[Federal Register Volume 61, Number 67 (Friday, April 5, 1996)]
[Notices]
[Pages 15218-15221]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-8364]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-803]
Heavy Forged Hand Tools, Finished or Unfinished, With or Without
Handles, from the People's Republic of China; Preliminary Results of
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of Antidumping Duty
Administrative Review.
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SUMMARY: In response to requests by the petitioner and two resellers of
the subject merchandise, the Department of Commerce (the Department) is
conducting an administrative review of the antidumping duty order on
heavy forged hand tools, finished or unfinished, with or without
handles, (HFHTs) from the People's Republic of China (PRC). The review
covers four exporters of subject merchandise to the United States and
the period February 1, 1994 through January 31, 1995. The review
indicates the existence of dumping margins during the period of review.
We have preliminarily determined that sales have been made below
normal value (NV). If these preliminary results are adopted in our
final results of administrative review, we will instruct the U.S.
Customs Service to assess antidumping duties equal to the difference
between United States price (U.S. price) and NV.
Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: April 5, 1996.
FOR FURTHER INFORMATION CONTACT: Tom Prosser, Rebecca Trainor or
Maureen Flannery, Office of Antidumping Compliance, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue NW., Washington D.C.
20230; telephone: (202) 482-4733.
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 Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
current regulations, as amended by the interim regulations published in
the Federal Register on May 11, 1995 (60 FR 25130).
SUPPLEMENTARY INFORMATION:
Background
On February 19, 1991, the Department published in the Federal
Register (56 FR 6622) the antidumping duty order on HFHTs from the PRC.
On February 2, 1995, the Department published in the Federal Register
(60 FR 6524) a notice of opportunity to request an administrative
review of this antidumping duty order. On February 27, 1995, in
accordance with 19 CFR 353.22(a), two exporters of the subject
merchandise to the United States, Fujian Machinery & Equipment Import &
Export Corporation (FMEC) and Shandong Machinery Import & Export
Corporation (SMC), requested that the Department conduct an
administrative review of their exports of subject merchandise to the
United States. On February 28, 1995, the petitioner, Woodings-Verona
Tool Works, Inc., requested that the Department conduct an
administrative review of FMEC, SMC, Henan Machinery Import and Export
Co. (Henan) and Tianjin Machinery Import and Export Co. (Tianjin). We
published the notice of initiation of this review on March 15, 1995 (60
FR 13956).
The Department received no questionnaire responses from either
Henan or Tianjin. Therefore, we have based our analysis of these two
companies on facts otherwise available. The Department is conducting
this administrative review in accordance with section 751 of the Act.
Scope of the Review
Imports covered by this review are shipments of HFHTs from the PRC
comprising the following classes or kinds of merchandise: (1) hammers
and sledges with heads over 1.5 kg. (3.33 pounds) (hammers/sledges);
(2) bars over 18 inches in length, track tools and wedges (bars and
wedges); (3) picks/mattocks; and (4) axes/adzes.
HFHTs include heads for drilling, hammers, sledges, axes, mauls,
picks, and mattocks, which may or may not be painted, which may or may
not be finished, or which may or may not be imported with handles;
assorted bar products and track tools including wrecking bars, digging
bars and tampers; and steel woodsplitting wedges. HFHTs are
manufactured through a hot forge operation in which steel is sheared to
required length, heated to forging temperature and formed to final
shape on forging equipment using dies specific to the desired product
shape and size. Depending on the product, finishing operations may
include shot blasting,
[[Page 15219]]
grinding, polishing and painting, and the insertion of handles for
handled products. HFHTs are currently provided for under the following
Harmonized Tariff System (HTS) subheadings: 8205.20.60, 8205.59.30,
8201.30.00, and 8201.40.60. Specifically excluded are hammers and
sledges with heads 1.5 kg. (3.33 pounds) in weight and under, hoes and
rakes, and bars 18 inches in length and under.
This review covers four exporters of HFHTs from the PRC. The review
period is February 1, 1994 through January 31, 1995.
