[Federal Register Volume 62, Number 200 (Thursday, October 16, 1997)]
[Notices]
[Pages 53808-53821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27471]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-549-502]


Certain Welded Carbon Steel Pipes and Tubes From Thailand: Final 
Results of Antidumping Duty Administrative Review

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

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

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SUMMARY: In response to requests by Thai Union Steel Co., Ltd. (``Thai 
Union''), Saha Thai Steel Pipe Company, Ltd. (``Saha Thai''), and its 
affiliated exporter S.A.F. Pipe Export Co., Ltd., (``SAF'') 
(collectively ``Saha Thai''), and two importers, Ferro Union Inc. 
(``Ferro Union''), and ASOMA Corp. (``ASOMA''), the Department of 
Commerce (``the Department'') is conducting an administrative review of 
the antidumping duty order on certain welded carbon steel pipes and 
tubes from Thailand. This review covers the following manufacturers/
exporters of the subject merchandise to the United States: Saha Thai 
and Thai Union. The period of review (``POR'') is March 1, 1995 through 
February 29, 1996. We received comments on the preliminary results and 
rebuttal comments from the petitioners and respondents.
    Based on our analysis of comments received, we have applied total 
adverse facts available to both Saha Thai and Thai Union. Therefore, 
with respect to both respondents, the final results do not differ from 
the preliminary results. The final weighted-average dumping margins are 
listed below in the section entitled ``Final Results of Review.''

EFFECTIVE DATE: October 16, 1997.

FOR FURTHER INFORMATION CONTACT: John Totaro or Dorothy Woster, AD/CVD 
Enforcement Group III, Office 7, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
1398 or (202) 482-3362, respectively.

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (hereinafter, 
``the Act'') by the Uruguay Round Agreements Act (``URAA''). In 
addition, unless otherwise indicated, all citations to the Department's 
regulations

[[Page 53809]]

are to the current regulations, as codified at 19 CFR part 353 (April 
1997). Although the Department's new regulations codified at 19 CFR 
part 351 (62 FR 27296, May 19, 1997) (``Final Regulations'') do not 
govern this administrative review, citations to those regulations are 
provided, where appropriate, as a statement of current departmental 
practice.

SUPPLEMENTARY INFORMATION:

Background

    On March 11, 1986, the Department published in the Federal Register 
an antidumping duty order on welded carbon steel pipes and tubes from 
Thailand (51 FR 8341). On March 4, 1996, the Department published a 
notice of opportunity to request an administrative review of this order 
covering the period March 1, 1995 through February 29, 1996 (61 FR 
8238). Timely requests for an administrative review of the antidumping 
order with respect to sales by Saha Thai/SAF and Thai Union during the 
POR were filed by Thai Union, and jointly by Saha Thai, SAF, Ferro 
Union, and ASOMA. The Department published a notice of initiation of 
this antidumping duty administrative review on April 25, 1996 (61 FR 
18378).
    On May 14, 1996, Saha Thai, SAF, Ferro Union, and ASOMA sought to 
withdraw their request for review and requested that the Department 
terminate the review with respect to sales by Saha Thai/SAF during the 
POR. The domestic interested parties, Allied Tube & Conduit 
Corporation, Laclede Steel Company, Sawhill Tubular Division of Armco, 
Inc., and Wheatland Tube Company, (``petitioners''), objected to 
partial termination of the review on the grounds that, on March 29, 
1996, they had submitted to the Department a timely request for review 
of sales by these companies and served Saha Thai with a copy of this 
request. Although there is no official record of petitioners' request, 
because the reason for the filing error is unclear and given the 
remedial nature of the antidumping law and the fact that Saha Thai 
received notice of petitioners' request, the Department elected to 
continue the ongoing review of these sales. See Memorandum to Robert S. 
LaRussa from Stephen J. Powell, July 11, 1996.
    On May 24, 1996, the petitioners requested that the Department 
verify the responses of both Saha Thai and Thai Union.
    The Department determined that it was not practicable to complete 
this review within statutory time limits, and, pursuant to section 
751(a)(3)(A) of the Act, extended the time limit for the preliminary 
results of the review on November 1, 1996. On April 10, 1997, the 
Department published in the Federal Register (62 FR 17590) the 
preliminary results of its administrative review of this antidumping 
order covering the period March 1, 1995 through February 29, 1996. On 
August 8, 1997, pursuant to section 751(a)(3)(A) of the Act, the 
Department extended the time limit for the final results of the review.
    On August 21, 1997, the Department requested Saha Thai to submit 
onto the record of this segment of the proceeding certain information 
concerning its ownership and management structure and the ownership 
interests of its directors that Saha Thai had placed on the record of 
the subsequent segment (the March 1, 1996-February 28, 1997 POR). Saha 
Thai complied with this request in a timely manner. Saha Thai 
submission August 25, 1997.<SUP>1</SUP> Both Saha Thai and petitioners 
filed comments on Saha Thai's submission.<SUP>2</SUP>
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    \1\ On two occasions, Saha Thai resubmitted portions of this 
filing as public documents after partially withdrawing its claims of 
business proprietary treatment. See Saha Thai submission September 
8, 1997 and Saha Thai submission October 2, 1997.
    \2\ Both sets of comments were submitted on September 8, 1997. 
Saha Thai resubmitted the business proprietary version of its 
comments as a public document. See Saha Thai submission October 1, 
1997.
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    The Department has now completed this review in accordance with 
section 751(a) of the Act.

Scope of the Review

    The products covered by this administrative review are certain 
circular welded carbon steel pipes and tubes from Thailand. The subject 
merchandise has an outside diameter of 0.375 inches or more, but not 
exceeding 16 inches. These products, which are commonly referred to in 
the industry as ``standard pipe'' or ``structural tubing,'' are 
hereinafter designated as ``pipe and tube.'' The merchandise is 
classifiable under the Harmonized Tariff Schedule (HTS) item numbers 
7306.30.1000, 7306.30.5025, 7306.30.5032, 7306.30.5040, 7306.30.5055, 
7306.30.5085 and 7306.30.5090. Although the HTS subheadings are 
provided for convenience and Customs purposes, our written description 
of the scope of the order is dispositive. This review covers sales of 
these products by Saha Thai/SAF and Thai Union during the period March 
1, 1995 through February 29, 1996.

Verification

    As provided in section 782(i) of the Tariff Act, we verified 
information provided by the respondents, Saha Thai and Thai Union, by 
using standard verification procedures, including on-site inspection of 
the manufacturers' facilities, examination of relevant purchase and 
financial records, and analysis of original documentation used by Saha 
Thai and Thai Union to prepare responses to requests for information 
from the Department. Our verification results are outlined in the 
verification reports. See Memoranda to the file from Theresa L. 
Caherty, John B. Totaro and Dorothy A. Woster, April 4, 1997 (``Cost 
Verification Reports'').

Facts Available

Saha Thai

    We preliminarily determined that the use of total adverse facts 
available was appropriate with respect to Saha Thai's submitted data in 
accordance with section 776(a)(2)(C) and section 776(b) of the Act 
because we found that Saha Thai had significantly impeded the review by 
failing to comply with our requests for complete information on 
affiliates. In response to the Department's requests that Saha Thai 
identify all affiliated companies involved in the production or sale of 
the subject merchandise, the record demonstrates that Saha Thai failed 
to disclose its affiliation with Thai Tube Co., Ltd. (``Thai Tube''), a 
producer of subject merchandise, and three customers, two of which are 
resellers of subject merchandise. Saha Thai also failed to provide 
complete information concerning ownership and management of the Siam 
Steel Group. See Memorandum to Robert S. LaRussa from Joseph A. 
Spetrini, March 31, 1997 on file in the Central Records Unit, Room B099 
of the main Commerce Building.
    Section 771(33) of the Act defines ``affiliated persons'' for 
purposes of our antidumping analysis. Section 771(33)(A) of the Act 
defines ``affiliates'' as ``[m]embers of a family including brothers 
and sisters (whether by whole or half blood), spouse, ancestors, and 
lineal descendants.'' Under the Act, members of a family are viewed as 
a unit, e.g., an affiliated person. Further, the term ``including'' in 
this definition indicates that the list of family relations is 
illustrative, not finite.
    Section 771(33)(F) defines affiliates as ``[t]wo or more persons 
directly or indirectly controlling, controlled by, or under common 
control with, any person.'' The statutory definition of affiliated 
persons in section 771(33) of the Act states that ``control'' exists

[[Page 53810]]

