties.
When examined in light of the requirements of section 782(e), the
facts of this review demonstrate that Saha Thai's sales data is
substantially incomplete and unusable and leaves the Department with no
reasonable basis upon which to calculate a dumping margin. The
verification disclosed evidence of affiliations that Saha Thai failed
to provide in response to the Department's questionnaires. Information
obtained during and after verification demonstrates that Saha Thai
failed to submit this information within the established deadlines as
required by subsection (e)(1). Given the affiliation between Saha Thai
and Thai Tube, there is no assurance that the Department has reviewed
the entire, rather than merely a part, of the producer. When the
Department collapses affiliated producers, it calculates a dumping
margin by merging the sales data of the producers into a consolidated
response. See Notice of Final Determination of Sales at Less than Fair
Value: Certain Pasta from Italy, 61 FR 30326 (June 14, 1996). Because
Saha Thai failed to disclose its affiliation with Thai Tube in a timely
manner, the Department is unable to request necessary sales data from
Thai Tube. Moreover, given the evidence of additional affiliated party
transactions in the home market, there is no assurance that the
Department has complete information on which to calculate NV. Thus, we
find that Saha Thai's submitted sales data is so fundamentally flawed
that it cannot serve as a reliable basis on which to calculate EP and
NV as required by section 782(e)(3). Because we find the sales data to
be unusable, the reliability of the cost data is irrelevant because at
a minimum the Department needs reliable U.S. sales data to calculate an
accurate dumping margin. Therefore, Saha Thai's sales and cost data
cannot be used without undue difficulties as required by subsection
(e)(5). On this basis, we determine that it is appropriate to resort to
total facts available.
The Department finds that Saha Thai did not act to the best of its
ability to comply with requests for information on affiliates. Saha
Thai demonstrated an understanding of the affiliated party definition
under section 771(33) by identifying companies affiliated by virtue of
stock ownership and common management. Its failure to provide complete
responses to our affiliation inquiries despite numerous opportunities
to do so can only be viewed as a failure to cooperate with our requests
for information. The failure to identify an affiliated producer further
evidences its lack of cooperation. Saha Thai failed to fully disclose
its affiliates in a timely manner. It is therefore appropriate, under
section 776(b) of the Act, for the Department to use an inference
adverse to the interests of Saha Thai in selecting from the facts
available. Because Saha Thai did not act to the best of its ability to
comply with the Department's requests, the requirement of section
782(e)(4) is not met.
Section 776(b) states that adverse facts available information may
be derived from the petition, the final determination in the LTFV
investigation, a previous administrative review under section 751 or
determination under section 753, or other information placed on the
record. See also Statement of Administrative Action accompanying the
Uruguay Round Agreements Act, H.R. Doc. 316, Vol. 1, 103d Cong., at
829-831 (1994) (``the SAA''). The SAA notes 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.'' Id. at 870. Thus, ``[i]n employing adverse
inferences, one factor the [Department] will consider is the extent to
which a party may benefit from its own lack of cooperation.'' Id. To
ensure that Saha Thai does not benefit from failing to cooperate with
the Department's requests for information on affiliates, we will employ
an adverse inference in selecting from the facts available and treat
Saha Thai and Thai Tube as a single entity. We will continue to explore
the affiliation issue for purposes of the final results.
We determine that the highest calculated margin from any prior
administrative review, 29.89 percent, is appropriate for our total
adverse facts available margin. This rate was calculated in the 1987-88
administrative review of this proceeding, for another respondent, Thai
Union Steel Co., Ltd. See Circular Welded Carbon Steel Pipes and Tubes
from Thailand; Notice of Amendment to Final Results of Antidumping
Administrative Review, 59 FR 65753 (December 21, 1994). As information
derived from a previous review under section 751 concerning the subject
merchandise, this margin constitutes ``secondary information'' under
section 776(c). Section 776(c) provides that the Department shall, to
the extent practicable, corroborate ``secondary information'' used for
facts available by reviewing independent sources reasonably at its
disposal. The SAA provides that to ``corroborate'' means simply that
the Department will satisfy itself that the secondary information to be
used has probative value. SAA at 870. As noted in Tapered Roller
Bearings and Parts Thereof, Finished and Unfinished, from Japan, and
Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and
Components Thereof, from Japan; Preliminary Results of Antidumping Duty
Administrative Reviews and Partial Termination of Administrative
Reviews, 61 FR 57391, 57392 (November 6, 1996), to corroborate
secondary information, the Department will, to the extent practicable,
examine the reliability and relevance of the information used. However,
unlike other types of information, such as input costs or selling
expenses, there are no independent sources from which the Department
can derive calculated dumping margins; the only source for margins is
administrative determinations. Thus, in an administrative review, if
the Department chooses as total adverse facts available a calculated
dumping margin from a prior segment of the proceeding, it is not
necessary to question the reliability of the margin for that time
period.
