[Federal Register Volume 62, Number 68 (Wednesday, April 9, 1997)]
[Notices]
[Pages 17171-17177]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9114]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-811]
Steel Wire Rope From the Republic of Korea; Final Results of
Antidumping Duty Administrative Review and Revocation in Part of
Antidumping Duty Order
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Final Results of Antidumping Duty Administrative
Review and Revocation in Part of Antidumping Duty Order.
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SUMMARY: On December 3, 1996, the Department of Commerce (the
Department) published the preliminary results of its 1995-96
administrative review of the antidumping duty order on steel wire rope
from the Republic of Korea and intent to revoke in part (61 FR 64058).
The review covers 12 manufacturers/exporters for the period March 1,
1995, through February 29, 1996 (the POR). We have analyzed the
comments received on our preliminary results and have determined that
no changes in the margin calculations are required. The final weighted-
average dumping margins for each of the reviewed firms are listed below
in the section entitled ``Final Results of Review.''
EFFECTIVE DATE: April 9, 1997.
FOR FURTHER INFORMATION CONTACT: Matthew Rosenbaum or Thomas O. Barlow,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue,
Washington, D.C. 20230; telephone: (202) 482-4733.
SUPPLEMENTARY INFORMATION:
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Act), are references to the provisions effective
January 1, 1995, the effective date of the amendments made to 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).
Background
On December 12, 1996, the Department published in the Federal
Register the preliminary results of its 1995-96 administrative review
of the antidumping duty order on steel wire rope from the Republic of
Korea and intent to revoke in part (61 FR 64058) (Preliminary Results).
We gave interested parties an opportunity to comment on our preliminary
results. We received case briefs from the petitioner, the Committee of
Domestic Steel Wire Rope and Specialty Cable Manufacturers (the
Committee), and rebuttal briefs from six respondents, including Chung-
Woo Rope Co., Ltd. (Chung Woo), Chun Kee Steel & Wire Rope Co., Ltd.
(Chun Kee), Manho Rope & Wire Ltd. (Manho), Kumho Wire Rope Mfg. Co.,
Ltd. (Kumho), Ssang Yong Steel Wire Co., Inc. (Ssang Yong), and Sungjin
Company (Sungjin). There was no request for a hearing.
We have conducted this administrative review in accordance with
section 751(a)(1) of the Tariff Act of 1930, as amended (the Act), and
19 CFR 353.22.
Revocation In Part
We are revoking the order for Chun Kee and Manho. Chun Kee and
Manho have sold the subject merchandise at not less than normal value
(NV) for three consecutive review periods, including this review.
Further, on the basis of no sales at less than NV for these periods and
the lack of any indication that such sales are likely in the future, we
have determined that Chun Kee and Manho are not likely to sell the
merchandise at less than NV in the future. Chun Kee and Manho have also
submitted certifications that they will not sell at less than NV in the
future, along with an agreement for immediate reinstatement of the
order if such sales occur. See our discussion in response to Comment 1
below.
Scope of Review
The product covered by this review is steel wire rope. Steel wire
rope encompasses ropes, cables, and cordage of iron or carbon steel,
other than stranded wire, not fitted with fittings or made up into
articles, and not made up of brass-plated wire. Imports of these
products are currently classifiable under the following Harmonized
Tariff Schedule (HTS) subheadings: 7312.10.9030, 7312.10.9060, and
7312.10.9090. Excluded from this review is stainless steel wire rope,
i.e., ropes, cables and cordage other than stranded wire, of stainless
steel, not fitted with fittings or made up into articles, which is
classifiable under HTS subheading 7312.10.6000. Although HTS
subheadings are provided for convenience and Customs purposes, our own
written description of the scope of this review is dispositive.
Use of Facts Otherwise Available
We have determined, in accordance with section 776(a) of the Act,
that the use of facts available is appropriate for Boo Kook Corporation
(Boo Kook), Dong-Il Steel Mfg. Co., Ltd. (Dong-Il), and Yeonsin Metal
(Yeonsin) because they did not respond to our antidumping
questionnaire. We find that these firms have not provided ``information
that has been requested by the administering authority.'' Furthermore,
we determine that, pursuant to section 776(b) of the Act, it is
appropriate to make an inference adverse to the interests of these
companies because they failed to cooperate by not responding to our
questionnaire.
Where the Department must base the entire dumping margin for a
respondent in an administrative review on facts otherwise available
because that respondent failed to cooperate, section 776(b) of the Act
authorizes the use of an inference adverse to the interests of that
respondent in choosing the facts available. Section 776(b) of the Act
also authorizes the Department to use as adverse facts available
information derived from the petition, the final determination, a
previous administrative review, or other information placed on the
record.
