Certain Circular Welded Carbon Steel Pipes and Tubes From Taiwan: Final Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-008]

Certain Circular Welded Carbon Steel Pipes and Tubes From Taiwan:

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.

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SUMMARY: On June 7, 1999, the Department of Commerce (the Department)

published the preliminary results of review of the antidumping duty

order on certain circular welded carbon steel pipes and tubes from

Taiwan (64 FR 30306). The review covers four manufacturer/exporters of

the subject merchandise to the United States and the period May 1, 1997

through April 30, 1998. The manufacturers covered are Yieh Hsing

Enterprise Co. Ltd. (Yieh Hsing), Yieh Loong Co., Ltd. (Yieh Loong),

Kao Hsing Chang Iron & Steel Corporation (KHC) and Yun Din Steel Co.,

Ltd. (Yun Din).

EFFECTIVE DATE: December 13, 1999.

FOR FURTHER INFORMATION CONTACT: Thomas Killiam or Michael J. Heaney,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, NW,

Washington, DC 20230; telephone (202) 482-3019 or 482-4475,

respectively.

Applicable Statute. Unless otherwise indicated, all citations to

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

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

amendments made to 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 351 (1998).

SUPPLEMENTARY INFORMATION:

Background

On June 7, 1999 the Department published the preliminary results of

the administrative review, and rescinded the review with respect to Far

East Machinery Co., Ltd., Sheng Yu Steel Co., Ltd., and Tai Feng

Industries. Certain Circular Welded Carbon Steel Pipes and Tubes From

Taiwan: Preliminary Results of Antidumping Duty Administrative Review

and Partial Recission of Review 64 FR 30306 (``Preliminary Results'').

We received comments from petitioners and respondents Yieh Hsing and

KHC. We received rebuttal comments from the petitioners and KHC. The

Department has now completed this review in accordance with section 751

of the Act.

Scope of the Review

Imports covered by this review are shipments of certain circular

welded carbon steel pipes and tubes. The Department defines such

merchandise as welded carbon steel pipes and tubes of circular cross

section, with walls not thinner than 0.065 inch and 0.375 inch or more

but not over 4\1/2\ inches in

[[Page 69489]]

outside diameter. These products are commonly referred to in the

industry as ``standard pipe'' and are produced to various American

Society for Testing Materials specifications, most notably A-53, A-120,

or A-135. Standard pipe is currently classified under Harmonized Tariff

Schedule of the United States (HTSUS) item numbers 7306.30.5025,

7306.30.5032, 7306.30.5040, and 7306.30.5055. Although the HTSUS

subheading is provided for convenience and customs purposes, the

written description of the merchandise under investigation is

dispositive.

Non-Responding Companies

Yun Din and Yieh Loong did not respond to our requests for

information. For the reasons discussed in the notice of preliminary

results, we have assigned these companies, as facts available, the

highest rate in any review of this order, 14.08%. See Preliminary

Results at 64 FR 30307.

Methodology

Except for the corrections of clerical errors discussed below we

did not change our method of analysis from the preliminary results. See

id. at 30307-30309. Thus, we applied the same methods with regard to

price and cost, and observed the requirements of section

773(a)(1)(B)(i) of the Act concerning level-of-trade analysis.

Comments: KHC

Comment 1: Petitioners argue with respect to KHC that the

Department should reject the cost-of-production (COP) offset claimed by

KHC unless ``heads and tails'' (pipe-end trimmings) were included in

the cost of raw input submitted by KHC. KHC counters that these items

were in fact included in its submitted costs.

Department's Position: There is no record evidence to indicate that

KHC omitted ``head and tails'' from its cost calculations. Accordingly,

we have allowed KHC's claimed offset.

Comment 2: KHC argues that the Department's application of facts

available in the preliminary results to COP and CV data for certain

product models which KHC did not produce during the POR is

inappropriate. KHC contends that it submitted data for alternate models

which are similar, and that the Department can and should use this

alternate data, rather than resorting to facts available. In its case

brief, KHC argues that it did not submit costs data for the sales in

question because ``* * * it would have been virtually impossible, given

the schedule, for KHC to use pre-POR cost data to determine actual

costs; * * *.'' KHC argues that the Department intended to use the

costs of similar home market models, and stated this intention in its

analysis memorandum. KHC argues that the Department accepted similar

substitute model data numbers from the other respondent in the case.

KHC also argues that the Department is incorrect to conclude that KHC

``failed to provide any costs of certain models'' since it provided

costs data of similar products.

KHC further argues that, assuming the use of facts available is

appropriate, the Department should not use as facts available the

highest reported costs among all costs reported for all categories of

products, because to do so results in the unintended use of adverse

facts available. The Department should, KHC argues, revise its

calculation programs in the final results to ensure that no adverse

facts available are applied to KHC's cost data.

Petitioners argue that if the Department recalculates the margin

applicable to KHC it should use values which petitioners put forward as

facts available data for material, labor, fixed and variable overhead,

interest and general & administrative expenses.

