53808 Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices

contract price as determined by the

Department.

Weighting

The Department used the average spot

and long-term volumes of U.S. utility

and domestic supplier purchases, as

reported by the Energy Information

Administration (EIA), to weight the spot

and long-term components of the

observed price. In this instance, we have

used purchase data from the period

1993–1996. During this period, the spot

market accounted for 79.31 percent of

total purchases, and the long-term

market for 20.69 percent.

As in previous determinations, the

Department used the Energy

Information Administration’s (EIA)

Uranium Industry Annual to determine

the available average spot-and long-term

volumes of U.S. utility purchases. We

have updated the data to reflect the

period 1993 through 1996. The EIA has

withheld certain business proprietary

contract data from the public versions of

the Uranium Industry Annual 1993,

Uranium Industry Annual 1994,

Uranium Industry Annual 1995 and the

Uranium Industry Annual 1996. The

EIA, however, provided all business

proprietary data to the Department and

the Department has used it to update its

weighting calculation.

Calculation Announcement

The Department determined, using

the methodology and information

described above, that the observed

market price is $12.35. This reflects an

average spot market price of $11.51,

weighted at 79.31 percent, and an

average long-term contract price of

$15.54, weighted at 20.69 percent. The

increase in the observed market price

from our preliminary determination

reflects the addition of one contract, as

discussed below, and revised

calculation methodology. Since this

price is between $12.00/pound and

$13.99/pound as defined in Appendix A

of the suspension agreement with

Kazakstan, as amended, Kazakstan

receives a quota of 1,000,000 pounds for

the period October 1, 1997, to

September 30, 1998. This price will also

be used, as appropriate, according to

Section 2.A. of the Uzbek agreement.

Comments

Consistent with the February 22,

1993, letter of interpretation, the

Department provided interested parties

the preliminary price determination for

this period on September 17, 1997. One

interested party submitted comments.

Comment 1: The Ad Hoc Committee

of Domestic Uranium Producers (the

Miners) requested that the Department

include Uzbekistan in the price

calculation.

Department’s Position: The

Department agrees with the Miners and

on September 29, 1997, placed the price

calculation on the Uzbek record and

served counsel. (See Memo to the File

from Cindy Sonmez, September 29,

1997.)

Comment 2: The Miners indicated

that the Department failed to include an

additional U.S. Base Price Indicator

month in its calculations of long-term

price.

Department’s Position: The

Department agrees with the Miners and

has included the relevant month under

the ‘‘UPIS Indicators’’ section. Further,

in accordance with our practice, the

Department simple-averaged the

relevant months, and this change has

been reflected on the ‘‘Simple Average

of UPIS and Contract Price.’’

Comment 3: The Miners requested the

Department to collect more information

on the reported prices of certain

contracts to ascertain that the contract

prices do not reflect unusual sale

circumstances.

Department’s Position: The

Department reviewed these contracts

and removed one contract from its longterm price calculations as it was a

duplicate. The Department also

confirmed with the submitting party

that the reported contract prices used in

our price calculations are accurate.

Comment 4: Petitioners request that

the Department weight-average the price

on multi-year contracts according to

yearly delivery volumes.

Department’s Position: The

Department agrees with petitioners and

has adjusted our long-term contract

price methodology accordingly. In order

to arrive at the contract price, the

Department derived weighted-average

price factors for each year of the

contract period and added each

individual factor. The Department

calculated the weighted-average price

factor by multiplying the deflated price

for each contract year by the nominal

volume of the contract year over the

total nominal volume of the contract.

Dated: October 6, 1997.

Joseph A. Spetrini,

Deputy Assistant Secretary for Antidumping

Countervailing Duty—Group III.

[FR Doc. 97–27472 Filed 10–15–97; 8:45 am]

BILLING CODE 3510–DS–P

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.

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
Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices 53809

1On 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.

2Both 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.

are to the current regulations, as

codified at 19 CFR part 353 (April

1997). Although the Department’s new

regulations codified at 19 CFR part 351

(62 FR 27296, May 19, 1997) (‘‘Final

Regulations’’) do not govern this

administrative review, citations to those

regulations are provided, where

appropriate, as a statement of current

departmental practice.

