[Federal Register Volume 61, Number 191 (Tuesday, October 1, 1996)]
[Notices]
[Pages 51269-51273]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25119]


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DEPARTMENT OF COMMERCE
[A-570-803]


Heavy Forged Hand Tools, Finished or Unfinished, With or Without 
Handles, From the People's Republic of China; Final Results of 
Antidumping Administrative Review

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

ACTION: Notice of final results of the antidumping duty administrative 
review of heavy forged hand tools, finished or unfinished, with or 
without handles, from the People's Republic of China.

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SUMMARY: On April 5, 1996, the Department of Commerce (the Department) 
published in the Federal Register the preliminary results of its 
administrative review of the antidumping duty orders on heavy forged 
hand tools, finished or unfinished, with or without handles (HFHTs) 
from the People's Republic of China (PRC) (61 FR 15218). This review 
covers the period February 1, 1994 through January 31, 1995. We gave 
interested parties an opportunity to comment on our preliminary 
results. Based upon our analysis of the comments received, we have 
changed the results from those presented in the preliminary results of 
review.

EFFECTIVE DATE: October 1, 1996.

FOR FURTHER INFORMATION CONTACT: Rebecca Trainor or Maureen Flannery, 
AD/CVD Enforcement, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
4733.
    Applicable Statute and Regulations: Unless otherwise stated, 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 2, 1995, the Department published in the Federal 
Register (60 FR 6524) a notice of opportunity to request administrative 
reviews of these antidumping duty orders. On February 27, 1995, in 
accordance with 19 CFR 353.22(a), two resellers of the subject 
merchandise to the United States, Fujian Machinery & Equipment Import & 
Export Corporation (FMEC) and Shandong Machinery Import & Export 
Corporation (SMC), requested that we conduct administrative reviews of 
their exports of subject merchandise to the United States. On February 
28, 1995, the petitioner, Woodings-Verona Tool Works, Inc., requested 
that we conduct administrative reviews of SMC, FMEC, Henan Machinery 
Import & Export Company (Henan), and Tianjin Machinery Import & Export 
Company (Tianjin). We published the notice of initiation of these 
antidumping duty administrative reviews on March 15, 1995 (60 FR 
13955). We received no questionnaire responses from either Henan or 
Tianjin. Therefore, we have based our analysis of these two companies 
on facts otherwise available (FA). On April 5, 1996, the Department 
published in the Federal Register the preliminary results of the 
administrative reviews of the antidumping duty orders on HFHTs from the 
PRC (61 FR 15218). The Department is conducting these administrative 
reviews in accordance with section 751 of the Act.

Scope of Review

    Imports covered by these reviews 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, 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.

Factor Valuations: Changes From the Preliminary Results

    In the preliminary results, we valued factors of production based 
on the year in which production occurred. We have not used that 
methodology for the final results because it is inconsistent with our 
standard practice. Our standard factors methodology, like our standard 
constructed value methodology, is intended to reflect value during the 
period of investigation (POI) or the POR. Thus, these methodologies 
rely on costs during the POI or the POR. Therefore, for the final 
results, we have valued the factors of production using surrogate 
values for the review period.

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. We received case briefs and rebuttal briefs from 
petitioner and FMEC, SMC, and Tianjin.
    Comment 1: Petitioner and respondents state that the Department 
made errors in the inflation calculations for its factors of production 
analysis.
    Department's Position: We agree that we made a clerical error in 
calculating the wholesale price index (WPI) inflator for the 
preliminary results, and have made the necessary corrections for the 
final results.
    Comment 2: Respondents claim that the Department should not use the 
WPI to derive 1993 and 1994 values for steel, iron straps and wood. 
Respondents argue that the record shows no indication that steel prices 
are tied to any inflation index, and that the Department's other 1994 
factor values show that Indian import prices have actually fallen in 
comparison with 1993 or even 1992 Indian import prices.
    Further, respondents state, there is no ``secondary information'' 
on the record to support the use of the WPI. The respondents claim 
that, if the Department relies on the 1993 Indian import statistics for 
iron straps and wood, those values should be adjusted by the average 
change in values from

[[Page 51270]]

