[Federal Register Volume 61, Number 222 (Friday, November 15, 1996)]
[Notices]
[Pages 58514-58519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29242]


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DEPARTMENT OF COMMERCE
[A-570-808]


Chrome-Plated Lug Nuts From the People's Republic of China; Final 
Results of Antidumping Duty Administrative Review

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

ACTION: Notice of final results of antidumping administrative review.

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SUMMARY: On August 16, 1995, the Department of Commerce (the 
Department) published in the Federal Register the preliminary results 
of its administrative review of the antidumping duty order on chrome-
plated lug nuts (lug nuts) from the People's Republic of China (PRC) 
(60 FR 48687). This review covers shipments of this merchandise to the 
United States during the period September 1, 1993, through August 31, 
1994. 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: November 15, 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 and Regulations

    Unless otherwise stated, all citations to the statute and to the 
Department's regulations are references to the provisions as they 
existed on December 31, 1994.

SUPPLEMENTARY INFORMATION:

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 2, 1994, the Department published in the Federal Register (59 
FR 45664) 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, 1993, through August 31, 1994.
    On September 21, 1994, in accordance with 19 CFR 353.22(a)(1994), 
the petitioner, Consolidated International Automotive, Inc., requested 
that we conduct an administrative review of China National Automotive 
Industry
I/E Corp. (China National); China National Machinery & Equipment Import 
and Export Corporation, Jiangsu Co., Ltd. (Jiangsu); Rudong Grease Gun 
Factory (Rudong); China National Automotive Industry I/E Corp., Nantong 
Branch (Nantong); China National Automotive Industry Shanghai 
Automobile Import & Export Corp. (Shanghai Automobile); Tianjin 
Automotive Import & Export Co. (Tianjin); China National Automobile 
Import and Export Corp., Yangzhou Branch (Yangzhou); and Ningbo Knives 
& Scissors Factory (Ningbo). We published a notice of initiation of 
this antidumping duty administrative review on October 13, 1994 (59 FR 
51939).
    On August 16, 1995, the Department published in the Federal 
Register the preliminary results of its administrative review of the 
antidumping duty order on lug nuts from the PRC (60 FR 48687). There 
was no request for a hearing. The Department has now completed this 
review in accordance with section 751 of the Tariff Act of 1930, as 
amended (the Tariff 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 subheadings 
7318.16.00.15, 7318.16.00.45, and 7318.16.00.80 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, 1993, through August 31, 
1994, and eight producers/exporters of Chinese lug nuts.

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. We received case and rebuttal briefs from 
petitioner and Rudong.
    Comment 1: Petitioner concurs with the Department's decision to use 
the best information available (BIA) for non-responding parties, and 
argues that the Department should apply partial BIA to Rudong. 
Petitioner states that, while Rudong did respond to the Department's 
requests for information, Rudong submitted erroneous cost information 
relating to packing costs, reported out-of-date factors of production 
values rather than actual factors-of-production and factory overhead 
for the period of review (POR), and included a substantial additional 
amount for electricity that is unexplained. Petitioner further asserts 
that scrap amounts reported by Rudong were incorrect, and that the 
Department could not verify the percentage of materials purchased from 
each supplier.
    For the six non-responding companies, petitioner contends that the 
Department should apply a first-tier BIA rate of 44.99 percent from the 
final results of the second administrative review (1992-1993). 
Petitioner argues that the use of this rate is supported by the record 
and follows applicable law and administrative practice.

[[Page 58515]]

