[Federal Register Volume 60, Number 217 (Thursday, November 9, 1995)]
[Notices]
[Pages 56567-56575]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27832]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-843]
Notice of Preliminary Determination of Sales at Less Than Fair
Value: Bicycles From the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: November 9, 1995.
FOR FURTHER INFORMATION CONTACT: Katherine Johnson or Shawn Thompson,
Office of Antidumping Investigations, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230;
telephone: (202) 482-4929 or (202) 482-1776, 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 Rounds Agreements Act (URAA).
PRELIMINARY DETERMINATION: We preliminarily determine that bicycles
from the People's Republic of China (PRC) 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 are shown in
the ``Suspension of Liquidation'' section of this notice.
Case History
Since the initiation of this investigation on April 25, 1995 (60 FR
21065, May 1 , 1995) the following events have occurred:
On April 28 and May 11 and 12, 1995, we sent surveys to the PRC's
Ministry of Foreign Trade and Economic Cooperation (MOFTEC) requesting
the identification of producers and exporters, and information on
production and sales of bicycles exported to the United States. We also
sent courtesy copies of this survey to the China Chamber of Commerce
for Machinery and Electronics Products Imports and Exports (China
Chamber) and the China Chamber of Commerce for Import/Export of Light
Industrial Products. In June, the China Chamber submitted responses to
the Department of Commerce's (the Department's) surveys. These
responses included partial company-specific data from 29 companies and
export data from all companies. See Respondent Selection section of
this notice.
[[Page 56568]]
On May 22, 1995, the United States International Trade Commission
(ITC) notified the the Department of its affirmative preliminary
determination that there is a reasonable indication that an industry in
the United States is threatened with material injury by reason of
bicycle imports from China.
On June 22, 1995, petitioners amended the petition to revise the
definition of an ``incomplete bicycle'' in order to discourage
circumvention of any antidumping order issued in this investigation. We
have revised the scope of this investigation to reflect petitioners'
amendment (see the ``Scope of Investigation'' section of this notice,
below).
On June 30, 1995, we determined that, due to limited resources, we
would only be able to analyze the responses of the nine largest
exporters of PRC bicycles to the United States. In August 1995, we
received responses from three of the nine mandatory respondents. We
also received responses from six of the nine exporters who had
requested voluntary participation. (See Respondent Selection section of
this notice).
Also, on June 30, 1995, the Department requested that interested
parties provide information for valuing the factors of production and
for surrogate country selection. We received comments from the
interested parties in September 1995.
On August 18, 1995, petitioners requested a postponement of the
preliminary determination. We granted petitioners' request, and
postponed the preliminary determination until not later than November
1, 1995 (60 FR 44006, August 24 , 1995).
In September 1995, we issued supplemental questionnaires to the
nine exporters from whom we received questionnaire responses. Responses
to these questionnaires were received in September and October 1995.
On September 15, 1995, petitioners alleged that critical
circumstances exist with respect to imports of bicycles from the PRC.
Accordingly, on September 20, 1995, the Department requested
information regarding shipments of bicycles for the period January 1993
to November 1995 from all respondents participating in this
investigation. We received the requested information on October 4 and
5, 1995. For these responding companies, we used company-specific
shipment data to perform our critical circumstances analysis. On
October 25, 1995, we received updated shipment data for Hua Chin
Bicycle Co., Ltd. (Hua Chin). However, this information was received
too late to be analyzed for purposes of the preliminary determination.
On September 28, 1995, we issued a supplemental questionnaire to
respondents requesting information regarding their selling, general,
and administrative (SG&A) expenses. On October 27 and 31, 1995,
respondents submitted responses to this questionnaire. Due to the time
constraints of this investigation, the Department was unable to analyze
this data for purposes of the preliminary determination.
Between September 28, and October 31, 1995, 11 PRC exporters
submitted unsolicited section A questionnaire responses and requested
separate rates treatment.
On September 25, 1995, and in subsequent submissions, certain
respondents requested that the Department terminate the investigation
on the grounds that the petition failed to contain all relevant price
and cost information reasonably available to petitioners, and because
the petition relied on unsubstantiated assertions regarding U.S.
prices.
Scope of the Investigation
The product covered by this investigation is bicycles of all types,
whether assembled or unassembled, complete or incomplete, finished or
unfinished, including industrial bicycles, tandems, recumbents, and
folding bicycles. For purposes of this investigation, the following
definitions apply irrespective of any different definition that may be
found in Customs rulings, U.S. Customs law, or the Harmonized Tariff
Schedule of the United States (HTSUS): (1) The term ``unassembled''
means fully or partially unassembled or disassembled; (2) the term
``incomplete'' means lacking one or more parts or components with which
the complete bicycle is intended to be equipped; and (3) the term
``unfinished'' means wholly or partially unpainted or lacking decals or
other essentially aesthetic material. Specifically, this investigation
is intended to cover: (1) Any assembled complete bicycle, whether
finished or unfinished; (2) any unassembled complete bicycle, if
shipped in a single shipment, regardless of how it is packed and
whether it is finished or unfinished; and (3) any incomplete bicycle,
defined for purposes of this investigation as a frame, finished or
unfinished, whether or not assembled together with a fork, and imported
in the same shipment with any two of the following components, whether
or not assembled together with the frame and/or fork: (a) The rear
wheel; (b) the front wheel; (c) a rear derailleur; (d) a front
derailleur; (e) any one caliper or cantilever brake; (f) an integrated
brake lever and shifter, or separate brake lever and click stick lever;
(g) crankset; (h) handlebars, with or without a stem; (i) chain; (j)
pedals; and (k) seat (saddle), with or without seat post and seat pin.