1993 to 1994 for the other factor values, rather than by the WPI.
    Petitioner argues that the WPI is the most appropriate inflation 
measure because it reflects prices paid for inputs at the wholesale 
level, where producers purchase them. Further, petitioner claims, it is 
widely recognized that steel prices move with overall economic 
activity; there is no evidence that the price of steel, iron straps or 
wood move in step with the other factor inputs. Thus, petitioner 
argues, the Department should not make the requested adjustment to its 
preliminary results.
    Department's Position: We disagree with respondents that steel 
factor values for periods prior to the review period should not be 
adjusted for inflation using the WPI. There is no record evidence to 
support respondents' argument that the WPI inflator is arbitrary when 
applied to steel. As we state in our factors analysis memo dated March 
27, 1996, we judged the 1994 Indian import data for steel to be 
unreliable, because it was based on a very small quantity of steel 
imports; we also determined that the 1993 Indian import data for steel 
was aberrational. Therefore, absent contemporaneous data and a more 
product-specific inflation index, we have adjusted steel factor values 
from periods prior to the period of review (POR) using the WPI, as we 
have done in prior reviews of this order, and in numerous other non-
market economy (NME) cases. See, e.g., Bicycles From the People's 
Republic of China: Final Determination of Sales at Less Than Fair 
Value, 60 FR 56567 (November 9, 1995) (Bicycles), and Certain Helical 
Spring Lock Washers From the People's Republic of China: Final Results 
of Antidumping Administrative Review, 61 FR 41994 (August 13, 1996) 
(Lock Washers).
    With respect to wood and iron straps, we have obtained surrogate 
values corresponding with the POR for the final results. Therefore, 
respondents' argument with respect to these inputs is moot.
    Comment 3: Petitioner argues that the Department should use the 
price quotations for special high quality steel bars that petitioner 
obtained from three Indian steel producers and submitted for the 
record, instead of the inflated 1992 Indian import statistics data 
which the Department used in the preliminary results. Petitioner claims 
that the data the Department relied upon are too broad, including steel 
that does not meet the exacting requirements of HFHT production. As a 
result, the average import values the Department used are too low, and 
do not accurately reflect the value of the steel used in making hand 
tools. Petitioner points out that the Department has used alternatives 
such as specific price quotations in situations where import statistics 
were found to be distortive or aberrational. Petitioner cites, for 
example, the Final Determination of Sales at Less Than Fair Value: 
Furfuryl Alcohol from the PRC, 60 FR 22544, 22548 (May 8, 1995) 
(Furfuryl Alcohol) and the Final Determination of Sales at Less Than 
Fair Value: Coumarin from the PRC, 59 FR 66895 (December 28, 1994) 
(Coumarin). Petitioner further argues that, in the less-than-fair-value 
(LTFV) investigation, the Department recognized that broad basket 
categories comprising many different types and sizes of steel, such as 
proposed by respondents, do not accurately reflect the prices of the 
specific types of steel used to manufacture HFHTs. Final Determination 
of Sales at Less than Fair Value: Heavy Forged Hand Tools, Finished or 
Unfinished, With or Without Handles, From the PRC, 56 FR 241 (Jan. 3, 
1991) (Final LTFV).
    Respondents contend that the Department should use the information 
contained in Statistics For Iron & Steel Industry in India, published 
in 1994 by the Steel Authority of India Limited (SAIL). Respondents 
argue that this source provides data that are contemporaneous with the 
