[Federal Register Volume 62, Number 175 (Wednesday, September 10, 1997)]
[Notices]
[Pages 47632-47645]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23994]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-533-502]


Certain Welded Carbon Standard Steel Pipes and Tubes From India; 
Final Results of New Shippers Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of final results of new shippers antidumping duty 
administrative review.

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SUMMARY: On May 1, 1997, the Department of Commerce published the 
preliminary results of a new shippers administrative review of the 
antidumping duty order on certain welded carbon steel standard pipes 
and tubes from India. The review covers two manufacturers/exporters. 
The period of review is May 1, 1995 through April 30, 1996.
    Based on our analysis of the comments received, we have made 
changes, including corrections of certain inadvertent programming and 
clerical errors, in the margin calculations for Rajinder Pipes Ltd. and 
Lloyd's Metals & Engineers Ltd. The final weighted-average dumping 
margins for the reviewed firms are listed below in the section entitled 
``Final Results of Review.''

EFFECTIVE DATE: September 10, 1997.

FOR FURTHER INFORMATION CONTACT: Davina Hashmi or Kristie Strecker, at 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, Washington, D.C. 20230; Telephone: (202) 482-
4733.

[[Page 47633]]

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Tariff Act), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Tariff Act by the Uruguay Round Agreements Act (URAA).

Background

    On May 1, 1997, the Department of Commerce (the Department) 
published the preliminary results of a new shippers administrative 
review of the antidumping duty order on certain welded carbon steel 
standard pipes and tubes from India (62 FR 23760) (Preliminary 
Results). On May 30, 1997, we received briefs on behalf of Allied Tube 
& Conduit Corp., Sawhill Tubular Division of Armco, Inc., Wheatland 
Tube Co., and Laclede Steel Co. (petitioners), and Rajinder Pipes Ltd. 
(Rajinder). We received rebuttal briefs from petitioners, Rajinder 
Pipes Ltd., and Lloyd's Metals & Engineers (Lloyd's) on June 6, 1997. 
The Department has conducted this new shippers administrative review in 
accordance with section 751(a)(2)(B) of the Act.
    This review covers Rajinder Pipes Ltd. (Rajinder) and Lloyd's 
Metals and Engineers (Lloyd's), and the period of review is May 1, 1995 
through April 30, 1996.

Scope of Review

    The products covered by this review include circular welded non-
alloy steel pipes and tubes, of circular cross-section, with an outside 
diameter of 0.372 inch or more but not more than 406.4 millimeters (16 
inches) in outside diameter, regardless of wall thickness, surface 
finish (black, galvanized, or painted), or end finish (plain end, 
beveled end, threaded, or threaded and coupled). These pipes and tubes 
are generally known as standard pipe, though they may also be called 
structural or mechanical tubing in certain applications. Standard pipes 
and tubes are intended for the low-pressure conveyance of water, steam, 
natural gas, air and other liquids and gases in plumbing and heating 
systems, air-conditioner units, automatic sprinkler systems, and other 
related uses. Standard pipe may also be used for light load-bearing and 
mechanical applications, such as for fence tubing, and for protection 
of electrical wiring, such as conduit shells.
    The scope is not limited to standard pipe and fence tubing or those 
types of mechanical and structural pipe that are used in standard pipe 
applications. All carbon-steel pipes and tubes within the physical 
description outlined above are included in the scope of this order, 
except for line pipe, oil-country tubular goods, boiler tubing, cold-
drawn or cold-rolled mechanical tubing, pipe and tube hollows for 
redraws, finished scaffolding, and finished rigid conduit.
    Imports of the products covered by this review are currently 
classified under the following Harmonized Tariff Schedule (HTS) 
subheadings: 7306.30.10.00, 7306.30.50.25, 7306.30.50.32, 
7306.30.50.40, 7306.30.50.55, 7306.30.50.85, and 7306.30.50.90. 
Although the HTS subheadings are provided for convenience and customs 
purposes, our written description of the scope of this proceeding is 
dispositive.

Changes Since the Preliminary Results

    Based on our analysis of comments received, we have made certain 
corrections that changed our results. We have corrected certain 
programming and clerical errors in our Preliminary Results, where 
applicable; they are discussed in the relevant comment sections below.

Comment 1

    Petitioners contend that, based on the record developed in this new 
shippers review, Rajinder is not entitled to a duty-drawback adjustment 
to constructed export price (CEP). Petitioners state that there is 
little supporting documentation on the record with respect to the duty-
drawback program to which Rajinder subscribes and that the information 
that is on the record is vague. Petitioners also argue that the record 
is void of evidence that Rajinder applied for or received duty drawback 
from the government for materials imported and used as inputs for the 
finished product exported to the United States. Petitioners state that 
the only evidence on the record supporting Rajinder's claimed duty 
drawback is a statement by Rajinder that it received a duty-drawback 
license.
    In addition, petitioners contend that the Department applies a two-
part test for determining whether an adjustment for duty drawback is 
appropriate, which petitioners contend Rajinder did not meet. First, 
petitioners maintain that the record does not indicate that import 
duties and rebates were directly linked to and dependent on one 
another. Second, petitioners also maintain that the record does not 
demonstrate that there were sufficient imports of raw materials (citing 
Far East Machinery Co. v United States, 699 F. Supp 309, 311 (CIT 
1988); Carlisle Tire & Rubber Co. v United States, 657 F. Supp. 1287 
(CIT 1987)).
    Petitioners further contend that the Advanced License program at 
issue is an export-incentive program rather than a duty-drawback 
program. Petitioners argue that, under the Indian Advanced License 
program to which Rajinder subscribed, eligibility for the benefit was 
based on the act of exporting rather than the act of importing. 
Petitioners indicate that, in its supplemental questionnaire response, 
Rajinder termed the duty-drawback program as an ``export incentive'' 
program and that Rajinder stated that payment was carried in its 
financial books as an export-incentive program. Petitioners assert that 
the Advanced License program operates in a manner similar to export-
restitution payments. Petitioners maintain that, as in Sorbitol From 
France; Final Determination of Sales at Less Than Fair Value, 47 FR 
6459, 6460 (February 12, 1982), the Department found that export-
restitution payments did not constitute a proper duty-drawback program 
and that the Court of International Trade (CIT) upheld the Department's 
decision denying drawback in the case where exporters of sorbitol were 
eligible for an export payment whether or not any import duties were 
paid.
    Petitioners also contend that Rajinder's export-incentive program 
does not meet the requirement for an adjustment under the statute. 
Citing Huffy v. United States, 632 F. Supp. 50, 53 (CIT 1986), 
petitioners argue that the payment of duties on imported material must 
be a prerequisite to receipt of the export rebate in order to qualify 
for a duty-drawback adjustment.
    Rajinder maintains that, in its questionnaire response, it stated 
that its claimed duty drawback is ``on the record''. Rajinder further 
states that, not only is there information on the record that a duty-
drawback program exists in India, but the Department examined such 
information when it conducted a verification of Lloyds' claimed duty 
drawback. Rajinder also states that, despite the absence of 
``documentary evidence'' on the record, it was ready and willing to 
provide evidence of its duty-drawback program at verification.
    Rajinder deems petitioners' comment meaningless that eligibility 
for the benefit was based on the act of exporting a finished product, 
not on the act of importing a dutiable product. Rajinder maintains 
that, under the Advanced License program, the drawback benefit never 
accrues unless the product is exported. If a company imports raw 
materials duty-free and

[[Page 47634]]

then fails to meet its export obligation, the company would be required 
to pay the duty on the imported material. Rajinder also states that, 
under the Advanced License program, there is a direct link between the 
imported material and the exported finished product because duty-free 
materials that may be imported are specified in the license and the 
materials imported must conform to the materials used in the finished 
export product. Rajinder points out that the Department granted 
adjustments for duty drawback in Notice of Final Determination of Sales 
at Less Than Fair Value: Certain Carbon Steel Butt-Weld Pipe Fittings 
From India, 60 FR 10545, 10547 (February 27, 1995), and Notice of Final 
Determination of Sales at Less Than Fair Value: Stainless Steel Bar 
from India, 59 FR 66915, 66919-20 (December 28, 1994), although in 
these cases adjustments were made to constructed value (CV).
    Rajinder contends that the Advanced License program is different 
from cases which generally relate to export-restitution payments. 
Rajinder maintains that the Department affirmed that the Advanced 
License scheme is equivalent to a duty-drawback system in Certain Iron-
Metal Castings from India: Final Results of Countervailing Duty 
Administrative Review, 61 FR 64687 (December 6, 1996).
Department's Position
    Although we allowed it for the preliminary results, we have denied 
Rajinder's claimed duty drawback for these final results of review. In 
our supplemental questionnaire, we requested Rajinder to provide 
information demonstrating that it met our two-part test. In using this 
test, we consider: (a) whether the import duty and rebate are directly 
linked to, and dependent upon, one another; and (b) whether the company 
claiming the adjustment can show that there were sufficient imports of 
the imported raw materials to account for the drawback received on the 
exported product. This test has been upheld consistently by the Court 
of International Trade (CIT). See, e.g., Federal-Mogul Corp. v. United 
States, 862 F. Supp. 384, 409 (CIT 1994) (Federal-Mogul). Although we 
have recognized India's Advanced License program in other cases 
involving Indian companies exporting merchandise to the United States, 
Rajinder responded inadequately to our requests for further information 
regarding this claimed adjustment because its response did not contain 
the information we requested in our supplemental questionnaire. 
Rajinder only supplied a narrative description of the Advanced License 
program and a worksheet showing its duty-drawback calculations. 
Rajinder did not supply a copy of the Advanced License nor any evidence 
that a duty-drawback transaction occurred. Therefore, the record lacks 
any evidence supporting Rajinder's claimed duty drawback. Rajinder only 
stated that it applied for the license for duty drawback after the 
period of review (POR). Rajinder argued that we reviewed duty drawback 
at Lloyd's and, therefore, the adjustment should be granted to 
Rajinder. The program we reviewed at Lloyd's was the Passbook system, 
while Rajinder uses the Advanced License program and, therefore, this 
argument is not relevant.
    Because we have denied Rajinder's claimed duty drawback on this 
basis, we have not addressed the other arguments concerning the program 
which petitioners raised.