where one person ``is legally or operationally in a position to 
exercise restraint or direction'' over another person. The Statement of 
Administrative Action accompanying the Uruguay Round Agreements Act 
(``SAA''), H.R. Doc. 316, Vol.1, 103d Cong. (1994), indicates that 
stock ownership is not the single evidentiary factor for determining 
whether a person is in a position of control, and that control may also 
be established through corporate or family groupings. SAA at 838. Thus, 
the statute and the SAA expressly envision affiliation based on family 
stockholdings, consistent with our prior practice. See, e.g., Certain 
Fresh Cut Flowers From Colombia; Final Results of Antidumping Duty 
Administrative Reviews, 61 FR 42833, 42853 (August 19, 1996) (common 
stockholdings of particular families found to control one or more 
corporate entities). Moreover, as stated in the final regulations, the 
Department intends to scrutinize closely issues of affiliation by 
family groupings. Final Regulations, 62 FR at 27380. The Department has 
analyzed the information on affiliation on the record in this 
administrative review, and determined that Saha Thai and certain home 
market customers, service providers, and producers of the subject 
merchandise to be affiliated under section 771(33)(F) by virtue of 
common control by several families involved in the ownership and 
management of Saha Thai.
    Members of six families hold varying percentages of Saha Thai's 
shares and hold all of the seats on Saha Thai's board of directors. 
Several of Saha Thai's directors also hold positions as officers and 
managers in the company: Limsiam Ampapankit, Chairman of the Board; 
Somchai Karuchit, Managing Director; Somchai Lamatipanont, Deputy 
Managing Director; and Kim Hua Sae Heng, Financial Director. Saha Thai 
September 8, 1997 submission. Saha Thai's affiliations are established 
through the common control and financial holdings of these families.
    We find that Saha Thai is affiliated with Thai Tube and Thai Hong 
Steel Pipe Import Export Co., Ltd, (``Thai Hong''), producers of the 
subject merchandise, under section 771(33)(F) of the Act by virtue of 
common control by the Lamatipanont family. Somchai Lamatipanont is the 
Deputy Managing Director of Saha Thai; under the circumstances in this 
case, we find this places him in a position of legal and operational 
control of Saha Thai. The Lamatipanont family is in a position of legal 
and operational control in Thai Tube and Thai Hong by virtue of the 
Lamatipanont family's substantial ownership interests in both companies 
and the positions of family members as officers and directors. 
Therefore, the Lamatipanont family is legally and operationally in a 
position of control over Thai Tube, Thai Hong, and Saha Thai. 
Therefore, these companies are affiliated under section 771(33)(F) of 
the Act.
    We also find that Saha Thai is affiliated with three of its home 
market customers by virtue of common control by three families in 
positions of control within Saha Thai. These customers are referred to 
in this notice as Company A, Company B, and Company C for business 
proprietary reasons. Two of these customers (Companies A and B) are 
resellers of Saha Thai pipe. In the circumstances of this case, we find 
that three Saha Thai officers, Kim Hua Sae Heng--Financial Director, 
Somchai Lamatipanont--Deputy Managing Director, and Limsiam 
Ampapankit--Chairman of the Board, are in positions of legal and 
operational control of Saha Thai due to their positions in the Saha 
Thai management hierarchy. Saha Thai September 8, 1997 QR. In addition, 
these officers' families each hold substantial ownership interests in 
Saha Thai. The officers' families are also in positions of legal and 
operational control in Company A, Company B, and Company C, 
respectively, by virtue of the family members' ownership interests in 
these companies. Saha Thai August 25, 1997 QR. Therefore, Saha Thai and 
Company A are under common control of the Sae Heng/Ratanasirivilai 
family, Saha Thai and Company B are under common control of the 
Lamatipanont family, and Saha Thai and Company C are under common 
control of the Ampapankit family. Thus, Saha Thai is affiliated with 
each of these customers within the meaning of section 771(33)(F) of the 
Act.
    Finally, we find that the Karuchit/Kunanantakul family also is in a 
position of legal and operational control of the Siam Steel Group 
companies by virtue of the Karuchit/Kunanantakul family members' 
positions as directors and the family's ownership interests in these 
companies. For example, Somchai Karuchit is the Managing Director of 
Saha Thai, which places him in a position of legal and operational 
control of Saha Thai. Also, Mr. Karuchit is the Chairman of another 
Siam Steel Group company, Siam Steel International, Saha Thai's largest 
shareholder. The record evidence demonstrates that the Karuchit/
Kunanantakul family controls the Siam Steel Group companies, therefore 
we consider the Siam Steel Group to be a corporate or family grouping 
as envisioned by the regulations and the SAA, which establishes an 
affiliation among all Siam Steel Group companies under section 
771(33)(F) of the Act. On this basis, we find that Saha Thai is 
affiliated under section 771(33)(F) of the Act with the Siam Steel 
Group, which include Company D, a Saha Thai customer, and Company E, a 
pipe producer, by virtue of common control by the Karuchit/Kunanantakul 
family.
    Despite our requests to do so, Saha Thai failed to identify these 
affiliated producers and customers in its questionnaire responses. 
Rather, the Department discovered information establishing these 
affiliations late in the administrative proceeding. In fact, as 
recently as weeks before these final results we received additional 
information from Saha Thai at the Department's request which further 
confirmed our preliminary findings of affiliation. Moreover, although 
Saha Thai identified members of the Siam Steel Group as potential 
affiliates, Saha Thai did not provide complete information concerning 
the management and ownership of the member companies when requested to 
do so. In light of these circumstances, our preliminary results in 
which we assigned a dumping margin to Saha Thai based on total adverse 
facts available remain unchanged.

Thai Union

    We preliminarily determined that the use of total adverse facts 
available was appropriate with respect to Thai Union's submitted data 
in accordance with section 776(a)(2)(D) and section 776(b) of the Act 
because we found that Thai Union provided cost of production (COP) data 
that could not be verified and because Thai Union failed to reconcile 
its reported costs with its normal books and records. We have not 
changed the preliminary results based on comments received (see Comment 
5 below); therefore, for these final results, we have assigned a 
dumping margin to Thai Union based upon total adverse facts available.

Analysis of Comments Received

    The petitioners, Saha Thai, and Thai Union submitted case briefs on 
May 12, 1997, and rebuttal briefs on May 19, 1997. A public hearing was 
held on June 6, 1997. The comments submitted by petitioners and 
respondents that relate to the calculation of margins are not addressed 
in this notice because the final margins for this administrative review 
are based on total adverse facts available.

[[Page 53811]]

Comment 1

    Saha Thai argues that the Department based its preliminary results 
upon a misapprehension of the pertinent facts with respect to parties 
deemed affiliated with Saha Thai. Saha Thai claims that the 
Department's statement in the preliminary results that Mr. Somchai 
Lamatipanont is Chairman of Saha Thai and that members of the 
Chairman's family manage Thai Tube, is factually incorrect. Saha Thai 
states that Mr. Somchai Karuchit, and not Mr. Somchai Lamatipanont, is 
Chairman of Saha Thai. Saha Thai also notes that Mr. Lamatipanont, and 
not Mr. Karuchit, has a brother who is the managing director of Thai 
Tube. Furthermore, Saha Thai argues that Mr. Lamatipanont is a director 
of Saha Thai. Saha Thai claims that it identified the family relations 
of Mr. Somchai Lamatipanont having a shareholding interest in Saha Thai 
and Thai Tube in its response to the Department's second post-
verification questionnaire dated March 27, 1997. Saha Thai further 
states that neither Mr. Karuchit nor his cousins, Mr. Wanchai 
Kunanantakul and Mr. Anantachai Kunanantakul, have direct or indirect 
interest in Thai Tube, and no family members are involved in the 
management of Thai Tube. Finally, Saha Thai notes that ownership of 
Saha Thai is dispersed such that no family or director controls Saha 
Thai by virtue of controlling the board. Saha Thai contends that 
because of its fractionated interests represented by multiple 
directorships and shareholdings, Saha Thai's directors can only control 
Saha Thai when acting ``together,'' not as individuals.
    Saha Thai disagrees with the Department's finding that the familial 
relationship between Mr. Somchai Lamatipanont and his brother Mr. 
Surasak Lamatipanont, Thai Tube's managing director, creates an 
affiliation between Saha Thai and Thai Tube. Moreover, Saha Thai argues 
that Congress, when enacting the changes to section 771(33) under the 
Uruguay Round Amendments Act, did not include a provision which holds 
that an affiliate of an affiliate is an affiliate.
    Saha Thai argues that, at the time it completed the Department's 
questionnaires, it had no direct knowledge of the operations of Thai 
Tube or Thai Tube's relationship to Thai Hong. Saha Thai also 
reiterates that it has no details regarding the terms of Thai Hong's 
bankruptcy in January 1992, and does not know why the 1991 Iron and 
Steel Works of the World lists Thai Hong as being located at the same 
address as Thai Tube, except to suggest that some of Thai Hong's 
personnel may have been transferred to Thai Tube. Saha Thai notes that 
in public filings made with the Thai Ministry of Commerce dated March 
1997, Thai Hong was located at a different address than the alleged 
address of Thai Tube. Finally, Saha Thai holds that while there is some 
overlap in the directors of Thai Hong and Thai Tube, the ownership is 
quite different.
    Saha Thai also argues that even if Saha Thai and Thai Tube are 
considered affiliated, there is substantial evidence on the record to 
demonstrate that collapsing them is inappropriate. Saha Thai argues 
that the Department considered only the extent to which the two 
companies have common family members in its decision to collapse Saha 
Thai with Thai Tube (see Memorandum from Joseph Spetrini to Assistant 
Secretary Robert LaRussa, March 31, 1997). Saha Thai notes that the 
Preamble to the Final Regulations states at 27345, ``[C]ollapsing 
requires a finding of more than affiliation.'' Moreover, Saha Thai 
notes that the Court of International Trade (CIT) has required the 
Department to undertake a serious analysis of the potential for price 
manipulation before collapsing two parties. Saha Thai further 
recognizes that the Department's general practice, as approved by the 
CIT in Nihon Cement Co. v. United States, 17 CIT 400 (1993), is not to 
collapse related parties. Saha Thai argues that the preliminary results 
in this case contains no substantive analysis of the potential for 
price manipulation which the Department must undertake before deviating 
from its general practice of calculating individual rates.
    Saha Thai concludes that the application of adverse facts available 
to Saha Thai is inappropriate. Saha Thai argues that the Department may 
resort to the facts available only when a respondent has not complied 
with a request for information. Saha Thai contends that when the 
Department neglects to request information that it later finds 
necessary for its determination, it should not resort to best 
information available, but should issue a supplemental request for 
information.
    In its supplemental comments, Saha Thai argued that Saha Thai is 
managed by its Managing Director, Mr. Somchai Karuchit, and that other 
individuals involved in Saha Thai are given titles and positions to 
accommodate the legal corporate requirements that different individuals 
hold each of various corporate office positions. Saha Thai continues 
that both day-to-day operating decisions and major management decisions 
are generally made by Mr. Karuchit, and that while major management 
decisions are subject to approval by the board, neither the deputy 
managing director nor any other officer or director has any special 
role in obtaining or ensuring such approval.
    Saha Thai also asserted in its supplemental comments that because 
Mr. Surasak Lamatipanont and Mr. Somchai Lamatipanont are not lineal 
descendants, Saha Thai and Thai Tube are not affiliated by virtue of 
their familial ties.
    Petitioners counter that the Department correctly based the 
preliminary results on the facts available and should do so for the 
final results as well. Petitioners hold that the facts available 
decision was based on three omissions by Saha Thai in reporting its 
affiliated parties: first, Saha Thai failed to report as affiliated 
parties the customers that are owned or controlled by members of the 
Saha Thai board of directors who are also shareholders in Saha Thai 
(Companies A, B and C) (see Comment 2, below); second, Saha Thai failed 
to disclose that one of the members of the Siam Steel Group, to which 
Saha Thai is affiliated (Company E), is a producer of subject 
merchandise (see Comment 4, below); and third, family members of a Saha 
Thai director who is also the largest individual shareholder of Saha 
Thai manage and control Thai Tube, a Thai producer of subject 
merchandise. Petitioners argue that in addition to not reporting 
information about its relationship to Thai Tube, Saha Thai committed an 
error of omission by responding to the Department's questions about 
Thai Hong without mentioning Thai Hong's successor, Thai Tube. 
Petitioners also note that Saha Thai failed to disclose that it 
purchased pipe from other Thai resellers or producers for sale (see 
Comment 3, below). Petitioners argue that the Department provided Saha 
Thai with numerous opportunities to list all of its affiliated parties, 
which Saha Thai failed to do. Petitioners state that these omissions 
indicate Saha Thai's intent to obfuscate its relationships with 
affiliated companies.
    Petitioners argue that the Department's incorrect identification of 
Somchai Lamatipanont as the Chairman of Saha Thai was not the 
``linchpin'' of the preliminary results, and it does not oblige the 
Department to change its preliminary results. Because Somchai 
Lamatipanont is (1) an officer and director of Saha Thai, and (2) the 
``scion'' of the Lamatipanont family ownership group, one of only six 
families participating in the control of

