[Federal Register Volume 59, Number 218 (Monday, November 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-28051]


[[Page Unknown]]

[Federal Register: November 14, 1994]


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DEPARTMENT OF COMMERCE
[A-583-810]

 

Chrome-Plated Lug Nuts 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 and Partial Termination.

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SUMMARY: On February 17, 1994, the Department of Commerce published the 
preliminary results of administrative review of the antidumpting duty 
order on chrome-plated lug nuts from Taiwan. The review covers four 
firms and the period April 18, 1991, through August 31, 1992. Based on 
our analysis of the comments received, we have determined that the 
dumping margins remain the same as those presented in the preliminary 
results.

EFFECTIVE DATE: November 14, 1994.

FOR FURTHER INFORMATION CONTACT:
Todd Peterson or Thomas Futtner, Office of Antidumping Compliance, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone (202) 482-4195 or 482-3814, 
respectively.

Background

    On February 17, 1994, the Department of Commerce (the Department) 
published the preliminary results (59 FR 7981) of its administrative 
review of the antidumping duty order on chrome-plated lug nuts from 
Taiwan (September 20, 1991, 56 FR 47737). No hearing was requested. On 
March 18, 1994, the petitioner submitted a brief. On March 25, 1994, 
the respondent submitted a rebuttal brief. 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

    The merchandise covered by this review is one-piece and two-piece 
chrome-plated lug nuts, finished or unfinished, which are more than 
\11/16\ inches (17.45 millimeters) in height and which have a hexagonal 
(hex) size of at least \3/4\ inches (19.05 millimeters) but not over 
one inch (25.4 millimeters), plus or minus \1/16\ of an inch (1.59 
millimeters). The term ``unfinished'' refers to unplated and/or 
unassembled chrome-plated lug nuts. The subject merchandise is used for 
securing wheels to cars, vans, trucks, utility vehicles, and trailers. 
Zinc-plated lug nuts, finished or unfinished, and stainless-steel 
capped lug nuts are not in the scope of this review. Chrome-plated lock 
nuts are also not in the scope of this review.
    During the period of review, chrome-plated lug nuts were provided 
for under subheading 7318.16.00.00 of the Harmonized Tariff Schedule 
(HTS). Although the HTS subheading is provided for convenience and 
Customs purposes, our written description of the scope of this review 
is dispositive.
    This review covers four firms: King Kong Corporation; Gourmet 
Equipment (Taiwan) Corporation (Gourmet); Chu Fong Metallic Industrial 
Corporation (Chu Fong); and San Chien Electric Industrial Works (San 
Chien). The period of review is April 18, 1991, through August 31, 
1992.
    For the two parties that refused to respond to our questionnaire, 
Chu Fong and San Chien, we based our determination on best information 
available (BIA). The First-tier BIA rate we applied is 10.67 percent, 
which is the highest rate the Department found in the original less-
than-fair value investigation (LTFV). Gourmet provided us with 
responses to our questionnaire, however the information it provided was 
unverifiable (see verification report). Accordingly, we applied the 
second-tier BIA rate of 6.47 percent. This rate represents the highest 
rate ever applicable to Gourmet. King Kong Corporation received the 
``all others'' rate because the Department attempted, but could not 
locate, an address for it.

Analysis of Comments Received

    We invited interested parties to comment on the preliminary 
results. We received timely comments from the petitioner, Consolidated 
International Automotive, Inc., and rebuttal comments from one 
respondent, Gourmet.