Comment 2

    Petitioners contend that Lloyd's is not entitled to a duty-drawback 
adjustment for its export price sales. Petitioners assert that Lloyd's 
failed to meet the Department's two-part test for a duty-drawback 
adjustment. Petitioners argue that the record fails to demonstrate that 
the payment of import duties was directly linked to and dependent upon 
receipt of the export rebate. Petitioners argue, in particular, that 
the payment of duties on imported material must be a prerequisite to 
receipt of the export rebate in order to qualify for a duty-drawback 
adjustment (citing Huffy v. United States). Petitioners maintain that, 
under India's Passbook system (a duty-drawback program), Lloyd's can 
apply for the export incentive even though it did not previously import 
raw material used in the production of the exported merchandise. 
According to petitioners, under the Passbook system, Lloyd's first 
exports products and then receives credit based on its volume of 
exports. Petitioners point out that, in its supplemental questionnaire 
response, Lloyd's states that the credit received may not be limited to 
the raw material used in the production of exported merchandise for 
which it received credit.
    Petitioners assert that Lloyd's was free to import any type of hot-
rolled steel product regardless of whether it was an input used in the 
production of the exported subject merchandise. Petitioners refer to 
the Input-Output (I-O) Norms, which identify on a product-specific 
basis the amount of raw material which may be imported compared to the 
amount of finished product which may be exported under the drawback 
program. Petitioners argue that Lloyds' response indicates that these 
norms allow for the importation of steel material that may not be used 
to produce the exported product.
    Petitioners contend that the verification exhibit and Lloyds' 
supplemental questionnaire response demonstrate that, rather than 
operating as a duty-drawback system, the Passbook system is an export-
incentive program. Petitioners state that the Passbook program is 
similar to that in Sorbitol From France, 47 FR 6459, 6460 (1982), in 
which the Department denied a duty-drawback adjustment because 
exporters of sorbitol were eligible for an export payment whether or 
not any import duties were paid, and the CIT upheld the Department's 
determination in Roquette Freres v. United States, 583 F. Supp. 599, 
602 (1984). Petitioners conclude that, as in Roquette Freres, there is 
no evidence on the record in this case that accrual of the benefit is 
determined on the importation of an input product that could be used in 
the production of the exported merchandise from which the export 
benefit was calculated. Therefore, petitioners argue that the drawback 
adjustment should be denied.
    Lloyd's responds that petitioners' arguments are baseless. Lloyd's 
contends that it has met both parts of the Department's two-part test. 
Specifically, Lloyd's argues that under the Passbook system there is a 
direct link between the import duty and the rebate of duties. Lloyd's 
explains that the credits recorded in the Passbook can only be given to 
the exporter upon exportation of certain items and the credit can only 
be used by the exporter to pay import duties. Lloyd's argues that, if a 
sufficient amount of credits exist in the Passbook, the Indian Customs 
Service does not collect duties. Lloyd's points out that the credit 
received is limited to the payment of customs duties by the exporter 
and that these credits are otherwise rendered useless. Lloyd's states 
that, in the instant case, it accrued benefits for import duties. 
Lloyd's further asserts that the verification documents provide 
evidence that there were sufficient raw materials on which Lloyd's paid 
duty and which were used in the production and subsequent export of 
subject merchandise.
    Lloyd's states that the Passbook system is an international-trade 
incentive because it encourages and requires both imports and exports. 
Lloyd's states that the Passbook system requires the credits accrued to 
be applied toward import duties and the refund can be used for any 
purpose.

[[Page 47635]]

Lloyd's also indicates that the Passbook system allows Indian companies 
to select the most advantageous raw materials without regard to duties, 
which results in a savings in costs and sales prices.
    Lloyd's argues that petitioners incorrectly characterize the 
Passbook program as an export-incentive program. Lloyd's explains that 
the Indian government changed its former system, the International 
Price Reimbursement Scheme, to its current Passbook system because it 
determined that the old scheme did not comport with the U.S. fair-trade 
statute. Lloyd's indicates that, under the new program, eligible export 
items and their corresponding import items are identified.
    Lloyd's also rebuts petitioners' claim that Lloyd's I-O Norms allow 
for the importation of steel products that are not used in the 
production of the final exported merchandise. Lloyd's maintains that 
the products identified are steel products that are both authorized as 
qualifying goods and envisioned for use in the production of pipe and 
tube. Lloyd's asserts that it met the requirements that imports be 
sufficient to cover the amount of exports which Lloyd's argues it 
demonstrated at verification.
    Lloyd's contends that the Passbook program can be easily 
distinguished from the program cited in Roquette Freres. In Roquette 
Freres, Lloyd's asserts, the Department denied the claimed drawback 
because the export credits were received regardless of whether the 
recipient had imported raw materials. Lloyd's maintains that, unlike 
the program cited in Roquette Freres, the credit Lloyd's received is 
dependent upon the identity and quantity of exported goods. Lloyd's 
further contends that, under the drawback program in Roquette Freres, 
imports were not required, whereas under the Passbook program, receipt 
of benefits are contingent upon the importation of materials.
    Lloyd's maintains that the Passbook program meets the requirements 
under section 772(c)(1)(B) of the statute. Lloyd's states that this 
provision of the law applies to both rebates and the non-collection of 
duties. Lloyd's argues that there is no requirement in the statute that 
duties must first be paid and then rebated.
Department's Position
    We disagree with petitioners. Section 772(c)(1)(B) of the Act 
provides that export price (or constructed export price) shall be 
increased by ``the amount of any import duties imposed by the country 
of exportation which have been rebated, or which have not been 
collected, by reason of the exportation of the subject merchandise to 
the United States' (emphasis added). As described in response to 
comment 1 above, we determine whether an adjustment to U.S. price for a 
respondent's claimed duty drawback is appropriate when the respondent 
can demonstrate that it meets both parts of our two-part test. There 
must be: (1) a sufficient link between the import duty and the rebate, 
and (2) a sufficient amount of raw materials imported and used in the 
production of the final exported product. Petitioners have not 
challenged the Department's determination regarding the second part of 
the test, that Lloyd's has demonstrated that it imported a sufficient 
amount of raw materials, or hot-rolled (HR) coils, used in the 
production of the final exported product. See Lloyds' Home-market 
Verification Report, at 11 (May 9, 1997).
    As for the first part of the test, which petitioners have 
challenged, the Indian Passbook System presents the rare situation in 
which, rather than being rebated as is usually the case, the import 
duties were actually ``not collected, by reason of the exportation of 
the subject merchandise to the United States.'' This type of program 
falls within the express language of section 772(c)(1)(B). As described 
below, Lloyd's has demonstrated to our satisfaction that it met both 
parts of our two-part test.
    The Indian Passbook system constitutes a proper drawback program. 
At verification, we examined Lloyd's claimed duty drawback and certain 
aspects of the Indian law which govern the application of the Passbook 
system. The system requires that the input used in the production of 
the final exported product be imported in order to obtain the drawback 
benefit. Under the program, the Indian government records all imports 
and exports in a ``passbook''. The government reduces the amount of 
duties owed on future imports, provided the final exported merchandise 
incorporates an amount of the input product equivalent to that which 
was previously imported and an equivalent amount of duties were 
previously suspended. As explained in our verification report, 
``Lloyd's must show to the government that the exported product 
includes imported inputs in order to be credited the percentage charged 
for the imported goods' (emphasis added). Lloyds' Verification Report 
at 12.
    We disagree with petitioners that payment of duties on the imported 
material is a prerequisite to receipt of benefits. As noted, section 
772(c)(1)(B) requires either that the import duties be rebated or that 
they not be collected by reason of the exportation of the subject 
merchandise to the United States. Consequently, the Department has 
never established a strict prerequisite that import duties must 
actually be paid and subsequently rebated in order for there to be the 
necessary link justifying an adjustment to U.S. price. Nor have the 
courts established such a requirement. It is true, as petitioners note, 
that the CIT stated in Far East Machinery that payment of import duties 
is a ``prerequisite to receipt of an export rebate'' to qualify for an 
adjustment. 699 F. Supp. at 313. However, petitioners have taken the 
CIT's discussion of this issue out of context. In Far East Machinery, 
as in other cases, the respondent had actually paid duties upon 
importing the input and had received some amount of rebate upon 
exporting the subject merchandise. The question concerned only whether 
the government drawback program at issue established the necessary link 
between actual payment of the duties and receipt of the rebate. See 
id.; see also E.I. DuPont de Nemours & Co. v. United States, 841 F. 
Supp. 1237, 1242-43 (CIT 1993); Huffy Corp., supra, 632 F. Supp. at 53. 
The Department is not aware of any case in which the CIT has ruled upon 
a government drawback program, such as the Indian Passbook system, 
under which duties are suspended on imported inputs, provided the 
company subsequently exports merchandise containing an equivalent 
amount of the input as was imported, all of which is monitored by way 
of a credit-debit system. Therefore, these cases do not address the 
Department's present determination.
    In this case, the Indian government has effectively suspended 
collection of duties on imported steel contingent upon the same company 
later exporting pipe containing an equivalent amount of steel. The 
Department has reviewed this type of program before. For instance, in 
Silicon Metal From Brazil; Final Results of Antidumping Duty 
Administrative Review, 62 FR 1970, 1976 (January 7, 1997), the 
Department found that a certain Brazilian duty-drawback program 
suspended the payment of taxes or duties that ordinarily would have 
been due upon importation. The Department granted a duty-drawback 
adjustment to export price pursuant to section 771(c)(1)(B) of the Act. 
In Extruded Rubber Thread From Malaysia; Final Results of Antidumping 
Duty Administrative Review, 62 FR 33588, 33598-99 (June 20, 1997), a 
duty was imposed upon imported goods sold in the home market but not 
collected