SUPPLEMENTARY INFORMATION:

Background

On March 11, 1986, the Department

published in the Federal Register an

antidumping duty order on welded

carbon steel pipes and tubes from

Thailand (51 FR 8341). On March 4,

1996, the Department published a notice

of opportunity to request an

administrative review of this order

covering the period March 1, 1995

through February 29, 1996 (61 FR 8238).

Timely requests for an administrative

review of the antidumping order with

respect to sales by Saha Thai/SAF and

Thai Union during the POR were filed

by Thai Union, and jointly by Saha

Thai, SAF, Ferro Union, and ASOMA.

The Department published a notice of

initiation of this antidumping duty

administrative review on April 25, 1996

(61 FR 18378).

On May 14, 1996, Saha Thai, SAF,

Ferro Union, and ASOMA sought to

withdraw their request for review and

requested that the Department terminate

the review with respect to sales by Saha

Thai/SAF during the POR. The domestic

interested parties, Allied Tube &

Conduit Corporation, Laclede Steel

Company, Sawhill Tubular Division of

Armco, Inc., and Wheatland Tube

Company, (‘‘petitioners’’), objected to

partial termination of the review on the

grounds that, on March 29, 1996, they

had submitted to the Department a

timely request for review of sales by

these companies and served Saha Thai

with a copy of this request. Although

there is no official record of petitioners’

request, because the reason for the filing

error is unclear and given the remedial

nature of the antidumping law and the

fact that Saha Thai received notice of

petitioners’ request, the Department

elected to continue the ongoing review

of these sales. See Memorandum to

Robert S. LaRussa from Stephen J.

Powell, July 11, 1996.

On May 24, 1996, the petitioners

requested that the Department verify the

responses of both Saha Thai and Thai

Union.

The Department determined that it

was not practicable to complete this

review within statutory time limits, and,

pursuant to section 751(a)(3)(A) of the

Act, extended the time limit for the

preliminary results of the review on

November 1, 1996. On April 10, 1997,

the Department published in the

Federal Register (62 FR 17590) the

preliminary results of its administrative

review of this antidumping order

covering the period March 1, 1995

through February 29, 1996. On August

8, 1997, pursuant to section 751(a)(3)(A)

of the Act, the Department extended the

time limit for the final results of the

review.

On August 21, 1997, the Department

requested Saha Thai to submit onto the

record of this segment of the proceeding

certain information concerning its

ownership and management structure

and the ownership interests of its

directors that Saha Thai had placed on

the record of the subsequent segment

(the March 1, 1996–February 28, 1997

POR). Saha Thai complied with this

request in a timely manner. Saha Thai

submission August 25, 1997.1 Both Saha

Thai and petitioners filed comments on

Saha Thai’s submission.2

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 onsite 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
53810 Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices

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.
Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices 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 postverification 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
53812 Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices

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
Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices 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-today 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
53814 Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices

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
Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices 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
53816 Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices

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 PVCcoated 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,
Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices 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 courtapproved 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
53818 Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices

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
Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices 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
53820 Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices

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-toprice 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
Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices 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 weightedaverage dumping margins exist for the

period March 1, 1995, through February

29, 1996:

Manufacturer/exporter Period

Margin

(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 companyspecific 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

§ 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

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

[I.D. 100697C]

Advisory Committee to the U.S.

Section of the International

Commission for the Conservation of

Atlantic Tunas (ICCAT); Fall Meeting

and Notice of Availability of Statement

of Operating Practices and Procedures

(SOPP)

AGENCY: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Notice of public meeting and of

availability of SOPP.

SUMMARY: The Advisory Committee to

the U.S. Section of ICCAT will hold its

annual fall meeting on November 2–4,

1997. In addition, the Advisory

Committee has finalized its SOPP and is

announcing the availability of this

document to the public.

DATES: The open sessions will be held

on November 2, 1997, from 1 p.m. to 6

p.m. and November 3, 1997, from 8 a.m.

to 12:45 p.m. Closed sessions will be

held on November 3 from 1:45 p.m. to

6 p.m. and on November 4 from 8 a.m.