65 FR60910 October 13, 2000 
                                                     A-549-502
                                                     POR: 98/99
                                                     Public Document
                                                     DAS III (7): AE/JB

MEMORANDUM TO: Troy H. Cribb 
               Acting Assistant Secretary
                for Import Administration

FROM:          Joeseph A. Spetrini
               Deputy Assistant Secretary
               AD/CVD Enforcement Group III 

DATE: October 4, 2000

SUBJECT:       Issues and Decision Memorandum for the Antidumping Duty
               Administrative Review of Certain Welded Carbon Steel 
               Pipes and Tubes from Thailand

Summary

In Section I, we identify the issues in this administrative review for
which we received comments from the interested parties. Section II sets
out the scope, or product coverage, of this review. Section III identifies
any changes made in the margin calculation since the Preliminary Results.
Section IV analyzes the comments of the interested parties. Finally, we
recommend approval of the positions developed for each of the issues.

I. List of issues:
   1. Date of Sale
   2. Exchange Rate Losses
   3. VAT charges
   4. Duty Drawback
   5. Thai Antidumping Duties on Russian Coils 
   6. Raw Materials Exchange Gains
   7. U.S. Brokerage Expenses
   8. U.S. Imputed Credit Expense
   9. Duty Reimbursement 

II. Scope of the Review

The products covered by this administrative review are certain welded
carbon steel pipes and tubes from Thailand. The subject merchandise has an
outside diameter of 0.375 inches or more, but not exceeding 16 inches.
These products, which are commonly referred to in the industry as
"standard pipe" or "structural tubing," are hereinafter designated as
"pipe and tube." The merchandise is classifiable under the Harmonized
Tariff Schedule (HTS) item numbers 7306.30.1000, 7306.30.5025,
7306.30.5032, 
7306.30.5040, 7306.30.5055, 7306.30.5085, and 7306.30.5090. Although the 
HTS subheadings are provided for convenience and Customs purposes, our 
written description of the scope of the order is dispositive.

III. Changes in the Margin Calculation Since the Preliminary Results

Based on our analysis of comments received and the database calculations,
we have changed our results from the preliminary results of review. For
the final results of review, Date of Sale, U.S. Brokerage Expenses, U.S.
Imputed Credit Expense, and Raw Materials Exchange Gains have been
adjusted to reflect the decisions the Department has reached for the Final
Results. These changes are discussed in the relevant sections of this
memo. In addition, minor corrections from verification and review of the
preliminary results calculations by the Department resulted in revisions
to: the net U.S. price calculation, which has been corrected to account
for the proper currency in one of the variables; the home market customer
affiliation for some observations; the interest amounts in the duty
drawback calculation; ship date and credit for one U.S. observation; and
other miscellaneous U.S. market related expenses in some of the
observations.

IV. Discussion of Interested Party Comments

Comment 1: Date of Sale

Petitioners argue that the Department of Commerce ("the Department")
should use contract date for purposes of establishing the date of sale.
Petitioners believe that the contract date better reflects the time when
the material terms of sale were established for the U.S. sales.
Petitioners hold that the record does not contain ample evidence of
changes to the material terms of sale after the contract date. Due to the
proprietary nature of this discussion, please see Memorandum to the File
from Abdelali Elouaradia and Javier Barrientos: Determination of the Date
of Sale for Saha Thai Steel Pipe Co., Ltd. (October 4, 2000) ("Date of
Sale Memorandum"), on file in the CRU, for a detailed analysis.

Petitioners maintain that prior to the Uruguay Round Agreement, the
Department's practice in determining the date of sale was to focus 
on the material terms of sale. Petitioners allege that the Uruguay 
Round Agreement's definition of date of sale was essentially identical 
to the Department's longstanding date of sale policy and that the 
Agreement provides that the date of sale is normally the date of 
contract, purchase order, order confirmation or invoice, whichever
establishes the material terms of sale. See Agreement on Implementation of
Article VI of the General Agreement on Tariffs and Trade 1994, Article
2.4.1, n.8. Petitioners further note that there were no statutory changes
to the date of sale methodology in the Uruguay Round Agreements Act
("URAA"). See URAA, Pub. L. No. 103-465, 108 Stat. 4809 (1994).
Petitioners also assert that the Statement of Administrative Action
("SAA") defines date of sale as "a date when the material terms of sale
are established." See SAA at 810. Petitioners hold that Congress provided
that the SAA "shall be regarded as an authoritative expression by the
United States concerning interpretation and application of {the Agreements
and the URAA} in any judicial proceeding in which the question arises
concerning such interpretation or application." See 19 U.S.C. 3512(d);
see also Kemira Fibres Oy v. United States, 61 F.3d 866, 873 (Fed. Cir.
1995) (discussing the SAA: "when Congress enacted the current antidumping
law, it ratified Commerce's position.") Thus, petitioners maintain that
Congress ratified Commerce's then existing date of sale policy as set out
in the SAA.

Petitioners claim that Commerce's URAA implementing regulations provide
that the date of sale will normally be the invoice date as recorded in the
ordinary course of business. See 19 C.F.R. 351.401(i); and Antidumping
Duties; Countervailing Duties; Final Rule, 62 FR 27295, 27348 (May 19,
1997) ("Final Rule"). Petitioners contend that the regulations also
provide that this presumption can be overcome and a date other than
invoice date may be used where a different date better reflects the 
date on which the exporter or producer establishes the material terms 
of sale. Petitioners maintain that this exception is met when the 
terms are usually established on some date other than the date of 
invoice. See Final Rule, 62 FR at 27348; and Circular Welded Non-
alloy Steel Pipe from Korea: Final Results of Antidumping Duty 
Administrative Review, 63 FR 32833, 32835 (June 16, 1998). Petitioners 
contend that where an agreement on the material terms of sale has 
been reached but the terms are nevertheless subject to change, the 
Department's analysis focuses on whether changes are sufficiently
common to allow us to conclude that initial agreements should not be
considered to finally establish the material terms of sale. See Stainless
Steel Plate in Coils from the Republic of Korea: Final Determination of
Sales at Less Than Fair Value, 64 FR 15444, 15449-15450 (March 31, 1999).

Petitioners argue that much, if not all, of the dispute involving date of
sale is occasioned by Saha Thai's past efforts to evade complete
discussion of the sales process, Saha Thai's incomplete reporting, and
Saha Thai's contradictory statements on the issue.

