[Federal Register Volume 64, Number 249 (Wednesday, December 29, 1999)]
[Notices]
[Pages 73126-73131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33228]
[[Page 73125]]
_______________________________________________________________________
Part II
Department of Commerce
_______________________________________________________________________
International Trade Administration
_______________________________________________________________________
Final Determination of Sales at Less Than Fair Value and Final
Affirmative Countervailing Duty Determination: Certain Cut-to-Length
Carbon-Quality Steel Plate Products From India et al.; Notices
Federal Register / Vol. 64, No. 249 / Wednesday, December 29, 1999 /
Notices
[[Page 73126]]
DEPARTMENT OF COMMERCE
International Trade Administration
[A-533-817]
Notice of Final Determination of Sales at Less Than Fair Value:
Certain Cut-To-Length Carbon-Quality Steel Plate Products From India
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice.
-----------------------------------------------------------------------
EFFECTIVE DATE: December 29, 1999.
FOR FURTHER INFORMATION CONTACT: Timothy Finn or Nithya Nagarajan,
Office 4, Group II, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
0065 or (202) 482-5253, respectively.
The 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 (``the Act'') by
the Uruguay Round Agreements Act (``URAA''). In addition, unless
otherwise indicated, all references are made to the Department's
regulations at 19 CFR Part 351 (1999).
Final Determination
We determine that certain cut-to-length carbon-quality steel plate
products (``CTL plate'') from India are being, or are likely to be,
sold in the United States at less than fair value (``LTFV''), as
provided in section 733 of the Act. The estimated margins of sales at
LTFV are shown in the ``Suspension of Liquidation'' section of this
notice.
Case History
Since the preliminary determination in this investigation
(Preliminary Determination of Sales at Less Than Fair Value: Certain
Cut-To-Length Carbon-Quality Steel Plate Products from India, 64 FR
41202 (July 29, 1999)) (``Preliminary Determination''), the following
events have occurred:
In August, 1999, the Department issued two additional supplemental
questionnaires to Steel Authority of India, Ltd.(``SAIL''), in response
to which the respondent filed submissions on August 17, 1999. In
September 1999, the Department conducted verification of SAIL, the sole
respondent in the instant investigation. A public version of our report
of the results of this verification is on file in the Central Records
Unit (``CRU''), room B-099, of the main Department of Commerce
building, under the appropriate case number. On November 18, 1999, a
public hearing was held at the main Department of Commerce building and
was attended by interested parties.
Scope of Investigation
The products covered by the scope of this investigation are certain
hot-rolled carbon-quality steel: (1) Universal mill plates (i.e., flat-
rolled products rolled on four faces or in a closed box pass, of a
width exceeding 150 mm but not exceeding 1250 mm, and of a nominal or
actual thickness of not less than 4 mm, which are cut-to-length (not in
coils) and without patterns in relief), of iron or non-alloy-quality
steel; and (2) flat-rolled products, hot-rolled, of a nominal or actual
thickness of 4.75 mm or more and of a width which exceeds 150 mm and
measures at least twice the thickness, and which are cut-to-length (not
in coils). Steel products to be included in this scope are of
rectangular, square, circular or other shape and of rectangular or non-
rectangular cross-section where such non-rectangular cross-section is
achieved subsequent to the rolling process (i.e., products which have
been ``worked after rolling'')--for example, products which have been
beveled or rounded at the edges. Steel products that meet the noted
physical characteristics that are painted, varnished or coated with
plastic or other non-metallic substances are included within this
scope. Also, specifically included in this scope are high strength, low
alloy (HSLA) steels. HSLA steels are recognized as steels with micro-
alloying levels of elements such as chromium, copper, niobium,
titanium, vanadium, and molybdenum. Steel products to be included in
this scope, regardless of Harmonized Tariff Schedule of the United
States (HTSUS) definitions, are products in which: (1) Iron
predominates, by weight, over each of the other contained elements, (2)
the carbon content is two percent or less, by weight, and (3) none of
the elements listed below is equal to or exceeds the quantity, by
weight, respectively indicated: 1.80 percent of manganese, or 1.50
percent of silicon, or 1.00 percent of copper, or 0.50 percent of
aluminum, or 1.25 percent of chromium, or 0.30 percent of cobalt, or
0.40 percent of lead, or 1.25 percent of nickel, or 0.30 percent of
tungsten, or 0.10 percent of molybdenum, or 0.10 percent of niobium, or
0.41 percent of titanium, or 0.15 percent of vanadium, or 0.15 percent
zirconium. All products that meet the written physical description, and
in which the chemistry quantities do not equal or exceed any one of the
levels listed above, are within the scope of these investigations
unless otherwise specifically excluded. The following products are
specifically excluded from these investigations: (1) Products clad,
plated, or coated with metal, whether or not painted, varnished or
coated with plastic or other non-metallic substances; (2) SAE grades
(formerly AISI grades) of series 2300 and above; (3) products made to
ASTM A710 and A736 or their proprietary equivalents; (4) abrasion-
resistant steels (i.e., USS AR 400, USS AR 500); (5) products made to
ASTM A202, A225, A514 grade S, A517 grade S, or their proprietary
equivalents; (6) ball bearing steels; (7) tool steels; and (8) silicon
manganese steel or silicon electric steel.