[[Page 47636]]

when the subject merchandise incorporating those imported goods was 
exported. The Department ``add[ed] the amount of the uncollected duty 
to the U.S. price.''
    Therefore, the issue in this review remains whether Lloyd's has 
established the necessary link between the government's collection--or, 
in this case, suspension--of import duties and the rebate, which in 
this case is a credit. The Department is satisfied that this link 
exists.
    Further, we disagree with petitioners' contention that the Passbook 
system constitutes an export-restitution program rather than a duty-
drawback program. For instance, the Passbook program differs from the 
export-substitution program administered by the European Community in 
Sorbitol From France. There, the Department denied the claimed drawback 
because export-restitution payments were received by exporters 
regardless of whether they used inputs that were imported or sourced 
domestically. The CIT upheld this determination in Roquette Freres, 
supra, 583 F. Supp. at 602-03. By contrast, the Indian Passbook program 
requires that the final exported product contain an equivalent amount 
of the input as was imported. At our verification of Lloyd's, we 
examined the provision of the Indian law requiring that a company 
``show to the government that the exported product includes imported 
inputs.'' The raw materials referred to in this provision of the Indian 
law are the ``. . . imports of the input used in the exported 
product.'' Lloyds' Verification Report at 11.

Comment 3

    Petitioners argue that the Department should reject Rajinder's 
reported steel costs, which petitioners contend contain numerous 
problems and deficiencies. Petitioners allege that (1) Rajinder's 
reported steel prices may not include freight costs; (2) although 
Rajinder made purchases from other suppliers, it reported its steel 
prices only on the prices based from the Steel Authority of India 
(SAIL) and the Department was not able to verify purchases made from 
other suppliers because Rajinder did not provide invoices for other 
suppliers; (3) the cost of steel reported in Rajinder's 1996 annual 
report is higher than the rates listed on the invoices at verification; 
(4) Rajinder never provided supporting documentation for its assumed 
scrap rate and, based on the verification report, it appears that the 
Department never verified the actual scrap rate; and (5) Rajinder 
grossly overstated the scrap value of steel. For these reasons, 
petitioners urge the Department to value scrap based on the ratio of 
the reported scrap price per metric ton to the average price of steel 
consumed and apply this ratio to the price of steel reported in the 
cost response.
    Rajinder argues that its cost response indicates that 
transportation costs, along with other selling expenses, were included 
in the steel price. Rajinder also maintains that the Department 
verified its freight costs and found no discrepancies.
    With respect to the issue of Rajinder's other suppliers, Rajinder 
argues that, although the verification report indicates that ``on rare 
occasions'' Rajinder purchased from other suppliers, it is unlikely 
that these rare purchases were made at prices higher than those made 
from SAIL. Rajinder also points out that not every invoice is required 
to be provided at verification. Rajinder maintains that the Department, 
nonetheless, found no discrepancies with Rajinder's reported steel 
costs.
    Rajinder contends that petitioners have used an invalid approach to 
conclude that, on average, the cost of steel reported in Rajinder's 
annual report is higher than the price it reported. Rajinder also 
argues that there is nothing on the record or in the verification 
report that suggests that Rajinder's scrap rate is unreasonable or 
should not have been used. Rajinder states that the scrap value was 
verified and, therefore, should be accepted for the final results of 
review.
Department's Position
    We agree with petitioners that freight costs are not included in 
the cost of steel, and we have added freight costs to Rajinder's 
reported steel costs for these final results of review. Although 
Rajinder reported the correct amount for steel costs, it neglected to 
include the amounts for freight which are clearly indicated on its 
invoices. Therefore, we have adjusted Rajinder's reported steel prices 
for freight costs. See Section B response, October 7, 1996, page B-7; 
Section D Supplemental Questionnaire response, March 18, 1997, page 8; 
and verification exhibit 22.
    Concerning Rajinder's reported steel prices, we have accepted them 
for these final results of review. See Memo to the File, August 29, 
1997.
    Petitioners are incorrect that the cost of steel reported in 
Rajinder's 1996 annual report is higher than the rates listed on the 
invoices at verification. Petitioners compared the average cost of 
steel consumed for year-end 1996 to individual steel invoice prices. 
Petitioners determined an average cost of steel consumed by dividing 
the total value, in rupees, of iron and steel consumed by the total 
quantity of iron and steel consumed. This equation contains general 
values that are comprised of both steel and iron. However, iron is not 
a material used in the production of merchandise covered by the scope 
of this order. Further, the steel inputs in the numerator are not 
limited to the production of subject merchandise. Therefore, 
petitioners have incorrectly made a comparison between a broad spectrum 
of merchandise reported in Rajinder's financial statements and the 
individual steel invoice prices that are materials Rajinder used to 
produce merchandise subject to this review.
    Petitioners' argument that the scrap value is too high, as well as 
petitioners' suggested alternative method for calculating the scrap 
value, are equally misplaced. Petitioners determined that the scrap 
value was too high by dividing a scrap resale value by the invoice 
value of a single transaction. This method is incorrect because the 
numerator is based on both subject and non-subject merchandise, whereas 
the denominator reflects subject merchandise only. However, scrap value 
can be easily and correctly derived by dividing the quantity of 
merchandise (i.e., iron and steel) by the value of such merchandise 
(i.e., iron and steel). Based on this method, the scrap value for 
either category of merchandise in the financial statement (i.e., 
material consumed or ending inventory) provides reasonable values upon 
which we can rely. Moreover, we verified these amounts and found no 
discrepancies. Therefore, there is no reason to suspect the reported 
scrap rate.

Comment 4

    Petitioners argue that the Department should reject Rajinder's 
reported zinc costs. Petitioners argue that the zinc price and zinc 
scrap value Rajinder reported in its questionnaire response were 
understated and overstated, respectively, compared with the zinc price 
and zinc scrap value Rajinder reported in its annual report. 
Petitioners contend that, for the final results of review, the 
Department should make the necessary changes to the reported zinc price 
and zinc scrap value.
    Rajinder states that, with respect to zinc costs, there is no 
reason to suspect that Rajinder overvalued its scrap adjustment. 
Rajinder states that virtually all cost data were verified and the 
Department found no discrepancies with the zinc cost data. Rajinder 
further maintains that the difference between amounts reported by 
Rajinder and the average cost for zinc that the

[[Page 47637]]

Department and the petitioners calculated can be attributed to the 
adjustments for excise and sales tax, as noted in the Department's 
verification report.

Department's Position

    We disagree with petitioners. Reference to the amounts in the 
financial statement is not necessary here because we verified the 
reported amounts and are satisfied that use of these amounts is 
appropriate.
    Rajinder also confuses the issue by arguing that the difference 
between the amount of zinc it reported and the average cost of zinc 
that the Department and petitioners calculated can be explained by an 
adjustment for excise and sales tax. As we stated in the verification 
report, excise and sales tax account for the difference between the 
cost per metric ton, reported in Indian rupees, and the average cost 
per metric ton of zinc purchased during the period of review (POR), 
also reported in Indian rupees. The comparison of these zinc costs to 
which Rajinder referred in its reply brief is different from the 
comparison of zinc costs that petitioners made, which focused on the 
figures reported for zinc price, zinc scrap value, and zinc consumed.
    In conclusion, we are satisfied that the reported amounts were 
verified and accurately reflect Rajinder's costs. For the final 
results, we have accepted Rajinder's reported zinc price and scrap 
value.