review period, are specific to the thicknesses of steel bars used to 
make the subject merchandise, and have been used by the Department in 
other antidumping proceedings. See Drawer Slides from the People's 
Republic of China: Final Determination of Sales at Less Than Fair 
Value, 60 FR 54472 (October 24, 1995) (Drawer Slides) and Bicycles. 
Further, respondents contend, the SAIL data reflect prices that are 
comparable to the prices the Chinese factories actually paid for steel.
    Respondents argue that the price quotations supplied by petitioner 
are not contemporaneous with the POR, and do not represent the type of 
steel used in the Chinese manufacture of HFHTs. Respondents claim that 
the specifications offered for the steel quotations are for a higher 
quality steel than the Chinese HFHT factories actually use. Respondents 
further contend that the price quotations are aberrational in terms of 
ordinary steels, and are similar to the 1993 Indian import data that 
the Department judged to be aberrational. See Memorandum to the File 
for the 1993-1994 review, dated March 27, 1996.
    Respondents argue that petitioner's price quotations are not 
publicly available published data. Respondents assert that the 
Department should use such unpublished, non-publicly available 
information submitted by an interested party only as a last resort.
    Petitioner disputes respondents' contention that the SAIL data is 
representative of the type of steel used to make hand tools, stating 
that it covers steel bars used in non-critical structural work instead 
of the high quality bars used in HFHTs. Further, petitioner asserts, 
respondents' data appears to cover steel with a wide range of carbon 
content, which the Department found to be unacceptable in the LTFV 
investigation.
    Department's Position: We disagree with petitioner that we should 
use its submitted price quotations, and with respondents that we should 
use the SAIL data instead of the Indian import statistics we used in 
the preliminary results. Our objective is to value the surrogate steel 
at prices which most closely reflect the type of steel used by the PRC 
producer. (Here, we have matched respondents' hot rolled C45 steel bars 
with category number 7214.5 in the Indian import statistics, forged 
bars and rods containing between 25 and 60 percent carbon.) We have 
found that the chemical composition of the steel used is a more 
important determinant of its end use than is size. See, e.g. Lock 
Washers at 41997.
    While the SAIL data submitted by respondents in this case is more 
size-specific than the Indian import statistics we used in the 
preliminary results, it is less specific as to grade and chemical 
composition. The SAIL data presents average values for steel of unknown 
grade and chemical composition. Also, in the final determination of 
these orders, we rejected respondent's proposal of applying an average 
rate comprising many different types and sizes of steel, because we 
determined that using average values results in a less accurate 
calculation. Final LTFV at 245.
    Our use of SAIL data in Drawer Slides and Bicycles was based on our 
finding that, although less contemporaneous than the other data on the 
record, the SAIL data provided prices for steel that most closely 
matched the specifications of the steel used in those particular cases. 
See Drawer Slides at 54475, and Bicycles at 56573. However, in this 
case, we find that the Indian import data more closely matches the 
steel used to produce hand tools.
    We rejected petitioner's submitted steel price quotations for 
similar reasons. The price quotations are based on a higher quality 
steel than what is actually used by the respondents in hand tool 
production. Therefore, consistent with our practice, we find it