The merchandise subject to these investigations is classified in
the HTSUS under subheadings: 7208.40.3030, 7208.40.3060, 7208.51.0030,
7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000,
7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045,
7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7225.40.3050,
7225.40.7000, 7225.50.6000, 7225.99.0090, 7226.91.5000, 7226.91.7000,
7226.91.8000, 7226.99.0000.
Although the HTSUS subheadings are provided for convenience and
Customs purposes, the written description of the merchandise under
investigation is dispositive.
Period of Investigation
The period of investigation (``POI'') is January 1, 1998, through
December 31, 1998.
Facts Available
Based on our analysis of the facts on the record of this
investigation, we continue to find that SAIL failed to act to the best
of its ability in reporting accurate and verifiable information to the
Department. At the preliminary determination, we found that because of
1) the problems with the electronic databases that SAIL submitted; 2)
the lateness and incompleteness of narrative portions of the
questionnaire responses; and 3) the lack of product-specific costs,
SAIL's questionnaire response could not be used to calculate a reliable
margin. As a result, we utilized adverse facts available as the basis
of the preliminary margin.
Section 776(a)(2) of the Act provides that ``if an interested party
or any other person--(A) withholds information that
[[Page 73127]]
has been requested by the administering authority; (B) fails to provide
such information by the deadlines for the submission of the information
or in the form and manner requested, subject to subsections (c)(1) and
(e) of section 782; (C) significantly impedes a proceeding under this
title; or (D) provides such information but the information cannot be
verified as provided in section 782(i), the administering authority * *
* shall, subject to section 782(d), use the facts otherwise available
in reaching the applicable determination under this title.''
The Department has further determined that the use of facts
available is appropriate for SAIL for purposes of the final
determination, pursuant to section 776(a)(2)(A), (B), and (D) of the
Act. With respect to subsection (A), at verification the Department
discovered that SAIL failed to report a significant number of home
market sales; was unable to verify the total quantity and value of home
market sales; and failed to provide reliable cost or constructed value
data for the products. See Home Market and United States Sales
Verification Report (``Sales Report''), dated November 3, 1999; see
also Cost of Production and Constructed Value Verification Report
(``Cost Report''), dated November 3, 1999. With regard to subsection
(B), SAIL was provided with numerous opportunities and extensions of
time to fully respond to the Department's original and supplemental
questionnaires, as well as ample time to prepare for verification.
However, even with numerous opportunities to remedy problems, SAIL
failed to provide reliable data to the Department in the form and
manner requested.
With respect to section 776(a)(2)(D) of the Act., we note that as a
result of the widespread problems encountered at verification, SAIL's
questionnaire responses could not be verified. See Sales Report and
Cost Report. See Memorandum to the File: Determination of Verification
Failure (``Verification Memo''), dated December 13, 1999.
Section 782(d) provides certain conditions that must be satisfied
before the Department may, subject to section 782(e), disregard all or
part of the information submitted by a respondent. First, this section
states that, if the Department determines that a response to a request
for information does not comply with the request, it shall promptly
inform the person submitting the response of the nature of the
deficiency and shall, to the extent practicable, provide that person
with an opportunity to remedy or explain the deficiency in light of the
time limits established for the completion of the review. Section
782(d) continues that, if the party submits further information in
response to the deficiency and the Department finds the response is
still deficient or submitted beyond the applicable time limits, the
Department may disregard all or part of the original and subsequent
responses.
