[Federal Register Volume 62, Number 200 (Thursday, October 16, 1997)]
[Notices]
[Pages 53808-53821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27471]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-549-502]
Certain Welded Carbon Steel Pipes and Tubes From Thailand: Final
Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of antidumping duty administrative
review.
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SUMMARY: In response to requests by Thai Union Steel Co., Ltd. (``Thai
Union''), Saha Thai Steel Pipe Company, Ltd. (``Saha Thai''), and its
affiliated exporter S.A.F. Pipe Export Co., Ltd., (``SAF'')
(collectively ``Saha Thai''), and two importers, Ferro Union Inc.
(``Ferro Union''), and ASOMA Corp. (``ASOMA''), the Department of
Commerce (``the Department'') is conducting an administrative review of
the antidumping duty order on certain welded carbon steel pipes and
tubes from Thailand. This review covers the following manufacturers/
exporters of the subject merchandise to the United States: Saha Thai
and Thai Union. The period of review (``POR'') is March 1, 1995 through
February 29, 1996. We received comments on the preliminary results and
rebuttal comments from the petitioners and respondents.
Based on our analysis of comments received, we have applied total
adverse facts available to both Saha Thai and Thai Union. Therefore,
with respect to both respondents, the final results do not differ from
the preliminary results. The final weighted-average dumping margins are
listed below in the section entitled ``Final Results of Review.''
EFFECTIVE DATE: October 16, 1997.
FOR FURTHER INFORMATION CONTACT: John Totaro or Dorothy Woster, AD/CVD
Enforcement Group III, Office 7, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
1398 or (202) 482-3362, respectively.
Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (hereinafter,
``the Act'') by the Uruguay Round Agreements Act (``URAA''). In
addition, unless otherwise indicated, all citations to the Department's
regulations
[[Page 53809]]
are to the current regulations, as codified at 19 CFR part 353 (April
1997). Although the Department's new regulations codified at 19 CFR
part 351 (62 FR 27296, May 19, 1997) (``Final Regulations'') do not
govern this administrative review, citations to those regulations are
provided, where appropriate, as a statement of current departmental
practice.
SUPPLEMENTARY INFORMATION:
Background
On March 11, 1986, the Department published in the Federal Register
an antidumping duty order on welded carbon steel pipes and tubes from
Thailand (51 FR 8341). On March 4, 1996, the Department published a
notice of opportunity to request an administrative review of this order
covering the period March 1, 1995 through February 29, 1996 (61 FR
8238). Timely requests for an administrative review of the antidumping
order with respect to sales by Saha Thai/SAF and Thai Union during the
POR were filed by Thai Union, and jointly by Saha Thai, SAF, Ferro
Union, and ASOMA. The Department published a notice of initiation of
this antidumping duty administrative review on April 25, 1996 (61 FR
18378).
On May 14, 1996, Saha Thai, SAF, Ferro Union, and ASOMA sought to
withdraw their request for review and requested that the Department
terminate the review with respect to sales by Saha Thai/SAF during the
POR. The domestic interested parties, Allied Tube & Conduit
Corporation, Laclede Steel Company, Sawhill Tubular Division of Armco,
Inc., and Wheatland Tube Company, (``petitioners''), objected to
partial termination of the review on the grounds that, on March 29,
1996, they had submitted to the Department a timely request for review
of sales by these companies and served Saha Thai with a copy of this
request. Although there is no official record of petitioners' request,
because the reason for the filing error is unclear and given the
remedial nature of the antidumping law and the fact that Saha Thai
received notice of petitioners' request, the Department elected to
continue the ongoing review of these sales. See Memorandum to Robert S.
LaRussa from Stephen J. Powell, July 11, 1996.
On May 24, 1996, the petitioners requested that the Department
verify the responses of both Saha Thai and Thai Union.
The Department determined that it was not practicable to complete
this review within statutory time limits, and, pursuant to section
751(a)(3)(A) of the Act, extended the time limit for the preliminary
results of the review on November 1, 1996. On April 10, 1997, the
Department published in the Federal Register (62 FR 17590) the
preliminary results of its administrative review of this antidumping
order covering the period March 1, 1995 through February 29, 1996. On
August 8, 1997, pursuant to section 751(a)(3)(A) of the Act, the
Department extended the time limit for the final results of the review.
On August 21, 1997, the Department requested Saha Thai to submit
onto the record of this segment of the proceeding certain information
concerning its ownership and management structure and the ownership
interests of its directors that Saha Thai had placed on the record of
the subsequent segment (the March 1, 1996-February 28, 1997 POR). Saha
Thai complied with this request in a timely manner. Saha Thai
submission August 25, 1997.1 Both Saha Thai and petitioners
filed comments on Saha Thai's submission.2
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\1\ On two occasions, Saha Thai resubmitted portions of this
filing as public documents after partially withdrawing its claims of
business proprietary treatment. See Saha Thai submission September
8, 1997 and Saha Thai submission October 2, 1997.
\2\ Both sets of comments were submitted on September 8, 1997.
Saha Thai resubmitted the business proprietary version of its
comments as a public document. See Saha Thai submission October 1,
1997.
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The Department has now completed this review in accordance with
section 751(a) of the Act.
Scope of the Review
The products covered by this administrative review are certain
circular welded carbon steel pipes and tubes from Thailand. The subject
merchandise has an outside diameter of 0.375 inches or more, but not
exceeding 16 inches. These products, which are commonly referred to in
the industry as ``standard pipe'' or ``structural tubing,'' are
hereinafter designated as ``pipe and tube.'' The merchandise is
classifiable under the Harmonized Tariff Schedule (HTS) item numbers
7306.30.1000, 7306.30.5025, 7306.30.5032, 7306.30.5040, 7306.30.5055,
7306.30.5085 and 7306.30.5090. Although the HTS subheadings are
provided for convenience and Customs purposes, our written description
of the scope of the order is dispositive. This review covers sales of
these products by Saha Thai/SAF and Thai Union during the period March
1, 1995 through February 29, 1996.
Verification
As provided in section 782(i) of the Tariff Act, we verified
information provided by the respondents, Saha Thai and Thai Union, by
using standard verification procedures, including on-site inspection of
the manufacturers' facilities, examination of relevant purchase and
financial records, and analysis of original documentation used by Saha
Thai and Thai Union to prepare responses to requests for information
from the Department. Our verification results are outlined in the
verification reports. See Memoranda to the file from Theresa L.
Caherty, John B. Totaro and Dorothy A. Woster, April 4, 1997 (``Cost
Verification Reports'').
Facts Available
Saha Thai
We preliminarily determined that the use of total adverse facts
available was appropriate with respect to Saha Thai's submitted data in
accordance with section 776(a)(2)(C) and section 776(b) of the Act
because we found that Saha Thai had significantly impeded the review by
failing to comply with our requests for complete information on
affiliates. In response to the Department's requests that Saha Thai
identify all affiliated companies involved in the production or sale of
the subject merchandise, the record demonstrates that Saha Thai failed
to disclose its affiliation with Thai Tube Co., Ltd. (``Thai Tube''), a
producer of subject merchandise, and three customers, two of which are
resellers of subject merchandise. Saha Thai also failed to provide
complete information concerning ownership and management of the Siam
Steel Group. See Memorandum to Robert S. LaRussa from Joseph A.
Spetrini, March 31, 1997 on file in the Central Records Unit, Room B099
of the main Commerce Building.
Section 771(33) of the Act defines ``affiliated persons'' for
purposes of our antidumping analysis. Section 771(33)(A) of the Act
defines ``affiliates'' as ``[m]embers of a family including brothers
and sisters (whether by whole or half blood), spouse, ancestors, and
lineal descendants.'' Under the Act, members of a family are viewed as
a unit, e.g., an affiliated person. Further, the term ``including'' in
this definition indicates that the list of family relations is
illustrative, not finite.
Section 771(33)(F) defines affiliates as ``[t]wo or more persons
directly or indirectly controlling, controlled by, or under common
control with, any person.'' The statutory definition of affiliated
persons in section 771(33) of the Act states that ``control'' exists
[[Page 53810]]
where one person ``is legally or operationally in a position to
exercise restraint or direction'' over another person. The Statement of
Administrative Action accompanying the Uruguay Round Agreements Act
(``SAA''), H.R. Doc. 316, Vol.1, 103d Cong. (1994), indicates that
stock ownership is not the single evidentiary factor for determining
whether a person is in a position of control, and that control may also
be established through corporate or family groupings. SAA at 838. Thus,
the statute and the SAA expressly envision affiliation based on family
stockholdings, consistent with our prior practice. See, e.g., Certain
Fresh Cut Flowers From Colombia; Final Results of Antidumping Duty
Administrative Reviews, 61 FR 42833, 42853 (August 19, 1996) (common
stockholdings of particular families found to control one or more
corporate entities). Moreover, as stated in the final regulations, the
Department intends to scrutinize closely issues of affiliation by
family groupings. Final Regulations, 62 FR at 27380. The Department has
analyzed the information on affiliation on the record in this
administrative review, and determined that Saha Thai and certain home
market customers, service providers, and producers of the subject
merchandise to be affiliated under section 771(33)(F) by virtue of
common control by several families involved in the ownership and
management of Saha Thai.
Members of six families hold varying percentages of Saha Thai's
shares and hold all of the seats on Saha Thai's board of directors.
Several of Saha Thai's directors also hold positions as officers and
managers in the company: Limsiam Ampapankit, Chairman of the Board;
Somchai Karuchit, Managing Director; Somchai Lamatipanont, Deputy
Managing Director; and Kim Hua Sae Heng, Financial Director. Saha Thai
September 8, 1997 submission. Saha Thai's affiliations are established
through the common control and financial holdings of these families.