Comment 5

    Petitioners argue that the Department should reject Rajinder's 
reported variable, labor, and fixed overhead costs. Petitioners also 
contend that the Department should disregard Rajinder's response and 
apply adverse facts available because Rajinder refused to comply with 
the Department's request to provide labor and overhead costs on a 
product-specific basis. Petitioners point out that Rajinder stated in 
its supplemental questionnaire response that it could not provide the 
requested product-specific information because it does not maintain 
costs in the manner requested by the Department. Petitioners assert 
that, because Rajinder did not provide the requested information, costs 
for products with different physical characteristics were not 
differentiated. Petitioners further state that labor and overhead costs 
will be affected because pipes with different sizes and finish have 
different processing times and the number of pieces to handle will also 
be different. Petitioners also maintain that galvanized pipe will have 
higher labor and overhead costs than black pipe as a result of the pipe 
undergoing an additional galvanizing process.
    Petitioners argue that respondents are often required to provide 
information in an antidumping proceeding that is different from the 
manner in which they maintain their records in the ordinary course of 
business. Petitioners also state that, because Rajinder requested this 
review, it should be held to the standard of providing information that 
conforms to the manner in which the Department calculates dumping 
margins. Petitioners maintain that, without the product-specific labor, 
variable, and overhead costs, the Department cannot perform accurate 
cost-of-production (COP) and CV analyses and difference-in-merchandise 
(difmer) adjustments.
    Petitioners contend that, with respect to steel prices, steel scrap 
prices, zinc values, and zinc scrap values, the Department was unable 
to reconcile with Rajinder's financial statements information that was 
collected at verification. Petitioners argue that this provides 
additional grounds, in addition to Rajinder's refusal to provide labor, 
variable, and overhead cost information on a product-specific basis, 
for disregarding Rajinder's response and applying adverse facts 
available.
    Rajinder states that it did not refuse to comply with the 
Department's request to report its labor, variable, and fixed overhead 
costs on a product-specific basis. Rather, Rajinder states, it did not 
have the necessary data in its cost system. Rajinder states that the 
verification report further supports its inability to provide the 
information as requested by the Department. For instance, Rajinder 
states that the verification report notes that labor and overhead costs 
were reported for one type of pipe; it also notes that Rajinder 
allocated costs on a mill-specific basis which Rajinder believes is 
more reasonable than if it had allocated the costs over all production 
from the various mills. Further, Rajinder contends that petitioners 
erroneously suggest that black pipe was used in Rajinder's calculations 
because galvanized pipe will have higher labor and overhead costs. 
Rajinder maintains that its labor and overhead costs were calculated 
for galvanized pipe only.
    Rajinder maintains that it cooperated fully in this review, that it 
provided information based on its available records, and that the 
Department should accept its response. Rajinder concludes that it makes 
no sense for the Department to verify Rajinder's costs, find no 
discrepancies, use the information for the preliminary results of 
review, and then disregard the entire response because petitioners feel 
these costs should have been calculated differently.
Department's Position
    We have determined that Rajinder's allocation of its reported labor 
and overhead costs (variable and fixed) was reasonable. The Department 
generally prefers that respondents report costs on a product-specific 
basis. However, in accordance with section 773(f)(1)(A) of the Act, our 
practice is to adhere to an individual firm's recording of costs, 
provided we are satisfied that such costs reasonably reflect the costs 
of producing the subject merchandise and are in accordance with the 
generally accepted accounting principles (GAAP) of the firm's home 
country. See, e.g., Notice of Final Determination of Sales at Less Than 
Fair Value: Large Newspaper Printing Presses and Components Thereof, 
Whether Assembled or Unassembled, From Japan, 61 FR 38139, 38154 (July 
23, 1996).
    Rajinder provided its labor and overhead costs on a mill-specific 
basis. Rajinder used this methodology to record and allocate these 
costs in the company's ordinary course of business during the POR. See 
Rajinder's Supplemental Cost Response at 12, 26 (March 18, 1997). As we 
noted in the verification report, Rajinder produces merchandise at 
several mills. Black and galvanized pipe, merchandise subject to this 
review, were produced at two of these mills. Moreover, as stated in the 
verification report, black and galvanized pipe were also produced at 
separate mills. See Rajinder's Cost Verification Report, at 7 (May 9, 
1997). The three home-market models of pipe that proved to be the most 
comparable matches to the models sold in the United States were all 
galvanized pipe. Each of these models passed the sales-below-cost test 
and were within the Department's twenty-percent difmer threshold. The 
record demonstrates that all of these comparable models were produced 
at the same mill. See Rajinder's Cost Questionnaire Response at 5 
(January 22, 1997); Rajinder's Section B Questionnaire Response, 
Exhibit B-1 and B-2 (October 7, 1996); and Rajinder's Cost Verification 
Report at 7. In addition, all of the pipe exported to the United States 
was produced in the same mill. See id. Therefore, because we matched 
galvanized pipe sold in the United States to galvanized pipe of 
comparable size sold in the home market and because black pipe was not 
produced at the same mill at which the comparable models were produced, 
our calculations do not rely

[[Page 47638]]

on any averaging of costs for galvanized and black pipe.
    Therefore, we have accepted Rajinder's allocation of its reported 
labor and overhead costs. We are satisfied that Rajinder's allocation 
methodology reasonably reflects its costs of producing the subject 
merchandise and it is in accordance with Indian GAAP.

Comment 6

    Petitioners argue that the Department failed to include any sales 
from Rajinder's affiliate, Rajinder Steels Ltd. (RSL), in the 
preliminary margin calculations. Petitioners maintain that, for the 
final results of review, the Department should include RSL's sales in 
the price comparison because RSL manufactured and sold subject 
merchandise during the POR and RSL's reported sales transactions had 
control numbers that matched Rajinder's reported U.S. sales.
    Rajinder responds that the Department properly excluded RSL's sales 
transactions from the margin calculation. Rajinder contends that only 
Rajinder sold subject merchandise to the United States. Rajinder also 
argues that its sales in the United States were comparable in size to 
home-market sales. Rajinder maintains that the Department is not 
required to use RSL's sales in the price comparisons or cost test 
because, as verified, the facilities of Rajinder and RSL are separate. 
Further, Rajinder states that there is no indication of price 
manipulation.
Department's Position
    For purposes of the final results, we have treated RPL and RSL as a 
single entity, as described below.
    As a precondition to ``collapsing'' two companies in an antidumping 
analysis, the Department must determine that the parties are 
``affiliated'' within the meaning of section 771(33) of the Act. 
Section 771(33) provides several bases for finding affiliation. 
Subsection (F) of section 771(33) is applicable here. It provides that 
the definition of ``affiliated persons'' includes ``[t]wo or more 
persons directly or indirectly controlling, controlled by, or under 
common control with, any person.'' Section 771(33) further explains 
that control exists when one person is ``legally or operationally in a 
position to exercise restraint or direction over another person.''
    The Department's final regulations implementing the URAA elaborate 
upon the meaning of ``control'' under section 771(33). See Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27380 (May 19, 
1997) (Sec. 351.102(b)) (Final Regulations); see also Statement of 
Administrative Action (SAA), H.R. Doc. 103-316, at 838 (1994). The 
final regulations are not directly applicable to this review because 
the review was initiated prior to the date the regulations took effect. 
However, these new regulations do provide a concise and accurate 
statement of the Department's practice and the type of evidentiary 
criteria the Department has determined are relevant to a collapsing 
determination.
    Section 351.102(b) of the Final Regulations provides that, in 
determining whether control exists for the purpose of finding 
affiliation, the Department will consider, among other things, 
corporate or family groupings, franchise or joint-venture agreements, 
debt financing, and close supplier relationships. See also SAA at 838. 
Rajinder refers to RPL and RSL as ``affiliated'' but also claims that 
they are ``independent'' companies, with their operational 
responsibilities managed by different sets of people. Rajinder argues 
that this is because the two companies have separate shareholders and 
separate operations--including accounts, commercial, manufacturing, and 
sales activities. As explained below, however, we find that these are 
immaterial differences and that RPL and RSL are affiliated on the basis 
of control.
    The record demonstrates that RPL and RSL are ``manufacturing 
units'' within the ``Rajinder Group.'' See Rajinder's Supplemental 
Section A Response, Nov. 13, 1996, at 2-6 & Appendix 1 (Section A 
Supplemental); Rajinder's Section A Response, Aug. 20, 1996, at 10 
(Section A Response). The two companies share four members of their 
boards of directors out of a total of seven board members for RPL and 
nine for RSL. RPL and RSL also share the same top-level management. 
Respondent also identified numerous other management and operational 
functions performed jointly on behalf of the entire Rajinder Group. 
Therefore, we determine that RPL and RSL, and the Rajinder Group as a 
whole, constitute a single ``corporate grouping,'' as contemplated in 
our final regulations and the SAA, which is under the common control, 
directly or indirectly, of the same person or persons, who are legally 
or operationally in a position to exercise restraint or direction over 
the entire Rajinder Group. Furthermore, we find that this 
``relationship has the potential to impact decisions concerning the 
production, pricing, or cost of the subject merchandise of foreign like 
product.'' Final Regulations, 62 FR at 27380 (Sec. 351.102(b)). On this 
basis, we determine that RPL and RSL are affiliated pursuant to section 
771(33)(F) of the Act.
    Section 351.401(f)(1) of the final regulations provides that, 
consistent with the Department's practice, the Department will collapse 
two or more affiliated producers (1) which have production facilities 
for similar or identical products that would not require substantial 
retooling of either facility in order to restructure manufacturing 
priorities and (2) the Department concludes that there is a significant 
potential for the manipulation of price or production. See Final 
Regulations, 62 FR at 27410 (Sec. 351.401(f)). Regarding the first 
requirement, Rajinder acknowledges that, like RPL, RSL produces and 
sells subject merchandise in the home market. Section A Supplemental at 
2 and 6. According to Rajinder, this merchandise is ``similar'' to that 
exported by RPL to the United States. On this basis, we determine that 
RPL and RSL have production facilities for similar or identical 
products that would not require substantial retooling of either 
facility in order to restructure manufacturing priorities.
    Regarding the second requirement, whether ``there is a significant 
potential for the manipulation of price or production,'' section 
351.401(f) explains that the factors the Department may consider 
include (1) the level of common ownership; (2) whether managerial 
employees or board members of one of the affiliated producers sit on 
the board of directors of the other affiliated person; and (3) whether 
operations are intertwined, such as through the sharing of sales 
information, involvement in production and pricing decisions, the 
sharing of facilities or employees, or significant transactions between 
the affiliated producers. See also FAG Kugelfischer v. United States, 
932 F. Supp. 315 (CIT 1996); Certain Fresh Cut Flowers From Colombia; 
Final Results of Antidumping Duty Administrative Reviews, 61 FR 42833, 
42853 (August 19, 1996). Not all of these criteria must be met in a 
particular case; the requirement is that the Department determine that 
the affiliated companies are sufficiently related to create the 
potential of price or production manipulation. See, e.g., Final 
Regulations, 62 FR at 27346 (preamble); Flowers From Colombia, 61 FR at 
42853.
    We note that when affiliation is based upon control, as in the 
present review, there may be substantial overlap between the evidence 
relied upon to determine affiliation and that relied upon to determine 
whether there is a significant potential for the