Saha Thai argues that the Department's regulations establish a strong
presumption for invoice date as date of sale and that in this case,
invoice date is the appropriate date of sale for U.S. sales. In support of
this argument, the company states that the material terms of sale change
between contract date and invoice date. Saha Thai also points to the
preamble to the regulations which discusses the presumption in favor of
invoice date. In citing to the preamble, Saha Thai states that the date on
which the terms of a sale are first agreed upon is not necessarily the
date on which those terms are finally established, and that price and
quantity are often subject to continued negotiation between the buyer and
the seller until a sale is invoiced. Although a buyer and seller may 
initially agree on the terms of a sale, those terms remain negotiable 
and are not finally established until the sale is invoiced because 
customers frequently change their minds and sellers respond to
those changes. See Final Rule.

The Department stated in a recent case that the use of a single date of
sale for each respondent makes more efficient use of the Department's
resources and enhances the predictability of outcomes. See Hot-Rolled Flat-
Rolled Carbon-Quality Steel Products from Japan: Final Determination of
Sales at Less Than Fair Value, 64 FR 24329, 24331-24335 (May 6, 1999).
Saha Thai states that an initial agreement does not establish the material
terms of sale between the buyer and seller when changes to such an
agreement are common, even if, for a particular sale, the terms did not
actually change. Saha Thai argues that the Department should not examine
whether changes to initial agreements are sufficiently common in
determining when the material terms of sale are established. See Stainless
Steel Plate in Coils from the Republic of Korea: Final Determination of
Sales at Less Than Fair Value, 64 FR 15444, (March 31, 1999) ("SSPC
Korea"); Stainless Steel Plate in Coils from Canada: Final Determination
of Sales at Less Than Fair Value: Final Determination of Sales at Less
Than Fair Value, 64 FR 15457, (March 31, 1999); Stainless Steel Plate in
Coils From Italy: Final Determination of Sales at Less Than Fair Value, 64
FR 15458, (March 31, 1999); Stainless Steel Plate in Coils From South
Africa: Final Determination of Sales at Less Than Fair Value, 64 FR 15459,
15463-15465 (March 31, 1999) ("Stainless Coils from South Africa");
Stainless Steel Plate in Coils from Belgium: Final Determination of Sales
at Less Than Fair Value, 64 FR 15476, (March 31, 1999) ("Stainless Coils
from Belgium"); and Stainless Steel Plate in Coils from Taiwan: Final
Determination of Sales at Less Than Fair Value, 64 FR 15493, (March 31,
1999).

Saha Thai further argues that in this case there is no "uniform event"
until the invoice is issued, because price and quantity change up until
the invoice is issued. Saha Thai claims that the use of invoice date as
date of sale is consistent with the Department's practice and that the
Department has, in numerous recent cases, used invoice date as date of
sale, even where petitioners argued that purchase order or contract date
was more appropriate. See Hot-Rolled Flat-Rolled Carbon-Quality Steel
Products from Japan: Final Determination of Sales at Less Than Fair Value,
64 FR 24329, 24331-24335 (May 6, 1999); Certain Corrosion-Resistant Carbon
Steel Flat Products From Japan: Final Results of Antidumping Duty
Administrative Review, 65 FR 8935, 8945 (February 23, 2000); Certain Cold-
Rolled and Corrosion Resistant Carbon Steel Flat Products From Korea:
Final Results of Antidumping Duty Administrative Review, 64 FR 12927,
12933-12935 (March 16, 1999); Hot-Rolled Flat-Rolled Carbon-Quality Steel
Products from Japan: Final Determination of Sales at Less Than Fair Value,
64 FR 24329, 24331-24335 (May 6, 1999); Stainless Coils from Belgium 64 FR
at 15478-15482; Certain Corrosion-Resistant Carbon Steel Flat Products and
Certain Cut-to-Length Carbon Steel Plate from Canada: Final Results of
Antidumping Duty Administrative Review, 64 FR 2173, 2178 (January 13,
1999); Stainless Coils from South Africa 64 FR at 15463-15465; and
Emulsion Styrene-Butadiene Rubber from the Republic of Korea: Final
Determination of Sales at Less Than Fair Value, 64 FR 14865, 14869 (March
29, 1999).

Saha Thai argues that using contract date for the date of sale for 
U.S. sales would result in using different dates of sale for the U.S. 
and home markets, which contradicts the Department's recent rejection 
of the use of confirmation date as U.S. date of sale on the basis that 
doing so would have meant using different dates of sale in the U.S. 
and home markets. See Small Diameter Circular Seamless Carbon and Alloy 
Steel Standard, Line and Pressure Pipe from Germany: Final Results of 
Antidumping Duty Administrative Review, 63 FR 13217, 13226 (March 18,
1998).

Saha Thai alleges that the material terms of the sale do change between
the purchase order date and the invoice date, and that the Department
recognized that the terms of sale changed between the contract and invoice
dates for a significant number of sales. Saha Thai further states that the
Department's preliminary results recognized that with respect to home
market sales, the invoice is the first written document that established
the terms of sale, and thus, the invoice date is the appropriate date of
sale. See Certain Welded Carbon Steel Pipes and Tubes From Thailand:
Preliminary Results of Antidumping Duty Administrative Review, 65 FR
18301, 18302 (April 7, 2000).

Saha Thai maintains that in the previous review the Department concluded
that invoice date was the appropriate date of sale based on the sales
documents examined. In that review the Department concluded from the
record evidence that the quantity of subject merchandise invoiced to Saha
Thai's U.S. customers varied from the quantities requested in the
customers' purchase orders and therefore used invoice date as the date of
sale. See Certain Welded Carbon Steel Pipes and Tubes From Thailand: Final
Results of Antidumping Duty Administrative Review, 64 FR 56759, 56766
(October 21, 1999) ("Pipes and Tubes from Thailand 97-98").

The company argues that quantities changed after the purchase order date,
and prices changed after the contract date and therefore invoice date is
the appropriate date of sale. Saha Thai claims that its sales to the
United States are made pursuant to umbrella contracts which are negotiated
for price (by size and type), for a general quantity (an amount that
covers all products); and that neither the contract nor the purchase order
establishes the final quantity that will be shipped. Saha Thai points out
that price also changes from contract date to invoice date. The invoice is
the first written evidence of changes to prices set in the signed
contract. While changes are penciled onto the signed contract, these
changes are not initialed or dated by either party, and may occur any time
between the contract and the invoice. Furthermore, Saha Thai argues that
the Department verified that Saha Thai records the invoice date as the
date of sale in its accounting system. See Sales Verification Report at
12. Saha Thai notes that the Department has previously used invoice date
as date of sale because a respondent's internal records and financial
statements did not recognize a sale until dispatch and invoicing. See
Stainless Coils from South Africa 64 FR at 15464.