We find that Saha Thai is affiliated with Thai Tube and Thai Hong
Steel Pipe Import Export Co., Ltd, (``Thai Hong''), producers of the
subject merchandise, under section 771(33)(F) of the Act by virtue of
common control by the Lamatipanont family. Somchai Lamatipanont is the
Deputy Managing Director of Saha Thai; under the circumstances in this
case, we find this places him in a position of legal and operational
control of Saha Thai. The Lamatipanont family is in a position of legal
and operational control in Thai Tube and Thai Hong by virtue of the
Lamatipanont family's substantial ownership interests in both companies
and the positions of family members as officers and directors.
Therefore, the Lamatipanont family is legally and operationally in a
position of control over Thai Tube, Thai Hong, and Saha Thai.
Therefore, these companies are affiliated under section 771(33)(F) of
the Act.
We also find that Saha Thai is affiliated with three of its home
market customers by virtue of common control by three families in
positions of control within Saha Thai. These customers are referred to
in this notice as Company A, Company B, and Company C for business
proprietary reasons. Two of these customers (Companies A and B) are
resellers of Saha Thai pipe. In the circumstances of this case, we find
that three Saha Thai officers, Kim Hua Sae Heng--Financial Director,
Somchai Lamatipanont--Deputy Managing Director, and Limsiam
Ampapankit--Chairman of the Board, are in positions of legal and
operational control of Saha Thai due to their positions in the Saha
Thai management hierarchy. Saha Thai September 8, 1997 QR. In addition,
these officers' families each hold substantial ownership interests in
Saha Thai. The officers' families are also in positions of legal and
operational control in Company A, Company B, and Company C,
respectively, by virtue of the family members' ownership interests in
these companies. Saha Thai August 25, 1997 QR. Therefore, Saha Thai and
Company A are under common control of the Sae Heng/Ratanasirivilai
family, Saha Thai and Company B are under common control of the
Lamatipanont family, and Saha Thai and Company C are under common
control of the Ampapankit family. Thus, Saha Thai is affiliated with
each of these customers within the meaning of section 771(33)(F) of the
Act.
Finally, we find that the Karuchit/Kunanantakul family also is in a
position of legal and operational control of the Siam Steel Group
companies by virtue of the Karuchit/Kunanantakul family members'
positions as directors and the family's ownership interests in these
companies. For example, Somchai Karuchit is the Managing Director of
Saha Thai, which places him in a position of legal and operational
control of Saha Thai. Also, Mr. Karuchit is the Chairman of another
Siam Steel Group company, Siam Steel International, Saha Thai's largest
shareholder. The record evidence demonstrates that the Karuchit/
Kunanantakul family controls the Siam Steel Group companies, therefore
we consider the Siam Steel Group to be a corporate or family grouping
as envisioned by the regulations and the SAA, which establishes an
affiliation among all Siam Steel Group companies under section
771(33)(F) of the Act. On this basis, we find that Saha Thai is
affiliated under section 771(33)(F) of the Act with the Siam Steel
Group, which include Company D, a Saha Thai customer, and Company E, a
pipe producer, by virtue of common control by the Karuchit/Kunanantakul
family.
Despite our requests to do so, Saha Thai failed to identify these
affiliated producers and customers in its questionnaire responses.
Rather, the Department discovered information establishing these
affiliations late in the administrative proceeding. In fact, as
recently as weeks before these final results we received additional
information from Saha Thai at the Department's request which further
confirmed our preliminary findings of affiliation. Moreover, although
Saha Thai identified members of the Siam Steel Group as potential
affiliates, Saha Thai did not provide complete information concerning
the management and ownership of the member companies when requested to
do so. In light of these circumstances, our preliminary results in
which we assigned a dumping margin to Saha Thai based on total adverse
facts available remain unchanged.
Thai Union
We preliminarily determined that the use of total adverse facts
available was appropriate with respect to Thai Union's submitted data
in accordance with section 776(a)(2)(D) and section 776(b) of the Act
because we found that Thai Union provided cost of production (COP) data
that could not be verified and because Thai Union failed to reconcile
its reported costs with its normal books and records. We have not
changed the preliminary results based on comments received (see Comment
5 below); therefore, for these final results, we have assigned a
dumping margin to Thai Union based upon total adverse facts available.
Analysis of Comments Received
The petitioners, Saha Thai, and Thai Union submitted case briefs on
May 12, 1997, and rebuttal briefs on May 19, 1997. A public hearing was
held on June 6, 1997. The comments submitted by petitioners and
respondents that relate to the calculation of margins are not addressed
in this notice because the final margins for this administrative review
are based on total adverse facts available.
[[Page 53811]]
Comment 1
Saha Thai argues that the Department based its preliminary results
upon a misapprehension of the pertinent facts with respect to parties
deemed affiliated with Saha Thai. Saha Thai claims that the
Department's statement in the preliminary results that Mr. Somchai
Lamatipanont is Chairman of Saha Thai and that members of the
Chairman's family manage Thai Tube, is factually incorrect. Saha Thai
states that Mr. Somchai Karuchit, and not Mr. Somchai Lamatipanont, is
Chairman of Saha Thai. Saha Thai also notes that Mr. Lamatipanont, and
not Mr. Karuchit, has a brother who is the managing director of Thai
Tube. Furthermore, Saha Thai argues that Mr. Lamatipanont is a director
of Saha Thai. Saha Thai claims that it identified the family relations
of Mr. Somchai Lamatipanont having a shareholding interest in Saha Thai
and Thai Tube in its response to the Department's second post-
verification questionnaire dated March 27, 1997. Saha Thai further
states that neither Mr. Karuchit nor his cousins, Mr. Wanchai
Kunanantakul and Mr. Anantachai Kunanantakul, have direct or indirect
interest in Thai Tube, and no family members are involved in the
management of Thai Tube. Finally, Saha Thai notes that ownership of
Saha Thai is dispersed such that no family or director controls Saha
Thai by virtue of controlling the board. Saha Thai contends that
because of its fractionated interests represented by multiple
directorships and shareholdings, Saha Thai's directors can only control
Saha Thai when acting ``together,'' not as individuals.
Saha Thai disagrees with the Department's finding that the familial
relationship between Mr. Somchai Lamatipanont and his brother Mr.
Surasak Lamatipanont, Thai Tube's managing director, creates an
affiliation between Saha Thai and Thai Tube. Moreover, Saha Thai argues
that Congress, when enacting the changes to section 771(33) under the
Uruguay Round Amendments Act, did not include a provision which holds
that an affiliate of an affiliate is an affiliate.
Saha Thai argues that, at the time it completed the Department's
questionnaires, it had no direct knowledge of the operations of Thai
Tube or Thai Tube's relationship to Thai Hong. Saha Thai also
reiterates that it has no details regarding the terms of Thai Hong's
bankruptcy in January 1992, and does not know why the 1991 Iron and
Steel Works of the World lists Thai Hong as being located at the same
address as Thai Tube, except to suggest that some of Thai Hong's
personnel may have been transferred to Thai Tube. Saha Thai notes that
in public filings made with the Thai Ministry of Commerce dated March
1997, Thai Hong was located at a different address than the alleged
address of Thai Tube. Finally, Saha Thai holds that while there is some
overlap in the directors of Thai Hong and Thai Tube, the ownership is
quite different.
Saha Thai also argues that even if Saha Thai and Thai Tube are
considered affiliated, there is substantial evidence on the record to
demonstrate that collapsing them is inappropriate. Saha Thai argues
that the Department considered only the extent to which the two
companies have common family members in its decision to collapse Saha
Thai with Thai Tube (see Memorandum from Joseph Spetrini to Assistant
Secretary Robert LaRussa, March 31, 1997). Saha Thai notes that the
Preamble to the Final Regulations states at 27345, ``[C]ollapsing
requires a finding of more than affiliation.'' Moreover, Saha Thai
notes that the Court of International Trade (CIT) has required the
Department to undertake a serious analysis of the potential for price
manipulation before collapsing two parties. Saha Thai further
recognizes that the Department's general practice, as approved by the
CIT in Nihon Cement Co. v. United States, 17 CIT 400 (1993), is not to
collapse related parties. Saha Thai argues that the preliminary results
in this case contains no substantive analysis of the potential for
price manipulation which the Department must undertake before deviating
from its general practice of calculating individual rates.
Saha Thai concludes that the application of adverse facts available
to Saha Thai is inappropriate. Saha Thai argues that the Department may
resort to the facts available only when a respondent has not complied
with a request for information. Saha Thai contends that when the
Department neglects to request information that it later finds
necessary for its determination, it should not resort to best
information available, but should issue a supplemental request for
information.
In its supplemental comments, Saha Thai argued that Saha Thai is
managed by its Managing Director, Mr. Somchai Karuchit, and that other
individuals involved in Saha Thai are given titles and positions to
accommodate the legal corporate requirements that different individuals
hold each of various corporate office positions. Saha Thai continues
that both day-to-day operating decisions and major management decisions
are generally made by Mr. Karuchit, and that while major management
decisions are subject to approval by the board, neither the deputy
managing director nor any other officer or director has any special
role in obtaining or ensuring such approval.
Saha Thai also asserted in its supplemental comments that because
Mr. Surasak Lamatipanont and Mr. Somchai Lamatipanont are not lineal
descendants, Saha Thai and Thai Tube are not affiliated by virtue of
their familial ties.
Petitioners counter that the Department correctly based the
preliminary results on the facts available and should do so for the
final results as well. Petitioners hold that the facts available
decision was based on three omissions by Saha Thai in reporting its
affiliated parties: first, Saha Thai failed to report as affiliated
parties the customers that are owned or controlled by members of the
Saha Thai board of directors who are also shareholders in Saha Thai
(Companies A, B and C) (see Comment 2, below); second, Saha Thai failed
to disclose that one of the members of the Siam Steel Group, to which
Saha Thai is affiliated (Company E), is a producer of subject
merchandise (see Comment 4, below); and third, family members of a Saha
Thai director who is also the largest individual shareholder of Saha
Thai manage and control Thai Tube, a Thai producer of subject
merchandise. Petitioners argue that in addition to not reporting
information about its relationship to Thai Tube, Saha Thai committed an
error of omission by responding to the Department's questions about
Thai Hong without mentioning Thai Hong's successor, Thai Tube.