    Rudong disagrees with petitioner's assertion that partial BIA 
should be administered with respect to its factors of production. 
Rudong argues that it has been fully responsive and cooperative in this 
review. Rudong contends that the Department was able to verify the data 
used in the preliminary results and that no reason exists to reject 
these verified data. Rudong states that this claim for BIA, or partial 
BIA, is without any basis whatsoever, and the Department should reject 
petitioner's claim that Rudong should be punished with BIA in this 
administrative review.
    Department's Position: We agree with petitioner, in part. As in the 
preliminary results, we have determined that it is appropriate, in 
accordance with Section 776(c) of the Tariff Act, to apply first-tier 
BIA to the six non-responding firms. In deciding what to use as BIA, 
the Department's regulations provide that the Department may take into 
account whether a party refuses to provide requested information. 19 
CFR 353.37 (b). Thus, the Department may determine, on a case-by-case 
basis, what constitutes BIA. When a company refuses to cooperate with 
the Department or otherwise significantly impedes the proceedings, we 
use as BIA the higher of (1) the highest of the rates found for any 
firm for the same class or kind of merchandise in the same country of 
origin in the less-than-fair-value (LTFV) investigation or prior 
administrative reviews; or (2) the highest rate found in this review 
for any firm for the same class or kind of merchandise in the country 
of origin. When a company substantially cooperates with our requests 
for information and substantially cooperates in verification, but fails 
to provide the information requested in a timely manner or in the form 
required or is unable to substantiate it, we use as BIA the higher of 
(1) the highest rate ever applicable to the firm for the same class or 
kind of merchandise from either the LTFV investigation or a prior 
administrative review; or (2) the highest calculated rate in this 
review for the class or kind of merchandise for any firm from the same 
country of origin. (See Final Results of Antidumping Duty 
Administrative Reviews and Revocation in Part of an Antidumping Duty 
Order: Antifriction Bearings (Other than Tapered Roller Bearings) and 
Parts Thereof From France, et. al. (58 FR 39729, (July 26, 1993).)
    We have applied BIA to sales made by China National, Jiangsu, 
Yangzhou, Ningbo, Shanghai Automobile, and Tianjin. Because these firms 
did not respond to our questionnaire, as BIA we have applied the 
highest margin ever calculated in the investigation or this or the 
prior review, which is 44.99 percent.
    Contrary to petitioner's claim, Rudong did not report an 
unexplained amount for electricity; however, at verification we did 
find an additional charge for electricity. The question of whether to 
make an adjustment for this additional amount is moot because we have 
determined that it is appropriate to use factors of production rather 
than cost to calculate foreign market value (FMV) (see comment 2). We 
verified the amounts of electricity we used in our calculations. 
Similarly, because we used factors of production, petitioner's comments 
regarding packing costs are moot. We agree with petitioner that we 
could not fully verify the exact percentage of material purchased from 
each supplier; this was due to the way in which Rudong keeps its 
records. These percentages are relevant to the calculation of the 
transportation component of the materials factor for transportation of 
materials to the factory. To value transportation we used ranges of 
distance, e.g., up to 100 kilometers, up to 250 kilometers, etc. We 
used this methodology because the best surrogate data for 
transportation was in ranges of distance (see Memorandum to the File, 
``Factor Values Used for the Preliminary Results of the Third 
Administrative Review,'' dated August 3, 1995). For materials that fell 
within a single distance range, the inability to verify the exact 
percentage of material from each supplier is moot because there would 
be no difference between the rates for each supplier. For those 
materials which fell into more than one category of distance, as 
partial BIA we used the longest distance range for all transportation 
for that input.
    We agree with petitioner that Rudong reported factors of production 
that were out of date with respect to the POR, from schedules last 
updated in 1992 and 1993, rather than its actual experience during the 
POR. We found, at verification, that these were the most recent 
schedules that Rudong had, and that Rudong used these schedules in its 
normal course of business. We also agree with petitioner that Rudong 
reported scrap amounts which were also incorrect. However, we disagree 
that these errors were serious enough to warrant partial BIA. As is our 
general practice, we were able to make minor corrections to the figures 
reported by Rudong following verification. We replaced submitted 
figures which were erroneous with verified figures. Therefore, we have 
not applied partial BIA to Rudong with respect to these items.
    Comment 2: Rudong argues that the Department incorrectly concluded 
in the preliminary results that the lug nut industry in the PRC was not 
market-oriented. Rudong contends that, based on the facts on the 
record, the lug nut industry is market-oriented, and that the 
Department should so determine for purposes of the final results. 
Rudong notes that the Department held that Rudong had not demonstrated 
that the lug nuts industry met the market-oriented industry (MOI) test 
set forth, as follows, in the 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 15052 
(April 24, 1992) (Amended Final):

    (1) For the subject merchandise, there must be virtually no 
government involvement in setting prices or amounts to be produced. 
For example, state-owned production or allocation of production of 
the merchandise, whether for export or domestic consumption in the 
non-market economy country would be an almost insuperable barrier to 
finding a market-oriented industry.
    (2) The industry producing the merchandise under review should 
be characterized by private or collective ownership. There may be 
state-owned enterprises in the industry but substantial state 
ownership would weight heavily against finding a market-oriented 
industry.
    (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 insignificant proportion of all the inputs 
accounting for the total value of the merchandise under 
investigation. For example, an input price will not be considered 
market determined if the producers of the merchandise under 
investigation pay a state-set price for the input or if the input is 
supplied to the producers at government direction. Moreover, if 
there is any state-required production in the industry producing the 
input, the share of state-required production must be insignificant.