The scope of this investigation is not intended to cover bicycle
parts except to the extent that they are attached to or in the same
shipment as an unassembled complete bicycle or an incomplete bicycle,
as defined above.
Complete bicycles are classifiable under subheadings 8712.00.15,
8712.00.25, 8712.00.35, 8712.00.44, and 8712.00.48 of the 1995 HTSUS.
Incomplete bicycles, as defined above, may be classified for tariff
purposes under any of the aforementioned HTSUS subheadings covering
complete bicycles or under HTSUS subheadings 8714.91.20-8714.99.80,
inclusive (covering various bicycle parts). The HTSUS subheadings are
provided for convenience and customs purposes. The written description
of the scope of this investigation is dispositive.
Period of Investigation
Our normal practice in cases involving non-market economy countries
is to examine sales over a six-month period. In this case, however, we
examined the import data for bicycles and noticed a distinct seasonal
pattern associated with the Christmas and Spring selling seasons. We,
therefore, determined that it would be appropriate to extend the POI to
capture a full-year seasonal pattern. As a result, the period of
investigation (POI) in this case is April 1, 1994, through March 31,
1995.
Nonmarket Economy Country Status
The Department has treated the PRC as a nonmarket economy country
(NME) in all past antidumping investigations (see, e.g., Final
Determination of Sales at Less Than Fair Value: Silicon Carbide from
the People's Republic of China 59 FR 22585 (May 2, 1994) (Silicon
Carbide) and Final Determination of Sales at Less Than Fair Value:
Furfuryl Alcohol from the People's Republic of China 60 FR 22544 (May
8, 1995) (Furfuryl Alcohol). Neither respondents nor petitioners have
challenged such treatment. Therefore, in accordance with section
771(18)(C) of the Act, we will continue to treat the PRC as an NME in
this investigation.
When the Department is investigating imports from an NME, section
773(c)(1) of the Act directs us to base normal value (NV) on the NME
producers' factors of production, valued, to the extent possible, in a
comparable market economy that is a significant producer of comparable
merchandise. The
[[Page 56569]]
sources of individual factor prices are discussed under the NV section,
below.
Surrogate Country
The Department has determined that India, Kenya, Nigeria, Pakistan,
Sri Lanka, and Indonesia are countries comparable to the PRC in terms
of overall economic development (see Memorandum from David Mueller,
Director, Office of Policy, to Gary Taverman, Acting Director, Office
of Antidumping Investigations, dated June 15, 1995).
According to the available information on the record, we have
determined that India and Indonesia are significant producers of
merchandise comparable to the subject merchandise. India and Indonesia,
in fact, produce a broad range of bicycles, including children's
bicycles, mountain bicycles, lightweight road bicycles, and BMX
bicycles. Moreover, the bicycle industries in both countries, like
their PRC counterparts, purchase imported components for production of
export-quality bicycles.
Because both countries are significant producers of bicycles, we
analyzed the availability and quality of the surrogate price data from
both India and Indonesia. Regarding Indonesia, petitioners submitted
excerpts from a 1992 Indonesian government survey pertaining to the
Indonesian bicycle industry. The survey is an annual government study
which contains the average unit values for the majority of components
used to produce bicycles. However, this survey does not report prices
by material composition, quality, size, or other variations in the
physical characteristics of the components. Furthermore, the portions
within the survey that pertain to SG&A expenses, as well as profit, are
not readily identifiable. It is, therefore, not apparent what should or
should not be included in these categories. Lastly, it appears that
certain factor values provided in the 1992 study are abnormally high
when compared with comparable figures from 1991 and 1993, as provided
by respondents subsequent to the initiation of this case.
Regarding India, respondents submitted Indian bicycle industry
publications containing suggested wholesale and retail prices of
several of the largest bicycle companies in India, covering the entire
POI. Respondents also submitted a price list, contemporaneous with the
POI, from one of the largest bicycles manufacturers in India, as well
as 1993-1994 annual reports from two of the largest bicycle
manufacturers in India. We also note that India, like the PRC, has a
long and established tradition of bicycles production. This is not the
case with Indonesia, where the bicycles industry was developed
relatively recently.
The Indian data, like the Indonesian data, contains prices for
components without specific descriptions with regard to size, material
content, design, or other variations in the physical characteristics.
However, the Indian data, in certain instances, does contain more
specific information regarding the characteristics of components than
the Indonesian data. In addition, the Indian data encompasses the
entire POI. Moreover, contrary to petitioners' assertion that the
Indian data submitted by respondents was self-serving, the objectivity
of the data was corroborated by the U.S. embassy in New Delhi when it
transmitted the identical market publication in response to the
Department's request for pricing information. Lastly, the financial
reports submitted for two large Indian bicycle companies provided
information which was sufficiently detailed to render it usable in
calculating factory overhead, SG&A, and profit.
For these reasons, we find that the availability and quality of the
Indian data is superior to the Indonesian data. In instances where the
Indian data was not available for a particular item, we used Indonesian
data (subject to the conditions noted below).
