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

DEPARTMENT OF COMMERCE

International Trade Administration

A-583-815

Certain Welded Stainless Steel Pipe From Taiwan; Final Results of

Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of administrative review.

-----------------------------------------------------------------------

SUMMARY: On January 9, 1998, the Department of Commerce (the

Department) published in the Federal Register the preliminary results

of the 1995-1996 administrative review of the antidumping duty order on

certain welded stainless steel pipe from Taiwan (A-583-815). This

review covers one manufacturer/exporter of the subject merchandise

during the period December 1, 1995 through November 30, 1996.

We gave interested parties an opportunity to comment on the

preliminary results. Although, based upon our analysis of the comments

received, we have changed the results from those presented in our

preliminary results of review, a de minimis dumping margin still exists

for Ta Chen's sales of welded stainless steel pipe (WSSP) in the United

States. Accordingly, we will instruct the U.S. Customs Service to

assess antidumping duties on entries of Ta Chen merchandise during the

period of review, in accordance with the Department's regulations (19

CFR 353.6).

EFFECTIVE DATE: July 16, 1998.

FOR FURTHER INFORMATION CONTACT: Robert James at (202) 482-5222 or John

Kugelman at (202) 482-0649, Antidumping and Countervailing Duty

Enforcement Group III, Import Administration, International Trade

Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, NW, Washington, DC 20230.

Applicable Statute and Regulations: Unless otherwise indicated, all

citations to the Tariff Act of 1930, as amended (the Tariff Act), are

to the provisions effective January 1, 1995, the effective date of the

amendments made to the Tariff Act by the Uruguay Round Agreements Act

(URAA). In addition, unless otherwise indicated, all citations to the

Department's regulations are to the regulations codified at 19 CFR Part

353 (April 1, 1997).

SUPPLEMENTARY INFORMATION:

Background

On December 30, 1992, the Department published in the Federal

Register the antidumping duty order on welded stainless steel pipe

(WSSP) from Taiwan (57 FR 62300). On December 3, 1996, the Department

published the notice of ``Opportunity to Request Administrative

Review'' for the period December 1, 1995 through November 30, 1996 (61

FR 64051). In accordance with 19 CFR 353.22(a)(1) (1997), respondent Ta

Chen Stainless Pipe Co., Ltd. and its wholly-owned U.S. subsidiary, Ta

Chen International (collectively, Ta Chen), requested that we conduct a

review of their sales. On January 17, 1997, we published in the Federal

Register our notice of initiation of this antidumping duty

administrative review covering the period December 1, 1995 through

November 30, 1996 (62 FR 2647).

[[Page 38383]]

Because it was not practicable to complete this review within the

normal time frame, on July 24, 1997, we published in the Federal

Register our notice of extension of time limits for this review (62 FR

39824). We published the preliminary results of this review in the

Federal Register on January 9, 1998 (Certain Welded Stainless Steel

Pipe From Taiwan; Preliminary Results of Administrative Review, 63 FR

1437 (Preliminary Results)). We published our notice of extension of

time limits for these final results in the Federal Register on March

17, 1998 (63 FR 13032).

Furthermore, on January 12 through January 20, 1998, the Department

conducted a verification of Ta Chen's home market sales data at Ta

Chen's headquarters in Tainan, Taiwan. We also verified Ta Chen's U.S.

sales data at the premises of Ta Chen International on January 26

through January 29, 1998 (see ``Results of Verification,'' below). The

full results of our verification are detailed in the Department's

verification reports. Public versions of these, and all public

documents referenced in this notice, are on file in Room B-099 of the

main Commerce building.

Petitioners and Ta Chen timely filed case briefs on May 14, 1998;

Ta Chen replied with its rebuttal brief dated May 21, 1998.

The Department has now completed this review in accordance with

section 751 of the Tariff Act.

Scope of the Review

The merchandise subject to this administrative review is certain

welded austenitic stainless steel pipe (WSSP) that meets the standards

and specifications set forth by the American Society for Testing and

Materials (ASTM) for the welded form of chromium-nickel pipe designated

ASTM A-312. The merchandise covered by the scope of the order also

includes austenitic welded stainless steel pipes made according to the

standards of other nations which are comparable to ASTM A-312.

WSSP is produced by forming stainless steel flat-rolled products

into a tubular configuration and welding along the seam. WSSP is a

commodity product generally used as a conduit to transmit liquids or

gases. Major applications for WSSP include, but are not limited to,

digester lines, blow lines, pharmaceutical lines, petrochemical stock

lines, brewery process and transport lines, general food processing

lines, automotive paint lines, and paper process machines.

Imports of WSSP are currently classifiable under the following

Harmonized Tariff Schedule of the United States (HTS) subheadings:

7306.40.5005, 7306.04.5015, 7306.40.5040, 7306.40.5065, and

7306.40.5085. Although these subheadings include both pipes and tubes,

the scope of this investigation is limited to welded austenitic

stainless steel pipes. Although the HTS subheadings are provided for

convenience and Customs purposes, our written description of the scope

of this order is dispositive.

The period for this review is December 1, 1994 through November 30,

1995. This review covers one manufacturer/exporter, Ta Chen.

Results of Verification

As provided in section 782(i) of the Tariff Act, we verified

information provided by the respondent using standard verification

procedures, including on-site inspection of Ta Chen's facilities in

Tainan, Taiwan and Ta Chen International's headquarters in Long Beach,

California, the examination of relevant sales and financial records,

and selection of original documentation containing relevant

information. Our verification results for the home market and U.S.

verifications are outlined in public versions of, respectively, the

Home Market Verification Report and the U.S. Verification Report,

available to the public in Room B-099 of the main Commerce building. In

preparing for verification Ta Chen discovered minor corrections which

it presented to the Department's verifiers at the start of the home

market and U.S. verifications. In addition, as noted in the ``Analysis

of Comments'' section, below, our verifications revealed other minor

inaccuracies in Ta Chen's submitted data. Where appropriate, we have

adjusted Ta Chen's reported sales data to reflect these corrections.