[[Page 17172]]
Section 776(c) of the Act provides that the Department shall, to the
extent practicable, corroborate secondary information from independent
sources reasonably at its disposal. The Statement of Administrative
Action (SAA) provides that ``corroborate'' means simply that the
Department will satisfy itself that the secondary information to be
used has probative value. (See H.R. Doc. 316, Vol. 1, 103d Cong., 2d
sess. 870 (1994).)
To corroborate secondary information, the Department will, to the
extent practicable, examine the reliability and relevance of the
information to be used. However, unlike other types of information,
such as input costs or selling expenses, there are no independent
sources for calculated dumping margins. Thus, in an administrative
review, if the Department chooses as total adverse facts available a
calculated dumping margin from a prior segment of the proceeding, it is
not necessary to question the reliability of the margin for that time
period. With respect to the relevance aspect of corroboration, however,
the Department will consider information reasonably at its disposal as
to whether there are circumstances that would render a margin not
relevant. Where circumstances indicate that the selected margin is not
appropriate as adverse facts available, the Department will disregard
the margin and determine an appropriate margin (see, e.g., Fresh Cut
Flowers from Mexico; Final Results of Antidumping Duty Administrative
Review, 61 FR 6812 (Feb. 22, 1996) (where the Department disregarded
the highest margin as adverse best information available (BIA) because
the margin was based on another company's uncharacteristic business
expense resulting in an unusually high margin)).
For a discussion of our application of facts available regarding
specific firms, see our response to Comment 3 below.
Analysis of Comments Received
Comment 1: The Committee contends that Chun Kee and Manho failed to
establish the second of three requisite regulatory criteria for
revocation of an antidumping duty order. It argues, citing Toshiba
Corp. v. United States, 15 CIT 597, 600 (1991), that the burden is on
the respondent requesting revocation to demonstrate, by placing
substantial evidence on the record, that there is no likelihood of a
resumption of sales at less than normal value and that Chun Kee and
Manho failed to demonstrate this.
The Committee claims that several factors demonstrate that Chun Kee
and Manho are likely to resume selling steel wire rope at less than
normal value. First, it contends that the U.S. steel wire rope market
is characterized by intensely competitive conditions among many foreign
suppliers who compete against one another based mainly on price.
According to the Committee, since the antidumping duty order on this
product went into effect (March 26, 1993), total U.S. imports of steel
wire rope have decreased and foreign competition has increased. The
Committee argues that these market trends place pressure on Chun Kee
and Manho to reduce their prices and remain competitive in the U.S.
market. The Committee further contends that these pressures are
intensified by the fact that both Chun Kee and Manho export only to the
United States and that the U.S. market represents a substantial
percentage of each company's total sales. The Committee contends that
neither Chun Kee nor Manho can afford to abandon the U.S. market and
must price their products competitively, forcing them sell steel wire
rope at the lowest possible price.
The Committee claims that the volatility of the Korean won makes it
inappropriate to conclude that there is no likelihood of a resumption
of sales at less than normal value. The Committee states that, in Brass
Sheet and Strip from Germany; Final Results of Antidumping Duty
Administrative Review and Determination Not to Revoke in Part, 61 FR
49731 (September 23, 1996) (Brass Sheet and Strip), the Department
determined that it could not conclude that there was no likelihood of a
resumption of sales at less than normal value, in part due to the
continued strengthening of the Deutsche mark. The Committee also notes
that in Titanium Sponge from Japan; Preliminary Results of Antidumping
Duty Administrative Review, 53 FR 26099 (July 11, 1988) (Titanium
Sponge), the Department refused to grant partial revocation due in part
to the decline in purchasing power of the U.S. dollar against the
Japanese yen.
The Committee claims that throughout the three periods of review in
this case, the Korean won appreciated against the U.S. dollar, which
increases the likelihood that a respondent's future sales will be made
at less than normal value. The Committee notes that, since the end of
this POR, the Korean won has depreciated quickly and steadily against
the U.S. dollar, illustrating the volatility of the Korean currency.
The Committee further notes that such volatility suggests that the
currency could experience a sudden and substantial appreciation in the
future. The Committee argues that this appreciation could force Korean
exporters to decrease their prices on steel wire rope sales to the
United States to maintain their competitiveness.
The Committee also claims that the Korean won's fluctuation vis-a-
vis the Japanese yen militates against a finding of no likely future
dumping. The Committee states, first, that the won depreciated against
the yen during the 1993/94 and 1994/95 periods, thereby increasing the
costs of inputs into subject merchandise. The Committee claims that,
despite this increase in costs, the Korean respondents continued to
sell subject merchandise in the United States at unfairly low prices.