[[Page 47639]]

manipulation of price or production. The decision of whether to 
collapse is normally dependent to one extent or another upon the 
potential of one or more persons or a part of a company to control 
another. As we have often stated, in collapsing, we look at the ``level 
of inter-relatedness between parties'' or the ``type and degree'' of 
the parties'' relationship or affiliation. See, e.g., Sulfanilic Acid 
from the PRC: Final Results of Antidumping Duty Administrative Review, 
61 FR 53,711, 53,712 (1996) (citing Nihon Cement v. United States, 17 
CIT 400, 426 (1993)); Final Results of Antidumping Duty Administrative 
Review; Iron Construction Castings From Canada, 59 FR 25,603, 25,603-04 
(1994); Final Determination of Sales at Less Than Fair Value: 
Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts 
Thereof from the Federal Republic of Germany, 54 FR 18,992, 19,089 
(1989).
    We determine that this requirement is met as well. For the most 
part, we have based this determination upon the same evidence upon 
which we relied to determine that the two companies are affiliated. We 
consider the evidence regarding control and the overlap between the two 
companies' boards of directors and management sufficient to warrant 
concluding that RPL and RSL pose a significant potential for the 
manipulation of price or production. As detailed above, the boards of 
directors of the two companies broadly overlap. Moreover, three of the 
four overlapping directors also jointly manage the two affiliated 
companies. Along with the other evidence of control in the record, this 
evidence supports a finding that the two companies essentially function 
or have a significant potential to function as a single entity. There 
is also proprietary information on the record of common ownership and 
inter-company transactions within the Rajinder Group. This evidence is 
not complete, however, and we have not relied upon it in reaching our 
determination.
    Based upon our analysis of the evidence on the record, we determine 
that RPL and RSL are affiliated pursuant to section 771(33)(F) of the 
Act; the two companies have production facilities for similar or 
identical products that would not require substantial retooling of 
either facility in order to restructure manufacturing priorities; and, 
because of the extent of common control between the two companies, RPL 
and RSL pose a significant potential for manipulation of price or 
production. Therefore, we have collapsed and treated RPL and RSL as a 
single entity for purposes of calculating the appropriate dumping 
margin in these final results of review.

Comment 7

    Petitioners requested that the Department conduct sales and cost 
verifications of the responses submitted by Lloyd's and Rajinder. 
Petitioners contend that the Department's failure to verify Lloyds' 
cost response and Rajinder's sales response is contrary to law. 
Petitioners state that, while the Department enjoys ``a degree of 
latitude in implementing its verification procedures,'' these 
procedures must be reasonable.
    Petitioners state that, given the large number of inaccuracies in 
Lloyds' sales response presented to the Department officials at the 
outset of verification and the fact that Lloyd's is a first-time 
participant, it is plausible that Lloyds' cost response also contains 
numerous deficiencies. Petitioners assert that Lloyd's did not provide 
corrections to its cost response knowing that its cost response would 
not be verified. Petitioners conclude that the Department should either 
verify Lloyds' cost response prior to the final results of review or 
apply facts available.
    As for Rajinder, petitioners argue that the company's failure to 
provide supporting documentation of price adjustments, its failure to 
allocate costs on a product-specific basis, and inaccuracies found at 
verification should have compelled the Department to conduct a more 
complete verification and are grounds to base the final results on 
adverse facts available.
    Lloyd's states that the Department conducted a thorough five-day 
verification of Lloyds' response and there was no reason to suspect or 
find inadequate the verified information. Lloyd's argues that the 
Department's verification report is filled with conclusions of ``no 
discrepancies''. Lloyd's also asserts that it is unreasonable to throw 
out Lloyds' cost response because it presented minor corrections of its 
sales response at the outset of verification.
    Lloyd's responds that the law does not require the Department to 
verify every aspect of a response. Lloyd's maintains that the 
Department has the discretion to determine which items it wishes to 
examine at verification. Further, Lloyd's asserts that it is common 
practice for a respondent to present corrections to its response that 
were discovered during the preparation for verification. Lloyd's also 
asserts that the corrections presented at verification were minor and 
did not undermine the reliability of Lloyd's response. Lloyd's adds 
that, as far as it knew, the Department intended to conduct a cost 
verification since the verification outline contained procedures for a 
cost verification. Lloyd's further states that its cost information was 
accessible for examination during the verification.
    Rajinder responds that no verification is required in a new shipper 
review. Rajinder also states that the Department's decision to conduct 
only a cost verification of Rajinder's response is not contrary to law 
because no verification was required. Rajinder also argues that, 
because there were no discrepancies found with the verified data, there 
is no reason to assume that discrepancies would be found with non-
verified data.
Department's Position
    We have conducted this new shippers review in accordance with 
section 751(a)(2) of the Act and our regulations. Although a 
verification was not required by statute, the Department decided to 
verify the accuracy of both parties' submissions.
    The courts have long agreed that verification is a selective 
procedure and the Department's ability to verify complete responses is 
constrained by limitations on time and resources. See, e.g., Bomont 
Indus. v. United States, 733 F. Supp. 1507, 1508 (CIT 1990). As in this 
case, it is not always practicable for the Department to conduct both 
sales and cost verifications of every company during every review. The 
Department has considerable latitude in picking and choosing which 
items it will examine in detail. See Monsanto Co. v. United States, 698 
F. Supp. 275, 281 (CIT 1988) (citing Hercules, Inc. v. United States, 
673 F. Supp. 454, 469 (CIT 1987)). It is enough for the Department ``to 
receive and verify sufficient information to reasonably and properly 
make its determination.'' Hercules, 673 F. Supp. at 471; see also 
Certain Internal-Combustion Industrial Forklift Trucks From Japan: 
Final Results of Antidumping Duty Administrative Review, 62 FR 5992, 
5602 (February 6, 1997).
    Therefore, contrary to petitioners' assertions, the fact that the 
Department could not devote the resources necessary to verify Rajinder 
and Lloyds' entire responses does not, standing alone, call those 
responses into question. Moreover, to the extent we found problems with 
those portions of the responses that we did verify, these problems were 
relatively minor and did not seriously call the responses into 
question, neither with respect to the portions we did verify nor those 
which we did not. See Forklift Trucks From Japan, 62 FR at 5602. For 
these reasons,

[[Page 47640]]

we have continued to rely upon both respondents' complete responses, 
except where indicated.

