[Federal Register Volume 63, Number 200 (Friday, October 16, 1998)]
[Notices]
[Pages 55578-55591]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-27876]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-549-502]


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

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

ACTION: Notice of Final Results of Antidumping Duty Administrative 
Review; Certain Welded Carbon Steel Pipes and Tubes from Thailand.

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SUMMARY: In response to a request by Saha Thai Steel Pipe Company, Ltd. 
(``Saha Thai''), and its affiliated exporter S.A.F. Pipe Export Co., 
Ltd., (``SAF''), and two importers, Ferro Union Inc. (``Ferro Union''), 
and ASOMA Corp. (``ASOMA''), the Department of Commerce (``the 
Department'') is conducting an administrative review of the antidumping 
duty order on certain welded carbon steel pipes and tubes from 
Thailand. This review covers the following manufacturer/exporter of the 
subject merchandise to the United States: Saha Thai/SAF. The period of 
review (POR) is March 1, 1996 through February 29, 1997. We received 
comments on the preliminary results and rebuttal comments from the 
petitioners and respondent.
    Based on our analysis of comments received, we have calculated a 
margin for Saha Thai. The final weighted-average dumping margins are 
listed below in the section entitled Final Results of Review.

EFFECTIVE DATE: October 16, 1998.

FOR FURTHER INFORMATION CONTACT: John Totaro or Dorothy Woster, AD/CVD 
Enforcement Group III, Office 7, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
1374 or (202) 482-3362, respectively.

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (hereinafter, 
``the Act'') by the Uruguay Round Agreements Act (URAA). In addition, 
unless otherwise indicated, all citations to the Department's 
regulations are to the regulations codified at 19 CFR Part 353 (April 
1997). Although the Department's new regulations, codified at 19 CFR 
351 (62 FR 27296, May 19,

[[Page 55579]]

1997) (``Final Regulations''), do not govern this administrative 
review, citations to those regulations are provided, where appropriate, 
as a statement of current Departmental practice.
SUPPLEMENTARY INFORMATION:

Background

    On March 11, 1986, the Department published in the Federal Register 
an antidumping duty order on welded carbon steel pipes and tubes from 
Thailand (51 FR 8341). On March 7, 1997, the Department published a 
notice of opportunity to request an administrative review of this order 
covering the period March 1, 1996 through February 28, 1997 (62 FR 
10521). A timely request for an administrative review of the 
antidumping order with respect to sales by Saha Thai/SAF during the POR 
was filed jointly by Saha Thai, SAF, Ferro Union, and ASOMA. The 
Department published a notice of initiation of this antidumping duty 
administrative review on April 24, 1997 (62 FR 19988). On May 14, 1997, 
certain domestic producers of standard pipe products entered an 
appearance in this review: Allied Tube & Conduit Corporation, Sawhill 
Tubular Division--Armco, Inc., Wheatland Tube Company, and Laclede 
Steel Company, (``petitioners'' or ``domestic interested parties'').
    Because the Department determined that it was not practicable to 
complete this review within statutory time limits, on November 19, 
1997, we published in the Federal Register our notice of extension of 
time limits for this review (62 FR 61802) pursuant to section 
751(a)(3)(A) of the Act. On April 7, 1998, the Department published in 
the Federal Register (63 FR 16974) the preliminary results of its 
administrative review of this antidumping order covering the period 
March 1, 1996 through February 28, 1997. The Department has now 
completed this review in accordance with section 751(a) of the Act.

Scope of the Review

    The products covered by this administrative review are certain 
circular welded carbon steel pipes and tubes from Thailand. The subject 
merchandise has an outside diameter of 0.375 inches or more, but not 
exceeding 16 inches. These products, which are commonly referred to in 
the industry as ``standard pipe'' or ``structural tubing,'' are 
hereinafter designated as ``pipe and tube.'' The merchandise is 
classifiable under the Harmonized Tariff Schedule (HTS) item numbers 
7306.30.1000, 7306.30.5025, 7306.30.5032, 7306.30.5040, 7306.30.5055, 
7306.30.5085 and 7306.30.5090. Although the HTS subheadings are 
provided for convenience and Customs purposes, our written description 
of the scope of the order is dispositive. This review covers sales of 
these products by Saha Thai/SAF during the period March 1, 1996 through 
February 28, 1997.

Verification

    As provided in section 782(i) of the Act, we verified sales 
information provided by the respondent Saha Thai from March 2-6, 1997, 
using standard verification procedures, including examination of 
relevant financial records and analysis of original documentation used 
by Saha Thai to prepare responses to requests for information from the 
Department. We also verified sales and level of trade issues at one of 
Saha Thai's affiliated home market resellers. Our verification results 
are outlined in the public version of the verification report 
(Memorandum to Roland L. MacDonald from John B. Totaro and Dorothy A. 
Woster, March 19, 1998 (``Saha Thai Verification Report'').

Analysis of Comments Received

    Saha Thai, SAF, Ferro Union, and ASOMA (collectively ``Saha Thai'') 
and the petitioners submitted case briefs on May 22, 1998, and rebuttal 
briefs on June 1, 1998.

Comment 1

    Saha Thai argues that the Department correctly found that Saha Thai 
is jointly controlled by more than one person, but incorrectly found 
that Somchai Lamatipanont individually controls Saha Thai. Saha Thai 
states that in view of Mr. Lamatipanont's limited role in Saha Thai, 
there is no basis upon which to find that he is either ``legally or 
operationally in a position to exercise restraint or direction'' over 
Saha Thai. Citing to a commentator on Securities and Exchange 
Commission rules, Saha Thai advocates a definition of control based on 
identifying who ``calls the day-to-day shots'' in the company. A.A. 
Sommer, Jr., ``Who's `In Control'--SEC,'' 21 Bus. Law 559, 582 (1966). 
Saha Thai argues that the Department's discussions with Saha Thai's 
officers at verification showed that Saha Thai, a closely held 
corporation, operates through a consensus of its owners and operators. 
Saha Thai claims that the company is controlled ``jointly'' by a 
control group consisting of either the entire board acting together or 
a majority of the board; thus, no single individual, particularly 
Somchai Lamatipanont, can be said to control Saha Thai. Saha Thai 
asserts that only the board can exercise restraint or direction over 
the company.
    Petitioners respond that the opinions of a particular commentator 
on the definition of control in the context of securities law are 
irrelevant to the application of the antidumping statute. Petitioners 
note that the statute requires that a person be ``legally or 
operationally in a position to exercise restraint or direction'' for 
control to exist. Moreover, petitioners refer to the statement in the 
Preamble to the Final Regulations that the analysis of whether a person 
is in a position to exercise restraint or direction ``focuses on the 
relationships that have the potential to impact decisions concerning 
production, pricing or cost. . . . the ability to exercise `control' 
rather than the actuality of control over specific decisions.'' 62 FR 
at 27297-98. Petitioners contrast this definition of control with that 
proffered by Saha Thai--whether a person ``calls the day-to-day 
shots''--which focuses on the actuality of control instead of the 
potential to impact decisions. Petitioners state that Saha Thai's 
definition of control promotes the idea that only a person or persons 
who can compel a vote of the majority of the stock or board seats can 
exercise control, and that this idea is contrary to the statute, the 
SAA, and the regulations. Petitioners conclude that all of Saha Thai's 
arguments regarding control were considered and rejected by the 
Department in the preliminary results.
    Petitioners also reject Saha Thai's argument that Somchai 
Lamatipanont is not ``in control'' of Saha Thai. First, Petitioners 
state that Somchai Lamatipanont's role in the company is substantial 
and meets the statutory test for control. Second, petitioners argue 
that the fact that the board of directors may be deemed to be in 
control of Saha Thai does not preclude a finding that Somchai 
Lamatipanont, or other individuals, may also be in a position to 
exercise restraint and direction over Saha Thai. Petitioners state that 
the Department correctly recognized in the preliminary results that 
multiple persons of varying degrees of control may individually and 
jointly control a company for purposes of the statute. Petitioners 
claim that Saha Thai's own description of its corporate structure 
supports this finding. Petitioners argue that within that type of 
structure, the Deputy Managing Director, Somchai Lamatipanont, would 
have the potential to impact decisions concerning production, pricing 
or cost, which meets the Department's definition of control as

[[Page 55580]]

stated in the Preamble to the Final Regulations. Petitioners conclude 
that the Department correctly determined that Somchai Lamatipanont 
controls Saha Thai within the meaning of section 771(33).

Department's Position

    We find Saha Thai's concept of ``control'' inconsistent with the 
statute. Section 771(33) of the Act states that ``control'' exists 
where one person ``is legally or operationally in a position to 
exercise restraint or direction'' over another person. This definition 
is stated in terms of the ability to restrain or direct a company's 
operations. As explained in the Preamble to the Proposed Regulations 
and reiterated in the Final Regulations, the Department need not find 
evidence of actual control to satisfy this statutory definition. 
Proposed Rule, 61 FR at 7310, 7311; Final Regulations, 62 FR at 29298.
    The control test advocated by Saha Thai defines control in terms of 
actual direction of a company's operations. However, this argument is 
similar to several comments rejected by the Department in the Preamble 
to the Final Regulations. For example, the Preamble states:

[i]n general we agree with the suggestion that we focus on 
relationships that have the potential to impact decisions concerning 
production, pricing or cost. This does not mean however, that proof 
is required that a relationship in fact has had such an impact. In 
this regard, section 771(33), which refers to a person being ``in a 
position to exercise restraint or direction,'' properly focuses the 
Department on the ability to exercise ``control'' rather than the 
actuality of control over specific decisions. Therefore, we will 
consider the full range of criteria identified in the SAA, at 838, 
in determining whether ``control'' exists. (emphasis added).