The Committee suggests that the won's subsequent appreciation against
the yen (since the last quarter of the 1994/95 period) will allow
respondents to sell in the United States at even lower prices.
The Committee also argues that the Department should not revoke the
antidumping duty order in part because Chun Kee and Manho have failed
to provide any evidence on the record of this proceeding to establish
that there is no likelihood of a resumption of sales at less than
normal value. The Committee claims that, because the Department
conducted verifications of Chun Kee's and Manho's sales responses, both
companies had ample time to submit evidence in support of their
revocation requests. Therefore, according to the Committee, the
Department does not have the authority to revoke the order with respect
to Chun Kee and Manho because of the lack of verification of any
evidence in support of their requests for verification.
Finally, the Committee contends that, although Chun Kee and Manho
received de minimis or zero-percent dumping margins in the 1993/94 and
1994/95 reviews and in the preliminary results of this review, the
Department determined that both companies sold subject merchandise in
the home market at prices below the cost of production. It argues that
this pattern of selling below cost greatly increase the likelihood that
the companies will sell at less than normal value in the future. The
Committee also suggests that the Department must consider the fact that
Chun Kee received de minimis rather than zero-percent margins in the
prior reviews. Hence, claims the Committee, the slightest shift in Chun
Kee's pricing practice could easily result in a resumption in sales at
less than fair value.
Chun Kee and Manho respond that they have both established all of
the requisite regulatory criteria for revocation. They state that the
Department's regulations authorize the
[[Page 17173]]
Department to revoke an antidumping order when: (1) The producer has
sold the merchandise at not less than normal value for three
consecutive years; (2) it is not likely that the producer will in the
future sell the merchandise at less than normal value; and (3) the
producer agrees in writing to immediate reinstatement of the order if
the Department later finds that the revoked producer is selling the
merchandise at less than normal value (citing 19 CFR 353.25(a)(2)).
Respondents claim that, since the current version of 19 CFR 353.25 was
adopted in 1989, the Department has granted revocation in virtually
every case where a respondent has established three consecutive years
of no dumping and furnished the required certifications.
Respondents cite Tatung Company v. United States, 18 CIT 1137
(December 14, 1994) (Tatung Company), where the court found that past
behavior constitutes substantial evidence of expected future behavior.
Respondents state that, during the history of this proceeding, the only
dumping margin found for any responding company was a 1.51 percent
margin for Manho during the 1992 less-than-fair-value (LTFV)
investigation. They further note that, under the post-URAA law, a 1.51
percent margin is de minimis; therefore, they contend, under the
current law neither Chun Kee nor Manho have ever sold the subject
merchandise at less than normal value.
With respect to the Committee's arguments concerning competitive
U.S. market conditions, respondents state that they have been selling
steel wire rope in the United States without dumping for at least 18
years and that the Korean market is equally if not more competitive
than the U.S. market and becoming more competitive with a depreciating
currency (citing Fresh Cut Flowers from Mexico; Final Results of
Antidumping Duty Administrative Review and Revocation in Part of
Antidumping Duty Order, 61 FR 63822, 63825 (December 2, 1996) (Fresh
Cut Flowers), where the Department granted revocation to a respondent
while agreeing that the devaluation of the home market currency makes
dumping less likely).
Respondents dispute the Committee's argument that an increase in
imports into the United States from countries other than the Republic
of Korea will cause Chun Kee and Manho to sell subject merchandise at
unfair prices in the United States in the future. Respondents note that
Korean imports have decreased relative to total imports since the 1992
LTFV investigation, during which time they have not sold at less than
normal value.
Respondents also state that they have not artificially decreased or
manipulated product lines to ensure revocation. Respondents distinguish
this case from Brass Sheet and Strip where the respondent had an
incentive to continue dumping, intentionally avoided sales of lower-
priced subject merchandise, and purposefully sold small and controlled
quantities for a three-year period.
Respondents claim that there is no evidence on the record to
support the assertion that either company depends on sales to the
United States for financial viability or that this alleged financial
dependence will cause Chun Kee and Manho to sell at prices below the
normal value in the future. In this regard, respondents claim that the
Committee misrepresents the facts by claiming that Chun Kee and Manho
do not sell subject merchandise to third countries. Respondents claim
that they both sold significant volumes of subject merchandise to third
countries and proved so at verification.