Department's Position: Where KHC failed to provide cost data, we

used the highest average costs of models for which KHC did provide

data. The facts which we used constitute partial adverse facts

available, and are also the least adverse facts available on the

record. We did not use petitioners' suggested alternative values

because petitioners did not provide any supporting calculations or

rationales, and because we were in possession of verified average cost

data from KHC's submission. For the reasons below we disagree with each

of respondent's arguments.

KHC withheld information requested by the Department, then

belatedly offered different information, which did not fulfill the

request, in an unacceptable format. Section 776(a)(2) of the Act

provides in part that if an interested party withholds information that

has been requested or fails to provide such information in a timely

manner or in the form or manner requested, subject to section 782 (d)

and (e), the Department shall use facts otherwise available in reaching

the applicable determination.

The Department's July 10, 1998 questionnaire stated at D-IV-A that

``(t)he COP file should contain unit cost information for the foreign

like product manufactured for sale in the foreign market.'' Section D

also contained the instruction: ``If you have any questions regarding

the appropriate cost calculation period for the merchandise under

review, notify the Department in writing before preparing your response

to this section of the questionnaire'' (emphasis in original). Appendix

II of the questionnaire specified the computer-readable format

required. The cover letter for the questionnaire further stated: ``If

you have any questions about these or any other matters, please contact

the official in charge.'' See Letter from Department to KHC, July 10,

1998, page 1.

Both supplemental cost questionnaires (January 21 and February 17,

1999) requested information concerning models with missing product

quantity data, which are the same models as those with missing costs.

KHC did not consult the Department on this matter, and did not explain

its omission of quantity or cost data until its April 13, 1999 addendum

to its April 12, 1999 supplemental response, where it mentioned in

passing that the models were not produced during the POR.

KHC was in a position either to provide the requested data or

consult with the Department on acceptable alternative approaches, but

did neither. By repeatedly choosing not to respond adequately to

repeated requests for the data, as outlined below, KHC failed to

cooperate to the best of its ability. The Department may therefore use

an inference that is adverse to the interests of KHC in selecting among

the facts otherwise available, per section 776(b) and well-established

Department practice. See, for example, Notice of Final Determination of

Sales at Less Than Fair Value: Hot-Rolled Flat-Rolled Carbon-Quality

Steel Products From Japan (64 FR 24329, 24348, May 6, 1999).

KHC's April 13, 1999 list of alternates was unusable for four main

reasons. First, it was not the information that we requested. Second,

KHC provided no supporting documentation or worksheets to establish

that its suggested alternate models were indeed the most similar, and

were not models the use of which would result in a lower margin. This

was a significant omission since the codes are complex, covering five

product attributes and extending to well over 100 pairs of sixteen-

digit model numbers. Many different models could potentially represent

similar models to those for which KHC failed to provide quantity and

cost information. Third, even assuming the Department determined that

it should use the list KHC proffered, the list did not include a

computer-compatible version, as required by the Department's

questionnaire, but merely an unclear set

[[Page 69490]]

of hand-written notes which had been faxed and photocopied multiple

times. Fourth, it is the responsibility of the respondent to submit its

cost data in a useable format to the Department and with the specified

documentation and worksheets. See Sugiyama Chain Co. Ltd. et v. United

States, 797 F. Supp. 989, 994-995 (CIT 1992). KHC's tactics amounted to

an improper attempt to shift the task of compiling and categorizing its

alternate home market models to the Department.

KHC's argument that it would have been ``impossible'' to supply the

requested data is unpersuasive: KHC never asked for assistance or for

more time to collect and report the cost data in question. Instead, KHC

chose to ignore both the instructions in the questionnaire, already

cited, and basic statutory guidelines: section 782(c)(1) of the Act

requires that an interested party promptly notify the Department if it

is unable to submit information in the form and manner requested, and

that it provide a ``full explanation and suggested alternate forms'' in

which it is able to provide the information. KHC provided no such

notification or explanation.

KHC's belated claim concerning lack of time is in any case belied

by the facts. The Department extended this review by 4 months on

January 6, 1999 (64 FR 860), granted each of KHC's four requests for

extensions of deadlines to submit responses pertaining in whole or in

part to the cost section of our questionnaire, and accepted KHC's April

13, 1999 addendum to its second supplemental cost response, the due

date for which was April 12. See letters from the Department to KHC,

granting extensions, November 17, 1998 (Section D Cost Response

deadline moved from November 19 to December 4), February 3, 1999

(supplemental cost response deadline moved from February 5 to February

16), March 29, 1999 (second supplemental cost response deadline moved

from April 1 to April 9), and April 8, 1999 (second supplemental cost

response deadline moved again, from April 9 to April 12). KHC thus

received approximately six additional weeks in which to file its cost

responses. During this time KHC never mentioned the need to retrieve

pre-POR cost data. KHC only raised the timing problem in its case

brief, after the period for submission of new factual information had

closed. Moreover, KHC has failed to demonstrate why providing actual

cost data from a few months prior to the POR would be unreasonably

burdensome. The Department routinely requests and receives sales and

cost data from the months preceding a POR (see Antidumping

Questionnaire I-3, I-4, ``Contemporaneous Sales'').

