[Federal Register Volume 63, Number 6 (Friday, January 9, 1998)]
[Notices]
[Pages 1434-1437]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-488]


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DEPARTMENT OF COMMERCE

International Trade Administration
[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 is conducting an administrative 
review of the antidumping duty order on porcelain-on-steel cooking ware 
from the People's Republic of China. The review covers one 
manufacturer/exporter of the subject merchandise and its affiliated 
third-country reseller in Hong Kong and the period December 1, 1995, 
through November 30, 1996.
    We preliminarily determine that sales have been made below normal 
value. If these preliminary results are adopted in our final results of 
administrative review, we will instruct the U.S. Customs Service to 
assess antidumping duties on all appropriate entries. Interested 
parties are invited to comment on these preliminary results.

EFFECTIVE DATE: January 9, 1998.

FOR FURTHER INFORMATION CONTACT: Lorenza Olivas or Suzanne King, Office 
of CVD/AD Enforcement VI, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
2786.

SUPPLEMENTARY INFORMATION:

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, as amended, (the 
Act), by the Uruguay Round Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department of Commerce's (the 
Department's) regulations are to 19 CFR Part 353 (April 1997).

Background

    On December 2, 1986, the Department published in the Federal 
Register the antidumping duty order on Porcelain-on-Steel (POS) cooking 
ware from the People's Republic of China (PRC) (51 FR 43414). On 
December 3, 1996, the Department published in the Federal Register a 
notice of opportunity to request an administrative review of this 
antidumping duty order (61 FR 64051). On December 20 and 26, 1996, 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 period December 1, 1995, through November 30, 1996, on January 17, 
1996 (62 FR 2647). The Department is conducting this administrative 
review in accordance with section 751(a) of the Act.

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

[[Page 1435]]

currently classifiable under the Harmonized Tariff Schedule (HTS) item 
7323.94.00. HTS item numbers are provided for convenience and Customs 
purposes. The written description of the scope remains dispositive.

Verification 

    We verified the questionnaire responses submitted by Clover and 
Lucky, using standard verification procedures, including on-site 
inspection of the manufacturer's facilities, the examination of 
relevant sales and financial records, and selection of original 
documentation containing relevant information, as provided in section 
782(i) of the Act. Our verification results are outlined in the public 
versions of the verification reports, which are on file in the Central 
Records Unit (Room B-099 of the Main Commerce Building).

Affiliated Parties

    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 parties 
pursuant to section 771(33) of the Act. As such, and consistent with 
prior reviews of this order, we are assigning Clover and Lucky 
(hereinafter Clover/Lucky) a single dumping margin. See Porcelain-on-
Steel Cooking Ware from the People's Republic of China: Final Results 
of Antidumping Administrative Review; 62 FR 32758 (June 17, 1997). No 
new information or evidence of changed circumstances has been submitted 
in this proceeding to warrant reconsideration of this finding.

Separate Rates Analysis 

    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 manufacturer/
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 December 9, 
1997. ``Separate Rate Analysis for Assignment of Separate Rate for 
Clover/Lucky in the 1995-1996 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.

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. In addition, 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 
preliminarily determine that Clover 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 Clover's sole sales 
agent with respect to all subject merchandise manufactured by Clover 
and, as discussed above, Lucky and Clover are affiliated pursuant to 
section 771(33) of the Act. We deducted amounts, where appropriate, for 
discounts, 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 merchandise produced 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) 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 are treating 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

[[Page 1436]]

the Act, except for the factors of steel, percolators and certain 
customer-specific packing materials. For these factors, which were 
purchased from market economy suppliers and 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 vs. 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 information regarding Indonesia to value all of the remaining 
factors of production which were not purchased from market economy 
suppliers. (See Memorandum to Barbara Tillman, Director, Office of CVD/
AD Enforcement VI from Jeff May, Director, Office of Policy, dated 
August 11, 1997, ``Porcelain-on-Steel Cooking Ware from the People's 
Republic of China, Non-Market Economy Status and Surrogate Country 
Selection'' and the Memorandum to the File from Case Analysts, dated 
August 18, 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.)
    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 used an average exchange rate for the POR to convert 
surrogate values to U.S. dollars.
     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). We used 
an average exchange rate for the POR to convert surrogate values to 
U.S. dollars.
     For labor amounts, we were unable to find a publicly 
available source for skilled and unskilled labor rates for the POS 
cooking ware industry, or 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. We used an 
average exchange rate for the POR to convert surrogate values to U.S. 
dollars.
     For factory overhead, we were unable to locate any 
publicly available data for the POS cooking ware industry, or a similar 
industry, in Indonesia. Therefore, we used information reported in a 
December 1994, U.S. State Department cable from the U.S. Embassy in 
Jakarta, Indonesia. These data were received for the LTFV investigation 
of Furfuryl Alcohol from the People's Republic of China, and provide 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 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 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 1995-1996 Administrative Review 
of POS Cooking Ware from the PRC'' (Public Version) dated December 10, 
1997, on file in the Central Records Unit.