[[Page 53812]]

Saha Thai, petitioners argue that he is ``one of the most important 
members of the small group of directors and shareholders who control 
Saha Thai'' and ``both `legally and operationally in a position to 
exercise direction or restraint' over Saha Thai, whether directly or 
indirectly, in concert with other directors and shareholders from the 
small group of control families in this closely held company.''
    Petitioners argue that Saha Thai is affiliated with Thai Tube 
within the meaning of section 771(33) (F) and (G) of the Act. 
Petitioners argue that operation of Saha Thai requires the concerted 
action of at least several to all of the six families that control Saha 
Thai's stock. Petitioners then infer that each of the six families, 
separately and together, control Saha Thai. The families' 
representatives on the board are each legally or operationally in a 
position to exercise restraint or direction over Saha Thai, either 
directly or indirectly. Therefore, the Lamatipanont family, led by Mr. 
Somchai Lamatipanont, is part of the control group of Saha Thai. In 
addition, petitioners argue that Saha Thai clearly controls Thai Tube 
and its predecessor, Thai Hong. Petitioners note that information on 
the record indicates that two members of the Lamatipanont family are 
the only directors of Thai Tube, and that one member of the family is 
the managing director of Thai Tube. Thus, petitioners reason that 
Lamatipanont family members who are affiliated under section 771(33)(A) 
are legally and operationally in a position to exercise direction or 
restraint over both Saha Thai and Thai Tube, and that this establishes 
affiliation under section 771(33)(F)--affiliation by common control of 
the Lamatipanont family. In addition, petitioners argue that the 
Department does not have complete information about the extent of 
management or ownership of Thai Tube by other Lamatipanont family 
members or by the other families who control Saha Thai, if any.
    Petitioners argue that Saha Thai errs in inferring that because the 
Lamatipanont family does not control 50% or more of the voting shares 
or the board of directors of Saha Thai, the family cannot exercise 
control over Saha Thai. This inference, petitioners argue, is not 
supported by the statute. Petitioners cite the SAA at 838, which states 
that control can exist ``even in the absence of an equity 
relationship,'' and the statute which defines control as one person 
``legally or operationally in a position to exercise restraint or 
direction'' over another person. Petitioners reason that this phrase in 
the statute does not mean that the person exercising control must be 
able to compel the actions of another person or entity in every 
instance, but that the ``controlling'' person or entity must be able to 
influence the actions of the entity controlled by virtue of the 
controlling entity's or person's position. Petitioners conclude that, 
in the case of Saha Thai, where no one director, shareholder or family 
of shareholders can dictate the course of Saha Thai, each of the 
directors, ``control families'' and shareholders, including Somchai 
Lamatipanont, can exercise control as defined in the statute.
    Therefore, petitioners argue, Saha Thai should have placed 
information concerning its relationship with Thai Tube on the record in 
response to the Department's questionnaire requests for information on 
entities affiliated through stock ownership and by means other than 
stock ownership. Petitioners argue that evidence on the record shows 
that Saha Thai made a tactical decision not to report the full extent 
of its affiliations, including its affiliation with Thai Tube. 
Petitioners state that Saha Thai's failure to provide requested data on 
affiliation should lead to the application of facts available. If there 
was ambiguity as to the information requested by the Department, 
petitioners argue that Saha Thai should have resolved this ambiguity 
through consultation with the Department as directed by the 
questionnaire itself.
    Petitioners then argue that the Department was unable to perform a 
collapsing analysis of Saha Thai and Thai Tube because Saha Thai failed 
to provide the requested information about affiliates. Because the 
Department could not determine whether sales from Thai Tube were 
necessary for its calculation of normal value or export price, there is 
no assurance that the Department has reviewed all of the U.S. and home 
market sales that should be attributed to Saha Thai. Petitioners state 
that because the Department was unable to collect, place on the record, 
and verify the information necessary to perform a collapsing analysis, 
Saha Thai's contention that evidence on the record indicates that 
collapsing is inappropriate is inaccurate.
    In summary, petitioners argue that the Department cannot calculate 
normal value or export price because Saha Thai's reported information 
on affiliates is incomplete. In addition, petitioners argue that Saha 
Thai purposefully failed to discuss Thai Tube when the Department 
requested information after verification about Saha Thai's affiliation 
with Thai Hong. Petitioners argue that Saha Thai did not act in good 
faith by failing to identify Thai Tube as the successor to Thai Hong. 
Petitioners argue that Saha Thai failed to provide requested 
information on its affiliations by the deadlines set by the Department, 
thus impeding the proceeding, and that Saha Thai's incomplete responses 
meet all of the statutory factors for resorting to facts available. In 
addition, petitioners assert that an adverse inference is warranted 
because of Saha Thai's failure to act to the best of its ability to 
provide information on affiliates. Finally, petitioners argue that the 
Department should apply a single dumping margin to Saha Thai, Thai 
Tube, and Saha Thai's affiliated producer of PVC-coated water pipe 
(Company E) (see comment 4, below).
Department's Position
    As discussed above in the Facts Available section, the definition 
of affiliated persons in the Act includes two (or more) companies under 
common control of a third entity (section 771(33)(F)). The Act states 
that ``control'' exists where one person ``is legally or operationally 
in a position to exercise restraint or direction'' over another person, 
section 771(33). The SAA indicates that stock ownership is not the 
single evidentiary factor for determining whether a person is in a 
position of control, and that control may also be established through 
corporate or family groupings. SAA at 838. We, therefore, disagree with 
Saha Thai's assertion that no family can be found to ``control'' Saha 
Thai under section 771(33), and that Saha Thai cannot be found to be 
affiliated with another company by virtue of common ownership interests 
of a single family. We find that based on the particular facts of this 
case, there is sufficient evidence on the record to find Saha Thai, 
Thai Hong, and Thai Tube to be affiliated under section 771(33)(F) by 
virtue of common control by the Lamatipanont family.
    In the preliminary results, our determination that Saha Thai and 
Thai Tube are under common control of the Lamatipanont family was based 
in part on an erroneous identification of Mr. Somchai Lamatipanont as 
Saha Thai's Chairman. However, while Mr. Somchai Lamatipanont is not 
Saha Thai's Chairman, information submitted on the record by Saha Thai 
after the preliminary results demonstrates that Somchai Lamatipanont is 
the Deputy Managing Director of Saha Thai. Saha Thai Supp. QR, 
September 8, 1997. Saha Thai argued in its case brief that Somchai 
Karuchit is the Managing Director of Saha Thai, while Somchai 
Lamatipanont is a member of Saha

[[Page 53813]]

