[Federal Register Volume 63, Number 136 (Thursday, July 16, 1998)]
[Notices]
[Pages 38382-38390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18882]


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DEPARTMENT OF COMMERCE

International Trade Administration
A-583-815


Certain Welded Stainless Steel Pipe From Taiwan; Final Results of 
Administrative Review

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

ACTION: Notice of final results of administrative review.

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SUMMARY: On January 9, 1998, the Department of Commerce (the 
Department) published in the Federal Register the preliminary results 
of the 1995-1996 administrative review of the antidumping duty order on 
certain welded stainless steel pipe from Taiwan (A-583-815). This 
review covers one manufacturer/exporter of the subject merchandise 
during the period December 1, 1995 through November 30, 1996.
    We gave interested parties an opportunity to comment on the 
preliminary results. Although, based upon our analysis of the comments 
received, we have changed the results from those presented in our 
preliminary results of review, a de minimis dumping margin still exists 
for Ta Chen's sales of welded stainless steel pipe (WSSP) in the United 
States. Accordingly, we will instruct the U.S. Customs Service to 
assess antidumping duties on entries of Ta Chen merchandise during the 
period of review, in accordance with the Department's regulations (19 
CFR 353.6).

EFFECTIVE DATE: July 16, 1998.

FOR FURTHER INFORMATION CONTACT: Robert James at (202) 482-5222 or John 
Kugelman at (202) 482-0649, Antidumping and Countervailing Duty 
Enforcement Group III, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230.
    Applicable Statute and Regulations: Unless otherwise indicated, all 
citations to the Tariff Act of 1930, as amended (the Tariff Act), are 
to the provisions effective January 1, 1995, the effective date of the 
amendments made to the Tariff Act by the Uruguay Round Agreements Act 
(URAA). In addition, unless otherwise indicated, all citations to the 
Department's regulations are to the regulations codified at 19 CFR Part 
353 (April 1, 1997).

SUPPLEMENTARY INFORMATION:

Background

    On December 30, 1992, the Department published in the Federal 
Register the antidumping duty order on welded stainless steel pipe 
(WSSP) from Taiwan (57 FR 62300). On December 3, 1996, the Department 
published the notice of ``Opportunity to Request Administrative 
Review'' for the period December 1, 1995 through November 30, 1996 (61 
FR 64051). In accordance with 19 CFR 353.22(a)(1) (1997), respondent Ta 
Chen Stainless Pipe Co., Ltd. and its wholly-owned U.S. subsidiary, Ta 
Chen International (collectively, Ta Chen), requested that we conduct a 
review of their sales. On January 17, 1997, we published in the Federal 
Register our notice of initiation of this antidumping duty 
administrative review covering the period December 1, 1995 through 
November 30, 1996 (62 FR 2647).

[[Page 38383]]

    Because it was not practicable to complete this review within the 
normal time frame, on July 24, 1997, we published in the Federal 
Register our notice of extension of time limits for this review (62 FR 
39824). We published the preliminary results of this review in the 
Federal Register on January 9, 1998 (Certain Welded Stainless Steel 
Pipe From Taiwan; Preliminary Results of Administrative Review, 63 FR 
1437 (Preliminary Results)). We published our notice of extension of 
time limits for these final results in the Federal Register on March 
17, 1998 (63 FR 13032).
    Furthermore, on January 12 through January 20, 1998, the Department 
conducted a verification of Ta Chen's home market sales data at Ta 
Chen's headquarters in Tainan, Taiwan. We also verified Ta Chen's U.S. 
sales data at the premises of Ta Chen International on January 26 
through January 29, 1998 (see ``Results of Verification,'' below). The 
full results of our verification are detailed in the Department's 
verification reports. Public versions of these, and all public 
documents referenced in this notice, are on file in Room B-099 of the 
main Commerce building.
    Petitioners and Ta Chen timely filed case briefs on May 14, 1998; 
Ta Chen replied with its rebuttal brief dated May 21, 1998.
    The Department has now completed this review in accordance with 
section 751 of the Tariff Act.

Scope of the Review

    The merchandise subject to this administrative review is certain 
welded austenitic stainless steel pipe (WSSP) that meets the standards 
and specifications set forth by the American Society for Testing and 
Materials (ASTM) for the welded form of chromium-nickel pipe designated 
ASTM A-312. The merchandise covered by the scope of the order also 
includes austenitic welded stainless steel pipes made according to the 
standards of other nations which are comparable to ASTM A-312.
    WSSP is produced by forming stainless steel flat-rolled products 
into a tubular configuration and welding along the seam. WSSP is a 
commodity product generally used as a conduit to transmit liquids or 
gases. Major applications for WSSP include, but are not limited to, 
digester lines, blow lines, pharmaceutical lines, petrochemical stock 
lines, brewery process and transport lines, general food processing 
lines, automotive paint lines, and paper process machines.
    Imports of WSSP are currently classifiable under the following 
Harmonized Tariff Schedule of the United States (HTS) subheadings: 
7306.40.5005, 7306.04.5015, 7306.40.5040, 7306.40.5065, and 
7306.40.5085. Although these subheadings include both pipes and tubes, 
the scope of this investigation is limited to welded austenitic 
stainless steel pipes. Although the HTS subheadings are provided for 
convenience and Customs purposes, our written description of the scope 
of this order is dispositive.
    The period for this review is December 1, 1994 through November 30, 
1995. This review covers one manufacturer/exporter, Ta Chen.

Results of Verification

    As provided in section 782(i) of the Tariff Act, we verified 
information provided by the respondent using standard verification 
procedures, including on-site inspection of Ta Chen's facilities in 
Tainan, Taiwan and Ta Chen International's headquarters in Long Beach, 
California, the examination of relevant sales and financial records, 
and selection of original documentation containing relevant 
information. Our verification results for the home market and U.S. 
verifications are outlined in public versions of, respectively, the 
Home Market Verification Report and the U.S. Verification Report, 
available to the public in Room B-099 of the main Commerce building. In 
preparing for verification Ta Chen discovered minor corrections which 
it presented to the Department's verifiers at the start of the home 
market and U.S. verifications. In addition, as noted in the ``Analysis 
of Comments'' section, below, our verifications revealed other minor 
inaccuracies in Ta Chen's submitted data. Where appropriate, we have 
adjusted Ta Chen's reported sales data to reflect these corrections.