[[Page 17594]]
As to the relevance of the margin used for adverse facts available,
the Department stated in the Tapered Roller Bearings determination that
it will ``consider information reasonably at its disposal as to whether
there are circumstances that would render a margin irrelevant. Where
circumstances indicate that the selected margin is not appropriate as
adverse facts available, the Department will disregard the margin and
determine an appropriate margin.'' Id.; see also Fresh Cut Flowers from
Mexico; Preliminary Results of Antidumping Duty Administrative Review,
60 FR 49567. We have examined the history of this case and determined
that 29.89 percent, the rate the Department calculated for Thai Union
in the 1987-88 administrative review, is the highest calculated rate
for any prior segment of the proceeding. In addition, the Court of
International Trade (CIT) affirmed the Department's calculation of the
29.89 percent rate for Thai Union (a recalculation pursuant to a remand
order from the CIT, Slip Op. 94-7, (January 14, 1994)). In these
preliminary results, we have determined that there is no evidence on
the administrative record for the 1987-88 review which indicates that
this rate is irrelevant or inappropriate as a total facts available
rate for Saha Thai.
Thai Union
We preliminarily determine that the use of total adverse facts
available is appropriate with respect to Thai Union's submitted data in
accordance with section 776(a)(2)(D) and section 776(b) of the Act
because we find that Thai Union provided cost of production (COP) data
that could not be verified and because Thai Union failed to reconcile
its reported costs with its normal books and records. The last
administrative review that included Thai Union as a respondent (1987-
88) found that Thai Union sold substantial quantities of the subject
merchandise in the home market at prices below production costs (See
Certain Circular Welded Carbon Steel Pipe and Tube from Thailand
Preliminary Results of Antidumping Administrative Review, 55 FR 42596
(Oct. 22, 1990)). For this reason, in accordance with section
773(b)(2)(A)(ii) of the Act, the Department initiated a COP
investigation of Thai Union in the instant administrative review.
In the initial questionnaire, the Department instructed Thai Union
to report COP and constructed value (CV) figures based on the actual
costs incurred by Thai Union during the POR as recorded in its normal
accounting system. Thai Union was also requested to describe how these
figures reconciled to the actual costs reported in its cost accounting
system and used by the company to prepare its financial statements.
Thai Union provided contradictory explanations of its cost and
financial accounting systems and failed to provide the Department with
copies of its original cost accounting sheets despite repeated requests
to do so. Thai Union never informed the Department that it used a
process other than its normal accounting system and normal cost
allocation methods to prepare its COP/CV responses.
Thai Union's responses contained substantial omissions and
incomplete responses to the Department's requests for clarification of
its submitted cost data. Thai Union failed to provide supporting
documentation for its reported production yield data, reconciliation of
its inventory expenses, calculation of general and administrative
expenses, methodology for allocation of costs, and explanation of its
chart of accounts. Thai Union also failed to report its subject
merchandise using the Department's model match methodology and did not
provide an explanation for its refusal to do so. (For a more detailed
discussion of the deficiencies in Thai Union's questionnaire responses,
see Memorandum to Robert S. LaRussa from Joseph A. Spetrini, March 31,
1997.)
On January 14, 1997, in advance of the scheduled COP/CV
verification of Thai Union, the Department issued a verification agenda
which stated that Thai Union's reported cost data must be reconciled to
the company's general ledger, cost accounting system, and financial
statements. The agenda indicated specific steps that would be followed
at verification to reconcile the submitted cost data to the normal
accounting books and records, and instructed Thai Union to contact the
Department if it had any questions concerning the agenda or if it
determined that any of the verification procedures could not be
performed. Thai Union did not contact the Department regarding the
verification agenda prior to verification. In accordance with section
782(i) of the Act, from January 20 through January 24, 1997, the
Department conducted a verification of Thai Union's submitted cost
data.
At verification, Thai Union was unable to reconcile its submitted
cost data to its books and records or financial statements. (A detailed
discussion of the Department's verification of Thai Union's cost data
is not possible in a public notice due to the proprietary nature of
such information.) Because the company was unable to reconcile its
submitted costs to its normal accounting books and records and was
unable to tie its books and records to its financial statements, the
verification could not proceed in an orderly and timely manner. Thai
Union was unable to demonstrate to the Department that the submitted
COP and CV data was based on the company's actual production experience
and could not be verified using the Department's standard verification
procedures.
