[Federal Register Volume 68, Number 33 (Wednesday, February 19, 2003)]
[Notices]
[Pages 7967-7976]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3993]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-817]


Notice of Determination Under Section 129 of the Uruguay Round 
Agreements Act: Antidumping Measure on Certain Cut-to-Length Carbon-
Quality Steel Plate Products From India

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

SUMMARY: Pursuant to section 129 of the Uruguay Round Agreements Act, 
which governs administrative actions following World Trade Organization 
Panel reports, the Department of Commerce is issuing a second 
determination with respect to the antidumping duty investigation on 
cut-to-length carbon-quality steel plate from India. This determination 
is in conformity with the findings of a World Trade Organization Panel 
report, as adopted by the World Trade Organization Dispute Settlement 
Body.

FOR FURTHER INFORMATION CONTACT: Howard Smith, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-5193.

The Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the Tariff Act of 1930, as amended (the Act). In 
addition, unless otherwise indicated, all citations to Department of 
Commerce's regulations are references to the provisions codified at 19 
CFR Part 351 (2001). Citation to ``section 129'' refers to section 129 
of the Uruguay Round Agreements Act, codified at 19 U.S.C. 3538.

Background

    On December 29, 1999, the Department of Commerce (Commerce) 
published a final determination of sales at less than fair value in the 
antidumping duty investigation on cut-to-length carbon-quality steel 
plate (subject merchandise) from India.\1\ During this proceeding, the 
sole Indian respondent, the Steel Authority of India, Ltd. (SAIL), 
acknowledged serious deficiencies with respect to its home market 
sales, cost of production, and constructed value information. However, 
SAIL argued that Commerce should use its submitted U.S. sales price 
information in the margin calculation, by comparing the prices of these 
sales to information concerning normal value from the petition.\2\ 
Commerce rejected this request and based the dumping margin on total 
facts available.\3\ In determining to reject the partial information 
submitted by SAIL and rely entirely on the facts available, Commerce 
found that the information submitted did not meet any of the criteria 
established by section 782(e) of the Act. This included a finding, 
pursuant to section 782(e)(5), that the information could not be used 
without undue difficulties.\4\ Commerce's explanation for this finding 
was that ``the U.S. sales database contained errors that, while in 
isolation were susceptible to correction, however when combined with 
the other pervasive flaws in SAIL's data lead us to conclude that 
SAIL's data on the whole is unreliable.''\5\
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    \1\ Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Cut-to-Length Carbon-Quality Steel Plate Products 
from India, 64 FR 73126 (December 29, 1999) (Final Determination). 
Following an affirmative injury determination issued by the United 
States International Trade Commission, Commerce issued an 
antidumping duty order on this product. See Notice of Amendment of 
Final Determinations of Sales at Less Than Fair Value and 
Antidumping Duty Orders: Certain Cut-to-Length Carbon Quality Steel 
Plate Products from France, India, Indonesia, Italy, Japan and the 
Republic of Korea, 65 FR 6585 (February 10, 2000).
    \2\ Final Determination at 73128.
    \3\ Commerce selected, as facts available, the highest of the 
margins alleged in the petition, 72.49 percent.
    \4\ Final Determination at 73127. Section 782(e)(5) lists, as a 
factor to consider in determining whether to accept information that 
does not meet all applicable requirements, whether ``the information 
can be used without undue difficulties.'' The corresponding 
provision in the AD Agreement, which was the focus of the Panel 
ruling in this case, is at Annex II, paragraph 3.
    \5\ Id.
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    Subsequently, the Government of India requested the establishment 
of a World Trade Organization (WTO)

[[Page 7968]]

dispute settlement panel (the Panel) to consider, inter alia, 
Commerce's rejection of SAIL's U.S. sales data in this case. The Panel 
issued its report on June 28, 2002.\6\ The WTO Dispute Settlement Body 
(DSB) adopted the findings in this report on July 29, 2002. On August 
30, 2002, the United States informed the DSB that it would implement 
the recommendations of the DSB in a manner consistent with its WTO 
obligations.
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    \6\ United States--Antidumping and Countervailing Measures on 
Steel Plate from India, WT/DS206/R (June 28, 2002) (Panel Report), 
full text available at www.wto.org).
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    On December 10, 2002, pursuant to section 129(b)(2) of the Uruguay 
Round Agreements Act (URAA), the U.S. Trade Representative (USTR) 
requested that Commerce issue a determination that would render its 
original antidumping determination in this matter not inconsistent with 
the findings of the Panel.
    On December 26, 2002, Commerce issued its draft determination in 
this proceeding. See draft Notice of Determination Under Section 129 of 
the Uruguay Round Agreements Act: Antidumping Measure on Certain-Cut-
to-Length Carbon-Quality Steel Plate Products from India (Draft 
Determination) which is on file in the Central Records Unit, room B-099 
of the main Commerce building. On January 2, 2003, SAIL submitted 
comments regarding Commerce's Draft Determination. On January 6, 2003, 
Bethlehem Steel Corporation and United States Steel Corporation 
(Petitioners) submitted rebuttal comments. A summary of these comments 
and rebuttal comments, as well as Commerce's response are included in 
this determination. On February 3, 2003, the USTR held consultations 
with Commerce and the appropriate congressional committees with respect 
to this determination. On February 7, 2003, the USTR directed Commerce 
to implement this determination.

WTO Panel Findings and Conclusions

    In its report, the Panel found that the U.S. statutory provisions 
concerning use of facts available are not inconsistent with Article 6.8 
and paragraphs 3, 5, and 7 of Annex II of the Agreement on 
Implementation of Article VI of the General Agreement on Tariffs and 
Trade 1994 (AD Agreement).\7\ However, the Panel found that the 
application of these provisions in this case was inconsistent with 
Article 6.8 and paragraph 3 of Annex II of the AD Agreement.
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    \7\ Panel Report, paragraph 8.2(a).
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    Specifically, the Panel found that the United States had not 
provided a ``legally sufficient justification'' in the final 
determination for refusing to take into account U.S. sales price 
information submitted by SAIL and basing the dumping margin entirely on 
the facts available.\8\ The focus of any such justification, according 
to the Panel, should be on whether the information met the requirements 
set forth in paragraph 3, Annex II, of the AD Agreement, taking into 
account the interrelationship between the partial data at issue (U.S. 
sales data) and the other elements of the dumping analysis, for which, 
both sides agree, SAIL did not submit reliable information. In this 
regard, the Panel noted ``we consider to be critical the question of 
whether information which itself may satisfy the criteria of paragraph 
3 can be used without undue difficulties in light of its relationship 
to rejected information.''\9\
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    \8\ Panel Report, paragraph 8.1.
    \9\ Panel Report, paragraph 7.61 (emphasis added). The Panel 
here refers to the ``undue difficulties'' standard contained in 
paragraph 3, Annex II of the AD Agreement. As noted, a corresponding 
standard is set forth at section 782(e)(5) of the U.S. antidumping 
law.
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    The Panel did not consider as sufficient the statement in the final 
determination, without elaboration, that the U.S. database could not be 
used without undue difficulties because the errors in that database, 
when combined with the other pervasive flaws in SAIL's data, indicate 
the unreliability of SAIL's data on the whole.\10\ The Panel noted 
Commerce's acknowledgment that the errors in the U.S. database ``in 
isolation were susceptible to correction,'\11\ and stated that, in 
light of this, Commerce needed to provide a more adequate explanation 
for its decision to reject this information: ``[W]e consider it 
imperative that the investigating authority explain, as required by 
paragraph 6 of Annex II, the basis of a conclusion that information 
which is verifiable and timely submitted cannot be used in the 
investigation without undue difficulties.''\12\
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    \10\ Panel Report, paragraph 7.69.
    \11\ Final Determination at 73127. See also Panel Report, 
paragraph 7.71.
    \12\ Panel Report, paragraph 7.74.
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    Although the United States explained, during the panel proceedings, 
why it could not use SAIL's data without undue difficulty, the Panel 
focused on the need for Commerce itself to provide the explanation in 
its antidumping determination. ``Even assuming we were persuaded by the 
United States'' arguments before us that USDOC could have made the 
decision posited [to reject the U.S. sales data as unduly difficult to 
use based on arguments made in dispute settlement], there is nothing in 
the record to indicate to us that it did make such a decision in the 
case.''\13\
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    \13\ Panel Report, paragraph 7.69 (emphasis original).
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    The Panel refused a request by India that it suggest the United 
States implement this finding by recalculating the dumping margin 
taking into account the U.S. price data at issue, stating that ``[i]n 
this case, we see no particular need to suggest a means of 
implementation, and therefore decline to do so.''\14\ The Panel added 
that ``the choice of means of implementation is decided, in the first 
instance, by the Member concerned.''\15\ The Panel then issued a 
general recommendation that the DSB request the United States ``to 
bring its measure into conformity with its obligations under the AD 
Agreement,''\16\ which the DSB subsequently adopted.
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    \14\ Panel Report, paragraph 8.8.
    \15\ Id.
    \16\ Panel Report, paragraph 8.6.
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Implementation