Analysis of Comments Received

Comment 1: Export Price Versus Constructed Export Price Sales

Petitioners take issue with the determination in the Preliminary

Results to treat all of Ta Chen's U.S. sales as export price (EP)

sales, as defined in section 772(a) of the Tariff Act. Rather,

petitioners maintain, Ta Chen's so-called ``back-to-back'' sales

through Ta Chen International (TCI) properly are considered constructed

export price (CEP) transactions. Petitioners assert that the Department

customarily examines the activities of the affiliated U.S. importer in

determining whether U.S. sales should be classified as EP or CEP sales

using a three-prong test: (i) Whether the merchandise is shipped

directly from the manufacturer to the unaffiliated purchaser without

entering the physical inventory of the U.S. affiliate; (ii) whether

direct shipment from the manufacturer to the unaffiliated purchaser is

the customary channel of sales for the subject merchandise; and (iii)

whether the U.S. selling agent acted merely as a processor of sales-

related paperwork and a communication link between the manufacturer and

the unaffiliated purchaser. See Petitioners' May 14, 1998 Case Brief

(Case Brief) at 2, citing Roller Chain, Other Than Bicycle Chain, From

Japan, 63 FR 25450 (May 8, 1998) (Roller Chain). Even if the

transactions involving TCI meet the first two prongs of this test,

petitioners continue, record evidence establishes that, as to the third

point, TCI acted as more than just a paper processor or communications

link. Claiming that TCI is ``integrally involved'' with Ta Chen's U.S.

sales of subject merchandise, petitioners point out that U.S. customers

approach TCI, not Ta Chen, when seeking price quotes. Case Brief at 3,

quoting the Department's Home Market Verification Report at 12. The

verification report continues by stating that the president of Ta Chen

and TCI, Robert Shieh, responds directly to the unaffiliated U.S.

customer. According to petitioners, what happens when the customer

rejects the initial quote and further price negotiations are required

is not clear; petitioners therefore make the ``reasonable inference''

that TCI concludes any such negotiations itself on behalf of Ta Chen in

Taiwan. Id. at 4. Further, petitioners argue, Ta Chen ``glosses over''

Mr. Shieh's role in Ta Chen's U.S. sales; as noted, in addition to

being president of Ta Chen, Mr. Shieh is also president of TCI, and

spends a considerable amount of his time in the United States at TCI's

Long Beach headquarters. Petitioners suggest that this indicates that

Mr. Shieh is acting as president of TCI, not of Ta Chen in Taiwan, when

he negotiates U.S. sales of welded stainless steel pipe.

Petitioners stress that when viewing sales transactions involving a

U.S. firm affiliated with the exporter, the Department will presume

that the transactions are CEP sales unless the record indicates that

the affiliate's role in the sale was ``incidental or ancillary.'' Case

Brief at 5, citing Certain Cold-Rolled and Corrosion-Resistant Carbon

Steel Flat Products From Korea, 63 FR 13170, 13177 (March 18, 1998)

(Korean Steel III). When viewed in its totality, petitioners aver, the

evidence demonstrates that TCI's role was more than ancillary and,

thus, Ta Chen's U.S.

[[Page 38384]]

sales should be treated as CEP sales. For example, petitioners argue,

TCI purchases subject pipe from Ta Chen and assumes ownership and risk

of loss, and TCI, not Ta Chen in Taiwan, actually enters into the sales

contract with the unaffiliated U.S. customers. This situation,

petitioners maintain, is analogous to that found in Korean Steel III

where, as here, the U.S. affiliate acted as the conduit for the foreign

parent's U.S. sales, the U.S. affiliate entered into the sales

contracts with unaffiliated U.S. customers, the U.S. affiliate played a

key role in all sales activities (such as issuing invoices, collecting

payment, financing the sale, etc.), and the U.S. affiliate incurred

``significant selling expenses in the United States.'' Case Brief at 6.

In light of TCI's ``very meaningful'' role in Ta Chen's U.S. sales,

petitioners conclude, the Department should treat all of Ta Chen's

sales as CEP transactions.

Ta Chen counters that the Department's treatment of Ta Chen's U.S.

sales as EP transactions was the correct interpretation of the

statutory definition of EP sales. Furthermore, Ta Chen insists, nothing

found at verification contradicted Ta Chen's long-standing assertion

that its U.S. sales comprised EP (or, under the pre-URAA statute,

``purchase price'') transactions. Citing Extruded Rubber Thread From

Malaysia, 62 FR 33588 (June 20, 1997) (Extruded Rubber), Ta Chen argues

that the Department examined a similar fact pattern surrounding so-

called ``back-to-back'' sales and concluded that where all three

conditions of the Department's test are met (i.e., the merchandise was

shipped directly to the unaffiliated U.S. customer, the channel of

distribution was normal for the parties involved, and the U.S. selling

agent acted as a communication link only), the transactions qualify for

treatment as EP sales. According to Ta Chen, Extruded Rubber also noted

that the Tariff Act defines EP as ``the price at which the subject

merchandise is first sold (or agreed to be sold) before the date of

importation by the producer or exporter of the subject merchandise

outside of the United States to an unaffiliated purchaser in the United

States * * * '' Ta Chen's Rebuttal Brief at 5, quoting Extruded Rubber

at 33597 (Ta Chen's emphasis).

Ta Chen submits that all of its sales of subject pipe during this

review were shipped directly from Ta Chen's Tainan plant to the

unaffiliated U.S. customer. This channel of distribution, Ta Chen

avers, has been customary between Ta Chen and its U.S. customers

``since well before the U.S. dumping matter began,'' noting that it

employed ``back-to-back'' sales as one of its major channels of

distribution prior to the 1991 filing of the antidumping petition.

As to the third test, whether Ta Chen International acted merely as

a processor of sales-related documents and communications link between

Ta Chen and its U.S. customers, Ta Chen insists that TCI's activities

are even less extensive than those typically cited by the Department as

possible indicators that a U.S. affiliate played a more substantial

part in the sales in question. For example, Ta Chen continues, the

Department's January 22, 1998 Antidumping Manual suggests that

functions ``such as the administration of warranties, advertising, in-

house technical assistance, and the supervision of further

manufacturing may indicate that the [U.S.] agent is more than the sales

facilitator envisioned for EP sales.'' Rebuttal Brief at 5, quoting

Antidumping Manual, Chapter 7 (Ta Chen's emphasis). That TCI engages in

none of the activities suggested as indicating sales might be

considered CEP transactions, Ta Chen maintains, further supports the

Department's preliminary determination that these sales warranted EP

treatment.

Furthermore, Ta Chen continues, in Extruded Rubber the Department

found sales to be EP transactions ``irrespective of any involvement in

the pricing of these sales by the U.S. subsidiary.'' Rebuttal Brief at

6. In Ta Chen's view the key determinant in the EP versus CEP analysis

is the statute's focus on whether the ``subject merchandise is first

sold (or agreed to be sold) before the date of importation,'' as is the

case in the instant review. Ta Chen submits that for its U.S.

transactions the subject merchandise was first sold to the unaffiliated

U.S. customer before importation and subsequently shipped directly to

that customer, pointing to the purchase orders and shipment dates as

confirmation. Thus, Ta Chen argues, the controlling statutory language

defines these as EP sales. As to Robert Shieh's involvement in setting

prices, Ta Chen argues in both its case and rebuttal briefs that Mr.

