[Federal Register Volume 62, Number 91 (Monday, May 12, 1997)]
[Notices]
[Pages 25899-25904]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12394]



[[Page 25899]]

-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-850]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Collated Roofing Nails 
From the People's Republic of China

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

EFFECTIVE DATE: May 12, 1997.

FOR FURTHER INFORMATION CONTACT: Everett Kelly or Ellen Grebasch, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone: (202) 482-4194 or (202) 482-3773, 
respectively.

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).

Preliminary Determination

    We preliminarily determine that collated roofing nails (``CR 
nails'') from the People's Republic of China are being, or are likely 
to be, sold in the United States at less than fair value (``LTFV''), as 
provided in section 733 of the Act. The estimated margins of sales at 
LTFV are shown in the ``Suspension of Liquidation'' section of this 
notice.

Case History

    Since the initiation of this investigation (Notice of Initiation of 
Antidumping Duty Investigations: Collated Roofing Nails from the 
People's Republic of China, the Republic of Korea, and Taiwan (61 FR 
67306, Dec. 20, 1996), the following events have occurred.
    On January 17, 1997 the United States International Trade 
Commission (``ITC'') issued an affirmative preliminary injury 
determination in this case (see ITC Investigation Nos. 731-TA-757-759). 
During November 1996 through February 1997, the Department obtained 
information from various sources regarding producers/exporters of the 
subject merchandise. (See Memorandum to the File, dated May 5, 1997, 
for a detailed explanation of the Department's efforts to identify 
producers/exporters of the subject merchandise.) On January 23, 1997, 
the Department issued an antidumping questionnaire to the China Chamber 
of Commerce for Import & Export of Metals, Minerals & Chemicals and the 
Ministry of Foreign Trade and Economic Cooperation with instructions to 
forward the document to all producers/exporters of the subject 
merchandise and that these companies must respond by the due dates. We 
also sent courtesy copies of the antidumping duty questionnaire to the 
following companies identified as possible exporters/producers of the 
subject merchandise during the POI: China Wuxi Zhenfen Screw Factory 
(``Wuxi''), Zhejiang Material Industry (Group) General Company 
(``Zhejiang''), Shanghai Minmetals Pu Dong Corporation (``Pu Dong''), 
Honshu Changing Hardware Tools Factory (``Honshu''), Taiqian 
Construction Materials Plant (``Taiqian''), Tianjin Beiyang Standard 
Equipment Factory (``Tianjin''), Shenzhen Top United Steel Co., Ltd. 
(``Top United''), Suzhou Jun Hua Metal Products Co., Ltd. (``Junhua''), 
Qingdao Zong Xun Nail Products Co., Ltd. (``Zongxun''), Wuxi Jiangchao 
Metal Products Co. Ltd. (``Wuxi Jiangchao''), and JAACO Corporations 
Incorporated (``JAACO''). The questionnaire is divided into four 
sections: Section A requests general information concerning a company's 
corporate structure and business practices, the merchandise under 
investigation that it sells, and the sales of the merchandise in all of 
its markets. Sections B and C request home market sales listings and 
U.S. sales listings, respectively (Section B does not normally apply in 
investigations involving the PRC). Section D requests information on 
the factors of production of the subject merchandise.
    During February and March 1997, the Department received 
questionnaire responses from Top United, Zongxun, Junhua, Pu Dong and 
Wuxi. We issued supplemental requests for information in March 1997, 
and received supplemental responses to these requests in April 1997. 
The remaining companies never responded to the Department's antidumping 
questionnaire. (See the ``Fair Value Comparisons'' section, below, for 
further discussion.)
    Despite numerous attempts by the Department to make the filing 
requirements perfectly clear, Wuxi failed to file its questionnaire 
responses with the Department in the proper manner and to serve its 
responses on the other interested parties in this investigation (see 
letters from Erik Warga, Acting Program Manager, AD/CVD Enforcement, to 
Wuxi dated January 23, 1997, February 18, 1997, and March 24, 1997). In 
the Department's final letter notifying Wuxi of these errors, the due 
date to correct such matters was set at March 31, 1997. Wuxi has never 
filed a response with the Department in the proper manner nor served 
any submission on the other interested parties. Moreover, Wuxi's 
supplemental questionnaire response was due on April 11, 1997; however, 
the Department did not receive Wuxi's response until April 14, 1997, 
when it was faxed to (not filed with) the Department. (See the ``Fair 
Value Comparisons'' section, below, for further discussion.)
    On March 24, 1997, the Department requested that interested parties 
provide publicly available information (``PAI'') for valuing the 
factors of production and for surrogate country selection. We received 
comments from the interested parties in April 1997.
    On April 17 and 25, 1997, petitioner filed comments on the Top 
United, PuDong, Junhua, and Zongxun questionnaire responses.