Department's Position: As both petitioners and respondents note, the
Department, pursuant to section 351.401(i) of its regulations, will
normally use the date of invoice as recorded in the producer's or
exporter's records kept in the ordinary course of business as the date of
sale. However, the Department recognizes the need for flexibility in those
circumstances in which an alternative date better reflects the date of
sale. 
Pursuant to section 351.401(i), "the Secretary may use a date other than 
the date of invoice if the Secretary is satisfied that a different date 
better reflects the date on which the exporter or producer establishes the
material terms of the sale." The Department will use an alternative date
if it "is presented with satisfactory evidence that the material terms of
sale are finally established on a date other than the date of invoice."
See Antidumping Duties; Countervailing Duties; Final Rule (Preamble), 62
FR 27296, 27349 (May 19, 1997). Material terms include price and quantity.
See Notice of Final Determination of Sales at Less Than Fair Value:
Emulsion Styrene-Butadiene Rubber From the Republic of Korea, 64 FR 14865,
14869 (March 29, 1999). After reviewing all of the information on the
record of this review with respect to the date of sale issue, the
Department finds that the contract date appropriately reflects the date of
sale for Saha Thai's U.S. sales during this review. 

As part of our ongoing analysis of the date sale issue in this
proceeding, the Department has continued to gain a better understanding of
the respondent's sales process and the level of importance of the
different terms of sale in their contracts. Based on the Department's
understanding of the respondent's sales process and the terms of sale
established in their contracts for U.S. sale, the Department believes that
it is appropriate to place a stronger emphasis on price when analyzing the
date of sale issue. In reviewing the information on the record and our
verification results, we found that the price terms did not change between
the contract date and invoice date for any subject merchandise that was
shipped. See Supplemental Questionnaire Response dated (March 7, 2000);
Sales Verification Report at 20-27, and Verification Exhibits 9, 12, 17,
19, 26, 27, 28, 29. We disagree with respondent that there were any price
changes. As stated above, based on the information verified, we found no
evidence that there was any change to the unit price on subject
merchandise 
that was shipped, as set forth in the contract. Moreover, respondents did 
not cite to any examples showing us that price had changed on any shipped 
product. 

With respect to changes in quantities, documentation on the record in
this review shows that, even though quantity changed for virtually all
contracts, most of the changes were within the overall weight tolerance
agreed to by respondents and customers in each contract. The identified
quantity tolerances in the contracts are in line with the industry
standards. See Memorandum to the File from Abdelali Elouaradia:
Determination of the Date of Sale for Saha Thai Steel Pipe Co., Ltd.
(October 4, 2000) ("Date of Sale Memorandum"), on file in the CRU.
Therefore, based on the terms of the contracts, the quantity changes were
not changes to the terms of the contract, because the changes for all
products shipped were within the tolerance that both the seller and the
buyer had agreed upon at the time of the contract.

Our analysis of changes in quantity terms in this review differs from our
analysis in prior reviews because here we were able to analyze the limited
number of the contracts, purchase orders and invoices contained on the
record covering all subject merchandise entered during the POR. In the
previous review, Saha Thai's export manager stated at verification that
the quantity tolerance in its sales contracts applies to the total
quantity on a purchase order (including all products), not to each
individual product ordered. See Pipes and Tubes from Thailand 97-98, 64 FR
at 56768. Therefore in the prior review, in reaching our determination on
the proper date 

of sale, we had to analyze the changes of the sale terms for line items
in selected contracts instead of analyzing the changes from the contract
as a whole. In addition, the record in the prior review did not contain a
complete set of purchase orders or invoices for any of the contracts. Thus
it was not possible for the Department to analyze the applicability of the
weight tolerance in the contract to the total weight ordered and invoiced.
Id. As a result, the Department used the date of invoice as the date of
sale in the prior review in accordance with its regulations, because the
information on the record of that review indicated that line item
quantities in Saha Thai's U.S. sales were not fully established until the
invoice. Id.

The evidence on the record for this review however, as stated above,
shows that there were no changes in prices and overall quantity set forth
in the contract for all subject merchandise that was shipped and invoiced.
Moreover, there is no discernible pattern of changes in the material terms
of sale after the date of contract. We also note that the frequency and
degree of the changes in quantity between contract and invoice line items
is not identical to that observed in the previous review. Therefore, for
the reasons stated above, we disagree with Saha Thai that similar facts in
this and the prior review necessitate the continued use of date of invoice
as the date of sale. Instead, we find that the information on the record
of this review helped us to determine that it is appropriate for us to
change the focus of our analysis to consider the importance of price terms
and the relevance of agreed-upon weight tolerances in this proceeding.
Therefore, the Department believes that the facts support our decision to
change the appropriate 

date of sale for Saha Thai's U.S. sales in this review to the date of
contract. Due to the proprietary nature of the facts related to Saha
Thai's U.S. sales in both this case and the prior review, a detailed
discussion of our analysis is contained in Date of Sale Analysis
Memorandum. We also disagree with respondent that the Department cannot
use different dates of sale for the U.S. and home market. In situations
where it is clear that the date of sale is different in each market, as is
the case here, the Department did use different appropriate dates of sale
for each market. See Notice of Final Results of Antidumping Duty
Administrative Review: Circular Welded Non-alloy Steel Pipe from Korea, 63
FR 32833 (June 16, 1998).

Given that the evidence on the record indicates that the price and
quantity of subject merchandise sold and shipped to Saha Thai's U.S.
customers does not vary from the prices and overall quantity specified in
the contracts, we find that contract date is the appropriate date of sale.
See Final Rule, Preamble, 62 FR at 27348-49. Therefore, our preliminary
results on date of sale is changed for these final results, and we find
that the contract date better reflects the date on which the material
terms of sale were established.

Comment 2: Exchange Rate Losses 

Petitioners request that the Department deduct exchange rate losses from
export value on certain sales because these losses were directly related
to U.S. sales. They maintain that the Department has consistently treated
exchange gains and losses on sales distinctly from more general gains and
losses, i.e., losses on loans. Petitioners state that when exchange losses
are directly related to U.S. sales, the Department should make a deduction
to U.S. price.

Petitioners assert that verification in the previous review established
that certain activities were solely related to exporting subject
merchandise to the United States and that the current verification
revealed nothing to change this conclusion. Therefore, certain reported
exchange rate losses are directly linked to these export sales to the
United States. 

Petitioners argue that the Department has made adjustments for exchange
rate gains or losses when they could be directly linked to U.S. sales.
Petitioners cite Antifriction Bearings (Other than Tapered Roller
Bearings) and Parts Thereof from France: Final Results of Antidumping Duty
Administrative Review, 57 FR 28360, 28413 (June 24, 1992) wherein the
Department considered respondent's use of currency hedging contracts and
adjusted for currency hedging gains and losses where respondents showed
that these gains and losses tied directly to sales of covered merchandise.
Petitioners note that in that case, where an allocation involved accounts
not limited to U.S. sales, the Department did not adjust U.S. price
because the reported gains and losses couldn't be directly tied to U.S.
sales. Id. Petitioners also note that the Court of International Trade
rejected adjustments based on currency hedging on the grounds the
gains/losses were not directly related to U.S. sales. Thyssen Stahl AG. v.
United States, 19 CIT 605, 614, 886 F.Supp. 23 (1995). Petitioners argue
that the Uruguay Round amendments make clear that an adjustment for
hedging, either a gain or loss, is appropriate if it was directly linked
to an export sale under consideration. See 19 U.S.C. 1677b-1(a) and 19
C.F.R. 351.415(b).