Analysis of Comments Received

Comment 1: Export Price Versus Constructed Export Price Sales

    Petitioners take issue with the determination in the Preliminary 
Results to treat all of Ta Chen's U.S. sales as export price (EP) 
sales, as defined in section 772(a) of the Tariff Act. Rather, 
petitioners maintain, Ta Chen's so-called ``back-to-back'' sales 
through Ta Chen International (TCI) properly are considered constructed 
export price (CEP) transactions. Petitioners assert that the Department 
customarily examines the activities of the affiliated U.S. importer in 
determining whether U.S. sales should be classified as EP or CEP sales 
using a three-prong test: (i) Whether the merchandise is shipped 
directly from the manufacturer to the unaffiliated purchaser without 
entering the physical inventory of the U.S. affiliate; (ii) whether 
direct shipment from the manufacturer to the unaffiliated purchaser is 
the customary channel of sales for the subject merchandise; and (iii) 
whether the U.S. selling agent acted merely as a processor of sales-
related paperwork and a communication link between the manufacturer and 
the unaffiliated purchaser. See Petitioners' May 14, 1998 Case Brief 
(Case Brief) at 2, citing Roller Chain, Other Than Bicycle Chain, From 
Japan, 63 FR 25450 (May 8, 1998) (Roller Chain). Even if the 
transactions involving TCI meet the first two prongs of this test, 
petitioners continue, record evidence establishes that, as to the third 
point, TCI acted as more than just a paper processor or communications 
link. Claiming that TCI is ``integrally involved'' with Ta Chen's U.S. 
sales of subject merchandise, petitioners point out that U.S. customers 
approach TCI, not Ta Chen, when seeking price quotes. Case Brief at 3, 
quoting the Department's Home Market Verification Report at 12. The 
verification report continues by stating that the president of Ta Chen 
and TCI, Robert Shieh, responds directly to the unaffiliated U.S. 
customer. According to petitioners, what happens when the customer 
rejects the initial quote and further price negotiations are required 
is not clear; petitioners therefore make the ``reasonable inference'' 
that TCI concludes any such negotiations itself on behalf of Ta Chen in 
Taiwan. Id. at 4. Further, petitioners argue, Ta Chen ``glosses over'' 
Mr. Shieh's role in Ta Chen's U.S. sales; as noted, in addition to 
being president of Ta Chen, Mr. Shieh is also president of TCI, and 
spends a considerable amount of his time in the United States at TCI's 
Long Beach headquarters. Petitioners suggest that this indicates that 
Mr. Shieh is acting as president of TCI, not of Ta Chen in Taiwan, when 
he negotiates U.S. sales of welded stainless steel pipe.
    Petitioners stress that when viewing sales transactions involving a 
U.S. firm affiliated with the exporter, the Department will presume 
that the transactions are CEP sales unless the record indicates that 
the affiliate's role in the sale was ``incidental or ancillary.'' Case 
Brief at 5, citing Certain Cold-Rolled and Corrosion-Resistant Carbon 
Steel Flat Products From Korea, 63 FR 13170, 13177 (March 18, 1998) 
(Korean Steel III). When viewed in its totality, petitioners aver, the 
evidence demonstrates that TCI's role was more than ancillary and, 
thus, Ta Chen's U.S.

[[Page 38384]]

sales should be treated as CEP sales. For example, petitioners argue, 
TCI purchases subject pipe from Ta Chen and assumes ownership and risk 
of loss, and TCI, not Ta Chen in Taiwan, actually enters into the sales 
contract with the unaffiliated U.S. customers. This situation, 
petitioners maintain, is analogous to that found in Korean Steel III 
where, as here, the U.S. affiliate acted as the conduit for the foreign 
parent's U.S. sales, the U.S. affiliate entered into the sales 
contracts with unaffiliated U.S. customers, the U.S. affiliate played a 
key role in all sales activities (such as issuing invoices, collecting 
payment, financing the sale, etc.), and the U.S. affiliate incurred 
``significant selling expenses in the United States.'' Case Brief at 6. 
In light of TCI's ``very meaningful'' role in Ta Chen's U.S. sales, 
petitioners conclude, the Department should treat all of Ta Chen's 
sales as CEP transactions.
    Ta Chen counters that the Department's treatment of Ta Chen's U.S. 
sales as EP transactions was the correct interpretation of the 
statutory definition of EP sales. Furthermore, Ta Chen insists, nothing 
found at verification contradicted Ta Chen's long-standing assertion 
that its U.S. sales comprised EP (or, under the pre-URAA statute, 
``purchase price'') transactions. Citing Extruded Rubber Thread From 
Malaysia, 62 FR 33588 (June 20, 1997) (Extruded Rubber), Ta Chen argues 
that the Department examined a similar fact pattern surrounding so-
called ``back-to-back'' sales and concluded that where all three 
conditions of the Department's test are met (i.e., the merchandise was 
shipped directly to the unaffiliated U.S. customer, the channel of 
distribution was normal for the parties involved, and the U.S. selling 
agent acted as a communication link only), the transactions qualify for 
treatment as EP sales. According to Ta Chen, Extruded Rubber also noted 
that the Tariff Act defines EP as ``the price at which the subject 
merchandise is first sold (or agreed to be sold) before the date of 
importation by the producer or exporter of the subject merchandise 
outside of the United States to an unaffiliated purchaser in the United 
States * * * '' Ta Chen's Rebuttal Brief at 5, quoting Extruded Rubber 
at 33597 (Ta Chen's emphasis).
    Ta Chen submits that all of its sales of subject pipe during this 
review were shipped directly from Ta Chen's Tainan plant to the 
unaffiliated U.S. customer. This channel of distribution, Ta Chen 
avers, has been customary between Ta Chen and its U.S. customers 
``since well before the U.S. dumping matter began,'' noting that it 
employed ``back-to-back'' sales as one of its major channels of 
distribution prior to the 1991 filing of the antidumping petition.
    As to the third test, whether Ta Chen International acted merely as 
a processor of sales-related documents and communications link between 
Ta Chen and its U.S. customers, Ta Chen insists that TCI's activities 
are even less extensive than those typically cited by the Department as 
possible indicators that a U.S. affiliate played a more substantial 
part in the sales in question. For example, Ta Chen continues, the 
Department's January 22, 1998 Antidumping Manual suggests that 
functions ``such as the administration of warranties, advertising, in-
house technical assistance, and the supervision of further 
manufacturing may indicate that the [U.S.] agent is more than the sales 
facilitator envisioned for EP sales.'' Rebuttal Brief at 5, quoting 
Antidumping Manual, Chapter 7 (Ta Chen's emphasis). That TCI engages in 
none of the activities suggested as indicating sales might be 
considered CEP transactions, Ta Chen maintains, further supports the 
Department's preliminary determination that these sales warranted EP 
treatment.
    Furthermore, Ta Chen continues, in Extruded Rubber the Department 
found sales to be EP transactions ``irrespective of any involvement in 
the pricing of these sales by the U.S. subsidiary.'' Rebuttal Brief at 
6. In Ta Chen's view the key determinant in the EP versus CEP analysis 
is the statute's focus on whether the ``subject merchandise is first 
sold (or agreed to be sold) before the date of importation,'' as is the 
case in the instant review. Ta Chen submits that for its U.S. 
transactions the subject merchandise was first sold to the unaffiliated 
U.S. customer before importation and subsequently shipped directly to 
that customer, pointing to the purchase orders and shipment dates as 
confirmation. Thus, Ta Chen argues, the controlling statutory language 
defines these as EP sales. As to Robert Shieh's involvement in setting 
prices, Ta Chen argues in both its case and rebuttal briefs that Mr. 
Shieh ``acts under the direction of Ta Chen Taiwan's Board of 
Directors'' which has ``directed Mr. Shieh to set U.S. prices based on 
cost of production in Taiwan and Ta Chen's home market prices * * *'' 
Ta Chen's Case Brief at 3 and 4; Ta Chen's Rebuttal Brief at 7, quoting 
Ta Chen's supplemental response at 253. ``Robert Shieh's authority,'' 
Ta Chen asserts, ``flows from Ta Chen Taiwan,'' and not from TCI. 
Rebuttal Brief at 9. In any event, Ta Chen concludes, a U.S. 
affiliate's active participation in the sales process is insufficient 
grounds for treating sales as EP transactions where the affiliate lacks 
the ability to set prices or terms of sale. Id. at 8, citing Certain 
Stainless Steel Wire Rods From France, 58 FR 68865 (December 29, 1993).
    Ta Chen also contests several factual conclusions posited in 
petitioners case brief. According to Ta Chen, TCI passed requests for 
quotes from U.S. customers to Ta Chen Taiwan, a role consistent with 
that of a paper processor. Ta Chen also insists that the amount of time 
Mr. Shieh spends in the United States is a ``personal decision'' 
relating to his family which is irrelevant to the Department's 
antidumping analysis. Further, that TCI actually purchases the subject 
merchandise and then enters into contracts to sell it to unaffiliated 
U.S. customers (in ``back-to-back'' sales transactions) is the same 
situation found in Extruded Rubber and Cold-Rolled and Corrosion-
Resistant Carbon Steel Flat Products From Korea, 62 FR 18404 (April 15, 
1997) (Korean Steel II), where the Department analyzed the sales in 
question as EP transactions. Finally, Ta Chen rejects petitioners' 
``speculative claims'' that TCI takes over and concludes price 
negotiations for Ta Chen's U.S. sales independently of Ta Chen Taiwan 
in those cases where a customer rejects Ta Chen's initial price 
offering.
    Furthermore, Ta Chen argues, petitioners reliance on Korean Steel 
III is misplaced, noting several quantitative and qualitative 
differences between the activities of TCI when compared to those of the 
affiliated U.S. resellers in Korean Steel III. Ta Chen suggests that in 
the latter case, U.S. customers seldom had contact with the foreign 
producer, nor did the foreign producer set prices for U.S. sales. 
Furthermore, the U.S. affiliates financed U.S. sales by borrowing to 
finance accounts receivable. These facts, Ta Chen insists, do not 
obtain in the instant review.
    Assuming, arguendo, that Ta Chen's sales are properly considered 
CEP transactions, Ta Chen suggests that the record contains sufficient 
information to make any adjustments to U.S. price and normal value 
required under a CEP analysis. Furthermore, Ta Chen argues that should 
the Department elect to treat Ta Chen's sales as CEP transactions, Ta 
Chen should be granted a CEP offset in lieu of a level-of-trade 
adjustment, as its home market sales represent a more advanced stage of 
marketing than the Ta Chen--TCI CEP level of trade. Ta Chen makes 
further comments regarding the Department's treatment of sales to 
specific customers in prior review periods. As these customers do not 
appear in this review, any comments