Separate Rates
To establish whether a company is sufficiently independent to be
entitled to a separate rate, the Department analyzes each exporting
entity under the test established in 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), as amplified in 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). Under this policy, exporters in non-market-economy (NME)
countries are entitled to separate, company-specific margins when they
can demonstrate an absence of government control, both in law (de jure)
and in fact (de facto), with respect to exports. Evidence supporting,
though not requiring, a finding of de jure absence of government
control includes: (1) an absence of restrictive stipulations associated
with an individual exporter's business and export licenses; (2) any
legislative enactments decentralizing control of companies; and (3) any
other formal measures by the government decentralizing control of
companies. De facto absence of government control with respect to
exports is based on four criteria: (1) whether the export prices are
set by or subject to the approval of a government authority; (2)
whether each exporter retains the proceeds from its sales and makes
independent decisions regarding the disposition of profits and
financing of losses; (3) whether each exporter has autonomy in making
decisions regarding the selection of management; and (4) whether each
exporter has the authority to negotiate and sign contracts. See Silicon
Carbide, 59 FR at 22587.
In our final results of review for the 1992-1993 review period of
this order, the Department determined that FMEC and SMC warranted
company-specific dumping margins according to the criteria identified
in Sparklers and Silicon Carbide. See Preliminary Results of
Antidumping Duty Administrative Review: Heavy Forged Hand Tools from
the PRC 60 FR 19723, 19724 (April 20, 1995), and Final Results of
Antidumping Duty Administrative Review: Heavy Forged Hand Tools from
the PRC, 60 FR 49251 (September 22, 1995). Because there is no new
evidence on the record, we preliminarily determine that these two
companies continue to be entitled to separate rates.
Because Henan and Tianjin did not respond to our separate rates
questionnaire, we preliminarily determine that they do not merit
separate rates.
United States Price
The Department used export price (EP), in accordance with section
772(a) of the Act, in calculating U.S. price. We made deductions from
EP, where appropriate, for brokerage and handling, foreign inland
freight, ocean freight, and marine insurance. Ocean freight services
were provided by both PRC-owned and non-PRC-owned companies. Where we
knew that the company providing the ocean freight services was not a
PRC-owned company, we used the actual rates charged; for ocean freight
services provided by PRC-owned companies, we applied a weighted-average
ocean freight rate derived from those sales for which we used actual
ocean freight rates. Since marine insurance services were provided by
PRC-owned companies, we based the deduction for marine insurance on
surrogate values. We also used surrogate data to value foreign inland
freight and brokerage and handling.
Normal Value
For companies located in NME countries, section 773(c)(1) of the
Act provides that the Department shall determine normal value (NV)
using a factors of production methodology if (1) the subject
merchandise is exported from an NME country, and (2) available
information does not permit the calculation of NV using home market
prices or third country prices, in accordance with section 773(a) of
the Act.
In every case conducted by the Department involving the PRC, the
PRC has been treated as an NME country. In accordance with section
771(18)(c)(i), any determination that a foreign country is an NME
country shall remain in effect until revoked by the administering
authority. Accordingly, we calculated NV in accordance with section
773(c) of the Act and section 353.52 of the Department's regulations.
In accordance with section 773(c)(3) of the Act, the factors of
production utilized in producing HFHTs include, but are not limited
to--(A) hours of labor required, (B) quantities of raw materials
employed, (C) amounts of energy and other utilities consumed, and (D)
representative capital cost, including depreciation. In accordance with
section 773(c)(4) of the Act, the Department valued the factors of
production, to the extent possible, using the prices or costs of
factors of production in a market economy country that is--(A) at a
level of economic development comparable to that of the PRC, and (B) a
significant producer of comparable merchandise. We determined that
India is comparable to the PRC in terms of per capita gross national
product (GNP), the growth rate in per capita income, and the national
distribution of labor. Furthermore, India is a significant producer of
comparable merchandise. For a further discussion of the Department's
selection of India as the surrogate country, see File Memorandum, dated
February 26, 1996, on file in Room B-099 of the Commerce Department.