With respect to section 782(d), we gave SAIL numerous opportunities
and extensions to submit complete and accurate data. As stated in the
Preliminary Determination, SAIL's questionnaire and deficiency
questionnaire responses were found to be substantially deficient and
untimely for purposes of calculating an accurate antidumping margin.
See Preliminary Determination. However, subsequent to the preliminary
determination we issued two additional questionnaires and further
extensions to SAIL presenting it yet additional opportunities to submit
a complete and accurate electronic database. Nevertheless, the
Department found at verification that the final submission was again
substantially deficient (see the Department's Position below; see
Verification Memo; and see Sales Report and Cost Report). Therefore the
Department may ``disregard all or part of the original and subsequent
responses,'' subject to subsection (e) of section 782.
Section 782(e) of the Act states that the Department shall not
decline to consider information deemed ``deficient'' under section
782(d) provided that:
(1) The information is submitted by the deadline established for
its submission,
(2) The information can be verified,
(3) The information is not so incomplete that it cannot be
served as a reliable basis for reaching the applicable
determination,
(4) The interested party has demonstrated that it has acted to
the best of its ability in providing the information and meeting the
requirements established by the administering authority * * * with
respect to the information, and
(5) The information can be used without undue difficulties.
See Section 782(e) of the Act. In the instant investigation, record
evidence supports the following findings:
First, with respect to section 782(e)(1), as stated in the
Preliminary Determination and the sales and cost verification reports,
SAIL was given numerous extensions to submit accurate data which it
failed to do. In fact the last submission of cost data filed on August
18, 1999, was a database which contained unreadable electronic versions
of SAIL's cost of production which did not include any constructed
value information.
Second, with respect to section 782(e)(2), we were not able to
verify SAIL's questionnaire response due to the fact that essential
components of the response (i.e., the home market and cost databases)
contained significant errors.
Third, with respect to section 782(e)(3), the fact that essential
components of SAIL's response could not be verified resulted in
information that was incomplete and unreliable as a basis for
determining the accurate margin of dumping.
Fourth, with respect to section 782(e)(4), SAIL, as stated in the
home market sales verification report, did not sufficiently verify the
accuracy and reliability of its own data prior to submitting the
information to the Department, thereby indicating that it did not act
to the best of its ability to provide accurate and reliable data to the
Department.
Finally, with respect to section 782 (e)(5), the U.S. sales
database contained errors that, while in isolation were susceptible to
correction, however when combined with the other pervasive flaws in
SAIL's data lead us to conclude that SAIL's data on the whole is
unreliable. As a result, the Department does not have an adequate basis
upon which to conduct its analysis to determine the dumping margin and
must resort to facts available pursuant to section 776(a)(2) of the
Act.
In selecting from among the facts otherwise available, section
776(b) of the Act provides that adverse inferences may be used when a
party has failed to cooperate by not acting to the best of its ability
to comply with a request for information. See the Statement of
Administrative Action (``SAA'') at 870. To examine whether the
respondent ``cooperated'' by ``acting to the best of its ability''
under section 776(b), the Department considers, inter alia, the
accuracy and completeness of submitted information and whether the
respondent has hindered the calculation of accurate dumping margins.
See e.g., Certain Welded Carbon Steel Pipes and Tubes From Thailand:
Final Results of Antidumping Duty Administrative Review (``Pipes and
Tubes from Thailand''), 62 FR 53808, 53819-53820 (October 16, 1997).
In addition to repeated problems in the timeliness and completeness
of submissions and the workability of computer tapes, verification
revealed that SAIL's data was significantly inaccurate, incomplete or
otherwise unreliable. Therefore, pursuant to 776(b) of the Act, we
conclude that SAIL did not cooperate to the best of its ability during
the course of this investigation and consequently we used an adverse
[[Page 73128]]
inference in selecting a margin as facts available. The Department has
applied a margin rate of 72.49 percent, the highest of the margins
alleged in the petition, as facts available.
Corroboration
Section 776(c) of the Act provides that where the Department
selects from among the facts otherwise available and relies on
``secondary information,'' such as the petition, the Department shall,
to the extent practicable, corroborate that information from
independent sources reasonably at the Department's disposal. The
Statement of Administrative Action accompanying the URAA, H.R. Doc.
