[Federal Register Volume 59, Number 94 (Tuesday, May 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11968]


[[Page Unknown]]

[Federal Register: May 17, 1994]


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DEPARTMENT OF COMMERCE
International Trade Administration
[A-122-503]

 

Final Results of Antidumping Duty Administrative Review; Iron 
Construction Castings From Canada

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

ACTION: Notice of Final Results of Antidumping Duty Administrative 
Review.

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SUMMARY: On January 3, 1994, the Department of Commerce published in 
the Federal Register the preliminary results of an administrative 
review of the antidumping duty order on iron construction castings from 
Canada. The review covered 11 manufacturers and/or exporters of the 
subject merchandise to the United States during the period March 1, 
1992, through February 28, 1993. Based on our analysis of comments 
received, the dumping margins for the original 11 companies have not 
changed from the margins presented in the preliminary results. However, 
we have found that three additional companies are related to 
respondents in this review and have assigned cash deposit rates to 
reflect this relationship.

EFFECTIVE DATE: May 17, 1994.

FOR FURTHER INFORMATION CONTACT: Lisa Raisner, Office of Antidumping 
Compliance, International Trade Administration, U.S. Department of 
Commerce, Washington, DC 20230, telephone: (202) 482-3518.

SUPPLEMENTARY INFORMATION:

Background

    On January 3, 1994, the Department of Commerce (the Department) 
published in the Federal Register the preliminary results of an 
administrative review (59 FR 65) of the antidumping duty order on iron 
construction castings from Canada (51 FR 17220). The Department has now 
completed this administrative review in accordance with section 751 of 
the Tariff Act of 1930, as amended (the Tariff Act).

Scope of the Review

    Imports covered by this review are shipments of certain iron 
construction castings from Canada, limited to manhole covers, rings, 
and frames, catch basin grates and frames, cleanout covers and frames 
used for drainage or access purposes for public utility, water, and 
sanitary systems, classifiable as heavy castings under Harmonized 
Tariff Schedule (HTS) item numbers 7325.10.0010 and 7325.10.0050 and to 
valve, service, and meter boxes which are placed below ground to encase 
water, gas, or other valves, or water and gas meters, classifiable as 
light castings under HTS item numbers 8306.29.0000 and 8310.00.0000. 
The HTS item numbers are provided for convenience and Customs purposes 
only. The written description remains dispositive.
    This review covers sales of certain Canadian iron construction 
castings by Associated Foundry Ltd., Bibby Foundry Ltd., Bibby 
Waterworks Inc., Dobney Foundry Ltd., Bibby St. Croix, LaPerle Foundry 
Division (LaPerle), McCoy Foundry Company, Penticton Foundry Ltd., 
Titan Foundry Ltd., Titan Supply Ltd., and Trojan Industries, Inc., 
during the period March 1, 1992, through February 28, 1993. In 
addition, based on our analysis, we have found that three other 
companies, for which we did not initiate an administrative review, are 
related to respondents in this review and have, therefore, been 
assigned cash deposit rates to reflect this relationship.

Clerical Error

    The first-tier BIA rate used in the notice of preliminary results 
of review was listed as 9.9 percent. We have corrected this error for 
the final results and have used the rate of 9.8 percent as listed in 
Iron Construction Castings from Canada; Amendment to Final 
Determination of Sales at Less than Fair Value and Amendment to 
Antidumping Duty Order (51 FR 34110, September 25, 1986). We have also 
corrected references to this rate in all comments addressed below.

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. We received written comments and rebuttal briefs 
from the Municipal Castings Fair Trade Council and its individually-
named members (petitioner) and LaPerle.