Petitioners also note that Saha Thai failed to disclose that it
purchased pipe from other Thai resellers or producers for sale (see
Comment 3, below). Petitioners argue that the Department provided Saha
Thai with numerous opportunities to list all of its affiliated parties,
which Saha Thai failed to do. Petitioners state that these omissions
indicate Saha Thai's intent to obfuscate its relationships with
affiliated companies.
Petitioners argue that the Department's incorrect identification of
Somchai Lamatipanont as the Chairman of Saha Thai was not the
``linchpin'' of the preliminary results, and it does not oblige the
Department to change its preliminary results. Because Somchai
Lamatipanont is (1) an officer and director of Saha Thai, and (2) the
``scion'' of the Lamatipanont family ownership group, one of only six
families participating in the control of
[[Page 53812]]
Saha Thai, petitioners argue that he is ``one of the most important
members of the small group of directors and shareholders who control
Saha Thai'' and ``both `legally and operationally in a position to
exercise direction or restraint' over Saha Thai, whether directly or
indirectly, in concert with other directors and shareholders from the
small group of control families in this closely held company.''
Petitioners argue that Saha Thai is affiliated with Thai Tube
within the meaning of section 771(33) (F) and (G) of the Act.
Petitioners argue that operation of Saha Thai requires the concerted
action of at least several to all of the six families that control Saha
Thai's stock. Petitioners then infer that each of the six families,
separately and together, control Saha Thai. The families'
representatives on the board are each legally or operationally in a
position to exercise restraint or direction over Saha Thai, either
directly or indirectly. Therefore, the Lamatipanont family, led by Mr.
Somchai Lamatipanont, is part of the control group of Saha Thai. In
addition, petitioners argue that Saha Thai clearly controls Thai Tube
and its predecessor, Thai Hong. Petitioners note that information on
the record indicates that two members of the Lamatipanont family are
the only directors of Thai Tube, and that one member of the family is
the managing director of Thai Tube. Thus, petitioners reason that
Lamatipanont family members who are affiliated under section 771(33)(A)
are legally and operationally in a position to exercise direction or
restraint over both Saha Thai and Thai Tube, and that this establishes
affiliation under section 771(33)(F)--affiliation by common control of
the Lamatipanont family. In addition, petitioners argue that the
Department does not have complete information about the extent of
management or ownership of Thai Tube by other Lamatipanont family
members or by the other families who control Saha Thai, if any.
Petitioners argue that Saha Thai errs in inferring that because the
Lamatipanont family does not control 50% or more of the voting shares
or the board of directors of Saha Thai, the family cannot exercise
control over Saha Thai. This inference, petitioners argue, is not
supported by the statute. Petitioners cite the SAA at 838, which states
that control can exist ``even in the absence of an equity
relationship,'' and the statute which defines control as one person
``legally or operationally in a position to exercise restraint or
direction'' over another person. Petitioners reason that this phrase in
the statute does not mean that the person exercising control must be
able to compel the actions of another person or entity in every
instance, but that the ``controlling'' person or entity must be able to
influence the actions of the entity controlled by virtue of the
controlling entity's or person's position. Petitioners conclude that,
in the case of Saha Thai, where no one director, shareholder or family
of shareholders can dictate the course of Saha Thai, each of the
directors, ``control families'' and shareholders, including Somchai
Lamatipanont, can exercise control as defined in the statute.
Therefore, petitioners argue, Saha Thai should have placed
information concerning its relationship with Thai Tube on the record in
response to the Department's questionnaire requests for information on
entities affiliated through stock ownership and by means other than
stock ownership. Petitioners argue that evidence on the record shows
that Saha Thai made a tactical decision not to report the full extent
of its affiliations, including its affiliation with Thai Tube.
Petitioners state that Saha Thai's failure to provide requested data on
affiliation should lead to the application of facts available. If there
was ambiguity as to the information requested by the Department,
petitioners argue that Saha Thai should have resolved this ambiguity
through consultation with the Department as directed by the
questionnaire itself.
Petitioners then argue that the Department was unable to perform a
collapsing analysis of Saha Thai and Thai Tube because Saha Thai failed
to provide the requested information about affiliates. Because the
Department could not determine whether sales from Thai Tube were
necessary for its calculation of normal value or export price, there is
no assurance that the Department has reviewed all of the U.S. and home
market sales that should be attributed to Saha Thai. Petitioners state
that because the Department was unable to collect, place on the record,
and verify the information necessary to perform a collapsing analysis,
Saha Thai's contention that evidence on the record indicates that
collapsing is inappropriate is inaccurate.
In summary, petitioners argue that the Department cannot calculate
normal value or export price because Saha Thai's reported information
on affiliates is incomplete. In addition, petitioners argue that Saha
Thai purposefully failed to discuss Thai Tube when the Department
requested information after verification about Saha Thai's affiliation
with Thai Hong. Petitioners argue that Saha Thai did not act in good
faith by failing to identify Thai Tube as the successor to Thai Hong.
Petitioners argue that Saha Thai failed to provide requested
information on its affiliations by the deadlines set by the Department,
thus impeding the proceeding, and that Saha Thai's incomplete responses
meet all of the statutory factors for resorting to facts available. In
addition, petitioners assert that an adverse inference is warranted
because of Saha Thai's failure to act to the best of its ability to
provide information on affiliates. Finally, petitioners argue that the
Department should apply a single dumping margin to Saha Thai, Thai
Tube, and Saha Thai's affiliated producer of PVC-coated water pipe
(Company E) (see comment 4, below).
Department's Position
As discussed above in the Facts Available section, the definition
of affiliated persons in the Act includes two (or more) companies under
common control of a third entity (section 771(33)(F)). The Act states
that ``control'' exists where one person ``is legally or operationally
in a position to exercise restraint or direction'' over another person,
section 771(33). The SAA indicates that stock ownership is not the
single evidentiary factor for determining whether a person is in a
position of control, and that control may also be established through
corporate or family groupings. SAA at 838. We, therefore, disagree with
Saha Thai's assertion that no family can be found to ``control'' Saha
Thai under section 771(33), and that Saha Thai cannot be found to be
affiliated with another company by virtue of common ownership interests
of a single family. We find that based on the particular facts of this
case, there is sufficient evidence on the record to find Saha Thai,
Thai Hong, and Thai Tube to be affiliated under section 771(33)(F) by
virtue of common control by the Lamatipanont family.
In the preliminary results, our determination that Saha Thai and
Thai Tube are under common control of the Lamatipanont family was based
in part on an erroneous identification of Mr. Somchai Lamatipanont as
Saha Thai's Chairman. However, while Mr. Somchai Lamatipanont is not
Saha Thai's Chairman, information submitted on the record by Saha Thai
after the preliminary results demonstrates that Somchai Lamatipanont is
the Deputy Managing Director of Saha Thai. Saha Thai Supp. QR,
September 8, 1997. Saha Thai argued in its case brief that Somchai
Karuchit is the Managing Director of Saha Thai, while Somchai
Lamatipanont is a member of Saha
[[Page 53813]]
Thai's board of directors. Saha Thai Case Brief, May 12, 1997, at 17.
Saha Thai failed to note Mr. Lamatipanont's position as Deputy Managing
Director, thereby mischaracterizing his role as merely a member of the
board.
In its supplemental comments, Saha Thai asserted that Somchai
Lamatipanont's title as Deputy Managing Director does not vest in him
any managerial control over the day-to-day operations of the company.
Saha Thai claims that this title was designated merely to fulfill legal
requirements that different individuals hold each of the various
corporate office positions. Saha Thai further claims that all day-to-
day operating decisions and major management decisions (including those
concerning financial issues) are made by Mr. Karuchit, the Managing
Director, and therefore, Mr. Lamatipanont is not in a position of legal
or operational control in Saha Thai. Saha Thai submission September 5,
1997 (revised public version submitted October 1, 1997).
While Saha Thai may be legally bound to assign a different
individual to each of Saha Thai's corporate office positions, Saha Thai
has offered no evidence to support its assertion that all such
positions, with the exception of Managing Director, are devoid of any
responsibility over either day-to-day operating decisions or major
management decisions. As the officer second to the Managing Director, a
Deputy Managing Director is normally in a position of control. Saha
Thai's unsubstantiated, eleventh hour claims are insufficient to
establish that a Deputy Managing Director has no legal or operational
authority.
Moreover, based on the facts on the record, the Department
maintains its finding in the preliminary results that the Lamatipanont
family controls Thai Tube. Information submitted following the
preliminary results confirms our preliminary finding: Surasak and
Surangrat Lamatipanont are Thai Tube's only directors; Surasak
Lamatipanont is Thai Tube's Managing Director; and the Lamatipanont
family members have owned 48% of Thai Tube's common stock since 1992.
August 25, 1997 QR, Exhibit 3; Saha Thai Case Brief, May 12, 1997, at
17. The Department therefore finds that Saha Thai and Thai Tube are
affiliated by means of common control by the Lamatipanont family. (For
a more detailed analysis of this issue, see the public version of the
Memorandum to the File, October 7, 1997.)
We also disagree with Saha Thai's assertion in its supplemental
comments that because Mr. Surasak Lamatipanont and Mr. Somchai
Lamatipanont are not lineal descendants, Saha Thai and Thai Tube are
not affiliated by virtue of their familial ties. Saha Thai submission
September 5, 1997 at fn. 3 (revised public version submitted October 1,
1997). As discussed above, the plain language of section 771(33)(A)
does not exclude uncles and nephews from the category of familial
relations covered by this subsection. We therefore find Somchai
Lamatipanont, Surasak Lamatipanont, and the other Lamatipanont family
members involved in Saha Thai and Thai Tube to be members of a family
group, affiliated under section 771(33)(A) of the Act.
We also conclude that the evidence on the record supports a finding
of affiliation between Saha Thai and Thai Hong, another Thai pipe
producer owned or controlled by members of the Lamatipanont family.