    In order to bring the measure at issue into conformity with the AD 
Agreement, in this section 129 determination, we are providing the 
``legally sufficient explanation'' that the Panel found lacking in the 
initial determination regarding why the U.S. sales information at issue 
could not be used ``without undue difficulties'' in calculating a 
dumping margin under the AD Agreement. The following ``legally 
sufficient explanation'' fully explains why Commerce is under no 
obligation to take SAIL's U.S. sales transactions into account in 
establishing a dumping margin for SAIL. Nonetheless, in implementing 
the DSB's recommendation, Commerce has given careful attention to the 
Panel's reasoning and has determined that it is appropriate, under the 
particular facts of this case, to give consideration to the U.S. sales 
information in a limited manner in determining the appropriate facts 
available margin to assign to SAIL. Each of these aspects of our 
implementation is explained below.
    In its report, the Panel defined the term ``undue difficulties'' as 
those that ``go beyond what is otherwise the norm in an anti-dumping 
investigation,''\17\ as opposed to difficulties that arise routinely 
during the course of an investigation and which are within the ambit of 
the ``two-way process involving joint effort'' between investigating 
authorities and respondents established

[[Page 7969]]

by Annex II of the AD Agreement.\18\ In situations involving the 
potential use of partial information submitted where other data has 
been rejected, the Panel focused on:
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    \17\ Panel Report, paragraph 7.72.
    \18\ Panel Report, paragraph 7.73.
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    [W]hether a conclusion that some information fails to satisfy 
the criteria of paragraph 3, and thus may be rejected, can in any 
case justify a decision to reject other information submitted which, 
if considered in isolation, would satisfy the criteria of paragraph 
3. We consider that the answer to this question is yes, in some 
cases, but that the result in any given case will depend on the 
specific facts and circumstances of the investigation at hand.\19\
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    \19\ Panel Report, paragraph 7.62.

    While the Panel noted the fact-specific nature of this 
determination, it also discussed some general considerations regarding 
the interconnection between databases that could apply across cases. 
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The Panel states, for instance, that:

    We consider * * * that the various elements, or categories, of 
information necessary to an antidumping determination are often 
interconnected, and a failure to provide certain information may 
have ramifications beyond the category in which it falls. For 
instance, a failure to provide cost of production information would 
leave the investigating authority unable to determine whether sales 
were in the ordinary course of trade, and further unable to 
calculate a constructed normal value. Thus, a failure to provide 
cost of production information might justify resort to facts 
available with respect to elements of the determination beyond just 
the calculation of cost of production. Moreover, without considering 
any particular ``categories'' of information, it seems clear to us 
that if certain information is not submitted, and facts available 
are used instead, this may affect the relative ease or difficulty of 
using the information that has been submitted and which might, in 
isolation, satisfy the requirements of paragraph 3 of Annex II.\20\
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    \20\ Panel Report, paragraph 7.60 (emphasis added).

    The Panel's hypothetical example underscores the impact that the 
failure to provide one element of necessary information (e.g., cost of 
production) can have on the usability of other elements. While the 
Panel does not take the view that a failure to provide one element of 
information automatically allows for disregarding all other information 
submitted,\21\ it makes clear in the report that the absence of one 
element can result in the failure of other elements to meet the 
requirements of paragraph 3:
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    \21\ Id.

    [I]t may indeed be the case that a failure to provide one 
element of information undermines the usability of information that 
is submitted, making it unduly difficult to use the information 
submitted in making determinations. * * * A panel reviewing such a 
decision must be able to conclude that the investigating authority 
considered the relationship between the missing information and the 
information submitted, and concluded in light of that relationship, 
the fact that one element of information was not submitted justified 
the conclusion that information submitted did not satisfy the 
criteria of paragraph 3 of Annex II.\22\
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    \22\ Panel Report, paragraph 7.67 (emphasis added).

    The Panel's concern with the impact that a single missing element 
of information can have on other elements of information is 
particularly relevant to the investigation at issue because, in this 
investigation, SAIL failed to provide usable information not just for 
one of the major elements of information required, but for three out of 
four major elements of information required in an antidumping 
proceeding, namely home market sales, cost of production, and 
constructed value information.\23\ As a result, the question under the 
facts of this determination is not whether SAIL's failure to provide a 
single element renders unusable the remainder of the information, but 
whether SAIL's failure to provide potentially usable information for 
all elements except U.S. sales renders this sole remaining element 
unduly difficult to use.
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    \23\ We refer to normal value, export price, cost of production, 
and constructed value information as major ``elements'' of 
information for an antidumping analysis, consistent with statements 
by India and the Panel. See, e.g., Panel Report , Paragraph 7.54-
7.55.
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    In addressing this question, Commerce has considered both the 
Panel's definition of undue difficulties as those that go ``beyond what 
is otherwise the norm'' in an antidumping case and its hypothetical 
example involving the impact of missing cost of production information 
on the relative ease or difficulty of using home market sales data. 
While certain minor data deficiencies may be the norm in antidumping 
cases, the absence of any information regarding normal value and 
production costs far exceeds that norm and, therefore, the difficulties 
faced in dealing with the absence of such information are far beyond 
the norm. As the Panel noted, a lack of usable cost of production 
information ``would leave the investigating authority unable to 
determine whether sales were in the ordinary course of trade and 
further unable to calculate a constructed normal value. Thus, a failure 
to provide cost of production information might justify resort to facts 
available with respect to elements of the determination beyond just the 
calculation of cost of production.'' \24\ In the hypothetical example 
posed by the Panel, the investigating authority would be unable to 
determine whether the partial information submitted satisfies the 
requirements of the AD Agreement (e.g., whether home market sales are 
in the ordinary course of trade as required by Article 2.1). Thus, the 
hypothetical suggests that one missing element of the information 
required for an antidumping analysis may render other elements of 
information submitted ``unduly difficult'' to use in a way that turns 
fundamentally on whether it is possible to calculate a meaningful and 
accurate dumping margin under these circumstances, given the 
interrelationship between the elements involved and the requirements of 
the AD Agreement.\25\
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    \24\ Panel Report, paragraph 7.60 (emphasis added).
    \25\ We note that the current proceeding represents a 
particularly extreme version of the scenario described by the Panel. 
In this proceeding, SAIL did not merely fail to provide cost of 
production information, rather it failed to provide any usable 
information for any of the required elements other than U.S. sales, 
and even its U.S. sales information is incomplete.
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    Therefore, in considering whether it is unduly difficult to use 
SAIL's U.S. sales data under these circumstances, we have taken into 
account whether any such calculation would produce a meaningful and 
accurate result, in light of the interrelationship between elements in 
a dumping analysis, as well as the degree of difficulty that would be 
incurred in order to use the U.S. data to calculate a dumping margin in 
accordance with Article 2 of the AD Agreement. Applying these 
considerations to the facts of this case, we find that it is unduly 
difficult to use SAIL's U.S. data because it is not possible to 
calculate a dumping margin in the manner envisioned by the AD Agreement 
where the respondent has provided potentially usable information on 
only a single element of the dumping analysis, and where even that 
information has substantial flaws. Instead, any dumping margin 
determined under these circumstances is a facts available margin. We 
address this in more detail below.
    In light of the relationship between SAIL's missing information 
(home market sales, cost of production, and constructed value data) and 
the information submitted (the U.S. sales data), SAIL's flawed U.S. 
data could not be used without undue difficulty in calculating a 
dumping margin in the manner envisioned by the AD Agreement.
    In the context of the AD Agreement, which defines dumping based on 
a