Comments Regarding the Collapsing of Related Parties

    Comment 1: Petitioner supports the Department's analysis of the 
relationship between LaPerle and other respondents in this review and 
its use of the methodology outlined in the preliminary results, most 
recently upheld in Nihon Cement Co., Ltd., et al. v United States, et 
al., Slip Op. 93-80 (May 25, 1993), and argues that the Department 
properly determined that LaPerle is related to other respondents in 
this review.
    LaPerle argues that the Department improperly determined that 
LaPerle's response should be collapsed with responses of other 
entities. Although it does not dispute the fact that it is related to 
the other companies listed by the petitioner, LaPerle maintains that it 
is an autonomous operation and further asserts that each of the related 
companies covered by this review also operated as distinct and separate 
entities during the period of review.
    LaPerle also maintains that the decision to collapse in this 
administrative review directly contradicts the Department's decision in 
an earlier review not to require Bibby Ste-Croix to submit information 
regarding sales of castings produced by Laperle because the two 
companies operated as separate entities (see Iron Construction Castings 
from Canada, 55 FR 460, January 5, 1990).
    Department's Position: During the questionnaire process, LaPerle 
provided no evidence to demonstrate that it was an independent entity. 
In fact, analysis of the information provided by LaPerle proved the 
contrary. Further, LaPerle's comment does not cite to any relevant 
factual information on record, other than the geographical distance 
between several of the components and specific product-line 
differences, in support of its claim that LaPerle and each of its 
related parties were autonomous.
    In this review, we received only one questionnaire response, and 
that was from LaPerle. Based on our analysis of this response, for the 
preliminary results we determined that LaPerle was related to other 
respondents in this review. In doing so, we determined that LaPerle and 
its related entities met all five criteria, in addition to ownership, 
that the Department considers in determining whether to collapse 
related parties, as laid out in the preliminary results and in Certain 
Granite Products from Spain, 53 FR 24335, 1988; Certain Granite 
Products from Italy, 53 FR 27187, 1988; Steel Wheels from Brazil, 54 FR 
8780, 1989; Cellular Mobile Telephones and Subassemblies from Japan, 54 
FR 48011, 1989; and Final Determinations of Sales at Less Than Fair 
Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-
Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon 
Steel Flat Products, and Certain Cut-to-Length Carbon Steel Plate from 
Canada, 58 FR 37099 (July 9, 1993). The five criteria, in addition to 
ownership, are as follows:
     Interlocking boards of directors
     Similar production processes, facilities or equipment so 
as to facilitate shifting of production between facilities
     Do not operate as separate and distinct entities
     Share of marketing and sales information or offices
     Involvement in the pricing or production decisions of the 
other entity
    In response to LaPerle's claim that we are contradicting our 
earlier decision, we have determined that the record of this review 
differs substantially from that of the previous review in the amount of 
information we requested and the level of inter-relatedness which the 
information in this review shows. We consider these relationships to be 
sufficient to allow for price manipulation and involvement in pricing 
and/or production decisions (see analysis and decision memoranda for 
preliminary results). Therefore, we properly determined that LaPerle is 
related to, and should be collapsed with, other respondents in this 
review.
    Comment 2: The petitioner asserts that the Department should also 
collapse Grand Mere with LaPerle for these final results because public 
information on the record of this review indicates that Grand Mere is 
related to LaPerle.
    LaPerle responds that the Department should not collapse Grand Mere 
or any other related party with LaPerle for this review. LaPerle 
further argues that petitioner's attempt to collapse a non-reviewed 
firm with LaPerle in this review is untimely.
    Department's Position: Based on our criteria, as listed above, the 
information on the record indicates that three other companies, in 
addition to those included in the notice of initiation of 
administrative review, are sufficiently related to be collapsed with 
LaPerle and will be included in this administrative review for purposes 
of future entries and cash deposit rates. (For more information, see 
the analysis memorandum for these final results.) Therefore, we will 
instruct Customs to require cash deposits and assess estimated 
antidumping duties in the amount of the rate assigned to the entire 
entity.
    The issue of timeliness is not relevant in this instance because we 
are treating LaPerle and all its related companies as a single entity. 
Therefore, in effect, we are now reviewing one single company, 
comprised of various individual components, including LaPerle. The fact 
that three of these individual components were not included in the 
notice of initiation of this review is immaterial because we are 
treating the various components as one entity.