In accordance with section 773(c) of the Act, for purposes of
calculating NV, we valued PRC factors of production in the year in
which production occurred as follows:
To value all direct materials used in the production of
HFHTs, including steel, resin glue, paint, varnish, wood for handles,
iron wedges, anti-rust oil, scrap steel, and dilution, we used the
rupee per metric ton, per kilogram, or per cubic meter value of imports
into India during April-December 1993, for production in 1993, and
during April 1994-January 1995, for production in 1994, obtained from
the Monthly Statistics of the Foreign Trade of India, Volume II--
Imports, January 1994 and January 1995 (Indian Import Statistics).
For direct labor, we used the labor rates reported in the
Economist Intelligence Unit's Investing, Licensing & Trading Conditions
Abroad: India, released in November 1993 and November 1994. This source
breaks out labor rates between skilled, unskilled, semi-skilled, and
foreman labor, and provides information on the number of labor hours
worked per week.
For factory overhead, we used information reported in the
April 1995 Reserve Bank of India Bulletin. From this information, we
were able to determine factory overhead as a percentage of total cost
of manufacture. We included steel pellets used to remove oxidization
from the tool heads and detergent used to clean the tool heads in
factory overhead as these materials are not physically incorporated
into the subject merchandise.
[[Page 15220]]
For selling, general and administrative (SG&A) expenses,
we used information obtained from the April 1995 Reserve Bank of India
Bulletin. We calculated an SG&A rate by dividing SG&A expenses by the
cost of manufacture.
To calculate a profit rate, we used information obtained
from the April 1995 Reserve Bank of India Bulletin. We calculated a
profit rate by dividing the before-tax profit by the sum of those
components pertaining to the cost of manufacturing plus SG&A.
To value the packing materials, including cartons,
pallets, anti-rust paper, anti-damp paper, plastic and iron straps,
plastic bags, iron buttons and knots, synthetic fiber, and iron wire,
we used the rupee per metric ton, per kilogram, or per cubic meter
value of imports into India during April-December 1993, for production
in 1993, and during April 1994-January 1995, for production in 1994,
obtained from the 1994 and 1995 Indian Import Statistics. We adjusted
these values to include freight costs incurred between the suppliers
and the HFHT factories.
To value coal, we used the price of steam coal reported
for 1990 in the International Energy Agency publication Energy Prices
and Taxes, 2nd Quarter 1995. We adjusted the value of coal to reflect
inflation, using wholesale price indices (WPI) of India as published in
the International Financial Statistics by the International Monetary
Fund (IMF).
To value electricity, we used the price of electricity for
India for 1990, reported in the Asian Development Bank publication
Energy Indicators of Developing Member Countries of the Asian
Development Bank, July 1992. We adjusted the value of electricity to
reflect inflation, using the WPI published by the IMF.
To value truck freight, we used the rates reported in a
June 1992 cable from the U.S. Embassy in India submitted for the Final
Determination of Sales at Less Than Fair Value: Sulfanilic Acid from
the People's Republic of China, 57 FR 29705 (July 6, 1992) and an
August 1993 cable from the U.S. Embassy in India submitted for the
Final Determination of Sales at Less Than Fair Value: Certain Helical
Spring Lock Washers from the People's Republic of China, 58 FR 48833
(September 20, 1993). We adjusted truck freight rates to reflect
inflation, using the WPI published by the IMF.
To value rail freight, we used the price reported in a
December 1989 cable from the U.S. Embassy in India submitted for the
Final Results of Antidumping Duty Administrative Review: Shop Towels of
Cotton from the People's Republic of China, 56 FR 4040 (February 1,
1991). We adjusted rail freight rates to reflect inflation, using the
WPI published by the IMF.
Currency Conversion
We made currency conversions based on the official exchange rates
in effect on the date of the U.S. sales as certified by the Federal
Reserve Bank.
Use of Facts Otherwise Available
On August 18, 1995, the Department sent to each respondent the
Department's antidumping questionnaire. We established that all of the
respondents received the questionnaires; however Henan and Tianjin
failed to submit responses. See File Memorandum dated September 11,
1995, on file in Room B-099 of the Commerce Department. Because Henan
and Tianjin have withheld the requested information, we must make our
preliminary determination based on facts otherwise available, in
accordance with section 776(a)(2)(A) of the Act.