[[Page 7970]]

comparison of the export price with the normal value of sales made in 
the ordinary course of trade, the information necessary for conducting 
an antidumping analysis includes prices of the subject merchandise in 
the domestic market of the exporting country, export prices of the 
subject merchandise, and, where needed (such as this case), cost of 
production and constructed value information.\26\ A competent authority 
conducting an antidumping analysis requires each of these elements of 
information in order to calculate a respondent's dumping margin. Thus, 
there is an explicit relationship between SAIL's U.S. sales database 
and the information that was absent in this case: SAIL's home market 
price, cost of production, and constructed value information.\27\ With 
such fundamental aspects of data entirely absent--a scenario that goes 
well beyond the norm in an antidumping investigation--a fair and 
objective investigating authority could reasonably determine that 
SAIL's U.S. sales database could not be used without undue difficulty 
in calculating a dumping margin consistent with the AD Agreement.
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    \26\ In this case, cost of production and constructed value 
information was needed because Commerce was conducting a cost 
investigation.
    \27\ In fact, the explicit linkages between each of these 
elements needed to calculate an accurate dumping margin are 
reflected in SAIL's own questionnaire responses. In SAIL's export 
price response, for example, SAIL referred Commerce to its cost of 
production response--which SAIL and the Government of India have 
conceded was never usable--for cost information needed to measure 
differences in physical characteristics between products. SAIL 
Section C Response, at C-45 and C-50 (May 10, 1999).
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    The interrelationship between elements in a dumping analysis starts 
with the basic measure of dumping in Article 2.1 of the AD Agreement--
export sales prices compared with normal value--and extends to the 
numerous requirements throughout Article 2 establishing the 
circumstances under which export prices and normal value may be 
compared. This interrelationship is underscored by the fact that the 
basic purpose of each of the four major data elements required for a 
dumping analysis that come into play under Article 2--comparison market 
prices, export prices, cost of production, and constructed value--is 
defined in terms of its comparison with other elements. None of these 
elements serves any purpose in isolation, separate from the other 
aspects of the dumping analysis, and each requires adjustments that 
take into account the element against which it is being compared.
    First, upon selection of the appropriate comparison market, sales 
in that market must be analyzed to determine whether they are in the 
ordinary course of trade, as required by Article 2.1 of the AD 
Agreement. Most typically, this requires a comparison between the sales 
price element and the cost of production element in the comparison 
market, as governed by Article 2.2.1 and Article 2.2.1.1. As with other 
aspects of the analysis, this ``cost test'' does not concern the cost 
of production element alone but instead requires a comparison between 
major data elements, as illustrated by the hypothetical example 
discussed in the Panel Report. Where it is determined, under the 
criteria established in Article 2.2, that comparison market sales are 
not in the ordinary course of trade, constructed value may be used as 
normal value.
    The prices of sales in the comparison market made in the ordinary 
course of trade must then be compared with sales prices to the export 
market. This in turn requires a comparison of a number of 
characteristics related to sales in each market, as described in 
Article 2.4. Sales in the two markets must be matched according to the 
physical characteristics of the products sold, and adjustment for any 
differences in physical characteristics must be made. Sales in the two 
markets must also be compared at the same level of trade, where 
possible, and an adjustment for any differences in level of trade must 
be made where such differences are demonstrated to affect price 
comparability. Article 2.4 requires that comparisons between markets be 
made at the ex-factory level, necessitating an adjustment for 
transportation and certain warehousing expenses in the two markets. 
Article 2.4 also requires that due allowance be made for a number of 
other differences that affect price comparability, including 
differences in terms and conditions of sale, taxation, quantities, and 
any other differences that affect price comparability. For instance, in 
the case of export price sales, such as the U.S. sales at issue, 
Commerce would normally adhere to the Article 2.4 requirement that an 
adjustment be made for differences in terms and conditions of sale by 
adding direct selling expenses incurred on export price sales to normal 
value, while deducting home market selling expenses. This adjustment 
would also be made when normal value is based on constructed value.\28\ 
A proper comparison under Article 2 of the AD Agreement requires that 
we account for all such differences between the export and comparison 
markets in our analysis.
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    \28\ Many of the same allowances and adjustments must be made 
when constructed value is used.
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    It is important to note that these provisions of the AD Agreement 
enable the investigating authority to arrive at an accurate 
determination of whether dumping is occurring in the export market. For 
example, it is often the case that selling to an export market involves 
a higher level of expenses than selling in the domestic market, and 
such differences in terms and conditions of sale must be taken into 
account in determining whether price discrimination between markets is 
occurring.
    In this case, the absence of usable data for all elements other 
than U.S. sales, along with the deficiencies relating to SAIL's U.S. 
sales data, leaves Commerce unable to conduct a meaningful dumping 
analysis under the framework discussed above. There are no usable home 
market sales prices for SAIL. Moreover, the sales expense and 
production cost information relating to those sales are not usable. 
Therefore, it is not possible to compare any of SAIL's home market 
sales prices to its U.S. sales prices. Any analysis attempted without 
such data would leave the investigating authority unable to adjust for 
all differences in terms and conditions of sale between U.S. sales and 
normal value. Further, it is not possible to match sales at the same 
level of trade, or to adjust for differences in levels of trade where 
price comparability is affected. In fact, the types of difficulties 
encountered by Commerce in attempting to conduct an antidumping 
analysis, given the pervasive reporting failures in this case, may be 
illustrated by examining the Article 2.4 requirements with respect to 
level of trade.
    In its questionnaire response SAIL claimed that it made home market 
sales at multiple levels of trade, some of which corresponded more 
closely to the U.S. level of trade than others.\29\ In order to meet 
the Article 2.4 requirements regarding levels of trade, we normally 
would first seek to compare U.S. sales with home market sales made at 
the same level of trade. If price comparisons could not be made at the 
same level of trade, we would attempt to compare U.S. and home market 
sales at different levels of trade while considering whether a level-
of-trade adjustment was appropriate. If we were unable to make any 
price comparisons (because, for instance, home market sales were below 
the cost of production) and had to rely on

