[Federal Register Volume 62, Number 22 (Monday, February 3, 1997)]
[Notices]
[Pages 4979-4982]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2611]
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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 a request by an importer of the subject
merchandise, 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 one manufacturer/exporter of the subject merchandise and
its affiliated third-country reseller in Hong Kong and the period
December 1, 1994 through November 30, 1995. The review preliminarily
indicates the existence of a dumping margin during the period of
review.
We have preliminarily determined that sales have been made below
normal value (NV). 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: February 3, 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 NW., Washington D.C. 20230; telephone: (202) 482-
2786.
Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provisions as of 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 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 4, 1995, the Department published in the
Federal Register a notice of opportunity to request an administrative
review of this antidumping duty order (60 FR 62070). On February 27,
1995, in accordance with 19 CFR 353.22(a), an importer of the subject
merchandise to the United States, CGS International, requested that the
Department conduct an administrative review of Clover Enamelware
Enterprise, Ltd. of China (Clover), a manufacturer/exporter, and its
third-country reseller Lucky Enamelware Factory Ltd. of Hong Kong
(Lucky). We published the notice of initiation of this review covering
the
[[Page 4980]]
period December 1, 1994 through November 30, 1995, on February 1, 1995
(61 FR 3670). The Department is conducting this administrative review
of one manufacturer/exporter of POS cooking ware from the PRC, Clover,
and its third-country reseller in Hong Kong, Lucky, in accordance with
section 751(a) of the Act. We will be conducting verification of the
information provided by Clover and Lucky after publication of the
preliminary results of this administrative review. The final results
will incorporate our findings from the verification.
Scope of the 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 items numbers are
provided for convenience and Customs purposes. The written description
of the scope remains dispositive.
Collapsing
The Department collapses affiliated 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
Notice of Final Determination of Sales at Less than Fair Value: Large
Newspaper Printing Presses and Components Thereof, Whether Assembled or
Unassembled, From Japan (61 FR 38139, 38163; July 23, 1996). See 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 to be affiliated pursuant
to section 771(33) of the Act. As such, and consistent with prior
reviews of this order, we are collapsing Clover and Lucky (hereafter
Clover/Lucky) and assigning them a single dumping margin. For a further
discussion of this issue, see Memorandum from Case Analyst to the File
``Status as Affiliated Parties'' dated January 17, 1997, which is a
public document on file in the Central Records Unit (room B-099 of the
Main Commerce Building).
Separate Rates
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. 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 the 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.
Export Price
The Department used export price (EP) for sales made by Clover/
Lucky, in accordance with section 772(a) of the Act, because the
subject merchandise was sold to unaffiliated purchasers in the United
States, or Hong Kong (in cases where Clover/Lucky knew the ultimate
destination was the United States), prior to importation into the
United States and constructed export price is not otherwise indicated.
We calculated EP based on Lucky's price charged to unaffiliated
purchasers in the United States because Lucky is the sales agent with
respect to all subject merchandise manufactured by Clover. We deducted
amounts, where appropriate, for discounts, and for brokerage and
handling, foreign inland freight, ocean freight, and marine insurance,
which were provided by market economy carriers and paid for in market
economy currencies.
Normal Value
For companies located in NME countries, section 773(c)(1) of the
Act provides that the Department shall determine normal value (NV)
using a factors of production methodology if (1)
[[Page 4981]]
the subject merchandise is exported from an NME country, and (2)
available information does not permit the calculation of NV using home
market prices or third country prices, in accordance with section
773(a) of the Act.
In every case conducted by the Department involving the PRC, the
PRC has been treated as an NME country. Pursuant to section
771(18)(c)(i) of the Act, any determination that a foreign country is
an NME country shall remain in effect until revoked by the
administering authority. None of the parties to this proceeding has
contested such treatment in this review. Accordingly, we treated the
PRC as an NME country for purposes of this review.
We calculated NV by valuing factors of production as set forth in
773(c)(3) of the Act, except for the factors of steel, percolators and
packing materials. For these factors, which were paid for in market
economy currencies, we used the actual prices paid for the factors to
calculate the factor-based NV in accordance with our practice. See
Lasko Metal Products v. United States, 437 F. 3d 1442, 1443 (Fed. Cir.
