[Federal Register Volume 61, Number 132 (Tuesday, July 9, 1996)]
[Notices]
[Pages 36025-36029]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17463]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-808]
Chrome-Plated Lug Nuts From The People's Republic of China;
Preliminary Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration, U.S.
Department of Commerce.
ACTION: Notice of Preliminary Results of the Antidumping Duty
Administrative Review of Chrome-Plated Lug Nuts from the People's
Republic of China.
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SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order on chrome-plated
lug nuts (lug nuts) from the People's Republic of China (PRC) in
response to a request by petitioner, Consolidated International
Automotive, Inc. (Consolidated). This review covers shipments of this
merchandise to the United States during the period September 1, 1994,
through August 31, 1995.
We have preliminarily determined that sales have been made below
normal value (NV). If these preliminary results are adopted in our
final results, we will instruct the U.S. Customs Service to assess
antidumping duties equal to the difference between export price and NV.
Interested parties are invited to comment on these preliminary
results. Parties who submit argument are requested to submit with each
argument (1) a statement of the issue and (2) a brief summary of the
argument.
EFFECTIVE DATE: July 9, 1996.
FOR FURTHER INFORMATION CONTACT: Donald Little, Elisabeth Urfer, or
Maureen Flannery, 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) 482-4733.
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).
Background
The Department published in the Federal Register an antidumping
duty order on lug nuts from the PRC on April 24, 1992 (57 FR 15052). On
September 12, 1995, the Department published in the Federal Register
(60 FR 47349) a notice of opportunity to request an administrative
review of the antidumping duty order on lug nuts from the PRC covering
the period September 1, 1994, through August 31, 1995.
On September 28, 1995, in accordance with 19 CFR 353.22(a),
Consolidated requested that we conduct an administrative review of
China National Automotive Industry I/E Corp., Nantong
[[Page 36026]]
Branch (Nantong); China National Automobile Import and Export Corp.,
Yangzhou Branch (Yangzhou); Jiangsu Rudong Grease-Gun Factory, also
known as JiangSu Huanghai Auto Parts Share Co., Ltd. (Rudong); Ningbo
Knives & Scissors Factory (Ningbo); Shanghai Automobile Import & Export
Corp. (Shanghai Automobile); Tianjin Automotive Import and Export Co.
(Tianjin); China National Machinery & Equipment Import & Export Corp.,
Jiangsu Branch (Jiangsu); and China National Automotive Industry I/E
Corp. (China National). We published a notice of initiation of this
antidumping duty administrative review on October 12, 1995 (60 FR
53165). The Department is conducting this administrative review in
accordance with section 751 of the Act.
Scope of Review
On April 19, 1994, the Department issued its ``Final Scope
Clarifications on Chrome-Plated Lug Nuts from Taiwan and the PRC.'' The
scope, as clarified, is described in the subsequent paragraph. All lug
nuts covered by this review conform to the April 19, 1994 scope
clarification.
Imports covered by this review are one-piece and two-piece chrome-
plated lug nuts, finished or unfinished. The subject merchandise
includes chrome-plated lug nuts, finished or unfinished, which are more
than 11/16 inches (17.45 millimeters) in height and which have a
hexagonal (hx) size of at least 3/4 inches (19.05 millimeters) but not
over one inch (25.4 millimeters), plus or minus 1/16 of an inch (1.59
millimeters). The term ``unfinished'' refers to unplated and/or
unassembled chrome-plated lug nuts. The subject merchandise is used for
securing wheels to cars, vans, trucks, utility vehicles, and trailers.
Zinc-plated lug nuts, finished or unfinished, and stainless-steel
capped lug nuts are not included in the scope of this review. Chrome-
plated lock nuts are also not subject to this review.
Chrome-plated lug nuts are currently classified under subheading
7318.16.00.00 of the Harmonized Tariff Schedule (HTS). Although the HTS
subheading is provided for convenience and customs purposes, the
written description of the scope of this proceeding is dispositive.
This review covers the period September 1, 1994, through August 31,
1995, and eight producers/exporters of Chinese lug nuts.
Market-Oriented Industry
In every case conducted by the Department involving the PRC, the
PRC has been treated as a non-market economy (NME) country. Pursuant to
section 771(18)(c)(i) of the Act, any determination that a foreign
country is an NME country shall remain in effect until revoked by the
administering authority. Information presented in this review has not
caused the Department to change that determination.
Rudong submitted, with its January 25, 1996 questionnaire response,
a request that we treat the lug nuts industry as a market-oriented
industry (MOI). Rudong claims that its material inputs are acquired at
market prices and that, accordingly, we should find that the Chinese
lug nuts industry is an MOI, and use Rudong's home market sales and/or
costs as the basis of NV.