Shieh ``acts under the direction of Ta Chen Taiwan's Board of

Directors'' which has ``directed Mr. Shieh to set U.S. prices based on

cost of production in Taiwan and Ta Chen's home market prices * * *''

Ta Chen's Case Brief at 3 and 4; Ta Chen's Rebuttal Brief at 7, quoting

Ta Chen's supplemental response at 253. ``Robert Shieh's authority,''

Ta Chen asserts, ``flows from Ta Chen Taiwan,'' and not from TCI.

Rebuttal Brief at 9. In any event, Ta Chen concludes, a U.S.

affiliate's active participation in the sales process is insufficient

grounds for treating sales as EP transactions where the affiliate lacks

the ability to set prices or terms of sale. Id. at 8, citing Certain

Stainless Steel Wire Rods From France, 58 FR 68865 (December 29, 1993).

Ta Chen also contests several factual conclusions posited in

petitioners case brief. According to Ta Chen, TCI passed requests for

quotes from U.S. customers to Ta Chen Taiwan, a role consistent with

that of a paper processor. Ta Chen also insists that the amount of time

Mr. Shieh spends in the United States is a ``personal decision''

relating to his family which is irrelevant to the Department's

antidumping analysis. Further, that TCI actually purchases the subject

merchandise and then enters into contracts to sell it to unaffiliated

U.S. customers (in ``back-to-back'' sales transactions) is the same

situation found in Extruded Rubber and Cold-Rolled and Corrosion-

Resistant Carbon Steel Flat Products From Korea, 62 FR 18404 (April 15,

1997) (Korean Steel II), where the Department analyzed the sales in

question as EP transactions. Finally, Ta Chen rejects petitioners'

``speculative claims'' that TCI takes over and concludes price

negotiations for Ta Chen's U.S. sales independently of Ta Chen Taiwan

in those cases where a customer rejects Ta Chen's initial price

offering.

Furthermore, Ta Chen argues, petitioners reliance on Korean Steel

III is misplaced, noting several quantitative and qualitative

differences between the activities of TCI when compared to those of the

affiliated U.S. resellers in Korean Steel III. Ta Chen suggests that in

the latter case, U.S. customers seldom had contact with the foreign

producer, nor did the foreign producer set prices for U.S. sales.

Furthermore, the U.S. affiliates financed U.S. sales by borrowing to

finance accounts receivable. These facts, Ta Chen insists, do not

obtain in the instant review.

Assuming, arguendo, that Ta Chen's sales are properly considered

CEP transactions, Ta Chen suggests that the record contains sufficient

information to make any adjustments to U.S. price and normal value

required under a CEP analysis. Furthermore, Ta Chen argues that should

the Department elect to treat Ta Chen's sales as CEP transactions, Ta

Chen should be granted a CEP offset in lieu of a level-of-trade

adjustment, as its home market sales represent a more advanced stage of

marketing than the Ta Chen--TCI CEP level of trade. Ta Chen makes

further comments regarding the Department's treatment of sales to

specific customers in prior review periods. As these customers do not

appear in this review, any comments

[[Page 38385]]

concerning sales made in prior PORs are thus irrelevant to this review

and are not addressed here.

Department's Position

We disagree with petitioners, and agree, in part, with respondent

that Ta Chen's U.S. sales in this review warrant treatment as EP

transactions. As a threshold matter, while we agree with Ta Chen that

its U.S. sales in this review warrant EP treatment, we disagree with Ta

Chen's assertions that the statute requires the Department in every

instance to treat sales which precede importation as EP sales. Rather,

while the statute defines EP as involving sales made prior to

importation, the relevant statutory definition of CEP states clearly

that

* * *``constructed export price'' means the price at which the

subject merchandise is first sold (or agreed to be sold) into the

United States before or after the date of importation by or for the

account of the producer or exporter of such merchandise or by a

seller affiliated with the producer or exporter, to a purchaser not

affiliated with the producer or exporter * * *

See Section 772(b) of the Tariff Act (emphasis added).

Thus, nothing in the statute requires the Department to treat as EP

transactions all sales which happen to precede the date of importation.

Rather, sales taking place prior to importation may be either EP or CEP

sales, given the specific circumstances surrounding the transactions.

In the instant review, as we stated above, the evidence on record does

not support a reclassification of Ta Chen's U.S. sales from EP to CEP

transactions. Nothing in the statute, however, precludes the Department

from doing so, where appropriate.

To ensure proper application of the statutory definitions, where a

U.S. affiliate is involved in making a sale, we consider the sale to be

CEP unless the record demonstrates that the U.S. affiliate's

involvement in making the sale is incidental or ancillary. See Korean

Steel III, 63 FR 13170, 13177 (March 18, 1998). Whenever sales are made

prior to importation through an affiliated entity in the United States,

the Department applies a three-pronged test to determine whether to

treat such sales as EP, as follows: (i) Whether the merchandise was

shipped directly to the unaffiliated buyer, without first being

introduced into the affiliated selling agent's inventory; (ii) whether

direct shipment from the manufacturer to the unaffiliated buyer was the

customary channel for sales of this merchandise between the parties

involved; and (iii) whether the affiliated selling agent located in the

United States acts only as a processor of sales-related documentation

and communication link between the foreign producer and the

unaffiliated purchaser. See, e.g., PQ Corp. v. U.S., 652 F. Supp. 724,

731 (CIT 1987) and Outokumpu Copper Rolled Products v. United States,

829 F. Supp. 1371, 1379 (CIT 1993). Where all three of these criteria

are met, we consider the exporter's sales functions to have been

relocated geographically from the country of exportation to the United

States, where the sales agent performs them. See, e.g., Large Newspaper

Printing Presses and Components Thereof, Whether Assembled or

Unassembled, From Germany, 61 FR 38166 (July 23, 1996), New Minivans

From Japan, 57 FR 21937 (May 26, 1992), and Certain Internal-Combustion

Forklift Trucks From Japan, 53 FR 12552 (April 15, 1988). Furthermore,

as we stated in Stainless Steel Wire Rod From Spain, 63 FR 10849 (March

5, 1998) (Preliminary Determination), where ``the activities of the

U.S. affiliate are ancillary to the sale (e.g., arranging

transportation or customs clearance), we treat the transactions as EP

sales. Where the U.S. affiliate is substantially involved in the sales

process (e.g., negotiating prices, performing support functions), we

treat the transactions as CEP sales.'' 63 FR 10849, 10852; see also

Korean Steel III.