No.103-316 (1994) (hereinafter, the ``SAA'') states that
``corroborate'' means to determine that the information used has
probative value. See SAA at 870.
To corroborate the range of the margins alleged in the petition, we
examined the basis of the rates contained in the petition. The petition
margins were based on both price-to-price and price-to-constructed
value comparisons. Petitioners' calculated export price was based on
U.S. price offerings, with deductions taken for international movement
charges. We compared this with information from U.S. Customs and found
them consistent. Petitioners based normal value on prices for
comparable products sold in the home market obtained from market
research. Petitioners calculated constructed value based on their own
production experience adjusted for known differences. With regard to
the normal values contained in the petition, the Department is aware of
no other independent sources of information that would enable us to
further corroborate this information. We compared the petition
information with reliable information obtained during the
investigation, primarily SAIL's financial statements and other
published materials from the questionnaire response and found them
consistent. Finally, with respect to the relevance of the margin used
for adverse facts available, the Department stated in Tapered Roller
Bearings from Japan; Final Results of Antidumping Duty Administrative
Review, 62 FR 47454 (September 9, 1997), that it will consider
information reasonably at its disposal as to whether there are
circumstances that would render a margin irrelevant. Where
circumstances indicate that the selected margin is not appropriate as
adverse facts available, the Department will disregard the margin and
determine an appropriate margin. See also Fresh Cut Flowers from
Mexico; Preliminary Results of Antidumping Duty Administrative Review,
60 FR 49567 (September 26, 1995). We have determined that there is no
evidence on the record that the selected margin is not appropriate. See
Memorandum to the File: Corroboration of the Petition Data, dated July
19, 1999, on file in the CRU.
Finally, we note that the SAA at 870 specifically states that where
``corroboration may not be practicable in a given circumstance,'' the
Department may nevertheless apply an adverse inference. The SAA at 869
emphasizes that the Department need not prove that the facts available
are the best alternative information. Therefore, based on our efforts,
described above, to corroborate information contained in the petition,
and mindful of the legislative history discussing facts available and
corroboration, we consider the petition margin we are assigning to SAIL
in this investigation as adverse facts available to be corroborated to
the extent practicable.
Interested Party Comments
Comment 1: Facts Available
Respondent argues that the Department should determine that SAIL
cooperated to the best of its ability to accurately report its export
sales to the U.S., and as a result the Department should not base its
final determination on total adverse facts available.
SAIL argues that it responded in a timely manner to all of the
Department's requests for information and also cooperated in the
conduct of a 21-day verification to ensure the accuracy of its
responses. SAIL admits that it had difficulties in verifying the
accuracy of its home market sales, and cost of production data, but
argues that its U.S. sales data were verified without significant
problems and should be used as a basis for calculating the final
antidumping duty margin in this determination. SAIL further argues that
although it had difficulties in verifying the home market sales, the
majority of these problematic sales would not have been used for
comparison purposes as they were either of defective or off-grade
merchandise or merchandise that would not be used for comparison
purposes to the U.S. products. Accordingly, although SAIL's home market
database lacks the degree of precision required by the Department,
respondent argues that there is sufficient reliable information about
the home market sales for the Department to evaluate and determine the
``true'' picture of SAIL's home market sales. Finally, while
acknowledging that there were problems associated with its cost of
production data, SAIL contends that the Department verified the
underlying accuracy of SAIL's books and records and also verified the
plant-specific average plate costs. Therefore, the Department has a
reliable basis from which to determine the relevant costs of the
products sold to the United States. SAIL argues that extrapolating
information from this reliable information, the Department could
determine that SAIL's margin would be in the range of zero to 1
percent. As a result, SAIL proposes that the Department compare the
U.S. prices in the submitted Section C responses to the normal value
and constructed value alleged in the petition, after comparing these
figures to the home market prices from Section B responses, and cost of
production data in the Section D responses to evaluate the reliability
of the petition information.
In SAIL's view, the Department cannot ignore the U.S. sales
information submitted and verified and resort to total adverse facts
available. SAIL relies on the premise that the ``basic purpose of the
statute'' is to determine a margin as accurately as possible citing
Rhone-Poulenc Inc, v. United States, 899 F.2d 1185, 1191 (Fed. Cir.