The criteria for determining whether an MOI exists are: 1) for the
merchandise under review, there must be virtually no government
involvement in setting prices or amounts to be produced; 2) the
industry producing the merchandise under review should be characterized
by private or collective ownership; and 3) market-determined prices
must be paid for all significant inputs, whether material or non-
material (e.g., labor and overhead), and for all but an insignificant
portion of all the inputs accounting for the total value of the
merchandise under review. (See Amendment to Final Determination of
Sales at Less than Fair Value and Amendment to Antidumping Duty Order:
Chrome-Plated Lug Nuts from the People's Republic of China (57 FR
15054, April 24, 1992) (Lug Nuts Redetermination).)
We find preliminarily in this review that the PRC lug nut industry
does not meet these three criteria. With respect to the first and
second criteria, Rudong has stated that it is the only producer of lug
nuts, that it is a collectively-owned public enterprise, and that it
independently negotiates prices. However, we did not receive a PRC
government response to our questionnaire requesting the names of all
lug nut producers in the PRC. We were unable, therefore, to determine
whether the first and second criteria are met for the industry as a
whole. With respect to the third criterion, Rudong did not submit any
information on supply and demand factors indicating that it pays
market-determined prices for steel, a major input in lug nut
production, or that the steel industry is not subject to significant
state control. Further, Rudong has not placed on the record any
information on supply and demand factors indicating that it pays
market-determined prices for chemical inputs, or that the chemicals
industry is not subject to significant state control. Based on the
foregoing, we preliminarily determine that Rudong has not demonstrated
the lug nut industry is an MOI and accordingly have calculated NV in
accordance with section 773(c) of the Act. For a further discussion of
the Department's preliminary determination that the lug nuts industry
does not constitute an MOI, see Decision Memorandum to Holly A. Kuga,
Director of the Office of Antidumping Compliance, dated June 18, 1996,
``Market Oriented Industry Request in the Third Administrative Review
of Chrome-Plated Lug Nuts from the People's Republic of China,'' which
is on file in the Central Records Unit (room B099 of the Main Commerce
Building).
Facts Available
We preliminarily determine that, in accordance with section 776(a)
of the Act, the use of facts available is appropriate for Nantong,
Yangzhou, Ningbo, Jiangsu, China National, Tianjin, and Shanghai
Automobile because these firms did not respond to the Department's
antidumping questionnaire. The Department finds that, in not responding
to the questionnaire, these seven firms failed to cooperate by not
acting to the best of their ability to comply with requests for
information from the Department. Because necessary information is not
available on the record with regard to sales by these firms as a result
of their withholding the requested information, we must make our
preliminary determination based on facts otherwise available pursuant
to section 776(a) of the Act.
Where the Department must base the entire dumping margin for a
respondent in an administrative review on the facts available because
that respondent failed to cooperate, section 776(b) 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) 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
[[Page 36027]]
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, September 26, 1995), where the
Department disregarded the highest margin as adverse best information
available because the margin was based on another company's
uncharacteristic business expense resulting in an unusually high
margin). In this case, we have used the highest rate from any prior
segment of the proceeding, 44.99 percent. There is no indication that
this rate is not appropriate. This rate was calculated in the review
covering the period September 1, 1992 through August 31, 1993 (1992-
1993 review).
Separate Rates
To establish whether a company operating in a state-controlled
economy 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 by the 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 economies (NMEs) are entitled to separate,
company-specific margins when they can demonstrate an absence of
government control, both in law and in fact, with respect to export
activities. Evidence supporting, though not requiring, a finding of de
jure absence of government control over export activities 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 over exports is based on four factors: 1) whether
each exporter sets its own export prices independently of the
government and without 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 or financing
of losses; 3) whether each exporter has the authority to negotiate and
sign contracts and other agreements; and 4) whether each exporter has
autonomy from the government regarding the selection of management.
In the administrative review covering the period from September 1,
1992 through August 31, 1993 (1992-93 review), we determined that
Nantong merited a separate rate, and in the 1993-94 review we
preliminary determined that Rudong merited a separate rate. Because we
made a final determination, under the criteria set forth in Sparklers
and Silicon Carbide, that Nantong merited a separate rate, and
therefore did not request that Nantong respond to the separate rates
section of the questionnaire, and because no evidence was put on the
record of this review demonstrating that Nantong did not merit a
separate rate, for this review we continue to assign Nantong a separate
rate. (As noted above, this rate is based on facts available.) Because
the results from the 1993-94 review are not final, we analyzed Rudong's
submission in this review to determine whether Rudong merits a separate
rate. We have made the determination of whether Rudong should receive a
separate rate under the policy set forth in Silicon Carbide and
Sparklers. No other company in this review was previously determined to
merit a separate rate under the Sparklers and Silicon Carbide criteria,
or responded to our request for information regarding separate rates;
therefore, we are assigning the PRC rate to these remaining companies.