62 FR 27297-98. The Department declined to adopt the suggestion that 
the Department define ``legal or operational control'' under section 
771(33)(F) of the Act as the ``enforceable ability to compel or 
restrain commercial actions.'' Id. at 27298. Thus, we agree with 
petitioners that the definition of control proposed by Saha Thai is 
inconsistent with the antidumping statute and the Department's 
regulations. Although this more narrow application may be appropriate 
for the securities laws, the definition contained in the antidumping 
statute is consistent with Congress' intent to expand the category of 
business relationships examined for purposes of the Department's 
antidumping analysis.
    We also disagree with Saha Thai's assertion that Somchai 
Lamatipanont does not control Saha Thai within the meaning of section 
771(33)(F). As discussed above, consistent with the statute and 
regulations, the Department's control analysis properly examines the 
ability or potential to restrain or direct a company's operations. As 
we stated in the preliminary results, the facts on the record establish 
that Somchai Lamatipanont is one of the nine members of Saha Thai's 
board of directors, and has held this position for at least the last 
ten years. July 30, 1997 QR at 2. Further, as Deputy Managing Director, 
Mr. Lamatipanont (1) assists the Managing Director in ensuring that 
decisions made are executed in accordance with the Managing Director's 
instructions, (2) acts for the Managing Director with respect to 
administrative matters when Managing Director is out of the office, and 
(3) is responsible for significant issues involving day-to-day 
operations and management decisions in consultation with the Managing 
Director. October 31, 1997 QR at 2. These responsibilities place 
Somchai Lamatipanont in a position to exercise restraint or direction 
over Saha Thai's operations, particularly with respect to pricing and 
production decisions.
    Our conclusion is not altered by Saha Thai's argument that, because 
Saha Thai operates through a consensus of its owners and operators, no 
individual can be said to control Saha Thai without a majority of the 
remainder of the group. Neither the statute nor the legislative history 
expressly limits the definition of control to a single person. The 
definition of ``control'' is based solely on the ability to direct or 
restrain operations. Therefore, multiple persons or groups may be in 
control, individually and jointly, of a single entity, each having the 
ability to direct or restrain the company's activities. Based on this 
analysis, we confirm our preliminary finding that the Lamatipanont 
family, through its equity interest and a family member's position as a 
director and senior executive officer of Saha Thai, controls Saha Thai 
within the meaning of section 771(33)(F).

Comment 2

    Saha Thai disputes the Department's finding under section 
771(33)(F) of the Act that Saha Thai is affiliated with two Thai 
producers of the subject merchandise, Thai Hong Steel Pipe Import 
Export Co., Ltd. (``Thai Hong'') and Thai Tube Co., Ltd. (``Thai 
Tube''). Saha Thai argues that the Department erred in finding common 
control of these producers by the Lamatipanont family because, 
according to Saha Thai, there is no such family group who possesses the 
power of common control over these producers. Saha Thai argues that 
besides Somchai Lamatipanont, the other Lamatipanont family members own 
small percentages of Saha Thai stock and have no role in Saha Thai. In 
addition, Saha Thai notes that Somchai Lamatipanont does not own any 
shares in Thai Tube or Thai Hong and is not involved with either 
company.
    Saha Thai argues that it had no commercial transactions with Thai 
Hong or Thai Tube and does not share officers, directors, employees, 
information, or facilities with these companies. Saha Thai states that 
the three producers never supplied each other with production materials 
or finished products, never provided loans or capital, and never 
discussed their common industry and/or markets in spite of the 
Lamatipanont family's involvement in each. Saha Thai adds that, based 
on the supplier lists obtained at verification, the reseller identified 
as Company B in the Federal Register notice of the preliminary results 
(owned and controlled by Somchai Lamatipanont and his son, Worawut) did 
not purchase pipe from either Thai Hong or Thai Tube.
    Saha Thai concludes that the Saha Thai stock owned by Somchai 
Lamatipanont's brother, Samarn, and Samarn's family (shareholders, 
officers and directors in Thai Tube and Thai Hong) is the only link 
between Saha Thai and Thai Hong and Thai Tube, and that this connection 
does not amount to evidence of a family group. Saha Thai asserts that 
the Department based its preliminary finding of a family group on a 
shared last name as opposed to record evidence. Saha Thai continues 
that the Department's finding that a significant potential for 
manipulation of price and production does not exist between these 
companies casts doubt on the Department's conclusion that the 
Lamatipanont family members constitute a family control group. Saha 
Thai argues that the ``Somchai Lamatipanont branch'' of the family 
should be recognized as operating distinctly from and without 
involvement by the ``Samarn-Thai Hong/Thai Tube branch'' of the 
Lamatipanont family.
    Saha Thai argues that by considering the Lamatipanonts a ``family 
group,'' the Department has ``collapsed'' these individuals under 
section 771(33)(A) of the Act. Saha Thai argues that this is incorrect 
because nephews and in-laws are not affiliated under the section 
771(33)(A) definition of the types of family members that can be 
considered affiliates. Thus, according to Saha Thai, there is no 
affiliation under section

[[Page 55581]]

771(33)(A) between Somchai Lamatipanont and his nephew and in-laws 
involved in Thai Tube and Thai Hong. Even if the Department finds that 
the members of the Lamatipanont family are affiliated under section 
771(33)(A), Saha Thai argues that based on the record evidence the 
Department should not collapse these individuals into a single family 
control group for purposes of the antidumping law.
    Petitioners agree with the Department's preliminary determination 
that the Lamatipanont family constitutes a family group who controls 
Saha Thai, Thai Hong, and Thai Tube. To support their argument, the 
petitioners refer to elements of the Department's preliminary results 
collapsing analysis. The petitioners argue that, contrary to Saha 
Thai's claim, the Department did not find that there was no potential 
for manipulation, but that there was not a ``significant'' potential 
for manipulation. Petitioners emphasize that the focus of the 
Department's collapsing analysis is on the potential for sharing 
information and cooperation, not on the structure of ownership 
interest. Petitioners state that in the preliminary results, the 
Department found every element for collapsing present other than 
evidence of intertwined operations; petitioners note that actual 
evidence of intertwined operations is not required to find significant 
potential for manipulation. Petitioners continue that finding actual 
evidence of cooperation between Saha Thai and Thai Hong and Thai Tube 
would have been nearly impossible, and the Department was unable to 
verify such cooperation, because (1) Saha Thai chose not to provide 
relevant information, (2) Saha Thai's responses are not reliable, and 
(3) Thai Hong and Thai Tube refused to participate in this review.
    Furthermore, petitioners argue that the record evidence does 
support the conclusion that a significant potential for price and 
production manipulation exists. Petitioners cite Collated Roofing Nails 
from Taiwan, in which the Department found that persons in ``positions 
of legal and operational control in their respective companies [can] 
create a significant potential for price or production manipulation.'' 
62 FR 51427, 51436 (Oct. 1, 1997) (emphasis added). Petitioners assert 
that family members can be expected to act in concert when doing so is 
in their common interests. Petitioners add that the Department has not 
improperly adopted a presumption that family members necessarily act in 
concert because such cooperation between family members is not required 
to find affiliation under the statute. Because the statute defines 
family members as affiliated persons, it is reasonable to presume that 
they will cooperate with one another. Petitioners continue that the 
Department reasonably interpreted the statute to find that a person is 
affiliated with the children of his brother. Petitioners conclude that 
the Department correctly found that Saha Thai is affiliated with Thai 
Hong and Thai Tube in the preliminary results, and should find the same 
in the final results.

Department's Position

    We disagree with Saha Thai's argument that we improperly examined 
the Lamatipanont family as a control group for purposes of our 
affiliation analysis under section 771(33)(F) of the Act. Section 
351.102(b) of the Final Regulations provides that, in determining 
whether control exists for the purpose of finding affiliation, the 
Department will consider, among other things, corporate or family 
groupings, franchise or joint-venture agreements, debt financing, and 
close supplier relationships. 62 FR at 27380. The directive in the 
regulations that the Department consider family groupings in examining 
affiliation recognizes that control may be exerted through familial 
holdings and corporate positions. It is therefore reasonable to examine 
familial control in the aggregate to ensure that prices and costs used 
in the dumping calculation reflect market value, and are not influenced 
by familial relationships, and that the appropriate methodology is 
employed (e.g., affiliated producers are collapsed where warranted). 
See e.g., Queen's Flowers de Colombia v. United States, F.Supp. 617, 
626 (CIT 1997).
    The facts on the record demonstrate that several families are each 
involved in the ownership and management of Saha Thai. Four of these 
families also own and control at least one other Thai company that 
produces and/or sells the subject merchandise. Throughout its 
questionnaire responses, Saha Thai refers to ``six family groups with 
ownership interests in Saha Thai.'' See, e.g., October 31, 1997 QR at 
9. Each family owns a significant minority of Saha Thai's shares. Each 
of these six stockholding families holds at least one seat on Saha 
Thai's nine-member Board of Directors (together they hold all of the 
nine board seats in Saha Thai), and members of the four families with 
the largest equity interests also serve as the senior executive 
officers in Saha Thai: Chairman of the Board (Ampapankit), Managing 
Director (Karuchit/Kunanantakul), Deputy Managing Director 
(Lamatipanont), and Financial Director (Sae Haeng/Ratanasirivilai). The 
facts on the record demonstrate that Saha Thai's ownership and 
management structure is family-oriented, and that within this 
structure, these families are legally or operationally in a position, 
jointly and severally, to control Saha Thai within the meaning of 
section 771(33) of the Act.
    The Department's analysis in this case follows current practice by 
evaluating all indicia of control by the family, not just stock 
ownership. For instance, in an analysis of affiliation based on common 
control by a family group, the Department explained:

The legislative history of the URAA makes it clear that the statute 
does not require majority ownership for a finding of control. Even a 
minority shareholder interest, examined within the context of the 
totality of other evidence of control, can be a factor that we 
consider in determining whether one party is operationally in a 
position to control another.