1990). Furthermore, respondent argues that the Court of International
Trade (``CIT'') has upheld the Department's use of best information
available where the respondent's data was more accurate than the data
in the petition and where the Department appeared to verify the data
and make adjustments to it. See Micron Technology, Inc. v. United
States, 893 F. Supp. 21, 35 (CIT 1995) (``Micron''). In the present
determination, SAIL argues that the Department should not ignore SAIL's
probative, accurate U.S. sales data and rely on less probative export
information as facts available which would result in inaccurate dumping
margins. SAIL repeats its claim that the Department has accurate and
verified U.S. sales data; reliable home market sales data for the
product most similar to the U.S. product; and average plant-specific
costs sufficient to demonstrate that home market sales were not made
below cost; and therefore, can make an accurate price comparison.
SAIL's secondary argument is that the URAA requires the use of its
timely and verified information on the record of this investigation.
SAIL argues that, pursuant to section 782(e) of the Act, the Department
must consider information if: (1) the information has been submitted in
a timely manner; (2) the information can be verified; (3) the
information can serve as a reliable basis for reaching the applicable
determination; (4) the interested party
[[Page 73129]]
demonstrated that it acted to the best of its ability; and (5) the
information can be used without undue difficulties. See section 782(e)
of the Act. Citing multiple prior Department determinations, SAIL
argues that it has met all these criteria, therefore, the submitted
U.S. sales data must be used to calculate the margin. (See Toyota Motor
Sales, U.S.A. Inc. v. United States, 15 F. Supp. 2d 872 (CIT 1988);
Koenig & Bauer-Albert AG v. United States, 15 F. Supp. 2d 834 (CIT
1998); see also Stainless Steel Sheet and Strip in Coils from Mexico,
64 FR 30790 (1999); Certain Preserved Mushrooms from Chile, 63 FR 56613
(1998)). SAIL argues that it would be arbitrary and capricious for the
Department to reject SAIL's accurate U.S. sales data in favor of an
adverse facts available margin from the petition and that the
Department must use SAIL's U.S. data and partial facts available for
the other missing data in calculating SAIL's final dumping margin on
the basis that SAIL cooperated to the best of its ability during the
instant investigation. Citing Annex II of the Agreement on
Implementation of Article VI of the GATT 1994 (``AD Agreement''), SAIL
contends that where a party acts to the best of its ability, its
information should not be disregarded even though the information is
not ideal in all respects.
Petitioners counter SAIL's arguments on the grounds that SAIL
failed to act to the best of its ability. As support for their
contention, petitioners cite to SAIL's omissions of both home market
sales and cost data, and its selective compliance with the Department's
instructions. Petitioners note that the Department attempted to
accommodate SAIL in the course of the investigation and during
verification; however, SAIL continued to fail to submit a full,
readable, and complete database for use in the Department's
investigation.
Furthermore, petitioners argue that SAIL understates the gravity of
the errors in its database. Petitioners cite to numerous factual
discrepancies in the home market sales and cost databases including:
(i) inability to reconcile total quantity and value; (ii) under-
reported sales values and over-reported quantities; (iii) omitted home
market sales; (iv) double-counted transactions; (v) misreported gross
unit prices, product characteristics, and taxes; (vi) misreported
thickness and width values in the home market database; (vii) over and
under-reported freight costs in the U.S. sales database; (viii)
misreported product characteristics for U.S. sales; (ix) failure to
provide a constructed value database; (x) problematic yield adjustments
to reported costs; (xi) understated material costs; (xii) failure to
provide a ratio analyses for the RSP plant; (xiii) failure to provide
product-specific costs; (xiv) failure to report the conversion factor
of theoretical to actual weights; and (xv) failure to explain the
reason for transactions with an identical home market control number
(``CONNUMH'') having different variable costs. As a result, petitioners
argue that there was no reliable information on the record (as
evidenced by the Department's verification reports) to enable the
Department to calculate a margin. Petitioners cite Pipes and Tubes from
Thailand, at 53814, in support of their contention that without
reliable cost data there is no means of ensuring the accuracy and
reliability of the home market sales data. In addition, petitioners
also argue that the errors with the U.S. database (such as errors in
reporting product characteristics of a majority of U.S. sales) render
it deficient, incomplete, and inaccurate. As a result, the Department
cannot calculate a margin and must resort to total adverse facts
available.
Petitioners also contest SAIL's invocation of Annex II of the AD
Agreement. According to petitioners, SAIL's information was
considerably less than ideal. Petitioners cite to the problems, listed
above, with the home market sales, cost, and U.S. sales databases to
counter SAIL's argument regarding the reliability of its information.