Respondents characterize as illogical the Committee's argument that
the Department should deny revocation now that the Korean won is
depreciating relative to the U.S. dollar. Respondents state that a
depreciating Korean won in facts makes selling at below normal value
less likely to occur and note that Chun Kee and Manho have a proven
record of selling subject merchandise above normal value when the
Korean won appreciates. They claim that the Department has granted
revocation in past cases when respondents have shown a proven track
record that it had not sold its merchandise at less than fair value
when the home market currency appreciated during past administrative
reviews (citing Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, From Japan and Tapered Roller Bearings, Four Inches or Less
in Outside Diameter, and Components Thereof, From Japan; Final Results
of Antidumping Duty Administrative Reviews and Revocation in Part of an
Antidumping Finding, 61 FR 57650, (November 7, 1996) (TRBs), and Color
Television Receivers, Except for Video Monitors, From Taiwan; Final
Results, 55 FR 47093 (November 9, 1990) (Color TVs)). Respondents also
note that, in Color TVs, as in this case, respondents were never found
to have sold at less than normal value either before or since the order
was issued, and respondents sold substantial and increasing quantities
of subject merchandise throughout the three review periods.
Respondents also deny the Committee's claim that Chun Kee and Manho
imported wire rod from Japan in the period of review and argue that,
even if they did import from Japan, the cost for the input would be
reflected in the home market and in the United States price.
With respect to the Committee's argument that respondents did not
demonstrate ``no likelihood'' to resume selling at prices below the
normal value at verification, respondents claim that the Department's
verifications of Chun Kee and Manho were consistent with its
regulations and claim that the Committee never asked prior to
verification that the Department consider the issue of likelihood of
resumption of sales at less than fair value at verification.
Respondents cite 19 CFR 353.36(c) and claim that at verification the
Department's only obligation is to have access to all files, records
and personnel which the Secretary considers relevant to submitted
factual information. They claim that at both verifications the
Department had access to all the information it needed to make a
preliminary finding to partially revoke the order and it had the
responsibility to request any other information it considered relevant.
Finally, respondents state that the Department considers a
weighted-average de minimis margin to be equivalent to a zero margin
for all sales regardless of the actual margin on individual sales for
purposes of eligibility for revocation (citing Color TVs). Therefore,
argue respondents, the Committee's statement that Chun Kee's margin was
0.1 percent rather than zero is irrelevant.
Department's Position: We disagree with the Committee and are
revoking in part the antidumping duty order with respect to Chun Kee
and Manho. Both respondents have obtained de minimis margins for the
requisite consecutive review periods and have provided us with the
necessary certifications in accordance with our regulations. In
addition, based on the evidence on the record, we have concluded that
it is not likely that in the future that these respondents will sell
the subject mechandise at less than normal value. As noted above, in
the past two reviews and for the final results of review, Chun Kee and
Manho have had de minimis weighted-average margins. As the CIT affirmed
in Tatung Company, past behavior constitutes substantial evidence of
expected future behavior.
The Committee claims that recent market trends place pressure on
Chun Kee and Manho to reduce their prices in
[[Page 17174]]
the United States and state this is partially because Chun Kee and
Manho export only to the United States. There is no evidence to suggest
that competition in the United States steel wire rope industry is any
more fierce than in past years, during which Chun Kee increased its
sales of steel wire in the United States and Manho's sales volume has
fluctuated, both without selling at prices below normal value. Further,
both Chun Kee and Manho sell steel wire rope in countries other than
the Republic of Korea and the United States and are not solely
dependent on the United States for financial viability as suggested by
the Committee. See Home Market and Export Price Verification of Chun
Kee Steel & Wire Rope Company at 3 and HM and Export Price Verification
of Manho Rope & Wire, Ltd. at 3.
While the Committee argues that the volatility of the Korean won
and a possible future appreciation of the Korean won make it difficult
to conclude that it is not likely that these respondents will resume
sales at less than normal value, neither Chun Kee nor Manho have had
above de minimis weighted-average dumping margins over the past three
reviews during which the Korean won has appreciated against the U.S.
dollar. During a period of a depreciating Korean won, as the Committee
acknowledged has occurred since the end of this review period, there is
even less pressure to engage in less-than-normal-value pricing. Given
that the past appreciation of the Korean won did not cause Chun Kee and
Manho to sell steel wire in the United States at prices below normal
value, we have no basis to conclude that a possible currency
appreciation in the future will cause them to change their pricing
practices. See Fresh Cut Flowers at 63825. Further, while in Brass
Sheet and Strip we acknowledged that the continued strengthening of the
home market currency provides an impetus to resume sales at less than
normal value in the absence of an antidumping duty order, this was only
one of many reasons to deny revocation of the antidumping duty order.