With respect to the absence of de jure government control, evidence
on the record indicates that Rudong is a collectively-owned enterprise.
The ``Regulations on Rural Collective Enterprises'' identify rules and
regulations pertaining to collectively-owned enterprises which give
rural collective enterprises such rights as the right to act on their
own, adopt independent accounting, and assume the sole responsibility
for their profits and losses. (See May 31, 1996 memorandum to the file,
with attachments, ``Chrome-Plated Lug Nuts from the People's Republic
of China: laws and regulations governing various categories of
companies in the PRC.'')
Further, several PRC laws establish that the responsibility for
managing entities has been transferred from the central government to
the enterprise. (See July 18, 1995 memorandum to the file, with
attachments, ``Chrome-Plated Lug Nuts from the People's Republic of
China: laws and regulations governing various categories of companies
in the PRC.'') Additionally, lug nuts do not appear on the ``Temporary
Provisions for Administration of Export Commodities,'' approved on
December 21, 1992, and are not, therefore, subject to the constraints
of this provision.
With respect to the absence of de facto control, Rudong's
management is elected by Rudong's staff, and is responsible for all
decisions such as the determination of its export prices, profit
distribution, employment policy, and marketing strategy, and for
negotiating contracts.
We have found that the evidence on the record demonstrates an
absence of government control, both in law and in fact, with respect to
Rudong according to the criteria identified in Sparklers and Silicon
Carbide. For further discussion of the Department's preliminary
determination that Rudong is entitled to a separate rate, see Decision
Memorandum to Holly A. Kuga, Director of the Office of Antidumping
Compliance, dated June 18, 1996, ``Separate Rate for Jiangsu Rudong
Grease-Gun Factory in the Fourth Administrative Review of Chrome-Plated
Lug Nuts from the People's Republic of China,'' which is on file in the
Central Records Unit (room B099 of the Main Commerce Building).
Export Price
For sales made by Rudong we used export price, in accordance with
section 772(a) of the Act, because the subject merchandise was sold to
unrelated purchasers in the United States prior to importation into the
United States.
We calculated export price based on the price to unrelated
purchasers. We deducted an amount for foreign inland freight. We valued
foreign inland freight using surrogate data based on Indian freight
costs. We selected India as the
[[Page 36028]]
surrogate country for the reasons explained in the ``Normal Value''
section of this notice.
Normal Value
For companies located in NME countries, section 773(c)(1) of the
Act provides that the Department shall determine NV using a factors-of-
production methodology if (1) the merchandise is exported from an NME
country, and (2) the information does not permit the calculation of NV
using home-market prices, third-country prices, or constructed value
under section 773(a) of the Act.
In the amendment to the final determination of sales at less than
fair value (LTFV), the Department treated the PRC as an NME country,
and determined that the lug nuts industry is not an MOI (see Lug Nuts
Redetermination). Rudong has argued that the lug nut industry is an
MOI; however, as discussed above, we have preliminarily determined the
lug nut industry not to be market-oriented. Accordingly, we are not
able to determine NV on the basis of Rudong's costs and prices, and
have applied surrogate values to the factors of production to determine
NV.
We calculated NV based on factors of production in accordance with
section 773(c)(4) of the Act and section 353.52(c) of our regulations.
We determined that India (1) is comparable to the PRC in terms of level
of economic development, and (2) is a significant producer of
comparable merchandise. Therefore, for this review, we have used
publicly available information relating to India to value the various
factors of production. (See Memorandum to Laurie Parkhill from David
Mueller, dated March 15, 1996, ``Chrome-Plated Lug Nuts from the
People's Republic of China: Non-market Economy Status and Surrogate
Country Selection,'' and Memorandum to the File from Elisabeth Urfer,
dated June 14, 1996, ``India: Significant Production of Comparable
Merchandise,'' which are on file in the Central Records Unit (room B099
of the Main Commerce Building).)
We valued the factors of production as follows:
For steel wire rods, we used a per kilogram value obtained
from the Monthly Statistics of Foreign Trade of India (Indian Import
Statistics). Using wholesale price indices (WPI) obtained from the
International Financial Statistics, published by the International
Monetary Fund (IMF), we adjusted these values to reflect inflation
through the period of review (POR). We made further adjustments to
include freight costs incurred between the supplier and Rudong.