Comment 1

    Petitioner believes that the Department correctly applied best 
information available (BIA) to both cooperative and uncooperative 
firms. However, petitioner asserts that the rates assigned to 
uncooperative firms do not accomplish the statute's two goals with 
regard to BIA, which are: (1) To approximate the actual dumping 
margins, and (2) to induce future compliance. Petitioner further 
stresses that these rates may not be sufficient to encourage compliance 
with the order by middlemen, which is especially important in this case 
since the Department chose not to initiate a middleman dumping 
investigation in response to petitioner's request for one. Accordingly, 
petitioner asserts that the Department has the authority to apply a BIA 
rate to the uncooperative firms based on a rate found in the petition.
    Petitioner cites Brass Sheet and Strip from Sweden: Final Results 
of Antidumping Duty Administrative Review (57 FR 29278, July 1, 1992) 
for an explanation of the Department's BIA policy. In that case, the 
Department stated: ``The primary purpose of the BIA rule is to induce 
respondents to provide the Department with timely, complete or accurate 
information, so that the agency can achieve the fundamental purpose of 
the Tariff Act, namely, `determining current margins as accurately as 
possible'.'' The Department also explained that ``to induce a 
noncomplying respondent to provide the necessary response to a future 
information request, the Department must select an appropriate BIA rate 
to encourage future compliance.'' Petitioner stresses that encouraging 
middlemen to cooperate is especially important, otherwise the issue of 
middleman dumping cannot be addressed.
    Petitioner cites Sec. 353.37(b) of the Department's regulations 
which defines the Department's latitude in assigning BIA rates: ``The 
best information available may include the factual information 
submitted in support of the petition or subsequently submitted by 
interested parties. * * *. If an interested party refuses to provide 
factual information requested by the Secretary or otherwise impedes the 
proceeding, the Secretary may take that into account in determining 
what is the best information available.'' Petitioner also cites Krupp 
Stahl A.G. v. United States, 822 F. Supp. 789 (CIT 1993) (Krupp Stahl) 
where the Court of International Trade (CIT) affirmed the Department's 
broad discretion in determining which BIA rate to apply. Petitioner 
states that Krupp Stahl supports its argument that ``[o]nce Commerce 
has exercised its discretion to use the best information available rule 
against a respondent, it is for Commerce, not the respondent, to 
determine what is the best information.''
    The respondent, Gourmet, argues that Chu Fong and San Chien, should 
be assigned the cooperative second-tier BIA rate because they are 
trading companies. Gourmet claims that, according to the Department's 
own policy, trading companies are not required to respond. Gourmet 
points to the Final Determination of Sales at Less Than Fair Value: 
Chrome-Plated Lug Nuts from Taiwan (56 FR 36130, 36132 (July 31, 
1991)), which states that ``it is the Department's longstanding 
practice to look at prices charged by the manufacturer, as opposed to 
the trading company, where the manufacturer knows the destination of 
the merchandise.'' According to Gourmet, the Department was aware of 
Gourmet's relationship with trading companies during the original 
investigation. In addition, Gourmet provided one trading company's 
invoices of lug nuts manufactured by Gourmet in the questionnaire 
response and at verification. Respondent claims the Department 
therefore had all the necessary information to cover Gourmet's and all 
trading company sales. It refers to Allied-Signal Aerospace Co. v. 
United States, 996 F.2nd 1185 (Fed. Cir. 1993) (Allied-Signal), where 
the CIT found that the Department cannot apply punitive BIA when a firm 
did provide the requested information, although not in the form 
requested by the Department.
    Respondent claims that the Department cannot apply adverse BIA to 
the trading companies based on the margins contained in the petition. 
Following the Department's two-tiered BIA methodology, respondent 
argues that the rate assigned to an uncooperative firm may be based on 
either (1) the highest of the rates found for any firm for the same 
class or kind of merchandise in the same country of origin in the LTFV 
or prior administrative reviews, or (2) the highest rate found in this 
review for any firm for the same class or kind of merchandise in the 
same country of origin. Furthermore, the respondent claims that the 
petition-based rate may not be considered because the petition is not 
part of this administrative review.