Accordingly, we have calculated NV using Indian prices to value the
PRC producers' factors of production, when available and where
appropriate. We have obtained and relied upon published publicly
available information wherever possible. However, due to the unique
nature of the subject merchandise in this investigation, there are
certain instances in which the Department determined that the published
publicly available information was not adequate. Below is a discussion
regarding situations in which we did not use the Indian prices (see,
the ``Valuation of Bicycle Parts'' section of this notice).
Respondent Selection
In NME cases, we presume a single rate is applicable to all
exporters and we attempt to examine the sales of all exporters during
the POI. As is our normal practice, we sent a survey to MOFTEC to
determine who the producers and exporters were, the relationships
between and among these companies, and relevant information about
production and exports. In response to the survey, the China Chamber of
Commerce for Import & Export of Machinery and Electronics (the
Chamber), which covers the bicycle industry, provided a list of
companies identified by Chinese Customs as exporters of bicycles from
the PRC to the United States, along with their respective export
volumes. The Chamber also provided limited company-specific data
regarding 29 other firms. This information showed that the number of
exporters was extremely large. In fact, based on the information
submitted by the Chamber, it appeared that there were well over 100
exporters of Chinese bicycles during the calendar year 1994. Given that
we did not have the administrative resources to examine the sales of
all exporters, we determined that our investigation would be limited to
the analysis of the sales of the nine largest PRC exporters of bicycles
to the United States. The identification of the largest exporters was
based on the data supplied by the Chamber. We issued questionnaires to
MOFTEC with instructions that all nine companies were required to
respond to the questionnaire.
At the time we selected these companies, we were aware of at least
ten other companies that wished to participate in the investigation as
voluntary respondents. Although we had already determined that we did
not have the resources to examine more than nine, we indicated that
should any of the nine mandatory respondents fail to respond, we would
randomly select voluntary respondents for analysis from those companies
providing complete questionnaire responses, including a valid separate
rates claim, on the date the mandatory responses were due.
On the due date for the nine mandatory respondents, we received
questionnaire response from only three, that is, six mandatory
respondents failed to respond. Instead, six other companies supplied
voluntary responses.
All nine companies who submitted complete questionnaire responses
on the due date have qualified for a separate rate. See Separate Rates
section below.
Finally, in October, several months after the due date for the
mandatory and voluntary responses, we received partial questionnaire
responses from 11 companies. These were responses to only section A of
the questionnaire which deals primarily with separate rates. We are
rejecting these unsolicited responses as untimely. See China-Wide Rate
section below for these companies.
Separate Rates
Four of the responding exporters in this investigation are located
outside the
[[Page 56570]]
PRC. They are (1) Merida Industry (Hong Kong) Co., Ltd./Merida Bicycle
Co., Ltd . (hereinafter Merida); (2) Giant China Co., Ltd. (hereinafter
Giant); (3) Hua Chin Bicycle Co., Ltd. (hereinafter Hua Chin); and (4)
Chitech Industries, Ltd. (Hong Kong) (and affiliated parties Tandem
Industries, Ltd. (Hong Kong), Magna Technology Corp. (Taiwan), Taiwan
Tandem Co., Ltd. (Taiwan), and Shun Lu Bicycle Co. (aka Shunde Tandem
Bicycle Parts Company) (hereinafter Chitech)). Further, there is no PRC
ownership of any of these companies. Therefore, we determine that no
separate rates analysis is required for these exporters because they
are beyond the jurisdiction of the PRC government. See, e.g., Final
Determination of Sales at Less Than Fair Value: Disposable Pocket
Lighters from the People's Republic of China (60 FR 22359, 22361, May
5, 1995).
The remaining five respondents are joint ventures between Chinese
and foreign companies. They are (1) CATIC Bicycle Co, Ltd. (hereinafter
CATIC); (2) Shenzhen China Bicycles Co. (Holdings)., Ltd. (hereinafter
CBC); (3) Shenzhen Overlord Bicycle Co., Ltd. (hereinafter Overlord);
(4) Universal Cycle Corp. (hereinafter Universal); and (5) Bo An Bike
Co., Ltd. (hereinafter Bo An). For these respondents, a separate rates
analysis is necessary to determine whether the exporters are
independent from government control.
To establish whether a firm is sufficiently independent from
government control to be entitled to a separate rate, the Department
analyzes each exporting entity under a test arising out of the Final
Determination of Sales at Less Than Fair Value: Sparklers from the
People's Republic of China 56 FR 20588 (May 6, 1991) (Sparklers) and
amplified in Silicon Carbide. Under the separate rates criteria, the
Department assigns separate rates in nonmarket economy cases only if
respondents can demonstrate the absence of both de jure and de facto
governmental control over export activities.
1. Absence of De Jure Control
The respondents have placed on the administrative record a number
of documents to demonstrate absence of de jure control, including laws,
regulations and provisions enacted by the State Council of the central
government of the PRC. Respondents have also submitted documents which
establish that bicycles are not included on the list of products that
may be subject to central government export constraints (Export
Provisions).