[[Page 51271]]

more appropriate to use the Indian import data. Although we used price 
quotations in Furfuryl Alcohol and Coumarin, in those cases we found 
the price quotations to be superior to the other available data.
    Therefore, for the final results, we continue to use Indian import 
statistics to value steel, because it is the most specific to the grade 
and chemical composition of the type of steel used by respondents in 
hand tool production.
    Comment 4: Petitioner states that the Department should use factor 
inputs to value wooden pallets, as the Department did in the previous 
review. Although the necessary information to do this is not on the 
record of this review, petitioner suggests that the Department value 
the pallets using factor inputs derived from data submitted on the 
public record in the preceding reviews, adjusted for inflation. If the 
Department judges this approach to be inappropriate for this review, 
petitioner requests that the Department collect the necessary 
information on pallet inputs in all subsequent administrative reviews 
of this order.
    Respondents argue that, unlike in the prior review, the record in 
this review is clear that the factories buy wooden pallets. Respondents 
assert that there is no established Departmental practice or legal 
authority for applying a factors methodology to all packing materials. 
Respondents assert that the Department must consider the evidence on 
the record that the factories do not make pallets and reject 
petitioner's argument.
    Department's Position: We agree with respondents. Unlike in the 
prior review, the record of this review indicates that the Chinese 
factories do not construct wooden packing pallets themselves, but 
purchase them already constructed. Thus, using surrogate values for 
complete pallets results in a more accurate calculation than valuing 
the wood and nails separately. Moreover, the statute and the 
Department's regulations do not require the Department to construct a 
value for packing materials. For these reasons, we have continued to 
value the cost of a complete pallet for the final results.
    Comment 5: Respondents object to the Department's use of the 
Economist Intelligence Unit's Investing, Licensing & Trading Conditions 
Abroad (IL&T) data as the surrogate labor rate source, stating that 
this source provides estimates based not on actual wage rates, but on 
rates stipulated in various Indian laws. Respondents point out that the 
Department rejected this data source in Bicycles.
    Instead, respondents argue that the Department should use the data 
contained in the publication, Foreign Labor Trends--India (FLTI), 
prepared by the American Embassy in New Delhi, which provides 1992 
Indian wage rates broken down into skilled, semi-skilled and unskilled 
categories. As an alternative, respondents suggest that the Department 
use the Yearbook of Labor Statistics (YLS), which the Department 
recently used in Bicycles. Respondents state that, should the 
Department use this source, SIC code 381 includes the manufacture of 
hand tools. Since the YLS does not differentiate among skill levels, 
respondents suggest a methodology for using the IL&T data as a 
``scale'' to derive skill levels from the YLS data.
    Respondents further comment that their suggested wage rates are 
comparable to other surrogate rates used by the Department. Respondents 
specifically point to the Indonesian wage rates the Department used in 
Disposable Pocket Lighters from the People's Republic of China: Final 
Determination of Sales at Less Than Fair Value (Lighters), 60 FR 22359 
(May 5, 1995) and Furfuryl Alcohol. Petitioner supports the 
Department's continued use of the IL&T for valuing labor and challenges 
respondents' argument in favor of the YLS data. Petitioner argues that 
respondents have made no showing why SIC code 381 is the appropriate 
code for the hand tool industry, and points out that, since YLS wage 
rates vary greatly among SIC codes, choosing the correct code is 
essential. Petitioner cautions that the Department should not 
arbitrarily use a data source it has rejected as a ratio to apply to a 
different information source, as respondents suggest.
    Petitioner states that the fact that the alternative wage rates 
suggested by respondents may be comparable to Indonesian wage rates 
used by the Department in two other recent NME cases is irrelevant, as 
the Department has selected India as the surrogate country for this 
review.
    Department's Position: We agree with respondents in part. As we 
stated in Bicycles, the IL&T, which we used for the preliminary 
results, provides estimates based not on actual wage rates, but on 
rates stipulated in various Indian laws. See e.g., Memorandum to 
Barbara R. Stafford, Factors Valuation Memo, Nov. 1, 1995, at 20 
(public memo on file in B-099 of the Commerce Department). Therefore, 
we have not used IL&T data for the final results. We recalculated labor 
rates, using data from the YLS. Unlike the FLTI data that respondents 
prefer, the YLS provides wage rates on an industry-specific basis. We 
used the daily wage rate specified for SIC code 381, ``manufacture of 
fabricated metal products, except machinery and equipment,'' because 
the description of the various industries this category covers was the 
best match for the hand tool industry. The YLS does not provide wage 
rates for different skill levels; we therefore applied the same rate to 
all three skill levels reported by respondents. Having found the IL&T 
data to be an inappropriate source for wage rates, it would be 
inappropriate to use the IL&T data to differentiate among skill levels, 
as respondent suggests. Because the YLS provides wage rates from 1990, 
we inflated the data for the review period, using the consumer price 
index, published in the International Monetary Fund's International 
Financial Statistics.
    We disagree with respondents that a comparison of their suggested 
wage rates to Indonesian wage rates used by the Department in Lighters 
and Furfuryl Alcohol is relevant, since those cases entail different 
industries and a different surrogate country than does this review.
    Comment 6: Respondents state that, consistent with past practice, 
the Department should use the actual prices Chinese companies paid in 
convertible currencies to market-economy suppliers. Respondents cite 
Oscillating Ceiling Fans from the PRC, 56 FR 55271 (October 25, 1991) 
(Fans), as an example of this practice. Respondents claim that the 
HFHTs case is distinct from Coumarin, in which the Department qualified 
this approach where inputs were ``purchased from market-economy 
countries by trading companies for use by their suppliers.'' 
Respondents state that here, some steel inputs were imported by the 
same Chinese company which sold the subject merchandise to the United 
States, virtually nullifying the possibility of price manipulation. 
Thus, respondents conclude, using these prices is the most accurate way 
to value the inputs.
    Petitioner points out that in the third review of HFHTs, the 
Department considered and rejected Chinese import prices for steel, in 
favor of surrogate country prices. Petitioner asserts that the 
Department may use actual purchase prices in limited circumstances, if 
the NME manufacturer purchases the inputs from a market economy 
supplier and pays in convertible currency. These circumstances are not 
met in this review, as the inputs were purchased from a market economy 
country by a PRC trading company, which then transferred the inputs to 
the PRC manufacturer.
    Department's Position: We agree with the petitioner. It is the 
Department's