We stated in Brass Sheet and Strip that the exchange rate trend was one
element in determining the likelihood of resumption of sales at less
than normal value. Further, in Brass Sheet and Strip, we were concerned
with a continuing strengthening of the home market currency whereas in
this case the Korean won is currently depreciating relative to the U.S.
dollar. See Brass Sheet and Strip, 61 FR at 49731. The present case is
also distinct from Titanium Sponge, where at the time of the decision
not to revoke the antidumping duty order the Japanese yen was
appreciating against the U.S. dollar.
Regarding the fluctuations of the Korean won against the Japanese
yen as an influence on respondents' costs, the Committee did not point
to any evidence on the record in this review that Chun Kee or Manho
purchased any inputs of steel wire rope from Japan. Further, the
Committee acknowledges that, since the 1994/95 period, the Korean won
has appreciated against the Japanese yen, thereby making purchases of
Japanese inputs less expensive. For the three consecutive review
periods and during the volatility of the Korean won against the
Japanese yen, we have consistently calculated a zero-percent weighted-
average dumping margin for Manho and a 0.01 percent weighted-average
dumping margin for Chun Kee. Finally, any changes in respondents' input
costs due to currency fluctuations would be reflected in both the home
market and U.S. prices.
Moreover, the Committee provides no support for its claim that,
because we have found Chun Kee and Manho to have sold steel wire rope
at prices below cost in the home market, they are likely to sell at
prices at less than fair value in the future. All of the evidence in
this case, as mentioned above, leads us to believe that it is not
likely that Chun Kee and Manho will sell at prices below the normal
value in the future.
Finally, the Committee is incorrect in citing Titanium Sponge to
argue that the Department must consider the fact that Chun Kee's
weighted-average antidumping duty margin has been de minimis rather
than zero in denying revocation to Chun Kee. Titanium Sponge does not
imply that a de minimis margin should be treated as anything other than
equivalent to a zero margin for the purposes of eligibility for
revocation. In Titanium Sponge, 53 FR at 26100, we stated only that the
contributing factors to our decision not to revoke the antidumping duty
order include ``the large surplus of titanium sponge inventories, the
decline in purchasing power of the dollar against the yen, and the
minimal pricing differential currently existing between the U.S. and
domestic market.'' In fact, in Color TVs, 55 FR at 47097, the
Department stated that it ``considers a de minimis margin to be
equivalent to a zero margin, and a weighted-average de minimis margin
to be equivalent to zero for all sales, regardless of the actual margin
on individual sales, for purposes of eligibility of revocation.''
Chun Kee and Manho have each met the requirement established by our
regulations of de minimis margins for the requisite consecutive number
of years. In addition, each has agreed to immediate reinstatement in
the order if we conclude that subsequent to the partial revocation of
the order, the particular respondent sold the merchandise at less than
normal value. Finally, based on the evidence on the record of this
review and conclusions drawn from our experience with these respondents
in prior reviews, we conclude that it is not likely that in the future
these respondents will sell the subject merchandise at less than normal
value. Therefore, we are revoking the order with respect to Chun Kee
and Manho.
Comment 2: The Committee claims that, because the Department
performed the arm's-length test on a customer-specific basis by
comparing the average net price to affiliated parties against prices to
unaffiliated parties, the Department used sales to affiliated parties
which were found not to be arm's-length transactions in its calculation
of normal value. The Committee asserts that the Department must examine
home market sales to affiliated parties on a transaction-by-transaction
basis and exclude those particular sales which are found not to be
arm's-length transactions. The Committee maintains that the inclusion
of such sales is violative of the controlling regulation, precedent and
the proposed regulations (citing 19 CFR 353.45(a), 19 CFR 351.403
(proposed regulation), and Welded Carbon Steel Pipe and Tube Products
From Turkey: Final Results of Antidumping Duty Administrative Review,
55 FR 42230 (October 18, 1990) (Pipe and Tube)). The Committee asserts,
therefore, that the Department must recalculate NV excluding such sales
by Chun Kee. The Committee notes an apparent discrepancy between the
preliminary results analysis memorandum and the notice of Preliminary
Results, the latter of which suggests such sales were excluded.