After verification of Saha Thai, the Department obtained public
information indicating Lamatipanont family management of Thai Hong, a
respondent in an earlier segment of this proceeding (March 1, 1987--
February 29, 1988 POR). We pursued the potential for affiliation
between Saha Thai and Thai Hong raised by this public information by
issuing a questionnaire inquiring about the nature of the relationship
between Saha Thai and Thai Hong. Saha Thai's response explained that
Surasak, Samarn, and Surang Lamatipanont controlled Thai Hong, but that
the company had entered into bankruptcy. Saha Thai asserted that ``[t]o
the best of Saha Thai's knowledge, Thai Hong never resumed operations
after going bankrupt.'' Saha Thai response, March 12, 1997. On March
21, 1997, petitioners submitted public information stating that Thai
Tube is the successor to Thai Hong.
Petitioners argue that, because Thai Tube is the successor to Thai
Hong, Saha Thai was obligated to supply information on Thai Tube in
response to the Department's questionnaire on Thai Hong. As described
above, the Department finds that, based on the information on the
record, Saha Thai and Thai Tube are ``affiliated persons'' as defined
by section 771(33)(F) of the Act. However, contrary to petitioners'
argument, we find that the record does not contain conclusive evidence
that Thai Tube is the successor organization to Thai Hong. Petitioners
submitted public information indicating that Thai Tube operates from
the same address as Thai Hong, that Thai Tube's brand device is
``THS,'' and that Thai Tube ``was formerly known as Thai Hong Steel
Pipe Co., Ltd.'' (March 21, 1997 submission, exhibit 1 and 2). Saha
Thai submitted a certified statement from the Thai Ministry of
Commerce--indicating its final decision on Thai Hong's bankruptcy in
1992--which provides a different address for Thai Hong's head office
than that listed in any of the petitioners' sources. (March 12, 1997
submission).
Moreover, the Department has obtained public information indicating
that both Thai Hong and Thai Tube were operating producers of steel
pipe and tube during the POR. See Memorandum to the File, September 29,
1997. The information includes the audited 1995 balance sheet and
income statement for Thai Hong, indicating the fact that Thai Hong is a
manufacturer, exporter, and importer of steel pipe, and that as of
April 1996, 98.75% of its shares were owned by individuals with the
surname Lamatipanont. Because the POR covers most of 1995 (March 1,
1995 through February 29, 1996), and because the public financial
information indicates that Thai Hong maintained inventories, received
export compensation, paid out employee social welfare, and by all
indications conducted business during 1995, the Department concludes
that Thai Hong was operating as a manufacturer, importer, and exporter
of the subject merchandise during the POR.
The same source that contained information on Thai Hong also lists
Thai Tube Co., Ltd. as a manufacturer of steel pipe, states that
Surangrat Lamatipanont is a Director of the company, and identifies
three individuals with the surname Lamatipanont as holding 48% of Thai
Tube's shares. The reliability of this information is corroborated by
information obtained from the Thai Ministry of Commerce and submitted
to the Department by Saha Thai. Saha Thai submission, August 25, 1997.
Because public information on the record of this review indicates that,
during the POR, Thai Hong was an active producer of the subject
merchandise with a substantial ownership interest held by members of
the Lamatipanont family, the Department finds that Saha Thai and Thai
Hong are affiliated under section 771(33)(F) of the Act by means of
common control by the Lamatipanont family. The Department therefore
concludes that Saha Thai failed in its obligation to report complete
information on affiliated parties, in particular, Thai Hong, a producer
of the subject merchandise.
These findings of affiliation support the Department's
determination to resort to adverse facts available in this review.
Information establishing Somchai Lamatipanont's position as the Deputy
Managing Director of Saha Thai was submitted on the record at the
[[Page 53814]]
Department's request several weeks before the deadline for these final
results. This information is yet another indication supporting the
ability of the Lamatipanont family to control Saha Thai. This
information, as well as facts confirming the Lamatipanont family's
ownership and control of both Thai Tube and Thai Hong, confirms the
appropriateness of our preliminary results determination that Saha Thai
impeded this review by failing to fully disclose its affiliated parties
in a timely manner. Saha Thai's failure to identify Thai Tube and Thai
Hong as affiliated parties in response to the Department's
questionnaires inhibited our inquiries into its relationships with
these companies. Saha Thai should have identified these producers as
affiliates or potential affiliates, as it did with the Siam Steel
Group. If it was uncertain as to the Department's interpretation of the
``affiliated persons'' definition, Saha Thai should have contacted the
Department and requested clarification. Saha Thai never made such a
request. As long recognized by the CIT, the burden is on the
respondent, not the Department, to create a complete and accurate
record. See Pistachio Group of Association Food Industries v. United
States, 641 F.Supp. 31, 39-40 (CIT 1987). Saha Thai failed to do so.
Like the best information available rule under the pre-URAA statute,
section 776(a) of the Act serves the same purpose of encouraging
respondents to provide timely, complete, and accurate responses to the
Department's questionnaires. See SAA at 868-91. Therefore, in light of
the circumstances surrounding the revelation of Saha Thai's
affiliations, resorting to total adverse facts available is entirely
consistent with the purposes of section 776 (a) and (b) of the Act. See
e.g., Olympic Adhesives, Inc. v. United States, 899 F.2d. 1565 (Fed.
Cir. 1990) (Commerce ``cannot be left to merely the largesse of the
parties at their discretion to supply [Commerce] with information'').
Under Department practice, the affiliation between Saha Thai, Thai
Tube, and Thai Hong, producers of subject merchandise, would invoke an
inquiry to determine whether they should be treated as a single entity
for purposes of calculating a dumping margin. See section 351.401(f) of
the Final Regulations, 62 FR at 27410; Certain Fresh Cut Flowers From
Colombia; Final Results of Antidumping Duty Administrative Reviews, 61
FR 42833, 42853 (August 19, 1996). Indeed, in the preliminary results,
we made an adverse inference that Saha Thai and Thai Tube should be
treated as a single entity for purposes of our antidumping analysis,
and noted that we would continue to explore the affiliation issue for
these final results. As a result of this examination, as described
above, we obtained information both from Saha Thai and from public
sources that establishes the affiliation between Saha Thai and Thai
Tube and between Saha Thai and Thai Hong. However, because the
information establishing the existence of these affiliations was placed
on the record so late in the proceeding, we were unable to collect
additional information or to analyze the propriety of collapsing these
producers. We therefore disagree with Saha Thai's contention that
substantial evidence on the record demonstrates that collapsing Saha
Thai and Thai Tube is inappropriate. The record is incomplete and the
Department is unable to perform the collapsing inquiry because Saha
Thai impeded the investigation by failing to disclose relevant
information concerning its affiliation with Thai Tube and Thai Hong in
a timely manner. Therefore, for the final results the Department makes
the adverse inference that it is appropriate to collapse Saha Thai,
Thai Tube, and Thai Hong.
Comment 2
Saha Thai argues that neither the two resellers (Company A and
Company B) nor the third home market customer (Company C) identified by
the Department in the preliminary results as potential affiliates are
affiliated with Saha Thai under section 771(33) of the Act. Saha Thai
argues in its case brief that managerial and shareholding control of
Saha Thai is divided among six, unrelated families, and that no
individual family is in a position to control Saha Thai. Saha Thai also
states in its rebuttal brief that no company or individual has the
power to appoint a majority of directors in Saha Thai, and that the
chairman of Saha Thai has no interest in the resellers Companies A and
B or in Company C.
Saha Thai states that Company A is ``owned or controlled'' by one
of these six families who own Saha Thai, the Ratanasirivilai family,
which holds seats on Saha Thai's board and owns less than 50% of Saha
Thai's shares. Saha Thai argues, however, that Company A is not
affiliated with Saha Thai because the Ratanasirivilai family does not
exercise control over Saha Thai. The other reseller, Company B,
according to Saha Thai, is ``owned or controlled'' by Mr. Somchai
Lamatipanont, a member of a different family with interests in Saha
Thai who is a director and shareholder of Saha Thai. Saha Thai argues
it is not affiliated with Company B because Mr. Lamatipanont is not in
a position, individually or with other family members, to control Saha
Thai. Finally, Saha Thai argues in its rebuttal brief that the home
market customer identified in the Department's preliminary results as
potentially affiliated, Company C, is not affiliated with Saha Thai for
similar reasons.
According to Saha Thai, because no single Saha Thai director is
legally or operationally in a position to exercise restraint or
direction over Saha Thai, the fact that a Saha Thai director occupies
that control position with respect to another corporation does not give
rise to affiliation between Saha Thai and that other corporation. Saha
Thai argues that common control as envisioned by section 771(33) (E)
and (F) exists in circumstances ``in which the controlling party or
control group in its entirety jointly exercises control over both
corporations (or where a subset of the control group is in a position
to and in fact does exercise control over both corporations.'' Saha
Thai Case Brief at 34 (May 12, 1997). Saha Thai argues that it and
Companies A and B are not under the common control of any of Saha
Thai's directors or their families, and that Saha Thai is not
affiliated with these companies under any subsection of section
771(33).
Petitioners argue that the directors and shareholders who control
Saha Thai appear to control Companies A and B, the two resellers
identified by the Department at verification and found to be
potentially affiliated with Saha Thai in the preliminary results. They
argue that the information the Department obtained at verification
supports a determination that these customers are affiliated to Saha
Thai, but because it was received so late in the proceeding, the issue
could not be completely explored. Given the available information,
petitioners argue that the Department was correct in determining for
the preliminary results that Companies A and B are affiliated with Saha
Thai. Specifically, petitioners argue that two companies may be
affiliated within the meaning of section 771(33) (F) or (G) through a
family grouping that participates in the control of both companies.
Petitioners state that Saha Thai admitted Company A is owned or
controlled by the Ratanasirivilai family, and that Company B is owned
or controlled by Somchai Lamatipanont, a director and officer of Saha
Thai, and therefore the control exercised over these resellers
constitutes control under the statute. Petitioners contend that both
the Ratanasirivilai family and the
[[Page 53815]]
Lamatipanont family are ``legally or operationally in a position to
exercise restraint or direction'' over Saha Thai, and therefore also
control Saha Thai under the statutory definition of control.