Because Thai Union submitted COP data that could not be verified,
it is appropriate to use facts available in accordance with section
776(a)(D) of the Act. As discussed above, we must therefore consider
whether Thai Union's submitted cost data is usable under section 782(e)
of the Act. When examined in light of these requirements, the facts in
this case indicate that Thai Union's cost data is so fundamentally
flawed as to render it unusable. First, because Thai Union repeatedly
failed to provide the Department with requested information such as
worksheets to support its calculated COP/CV figures, the requirement of
782(e)(1) that information be submitted within the established deadline
is not met. Second, Thai Union was unable to reconcile its submitted
costs to its normal accounting books and records at verification. The
COP and CV data submitted to the Department by Thai Union was not based
on the company's actual production experience and could not be verified
as required by section 782(e)(2).
Third, because of the extensive defects in its cost data, Thai
Union's submitted COP data is unusable and cannot serve as a reliable
basis for reaching the applicable determination as required by section
782(e)(3). Insofar as the Department can only make price-to-price
comparisons (normal value to export price) using those home market
sales that pass the cost test under section 773(b) of the Act, the
systematically flawed nature of Thai Union's COP data prevents the
Department from making this determination and thus from making proper
price-to-price comparisons. Also, the Department is unable to calculate
reliable difference in merchandise figures (DIFMERs) using Thai Union's
unverified COP data. When comparing normal value to export price, the
Department is required to account for the effect of physical
differences between the merchandise sold in each market. See, section
773(a)(6)(C) of the Act. In this case DIFMERs would have been required
for a majority of the United States and home market sales matches.
However, because DIFMER
[[Page 17595]]
data is based on COP information from Thai Union's questionnaire
responses, which as discussed above could not be verified, the
Department is unable to determine the effect of physical differences in
making sales comparisons.
In the absence of home market sales data (i.e., when the home
market is viable but there are insufficient sales that pass the cost
test to compare with U.S. sales), the Department would normally resort
to the use of CV to calculate NV under section 773(a)(4). However, the
CV data reported by Thai Union includes the unverifiable cost data.
Therefore, the use of facts available for COP data precludes the use of
the submitted CV data. In addition, although the Department elected not
to verify Thai Union's sales data, the Department determines that it is
not appropriate to accept Thai Union's sales data because its cost data
could not be verified. The Department has declined to use a
respondent's sales data when its cost data is unverifiable to avoid
manipulation of the margin calculation. See Certain Pasta from Italy,
61 FR 30326. Based on these circumstances, we find it appropriate to
resort to total facts available.
We find that Thai Union did not act to the best of its ability to
comply with the Department's requests for information. As detailed
above, Thai Union failed to provide complete responses to the
Department's numerous requests for information. Despite our
instructions to do so, Thai Union was unable to reconcile its reported
cost data with its normal books and records kept in the ordinary course
of business. Also, Thai Union never informed the Department of any
difficulties it encountered in complying with the Department's requests
for information prior to verification. It is therefore appropriate,
according to section 776(b) of the Act, for the Department to use an
inference adverse to the interests of Thai Union in selecting from the
facts available. Because Thai Union has not acted to the best of its
ability to comply with our requests for information, we find that
section 782(e)(4) provides a further basis for declining to use Thai
Union's submitted cost and sales data.
Section 776(b) states that adverse facts available information may
be derived from the petition, the final determination in the LTFV
investigation, a previous administrative review under section 751 or
determination under section 753, or other information placed on the
record. See also SAA at 829-31. For a total adverse facts available
margin for Thai Union, we considered both the highest calculated margin
from this proceeding, 29.89 percent, (the margin calculated for Thai
Union in the 1987-88 administrative review) and the average of the
estimated margins in the petition, 37.55 percent.
Because the highest calculated margin from this proceeding is the
rate currently assigned to Thai Union, we find that this rate is not
adverse to Thai Union. Accordingly, consistent with section 776(b)(1)
of the Act, to ensure that Thai Union does not benefit from failing to
cooperate with our requests for information, we conclude that the
average of the estimated margins in the petition is the most
appropriate information on the record to form the basis for a adverse
facts available margin. See e.g., Notice of Final Determination of
Sales at Less Than Fair Value: Circular Welded Non-Alloy Steel Pipe
from South Africa 61 FR 24271, 24273 (May 14, 1996).