Petitioners argue that the calculation of a margin comparing SAIL's
U.S. sales information to the normal value (``NV'') and constructed
value (``CV'') from the petition would lead to an untenable result that
would encourage selective reporting in the future and undermine the
statutory goal of calculating an accurate margin. Moreover, petitioners
state that the premise of SAIL's argument relies on the belief that the
U.S. sales database is without errors, which is not factually supported
by the Department's findings at verification. See Sales Report.
Finally, petitioners state that the standard set forth in section
782(e) of the Act does not support the use of U.S. sales information
upon the rejection of home market sales and cost of production
information. Petitioners state that section 782(e) does not direct the
Department to use part of response where essential components of the
response are not otherwise useable. See Frozen Concentrated Orange
Juice from Brazil, 64 FR 43650 (August 11, 1999). As a result of the
data problems described above, as well as SAIL's inadequate review of
its database for accuracy and completeness, petitioners argue that
respondent clearly failed to act to the best of its ability to provide
the Department with requested information, and therefore use of total
adverse facts available is warranted for SAIL.
Petitioners rely on two recent cases to demonstrate the
Department's methodology for selecting total adverse facts available
under circumstances similar to those in the present investigation.
First, petitioners argue that the Department normally rejects a
respondent's response in its entirety when price-to-price comparison is
impossible due to a reporting failure on the behalf of the respondent.
In Heavy Forged Hand Tools Finished or Unfinished, With or Without
Handles from the People's Republic of China (``Tools from China''), 64
FR 43659 (August 11, 1999), the Department rejected the response and
used total adverse facts available when it discovered, at verification,
that a significant portion of sales were missing for four months of the
POR and that it could not ``successfully perform the completeness
test.'' See Tools from China, 64 FR at 43663. Second, petitioners argue
that total adverse facts available is warranted where the questionnaire
response is extremely deficient in other respects such that the
Department cannot reliably use the reported data to calculate a margin.
See Notice of Final Determination of Sales at Less Than Fair Value:
Steel Wire Rod from Germany (``Steel Wire Rod from Germany''), 63 FR
8953 (February 23, 1998). In that case, the Department found that the
response was deficient and an unreliable basis to calculate a margin as
a result of ``numerous inconsistencies'' in the reported sales and cost
data. Petitioners argue that the fact pattern of the present case is
similar to both Tools from China and Steel Wire Rod from Germany;
therefore, the Department's only choice is to apply total adverse facts
available in determining the dumping margin for SAIL's transactions
during the POI.
SAIL takes issue in the petitioners' claim that the facts here are
similar to those in Tools from China and argues that petitioners'
reliance on Tools from China is misplaced, since there was a
determination in that case that the respondents were withholding
information and generally acting in ``bad faith.'' Contrary to the
circumstances in that case, SAIL argues that there is no evidence of
``bad faith'' on its part in the instant investigation.
Department Position:
We disagree with respondent that total adverse facts available are
not warranted for this determination. SAIL
[[Page 73130]]
has consistently failed to provide reliable information throughout the
course of this investigation. At the preliminary determination we
relied on facts available because widespread and repeated problems in
SAIL's questionnaire response rendered it unuseable for purposes of
calculating a margin. These problems recurred despite our numerous and
clear indications to SAIL of its response deficiencies. Even though we
rejected use of SAIL's questionnaire response at the preliminary
determination, because the company was seemingly attempting to
cooperate, albeit in a flawed manner, we continued to collect data
after the preliminary determination in an attempt to gather a
sufficiently reliable database and narrative record for verification
and for use in the final determination. The Department also rejected
petitioners' request that verification be cancelled in light of the
response deficiencies. However, as evidenced by the summary below, SAIL
was unable to provide the Department with useable information to
calculate and determine whether sales were made at less than fair
value.
Throughout the responses to the Department's original questionnaire
and supplemental questionnaires there were ongoing, serious problems in
the areas of completeness, timeliness, and workability of computer
tapes. Regarding completeness, the responses repeatedly made the
statement that certain data were not available and would be supplied
later (i.e., during verification). Instances of this unavailability
included unreported home market sales, a substantial number of sales
dates, product specifications, supporting documentation, and so forth.