Postponement of Final Determination

    On April 22, 1997, respondents requested that, pursuant to section 
735(a)(2)(A) of the Act, in the event of an affirmative preliminary 
determination in this investigation, the Department postpone its final 
determination until not later than 135 days after the publication of 
the affirmative preliminary determination in the Federal Register. In 
accordance with section 735(a)(2) of the Act and 19 CFR 353.20(b), and 
inasmuch as our preliminary determination is affirmative, the 
respondents account for a significant proportion of exports of the 
subject merchandise, and we are not aware of the existence of any 
compelling reasons for denying the request, we are granting the 
respondents' request and postponing the final determination. Suspension 
of liquidation will be extended accordingly. See Preliminary 
Determination of Sales at Less Than Fair Value: Large Newspaper 
Printing Presses and Components Thereof, Whether Assembled or 
Unassembled, from Japan (61 FR 8029, March 1, 1996).

Scope of Investigation

    The product covered by this investigation is CR nails made of 
steel, having a length of \13/16\ inch to 1\13/16\ inches (or 20.64 to 
46.04 millimeters), a

[[Page 25900]]

head diameter of 0.330 inch to 0.415 inch (or 8.38 to 10.54 
millimeters), and a shank diameter of 0.100 inch to 0.125 inch (or 2.54 
to 3.18 millimeters), whether or not galvanized, that are collated with 
two wires.
    CR nails within the scope of this investigation are classifiable 
under the Harmonized Tariff Schedule of the United States (``HTSUS'') 
subheading 7317.00.55.05. Although the HTSUS subheading is provided for 
convenience and customs purposes, our written description of the scope 
of this investigation is dispositive.

Period of Investigation

    The period of this investigation (``POI'') comprises each 
exporter's two most recent fiscal quarters prior to the filing of the 
petition.

Nonmarket Economy Country Status

    The Department has treated the PRC as a nonmarket economy country 
(``NME'') in all past antidumping investigations (see, e.g., 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'') and Final Determination of Sales at Less Than Fair Value: 
Furfuryl Alcohol from the People's Republic of China, 60 FR 22545 (May 
8, 1995) (``Furfuryl Alcohol'')). Neither respondents nor petitioner 
have challenged such treatment. Therefore, in accordance with section 
771(18)(C) of the Act, we will continue to treat the PRC as an NME in 
this investigation.
    When the Department is investigating imports from an NME, section 
773(c)(1) of the Act directs us to base normal value (``NV'') on the 
NME producers'' factors of production, valued, to the extent possible, 
in a comparable market economy that is a significant producer of 
comparable merchandise. The sources of individual factor prices are 
discussed in the NV section of this notice, below.