Thai's board of directors. Saha Thai Case Brief, May 12, 1997, at 17. 
Saha Thai failed to note Mr. Lamatipanont's position as Deputy Managing 
Director, thereby mischaracterizing his role as merely a member of the 
board.
    In its supplemental comments, Saha Thai asserted that Somchai 
Lamatipanont's title as Deputy Managing Director does not vest in him 
any managerial control over the day-to-day operations of the company. 
Saha Thai claims that this title was designated merely to fulfill legal 
requirements that different individuals hold each of the various 
corporate office positions. Saha Thai further claims that all day-to-
day operating decisions and major management decisions (including those 
concerning financial issues) are made by Mr. Karuchit, the Managing 
Director, and therefore, Mr. Lamatipanont is not in a position of legal 
or operational control in Saha Thai. Saha Thai submission September 5, 
1997 (revised public version submitted October 1, 1997).
    While Saha Thai may be legally bound to assign a different 
individual to each of Saha Thai's corporate office positions, Saha Thai 
has offered no evidence to support its assertion that all such 
positions, with the exception of Managing Director, are devoid of any 
responsibility over either day-to-day operating decisions or major 
management decisions. As the officer second to the Managing Director, a 
Deputy Managing Director is normally in a position of control. Saha 
Thai's unsubstantiated, eleventh hour claims are insufficient to 
establish that a Deputy Managing Director has no legal or operational 
authority.
    Moreover, based on the facts on the record, the Department 
maintains its finding in the preliminary results that the Lamatipanont 
family controls Thai Tube. Information submitted following the 
preliminary results confirms our preliminary finding: Surasak and 
Surangrat Lamatipanont are Thai Tube's only directors; Surasak 
Lamatipanont is Thai Tube's Managing Director; and the Lamatipanont 
family members have owned 48% of Thai Tube's common stock since 1992. 
August 25, 1997 QR, Exhibit 3; Saha Thai Case Brief, May 12, 1997, at 
17. The Department therefore finds that Saha Thai and Thai Tube are 
affiliated by means of common control by the Lamatipanont family. (For 
a more detailed analysis of this issue, see the public version of the 
Memorandum to the File, October 7, 1997.)
    We also disagree with Saha Thai's assertion in its supplemental 
comments that because Mr. Surasak Lamatipanont and Mr. Somchai 
Lamatipanont are not lineal descendants, Saha Thai and Thai Tube are 
not affiliated by virtue of their familial ties. Saha Thai submission 
September 5, 1997 at fn. 3 (revised public version submitted October 1, 
1997). As discussed above, the plain language of section 771(33)(A) 
does not exclude uncles and nephews from the category of familial 
relations covered by this subsection. We therefore find Somchai 
Lamatipanont, Surasak Lamatipanont, and the other Lamatipanont family 
members involved in Saha Thai and Thai Tube to be members of a family 
group, affiliated under section 771(33)(A) of the Act.
    We also conclude that the evidence on the record supports a finding 
of affiliation between Saha Thai and Thai Hong, another Thai pipe 
producer owned or controlled by members of the Lamatipanont family. 
After verification of Saha Thai, the Department obtained public 
information indicating Lamatipanont family management of Thai Hong, a 
respondent in an earlier segment of this proceeding (March 1, 1987--
February 29, 1988 POR). We pursued the potential for affiliation 
between Saha Thai and Thai Hong raised by this public information by 
issuing a questionnaire inquiring about the nature of the relationship 
between Saha Thai and Thai Hong. Saha Thai's response explained that 
Surasak, Samarn, and Surang Lamatipanont controlled Thai Hong, but that 
the company had entered into bankruptcy. Saha Thai asserted that ``[t]o 
the best of Saha Thai's knowledge, Thai Hong never resumed operations 
after going bankrupt.'' Saha Thai response, March 12, 1997. On March 
21, 1997, petitioners submitted public information stating that Thai 
Tube is the successor to Thai Hong.
    Petitioners argue that, because Thai Tube is the successor to Thai 
Hong, Saha Thai was obligated to supply information on Thai Tube in 
response to the Department's questionnaire on Thai Hong. As described 
above, the Department finds that, based on the information on the 
record, Saha Thai and Thai Tube are ``affiliated persons'' as defined 
by section 771(33)(F) of the Act. However, contrary to petitioners' 
argument, we find that the record does not contain conclusive evidence 
that Thai Tube is the successor organization to Thai Hong. Petitioners 
submitted public information indicating that Thai Tube operates from 
the same address as Thai Hong, that Thai Tube's brand device is 
``THS,'' and that Thai Tube ``was formerly known as Thai Hong Steel 
Pipe Co., Ltd.'' (March 21, 1997 submission, exhibit 1 and 2). Saha 
Thai submitted a certified statement from the Thai Ministry of 
Commerce--indicating its final decision on Thai Hong's bankruptcy in 
1992--which provides a different address for Thai Hong's head office 
than that listed in any of the petitioners' sources. (March 12, 1997 
submission).
    Moreover, the Department has obtained public information indicating 
that both Thai Hong and Thai Tube were operating producers of steel 
pipe and tube during the POR. See Memorandum to the File, September 29, 
1997. The information includes the audited 1995 balance sheet and 
income statement for Thai Hong, indicating the fact that Thai Hong is a 
manufacturer, exporter, and importer of steel pipe, and that as of 
April 1996, 98.75% of its shares were owned by individuals with the 
surname Lamatipanont. Because the POR covers most of 1995 (March 1, 
1995 through February 29, 1996), and because the public financial 
information indicates that Thai Hong maintained inventories, received 
export compensation, paid out employee social welfare, and by all 
indications conducted business during 1995, the Department concludes 
that Thai Hong was operating as a manufacturer, importer, and exporter 
of the subject merchandise during the POR.
    The same source that contained information on Thai Hong also lists 
Thai Tube Co., Ltd. as a manufacturer of steel pipe, states that 
Surangrat Lamatipanont is a Director of the company, and identifies 
three individuals with the surname Lamatipanont as holding 48% of Thai 
Tube's shares. The reliability of this information is corroborated by 
information obtained from the Thai Ministry of Commerce and submitted 
to the Department by Saha Thai. Saha Thai submission, August 25, 1997. 
Because public information on the record of this review indicates that, 
during the POR, Thai Hong was an active producer of the subject 
merchandise with a substantial ownership interest held by members of 
the Lamatipanont family, the Department finds that Saha Thai and Thai 
Hong are affiliated under section 771(33)(F) of the Act by means of 
common control by the Lamatipanont family. The Department therefore 
concludes that Saha Thai failed in its obligation to report complete 
information on affiliated parties, in particular, Thai Hong, a producer 
of the subject merchandise.
    These findings of affiliation support the Department's 
determination to resort to adverse facts available in this review. 
Information establishing Somchai Lamatipanont's position as the Deputy 
Managing Director of Saha Thai was submitted on the record at the

[[Page 53814]]

Department's request several weeks before the deadline for these final 
results. This information is yet another indication supporting the 
ability of the Lamatipanont family to control Saha Thai. This 
information, as well as facts confirming the Lamatipanont family's 
ownership and control of both Thai Tube and Thai Hong, confirms the 
appropriateness of our preliminary results determination that Saha Thai 
impeded this review by failing to fully disclose its affiliated parties 
in a timely manner. Saha Thai's failure to identify Thai Tube and Thai 
Hong as affiliated parties in response to the Department's 
questionnaires inhibited our inquiries into its relationships with 
these companies. Saha Thai should have identified these producers as 
affiliates or potential affiliates, as it did with the Siam Steel 
Group. If it was uncertain as to the Department's interpretation of the 
``affiliated persons'' definition, Saha Thai should have contacted the 
Department and requested clarification. Saha Thai never made such a 
request. As long recognized by the CIT, the burden is on the 
respondent, not the Department, to create a complete and accurate 
record. See Pistachio Group of Association Food Industries v. United 
States, 641 F.Supp. 31, 39-40 (CIT 1987). Saha Thai failed to do so. 
Like the best information available rule under the pre-URAA statute, 
section 776(a) of the Act serves the same purpose of encouraging 
respondents to provide timely, complete, and accurate responses to the 
Department's questionnaires. See SAA at 868-91. Therefore, in light of 
the circumstances surrounding the revelation of Saha Thai's 
affiliations, resorting to total adverse facts available is entirely 
consistent with the purposes of section 776 (a) and (b) of the Act. See 
e.g., Olympic Adhesives, Inc. v. United States, 899 F.2d. 1565 (Fed. 
Cir. 1990) (Commerce ``cannot be left to merely the largesse of the 
parties at their discretion to supply [Commerce] with information'').
    Under Department practice, the affiliation between Saha Thai, Thai 
Tube, and Thai Hong, producers of subject merchandise, would invoke an 
inquiry to determine whether they should be treated as a single entity 
for purposes of calculating a dumping margin. See section 351.401(f) of 
the Final Regulations, 62 FR at 27410; Certain Fresh Cut Flowers From 
Colombia; Final Results of Antidumping Duty Administrative Reviews, 61 
FR 42833, 42853 (August 19, 1996). Indeed, in the preliminary results, 
we made an adverse inference that Saha Thai and Thai Tube should be 
treated as a single entity for purposes of our antidumping analysis, 
and noted that we would continue to explore the affiliation issue for 
these final results. As a result of this examination, as described 
above, we obtained information both from Saha Thai and from public 
sources that establishes the affiliation between Saha Thai and Thai 
Tube and between Saha Thai and Thai Hong. However, because the 
information establishing the existence of these affiliations was placed 
on the record so late in the proceeding, we were unable to collect 
additional information or to analyze the propriety of collapsing these 
producers. We therefore disagree with Saha Thai's contention that 
substantial evidence on the record demonstrates that collapsing Saha 
Thai and Thai Tube is inappropriate. The record is incomplete and the 
Department is unable to perform the collapsing inquiry because Saha 
Thai impeded the investigation by failing to disclose relevant 
information concerning its affiliation with Thai Tube and Thai Hong in 
a timely manner. Therefore, for the final results the Department makes 
the adverse inference that it is appropriate to collapse Saha Thai, 
Thai Tube, and Thai Hong.

Comment 2

    Saha Thai argues that neither the two resellers (Company A and 
Company B) nor the third home market customer (Company C) identified by 
the Department in the preliminary results as potential affiliates are 
affiliated with Saha Thai under section 771(33) of the Act. Saha Thai 
argues in its case brief that managerial and shareholding control of 
Saha Thai is divided among six, unrelated families, and that no 
individual family is in a position to control Saha Thai. Saha Thai also 
states in its rebuttal brief that no company or individual has the 
power to appoint a majority of directors in Saha Thai, and that the 
chairman of Saha Thai has no interest in the resellers Companies A and 
B or in Company C.
    Saha Thai states that Company A is ``owned or controlled'' by one 
of these six families who own Saha Thai, the Ratanasirivilai family, 
which holds seats on Saha Thai's board and owns less than 50% of Saha 
Thai's shares. Saha Thai argues, however, that Company A is not 
affiliated with Saha Thai because the Ratanasirivilai family does not 
exercise control over Saha Thai. The other reseller, Company B, 
according to Saha Thai, is ``owned or controlled'' by Mr. Somchai 
Lamatipanont, a member of a different family with interests in Saha 
Thai who is a director and shareholder of Saha Thai. Saha Thai argues 
it is not affiliated with Company B because Mr. Lamatipanont is not in 
a position, individually or with other family members, to control Saha 
Thai. Finally, Saha Thai argues in its rebuttal brief that the home 
market customer identified in the Department's preliminary results as 
potentially affiliated, Company C, is not affiliated with Saha Thai for 
similar reasons.
    According to Saha Thai, because no single Saha Thai director is 
legally or operationally in a position to exercise restraint or 
direction over Saha Thai, the fact that a Saha Thai director occupies 
that control position with respect to another corporation does not give 
rise to affiliation between Saha Thai and that other corporation. Saha 
Thai argues that common control as envisioned by section 771(33) (E) 
and (F) exists in circumstances ``in which the controlling party or 
control group in its entirety jointly exercises control over both 
corporations (or where a subset of the control group is in a position 
to and in fact does exercise control over both corporations.'' Saha 
Thai Case Brief at 34 (May 12, 1997). Saha Thai argues that it and 
Companies A and B are not under the common control of any of Saha 
Thai's directors or their families, and that Saha Thai is not 
affiliated with these companies under any subsection of section 
771(33).
    Petitioners argue that the directors and shareholders who control 
Saha Thai appear to control Companies A and B, the two resellers 
identified by the Department at verification and found to be 
potentially affiliated with Saha Thai in the preliminary results. They 
argue that the information the Department obtained at verification 
supports a determination that these customers are affiliated to Saha 
Thai, but because it was received so late in the proceeding, the issue 
could not be completely explored. Given the available information, 
petitioners argue that the Department was correct in determining for 
the preliminary results that Companies A and B are affiliated with Saha 
Thai. Specifically, petitioners argue that two companies may be 
affiliated within the meaning of section 771(33) (F) or (G) through a 
family grouping that participates in the control of both companies. 
Petitioners state that Saha Thai admitted Company A is owned or 
controlled by the Ratanasirivilai family, and that Company B is owned 
or controlled by Somchai Lamatipanont, a director and officer of Saha 
Thai, and therefore the control exercised over these resellers 
constitutes control under the statute. Petitioners contend that both 
the Ratanasirivilai family and the

[[Page 53815]]