Regarding timeliness, on several occasions SAIL called requesting
extensions past the already extended deadlines for its submissions. On
other occasions SAIL submitted unrequested clarifications to previous
responses and responses to questions after the required deadline, in
effect providing itself with an extension to respond to the
Department's questionnaires. In fact, several of SAIL's submissions
were returned to it due to untimely filing. See Letter to Respondent's
Counsel on July 7, 1999, Antidumping Duty Investigation of Certain Cut-
to-Length Carbon Quality Steel Plate (``CTL Plate'') from India.
Regarding computer tapes, repeated technical problems with the
submitted data resulted in our inability to load, run, and analyze the
data, despite a significant amount of time and attention from the
Department. Moreover, at verification we discovered that SAIL's last
submission (made just prior to verification and to provide the
Department with useable cost of production and constructed value data)
was not only incomplete, but also riddled with inaccuracies to the
point where SAIL's data remains unuseable. SAIL attempted to provide
the Department with a new tape at verification containing revised cost
of production and constructed value data which the Department rejected
as untimely.
Furthermore, at verification, we discovered that: SAIL had failed
to report a significant number of home market sales; we were unable to
verify the total quantity and value of home market sales; SAIL failed
to report accurate gross unit prices; SAIL failed to reconcile costs of
production to its audited financial statements; and SAIL failed to
provide constructed value data on the costs of products produced and
sold to the United States. See Sales Report and Cost Report.
Furthermore, we disagree with SAIL's characterization of its U.S.
sales as accurate, timely, and verified. In fact, the U.S. sale
database contained certain errors, as revealed at verification. See
Sales Report; see also Verification Memo. Moreover, we disagree with
SAIL that we are required by the Act to use SAIL's reported U.S.
prices. SAIL cites to Toyota Motor Sales, U.S.A., Inc., v. United
States, 15 F. Supp. 2d 872 (CIT 1998); Koenig & Bauer-Albert AG v.
United States, 15 F. Supp. 2d 834 (CIT 1998); Antidumping Duty
Investigation on Sales at Less-Than-Fair-Value: Certain Cut-to-Length
Carbon-Quality Steel Plate from Indonesia, 64 FR 40457 (July 19, 1999);
Antidumping Duty Investigation on Sales at Less-Than-Fair-Value:
Stainless Steel Sheet and Strip in Coils from Mexico, 64 FR 30790
(1999), as support for the contention that the Department does not
resort to total facts available if there are deficiencies in the
respondent's submitted information. It is the Department's long-
standing practice to reject a respondent's questionnaire response in
toto when essential components of the response are so riddled with
errors and inaccuracies as to be unreliable. See Steel Wire Rod from
Germany. SAIL's argument relies on a mischaracterization of our
practice with respect to so-called ``gap-filler'' facts available. SAIL
argues that the Department should fill in the record for home market
sales, cost of production, and constructed value as if there were a
mere ``gap'' in the response, as opposed to the entire record. Thus
respondent's arguments and citations to these cases are inapposite. In
each of the above-mentioned cases, the majority of the information on
the record was verified and useable; there were only certain small
areas of information which required the Department to facts otherwise
available to accurately calculate a dumping margin. The Department's
long-standing practice of filling in gaps or correcting inaccuracies in
the information reported in a questionnaire response, often based on
verification findings, is appropriate only in cases where the
questionnaire response is otherwise substantially complete and useable.
In contrast, in this case, SAIL's questionnaire response is
substantially incomplete and unuseable in that there are deficiencies
concerning a significant portion of the information required to
calculate a dumping margin. To properly conduct an antidumping analysis
which includes a sales-below-cost allegation, the Department must
analyze four essential components of a respondent's data: U.S. sales;
home market sales; cost of production for the home market models; and
constructed value for the U.S. models. Yet SAIL has not provided a
useable home market sales database, cost of production database, or
constructed value database. Moreover, the U.S. sales database would
require some revisions and corrections in order to be useable. As a
result of the aggregate deficiencies (data problems and SAIL's
responses), the Department was unable to adequately analyze SAIL's
selling practices in a thorough manner for purposes of measuring the
existence of sales at less than fair value for this final
determination. See Sales Report and Cost Report.