Petitioners claim that the record in this case does not involve certain
contracts and that there is no question that the exchange losses at issue
here are specifically and directly tied to U.S. sales. Moreover,
petitioners maintain that export price in the instant review should be
adjusted to reflect exchange losses on those sales because the record
indicates those losses are exclusively and directly linked to the U.S.
sales. Petitioners argue that information submitted by Saha Thai does not
reflect this reduction in export value and that Saha Thai stated that the
exchange rate 

losses have not been included in certain U.S. selling expenses, pursuant
to the Department's normal practice of not including in cost or adjusting
sales prices for exchange gains or losses associated with accounts
receivable. See Stainless Steel Wire Rod from Japan: Final Results of
Antidumping Duty Administrative Review, 63 FR 40434, 40441 (July 29, 1998)
("Rod from Japan"); Certain Welded Carbon Steel Pipe and Tube from Turkey:
Final Results of Antidumping Duty Administrative Review, 63 FR 35190,
35198 (June 29, 1998) ("Pipe and Tube from Turkey"); and Steel Wire Rod
from Trinidad and Tobago: Final Determination of Sales at Less Than Fair
Value, 63 FR 9177, 9181 (February 24, 1998) ("Wire Rod from Trinidad &
Tobago"). According to petitioners, Saha Thai mis-characterizes these
cases which actually support petitioners on this issue.

Petitioners do not dispute the Department's practice of either including
foreign exchange gains as an offset to financial expenses if they are
related to the cost of acquiring debt for purposes of financing production
operations, or excluding this item if it relates to sales. Relying on Pipe
and Tube from Turkey, 63 FR at 35198, which cites Certain Steel Concrete
Reinforcing Bars from Turkey: Final Determination of Sales at Less Than
Fair Value, 62 FR 9737, 9741 (March 4, 1997), petitioners point out that
the Department normally distinguishes between exchange gains and losses
from sales transactions and exchange gains and losses from purchase
transactions. See Wire Rod from Trinidad & Tobago 63 FR at 9181; and Rod
from Japan 63 FR at 40441. Consequently, petitioners argue that the
segregation of exchange gains and losses related to sales by the
Department supports their position in this case and none of the cases 
cited by Saha Thai show that exchange gains and losses related to sales
are to be ignored in the context of calculating the costs associated with
those sales.

Saha Thai argues that exchange rate losses were not included in certain
U.S. selling expenses in accordance with the Department's normal practice
of not including in cost or adjusting sales prices for exchange gains or
losses associated with accounts receivable. See Rod from Japan 63 FR at
40441; Pipe and Tube from Turkey 63 FR at 35198; Wire Rod from Trinidad &
Tobago 63 FR at 9181; and Certain Cold-Rolled Flat-Rolled Carbon-Quality
Steel Products From Brazil: Final Determination of Sales at Less Than Fair
Value, 65 FR 5554, 5581 (February 4, 2000). Saha Thai asserts that the
only exception to the Department's normal practice is when a company
engages in hedging on a forward currency market. Saha Thai argues that
exchange losses are not deducted because the Department is only concerned
with the price set by a respondent in U.S. dollars. In addition,
respondents note that the Department recognizes that if it subtracted
exchange losses from export price, it would similarly have to add exchange
gains to export price.

DOC Position: We disagree with petitioners. To adjust for currency
exchange losses from the export value of the U.S. sales would be contrary
to the Department's practice of not including exchange gains or losses
related to selling activities. As both parties acknowledge, the
Department's normal practice is to distinguish between exchange gains and
losses from sales transactions and exchange gains and losses from purchase
transactions. See Wire Rod from Trinidad & Tobago at 9181-82; Circular
Welded Non-Alloy Steel Pipe and Tube from Mexico: Final Results of
Antidumping Duty Administrative Review, 62 FR 37014, 37026 (July 10, 1997) 

("Steel Pipe and Tube from Mexico"). Accordingly, the Department's
longstanding practice is to exclude exchange gains and losses on accounts
receivable, which include sales transactions. See Certain Cut-to-Length
Carbon-Quality Steel Plate Products from Indonesia: Final Determination of
Sales at Less Than Fair Value, 64 FR 73164, 73174 (Dec. 29, 1999) ("CTL
Plate Indonesia"), which cites Steel Pipe and Tube from Mexico. 

In reviewing petitioners' arguments, the Department finds no reason or
rationale to change its current policy. Petitioners' request that the
Department make an adjustment for currency exchange losses in this case is
equivalent to requesting that the Department use the (spot) exchange rate
in effect on the date of payment for conversion purposes. Consider, for
example, a U.S. sale which occurs on January 1, 1999, calling for payment
of US$1000 with a spot rate of 100 Baht/US$ 1 on that date. Converting on
this date would yield a price of 100,000 Baht for the Department's
purposes. On the actual date of payment three months later, April 1, 1999,
the spot exchange rate is 80 Baht per US$ 1. Converting on this date would
yield a price of 80,000 Baht. In this example, there will be an exchange
loss of 20,000 Baht. If we adjusted the price for an exchange loss as 
petitioners are arguing the Department should do, we would deduct the 
20,000 Baht exchange loss on the date of payment from the 100,000 Baht 
on the date of sale. This is equivalent to using the exchange rate on 
the day of payment for the Department's pricing purposes, and would give 
us a price of 80,000 Baht ( US$1000 * 80 Baht/$).

Pursuant to section 351.415 of the Department's regulations, the
Department will convert currencies, relative to the U.S. dollar, using the
rate of exchange on the date of sale of the subject merchandise. Thus,
petitioners' request falls within the scope of section 351.415(b) of our
regulations, which provides an exception to our general rule and practice
of using the official exchange rate in effect on the date of the U.S. sale
for conversion purposes. Exceptions under that provision allow the
Department to use the exchange rate as specified in a hedging forward
contract directly tied to the U.S. sale only when the Department can
establish that the exporter has set the price on the basis of the rate in
the hedging forward contract. To establish such a finding, there must be
evidence of a currency hedging contract directly tied to the U.S. sales in
question. In this case, petitioners' request fails on two grounds. The
first is that section 351.415 does not provide for the use of the spot
rate in effect on the date of payment. The second is that even if we were
to accept the spot rate in effect on the date of payment as a rough proxy
for the forward rate in effect on the date of the U.S. sale, there is no
hedging contract directly tied to the sale in question. Therefore the
Department will not adjust export value for exchange rate losses or gains. 