Comment Regarding the Use of Best Information Available

    Comment 3: Petitioner contends that despite the numerous 
opportunities LaPerle was given to submit information to the Department 
in support of its claim of being autonomous, the information LaPerle 
submitted only indicated the contrary. Further, because it failed to 
consolidate all information for itself, as outlined in the Department's 
questionnaire, LaPerle's questionnaire response and additional 
submissions do not constitute cooperation.
    Therefore, the petitioner maintains that the Department properly 
determined that LaPerle significantly impeded the proceedings and 
correctly applied first-tier best information available (BIA) in this 
review. The petitioner argues, however, that the BIA rate should be 
higher than the BIA rate used for the preliminary results in order to 
encourage compliance in future administrative reviews. The petitioner 
further suggests the possibility that, following the Department's two-
tiered methodology, the respondents in this case could have predicted 
the worst-case outcome of the administrative review.
    The petitioner argues that the Department's selection of 9.8 
percent applied as BIA in the preliminary results is not significantly 
greater than the rates that currently apply and therefore will not 
encourage future compliance. As such, the Department would be justified 
in departing from its normal BIA methodology by selecting a higher 
rate. The petitioner points out that the courts have held that the 
Department is not required to choose a rate that is precisely accurate 
but instead is to choose a rate that is ``usable'', citing Allied-
Signal Aerospace Co. v. United States, 13 CIT 13, 28, 704 F.Supp. 1114, 
1126 (1989), appeal after remand, 13 CIT 526, 717 F.Supp. 834 (1989), 
aff'd, 901 F.2d 1089 (Fed. Cir. 1990), cert.denied sub nom, and 
Floramerica, S.A. v. United States, 498 U.S. 848 (1990). Petitioner 
also points out that the Department has departed from its two-tiered 
approach when necessary in Cold-Rolled Stainless Steel Sheet from 
Germany; Final Results of Antidumping Duty Administrative Review, (59 
FR 15888, April 5, 1994 ), aff'd Krupp Stahl A.G. v. United States, 822 
F.Supp. 789 (CIT 1993). Accordingly, the petitioner argues the 
Department should apply the higher rate of 33.46 percent, which is the 
rate determined for a respondent in the preliminary results of the 
1985-1987 administrative review of the subject merchandise (Iron 
Construction Castings from Canada, 56 FR 274, May 21, 1991), as BIA.
    LaPerle states that the Department should not have resorted to BIA, 
particularly punitive BIA, for purposes of its preliminary results 
because LaPerle fully cooperated with the Department in every respect, 
responded to all requests for information, and was preparing for 
verification. LaPerle argues that, if the Department still deems use of 
BIA is necessary for the final results, the Department should use the 
second-tier rate.
    LaPerle argues that petitioner's reference to Allied-Signal, while 
it does lend support to the Department's use of 9.8 percent as BIA, 
does not offer a precedent for use of a preliminary results margin 
rate. LaPerle further argues petitioner's cite to Krupp Stahl is also 
misleading because the factual situation in this administrative review 
is distinctly different. In addition, in Krupp Stahl, the respondent 
was clearly uncooperative and impeded the proceeding by failing to 
respond to a new questionnaire and destroying the records necessary to 
verify the adequacy of the information submitted in the earlier 
response.
    LaPerle also refutes petitioner's allegation that it could have 
predicted the worst-case outcome of the administrative review, 
suggesting it would have been more efficient, in that case, to refuse 
to respond to any requests for information. Finally, LaPerle argues 
that the 9.8 percent rate used by the Department in its preliminary 
results is highly punitive in comparison to LaPerle's existing cash 
deposit rate of 3.16 percent from the most recent final results of 
administrative review.
    Department's Position: While LaPerle provided information during 
the review, our analysis of information on the record indicated that 
LaPerle was not independent, but was, in fact, one of many components 
of a single entity. Therefore, the single entity, comprised of many 
components including LaPerle, became, in effect, the respondent in this 
review.
    In Allied-Signal, the Court affirmed our two-tiered BIA 
methodology, noting that

    Whether the first or second tier properly applies to a 
nonresponsive respondent essentially turns on the level of 
cooperation exhibited by the respondent during the review. In order 
to apply the first tier to a particular respondent, the ITA must 
conclude that the respondent ``refused to cooperate with the [ITA] 
or otherwise significantly impeded'' the review.