Lamatipanont family are ``legally or operationally in a position to 
exercise restraint or direction'' over Saha Thai, and therefore also 
control Saha Thai under the statutory definition of control. 
Petitioners argue that these families participate in the small control 
group of persons who control Saha Thai, and possess the ability to 
influence the actions of the company through their directors and voting 
shares. Petitioners state that this degree of control is sufficient to 
satisfy the requirements of the statute.
Department's Position
    With respect to Company A, Company B, and Company C, Saha Thai's 
home market customers (Companies A and B are also resellers) of subject 
merchandise, the Department finds that, based on the record evidence, 
there is a sufficient basis to conclude that Saha Thai and these 
companies are affiliated on the basis of common control under section 
771(33)(F) of the Act. Saha Thai argued in its case and rebuttal briefs 
that common control can be found only where the ``control group is in a 
position to and in fact does exercise control over both corporations.'' 
We disagree. Evidence of actual control is not a prerequisite to 
finding ``control'' within the meaning of section 771(33) of the Act, 
which defines control in terms of the ability to control. As we stated 
in the Preamble in the proposed regulations and reiterated in the Final 
Regulations, the Department need not find evidence of actual control to 
satisfy the statutory definition of ``control.'' Proposed Rule, 61 FR 
at 7310; Final Regulations, 62 FR at 29297-98. Further, Saha Thai's 
argument is premised on the assumption that total or sole control is 
necessary for a finding of affiliation. Again, we disagree. Nothing in 
the statute or legislative history suggests that such a narrow 
interpretation is intended. To the contrary, the statutory definition 
of control encompasses both legal and operational control. Multiple 
persons or groups may be in control, individually and jointly, of a 
single entity, i.e., each has the ability to direct or restrain the 
company's activities. The facts in this case demonstrate that families 
that individually and jointly control Saha Thai also control Companies 
A, B and C.
    First, Company B and Saha Thai are affiliated under section 
771(33)(F) of the Act by virtue of common control by the Lamatipanont 
family. Saha Thai concedes that the record establishes that the 
Lamatipanont family has substantial ownership interest in Company B, 
sufficient to establish control. In addition, Mr. Somchai Lamatipanont 
is a member of the board of directors, is the Deputy Managing Director 
of Saha Thai, and the Lamatipanont family owns an equity interest in 
Saha Thai. Based on these facts, the Lamatipanont family is in a 
position to control Saha Thai. Therefore, we find that Saha Thai and 
Company B are under common control of the Lamatipanont family and Saha 
Thai was obligated to identify this customer as an affiliate in 
response to our questionnaires.
    Similarly, the evidence on the record supports a finding that 
Company C and Saha Thai are affiliated under section 771(33)(F) of the 
Act by virtue of common control by the Ampapankit family. September 8, 
1997 QR, Exh. 1. Saha Thai conceded that the record establishes that 
the Ampapankit family has substantial ownership interest in Company C, 
sufficient to establish control. The Ampapankit family also has an 
ownership interest in Saha Thai and Mr. Ampapankit is Chairman of the 
Board of Saha Thai, and is a director and shareholder of Saha Thai. Id. 
Mr. Ampapankit is, in fact, one of the three Saha Thai officers who, 
together with one of the other officials can bind Saha Thai with his 
signature. Saha Thai October 2, 1997 QR, Exh. 3 (Saha Thai Commercial 
Registration). Viewing the facts as a whole, the Ampapankit family is 
``legally or operationally in a position to exercise restraint or 
direction'' over both Saha Thai and Company C. Therefore, we find that 
Saha Thai and Company C are affiliated and that Saha Thai was obligated 
to identify this customer as an affiliate in response to our 
questionnaires.
    We also find that Saha Thai and Company A are under common control 
by the Sae Heng/Ratanasirivilai family. Saha Thai conceded that the 
record establishes that the Sae Heng/Ratanasirivilai family has 
substantial ownership interest in Company A, sufficient to establish 
control. The Ratanasirivilai family is also in a position to exercise 
restraint or direction over Saha Thai within the meaning of section 
771(33) on the basis of the family's ownership interest, possession of 
two seats on Saha Thai's board of directors, and the fact that Mr. Sae 
Heng is Saha Thai's Financial Director. Saha Thai's September 8, 1997 
QR at Exhibit 2. As is true of Mr. Ampapankit, Mr. Sae Heng is one of 
the three Saha Thai officers who, together with one of the other 
officials can bind Saha Thai with his signature. Saha Thai October 2, 
1997, Exh. 3 (Saha Thai Commercial Registration).
    Saha Thai also contends that the Ratanasirivilai family is not in a 
position of control over Saha Thai because the family as a whole holds 
less than a 50% ownership interest in Saha Thai. We disagree. The Sae 
Heng/Ratanasirivilai family owns substantial interests in both Saha 
Thai and Company A. These ownership interests, coupled with the 
additional facts described above, support a finding that the Sae Heng/
Ratanasirivilai family controls Saha Thai as well as Company A. See 
e.g. Certain Cut-to-Length Carbon Steel Plate from Brazil: Final 
Results of Antidumping Administrative Review, 62 FR 18486, 18490 (April 
15, 1997). Therefore, we conclude that Saha Thai and Company A are 
affiliated under section 771(33)(F) by virtue of common control by the 
Ratanasirivilai family.
    Because we find Saha Thai affiliated with Company A, Company B, and 
Company C under section 771(33)(F) of the Act, our preliminary 
determination that Saha Thai significantly impeded this review by 
failing to identify these customers as affiliated parties remains 
unchanged. As we stated in the preliminary results, sales to these 
customers represent a significant portion of Saha Thai's home market 
sales. However, because Saha Thai failed to provide the information 
that identified these potential affiliations until late in the 
proceeding, we were unable to fully explore the nature of the 
affiliation between Saha Thai and these customers.
    Our initial analysis of Saha Thai's sales to Company A and Company 
B, resellers of the subject merchandise, indicates that these sales 
were not made at arm's length. (Saha Thai objected to the Department's 
standard arm's length test in this review. See Comment 4 below and the 
``Department's Position.'') As total sales to the affiliated resellers 
exceeded 5% of Saha Thai's total home market sales during the POR, 
under our standard practice, we would have requested downstream sales 
data for these sales. The Department would then have been able to 
calculate normal value for these sales based on downstream prices 
pursuant to section 773(a)(5) of the Act. Therefore, we continue to 
find that Saha Thai was obligated to report these customers as 
affiliated resellers, and that its failure to do so prevented the 
Department from requesting and analyzing necessary downstream sales 
data. Given Saha Thai's failure to identify Company A, Company B and 
Company C as affiliates, we continue to find that Saha Thai failed to 
act to the best of its ability to comply with our requests for 
information on affiliates. (For a more detailed analysis of this issue, 
see the public version of the

[[Page 53816]]

Memorandum to the File, October 7, 1997.)

Comment 3

    Saha Thai disputes petitioners' assertion that Saha Thai is 
affiliated with a home market customer and steel pipe producer, 
referred to in this public notice as Company E. Saha Thai also disputes 
petitioners' claim that the pipe manufactured by Company E is included 
in the scope of this review. Specifically, Saha Thai notes that the 
record does not show that Company E manufactures pipe with a surface 
coating, but rather pipe lined with PVC. Moreover, Saha Thai argues, 
the HTS subcategory 7306.30.5028, which includes pipe that is 
internally coated or lined with a non-electrically insulating material, 
is not included in the scope of the review. Saha Thai states that there 
is no evidence on the record that demonstrates that Company E produces 
unlined black or galvanized pipe as suggested by petitioners.
    Saha Thai also argues that it is not affiliated with a home market 
customer that is a member of the Siam Steel Group (referred to in this 
public notice as Company D). Saha Thai argues that Company D also is 
not subject to common control with Saha Thai. Further, Saha Thai 
disputes petitioners' suggestion that it inconsistently applied the 
affiliated party provision of section 771(33) when responding to the 
Department's questionnaires. Saha Thai acknowledges, however, that the 
Department may classify certain members of the Siam Steel Group as 
affiliated because Saha Thai's managing director is chairman of each of 
these companies.
    Petitioners argue that Saha Thai is affiliated with a certain end-
user customer which also produces PVC-coated water pipes (Company E). 
Petitioners argue that PVC-coated steel water pipes are within the 
scope in this proceeding since the scope places no restriction on the 
surface finish of the merchandise. Moreover, petitioners note that it 
is likely that Company E would make uncoated water pipes as well as its 
production lines and would certainly be capable of producing uncoated 
water pipes as a requisite step in the production of coated water 
pipes. Petitioners argue that Saha Thai should have reported 
information about Company E's production and sales.
    Petitioners also argue that home market customer Company D is 
affiliated with Saha Thai. Petitioners contend that Saha Thai admitted 
that the Chairman of Saha Thai is the Honorary Chairman of Company D.
Department's Position
    Saha Thai, Company D, a home market customer, and Company E, a 
steel pipe producer, and other home market service providers are all 
members of the Siam Steel Group. The Department's regulations state 
that when analyzing affiliations under section 771(33) of the Act, the 
existence of corporate or family groupings is one indicia of control 
that will be closely scrutinized in each case. Final Regulations, 62 FR 
at 27380. The evidence on the record of this case demonstrates that, 
because of the Karuchit/Kunanantakul family's control of its member 
companies, the Siam Steel Group is a corporate or family grouping as 
envisioned by the SAA and the regulations, and therefore, the member 
companies are affiliated under section 771(33) of the Act.
    Saha Thai acknowledged the potential for affiliation in its 
response to the Department's second supplemental questionnaire when it 
stated that ``[t]he Chairman of Saha Thai is in a position to exercise 
`restraint or control' over Saha Thai due to his position as Chairman 
and the authority he exercises on a day-to-day basis over the company's 
affairs. For this reason, we have described other members of the Siam 
Steel Group as potentially affiliated * * *''. November 26, 1996 
response at 2. Even more on point, in its rebuttal brief, Saha Thai 
conceded that at least four members of the Siam Steel Group are 
affiliated with Saha Thai because Mr. Somchai Karuchit, Saha Thai's 
Managing Director, is also the Chairman of these four companies. Saha 
Thai Rebuttal Brief at 4. As we stated in the preliminary results, Saha 
Thai's managing director is also chairman of Siam Steel International, 
a member of the Siam Steel Group, which during the POR became Saha 
Thai's largest shareholder. Saha Thai noted at verification that Siam 
Steel International also has investments in 11 of the other members of 
the Siam Steel Group. Saha Thai Cost Verification Report at 5. 
Moreover, the record evidence demonstrates that the Karuchit/ 
Kunanantakul family has significant common ownership interests in the 
members of the Siam Steel Group.
    We find that this evidence of common management of and common 
ownership interests in these companies by Saha Thai's Managing Director 
and his family is strong evidence of affiliation by common control and 
the existence of a corporate or family grouping. However, despite the 
Department's request for such information, Saha Thai failed to provide 
sufficient data on the Siam Steel Group to permit a full analysis of 
control within the group. We disagree that Saha Thai has ``provided 
excruciating detail'' concerning the Siam Steel Group and its 
affiliation with Mr. Karuchit, Saha Thai's Managing Director (Rebuttal 
Brief at 35). For example, in its second supplemental questionnaire 
response, Saha Thai offered what can only be described as minimal 
disclosure on the nature of the common stockholding interests held by 
the family in the Siam Steel Group companies. While Saha Thai listed 
all family members with stock interests in group companies, Saha Thai 
failed to provide the percentage of interest held by each family member 
and the specific member company in which the family member's interests 
were held. September 23, 1996 response at 1. Further, Saha Thai 
provided only a ``summary of the ownership and control structure'' of 
each member of the group with no documentation to support its later 
claim that the companies in the group are operated independently. 
November 26, 1996 QR at 1. Saha Thai's submission is devoid of any 
explanation of the operation of the member companies; Saha Thai simply 
listed each company's investors and provided no explanation of the 
meaning it intended to convey when it identified companies being 
``controlled'' by the family or certain investors.
    The ``affiliated person'' provision of the statute is critical to 
the Department's antidumping analysis. Transactions between affiliated 
persons are highly scrutinized because they provide a means of 
potentially masking dumping and undermining the remedial purpose of the 
statute. With enactment of the URAA, Congress intended the Department 
to expand its longstanding scrutiny of relationships among corporate 
entities to ``permit a more sophisticated analysis which better 
reflects the realities of the marketplace,'' identifying corporate or 
family groupings as illustrative areas warranting heightened scrutiny. 
SAA at 838. Accordingly, based on the facts of this case, we find it 
reasonable to conclude that the Siam Steel Group companies, which 
include Saha Thai, Company D, and Company E are affiliated under 
section 771(33)(F) of the Act based on common control. As described 
above, Saha Thai identified members of the Siam Steel Group as 
potential affiliates but provided incomplete information concerning the 
ownership interests and management structure of these companies in 
response to supplemental questionnaires. Absent this information,