Petitioners argue that these families participate in the small control
group of persons who control Saha Thai, and possess the ability to
influence the actions of the company through their directors and voting
shares. Petitioners state that this degree of control is sufficient to
satisfy the requirements of the statute.
Department's Position
With respect to Company A, Company B, and Company C, Saha Thai's
home market customers (Companies A and B are also resellers) of subject
merchandise, the Department finds that, based on the record evidence,
there is a sufficient basis to conclude that Saha Thai and these
companies are affiliated on the basis of common control under section
771(33)(F) of the Act. Saha Thai argued in its case and rebuttal briefs
that common control can be found only where the ``control group is in a
position to and in fact does exercise control over both corporations.''
We disagree. Evidence of actual control is not a prerequisite to
finding ``control'' within the meaning of section 771(33) of the Act,
which defines control in terms of the ability to control. As we stated
in the Preamble in the proposed regulations and reiterated in the Final
Regulations, the Department need not find evidence of actual control to
satisfy the statutory definition of ``control.'' Proposed Rule, 61 FR
at 7310; Final Regulations, 62 FR at 29297-98. Further, Saha Thai's
argument is premised on the assumption that total or sole control is
necessary for a finding of affiliation. Again, we disagree. Nothing in
the statute or legislative history suggests that such a narrow
interpretation is intended. To the contrary, the statutory definition
of control encompasses both legal and operational control. Multiple
persons or groups may be in control, individually and jointly, of a
single entity, i.e., each has the ability to direct or restrain the
company's activities. The facts in this case demonstrate that families
that individually and jointly control Saha Thai also control Companies
A, B and C.
First, Company B and Saha Thai are affiliated under section
771(33)(F) of the Act by virtue of common control by the Lamatipanont
family. Saha Thai concedes that the record establishes that the
Lamatipanont family has substantial ownership interest in Company B,
sufficient to establish control. In addition, Mr. Somchai Lamatipanont
is a member of the board of directors, is the Deputy Managing Director
of Saha Thai, and the Lamatipanont family owns an equity interest in
Saha Thai. Based on these facts, the Lamatipanont family is in a
position to control Saha Thai. Therefore, we find that Saha Thai and
Company B are under common control of the Lamatipanont family and Saha
Thai was obligated to identify this customer as an affiliate in
response to our questionnaires.
Similarly, the evidence on the record supports a finding that
Company C and Saha Thai are affiliated under section 771(33)(F) of the
Act by virtue of common control by the Ampapankit family. September 8,
1997 QR, Exh. 1. Saha Thai conceded that the record establishes that
the Ampapankit family has substantial ownership interest in Company C,
sufficient to establish control. The Ampapankit family also has an
ownership interest in Saha Thai and Mr. Ampapankit is Chairman of the
Board of Saha Thai, and is a director and shareholder of Saha Thai. Id.
Mr. Ampapankit is, in fact, one of the three Saha Thai officers who,
together with one of the other officials can bind Saha Thai with his
signature. Saha Thai October 2, 1997 QR, Exh. 3 (Saha Thai Commercial
Registration). Viewing the facts as a whole, the Ampapankit family is
``legally or operationally in a position to exercise restraint or
direction'' over both Saha Thai and Company C. Therefore, we find that
Saha Thai and Company C are affiliated and that Saha Thai was obligated
to identify this customer as an affiliate in response to our
questionnaires.
We also find that Saha Thai and Company A are under common control
by the Sae Heng/Ratanasirivilai family. Saha Thai conceded that the
record establishes that the Sae Heng/Ratanasirivilai family has
substantial ownership interest in Company A, sufficient to establish
control. The Ratanasirivilai family is also in a position to exercise
restraint or direction over Saha Thai within the meaning of section
771(33) on the basis of the family's ownership interest, possession of
two seats on Saha Thai's board of directors, and the fact that Mr. Sae
Heng is Saha Thai's Financial Director. Saha Thai's September 8, 1997
QR at Exhibit 2. As is true of Mr. Ampapankit, Mr. Sae Heng is one of
the three Saha Thai officers who, together with one of the other
officials can bind Saha Thai with his signature. Saha Thai October 2,
1997, Exh. 3 (Saha Thai Commercial Registration).
Saha Thai also contends that the Ratanasirivilai family is not in a
position of control over Saha Thai because the family as a whole holds
less than a 50% ownership interest in Saha Thai. We disagree. The Sae
Heng/Ratanasirivilai family owns substantial interests in both Saha
Thai and Company A. These ownership interests, coupled with the
additional facts described above, support a finding that the Sae Heng/
Ratanasirivilai family controls Saha Thai as well as Company A. See
e.g. Certain Cut-to-Length Carbon Steel Plate from Brazil: Final
Results of Antidumping Administrative Review, 62 FR 18486, 18490 (April
15, 1997). Therefore, we conclude that Saha Thai and Company A are
affiliated under section 771(33)(F) by virtue of common control by the
Ratanasirivilai family.
Because we find Saha Thai affiliated with Company A, Company B, and
Company C under section 771(33)(F) of the Act, our preliminary
determination that Saha Thai significantly impeded this review by
failing to identify these customers as affiliated parties remains
unchanged. As we stated in the preliminary results, sales to these
customers represent a significant portion of Saha Thai's home market
sales. However, because Saha Thai failed to provide the information
that identified these potential affiliations until late in the
proceeding, we were unable to fully explore the nature of the
affiliation between Saha Thai and these customers.
Our initial analysis of Saha Thai's sales to Company A and Company
B, resellers of the subject merchandise, indicates that these sales
were not made at arm's length. (Saha Thai objected to the Department's
standard arm's length test in this review. See Comment 4 below and the
``Department's Position.'') As total sales to the affiliated resellers
exceeded 5% of Saha Thai's total home market sales during the POR,
under our standard practice, we would have requested downstream sales
data for these sales. The Department would then have been able to
calculate normal value for these sales based on downstream prices
pursuant to section 773(a)(5) of the Act. Therefore, we continue to
find that Saha Thai was obligated to report these customers as
affiliated resellers, and that its failure to do so prevented the
Department from requesting and analyzing necessary downstream sales
data. Given Saha Thai's failure to identify Company A, Company B and
Company C as affiliates, we continue to find that Saha Thai failed to
act to the best of its ability to comply with our requests for
information on affiliates. (For a more detailed analysis of this issue,
see the public version of the
[[Page 53816]]
Memorandum to the File, October 7, 1997.)
Comment 3
Saha Thai disputes petitioners' assertion that Saha Thai is
affiliated with a home market customer and steel pipe producer,
referred to in this public notice as Company E. Saha Thai also disputes
petitioners' claim that the pipe manufactured by Company E is included
in the scope of this review. Specifically, Saha Thai notes that the
record does not show that Company E manufactures pipe with a surface
coating, but rather pipe lined with PVC. Moreover, Saha Thai argues,
the HTS subcategory 7306.30.5028, which includes pipe that is
internally coated or lined with a non-electrically insulating material,
is not included in the scope of the review. Saha Thai states that there
is no evidence on the record that demonstrates that Company E produces
unlined black or galvanized pipe as suggested by petitioners.
Saha Thai also argues that it is not affiliated with a home market
customer that is a member of the Siam Steel Group (referred to in this
public notice as Company D). Saha Thai argues that Company D also is
not subject to common control with Saha Thai. Further, Saha Thai
disputes petitioners' suggestion that it inconsistently applied the
affiliated party provision of section 771(33) when responding to the
Department's questionnaires. Saha Thai acknowledges, however, that the
Department may classify certain members of the Siam Steel Group as
affiliated because Saha Thai's managing director is chairman of each of
these companies.
Petitioners argue that Saha Thai is affiliated with a certain end-
user customer which also produces PVC-coated water pipes (Company E).
Petitioners argue that PVC-coated steel water pipes are within the
scope in this proceeding since the scope places no restriction on the
surface finish of the merchandise. Moreover, petitioners note that it
is likely that Company E would make uncoated water pipes as well as its
production lines and would certainly be capable of producing uncoated
water pipes as a requisite step in the production of coated water
pipes. Petitioners argue that Saha Thai should have reported
information about Company E's production and sales.
Petitioners also argue that home market customer Company D is
affiliated with Saha Thai. Petitioners contend that Saha Thai admitted
that the Chairman of Saha Thai is the Honorary Chairman of Company D.
Department's Position
Saha Thai, Company D, a home market customer, and Company E, a
steel pipe producer, and other home market service providers are all
members of the Siam Steel Group. The Department's regulations state
that when analyzing affiliations under section 771(33) of the Act, the
existence of corporate or family groupings is one indicia of control
that will be closely scrutinized in each case. Final Regulations, 62 FR
at 27380. The evidence on the record of this case demonstrates that,
because of the Karuchit/Kunanantakul family's control of its member
companies, the Siam Steel Group is a corporate or family grouping as
envisioned by the SAA and the regulations, and therefore, the member
companies are affiliated under section 771(33) of the Act.
Saha Thai acknowledged the potential for affiliation in its
response to the Department's second supplemental questionnaire when it
stated that ``[t]he Chairman of Saha Thai is in a position to exercise
`restraint or control' over Saha Thai due to his position as Chairman
and the authority he exercises on a day-to-day basis over the company's
affairs. For this reason, we have described other members of the Siam
Steel Group as potentially affiliated * * *''. November 26, 1996
response at 2. Even more on point, in its rebuttal brief, Saha Thai
conceded that at least four members of the Siam Steel Group are
affiliated with Saha Thai because Mr. Somchai Karuchit, Saha Thai's
Managing Director, is also the Chairman of these four companies. Saha
Thai Rebuttal Brief at 4. As we stated in the preliminary results, Saha
Thai's managing director is also chairman of Siam Steel International,
a member of the Siam Steel Group, which during the POR became Saha
Thai's largest shareholder. Saha Thai noted at verification that Siam
Steel International also has investments in 11 of the other members of
the Siam Steel Group. Saha Thai Cost Verification Report at 5.
