[Federal Register Volume 63, Number 194 (Wednesday, October 7, 1998)]
[Notices]
[Pages 53872-53874]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26917]


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

DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-808]


Chrome-Plated Lug Nuts From The People's Republic of China; Final 
Results of Antidumping Duty Administrative Review

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

ACTION: Notice of Final Results of the Antidumping Duty Administrative 
Review of Chrome-Plated Lug Nuts from the People's Republic of China.

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

SUMMARY: On June 10, 1998, the Department of Commerce (the Department) 
published the preliminary results of its administrative review of the 
antidumping order on chrome-plated lug nuts (lug nuts) from the 
People's Republic of China (PRC). The review covers one exporter of the 
subject merchandise and the period September 1, 1996 through August 31, 
1997.
    We gave interested parties an opportunity to comment on our 
preliminary results. We received comments from Jiangsu Rudong Grease 
Gun Factory (Rudong). We did not receive rebuttal comments. After 
considering these comments, we have changed the final results from 
those presented in the preliminary results of review and have 
determined that sales have been made below normal value (NV), as 
explained below.

EFFECTIVE DATE: October 7, 1998.

FOR FURTHER INFORMATION CONTACT: Eric Scheier, Thomas Gilgunn, or 
Maureen Flannery, Antidumping/Countervailing Duty Enforcement, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington D.C. 
20230; telephone (202) 482-4052, (202) 482-0648 and (202) 482-3020 
respectively .

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act. In addition, unless otherwise indicated, 
all citations to the Department's regulations are to the provisions 
codified at 19 CFR part 351.

Background

    On June 10, 1998, the Department published the preliminary results 
of review (63 FR 31719). The Department has now completed this 
administrative review in accordance with section 751 of the Act.

Scope of Review

    The products covered by the order and this review are one-piece and 
two-piece chrome-plated and nickel-plated lug nuts from the PRC. The 
subject merchandise includes chrome-plated and nickel-plated lug nuts, 
finished or unfinished, which are more than \11/16\ inches (17.45 
millimeters) in height and which have a hexagonal (hx) size of at least 
\3/4\ inches (19.05 millimeters) but not over one inch (25.4 
millimeters), plus or minus \1/16\ of an inch (1.59 millimeters). The 
term ``unfinished'' refers to unplated and/or unassembled chrome-plated 
lug nuts. The subject merchandise is used for securing wheels to cars, 
vans, trucks, utility vehicles, and trailers. Excluded from the order 
are zinc-plated lug nuts, finished or unfinished, stainless steel 
capped lug nuts, and chrome-plated lock nuts.
    The merchandise under review is currently classifiable under item 
7318.16.00 of the Harmonized Tariff Schedule of the United States 
(HTSUS). Although the HTSUS subheading is provided for convenience and 
customs purposes, the written description of the merchandise is 
dispositive.
    This review covers the period September 1, 1996 through August 31, 
1997.

Interested Party Comments

    We gave interested parties an opportunity to comment on the 
preliminary results of review. We received comments from Rudong. We did 
not receive rebuttal comments from any party.
    Comment 1. Rudong argues that the October 1996 Indian import 
statistics used to value steel wire rod are aberrational. For the 
preliminary results, the Department used the then available Indian 
import statistics for September, October, November, and December 1996. 
Rudong states that Indian imports of steel wire rod as valued by the 
October 1996 data are 3.5 times greater than the value of steel wire 
rod in the September, November, and December

[[Page 53873]]