Respondents assert that sales to affiliated parties are not
automatically removed from consideration as part of the home market
sales database and are included in the margin calculation as long as
they are deemed to be arm's-length transactions (citing Connors Steel
Company v. United States, 527 F. Supp. 350, 354 (CIT 1981), and Usinor
Sacilor et al. v. United States, 872 F. Supp. 1000, 1002 (CIT 1994)
(Usinor)). Respondents state that the Department's 99.5% arm's-length
test, which compares the customer-specific average
[[Page 17175]]
prices at which the respondent sells to affiliated and unaffiliated
customers, is well established and note that Chun Kee's sales passed
the test (citing Tapered Roller Bearings and Parts Thereof, Finished
and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or
Less in Outside Diameter, and Components Thereof, From Japan;
Preliminary Results of Antidumping Duty Administrative Reviews and
Partial Termination of Administrative Reviews, 61 FR 57391, 57393
(November 6, 1996) (TRBs Prelim.)). Respondents maintain that the
Department uses customer-specific averages rather than individual sales
to ensure that the comparison is not distorted by normal price
fluctuations. Respondents note that this practice has been upheld by
the Court of International Trade (CIT).
Department's Position: We disagree with the Committee that we must
perform the arm's-length test on a transaction-by-transaction basis.
Performing the test in such a manner would conflict with our long-
standing practice of using customer-specific weighted-average prices
(see, e.g., Antifriction Bearings (Other Than Tapered Roller Bearings)
and Parts Thereof From France, et al.; Final Results of Antidumping
Duty Administrative Reviews, Partial Termination of Administrative
Reviews, and Revocation in Part of Antidumping Duty Orders, 60 FR
10900, 10946 and 10947 (February 28, 1995); Industrial Phosphoric Acid
From Belgium; Final Results of Antidumping Duty Administrative Review,
61 FR 51424, 51425 (October 2, 1996); TRBs Prelim., 61 FR at 57393-94).
The Committee's reliance on Pipe and Tube to support its position that
average prices cannot be used in an arm's-length test is misplaced. In
Pipe and Tube, 55 FR at 42231, we merely confirmed our practice of
disregarding sales not made at arm's length; we did not expound on the
methodology for determining the arm's-length nature of such sales.
In addition, the CIT has implicitly approved of our use of
weighted-average prices to conduct the test. In Usinor, we used the
same arm's-length test as in the instant review. In finding the
Department's application of the arm's-length test reasonable on other
grounds, the CIT implicitly approved of the Department's practice of
weight-averaging prices (Usinor, 872 F. Supp. at 1002-04). We believe
that our application of the test is reasonable and have maintained our
approach for the final results.
Comment 3: The Committee argues that the Department's use of a 1.51
percent dumping margin as adverse facts available for Boo Kook, Dong-Il
and Yeonsin undercuts the cooperation-inducing purpose of the facts-
available provision of the statute. The Committee contends that,
instead of using the highest rate available from any prior segment of
the proceeding, the Department should apply a dumping rate based on the
rate calculated in the petition of the original investigation (148.94
percent) or the calculations set forth in the Committee's submissions
to the Department in the 1994/95 administrative review (23.5 percent).
The Committee states that, pursuant to section 776(a) of the Act,
if the Department finds that an interested party has not cooperated
with the Department's request for information, the Department may use
an inference that is adverse to the interests of that party in
selecting from facts available; further, this adverse inference may be
based on information derived from the petition or any other information
placed on the record. The Committee also contends that the SAA states
that the Department does not need to prove that the facts available
that it selects constitute the best alternative, but that the facts
available need only to be information or inferences which are
reasonable to use under the circumstances (citing H.R. Doc. 316, Vol.
1, 103d Cong., 2d sess. 870 (1994)).
The Committee states that the SAA provides that the Department may
employ an adverse inference about missing information to ensure that
the non-responding party does not obtain a more favorable result by
failing to cooperate that if it had cooperated fully. It argues that it
is apparent that continuing use of the 1.51 percent rate has failed to
achieve the cooperation-inducing purpose of the facts-available rule.
The Committee argues that Boo Kook, Dong-Il and Yeonsin have expressly
failed to cooperate with the Department's request for information and
have never submitted a response to the Department's questionnaire in
the three reviews of this antidumping duty order. It further claims
that the 1.51 facts-available rate that the three companies have
received has remained low enough to encourage them not to respond to
the Department's requests for information. The Committee also argues
that the Department's rigid application of the facts-available
methodology employed in prior reviews provides a safe harbor for the
companies that did not respond in this proceeding and allows the
respondent to control the proceeding. The Committee cites Olympic
Adhesives, Inc. v. United States, 899 F.2d 1565, 1571-72 (Fed. Cir.
1990) (Olympic Adhesives), in arguing that parties should not be
allowed to control the magnitude of the dumping margin by selectively
providing the Department with information.
Department's Position: We disagree with the Committee that reliance
on the petition rate from the original investigation or petitioner-
supplied data from the 1994/95 review as a basis for facts available
would be appropriate in the context of this review.