[[Page 51272]]

normal practice in NME cases to value the factors of production using 
surrogate country input prices. The Department normally allows for the 
valuation of inputs based on the actual purchase price of the input 
only when the NME manufacturer purchases the inputs from a market 
economy supplier and pays in a convertible currency. See, e.g., Final 
Determination of Sales at Less Than Fair Value: Saccharin from the 
People's Republic of China, 59 FR 58818 (November 15, 1994) 
(Saccharin), and Fans.
    As we explained in Coumarin, this rule does not extend to inputs 
purchased by a trading company who then resells the input to the 
manufacturer. See Coumarin at 66900. The record of this review 
demonstrates that respondents, not their supplier factories, imported 
steel from a market economy source. Respondents then sold the steel to 
the factories, who paid them in renminbi. Thus, the criteria 
established in Fans and Saccharin for use of actual import prices to 
value steel are not satisfied in this case.
    Moreover, the respondents' claim with regard to nullification of 
price manipulation is irrelevant. The rationale behind use of actual 
import prices of the NME producer is that the producer's import prices 
more accurately reflect its costs of the particular input. Fans at 
55275. Respondents misconstrue this exception because they fail to 
recognize that the focus of inquiry is the NME producer's costs, not 
the costs of the NME trading company. The market-economy price paid by 
the trading company does not represent the cost to the manufacturer, 
and the trading company's price to the manufacturer is not a market-
economy price. Therefore, for these final results, we have used 
surrogate values to value all steel inputs used in the production of 
HFHTs.
    Comment 7: The respondents assert that the Department's use of a 
price reported in a December 1989 cable from the U.S. Embassy in India, 
adjusted by the WPI, to value inland rail freight is less 
contemporaneous than other rail freight data on the record, and is 
unsupported by secondary data. Respondents argue that the information 
in Doing Business in India, published by the Ministry of External 
Affairs of the Government of India, is more current, is official 
government data, and provides specific rates on a per-kilometer basis.
    Petitioner objects to respondents' suggested alternative rail 
freight rate. Petitioner points out that the data respondents submitted 
consists of a single, average rate. This rate would distort freight 
cost calculations by overstating the per-kilometer costs of long trips 
and understating the per-kilometer costs of short trips. Petitioner 
argues that because the rate is only one digit, it is inherently 
imprecise. Further, its source is unknown. When selecting surrogate 
data, petitioner asserts, the primary focus is on the accuracy and 
specificity of the data; the fact that respondents' data is slightly 
more current is not dispositive. Petitioner states that the Embassy 
cable data provides rates for varying distances, unlike the 
respondents' data, which provides one rate for all distances.
    Department's Position: We agree with petitioner. The 1989 Embassy 
cable data we used to value inland rail freight is less contemporaneous 
than data provided by respondents by one year, but it is more precise 
than the average freight rate contained in respondents' submission, 
because it provides freight rates for various distances. Therefore, we 
continued to use this data for the final results.
    Comment 8: Respondents object to the Department's use of a selling, 
general and administrative (SG&A) expenses figure of 17.99 percent, 
derived from the April 1995 Reserve Bank of India (RBI) Bulletin, 
because (1) it is based on information that does not apply to the POR; 