[[Page 7971]]

constructed value, we would still take level of trade into account in 
calculating the selling expense and profit elements of constructed 
value. None of these considerations with respect to the comparison 
between U.S. prices and normal value is possible because SAIL provided 
no usable home market sales, cost of production, or constructed value 
information. Under these circumstances, despite the investigating 
authority's efforts, there is no way of knowing the extent to which a 
dumping margin is affected, upward or downward, by comparisons made at 
different levels of trade. Simply put, it is not possible, under these 
facts, to engage in partial, selective ``gap-filling'' of the sort that 
would allow for a meaningful determination of dumping as defined in the 
AD Agreement.
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    \29\ SAIL section B questionnaire response, B32-B35 (May 10, 
1999).
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    SAIL's argument that a dumping margin should be calculated by 
comparing its U.S. prices to the constructed value offered in the 
petition does nothing to remedy the data deficiencies that make 
calculating a dumping margin in the manner envisioned by the AD 
Agreement impossible. Moreover, there is no way to know whether 
substituting the constructed value from the petition for SAIL's entire 
home market sales and cost databases would adequately represent SAIL's 
home market pricing practices. Because the use of SAIL's U.S. sales 
information with the constructed value in the petition would not result 
in a dumping calculation as outlined in the AD Agreement, it would 
represent a facts available margin.
    The facts available nature of the dumping determination under these 
circumstances is further underscored by the substantial flaws in the 
sole element of information for which SAIL provided potentially usable 
data. SAIL's U.S. data excluded necessary information on variable and 
total costs of manufacturing and misreported information on matching 
criteria for a majority of U.S. sales. At a minimum, as envisioned by 
Article 2 of the AD Agreement, Commerce would need the missing cost 
information in order to adjust for any differences in physical 
characteristics between the products SAIL sold in the United States and 
the product for which constructed value was calculated in the 
petition.\30\ Those physical characteristics include specification/
grade, quality, thickness, and width of the subject merchandise. 
Differences in these physical characteristics affect both prices and 
costs of the subject merchandise. However, there is no way to make such 
adjustments using SAIL's reported data because the variable and total 
cost information is missing in its entirety from the U.S. database, and 
thus is not susceptible to correction. Moreover, while there were other 
errors in SAIL's U.S. sales database that ``in isolation were 
susceptible to correction * * *'' (Final Determination at 73127), 
correcting these errors would still leave the gap created by the 
missing U.S. cost information. This is because SAIL provided no usable 
cost of production or constructed value information anywhere on the 
record. This is not a case where Commerce could correct those errors 
that were susceptible to correction and fill the gap created by missing 
variable and total cost information on some U.S. sales by using 
accurate information provided on other U.S. sales. Nor can Commerce 
adapt cost information provided in the cost of production or 
constructed value portions of the response to fill the gap created by 
the missing information on U.S. sales, since there is no such 
information on the record that was capable of being verified. Thus, 
while some of the deficiencies in SAIL's U.S. sales information were 
correctable, these deficiencies, when combined with other missing U.S. 
sales information and an unusable home market sales and cost response 
made using SAIL's U.S. sales information in a dumping calculation 
unduly difficult. The lack of variable and total cost information for 
SAIL in this case leaves Commerce unable to calculate a dumping margin 
in accordance with the provisions of Article 2 of the AD Agreement 
(e.g., unable to make adjustments for differences in physical 
characteristics), which is similar to the position in which the 
investigating authority would find itself in the hypothetical example 
provided by the Panel where ``a failure to provide cost of production 
information would leave an investigating authority unable to determine 
whether sales were made in the ordinary course of trade, and further 
unable to calculate a constructed normal value.'' \31\
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    \30\ Normally, adjustments for differences in physical 
characteristics would not need to be made when comparing U.S. prices 
to constructed values because respondents provide the constructed 
value for each product sold to the United States. In this case, 
however, we have a constructed value for only one product. Thus, any 
comparison of SAIL's U.S. sales prices to the constructed value in 
the petition would have to take into account the adjustment for 
differences in physical characteristics using SAIL's cost 
information, information which SAIL failed to provide.
    \31\ Panel Report, paragraph 7.60.
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    Nevertheless, throughout the course of the dispute settlement 
proceeding, the Government of India--on behalf of SAIL--offered a 
variety of proposals for using SAIL's U.S. sales data in the dumping 
analysis, including corrections to the data that it suggested could be 
employed. As noted by Commerce in its statements before the Panel, the 
first of India's proposals employed methodologies that were contrary to 
the requirements of the AD Agreement, while its latter proposals 
conceded that no more than 30 percent of SAIL's U.S. sales was even 
potentially suitable for comparison to the normal value in the 
petition.\32\ However, even if 30 percent of SAIL's U.S. sales was 
potentially suitable for comparison to the normal value in the petition 
because it matched the product for which the petition normal value was 
calculated, for the reasons noted above, any such comparison would not 
result in a dumping margin calculated in accordance with the provisions 
of Article 2 of the AD Agreement. Moreover, such a comparison would not 
account for the majority of SAIL's U.S. sales, and would require 
Commerce to determine the dumping margin for the majority of U.S. sales 
in a different manner. In light of these circumstances, the use of 
SAIL's U.S. sales data in calculating a dumping margin in accordance 
with the AD Agreement presented undue difficulties that Commerce was 
not obligated to undertake.
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    \32\ Commerce explained that the initial proposal submitted by 
India is flawed in many respects. In addition to offering new facts 
not presented to Commerce in the underlying investigation, this 
proposal offers three flawed options: (1) An option that would have 
Commerce use a below-cost price as normal value, contrary to the 
requirement that sales be in the ordinary course of trade; (2) an 
option that would have Commerce compare export prices to a normal 
value based on a different product without making an adjustment for 
differences in physical characteristics, contrary to the requirement 
in Article 2.4 of the AD Agreement that such an adjustment be made; 
and (3) an option that would have Commerce calculate a margin for 
SAIL using a small subset of SAIL's U.S. database.
---------------------------------------------------------------------------

    This position is reasonable, not only from the standpoint of 
satisfying the ``unduly difficult'' requirement of paragraph 3 of Annex 
II of the AD Agreement, but also when viewed in the broader context of 
the goals of the AD Agreement. The AD Agreement establishes certain 
requirements in making a comparison between export price and normal 
value in order to ensure that price discrimination is accurately 
measured. As explained above, a comparison of actual U.S. sales prices 
to a constructed value from the petition does not result in the 
accurate measurement of dumping envisioned by Article 2 because such a 
comparison