Certain Cut-to-Length Carbon Steel Plate From Brazil: Final Results of 
Antidumping Duty Administrative Review, 62 FR 18486, 18490 (April 15, 
1997). In the most recently completed segment of this proceeding, the 
Department noted the breadth of the term ``control'' under section 
771(33) of the Act: ``the statutory definition of control encompasses 
both legal and operational control. Multiple persons or groups may be 
in control, individually and jointly, of a single entity, i.e., each 
has the ability to direct or restrain the company's activities.'' 
Certain Circular Welded Carbon Steel Pipes and Tubes from Thailand; 
Final Results of Antidumping Administrative Review, 62 FR 53808 at 
53815 (October 16, 1997).
    Our finding that Saha Thai is affiliated under section 771(33)(F) 
of the Act with Thai Tube and Thai Hong by virtue of common control by 
the Lamatipanont family is based on record evidence that this family is 
one of the control groups within Saha Thai. Our analysis of the 
Lamatipanont family's control is consistent with the statute, 
regulations and current practice.
    We disagree with Saha Thai's assertion that we should consider the 
Lamatipanonts as two separate branches of the same family who operate 
independently of each other. In its questionnaire responses and case 
briefs, Saha Thai does not deny that Somchai Lamatipanont, the center 
of one alleged branch of the family, is the brother of Samarn 
Lamatipanont, the center of the second alleged branch of the family. 
These brothers, their wives, and their children are owners, directors 
and managers of three producers of standard pipe: Saha Thai, Thai Hong 
and Thai Tube. Where members of the same

[[Page 55582]]

family hold interests and management positions in several companies in 
the same industry, it is reasonable to examine the interests of the 
family as a whole for purposes of determining where common control 
exists. See Queen's Flowers 981 F.Supp. at 626.
    Saha Thai misconstrues our analysis by claiming that we improperly 
collapsed the Lamatipanont family members under section771(33)(A) of 
the Act. We did not rely on this provision for purposes of aggregating 
the interests of the Lamatipanont family members. Rather, we made 
reference to this subsection merely as further support for considering 
familial holdings in our affiliation analysis, i.e., the fact that 
family members are affiliated, confirms the reasonableness of examining 
control by family groups. We, therefore, find it reasonable to examine 
the interests of the Lamatipanont family as a whole in steel pipe 
businesses.
    Moreover, in determining the existence of a ``corporate or family 
grouping'' for purposes of affiliation, the Department is not required 
to find, as Saha Thai suggests, the existence of a ``control group 
acting in concert.'' Drawing such a bright line test ignores the focus 
of the statute and the regulations on the ability of a person to exert 
restraint or direction over a company in determining ``control'' for 
purposes of affiliation. The Department is equally concerned with a 
control group which has the potential to act in concert or act out of 
common interest.
    Finally, Saha Thai's arguments that it had no commercial 
transactions and does not share officers, directors, employees, 
information or facilities with Thai Hong or Thai Tube to support its 
argument that the Lamatipanont family does not control these producers 
is unpersuasive. These factors are relevant to a collapsing analysis 
but are not determinative of control within the meaning of section 
771(33) of the Act. (See Department's Position in response to Comment 
3.) For the purpose of examining the existence of common control, we 
examined indicia of control, such as the ownership interests, board of 
directors seats and management positions held by members of the 
Lamatipanont family in Saha Thai, Thai Hong, and Thai Tube. Analysis of 
these facts led us to conclude that these three producers of the 
subject merchandise are affiliated because they are under the common 
control of the Lamatipanont family within the meaning of section 
771(33)(F) of the Act. Our conclusion is unchanged for the final 
results.

Comment 3

    Petitioners argue that the Department incorrectly found in the 
preliminary results that Saha Thai and Thai Tube and Thai Hong should 
not be collapsed because there is no evidence of intertwined 
operations. Petitioners argue that while evidence of actual price and 
production manipulation is not present on the record, the Department in 
its regulations explicitly rejected the need for a showing of actual 
manipulation in favor of finding a significant potential for 
manipulation. Petitioners also argue that there is significant 
potential for manipulation of price and production where affiliation is 
based on control under section 771(33) of the Act. Petitioners contend 
that whenever a person or group of people are legally or operationally 
in a position to exercise restraint or direction over two entities, 
there is a significant potential for manipulation of price and 
production. Petitioners cite Certain Welded Carbon Standard Steel Pipes 
and Tubes From India; Final Results of New Shippers Antidumping Duty 
Administrative Review, 62 FR 51427, 51436 (Sept. 10, 1997), as a case 
where the Department found that it was ``immaterial'' that two 
collapsed entities were operated as separate entities, and that there 
may be overlap between the evidence used to find affiliation based on 
control and the evidence used to determine the appropriateness of 
collapsing. Petitioners then cite Collated Roofing Nails From Taiwan; 
Final Determination of Sales at Less Than Fair Value, 62 FR 51427, 
51436 (Oct. 1, 1997), as support for the proposition that significant 
potential for manipulation of price or production can be created by a 
person or a group of persons in positions of legal and operational 
control in their respective companies.
    Petitioners argue that the Department's preliminary affiliation 
analysis regarding the Lamatipanont family's ownership, management and 
access to marketing, sales and production data support the existence of 
a significant potential for price and production manipulation. 
Petitioners note that the Department found that Saha Thai's competition 
policy on its own does not rebut the potential for manipulation of 
prices and production. Petitioners note that the focus of the 
Department's regulations on this issue is the potential for 
manipulation, and argue that requiring a showing of actual intertwined 
operations undercuts this focus of the regulations.
    Petitioners also argue that Saha Thai has frustrated the 
Department's attempts to gain information on Thai Tube and Thai Hong, 
and that the record contains numerous instances where Saha Thai refused 
to provide basic information. Petitioners continue that the Department 
should hold Saha Thai responsible if the record contains inconclusive 
evidence of intertwined operations between Saha Thai and Thai Tube and 
Thai Hong. Petitioners conclude that the Department should collapse 
these three companies for the final results.
    Saha Thai responds that there is no basis on which Thai Tube and 
Thai Hong can be collapsed with Saha Thai, particularly because Saha 
Thai had no commercial or other transactions with these companies, and 
in fact had a twelve-year-old company policy prohibiting such 
transactions. Saha Thai states that petitioners' arguments that these 
companies should be collapsed are irrelevant and ludicrous. Saha Thai 
concludes that the Department should affirm its decision not to 
collapse Saha Thai and Thai Tube.

Department's Position

    A finding of affiliation has been and continues to be a necessary, 
but not determinative, criterion in deciding whether to ``collapse'' 
two or more companies, i.e., treat them as a single entity for margin 
calculation purposes. For example, the Department may find two 
companies affiliated on the basis of an equity interest and then 
consider the level of that interest in deciding whether to collapse the 
affiliated parties. One producer's equity interest of ten percent of 
another would result in treating two companies as affiliated, but 
absent other factors may be insufficient to warrant collapsing them. 
Similarly, a finding of control results in treating companies as 
affiliated. However, it is appropriate to consider the level of control 
in deciding whether to collapse those companies. The existence of some 
degree of control alone is not necessarily determinative of the 
collapsing question. In short, affiliation alone is not a sufficient 
basis to collapse. See Preamble to the Final Regulations, 62 FR at 
27345.
    In the preliminary results, we found Saha Thai affiliated with Thai 
Tube and Thai Hong under section 771(33)(F) of the Act by virtue of 
common control by the Lamatipanont family. We then applied our 
collapsing analysis, using factors set forth in the Final Regulations 
at Sec. 351.401(f), to determine whether these two producers should be 
collapsed with Saha Thai for purposes of calculating dumping margins. 
Although each producer is affiliated with Saha Thai and each company 
produces subject merchandise, we

[[Page 55583]]

concluded that the record evidence did not support a finding of 
significant potential for manipulation of pricing or production. 
Therefore, we did not collapse Saha Thai with either Thai Tube or Thai 
Hong. See Memo to File from John Totaro, March 30, 1998. We continue to 
find that collapsing Saha Thai with these producers is inappropriate in 
this review.
    Although we agree with the petitioners' assertion that evidence of 
actual manipulation is not a prerequisite to finding a significant 
potential for manipulation, the record evidence must demonstrate a 
``significant potential'' for such manipulation to justify treating 
affiliated producers as a single entity. We also agree that each factor 
set forth as a relevant indicator to determine whether a significant 
potential for manipulation exists need not be met in each case. Rather, 
as explained in the Preamble to the Final Regulations, this is a non-
exhaustive list of factors which the Department considers in 
determining whether to collapse affiliated producers. Id. In practice, 
where factors such as substantial transactions, shared distributors, or 
interlocking boards or management indicate a significant potential for 
manipulation, the Department has treated separate entities as one. See 
Certain Fresh Cut Flowers from Colombia; Final Results of Antidumping 
Duty Administrative Reviews, 61 FR 42833, 42853 (Aug. 19, 1996); Cut to 
Length Carbon Steel Plate from Brazil; Preliminary Results of 
Antidumping Duty Administrative Review, 62 FR 47436, 47437 (Sept. 9, 
1997) and Certain Cut-to-Length Carbon Steel Plate from Brazil; Final 
Results of Antidumping Duty Administrative Review, 62 FR 12744, 12749 
(March 16, 1998); Certain Welded Carbon Standard Steel Pipes and Tubes 
from India; Final Results of New Shippers Antidumping Duty 
Administrative Review, 62 FR 47632, 47638-39 (Sept. 10, 1997).
    In this instance, we found the factors indicating a potential for 
manipulation insufficient to collapse Saha Thai and Thai Tube and Thai 
Hong. While the Lamatipanont family exercises some control over each of 
these entities, it is only one of several groups that jointly and 
severally control Saha Thai. There is little overlap between the boards 
and management of Saha Thai and the other two producers. While the 
Lamatipanont family holds all the board seats and high management 
positions in Thai Tube and Thai Hong, another member of the family 
holds only one of nine board seats and the Deputy Managing Director 
position in Saha Thai. Moreover, there are no commercial transactions 
or other evidence of intertwined operations between Saha Thai and 
either Thai Hong or Thai Tube. Petitioners claim that there is some 
evidence on the record of intertwined operations, but we cannot 
conclude from the evidence to which petitioners refer that Saha Thai's 
operations are intertwined with Thai Hong or Thai Tube. (Due to the 
proprietary nature of this information, details of our analysis are 
contained in the proprietary version of the Memorandum to File from 
John Totaro, dated October 5, 1998.) Thus, the facts presented in this 
review are similar to those in Chilean salmon, where the Department did 
not collapse two companies because it found no evidence to suggest a 
significant possibility of price or production manipulation. See Notice 
of Final Determination of Sales at Less Than Fair Value: Fresh Atlantic 
Salmon From Chile, 63 FR 31411, 31421 (June 9, 1998).
    We do not consider our finding of the Lamatipanont family's 
ownership and control, by itself, as a sufficient basis to collapse 
these affiliates. As discussed above, the Lamatipanont family is a 
significant but minority owner of Saha Thai, and multiple entities are 
in control of Saha Thai. In Standard Pipes from India, Commerce 
recognized that there may be overlap in the evidence establishing 
affiliation by control and our collapsing analysis, but the evidence 
relied on in our collapsing analysis goes beyond that which is 
necessary to find common control. For example, in Standard Pipes from 
India, the two affiliated producers shared four members of their boards 
of directors out of a total of seven directors for one company and nine 
directors for the other. 62 FR at 51438. In addition, the same 
individuals held the top management positions in both producers. Id. 
Similarly, in Collated Roofing Nails from Taiwan, the family members 
who owned and controlled the affiliated producers also had significant 
ties to both companies. The chairman of one producer was the past 
general manager and current advisor to the second producer, where his 
son was the current general manager. Each family member had substantial 
responsibility for the sales and production decisions of their 
respective companies, which facilitated the sharing of employees and 
the transferring of sales between the two. See Collated Roofing Nails 
from Taiwan, 62 FR at 51436.
    In the present case, the level of control and the absence of 
evidence of intertwined operations leads us to conclude the collapsing 
is not warranted. This determination does not reflect a heightened 
evidentiary standard, as petitioners suggest. Rather, it is consistent 
with the Department's practice of not collapsing producers solely on 
the basis of affiliation. See Preamble to the Final Regulations, 62 FR 
at 27345.
    Saha Thai provided sufficient information for the Department to 
make a collapsing information. Therefore, despite that fact that Thai 
Tube and Thai Hong refused to provide information, the use of facts 
available was unnecessary. We note, however, that we will continue to 
examine the appropriateness of collapsing these affiliated producers in 
future reviews. Therefore, continued lack of participation from these 
companies may result in the application of facts available.