As for the first criterion in this case, i.e., direct shipment to

the unaffiliated U.S. customer, no party to these proceedings has

presented any evidence to challenge Ta Chen's statements that in the

instant review Ta Chen shipped the subject merchandise directly to the

unaffiliated U.S. customer's location (or to the U.S. port designated

by the customer) without first introducing the merchandise into TCI's

physical inventory. Further, we discovered no evidence at verification

to suggest that the merchandise was shipped in any other fashion.

With respect to the second criterion, i.e., whether direct shipment

to the customer is the customary channel of trade, we agree with Ta

Chen. No evidence on record contradicts Ta Chen's statement that direct

shipment was the normal course of business long before this dumping

matter began. See Ta Chen's April 14, 1997, questionnaire response at 5

and 6. In the most-recently-concluded past review, the Department has

treated Ta Chen's sales as EP sales based, in part, upon direct

shipment from Ta Chen to the U.S. customer. See Certain Welded

Stainless Steel Pipe From Taiwan; Preliminary Results of Administrative

Review, 62 FR 1435, 1436.

With respect to the third criterion, i.e., whether Ta Chen

International (TCI) acted as a processor of sales-related documentation

and a communication link with the unaffiliated purchaser, the facts on

record indicate that TCI's role is ancillary to the sales process with

respect to sales of subject merchandise during this administrative

review. In this review TCI did not play a key role in the sales

negotiation process, nor did TCI play a major role in the selling

activities in the United States. Accordingly, we have continued to

accord EP treatment to Ta Chen's sales in this review.

In this case the available evidence of record indicates that Ta

Chen in Taiwan is responsible for setting the prices of U.S. sales,

acting through its president, Robert Shieh.1 Ta Chen sets

base, or minimum, prices using its costs of production in Taiwan. Ta

Chen responds to requests for price quotes, and Ta Chen officials in

Tainan develop new quotes for any sizes or schedules of pipe not found

on Ta Chen's prepared lists. See, e.g., Ta Chen's supplemental response

at 79, n. 12, and U.S. Verification Report at 10. Further, Ta Chen

knows the final price to the U.S. customer at the time it sets its

transfer prices between Ta Chen and TCI, and the record clearly

indicates that TCI has no say in the prices of these

transactions.2 Thus, the subject merchandise is first sold

to the unaffiliated customer in the United States before it is sold to

the affiliated distributor, TCI. There is no record evidence, either

submitted by the parties or generated at verification, to indicate that

TCI has any independent authority to negotiate or set prices for direct

sales of subject merchandise in the United States. For example, the

Home Market Verification Report at 13 notes that the vice-president of

TCI will not quote prices to customers; rather, he defers to Mr. Shieh,

whether the latter is in Long Beach or in Tainan. This is decidedly not

the case for TCI's sales of non-subject merchandise from its

[[Page 38386]]

warehouse facilities. The U.S. Verification Report notes that:

---------------------------------------------------------------------------

\1\ While we agree with Ta Chen that in setting prices Mr. Shieh

is acting principally in his role as president of Ta Chen, rather

than as president of TCI, we reject Ta Chen's dictum that he ``acts

under the direction of Ta Chen's Board of Directors,'' or that the

Board of Directors issues specific instructions to Mr. Shieh as to

how to set prices. Rather, the record evidence, including Mr.

Shieh's statements at verification, makes abundantly clear that Mr.

Shieh acts on his own authority with no direction or input whatever

from any other member of Ta Chen's Board.

\2\ That TCI has no say whatever in the profitability of its own

sales of subject merchandise, by determining the amount of a price

markup, is further evidence that the entire sales process is

controlled by Ta Chen in Taiwan. See Korean Steel III at 13183.

[c]ustomers' requests for price quotes are handled by TCI and

not forwarded to Ta Chen. A number of officials at TCI are

authorized to provide quotes to customers for these sales * * *. The

customer's [purchase order] is handed directly to TCI's shipping

---------------------------------------------------------------------------

department for preparation and shipment.

U.S. Verification Report at 8 (emphasis added).

Moreover, the authority to set prices as indicated above is further

evidenced by the ways in which the companies set prices for ``back-to-

back'' sales and sales out of TCI's inventory. The prices of TCI's

sales from its Long Beach inventory are set on an entirely different

basis than prices for direct shipments. Prices for products sold out of

inventory are derived from a multiplier of a domestic mill's list

prices, whereas prices for direct shipments are computed from Ta Chen's

cost of production. Finally, unlike the case of Korean Steel III, in

the present case unaffiliated U.S. customers maintain direct contact

with the foreign exporter or producer, Ta Chen.

With respect to any subsequent price negotiations that may become

necessary when a customer rejects Ta Chen's initial quote, it is clear

from the record that in Ta Chen's ``back-to-back'' sales arrangement no

official other than Mr. Shieh is authorized to provide prices, grant

discounts, or allow credits for damaged or defective goods. After

discussions with company officials at verifications in Tainan and Long

Beach, it is clear that TCI company officials are not authorized to

negotiate prices. See, e.g., Home Market Verification Report at 13

(``Using the same pricing scheme (cost + GNA + profit), Ta Chen Taiwan

will provide a price quote''), and U.S. Verification Report at 3

(``While TCI's vice-president, James Chang, is nominally head of the

pipe and fittings sales division, Mr. Chang himself averred that Mr.

Shieh `handles all the [pipe and pipe fittings] sales' '').

As for petitioners' observation that Ta Chen resumed sales of

subject merchandise from inventory immediately following the instant

POR, thus supporting a conclusion that Ta Chen's sales in this POR

should be considered CEP transactions, we find this fact does not

relate to the issue of how direct ``back-to-back'' sales were

negotiated during the instant review. As we have noted, sales from

inventory follow an entirely different course, and are concluded by

different individuals, using different pricing formulae, than are Ta

Chen's direct ``back-to-back'' sales.

Further, we did not include in our analysis the fact that TCI did

not engage in such activities as warranties, advertising, in-house

technical assistance and supervision of further manufacturing, as was

the case, for example, in Korean Steel III and Certain Corrosion-

Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon

Steel Plate From Canada, 63 FR 12725 (March 16, 1998). Although these

types of activities are clearly selling functions, the issue of who

performs such activities is only relevant where such activities are in

fact performed for the sale of the subject merchandise. In this case,

neither TCI nor Ta Chen engaged in such activities with respect to

sales of the subject merchandise.3

---------------------------------------------------------------------------

\3\ Ta Chen Taiwan does provide minimal advertising in the form

of product brochures; no other advertising medium is employed either

by Ta Chen or by TCI.