Moreover, the record evidence demonstrates that the Karuchit/
Kunanantakul family has significant common ownership interests in the
members of the Siam Steel Group.
We find that this evidence of common management of and common
ownership interests in these companies by Saha Thai's Managing Director
and his family is strong evidence of affiliation by common control and
the existence of a corporate or family grouping. However, despite the
Department's request for such information, Saha Thai failed to provide
sufficient data on the Siam Steel Group to permit a full analysis of
control within the group. We disagree that Saha Thai has ``provided
excruciating detail'' concerning the Siam Steel Group and its
affiliation with Mr. Karuchit, Saha Thai's Managing Director (Rebuttal
Brief at 35). For example, in its second supplemental questionnaire
response, Saha Thai offered what can only be described as minimal
disclosure on the nature of the common stockholding interests held by
the family in the Siam Steel Group companies. While Saha Thai listed
all family members with stock interests in group companies, Saha Thai
failed to provide the percentage of interest held by each family member
and the specific member company in which the family member's interests
were held. September 23, 1996 response at 1. Further, Saha Thai
provided only a ``summary of the ownership and control structure'' of
each member of the group with no documentation to support its later
claim that the companies in the group are operated independently.
November 26, 1996 QR at 1. Saha Thai's submission is devoid of any
explanation of the operation of the member companies; Saha Thai simply
listed each company's investors and provided no explanation of the
meaning it intended to convey when it identified companies being
``controlled'' by the family or certain investors.
The ``affiliated person'' provision of the statute is critical to
the Department's antidumping analysis. Transactions between affiliated
persons are highly scrutinized because they provide a means of
potentially masking dumping and undermining the remedial purpose of the
statute. With enactment of the URAA, Congress intended the Department
to expand its longstanding scrutiny of relationships among corporate
entities to ``permit a more sophisticated analysis which better
reflects the realities of the marketplace,'' identifying corporate or
family groupings as illustrative areas warranting heightened scrutiny.
SAA at 838. Accordingly, based on the facts of this case, we find it
reasonable to conclude that the Siam Steel Group companies, which
include Saha Thai, Company D, and Company E are affiliated under
section 771(33)(F) of the Act based on common control. As described
above, Saha Thai identified members of the Siam Steel Group as
potential affiliates but provided incomplete information concerning the
ownership interests and management structure of these companies in
response to supplemental questionnaires. Absent this information,
[[Page 53817]]
the Department was unable to examine the extent of common management
and ownership among the Siam Steel Group. Saha Thai's failure to report
complete information on the Siam Steel Group Companies is an additional
factor supporting our determination to resort to total adverse facts
available for this review. However, because evidence on the record does
not establish that the products manufactured by Company E are within
the scope of the antidumping duty order, our finding of affiliation
between Saha Thai and this producer will not further affect the final
results. (For a more detailed analysis of this issue, see the public
version of the Memorandum to the File, October 7, 1997.)
Comment 4
Saha Thai argues that application of the Department's standard
arm's length test is unreasonable and that use of an alternative test
supports a finding of no affiliation between Saha Thai and certain of
its home market customers. Saha Thai argues that reviewing courts have
indicated that where evidence on the record of an individual case
demonstrates that the test ``resulted in actual distortion of price
comparability'' or otherwise produced unreasonable results, the
standard test would not be sustained. Saha Thai further argues that the
standard test continues to undergo refinements, and notes that the
Department did not codify the standard test in its just-released final
regulations, and cites the preamble to the Final Regulations, at 27355.
Saha Thai claims that the Department's standard arm's length test,
which uses average prices over the entire POR, introduces distortions
into the price comparisons made and therefore produces inaccurate
results. Saha Thai claims that its prices fluctuate with the cost of
coil, the major production input, which changes frequently. Saha Thai
claims that if a customer had no purchases of the product or if it
purchased smaller quantities in months of lower prices, a comparison of
this price with a weighted average based on the entire POR virtually
guarantees that the alleged affiliate's price will fail the arm's
length test. Saha Thai submits that because its prices are subject to
frequent change the arm's length test used to analyze those prices must
also compare prices at frequent intervals.
Saha Thai proposes limiting the window from which comparison sales
are obtained to the allegedly affiliated parties' sale date. Under this
proposed alternative, Saha Thai notes that no company which was
reported as affiliated by Saha Thai, nor any company determined by the
Department to be affiliated, fails the test. Saha Thai asserts that the
Department should modify the standard arm's length test as proposed by
Saha Thai for the final results of this administrative review. Saha
Thai argues that application of this test yields two conclusions,
either of which supports the use of Saha Thai's data as submitted:
first, that Saha Thai is not affiliated with these resellers because it
is not dealing with the resellers any differently from its dealings
with other unaffiliated customers, and second, Saha Thai's prices to
these resellers are at arm's length, thus permitting the use of these
prices in the calculation of normal value even if the resellers are
considered affiliated.
Petitioners counter that Saha Thai has provided no compelling
reason for the Department to change its arm's length test at this
belated stage of this administrative review. Therefore, argue
petitioners, the Department should continue to apply its traditional
court-approved 99.5% arm's length test for the final results of this
administrative review. Petitioners first note that while the Department
did not incorporate its arm's length test into its new regulations,
just as they were not part of the old regulations, it did not repudiate
this test. Petitioners note that in the preamble to Final Regulations
at 27355, the Department states that it ``will continue to apply the
current 99.5% test unless and until we develop a new method.''
Petitioners hold that if the Department was going to change the 99.5%
rule in this proceeding it should have done so in the preliminary
results and afforded all parties adequate opportunity for comment for
the final results.
Second, petitioners dispute Saha Thai's allegation that the 99.5%
test does not reflect its pricing practices and should be modified.
Petitioners oppose Saha Thai's suggestion of limiting the arm's length
test to sales within seven days. Petitioners claim that this
methodology is far too restrictive to capture the effects of changes in
coil cost, as most companies purchase coils on a quarterly or monthly
basis and the price of the output pipe does not change on a daily basis
because of changing coil cost.
Department's Position
Although the Department did not codify its standard arm's length
test in the final regulations, the Department explicitly stated its
intent to continue to apply the current test. Final Regulations, 62 FR
at 27355. The Department's 99.5 percent arm's length test methodology
is well established, and the CIT has repeatedly sustained the
methodology. See Micron Technology, Inc. v. United States, 893 F. Supp.
21 (CIT 1995), Usinor Sacilor v. United States, 872 F. Supp. 1000 (CIT
1994), NTN Bearing Corp. Of America v. United States, 905 F. Supp. 1083
(CIT 1995), and Torrington Co. v. United States, Slip Op. 97-29 (March
7, 1997). As cited in Micron, the CIT will uphold the arm's length
test, unless that test is shown to be unreasonable. 893 F. Supp at 45
(citing Usinor, 872 F. Supp at 1004). In this case, Saha Thai has not
provided sufficient record evidence to warrant the Department's
departure from its standard arm's length test. As coil costs change on
a monthly or quarterly basis, prices do not change rapidly enough to
compel the use of a restrictive seven-day window for comparison. Absent
compelling evidence of price distortion, the Department finds no reason
to depart from its standard methodology for purposes of this review.
Thus, the Department finds it reasonable to apply the standard arm's
length test in this instance and has done so for this review. Further,
even if these sales had passed the arm's-length test, we would still be
using total facts available for Saha Thai's margin because of its
failure to identify affiliated producers. Thus, this issue is moot.
Comment 5
Saha Thai asserts in its case and rebuttal briefs that the
Department should have terminated this review upon the timely
withdrawal by Saha Thai and SAF of their request for a review. Saha
Thai states that on May 14, 1996, in accordance with 19 CFR
353.22(a)(5), it timely submitted a letter to the Department
withdrawing the request for the 1995-1996 administrative review. Saha
Thai argues that since it was the only party to the proceeding to make
a timely review request in accordance with the law and the Department's
regulations, and since that request was timely and properly withdrawn,
the Department should terminate this review immediately. Saha Thai
notes that while the domestic interested parties claimed that they
filed a review request on March 29, 1996, they conceded in their June
21, 1996, letter that the Department had no knowledge of their review
request and that the request was neither entered in the Central Record
Unit log nor placed in the proper file. Saha Thai holds that the only
question, jurisdictional in nature, is whether the document was
received by the Central Records Unit and that there is no reason for
the
[[Page 53818]]
Department to depart from the unambiguous filing requirements for
administrative review requests.
Petitioners argue that they made a timely request for an
administrative review for the 1995-1996 period and that request was
delivered to Saha Thai's counsel. They argue that this delivery
constituted notice to Saha Thai, who had itself requested a review for
this period, that petitioners had requested a review. Petitioners state
that, several weeks after submitting its request, it was informed by
the Department that its request was not entered into the log of the
Department's Central Records Unit and was not placed in the proper
file. Petitioners cite evidence showing that copies of their request
were delivered in a timely manner to the Central Records Unit and to
the Department official identified as the contact for requests for this
review by messengers and that these copies of the request were received
by the proper Department employees. Petitioners argue that the evidence
it cites constitutes reliable evidence of actual delivery and receipt
of a request for an administrative review that satisfies the
requirements of both the Act and the Department's regulations.
Petitioners argue that the Department should not penalize the
domestic interested parties because the Department inexplicably failed
to perform the ministerial tasks of stamping, logging in and filing in
their timely request for an administrative review. Further, petitioners
cite Kemira Fibres Oy v. United States, Slip Op. 95-1077 at 10 (Federal
Circuit, August 2, 1995) citing Brock v. Pierce County, 476 U.S. 253,
260 (1986) as support for the proposition that the Department may
accept the petitioners' request as timely where a party fails to comply
with regulatory or statutory timing requirements.