The Department has broad discretion in determining what constitutes
facts available in a given situation. Krupp Stahl AG v. United States,
822 F. Supp 789, 792 (CIT 1993); see also Allied-Signal Aerospace Co.
v. United States, 996 F.2d. 1185, 1191 (Fed. Cir. 1993) (``[b]ecause
Congress has `explicitly left a gap for the agency to fill' in
determining what constitutes the [best information available], the
ITA's construction of the statute must be accorded considerable
deference,'' citing Chevron U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837, 833-44 (1984)).
In any given review, a respondent will have knowledge of the
antidumping rates from the investigation and past reviews but not of
the rates that will be established in the ongoing review. Because under
our facts-available policy we consider the highest rate from the
current review as one possible source of facts available, potentially
uncooperative respondents will generally be less able to predict their
facts-available rate as the number of participants in the ongoing
review increases. Thus, respondents that do not participate and receive
their own known rates risk receiving a potentially much higher unknown
rate. Accordingly, this uncertainty in the facts-available rate which
may be selected ordinarily satisfies the cooperation-inducing function
of the facts-available provision.
In addition, respondents have an incentive to respond to our
request for information because of the possibility of eventual
revocation of the antidumping duty order with respect to the company. A
respondent with a rate above de minimis that does not participate in
the administrative review is not eligible for revocation. Hence, a
further reason the rate assigned to uncooperative respondents in
reviews in accordance with our practice may be considered adverse
because it results in respondents with a rate above de minimis
remaining subject to the order without eligibility for revocation.
We recognize that there are instances in which the uncooperative
rate resulting from our standard
[[Page 17176]]
methodology may not induce respondents to cooperate in subsequent
segments of the proceeding. We recognize that this case may be an
instance where our methodology may no longer be inducing cooperation;
however, we are unable to make such a determination based on the facts
of this record.
The few cases in which we have not relied on our standard approach
have involved an extremely limited number of participants and,
therefore, a consequently small number of rates available for use as a
basis for the uncooperative rate.1 For instance, in Sodium
Thiosulfate from the People's Republic of China: Final Results of
Antidumping Duty Administrative Review, 59 FR 12934 (March 8, 1993)
(Sodium Thiosulfate), we used information supplied by the petitioner to
establish the uncooperative rate for the only respondent that had
shipments of subject merchandise during the POR. Similarly, in Silicon
Metal From Argentina: Final Results of Antidumping Duty Administrative
Review, 58 FR 65336, 65337 (December 14, 1993) (Silicon Metal), we
resorted to petitioner-supplied data where we had a calculated rate for
only one firm: ``[i]n this instance, we have only Andina's rate from
the LTFV investigation * * *. Because Andina's rate is also the `all
other' rate, Silarsa would be assured a rate no higher than Andina's,
the only respondent who cooperated fully with the Department in this
administrative review. The use of the uncooperative BIA methodology, in
this instance, restricts the field of potential BIA rates to the rate
established for one firm.'' Silicon Metal, 58 FR at 65336 and 65337
(emphasis added).
---------------------------------------------------------------------------
\1\ As noted, although we have explained our practice in terms
of a two-tiered methodology in pre-URAA reviews, the cases where we
deviated from this approach, as cited by the Committee, involved
first-tier, uncooperative respondents, and our practice regarding
the derivation of the dumping margin assigned to uncooperative
companies has not changed.
---------------------------------------------------------------------------
Our determination in Certain Malleable Cast Iron Pipe Fittings from
Brazil; Final Results of Antidumping Duty Administrative Review, 60 FR
41876 (August 14, 1995) (Pipe Fittings), is a further example of a
situation in which the circumstances of the case clearly demonstrated
that the uncooperative rate was not sufficient to induce the respondent
to cooperate. In Pipe Fittings, we applied a petition-based rate to a
non-responsive company that was the only company to have ever been
investigated or reviewed: ``[we] have only calculated one margin, which
was in the LTFV investigation. Due to the unusual situation, we have
determined to use as BIA the simple average of the rates from the
petition. * * * In not responding to our requests for information, Tupy
could be relying upon our normal BIA practice to lock in a rate that is
capped at its LTFV rate'' (see Pipe Fittings, 61 FR at 41877-78).
The concern in such cases with respect to the uncooperative-rate
methodology is that the lack of past rates, as well as the small number
of participants in the current review, could allow a respondent in such
a review to manipulate the proceeding by choosing not to comply with
our requests for information. In such cases the cooperation-inducing
function of the facts-available provision of the Act may not be
achieved by use of the uncooperative-rate methodology, in which case
the Department will resort to alternatives sources in determining the
appropriate rate for uncooperative respondents. That is not to say that
we will deviate from our standard uncooperative-rate methodology only
when those case facts are present.