The Department finds that, in not responding to the questionnaire,
Henan and Tianjin failed to cooperate by not acting to the best of
their abilities to comply with a request for information from the
Department. Section 776(b) of the Act therefore authorizes the
Department to use an inference adverse to the interests of that
respondent in choosing the facts available. Section 776(b) also
authorizes the Department to use as adverse facts available information
derived from the petition, the final determination, a previous
administrative review, or other information placed on the record.
Because information from prior proceedings constitutes secondary
information, section 776(c) of the Act provides that the Department
shall, to the extent practicable, corroborate that secondary
information from independent sources reasonably at its disposal. The
Statement of Administrative Action (SAA) provides that ``corroborate''
means simply that the Department will satisfy itself that the secondary
information to be used has probative value.
To corroborate secondary information, the Department will, to the
extent practicable, examine the reliability and relevance of the
information to be used. However, unlike other types of information,
such as input costs or selling expenses, there are no independent
sources for calculated dumping margins. The only source for margins is
administrative determinations. Thus, in an administrative review, if
the Department chooses as total adverse facts available a calculated
dumping margin from a prior segment of the proceeding, it is not
necessary to question the reliability of the margin for that time
period. With respect to the relevance aspect of corroboration, however,
the Department will consider information reasonably at its disposal as
to whether there are circumstances that would render a margin not
relevant. Where circumstances indicate that the selected margin is not
appropriate as adverse facts available, the Department will disregard
the margin and determine an appropriate margin (see, e.g., Fresh Cut
Flowers from Mexico; Preliminary Results of Antidumping Duty
Administrative Review (60 FR 49567)), where the Department disregarded
the highest margin in that case as adverse BIA because the margin was
based on another company's uncharacteristic business expense resulting
in an unusually high margin). For these reviews, we have used the
highest rate from any prior segment of each proceeding. These were
21.92 percent for axes/adzes, 66.32 percent for bars/wedges, 45.42
percent for hammers/sledges, and 108.20 percent for picks/mattocks.
Preliminary Results of the Review
As a result of our review, we preliminarily determine that the
following margins exist for the period February 1, 1994 through January
31, 1995:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Fujian Machinery & Equipment Import & Export Corp:
Axes/Adzes............................................... 0.34
Bars/Wedges.............................................. 3.89
Hammers/Sledges.......................................... 0.34
Picks/Mattocks........................................... 46.91
Shandong Machinery Import & Export Corp:
Bars/Wedges.............................................. 12.51
Hammers/Sledges.......................................... 0.36
Picks/Mattocks........................................... 39.19
Henan Machinery Import & Export Co:
Axes/Adzes............................................... 21.92
Bars/Wedges.............................................. 66.32
Hammers/Sledges.......................................... 45.42
Picks/Mattocks........................................... 108.20
Tianjin Machinery Import & Export Co:
Axes/Adzes............................................... 21.92
Bars/Wedges.............................................. 66.32
Hammers/Sledges.......................................... 45.42
Picks/Mattocks........................................... 108.20
------------------------------------------------------------------------
Parties to the proceeding may request disclosure within 5 days of
the date of publication of this notice. Any interested party may
request a hearing within 10 days of publication. Any hearing, if
requested, will be held 44
[[Page 15221]]
days after the publication of this notice, or the first workday
thereafter. Interested parties may submit case briefs within 30 days of
the date of publication of this notice. Rebuttal briefs, which must be
limited to issues raised in the case briefs, may be filed not later
than 37 days after the date of publication. See section 353.38(d) of
the Department's regulations. Parties who submit argument in this
proceeding are requested to submit with the argument (1) a statement of
the issue and (2) a brief summary of the argument. The Department will
publish a notice of final results of these administrative reviews,
which will include the results of its analysis of issues raised in any
such comments.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between U.S. price and NV may vary from the percentages
stated above. The Department will issue appraisement instructions
directly to the Customs Service.