[[Page 53817]]

the Department was unable to examine the extent of common management 
and ownership among the Siam Steel Group. Saha Thai's failure to report 
complete information on the Siam Steel Group Companies is an additional 
factor supporting our determination to resort to total adverse facts 
available for this review. However, because evidence on the record does 
not establish that the products manufactured by Company E are within 
the scope of the antidumping duty order, our finding of affiliation 
between Saha Thai and this producer will not further affect the final 
results. (For a more detailed analysis of this issue, see the public 
version of the Memorandum to the File, October 7, 1997.)

Comment 4

    Saha Thai argues that application of the Department's standard 
arm's length test is unreasonable and that use of an alternative test 
supports a finding of no affiliation between Saha Thai and certain of 
its home market customers. Saha Thai argues that reviewing courts have 
indicated that where evidence on the record of an individual case 
demonstrates that the test ``resulted in actual distortion of price 
comparability'' or otherwise produced unreasonable results, the 
standard test would not be sustained. Saha Thai further argues that the 
standard test continues to undergo refinements, and notes that the 
Department did not codify the standard test in its just-released final 
regulations, and cites the preamble to the Final Regulations, at 27355. 
Saha Thai claims that the Department's standard arm's length test, 
which uses average prices over the entire POR, introduces distortions 
into the price comparisons made and therefore produces inaccurate 
results. Saha Thai claims that its prices fluctuate with the cost of 
coil, the major production input, which changes frequently. Saha Thai 
claims that if a customer had no purchases of the product or if it 
purchased smaller quantities in months of lower prices, a comparison of 
this price with a weighted average based on the entire POR virtually 
guarantees that the alleged affiliate's price will fail the arm's 
length test. Saha Thai submits that because its prices are subject to 
frequent change the arm's length test used to analyze those prices must 
also compare prices at frequent intervals.
    Saha Thai proposes limiting the window from which comparison sales 
are obtained to the allegedly affiliated parties' sale date. Under this 
proposed alternative, Saha Thai notes that no company which was 
reported as affiliated by Saha Thai, nor any company determined by the 
Department to be affiliated, fails the test. Saha Thai asserts that the 
Department should modify the standard arm's length test as proposed by 
Saha Thai for the final results of this administrative review. Saha 
Thai argues that application of this test yields two conclusions, 
either of which supports the use of Saha Thai's data as submitted: 
first, that Saha Thai is not affiliated with these resellers because it 
is not dealing with the resellers any differently from its dealings 
with other unaffiliated customers, and second, Saha Thai's prices to 
these resellers are at arm's length, thus permitting the use of these 
prices in the calculation of normal value even if the resellers are 
considered affiliated.
    Petitioners counter that Saha Thai has provided no compelling 
reason for the Department to change its arm's length test at this 
belated stage of this administrative review. Therefore, argue 
petitioners, the Department should continue to apply its traditional 
court-approved 99.5% arm's length test for the final results of this 
administrative review. Petitioners first note that while the Department 
did not incorporate its arm's length test into its new regulations, 
just as they were not part of the old regulations, it did not repudiate 
this test. Petitioners note that in the preamble to Final Regulations 
at 27355, the Department states that it ``will continue to apply the 
current 99.5% test unless and until we develop a new method.'' 
Petitioners hold that if the Department was going to change the 99.5% 
rule in this proceeding it should have done so in the preliminary 
results and afforded all parties adequate opportunity for comment for 
the final results.
    Second, petitioners dispute Saha Thai's allegation that the 99.5% 
test does not reflect its pricing practices and should be modified. 
Petitioners oppose Saha Thai's suggestion of limiting the arm's length 
test to sales within seven days. Petitioners claim that this 
methodology is far too restrictive to capture the effects of changes in 
coil cost, as most companies purchase coils on a quarterly or monthly 
basis and the price of the output pipe does not change on a daily basis 
because of changing coil cost.
Department's Position
    Although the Department did not codify its standard arm's length 
test in the final regulations, the Department explicitly stated its 
intent to continue to apply the current test. Final Regulations, 62 FR 
at 27355. The Department's 99.5 percent arm's length test methodology 
is well established, and the CIT has repeatedly sustained the 
methodology. See Micron Technology, Inc. v. United States, 893 F. Supp. 
21 (CIT 1995), Usinor Sacilor v. United States, 872 F. Supp. 1000 (CIT 
1994), NTN Bearing Corp. Of America v. United States, 905 F. Supp. 1083 
(CIT 1995), and Torrington Co. v. United States, Slip Op. 97-29 (March 
7, 1997). As cited in Micron, the CIT will uphold the arm's length 
test, unless that test is shown to be unreasonable. 893 F. Supp at 45 
(citing Usinor, 872 F. Supp at 1004). In this case, Saha Thai has not 
provided sufficient record evidence to warrant the Department's 
departure from its standard arm's length test. As coil costs change on 
a monthly or quarterly basis, prices do not change rapidly enough to 
compel the use of a restrictive seven-day window for comparison. Absent 
compelling evidence of price distortion, the Department finds no reason 
to depart from its standard methodology for purposes of this review. 
Thus, the Department finds it reasonable to apply the standard arm's 
length test in this instance and has done so for this review. Further, 
even if these sales had passed the arm's-length test, we would still be 
using total facts available for Saha Thai's margin because of its 
failure to identify affiliated producers. Thus, this issue is moot.

Comment 5

    Saha Thai asserts in its case and rebuttal briefs that the 
Department should have terminated this review upon the timely 
withdrawal by Saha Thai and SAF of their request for a review. Saha 
Thai states that on May 14, 1996, in accordance with 19 CFR 
353.22(a)(5), it timely submitted a letter to the Department 
withdrawing the request for the 1995-1996 administrative review. Saha 
Thai argues that since it was the only party to the proceeding to make 
a timely review request in accordance with the law and the Department's 
regulations, and since that request was timely and properly withdrawn, 
the Department should terminate this review immediately. Saha Thai 
notes that while the domestic interested parties claimed that they 
filed a review request on March 29, 1996, they conceded in their June 
21, 1996, letter that the Department had no knowledge of their review 
request and that the request was neither entered in the Central Record 
Unit log nor placed in the proper file. Saha Thai holds that the only 
question, jurisdictional in nature, is whether the document was 
received by the Central Records Unit and that there is no reason for 
the

[[Page 53818]]