In prior cases, the Department has analyzed the laws which the
respondents have submitted in this record and found that they establish
an absence of de jure control. See Notice of Preliminary Determination
of Sales at Less Than Fair Value and Postponement of Final
Determination; Certain Partial-Extension Steel Drawer Slides With
Rollers From the People's Republic of China, 60 FR 29572, 29573 (June
5, 1995); see also Notice of Final Determination of Sales at Less Than
Fair Value: Furfuryl Alcohol From the People's Republic of China, 60 FR
22544 (May 8, 1995). We have no new information in this preceding which
would cause us to reconsider this determination.
However, as in previous cases, there is some evidence, that the PRC
central government enactments have not been implemented uniformly among
different sectors and/or jurisdictions in the PRC. (See Silicon Carbide
and Furfuryl Alcohol.) Therefore, the Department has determined that an
analysis of de facto control is critical in determining whether
respondents are, in fact, subject to a degree of governmental control
which would preclude the Department from assigning separate rates.
2. Absence of De Facto Control
The Department typically considers four factors in evaluating
whether each respondent is subject to de facto governmental control of
its export functions: (1) Whether the export prices are set by or
subject to the approval of a governmental authority; (2) whether the
respondent has authority to negotiate and sign contracts and other
agreements; (3) whether the respondent has autonomy from the government
in making decisions regarding the selection of management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding disposition of profits or
financing of losses (see Silicon Carbide and Furfuryl Alcohol).
Each respondent has asserted the following: (1) It establishes its
own export prices; (2) it negotiates contracts, without guidance from
any governmental entities or organizations; (3) it makes its own
personnel decisions and, according to respondents, there is no
information on the record suggesting central government control over
selection of management; and (4) it retains the proceeds of its export
sales, uses profits according to its business needs and has the
authority to sell its assets and to obtain loans. In addition,
respondents' questionnaire responses indicate that company-specific
pricing during the POI does not suggest coordination among exporters.
This information supports a preliminary finding that there is a de
facto absence of governmental control of export functions.
Consequently, we preliminarily determine that each of the nine
exporters has met the criteria for the application of separate rates.
We will examine this matter further at verification and determine
whether the questionnaire responses are supported by verifiable
documentation.
China-Wide Rate
As stated above, six of the mandatory respondents did not respond
to the questionnaire. Hence, we are applying a single antidumping rate
to these exporters as well as all other exporters in the PRC based on
our presumption that the export activities of these respondents who
failed to respond are controlled by the PRC government. This PRC-wide
antidumping rate is based on adverse facts available.
Facts Available
We have based the China-wide rate on facts available using adverse
inferences. Given that this margin involves secondary data contained in
the petition (i.e., secondary information), we are required to
corroborate this data, to the extend practible, pursuant to section
776(c) of the Act. See, also, Statement of Administrative Action at
200. We have identified several major items (i.e., depreciation,
interest, and profit, as well as the factor values for frames, forks,
and rims) contained in the petition which individually comprise a
significant portion of the normal value calculations. We compared the
data in the petition to secondary data which includes but is not
limited to the same type of data used as the basis for the petition and
the audited financial reports of two of the largest Indian bicycle
producers.
As a result of our analysis, we found that, in the majority of
instances, the secondary information for these factor values are
comparable to those provided in the petition. Accordingly, this
petition information has been corroborated.
However, after analyzing the figures contained in the petition for
depreciation, interest and profit (value-added), we found, as did both
petitioners and respondents, that this figure does not reflect usual
cost and profit in the Indonesian bicycle industry. Specifically, the
57.91 percent figure provided in the petition for 1992 does not
correspond with the 22.84 and 22 percent figures provided for 1993 and
1991, respectively. Therefore, we find that the 57.91 percent figure is
not
[[Page 56571]]
corroborated, (i.e., has no probative value in determining
depreciation, interest, and profit).
We have used the 1991 value-added figure for depreciation, profit,
and interest in recalculating the margins in the petition. We did not
use the more current 1993 figure, because the study containing it was
issued only in draft form.
Finally, the respondents have made numerous submissions requesting
that the Department rescind the investigation based on the fact that
the petitioners had a variety of information available to them which
showed lower or even de minimis dumping margins. The respondents argue
that the Indonesia study is demonstrably aberrant and that the
petitioners had access to more accurate Indian data. The respondents
also show that the petitioners had access to some Chinese bicycle
prices which they did not use in the petition.
We disagree with the respondents that any of the information they
provided forms a basis for rescinding the investigation. The statute
and regulations lay out in detail the requirements for a petition. In
particular, the statute states that the domestic producers are required
to provide information supporting each element required, to the extent
it is reasonably available. Nevertheless, we are concerned about any
potential for abuse or misrepresentation by all parties and to that
extent have carefully considered the respondents' allegations. After
comparing data in the petition with the information provided by the
respondents, we find no evidence of abuse or misrepresentation.
Moreover, as discussed above, we have corroborated the data in the
petition and, with one exception, are satisfied with the data and have
relied on it in making our determination.
Fair Value Comparisons
To determine whether sales of bicycles from the PRC to the United
States by the nine PRC exporters were made at less than fair value, we
compared the ``United States Price'' (USP) to the NV, as specified in
the ``United States Price'' and ``Normal Value'' sections of this
notice.
United States Price
For all responding exporters, with the exception of CATIC, which
had only constructed export price (CEP) sales, we based USP on export
price (EP) in accordance with section 772(a) of the Act, when the
subject merchandise was sold directly to the first unaffiliated
purchaser in the United States prior to importation and when CEP
methodology was not otherwise indicated.
