[Federal Register Volume 60, Number 167 (Tuesday, August 29, 1995)]
[Notices]
[Pages 44835-44837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-21431]



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DEPARTMENT OF COMMERCE
International Trade Administration
[A-583-810]


Chrome-Plated Lug Nuts From Taiwan; Final Results of Antidumping 
Duty Administrative Review and Termination in Part

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

ACTION: Notice of final results of antidumping duty administrative 
review and termination in part.

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SUMMARY: On December 19, 1994, the Department of Commerce (the 
Department) published the preliminary results of administrative review 
of the antidumping duty order on chrome-plated lug nuts from Taiwan. 
The review covers seven firms and the period September 1, 1992, through 
August 31, 1993. Based on our analysis of the comments received, we 
determine the dumping margins have not changed from those presented in 
the preliminary results.

EFFECTIVE DATE: August 29, 1995.

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.

Applicable Statute and Regulations

    The Department is conducting this review in accordance with section 
751(a) of the Tariff Act of 1930, as amended (Act). Unless otherwise 
indicated, all citations to the statute and to the Department's 
regulations are in reference to the provisions as they existed on 
December 31, 1994.

Background

    On December 19, 1994, the Department published the preliminary 
results (59 FR 65317) of its administrative review of the antidumping 
duty order on chrome plated lug nuts from Taiwan (September 20, 1991, 
56 FR 47737). The Department has now completed this administrative 
review in accordance with section 751 of the 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 mm). 
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 seven firms; Gourmet Equipment 
(Taiwan) Corporation (Gourmet), Buxton International Corporation 
(Buxton), Chu Fong Metallic Industrial Works Co, Ltd, Transcend 
International, Kuang Hong Industrial Works, San Chien Industrial Works, 
Ltd, and Everspring Corporation, and the period September 1, 1993, 
through August 31, 1994.
Analysis of Comments Received

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

Comment

    Respondent believes that the Department's use of overall best 
information available (BIA) to determine Buxton's preliminary margin 
was unsupported by the facts and not in accordance with the 
Department's past practice.
    Buxton believes that its disclosure of several ``minor pieces of 
data'' not traceable to its audited financial statements is ``normal 
business practice'' and should not be seen as a deficiency. Buxton 
points to the Department's use of Sweaters Wholly or in Chief Weight of 
Man-Made Fiber from Taiwan; Final Results of Changed Circumstances 
Antidumping Duty Administrative Review, 58 FR 32644 (June 11, 1993) to 
justify its claim that 

[[Page 44836]]
use of BIA is incorrect because in Buxton's opinion, Sweaters from 
Taiwan advocates the use of BIA only in cases of gross inconsistencies 
or deficiencies.
    Buxton cites Lasko Metal Products, Inc. v. United States, Slip Op. 
93-1242 (Fed. Cir. December 29, 1994) to point out that the purpose of 
the antidumping (AD) law is to determine the AD margin as accurately as 
possible. Buxton charges that by basing the entire margin on BIA, the 
Department has disregarded hundreds of verifiable items. Also, they 
claim the total BIA margin does not accurately reflect the true dumping 
margin.
    Finally, Buxton cites National Steel Corp. v. United States, 18 
CIT__, Slip. Op 94-194, at 11 (December 13, 1994), to emphasize that 
the Department only applies total BIA when a respondent ``has failed to 
submit information in a timely manner, or when part of the submitted 
data is sufficiently flawed so that the response as a whole is rendered 
unusable.'' Buxton claims that according to Usinor Sacilor v. United 
States, Slip Op. 94-197 at 14 (CIT December 19, 1994) total BIA is 
improper when data adjustments are minor or there is an inadvertent gap 
in the record.
    Petitioner believes that the Department correctly applied a BIA 
margin to Buxton. Petitioner disagrees with Buxton's contention that 
the ``problem areas are minor''. Petitioner states that the respondent 
has the obligation to establish the validity and accuracy of all its 
reported expenses.
    Petitioner states that the cooperative BIA rate assigned in the 
preliminary determination should be higher. Petitioner points to 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. There, 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'.'' Furthermore, 
petitioner notes the Department stated in Final Results of Antidumping 
Duty Administrative Review, Steel Jacks from Canada, 52 FR 32957 
(September 1, 1987): ``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 cites section 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 further points to 
Krupp Stahl A.G. v. United States, Slip Op. 93-84 (CIT May 26, 1993) 
where the Court of International Trade affirmed the Department's broad 
discretion in determining which BIA rate to apply.