Currency Conversion 

    For purposes of the preliminary results, we made currency 
conversions based on the official exchange rates published by the 
Federal Reserve. Section 773A(a) of the Act directs the Department to 
use a daily exchange rate in order to convert foreign currencies into 
U.S. dollars, unless the daily rate involves a ``fluctuation.'' In 
accordance with the Department's practice, we have determined as a 
general matter that a fluctuation exists when the daily exchange rate 
differs from a benchmark by 2.25 percent. The benchmark is defined as 
the rolling average of rates for the past 40 business days. When we 
determine that a fluctuation exists, we substitute the benchmark for 
the daily rate. However, for the preliminary results in this review we 
have determined that a fluctuation did not exist during the POR, and we 
have not substituted the benchmark for the daily rate.

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, 1995 through 
November 30, 1996:

------------------------------------------------------------------------
                                                                 Margin 
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Clover Enamelware Enterprise/Lucky Enamelware Factory .......       0.81
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

[[Page 1437]]

implements a policy in NME cases whereby all exporters or producers are 
presumed to comprise a single entity, the ``NME entity.'' The U.S. 
Court of International Trade has upheld our NME policy in previous 
cases. See e.g., UCF America, Inc. v. United States, 870 F. Supp. 1120, 
1126 (CIT 1994); Sigma Corp. v. United States, 841 F. Supp. 1255, 1266-
67 (CIT 1993), and; Tianjin Machinery Import & Export Corp. v. United 
States, 806 F. Supp. 1008, 1013-15 (CIT 1992). Thus, we assign the NME 
rate to the NME entity just as we assign an individual rate to a single 
exporter or producer operating in a market economy. As a result, all 
exporters and producers that are part of the NME entity are assigned 
the ``NME-wide'' rate. Because the ``NME-wide'' rate is the equivalent 
of a company-specific rate, it changes only when we review the NME 
entity (i.e., all NME producers and exporters that have not qualified 
for a separate rate). To qualify for a separate rate, as discussed 
under the Separate Rates section of this notice, an NME exporter or 
producer must provide evidence showing both de jure and de facto 
absence of government control over export activities. Until such 
evidence is presented, a company is presumed to be part of the NME 
entity and receives the ``NME-wide'' rate. All exporters or producers 
will either qualify for a separate, company-specific rate, or be part 
of the NME 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 under the Separate Rates Analysis section of this notice. 
The PRC-wide rate has not changed from the last administrative review 
because no companies representing the single entity were 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, not later than 120 days after the date of the 
publication of this notice.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. We will 
calculate, wherever possible, an exporter/importer-specific assessment 
rate. With respect these preliminary results, we divided the total 
dumping margins for each importer (calculated as the difference between 
NV and EP), by the total quantity of sales to that importer during the 
POR. We will instruct Customs to assess the resulting per-piece (a set 
to be treated as a single piece) amount against each piece in each of 
the importer's entries during the POR. Although this will result in 
assessing different percentage margins for individual entries, the 
total antidumping duties collected for each importer for the review 
period will approximately equal the total dumping margins. 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; 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 
margin of 66.65 percent continues to be the PRC-wide rate because no 
companies representing the single entity were reviewed. 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 3 53.26 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 
sections 751(a)(1) and 777(i) of the Act (19 U.S.C. 1675(a)(1) and 19 
U.S.C. 1 677f (i)) and 19 CFR 353.22 of the Department's regulations.

    Dated December 31, 1997.
Richard W. Moreland, 
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-488 Filed 1-8-98; 8:45 am]
BILLING CODE 3510-DS-P-M