[[Page 38385]]

concerning sales made in prior PORs are thus irrelevant to this review 
and are not addressed here.

Department's Position

    We disagree with petitioners, and agree, in part, with respondent 
that Ta Chen's U.S. sales in this review warrant treatment as EP 
transactions. As a threshold matter, while we agree with Ta Chen that 
its U.S. sales in this review warrant EP treatment, we disagree with Ta 
Chen's assertions that the statute requires the Department in every 
instance to treat sales which precede importation as EP sales. Rather, 
while the statute defines EP as involving sales made prior to 
importation, the relevant statutory definition of CEP states clearly 
that

    * * *``constructed export price'' means the price at which the 
subject merchandise is first sold (or agreed to be sold) into the 
United States before or after the date of importation by or for the 
account of the producer or exporter of such merchandise or by a 
seller affiliated with the producer or exporter, to a purchaser not 
affiliated with the producer or exporter * * *

See Section 772(b) of the Tariff Act (emphasis added).
    Thus, nothing in the statute requires the Department to treat as EP 
transactions all sales which happen to precede the date of importation. 
Rather, sales taking place prior to importation may be either EP or CEP 
sales, given the specific circumstances surrounding the transactions. 
In the instant review, as we stated above, the evidence on record does 
not support a reclassification of Ta Chen's U.S. sales from EP to CEP 
transactions. Nothing in the statute, however, precludes the Department 
from doing so, where appropriate.
    To ensure proper application of the statutory definitions, where a 
U.S. affiliate is involved in making a sale, we consider the sale to be 
CEP unless the record demonstrates that the U.S. affiliate's 
involvement in making the sale is incidental or ancillary. See Korean 
Steel III, 63 FR 13170, 13177 (March 18, 1998). Whenever sales are made 
prior to importation through an affiliated entity in the United States, 
the Department applies a three-pronged test to determine whether to 
treat such sales as EP, as follows: (i) Whether the merchandise was 
shipped directly to the unaffiliated buyer, without first being 
introduced into the affiliated selling agent's inventory; (ii) whether 
direct shipment from the manufacturer to the unaffiliated buyer was the 
customary channel for sales of this merchandise between the parties 
involved; and (iii) whether the affiliated selling agent located in the 
United States acts only as a processor of sales-related documentation 
and communication link between the foreign producer and the 
unaffiliated purchaser. See, e.g., PQ Corp. v. U.S., 652 F. Supp. 724, 
731 (CIT 1987) and Outokumpu Copper Rolled Products v. United States, 
829 F. Supp. 1371, 1379 (CIT 1993). Where all three of these criteria 
are met, we consider the exporter's sales functions to have been 
relocated geographically from the country of exportation to the United 
States, where the sales agent performs them. See, e.g., Large Newspaper 
Printing Presses and Components Thereof, Whether Assembled or 
Unassembled, From Germany, 61 FR 38166 (July 23, 1996), New Minivans 
From Japan, 57 FR 21937 (May 26, 1992), and Certain Internal-Combustion 
Forklift Trucks From Japan, 53 FR 12552 (April 15, 1988). Furthermore, 
as we stated in Stainless Steel Wire Rod From Spain, 63 FR 10849 (March 
5, 1998) (Preliminary Determination), where ``the activities of the 
U.S. affiliate are ancillary to the sale (e.g., arranging 
transportation or customs clearance), we treat the transactions as EP 
sales. Where the U.S. affiliate is substantially involved in the sales 
process (e.g., negotiating prices, performing support functions), we 
treat the transactions as CEP sales.'' 63 FR 10849, 10852; see also 
Korean Steel III.
    As for the first criterion in this case, i.e., direct shipment to 
the unaffiliated U.S. customer, no party to these proceedings has 
presented any evidence to challenge Ta Chen's statements that in the 
instant review Ta Chen shipped the subject merchandise directly to the 
unaffiliated U.S. customer's location (or to the U.S. port designated 
by the customer) without first introducing the merchandise into TCI's 
physical inventory. Further, we discovered no evidence at verification 
to suggest that the merchandise was shipped in any other fashion.
    With respect to the second criterion, i.e., whether direct shipment 
to the customer is the customary channel of trade, we agree with Ta 
Chen. No evidence on record contradicts Ta Chen's statement that direct 
shipment was the normal course of business long before this dumping 
matter began. See Ta Chen's April 14, 1997, questionnaire response at 5 
and 6. In the most-recently-concluded past review, the Department has 
treated Ta Chen's sales as EP sales based, in part, upon direct 
shipment from Ta Chen to the U.S. customer. See Certain Welded 
Stainless Steel Pipe From Taiwan; Preliminary Results of Administrative 
Review, 62 FR 1435, 1436.
    With respect to the third criterion, i.e., whether Ta Chen 
International (TCI) acted as a processor of sales-related documentation 
and a communication link with the unaffiliated purchaser, the facts on 
record indicate that TCI's role is ancillary to the sales process with 
respect to sales of subject merchandise during this administrative 
review. In this review TCI did not play a key role in the sales 
negotiation process, nor did TCI play a major role in the selling 
activities in the United States. Accordingly, we have continued to 
accord EP treatment to Ta Chen's sales in this review.
    In this case the available evidence of record indicates that Ta 
Chen in Taiwan is responsible for setting the prices of U.S. sales, 
acting through its president, Robert Shieh.<SUP>1</SUP> Ta Chen sets 
base, or minimum, prices using its costs of production in Taiwan. Ta 
Chen responds to requests for price quotes, and Ta Chen officials in 
Tainan develop new quotes for any sizes or schedules of pipe not found 
on Ta Chen's prepared lists. See, e.g., Ta Chen's supplemental response 
at 79, n. 12, and U.S. Verification Report at 10. Further, Ta Chen 
knows the final price to the U.S. customer at the time it sets its 
transfer prices between Ta Chen and TCI, and the record clearly 
indicates that TCI has no say in the prices of these 