Petitioners state that the Act does not require a stamped copy for
proof of filing. Moreover, argue petitioners, while the Department's
regulations do require a stamp as proof of timely filing, the
regulations do not preclude the Department from considering other proof
of timely filing such as that presented by petitioners in their case
brief. Petitioners argue that the Department could consider the
evidence they presented as sufficient to initiate or continue a review
and that doing so would be within the Department's discretion.
Petitioners' argument continues that the Department's regulations
in force at the time permit termination of a review upon timely
withdrawal but do not require such termination. Given the domestic
industry's interest in continuing the review and the evidence of a
timely request detailed above, petitioners argue that the Department
acted correctly in exercising its discretion to continue the review.
Petitioners conclude by arguing that while the respondents in this
review would not be prejudiced by the Department continuing this review
the domestic interested parties have a statutory right to an
administrative review and that the denial of this right would have
caused them severe prejudice.
Department's Position
On May 14, 1996, Saha Thai, SAF, Ferro Union and ASOMA withdrew
their request for review and requested that the Department terminate
the review with respect to sales by Saha Thai/SAF during the period of
review. The petitioners objected to termination of the review on the
grounds that, in accordance with 19 CFR 353.22, they had submitted a
timely request for review of these companies to the Department on March
29, 1996. Petitioners also noted that respondents were served with a
copy of their request for review.
The antidumping statute is silent with respect to the Department's
authority to terminate administrative reviews. When the statute is
silent, the Department has inherent authority to fill any ``gaps'' in
the statute by promulgating regulations. Section 353.22(a)(5) of the
Department's regulations provides the Secretary with discretion in
accepting a timely request for withdrawal. As indicated above, the
evidence on the record does not provide a definitive answer as to
whether there is an official record of petitioners' request for review
in the Central Records Unit due to faulty delivery by the petitioners
or ministerial error by the Department. The evidence does demonstrate,
however, that the respondents were served with a copy of petitioners'
request, and, therefore, were put on notice of petitioners' intent that
the Department conduct this review. Given these facts and the remedial
nature of the antidumping law, the Department exercised its discretion
to continue the review. See Memorandum to Robert S. LaRussa from
Stephen J. Powell, July 11, 1996.
Comment 6
Thai Union argues in its case and rebuttal briefs that the
Department's use of average estimated margins contained in the original
petition as the basis for the adverse facts available is an unwarranted
departure from prior practice, frustrates the remedial purpose of the
antidumping duty statute, is punitive, and is not the most probative
evidence of the current margin of dumping. Thai Union claims that by
resorting to margins contained in the original petition, the Department
has eliminated any distinction between its treatment of cooperative
respondents participating fully in an investigation and verification
and its treatment of uncooperative respondents that ignore or mislead
the Department. Thai Union contends that it has been a fully
cooperative respondent during the 1995-1996 administrative review as
evidenced by its detailed and timely responses to the Department's
original and supplemental questionnaires, as well as to Department
inquiries made by telephone. Thai Union further asserts that it
cooperated fully with the Department during the verification and that
Thai Union's employees met with the Department officials and responded
to all questions and requests for information to the best of their
ability. Thai Union argues that it encountered several situations which
led to its failure of verification, but that these situations are not
related to its efforts to cooperate. Thai Union states that several key
Thai Union employees left the company during this administrative
review. In addition, Thai Union contends that new individuals replacing
the departed personnel entered their positions without the benefit of
proper training and instruction from their predecessors.
Thai Union states that adverse facts available is usually applied
to respondents who disregard the Department's requests for information,
who refuse to participate in an investigation and verification, or who
attempt to mislead the Department with the information provided. Thai
Union contends that it does not fall into this category of respondent.
As such, Thai Union argues that resorting to the adverse inference in
this case frustrates the purpose of the statute, which is to induce
respondents to provide the Department with requested information in a
timely, complete, and accurate manner so that the Department may
determine current margins within statutory deadlines. Thai Union argues
that because the record demonstrates that it did not refuse to
cooperate with the Department assigning the higher rate for facts
available is unreasonable. Thai Union avers that the Department's
reasoning defeats the policy behind the two-tiered BIA structure
because it completely overlooks substantial cooperation by the company
and instead focuses on the results of the verification
[[Page 53819]]
to measure responsiveness. However, Thai Union contends that at
verification, for a number of reasons, none of which touch on Thai
Union's level of cooperation or participation, the data provided simply
did not measure up. Thai Union states that the Department erred in its
reference to Thai Union's ``substantial omissions and incomplete
responses'' to the Department's requests for cost data as a
justification for applying an adverse inference to the selection of
facts available. Thai Union argues that it was wrong for the Department
to gauge Thai Union's responsiveness on the results of verification.
Thai Union states that it did not refuse to cooperate, but provided as
much information as possible each time the Department made requests and
communicated regularly with the Department during the investigation.
Thai Union claims the Department's determination--that the highest
calculated margin in a prior review is not adverse--is unfounded. Thai
Union argues that the Department offered no support for its opinion
that application of the highest calculated margin of 29.89 percent ad
valorem was not adverse to Thai Union, and that the average of the
estimated margins in the petition, 37.55 percent ad valorem, was
adverse.
Thai Union also contends that the Department acted punitively in
its choice of facts available. Thai Union argues that in choosing the
average of petition rates instead of the highest calculated margin to
assign to Thai Union the Department in effect sought out the most
punitive information rather than the best information. Thai Union
argues that the Department has violated the ruling in Rhone Poulenc,
Inc. v. United States, 899 F.2d 1185 (Fed. Cir. 1990) where the court
stated that the application of the BIA rule is punitive if the
Department rejects ``low margin information in favor of high margin
information that was demonstrably less probative of current
conditions.'' Thai Union argues that the Department should have found
that the highest calculated margin from the 1987-1988 administrative
review was the most probative evidence of current margins but that it
instead relied on refuted allegations from the original petition. Thai
Union adds that there is no information on the record indicating that
29.89 percent is not indicative of current conditions and that there is
no information on the record indicating that conditions reflected in
the original investigation are more probative than the Department's
findings in a more contemporaneous review. It argues that the
Department should choose the most contemporaneous information in making
its choice of facts available.
Finally, Thai Union argues that the Department erred in rejecting
Thai Union's sales data. Thai Union states that the Department rejected
Thai Union's sales data because the cost data could not be verified and
to avoid manipulation of the margin calculation. Thai Union argues that
this was inappropriate because Thai Union provided sales data in a
timely manner, which the Department elected not to verify; therefore,
there is nothing on the record which supports the conclusion that Thai
Union's sales data is inaccurate. Thai Union concludes that the
Department's rejection of Thai Union's sales data was arbitrary and
that the Department improperly selected unverified estimates of
margins, refuted in the original investigation, rather than using
previously verified margins to determine the facts available in this
administrative review.
Petitioners hold that the Department should apply adverse facts
available to Thai Union for the final results as it did in the
preliminary results of this review. Petitioners note that Thai Union
had not provided complete questionnaire responses at the time
verification commenced. In addition, during verification, Thai Union
was unable to produce necessary records or to reconcile its submitted
data with its records. Petitioners argue that virtually no aspect of
Thai Union's cost of production and constructed value data was able to
be verified by the Department. Moreover, the Department discovered at
verification that Thai Union did not use its normal accounting books
and records to prepare its responses even though these books contained
product specific data, which Thai Union claimed to have used in its
responses. Petitioners emphasize that Thai Union's incomplete general
ledger made it impossible for the Department to reconcile the responses
to the ledger. Petitioners assert that the cost build-ups provided by
Thai Union at verification were inaccurate concerning reported labor
costs, and Thai Union could not explain the calculations contained in
those worksheets.
Petitioners argue that, because the cost of production and
constructed value data was unverifiable, this data is unreliable and
unusable for the final results. Therefore, petitioners assert, the
Department is unable to determine whether Thai Union's home market
sales were made at less than cost of production. However, since the
constructed value data is unreliable and unusable as well, petitioners
argue, there is no information on the record on which to base normal
value, and the Department should decline to consider any of Thai
Union's submitted information for the final results. Petitioners argue
that Thai Union did not cooperate with the Department or act to the
best of its ability to provide the information requested by the
Department. Therefore, according to petitioners, the Department should
apply an adverse inference to the facts available for the final results
as it did in the preliminary results.
Department's Position
For these final results, we have determined that the facts of this
case support assigning 37.55 percent, the average estimated margins
from the petition, as total adverse facts available for Thai Union.
Assigning this rate is fully consistent with section 776(a) and 776(b)
of the Act. Section 776(a)(1) of the Act mandates the Department to use
the facts available if necessary information is not available on the
record and section 776(a)(2)(D) of the Act mandates the use of facts
available when an interested party or any other person provides
information that cannot be verified. As detailed in the preliminary
results, Thai Union's responses to the Department's initial and three
supplemental COP questionnaires were incomplete and unresponsive and
contained numerous errors, omissions, and discrepancies. The
information that Thai Union failed to provide the Department in the
supplemental questionnaire responses is, in many instances, data that
the Department first requested in the initial questionnaire. Moreover,
at verification, Thai Union was unable to reconcile its reported cost
data with its normal books and records kept in the ordinary course of
business, was unable to provide requested worksheets to demonstrate the
methodology used to calculate COP and CV, and was generally unprepared
to go over items identified on the verification agenda. See Thai Union
Cost Verification Report. Accordingly, the record in this case fully
supports our determination to use facts available because necessary
information is not on the record and Thai Union provided information
that could not be verified.
In light of unverifiable COP and CV responses, the Department had
no option other than resort to total facts available. We disagree with
Thai Union's contention that we arbitrarily rejected Thai Union's sales
data because our decision to resort to total facts available is based
on our determination that Thai Union's entire response does not meet
the requirements of section 782(e) of the Act. Because of the
[[Page 53820]]
extensive defects as detailed in the preliminary results, Thai Union's
submitted COP and CV data could not be verified, which renders this
information unreliable for purposes of calculating costs associated
with Thai Union's actual production experience as required under the
statute. Further, Thai Union's sales data does not meet the
requirements of section 782(e) and was, therefore, not considered. The
Department can only make price-to-price comparisons (normal value to
export price) using those home market sales that pass the cost test
under section 773(b) of the Act. The systematically flawed nature of
Thai Union's COP data prevents the Department from testing Thai Union's
home market sales to distinguish between below cost sales, which must
be disregarded, and above cost sales, which are included in the margin
calculation. Also, the Department is unable to calculate reliable
difference in merchandise figures (DIFMERs) using Thai Union's
unverified COP data. In this review, DIFMERs would have been required
for a majority of the United States and home market sales matches.