For chemicals used in the production and plating of lug
nuts, we used per kilogram values obtained from the Indian publication
Chemical Weekly and the Indian Import Statistics. We adjusted the
Indian Import Statistics rates to reflect inflation through the POR
using WPI published by the IMF. We made further adjustments to include
freight costs incurred between the supplier and Rudong.
For hydrochloric acid, we based the value on an Indian
price quote used in the Final Determination of Sales at Less Than Fair
Value: Coumarin from the People's Republic of China (59 FR 66895,
December 28, 1994) (Coumarin), because data in the Indian Import
Statistics for hydrochloric acid has been found to be aberrational (see
Coumarin). We adjusted the value used in Coumarin to reflect inflation
through the POR using WPI published by the IMF.
For direct labor, we used the labor rates reported in the
Economic Intelligence Unit report Investing, Licensing & Trading
Conditions Abroad: India, released November 1994. This source breaks
out labor rates between skilled and unskilled labor for 1994 and
provides information on the number of labor hours worked per week. We
adjusted these rates to reflect inflation through the POR using WPI
published by the IMF.
For factory overhead, we used information reported in the
April 1995 Reserve Bank of India Bulletin for the Indian metals and
chemicals industries. From this information, we were able to determine
factory overhead as a percentage of the total cost of manufacture.
For selling, general and administrative (SG&A) expenses,
we used information obtained from the April 1995 Reserve Bank of India
Bulletin for the Indian metals and chemicals industries. 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 for the Indian
metals and chemicals industries. We calculated a profit rate by
dividing the before-tax profit by the cost of manufacturing plus SG&A.
For packing materials, we used per kilogram values
obtained from the Indian Import Statistics. We adjusted these values to
reflect inflation through the POR using WPI published by the IMF.
To value electricity, we used the average price of
electricity as of March 1995 published in the Current Energy Scene in
India. We adjusted the value of electricity to reflect inflation
through the POR using WPI published by the IMF.
To value truck freight, we used the rates reported in an
August 1993 cable from the U.S. Consulate 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 the rates to reflect inflation through
the POR using WPI published by the IMF.
Currency Conversion
We made currency conversions pursuant to section 353.60 of the
Department's regulations at the rates certified by the Federal Reserve
Bank.
Preliminary Results of Review
We preliminarily determine that the following dumping margin
exists:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Time period (percent)
------------------------------------------------------------------------
Jiangsu Rudong Grease-Gun Factory,
also known as JiangSu Huanghai
Auto Parts Share Co., Ltd........ 09/01/94-08/31/95 20.11
China National Automotive Industry
I/E Corp., Nantong Branch........ 09/01/94-08/31/95 44.99
PRC rate.......................... 09/01/94-08/31/95 44.99
------------------------------------------------------------------------
Parties to the proceeding may request disclosure within 5 days of
the date of publication of this notice in accordance with 19 CFR
353.22(c)(6). Any interested party may request a hearing within 10 days
of publication in accordance with 19 CFR 353.38(b). Any hearing, if
requested, will be held 44 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 in
accordance with 19 CFR 353.38(c). Rebuttal briefs, which must be
limited to issues raised in the case
[[Page 36029]]
briefs, may be filed not later than 37 days after the date of
publication. The Department will publish a notice of final results of
this administrative review, which will include the results of its
analysis of issues raised in any such comments.
The Department shall determine, and the U.S. Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between export price and NV may vary from the percentage
stated above. The Department will issue appraisement instructions
directly to the U.S. Customs Service.
Furthermore, the following deposit rates will be effective upon
publication of the final results of this administrative review for all
shipments of lug nuts from the PRC entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided for by section 751(a)(2)(C) of the Act: (1) for Rudong, which
has a separate rate, the cash deposit rate will be the company-specific
rate established in the final results of this administrative review;
(2) for Nantong, which has a separate rate, the cash deposit rate will
be the highest margin ever in the LTFV investigation or in this or
prior administrative reviews; (3) for the companies named above which
have not been found to have separate rates, China National, Jiangsu,
Yangzhou, Ningbo, Shanghai Automobile, and Tianjin, as well as for all
other PRC exporters, the cash deposit rate will be the PRC rate; and
(4) for non-PRC exporters of subject merchandise from the PRC, the cash
deposit rate will be the rate applicable to the PRC supplier of that
exporter.
These deposit rates, when imposed, shall remain in effect until
publication of the final results of the next administrative review.
This notice also serves as a preliminary 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 administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: July 1, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-17463 Filed 7-8-96; 8:45 am]
BILLING CODE 3510-DS-P