We also disagree with SAIL's reliance on the Micron decision in
arguing that we should use its U.S. sales data as facts available. In
the Micron case, the CIT affirmed the Department's use of respondent
data as non-adverse facts available for a discrete piece of data which
required adjustment. Specifically, the Department had concluded that a
respondent used an improper methodology in reporting depreciation
expenses. In selecting non-adverse facts available in order to properly
adjust the depreciation expenses, the Department relied on calculations
proposed by the respondent, which were specific to the subject
merchandise, rather than calculations proposed by petitioner, which
were based on broader assets. Thus, the facts of the Micron case are
quite different from this case, where the Department must apply total
adverse facts available because SAIL's data on the whole is unreliable.
Respondent also cites to section 782(e) of the Act as support for
its
[[Page 73131]]
argument that the Department should utilize the verified U.S. sales in
calculating a dumping margin in the instant investigation. Section
782(e) of the Act states that the Department shall not decline to
consider information deemed ``deficient'' under section 782(d) provided
that subsections (1), (2), (3), (4), and (5) of section 782(e) are met.
In the instant investigation, record evidence supports the finding that
SAIL did not meet these requirements (see, Facts Available section
above).
With regard to each respective subsection of 782(e): (1) SAIL did
not provide information in a timely manner; (2) the information
submitted could not be verified; (3) essential components of the
information (e.g., home market sales and cost information) are so
incomplete that it cannot be used as a reliable basis for reaching a
determination; (4) SAIL did not act to the best of its ability in
providing the information and meeting the requirements established by
the administering authority; and (5) the information cannot be used
without undue difficulties. Accordingly, we are applying a margin based
on total facts available to SAIL in the final determination. See, Facts
Available section above.
Accordingly, pursuant to section 776(a)(2) of the Act, the
Department has determined that the information on the record is
unusable and is not a reliable basis upon which to calculate a margin
in this investigation. Moreover, because we determine that SAIL has not
acted to the best of its ability, pursuant to 776(b) of the Act, we
used an adverse inference in selecting a margin as facts available. The
Department has applied a margin rate of 72.49 percent, the highest
margin alleged in the petition, as facts available.
Continuation of Suspension of Liquidation
In accordance with section 735(c)(1)(B) of the Act, we are
directing the Customs Service to continue to suspend liquidation of all
entries of subject merchandise from India that were entered, or
withdrawn from warehouse, for consumption on or after July 29, 1999
(the date of publication of the Department's preliminary determination)
for SAIL. The Customs Service shall continue to require a cash deposit
or posting of a bond equal to the estimated amount by which the normal
value exceeds the U.S. price as shown below. These suspension of
liquidation instructions will remain in effect until further notice.
The weighted-average dumping margins are as follows:
------------------------------------------------------------------------
Weighted-
average
Exporter/manufacturer margin
percentage
------------------------------------------------------------------------
SAIL....................................................... 72.49
All others\1\.............................................. 72.49
------------------------------------------------------------------------
\1\ The Act normally prohibits inclusion in the ``All Others'' rate of
any margins determined entirely on the basis of facts available,
pursuant to section 776. However, where the estimated weighted-average
margin is based entirely on facts available, we must use any
reasonable method to establish the estimated ``All Others'' rate for
exporters and producers not individually investigated. See section
733(d)(1)(ii); 735(c)(5)(B). In this case, we have determined that a
reasonable method is to use 72.49 percent, the highest margin alleged
in the petition, which was also the source of our facts available
margin for SAIL. This is consistent with the Department's practice.
See, e.g., Notice of Final Determination of Sales at Less Than Fair
Value: Steel Wire Rod from Venezuela, 63 FR 8946, 8948 (1998).
ITC Notification
In accordance with section 735(d) of the Act, we have notified the
International Trade Commission (``ITC'') of our determination. Because
our final determination is affirmative, the ITC will, within 45 days,
determine whether these imports are materially injuring, or threatening
material injury to, the U.S. industry. If the ITC determines that
material injury, or threat of material injury does not exist, the
proceeding will be terminated and all securities posted will be
refunded or canceled. If the ITC determines that such injury does
exist, the Department will issue an antidumping duty order directing
Customs officials to assess antidumping duties on all imports of the
subject merchandise entered, or withdrawn from warehouse, for
consumption on or after the effective date of the suspension of
liquidation.
This determination is issued and published in accordance with
sections 735(d) and 777(i)(1) of the Act.
Dated: December 13, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-33228 Filed 12-28-99; 8:45 am]
BILLING CODE 3510-DS-P