Concerning the Department's use of alternate model data from

another respondent, the facts are not analogous. Yieh Hsing's

alternative model codes were only 4 in number, and were submitted in a

clear, timely, coherent response, duly accompanied by a computer-

readable version.

We also disagree with KHC's assertions that use of its highest

product cost is unduly punitive and that the Department intended to

apply some other less adverse facts available. KHC misreads the

analysis memo, which simply states, ``For models in which KHC failed to

provide the material, labor, fixed factory overhead, variable factory

overhead information, interest expenses, and general and administrative

expenses, necessary to complete our analysis, we used the costs of

similar home market models.'' This statement accurately describes the

Department's methodology. The Preliminary Results notice was more

specific in this regard, stating: ``Because KHC failed to provide any

costs for certain models, as facts available we used the highest

average cost for the same category of product.'' Thus, the Department

clearly stated its exact intent with respect to which facts available

it intended to apply for the unreported data.

We note that the facts we used are only partial adverse facts

available and are the least adverse verified facts available on the

record which would not reward non-compliance. Rather than applying the

highest calculated margin for the sales with unreported cost data, we

simply inserted the highest costs in order to complete the costs test

and leave the price-to-price analysis intact. We have relied upon KHC's

own verified data as our source of facts available. Use of costs other

than those we have used, such as KHC's overall, non-product specific

average costs, could reward KHC for failure to fully cooperate in this

review because use of such data could potentially result in a lower

margin than would have resulted from use of KHC's actual costs. Our

application of partial adverse facts available in this manner is

consistent with established practice because it is based on verified

data and is sufficiently adverse to induce KHC's cooperation in future

reviews. Accordingly, for these final results, we have continued to use

as partial facts available KHC's highest costs where KHC failed to

report actual costs.

Comment 3: KHC argues that although the verification report

suggests, on the basis of statements by KHC officials, that certain

packing costs were underreported, a close review of the data on the

record show that the costs in question were fully reported. Petitioners

did not comment on this issue.

Department's Position: Notwithstanding the doubts and confusion

raised at verification, the evidence indicates that the costs in

question were not underreported. Therefore we have not altered the

packing costs for these final results.

Yieh Hsing

Comment 4: With regards to Yieh Hsing, petitioners argue that the

Department should convert the reported per-ton packing expense for U.S.

sales to a per-kilo basis prior to its inclusion in constructed value,

and also that the Department should put constructed value on a per-ton

basis prior to the calculation of foreign unit price in dollars.

Department's Position: We agree with petitioners and have adjusted

our final results accordingly.

Comment 5: Yieh Hsing argues that the margin announced in the

preliminary results contains an incorrectly located decimal point.

Department's Position: This is a moot point, because the margin has

changed.

Yun Din

Comment 6: Concerning Yun Din, petitioners argue that, as it did in

the preliminary results, the Department should continue to apply the

highest rate available to this company because of the company's failure

to cooperate with the Department to the best of its ability following

the Department's requests for information.

Department's Position: With regard to Yun Din, we agree with

petitioners and have maintained our methodology from the preliminary

results.

Final Results of Review

As a result of this review, we determine that the following margins

exist:

[[Page 69491]]

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Margin

Manufacturer/exporter Period (percent)

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Yieh Hsing............................. 5/1/97-4/30/98 1.40

KHC.................................... 5/1/97-4/30/98 14.08

Yun Din................................ 5/1/97-4/30/98 14.08

Yieh Loong............................. 5/1/97-4/30/98 14.08

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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 to the

total entered value of sales examined. The Department will issue

appraisement instructions directly to the U.S. Customs Service.

Furthermore, the following deposit requirements will be effective

for all shipments of certain circular welded carbon steel pipes and

tubes from Taiwan entered, or withdrawn from the warehouse, for

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

these administrative reviews, as provided by section 751(a)(1) of the

Act: (1) For the companies named above, the cash deposit rates will be

the rates listed above; (2) for merchandise exported by manufacturers

or exporters not covered in this review but covered in the original

less-than-fair-value (LTFV) investigation or a previous review, the

cash deposit will continue to be the most recent rate published in the

final determination or final results for which the manufacturer or

exporter received a company-specific rate; (3) if the exporter is not a

firm covered in this review or the original investigation, but the

manufacturer is, the cash deposit rate will be that established for the

manufacturer of the merchandise in the final results of these reviews

or the LTFV investigation; and (4) if neither the exporter nor the

manufacturer is a firm covered in this or any previous reviews or the

original fair value investigation, the cash deposit rate will be 9.7%,

the ``all others'' rate established in the LTFV investigation.

This notice also serves as a reminder to importers of their

responsibility under 19 CFR 351.402(f)(2) to file a certificate

regarding the reimbursement of antidumping duties prior to liquidation

of the relevant entries during these review periods. 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 orders (APOs) of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with sections 351.305 and 351.306 of the Department's

regulations. Timely written notification of the return/destruction of

APO materials or conversion to judicial protective order is hereby

requested. Failure to comply with the regulations and terms of an APO

is a violation which is subject to sanction.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

Dated: December 6, 1999.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-32228 Filed 12-10-99; 8:45 am]

BILLING CODE 3510-DS-P