[Federal Register Volume 62, Number 19 (Wednesday, January 29, 1997)]
[Notices]
[Pages 4250-4253]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2211]
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DEPARTMENT OF COMMERCE
[A-570-506]
Porcelain-on-Steel Cooking Ware From the People's Republic of
China; Preliminary Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
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SUMMARY: In response to requests by a U.S. importer of the subject
merchandise to the United States and by petitioner, the Department of
Commerce (the Department) is conducting an administrative review of the
antidumping duty order on porcelain-on-steel (POS) cooking ware from
the People's Republic of China (PRC). The review covers two
manufacturers/exporters of subject merchandise to the United States and
the period December 1, 1993 through November 30, 1994. We have
preliminarily determined that sales have been made at less than fair
value. The Department has calculated these margins based on the best
information available.
If these preliminary results are adopted in our final results of
administrative review, we will instruct the U.S. Customs Service to
assess antidumping duties on all appropriate entries. Interested
parties are invited to comment on these preliminary results.
EFFECTIVE DATE: January 29, 1997.
FOR FURTHER INFORMATION CONTACT: Judy Kornfeld or Kelly Parkhill,
Office of CVD/AD Enforcement VI, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington D.C. 20230; telephone: (202) 482-
2786.
SUPPLEMENTARY INFORMATION:
Background
On December 2, 1986, the Department published, in the Federal
Register, the antidumping duty order on POS Cooking Ware from the PRC
(51 FR 43414). On December 6, 1994, the Department published, in the
Federal Register, a notice of opportunity to request an administrative
review of this antidumping duty order (59 FR 62710). On December 21,
1994, in accordance 19 C.F.R. 353.22(a)(1), a U.S. importer, CGS
International, Inc. (CGS), requested that we conduct an administrative
review of Clover Enamelware Enterprise, Ltd. (Clover), a PRC
manufacturer/exporter of the subject merchandise, and its third-country
reseller in Hong Kong, Lucky Enamelware Factory Ltd. (Lucky). On
December 29, 1994, in accordance with 19 CFR 353.22(a), petitioner,
General Housewares Corp. (GHC), requested that we conduct an
administrative review of China National Light Import and Export
Corporation (China Light), Shanghai Branch, through Amerport (H.K.),
Ltd. We published the initiation of this antidumping duty
administrative review covering the period December 1, 1993 through
November 30, 1994, on January 13, 1995 (60 FR 3192). The Department is
conducting this administrative review in accordance with section 751(a)
of the Tariff Act of 1930, as amended (the Act).
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.
Collapsing
The Department collapses related firms (i.e., treats them as a
single entity for review purposes and assigns them a single dumping
margin) where the type and degree of relationship is so significant
that we find there is a strong possibility of price manipulation. See
Sulfanilic Acid From the People's Republic of China; Final Results of
Antidumping Administrative Review (61 FR 53711, 53712; October 15,
1996). See
[[Page 4251]]
also Nihon Cement Co. Ltd. v. United States, 17 CIT 400 (CIT 1993).
Clover is two-thirds owned by Lucky and therefore Lucky holds
controlling interest in Clover. Due to Lucky's ownership interest in
Clover, and the fact that the same individual is the general manager at
both companies, we consider Clover and Lucky (hereafter Clover/Lucky)
to be related pursuant to section 771(13) of the Act. As such, and
consistent with prior reviews of this order, we have calculated only
one rate for both of these companies. For a further discussion of this
issue, see Memorandum from Case Analyst to the File Regarding Status as
Related Parties dated January 17, 1997, which is a public document on
file in the Central Records Unit (room B-009 of the Department of
Commerce).
Scope of Review
Imports covered by this review are shipments of POS cooking ware,
including tea kettles, which do not have self-contained electric
heating elements. All of the foregoing are constructed of steel and are
enameled or glazed with vitreous glasses. The merchandise is currently
classifiable under the HTS item 7323.94.00. HTS item numbers are
provided for convenience and Custom purposes. The written description
remains dispositive.
Market-Oriented Industry
Clover/Lucky submitted, with its June 20, 1995 questionnaire
response, a request that we treat the POS cooking ware industry as a
market-oriented industry (MOI) and therefore use PRC prices for
material and non-material inputs for valuing the inputs used to produce
POS cooking ware. Clover/Lucky claims that it is subject to market
discipline and pays market rates for production process inputs.