Comment 8

    Rajinder contends that, for the final results of review, the 
Department should make a level-of-trade adjustment for the Channel One 
sales that were compared to U.S. sales because a pattern of price 
differences exists at the different levels of trade. Rajinder also 
contends that the Department should use the weighted-average price 
differences provided in Rajinder's questionnaire response. Rajinder 
states that the Department's inability to determine a pattern of 
consistent price differences should not work to the disadvantage of 
respondents, particularly since the information has already been 
provided on the record. Further, Rajinder maintains that, until the 
Department formulates a satisfactory methodology of determining 
consistent price differences, the pricing differences presented by a 
respondent should be valid indicators that such differences exist at 
the different levels of trade and should be used by the Department as 
the pricing differences between the different levels of trade.
    Petitioners respond that the Department should not grant a level-
of-trade adjustment. Petitioners claim that Rajinder has not 
demonstrated that a pattern of different price levels exists. 
Petitioners assert that Rajinder's calculation of the price 
differential is flawed and that the statute requires more than the 
comparison of two average prices. According to petitioners, the statute 
requires that prices be reviewed on a product-specific basis. 
Petitioners also argue that the difference in prices must be measured 
against net prices, exclusive of all statutory adjustments, in order to 
ensure no double counting occurs. Citing Certain Carbon Steel Pipe and 
Tube From Turkey, 61 FR 69,067 (December 31, 1996), petitioners 
maintain that the Department has applied these minimum standards in 
other cases.
Department's Position
    Rajinder reported two channels of distribution in the home market: 
(1) Sales to government agencies, original equipment manufacturers, and 
end-users (Channel One); and (2) sales to local distributors and 
trading companies (Channel Two). In our preliminary results, we 
determined, based on an analysis of the selling functions performed and 
the point in the chain of distribution where the sale takes place, that 
these two channels constituted two different levels of trade in the 
home market.
    With respect to the U.S. market, Rajinder reported that all sales 
were made through one channel of distribution, a local distributor. For 
our preliminary results, we determined that the CEP sales constituted a 
single level of trade. Further, we found that, although there were 
differences in terms of selling activities performed in Channel Two in 
the home market and the CEP sales in the United States, these 
differences in selling functions were not alone sufficient to establish 
a difference in the level of trade. We did find that a difference in 
the level of trade existed between Rajinder's CEP sales and Channel One 
sales in the home market. For certain CEP sales where we found that 
sales of identical matches took place only at the Channel One level of 
trade, we matched these sales to sales at the Channel One level of 
trade. However, because we were unable to determine the extent of any 
pattern of consistent price differences between the two home-market 
channels of distribution, we did not make a level-of-trade adjustment. 
We did, however, apply a CEP-offset adjustment in the preliminary 
results.
    As we stated in the preliminary results, we continued to examine 
the issue of level of trade in this review. After a more in-depth 
analysis, we confirm our preliminary findings that there are two 
different levels of trade in the home market and that sales to Channel 
Two are made at the same level as the sales to the United States. Since 
some products did not have a match at the same level of trade, we 
reexamined the issue of whether we should have granted Rajinder a 
level-of-trade adjustment.
    When we compare U.S. sales to home market sales at a different 
level of trade, we make a level-of-trade adjustment if the difference 
in levels of trade affects price comparability. We determine any effect 
on price comparability by examining sales at different levels of trade 
in a single market, the home market. Any price effect must be 
manifested in a pattern of consistent price differences between home 
market sales used for comparison and sales at the equivalent level of 
trade of the export transaction. To quantify the price differences, we 
calculate the difference in the average of the net prices of the same 
models sold at different levels of trade. If we find a pattern of 
consistent price differences, we use the average difference in net 
prices to adjust normal value when normal value is based on a level of 
trade different from that of the export sale. If there is no pattern of 
consistent price differences, the difference in levels of trade does 
not have a price effect and, therefore, no adjustment is necessary. See 
Preliminary Results of Antidumping Administrative Review: Antifriction 
Bearings (Other Than Tapered Roller Bearings) and Parts Thereof from 
France, Germany, Italy, Japan, Romania, Singapore, Sweden and the 
United Kingdom, 62 FR 31566 (June 10, 1997).
    In its October 7, 1996, submission Rajinder presented its 
calculations of a level-of-trade adjustment. However, Rajinder provided 
no evidence that the prices it used for its analysis were net prices or 
that the calculations were done on a model-specific basis.
    Therefore, we determined whether there was a pattern of consistent 
price differences between the different levels of trade in the home 
market. We made this determination by comparing, for each model sold at 
both levels, the average net price of sales made in the ordinary course 
of trade at the two levels of trade. If the average prices were higher 
at one of the levels of trade for a preponderance of the models, we 
considered this to demonstrate a pattern of consistent price 
differences. We also considered whether the average prices were higher 
at one of the levels of trade for a preponderance of sales, based on 
the quantities of each model sold, in making this determination. For 
Rajinder, we found a pattern of consistent price differences. We 
applied the average percentage difference to the adjusted normal value 
as the level-of-trade adjustment. See Final Results of Antidumping 
Administrative Review: Antifriction Bearings (Other Than Tapered Roller 
Bearings) and Parts Thereof from France, Germany, Italy, Japan, 
Singapore, and the United Kingdom, 62 FR 2081, 2105 (January 15, 1997).

Comment 9

    Rajinder argues that, if the Department uses a CEP-offset 
adjustment for the final results of review, it must correct the home-
market indirect selling expenses figure the Department used in this 
calculation. Rajinder explains that, while the Department's CEP-offset 
amount is intended to represent home market indirect selling expenses 
in dollars per metric ton, it did not calculate it correctly. Rajinder 
states that the Department divided the total reported indirect selling 
expenses by the total sales quantity to obtain the numerator in rupees 
per metric ton. However, Rajinder notes that the total indirect selling 
expenses were already reported on a per-metric-ton basis, causing the

[[Page 47641]]

Department to make a lower CEP-offset adjustment. Rajinder states that 
record evidence shows that the rupee figure is already reported on a 
per-metric-ton basis and that the Department should correct this error 
for the final results of review.
    Petitioners respond that, should the Department change the 
calculation of home-market indirect selling expenses as Rajinder 
requests, it must make several other changes to the calculations as 
well. Petitioners repeat their comment concerning commissions 
(discussed in comment 13, below). Petitioners assert that the 
Department must ensure that deductions from normal value for indirect 
selling expenses are also deducted from the home-market price in the 
below-cost-sales analysis.
Department's Position
    We agree with Rajinder that the amount it reported for indirect 
selling expenses was already on a metric-ton basis. We have corrected 
this clerical error for the final results.
    Further, in conducting the cost test, we adjust normal value and do 
not include all deductions that we make to the weighted-averaged normal 
value. In doing this we adjust normal value to a level comparable to 
the reported COP, not to a level comparable to U.S. sales. In 
particular, although adjusted normal value reflects all actual 
deductions, it does not include deductions for expenses such as credit 
or inventory carrying cost. Moreover, both parties' comments concerning 
commissions and appropriate CEP offset are irrelevant since the 
Department has determined not to use a CEP offset as described in 
response to comment 8, above.
    Finally, we have addressed petitioners' argument concerning 
commissions and the appropriate CEP offset in response to comment 13, 
below.

Comment 10

    Petitioners state that, for Rajinder's U.S. sales, the Department 
incorrectly calculated gross unit price on a metric-ton basis. Further, 
they state that the Department used the incorrect conversion factor to 
translate net-ton gross unit prices into metric-ton gross unit prices 
which, according to petitioners, resulted in an overstatement of gross 
unit prices. Petitioners provide instructions on how to calculate gross 
unit price properly on a metric-ton basis for the final results of 
review.
    Rajinder agrees that the Department applied the incorrect 
conversion factor to translate net-ton gross unit prices into metric-
ton gross unit prices. Rajinder also claims, however, that, aside from 
the gross unit price, many other deductions were overstated because the 
Department used the incorrect conversion factor to convert all U.S. 
expenses to a metric-ton basis. Rajinder recommends that the Department 
correct all deductions, in addition to the gross unit price, that were 
affected by this conversion error. Rajinder states that the Department 
also incorrectly converted the adjustment for ``Inland Freight-Plant to 
Distribution Warehouse'' into metric tons because it had reported this 
adjustment on a metric-ton basis.
Department's Position
    We agree with both petitioners and Rajinder that we converted the 
gross unit price and selling expenses incorrectly for the preliminary 
results. We have examined all conversions, including Inland Freight-
Plant to Distribution Warehouse, as recommended by Rajinder and 
petitioners and have corrected them for the final results.

Comment 11

    Petitioners state that, although the preliminary analysis memo 
indicated a deduction, the Department failed to deduct Rajinder's U.S. 
commissions from CEP. Petitioners request that the Department make this 
deduction for the final results of review.
    Rajinder agrees that the Department failed to deduct U.S. 
commissions from CEP. Rajinder explains that the Department's failure 
to make this deduction has no effect on the margins, however, because 
the Department inadvertently did not make the deduction for commissions 
in calculating normal value. Rajinder suggests that, if the Department 
makes a deduction from CEP starting price for U.S. commissions, it must 
offset that deduction with a corresponding deduction from normal value 
for commissions or, as appropriate, indirect selling expenses, in 
accordance with 19 CFR 353.56(b)(1). Thus, Rajinder claims, the net 
effect of this adjustment would be zero.
Department's Position
    The Department agrees with both parties. In the preliminary 
results, we neglected to deduct commissions from either CEP or normal 
value. In accordance with 19 CFR 353.56(a)(2), the Department makes 
reasonable allowances for differences in circumstance of sale, 
including commissions. For the final results, we have deducted 
commissions from both CEP and normal value, using the amounts reported 
in the response. Where Rajinder has a commission on the U.S. sale but 
no home-market commission, we have adjusted normal value by using home-
market indirect selling expenses as an offsetting commission to the 
commission in the U.S. market. See our response to comment 13.