Separate Rates

    Each of the respondents has requested a separate company-specific 
rate. Pu Dong was reported as being ``owned by all the people.'' Top 
United is a joint venture between (a) Guangming Overseas Chinese Farm 
(company ``owned by all the people''), (b) Padico Investment (China), 
Ltd. (company in Hong Kong), and (c) Topvan International (company in 
British Virgin Islands). Junhua is a joint venture between Taicang 
Metal Fusu Factory (collective-owned enterprise) and Hong Kong Zhanghua 
Company, Ltd. (a Hong Kong company). Zongxun is a joint venture between 
Qingdao Jiaozhou City Hardware Factory (collective-owned enterprise) 
and Taiwan Fuxun Enterprise Company, Ltd. (a Taiwan company).
    As stated in Silicon Carbide and Furfuryl Alcohol, ownership of the 
company by all the people does not require the application of a single 
rate. Accordingly, Pu Dong and Top United are eligible for 
consideration of a separate rate.
    The business licenses' of the remaining two respondents, Junhua and 
Zongxun, note that these PRC companies are foreign trade joint ventures 
which own the production and export facilities used to manufacture and 
export the subject merchandise they sell to the United States. In other 
cases involving the PRC, joint ventures between ``collective''-owned 
enterprises and foreign investors have not been precluded from 
consideration of a separate rate (see Final Antidumping Duty 
Determination of Sales at Less Than Fair Value: Certain Partial-
Extension Steel Drawer Slides with Rollers from the People's Republic 
of China, 60 FR 54472 (Oct. 23, 1995) and Preliminary Antidumping Duty 
Determination of Sales at Less Than Fair Value: Certain Partial-
Extension Steel Drawer Slides with Rollers from the People's Republic 
of China, 60 FR 29571 (June 5, 1995)). Therefore, for purposes of the 
preliminary determination, the remaining respondents are eligible for 
consideration of a separate rate.
    To establish whether a firm is sufficiently independent from 
government control to be entitled to a separate rate, the Department 
analyzes each exporting entity under a test arising out of the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588 (May 6, 1991) and amplified in 
Silicon Carbide. Under the separate rates criteria, the Department 
assigns separate rates in NME cases only if respondents can demonstrate 
the absence of both de jure and de facto governmental control over 
export activities.
1. Absence of De Jure Control
    The respondents have placed on the record a number of documents to 
demonstrate absence of de jure control, including laws, regulations, 
and provisions enacted by the State Council of the central government 
of the PRC. They have also submitted documents which establish that 
collated roofing nails are not included on the list of products that 
may be subject to central government export constraints. In addition, 
respondents submitted the ``Law of the People's Republic of China on 
Chinese-Foreign Contractual Joint Ventures' (April 13, 1988). The 
articles of this law authorize joint venture companies to make their 
own operational and management decisions. Further, Junhua and Zongxun 
submitted the ``Regulations Governing Rural Collective Owned 
Enterprises of the PRC'' (July 1, 1990). The articles of this law 
authorize collective-owned enterprises to make their own operational 
and management decisions.
    In prior cases, the Department has analyzed the very laws which the 
respondents have submitted in this investigation and found that they 
establish an absence of de jure control. (See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Partial-
Extension Steel Drawer Slides with Rollers from the People's Republic 
of China, 60 FR 54472 (Oct. 24, 1995); see also Furfuryl Alcohol.) We 
have no new information in these proceedings which would cause us to 
reconsider this determination.
    However, as in previous cases, there is some evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC. (See 
Silicon Carbide and Furfuryl Alcohol.) Therefore, the Department has 
determined that an analysis of de facto control is critical in 
determining whether respondents are, in fact, subject to a degree of 
governmental control which would preclude the Department from assigning 
separate rates.
2. Absence of De Facto Control
    The Department typically considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) Whether the export prices are set by, or 
subject to, the approval of a governmental authority; (2) whether the 
respondent has authority to negotiate and sign contracts, and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of its management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses (see Silicon Carbide and Furfuryl Alcohol).
    Pu Dong, Zongxun, Junhua, and Top United each asserted the 
following: (1) They establish their own export prices; (2) they 
negotiate contracts without guidance from any governmental entities or 
organizations; (3) they make

[[Page 25901]]

their own personnel decisions; and (4) they retain the proceeds of 
their export sales, use profits according to their business needs, and 
have the authority to sell their assets and to obtain loans. 
Additionally, respondents' questionnaire responses indicate that 
company-specific pricing during the POI does not suggest coordination 
among exporters. This information supports a preliminary finding that 
there is de facto absence of governmental control of the export 
functions of these companies.
    Consequently, we determine preliminarily that these exporters have 
met the criteria for the application of separate rates. We will examine 
this matter further at verification.