---------------------------------------------------------------------------

The purpose of this portion of the test is to determine which

entity performs the primary selling functions pertaining to the sale of

the subject merchandise during the POR. Accordingly, that analysis is

conducted on a case-by-case basis and is based upon the actual selling

functions performed in each case. In the present case the selling

activities performed for the sale of this commodity product, for both

Ta Chen and TCI combined, appear to be minimal.

Finally, during this review, we note that TCI engaged in the

process of issuing invoices, collecting payment, paying antidumping

duty deposits, and taking title to the subject merchandise after entry

into the United States. We do not find that these activities alone are

sufficient to warrant treatment of such sales as CEP transactions.

Rather, consistent with our past precedent in these matters, such

activities are fully consistent with those of the selling agent that

takes over the sales functions which have been ``relocated

geographically from the country of exportation to the United States,

where the sales agent performs them.'' Large Newspaper Printing Presses

and Components Thereof, Whether Assembled or Unassembled, From Germany,

61 FR 38166 (July 23, 1996).

Comment Two: U.S. Packing Costs

Petitioners charge Ta Chen with understating the cost of packing

materials (specifically, wooden crates) used to package shipments for

export to the United States. According to petitioners, the Department's

Home Market Verification Report notes that this understatement occurred

on four of the five sales transactions examined at verification.

Petitioners urge the Department to make an upward adjustment to Ta

Chen's export packing materials equal to the average percentage

difference between the reported material expenses and the actual

amounts found at verification.

Also understated, petitioners contend, was Ta Chen's packing labor

for export sales. Petitioners note that Ta Chen's supplemental

questionnaire response and home market and U.S. sales listings

contained revised packing labor costs, with labor costs for home market

packing considerably higher than that for U.S. sales. Turning to the

Department's verification report, petitioners note that Ta Chen derived

these figures using estimates provided by Ta Chen's supervisor for

packing, but was unable to provide any documentation or worksheets to

support the supervisor's estimates. Petitioners suggest that Ta Chen

contradicted these estimates when it admitted at verification that

``export shipping, in fact, requires more steps and takes longer per

kilogram than home market shipments.'' Case Brief at 8, quoting the

Home Market Verification Report at 21 and 22 (petitioners' emphasis

omitted). Thus, petitioners insist, by Ta Chen's own admission the

actual packing labor costs for U.S. sales exceed actual packing labor

costs for domestic shipments within Taiwan. That statement is

consistent with the extra steps (such as packing the subject pipe in

wooden crates) required for export shipments. To correct this alleged

under-reporting of U.S. packing labor, petitioners argue, the

Department should use the ratio of U.S. and home market packing

material costs as the basis for adjusting upward Ta Chen's U.S. packing

labor expenses.

Ta Chen submits that its records do not permit a breakdown of

packing labor by market or product type and, therefore, it simply

allocated packing costs over the U.S. and home market weights packed.

According to Ta Chen, it included revised packing costs based on an

estimate of the relative time spent packing home market and export

shipments in its supplemental response as instructed by the Department

in its supplemental questionnaire. Ta Chen concedes that export

shipments require more packing materials and more steps to pack the

merchandise than do shipments within Taiwan. On the other hand, Ta Chen

continues, the larger quantities of merchandise packed for export work

to reduce the per-kilogram packing costs associated with export sales.

As for petitioners' comments concerning wooden crate expenses, Ta Chen

did not reply.

[[Page 38387]]

Noting that it can ``appreciate'' the Department seeking to

determine a more accurate method of calculating packing labor costs (by

investigating alternative reporting methodologies in its supplemental

questionnaire), Ta Chen expresses ``no objections'' to the Department's

use of the data originally submitted with Ta Chen's April 14, 1997

response. Ta Chen does, however, object to petitioners' proposal to

recalculate packing labor costs based on the ratio of packing material

costs for the respective markets, claiming that such an allocation

``makes no sense'' and has no rational connection to actual packing

labor time.

Department's Position

We agree with petitioners on both points. During verification we

compared the reported export packing material costs for the wooden

crates, reported as data field PACKM1P, to the actual per-kilogram

expenses as reflected in Ta Chen's ``Packing & Finished Goods Turn-in

Reports.'' For four of the five transactions examined Ta Chen's

reported packing material expenses were understated (wooden crate costs

for the remaining transaction were overstated). We conclude, therefore,

that Ta Chen's allocation methodology for reporting these expenses

bears little or no relationship to the manner in which these costs are

actually incurred. Therefore, we have recalculated Ta Chen's wooden

crate expenses using Ta Chen's own data gathered at verification. Based

on these data, we have adjusted PACKM1P upward by the average

percentage difference between the actual wooden crate costs reflected

in Ta Chen's shipping department records and the values reported in Ta

Chen's U.S. sales listing. See the Department's Final Results Analysis

Memorandum, July 8, 1998, a public version of which is on file in Room

B-099 of the main Commerce building.

With respect to packing labor, as noted in the Ta Chen Verification

Report, packing for export requires additional steps, additional

materials, and, consequently, additional time. However, Ta Chen used an

allocation methodology for its packing labor expenses which apportions

a significantly greater amount of these expenses to its home market

sales, based upon ``an estimate provided by the supervisor of the

packing division.'' Home Market Verification Report at 21. The

resultant home market and U.S. packing labor factors do not, as the

report notes, ``comport with Ta Chen's actual experience in packing

subject merchandise for the respective markets.'' That the report also

notes ``no discrepancies with this allocation'' cannot be read as the

Department's endorsement of the specific allocation methodology

selected. Rather, it indicates that Ta Chen used verifiably accurate

figures for total labor expense and total shipments in its allocation,

not that the allocation methodology itself was appropriate in this

case. In fact, as with the wooden crate expenses, Ta Chen's method of

reporting its packing labor expenses bears no relationship to the

manner in which Ta Chen actually incurred these expenses. Ta Chen's use

of an estimate to allocate packing labor expenses ``does not

necessarily mean that [Ta Chen] incurred the expenses differently'' due

to shipping for the home market versus for the export market. Tapered

Roller Bearings and Parts Thereof, Finished and Unfinished From Japan,

63 FR 2558, 2579 (January 15, 1998) (TRBs From Japan). Rather, the sole

support for this allocation is the allocation itself. When we asked

officials at Ta Chen to provide some support, in the form of internal

time studies, worksheets used by the supervisor in devising the

estimate, etc., Ta Chen responded that it had no such documentation.