However, because DIFMER data is based on COP information from Thai
Union's questionnaire responses, which, as discussed above, could not
be verified, the Department is unable to measure the effect of physical
differences in making sales comparisons. Finally, as we explained in
the preliminary results, we determine that the use of facts available
for Thai Union's COP data precludes the use of the submitted CV data
because this data is tainted with unreliable cost elements. In sum, the
unreliability of the submitted cost data renders Thai Union's sales
unreliable and unusable. Thus, our rejection of Thai Union's sales data
is based on a full examination of the record and analysis of the
factors set forth in section 782(e). In similar factual circumstances,
the Department has rejected an entire response due to the unreliability
of a respondent's submitted cost data. See e.g., Notice of the Final
Determination of Sales at Less than Fair Value: Certain Pasta from
Turkey, 61 FR 30309, 30312 (June 14, 1996); Notice of Final Results of
Antidumping Duty Administrative Review: Cut to Length Carbon Steel
Plate from Sweden, 62 FR 18396, 18401 (April 15, 1997).
Our determination that the use of adverse inferences is warranted
in this review is also supported by record evidence that demonstrates
Thai Union's failure to act to the best of its ability to comply with
our requests. In this review, we evaluated Thai Union's level of
cooperation based on both the sufficiency of its questionnaire
responses and the results of verification. Thai Union's failure to
provide complete and accurate responses coupled with the evident lack
of preparation for the verification demonstrates that Thai Union did
not act to the best of its ability to cooperate in this review. Thai
Union's responses contained numerous discrepancies that remained
unexplained at verification. Moreover, Thai Union was unprepared to
perform the primary test of verification, e.g., reconciling its
reported cost data with its normal books and records. This lack of
preparation undermined the entire verification. Thai Union's attempt to
explain its lack of preparation by arguing that key personnel had
departed the company does not excuse its failure to explain the
calculation of substantial portions of the cost response, retain
necessary worksheets, or provide a complete general ledger from which
we could examine the rudimentary elements of its cost data. We also
note that Thai Union had participated in a previous segment of this
proceeding wherein we conducted a verification of its response. See
e.g., Certain Circular Welded Carbon Steel Pipes and Tubes from
Thailand; Final Results of Antidumping Administrative Review, 56 FR
58355 (November 19, 1991). Therefore, the company was familiar with the
requirements and procedures for verification.
We disagree with Thai Union's contention that because it has
participated fully in this review we cannot find that it is
uncooperative. The SAA explicitly states that the determination of
whether a party is uncooperative rests on whether or not the party has
``acted to the best of its ability to comply with requests for
necessary information.'' SAA at 870. A respondent's submission of
information is one consideration in evaluating the level of
cooperation. Neither the SAA nor our regulations prohibit us from
finding a respondent has not cooperated to the best of its ability
despite timely responses to our questionnaires. Rather, our
determination is based on a full examination of the record of a
particular segment to determine the quality of those responses (i.e.,
accuracy and completeness) and whether the respondent has hindered the
calculation of accurate dumping margins. If this were not the case,
then a respondent easily could manipulate the investigative process by
providing complete yet inaccurate responses that cannot be verified.
This scenario would cede control to the respondent to dictate the
course of the review and force the Department to devote its limited
administrative resources to scrutinizing frivolous questionnaire
responses. In this regard, resorting to facts available under the
current statute effectuates the same purpose as the BIA rule under the
old law, that is, to encourage respondents to provide timely, complete,
and accurate responses. See e.g., Proposed Regulations, 61 FR 7307,
7327 (February 27, 1996) (noting that the factual circumstances
triggering use of facts available are ``virtually identical'' to those
triggering BIA); Olympic Adhesives, Inc. v. United States, 899 F.2d
1565, 1571 (Fed. Cir. 1990).
Thai Union's contention that we have unlawfully eliminated the
distinction between cooperative and uncooperative respondents adopted
under our prior practice apparently presumes that under the two-tiered
BIA structure a cooperative respondent was assigned a non-adverse rate.
However, that is not the case. As we explained in the Proposed
Regulations, under the BIA provision, we automatically applied an
adverse inference regardless of the level of cooperation by the
respondent. See Proposed Regulations, 61 FR at 7327. We assigned the
most adverse rate to uncooperative respondents and a less adverse rate
to cooperative respondents. Thus, under either tier, the BIA rate was
adverse. The URAA has eliminated this automatic use of an adverse
inference by limiting the use of adverse inferences to factual
situations in which the Department has determined that the respondent
has not acted to the best of its ability. Id. Use of adverse inferences
is now determined on a case-by-case basis by examining the record
evidence in a particular segment to evaluate the respondent's level of
cooperation. Id. at 7328; Final Regulations, 62 FR at 27340.
Accordingly, Thai Union's reference to the two-tiered BIA structure
under our prior practice is misplaced. In this review, consistent with
the SAA and current practice, we have determined that the record
evidence demonstrates that Thai Union failed to act to the best of its
ability and appropriately have applied adverse inferences consistent
with section 776(b) of the Act.
With respect to our selection of an adverse facts available rate,
we disagree with Thai Union's assertion that the rate most recently
calculated for Thai Union is an appropriate adverse facts available
rate for purposes of this review. The SAA directs us to consider ``the
extent to which a party may benefit from its own lack of cooperation''
in employing adverse inferences. SAA at 870. The
[[Page 53821]]
highest calculated rate from this proceeding (29.89%) is the cash
deposit rate currently assigned to Thai Union, which has been carried
forward from the 1987-1988 administrative review. Based on the facts of
this case, we find that assignment of Thai Union's existing cash
deposit rate would be insufficient to effectuate the purpose of the
facts available rule. We therefore selected a higher rate, the average
of the estimated margins in the petition (37.55%).
Nor do we agree with Thai Union's contention that assignment of
37.55% is inappropriately punitive because it is ``demonstrably less
probative of current conditions.'' Section 776(c) authorizes the use of
secondary information, which includes information derived from the
petition, as a source of facts available, and the SAA explicitly states
that the Department may rely upon information contained in the petition
when making adverse inferences under section 776(b) of the Act. SAA, at
870. Therefore, the statute and SAA clearly envision the use of
petition margins as the source of adverse total facts available, and
there is no requirement that the Department prove that a petition
margin is ``more probative'' than any other rate calculated during the
particular proceeding. In fact, the SAA emphasizes that the Department
need not ``prove that the facts available are the best alternative
information.'' SAA at 869.
The corroboration requirement contained in section 776(c) serves
the purpose of assessing the probative value of the selected secondary
information. To this end, when the Department relies on petition
margins or calculated rates as total facts available, our practice is
to evaluate the reliability and relevance of the information used as a
measure of probative value. See, e.g., Tapered Roller Bearings and
Parts Thereof, Finished and Unfinished from Japan and Tapered Roller
Bearings, Four Inches or Less In Outside Diameter, and Components
Thereof, from Japan: Final Results of Antidumping Duty Administrative
Reviews, 62 FR 11825 (March 13, 1997); Notice of Final Determination of
Sales at Less Than Fair Value: Certain Pasta from Turkey, 61 FR 30309
(June 14, 1996).
In this case, as explained in the preliminary results, we
determined that the petition margins are reliable because they were
derived from price quotes, U.S. Customs data, import and export
statistics, and other public information contemporaneous with the
period of investigation. See Antidumping Duty Petition, February 28,
1985; Memorandum for Alan F. Holmer from Gilbert B. Kaplan, March 20,
1985. We also determined that the petition margins are relevant because
there is no information on the record that demonstrates that 37.55% is
not an appropriate total adverse facts available rate for Thai Union.
See e.g., Certain Welded Stainless Steel Pipe From Taiwan; Final
Results of Administrative Review, 62 FR 37543, 37555 (July 14, 1997).
Final Results of the Review
As a result of this review, we have determined that the following
weighted-average dumping margins exist for the period March 1, 1995,
through February 29, 1996:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Period (percent)
------------------------------------------------------------------------
Saha Thai/SAF/Thai Tube/Thai Hong............ 3/1/95-2/29/96 29.89
Thai Union................................... 3/1/95-2/29/96 37.55
------------------------------------------------------------------------
The Department shall determine, and the U.S. Customs Service shall
assess, antidumping duties on all appropriate entries. The Department
shall issue appraisement instructions directly to the Customs Service.
Furthermore, the following deposit requirements shall be effective
upon publication of this notice of final results of review for all
shipments of certain welded carbon steel pipes and tubes from Thailand,
entered, or withdrawn from warehouse, for consumption on or after the
publication date, as provided for by section 751(a)(1) of the Tariff
Act: (1) The cash deposit rates for the reviewed companies named above
which have separate rates will be the rates for those firms as stated
above; (2) for previously 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 these reviews, or the original LTFV investigations, but the
manufacturer is, the cash deposit rate will be the rate established for
the most recent period for the manufacturer of the merchandise; and (4)
if neither the exporter nor the manufacturer is a firm covered in these
reviews, the cash deposit rate for this case will continue to be 15.67
percent, the ``All Others'' rate made effective by the LTFV
investigation. These deposit requirements shall remain in effect until
publication of the final results of the next administrative review.
This notice 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 subsequent
assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to
administrative protective order (``APO'') of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with section 353.34(d) of the Department's
regulations. Timely notification of 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.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and Sec. 353.22 of
the Department's regulations.
Dated: October 7, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-27471 Filed 10-15-97; 8:45 am]
BILLING CODE 3510-DS-P