Comment 12

    Petitioners claim that the Department incorrectly calculated the 
CEP-profit ratio by dividing the total selling expenses reported by 
Rajinder and RSL in their financial statements by the profit reported 
in the financial statements. Petitioners state that, to calculate total 
expenses in accordance with section 772(f)(2)(C) of the Act, the 
Department should use the expenses incurred in order of preference (1) 
on subject merchandise sold in the home and U.S. markets, (2) the 
narrowest category of merchandise sold in the United States and home 
market that contains the subject merchandise, or (3) the narrowest 
category of merchandise sold in all countries that contains the subject 
merchandise. Petitioners claim that the Department should have used the 
sales and profit data for the foreign like product as a basis for the 
CEP-profit calculation, as required by the statute, instead of relying 
on data at the overall sales level from the financial statements, which 
is the third choice under section 772(f)(2)(C) of the Act.
    Additionally, petitioners claim that the CEP ratio used by the 
Department in the preliminary margin calculation contained a misplaced 
decimal point which should be corrected. Petitioners also contend that 
the Department must include commissions in the U.S. selling expenses 
when it calculates CEP profit for the final results of review.
    Rajinder states that, because the Department made a clerical error 
in applying the calculated CEP-profit ratio, the ratio the Department 
applied is grossly different than the CEP ratio that the Department 
actually calculated. Provided the CEP ratio for the final results of 
review does not change, Rajinder contends that the Department should 
use the ratio that it actually calculated. Rajinder explains that any 
change the Department makes to the calculation of the CEP ratio may 
produce lower, if not de minimis, CEP-profit figures than the ratio 
that the Department actually calculated for the preliminary results of 
review.
Department's Position
    We agree with the petitioners in part. We used information from the 
financial statements to determine CEP profit in

[[Page 47642]]

our preliminary results, which is the third preference under section 
772(f)(2)(C) of the Act. Because COP information was reported for only 
an extraordinarily small portion of its pipe sales in the home market, 
in this case, we have continued to use profit levels which we 
calculated from the financial statements.
    We agree that there were several ministerial errors in the 
calculation of CEP profit which caused us to understate CEP profit. We 
have reexamined Rajinder's financial statements and have made several 
changes to the profit calculation. We added the amounts listed as 
``variation in stock'' to the total revenue amounts. We added interest 
expense and depreciation expense to total cost and then subtracted an 
amount for change in inventory from total cost. We divided total 
revenue by total cost to arrive at the CEP-profit figure. Additionally, 
when applying this percentage to U.S. expenses, no change is necessary 
as petitioners suggest because we have already included commissions in 
the denominator.

Comment 13

    Petitioners state that, according to the analysis memorandum 
prepared for Rajinder for the preliminary results, the Department 
deducted both the indirect selling expenses and the CEP offset from 
normal value and, as a result, some indirect selling expenses were 
deducted twice. Petitioners claim that indirect selling expenses should 
not be deducted from the home-market gross unit price to calculate net 
home-market price because these expenses can only be deducted as a CEP 
offset when comparing sales at different levels of trade. Petitioners 
state, that as a circumstance-of-sale (COS) adjustment, commissions and 
indirect selling expenses may be deducted from net home-market price up 
to the amount of U.S. commissions. Petitioners contend that, when a COS 
adjustment is based on the amount of home-market indirect selling 
expenses (limited by the U.S. commission amount), the CEP offset cannot 
include those expenses that were already deducted from the net home-
market price through the commission-offset step.
    Rajinder responds that, contrary to petitioners' assertion, the 
preliminary calculations demonstrate that home-market indirect selling 
expenses were not deducted from net home-market price. Therefore, these 
expenses were not double counted. Rajinder states that home-market 
inventory carrying costs were not deducted from normal value and, since 
they are post-sale expenses, they are direct costs and normal value 
should be adjusted to account for these costs.
Department's Position
    Since the Department has determined that a CEP-offset adjustment is 
not appropriate, both petitioners' and Rajinder's comments are moot. 
See our response to comment 8 above.

Comment 14

    The petitioners state that the Department must apply a difmer 
adjustment because the products sold in the United States and home 
market are not identical.
    Rajinder claims that the petitioners' assertion that the Department 
should have adjusted normal value upward is incorrect. Rajinder states 
that evidence on the record indicates that the total cost of 
manufacture for pipe sold in the United States is less than the cost of 
manufacture for the comparable pipe sold in India. Rajinder adds that, 
if the Department adjusts for difmer, the adjustment should be a 
deduction from, not an addition, to normal value.
Department's Position
    We agree with the petitioners that a difmer adjustment should be 
applied because the products are not identical. The third matching 
characteristic, wall thickness, varies slightly for the subject 
merchandise sold in the United States. Therefore, in accordance with 
section 773 (a)(6)(C)(iii), a difmer adjustment is appropriate to 
account for this difference.
    We have calculated the difmer adjustment by subtracting the 
variable cost of manufacture for the closest model match in the home 
market from the variable cost of manufacture for each U.S. sale. We 
then added the difmer amount to normal value.

Comment 15

    Petitioners state that the Department incorrectly calculated 
Rajinder's interest expense in the COP calculation. Petitioners claim 
that it not clear where the Department obtained the figures it used to 
calculate COP. According to petitioners, the COP figures the Department 
used were different from those which Rajinder reported in its 
supplemental cost-questionnaire response. Petitioners recommend that 
the Department correct its COP analysis based on the more recent 
supplemental cost-questionnaire response Rajinder submitted.
    Rajinder disagrees with petitioners. Rajinder explains that the 
Department's COP calculation is different from the COP reported by 
Rajinder in its supplemental cost-questionnaire response because the 
reported HM gross unit prices do not include taxes, whereas the data 
reported in the supplemental cost-questionnaire response do include 
taxes. Rajinder claims that the Department properly calculated COP 
because the taxes excluded from gross unit price must also be excluded 
from the cost calculation for comparison purposes.
Department's Position
    We disagree with both parties. In its supplemental cost response, 
Rajinder reported separate interest-expense calculations for Rajinder 
and its affiliated party, RSL. In situations involving affiliated 
parties, it is sometimes appropriate for the Department to calculate 
the interest expense based on the operations of the consolidated 
corporation. See Ferrosilicon From Brazil: Final Results of Antidumping 
Duty Administrative Review, 61 FR 59407, 59412 (Nov. 22, 1996); Certain 
Corrosion-Resistant Carbon Steel Flat Products From Korea: Final 
Results of Antidumping Duty Administrative Review, 61 FR 18547, 18567 
(April 26, 1996). This is because ``debt is fungible and corporations 
can shift debt and its related expenses toward or away from 
subsidiaries in order to manage profit.'' Ferrosilicon From Brazil, 61 
FR at 59412. Therefore, the Department calculates COP using the 
consolidated financing expenses of the corporation or the affiliated 
parties whenever the parent or the controlling entities have ``the 
power to determine the capital structure of each member company within 
the group.'' Final Determination of Sales at Less Than Fair Value: New 
Minivans From Japan, 57 FR 21937, 21946 (May 26, 1992). This is 
particularly the case when the Department determines to collapse two or 
more affiliated parties, as here. See our response to comment 6, above.
    Therefore, in this case, we used the combined financial statements 
of Rajinder and RSL to recalculate the interest expense by dividing the 
reported interest expense by the sum of the cost of goods sold plus the 
depreciation. This yields an applicable ratio representative of the 
interest expenses of both companies combined. Contrary to petitioners' 
recommendation to use the reported amounts in the supplemental 
response, the Department has used the recalculated amounts that it used 
in the preliminary results. Rajinder's argument that taxes were 
excluded from this calculation is irrelevant.

[[Page 47643]]

Comment 16

    Petitioners claim that there were serious deficiencies in Lloyds' 
cost response which the Department never examined. Petitioners claim 
that Lloyd's purchased coils from an affiliated party and, while 
Lloyd's claims the purchases were at arm's length, the transfer price 
of coils from unaffiliates were on average seven percent higher than 
prices from the affiliate. Petitioners recommend that the Department 
disregard the steel prices from Lloyds' affiliate and use the average 
from unaffiliated parties.
    Additionally, petitioners assert that Lloyd's did not report labor 
and overhead costs to account for differences in physical 
characteristics. Petitioners explain that Lloyd's allocated all costs 
by tonnage which failed to differentiate the costs for products with 
different physical characteristics. Petitioners state that pipes with 
different sizes and finish have different processing times and the 
number of pieces to handle will be different which ultimately affects 
labor and overhead costs. Petitioners explain that, since Lloyds' COP 
and CV calculations are based on inherently flawed and distorted data, 
the Department is unable to perform an accurate COP analysis. 
Petitioners reason that respondents are often required to provide 
information in an antidumping review that is different from the manner 
in which they maintain their records in the ordinary course of 
business. Petitioners claim that, since Lloyd's requested this review, 
Lloyd's should be held to the standard of providing information that 
conforms to the manner in which the Department calculates dumping 
margins. Petitioners remark that the Department requested that Lloyd's 
provide information on a product-specific basis and declined to do so; 
therefore, Lloyd's has withheld information and impeded this review 
which is grounds for applying facts available. Petitioners state that, 
absent this information, the Department cannot perform accurate COP and 
CV analyses and difmer adjustments.
    Lloyd's responds that petitioners have no basis to question that 
purchases from affiliated suppliers were priced lower than purchases 
from unaffiliated suppliers. Lloyd's argues that petitioners merely 
make an observation from one exhibit on the record which demonstrates 
price fluctuation. Lloyd's points out that prices from affiliated 
suppliers were not consistently higher or lower than prices from 
unaffiliated suppliers. Lloyd's claims that, in fact, several purchases 
from affiliated suppliers were priced lower than purchases from 
unaffiliated suppliers. Lloyd's states further that these fluctuations 
in price are indicative of price negotiation and that seven percent is 
not a meaningful difference in price.
    Lloyd's states that, contrary to petitioners' claim, it properly 
reported labor and overhead costs. Lloyd's claims that it sold only one 
type of pipe in the United States and that the variable costs for 
producing pipe do not vary significantly depending on the type of steel 
pipe reported. Lloyd's maintains that, since the Department agreed with 
Lloyds' choice of home-market sales to report (black, plain end, non-
galvanized pipe), there were no significant differences in physical 
characteristics such as size, surface finish or end finish and, 
accordingly, no significant differences in labor and overhead costs to 
report. Lloyd's explains that it differentiates and allocates its costs 
in the normal course of business, a methodology the Department accepts 
when the allocation of costs is reasonable (citing Final Determination 
of Sale at Less Than Fair Value: Fresh Cut Roses From Colombia, 60 FR 
6980, 7015 (Feb. 6, 1995)). Lloyd's claims that petitioners make 
reference to the higher costs associated with galvanizing steel pipe 
and manufacturing threaded and coupled pipe, but that petitioners fail 
to take into account that Lloyds' reported sales did not included 
galvanized, threaded or coupled pipe. Additionally, Lloyd's explains 
that it did report a difference in U.S. packing costs which were 
approximately 30 percent higher than home-market packing costs, due to 
extra costs associated with packing for international shipment.
Department's Position
    We agree in part with both parties. Concerning the costs of hot-
rolled coil, we have used the average price listed for other home-
market suppliers from Exhibit 3 of the March 17, 1997 submission. We 
found that the purchases from Lloyd's Steel Industries Ltd. (LSIL), 
Lloyds' affiliated supplier, were nearly all lower in price than those 
from the other home-market suppliers. While Lloyd's claims that its 
purchases of hot-rolled coil from LSIL were at arm's-length prices, the 
evidence on the record indicates otherwise. When, as here, the transfer 
price between affiliated parties is significantly lower than the price 
from unaffiliated suppliers, the respondent bears the burden to provide 
evidence that the affiliated-party's transfer prices were at arm's-
length. See section 773(f)(2) of the Act. Lloyd's failed to provide 
such evidence. Therefore, we have not relied upon Lloyds' steel prices 
from LSIL and have instead relied entirely upon the price from the 
unaffiliated home-market suppliers in our calculations of steel 
material values.
    Concerning the reporting of labor and overhead costs, we agree with 
Lloyd's. We found that Lloyds' allocation of its labor and overhead 
costs was reasonable. Because Lloyds' U.S. sales consisted of only one 
type of pipe (black, plain-end pipe), the Department permitted Lloyd's 
to limit its home market data base to those sales which Lloyd's 
considered most similar to the sale made in the United States, 
conditioned upon the Department agreeing with Lloyds' model-match 
selections. The appropriate model matches submitted by Lloyd's were all 
black, plain-end pipe. Therefore, contrary to petitioners' assertion, 
Lloyd's was not required to differentiate costs for products with 
different physical characteristics; such products were simply not used 
for matching purposes.
    Lloyd's reported its costs for the home market, including labor, on 
a product-specific basis. This reflects Lloyd's cost-recording 
methodology used in its ordinary course of business. See Section D 
Questionnaire, January 22, 1997, page 21. Furthermore, petitioners 
incorrectly claim that Lloyd's allocated its costs by tonnage. Lloyd's 
explained that it allocated the product-specific costs associated with 
the production of the subject merchandise on the basis of the quantity 
and time required in the mill to produce the product. See Section D 
Supplemental Response, March 17, 1996, page 8.