Therefore, we have rejected Ta Chen's reporting of packing labor based

upon the unsupported estimate of the packing labor supervisor.

Likewise, while not as egregious, Ta Chen's original packing labor

methodology included in its April 14, 1997 response has the effect of

understating packing labor costs attributable to export shipments while

overstating these costs for home market shipments. We have stated in a

different context that we will not reject a respondent's allocation

methodologies in favor of the facts otherwise available if (i) a fully-

cooperating respondent is unable to report the requested information in

a more specific manner and (ii) the selected allocation methodology is

not unreasonably distortive. See Antifriction Bearings (Other Than

Tapered Roller Bearings), and Parts Thereof, From France, et al., 72 FR

2081, 2090 (January 15, 1997); see also TRBs From Japan, 63 FR 2558,

2566 (January 15, 1998). While we believe that Ta Chen has satisfied

the first test (Ta Chen's records kept in its ordinary course of

business do not readily permit a breakdown of home market versus export

packing labor), we cannot accept a resulting allocation methodology

which is unreasonably distortive. Allocating this expense so that home

market packing labor is equal to, or greater than, export packing

labor, while simultaneously acknowledging that the latter is more

labor-intensive, is unreasonably distortive.

As to Ta Chen's suggestion that it merely revised its labor costs

in response to the Department's request, we reject that assertion. The

Department's inquiry on this point, included in its October 9, 1997

supplemental questionnaire, reads:

It appears as though you have reported the same packing labor

costs for both H[ome] M[arket] and U.S. sales while your response

indicates that U.S. sales require additional labor (i.e., packing of

merchandise into wooden boxes). Please explain and, if necessary,

revise your labor costs to reflect this additional service for

export sales.

Supplemental Questionnaire at 8.

In response, Ta Chen argued that any differences in packing labor

expenses in the two markets would, of necessity, be de minimis, but

then proceeded to reallocate these expenses in such a fashion as to

actually decrease the portion of Ta Chen's labor expenses relating to

export shipments. As indicated above, we find that neither of Ta Chen's

selected reporting methodologies reflects its actual experience in the

packing and shipping of subject merchandise. Therefore, we have

recalculated Ta Chen's U.S. packing labor expenses. As facts available,

we relied on Ta Chen's own data submitted on the record of this review.

We compared the ratio of home market to U.S. packing material costs and

applied the resulting ratio to Ta Chen's reported packing labor. For a

discussion of the precise calculation of this revised packing labor

factor, please see the Department's Final Results Analysis Memorandum,

a public version of which is on file in Room B-099 of the main Commerce

building.

Comment Three: Import Duties and Cost of Production

Ta Chen imports stainless steel coil to its customs-bonded factory

in Tainan where it fashions the stainless steel into finished pipe

subject to the order and other merchandise (for example, stainless

steel pipe fittings) which is not subject to the order. It also resells

some stainless steel coil in the home market. For finished products

subsequently sold in Taiwan Ta Chen is liable for import duties (these

duties are forgiven if the finished products are exported). Petitioners

note that the Department in its Preliminary Results increased U.S.

price by the amount of Taiwan import duties because Ta Chen's home

market prices included these duties. If, petitioners suggest, Ta Chen's

home market prices included import duties on imported stainless steel

coil, Ta Chen's cost of production should also reflect

[[Page 38388]]

these home market duties to avoid comparison of duty-inclusive home

market prices to duty-exclusive costs of production. Petitioners

contend that such an approach would be consistent with the Department's

treatment of this identical issue in the final results of the 1994-1995

administrative review. Case Brief at 10 and 11, citing Certain Welded

Stainless Steel Pipe From Taiwan; Final Results of Administrative

Review, 62 FR 37543, 37555 (July 14, 1997) (Stainless Pipe From

Taiwan).

Ta Chen responds by confirming that its home market gross unit

prices include Taiwan import duties, and suggests that the Department

deduct these duties when calculating the net home market price used for

comparison to COP. This approach, Ta Chen avers, ``most accurately

determines the true profitability of each individual sale.'' Rebuttal

Brief at 17. The alternative, i.e., adding the import duties to Ta

Chen's reported costs of production, would, Ta Chen insists, result in

double-counting of these duties.

Department's Position

We agree with petitioners and with Ta Chen. As we stated in the

final results of the 1994-1995 administrative review, ``[w]e have

adjusted our calculation of the net home market price used in our COP

test to deduct the amount of the import duties.'' Stainless Pipe From

Taiwan 62 FR 37543, 37555 (July 14, 1997).

Consistent with Stainless Pipe From Taiwan, we conducted the cost

test on a duty-exclusive basis. Thus, no change is required to our

final margin computer program because the preliminary program already

deducts import duties from the net price used in the cost test. See the

Public Version of the Department's Preliminary Analysis Memorandum,

December 29, 1997, at Attachment One, line 148.

Comment Four: Duty Drawback

In addition to their comment regarding the treatment of import

duties in Ta Chen's cost of production, petitioners argue that Ta Chen

is not entitled to an upward ``duty drawback'' adjustment to EP.

Petitioners note that unlike in prior reviews, Ta Chen purchased much

of the stainless steel coil used to fabricate subject WSSP from

domestic sources; the Home Market Verification Report states that a

Taiwanese mill was Ta Chen's single largest coil supplier during the

POR. Case Brief at 12, quoting the Home Market Verification Report at

10. Furthermore, petitioners maintain, Ta Chen's own questionnaire

response indicated that Ta Chen ``does not pay any Taiwan import duties

on material used to make pipe.'' Id., quoting Ta Chen's April 14, 1997

response at 70. Petitioners contend that this issue did not arise in

prior reviews when Ta Chen imported all of the stainless steel coil

used to produce subject merchandise (and, thus, all home market sales

of finished pipe were subject to the Taiwanese import duties). In

contrast, petitioners argue, in the instant review the record indicates

that a portion of Ta Chen's input stainless steel coil came from

Taiwanese mills. In light of this change petitioners urge the

Department to ``conduct its standard analysis to determine whether Ta

Chen meets the requirements for a duty drawback adjustment.''