    Rudong notes that the Department concluded that the lug nut 
industry failed the MOI test for two reasons: first, the Department had 
not received information from every producer of lug nuts in the PRC; 
second, the Department found that Rudong did not submit evidence that 
demonstrated that a significant portion of its suppliers' industries 
are not subject to significant government control and state-required 
production and demonstrated that the state involvement in these 
industries has changed since the Amended Final.
    Rudong notes that it has repeatedly made statements, which are 
certified and on the record, that to its knowledge it is the only lug 
nuts producer in the PRC. According to Rudong, petitioner's

[[Page 58516]]

argument regarding the need for government corroboration that Rudong is 
the only lug nuts producer leads to a situation in which MOI status 
itself prevents Rudong from proving its MOI status. Because the 
industry is an MOI, Rudong contends, there is no government control, 
and the government cannot certify who is part of that particular 
industry. Rudong contends that, in the absence of any evidence 
whatsoever of additional Chinese producers of lug nuts and given its 
certifications of no additional producers, the Department should 
conclude that Rudong was the sole lug nuts producer during the POR.
    Rudong contests the Department's conclusion that it did not submit 
evidence demonstrating that a significant portion of its supplier 
industries are not subject to significant government control and state-
required production. Rudong argues that, in its supplemental 
questionnaire response, it provided statements from its suppliers of 
steel rod and chemicals, indicating that each particular supplier was 
free of state control, that the industry of which that supplier was a 
member was also free of state control, and that the supplier's prices 
to Rudong were set without any government interference. Rudong argues 
that the Department itself was able to verify that Rudong's suppliers 
themselves are free of government control, and affirms that it already 
has submitted certifications that the relevant industries in the PRC 
are free of government control and interference, except for small 
quantities of government purchases in unrelated sectors of the steel 
industry.
    Rudong further argues that the Department cannot conclude that no 
individual sector of the huge PRC steel industry could be market-driven 
simply because of the existence of possible state influence over a 
minor sector. Rudong contends that this is contrary to the third 
element of the Department's own three-part MOI test, which allows 
insignificant state-required production in an MOI. Rudong contends that 
if the Department were to examine the steel industry in any other 
market-oriented country, it would undoubtedly find some mandatory 
production of steel in every country that had even a minor defense 
industry. Rudong argues that the relevant steel supplier industry for 
purposes of an MOI determination is the steel rod industry in the 
region in which Rudong manufactures lug nuts.
    Petitioner states that the Department appropriately determined that 
the PRC lug nut industry was not an MOI and properly applied factors of 
production to determine Rudong's FMV. Petitioner contends that although 
the Department has assigned Rudong a separate rate based on lack of 
government control of its operations, this does not mean that the 
entire PRC industry as a whole is market-oriented.
    Petitioner maintains that, although Rudong asserts that it is the 
only PRC producer of lug nuts, it has failed to provide objective 
corroboration of this claim. Petitioner further maintains that the 
Department's attempts to obtain further information on this point have 
been frustrated by lack of response from both the PRC government and 
the Chinese Chamber of Commerce for Imports & Exports of Machinery & 
Electronics (China Chamber). Petitioner claims that, in spite of its 
efforts, the Department has been unable to determine whether there are 
additional PRC producers of lug nuts. Petitioner argues that it is 
insufficient that Rudong alone has responded, and that the Department 
must be certain that it has obtained responses from all PRC producers 
before evaluating whether the PRC industry is market-oriented.
    Petitioner states that, although Rudong claims its suppliers pay 
market-determined prices for all inputs, Rudong has failed to produce 
information that would allow evaluation of its claim despite having 
been provided an extended opportunity to do so. Petitioner also states 
that Rudong has provided conclusory, unsupported statements from 
several of its suppliers claiming that they are free from government 
control and that such statements are unverified.
    Petitioner contends that Rudong's submission does not address the 
overarching question of Chinese steel and chemical industries. 
Petitioner argues that, regardless of the nominal ``independence'' of 
Rudong's suppliers, the Department has properly recognized that the 
industries supplying materials must be market-driven. Petitioner also 
argues that Rudong has not provided any evidence that it pays market-
determined prices for steel or chemical inputs, that these two 
industries that provide key inputs were free from state control, or 
that the demand factors support a claim that the steel and chemical 
industries in the PRC are demand-driven.
    Department's Position: We disagree with Rudong. Rudong has not 
demonstrated that the prices for steel and chemical inputs in the PRC 
are market-determined. We further disagree that it is sufficient to 
find a segment of a particular industry, such as the steel wire rod 
manufacturers in a particular province, to be free of government 
control, as price and quantity decisions made by the state for the PRC 
steel industry could affect the local steel wire rod industry. Rudong 
simply has not demonstrated that the central government did not direct 
production or set prices in this case.
    Rudong has focused narrowly on its suppliers, providing 
certificates stating that its suppliers are free of government control; 
however, even if its suppliers are free of government control, this 
would not prove that there is no government control of the industry. We 
concluded in the Amended Final that such a narrow focus on Rudong's 
suppliers was not sufficient for determining that an industry was a 
MOI. We stated:

    The absence of explicit government involvement in these 
transactions is not sufficient to warrant the conclusion that the 
prices for these inputs are market-driven. Instead, it is necessary 
to examine whether market forces are at work in determining the 
steel and chemical prices in general within the PRC.
    For example, it may be the case that the state purchases large 
quantities of the input in question. Where this is so, it is 
reasonable to assume that the state's purchases affect the quantity 
available to non-state consumers and the prices they would pay. 
Also, where the state owns many of the input producers and where the 
input is an important commodity fundamental to the operation of the 
larger economy, it is not at all clear that the pricing and 
production of those input producers would mirror those of privately-
owned, profit maximizing enterprises.
    For the [sic] reasons, it is necessary to look beyond direct 
state involvement in the specific transactions between the 
manufacturer under investigation and its suppliers to ascertain 
whether market forces are actually at work in determining the input 
prices.

    Amended Final, 15053. For this administrative review, Rudong has 
not demonstrated that there have been any changes to the industries 
from which it sources its materials that would compel us to reconsider 
the determination we made in the Amended Final.
    Furthermore, Rudong has not put any information on the record to 
support its claim that its suppliers do not pay state-set prices for 
their input materials. In addition, Rudong has argued that there have 
been only small quantities of government purchases in unrelated sectors 
of the steel industry, but has not put any information on the record to 
support this point.
    We agree with petitioner's contention that the record lacks 
objective corroboration of Rudong's claim that it is the only PRC 
producer of lug nuts. We disagree with Rudong's deduction that the lack 
of response from the PRC government is indicative of the lack of 
government control in the industry. We

[[Page 58517]]