Comment 4

    Saha Thai argues that the Department failed to undertake the 
requisite statutory and regulatory analysis of the Siam Steel Group 
companies in reaching its conclusion that those companies are 
affiliated on the basis of common control by the Karuchit/Kunanantakul 
family. Saha Thai argues that because Saha Thai is controlled by a 
group other than the Karuchit/Kunanantakul family, Saha Thai cannot be 
affiliated with Siam Matsushita \1\ or any other Siam Steel Group 
company by means of common control under section 771(33)(F) by the 
Karuchit/Kunanantakul family. Saha Thai asserts that the Karuchit/
Kunanantakul family does not control Saha Thai and that major company 
decisions require board approval. Further, Saha Thai argues that the 
Karuchit/Kunanantakul family does not control Siam Matsushita because 
(1) it held only 39% of Siam Matsushita's shares, (2) Karuchit/
Kunanantakul family members held only ceremonial titles in the company, 
(3) the operational and management roles in Siam Matsushita are held by 
Japanese individuals, and (4) a majority of the board members are 
Japanese individuals. Saha Thai concludes that Japanese investors 
control Siam Matsushita, while the Karuchit/Kunanantakul family is 
merely the

[[Page 55584]]

company's local conduit into the Thai market.
---------------------------------------------------------------------------

    \1\ In its case and rebuttal briefs, Saha Thai referred to Siam 
Matsushita Steel Co., Ltd. as ``Company E,'' the name used by the 
Department to refer to this company in the preliminary results 
because Saha Thai requested for business proprietary treatment of 
this company's name. However, Saha Thai has referred to this company 
on the public record of this review, for example, at page 2 and 
Exhibit A of its December 31, 1997 questionnaire response (public 
version), Exhibit 2 of its October 31, 1997 questionnaire response 
(public version). Therefore, the company's identity is no longer 
proprietary.
---------------------------------------------------------------------------

    Saha Thai contends that the Department's conclusions in the 
preliminary results regarding the influence of Siam Steel International 
on the manufacturing policies and product selection of the Siam Steel 
Group companies were not supported by the record. Saha Thai claims that 
the reference to the Siam Steel Group name is for public relations 
purposes only and there is no legal entity known as the Siam Steel 
Group. Saha Thai contends that the Karuchit/Kunanantakul family holds 
only minority interests in the Siam Steel Group companies and exerts no 
managerial control in the series of joint ventures that comprise these 
entities. Saha Thai asserts that the Karuchit/Kunanantakul family does 
not have the ability to direct the production decisions of the Siam 
Steel Group members because that control rests with Japanese investors.
    Second, Saha Thai argues that the Department correctly decided to 
not collapse Saha Thai and Siam Matsushita for the preliminary results 
because of the substantial retooling needed to shift production from 
Saha Thai to Siam Matsushita. In addition, Saha Thai argues that the 
record does not contain evidence of any potential for the manipulation 
of price or production between these companies. Saha Thai references 
the company policy adopted twelve years ago that prohibits certain 
kinds of cooperation, and its statement in its October 31, 1997, 
questionnaire response that none of the operations of Saha Thai and 
Siam Matsushita were intertwined. Saha Thai asserts that neither 
company was performing any part of the other's production processes, 
nor were they sharing designs. Moreover, except for Siam Matsushita's 
extremely small-quantity purchases from Saha Thai, Saha Thai claims 
there were no commercial interactions between Saha Thai and Siam 
Matsushita.
    Finally, Saha Thai states that it provided information concerning 
Saha Thai's relationship to and interactions with many other companies 
in response to the Department's questions. Saha Thai claims that it 
made overtures to the Department concerning the need to include 
meetings with Siam Matsushita or visits to the company as part of its 
verification, but that the Department did not request any additional 
information. Saha Thai urges the Department to affirm its preliminary 
results decision to not collapse Saha Thai and Siam Matsushita.
    Petitioners agree with the Department's conclusion in the 
preliminary results that the facts on the record establish that Saha 
Thai is affiliated within the meaning of section 771(33)(F) with Siam 
Matsushita. However, petitioners argue that the Department should 
collapse Saha Thai and Siam Matsushita for the final results. 
Petitioners disagree with the Department's preliminary analysis, in 
which the Department concluded that the substantial retooling criterion 
of the collapsing analysis is not satisfied.
    Petitioners argue that the record does not contain sufficient 
information on Siam Matsushita's PVC-lined pipe production process to 
determine whether it produces this pipe at full capacity or whether it 
has excess capacity to devote to the production of the subject 
merchandise. Also, petitioners contend that the record does not contain 
information on the capacity of Siam Matsushita's pipe mill relative to 
Saha Thai's, or its galvanizing facilities and PVC-coating equipment. 
Petitioners argue that, absent this record evidence, the Department's 
conclusion that Siam Matsushita would have to significantly alter its 
manufacturing process is flawed.
    Petitioners also disagree with the Department's conclusion that 
allowing a portion of production facilities to stand idle constitutes a 
substantial retooling of Siam Matsushita's facility. Petitioners 
contend that retooling requires the addition of new equipment or 
modification of existing equipment, not merely the lack of use of 
existing equipment. Petitioners contend that, unlike the circumstances 
in Certain Porcelain-on-Steel Cookware From Mexico: Final Results of 
Antidumping Duty Administrative Review, 62 FR 42496 (July 30, 1997), no 
infrastructure changes would be necessary for Siam Matsushita to 
produce the subject merchandise because Siam Matsushita produces 
standard pipe as an intermediate product. Further, petitioners argue 
that the record establishes that Siam Matsushita has break points in 
its process after pipe production for galvanizing and PVC coating that 
allow it to use portions of its facilities without engaging other 
portions of its facilities. Petitioners conclude that the record 
evidence supports the fact that Siam Matsushita could produce standard 
pipe identical to that produced by Saha Thai without substantial 
retooling of its production facilities.
    Furthermore, petitioners note that the Department's preliminary 
analysis did not address the third collapsing criterion contained in 
section 351.401(f)(1) of the Final Regulations, i.e., significant 
potential for price or production manipulation. However, petitioners 
argue that the facts which support the Department's preliminary finding 
that Saha Thai and Siam Matsushita are affiliated by means of common 
control by the Karuchit/Kunanantakul family and membership in the Siam 
Steel Group also support this collapsing factor. Petitioners argue that 
family ownership and control under section 771(33) necessarily 
constitutes a significant potential for manipulation, citing Collated 
Roofing Nails from Taiwan, 62 FR at 51436. Petitioners also note that 
the Department need not find that this factor exists, but must find 
that, based on the totality of circumstances, the two companies are 
sufficiently related to warrant treatment as a single entity, citing 
Certain Welded Carbon Standard Steel Pipes and Tubes from India, 62 FR 
at 47638.
    Petitioners claim the Department's preliminary findings regarding 
the Siam Steel Group indicate at least some degree of common 
involvement by the group in pricing decisions of the two companies. 
However, petitioners state that additional information about the 
intertwined nature of Saha Thai's and Siam Matsushita's operations is 
not available because Saha Thai did not make such information 
available. Petitioners claim these are essentially the same 
circumstances that led the Department to apply adverse facts available 
to Saha Thai in the last review.