Comment 3: VAT Charges

Petitioners argue the Department should not permit Saha Thai to reduce
the calculated normal value by reporting data exclusive of raw material
VAT and that similarly, the Department's constructed value calculations
should include raw material VAT. See 19 U.S.C. 1677b(e). Petitioners
claim that Saha Thai has failed to demonstrate that raw material VAT is
rebated and/or refunded prior to exportation of the subject merchandise
and thus, the Department should adjust normal value and its COP/CV
calculations to reflect raw material VAT costs. Additionally, Petitioners
argue that Saha Thai failed to provide any documentation on recovery of
VAT (and thus failed to carry its burden as to either normal value).
Petitioners claim that, rather than showing VAT raw material recovery by
Saha Thai, the record instead indicates that a large percentage of U.S.
exports were produced from domestically-produced coil on which no raw
material VAT was recovered. Moreover, petitioners argue that the evidence
respondents provide, tax ledgers showing taxes paid and taxes collected,
is insufficient because it doesn't show sale-specific correspondence. See
AIMCOR v. United States, 141 F.3d 1098, 1109-1110 (Fed.. Cir.) 1998) and
AIMCOR v. United States, 20 CIT 606 (1996) ("the AIMCOR cases").
Petitioners hold that the burden is on Saha Thai to prove that their pre-
exportation cost of materials did not include value-added taxes. See
Camargo Correa Metais, S.A. v. United States, 200 F.3d 771 (Fed. Cir.
1999) ("Camargo"). Petitioners comment that Saha Thai has failed to carry
its burden and argue that the facts available do not support exclusion of
VAT from normal value, but do support inclusion of raw material VAT in
constructed value.

Saha Thai argues that the Department should not artificially increase
Saha Thai's reported materials costs by non-existent VAT taxes noting that
VAT taxes are not costs borne by manufacturers and thus should not be
included in the cost of production or constructed value. According to Saha
Thai, the Department has long held that value-added taxes are not a part
of cost of production or constructed value, precisely because they are not
costs borne by manufacturers. See Porcelain-on-Steel Cooking Ware from
Mexico: Final Results of Antidumping Duty Administrative Review, 55 FR
21061 (May 22, 1990); and Melamine Institutional Dinnerware Products from
Taiwan: Final Determination of Sales at Less Than Fair Value, 62 FR 1726
(January 13, 1997). 

Saha Thai notes that during verification, the Department found nothing to
challenge its normal assumption that all VAT taxes on inputs are rebated.
Saha Thai further maintains that with respect to the duty exemptions for
imported coil and zinc, the Department saw, through the quarterly Customs
reports, that all such purchases were exempt from VAT payments. See Sales
Verification Report, Exhibit 11 at 11 (showing total exempted import
duties and VAT valued at a certain percentage of the total sales price);
Saha Thai's Supplemental Questionnaire Response, Exhibit SR1-26, at 4
(September 27, 1999). Saha Thai holds that when the Department tied the
total manufacturing, SG&A and interest costs for Saha Thai and its tollee
to the reported costs, the Department found no unreported VAT tax
expenses. See Memorandum from Nancy M. Decker and Javier Barrientos to the
Files: Cost Verification of Section D Questionnaire Responses Submitted by
Saha Thai Steel Pipe Company, Ltd., at 10, Exhibit 3 at 16-17 (tying all
costs associated with materials (domestic and import) to total reported
costs), at 25-6, and Exhibit 16 at 1 and 2 (tying total reported SG&A to
the financial statement) (August 4, 2000) ("Cost Verification Report").
Saha Thai argues that if the company had incurred VAT costs, such costs
would have turned up in the total cost reconciliation and therefore, all
of Saha Thai's costs were found by the Department at verification either
to be included in the reported costs or properly excluded.

Finally, Saha Thai alleges that the Department has the discretion to
choose what it verifies, and at verification the Department did not ask
Saha Thai to produce VAT payment records for raw material purchases.
Therefore, Saha Thai contends, the company cannot be "punished" for
failing to provide documents never requested by the Department at
verification. 

Additionally, Saha Thai remarks that petitioners' suggestion that Saha
Thai may not get credit for its VAT payment on raw material purchases
simply defies common sense because a company would have no reason not to
claim a common tax credit. 

DOC Position: As noted by respondent, petitioners are incorrect in
asserting that Saha Thai is required to and failed to provide information
on recovery of VAT and demonstrate that raw material VAT is rebated and/or
refunded prior to exportation of the subject merchandise. The Department
specifically does not require reporting of the information about VAT in
its Antidumping Questionnaire. In Section D, question IV(A)(4.0) "Internal
Taxes on Direct 

Materials Purchases," the Department's questionnaire asks: Report the net
unit amount incurred for all internal taxes (other than value-added taxes)
imposed on purchases of direct materials used to produce the merchandise
under review. The amount incurred for internal taxes on direct materials
purchases will be added to the cost of the materials unless you
demonstrate that such taxes are remitted or refunded upon exportation of
the merchandise under review." (Emphasis added).

Therefore, Saha Thai was not required to provide any information on VAT.
In addition, during verification the Department found nothing to raise any
concerns about the treatment of VAT. See Cost Verification Report at 16.
Therefore, the Department did not seek further information or
documentation relating to VAT. The Court of International Trade has
supported this approach. "Verification is like an audit, the purpose of
which is to test information provided by a party for accuracy and
completeness. Normally an audit entails selective examination rather than
testing of an entire universe. Hence, evasion is a common possibility, but
only when audits 

uncover facts indicating the actuality thereof are auditors compelled to
search further . . . Commerce has the discretion in choosing which items
it will verify, and so long as Commerce has not uncovered facts in the
process of verification that point to an improper accounting . . .
Commerce is not compelled to search further." See PMC Specialities Group,
Inc. v. United States, 20 CIT 1130, 1134-35 (1996).

Petitioners cite the AIMCOR cases and Camargo in support of their claim
that the burden is on Saha Thai to prove their pre-exportation cost of
material did not include value-added taxes. However, as stated above, in
the Department's questionnaire, this requirement is for all internal taxes
except VAT. In addition, these cases involved the Brazilian VAT tax
system, a unique system for which further information was required to
determine whether it should be taken into account in calculating CV. See
Camargo Correa Metais, S.A. v. United States, 200 F.3d 774 (Fed. Cir.
1999); AIMCOR v. United States, 141 F.3d at 1106, 1109-1110 (Fed. Cir.
1998). In the AIMCOR cases, the Department (on remand) had specifically
requested the information on the Brazilian VAT system, which is not the
case here. AIMCOR, 141 F.3d at 1106, 1109. Therefore, we have not adjusted
for VAT in either the calculation of CV or normal value.