Petitioners point to Stainless Steel Bar From India, where the

Department stated that any duty drawback adjustment would depend upon a

finding that (i) the import duty and rebate are directly linked to, and

dependent upon, each other, and (ii) the company claiming the

adjustment can demonstrate sufficient imports of raw material to

account for the claimed drawback received. Case Brief at 13, quoting

Stainless Steel Bar From India; Final Results of Antidumping Duty

Administrative Review, 63 FR 13622, 13625 (March 20, 1998). According

to petitioners, information gathered at verification concerning Ta

Chen's purchases of stainless steel coil from domestic and off-shore

mills indicates that Ta Chen's imports of stainless steel coil were not

sufficient to account for the drawback applicable to Ta Chen's exports.

Furthermore, petitioners continue, it is reasonable to assume that Ta

Chen used domestic coil to produce subject pipe for sale in the home

market precisely because such coil would not be subject to Taiwan

import duties. Because Ta Chen did not meet the Department's

requirements for a duty drawback adjustment, petitioners conclude, the

Department should deny this adjustment in the final results of this

review.

Ta Chen insists it is entitled to a circumstance-of-sale adjustment

to account for home market import duties, just as a ``comparable

circumstances of sale [sic] adjustment is made for the U.S. import

duties Ta Chen pays on its U.S. sales.'' Rebuttal Brief at 17.

According to Ta Chen, its section B home market sales listing reflects

that, in fact, for most sales the unaffiliated customer paid the duties

(and, therefore, Ta Chen reported a value of zero for import duties).

In those instances where Ta Chen did pay the duties, it reported these

on a per-kilogram basis. Ta Chen notes that its home market gross unit

prices are reported inclusive of import duties.

As for petitioners' comments regarding the quantities of stainless

steel coil purchased by Ta Chen from domestic and off-shore mills, Ta

Chen points out that petitioners failed to note the ``enormous

quantity'' of stainless steel coil sold in coil form, i.e., as

purchased, by Ta Chen. Furthermore, the figures cited by petitioners

demonstrate the stainless steel coil imported by Ta Chen was more than

sufficient to account for the volume of pipe Ta Chen sold domestically

and for export.

Department's Position

We disagree with petitioners. Welded stainless steel pipe is

produced, essentially, from a single raw material: annealed and pickled

austenitic stainless steel sheet or plate in coil form. Traditionally

Ta Chen sourced all of its stainless steel coil from foreign mills;

during the instant period of review as well the vast majority of Ta

Chen's coil came from abroad. As Ta Chen's plant is a customs bonded

facility, imports of stainless steel coil are not subject to import

duties at the time of importation. Import duties are only owed at such

time as the finished merchandise enters Taiwan customs territory, i.e.,

it is sold in the home market. No import duties are collected if the

imported raw material is subsequently re-exported, whether in the form

of finished pipe or pipe fittings, or in cut-to-length or coil form. Ta

Chen's questionnaire responses and the information presented at

verification amply demonstrate the nature of these import duties and

the manner in which they are assessed. See, e.g., Ta Chen Verification

Report at 23 and 24. Further, Ta Chen satisfied the Department as to

the amount of such duties (``[w]e traced the total [duties paid] to Ta

Chen's monthly import duty for domestic sales report, general ledger,

and statement of checking account without discrepancy * * *''). Id. at

15. As the Court of International Trade has consistently held, ``there

is no requirement that [a] specific input be traced from importation

through exportation before allowing drawback on duties paid * * *''

See, e.g., Far East Machinery Co. v. U.S., 699 F. Supp. 309, 312 (CIT

1988); see also LaClede Steel Co. v. U.S., Slip Op. 94-160 (October 12,

1994) (LaClede Steel). Thus, we are convinced that the import duties

and the amount ``not collected by reason of the exportation of the

subject merchandise to the United States'' are directly linked to, and

dependent upon,

[[Page 38389]]

each other. See Section 772(c)(1)(B) of the Tariff Act.

As for the second prong of the test, whether there were sufficient

imports of raw materials to account for the drawback received, the

record evidence, including data obtained during verification, indicates

that Ta Chen more than satisfied this requirement. As Ta Chen notes in

its rebuttal brief, petitioners' comment fails to take into account the

volumes of stainless steel coil that Ta Chen re-sold in coil form in

the home market, or subsequently exported in coil form. Nor do

petitioners consider the volume of imported and domestic stainless

steel coil used to fabricate non-subject merchandise for the domestic

and export markets, such as stainless steel pipe fittings. In this

case, we believe that we have, as the Court stated in LaClede Steel,

``verified that [the respondent] imported sufficient raw materials to

account for duty drawback received on exports of pipe.''

Finally, with respect to Ta Chen's statement that it ``does not pay

any Taiwan import duties on material used to make pipe,'' the record

indicates clearly that Ta Chen does not pay these duties at the time of

importation of the stainless steel coil. Rather, these duties are due

when the finished product (e.g., welded stainless steel pipe) enters

Taiwan customs territory. Thus, we find this case analogous to Certain

Welded Carbon Steel Pipes and Tubes From India, where a similar import

duty scheme was described as presenting ``the rare situation in which,

rather than being rebated as is usually the case, the import duties

were actually `not collected, by reason of the exportation of the

subject merchandise to the United States.' '' 62 FR 47632, 47634

(September 10, 1997). As we concluded in that case, so we conclude

here: ``[t]his type of program falls within the express language of

section 772(c)(1)(B)'' of the Tariff Act. Accordingly, we have accepted

Ta Chen's claimed adjustment for duty drawback for these final results.

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

According to petitioners, Ta Chen's imputed credit expenses for

U.S. sales must be increased to include the costs of compensating

balances. Petitioners note that the Department's October 9, 1997

supplemental questionnaire and Ta Chen's October 31, 1997 supplemental

response both indicated that Ta Chen's reported imputed credit expenses

did not take into account these compensating balances. Further, Ta

Chen's supplemental response provided the amounts of these compensating

balances and the factor necessary to calculate revised imputed credit

expenses for U.S. sales. Petitioners urge the Department to implement

this revision for the final results of this review.

Ta Chen offered no rebuttal to this comment.

Department's Position

We agree with petitioners and have made the appropriate correction

to U.S. credit costs. We did this by multiplying the reported credit

amounts on Ta Chen's U.S. sales listing by the revised factor supplied

by Ta Chen to account for compensating balances.

Comment Six: Comments on Verification Reports

Ta Chen insists that the completeness of its U.S. sales listing was

fully verified through reconciliation of the reported sales values to

Ta Chen's audited financial statements, a process used by Ta Chen and

accepted by the Department in the past. Ta Chen takes issue with the

tone of the U.S. Verification Report which suggests that Ta Chen failed

to provide documentation of its reported U.S. sales quantities.