(2) unlike data used in Bicycles and Lock Washers, it reflects too 
broad an industry spectrum; (3) the figure is aberrational, since 
during previous reviews, the figure was considerably smaller; and (4) 
under similar circumstances, such as in Bicycles, the Department 
rejected similarly aberrational data. Instead, respondents propose 
using the figure of 10 percent that the Department used in its 
preliminary results for 1993 production.
    Petitioner supports the Department's use of data from the RBI 
Bulletin for calculating SG&A expenses. Petitioner argues that 
respondents' reliance on Bicycles in this regard is misplaced because, 
in that case, the Department had industry-specific information on SG&A 
expenses in the surrogate country that were lower than those provided 
in the petition. Thus, the Department found the RBI figure to be 
uncorroborated, and of no probative value. Petitioner asserts that the 
Department has no such evidence in this case. Petitioner points out 
that the Department did use RBI data in Lock Washers.
    Department's Position: We agree with petitioner. In Bicycles, we 
based SG&A on industry-specific information. In this review, we did not 
have SG&A data specific to the hand tool industry. The SG&A rate of 
17.99 percent, which we used for both 1993 and 1994 production in the 
present review, was derived from 1992-1993 data, the most recent 
available data. (Our preliminary analysis memorandum, dated March 27, 
1996, erroneously states that we used the 9.5 percent rate for 1993 
production. We did not use this rate because it is derived from 1991-
1992 data.)
    Further, we do not consider this rate to be aberrational. The 
difference between the 17.99 percent rate used in this review, and the 
9.5 percent rate used in the prior review, is the result of a change in 
the Department's methodology for calculating SG&A, rather than an 
indication of an aberration. The 17.99 percent figure includes amounts 
for interest and insurance that the 9.5 percent figure does not. See 
Lock Washers at 41999, in which we amended our preliminary results to 
include amounts for interest and insurance in SG&A. Therefore, we have 
not recalculated SG&A for the final results.
    Comment 9: Tianjin argues that the Department exceeded its 
authority by applying to it a PRC-wide rate. Tianjin cites UCF America 
Inc. v. United States, Slip Op. 96-42 (CIT Feb. 27, 1996) (UCF America) 
and Sigma Corp. v. United States, 841 F. Supp. 1255, 1267 (CIT 1993) 
(Sigma Corp.), in which the Court expressed concern over the 
Department's NME policy, in support of its position.
    Tianjin argues that, in UCF America, the Court's primary concerns 
were that the PRC-wide rate increases the complexity of administrative 
reviews and requires NME suppliers to participate, even if their 
presence in the proceedings is unnecessary. Tianjin concludes that this 
policy contravenes 19 U.S.C. section 1675, which was amended to ``limit 
the number of reviews in cases in which there is little or no interest, 
thus limiting the burden on petitioners and respondents, as well as the 
administering authority.'' Id. (quoting H.R. Conf. Rep. No. 1156, 98th 
Cong., 2d Sess. 181 (1984). Thus, by applying the PRC-wide rate to 
Tianjin, the Department exceeded the authority of the statute and 
ignored the express intent of Congress and of the Court of 
International Trade (CIT).
    Petitioner points out that the issue of Tianjin's separateness was 
irrelevant in the Department's determination of Tianjin's dumping 
margin. The Department merely followed its policy of assessing 
uncooperative respondents the highest rate from any prior segment of 
the proceedings for each imported like product. Petitioner asserts, 
moreover, that the Department would be justified in assigning to 
Tianjin a PRC-wide rate under UCF America. Petitioner points out that 
Tianjin failed

