66 FR 31208, June 11, 2001 A-533-810 Administrative Review POR: 02/01/1999 - 01/31/2000 PUBLIC DOCUMENT I/1: B. Ziv x4207 MEMORANDUM TO: Faryar Shirzad Assistant Secretary for Import Administration FROM: Richard W. Moreland Deputy Assistant Secretary, Group I Import Administration DATE: June 5, 2001 SUBJECT: Issues and Decision Memorandum for the Final Results of the Administrative Review of Stainless Steel Bar from India ---------------------------------------------------------------------- I. BACKGROUND On February 5, 2001, the Department published Stainless Steel Bar From India; Preliminary Results of Antidumping Administrative Review and Partial Rescission of Administrative Review, 66 FR 8939 ("Preliminary Results") in which it invited parties to comment on the preliminary results. The sole respondent subject to this review, Panchmahal Steel Ltd. ("Panchmahal"), submitted a case brief on March 7, 2001. The petitioners (1) submitted a rebuttal brief on March 19, 2001. On April 26, 2001, the Department issued a memorandum addressing certain verification allegations in the respondent's case brief (see "Panchmahal Steel Limited's Verification Allegations" from Blanche Ziv to Susan Kuhbach which is on file in the Central Records Unit ("CRU") in Room B-099 of the Department of Commerce ("the Department") ("Verification Allegations Memo"). We invited parties to comment on the information presented in this memorandum, but received no comments. The period of review ("POR") is February 1, 1999, through January 31, 2000. II. ANALYSIS OF COMMENTS Comment 1: Home Market Sales of Bright Bar Panchmahal objects to the Department's preliminary finding that the company should have reported its home market sales of bright bar. Panchmahal contends that its bright bar sales in the home market constitute sales of reject merchandise and that this merchandise cannot be compared to the merchandise exported to the United States due to the differences in quality. Panchmahal concludes that it was justified in not reporting these reject sales because in the original investigation of stainless steel bar from India, the Department decided that third country sales was a more appropriate basis for calculating normal value than the Indian respondent's home market sales of scrap and rejects. The petitioners argue that it is the Department, and not the respondents, which determines which sales should be reported. The petitioners further argue that the Department's determination in the original investigation is inapplicable in the instant case because the respondent in that investigation had reported all home market sales, including rejects, thus allowing the Department to determine whether those sales should be used for comparison to U.S. sales. Finally, the petitioners note that Panchmahal reported its home market and U.S. sales on June 8, 2000. Between that time and the verification in December 2000, Panchmahal had nearly six months to report problems or request clarification from the Department with respect to which sales it should report. Department's Position: We agree with the petitioners that it is the Department which determines which sales are appropriate to use in a normal value calculation. Panchmahal should have reported its home market sales of bright bar. In the instant review, the Department sought to confirm in both the original and the supplemental questionnaires that Panchmahal's reported home market sales reflected the total quantity and value of all types of subject merchandise sold in the home market during the POR. In its supplemental questionnaire response submitted on October 10, 2000, Panchmahal stated that it had reported all home market sales of all types of merchandise under review. The Department confirmed at verification that Panchmahal had in fact not reported its home market sales of bright bar. See Preliminary Results, section entitled "Use of Facts Otherwise Available" (66 FR at 8940) and the Verification Allegations Memo at 2. Comment 2: Preparation and Availability of Information Panchmahal claims that, contrary to the discussion in the facts available section in the Preliminary Results, all documents required by the Department were prepared prior to verification and, during the verification, any information for which the Department asked was made available to the verifiers. Furthermore, Panchmahal disagrees with the Department's finding that a complete verification could not be conducted because some source material was stored at the company's factory, since the verification took place at both the production facility and the corporate headquarters. Panchmahal claims that officials offered to retrieve the materials requested for review by the Department's verifiers. The petitioners counter that Panchmahal does not provide any support for its claim that the documents the Department attempted to verify were made available to the verifiers. On the contrary, the petitioners argue, the Department's inability to examine significant portions of Panchmahal's response is the result of Panchmahal's failure to prepare certain documentation and have the documentation ready for review during verification as requested in the November 21, 2000 verification outline. The petitioners cite a number of instances described in the January 4, 2001 verification report where significant portions of the home market sales, U.S. sales, and cost of production responses could not be verified because of Panchmahal's failure to prepare complete documentation prior to the start of verification. The petitioners maintain that Panchmahal's lack of preparation for verification and uncooperative behavior call for the continued application of adverse facts available in this review. Department's Position: As noted throughout the verification report, Panchmahal did not prepare information as the Department requested in its verification outline, although the Department issued the verification outline two weeks prior to the beginning of the verification. In fact, as the verifiers discovered at the beginning of verification, Panchmahal company officials had not looked at the outline prior to the verifiers' arrival. In addition to a lack of preparation, the verification report describes numerous instances during the verification where the Department requested information and Panchmahal failed to provide it. See Verification Allegations Memo at 2-7. Comment 3: Availability of Company Staff During Verification Panchmahal disagrees with the Department's statement in the Preliminary Results that Panchmahal officials were unavailable on numerous occasions and for extended periods of time during the verification. Panchmahal asserts that it had created a five person team to assist the Department during the entire verification. According to Panchmahal, the availability of these people is evidenced by the fact that the Department verifiers visited certain tourist sites accompanied by them. The petitioners refute the respondent's claims regarding the availability of its staff during the verification. To support their argument, the petitioners point to the verification report which shows that the