do not know why the government failed to respond to our request for 
information. We note that we did not request information directly from 
the China Chamber.
    Based on the foregoing, we have not considered the lug nuts 
industry to be an MOI for this review.
    Comment 3: Rudong contends that the Department should select a more 
accurate measure of surrogate steel prices. Rudong argues that the 
Department should use the actual price for steel paid by Rudong under 
an MOI analysis (see comment 2 above). Moreover, Rudong contends, for 
the factors-of-production analysis conducted for preliminary results, 
the Department used Indian import value statistics that overstated the 
value of steel.
    Rudong argues that the steel surrogate price information the 
Department used in its preliminary results is less accurate and 
authoritative than the prices published in Steel Scenario, an Indian 
journal, and submitted by Rudong for this review. Rudong claims that 
the Department should rely on prices in Steel Scenario for several 
reasons. First, Rudong contends that the Indian steel import statistics 
the Department used are for a different period than this review, 
necessitating a rough and potentially distortive inflation adjustment 
based on the wholesale price index, while the Steel Scenario 
information is for each month of the POR. Second, Rudong asserts that 
the import data are for a less precise basket category of iron and 
steel, and, therefore, may include products that are not used in the 
production of lug nuts, while the Steel Scenario information is for the 
precise product--iron and steel rounds approximately 16 mm in diameter 
and steel and iron wire rods approximately 8 mm in diameter--that 
Rudong used to make lug nuts in the PRC.
    Rudong observes that it might be argued that, because the Indian 
import statistics specify relatively low-grade low-carbon steel, and 
the Steel Scenario data do not, the Indian import statistics are more 
precise; however, Rudong argues, this leads to the conclusion that the 
Steel Scenario pricing data are too high, not too low. Third, Rudong 
asserts that the import data are for imports of steel into India, not 
prevailing market rates in India, whereas it used local, and not 
imported, steel. The Steel Scenario data, Rudong contends, show the 
prevailing market rates in India. Rudong further contends that use of 
the publicly-available-published-information (PAPI) from Steel 
Scenario, unlike use of the import statistics, is consistent with the 
Department's established policy, as stated in Notice of Preliminary 
Determination of Sales at Less than Fair Value and Postponement of 
Final Determination: Furfuryl Alcohol From the People's Republic of 
China, 59 FR 65009 (December 16, 1994) (Furfuryl Alcohol).
    Rudong argues that the Indian import statistics do not agree with 
any other available data by a wide margin. Rudong argues that this 
could be because either the imported steel is a very special steel, 
used for particular purposes, and is, therefore, far more expensive, or 
the merchandise has simply been misclassified under the HTS.
    Petitioner asserts that the Department should continue to determine 
steel wire rod values based on Indian import statistics. Petitioner 
argues that the tariff descriptions provide narrow coverage for nearly 
all raw materials and packing and avoid problems of over-inclusiveness.
    Petitioner claims that the Department properly declined to rely on 
Rudong's surrogate data for the preliminary results and argues that the 
Department should continue to do so. Petitioner argues that rounds are 
not the raw material used in producing lug nuts, and cites to the 
verification report and factors memorandum. Petitioner further notes 
that the steel scrap data the Department used in the preliminary 
results indicate that Rudong's production process begins with wire rod, 
not the further-fabricated rounds.
    Petitioner also asserts that prices Rudong submitted cover both 
iron and steel products, and that Rudong used steel rod, not iron rod, 
in manufacturing lug nuts; therefore, in petitioner's view, reliance on 
Rudong data would produce a distorted value for steel.
    Petitioner argues that Rudong's proffered prices cover sales in 
only two Indian cities and there is no way to determine whether they 
are determinative of prices in India generally. Petitioner argues that, 
by contrast, import data provide a nationwide average from which the 
Department can determine the value of steel rod.
    Rudong contends that petitioner's factual assertions are wrong; 
furthermore, even under petitioner's analysis, the Department should 
use Rudong's submitted surrogate prices. Rudong states that its 
suggested surrogate prices were for wire rod, and notes that, while it 
also submitted rounds price data, it does not assert that the 
Department should use these data. In addition, Rudong contends that, 
although the category of product it reported in its submission was 
``iron and steel,'' it seems obvious that the category ``wire rod'' 
consists of steel, and not iron.
    Petitioner alleges that Rudong submitted new factual information in 
its case brief and that the Department should strike such information 
from the record.
    Department's Position: We agree with Rudong and petitioner, in 
part. In Furfuryl Alcohol, cited by Rudong, the Department stated:

    In determining which surrogate value to use for each factor of 
production that was not sourced from a market-economy country, we 
selected, where possible, from publicly available published 
information that is: (1) An average non-export value; (2) 
representative of a range of prices within the period of 
investigation if submitted by an interested party, or most 
contemporaneous with the POI; (3) product-specific; and (4) tax-
exclusive.

    Furfuryl Alcohol, 65011 (December 16, 1994). We agree with Rudong 
that the information in Steel Scenario is more contemporaneous with the 
POR than are the import statistics; however, the latter are more 
product-specific and are tax exclusive. Furthermore, the data Rudong 
submitted do not indicate the grade and specifications of the metal in 
the rounds and wire rods.
    We noted in Chrome-Plated Lug Nuts From the People's Republic of 
China; Final Results of Antidumping Administrative Review, 60 FR 48687 
(September 20, 1995), covering the 1991-1992 and 1992-1993 
administrative reviews of the antidumping duty order, that the Indian 
import statistics are more specific in that they indicate the carbon 
content of the steel, whereas by contrast, Steel Scenario does not 
specify either the carbon content of the steel or other chemicals 
present in the steel. Carbon content is a more important determinant of 
price than size. We further note that Steel Scenario prices include 
taxes and levies, without indicating the amount of taxes and levies 
included. Our objective is to value steel at prices at which it is 
available in the surrogate country.
    With respect to the petitioner's argument that Rudong submitted new 
information in its case brief, we disagree. The information Rudong 
submitted supported its argument, rather than presented new facts for 
the record.
    However, we agree with Rudong that the prices of the imported steel 
wire rod are out of line with other data. We compared the same 
``basket'' HTS number for the United States, the European Union, 
Canada, and Indonesia and found that steel wire rod import prices to be 
relatively the same in these