transactions.<SUP>2</SUP> Thus, the subject merchandise is first sold 
to the unaffiliated customer in the United States before it is sold to 
the affiliated distributor, TCI. There is no record evidence, either 
submitted by the parties or generated at verification, to indicate that 
TCI has any independent authority to negotiate or set prices for direct 
sales of subject merchandise in the United States. For example, the 
Home Market Verification Report at 13 notes that the vice-president of 
TCI will not quote prices to customers; rather, he defers to Mr. Shieh, 
whether the latter is in Long Beach or in Tainan. This is decidedly not 
the case for TCI's sales of non-subject merchandise from its

[[Page 38386]]

warehouse facilities. The U.S. Verification Report notes that:
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    \1\ While we agree with Ta Chen that in setting prices Mr. Shieh 
is acting principally in his role as president of Ta Chen, rather 
than as president of TCI, we reject Ta Chen's dictum that he ``acts 
under the direction of Ta Chen's Board of Directors,'' or that the 
Board of Directors issues specific instructions to Mr. Shieh as to 
how to set prices. Rather, the record evidence, including Mr. 
Shieh's statements at verification, makes abundantly clear that Mr. 
Shieh acts on his own authority with no direction or input whatever 
from any other member of Ta Chen's Board.
    \2\ That TCI has no say whatever in the profitability of its own 
sales of subject merchandise, by determining the amount of a price 
markup, is further evidence that the entire sales process is 
controlled by Ta Chen in Taiwan. See Korean Steel III at 13183.

    [c]ustomers' requests for price quotes are handled by TCI and 
not forwarded to Ta Chen. A number of officials at TCI are 
authorized to provide quotes to customers for these sales * * *. The 
customer's [purchase order] is handed directly to TCI's shipping 
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department for preparation and shipment.

U.S. Verification Report at 8 (emphasis added).
    Moreover, the authority to set prices as indicated above is further 
evidenced by the ways in which the companies set prices for ``back-to-
back'' sales and sales out of TCI's inventory. The prices of TCI's 
sales from its Long Beach inventory are set on an entirely different 
basis than prices for direct shipments. Prices for products sold out of 
inventory are derived from a multiplier of a domestic mill's list 
prices, whereas prices for direct shipments are computed from Ta Chen's 
cost of production. Finally, unlike the case of Korean Steel III, in 
the present case unaffiliated U.S. customers maintain direct contact 
with the foreign exporter or producer, Ta Chen.
    With respect to any subsequent price negotiations that may become 
necessary when a customer rejects Ta Chen's initial quote, it is clear 
from the record that in Ta Chen's ``back-to-back'' sales arrangement no 
official other than Mr. Shieh is authorized to provide prices, grant 
discounts, or allow credits for damaged or defective goods. After 
discussions with company officials at verifications in Tainan and Long 
Beach, it is clear that TCI company officials are not authorized to 
negotiate prices. See, e.g., Home Market Verification Report at 13 
(``Using the same pricing scheme (cost + GNA + profit), Ta Chen Taiwan 
will provide a price quote''), and U.S. Verification Report at 3 
(``While TCI's vice-president, James Chang, is nominally head of the 
pipe and fittings sales division, Mr. Chang himself averred that Mr. 
Shieh `handles all the [pipe and pipe fittings] sales' '').
    As for petitioners' observation that Ta Chen resumed sales of 
subject merchandise from inventory immediately following the instant 
POR, thus supporting a conclusion that Ta Chen's sales in this POR 
should be considered CEP transactions, we find this fact does not 
relate to the issue of how direct ``back-to-back'' sales were 
negotiated during the instant review. As we have noted, sales from 
inventory follow an entirely different course, and are concluded by 
different individuals, using different pricing formulae, than are Ta 
Chen's direct ``back-to-back'' sales.
    Further, we did not include in our analysis the fact that TCI did 
not engage in such activities as warranties, advertising, in-house 
technical assistance and supervision of further manufacturing, as was 
the case, for example, in Korean Steel III and Certain Corrosion-
Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon 
Steel Plate From Canada, 63 FR 12725 (March 16, 1998). Although these 
types of activities are clearly selling functions, the issue of who 
performs such activities is only relevant where such activities are in 
fact performed for the sale of the subject merchandise. In this case, 
neither TCI nor Ta Chen engaged in such activities with respect to 
sales of the subject merchandise.<SUP>3</SUP>
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    \3\ Ta Chen Taiwan does provide minimal advertising in the form 
of product brochures; no other advertising medium is employed either 
by Ta Chen or by TCI.
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    The purpose of this portion of the test is to determine which 
entity performs the primary selling functions pertaining to the sale of 
the subject merchandise during the POR. Accordingly, that analysis is 
conducted on a case-by-case basis and is based upon the actual selling 
functions performed in each case. In the present case the selling 
activities performed for the sale of this commodity product, for both 
Ta Chen and TCI combined, appear to be minimal.
    Finally, during this review, we note that TCI engaged in the 
process of issuing invoices, collecting payment, paying antidumping 
duty deposits, and taking title to the subject merchandise after entry 
into the United States. We do not find that these activities alone are 
sufficient to warrant treatment of such sales as CEP transactions. 
Rather, consistent with our past precedent in these matters, such 
activities are fully consistent with those of the selling agent that 
takes over the sales functions which have been ``relocated 
geographically from the country of exportation to the United States, 
where the sales agent performs them.'' Large Newspaper Printing Presses 
and Components Thereof, Whether Assembled or Unassembled, From Germany, 
61 FR 38166 (July 23, 1996).