1994).
For the remaining factors, we have selected a comparable market
economy country which is a significant producer of comparable
merchandise. Pursuant to section 773(c)(4) of the Act and section
353.52(c) of the Department's regulations, we determined that Indonesia
is comparable to the PRC in terms of per capita gross national product
(GNP), the growth rate in per capita GNP, and the national distribution
of labor, and that Indonesia is a significant producer of comparable
merchandise. Therefore, for this review, we have used publicly
available published information regarding Indonesia to value most of
the factors of production. (See Memorandum to Barbara Tillman,
Director, Office of CVD/AD Enforcement VI from David Mueller, Director,
Office of Policy, dated September 24, 1996, ``Porcelain-on-Steel
Cooking Ware from the People's Republic of China, Non-Market Economy
Status and Surrogate Country Selection'' and Memorandum to the File
from Case Analysts, dated January 13, 1997, ``Porcelain-on Steel
Cooking Ware from the People's Republic of China--Surrogate Country
Selection,'' which are public documents on file in the Central Records
Unit (room B-099 of the Main Commerce Building).)
For purposes of calculating NV, we valued PRC factors of production
as follows, in accordance with section 773(c)(1) of the Act:
For surrogate values of materials used in the production
of POS cooking ware, including soda ash, sulphuric acid, degreasing
agents, borax, barium molybdate, magnesium sulphate, potassium
carbonate, urea, quartz powder, clay, color oxides, and enamel frits,
we used per kilogram values obtained from the Foreign Trade Statistical
Bulletin-Imports, November 1995, from Indonesia (Indonesian Import
Statistics).
We calculated a cost for freight incurred between the supplier and
Clover by using the freight rates reported in a September, 1991 cable
from the U.S. Embassy in Jakarta, Indonesia and the actual kilometers
reported in the questionnaire response. The cable was received for the
less than fair value (LTFV) investigation of Certain Carbon Steel Butt-
Weld Pipe Fittings from the People's Republic of China. We adjusted
these freight rates to reflect yearly inflation through the period of
review (POR) using wholesale price indices (WPI), excluding petroleum,
obtained from the International Financial Statistics published by the
International Monetary Fund (IMF).
For labor amounts, we were unable to find a published,
publicly available source for skilled and unskilled labor rates for the
POS cooking ware industry, or other a similar industry, in Indonesia.
We therefore used information obtained from a September, 1991 cable
from the U.S. Embassy in Jakarta, Indonesia. This cable was received
for the LTFV investigation of Certain Carbon Steel Butt-Weld Pipe
Fittings from the People's Republic of China, and provides unskilled
and skilled labor rates. We adjusted these labor rates to reflect
yearly inflation through the POR using consumer price indices (CPI)
obtained from the International Financial Statistics published by the
IMF.
For factory overhead, we were unable to locate any
published, publicly available data for the POS cooking ware industry,
or a similar industry, in Indonesia. Therefore, we used information
reported in a December 2, 1994, U.S. State Department cable from the
U.S. Embassy in Jakarta, Indonesia. This data was received for the LTFV
investigation of Furfuryl Alcohol from the People's Republic of China,
and provides an estimated range of factory overhead costs in Indonesia.
The information was also used in the LTFV investigation of Disposable
Pocket Lighters from the People's Republic of China. From this
information, we were able to determine factory overhead as a percentage
of materials and labor. The surrogate overhead rate included energy and
indirect labor; therefore, we did not include Clover/Lucky's reported
energy and indirect labor factors.
For selling, general and administrative (SG&A) expenses,
we were unable to find published, publicly available data for POS
cooking ware, or a similar industry, in Indonesia. Therefore, we used
information obtained from a September, 1991 cable from the U.S. Embassy
in Jakarta, Indonesia. This cable was received for the LTFV
investigation of Certain Carbon Steel Butt-Weld Pipe Fittings from the
People's Republic of China, and provides an estimated range of SG&A
percentages.
For profit, we could not find published, publicly
available data for the POS cooking ware industry, or another similar
industry, in Indonesia. Therefore, to calculate a profit rate, we used
information obtained from a September 1991 cable from the U.S. Embassy
in Jakarta, Indonesia. This cable was received for the LTFV
investigation of Certain Carbon Steel Butt-Weld Pipe Fittings from the
People's Republic of China, and provides a range of profit margin
percentages.