Further, it claims that it operates as a fully independent entity,
responsible to private owners rather than central planners. The
Department has previously interpreted section 773(c)(1)(B) of the Act
to mean that FMV can be based on a non-market economy (NME) exporter's
prices or costs, despite the fact that the country may otherwise be
considered an NME, if sufficient market forces are at work. See Final
Determination of Sales at Less Than Fair Value: Sulfur Dyes, Including
Sulfur Vat Dyes, From the People's Republic of China (58 FR 7537, 7538;
February 8, 1993).
The following three conditions must be met for an MOI to exist: (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).)
The production of POS cooking ware requires a number of significant
inputs including chemicals, electricity and labor. In the past, the
Department has considered the prices of these inputs to be subject to
pricing controls by the PRC government. See Lug Nuts. Clover/Lucky has
not provided any information on the record of this review that would
cause the Department to reconsider its determination with respect to
these inputs. Because Clover/Lucky has not demonstrated that market-
determined prices are paid for all significant inputs, we do not need
to consider whether (1) there is state-required production of the
subject merchandise and (2) there is substantial state ownership in the
POS cooking ware industry. See Final Determination of Sales at Less
Than Fair Value: Sulfanilic Acid from the People's Republic of China
(57 FR 29705, 29706; July 6, 1992). We therefore find preliminarily in
this review that the POS cooking ware industry does not constitute an
MOI. Accordingly, we have calculated FMV in accordance with section
773(c) of the Act. For a more detailed discussion of the Department's
preliminary determination that the POS cooking ware industry does not
constitute an MOI, see Decision Memorandum to Barbara E. Tillman,
Director of the Office of CVD/AD Enforcement VI, dated January 17,
1997, ``Market-Oriented Industry Request in the 1993-1994
Administrative Review of POS Cooking Ware from the People's Republic of
China,'' which is a public document on file in the Central Records Unit
(room B-099 of the Main Commerce Building).
Verification
We conducted verification of the information provided by Clover/
Lucky. We used standard verification procedures, including on-site
inspection of the manufacturer's facilities, the examination of
relevant sales and financial records, and selection of original
documentation containing relevant information. Our verification results
are outlined in the public versions of the verification reports of
Clover and Lucky dated January 13, 1997, which are on file in the
Central Records Unit (room B-099 of the Main Commerce Building).
Separate Rates
AMEREX, the parent company of AMERPORT, China Light's related Hong
Kong sales agent, informed the Department in writing that AMERPORT was
in the process of corporate liquidation and that the company had no
further interest in this matter. Hence, it did not submit a response to
the Department's questionnaire, including the section regarding
separate rates and, therefore, we have not given China Light a separate
rate.
Lucky is located outside the PRC and there is no PRC ownership of
the company. Therefore, we determine that no separate rates analysis is
required for this third-country reseller because it is beyond the
jurisdiction of the PRC government. See Final Determination of Sales at
Less Than Fair Value; Disposable Pocket Lighters from the People's
Republic of China (60 FR 22359, 22361; May 5, 1995). Clover is
partially owned by a PRC government company and therefore a separate
rates analysis is necessary to determine whether this exporter is
independent from government control.
To establish whether a company is sufficiently independent to be
entitled to a separate rate, the Department analyzes each exporting
entity under the test established in the Final Determination of Sales
at Less Than Fair Value: Sparklers from the People's Republic of China
(56 FR 20588; May 6, 1991) (Sparklers), as amplified in Final
Determination of Sales at Less Than Fair Value: Silicon Carbide from
the People's Republic of China (59 FR 22585; May 2, 1994) (Silicon
Carbide). Under this policy, exporters in non-market-economy (NME)
countries are entitled to separate, company-specific margins when they
can demonstrate an absence of government control, both in law (de jure)
and in fact (de facto), with respect to exports.
1. Absence of De Jure Control
Evidence supporting, though not requiring, a finding of de jure
absence of government control includes: (1) an absence of restrictive
stipulations associated with an individual exporter's business and
export licenses; (2) any legislative enactments decentralizing control
of companies; and (3) any other formal measures by the government
decentralizing control of companies.
[[Page 4252]]
Clover's submissions pertaining to legislative enactments and the terms
of its Enterprise Legal Person Operation License demonstrate the
absence of de jure control. (See Memorandum from Kelly Parkhill to
Barbara E. Tillman, dated January 17, 1997, ``Assignment of Separate
Rate for Clover/Lucky in the 1993-1994 and 1994-1995 Administrative
Reviews of POS Cooking Ware from the People's Republic of China''
(Separate Rate Memorandum), which is a public document on file in
Central Records Unit (room B-009 of the Department of Commerce).