Facts Available

A. Non-Responding Exporters
    Because some companies did not respond to the questionnaire, we are 
applying a single antidumping deposit rate--the PRC-wide rate--to all 
exporters in the PRC (except the four fully participating exporters) 
based on our presumption that the export activities of the companies 
that failed to respond are controlled by the PRC government. See, e.g., 
Notice of Final Determination of Sales at Less Than Fair Value: 
Bicycles from the People's Republic of China (61 FR 19026, Apr. 30, 
1996).
    This PRC-wide antidumping rate is based on adverse facts available. 
Section 776(a)(2) of the Act provides that ``if an interested party or 
any other person--(A) Withholds information that has been requested by 
the administering authority, (B) fails to provide such information by 
the deadlines for the submission of the information or in the form and 
manner requested, subject to subsections (c)(1) and (e) of section 782, 
(C) significantly impedes a proceeding under this title, or (D) 
provides such information but the information cannot be verified as 
provided in section 782(i), the administering authority * * * shall, 
subject to section 782(d), use the facts otherwise available in 
reaching the applicable determination under this title.''
    Section 776(b) of the Act provides that adverse inferences may be 
used against a party that has failed to cooperate by not acting to the 
best of its ability to comply with a request for information. The 
exporters that decided not to respond in any form to the Department's 
questionnaire demonstrate that these companies have failed to act to 
the best of their ability in this investigation. Further, absent a 
response, we must presume government control of these and all other PRC 
companies for which we cannot make a separate rates determination. 
Thus, the Department has determined that, in selecting from among the 
facts otherwise available, an adverse inference is warranted. As 
adverse facts available, we are assigning the higher of the petition 
margin or margin calculated for any participating respondent in this 
investigation. Because the margins in the petition (as recalculated by 
the Department at initiation) were higher than any of the calculated 
margins, we used the highest margin stated in the Notice of Initiation, 
118.41%, as total adverse facts available for the PRC-wide rate.
    Section 776(c) of the Act provides that where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' such as the petition, the Department shall, 
to the extent practicable, corroborate that information from 
independent sources reasonably at the Department's disposal. The 
Statement of Administrative Action accompanying the URAA, H.R. Doc. No. 
316, 103d Cong., 2d Sess. (1994) (hereinafter, the ``SAA''), states 
that ``corroborate'' means to determine that the information used has 
probative value. See SAA at 870.
    In the petition, the petitioner based its allegation of export 
price on price quotations from two manufacturer/exporters of CRN in the 
PRC. These price quotations were adjusted for movement expenses using 
customs data and IM-145 Import Statistics. See Notice of Initiation, 61 
FR at 67307-08. As we stated in Final Determination of Sales at Less 
Than Fair Value: Certain Pasta From Turkey, 61 FR 30309 (June 14, 
1996), we consider price quotations as information from independent 
sources. The export price calculations were based upon independent 
sources and Import Statistics, both sources which we consider to 
require no further corroboration by the Department. Therefore, we 
determined at initiation, and continue to find, that the calculations 
set forth in the petition have probative value.
    The petitioner based its allegation of NV on the factors of 
production. See Notice of Initiation, 61 FR at 67308. To calculate the 
factors of production, the petitioner used manufacturing costs based on 
its own production experience, its 1995 audited financial statements, 
and publicly available industry data. Id. The factor of production 
amounts for the most significant raw material input (i.e., steel wire) 
in the petition are consistent with the factor of production amounts 
reported by the respondents on the record of this investigation. As 
such, we determine that the NV calculations have probative value. (See 
memorandum to the file dated May 5, 1997.)
    Based on our pre-initiation analysis and reexamination of the price 
information supporting the petition, we determine that the highest 
margin stated in the Notice of Initiation is corroborated within the 
meaning of section 776(c) of the Act.
B. Wuxi
    As stated above, Wuxi failed to file their questionnaire responses 
with the Department in the proper manner and to serve their responses 
on the other interested parties in this investigation. In addition, 
Wuxi's submissions did not provide adequate information for determining 
that Wuxi is sufficiently independent from government control to be 
entitled to a separate rate. As such, we determine that Wuxi is not 
entitled to a separate rate. We, therefore, have included Wuxi in the 
``PRC-wide'' rate.