[[Page 58518]]

countries, and significantly lower than Indian steel wire rod import 
prices. Indonesia is also comparable to the PRC in terms of level of 
economic development and Indonesia has some lug nut production, albeit 
not as great as India. (See Memorandum to Laurie Parkhill from David 
Mueller, dated June 9, 1995, ``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 Donald Little, dated July 
20, 1995, ``India: Significant Production of Comparable Merchandise,'' 
which are on file in the Central Records Unit (room B099 of the Main 
Commerce Building).)
    Therefore, for these final results we have used Indonesian steel 
wire rod import prices. These import prices are also for a basket 
category of steel wire rod imports, as are the Indian import prices, 
but are consistent with steel wire rod prices in other countries. They 
also do not include taxes. (See memorandum to the file from Elisabeth 
Urfer, ``Comparison of Import Statistics in the 1993-1994 
Administrative Review of Chrome-plated Lug Nuts from the PRC,'' dated 
November 5, 1996.)
    Comment 4: Rudong alleges that the Department made a number of 
clerical errors in its preliminary results. Rudong states that, for a 
series of observations for the factor amounts of chromium acid and 
sulfuric acid nickel, the Department omitted one zero after the 
decimal, and for the factor amounts of polisher the Department erred in 
the quantity consumed. Rudong further argues that the Department erred 
by not allowing for scrap and waste for certain group numbers.
    Department's Position: We agree with Rudong, in part. We have 
corrected clerical errors for chromium acid, polisher, and scrap and 
waste; however, we disagree that we made a clerical error for sulfuric 
acid nickel. We have reexamined the figures for sulfuric acid nickel in 
the verification exhibits and in the calculation and have not found an 
omitted zero after the decimal.
    Therefore, we have continued to use the verified amount for 
sulfuric acid nickel (see verification exhibit 19).
    Comment 5: Rudong argues that the Department should remove an 
amount for ``research and development'' from surrogate factory overhead 
because, as a mature industry, Rudong incurs no research and 
development expense. Rudong argues that, similarly, surrogate selling, 
general and administrative expenses should not include royalties, 
selling commissions or advertising, but notes that these amounts have 
no impact on the results.
    Department's Position: We disagree with Rudong. Factory overhead is 
a combination of elements; while Rudong may not incur research and 
development, there may be other factory overhead expenses it does incur 
which are not included in the surrogate factory overhead. Because we do 
not have detailed knowledge of the components of Rudong's factory 
overhead, and thus cannot make an adjustment for all differences, it 
would be inappropriate to make a partial adjustment for research and 
development. The Department has rejected item-by-item evaluation of 
overhead components in the past. (See Notice of Final Determinations of 
Sales at Less Than Fair Value: Pure Magnesium and Alloy Magnesium From 
the Russian Federation, 60 FR 16440 (March 30, 1995), and Final 
Determination of Sales at Less Than Fair Value; Tapered Roller Bearings 
and Parts Thereof, Finished or Unfinished, From the Hungarian People's 
Republic, 52 FR 17428 (May 8, 1987).) Based on the foregoing, we have 
not excluded research and development expense from factory overhead.
    Comment 6: Rudong contends that there are calculation errors in the 
use of import statistics for steel and adhesive tape factor values. 
Rudong argues that the Department should exclude steel imports from 
North Korea, and adhesive tape imports from the PRC, Croatia, and North 
Korea.
    Department's Position: We agree with Rudong that there was a 
clerical error in our calculations with respect to adhesive tape. The 
allegation of a clerical error with respect to steel is moot since we 
are using Indonesian import statistics for the final results (see 
comment 3 above). For these final results, we have excluded PRC and 
North Korean imports of adhesive tape, and recalculated the value for 
adhesive tape accordingly. We included import values for Croatia 
because we consider Croatia to be a market-economy country. This is 
because Croatia was part of Yugoslavia before its division into 
independent states, and Yugoslavia was considered to be a market-
economy country.
    Comment 7: Rudong asserts that the Department should use gross 
rather than standard weights for steel. Rudong notes that at 
verification the Department collected actual net, actual gross, and 
standard weights of steel and chemicals consumed in the lug nut 
production process. Rudong notes that the Department determined that 
gross weights should have been used in the response, and substituted 
gross weights for chemicals in the preliminary results, but apparently 
inadvertently did not do this for steel. Rudong argues that, for the 
sake of consistency, for the final results the Department should use 
the gross figures for actual steel consumed, as shown in verification 
exhibit 21.
    Department's Position: We disagree with Rudong. For steel 
consumption Rudong submitted what it labeled ``standard'' and ``gross'' 
weights. These were both standard amounts from schedules which Rudong 
uses in its normal course of business. ``Standard'' weight represents 
the weight of a piece of rod that will be cut into several smaller rods 
before being finished into lug nuts. The ``gross'' weight is the weight 
of the smaller pieces of rod cut from the larger rods. The ``standard'' 
steel weight is more appropriate for purposes of evaluating steel usage 
because it includes amounts for the ends of the larger steel wire rods, 
whereas ``gross'' weights do not. At verification, we tested these 
amounts and found that they reflected Rudong's actual experience. (See 
verification report at page 16.)
    We disagree with Rudong that we made any substitutions to chemicals 
beyond breaking ``other chemicals'' into the appropriate chemicals used 
in the production of lug nuts. We used exhibit 19, a schedule of 
chemical material consumption, to do so. We note that this exhibit did 
not distinguish chemical consumption by gross and standard weights.