[[Page 7972]]

cannot meet the requirements established by that Article.
    For these reasons, we conclude that a calculation that cannot be 
made in accordance with Article 2 of the AD Agreement cannot somehow be 
more accurate than resorting to facts available. The facts available 
used in the investigation in this case are based on information from 
the petition, as authorized by Annex II, paragraph 1 of the AD 
Agreement. While the facts available contained in the petition may not 
account for all of the adjustments described above because it is based 
on information ``reasonably available'' to the party preparing the 
petition, it is not appropriate to assume, as SAIL has done, that the 
dumping margin derived from the petition overstates the margin that 
Commerce would have calculated if SAIL had provided all of the 
information requested by Commerce. There is no basis for determining 
whether this assumption is true. For example, there is no basis to know 
whether the petition normal value exceeds--or is even as high as--
SAIL's actual normal value. Given the limited information available to 
a petitioner, a petition may understate the appropriate margin for any 
given respondent.\33\ Thus, there is no way to determine the actual 
dumping margin with any degree of accuracy, or to know whether the 
respondent may benefit by not providing reliable information regarding 
its prices and costs. In cases such as this, given the nature of the 
information available, it may be appropriate to rely on information 
that ensures the respondent has not benefitted from its failure to 
provide information that is under its control. This is particularly 
true in this case, where the limited amount of potentially usable data 
submitted by SAIL raises basic questions owing to the respondent's 
control of the information relating to a dumping proceeding.
---------------------------------------------------------------------------

    \33\ See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value: Steel Concrete Reinforcing Bars from the People's 
Republic of China, 66 FR 33522, 33523 (2001) (petition margin 
understated margin calculated for respondent); Notice of Final 
Determination of Sales at Less Than Fair Value: Stainless Steel Wire 
Rod from Japan, 63 FR 40434, 40435 (1998) (same).
---------------------------------------------------------------------------

    Nevertheless, ultimately, as the Panel indicated,\34\ the 
determination whether to use or disregard partial information is a 
fact-specific judgment that must be made from case to case. The 
circumstances surrounding our disregard of SAIL's information are set 
forth above, and are clearly distinguishable from the majority of 
Commerce's determinations involving facts available. In most cases, 
Commerce accepts imperfect, but adequate data supplied by respondents, 
and uses facts available to fill data gaps which are not so significant 
as to render a calculated dumping margin meaningless. Thus, in such 
cases where a respondent supplies information, Commerce does not, as a 
matter of practice, ``disregard all of the information submitted and 
base its determination exclusively on the facts available.'' \35\ 
Rather, as the Panel notes, Commerce frequently relies on ``partial'' 
facts available with respect to some piece of information that is not 
submitted by a party.\36\ In deciding whether the use of total or 
partial facts available is appropriate, it is necessary to consider all 
of the objectives of the AD Agreement, namely, to calculate dumping 
margins in accordance with the guidelines of Article 2, provide 
respondents with the procedural protections established by the 
Agreement, and at the same time provide the appropriate incentives for 
parties that control the information necessary to perform a dumping 
calculation to supply that information in the most timely and accurate 
manner possible. The application of these principles under these facts 
supports the conclusion that it was unduly difficult to use SAIL's 
substantially incomplete data in a dumping calculation consistent with 
the AD Agreement.
---------------------------------------------------------------------------

    \34\ Panel Report, paragraph 7.62.
    \35\ Panel Report, paragraph 7.60. The Panel here is summarizing 
its view of the U.S. position regarding what an investigating 
authority may do under the AD Agreement. In our view, it is 
important to emphasize that Commerce does not, in the majority of 
its cases, use any such discretion to disregard all information 
submitted.
    \36\ Panel Report, paragraph 7.92.
---------------------------------------------------------------------------

    Accordingly, in determining SAIL's dumping margin, Commerce is not 
required to attempt to match SAIL's U.S. sales data to a normal value 
derived from the petition given the ``undue difficulties'' that such 
usage would present within the meaning of paragraph 3, Annex II of the 
AD Agreement. Therefore, the use of total facts available is 
appropriate and consistent with the AD Agreement.
    At the same time, in selecting the most appropriate basis for facts 
available, we have considered the Panel's recognition of the positive 
aspects of SAIL's U.S. information relative to the complete reporting 
failure on all other elements.\37\ In light of this aspect of the 
Panel's decision, and in response to comments submitted by the parties 
(see below), we have determined that under these circumstances it is 
appropriate to consider average U.S. pricing levels, as reported by 
SAIL, in selecting the most appropriate facts available, as described 
below.
---------------------------------------------------------------------------

    \37\ Panel Report at paragraph 7.71. While the Panel explicitly 
declined to determine whether SAIL's U.S. sales information was 
unduly difficult to use, it did find that the information met other 
requirements of paragraph 3, Annex II, namely that it was ``capable 
of being verified'' and ``supplied in a timely fashion.''
---------------------------------------------------------------------------

    The petition contains two sources of information on U.S. sales 
prices: (1) An offer for sale of subject merchandise (price quote); and 
(2) average unit values (AUVs) of subject merchandise based on U.S. 
import data provided by the Bureau of Census. In the final 
determination, Commerce relied solely on the price quote in deriving 
the dumping margin of 72.49 percent. However, upon reconsideration of 
this information in light of the minimum and average pricing levels of 
all Indian exports to the United States during the period of 
investigation (POI) (particularly the pricing levels of identical 
merchandise), which in this case are indicated by the U.S. sales 
information provided by SAIL since it accounted for virtually all 
Indian exports during the POI, we have determined that this price quote 
is atypical by comparison with all comparable prices. Therefore, it is 
appropriate under the circumstances of this case to consider the other 
information on the record regarding U.S. prices during the POI. 
Normally, in such circumstances, we would turn to the other source of 
petition information for use as facts available. However, in this case, 
the use of AUV data from the petition would benefit the respondent for 
its reporting failures because use of this data yields a lower margin 
compared with the flawed data submitted by SAIL. Accordingly, under the 
particular circumstances of this case, we have determined that it is 
appropriate, as facts available, to compare SAIL's average net U.S. 
price during the POI to the normal value provided in the petition. This 
average U.S. price is net of average movement expenses. See the 
memorandum Facts Available Analysis for the Section 129 Determination--
Certain Cut-to-Length Carbon-Quality Steel Plate from India (Facts 
Available Memorandum), dated concurrently with this determination.
    With respect to the facts available used for normal value, we note 
that SAIL's complete failure to report usable information for normal 
value leaves only one source of information appropriate for use in 
determining normal value, namely the constructed value information from 
the petition. The only other source of information on the record 
concerning normal value--home market price information from the

[[Page 7973]]

petition--is inappropriate due to a properly documented allegation that 
home market sales were made below the cost of production. However, 
because, as acknowledged by SAIL, the constructed value from the 
petition is suitable for comparison with no more than 30 percent of the 
company's U.S. sales, it is appropriate to base the total facts 
available margin, in part, on a constructed value adjusted to account 
for physical differences for the remaining non-identical U.S. sales. In 
this case, an adjustment applied in accordance with the guidelines of 
Commerce's normal practice adequately accounts for the physical 
differences. Specifically, we increased the constructed value from the 
petition by 20 percent of the total cost of manufacturing included in 
that value. This is in keeping with Commerce's normal practice of 
considering products whose variable costs differ by no more than 20 
percent of the cost of manufacturing to be comparable. Hence, we have 
adjusted the cost of manufacturing to account for the physical 
differences, and revised the constructed value used as total facts 
available for non-identical merchandise.
    Therefore, the redetermined facts available margin is based on a 
comparison of SAIL's average net U.S. price with the constructed value 
from the petition, adjusted, where appropriate, for physical 
differences in merchandise. Due to the lack of usable information on 
the record, the dumping margin determined under these circumstances 
departs from our normal methodology in a number of respects. First, 
unlike a calculated dumping margin, this redetermined facts available 
margin is an aggregate calculation that does not involve model-specific 
comparisons between U.S. prices and normal value. Aside from the 
general classification described above regarding the percentage of 
SAIL's U.S. sales involving ``identical'' vs. ``similar'' merchandise 
compared with the product used in determining normal value, the 
calculation involves no analysis of product characteristics and no 
``model match'' methodology, as is normally done in accordance with 
section 771(16) of the Act.\38\ As such, there is no reliance on any of 
the individual product characteristic fields developed for this 
investigation and included in the antidumping questionnaire, such as 
specification/grade, quality, thickness, and width of the subject 
merchandise, since the lack of home market sales and cost information 
precludes comparisons made on the basis of these characteristics.
---------------------------------------------------------------------------