Department to depart from the unambiguous filing requirements for 
administrative review requests.
    Petitioners argue that they made a timely request for an 
administrative review for the 1995-1996 period and that request was 
delivered to Saha Thai's counsel. They argue that this delivery 
constituted notice to Saha Thai, who had itself requested a review for 
this period, that petitioners had requested a review. Petitioners state 
that, several weeks after submitting its request, it was informed by 
the Department that its request was not entered into the log of the 
Department's Central Records Unit and was not placed in the proper 
file. Petitioners cite evidence showing that copies of their request 
were delivered in a timely manner to the Central Records Unit and to 
the Department official identified as the contact for requests for this 
review by messengers and that these copies of the request were received 
by the proper Department employees. Petitioners argue that the evidence 
it cites constitutes reliable evidence of actual delivery and receipt 
of a request for an administrative review that satisfies the 
requirements of both the Act and the Department's regulations.
    Petitioners argue that the Department should not penalize the 
domestic interested parties because the Department inexplicably failed 
to perform the ministerial tasks of stamping, logging in and filing in 
their timely request for an administrative review. Further, petitioners 
cite Kemira Fibres Oy v. United States, Slip Op. 95-1077 at 10 (Federal 
Circuit, August 2, 1995) citing Brock v. Pierce County, 476 U.S. 253, 
260 (1986) as support for the proposition that the Department may 
accept the petitioners' request as timely where a party fails to comply 
with regulatory or statutory timing requirements.
    Petitioners state that the Act does not require a stamped copy for 
proof of filing. Moreover, argue petitioners, while the Department's 
regulations do require a stamp as proof of timely filing, the 
regulations do not preclude the Department from considering other proof 
of timely filing such as that presented by petitioners in their case 
brief. Petitioners argue that the Department could consider the 
evidence they presented as sufficient to initiate or continue a review 
and that doing so would be within the Department's discretion.
    Petitioners' argument continues that the Department's regulations 
in force at the time permit termination of a review upon timely 
withdrawal but do not require such termination. Given the domestic 
industry's interest in continuing the review and the evidence of a 
timely request detailed above, petitioners argue that the Department 
acted correctly in exercising its discretion to continue the review. 
Petitioners conclude by arguing that while the respondents in this 
review would not be prejudiced by the Department continuing this review 
the domestic interested parties have a statutory right to an 
administrative review and that the denial of this right would have 
caused them severe prejudice.
Department's Position
    On May 14, 1996, Saha Thai, SAF, Ferro Union and ASOMA withdrew 
their request for review and requested that the Department terminate 
the review with respect to sales by Saha Thai/SAF during the period of 
review. The petitioners objected to termination of the review on the 
grounds that, in accordance with 19 CFR 353.22, they had submitted a 
timely request for review of these companies to the Department on March 
29, 1996. Petitioners also noted that respondents were served with a 
copy of their request for review.
    The antidumping statute is silent with respect to the Department's 
authority to terminate administrative reviews. When the statute is 
silent, the Department has inherent authority to fill any ``gaps'' in 
the statute by promulgating regulations. Section 353.22(a)(5) of the 
Department's regulations provides the Secretary with discretion in 
accepting a timely request for withdrawal. As indicated above, the 
evidence on the record does not provide a definitive answer as to 
whether there is an official record of petitioners' request for review 
in the Central Records Unit due to faulty delivery by the petitioners 
or ministerial error by the Department. The evidence does demonstrate, 
however, that the respondents were served with a copy of petitioners' 
request, and, therefore, were put on notice of petitioners' intent that 
the Department conduct this review. Given these facts and the remedial 
nature of the antidumping law, the Department exercised its discretion 
to continue the review. See Memorandum to Robert S. LaRussa from 
Stephen J. Powell, July 11, 1996.

Comment 6

    Thai Union argues in its case and rebuttal briefs that the 
Department's use of average estimated margins contained in the original 
petition as the basis for the adverse facts available is an unwarranted 
departure from prior practice, frustrates the remedial purpose of the 
antidumping duty statute, is punitive, and is not the most probative 
evidence of the current margin of dumping. Thai Union claims that by 
resorting to margins contained in the original petition, the Department 
has eliminated any distinction between its treatment of cooperative 
respondents participating fully in an investigation and verification 
and its treatment of uncooperative respondents that ignore or mislead 
the Department. Thai Union contends that it has been a fully 
cooperative respondent during the 1995-1996 administrative review as 
evidenced by its detailed and timely responses to the Department's 
original and supplemental questionnaires, as well as to Department 
inquiries made by telephone. Thai Union further asserts that it 
cooperated fully with the Department during the verification and that 
Thai Union's employees met with the Department officials and responded 
to all questions and requests for information to the best of their 
ability. Thai Union argues that it encountered several situations which 
led to its failure of verification, but that these situations are not 
related to its efforts to cooperate. Thai Union states that several key 
Thai Union employees left the company during this administrative 
review. In addition, Thai Union contends that new individuals replacing 
the departed personnel entered their positions without the benefit of 
proper training and instruction from their predecessors.
    Thai Union states that adverse facts available is usually applied 
to respondents who disregard the Department's requests for information, 
who refuse to participate in an investigation and verification, or who 
attempt to mislead the Department with the information provided. Thai 
Union contends that it does not fall into this category of respondent. 
As such, Thai Union argues that resorting to the adverse inference in 
this case frustrates the purpose of the statute, which is to induce 
respondents to provide the Department with requested information in a 
timely, complete, and accurate manner so that the Department may 
determine current margins within statutory deadlines. Thai Union argues 
that because the record demonstrates that it did not refuse to 
cooperate with the Department assigning the higher rate for facts 
available is unreasonable. Thai Union avers that the Department's 
reasoning defeats the policy behind the two-tiered BIA structure 
because it completely overlooks substantial cooperation by the company 
and instead focuses on the results of the verification

[[Page 53819]]

to measure responsiveness. However, Thai Union contends that at 
verification, for a number of reasons, none of which touch on Thai 
Union's level of cooperation or participation, the data provided simply 
did not measure up. Thai Union states that the Department erred in its 
reference to Thai Union's ``substantial omissions and incomplete 
responses'' to the Department's requests for cost data as a 
justification for applying an adverse inference to the selection of 
facts available. Thai Union argues that it was wrong for the Department 
to gauge Thai Union's responsiveness on the results of verification. 
Thai Union states that it did not refuse to cooperate, but provided as 
much information as possible each time the Department made requests and 
communicated regularly with the Department during the investigation.
    Thai Union claims the Department's determination--that the highest 
calculated margin in a prior review is not adverse--is unfounded. Thai 
Union argues that the Department offered no support for its opinion 
that application of the highest calculated margin of 29.89 percent ad 
valorem was not adverse to Thai Union, and that the average of the 
estimated margins in the petition, 37.55 percent ad valorem, was 
adverse.
    Thai Union also contends that the Department acted punitively in 
its choice of facts available. Thai Union argues that in choosing the 
average of petition rates instead of the highest calculated margin to 
assign to Thai Union the Department in effect sought out the most 
punitive information rather than the best information. Thai Union 
argues that the Department has violated the ruling in Rhone Poulenc, 
Inc. v. United States, 899 F.2d 1185 (Fed. Cir. 1990) where the court 
stated that the application of the BIA rule is punitive if the 
Department rejects ``low margin information in favor of high margin 
information that was demonstrably less probative of current 
conditions.'' Thai Union argues that the Department should have found 
that the highest calculated margin from the 1987-1988 administrative 
review was the most probative evidence of current margins but that it 
instead relied on refuted allegations from the original petition. Thai 
Union adds that there is no information on the record indicating that 
29.89 percent is not indicative of current conditions and that there is 
no information on the record indicating that conditions reflected in 
the original investigation are more probative than the Department's 
findings in a more contemporaneous review. It argues that the 
Department should choose the most contemporaneous information in making 
its choice of facts available.
    Finally, Thai Union argues that the Department erred in rejecting 
Thai Union's sales data. Thai Union states that the Department rejected 
Thai Union's sales data because the cost data could not be verified and 
to avoid manipulation of the margin calculation. Thai Union argues that 
this was inappropriate because Thai Union provided sales data in a 
timely manner, which the Department elected not to verify; therefore, 
there is nothing on the record which supports the conclusion that Thai 
Union's sales data is inaccurate. Thai Union concludes that the 
Department's rejection of Thai Union's sales data was arbitrary and 
that the Department improperly selected unverified estimates of 
margins, refuted in the original investigation, rather than using 
previously verified margins to determine the facts available in this 
administrative review.
    Petitioners hold that the Department should apply adverse facts 
available to Thai Union for the final results as it did in the 
preliminary results of this review. Petitioners note that Thai Union 
had not provided complete questionnaire responses at the time 
verification commenced. In addition, during verification, Thai Union 
was unable to produce necessary records or to reconcile its submitted 
data with its records. Petitioners argue that virtually no aspect of 
Thai Union's cost of production and constructed value data was able to 
be verified by the Department. Moreover, the Department discovered at 
verification that Thai Union did not use its normal accounting books 
and records to prepare its responses even though these books contained 
product specific data, which Thai Union claimed to have used in its 
responses. Petitioners emphasize that Thai Union's incomplete general 
ledger made it impossible for the Department to reconcile the responses 
to the ledger. Petitioners assert that the cost build-ups provided by 
Thai Union at verification were inaccurate concerning reported labor 
costs, and Thai Union could not explain the calculations contained in 
those worksheets.
    Petitioners argue that, because the cost of production and 
constructed value data was unverifiable, this data is unreliable and 
unusable for the final results. Therefore, petitioners assert, the 
Department is unable to determine whether Thai Union's home market 
sales were made at less than cost of production. However, since the 
constructed value data is unreliable and unusable as well, petitioners 
argue, there is no information on the record on which to base normal 
value, and the Department should decline to consider any of Thai 
Union's submitted information for the final results. Petitioners argue 
that Thai Union did not cooperate with the Department or act to the 
best of its ability to provide the information requested by the 
Department. Therefore, according to petitioners, the Department should 
apply an adverse inference to the facts available for the final results 
as it did in the preliminary results.
Department's Position
    For these final results, we have determined that the facts of this 
case support assigning 37.55 percent, the average estimated margins 
from the petition, as total adverse facts available for Thai Union. 
Assigning this rate is fully consistent with section 776(a) and 776(b) 
of the Act. Section 776(a)(1) of the Act mandates the Department to use 
the facts available if necessary information is not available on the 
record and section 776(a)(2)(D) of the Act mandates the use of facts 
available when an interested party or any other person provides 
information that cannot be verified. As detailed in the preliminary 
results, Thai Union's responses to the Department's initial and three 
supplemental COP questionnaires were incomplete and unresponsive and 
contained numerous errors, omissions, and discrepancies. The 
information that Thai Union failed to provide the Department in the 
supplemental questionnaire responses is, in many instances, data that 
the Department first requested in the initial questionnaire. Moreover, 
at verification, Thai Union was unable to reconcile its reported cost 
data with its normal books and records kept in the ordinary course of 
business, was unable to provide requested worksheets to demonstrate the 
methodology used to calculate COP and CV, and was generally unprepared 
to go over items identified on the verification agenda. See Thai Union 
Cost Verification Report. Accordingly, the record in this case fully 
supports our determination to use facts available because necessary 
information is not on the record and Thai Union provided information 
that could not be verified.
    In light of unverifiable COP and CV responses, the Department had 
no option other than resort to total facts available. We disagree with 
Thai Union's contention that we arbitrarily rejected Thai Union's sales 
data because our decision to resort to total facts available is based 
on our determination that Thai Union's entire response does not meet 
the requirements of section 782(e) of the Act. Because of the