Comment 4: Duty Drawback

Petitioners argue that Saha Thai incorrectly calculated its duty drawback
claim and that the quantity of imported coil used in Saha Thai's
estimation of import duties paid should not include a certain volume of
export sales. Petitioners maintain that the exports of such pipe were
produced in all instances from domestically-purchased coils and that the
Department should require correction of Saha Thai's allocations for its
drawback claim. Petitioners assert that Saha 

Thai recognizes that these specific exports to the United States are not
entitled to drawback for this reason. Saha Thai explains that the
Department verified that the company's duty exemption claim was not
overstated. The company claimed an import duty exemption for imported
coils on only a few U.S. sales. Saha Thai maintains that no duty exemption
was claimed on the sales in question, as these sales were produced using
domestically-purchased coils and that petitioners' assertion that Saha
Thai overstated its duty drawback claim apparently arises from a
misunderstanding of the methodology used to calculate the exemption. The
company indicates that when it calculated the value of the exemption on
Saha Thai's U.S. sales, it used the average dutiable value of Saha Thai
purchases only. According to Saha Thai, this value was multiplied by the
Thai Customs duty rate on coil to obtain the value of the duty exemption
for coil incorporated into Saha Thai's U.S. shipments of subject
merchandise. Therefore, Saha Thai argues that no adjustment is necessary
for its verified duty exemption claims.

DOC Position: We agree with Saha Thai that its duty drawback claim was
appropriately calculated. In calculating the duty drawback adjustment,
Saha Thai did exclude the amounts of coil incorporated into the exports in
question since these pipes were produced using domestically-purchased
coils. At verification, the Department calculated the average dutiable
value used in the duty drawback calculation by summing only the values for
imported coils. See Sales Verification Report at 29 and exhibit 11 at 1.
Therefore, there is no need to make an adjustment to Saha Thai's duty
drawback claim.

Comment 5: Thai Antidumping Duties on Russian Coils

Petitioners argue that antidumping duties due on Russian coil imported
into Thailand should be included in the Department's COP/CV calculations.
Petitioners further claim that the Thai Government ruling which permitted
the exemption from the antidumping duties of coils stored in a bonded
warehouse was not issued until after the period of review. Petitioners
state that the exemption pronouncement does not indicate that it was
retroactive and that in accordance with normal Thai Government practice,
the Department should presume that the effective date is the date of
publication in the Thai Gazette.

Saha Thai argues that the Department should not include antidumping
duties on Saha Thai's purchases of Russian coil, because the Department
verified that Saha Thai did not deposit or pay duties on imports of
Russian coil. See Cost Verification Report at 16-18. Saha Thai asserts
that the Department requested and received all of the import documentation
related to Saha Thai's purchases of coil from the Russian Federation, Id.
at 12; in no instance did the Department find any evidence that Saha Thai
deposited or paid dumping duties on its imports of Russian coil.

Further, Saha Thai explains that when they imported the Russian coil, the
company understood that imports into bonded warehouses were exempt from
payment of dumping duties and entered its Russian coil imports without
paying antidumping duties. However, only after Saha Thai sought a formal
ruling from the Thai government on this issue, did the government confirm
Saha Thai's understanding that imports into bonded warehouses were not
liable for antidumping duty payments.

Saha Thai contends that nowhere in the definitive translation of the
ruling does it indicate that it was effective only upon publication.
Therefore, Saha Thai claims that in the absence of a stated effective date
of the ruling, it is logical to conclude that the Thai government's ruling 

applies retroactively. Finally, Saha Thai maintains that at verification
the Department found no evidence that it paid dumping duties on Russian
coil imports, and if any dumping duties had been paid, they would have
been included in the raw materials costs reported. The Department
confirmed that all import-related expenses were included in reported costs
for raw materials. Therefore, Saha Thai argues, there is no basis for
petitioners' belief that dumping duty liabilities were excluded from Saha
Thai's reported costs.

DOC Position: The Department found no evidence during verification that
Saha Thai paid any dumping duties for its imports of Russian coils,
regardless of the effective date of the Thai Government's ruling. At
verification, the Department examined in detail the various Thai
antidumping determinations regarding Russian and Ukrainian hot-rolled
coil, Thai Customs' approval of Saha Thai's bonded warehouse, Thai
Customs' law pertaining to bonded warehouses, accounting records related
to Saha Thai's Import Fees and Duties account, and Customs entry forms for
all 1998 coil purchases. See Cost Verification Report at 15-18. The
Department found no indication that Saha Thai paid any dumping duties for
the imports of hot-rolled coils from Russia. Therefore, we disagree with
petitioners that an adjustment to COP/CV for dumping duties is
appropriate, and we have made no such adjustment.

Comment 6: Raw Materials Exchange Gains 

Saha Thai argues that the Department should follow its long-standing
practice and offset total cost by exchange gains realized on purchases of
raw materials. The company states that, during the cost calculation
period, the company recognized substantial exchange gains on foreign 
currency transactions, and that virtually all of these gains were
directly related to the purchase of raw materials which the Department
verified. The company notes that it is the Department's practice to
include exchange gains or losses on purchases in calculating cost of
manufacturing, and cites the following cases as support: Canned Pineapple
Fruit From Thailand: Final Results and Partial Rescission of Antidumping
Duty Administrative Review, 63 FR 43661, 43669 (August 14, 1998)
("Pineapple from Thailand"); Wire Rod from Trinidad & Tobago at 9182; CTL
Plate Indonesia at 73174; Steel Pipe and Tube from Mexico at 37026; and
Certain Welded Carbon Steel Pipe and Tube From Turkey: Final Results of
Antidumping Duty Administrative Review, 62 FR 51629, 51632 (October 2,
1997). Saha Thai highlights the most recently completed administrative
review of this order, saying the Department boosted Saha Thai's reported
costs by almost 30 percent, to account for exchange losses incurred in
1997 on raw material purchases. See Pipes and Tubes from Thailand 97-98 64
FR at 56765.

Petitioners argue that Saha Thai's claimed raw material currency exchange
gain is a bookkeeping illusion which does not reasonably reflect the costs
of producing the subject merchandise. Thus, the Department should continue
to deny the claimed adjustment in its cost calculations for the final
results. Petitioners state that Saha Thai's exchange gain claim distorts
the raw material costs and that the Department has a well-established
policy of differentiating treatment of exchange gains and losses depending
on the nature of the underlying transaction. According to petitioners,
exchange gains and losses on raw material inputs are related to the cost 
of production, exchange gains and losses on long-term loans are amortized
over the life of the loan, and exchange gains and losses on sales are
segregated from other exchange gains and losses. See Case Brief on Behalf
of Saha Thai Steel Pipe Co., Ltd., August 16, 2000, at 2, n.3, citing to:
Pineapple from Thailand 63 FR at 43669; Wire Rod from Trinidad & Tobago 63
FR at 9182; CTL Plate Indonesia 64 FR at 73174; Steel Pipe and Tube from
Mexico 62 FR at 37026; and Certain Welded Carbon Steel Pipe and Tube From
Turkey: Final Results of Antidumping Duty Administrative Review, 62 FR
51629, 51632 (October 2, 1997).