Fair Value Comparisons

    To determine whether sales of the subject merchandise by Top 
United, Zongxun, Junhua, and Pu Dong to the United States were made at 
less than fair value, we compared the export price (``EP'') or 
constructed export price (``CEP'') to the NV, as described in the 
``Export Price and Constructed Export Price'' and ``Normal Value'' 
sections of this notice, below. In accordance with section 
777A(d)(1)(A)(i) of the Act, we compared POI-wide weighted-average EPs 
or CEPs to weighted-average NVs.

Export Price/Constructed Export Price

Top United
    We used CEP in accordance with section 772(b) of the Act, because 
the sales to unaffiliated purchasers were made after importation. We 
calculated CEP based on packed prices, FOB U.S. affiliate's warehouse 
to the first unaffiliated purchaser in the United States. We made the 
following deductions from the starting price (``gross unit price''): 
discounts, inland freight from the plant/warehouse to port of exit, PRC 
brokerage and handling, international freight, U.S. inland freight from 
port to warehouse, and U.S. customs duties, where appropriate. Because 
domestic brokerage and handling and inland freight were provided by a 
NME carrier, we based those charges on surrogate rates from Indonesia. 
We made additional deductions, in accordance with section 772(d)(1) of 
the Act, for credit expenses, indirect selling expenses, and inventory 
carrying costs. Pursuant to section

[[Page 25902]]

772(d)(3) of the Act, the price was further reduced by an amount for 
profit, to arrive at the CEP. The amount of profit deducted was 
calculated in accordance with section 772(f) of the Act. Because Top 
United is located in an NME country, we did not include any home market 
expenses, either actual or surrogate, in the CEP profit calculation. 
(See Notice of Final Determination of Sales at Less than Fair Value: 
Certain Bicycles from the People's Republic of China 61 FR 19026, 
19032, Apr. 30, 1996.) Because the PRC is an NME we are using a 
surrogate profit rate based on total expenses and total actual profit 
reflective of the industry experience in our CEP profit calculations.
Zongxun
    We used EP in accordance with section 772(a) of the Act, because 
the subject merchandise was sold to unaffiliated customers before 
importation and the CEP methodology was not indicated by the facts of 
record. We calculated EP based on packed prices, FOB to the first 
unaffiliated purchaser in the United States. Where appropriate, we made 
deductions from the starting price (gross unit price) for inland 
freight from the plant/warehouse to port of exit, and brokerage and 
handling in the PRC. Because domestic brokerage and handling and inland 
freight were provided by a NME carrier, we based those charges on 
surrogate rates from Indonesia.
Junhua
    We used EP in accordance with section 772(a) of the Act, because 
the subject merchandise was sold to unaffiliated customers before 
importation and the CEP methodology was not indicated by the facts of 
record. We calculated EP based on packed prices, FOB to the first 
unaffiliated purchaser in the United States. Where appropriate, we made 
deductions from the starting price (gross unit price) for inland 
freight from the plant/warehouse to port of exit, and brokerage and 
handling in the PRC. Because domestic brokerage and handling and inland 
freight were provided by a NME carrier, we based those charges on 
surrogate rates from Indonesia.
Pu Dong
    We used EP in accordance with section 772(a) of the Act, because 
the subject merchandise was sold to unaffiliated customers before 
importation and the CEP methodology was not indicated by the facts of 
record. We calculated EP based on packed prices, FOB to the first 
unaffiliated purchaser in the United States. Where appropriate, we made 
deductions from the starting price (i.e., gross unit price) for inland 
freight from the plant/warehouse to port of exit, and brokerage and 
handling in the PRC. Because domestic brokerage and handling and inland 
freight were provided by a NME carrier, we based those charges on 
surrogate rates from Indonesia.