Department's Position

    As the Department previously explained in the Preliminary Results 
of Antidumping Duty Administrative Review: Chrome-Plated Lug Nuts from 
Taiwan, 59 FR 65317 (December 19, 1994), reliance on the accounting 
system used for the preparation of the audited financial statements is 
a key and vital part of the Department's determination that a company's 
sales and constructed value data are credible. See Final Determination 
of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat 
Products, Certain Cold-Rolled Carbon Steel Flat Products, and Certain 
Cut-To-Length Carbon Steel Plate from Korea, 58 FR 37176, 37186 (July 
9, 1993). The reason for this is that use of internal documents that 
have not been audited and are not used for preparation of the financial 
statements or for any purpose outside internal deliberations of the 
company does not guarantee the accuracy of the information contained in 
the documents. Without such assurance, such costs are not verifiable.
    Buxton used data from internal documents that could not be traced 
to its audited financial statements. As a result, it was not possible 
for the Department to follow its standard practice of reconciling a 
company's sales and cost data to the company's audited financial 
statements. See Notice of Preliminary Results of Antidumping Duty 
Administrative Review: Chrome-Plated Lug Nuts from Taiwan, 59 FR 65317 
(December 19, 1994).
    It is not enough for Buxton simply to claim that it reported its 
normal business practices with respect to certain expenses because this 
can in no way compensate for the fact that certain expenses cannot be 
traced to its independently audited financial statements. In this 
respect, a claim of ``normal business practices'' cannot overcome the 
deficiencies and inconsistencies present in its response. See Sweaters 
Wholly or in Chief Weight of Man-Made Fiber from Taiwan; Final Results 
of Changed Circumstances Antidumping Duty Administrative Review, 58 FR 
32644, 32652 June 11, 1993.
    Buxton misinterprets Sweaters from Taiwan as advocating use of BIA 
only in cases of gross inconsistencies or deficiencies. Rather, the 
Department determined that BIA was appropriate in Sweaters from Taiwan 
because the respondent's financial records were unreliable, as in the 
present case with Buxton. Because Buxton's records cannot be reconciled 
to its audited financial statements, the Department cannot be assured 
that all sales and costs have been appropriately reported. Similarly, 
in this respect, in Sweaters from Taiwan the Department was unable to 
determine to what extent transactions of a company were not recorded, 
and thus, ``the Department could not confirm that these transactions 
totaled only a few hundred dollars nor could we confirm that these were 
minor expenses,'' 58 FR at 32651. Because the Department was unable to 
verify the accuracy or completeness of Buxton's response, the 
Department was compelled by section 776(c) of the Act to use BIA. See 
Memorandum to Holly Kuga, Director, Office of Antidumping Compliance: 
``Chrome-Plated Lug Nuts from Taiwan 9/1/92-8/31/93 Use of Best 
Information Available'' (Jan. 12, 1995), in the proprietary file of 
this case in the Central Records Unit, Room B-099.
    Buxton's reliance on National Steel Corps is also misplaced. For 
the reasons explained above, the Department determined that Buxton's 
submission was sufficiently flawed so as to be unreliable because 
Buxton could not reconcile that submission to its audited financial 
statements. Thus, contrary to Buxton's assertions, National Steel Corps 
supports the Department's determination to use BIA because in both 
cases, ``part of the submitted data is sufficiently flawed, so that the 
response as a whole is rendered unusable.'' Slip Op. 94-194 at 11.
    While we do not disagree with Buxton's reference to Lasko Metal for 
the general statutory proposition that dumping margins should be 
determined as accurately as possible, that statutory purpose cannot be 
carried out when part of the data submitted by the responding party is 
so flawed that it cannot be used. Thus, the court's statement in 
National Steel Corp. that the purpose of BIA is ``to induce respondents 
to provide Commerce with requested information 

[[Page 44837]]
in a timely, complete, and accurate manner * * *'' is more to the point 
in this case. Slip OP. 94-194 at 8. Furthermore, when the Department 
must resort the BIA, the courts have recognized that ``[the best 
information available is not necessarily the most accurate information; 
rather it is information that has become usable due to a respondent's 
failure to provide accurate information.'' Usinor Sacilor v. United 
States, Slip op. 94-197 at 12 (CIT December 19, 1994) (citations 
omitted). Accordingly, because Buxton's submission could not be 
reconciled to its audited financial statements, we have determined to 
continue to apply BIA to Buxton.
    In choosing a BIA rate it is the Department's policy to select a 
rate which will encourage respondents to provide the necessary response 
to future requests. The Department uses the following two-tier 
hierarchy to separate cooperative firms from non-cooperative firms (see 
Final Results of Antidumping Administrative Review of Antifriction 
Bearings and Parts Thereof from France, et al., 58 FR 39739, July 26, 
1993):

    1. When a company refuses to cooperate with the Department or 
otherwise significantly impedes these proceedings, we use as BIA the 
higher of (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 investigation 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.
    2. When a company substantially cooperates with our requests for 
information and, substantially cooperates in verification, but fails 
to provide the information requested in a timely manner or in the 
form required or was unable to substantiate it, we used as BIA the 
highest of (1) The highest rate ever applicable to the firm for the 
same class or kind of merchandise from either the LTFV investigation 
or a prior administrative review or if the firm has never before 
been investigated or reviewed, the all others rate from the LTFV 
investigation; or (2) the highest calculated rate in this review for 
the class or kind of merchandise for any firm from the same country 
of origin.

    In this instance, second-tier BIA applies to Buxton because it 
cooperated, but nevertheless failed to provide data which could be 
verified. As the Department is unable to compute a margin from 
verifiable information in this review, we determine that use of the all 
others rate established in the LTFV investigation is reasonable.
    We are not convinced that there is justification in this case to 
depart from our past practice in determining the cooperative BIA rate.

Final Results of Review

    As a result of comments received, we have not changed our 
preliminary results.

------------------------------------------------------------------------
                                                                Percent 
                    Manufacturer/exporter                        margin 
------------------------------------------------------------------------
Gourmet Equipment (Taiwan) Corporation.......................       6.47
Buxton International Corporation.............................       6.93
Chu Fong Metallic Industrial Works Co, Ltd...................      10.67
Transcend International......................................      10.67
Kuang Hong Industrial Works..................................      10.67
San Chien Industrial Works, Ltd..............................      10.67
Everspring...................................................       6.93
------------------------------------------------------------------------
*No shipments or sales subject to this review. The firm had no          
  individual rate from any segment of this proceeding, so we are        
  applying the all others rate from the LTFV investigation.             

    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. Customs 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 the rates outlined above; and (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, a prior review, or in 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) 
if neither the exporter nor the manufacturer is a firm covered in this 
or any previous review conducted by the Department, the cash deposit 
rate will be 6.93%, the all others rate established in the LTFV 
investigation.
    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 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 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: August 4, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-21431 Filed 8-28-95; 8:45 am]
BILLING CODE 3510-DS-M