In addition, for Giant, CBC, CATIC, and Chitech, where sales to the
first unaffiliated purchaser took place after importation into the
United States, we based USP on CEP, in accordance with section 772(b)
of the Act.
We made company-specific adjustments as follows:
1. Bo An
We calculated EP based on packed, FOB Hong Kong port prices to
unaffiliated purchasers in the United States. We made deductions from
the FOB Hong Kong price, where appropriate, for foreign inland freight
and brokerage and handling (which includes containerization,
documentation fees, the Hong Kong terminal handling charge and PRC
brokerage costs) and Hong Kong duty. As all foreign inland freight and
brokerage and handling were provided by PRC suppliers, these services
were valued in India.
2. CBC
We calculated EP and CEP based on packed, FOB Hong Kong port or CIF
U.S. port prices to unaffiliated purchasers in the United States, as
appropriate. We made deductions from the starting price, where
appropriate, for the following services which were provided by market
economy suppliers: ocean freight, foreign brokerage and handling (which
includes containerization, documentation fees, the Hong Kong terminal
handling charge and PRC brokerage costs), marine insurance, Hong Kong
duty expenses, U.S. brokerage and handling fees, U.S. duty expenses
(which also included harbor maintenance fees and merchandise processing
fees), and freight expenses to the first unrelated U.S. customer and/or
to the U.S. warehouse. We also deducted from the starting price, where
appropriate, an amount for foreign inland freight. However, because
these movement services were provided by PRC suppliers, these services
were valued in India. We also deducted, where appropriate, discounts
and rebates from the starting price.
Because there was insufficient time to analyze U.S. selling expense
data submitted by CBC for purposes of this preliminary determination,
we did not deduct U.S. selling expenses from CEP. This information will
be considered for purposes of the final determination.
3. CATIC
We calculated CEP based on FOB warehouse or CIF delivered prices to
unaffiliated purchasers in the United States. We made deductions from
the starting price, where appropriate, for the following services which
were provided by market economy suppliers: ocean freight, marine
insurance, Kong Kong duty expenses, U.S. brokerage and handling fees,
U.S. duty expenses (which also included harbor maintenance fees and
merchandise processing fees), and freight expenses to the first
unrelated U.S. customer and/or to the U.S. warehouse. We also deducted
from the starting price, where appropriate, an amount for foreign
inland freight and foreign brokerage and handling expenses. However,
because these movement services were provided by PRC suppliers, these
services were valued in India. We also deducted, where appropriate,
discounts and repacking expenses from the starting price.
Because there was insufficient time to analyze U.S. selling expense
data submitted by CATIC for purposes of this preliminary determination,
we did not deduct U.S. selling expenses from CEP. This information will
be considered for purposes of the final determination.
4. Giant
We calculated EP and CEP based on packed, FOB PRC port or CIF U.S.
port prices to unaffiliated purchasers in the United States, as
appropriate. We made deductions from the starting price, where
appropriate, for the following: foreign inland freight, foreign
brokerage and handling, U.S. brokerage, international freight (which
includes U.S. inland freight), U.S. duty, loading and containerization,
and marine insurance (which also includes U.S. inland insurance, harbor
maintenance fees and merchandise processing fees). All of the above
expenses were provided by market economy carriers and paid for in
market economy currencies. We also deducted an amount for foreign
inland freight but since this service was provided by a PRC supplier,
we valued this expense in India. We also deducted from the starting
price, where appropriate, discounts and rebates.
Because there was insufficient time to analyze U.S. selling expense
data submitted by Giant for purposes of this preliminary determination,
we did not deduct U.S. selling expenses from CEP. This information will
be considered for purposes of the final determination.
5. Hua Chin
We calculated EP based on packed, FOB Hong Kong port prices to
[[Page 56572]]
unaffiliated purchasers in the United States. We made deductions from
the FOB Hong Kong price, where appropriate, for foreign inland freight
and Hong Kong terminal handling fees. As all foreign inland freight and
handling fees were provided by PRC suppliers, these services were
valued in India.
6. Merida
We calculated EP based on packed, FOB Hong Kong port prices to
unaffiliated purchasers in the United States. We made deductions from
the FOB Hong Kong price, where appropriate, for foreign inland freight
and brokerage and handling (which includes containerization,
documentation fees, the Hong Kong terminal handling charge and PRC
brokerage costs) and Hong Kong duty. As all foreign inland freight and
brokerage and handling were provided by PRC suppliers, these services
were valued in India.
7. Overlord
We calculated EP based on packed, FOB Hong Kong port prices to
unaffiliated purchasers in the United States. We made deductions from
the FOB Hong Kong price, where appropriate, for foreign inland freight
brokerage and handling and Hong Kong duty. As all foreign inland
freight and brokerage and handling were provided by PRC suppliers,
these services were valued in India.
8. Chitech
We calculated EP and CEP based on packed, FOB Hong Kong port or CIF
U.S. port prices to unaffiliated purchasers in the United States, as
appropriate. We made deductions from the starting price, where
appropriate, for the following: foreign inland freight, domestic inland
insurance, ocean freight (which includes ``door to door'' delivery and
handling), marine insurance, Hong Kong Customs fees, and U.S. duties
(including harbor maintenance and merchandise processing fees), U.S.
brokerage and handling and U.S. inland freight from port to warehouse,
all of which were provided by non-PRC suppliers and paid for in market
economy currencies. In addition, we deducted from EP and CEP four types
of discounts Chitech offers its customers.