Indian import statistics, and that the values for imports into India 
from Germany and Japan in the October Indian import statistics are ten 
and four times greater, respectively, than the value of steel wire rod 
in the September, November, and December Indian import statistics. 
Rudong argues that October 1996 Indian import statistics, or, at a 
minimum, values for imports from Germany and Japan in the October 1996 
statistics, should be removed from the calculation of surrogate value 
for steel wire rod. Rudong further argues that because the HTSUS 
classification used by the Department to value steel wire rod is a 
basket category of bars and rods, there is a significant possibility 
that the imports from Germany and Japan were of more expensive, higher 
specification merchandise than steel used in the production of lug 
nuts. Rudong also notes the possibility of a clerical error in the 
October 1996 statistics.
    Rudong further argues that the September, November, and December 
Indian import statistics are accurate when compared to the now 
available import values of steel wire rod to India for January through 
May 1997, and the values of steel wire rod derived from import 
statistics for Indonesia, Canada, and the United States.
    Lastly, Rudong argues that the Department has in the past rejected 
aberrational values. Rudong cites to Certain Helical Spring Lock 
Washers from the People's Republic of China; Final Results of 
Antidumping Duty Administrative Review, 62 FR 61794 (November 19, 
1997), in which the Department rejected aberrational values for 
hydrochloric acid, and to Chrome-Plated Lug Nuts from the People's 
Republic of China; Final Results of Antidumping Duty Administrative 
Review, 61 FR 58514 (November 15, 1996) (Lug Nuts 1995-1996), in which 
the Department rejected certain aberrational Indian import data for 
steel wire rod.
    Department's Position. We agree that the value for Indian imports 
of German steel in October 1996, 168.9 rupees per kilogram, is 
aberrational, based on a comparison of this value with other Indian 
import values during the September 1996 through May 1997 period (the 
portion of the period of review for which data is now available). The 
value of these other imports ranged for 12.72 to 66.00 rupees per 
kilogram, with a weighted average of 17.64 rupees per kilogram. 
Accordingly, for the purposes of these final results, we have excluded 
October 1996 Indian imports of German steel from our calculation of 
surrogate value because their value is many times higher than the value 
of other Indian imports of steel. See ``Analysis for the Final Results 
of the 1996-1997 Administrative Review of Chrome-plated Lug Nuts from 
the Peoples Republic of China--Jiangsu Rudong Grease Gun Factory'' 
(``Final Analysis Memo for PRC Lug Nuts 1996-1997''). We also note that 
the data for October 1996 Indian imports of German steel are 
aberrational when compared to the value of similar steel imports into 
other market economies such as Canada, Indonesia, and the United 
States. In Lug Nuts 1994-1995, the Department discarded certain 
surrogate Indian steel values because they were found to be 
aberrational when compared to the steel values of these three market 
economies.
    Additionally, for these final results we have included in the 
calculation of the surrogate value for steel Indian import data from 
January 1997 through May 1997. This information was unavailable to the 
Department for the preliminary results, and has since become available. 
See memorandum to the file dated September 30, 1998 ``Final Analysis 
Memo for PRC Lug Nuts 1996-1997.''
    Comment 2. Rudong argues that the Department erred in using, as a 
surrogate for marine insurance, a per-kilogram surrogate value derived 
from actual insurance payments from the investigation of sulphur dyes 
from India, rather than a surrogate rate representing a percentage of 
the insurable value of the merchandise at issue. Rudong states that, in 
practice, marine insurance is not paid on a per-weight basis but as a 
percentage of value. Therefore, Rudong claims, it is this percentage, 
not the actual payment for a shipment of different merchandise (in this 
case sulphur dyes), that the Department should use to calculate 
surrogate marine insurance. Rudong suggests that the Department use the 
surrogate rate of 2.2 percent from Pakistan used in Final Determination 
of Sales at Less Than Fair Value: Chrome-Plated Lug Nuts From the 
People's Republic of China, 56 FR 46153 (September 10, 1991).
    Department's Position. We agree with Rudong. Because marine 
insurance is incurred as a percentage of value (see Page 5 of Rudong's 
questionnaire response dated July 10, 1998), it is appropriate to apply 
a surrogate rate on a value basis.
    In Peer Bearing Company v. United States, No. 98-70, slip op., (CIT 
May 27, 1998), the Department was instructed to recalculate the per-
kilogram surrogate value for marine insurance--the same value used in 
the preliminary results for this segment of the proceeding--based on 
value rather than weight. The Department, for those remand results, 
recalculated a surrogate rate of 0.241 percent of value, based on data 
used in the investigation of sulphur dyes from India, and applied this 
rate to gross unit price to recalculate a surrogate value for marine 
insurance. See memorandum to the file dated July 21, 1998: 
``Recalculation of Marine Insurance Expense Pursuant to Remand on 
Tapered Roller Bearings from the People's Republic of China,'' placed 
on the record of this review by the Department on September 21, 1998.
    For these final results, we are using the rate of 0.241 percent 
rather than the 2.2 percent rate suggested by Rudong because the former 
is a figure from the primary surrogate country in this segment of the 
proceeding, India, while the latter is from Pakistan.
    Comment 3. Rudong argues that the Department miscalculated the 
surrogate rate for ocean freight incurred for shipment by a non-market 
economy carrier. Rudong asserts that the Department apparently intended 
to calculate the ocean freight rate for one non-market economy carrier 
by applying a weighted average of the prices charged by the market-
economy carriers. In so doing, Rudong contends, the Department erred by 
attempting to recalculate ocean freight on a weight basis. Rudong 
asserts that the Department's calculation does not work, as shown by 
the fact that the calculated amount is twice as high as any of the 
market-economy invoices. Rudong argues that the Department's 
calculations are unnecessary and that the Department should use the 
data provided for the invoices shipped on market-economy carriers to 
calculate a per-value surrogate rate for any invoices shipped on non-
market-economy carriers.
    Department's Position. We agree, in part, with Rudong and have 
recalculated ocean freight accordingly. Because ocean freight is 
incurred on a container, and therefore weight, basis, the preferred 
methodology to value ocean freight is on a weight basis. However, there 
is no way to allocate the total freight cost to subject and non-subject 
merchandise listed on Rudong's invoice by weight. Consequently, we have 
no way to derive a weight-based ocean freight value from the 
documentation provided by Rudong. Therefore, we have calculated an 
alternative rate for the ocean freight incurred on Rudong's non-market-
economy forwarder based on a weighted-average per-value rate for the 
shipments made on market-economy carriers.
    Comment 4. Rudong argues that the Department based foreign inland 
freight