(See Allied-Signal, p.15.) Once the Department determined that the 
related parties in this case must be collapsed, LaPerle was given the 
opportunity, through two supplemental questionnaires, to supply the 
additional data. However, LaPerle failed to provide complete 
information on the related parties. The other named respondents, who 
were also collapsed with LaPerle, did not respond. Therefore, only a 
small fraction of the required information was provided while a 
significant quantity remained unreported. Accordingly, the application 
of first-tier BIA is appropriate because LaPerle impeded the proceeding 
by failing to give the Department the information necessary to conduct 
the review and by failing to provide any support for its position that 
LaPerle was independent.
    Finally, we believe the 9.8 percent rate we have chosen is 
consistent with a first-tier BIA approach. The 33.46 percent rate 
suggested by the petitioner was from a notice of preliminary results. 
Because the factual situation in this administrative review differs 
from that in Krupp Stahl, we do not consider this rate appropriate to 
be used for these final results. In Krupp Stahl, because it was the 
first administrative review, the only rates available for BIA were from 
the preliminary and final results of the less-than-fair-value (LTFV) 
investigation. In order to assign a rate higher than the calculated 
rate that Krupp had received in the LTFV investigation, where Krupp had 
cooperated, the Department had no choice but to resort to the 
preliminary results; otherwise, Krupp would have been in a better 
position as a result of its noncompliance (see Krupp Stahl at 793) than 
if it had responded to the Department's questionnaire. However, in this 
case, we do have other final rates available and appropriate for BIA.
    Because the 9.8 percent BIA rate we have chosen is higher than any 
individual rate that currently applies to LaPerle and its related 
entities, we believe that the rate is adverse and will achieve the 
objective of encouraging complete responses in future reviews. 
Therefore, we believe that the 9.8 percent rate chosen is both 
appropriate and consistent with a first-tier BIA rate approach.
    Comment 4: The petitioner argues that, apart from impeding the 
proceeding in connection with the respondents' business relationships, 
additional grounds exist for the Department to apply BIA: inconsistent 
product codes; incorrect model match methodology; incorrect dates of 
sales; and missing information regarding COP data, product matches, 
difference-in-merchandise (difmer) adjustments, level of trade 
information, and general and administrative expenses in COP incurred on 
behalf of LaPerle by its related companies.
    LaPerle counters that its response is not grossly deficient: COP 
data, product concordance, and difmer adjustments were provided; 
LaPerle maintains that its model match methodology is correct and its 
level-of-trade information and dates of sale are appropriate; and, 
finally, because its operations were independent of the other 
companies, LaPerle thought it inappropriate to include general and 
administrative costs for these entities in its COP (and thought that 
even if it were appropriate, some of LaPerle's expenses would have to 
be allocated to those entities).
    Department's Position: Because LaPerle failed to submit a 
consolidated response, the information provided was inadequate for 
purposes of our analysis. Therefore, the issue of deficiencies in what 
information was, in fact, submitted is moot.

Final Results of the Review

    After analysis of the comments received, we determine that the 
following weighted-average margins exist, and have been applied based 
on relationship and/or failure to respond, for the period March 1, 1992 
through February 28, 1993: 

------------------------------------------------------------------------
                                                               Percent  
                   Manufacturer/exporter                       margin   
------------------------------------------------------------------------
Associated Foundry Ltd.....................................          9.8
Bibby Foundry Ltd..........................................          9.8
Bibby Waterworks Inc.......................................          9.8
Dobney Foundry Ltd.........................................          9.8
Bibby St. Croix (to include: Bibby Ste-Croix Founderies,                
 Inc. and Bibby Ste-Croix Division)........................          9.8
LaPerle Foundry, Inc.......................................          9.8
McCoy Foundry Company......................................         *7.5
Penticton Foundry Ltd......................................          9.8
Titan Foundry Ltd..........................................          9.8
Titan Supply Ltd...........................................          9.8
Trojan Industries, Inc.....................................         9.8 
------------------------------------------------------------------------
*No shipments during the period; since there was no prior review of this
  company, we assigned the all other rate from the less-than-fair-value 
  (LTFV) investigation.                                                 

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
will issue appraisement instructions on each exporter directly to the 
Customs Service. We will also instruct Customs to collect cash deposits 
for the three additional companies, which were collapsed with LaPerle 
for purposes of these final results, at the rate assigned to LaPerle.
    Furthermore, the following deposit requirements will be effective, 
upon publication of this notice of final results of administrative 
review, for all shipments of the subject merchandise from Canada that 
are entered, or withdrawn from warehouse, for consumption on or after 
the publication date of this notice, as provided by section 751(a)(1) 
of the Tariff Act: (1) The cash deposit rates for the reviewed 
companies will be those rates outlined above; (2) for previously 
reviewed or investigated companies not listed above, the cash deposit 
rate will continue to be their company-specific rate published for the 
most recent period; (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 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, the cash deposit rate will be 7.5 percent, which is the ``all 
other'' rate established in the LTFV investigation, as discussed below.
    On May 25, 1993, the Court of International Trade (CIT), in Floral 
Trade Council v. United States, Slip Op. 93-79, and Federal-Mogul 
Corporation and the Torrington Company v. United States, Slip Op. 93-
83, decided that once an ``all others'' rate is established for a 
company, it can only be changed through an administrative review. The 
Department has determined that in order to implement these decisions, 
it is appropriate to reinstate the ``all others'' rate from the LTFV 
investigation (or that rate as amended for correction of clerical 
errors or as a result of litigation) in proceedings governed by 
antidumping duty orders.
    This notice serves as a final reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as the only reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d). Timely written notification of 
return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of the APO is a sanctionable violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 
353.22.

    Dated: May 9, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-11968 Filed 5-16-94; 8:45 am]
BILLING CODE 3510-DS-P