    \38\ The corresponding AD Agreement provision for comparisons 
and adjustments discussed in this section is Article 2.4.
---------------------------------------------------------------------------

    In addition, we have not matched sales by level of trade or 
otherwise adjusted for differences in levels of trade. As discussed 
above, the Department normally compares sales made at the same level of 
trade, where possible, pursuant to section 773(a)(1)(B)(i) of the Act. 
For comparisons involving different levels of trade, a level-of-trade 
adjustment is made pursuant to section 773(a)(7)(A) where it is 
established that any difference in levels of trade: (i) Involves the 
performance of different selling activities and (ii) is demonstrated to 
affect price comparability based on a pattern of consistent price 
differences between sales at different levels of trade in the country 
in which normal value is determined. While SAIL reported in the 
narrative portion of its questionnaire response that it made home 
market sales at multiple levels of trade, some of which corresponded 
more closely to the U.S. level of trade than others, the lack of any 
usable home market sales data precludes taking level of trade into 
account with respect to product matching and in determining whether a 
level-of-trade adjustment is appropriate.
    Finally, while we were able to adjust SAIL's U.S. prices for inland 
freight expenses, thereby arriving at an ex-factory price as required 
by section 772(c)(2)(A) of the Act, the lack of any usable expense 
information relating to home market sales precluded making any 
adjustments for differences in circumstances of sale between the two 
markets, as required by section 773(a)(6)(C)(iii). See Facts Available 
Memorandum for more details on the dumping margin determined for SAIL 
in this section 129 determination.
    While the margin determined for SAIL in this redetermination 
cannot, therefore, be considered a calculated margin in accordance with 
our normal methodology, we believe that this facts available margin 
reflects the Panel's recognition of the positive aspects of SAIL's 
participation in the investigation, while continuing to ensure that 
SAIL has not benefitted by its failure to provide usable information. 
The following section contains interested parties' comments and 
Commerce's response.

Interested Party Comments

Comment 1

    SAIL argues that Commerce's Draft Determination fails to implement 
the DSB's rulings and recommendations. SAIL notes that Commerce states 
in its Draft Determination that the Panel Report found ``the United 
States had not provided a legally sufficient justification for its 
underlying determination.'' However, SAIL maintains that the actual 
Panel finding was that the United States had acted inconsistently with 
the AD Agreement by refusing to take SAIL's U.S. sales data into 
account and making its determination regarding SAIL's dumping margin 
solely on the basis of facts available. Therefore, to the extent that 
Commerce continues to calculate SAIL's dumping margin entirely on the 
basis of facts available, it fails to implement the DSB decision. 
According to SAIL, during the Panel process, the United States 
attempted to provide a ``legally sufficient justification'' for its 
original determination, but the Panel considered it post hoc 
rationalization. In SAIL's view, nothing in the Panel Report suggests 
that repeating this rationalization in greater detail could constitute 
adequate implementation of the DSB ruling.
    Petitioners disagree with SAIL's representations. According to 
Petitioners, the Panel did not accept Commerce's rejection of SAIL's 
U.S. sales data based solely on the flaws in the other information 
submitted; nor did the Panel accept India's claim that if one category 
of information is submitted, it must be used. Rather, the Panel decided 
that categories of information may be interconnected such that failure 
to provide certain information may make it unduly difficult to use 
other data. Moreover, with respect to undue difficulties, Petitioners 
maintain that the Panel was not only referring to difficulties in 
physically calculating a margin, but ``to methodological difficulties 
that preclude the calculation of a dumping margin in a manner 
consistent with the AD Agreement.'' Petitioners note that the Panel 
found the issue of ``undue difficulties'' to be a highly fact-specific 
issue and stated that where these situations arise, the investigating 
authority is required to adequately explain why information that is 
timely and verifiable cannot, because of its relationship with rejected 
data, be used without undue difficulty. In this case, the Panel found 
Commerce failed to provide this explanation with respect to SAIL's U.S. 
sales data. Petitioners argue that the Panel would not have indicated 
that Commerce could provide a legally sufficient justification for 
rejecting the U.S. sales data if the Panel was requiring that those 
data be used. Moreover, in rejecting SAIL's request that the Panel 
instruct Commerce to recalculate the dumping

[[Page 7974]]

margin using its reported U.S. sales data, the Panel left the decision 
regarding the manner of implementation to the United States and held 
open the option of explaining how in this case the rejected data 
undermined the usability of the company's U.S. sales data. Petitioners 
maintain that Commerce analyzed the facts of this case and concluded 
that ``the absence of usable data for all elements other than U.S. 
sales, along with deficiencies relating to the U.S. sales themselves, 
leaves Commerce unable to conduct a meaningful dumping analysis * * * 
.'' Therefore, according to Petitioners, Commerce's Draft Determination 
is in full compliance with the Panel's decision and should not be 
modified in any way.
    Petitioners further urge Commerce to reject SAIL's contention that 
providing a legally sufficient justification constitutes an improper 
post hoc rationalization. According to Petitioners, the Panel described 
the justification for rejecting U.S. sales data offered by Commerce in 
its written submissions to the Panel as post hoc rationalization 
because this justification was not on the record of the investigation 
and was offered only in argument in written submissions to the Panel.
    As described above, Petitioners maintain that the Panel's decision 
permits Commerce to implement the findings in this WTO proceeding by 
explaining why SAIL's U.S. sales data is not usable. Petitioners argue 
that the justification in the section 129 determination for rejecting 
the U.S. sales data is being provided by the investigating authority to 
explain its determination and cannot possibly be considered a post hoc 
rationalization.

Commerce's Position

    The Panel stated that, under the AD Agreement, before rejecting an 
element of information submitted and resorting to facts available, the 
investigating authority must evaluate the element of information in 
question against the criteria of paragraph 3 of Annex II. Observing 
that ``the various elements, or categories of information necessary to 
an anti-dumping determination are often interconnected, and a failure 
to provide certain information may have ramifications beyond the 
category in which it falls,'' the Panel also acknowledged that the 
failure to provide one element of information can undermine the 
usability of information which, if considered in isolation, would 
satisfy the criteria of paragraph 3.\39\ Further, the Panel took the 
view that the decision to reject, as unduly difficult to use, 
information that otherwise satisfies the criteria of paragraph 3 is a 
case-specific determination that is dependent upon the facts and 
circumstances of the investigation at hand. With respect to such a 
decision, the Panel noted that ``[c]ritical to such a determination is 
the explanation by the investigating authority of its conclusion in 
this regard.'' \40\
---------------------------------------------------------------------------

    \39\ Panel Report, paragraph 7.60.
    \40\ Panel Report, paragraph 7.67.
---------------------------------------------------------------------------

    On this point, the Panel noted that while Commerce argued, during 
the Panel proceeding, that SAIL's U.S. sales data could not be used 
without undue difficulty, there was no evidence to indicate that 
Commerce had made such a determination on the record of this case. 
Based on the facts and explanations on the case record, the Panel 
stated that Commerce's decision to reject the U.S. sales information 
lacked a valid basis under paragraph 3, Annex II, of the AD Agreement. 
The Panel concluded its review by recommending that the United States 
bring its measures ``into conformity with its obligations under the AD 
Agreement.''
    Therefore, consistent with the Panel Report, providing the legally 
sufficient justification that the Panel found lacking in Commerce's 
initial determination regarding why U.S. sales information could not be 
used without undue difficulties brings the decision into conformity 
with the United States' obligation under the AD Agreement. Moreover, as 
the justification is an integral part of Commerce's new determination, 
it cannot be viewed as post hoc rationalization.