Comment Two: U.S. Packing Costs

    Petitioners charge Ta Chen with understating the cost of packing 
materials (specifically, wooden crates) used to package shipments for 
export to the United States. According to petitioners, the Department's 
Home Market Verification Report notes that this understatement occurred 
on four of the five sales transactions examined at verification. 
Petitioners urge the Department to make an upward adjustment to Ta 
Chen's export packing materials equal to the average percentage 
difference between the reported material expenses and the actual 
amounts found at verification.
    Also understated, petitioners contend, was Ta Chen's packing labor 
for export sales. Petitioners note that Ta Chen's supplemental 
questionnaire response and home market and U.S. sales listings 
contained revised packing labor costs, with labor costs for home market 
packing considerably higher than that for U.S. sales. Turning to the 
Department's verification report, petitioners note that Ta Chen derived 
these figures using estimates provided by Ta Chen's supervisor for 
packing, but was unable to provide any documentation or worksheets to 
support the supervisor's estimates. Petitioners suggest that Ta Chen 
contradicted these estimates when it admitted at verification that 
``export shipping, in fact, requires more steps and takes longer per 
kilogram than home market shipments.'' Case Brief at 8, quoting the 
Home Market Verification Report at 21 and 22 (petitioners' emphasis 
omitted). Thus, petitioners insist, by Ta Chen's own admission the 
actual packing labor costs for U.S. sales exceed actual packing labor 
costs for domestic shipments within Taiwan. That statement is 
consistent with the extra steps (such as packing the subject pipe in 
wooden crates) required for export shipments. To correct this alleged 
under-reporting of U.S. packing labor, petitioners argue, the 
Department should use the ratio of U.S. and home market packing 
material costs as the basis for adjusting upward Ta Chen's U.S. packing 
labor expenses.
    Ta Chen submits that its records do not permit a breakdown of 
packing labor by market or product type and, therefore, it simply 
allocated packing costs over the U.S. and home market weights packed. 
According to Ta Chen, it included revised packing costs based on an 
estimate of the relative time spent packing home market and export 
shipments in its supplemental response as instructed by the Department 
in its supplemental questionnaire. Ta Chen concedes that export 
shipments require more packing materials and more steps to pack the 
merchandise than do shipments within Taiwan. On the other hand, Ta Chen 
continues, the larger quantities of merchandise packed for export work 
to reduce the per-kilogram packing costs associated with export sales. 
As for petitioners' comments concerning wooden crate expenses, Ta Chen 
did not reply.

[[Page 38387]]

    Noting that it can ``appreciate'' the Department seeking to 
determine a more accurate method of calculating packing labor costs (by 
investigating alternative reporting methodologies in its supplemental 
questionnaire), Ta Chen expresses ``no objections'' to the Department's 
use of the data originally submitted with Ta Chen's April 14, 1997 
response. Ta Chen does, however, object to petitioners' proposal to 
recalculate packing labor costs based on the ratio of packing material 
costs for the respective markets, claiming that such an allocation 
``makes no sense'' and has no rational connection to actual packing 
labor time.