Department's Position

    In our preliminary results of review, we determined in accordance 
with section 776(c) of the Tariff Act that the use of BIA was 
appropriate for San Chien and Chu Fong because they failed to respond 
to our questionnaires. Each firm was sent a questionnaire and a follow-
up letter. The questionnaire stated, ``[a]ny undue delay or lack of 
response may result in our proceeding with appraisements based on the 
best information available'' (from Laurie Lucksinger, Division 
Director, Office of Antidumping Compliance, March 24, 1993). The 
follow-up letter stated, ``[t]he Department has received no response. 
If you are still intending to respond, we must receive your response by 
June 19, 1993. Otherwise the Department must conclude that your firm is 
not responding to the questionnaire. As stated in the questionnaire 
sent to you, the Department will use the best information otherwise 
available to determine your antidumping margin'' (from Laurie 
Lucksinger, Division Director, Office of Antidumping Compliance, June 
1, 1993). Neither firm responded to the questionnaire nor to the 
follow-up letter.
    While trading companies normally are not required to participate in 
a review when the manufacturer knows the ultimate destination of the 
merchandise, it is necessary for a firm to respond to a questionnaire 
in order for the Department to be able to establish the fact that it is 
a trading company. The nature of Chu Fong's and San Chien's business 
has not been established in this review, because neither firm responded 
to a questionnaire. Therefore, we cannot determine that these firms are 
in fact trading companies, manufacturing companies, or a combination of 
both.
    The LTFV investigation is not part of this review. Therefore, 
information submitted during the LTFV investigation cannot be used in 
this review unless it is placed on the record of this review by the 
Department or an interested party. Furthermore, business relationships 
and practices established during the LTFV investigation may or may not 
be the same during subsequent administrative reviews. Thus, it is 
necessary for respondents to respond to questionnaires.
    Gourmet is incorrect in claiming that the Department has all of the 
information necessary to conduct a review that covers both the trading 
company's and Gourmet's sales. In this review, we had only the invoices 
of the subject merchandise that related to Gourmet's sale to the United 
States through one trading company. There is no information concerning 
U.S., home market, or third country sales by the trading companies of 
subject merchandise produced by manufacturers other than Gourmet. In 
addition, there is no general information relating to corporate 
structure, ownership, corporate functions, accounting practices, and 
quantity and value of sales of the two trading companies.
    The respondent is also incorrect in citing Allied Signal to support 
its claim that first-tier BIA is inappropriate. In Allied Signal, the 
court stated, ``[t]he ITA may well have been justified in resorting to 
the first tier in selecting the best information available for bearings 
produced by INA Roulements S.A. after it announced that it would not 
participate in the administrative review and accordingly did not 
respond to the questionnaire at all.'' In this review, San Chien and 
Chu Fong submitted nothing, unlike the respondent in Allied Signal, 
which has submitted a response to the questionnaire and demonstrated 
its willingness to cooperate to the extent that it could.
    Because San Chien and Chu Fong failed to respond to our 
questionnaire, we assigned them the highest rate of any company from 
the LTFV investigation. In assigning this BIA rate, we were following 
our two-tiered methodology under which we impose the most adverse rates 
upon those who refuse to cooperate or otherwise significantly impede 
the proceeding, and less adverse rates upon those who were cooperative 
but failed to provide requested information in a timely manner or in 
the form required (see Final Results of Antidumping Duty Administrative 
Review of Antifriction bearings and Parts Thereof from France, et al., 
58 FR 39739, July 26, 1993, and section 776 (c) of the Tariff Act.
    The application of the two-tiered methodology used in the 
preliminary results does achieve the intended results of using BIA. The 
threat of application of first-tier BIA induces respondents to provide 
the Department with timely, complete, and accurate factual information. 
therefore, we have determined to continue our use of the two-tiered 
methodology. Accordingly, we have applied the highest margin from the 
LTFV investigation to San Chien and Chu Fong. The rate is 10.67 
percent.

Comment 2

    With respect to Gourmet, petitioner questions whether the 
cooperative BIA rate assigned in the preliminary results of review 
actually reflects the true dumping margins. Petitioner believes that 
this is an important criterion for the Department to consider in 
selecting a rate.

Department's Position

    We have determined that the cooperative second-tier BIA rate of 
6.47 percent is appropriate for Gourmet for the period of review, 
pursuant to section 776(c) of the Tariff Act. Although, Gourmet 
submitted all requested information in a timely manner, we were unable 
to reconcile its response with its audited financial statements.
    The BIA rate is Gourmet's rate from the LTFV investigation. As we 
are unable to compute a margin from verifiable information in this 
review, the Department determines that the rate Gourmet received in the 
LTFV investigation is a reasonable approximation of Gourmet's actual 
dumping margins.

Final Results of Review

    As a result of comments received, we have not revised our 
preliminary results. Therefore, we find the following margins exist for 
the period April 18, 1991 through August 31, 1992:

------------------------------------------------------------------------
                                                                 Margin 
                    Manufacturing/exporter                     (percent)
------------------------------------------------------------------------
Gourmet Equipment (Taiwan) Corporation.......................       6.47
Chu Fong Metallic Industrial Works Co, Ltd...................      10.67
San Chien Industrial Works, Ltd..............................      10.67
King Kong Corporation........................................       6.93
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
will issue appraisement instructions concerning all respondents 
directly to the U.S. Customers Service.
    Furthermore, the following deposit requirements will be effective 
for all shipments of the subject merchandise, entered, or withdrawn 
from warehouse, for consumption on or after the publication date of 
these final results of administrative review, as provided for by 
section 751(a)(1) of the Tariff Act: (1) The cash deposit rate for the 
reviewed firms will be those firms' rates established above; (2) for 
previously reviewed or investigated companies not listed above, the 
cash deposit rate will continue to be the company-specific rate 
published for the most recent period; (3) if the exporter is not a firm 
covered in this review, or the original LTFV investigation, but the 
manufacturer is, the cash deposit rate will be the rate established for 
the most recent period for the manufacturer of the merchandise; and (4) 
the ``all others'' rate will remain at 6.93 percent as established in 
the LTFV investigation (see Floral Trade Council versus United States, 
Slip Op. 93-79).
    These deposit requirements shall remain in effect until publication 
of the final results of the next administrative review.
    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 a final 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 or 
conversion to judicial protective order is hereby requested. Failure to 
comply with regulations and the terms of 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: November 4, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-28051 Filed 11-10-94; 8:45 am]
BILLING CODE 3510-DS-M