[[Page 53874]]

on the midpoint for the range of weights specified for subject 
merchandise in the CONNUM rather than the actual net weight of the 
individual products analyzed. Rudong states that the Department 
estimated the weight of each product by using a midpoint of the weight 
range reported to create CONNUMs for matching purposes rather than 
using a net weight equaling gross weight minus scrap, as done in prior 
segments of this proceeding.
    Department's Position. We agree with Rudong and have recalculated 
inland freight on the basis of net weight and distance. For the 
calculation of freight, we prefer to use actual weight instead of 
estimated weight based on the range of weights within each CONNUM. We 
calculated actual weight by subtracting scrap from the gross weight of 
steel wire rod. This was the methodology used in the prior review of 
this order. See the public version of ``Analysis for the Preliminary 
Results of the Fourth Administrative Review of Chrome-plated Lug Nuts 
from the People's Republic of China covering the period September 1, 
1994 through August 31, 1995--Jiangsu Rudong Grease Gun Company.''
    Comment 5. Rudong argues that the Department incorrectly calculated 
the tax-exclusive price for chemicals by setting the tax-exclusive 
price equal to the tax-inclusive price divided by the sum of one plus 
excise tax rate plus sales tax rate. Rudong states that the correct 
equation is: tax-exclusive price=tax-inclusive price/[(1+excise tax 
rate)*(1+sales tax rate)]. Rudong notes that their proposed formula was 
used consistently in past cases.
    Department's Position. We agree with Rudong. According to Indian 
Customs Tariffs, as presented on the Department's Trade Information 
Center web page, Indian excise and sales taxes are assessed 
sequentially. See Attachment 4 of the ``Final Analysis Memo for PRC Lug 
Nuts 1996-1997.'' Therefore, the correct equation is: tax-exclusive 
price=tax-inclusive price/[(1+excise tax rate)*(1+sales tax rate)].
    Comment 6. Rudong argues that the Department applied an incorrect 
formula in the calculation of factory overhead. Rudong states that the 
Department calculated overhead by multiplying the overhead rate by the 
sum of materials, labor and energy, and then dividing that product by 
the difference of one minus the overhead rate. Rudong argues that 
because the surrogate overhead rate was originally calculated as a 
percentage of materials, labor and energy, the factor for overhead in 
this segment of the proceeding should be calculated by multiplying the 
overhead rate by the sum of Rudong's materials, labor, and energy.
    Department's Position. We disagree with Rudong. In the calculation 
of the surrogate overhead rate, the Department used the same 
methodology as used in previous reviews of chrome-plated lug nuts. See 
``Analysis for the Preliminary Results of the Fourth Administrative 
Review of Chrome-plated Lug Nuts from the People's Republic of China 
covering the Period September 1, 1994 through August 31, 1995--Jiangsu 
Rudong Grease Gun Factory.'' This methodology is based on an industry 
income statement published in the April 1995 Reserve Bank of India 
Bulletin; see Attachment eight of the memorandum to the file dated June 
2, 1998: ``Factor Values Used for the Preliminary Results of the 1996-
97 Administrative Review of Chrome-Plated Lug Nuts from the PRC.'' The 
Department divided total overhead, less power and fuel, by a cost of 
manufacturing (COM) amount that already included total factory overhead 
as a component. Thus, in calculating Rudong's surrogate overhead cost 
we had to allow for the inclusion of total factory overhead as a part 
of the overhead rate equation's denominator. We did this by deducting 
that overhead percentage from a factor of one in the calculation of 
Rudong's surrogate overhead cost.

Final Results of Review

    We determine that the following dumping margins exist:

------------------------------------------------------------------------
                                                                 Margin
           Manufacturer/exporter                Time period    (percent)
------------------------------------------------------------------------
Jiangsu Rudong Grease Gun Factory..........    9/1/96-8/31/97      1.29
PRC-Wide rate..............................    9/1/96-8/31/97     44.99
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between export price and NV may vary from the percentage 
stated above for Rudong. We have calculated importer-specific duty 
assessment rates for lug nuts by dividing the total dumping margins 
(calculated as the difference between NV and EP) for each importer/
customer by the total number of units sold to that importer/customer. 
We will direct Customs to assess the resulting per-unit dollar amount 
against each unit of merchandise in each of the importer's/customer's 
entries during the review period. The Department will issue 
appraisement instructions directly to the Customs Service.
    Furthermore, the following deposit rates will be effective upon 
publication of this notice of final results of review for all shipments 
of lug nuts 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 Rudong, which was found to 
merit a separate rate for the final results of this review, the cash 
deposit rate will be 1.29 percent; (2) for all other PRC exporters, the 
cash deposit rate will be the PRC-wide rate; and (3) for non-PRC 
exporters of subject merchandise from the PRC, the cash deposit rate 
will be the rate applicable to a PRC supplier of that exporter.
    These deposit rates, when imposed, shall remain in effect until 
publication of the final results of the next administrative review.
    This notice serves as a final reminder to importers of their 
responsibility under 19 CFR 351.402(f) 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 subsequent assessment 
of double antidumping duties.

Notification to Interested Parties

    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.306. See 63 FR 24391, 24403 (May 4, 
1998). 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) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 351.221.

    Dated: September 30, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-26917 Filed 10-6-98; 8:45 am]
BILLING CODE 3510-DS-P