Because there was insufficient time to analyze U.S. selling expense
data submitted by Chitech for purposes of this preliminary
determination, we did not deduct U.S. selling expenses from CEP. This
information will be considered for purposes of the final determination.
9. Universal
We calculated EP based on packed, FOB Hong Kong port prices to
unaffiliated purchasers in the United States. We made deductions from
the FOB Hong Kong price, where appropriate, for foreign inland freight,
foreign brokerage and handling (which includes containerization,
documentation fees, the Hong Kong terminal handling charge, and PRC
brokerage costs), and Hong Kong duty. As all foreign inland freight and
brokerage and handling were provided by PRC suppliers, these services
were valued in India.
Normal Value
In accordance with section 773(c) of the Act we calculated NV based
on factors of production reported by the responding exporters. To
calculate NV where an input was sourced from a market economy and paid
for in market economy currency, we have used the actual price paid for
the input in accordance with Department practice, when possible. Lasko
Metal Products v. United States, 437.3d 1442, 1443 (Fed. Cir. 1994)
(Lasko)
In instances where inputs were sourced domestically, we valued the
factors using publicly available published information from India where
possible. Where appropriate Indian values were not available, we used
publicly available published information from Indonesia, where
possible, or other facts available, such as the publicly ranged market
economy prices of the other responding exporters.
Valuation of Bicycle Parts and Components
The nine responding exporters reported that they purchased a large
number of different components (e.g., brake sets) and sub-components
(e.g. brake arms) for use in assembling finished bicycles. The vast
majority of these purchased inputs are sub-components. These inputs,
both components and sub-components, vary in terms of material
composition (e.g., carbon steel versus aluminum), size, design (e.g.,
cantilever versus side-pull brakes), and other relevant physical
characteristics.
Some inputs are purchased from market-economy suppliers and paid
for in convertible currency. Following our normal practice, we used the
actual price paid for these inputs, where possible, See, Final
Determination of Sales at Less Than Fair Value: Oscillating Fans and
Ceiling Fans from the People's Republic of China FR 56 55271, (October
25, 1991) (Fans). However, where the input was not purchased from a
market economy supplier and paid for in a market economy currency, it
was necessary to develop a surrogate value.
For certain components and sub-components, differences in material
content and design result in large price differentials. For example,
there is a substantial difference in the price of a frame tube made
from high-tensile steel versus one made with chrome-molybdenum. Thus,
for example, using a surrogate value for a frame tube of high-tensile
steel would unreasonably distort the calculation of NV for a bicycle
with a chrome-molybdenum frame. In reality, for certain components, a
specific design or material composition can result in a distinctly
different input.
With respect to the factors of production methodology, the Court of
Appeals has noted that ``there is much in the statute that supports the
notion that it is Commerce's duty to calculate margins as accurately as
possible and to use the best information in doing so.'' See, Lasko.
Therefore, to minimize distortions and ensure the most accurate margin
calculation possible, we developed a hierarchy for selection of
surrogate values for parts and components based on the need for
specificity with respect to design or material composition or both. Our
first choice under that hierarchy is to use data from India or
Indonesia if it is specific with respect to design and material
composition or if we could not determine, based on the evidence,
whether significant variations in the price data stemmed from design or
material composition. Where design or material composition appeared to
have a significant impact on price but design or material-specific data
was not available in a surrogate country, we used the publicly ranged
data on prices from market-economy suppliers to the PRC. We believe
that in spite of the ranging, these data are far superior to average
values that would not reflect important differences in design and
material composition. However, we used this ranged data strictly as a
second alternative to design- or material-specific data from India or
Indonesia, where available. In one instance, a respondent reported a
number of sub-components produced by its affiliated supplier. In that
instance, we did not value those subcomponents because we did not have
any sufficient price information to do so. Instead, we valued the
smallest component that incorporated these subcomponents.
[[Page 56573]]
Other Factor Valuations
Where possible, we used public information for the surrogate
values. The selection of the surrogate values was based on the quality
and contemporaneity of the data. Where possible, we attempted to value
material inputs on the basis of tax-exclusive domestic prices. As
appropriate, we adjusted input prices to make them delivered prices.
For those values not contemporaneous with the POI, we adjusted for
inflation using wholesale price indices or, in the case of labor rates,
consumer price indices, published in the International Monetary Fund's
International Financial Statistics. For a complete analysis of
surrogate values, see the Factors Calculation Memorandum to Barbara R.
Stafford from the team, dated November 1, 1995.
To value caustic soda, sulfuric acid, nitric acid, oxalic acid, and
chromic anhydride, we used public information from POI issues of the
Indian publication Chemical Weekly. For various phosphates, we relied
on import prices contained in the September 1994 issue of Monthly
Statistics of the Foreign Trade of India (Monthly Statistics).
Regarding sodium bichromate, we could not find a price for this
exact input. Therefore, we used an average of prices for two chemicals
we found to be equally similar in name to sodium bichromate: sodium
dichromate and sodium chromate. We used Indian import price data from
Monthly Statistics and from the Indian publication, Chemical Business,
to value this input.