Petitioners maintain that it is the Department's practice to adhere to
respondent's recording of costs in accordance with the General Accepted
Accounting Principles ("GAAP") of its home country if those records
reasonably reflect the costs of producing the subject merchandise. See
Stainless Wire Rod from Italy: Final Determination of Sales at Less Than
Fair Value, 63 FR 40422 (July 29, 1998); Certain Fresh Cut Flowers from
Colombia: Final Results of Antidumping Duty Administrative Reviews, 61 FR
42833, 42846 (August 19, 1996); and 773(f)(1)(A) of the Act. Petitioners
continue that reliance on GAAP recorded expenses has been upheld where it
does not distort the firm's actual costs. See FAG U.K. Ltd. v. United
States, 20 CIT 1277, 1290, 945 F.Supp. 260, 271 (1996). In this case,
petitioners argue that respondent's accounting practices, even if in
accordance with Thai GAAP, do not reasonably reflect the costs of
producing the subject merchandise. Petitioners assert that granting Saha
Thai's claim would not produce a "representative measure" of Saha Thai's
coil cost. See SAA at 835. Petitioners provide examples where the
Department has corrected COP and CV calculations to reflect actual costs
rather than accounting valuations. See E.I. DuPont de Nemours & Co. v.
United States, 20 CIT 373, 376, 932 F.Supp. 296 (1996).

Petitioners contend that the fundamental objective of COP calculations is
to determine as accurately as possible the true cost to the respondent of
manufacturing the subject merchandise. See Timken Co. v. United States, 18
CIT 1, 10, 852 F.Supp. 1040 (1994). According to petitioners, the
Department's verification indicates that Saha Thai's treatment in its cost
questionnaire response of exchange gains and losses on hot-rolled coil
purchases does not reflect Saha Thai's true raw material costs. For
example, some invoiced coil purchases were booked in 1997, the exchange
loss for these purchases were recorded at 1997 year-end, but the invoice
was not paid until 1998, and there was an exchange gain since the 1997
year-end. See Cost Verification Report at 27. Petitioners hold that Saha
Thai claimed an exchange gain for the 1998 booked gain in its cost
response. Id. Petitioners assert that verification revealed Saha Thai's
distortive reporting and, contrary to Saha Thai's argument, the exchange
gain claim failed verification. Petitioners state that the 1998 raw
material exchange rate gain reported by Saha Thai in its cost response is
clearly distortive of raw material cost and that Saha Thai's true cost for
raw material should reflect the exchange gain or loss associated with the
specific coil purchase. Petitioners contend that bifurcated treatment of
exchange gains and losses inaccurately portrays Saha Thai's cost relative
to that coil and that 1997 year-end exchange losses on coil purchases
might possibly exceed the 1998 gains, in effect giving Saha Thai, in
total, an exchange loss rather than a gain on coil purchases. 

Petitioners allege that the inappropriateness of bifurcated treatment 
of exchange gains on raw material purchases is also revealed by 
illustrative comparison to instances of purchase and payment of 
coil during that same accounting period. Petitioners claim that in 
such situations, the complete effect of exchange rate movement is
fully reflected in Saha Thai's books and cost reporting yet, Saha Thai's
acquisition of identical coil, which through happenstance involved the
purchase and payment in two different accounting periods, could have
dramatically different booked and reported costs. Petitioners state that
an accounting treatment which captures the exchange rate movement in its
entirety would more accurately reflect Saha Thai's true cost of
production. Petitioners comment that the Department properly denied the
adjustment reported in the "EXGAIN" field of Saha Thai's Section D
response because it fully included, and did not segregate, gains and
losses related to capital equipment purchases in addition to raw material
purchases. See Cost Verification Report at 27. Petitioners state that
claims for exchange gains must be limited to gains related to raw material
purchases and the appropriately amortized portion of other production-
related expenses. Petitioners urge the Department to deny Saha Thai's
claimed exchange gain relating to reported costs because the company has
not supported its claim with accurate calculations and the reported raw
material cost does not reflect Saha Thai's true cost of manufacturing.
Additionally, petitioners contend that verification revealed Saha Thai's
distortive reporting and, contrary to Saha Thai's argument, the EXGAIN
claim failed verification.

DOC Position: The Department normally includes in its calculation of COP
and CV foreign exchange gains and losses resulting from transactions
related to a company's manufacturing operations (e.g., purchases of
inputs). See CTL Plate Indonesia 64 FR at 73174; Wire Rod from Trinidad &
Tobago 63 FR at 9181-82; and Polyethylene Terephthalate Film, Sheet, 
and Strip From the Republic of Korea: Final Determination of Sales
Less Than Fair Value, 56 FR 16305, 16313 (April 22, 1991) (comment 16).
Saha Thai's foreign exchange gains, which are included in its COP and CV,
are for gains resulting from raw materials purchase transactions or
borrowing money to support its production operations.

We disagree with petitioners argument that Saha Thai's exchange gain
claim failed verification because Saha Thai's reporting of exchange gains
on imports of raw material was distortive. Saha Thai recorded and reported
its exchange gains and losses the same way as it had in the past. In the
most recently completed review, the Department agreed with petitioners
that net exchange gains/losses on imports of raw materials should have
been included in Saha Thai's raw material cost based on Saha Thai's same
accounting method. In addition, the Department includes gains and losses
related to raw material imports in the cost of manufacturing not only
losses. As petitioners note in citing the Timken case, the fundamental
objective of COP calculations is to determine as accurately as possible
the true cost to the respondent of manufacturing the merchandise under
review. See Timken, 18 CIT 1, 10 (1999). Thus we rely on normal books and
records unless they are distortive. See 773(f)(1)(A) of the Act. In this
case, the Department found no distortions or discrepancies in Saha Thai's
reporting of its exchange gain claim on imported raw material purchases.
See Cost Verification Report at 27. Because the purchases of raw materials
that generates the foreign exchange gains and losses relate directly to
the company's manufacturing of the merchandise under consideration, we
included them in the calculation of COP and CV. 

Comment 7: U.S. Brokerage Expenses

Petitioners argue that Saha Thai made significant data reporting errors
in the "USBROKU" field and the data reporting problem affects the
"USBROKU" field in the Department's database. Petitioners claim that Saha
Thai has not submitted corrected data for this field and that absent any
correction, the Department should utilize adverse facts available to value
the field.