2. Absence of De Facto Control
De facto absence of government control with respect to exports is
based on four criteria: (1) whether the export prices are set by or
subject to the approval of a government authority; (2) whether each
exporter retains the proceeds from its sales and makes independent
decisions regarding the disposition of profits and financing of losses;
(3) whether each exporter has autonomy in making decisions regarding
the selection of management; and (4) whether each exporter has the
authority to negotiate and sign contracts. See Silicon Carbide at
22587.
With respect to de facto absence of government control, the
information submitted by Clover in the questionnaire response indicates
the following: (1) no government entity exercises control over its
export prices; (2) it negotiates contracts without guidance from any
governmental entities or organizations; (3) it makes its own personnel
decisions; and (4) it retains the proceeds of its export sales,
utilizing profits to provide dividends to shareholders, and it has the
authority to seek out loans at market interest rates. This information
supports the finding that there is de facto absence of governmental
control of export functions. Consequently, we have determined that
Clover/Lucky has met the criteria for the application of separate rates
according to the criteria identified in Sparklers and Silicon Carbide.
For a further discussion of this issue, see Separate Rate Memorandum.
Best Information Available
We preliminarily determine, in accordance with sections 776(b) and
(c) of the Act, that the use of best information available (BIA) is
appropriate for China Light and Clover/Lucky. (See ``Memorandum for
Jeffrey P. Bialos from Barbara E. Tillman Regarding Use of Best
Information Available'' dated January 16, 1997, which is a public
document on file in the Central Records Unit (room B-099 of the Main
Commerce Building).) Section 776(b) of the Act states that the
Department shall use BIA whenever it is unable to verify the
information submitted. Section 776(c) of the Act states that the
Department shall use BIA whenever a company refuses or is unable to
produce information in a timely manner and in the form required, or
significantly impedes an investigation or review.
In deciding what to use as BIA, section 353.37(b) of the
Department's regulations provide that the Department may take into
account whether a party refuses to provide requested information or
impedes a proceeding. Thus, the Department determines on a case-by-case
basis what is BIA. The Department uses a two-tiered approach in its
choice of BIA. When a company refuses to provide the information
requested in the form required or otherwise significantly impedes the
Department's review (first tier), the Department will normally assign
to that company the higher of (1) the highest rate found for any firm
in the less-than-fair-value (LTFV) investigation or a prior
administrative review; or (2) the highest rate found in the current
review for any firm. When a company has cooperated with the
Department's request for information but fails to provide information
requested in a timely manner or in the form required such that margins
for certain sales cannot be calculated (second tier), the Department
will normally assign to those sales the higher of (1) the highest rate
applicable to that company for the same class or kind of merchandise
from any previous review or the original investigation; or (2) the
highest calculated margin for any respondent in the current review. 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). This practice has been upheld in Allied-Signal
Aerospace Co. v. United States, 996 F.2d 1185 (Fed. Cir. 1993), and
Krupp Stahl AG et al. v. United States, 822 F. Supp. 789 (CIT 1993).
As mentioned above, China Light did not respond to our
questionnaire. As non-cooperative, first-tier BIA, and in accordance
with section 776(c) of the Act, we have applied the highest margin
calculated in the LTFV investigation, prior administrative reviews, or
in this review, which is 66.65 percent. Further, China Light was not
found eligible for a separate rate in this review. Consequently, China
Light is part of the single NME entity in this review, which has been
assigned the PRC country-wide rate (see, e.g., Heavy Forged Hand Tools,
Finished or Unfinished, With or Without Handles, from the People's
Republic of China; Preliminary Results of Antidumping Duty
Administrative Review; 67 FR 15218; April 5, 1996 at 15221, and
discussion below).
Clover/Lucky cooperated with our requests for information and
agreed to undergo verification. From July 17 through July 29, 1995, the
Department attempted verification of the company's questionnaire
response at Lucky's sales offices in Hong Kong and Clover's factory in
Shenzhen, PRC. As a result of these verification efforts with respect
to Clover's questionnaire response, we discovered significant
discrepancies and were unable to verify substantial sections of the
questionnaire response, including the statutorily required factors of
production information, such as the number of labor hours worked and
the per unit quantities consumed of primary material inputs. These
discrepancies are detailed in Clover's verification report, dated
January 13, 1997.