Department's Position

    We disagree with Saha Thai's assertions that it is not affiliated 
with Siam Matsushita under the Act. Section 351.102(b) of the Final 
Regulations provides that, in determining whether control exists for 
the purpose of finding affiliation, the Department will consider, among 
other things, corporate or family groupings, franchise or joint-venture 
agreements, debt financing, and close supplier relationships. The facts 
on the record demonstrate that the Siam Steel Group is a grouping of 
Thai entities involved in the steel industry which is owned and managed 
by the Karuchit/Kunanantakul family. Although these companies may 
operate independently of each other, they are nonetheless subject to 
direct or indirect control, within the meaning of section 771(33) of 
the Act, by the Karuchit/Kunanantakul family.
    The record indicates that one of the Siam Steel Group companies, 
Siam Steel Group International Co., Ltd., (``SSGI''), is the primary 
organizing body of the Siam Steel Group. SSGI is 98.88 percent owned by 
members of the Karuchit/Kunanantakul family. October

[[Page 55585]]

31, 1997 QR at Exhibit 5. The Siam Steel Group brochure describes SSGI 
as follows:

    Siam Steel Group International Co., Ltd. was established with an 
intention to promote and support the operation of affiliated 
companies in Siam Steel Group together with help in company's 
expansion and development business of the group to proceed more 
efficiently. . . .
    Apart from a strong purpose to develop technology and local 
industry in order to compete with other countries, Siam Steel Group 
have stable policy to continuously help preserving the environment 
and conserving the nature directly by selection of products that do 
not harm the nature and strictly control the manufacturing process 
conformable to technical know-how basis.

June 2, 1997 QR at Exhibit 6. Thus, the Siam Steel Group holds itself 
out to the public as an organization of affiliated companies, whose 
expansion and development of business is promoted and supported by 
SSGI, and who follow, to one degree or another, common policies on 
manufacturing methods and selection of products to be produced. Further 
evidence of SSGI's role in the Siam Steel Group companies is the fact 
that SSGI funded the Siam Steel Group brochure. December 22, 1997 QR at 
6. From this record evidence, we conclude that the Siam Steel Group is 
the type of corporate grouping envisioned by the SAA and the 
Department's regulations.
    The Karuchit/Kunanantakul family, together with Siam Steel 
International Public Company Ltd.2, own between 8.17 percent 
and 100 percent of each of the 26 Siam Steel Group companies, averaging 
57.97 percent ownership of each company. The members of the Karuchit/
Kunanantakul family are in various positions of legal and/or 
operational control in each member company through ownership and or 
management in each company, and through ownership and management of 
SSGI and Siam Steel International Public Company Ltd.
---------------------------------------------------------------------------

    \2\ Siam Steel International Public Company, Ltd. is a Siam 
Steel Group member, furniture manufacturer, Saha Thai shareholder 
and Saha Thai customer. The Karuchit/Kunanantakul family owns a 
controlling (65.33 percent) interest in this company.
---------------------------------------------------------------------------

    With respect to Saha Thai in particular, the Karuchit/Kunanantakul 
family directly or indirectly owns a significant percentage of Saha 
Thai's stock. This family controls three of the nine seats on Saha 
Thai's Board of Directors, as well as the Managing Director's position. 
Saha Thai notes that ``[p]ricing decisions (either in the establishment 
of a price list or changes to it) are not considered major decisions 
requiring board approval.'' December 22, 1997 QR at 1. As stated above, 
pricing decisions are made by the Managing Director, Somchai Karuchit. 
The significant minority equity interest, seats on the Board of 
Directors, and the Managing Director's position combine to place the 
Karuchit/Kunanantakul family in a position of legal and/or operational 
control of Saha Thai.
    Furthermore, the record evidence demonstrates that, of the seven 
directors of Siam Matsushita, three are Karuchit/Kunanantakul family 
members. October 31, 1997 QR at Exhibit 2. In addition, the record 
demonstrates that Wanchai Kunanantakul is the President of Siam 
Matsushita, Anantachai Kunanantakul is the Personnel and General 
Affairs Director of Siam Matsushita, and another Karuchit/Kunanantakul 
family member is the Chairman of Siam Matsushita. Id. Saha Thai Case 
Brief at 29; October 31, 1997 QR at Exhibit 5; Memorandum to the File 
from John Totaro, August 3, 1998.
    The record does not support Saha Thai's claim that the titles held 
by these Karuchit/Kunanantakul family members are merely ceremonial. 
There is evidence on the record that Siam Matsushita's President, 
Wanchai Kunanantakul, is one of only two individuals, along with 
Takashi Ozasa, Siam Matsushita's Vice President, with the power to bind 
the company with his signature. October 31, 1997 QR at Exhibit 5 and 
Exhibit 2. Anantachai Kunanantakul's position as Personnel and General 
Affairs Director of Siam Matsushita suggests substantial involvement in 
the operation of the company. Id. Moreover, given the Chairman's 
responsibility in Saha Thai, we can infer that the Karuchit/
Kunanantakul family member's position as Chairman in Siam Matsushita is 
equally substantive in nature. Saha Thai has offered no evidence to 
demonstrate otherwise. Thus, the record evidence supports our 
determination that the Karuchit/Kunanantakul family controls the 
members of the Siam Steel Group, particularly Saha Thai and Siam 
Matsushita. The fact that Japanese investors also have controlling 
interests in certain Siam Steel Group companies does not detract from 
this finding because, as discussed above, multiple persons or groups 
may individually and jointly control the same companies under section 
771(33) of the Act. On this basis, we continue to find that Saha Thai 
and Siam Matsushita are affiliated under section 771(33)(F) of the Act.
    However, we do not find that the record evidence supports treating 
these affiliated companies as a single entity under our collapsing 
analysis. In the preliminary results, we stated that the record 
evidence indicates that shifting production to subject merchandise 
would require extensive and expensive infrastructure changes in Siam 
Matsushita.
    The record establishes that Saha Thai's and Siam Matsushita's 
production facilities are devoted to manufacturing very different 
products: Saha Thai produces standard pipe and Siam Matsushita produces 
PVC-lined pipe. The record demonstrates that Siam Matsushita produces 
standard pipe as an intermediate product, but also that Siam 
Matsushita's production process requires substantially more processing 
to produce its final product, PVC-lined steel pipe. It is therefore 
reasonable to infer that shifting production to standard pipe would 
require Siam Matsushita to significantly alter its production process 
and incur additional costs in shifting production. This determination 
is consistent with prior cases where the Department did not collapse 
affiliated producers who produced similar but not comparable products 
which required different processes and equipment. See Certain 
Porcelain-on-Steel Cookware From Mexico: Final Results of Antidumping 
Duty Administrative Review, 62 FR 42496, 42497 (Aug. 7, 1997); Certain 
Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-
Length Carbon Steel Plate from Canada; Preliminary Results of 
Antidumping Duty Administrative Review, 60 FR 42511, 42512 (Aug. 16, 
1995) and Certain Corrosion-Resistant Carbon Steel Flat Products and 
Certain Cut-to-Length Carbon Steel Plate from Canada; Preliminary 
Results of Antidumping Duty Administrative Review, 61 FR 13815 (March 
28, 1996).
    In reaching this conclusion, we have not adopted the petitioner's 
view of ``substantial retooling,'' which advocates a finding of 
substantial retooling only where new equipment is added to the existing 
production facilities. This concept does not reflect commercial reality 
because a company may substantially revise its production facilities 
without adding new equipment. For example, we cannot conclude from the 
facts on the record that it would not involve significant time and 
expense for Siam Matsushita to restructure its continuous production 
process to transform what is now an intermediate product into a 
finished product. Thus, we do not consider Siam Matsushita's capacity 
to produce standard pipe as an intermediate product as decisive on the 
issue of whether substantial retooling would be necessary to shift 
production to the lower-grade standard pipe produced by Saha Thai.

[[Page 55586]]

    Therefore, based on our analysis of the record evidence, we do not 
find that the facts support collapsing Saha Thai and Siam Matsushita in 
this review. Because we were able to reach this determination based on 
the information provided by Saha Thai, application of the facts 
available rule is unwarranted. We note, however, that we will continue 
to examine any shift in production between these two affiliates in any 
subsequent reviews.

Comment 5

    Saha Thai argues that it is not affiliated under section 771(33)(F) 
with the three resellers, because none of the three Saha Thai directors 
who, with their families, control the resellers also control Saha Thai.
    Petitioners reject this argument. Petitioners assert that Saha 
Thai's interpretation of control is inconsistent with sections 
771(33)(B) and 771(33)(E) of the statute and the Department's 
statements in the Preamble to the Final Regulations that an enforceable 
ability to compel or restrain certain actions is not a necessary 
element for finding control under section 771(33) of the Act. 
Petitioners conclude that the Department should continue to find Saha 
Thai affiliated with Resellers A, B, and C for the final results.

Department's Position

    We disagree with Saha Thai's assertions that it is not affiliated 
with these resellers identified in the preliminary results. As 
discussed above in Comment 1, Saha Thai's argument is premised upon an 
interpretation of ``control'' that is inconsistent with the statute and 
the regulations. In the preliminary results, we found that Saha Thai 
was affiliated under section 771(33)(F) of the Act with three home 
market resellers of the subject merchandise, referred to in the notice 
of preliminary results as Company A, Company B and Company C. Each of 
these resellers is entirely owned by one of the six families that 
jointly and severally control Saha Thai. Each of these families owns a 
substantial minority interest in Saha Thai, has at least one family 
member on Saha Thai's board of directors, and has a family member who 
is an executive officer of Saha Thai. As we explained above, evidence 
of actual control is not a prerequisite to finding ``control'' within 
the meaning of section 771(33) of the Act, which defines control in 
terms of the ability of one person to restrain or direct another 
person. The statutory definition of control encompasses both legal and 
operational control, and multiple persons or groups may be in control, 
individually and jointly, of a single entity, each having the ability 
to direct or restrain the company's activities. Furthermore, among 
several individuals in a position to control an entity, one individual 
may possess a greater degree of control than the others. For example, 
the Managing Director of Saha Thai may have the greatest authority 
among Saha Thai's executives. However, the Managing Director's superior 
position would not eliminate the ability of the other officers--the 
Financial Director, the Deputy Managing Director and the Chairman of 
the Board--to direct or restrain the company's activities.
    We, therefore, conclude that the Sae Haeng/Ratanasirivilai family 
controls both Saha Thai and Company A, the Lamatipanont family controls 
both Saha Thai and Company B, and the Ampapankit family controls both 
Saha Thai and Company C. Our position on this issue remains unchanged 
for the final results.