Additional Change for the Final Results

    For these final results we have recalculated labor using data from 
the Yearbook of Labor Statistics (YLS). As we stated in the Notice of 
Final Determination of Sales at Less Than Fair Value: Bicycles From the 
People's Republic of China, 61 FR 19026, April 30, 1996, the IL&T 
reports estimates based not on actual wage rates, but on rates 
stipulated in various Indian laws. Therefore, we have not used IL&T 
data for the final results. 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 lug nut industry. 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. 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.

[[Page 58519]]

Final Results of Review

    As a result of the comments received, we have changed the results 
from those presented in our preliminary results of review. Therefore, 
we determine that the following margins exist as a result of our 
review:

----------------------------------------------------------------------------------------------------------------
                                                                                                        Margin  
                            Manufacturer/exporter                                   Time period       (percent) 
----------------------------------------------------------------------------------------------------------------
Jiangsu Rudong Grease Gun Factory, also known as China Nantong HuangHai Auto                                    
 Parts Group Co., Ltd........................................................     09/01/93-08/31/94         5.93
China National Machinery & Equipment Import & Export Corp., Nantong Branch...     09/01/93-08/31/94     \1\44.99
PRC Rate.....................................................................     09/01/93-08/31/94       44.99 
----------------------------------------------------------------------------------------------------------------
\1\ No shipments subject to this review. Rate is from the last relevant segment of the proceeding in which the  
  firm had shipments.                                                                                           

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries.
    Individual differences between United States price and FMV may vary 
from the percentages stated above. The Department will issue 
appraisement instructions directly to the Customs Service.
    Furthermore, the following deposit rates will be effective upon 
publication of these final results 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)(1) of the 
Tariff Act: (1) For Rudong and Nantong, which have separate rates, the 
cash deposit rates will be the company-specific rates indicated above; 
(2) for the companies named above which did not respond to our 
questionnaire (China National, Jiangsu, Yangzhou, Ningbo, Shanghai 
Automobile, and Tianjin) and for all other PRC exporters, the cash 
deposit rate will be the PRC rate for the 1993-1994 period; (3) 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 shall remain in effect until publication of the 
final results of the next administrative review.
    This notice also serves as a final reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective orders (APOs) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CR 353.34(d)(1). Timely written notification 
of the 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 are in accordance with 
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 
353.22.

    Dated: November 6, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-29242 Filed 11-14-96; 8:45 am]
BILLING CODE 3510-DS-P