Panchmahal employees responsible for participating in the verification did not make themselves available for significant portions of the verification process. Department's Position: We agree with the petitioners. The verification report cites numerous instances where the only company official qualified to answer the verifiers' questions was not available. See Verification Allegations Memo at 8-10. Comment 4: Timing of Verification The respondent claims that the Department abused its discretion when it scheduled another verification at Panchmahal in the administrative review of stainless steel flanges immediately before the stainless steel bar verification. Panchmahal cites Rubberflex v. United States, Slip Op. 99-68 (CIT July 23, 1999) (Rubberflex), to support its opinion that requiring "back to back verifications in two different reviews constitutes an abuse of discretion." Panchmahal notes that in Rubberflex, the CIT found unlawful Department actions which put a respondent in a position where it could not fully prepare for and participate in verification. Further, Panchmahal asserts that its questionnaire response in the flanges case was fully verified. The petitioners argue that Panchmahal's allegation that the Department abused its discretion is not supported by record evidence. The petitioners point out that there is no information on the record indicating that Panchmahal made any attempt to change the verification schedule in one or both of the reviews. Department's Position: We disagree with the respondent. It has always been the intention of the Department to cooperate with companies during the course of an investigation or review. In the instant example, the Department consulted with Panchmahal before establishing the date for verification. In the Department's verification outline, we urged Panchmahal to contact the Department, "If you have any questions regarding this verification." See Sales and Cost Verification Outline from Judith Wey Rudman to Panchmahal Steel Limited (November 21, 2000) ("Verification Outline") at 2. At no time prior to the verification did Panchmahal express dissatisfaction with the scheduling of the verification. In Rubberflex, the CIT found that the Department had abused its discretion when it allowed a respondent only two days to prepare for verification. There is no indication in this review that the Department seriously limited Panchmahal's ability to prepare for the verification. To the contrary, Panchmahal was given the verification outline at least 14 days prior to the beginning of the verification. Moreover, with respect to the stainless steel flanges verification, the record shows that Panchmahal had been notified of this verification in October, 2000 and had subsequently confirmed the dates for verification on November 8, 2000. See Memorandum: Sales Verification of Panchmahal Steel Ltd. (PSL) - Stainless Steel Flanges from India from Thomas Killiam to the File (February 15, 2001). With regard to Panchmahal's reference to its success in the flanges verification, verifications vary by product, production process, and circumstances particular to each individual case. Thus, the verification in stainless steel flanges is distinct from the verification in the instant case. It is both possible and reasonable for the Department to come to distinct conclusions for separate verifications of separate products at the same company. Comment 5: Use of Adverse Facts Available Panchmahal claims that the petitioners' decision not to request a review of Panchmahal in this proceeding is evidence that even petitioners do not think that Panchmahal is dumping at a rate higher than its existing cash deposit rate of approximately 10 percent. Citing Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27326 (May 19, 1997), Final Results of Full Sunset Review: Sugar and Syrups from Canada, 64 FR 48362, 48364 (September 3, 1999), and Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From the Federal Republic of Germany; Final Results of Antidumping Duty Administrative Review, 56 FR 31692, (July 11, 1991), Panchmahal claims that the Department has established a presumption that petitioners will be aware of commercial quantities being dumped, requesting a review in those circumstances, and conversely not requesting a review if they believe the merchandise is being fairly traded. Thus, Panchmahal argues that the application of the 19.54 percent dumping margin is unjustified. The petitioners counter that the presumption that Panchmahal references in its argument is irrelevant to the current circumstances. Instead, the petitioners contend that the citations referenced by Panchmahal deal only with the circumstance in which a respondent has a zero or de minimis rate of dumping and there is no subsequent request for review. The petitioners conclude that the fact that it was Panchmahal and not the domestic industry that requested this review raises no presumptions at all. The petitioners further maintain that the continued application of adverse facts available is appropriate and necessary in this review because Panchmahal failed to cooperate and significantly impeded the Department's ability to verify Panchmahal's questionnaire responses and conduct of the review. In addition, the petitioners believe that given Panchmahal's failure to cooperate, the Department is fully justified in applying the petition rate of 21.02 percent rather than the 19.54 rate assigned to Panchmahal in the Preliminary Results. Department's Position: The dumping margin ultimately assigned to a respondent for a particular POR is not related to which interested party requested the review. Instead, the final margin rate assigned is based on the evidence the Department gathers and analyzes regarding the sales made and costs incurred by the respondent during the period of review. Consistent with the Preliminary Results (66 FR 8939-8942), we continue to find the margin calculated for Ferro Alloys Corporation Limited ("Facor") during the 1998-1999 administrative review, representing the highest weighted-average margin determined for any firm during any segment of this proceeding (see Stainless Steel Bar from India; Final Results of Antidumping Duty Administrative Review and Partial Rescission of Administrative Review, 65 FR 48965, 48968 (Aug. 10, 2000)), to be an appropriate facts available rate. Comment 6: Other Factual Allegations To the extent that Panchmahal has raised other factual allegations in its case brief, especially in regard to events during the verification, the Department has considered and rejected these allegations. For a more detailed discussion of these allegations see the Verification Allegations Memo. Agree_________ Disagree_________ Faryar Shirzad Assistant Secretary for Import Administration (Date) _________________________________________________________________________ footnote: 1. Al Tech Specialty Steel Corp., Carpenter Technology Corp., Crucible Specialty Metals Division, Crucible Materials Corp., Electroalloy Corp., Republic Engineered Steels, Slater Steels Corp., Talley Metals Technology, Inc., and the United Steelworkers of America (AFL-CIO/CLC).