[[Page 51273]]

to establish its independence from the PRC government in the LTFV 
investigation. In this review, Tianjin forfeited its opportunity to 
establish separateness by not responding to the Department's 
questionnaire.
    Petitioner argues that the cases Tianjin cited support the fact 
that Tianjin is liable for the PRC-wide rate. In Sigma Corp., 
petitioner states, the CIT rejected the use of a PRC-wide rate because 
the Department unexpectedly switched from company-specific to a PRC-
wide rate for all respondents without giving them a chance to prove 
their independence. Petitioner asserts that the UCF America decision 
specifically endorsed the earlier decision in Tianjin Machinery Import 
& Export Corp., 806 F. Supp. at 1013-15, that Tianjin should receive a 
PRC-wide dumping margin.
    Department's Position: We agree with petitioner. Regardless of the 
Department's views on the concerns expressed by the CIT in UCF America 
regarding the ``all others'' rates, those concerns are not implicated 
in this case. The ``all others'' category is reserved for companies 
that have never been investigated or reviewed. Petitioner requested a 
review of Tianjin and Henan, and they refused to respond to the 
Department's request for information. Therefore, we conducted the 
review of these companies on the basis of adverse facts available, 
pursuant to section 776(b) of the Act. Under our NME policy, Tianjin, 
Henan and all other exporters that have not established that they are 
entitled to a separate rate are considered to be part of a single, 
government-controlled enterprise (the NME entity). Because Tianjin and 
Henan failed to cooperate, and because they are considered to be part 
of the NME entity, the entire NME entity has received a rate based on 
adverse facts available. See Preliminary Results at 15220.
    Comment 10: Respondents argue that the 1993 values for pallets, PVC 
bags and SG&A should be changed to reflect the 1993 values the 
Department used for the final results in the previous (1993-1994) 
review. Respondents also claim that the Department should adjust 1994 
values to eliminate bias. They argue that, while the POR covers imports 
during February 1994 through January 1995 and production beginning in 
January 1994, the Indian import data the Department used includes data 
for April 1994 through January 1995. Thus, respondents claim, the 
Department should adjust all values, except for those for HFHTs 
produced in 1993, to coincide with the 1994 calendar year.
    Petitioner argues that respondent has offered no citation to any 
evidence in the record to support its contention that 1993 values for 
pallets and PVC bags should be changed. Petitioner asserts that, in the 
prior review, the Department considered and rejected respondents' 
argument that Indian import statistics for 1994 should be adjusted to 
reflect the POR, stating that the Indian import data was both complete 
and contemporaneous.
    Department's Position: As we describe above, we have changed our 
factor valuation methodology for the final results to correspond with 
the POR. Therefore, respondents' arguments with respect to 1993 factor 
values is moot.
    With respect to 1994 surrogate information, data is available for 
the January through March 1994 period, and we have used that data for 
our final results. Therefore, respondents argument with respect to 
deflating the data is moot.

Final Results of Review

    As a result of our review, we have determined that the following 
margins exist:

------------------------------------------------------------------------
                                                                 Margin 
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Fujian Machinery & Equipment Import & Export Corp:                      
  Axes/Adzes.................................................       8.74
  Bars/Wedges................................................      13.20
  Hammers/Sledges............................................       7.44
  Picks/Mattocks.............................................      83.47
Shandong Machinery Import & Export Corp:                                
  Bars/Wedges................................................      42.97
  Hammers/Sledges............................................      14.70
  Picks/Mattocks.............................................      70.31
PRC-Wide Rates:                                                         
  Axes/Adzes.................................................      21.92
  Bars/Wedges................................................      66.32
  Hammers/Sledges............................................      44.41
  Picks/Mattocks.............................................     108.20
------------------------------------------------------------------------

    The Department shall determine, and the Customs service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between United States price and normal value 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 this notice of final results of reviews for all 
shipments of HFHTs from the PRC entered, or withdrawn from warehouse, 
for consumption on or after the publication date of these final 
results, 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 as 
stated above for the classes or kinds of merchandise listed above; (2) 
for axes/adzes from SMC, which are not covered by this review, the cash 
deposit rate will be the rate established in the most recent review of 
that class or kind of merchandise in which SMC received a separate 
rate--that is, the February 1, 1992 through January 31, 1993 review; 
(3) for all other PRC exporters, the cash deposit rates will be the 
PRC-wide rates established in these final results of this 
administrative review; and (4) the cash deposit rates for non-PRC 
exporters of the subject merchandise from the PRC will be the rate 
applicable to the PRC supplier of that exporter. We determine the PRC-
wide rates to be: 44.41 percent for hammers/sledges, 66.32 percent for 
bars/wedges, 108.20 percent for picks/mattocks, and 21.92 percent for 
axes/adzes. These deposit requirements shall remain in effect until 
publication of the final results of the next administrative review.
    This notice serves as a final reminder to importers of their 
responsibility under 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 notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with section 353.34(d) of the Department's 
regulations. Timely notification of return/destruction of APO materials 
or conversion to judicial protective order is hereby requested. Failure 
to comply with the regulations and the terms of an APO is a 
sanctionable violation.
    This administrative review and notice is 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: September 23, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-25119 Filed 9-30-96; 8:45 am]
BILLING CODE 3510-DS-P