Comment 6

    Petitioners argue that the Department has no choice but to apply 
the facts available under 19 U.S.C. Secs. 1677e and 1677m (section 
776(a) and (b) of the Act) because the record contains neither home 
market and U.S. sales data nor information on cost of production for 
Siam Matsushita, Thai Hong, and Thai Tube. Petitioners argue that this 
information is necessary to perform the dumping analysis. Petitioners 
state that the record is now so incomplete that it cannot serve as the 
basis for the final results, and neither Saha Thai nor its affiliates 
acted to the best of their ability to provide information requested by 
the Department. Petitioners argue that an adverse inference under 19 
U.S.C. 1677e(b) (section 776 (b) of the Act) is appropriate given the 
outright refusal of Thai Tube and Thai Hong to cooperate. Furthermore, 
argue petitioners, the record is replete with instances where either 
Saha Thai did not provide information that was requested or the 
Department found at verification that Saha Thai had not completely or 
correctly answered the questionnaires. Petitioners argue that the 
evidence on the record of this review should be viewed in light of Saha 
Thai's ``dissembling and prevarication'' in the original investigation 
and the most recently completed review. In this review, petitioners 
argue that Saha Thai's submissions, particularly concerning the 
affiliation and collapsing issues, contains enough unanswered 
questions, inconsistencies, and proven errors to render the entire 
response unreliable for the final results.
    Petitioners identify two issues in particular that demonstrate Saha 
Thai's lack of cooperation in this review. First, petitioners cite Saha 
Thai's alleged inability to produce documents at verification related 
to its corporate governance, including its memorandum of association, 
minutes of board meetings, or a record of a company policy decided at a 
board meeting. Petitioners assert that Saha Thai cannot reasonably 
claim that such documents do not exist. Second, petitioners note Saha 
Thai's stated inability to substantiate its claim that major company 
decisions are made by a 60% vote of the board. Petitioners identify 
other instances where Saha Thai provided inadequate responses and 
conclude that Saha Thai has provided less than full disclosure in this 
case. Petitioners argue that to accept Saha Thai's responses as an 
adequate basis for the final results would allow Saha Thai to ``control 
the amount of antidumping duties by selectively providing [the 
Department] information,'' citing Olympic Adhesives Inc., v. United 
States, 899 F.2d 1565, 1572 (Fed. Cir. 1990). Petitioners contend that 
the circumstances in this case require the use of adverse facts 
available, and recommend the 37.55% rate applied to Thai Union in the 
last review.
    Saha Thai responds that none of the alleged inconsistencies 
identified by petitioners warrants serious consideration by the 
Department as justification for total adverse facts available. 
Specifically, Saha Thai addresses petitioners' focus on Saha Thai's 
lack of ability to provide its memorandum of association and board of 
directors meetings. Saha Thai argues that the memorandum of association 
could not be located, and that board meeting minutes were not 
maintained except in instances where important company policies were 
established. Saha Thai argues that it has fully cooperated with the 
Department and provided all requested information. With respect to the 
requested corporate governance documents, Saha Thai notes that it 
explained that such documentation does not exist, and therefore, it 
should not be penalized for its informal governance structure. Saha 
Thai argues that in circumstances where it is unable to provide 
information or is never requested to provide information, the 
application of facts available is inappropriate, citing Borden, Inc. v. 
United States; Olympic Adhesives; Daewoo Elec. Co.

[[Page 55587]]

Department's Position

    Section 776(a) of the Act authorizes the resort to facts available 
only where necessary information is not available on the record or an 
interested party withholds information, fails to comply with the 
Department's reporting requirements, significantly impedes the 
proceeding, or submits unverifiable information. We have examined Saha 
Thai's submissions in light of these factors and determine that resort 
to facts available is inappropriate in this review. Saha Thai was 
unable to produce certain corporate governance documents because such 
documents do not exist. Further, the lack of this information did not 
hinder our ability to reach the necessary determinations concerning its 
affiliations with other entities.
    Further, as noted above, the information submitted by Saha Thai was 
sufficient to make a determination that Saha Thai, Thai Tube and Thai 
Hong should not be collapsed. Therefore, responses from Thai Hong and 
Thai Tube were not necessary for calculating a dumping margin in this 
review. This consideration applies equally to additional information 
from Siam Matsushita. We note, however, as discussed in the relevant 
collapsing analyses, that we will continue to examine these issues in 
future reviews and the failure of these affiliates to respond may lead 
to application of the facts available.
    In short, the record contains information necessary to complete the 
review and Saha Thai: (1) Has not withheld information that has been 
requested by the Department, (2) has submitted responses to the 
Department's requests timely and in the form requested, (3) did not 
significantly impede the review, and (4) provided information that was 
largely verifiable.

Comment 7

    Petitioners claim that Saha Thai's questionnaire responses and 
other data indicate that the contract date should be used as the date 
of U.S. sales. Petitioners claim that Saha Thai did not provide any of 
the requested factual information about changes in quantity after the 
contract date. Instead, petitioners assert that Saha Thai insisted upon 
using invoice date as the date of sale, claiming that the Department 
requires invoice date in all or most instances, that the company 
records sales based on invoice date, and that a change in date of sale 
methodology from review to review would result in either the double-
reporting or omission of certain sales.
    Second, petitioners assert that the contract establishes the final 
agreement of the parties to the sale. Petitioners cite the 1995-1996 
review of Circular Welded Non-Alloy Steel Pipe from the Republic of 
Korea, 62 FR 64559 (Dec. 8, 1997) (Pipe from Korea), where based on an 
understanding of the U.S. sales process, in which price and quantity 
are established at contract date, the Department instructed the 
respondent to report contract date as the date of sale. Petitioners 
contend that the Final Regulations allow flexibility in using a date 
other than the invoice date as date of sale; the appropriate date of 
sale occurs when the material terms of sale are set. Petitioners assert 
that Saha Thai has offered both the wrong factual and legal arguments 
for its choice in date of sale.
    According to the petitioners, as a consequence of an incorrect date 
of sale, (1) a different set of sales will be evaluated, (2) in a 
country subject to currency devaluation or inflation, the sale's value 
may be distorted, and (3) incorrect dates lead to incorrect matching, 
all of which ultimately distorts the antidumping duty margin. Thus, 
petitioners argue that because Saha Thai did not provide the contract 
dates as requested, the Department should find in its final results 
that Saha Thai has significantly impeded the investigation and use the 
facts available to determine Saha Thai's dumping margin. If the 
Department does not use facts available, petitioners argue that the 
U.S. date of sale should be corrected on the basis of non-adverse facts 
available, i.e., based on the difference between reported contract and 
invoice dates provided in Saha Thai's questionnaire responses. 
Petitioners propose an additional method, calculating the interval 
between the letter of credit date and the invoice date to derive a 
weighted-average interval for the number of days between contract and 
invoice.
    Saha Thai responds that the Department correctly used invoice date 
as the date of sale. Saha Thai states that the Department's policy 
clearly called for the use of invoice date as date of sale, since the 
invoice date is the date on which the final quantity and price were 
established. Saha Thai defends its reporting methodology, stating that 
upon issuance of the questionnaire, Saha Thai contacted the official in 
charge. Following the methodology set forth in the Final Regulations, 
Saha Thai used invoice date as the date of sale. Saha Thai notes that 
the Department's regulations, 351.401(i), express a preference for the 
use of invoice date as the sale date based on commercial reality. Saha 
Thai contends that there is no date which better reflects the final 
terms of sale than the invoice date, the date which, as verified, is 
recorded in Saha Thai's records maintained in the ordinary course of 
business. Saha Thai states that only by reference to the invoice can 
one see the quantities which were the subject of the sale.
    Saha Thai distinguishes this review from Pipe from Korea, where the 
exporter's U.S. prices and quantities were seldom revised prior to 
invoicing. Saha Thai further notes that the decision in the Korean case 
did not depend on the existence of ``tolerance'' levels in the 
contracts. Saha Thai also cites Certain Stainless Steel Wire Rod from 
India, 62 FR 38976, 38979 (July 21, 1997), where the Department used 
invoice date due to changes in quantity between the purchase order date 
and shipment dates. Finally, Saha Thai argues that the Department uses 
a date other than invoice date only when there are compelling reasons 
to deviate from this practice, citing Cold Rolled and Corrosion 
Resistant-Carbon Steel Flat Products from Korea, 63 FR 13170, 13194 
(March 18, 1998). Saha Thai asserts that there is no compelling reason 
in this review to deviate from the Department's standard practice of 
using invoice date as date of sale.
    Moreover, Saha Thai claims that because it accurately reported 
invoice date as the date of sale, application of facts available is 
entirely unwarranted. Saha Thai notes that petitioners did not take 
issue with Saha Thai's assertion that quantity was subject to change 
from contract to invoice date until the end of this proceeding. Saha 
Thai also claims that it never once refused to provide information 
requested by the Department. Saha Thai notes that the Department did 
not make an absolute and specific demand that Saha Thai report its 
contract dates. Saha Thai further states that petitioners never 
suggested that Saha Thai revise its sales listing. Saha Thai claims 
that moving the sale date this late in the proceeding unfairly 
penalizes Saha Thai by increasing the possibility that sales will be 
matched to constructed value. Saha Thai claims that it was fully 
cooperative with the Department and went to great lengths to provide 
the information requested, and thus did not impede the Department's 
investigation.