According to Ta Chen, its audited financial statements record total

sales value, but do not contain any information concerning sales

quantities. The Department, Ta Chen avers, has never insisted on a

separate confirmation of its sales quantities, once it had reconciled

successfully its overall sales value.

Ta Chen also maintains that it provided ample documentation at

verification to demonstrate that certain U.S. sales of pipe entered the

United States prior to the instant POR and, therefore, properly were

excluded from Ta Chen's section C U.S. sales listing.

Contrary to statements in the Ta Chen Verification Report, Ta Chen

submits, its packing personnel did not have difficulty bundling and

weighing subject pipe and, in any event, the weight figures reported to

the Department were taken from records kept in Ta Chen's normal course

of business.

With respect to home market sales to one affiliated customer,

Blossum, Ta Chen intimates that these sales represented an

insignificant portion of Ta Chen's home market sales and, thus,

Blossum's downstream sales would not be required for the Department's

analysis.

Ta Chen also commented on our description of the verification of

home market freight expenses. Ta Chen attributes the uncertainty of one

company official as to home market shipping distances to that ``high-

level'' official's unfamiliarity with the minutiae of domestic shipping

patterns; when the responsible company official addressed the issue, no

uncertainty remained. Also, Ta Chen sold its company-owned flatbed

truck at the midpoint of this POR. While Ta Chen's home market freight

expenses were not reduced by the value of refunded vehicle plate taxes

for the six months after Ta Chen sold its truck, Ta Chen suggests that

(i) the data exist to permit a recalculation and (ii) any such revision

would have a de minimis effect. As to fuel costs, Ta Chen takes issue

with the Home Market Verification Report's comment that Ta Chen could

not document these costs. According to Ta Chen, there were no

outstanding, unanswered requests for gasoline receipts or other

documentation at the close of verification.

Finally, Ta Chen makes a number of suggestions to correct

typographical errors in the reports.

Department's Position

While we agree in essence with many of Ta Chen's comments, we stand

by the verification reports as written. With respect to the

completeness test, we were unable to verify separately the quantities

reported in Ta Chen's U.S. sales listing. However, we did fully

reconcile the reported U.S. sales value to Ta Chen's and TCI's audited

financial statements and, furthermore, noted no discrepancies in an

unusually extensive random check of invoices and purchase orders issued

throughout the POR. The Department considers Ta Chen's home market and

U.S. sales quantities fully verified. We also agree with Ta Chen that

it satisfied the verifiers that certain sales of pipe entered the

United States prior to the POR, and that no outstanding questions on

this issue remained at the close of verification.

As for the comment on the facility with which Ta Chen's packing

personnel handled pipe at the scale, Ta Chen claimed at verification

that the weights reported for its home market and U.S. sales listings

were based on transaction-specific actual weights obtained, Ta Chen

claimed, by weighing each shipment of pipe as it was prepared for

dispatch. We asked to see this process in operation and returned to Ta

Chen's pipe mill. There Ta Chen personnel mishandled the pipe, had

difficulty gathering the proper number of pieces in a single bundle,

struggled to fasten the scale's sling to the scale's lift, and, using a

two-button switch box, nonetheless lowered the scale when they meant to

raise it, and raised it when they meant to lower it. Thus, we

[[Page 38390]]

stand by our characterization of this process as ``difficult.''

Ta Chen provided exhaustive explanations of its sales transactions

involving Blossom. We have no basis for rejecting Ta Chen's sales to

Blossom or for requiring that Ta Chen report Blossom's subsequent home

market sales. Similarly, we did not use the downstream U.S. sales

through one U.S. customer, Team Alloys, that Ta Chen subsequently

acquired, even though Ta Chen reported these downstream sales in a

separate section C computer file.

As for home market shipping expenses, we have used the expenses as

reported by Ta Chen, and have made no corrections in light of our

findings at verification.

Finally, the Department agrees with Ta Chen's suggested

typographical clarifications.

Final Results of Review

Based on our review of the arguments presented above, for these

final results we have made changes in our margin calculations for Ta

Chen. After comparison of Ta Chen's EP to normal value (NV), we have

determined that Ta Chen's weighted-average margin for the period

December 1, 1994 through November 30, 1995 is 0.10 percent.

The Department shall determine, and the U.S. Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between U.S. price and NV may vary from the percentage

stated above. The Department will issue appraisement instructions

directly to Customs.

Furthermore, the following deposit requirements will be effective

upon completion of the final results of this administrative review for

all shipments of WSSP from Taiwan entered, or withdrawn from warehouse,

for consumption on or after the publication of the final results of

this administrative review, as provided in section 751(a)(1) of the

Tariff Act:

(1) The cash deposit rate for Ta Chen will be zero percent, in

light of its de minimis weighted-average margin;

(2) For previously reviewed or investigated companies other than Ta

Chen, the cash deposit rate will continue to be the company-specific

rate published for the most recent period;

(3) If the exporter is not a firm covered in this review, a prior

review, or the LTFV investigation, but the manufacturer is, the cash

deposit rate will be the rate established for the most recent period

for the manufacturer of the merchandise; and

(4) If neither the exporter nor the manufacturer is a firm covered

in this or any previous review conducted by the Department, the cash

deposit rate will be 19.84 percent. See Amended Final Determination and

Antidumping Duty Order; Certain Welded Stainless Steel Pipe From

Taiwan, 57 FR 62300 (December 30, 1992). These deposit requirements,

when imposed, shall remain in effect until publication of the final

results of the next administrative review.

All U.S. sales by the respondent Ta Chen will be subject to one

deposit rate according to the proceeding. The cash deposit rate has

been determined on the basis of the selling price to the first

unrelated customer in the United States. For appraisement purposes,

where information is available, we will use the entered value of the

subject merchandise to determine importer-specific appraisement rates.

This notice also serves as a final reminder to importers of their

responsibility under 19 CFR 353.26 to file a certificate regarding the

reimbursement of antidumping duties prior to liquidation of the

relevant entries during this review period. Failure to comply with this

requirement could result in the Secretary's presumption that

reimbursement of the antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This notice also serves as a reminder to parties subject to

administrative protective orders (APOs) of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with 19 CFR 353.34(d). Timely written notification of

the return or destruction of APO materials, or conversion to judicial

protective order, is hereby requested. Failure to comply with the

regulations and the terms of an APO is a sanctionable violation.

This determination is issued and published in accordance with

sections 751(a)(1) and 777(l)(1) of the Tariff Act.

Dated: July 8, 1998.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

[FR Doc. 98-18882 Filed 7-15-98; 8:45 am]

BILLING CODE 3510-DS-P