Furthermore, the following deposit requirements will be effective
upon publication of the final results of this administrative review for
all shipments of HFHTs from the PRC entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided for by section 751(a)(1) of the Act: (1) the cash deposit
rates for the reviewed companies named above which have separate rates
(FMEC and SMC) will be the rates for those firms established in the
final results of this administrative review; (2) for all other PRC
exporters, the cash deposit rates will be the PRC-wide rates
established in the final results of this administrative review; and (3)
the cash deposit rates for non-PRC exporters of subject merchandise
from the PRC will be the rates applicable to the PRC supplier of that
exporter. We preliminarily determine the PRC-wide rates to be: 21.92
percent for axes/adzes; 66.32 percent for bars/wedges; 44.41 percent
for hammers/sledges; and 108.20 percent for picks/maddocks. These are
the highest rates found for any respondent in the LTFV investigation or
any review. These deposit requirements, when imposed, shall remain in
effect until publication of the final results of the next
administrative review.
The Department acknowledges a recent decision of the Court of
International Trade, UCF America Inc. v. United States, Slip Op. 96-42
(CIT Feb. 27, 1996), in which the Court affirmed the Department's
remand results for reinstatement of the relevant cash deposit rate, but
expressed disagreement with use of the ``PRC-wide'' rate as the
underlying basis for reinstatement. The Court raised various concerns
with the Department's application of a ``PRC-wide'' rate.
The Court suggested that the Department lacks authority for
applying a ``PRC-wide'' rate in lieu of an ``all others'' rate. We
note, however, that section 777A(c) requires the Department to
determine individual dumping margins for each known exporter or
producer. Pursuant to this authority, the Department implements a
policy in NME cases whereby all exporters or producers are presumed to
comprise a single entity, the ``NME entity''. The Court has upheld our
NME policy in previous cases. See e.g., UCF America, Inc. v. United
States, 870 F. Supp. 1120, 1126 (CIT 1994); Sigma Corp. v. United
States, 841 F. Supp. 1255, 1266-67 (CIT 1993); Tianjin Machinery Import
& Export Corp. v. United States, 806 F. Supp. 1008, 1013-15 (CIT 1992).
The ``NME-wide'' rate is consistent with section
735(c)(1)(B)(i)(I). This provision directs the agency to assign a
dumping margin for each exporter or producer individually investigated.
As discussed above, in NME cases, all producers and exporters comprise
a single entity. Thus, we assign the NME rate to the NME entity just as
we assign an individual rate to a single exporter or producer operating
in a market economy. As a result, all exporters and producers that are
part of the NME entity are assigned the ``NME-wide'' rate. Because the
``NME-wide'' rate is the equivalent of a company-specific rate, it
changes only when we review the NME entity (i.e., all NME producers and
exporters that have not qualified for a separate rate). To qualify for
a separate rate, an NME exporter or producer must provide evidence
showing both de jure and de facto absence of government control. See
Silicon Carbide. Until such evidence is presented, a company is
presumed to be part of the NME entity and receives the ``NME-wide''
rate. Consequently, whenever the NME enterprise has been investigated
or reviewed, calculation of an ``all others'' rate under section
735(c)(1)(B)(i)(II) is unnecessary. All exporters or producers will
either qualify for a separate company-specific rate, or be part of the
NME enterprise, and receive the ``NME-wide'' rate. Thus, there can be
no exporters or producers who have never been investigated or reviewed.
In this review, FMEC and SMC qualify for separate rates as
discussed in the ``Separate Rates'' section of this notice. Because
Henan and Tianjin do not qualify for separate rates, they remain
representative of the NME entity, which is subject to the new PRC-wide
rate established in the final results of this administrative review.
Notification of Interested Parties
This notice serves as a preliminary reminder to importers of their
responsibility under section 353.26 of the Department's regulations 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 administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22
of the Department's regulations.
Dated: March 27, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-8364 Filed 4-4-96; 8:45 am]
BILLING CODE 3510-DS-P