Department's Position

    The Department's current practice, as codified in the Final 
Regulations at section 351.401(i), is to use invoice date as the date 
of sale unless the record evidence demonstrates that the material terms 
of sale, i.e., price and quantity, are

[[Page 55588]]

established on a different date. See 19 CFR 351.401(i), 62 FR at 27411; 
Circular Welded Non-Alloy Steel Pipe From the Republic of Korea; Final 
Results of Antidumping Duty Administrative Review, 63 FR 32833, 32835-
36 (June 16, 1998). In this review, Saha Thai reported invoice date as 
the date of sale in response to the Department's initial questionnaire. 
June 2, 1997 QR at 3. To ascertain whether Saha Thai accurately 
reported the date of sale, we requested additional information 
concerning whether prices and quantities were fixed on a different 
date. Saha Thai reported that it generally enters into short-term 
contracts that establish price but quantities often change and are not 
finally established in any written document prior to the issuance of 
the invoice at the time shipment is arranged. July 30, 1997 QR at 18. 
Saha Thai also stated that the invoice date is recorded in its records 
kept in the ordinary course of business, whereas dates of contract and 
related dates are not so maintained. Id. at 19.
    The Department verified that Saha Thai records sales in its 
financial records by date of invoice. Verification Report at 17. We 
also discussed Saha Thai's export sales process with the company's 
export sales manager. As described in the Verification Report, Saha 
Thai negotiates price and quantity, a contract is signed and a letter 
of credit is arranged. At that point, a production order is issued to 
the mill and delivery department, and the sales invoice is issued just 
prior to shipping. Id. Based on verification and other information on 
the record, the Department was satisfied that invoice date was the 
appropriate date of sale for Saha Thai's U.S. sales, and we used this 
date in the preliminary results.
    Petitioners' claim that the contract date fixes prices and 
quantities is not supported by the record evidence. We examined the 
sample contract and invoices supplied by Saha Thai, and this 
information demonstrates that quantities were not fixed in the 
contract. (Due to the proprietary nature of this information, details 
of our analysis are contained in the proprietary version of the 
Memorandum to File from John Totaro, dated October 5, 1998). While we 
agree with petitioners that changes consistent with the tolerance level 
established in the contract may establish a binding agreement on 
quantity at the contract date, our analysis of the sample contract and 
corresponding invoices reveals that changes frequently were made beyond 
the agreed upon tolerance levels. Where such changes occur frequently 
after the contract date, we have relied upon a later date. See Certain 
Internal-Combustion Industrial Forklift Trucks from Japan; Final 
Results of Antidumping Duty Administrative Review, 62 FR 34216, 34227 
(June 25, 1997); Granular Polytetrafluoroethylene Resin from Italy; 
Final Results of Antidumping Duty Administrative Review, 62 FR 48592, 
48593 (Sept. 16, 1997). Consistent with this practice, we find that the 
record evidence in this case supports using invoice date as the date of 
sale.
    The facts in Pipe from Korea are distinguishable from those 
presented in this review. In that case, the Department was satisfied 
that invoice date was inappropriate because ``the material terms of 
sale in the U.S. are set on the contract date and any subsequent 
changes are usually immaterial in nature or, if material, rarely 
occur.'' Pipe from Korea, 63 FR at 32836. However, as discussed above, 
we have determined that the record evidence in this case supports Saha 
Thai's assertions that its contracts do not fix quantity, and that 
quantity is not established until invoice date. Therefore, given that 
quantity can and regularly does change between contract date and 
invoice date, we find that the invoice date better reflects the date on 
which the essential terms of the sale are established. We also find 
that Saha Thai accurately reported the appropriate date of sale; 
therefore, application of facts available is unwarranted.

Comment 8

    Petitioners argue that the Department should reduce Saha Thai's 
claimed duty drawback adjustment using the actual/ theoretical weight 
conversion. Petitioners state that Saha Thai purchases hot-rolled sheet 
in coils on an actual weight basis, and that customs duties on its 
purchases are applied on the same basis. However, the sales of subject 
merchandise on which duty drawback is granted are made on a theoretical 
weight basis. Thus, claim petitioners, the drawback received per unit 
of pipe exported exceeds the duties paid on the coil included in that 
unit of pipe by the ratio of one minus the actual/ theoretical weight 
conversion factor. Petitioners cite Certain Welded Non-Alloy Steel Pipe 
from the Republic of Korea; Final Results of Administrative Review, 62 
FR 55574, 55577 (Oct. 27, 1997) in support of their argument.
    Petitioners argue that as in the first administrative review on 
standard pipe from Korea, the adjustment for duty drawback for Saha 
Thai should be reduced by multiplying the drawback amount by the 
actual/theoretical conversion factor whenever the conversion factor is 
less than one. Petitioners claim that this will limit the drawback to 
the duties paid on material actually incorporated into the exported 
product as required by the statute and precedent.
    Saha Thai responds that petitioners' interpretation is incorrect 
and based on a misrepresentation of the Department's determination in 
Certain Welded Non-Alloy Steel pipe from the Republic of Korea. Saha 
Thai claims that there is a direct correlation, transaction-by-
transaction, between the drawback received and the duties actually paid 
on the inputs of the exported product. Saha Thai claims that 
petitioners' reference to the Korean Pipe case is erroneous, because in 
the Korean case respondents received drawback under a fixed rate 
refund, whereas Saha Thai based drawback on a transaction-by-
transaction calculation of duties actually paid on the inputs exported 
in the finished product. Saha Thai further states that the Department 
verified that Saha Thai paid the duties for which it received drawback 
and, with slight modification to certain clerical errors, accurately 
quantified drawback in its response.

Department's Position

    The information on the record indicates that Saha Thai accurately 
calculated duty drawback based on the amount of duties actually paid 
and received by Saha Thai. The Department in Certain Welded Non-Alloy 
Steel Pipe from the Republic of Korea examined two different types of 
duty drawback calculations,

``fixed-rate'' duty drawback provision and . . . ``individual-
transaction'' duty-drawback provision. We found that, when 
respondents received duty drawback under the individual-transaction 
duty drawback provision, companies received duty drawback based on 
the duties actually paid on the input of the exported product. . . . 
We also found that companies receiving duty drawback under the 
fixed-rate provision paid duties on the basis of the actual weight 
of inputs imported but received drawback on the basis of the 
theoretical weight of merchandise exported to the United States. 
Because theoretical weight is generally greater than actual weight, 
fixed-rate drawback calculated on a theoretical-weight basis is 
greater than that calculated on an actual-weight basis. Therefore we 
conclude that the reported duty drawback of respondents who received 
the drawback under the fixed-rate provision exceeds the duties 
actually paid.

62 FR 55574 at 55577 (Oct. 27, 1997).
    In the instant review, Saha Thai's duty drawback calculation does 
not resemble the ``fixed-rate'' methodology alluded to by petitioners 
in the Korean

[[Page 55589]]

Pipe case, wherein the duty paid on imported coil differed from the 
duty drawback received on exports incorporating that coil due to 
quantities calculated on actual versus theoretical weight. We examined 
the record of this review and have determined that Saha Thai has 
correctly calculated its duty drawback adjustment because the duty 
drawback Saha Thai received from Thai customs authorities was equal to, 
and not in excess of, the amount of duty paid. In its July 30, 1997 
supplemental questionnaire response at Exhibit 11-2, Saha Thai 
submitted the documentation generated by Thai customs which lists Saha 
Thai's ``Duty Drawback classified by Export Entry,'' indicating the 
amount of duty drawback paid to Saha Thai for a group of export sales, 
as well as the ``Duty Drawback Classified by Import Entry,'' indicating 
the actual duties Saha Thai paid on imports of coil. These documents 
show that the amount of duties paid by Saha Thai on imported coil 
equals the amount of duty drawback received by Saha Thai from Thai 
customs on exports of pipe. Saha Thai allocated this drawback amount 
over the total quantity of export sales. Thus, we find, based on the 
facts on the record, that Saha Thai has not overstated its duty 
drawback claims.
    In addition, the Department verified Saha Thai's duty drawback 
calculation (see Saha Thai Verification Report at 28, and exhibit C6). 
With the exception of several minor clerical errors noted at 
verification, the Department was satisfied with Saha Thai's 
calculations. Therefore for purposes of these final results, the 
Department will continue to adjust U.S. price by the amount of duty 
drawback calculated by Saha Thai.

Comment 9

    Petitioners claim that the Department made a ministerial error in 
the preliminary results margin calculation by limiting the price-to-
price analysis to sales with entries during the POR. Petitioners argue 
that while antidumping duties are assessed against entries that were 
made during the POR, the Department bases margin calculations on sales 
during the POR, citing Silicon Metal from Brazil, 61 FR 46763, 46765 
(Sept. 5, 1996).
    Saha Thai responds that date filters should be tied to entry date 
in accordance with standard Department practice. Saha Thai argues that 
the cases cited by petitioners involve situations where sales in 
addition to those entered during the POR are included in the database 
because respondents were unable to tie sales to entries. Saha Thai 
points out that it was able to tie all sales to entry dates, and 
reported only sales entered during the POR, as instructed by the 
Department.

Department's Position

    We agree with Saha Thai that the Department correctly calculated 
the dumping margin using all sales of merchandise entered during the 
POR. The Department's standard questionnaire instructed Saha Thai to 
report U.S. sales based on entry date during the POR, and we verified 
that Saha Thai accurately reported all sales with entry dates during 
the POR. See Saha Thai Verification Report at 21. As the Department 
stated in a recent case, the Department's preference is to base an 
administrative review on entries during the period of review. Circular 
Welded Non-Alloy Steel Pipe from the Republic of Korea; Final Results 
of Administrative Review, 63 FR 32833, 32836 (June 16, 1998). See also 
Ferrosilicon from Brazil; Final Results of Antidumping Administrative 
Review, 62 FR 43504, 43510 (Aug. 14, 1997). As the Department stated in 
Korean Pipe, section 751(a)(2)(A) of the Act states that a dumping 
calculation should be performed for each entry during the POR. Although 
the Department's regulations at section 351.213(e) provide some 
flexibility in this issue, the Department's preference is to review 
sales based on entry dates unless there are compelling circumstances 
that warrant a different approach to determining the universe of sales 
to be examined during a particular review. See Korean Pipe, 63 FR at 
32836. There is no record evidence of such compelling circumstances in 
this review. Therefore, we have continued to use sales with entries 
during the period of review, as reported by Saha Thai, for purposes of 
these final results.

