[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