Regarding dimethyl benzene, we could not obtain an exact material
price from public information from India. Absent public information
from India, we used the price of a similar chemical to value this input
from an Indonesian publication. To do this, we used a 1993 price for
diethyl benzene from the Indonesian Foreign Trade Statistical Bulletin
for Imports (Statistical Bulletin).
To value acetylene, argon gas, and carbon dioxide, we relied on
1993 Indonesian price data in the Statistical Bulletin because we could
not locate a price from Indian publications.
To value hydrochloric acid, we relied on a 1993 Indian domestic
price quote from Chemical Weekly because the prices for this input in
other known Indian publications are based on an Indian import category
that is not exclusive to hydrochloric acid (see Final Determination of
Sales at Less Than Fair Value: Coumarin from the People's Republic of
China FR 59 66895 (December 28, 1995.)
To value degreaser, we used information from the only known Indian
publication which contained such a price, The Analyst's Import
Reference 1993, Chemical & Pharmaceutical Products (The Analyst).
To value solvent, we could not find a material price from publicly
available information. Therefore, we used the price of a similar
chemical which also dilutes paint, thinner, to value this input. To
value solvent, we used Indian price data from Monthly Statistics.
To value diesel fuel, we used a POI Indian price from the
publication AP Worldstream. To value liquefied petroleum gas, we used a
POI price from the periodical Financial Times of India.
To value electricity, we used an average 1992 industrial rate from
the publication Current Energy Scene in India because this publication
contained data more contemporaneous to the POI than other known
publications.
To value labor, we used data from the United Nations' publication
Yearbook of Labor Statistics. Following the method established in the
Preliminary Determination of Sales at Less Than Fair Value: Polyvinyl
Alcohol from the PRC 60 FR 52647 (October 10, 1995), we find no basis
to assume the skill level of the surrogate value, nor do we have
agreement among parties regarding use of this labor rate for skilled
and unskilled labor rate assumptions. Thus, we applied a single labor
value to all reported labor factors, including indirect labor.
To value scrap metal, we relied on Indian data from Monthly
Statistics. We treated the scrap metal as a by-product and deducted its
value from the cost of manufacture for Merida, Chitech, Overlord, and
Giant. This adjustment was not appropriate for the remaining
respondents.
For certain subcomponents we had no published prices or publicly
ranged market prices from which to choose. Therefore, we valued these
specific components based on the content of material (e.g., steel,
plastic or rubber). To value components made of steel, we used an
average tax-exclusive 1994 domestic steel price from the Indian
publication Statistics for Iron and Steel. For components made of
plastic, we used Indian price data from Monthly Statistics. For
components made of rubber, we could not obtain publicly available
information. Therefore, we could not value such items for the
preliminary determination.
To value factory overhead, SG&A, and profit, we calculated average
percentages based on 1993-94 data from the financial reports of two
Indian producers of the subject merchandise. We made certain
adjustments to the percentages calculated by the respondents as a
result of reclassifying expenses contained in the financial reports.
Finally, to value the packing materials, corrugated cartons,
uncorrugated cartons, bubble wrap, staples, adhesive tape, rope,
packing paper, polypropylene, polyethylene, and plastic bags, we relied
on Indian data from Monthly Statistics. To value glue, we used an
average price based on Indian price data for two types of glue products
from the publication Chemical Weekly.
Critical Circumstances
On September 15, 1995, petitioners made a timely allegation that
there is a reasonable basis to believe or suspect that critical
circumstances exist with respect to imports of subject merchandise.
Section 733(e)(1) of the Act provides that the Department will
determine that there is a reasonable basis to believe or suspect
that critical circumstances exist if:
(A)(i) there is a history of dumping and material injury by
reason of dumped imports in the United States or elsewhere of the
subject merchandise, or
(ii) the person by whom, or for whose account, the merchandise
was imported knew or should have known that the exporter was selling
the subject merchandise at less than its fair value and that there
was likely to be material injury by reason of such sales, and
(B) there have been massive imports of the subject merchandise
over a relatively short period.
In this investigation, the first criterion is satisfied. Two
countries and a customs union--Canada, Mexico, and the European Union--
have recently imposed antidumping orders on bicycles from the PRC.
Therefore, we preliminarily determine that there is a history of
dumping elsewhere of bicycles by PRC producers/exporters. Because there
is a history of dumping, it is not necessary to address importer
knowledge.
Because we have preliminarily found that the first statutory
criterion is met, we must consider the second statutory criterion:
whether imports of the merchandise have been massive over a relatively
short period. According to 19 CFR 353.16(f) and 353.16(g), we consider
the following to determine whether imports have been massive over a
relatively short period of time: (1) Volume and value of the imports:
(2) seasonal trends (if applicable); and (3) the share of domestic
consumption accounted for by the imports.
[[Page 56574]]
When examining volume and value data, the Department typically
compares the export volume for equal periods immediately preceding and
following the filing of the petition. Under 19 CFR 353.16(f)(2), unless
the imports in the comparison period have increased by at least 15
percent over the imports during the base period, we will not consider
the imports to have been ``massive.'' The Department examines shipment
information submitted by the respondent or import statistics when
respondent-specific shipment information is not available.