Comment 10

    Saha Thai argues that if the Department continues to include 
reseller sales in the database, the Department should use the actual 
reseller sales quantities to calculate normal value. Saha Thai states 
that the resellers do not identify pipes held in inventory by producer, 
and thus do not identify the producer of the pipes they sell. The 
resellers' sales files include all sales of those products sold by Saha 
Thai to each reseller. In addition, the resellers' monthly average 
price for each product represents the monthly average price for all 
producers, including Saha Thai. Saha Thai claims that the replacement 
of the actual quantities of sales in each month made by each reseller 
with the Department's calculated simple monthly average of quantities 
sold by Saha Thai to the resellers has distorted the results of the 
antidumping calculations. Saha Thai claims that this methodology 
created the two highest dumping amounts for all U.S. transactions. Saha 
Thai further claims that the use of actual reseller sales quantities 
creates no distortion, as the resellers sold the pipe at the same 
price, regardless of manufacturer.
    Petitioners argue that the Department appropriately used average 
sales quantities sold by Saha Thai to the resellers. Petitioners 
suggest that the Department's choice to use non-adverse facts available 
was not arbitrary, as claimed by Saha Thai, but rather the only 
accurate tabulation of Saha Thai's pipe sales quantities that the 
Department could verify. Petitioners further state that the average 
sales quantities chosen by the Department were more, not less, 
probative of actual conditions, because the Department verified actual 
sales quantities of Saha Thai pipe. Petitioners note that the 
Department is accorded ``considerable deference'' in determining what 
constitutes the appropriate facts available, referring to Allied-Signal 
Aerospace Co. v. United States, 996 F 2d 1185 at 1190 (Fed. Cir. 1993).

Department's Position

    Because the resellers' sales data did not identify sales by 
producer, we were unable to segregate the resellers' sales of Saha Thai 
pipe. As a substitute, we determined a simple average by model of the 
monthly quantities sold by Saha Thai to the resellers. These simple 
average quantities were then used to weight average the reseller home 
market normal value for all reseller sales with the Saha Thai home 
market sales in order to calculate the normal value. See Memorandum to 
File from Dorothy Woster, March 31, 1998 (preliminary results analysis 
memorandum).
    Saha Thai proposes including the actual quantities of subject pipe 
sold by the resellers to calculate the margin, but these sales include 
pipe manufactured by other manufacturers. Using the resellers' complete 
sales databases would be contrary to the statutory directive that the 
Department calculate normal value based on sales of foreign like 
product. See, section 773(B)(i) of the Act. The foreign like product is 
merchandise manufactured by the same person that produced the subject 
merchandise sold to the United States. See section 771(16) of the Act. 
The statute indicates that, for the purposes of our antidumping 
analysis, sales of merchandise produced by manufacturers other than the 
manufacturer of the merchandise sold to the United States are not 
appropriate

[[Page 55590]]

bases for the calculation of normal value.
    Therefore, in other cases where a reseller's sales database 
contains sales of merchandise produced by other manufacturers, the 
Department used a weighting methodology that permits us to use the 
sales listing while neutralizing the effect of sales of other 
producers' merchandise. See, e.g., Certain Cut-to-Length Carbon Steel 
Plate from Sweden: Preliminary Results of Antidumping Duty 
Administrative Review, 60 FR 18502, 18503 (Sept. 19, 1995), and Certain 
Cut-to-Length Carbon Steel Plate from Sweden: Final Results of 
Antidumping Duty Administrative Review, 61 FR 15772 (April 9, 1996); 
Stainless Steel Bar from Spain; Final Determination of Sales at Less 
than Fair Value, 59 FR 66931, 66936 (Dec. 28, 1994).
    Under the circumstances presented in this review, using a weight 
averaging methodology based on the facts on the record (Saha Thai's 
verified sales quantities to the resellers, see Saha Thai Verification 
Report at 15 and 16) is a reasonable approach that addresses the intent 
of the statute that normal value be based on sales of subject 
merchandise manufactured by the producer of subject merchandise sold to 
the United States. Therefore, for purposes of these final results, we 
have continued to use the simple average by model of the monthly 
quantities sold by Saha Thai to the resellers.

Comment 11

    Petitioners argue that interest costs on coil inputs should be 
treated as a cost of manufacturing, as opposed to G&A costs, in 
accordance with Saha Thai's internal cost accounting procedures and 
generally accepted accounting principles in Thailand. Petitioners note 
that Saha Thai's practice of deducting these interest costs from the 
cost of coil and transferring them to G&A is consistent with the 
Department's treatment of these costs in the original investigation and 
previous reviews. However, petitioners claim that in accordance with an 
amendment to the statute at section 773(f)(1)(A) of the Act, these 
interest costs must be treated in the same manner as Saha Thai treats 
them internally. Petitioners argue that there is a presumption that the 
Department shall use the respondent's normal cost allocations based on 
how they are kept in its records, unless they are determined to be 
unreasonable and distortive of the dumping margin. Moreover, argue 
petitioners, these interest costs are directly attributable to the 
acquisition of hot-rolled coil inventories. For these reasons, 
petitioners contend that interest costs on coil inputs should be 
treated as a cost of manufacturing.
    Saha Thai responds that interest costs on coil inputs should be 
treated as they always have in this proceeding and according to 
standard Department practice. Saha Thai claims that the Department 
treats finance expenses as fungible business expenses, citing Silicon 
Metal from Brazil, 61 FR 46,763, 46,773 (Sept. 5, 1996) and Tapered 
Roller Bearings from China, 62 FR 6189, 6201 (Feb. 11, 1997). Saha Thai 
contends that such expenses were treated as a general expense of 
operating the company in previous reviews, and that nothing in the 
revisions to the antidumping law requires a change. Saha Thai stated 
that for purposes of the cost questionnaire response it transferred the 
coil finance costs from the purchases account to its reported selling, 
general (including financing expense) and administrative expense 
calculations.

Department's Position

    We disagree with petitioners that interest costs on coil inputs 
should be treated as a cost of manufacturing, as opposed to G&A costs. 
As we explained in less than fair value determination, the Department 
considers ``the financing expense of assets, long-term or short-term, 
to be fungible and, therefore, a general expense of operating the 
company.'' Circular Welded Carbon Steel Pipes and Tubes from Thailand; 
Final Determination of Sales at Less than Fair Value, 51 FR 3384, 3386 
(Jan. 27, 1986). See also Titanium Sponge from Japan; Final Results of 
Antidumping Administrative Review, 55 FR 42227 (Oct. 18, 1990). In its 
July 30, 1997 supplemental questionnaire response at 27, Saha Thai 
stated that, ``the finance charge is based upon payment terms.'' Saha 
Thai provided further detail in its October 31, 1997, second 
supplemental questionnaire response: ``[t]he expense clearly is an 
interest cost directly associated with Saha Thai's extended accounts 
payable on purchases of coil. If Saha Thai did not receive financing 
from its coil suppliers, it would have to borrow from banks to pay them 
at an earlier date.'' Thus, by incurring these interest costs, Saha 
Thai made a deliberate decision to delay payment of its payables (in 
effect borrowing money from its suppliers). Section 773(f)(1)(A) states 
that costs shall normally be calculated based on the records of the 
respondent where those records are prepared in accordance with home 
country GAAP and reasonably reflect the cost of producing the 
merchandise. While Saha Thai records these types of expenses as cost of 
manufacturing in its normal books and records which are prepared in 
accordance with GAAP of Thailand, our longstanding practice has been to 
treat these types of interest costs as general expenses and we find no 
basis to alter this approach in these final results. Therefore, the 
Department will continue to classify these interest costs on coil 
inputs as a financing expense, and continue to include these costs in 
our calculation as reported by Saha Thai.

Final Results of the Review

    As a result of this review, we have determined that the following 
weighted-average dumping margin exists for the period March 1, 1996, 
through February 28, 1997:

------------------------------------------------------------------------
                                                                Margin
          Manufacturer/Exporter                 Period        (percent)
------------------------------------------------------------------------
Saha Thai................................    3/1/96-2/28/97         1.92
------------------------------------------------------------------------

    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
shall issue appraisement instructions directly to the Customs Service. 
For assessment purposes, we have calculated importer-specific duty 
assessment rates for the merchandise based on the ratio of the total 
amount of antidumping duties calculated for the examined sales during 
the POR to the total entered value of sales examined during the POR. As 
a result of this review, we have determined that the importer-specific 
duty assessments rates are necessary.
    Furthermore, the following deposit requirements shall be effective 
upon publication of this notice of final results of review for all 
shipments of certain welded carbon steel pipes and tubes from Thailand, 
entered, or withdrawn from warehouse, for consumption on or after the 
publication date, as provided for by section 751(a)(1) of the Tariff 
Act: (1) the cash deposit rate for the reviewed company will be the 
rate stated above; (2) for previously investigated companies not listed 
above, the cash deposit rate will continue to be the company-specific 
rate published for the most recent period; (3) if the exporter is not a 
firm covered in these reviews, or the original LTFV investigations, but 
the manufacturer is, the cash deposit rate will be the rate established 
for the most recent period for the manufacturer of the merchandise; and 
(4) if neither the exporter nor the manufacturer is a firm covered in 
these reviews, the cash

[[Page 55591]]

deposit rate for this case will continue to be 15.67 percent, the ``All 
Others'' rate made effective by the LTFV investigation. These deposit 
requirements shall remain in effect until publication of the final 
results of the next administrative review.
    This notice serves as a final reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective order (``APO'') of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with section 353.34(d) of the Department's 
regulations. Timely notification of return/destruction of APO materials 
or conversion to judicial protective order is hereby requested. Failure 
to comply with the regulations and the terms of an APO is a 
sanctionable violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22 
of the Department's regulations.

    Dated: October 5, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-27876 Filed 10-15-98; 8:45 am]
BILLING CODE 3510-DS-P