Department's Position

    We agree with petitioners on both points. During verification we 
compared the reported export packing material costs for the wooden 
crates, reported as data field PACKM1P, to the actual per-kilogram 
expenses as reflected in Ta Chen's ``Packing & Finished Goods Turn-in 
Reports.'' For four of the five transactions examined Ta Chen's 
reported packing material expenses were understated (wooden crate costs 
for the remaining transaction were overstated). We conclude, therefore, 
that Ta Chen's allocation methodology for reporting these expenses 
bears little or no relationship to the manner in which these costs are 
actually incurred. Therefore, we have recalculated Ta Chen's wooden 
crate expenses using Ta Chen's own data gathered at verification. Based 
on these data, we have adjusted PACKM1P upward by the average 
percentage difference between the actual wooden crate costs reflected 
in Ta Chen's shipping department records and the values reported in Ta 
Chen's U.S. sales listing. See the Department's Final Results Analysis 
Memorandum, July 8, 1998, a public version of which is on file in Room 
B-099 of the main Commerce building.
    With respect to packing labor, as noted in the Ta Chen Verification 
Report, packing for export requires additional steps, additional 
materials, and, consequently, additional time. However, Ta Chen used an 
allocation methodology for its packing labor expenses which apportions 
a significantly greater amount of these expenses to its home market 
sales, based upon ``an estimate provided by the supervisor of the 
packing division.'' Home Market Verification Report at 21. The 
resultant home market and U.S. packing labor factors do not, as the 
report notes, ``comport with Ta Chen's actual experience in packing 
subject merchandise for the respective markets.'' That the report also 
notes ``no discrepancies with this allocation'' cannot be read as the 
Department's endorsement of the specific allocation methodology 
selected. Rather, it indicates that Ta Chen used verifiably accurate 
figures for total labor expense and total shipments in its allocation, 
not that the allocation methodology itself was appropriate in this 
case. In fact, as with the wooden crate expenses, Ta Chen's method of 
reporting its packing labor expenses bears no relationship to the 
manner in which Ta Chen actually incurred these expenses. Ta Chen's use 
of an estimate to allocate packing labor expenses ``does not 
necessarily mean that [Ta Chen] incurred the expenses differently'' due 
to shipping for the home market versus for the export market. Tapered 
Roller Bearings and Parts Thereof, Finished and Unfinished From Japan, 
63 FR 2558, 2579 (January 15, 1998) (TRBs From Japan). Rather, the sole 
support for this allocation is the allocation itself. When we asked 
officials at Ta Chen to provide some support, in the form of internal 
time studies, worksheets used by the supervisor in devising the 
estimate, etc., Ta Chen responded that it had no such documentation. 
Therefore, we have rejected Ta Chen's reporting of packing labor based 
upon the unsupported estimate of the packing labor supervisor.
    Likewise, while not as egregious, Ta Chen's original packing labor 
methodology included in its April 14, 1997 response has the effect of 
understating packing labor costs attributable to export shipments while 
overstating these costs for home market shipments. We have stated in a 
different context that we will not reject a respondent's allocation 
methodologies in favor of the facts otherwise available if (i) a fully-
cooperating respondent is unable to report the requested information in 
a more specific manner and (ii) the selected allocation methodology is 
not unreasonably distortive. See Antifriction Bearings (Other Than 
Tapered Roller Bearings), and Parts Thereof, From France, et al., 72 FR 
2081, 2090 (January 15, 1997); see also TRBs From Japan, 63 FR 2558, 
2566 (January 15, 1998). While we believe that Ta Chen has satisfied 
the first test (Ta Chen's records kept in its ordinary course of 
business do not readily permit a breakdown of home market versus export 
packing labor), we cannot accept a resulting allocation methodology 
which is unreasonably distortive. Allocating this expense so that home 
market packing labor is equal to, or greater than, export packing 
labor, while simultaneously acknowledging that the latter is more 
labor-intensive, is unreasonably distortive.
    As to Ta Chen's suggestion that it merely revised its labor costs 
in response to the Department's request, we reject that assertion. The 
Department's inquiry on this point, included in its October 9, 1997 
supplemental questionnaire, reads:

    It appears as though you have reported the same packing labor 
costs for both H[ome] M[arket] and U.S. sales while your response 
indicates that U.S. sales require additional labor (i.e., packing of 
merchandise into wooden boxes). Please explain and, if necessary, 
revise your labor costs to reflect this additional service for 
export sales.

    Supplemental Questionnaire at 8.
    In response, Ta Chen argued that any differences in packing labor 
expenses in the two markets would, of necessity, be de minimis, but 
then proceeded to reallocate these expenses in such a fashion as to 
actually decrease the portion of Ta Chen's labor expenses relating to 
export shipments. As indicated above, we find that neither of Ta Chen's 
selected reporting methodologies reflects its actual experience in the 
packing and shipping of subject merchandise. Therefore, we have 
recalculated Ta Chen's U.S. packing labor expenses. As facts available, 
we relied on Ta Chen's own data submitted on the record of this review. 
We compared the ratio of home market to U.S. packing material costs and 
applied the resulting ratio to Ta Chen's reported packing labor. For a 
discussion of the precise calculation of this revised packing labor 
factor, please see the Department's Final Results Analysis Memorandum, 
a public version of which is on file in Room B-099 of the main Commerce 
building.

Comment Three: Import Duties and Cost of Production

    Ta Chen imports stainless steel coil to its customs-bonded factory 
in Tainan where it fashions the stainless steel into finished pipe 
subject to the order and other merchandise (for example, stainless 
steel pipe fittings) which is not subject to the order. It also resells 
some stainless steel coil in the home market. For finished products 
subsequently sold in Taiwan Ta Chen is liable for import duties (these 
duties are forgiven if the finished products are exported). Petitioners 
note that the Department in its Preliminary Results increased U.S. 
price by the amount of Taiwan import duties because Ta Chen's home 
market prices included these duties. If, petitioners suggest, Ta Chen's 
home market prices included import duties on imported stainless steel 
coil, Ta Chen's cost of production should also reflect

[[Page 38388]]

these home market duties to avoid comparison of duty-inclusive home 
market prices to duty-exclusive costs of production. Petitioners 
contend that such an approach would be consistent with the Department's 
treatment of this identical issue in the final results of the 1994-1995 
administrative review. Case Brief at 10 and 11, citing Certain Welded 
Stainless Steel Pipe From Taiwan; Final Results of Administrative 
Review, 62 FR 37543, 37555 (July 14, 1997) (Stainless Pipe From 
Taiwan).
    Ta Chen responds by confirming that its home market gross unit 
prices include Taiwan import duties, and suggests that the Department 
deduct these duties when calculating the net home market price used for 
comparison to COP. This approach, Ta Chen avers, ``most accurately 
determines the true profitability of each individual sale.'' Rebuttal 
Brief at 17. The alternative, i.e., adding the import duties to Ta 
Chen's reported costs of production, would, Ta Chen insists, result in 
double-counting of these duties.

Department's Position

    We agree with petitioners and with Ta Chen. As we stated in the 
final results of the 1994-1995 administrative review, ``[w]e have 
adjusted our calculation of the net home market price used in our COP 
test to deduct the amount of the import duties.'' Stainless Pipe From 
Taiwan 62 FR 37543, 37555 (July 14, 1997).
    Consistent with Stainless Pipe From Taiwan, we conducted the cost 
test on a duty-exclusive basis. Thus, no change is required to our 
final margin computer program because the preliminary program already 
deducts import duties from the net price used in the cost test. See the 
Public Version of the Department's Preliminary Analysis Memorandum, 
December 29, 1997, at Attachment One, line 148.