Normal Value

A. Surrogate Country
    Section 773(c)(4) of the Act requires the Department to value the 
NME producer's factors of production, to the extent possible, in one or 
more market economy countries that: (1) Are at a level of economic 
development comparable to that of the NME, and (2) are significant 
producers of comparable merchandise. The Department has determined that 
India, Pakistan, Sri Lanka, Egypt, and Indonesia are countries 
comparable to the PRC in terms of overall economic development (see 
Memorandum dated March 24, 1997). According to the available 
information on the record, we have determined that Indonesia is a 
significant producer of merchandise that is comparable to CRN. 
Accordingly, we have calculated NV using Indonesian import prices--
except, as noted below, in the ``Normal Value'' section of this notice, 
in certain instances where an input was sourced from a market economy--
for the PRC producer's factors of production. We have obtained and 
relied upon PAI wherever possible.
B. Factors of Production
    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by the companies in the PRC 
which produced CR nails for the exporters which sold CR nails to the 
United States during the POI. To calculate NV, the reported unit factor 
quantities were multiplied by publicly available Indonesian values, 
where possible.
    For those inputs (i.e., steel wire) that were sourced (either 
partially or totally) from a market economy and paid for in market 
economy currency, we used the actual price paid for the input to 
calculate the factors-based NV in accordance with our practice. (See 
Lasko Metal Products v. United States, 437 F. 3d 1442, 1443 (Fed. Cir. 
1994).) We valued the remaining factors using PAI from Indonesia.
    The selection of the surrogate values applied in this determination 
was based on the quality, specificity, and contemporaneity of the data. 
As appropriate, we adjusted input prices to make them delivered prices. 
For those values not contemporaneous with the POI and quoted in a 
foreign currency, we adjusted for inflation using wholesale price 
indices or, in the case of labor rates, consumer price indices, 
published in the International Monetary Fund's International Financial 
Statistics. For a complete analysis of surrogate values, see the 
Preliminary Determination Calculation Memorandum from the team to the 
File (``Preliminary Determination Calculation Memorandum''), dated May 
5, 1997.
    Except where noted below, we valued the following reported direct 
raw material inputs and packing materials using 1996 Foreign Trade 
Statistics (``FTS'') data from Indonesia: welding wire, hydrochloric 
acid, zinc, zinc powder, barium carbonate, potassium chloride, zinc 
chloride, boracic acid, nitric acid, potassium chromate, sulfuric acid, 
caustic soda, ammonia chloride, and sodium hydrosulfite. Reported 
packing materials include: paper carton, rubber bands, adhesive strips, 
nylon strips, staples, wood, nails, steel strips, and plastic sheets. 
Absent accurate FTS data, we used 1995 United Nations Trade Statistics 
from Indonesia to value the following inputs: welding wire and rubber 
bands. One of the reported material inputs, water, was determined not 
to be a direct material input in the production of subject merchandise 
and, therefore, has been treated as part of the factory overhead cost. 
(For further discussion, see Preliminary Determination Calculation 
Memorandum.)
    To value direct skilled, direct unskilled, indirect labor and 
packing labor, we used the 1994 wage rate--the latest available 
information--for the manufacturing sector of fabricated metal products, 
machinery, and equipment in Indonesia published in the 1994 Statistical 
Yearbook of Indonesia. Because we cannot determine whether the labor 
values from this source were for skilled or unskilled workers, in 
accordance with the Department's practice in past NME cases, we applied 
a single earnings rate to all reported labor factors (see Preliminary 
Determination of Sales at Less Than Fair Value: Polyvinyl Alcohol from 
the PRC, 60 FR 52647 (Oct. 10, 1995) and Preliminary Determination of 
Sales at Less Than Fair Value: Steel Pipe from Romania, 60 FR 61532 
(Nov. 30, 1995)).
    To value electricity, we used the 1995 electricity rate reported in 
A Brief Guide for Investors, published by the Republic of Indonesia's 
Investment Coordinating Board. We based the value of diesel oil on 1996 
FTS data for Indonesia.