Comment 2

    According to SAIL, Commerce essentially offers two reasons for 
concluding that it is unduly difficult to use the U.S. sales data at 
issue in its dumping calculations, both of which SAIL rejects. SAIL 
maintains that the Panel already rejected one of Commerce's reasons for 
not using the U.S. sales data in a dumping calculation, namely that 
there is an explicit relationship between the U.S. data and the 
unusable information and thus it is reasonable to reject the U.S. sales 
data when fundamental aspects of other data are entirely absent. 
Specifically, SAIL maintains that this argument was addressed and 
dismissed by the Panel when it determined that the United States had 
not applied the criteria of paragraph 3, Annex II, of the AD Agreement 
to SAIL's U.S. sales data and found Commerce's decision rejecting this 
sales information lacked a valid basis under the AD Agreement. SAIL 
notes that in accepting the argument that the absence of certain data 
may affect the usability of other data, the Panel stated that:

    To accept that view does not necessarily require the further 
conclusion, espoused by the United States, that in a case in which 
any `essential element' of requested information is not provided in 
a timely fashion, the investigating authority may disregard all the 
information submitted and base its determination entirely on facts 
available. To conclude otherwise would fly in the face of one of the 
fundamental goals of the AD Agreement as a whole, that of ensuring 
that objective determinations are made, based to the extent possible 
on facts.\41\
---------------------------------------------------------------------------

    \41\ Panel Report, paragraph 7.60.

    SAIL contends that despite this statement, Commerce continues, in 
its Draft Determination, to argue that there is an ``explicit 
relationship'' among essential data elements and to assume that where 
any ``essential element'' of data is missing, Commerce is always 
justified in rejecting the other ``essential element'' entirely. SAIL 
notes that Commerce attempts to defend this position by stating that, 
based on the dumping analysis called for under Article 2 of the AD 
Agreement, none of these elements serves any purpose in isolation. SAIL 
asserts, however, that even dumping margins based on facts available 
must be calculated under Article 2 of the AD Agreement. SAIL claims 
that the only difference between a determination based on facts 
available and one based on the respondent's submitted data is that the 
information is derived from different sources. SAIL also notes that, 
regardless of the source of the information, the dumping margin is 
calculated by comparing the export price with normal value.
    Furthermore, SAIL argues that if Commerce cannot calculate a margin 
under Article 2 of the AD Agreement when one side of the equation is 
based on facts available, it is difficult to see how Commerce can 
establish a margin when both sides of the equation are based on facts 
available. Although Commerce attempts to address this point by noting 
that all the information required for each Article 2 adjustment may not 
be reasonably available to the petitioner, SAIL states that this 
argument underscores the obvious fact that the petition data is less 
accurate than the data submitted by SAIL and that Commerce has failed 
to `` `undertake a degree of effort' in selecting among the data in the 
petition and submitted by the respondent in order to calculate the most 
accurate

[[Page 7975]]

possible margin under Article 2.'' SAIL maintains that Commerce 
``cannot fulfill its obligations under the AD Agreement simply by 
asserting that the use of actual data does not necessarily provide any 
meaningful information.'' SAIL emphasizes that 30 percent of its U.S. 
sales involve a product that is identical to the one for which 
constructed value was calculated in the petition and could be used to 
calculate a dumping margin for SAIL that is more accurate and reliable 
than that based entirely on the petition.
    SAIL also notes that Commerce resorts to its old defense in arguing 
that a respondent should not be allowed to ``game'' the process by 
selectively submitting information, but maintains that this claim is 
groundless in this case. SAIL states that it did not attempt to 
manipulate the system and there is nothing in the Panel Report to 
suggest that this argument provides a legally sufficient basis under 
the AD Agreement to discard SAIL's U.S. sales information.
    SAIL observes that Commerce's second claim that it cannot use the 
U.S. data because the data are flawed attempts to disavow Commerce's 
statement in the investigation that errors in the U.S. sales database 
``in isolation were susceptible to correction'' by suggesting that 
there are other flaws in that database. However, other than claiming 
that missing cost of production data is a flaw in the U.S. sales 
database, SAIL contends that Commerce's claim simply recycles its 
initial argument and does not provide a reason for rejecting use of the 
U.S. data.
    Finally, SAIL notes that nothing in the Draft Determination 
suggests that Commerce even attempted to calculate a margin using its 
verified U.S. sales data. SAIL, therefore, asserts that Commerce is in 
no position whatsoever to state that it ``encountered undue difficulty 
in doing so.''
    Petitioners disagree with SAIL's claim that Commerce continues to 
assume that ``where any `essential element' is missing (in this case, 
home market sales and cost), the investigating authority is always 
justified in rejecting the other `essential element' entirely.'' 
Petitioners argue that Commerce has discussed the data shortcomings in 
this case extensively and explained why the reported U.S. sales data is 
unduly difficult to use. In Petitioners' view, Commerce has shown that 
``the egregiousness of the situation here goes well beyond the norm for 
an antidumping investigation.'' Moreover, it is Petitioners' contention 
that ``the interrelationship between elements in a dumping analysis is 
embodied in the numerous requirements throughout Article 2 of the AD 
Agreement.'' Petitioners maintain that to conduct a fair comparison 
between markets, Article 2 requires that due allowance be made for 
differences in physical characteristics, level of trade and other terms 
and conditions of sale, taxation, and quantities that affect price 
comparability. Petitioners note that as Commerce has shown in its Draft 
Determination, SAIL failed to provide any usable home market sales, 
constructed value or adjustment data that could be used as the basis 
for establishing normal value in calculating a dumping margin. 
Petitioners assert that this lack of usable data, under the facts of 
this case, render it unduly difficult to use SAIL's reported U.S. sales 
data in a manner consistent with Article 2. Petitioners' argue that 
this is ``the end of the matter as far as the reported U.S. sales data 
are concerned--Commerce may reject those data and use total facts 
available.'' Commerce then has the discretion to choose the facts 
available to apply.
    Petitioners also counter SAIL's claims that the margin calculation 
in the petition suffers from the same flaws as a margin calculated 
using SAIL's U.S. sales data and that the U.S. sales data are the most 
accurate data on the record. Petitioners argue, as described above, 
that once Commerce rejects the U.S. sales data as unduly difficult to 
use, it may use, and has the discretion to choose, the form of total 
facts available to apply. This includes use of the petition margin, 
just as Commerce did in this case. Petitioners claim that Commerce is 
under no obligation to prove that the facts available it selects are 
the most accurate. At the same time, Petitioners assert that ``it does 
not follow that the petition margin is less accurate than the margin 
calculated by comparing SAIL's reported U.S. sales data to the normal 
value in the petition. Without SAIL's actual data, it is impossible to 
determine what its true margin is.'' Petitioners point out that if 
SAIL's assertions about the presumed lack of accuracy in a petition 
margin were accepted, Commerce would never be able to use the petition 
margin as facts available--an argument that is flatly inconsistent with 
the AD Agreement.
    Petitioners dispute SAIL's claim that some of its U.S. sales can be 
compared to the petition's normal value arguing that the merchandise is 
not identical as SAIL purports and that Commerce cannot adjust for 
differences in the terms and conditions of these sales. Even if this 
were not the case, Petitioners further assert that this alternative is 
not acceptable as it violates the object and purpose of the AD 
Agreement in calculating accurate and reliable margins. Petitioners 
argue that this approach forces Commerce to calculate a dumping margin 
for SAIL based on only a minority of its U.S. sales and would be 
subject to manipulation and abuse by respondents. Petitioners respond 
to SAIL's claim that there is no evidence of ``gaming'' the process in 
this case by arguing that it would not be proper to require Commerce to 
produce such evidence. In Petitioners' view, ``to do so would require 
Commerce to assess the respondent's mental state--something that is 
literally impossible to do.''
    Finally, Petitioners argue that SAIL's assertion that ``Commerce 
does not provide any evidence that it actually attempted to use the 
verified U.S. sales data and encountered `undue difficulties' in doing 
so'' is irrelevant and should be dismissed. Petitioners note that this 
argument ``focuses solely on the difficulties, or lack thereof, in 
physically calculating a dumping margin using its submitted data. As 
noted above, however, the Panel's decision goes not only to the 
difficulties in physically calculating a dumping margin, but also to 
the methodological difficulties in determining the dumping margin in a 
manner consistent with the AD Agreement.'' Petitioners maintain that 
Commerce has determined ``that it is unduly difficult to use the U.S. 
sales data, including by using the methodologies proposed by India in 
the proceedings before the Panel, in a manner that is consistent with 
the AD Agreement.'' As Commerce's Draft Determination is fully 
consistent with the Panel's decision, SAIL's arguments should be 
rejected.