As a result, the Department has determined that the data the
company submitted is unverifiable. Therefore, in accordance with
section 776(b) of the Act, there is no basis to accept the integrity of
the factors of production information submitted in the questionnaire
response, constituting a verification failure. See, Notice of Final
Determination of Sales at Less Than Fair Value: Melamine Institutional
Dinnerware Products From the People's Republic of China (61 FR 1708;
January 13, 1997). Because the respondent failed verification, the
Department must use BIA. Since Clover/Lucky was cooperative, we have
applied second-tier BIA. The second-tier BIA rate is the highest rate
applicable to the company from a previous review or the original LTFV
investigation, which in this case is 66.65 percent, the rate Clover/
Lucky received in the 1990/91 administrative review.
Preliminary Results of Review
As a result of our review, we preliminarily determine that the
following margins exist:
------------------------------------------------------------------------
Rate
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Clover/Lucky............................................... 66.65
PRC-Wide Rate (including China Light)...................... 66.65
------------------------------------------------------------------------
The PRC-wide rate applies to all entries of subject merchandise
except for entries from manufacturers and exporters that are
individually identified above. The Department
[[Page 4253]]
implements a policy in NME cases whereby all exporters or producers are
presumed to comprise a single entity, the ``NME entity.'' The U.S.
Court of International Trade has upheld our NME policy in previous
cases. See, e.g., UCF America, Inc. v. United States, 870 F. Supp.
1120, 1126 (CIT 1994); Sigma Corp. v. United States, 841 F. Supp. 1255,
1266-67 (CIT 1993), and; Tianjin Machinery Import & Export Corp. v.
United States, 806 F. Supp. 1008, 1013-15 (CIT 1992). Thus, we assign
the NME rate to the NME entity just as we assign an individual rate to
a single exporter or producer operating in a market economy. As a
result, all exporters and producers that are part of the NME entity are
assigned the ``NME-wide'' rate. Because the ``NME-wide'' rate is the
equivalent of a company-specific rate, it changes only when we review
the NME entity (i.e., all NME producers and exporters that have not
qualified for a separate rate). To qualify for a separate rate, as
discussed under the Separate Rates section of this notice, an NME
exporter or producer must provide evidence showing both de jure and de
facto absence of government control over export activities. Until such
evidence is presented, a company is presumed to be part of the NME
entity and receives the ``NME-wide'' rate. All exporters or producers
will either qualify for a separate company-specific rate, or be part of
the NME entity and receive the ``NME-wide'' rate. In this review,
Clover/Lucky qualifies for a separate rate as discussed in the
``Separate Rates'' section of this notice. Because China Light does not
qualify for a separate rate, it remains part of the NME entity, which
is subject to the new PRC-wide rate established in the final results of
this administrative review.
Parties to the proceeding may request disclosure within 5 days of
the date of publication of this notice. Any interested party may
request a hearing within 10 days of publication. Any hearing, if
requested, will be held 44 days after the publication of this notice,
or the first workday thereafter. Interested parties may submit case
briefs within 30 days of the date of publication of this notice.
Rebuttal briefs, which must be limited to issues raised in the case
briefs, may be filed not later than 37 days after the date of
publication. See section 353.38(d) of the Department's regulations.
Parties who submit arguments in this proceeding are requested to submit
with each argument (1) a statement of the issue and (2) a brief summary
of the argument. The Department will publish a notice of final results
of 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 U.S. price and FMV may vary from the percentages
stated above. The Department will issue appraisement instructions
directly to the U.S. Customs Service.
Furthermore, the following deposit requirements will be effective
upon publication of the final results of this administrative review for
all shipments of POS cooking ware from the PRC entered, or withdrawn
from warehouse, for consumption on or after the publication date, as
provided for by section 751(a)(1) of the Act: (1) the cash deposit rate
for the reviewed company named above which has a separate rate, Clover/
Lucky, will be the rate for that company established in the final
results of this administrative review; (2) for all other PRC exporters,
the cash deposit rate will be the highest rate from the LTFV
investigation, this review, or any prior administrative reviews, which
is the PRC (country-wide) rate; and (3) the cash deposit rate for non-
PRC exporters of subject merchandise from the PRC will be the rate
applicable to the PRC supplier of that exporter. These deposit
requirements, when imposed, shall remain in effect until publication of
the final results of the next administrative review.
Notification of Interested Parties
This notice serves as a preliminary reminder to importers of their
responsibility under section 353.26 of the Department's regulations to
file a certificate regarding the reimbursement of antidumping duties
prior to liquidation of the relevant entries during this review period.
Failure to comply with this requirement could result in the Secretary's
presumption that reimbursement of antidumping duties occurred and the
subsequent assessment of double antidumping duties.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22
of the Department's regulations.
Dated: January 21, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-2211 Filed 1-28-97; 8:45 am]
BILLING CODE 3510-DS-P