These cases establish that we will consider, on a case-by-case
basis as appropriate, petitioner-supplied data in situations involving
a number of calculated rates insufficient to induce cooperation by
respondents in the proceeding. Unlike the instant case, in these cases,
we did not have rates for more than one company and therefore
determined that the use of a BIA rate higher than the highest rate in
the history of the case was appropriate to encourage future
cooperation. However, as expressed above, this case may be an instance
where deviation from our standard uncooperative-rate methodology might
be appropriate with the proper facts of record.
While the Committee cites Olympic Adhesives in support of its
position that a party should not be allowed to control the proceeding
by using evasive tactics, this case essentially addresses whether a
company should be assigned facts available (formerly the best
information available) and not the magnitude of the facts-available
rate as is the issue in this case. In the instant case we are assigning
facts available to the three above-mentioned companies, whereas in
Olympic Adhesives the court found that we should not apply facts
available to the participating company in the relevant case.
Because we have calculated rates from three companies in the LTFV
final determination, eight companies in the 1992/94 review, six
companies in the 1994/95 review, and six companies in this review, the
concern over potential manipulation of antidumping rates cited in
Sodium Thiosulfate, Silicon Metal, and Pipe Fittings is less likely to
be present in this review. As mentioned above, based on the facts of
this record, we feel that the facts-available rate in this case
satisfies the cooperation-inducing function of the facts-available
provision and does not allow the three non-responding companies in this
review to control the proceeding. However, the facts-available rate
available to us in this review may no longer be having the desired
effect of inducing cooperation by potential respondents. Therefore, in
the event a subsequent review is conducted, we will collect information
bearing on this issue to permit us to make a determination on the
cooperation-inducing effect of our rate and, if necessary, adjust our
rate accordingly.
Final Results of Review
We determine the following percentage weighted-average margins
exist for the period March 1, 1995, through February 29, 1996:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Boo Kook Corporation....................................... 1.51
Chun Kee Steel & Wire Rope Co., Ltd........................ 0.01
Chung Woo Rope Co., Ltd.................................... 0.24
Dong-Il Steel Manufacturing Co., Ltd....................... 1.51
Hanboo Wire Rope, Inc...................................... 1.51
Kumho Wire Rope Mfg. Co., Ltd.............................. 0.01
Manho Rope & Wire, Ltd..................................... 0.00
Myung Jin Co............................................... \1\ 1.51
Seo Jin Rope............................................... 1.51
Ssang Yong Steel Wire Co., Ltd............................. 0.01
Sung Jin................................................... 0.03
Yeonsin Metal.............................................. 1.51
------------------------------------------------------------------------
\1\ No shipments subject to this review. Rate is from the last relevant
segment of the proceeding in which the firm had shipments/sales.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between export price and normal value may vary from the
percentages stated above. The Department will issue appraisement
instructions on each exporter directly to the Customs Service.
Furthermore, the following deposit requirements will be effective
for all shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date of these
final results of this administrative review, as provided by section
751(a)(1) of the Act. (1) For Chun Kee and Manho, the revocation of the
antidumping duty order applies to all entries of subject merchandise
[[Page 17177]]
entered, or withdrawn from warehouse, for consumption on or after March
1, 1996. The Department will order the suspension of liquidation ended
for all such entries and will instruct the Customs Service to release
any cash deposits or bonds. The Department will further instruct the
Customs Service to refund with interest any cash deposits on post-March
1, 1995 entries. (2) The cash deposit rates for the other reviewed
companies will be those rates established above (except that, if the
rate for a firm is de minimis, i.e., less than 0.5 percent, a cash
deposit of zero will be required for that firm). (3) For previously
reviewed or investigated companies not listed above, the cash deposit
rate will continue to be the company-specific rate published for the
most recent period. (4) If the exporter is not a firm covered in this
review, a prior review, or the original LTFV investigation, but the
manufacturer is, the cash deposit rate will be the rate established for
the most recent period for the manufacturer of the merchandise. (5) If
neither the exporter nor the manufacturer is a firm covered in this or
any previous review or the original investigation, the cash deposit
rate will be 1.51 percent, the ``All Others'' rate established in the
LTFV Final Determination (58 FR 11029).
These deposit requirements 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 CFR 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) and 751(d) of the Act (19 U.S.C. 1675(a)(1)) and 19
CFR 353.22 and 19 CFR 353.25.
Dated: April 2, 1997.
Robert S. LaRussa,
Acting Assistant Secretary, for Import Administration.
[FR Doc. 97-9114 Filed 4-8-97; 8:45 am]
BILLING CODE 3510-DS-P