[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