[[Page 25903]]

    We based our calculation of factory overhead, SG&A expenses, and 
profit on financial information for nail, screw, and bolt industries' 
experience in Indonesia, as reported in Biro Pusat Statistik 1995, 
Volume II, Indonesian Large and Medium Manufacturing Statistics.
    To value truck freight rates, we used information in a September 
1991, cable from the U.S Embassy in Jakarta, Indonesia.
    To value foreign brokerage and handling, we relied on information 
reported in the antidumping investigation of stainless steel bar from 
India (see Final Determination of Sales at Less Than Fair Value: 
Stainless Steel Bar from India, 59 FR 66915, Dec. 28, 1994).

Critical Circumstances

    The petition contained a timely allegation that there is a 
reasonable basis to believe or suspect that critical circumstances 
exist with respect to imports of subject merchandise. Section 733(e)(1) 
of the Act provides that the Department will determine that there is a 
reasonable basis to believe or suspect that critical circumstances 
exist if: (A)(i) There is a history of dumping and material injury by 
reason of dumped imports in the United States or elsewhere of the 
subject merchandise, or (ii) the person by whom, or for whose account, 
the merchandise was imported knows or should have known that the 
exporter was selling the subject merchandise at less than its fair 
value and that there was likely to be material injury by reason of such 
sales, and (B) there have been massive imports of the subject 
merchandise over a relatively short period.
    To determine that there is a history of dumping of the subject 
merchandise, the Department normally considers evidence of an existing 
antidumping duty order on CRN in the United States or elsewhere to be 
sufficient. See e.g., Preliminary Determinations of Critical 
Circumstances: Brake Drums and Rotors from the People's Republic of 
China, 61 FR 55269 (Oct. 25, 1996); Notice of Final Determinations of 
Sales at Less Than Fair Value: Brake Drums and Rotors from the People's 
Republic of China, 62 FR 9160 (Feb. 28, 1997). Currently, no countries 
have outstanding antidumping duty orders on CRN from the PRC. The 
petitioner alleged a history of dumping based upon antidumping orders 
on steel wire nails from Korea and the People's Republic of China, both 
of which covered CRN. See Certain Steel Wire Nails From Korea; Final 
Results of Changed Circumstances Administrative Review and Revocation 
of Antidumping Duty Order, 50 FR 40045 (Oct. 1, 1985); Final Results of 
Changed Circumstances Administrative Review and Revocation of 
Antidumping Duty Order; Certain Steel Wire Nails from The People's 
Republic of China, 52 FR 33463 (Sept. 3, 1987). We preliminarily 
determine that these antidumping orders are not a sufficient basis to 
find a history of dumping because both orders were revoked several 
years ago. However, we will consider this issue further for the final 
determination and we invite interested parties to comment on the issue.
    In determining whether an importer knew or should have known that 
the exporter was selling subject merchandise at less than fair value 
and thereby causing material injury, the Department normally considers 
margins over 15% for EP sales and 25% for CEP sales to impute knowledge 
of dumping and of resultant material injury. Brake Drums and Rotors, 62 
FR at 9164-65. In this investigation, none of the participating 
exporters/manufacturers has a margin over 15% for EP sales or 25% for 
CEP sales. Based on these facts, we determine that the first criterion 
for ascertaining whether or not critical circumstances exist is not 
satisfied. Therefore, we have not analyzed the shipment data for any of 
these companies to examine whether imports of CRN have been massive 
over a relatively short period. Thus, because neither alternative of 
the first criterion has been met, we preliminarily determine that there 
is no reasonable basis to believe or suspect that critical 
circumstances exist with respect to exports of CRN from the PRC by Top 
United, Junhua, Pu Dong, and Zongxun.
    Regarding firms covered by the ``PRC-wide'' rate, we have used the 
``facts available'' as the basis for determining whether critical 
circumstances exist for non-respondent exporters. The ``facts 
available'' margin exceeds the threshold for imputing knowledge of 
dumping to the importers of the merchandise. In addition, we have 
adversely assumed, as the ``facts available'', a massive increase in 
imports from these non-respondent exporters. We, therefore, determine 
that critical circumstances exist for non-responding exporters.
    We will make a final determination concerning critical 
circumstances when we make our final determination of sales at less 
than fair value in this investigation.