[[Page 53820]]

extensive defects as detailed in the preliminary results, Thai Union's 
submitted COP and CV data could not be verified, which renders this 
information unreliable for purposes of calculating costs associated 
with Thai Union's actual production experience as required under the 
statute. Further, Thai Union's sales data does not meet the 
requirements of section 782(e) and was, therefore, not considered. The 
Department can only make price-to-price comparisons (normal value to 
export price) using those home market sales that pass the cost test 
under section 773(b) of the Act. The systematically flawed nature of 
Thai Union's COP data prevents the Department from testing Thai Union's 
home market sales to distinguish between below cost sales, which must 
be disregarded, and above cost sales, which are included in the margin 
calculation. Also, the Department is unable to calculate reliable 
difference in merchandise figures (DIFMERs) using Thai Union's 
unverified COP data. In this review, DIFMERs would have been required 
for a majority of the United States and home market sales matches. 
However, because DIFMER data is based on COP information from Thai 
Union's questionnaire responses, which, as discussed above, could not 
be verified, the Department is unable to measure the effect of physical 
differences in making sales comparisons. Finally, as we explained in 
the preliminary results, we determine that the use of facts available 
for Thai Union's COP data precludes the use of the submitted CV data 
because this data is tainted with unreliable cost elements. In sum, the 
unreliability of the submitted cost data renders Thai Union's sales 
unreliable and unusable. Thus, our rejection of Thai Union's sales data 
is based on a full examination of the record and analysis of the 
factors set forth in section 782(e). In similar factual circumstances, 
the Department has rejected an entire response due to the unreliability 
of a respondent's submitted cost data. See e.g., Notice of the Final 
Determination of Sales at Less than Fair Value: Certain Pasta from 
Turkey, 61 FR 30309, 30312 (June 14, 1996); Notice of Final Results of 
Antidumping Duty Administrative Review: Cut to Length Carbon Steel 
Plate from Sweden, 62 FR 18396, 18401 (April 15, 1997).
    Our determination that the use of adverse inferences is warranted 
in this review is also supported by record evidence that demonstrates 
Thai Union's failure to act to the best of its ability to comply with 
our requests. In this review, we evaluated Thai Union's level of 
cooperation based on both the sufficiency of its questionnaire 
responses and the results of verification. Thai Union's failure to 
provide complete and accurate responses coupled with the evident lack 
of preparation for the verification demonstrates that Thai Union did 
not act to the best of its ability to cooperate in this review. Thai 
Union's responses contained numerous discrepancies that remained 
unexplained at verification. Moreover, Thai Union was unprepared to 
perform the primary test of verification, e.g., reconciling its 
reported cost data with its normal books and records. This lack of 
preparation undermined the entire verification. Thai Union's attempt to 
explain its lack of preparation by arguing that key personnel had 
departed the company does not excuse its failure to explain the 
calculation of substantial portions of the cost response, retain 
necessary worksheets, or provide a complete general ledger from which 
we could examine the rudimentary elements of its cost data. We also 
note that Thai Union had participated in a previous segment of this 
proceeding wherein we conducted a verification of its response. See 
e.g., Certain Circular Welded Carbon Steel Pipes and Tubes from 
Thailand; Final Results of Antidumping Administrative Review, 56 FR 
58355 (November 19, 1991). Therefore, the company was familiar with the 
requirements and procedures for verification.
    We disagree with Thai Union's contention that because it has 
participated fully in this review we cannot find that it is 
uncooperative. The SAA explicitly states that the determination of 
whether a party is uncooperative rests on whether or not the party has 
``acted to the best of its ability to comply with requests for 
necessary information.'' SAA at 870. A respondent's submission of 
information is one consideration in evaluating the level of 
cooperation. Neither the SAA nor our regulations prohibit us from 
finding a respondent has not cooperated to the best of its ability 
despite timely responses to our questionnaires. Rather, our 
determination is based on a full examination of the record of a 
particular segment to determine the quality of those responses (i.e., 
accuracy and completeness) and whether the respondent has hindered the 
calculation of accurate dumping margins. If this were not the case, 
then a respondent easily could manipulate the investigative process by 
providing complete yet inaccurate responses that cannot be verified. 
This scenario would cede control to the respondent to dictate the 
course of the review and force the Department to devote its limited 
administrative resources to scrutinizing frivolous questionnaire 
responses. In this regard, resorting to facts available under the 
current statute effectuates the same purpose as the BIA rule under the 
old law, that is, to encourage respondents to provide timely, complete, 
and accurate responses. See e.g., Proposed Regulations, 61 FR 7307, 
7327 (February 27, 1996) (noting that the factual circumstances 
triggering use of facts available are ``virtually identical'' to those 
triggering BIA); Olympic Adhesives, Inc. v. United States, 899 F.2d 
1565, 1571 (Fed. Cir. 1990).
    Thai Union's contention that we have unlawfully eliminated the 
distinction between cooperative and uncooperative respondents adopted 
under our prior practice apparently presumes that under the two-tiered 
BIA structure a cooperative respondent was assigned a non-adverse rate. 
However, that is not the case. As we explained in the Proposed 
Regulations, under the BIA provision, we automatically applied an 
adverse inference regardless of the level of cooperation by the 
respondent. See Proposed Regulations, 61 FR at 7327. We assigned the 
most adverse rate to uncooperative respondents and a less adverse rate 
to cooperative respondents. Thus, under either tier, the BIA rate was 
adverse. The URAA has eliminated this automatic use of an adverse 
inference by limiting the use of adverse inferences to factual 
situations in which the Department has determined that the respondent 
has not acted to the best of its ability. Id. Use of adverse inferences 
is now determined on a case-by-case basis by examining the record 
evidence in a particular segment to evaluate the respondent's level of 
cooperation. Id. at 7328; Final Regulations, 62 FR at 27340. 
Accordingly, Thai Union's reference to the two-tiered BIA structure 
under our prior practice is misplaced. In this review, consistent with 
the SAA and current practice, we have determined that the record 
evidence demonstrates that Thai Union failed to act to the best of its 
ability and appropriately have applied adverse inferences consistent 
with section 776(b) of the Act.
    With respect to our selection of an adverse facts available rate, 
we disagree with Thai Union's assertion that the rate most recently 
calculated for Thai Union is an appropriate adverse facts available 
rate for purposes of this review. The SAA directs us to consider ``the 
extent to which a party may benefit from its own lack of cooperation'' 
in employing adverse inferences. SAA at 870. The

[[Page 53821]]

highest calculated rate from this proceeding (29.89%) is the cash 
deposit rate currently assigned to Thai Union, which has been carried 
forward from the 1987-1988 administrative review. Based on the facts of 
this case, we find that assignment of Thai Union's existing cash 
deposit rate would be insufficient to effectuate the purpose of the 
facts available rule. We therefore selected a higher rate, the average 
of the estimated margins in the petition (37.55%).
    Nor do we agree with Thai Union's contention that assignment of 
37.55% is inappropriately punitive because it is ``demonstrably less 
probative of current conditions.'' Section 776(c) authorizes the use of 
secondary information, which includes information derived from the 
petition, as a source of facts available, and the SAA explicitly states 
that the Department may rely upon information contained in the petition 
when making adverse inferences under section 776(b) of the Act. SAA, at 
870. Therefore, the statute and SAA clearly envision the use of 
petition margins as the source of adverse total facts available, and 
there is no requirement that the Department prove that a petition 
margin is ``more probative'' than any other rate calculated during the 
particular proceeding. In fact, the SAA emphasizes that the Department 
need not ``prove that the facts available are the best alternative 
information.'' SAA at 869.
    The corroboration requirement contained in section 776(c) serves 
the purpose of assessing the probative value of the selected secondary 
information. To this end, when the Department relies on petition 
margins or calculated rates as total facts available, our practice is 
to evaluate the reliability and relevance of the information used as a 
measure of probative value. See, e.g., Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished from Japan and Tapered Roller 
Bearings, Four Inches or Less In Outside Diameter, and Components 
Thereof, from Japan: Final Results of Antidumping Duty Administrative 
Reviews, 62 FR 11825 (March 13, 1997); Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Pasta from Turkey, 61 FR 30309 
(June 14, 1996).
    In this case, as explained in the preliminary results, we 
determined that the petition margins are reliable because they were 
derived from price quotes, U.S. Customs data, import and export 
statistics, and other public information contemporaneous with the 
period of investigation. See Antidumping Duty Petition, February 28, 
1985; Memorandum for Alan F. Holmer from Gilbert B. Kaplan, March 20, 
1985. We also determined that the petition margins are relevant because 
there is no information on the record that demonstrates that 37.55% is 
not an appropriate total adverse facts available rate for Thai Union. 
See e.g., Certain Welded Stainless Steel Pipe From Taiwan; Final 
Results of Administrative Review, 62 FR 37543, 37555 (July 14, 1997).

Final Results of the Review

    As a result of this review, we have determined that the following 
weighted-average dumping margins exist for the period March 1, 1995, 
through February 29, 1996:

------------------------------------------------------------------------
                                                                 Margin 
            Manufacturer/exporter                  Period      (percent)
------------------------------------------------------------------------
Saha Thai/SAF/Thai Tube/Thai Hong............  3/1/95-2/29/96      29.89
Thai Union...................................  3/1/95-2/29/96      37.55
------------------------------------------------------------------------

    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
shall issue appraisement instructions directly to the Customs Service.
    Furthermore, the following deposit requirements shall be effective 
upon publication of this notice of final results of review for all 
shipments of certain welded carbon steel pipes and tubes from Thailand, 
entered, or withdrawn from warehouse, for consumption on or after the 
publication date, as provided for by section 751(a)(1) of the Tariff 
Act: (1) The cash deposit rates for the reviewed companies named above 
which have separate rates will be the rates for those firms as stated 
above; (2) for previously investigated companies not listed above, the 
cash deposit rate will continue to be the company-specific rate 
published for the most recent period; (3) if the exporter is not a firm 
covered in these reviews, or the original LTFV investigations, but the 
manufacturer is, the cash deposit rate will be the rate established for 
the most recent period for the manufacturer of the merchandise; and (4) 
if neither the exporter nor the manufacturer is a firm covered in these 
reviews, the cash deposit rate for this case will continue to be 15.67 
percent, the ``All Others'' rate made effective by the LTFV 
investigation. These deposit requirements shall remain in effect until 
publication of the final results of the next administrative review.
    This notice serves as a final reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective order (``APO'') of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with section 353.34(d) of the Department's 
regulations. Timely notification of return/destruction of APO materials 
or conversion to judicial protective order is hereby requested. Failure 
to comply with the regulations and the terms of an APO is a 
sanctionable violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and Sec. 353.22 of 
the Department's regulations.

    Dated: October 7, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-27471 Filed 10-15-97; 8:45 am]
BILLING CODE 3510-DS-P