Commerce's Position

    The Panel has not rejected the position taken by Commerce in this 
determination, namely that SAIL's U.S. data is unduly difficult to use 
based on both its attendant errors and its relationship with the home 
market and cost of production information that SAIL failed to provide. 
Rather, the Panel found that Commerce incorrectly rejected SAIL's U.S. 
data on the basis of problems with other information without addressing 
whether the U.S. sales price information could be used without undue 
difficulties. In this determination, we have identified the undue 
difficulties attendant in calculating a dumping margin in the manner 
envisioned by the AD Agreement, including the fact that no more than 30 
percent of SAIL's U.S. sales are even potentially suitable for 
comparison to the product that served

[[Page 7976]]

as the basis for normal value in the petition. In its proposals, SAIL 
focuses on the ease of calculating a dumping margin using its U.S. 
sales data and the proffered calculation methodologies. However, as 
explained above, these methodologies do not, and cannot, account for 
all of the adjustments required under Article 2 of the AD Agreement 
because the information needed to make those adjustments is not on the 
record. Moreover, the proposed methodologies do not remedy the lack of 
useable home market sales and cost of production information. Where a 
lack of information precludes the investigating authority from applying 
the provisions of Article 2 of the AD Agreement in calculating a 
dumping margin, the authority is justified in finding potentially 
useable elements of information unduly difficult to use and basing the 
margin on facts available. The Panel recognized this possibility when 
it noted that a failure to provide cost of production information would 
leave the investigating authority unable to determine whether sales 
were in the ordinary course of trade (a requirement of Article 2) and 
thus might justify resorting to facts available with respect to 
elements of the determination beyond just the calculation of the cost 
of production.
    Furthermore, although SAIL contends that Commerce continues to 
believe it is justified in always entirely rejecting the other 
``essential elements'' of a response where any ``essential element'' is 
missing, Commerce has not in fact made this statement. The present case 
is not one where an ``essential element'' is missing; it is a case 
where all of the ``essential elements'' of information provided by 
SAIL, other than U.S. sales data, were unverifiable, with substantial 
additional problems associated with the U.S. data. Thus, of all the 
information requested by Commerce in order to calculate a margin in 
accordance with Article 2 of the AD Agreement, only a small portion of 
one of the ``essential elements'' of information needed to calculate a 
dumping margin is even potentially useable.
    In the instant case, it was not possible for Commerce to conduct an 
antidumping duty calculation, as envisioned by the AD Agreement, 
because SAIL failed to properly provide most of the information that 
Commerce required. This was despite Commerce's actions throughout the 
investigation to actively cooperate with SAIL in obtaining an accurate 
and complete record with which to calculate a dumping margin in 
accordance with Article 2 of the Agreement. In fact, during the course 
of the investigation Commerce provided SAIL with no fewer than five 
opportunities after its initial questionnaire response to supply 
useable information. As a result, the information-gathering stage of 
the investigation extended from the issuance of the initial 
questionnaire up to the preliminary determination, and was then further 
extended to a period well after the preliminary determination until 
just prior to verification. Each submission by SAIL required a separate 
analysis to identify remaining problems that needed to be addressed in 
order for the information to be used to calculate a dumping margin. 
Despite the numerous difficulties encountered prior to the preliminary 
determination, and the fact that Commerce made its preliminary 
determination entirely on the basis of facts available, Commerce sought 
to establish the validity of the information submitted by SAIL through 
extensive verifications undertaken in India. Thus, SAIL is incorrect 
when it claims that Commerce's position in this matter demonstrates 
that it fails to recognize the obligation on the investigating 
authority to cooperate with interested parties in making its 
determination and undertake a degree of effort in selecting between 
petition and respondent data for purposes of calculating a margin. 
Rather than failing to recognize this obligation, Commerce went far 
beyond what is otherwise the norm in an antidumping investigation in 
its attempts to base its determination on the data provided by SAIL.

Section 129 Determination Margin

    As a result of the redetermination of the facts available margin, 
the following margins exist:

------------------------------------------------------------------------
                                                               Margin
                   Exporter/Manufacturer                    (percentage)
------------------------------------------------------------------------
Steel Authority of India, Ltd.............................         42.39
All Others................................................         42.39
------------------------------------------------------------------------

Continuation of Suspension of Liquidation

    In accordance with section 129(c)(1)(B) of the URAA, we will 
instruct the U.S. Customs Service (Customs) to continue to suspend 
liquidation of all imports of certain cut-to-length carbon-quality 
steel plate from India that are entered, or withdrawn from warehouse, 
for consumption on or after February 7, 2003, the date on which the 
USTR directed Commerce under subsection (b)(4) of that section to 
implement this section 129 determination. Customs shall continue to 
require a cash deposit equal to the estimated amount by which the 
normal value exceeds the U.S. price. The suspension of liquidation 
instructions will remain in effect until further notice.
    The section 129 determination ``all others'' rate is the new cash 
deposit rate for all exporters of subject merchandise, other than SAIL. 
This rate will apply to entries of subject merchandise entered, or 
withdrawn from warehouse, for consumption on or after February 7, 2003.
    This section 129 determination is issued and published in 
accordance with section 129(c)(2)(A) of the URAA.

    Dated: February 7, 2003.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 03-3993 Filed 2-18-03; 8:45 am]
BILLING CODE 3510-DS-P