For a complete analysis of surrogate values, see ``Factor Values
Used for the Preliminary Results of the 1994-1995 Administrative Review
of POS Cooking Ware from the PRC'' (Public Version) dated January 17,
1997, on file in the Central Records Unit (room B-099 of the Main
Commerce Building).
Use of Facts Available
Section 776(a)(1) of the Act states that if necessary information
is not available on the record, the Department shall use the facts
otherwise available in reaching the applicable determination. Section
776(b) of the Act authorizes the Department to use as facts otherwise
available information derived from the petition, the final
determination, a previous review, or other information placed on the
record. We preliminarily determine, in accordance with section
776(a)(1) of the Act, that the use of partial facts available as the
basis for calculating certain constructed values is appropriate in this
case.
Clover/Lucky did not report some or all factors of production data
for three models sold in the U.S. during the POR. Since Clover/Lucky
did not act to the best of its ability in responding to our request for
such information pursuant to section 782(e)(4) of the Act, we have
drawn an adverse inference under the authority provided by section 776
of the Act. As partial facts available, we are using the highest rate
applicable to the
[[Page 4982]]
company from a previous review or the original LTFV investigation to
calculate constructed values for those models for which incomplete or
no factors of production data was reported.
We have also used partial facts available to calculate the packing
materials cost for one other model for which no packing factors of
production data was submitted. As facts available, we are using the
highest packing materials cost, excluding set costs, for an individual
piece of cooking ware from the information submitted by Clover/Lucky.
See Notice of Final Results of Antidumping Duty Administrative Review:
Welded Carbon Steel Pipe from Turkey (61 FR 69067, 69073; December 31,
1996).
Currency Conversion
We made currency conversions pursuant to section 773A(a) of the Act
and section 353.60(a) of the Department's regulations. Currency
conversions were made at rates certified by the Federal Reserve Bank.
Preliminary Results of the Review
As a result of our review, we preliminarily determine that the
following dumping margins exist for the period December 1, 1994 through
November 30, 1995:
------------------------------------------------------------------------
Margin
Manufacturer/Exporter (percent)
------------------------------------------------------------------------
Clover Enamelware Enterprise/Lucky Enamelware Factory...... 1.32
PRC-Wide Rate.............................................. 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 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
separate company-specific rate, or be part of the NME enterprise, and
receive the ``NME-wide'' rate. Thus, there can be no exporters or
producers who have never been investigated or reviewed. In this review,
Clover/Lucky qualifies for a separate rate as discussed in the
``Separate Rates'' section of this notice. The PRC-wide rate has not
changed from the last administrative review because no company
representing the single entity was reviewed.
Parties to the proceeding may request disclosure within 5 days of
the date of publication of this notice in accordance with 19 CFR
353.22(c)(6). Any interested party may request a hearing within 10 days
of publication in accordance with 19 CFR 353.38(b). Any hearing, if
requested, will be held 44 days after the publication of this notice,
or the first workday thereafter. Interested parties may submit case
briefs within 30 days of the date of publication of this notice in
accordance with 19 CFR 353.38(c). In accordance with 19 CFR 353.38(d),
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. Parties who submit case briefs or rebuttal briefs 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 export price and NV 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)(2)(C) of the Act: (1) for Clover/Lucky,
which has a separate rate, the cash deposit rate will be the company-
specific rate established in the final results of this administrative
review; (2) for all other PRC exporters, the cash deposit rate will be
the PRC-wide rate established in the final results of this
administrative review; and (3) the cash deposit rates for non-PRC
exporters of subject merchandise from the PRC will be the rates
applicable to the PRC supplier of that exporter. We preliminarily
determine that the PRC-wide rate continues to be 66.65 percent because
no company representing the single entity was reviewed. This is the
highest rate found for any respondent in the LTFV investigation or any
review. 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 also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 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 19 CFR 353.22
of the Department's regulations.
Dated: January 21, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-2611 Filed 1-31-97; 8:45 am]
BILLING CODE 3510-DS-P