38382 Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices

petitioner. The respondents have

characterized these rebates as ‘‘post-sale

price adjustments to account for shortshipments or returned merchandise.’’

There is no information on the record to

indicate that the returned merchandise

is defective—a prerequisite for a

warranty expense. However, this issue

is also moot since we did not deduct

rebates or warranties from the price on

which imputed credit is based.

Final Results of Review

As a result of this review, we have

determined that the following margins

exist for the period December 1, 1995

through November 30, 1996:

Manufacturer/Exporter Margin

(percent)

Cinsa ......................................... 17.33

ENASA ...................................... 62.75

The Department shall determine, and

the U.S. Customs Service shall assess,

antidumping duties on all appropriate

entries. We have calculated an importerspecific assessment rate based on the

ratio of the total amount of antidumping

duties calculated for the examined sales

to the total value of those same sales.

This rate will be assessed uniformly on

all entries of that particular importer

made during the POR. The Department

will 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 administrative review, for all

shipments of the subject merchandise

from Mexico that are 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withdrawn from warehouse, for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 Cinsa and ENASA will

be the rates established above; (2) for

previously investigated companies not

listed above, the cash deposit rate will

continue to be the company-specific rate

published for the most recent period; (3)

if the exporter is not a firm covered in

this review, or the original 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) The cash deposit rate for all other

manufacturers or exporters of this

merchandise will continue to be 29.52

percent, the all others rate established in

the final results of the less than fair

value investigation (51 FR 36435,

October 10, 1986). The cash deposit rate

has been determined on the basis of the

selling price to the first unaffiliated

customer in the United States. For

appraisement purposes, where

information is available, the Department

will use the entered value of the

merchandise to determine the

assessment rate.

The deposit requirements, when

imposed, 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 serves as the only

reminder to parties subject to

administrative protective order (APO) of

their responsibility concerning the

disposition of proprietary information

disclosed under APO in accordance

with 19 CFR 353.34(d). Timely written

notification of return/destruction of

APO materials or conversion to judicial

protective order is hereby requested.

Failure to comply with the regulation

and the terms of an APO is a

sanctionable violation.

This administrative review and notice

are in accordance with sections

751(a)(1) and 777(i)(1) of the Act and 19

CFR 353.22.

Dated: July 8, 1998.

Richard W. Moreland,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 98–18884 Filed 7–15–98; 8:45 am]

BILLING CODE 3510–DS–M

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.

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).
Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices 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 ColdRolled 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.
38384 Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices

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 preURAA 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
Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices 38385

1While 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.

2That 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.

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 mostrecently-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.1 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.2 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
38386 Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices

3Ta 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.

warehouse facilities. The U.S.

Verification Report notes that:

[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

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.3

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.
Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices 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 perkilogram 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
38388 Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices

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,
Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices 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
38390 Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices

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 importerspecific 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

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

[I.D. 071098H]

New England Fishery Management

Council; Public Meetings

AGENCY: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Public meetings; public hearing.

SUMMARY: The New England Fishery

Management Council (Council) is

scheduling a number of public meetings

of its oversight committees and advisory

panels in August, 1998 to consider

actions affecting New England fisheries

in the exclusive economic zone (EEZ).

Recommendations from these groups

will be brought to the full Council for

formal consideration and action, if

appropriate.

DATES: The meetings will be held

between August 3 and August 7, 1998.

See SUPPLEMENTARY INFORMATION for

specific dates and times.

ADDRESSES: Meetings will be held in

South Portland, Maine and Saugus, MA.

See SUPPLEMENTARY INFORMATION for

specific locations.

FOR FURTHER INFORMATION CONTACT: Paul

J. Howard, Executive Director, New

England Fishery Management

Council;(781) 231–0422. Requests for

special accommodations should be

addressed to the New England Fishery

Management Council, 5 Broadway,

Saugus, MA 01906–1036; telephone:

(781) 231–0422.

SUPPLEMENTARY INFORMATION:

Meeting Dates and Agendas

Monday, July 3, 1998, 9:00 a.m.—Joint

New England Fishery Management

Council Herring Advisory Panel and

Atlantic States Marine Fisheries

Commission Herring Section Advisory

Panel Meeting

Location: Sheraton South Portland,

363 Maine Mall Road, South Portland,

ME 04106; telephone: (207) 775–6161.

Development of advice on proposed

management measures for inclusion in

the Atlantic Herring Fishery

Management Plan (FMP).

Monday, July 3, 1998, 2:00 a.m.—Joint

New England Fishery Management

Council Herring Committee and Atlantic

States Marine Fisheries Commission

Herring Section Meeting

Location: Sheraton South Portland,

363 Maine Mall Road, South Portland,

ME 04106; telephone (207) 775–6161.

Review of public comments and

selection of management measures for

inclusion in the Atlantic Herring FMP.

Friday, August 7, 1998, 9:30 a.m.—

Mid-Atlantic Plans Committee Meeting

Location: New England Fishery

Management Council Office conference

room, 5 Broadway, Saugus, MA 01906;

telephone (781) 231–0422.

Development of recommendations for

the following Mid-Atlantic Fishery

Management Council and New England