Saha Thai argues that the Department should use the revised and verified
U.S. brokerage expense amounts, that were provided at the beginning of
verification, for all U.S. sales, in the final results. Saha Thai states
that at verification they disclosed and provided the Department with
revised U.S. brokerage calculations. See Sales Verification Report at 2.
Saha Thai states that they agree with Petitioners that these revised
amounts should be used in the Department's Final Results of this
administrative review.

DOC Position: At the beginning of verification, Saha Thai presented the
Department with revised US. brokerage expenses. The Department verified
these corrections and found no discrepancies. See Sales Verification
Report at 2, and 23-7. Therefore, the Department has used the revised U.S.
brokerage amounts presented at the onset of verification for these final
results.

Comment 8: U.S. Imputed Credit Expense

Saha Thai argues that the Department should correct an inadvertent error
found at verification with respect to the calculation of U.S. imputed
credit expense. The company maintains that at verification, the Department
discovered that Saha Thai's U.S. credit expenses had been systematically
over-reported in cases where payment was received in two installments. See
Sales Verification Report at 21-22. This over-reporting, according to Saha
Thai, was a result of a programming error in the company's submission. 
Saha Thai asserts that in calculating the two components of credit, Saha 
Thai's economic consultants failed to weight them correctly. Saha Thai 
contends that by using the incorrect payment weights for the first and 
second payment, total imputed credit expenses on these sales were greatly 
overstated. The company notes that the Department verified nearly all of 
the source information needed to recalculate imputed credit expense on 
these sales including payment information for virtually every reported 
U.S. sale and the reported interest rate. See Sales Verification Report
at 31.

Petitioners did not comment on this issue.

DOC Position: We agree with Saha Thai that U.S. credit expenses had been
systematically over-reported in cases where payment was received in two
installments. In its verification report, the Department noted that in
situations where there were two payments as part of a U.S. sale, the
imputed interest expense needed to be weighted. See Sales Verification
Report at 20 - 27 and Verification Exhibits 9, 26, 27, and 29. We have
therefore revised our imputed credit calculations to take into account the
proper weighting.

Comment 9: Duty Reimbursement

According to petitioners, the statute directs the Department to reduce
export prices of subject merchandise by subtracting amounts attributable
to U.S. import duties. Petitioners further argue that the Department may
exercise discretion and reduce the export price by the amount of
antidumping duty deposits paid based on the definitive treatment of such
expenses in Saha Thai's financial records. They maintain that the statute,
at 19 U.S.C. 1677b(f)(1)(A), provides that costs shall normally be
calculated based on the records of the exporter.

Petitioners assert that to the extent a reduction in export price for
antidumping duties paid conflicts with current policy, that policy should
be changed. Further, the distortive nature of current policy is evident in
the disparate treatment accorded antidumping duty deposits dependent on
whether a subsequent review is requested. Therefore, petitioners maintain,
the Department's regulation must be broad enough to cover such a situation
or it essentially has no efficacy.

Saha Thai argues that the Department should not change its policy with
respect to the treatment of U.S. dumping duties. Saha Thai contends that
the reimbursement regulation is inapplicable in this case because the
plain language of the regulation cited by petitioners clearly contemplates
that there be two entities: (1) an exporter or producer that paid duties
on behalf of (2) the importer. Saha Thai asserts that because Saha Thai is
itself the producer, exporter and importer of its U.S. entries, the
Department's regulation does not apply. In addition Saha Thai maintains
that the SAA states that the Department "intends no change in its
practice" with respect to the finding of reimbursement. See SAA Pub. L.
No. 103-465, 108 Stat. 4809 at 886 (1994). Saha Thai holds that
petitioners cite no case or administrative determination prior to the SAA
in which the Department found reimbursement in a situation where a single
entity acted as producer, exporter and importer. Thus, according to Saha
Thai, the SAA contradicts petitioners' argument. Saha Thai comments that
this interpretation of the regulatory language has been endorsed by the
Department, and was first articulated by the Department in Steel Pipe and
Tube from Mexico 62 FR at 37014. 

Saha Thai argues that antidumping duties should not be deducted from
export price. Saha Thai maintains that antidumping expenses are properly
included as a cost in a company's books to conform with accounting
principles and therefore, they should not be included in the Department's
calculations. Saha Thai asserts that to do so would mean that dumping
margins would increase exponentially from review to review as the
deduction from export price would grow. Saha Thai argues that the change
in policy which petitioners advocate would unfairly punish respondents and
would be contrary to the letter and the spirit of the dumping law.

DOC Position: Section 351.402(f) of the Department's regulations
addresses reimbursement of antidumping duties. The section states, in
relevant part, that, "[i]n calculating the export price (or the
constructed export price), the Secretary will deduct the amount of any
antidumping duty or countervailing duty which the exporter or producer:
(A) paid directly on behalf of the importer; or (B) reimbursed to the
importer. 19 CFR section 351.402(f)(1). We have addressed this issue in
previous segments of this proceeding as well as in other proceedings. See
Pipes and Tubes from Thailand 97-98, 64 FR at 56759; Certain Cold-rolled
Carbon Steel Flat Products from the Netherlands: Final Results of
Antidumping Duty Administrative Review, 64 FR 11825 (March 10, 1999)
("Cold-rolled Steel from the Netherlands"). In both instances, the
manufacturer/exporter was also the importer of record during the POR. The
Department found that two separate corporate entities must exist to invoke
the reimbursement regulation, and that therefore, the reimbursement
regulation does not apply where the producer/exporter and the importer are
one and the same entity. See Pipes and Tubes from Thailand 97-98, 

64 FR at 56759; and Cold-rolled Steel from the Netherlands, 64 FR at
11825. We explained that our "decision as to reimbursement is based upon
our regulatory interpretation of 19 CFR 351.401(f) [sic], which is that
two separate corporate entities must exist in order for the Department to
invoke the reimbursement regulation." See Pipes and Tubes from Thailand 97-
98, 64 FR at 56769. Because the facts on the record indicate that Saha
Thai has neither paid antidumping duties directly on behalf of another
entity, nor reimbursed another entity, we find that section 351.402(f) of
the Department's regulations does not apply. Therefore, we did not deduct
the amount of antidumping duties Saha Thai paid on certain U.S. sales from
our calculation of export price for those sales.

Recommendation

Based on our analysis of the comments received, we recommend adopting the
positions described above. If these recommendations are accepted, we will
publish the final results and the final weighted-average dumping margins
in the Federal Register. 

Agree____ Disagree____

________________________________

Troy H. Cribb
Acting Assistant Secretary
 for Import Administration
________________________________

(Date)