Comment Four: Duty Drawback

    In addition to their comment regarding the treatment of import 
duties in Ta Chen's cost of production, petitioners argue that Ta Chen 
is not entitled to an upward ``duty drawback'' adjustment to EP. 
Petitioners note that unlike in prior reviews, Ta Chen purchased much 
of the stainless steel coil used to fabricate subject WSSP from 
domestic sources; the Home Market Verification Report states that a 
Taiwanese mill was Ta Chen's single largest coil supplier during the 
POR. Case Brief at 12, quoting the Home Market Verification Report at 
10. Furthermore, petitioners maintain, Ta Chen's own questionnaire 
response indicated that Ta Chen ``does not pay any Taiwan import duties 
on material used to make pipe.'' Id., quoting Ta Chen's April 14, 1997 
response at 70. Petitioners contend that this issue did not arise in 
prior reviews when Ta Chen imported all of the stainless steel coil 
used to produce subject merchandise (and, thus, all home market sales 
of finished pipe were subject to the Taiwanese import duties). In 
contrast, petitioners argue, in the instant review the record indicates 
that a portion of Ta Chen's input stainless steel coil came from 
Taiwanese mills. In light of this change petitioners urge the 
Department to ``conduct its standard analysis to determine whether Ta 
Chen meets the requirements for a duty drawback adjustment.''
    Petitioners point to Stainless Steel Bar From India, where the 
Department stated that any duty drawback adjustment would depend upon a 
finding that (i) the import duty and rebate are directly linked to, and 
dependent upon, each other, and (ii) the company claiming the 
adjustment can demonstrate sufficient imports of raw material to 
account for the claimed drawback received. Case Brief at 13, quoting 
Stainless Steel Bar From India; Final Results of Antidumping Duty 
Administrative Review, 63 FR 13622, 13625 (March 20, 1998). According 
to petitioners, information gathered at verification concerning Ta 
Chen's purchases of stainless steel coil from domestic and off-shore 
mills indicates that Ta Chen's imports of stainless steel coil were not 
sufficient to account for the drawback applicable to Ta Chen's exports. 
Furthermore, petitioners continue, it is reasonable to assume that Ta 
Chen used domestic coil to produce subject pipe for sale in the home 
market precisely because such coil would not be subject to Taiwan 
import duties. Because Ta Chen did not meet the Department's 
requirements for a duty drawback adjustment, petitioners conclude, the 
Department should deny this adjustment in the final results of this 
review.
    Ta Chen insists it is entitled to a circumstance-of-sale adjustment 
to account for home market import duties, just as a ``comparable 
circumstances of sale [sic] adjustment is made for the U.S. import 
duties Ta Chen pays on its U.S. sales.'' Rebuttal Brief at 17. 
According to Ta Chen, its section B home market sales listing reflects 
that, in fact, for most sales the unaffiliated customer paid the duties 
(and, therefore, Ta Chen reported a value of zero for import duties). 
In those instances where Ta Chen did pay the duties, it reported these 
on a per-kilogram basis. Ta Chen notes that its home market gross unit 
prices are reported inclusive of import duties.
    As for petitioners' comments regarding the quantities of stainless 
steel coil purchased by Ta Chen from domestic and off-shore mills, Ta 
Chen points out that petitioners failed to note the ``enormous 
quantity'' of stainless steel coil sold in coil form, i.e., as 
purchased, by Ta Chen. Furthermore, the figures cited by petitioners 
demonstrate the stainless steel coil imported by Ta Chen was more than 
sufficient to account for the volume of pipe Ta Chen sold domestically 
and for export.

Department's Position

    We disagree with petitioners. Welded stainless steel pipe is 
produced, essentially, from a single raw material: annealed and pickled 
austenitic stainless steel sheet or plate in coil form. Traditionally 
Ta Chen sourced all of its stainless steel coil from foreign mills; 
during the instant period of review as well the vast majority of Ta 
Chen's coil came from abroad. As Ta Chen's plant is a customs bonded 
facility, imports of stainless steel coil are not subject to import 
duties at the time of importation. Import duties are only owed at such 
time as the finished merchandise enters Taiwan customs territory, i.e., 
it is sold in the home market. No import duties are collected if the 
imported raw material is subsequently re-exported, whether in the form 
of finished pipe or pipe fittings, or in cut-to-length or coil form. Ta 
Chen's questionnaire responses and the information presented at 
verification amply demonstrate the nature of these import duties and 
the manner in which they are assessed. See, e.g., Ta Chen Verification 
Report at 23 and 24. Further, Ta Chen satisfied the Department as to 
the amount of such duties (``[w]e traced the total [duties paid] to Ta 
Chen's monthly import duty for domestic sales report, general ledger, 
and statement of checking account without discrepancy * * *''). Id. at 
15. As the Court of International Trade has consistently held, ``there 
is no requirement that [a] specific input be traced from importation 
through exportation before allowing drawback on duties paid * * *'' 
See, e.g., Far East Machinery Co. v. U.S., 699 F. Supp. 309, 312 (CIT 
1988); see also LaClede Steel Co. v. U.S., Slip Op. 94-160 (October 12, 
1994) (LaClede Steel). Thus, we are convinced that the import duties 
and the amount ``not collected by reason of the exportation of the 
subject merchandise to the United States'' are directly linked to, and 
dependent upon,

[[Page 38389]]

each other. See Section 772(c)(1)(B) of the Tariff Act.
    As for the second prong of the test, whether there were sufficient 
imports of raw materials to account for the drawback received, the 
record evidence, including data obtained during verification, indicates 
that Ta Chen more than satisfied this requirement. As Ta Chen notes in 
its rebuttal brief, petitioners' comment fails to take into account the 
volumes of stainless steel coil that Ta Chen re-sold in coil form in 
the home market, or subsequently exported in coil form. Nor do 
petitioners consider the volume of imported and domestic stainless 
steel coil used to fabricate non-subject merchandise for the domestic 
and export markets, such as stainless steel pipe fittings. In this 
case, we believe that we have, as the Court stated in LaClede Steel, 
``verified that [the respondent] imported sufficient raw materials to 
account for duty drawback received on exports of pipe.''
    Finally, with respect to Ta Chen's statement that it ``does not pay 
any Taiwan import duties on material used to make pipe,'' the record 
indicates clearly that Ta Chen does not pay these duties at the time of 
importation of the stainless steel coil. Rather, these duties are due 
when the finished product (e.g., welded stainless steel pipe) enters 
Taiwan customs territory. Thus, we find this case analogous to Certain 
Welded Carbon Steel Pipes and Tubes From India, where a similar import 
duty scheme was described as presenting ``the rare situation in which, 
rather than being rebated as is usually the case, the import duties 
were actually `not collected, by reason of the exportation of the 
subject merchandise to the United States.' '' 62 FR 47632, 47634 
(September 10, 1997). As we concluded in that case, so we conclude 
here: ``[t]his type of program falls within the express language of 
section 772(c)(1)(B)'' of the Tariff Act. Accordingly, we have accepted 
Ta Chen's claimed adjustment for duty drawback for these final results.

Comment Five: Effect of Compensating Balances on U.S. Credit Expenses

    According to petitioners, Ta Chen's imputed credit expenses for 
U.S. sales must be increased to include the costs of compensating 
balances. Petitioners note that the Department's October 9, 1997 
supplemental questionnaire and Ta Chen's October 31, 1997 supplemental 
response both indicated that Ta Chen's reported imputed credit expenses 
did not take into account these compensating balances. Further, Ta 
Chen's supplemental response provided the amounts of these compensating 
balances and the factor necessary to calculate revised imputed credit 
expenses for U.S. sales. Petitioners urge the Department to implement 
this revision for the final results of this review.
    Ta Chen offered no rebuttal to this comment.