Comment 17

    Petitioners state that the Department should deduct U.S. customs 
duties indicated in verification exhibit 10 from export price. 
Petitioners claim that, because Lloyd's is the importer of record, it 
is responsible for the payment of the duties.
    Lloyd's responds that it did not pay the U.S. customs duties. 
Lloyd's explains that, with respect to most commercial imports, the 
buyer typically pays U.S. customs duties and then seeks reimbursement 
from the party contractually responsible. Lloyd's points to its 
supplemental questionnaire response which states that in this case, the 
buyer of Lloyds' merchandise was responsible for paying the U.S. 
customs duties. Lloyd's concludes that the Department should not deduct 
import duties from export price.

[[Page 47644]]

Department's Position
    We agree with petitioners. Lloyd's is the importer of record and, 
therefore, ultimately responsible for the payment of duties. Although 
record evidence indicates that Lloyd's sent a letter to the U.S. buyer 
making the buyer responsible for paying the U.S. customs duties, we 
have no evidence that the customer either accepted these terms or paid 
the duties. We, therefore, determine that Lloyd's was responsible for 
the payment of the U.S. duties, and we have deducted the regular duties 
from the export price.

Comment 18

    Rajinder contends that the Department improperly failed to deduct 
certain expenses from home-market sales prices. Rajinder maintains that 
the Department's preliminary analysis memorandum states that the 
Department intended to deduct, among other things, commissions, 
advertising and inventory carrying costs in the calculation of normal 
value. However, Rajinder argues, the printouts released at disclosure 
indicate that the Department failed to make these deductions, and 
Rajinder requests that the Department correct this error for the final 
results of review.
    Petitioners respond that the Department may deduct from normal 
value commissions and advertising expenses as circumstance-of-sale 
adjustments. Petitioners also respond that the Department may deduct 
from normal value indirect selling expenses, such as inventory carrying 
costs, as a CEP offset where two markets are being compared at 
different levels of trade.
Department's Position
    We agree with both parties that we should have adjusted home-market 
prices for advertising and commission expenses. With respect to 
advertising expenses, Rajinder reported these expenses as direct in 
nature although it was not able to tie these expenses to the specific 
models of merchandise under review. Rajinder states in its response 
that, ``advertising expenses are incurred only to advertise the 
merchandise to small farmers, retailers, and households.'' Hence, the 
advertising expenditures are aimed at the Rajinder's customer's 
customer and, therefore, the reported expenses are direct.
    We agree with Rajinder that commissions should be treated as direct 
expenses which we have deducted from normal value. Where Rajinder 
reported commissions in only the U.S. market, we have offset this 
expense by deducting the home-market indirect selling expenses by an 
equivalent amount.
    Because we have not applied a CEP offset to normal value, the 
inclusion of inventory carrying costs in Rajinder's indirect selling 
expenses pool is irrelevant.

Comment 19

    Rajinder states that the Department improperly deducted inland 
freight from U.S. prices for the distance from the plant to the 
warehouse in India. Rajinder explains that the Department incorrectly 
converted the inland freight expense into rupees per metric ton, 
thereby overstating the deduction of inland freight from U.S. price. 
According to Rajinder, the record provides evidence that this expense 
was already reported on a per-metric-ton basis. Rajinder states that 
the Department should correct this error for the final results.
    Petitioners respond that the Department should ensure that all 
adjustments are properly converted on a per-metric-ton basis for both 
the price-to-price and below-cost-sales analyses.
Department's Position
    We agree with Rajinder that by making the wrong conversion we 
improperly calculated the deduction of inland freight from plant to 
warehouse. We have corrected this error for these final results. 
Additionally, as suggested by petitioners, we have reexamined all of 
the adjustments for normal value, U.S. price, and the below-cost-sales 
analysis to ensure that we have converted them to the correct units.

Final Results of Review

    As a result of our analysis, we have determined that the following 
weighted-average margins exist for the period May 1, 1994, through 
April 31, 1995:

------------------------------------------------------------------------
                                                                Margin  
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Rajinder....................................................       25.45
Lloyd's.....................................................        0.00
------------------------------------------------------------------------

    The results of this review shall be the basis for the assessment of 
antidumping duties on entries of merchandise covered by these final 
results and for future deposits of estimated duties. The posting of a 
bond or security in lieu of a cash deposit, pursuant to section 
751(a)(2)(B)(iii) of the Act and section 353.22(h)(4) of the 
Department's regulations, will no longer be permitted for these firms.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. We have 
calculated an exporter/importer-specific assessment rate for both 
companies. For each respondent we have divided the total dumping 
margins for the reviewed sales by the total entered value of those 
reviewed sales. We will direct Customs to assess the resulting 
percentage margin against the entered Customs values for the subject 
merchandise on each of respondents' entries during the review period. 
While the Department is aware that the entered value of sales during 
the POR is not necessarily equal to the entered value of entries during 
the POR, use of entered value of sales as the basis of the assessment 
rate permits the Department to collect a reasonable approximation of 
the antidumping duties which would have been determined if the 
Department had reviewed those sales of merchandise actually entered 
during the POR.
    Furthermore, the following deposit requirements will be effective 
upon publication of this notice of final results of administrative 
review for all shipments of Indian pipe and tube entered, or withdrawn 
from warehouse, for consumption on or after the date of publication, as 
provided by section 751(a)(1) of the Act: (1) the cash deposit rates 
for the reviewed companies will be the rates shown above; (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, a prior review, or the less than fair value 
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. In accordance with the CIT's decisions in Floral Trade 
Council v. United States, Slip Op. 93-79, and Federal-Mogul v. United 
States, Slip Op. 93-83, the cash deposit rate for all other 
manufacturers or exporters will be 7.08 percent, the rate determined in 
the original less than fair value investigation (51 FR 9089, March 17, 
1986).
    These deposit requirements shall remain in effect until publication 
of the final results of the next administrative review.
    This notice also serves as a final 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

[[Page 47645]]

subsequent assessment of double antidumping duties.
    This notice also serves as the only reminder to parties subject to 
administrative protective orders (APO) of their responsibility 
concerning the return or destruction of proprietary information 
disclosed under APO in accordance with 19 CFR 353.34(d)(1). Timely 
written notification of the return/destruction of APO materials or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and the terms of an APO is a sanctionable 
violation. Failure to comply is a violation of the APO.
    This administrative review and this notice are in accordance with 
section 751(b) of the Act (19 U.S.C. 1675(b)(1)) and 19 CFR 
353.22(h)(1997).

    Dated: August 29, 1997.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-23994 Filed 9-9-97; 8:45 am]
BILLING CODE 3510-DS-P