Verification

    As provided in section 782(i) of the Act, we will verify all 
information determined to be acceptable for use in making our final 
determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
Customs Service to suspend liquidation of all imports of subject 
merchandise--except those exported by Top United, Zongxun, Junhua, or 
Pu Dong--that are entered, or withdrawn from warehouse, for consumption 
on or after the date of publication of this notice in the Federal 
Register. We will instruct the Customs Service to require a cash 
deposit or the posting of a bond equal to the weighted-average amount 
by which the NV exceeds the EP or CEP, as indicated in the chart below. 
These suspension of liquidation instructions will remain in effect 
until further notice.

------------------------------------------------------------------------
                                                               Weighted-
                                                                average 
                    Exporter/manufacturer                       margin  
                                                              percentage
------------------------------------------------------------------------
Top United..................................................           0
Zongxun.....................................................           0
Junhua......................................................         \1\
Pu Dong.....................................................           0
PRC-wide Rate...............................................     118.41 
------------------------------------------------------------------------
\1\ De Minimis.                                                         

    The PRC-wide rate applies to all entries of subject merchandise 
except for entries from exporters/factories that are identified 
individually above.

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final determination is affirmative, 
the ITC will determine before the later of 120 days after the date of 
this preliminary determination or 45 days after our final determination 
whether these imports are materially injuring, or threaten material 
injury to, the U.S. industry.

Public Comment

    Case briefs or other written comments in at least ten copies must 
be submitted to the Assistant Secretary for Import Administration no 
later than July 28, 1997, and rebuttal briefs, no later than August 4, 
1997. A list of authorities used and an executive summary of issues 
should accompany any briefs submitted to the Department. Such summary 
should be limited to five pages total, including footnotes. In 
accordance with section 774 of the Act, we will hold a public hearing, 
if requested, to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs. Tentatively, the hearing 
will be held on August 5, 1997, at 9:00 a.m. in Room 1412 at the U.S.

[[Page 25904]]

Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230. Parties should confirm by telephone the time, 
date, and place of the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within ten days of the publication of this notice. Requests 
should contain: (1) The party's name, address, and telephone number; 
(2) the number of participants; and (3) a list of the issues to be 
discussed. Oral presentations will be limited to issues raised in the 
briefs. If this investigation proceeds normally, we will make our final 
determination by 135 days after the publication of this notice in the 
Federal Register.
    This determination is published pursuant to section 733(d) of the 
Act.

    Dated: May 5, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-12394 Filed 5-9-97; 8:45 am]
BILLING CODE 3510-DS-P