Department's Position

    We agree with petitioners and have made the appropriate correction 
to U.S. credit costs. We did this by multiplying the reported credit 
amounts on Ta Chen's U.S. sales listing by the revised factor supplied 
by Ta Chen to account for compensating balances.

Comment Six: Comments on Verification Reports

    Ta Chen insists that the completeness of its U.S. sales listing was 
fully verified through reconciliation of the reported sales values to 
Ta Chen's audited financial statements, a process used by Ta Chen and 
accepted by the Department in the past. Ta Chen takes issue with the 
tone of the U.S. Verification Report which suggests that Ta Chen failed 
to provide documentation of its reported U.S. sales quantities. 
According to Ta Chen, its audited financial statements record total 
sales value, but do not contain any information concerning sales 
quantities. The Department, Ta Chen avers, has never insisted on a 
separate confirmation of its sales quantities, once it had reconciled 
successfully its overall sales value.
    Ta Chen also maintains that it provided ample documentation at 
verification to demonstrate that certain U.S. sales of pipe entered the 
United States prior to the instant POR and, therefore, properly were 
excluded from Ta Chen's section C U.S. sales listing.
    Contrary to statements in the Ta Chen Verification Report, Ta Chen 
submits, its packing personnel did not have difficulty bundling and 
weighing subject pipe and, in any event, the weight figures reported to 
the Department were taken from records kept in Ta Chen's normal course 
of business.
    With respect to home market sales to one affiliated customer, 
Blossum, Ta Chen intimates that these sales represented an 
insignificant portion of Ta Chen's home market sales and, thus, 
Blossum's downstream sales would not be required for the Department's 
analysis.
    Ta Chen also commented on our description of the verification of 
home market freight expenses. Ta Chen attributes the uncertainty of one 
company official as to home market shipping distances to that ``high-
level'' official's unfamiliarity with the minutiae of domestic shipping 
patterns; when the responsible company official addressed the issue, no 
uncertainty remained. Also, Ta Chen sold its company-owned flatbed 
truck at the midpoint of this POR. While Ta Chen's home market freight 
expenses were not reduced by the value of refunded vehicle plate taxes 
for the six months after Ta Chen sold its truck, Ta Chen suggests that 
(i) the data exist to permit a recalculation and (ii) any such revision 
would have a de minimis effect. As to fuel costs, Ta Chen takes issue 
with the Home Market Verification Report's comment that Ta Chen could 
not document these costs. According to Ta Chen, there were no 
outstanding, unanswered requests for gasoline receipts or other 
documentation at the close of verification.
    Finally, Ta Chen makes a number of suggestions to correct 
typographical errors in the reports.

Department's Position

    While we agree in essence with many of Ta Chen's comments, we stand 
by the verification reports as written. With respect to the 
completeness test, we were unable to verify separately the quantities 
reported in Ta Chen's U.S. sales listing. However, we did fully 
reconcile the reported U.S. sales value to Ta Chen's and TCI's audited 
financial statements and, furthermore, noted no discrepancies in an 
unusually extensive random check of invoices and purchase orders issued 
throughout the POR. The Department considers Ta Chen's home market and 
U.S. sales quantities fully verified. We also agree with Ta Chen that 
it satisfied the verifiers that certain sales of pipe entered the 
United States prior to the POR, and that no outstanding questions on 
this issue remained at the close of verification.
    As for the comment on the facility with which Ta Chen's packing 
personnel handled pipe at the scale, Ta Chen claimed at verification 
that the weights reported for its home market and U.S. sales listings 
were based on transaction-specific actual weights obtained, Ta Chen 
claimed, by weighing each shipment of pipe as it was prepared for 
dispatch. We asked to see this process in operation and returned to Ta 
Chen's pipe mill. There Ta Chen personnel mishandled the pipe, had 
difficulty gathering the proper number of pieces in a single bundle, 
struggled to fasten the scale's sling to the scale's lift, and, using a 
two-button switch box, nonetheless lowered the scale when they meant to 
raise it, and raised it when they meant to lower it. Thus, we

[[Page 38390]]

stand by our characterization of this process as ``difficult.''
    Ta Chen provided exhaustive explanations of its sales transactions 
involving Blossom. We have no basis for rejecting Ta Chen's sales to 
Blossom or for requiring that Ta Chen report Blossom's subsequent home 
market sales. Similarly, we did not use the downstream U.S. sales 
through one U.S. customer, Team Alloys, that Ta Chen subsequently 
acquired, even though Ta Chen reported these downstream sales in a 
separate section C computer file.
    As for home market shipping expenses, we have used the expenses as 
reported by Ta Chen, and have made no corrections in light of our 
findings at verification.
    Finally, the Department agrees with Ta Chen's suggested 
typographical clarifications.

Final Results of Review

    Based on our review of the arguments presented above, for these 
final results we have made changes in our margin calculations for Ta 
Chen. After comparison of Ta Chen's EP to normal value (NV), we have 
determined that Ta Chen's weighted-average margin for the period 
December 1, 1994 through November 30, 1995 is 0.10 percent.
    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between U.S. price and NV may vary from the percentage 
stated above. The Department will issue appraisement instructions 
directly to Customs.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of WSSP from Taiwan entered, or withdrawn from warehouse, 
for consumption on or after the publication of the final results of 
this administrative review, as provided in section 751(a)(1) of the 
Tariff Act:
    (1) The cash deposit rate for Ta Chen will be zero percent, in 
light of its de minimis weighted-average margin;
    (2) For previously reviewed or investigated companies other than Ta 
Chen, the cash deposit rate will continue to be the company-specific 
rate published for the most recent period;
    (3) If the exporter is not a firm covered in this review, a prior 
review, or the LTFV investigation, 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 this or any previous review conducted by the Department, the cash 
deposit rate will be 19.84 percent. See Amended Final Determination and 
Antidumping Duty Order; Certain Welded Stainless Steel Pipe From 
Taiwan, 57 FR 62300 (December 30, 1992). These deposit requirements, 
when imposed, shall remain in effect until publication of the final 
results of the next administrative review.
    All U.S. sales by the respondent Ta Chen will be subject to one 
deposit rate according to the proceeding. The cash deposit rate has 
been determined on the basis of the selling price to the first 
unrelated customer in the United States. For appraisement purposes, 
where information is available, we will use the entered value of the 
subject merchandise to determine importer-specific appraisement rates.
    This notice also 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 the antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective orders (APOs) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d). Timely written notification of 
the return or 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 determination is issued and published in accordance with 
sections 751(a)(1) and 777(l)(1) of the Tariff Act.

    Dated: July 8, 1998.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-18882 Filed 7-15-98; 8:45 am]
BILLING CODE 3510-DS-P