To determine whether or not imports of subject merchandise have
been massive over a relatively short period, we compared each
respondent's export volume for either the five or six months subsequent
to the filing of the petition to that during the five or six months
prior to the filing of the petition for all respondents, except Hua
Chin, because we had such data. For Hua Chin, we only had three months
of shipment data. Therefore, for this company, we compared the export
volume for the three months subsequent to the filing of the petition to
that during the three months prior to the filing of the petition. These
periods were selected based on the Department's practice of using the
longest period for which information is available from the month that
the petition was submitted through the effective date of the
preliminary determination. For the non-responding PRC exporters, we did
this analysis using import statistics.
Based on our analysis, we preliminarily find that the increase in
imports were less than 15 percent with respect to Merida, Giant,
Overlord, CBC, Universal, and CATIC. We found that the increase in
imports of the subject merchandise from Bo An, Hua Chin and Chitech and
the non-responding companies in the PRC increased by more than 15
percent over a relatively short period. However, based on the evidence
of seasonality, discussed below, we do not find the increases to be
massive with respect to Bo An, Chitech and the non-responding companies
in the PRC. We do find, however, the increase in imports of the subject
merchandise from Hua Chin to be massive over a relatively short period
of time.
We compared the increase in shipments from the first to the second
quarter for the period 1993 to 1995 for Bo An, Chitech, and Hua Chin
and the non-responding PRC companies to determine if there was a
regular seasonal occurrence associated with spring sales. We found that
for Bo An, Chitech, and the non-responding PRC government there was
such a regular occurrence and, therefore, determined the observed
increase in the imports between the two periods was not reflective of a
massive surge of imports associated with the filing of the petition.
Therefore, we determined that imports were not massive for these two
companies and the non-responding PRC companies. We noted no such
pattern for Hua Chin. We were unable to consider the share of domestic
consumption accounted for by the imports, pursuant to
353.16(f)(1)(iii), because the available data did not permit such
analysis.
Therefore, because there is a history of dumping of such or similar
merchandise, and imports of bicycles from Hua Chin have been massive
over a relatively short period of time, we preliminarily determine that
there is a reasonable basis to believe or suspect that critical
circumstances exist with respect to imports of bicycles from Hua Chin.
Because imports from Merida, Giant, Overlord, CBC, Universal, CATIC Bo
An, Chitech and the non-responding PRC companies have not been massive,
we preliminarily determine that there is not a reasonable basis to
believe or suspect that critical circumstances exist with respect to
imports of subject merchandise from these companies.
We will make a final determination concerning critical
circumstances when we make our final determination of sales at less
than fair value in this investigation.
Verification
As provided in section 782(i) of the Act, we will verify the
information used in making our final determination.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing the
Customs Service to suspend liquidation of all entries of bicycles from
the PRC, that are entered, or withdrawn from warehouse, for consumption
on or after the date of publication of this notice in the Federal
Register. The Customs Service will require a cash deposit or posting of
a bond equal to the estimated dumping margins by which the normal value
exceeds the USP, as shown below. These suspension of liquidation
instructions will remain in effect until further notice. Bo An, CATIC,
and Giant will be excepted from these instructions because their sales
of subject merchandise were found not to have been sold below fair
value. Bo An, CATIC, and Giant's sales of subject merchandise will be
excluded from an antidumping duty order should one be issued.
The weighted-average dumping margins are as follows:
------------------------------------------------------------------------
Weighted-
average
Manufacturer/producer/exporter margin
percentage
------------------------------------------------------------------------
Bo An..................................................... 0.00
CATIC..................................................... 0.00
Giant..................................................... 0.00
Hua Chin.................................................. 18.04
Merida.................................................... 2.39
CBC....................................................... 5.69
Overload.................................................. 3.10
Chitech................................................... 5.29
Universal................................................. 2.87
-------------
PRC-wide rate......................................... 61.7
------------------------------------------------------------------------
The PRC-Wide rate applies to all entries of subject merchandise
except for entries from exporters/factories that are identified
individually above.
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine before the later of 120 days after the date of
this preliminary determination or 45 days after our final determination
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry.
Public Comment
In accordance with 19 CFR 353.38, case briefs or other written
comments in at least ten copies must be submitted to the Assistant
Secretary for Import Administration no later than December 27, 1995,
and rebuttal briefs, no later than January 2, 1996. A list of
authorities used and a summary of arguments made in the briefs should
accompany these briefs. Such summary should be limited to five pages
total, including footnotes. We will hold a public hearing, if
requested, to afford interested parties an opportunity to comment on
arguments raised in case or rebuttal briefs. At this time, the hearing
is scheduled for January 4, 1996, the time and place to be determined,
at the U.S. Department of Commerce, 14th Street and Constitution
Avenue, N.W., Washington, D.C. 20230. Parties should confirm by
telephone the time, date, and place of the hearing 48 hours before the
scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
B-099, within ten days of the publication of this notice. Requests
should contain: (1) The party's name, address, and telephone number;
(2) the number of participants; and (3)
[[Page 56575]]
a list of the issues to be discussed. In accordance with 19 CFR
353.38(b) oral presentations will be limited to issues raised in the
briefs. If this investigation proceeds normally, we will make our final
determination by January 16, 1996.
This determination is published pursuant to section 733(f) of the
Act.
Dated: November 1, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-27832 Filed 11-8-95; 8:45 am]
BILLING CODE 3510-DS-P