As information derived from the petition, this margin constitutes
``secondary information'' under section 776(c). Section 776(c) of the
Act provides that where the Department relies on ``secondary
information,'' the Department shall, to the extent practicable,
corroborate that information from independent sources reasonably at the
Department's disposal. The SAA, accompanying the URAA, clarifies that
information from the petition is ``secondary information.'' SAA at 870.
The SAA also clarifies that ``corroborate'' means to determine that the
information used has probative value. Id. However, where corroboration
is not practicable, the Department may use uncorroborated information.
See Notice of Final Determination of Sales at Less Than Fair Value:
Certain Pasta From Turkey, 61 FR 30309, 30312 (June 14, 1996).
To corroborate the data contained in the petition we examined the
basis for the estimated margins. To calculate United States price, the
petitioners were unable to obtain price information for U.S. sales.
Therefore, they calculated United States price based on a quote from a
U.S. importer and the U.S. Customs value for Thailand imports of the
subject merchandise during November 1984. The petitioners were also
unable to secure home market or third country prices for the
merchandise subject to this investigation, therefore, they used CV as
the basis for foreign market value. To calculate CV, the petitioners
applied U.S. industry cost of manufacturing data, adjusted for Thailand
wage rates. Thailand wage rates were based upon an average industrial
wage taken from the United Nations Statistical Yearbook. The cost of
hot-rolled coil was calculated from Japanese export statistics on coil
shipments to Thailand for September 1994. Adjustments were made to the
coil price for freight, insurance and delivery charges from Japan to
Thailand. For galvanized products, estimates of zinc costs were
obtained from price quotes of zinc traders in Thailand. Certain
Circular Welded Carbon Steel Pipes and Tubes From Thailand; Initiation
of Antidumping Duty Investigation, 50 FR 12068, 12068 (March 27, 1985);
Antidumping Duty Petition, February 28, 1985; Memorandum for Alan F.
Holmer from Gilbert B. Kaplan, March 20, 1985. Petitioners based United
States price on a price quote confirmed by an independent public source
(i.e., import statistics). Further, the CV methodology was reasonable
and based on available information including public data. Therefore, we
find that the margins in the petition have probative value. See, Steel
Pipe from South Africa 61 FR at 24273; Pasta from Turkey, 61 FR at
30312.
Accordingly, we have corroborated, to the extent practicable, the
data contained in the petition and have relied upon this information
for the adverse facts available rate in this review. We have assigned
to Thai Union a margin of 37.55 percent, the average of the margins
calculated in the petition on subject merchandise.
Preliminary Results of the Review
As a result of our application of total adverse facts available to
Saha Thai and Thai Union, we preliminarily determine that the following
weighted-average dumping margins exist:
------------------------------------------------------------------------
Manufacturer/exporter Period Margin
------------------------------------------------------------------------
Saha Thai/SAF............................. 3/1/95-2/29/96 29.89
Thai Union................................ 3/1/95-2/29/96 37.55
------------------------------------------------------------------------
Parties to the proceeding may request disclosure within five days
of the date of publication of this notice. Any interested party may
request a hearing within 10 days of publication. Any hearing, if
requested, will be held 44 days after the date of publication or the
first business day thereafter. Case briefs and/or other written
comments from interested parties may be submitted not later than 30
days after the date of publication. Rebuttal briefs and rebuttals to
written comments, limited to issues raised in those comments, may be
filed not later than 37 days after the date of publication of this
notice. The Department will publish the final
[[Page 17596]]
results of this administrative review, which will include the results
of its analysis of issues raised in any such comments, within 120 days
from the date of publication of these preliminary results.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between export price and NV may vary from the percentage
stated above. Upon completion of this review, the Department will issue
appraisement instructions directly to the Customs Service.
Furthermore, the following deposit rates will be effective upon the
publication of the final results of these administrative reviews for
all shipments of welded carbon steel pipes and tubes from Thailand
entered, or withdrawn from warehouse, for consumption on or after the
publication date, as provided for by Section 751(a)(2)(c) of the Act:
(1) The cash deposit rate for the reviewed companies will be that
established in the final results of this review; (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 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; (4) the cash deposit
rate for all other manufacturers or exporters will continue to be 15.67
percent, the ``All Others'' rate made effective by the LTFV
investigation. These requirements, when imposed, shall remain in effect
until publication of the final results of the next administrative
review.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 353.26 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.
These preliminary results of review are published pursuant to
Section 751(a)(1) of the Act and 19 CFR 353.22.
Dated: April 1, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-9260 Filed 4-9-97; 8:45 am]
BILLING CODE 3510-DS-P
