[Federal Register Volume 63, Number 216 (Monday, November 9, 1998)]
[Notices]
[Pages 60299-60302]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29995]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-822]


Certain Helical Spring Lock Washers 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: We preliminarily determine that sales of certain helical 
spring lock washers from the People's Republic of China were made below 
normal value during the period October 1, 1996 through September 30, 
1997. Interested parties are invited to comment on these preliminary 
results.

EFFECTIVE DATE: November 9, 1998.

FOR FURTHER INFORMATION CONTACT: Sally Hastings or Vincent Kane, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone (202) 482-3464 or 482-2815, 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, 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 351 et. seq. Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27296 (May 19, 1997).

Background

    On October 19, 1993, the Department published the antidumping duty 
order on certain helical spring lock washers (HSLWs) from the People's 
Republic of China (PRC) (58 FR 53914). The Department notified 
interested parties of the opportunity to request an administrative 
review of this order on October 2, 1997 (62 FR 51628). The

[[Page 60300]]

petitioner, Shakeproof Industrial Products Division of Illinois Tool 
Works, Inc., and the respondent, Zhejiang Wanxin Group Co. (ZWG) (also 
known as Hangzhou Spring Washer Plant), requested that the Department 
conduct an administrative review of ZWG. These requests were received 
on October 24 and 27, 1997, respectively. The notice of initiation of 
this administrative review was published on November 26, 1997 (62 FR 
63069). On July 10, 1998, the Department extended the time limits for 
completion of the preliminary results in this proceeding until October 
31, 1998 (See 63 FR 37328).
    The Department is conducting this administrative review in 
accordance with Section 751 of the Act.

Scope of Review

    The products covered by this review are HSLWs of carbon steel, of 
carbon alloy steel, or of stainless steel, heat-treated or non-heat-
treated, plated or non-plated, with ends that are off-line. HSLWs are 
designed to: (1) Function as a spring to compensate for developed 
looseness between the component parts of a fastened assembly; (2) 
distribute the load over a larger area for screws or bolts; and, (3) 
provide a hardened bearing surface. The scope does not include internal 
or external tooth washers, nor does it include spring lock washers made 
of other metals, such as copper.
    HSLWs subject to this review are currently classifiable under 
subheading 7318.21.0030 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 scope 
of this proceeding is dispositive.
    This review covers the period from October 1, 1996 through 
September 30, 1997.

Verification

    As provided in section 782(i) of the Act, we verified sales and 
factor information provided by ZWG in Xiaoshan, PRC, using standard 
verification procedures, including on-site inspection of its 
facilities, the examination of relevant sales and financial records, 
and selection of original documentation containing relevant 
information. The findings at verification are detailed in the 
verification report dated October 15, 1998, the public version of which 
is on file in the Central Records Unit, Room B099 of the Main Commerce 
building (CRU-Public File).

Separate Rates Determination

    To establish whether a company operating in a state-controlled 
economy 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 by the 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 economies (NMEs) are entitled to separate, 
company-specific margins when they can demonstrate an absence of 
government control, both in law and in fact, with respect to export 
activities. Evidence supporting, though not requiring, a finding of de 
jure absence of government control over export activities includes: (1) 
An absence of restrictive stipulations associated with the 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. De facto absence 
of government control over exports is based on four factors: (1) 
Whether each exporter sets its own export prices independently of the 
government and without 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 or financing 
of losses; (3) whether each exporter has the authority to negotiate and 
sign contracts and other agreements; and, (4) whether each exporter has 
autonomy from the government regarding the selection of management. 
(See Silicon Carbide, 59 FR at 22587 and Sparklers, 56 FR at 20589.)
    In each of the previous administrative reviews of the antidumping 
duty order on HSLWs from the PRC, covering successive review periods 
from October 1, 1993 through September 30, 1996, we determined that ZWG 
merited a separate rate. We have found that the evidence on the record 
of this review also demonstrates an absence of government control, both 
in law and in fact, with respect to ZWG's export activities according 
to the criteria identified in Sparklers, and an absence of government 
control with respect to the additional criteria identified in Silicon 
Carbide. Therefore, we have continued to assign ZWG a separate rate.

Export Price

    Because ZWG sold the subject merchandise to unaffiliated purchasers 
in the United States prior to importation into the United States and 
Constructed Export Price methodology is not otherwise indicated, we 
have used export price in accordance with section 772(a) of the Act.
    We calculated export price based on the f.o.b. price to 
unaffiliated purchasers. From this price, we deducted amounts for 
foreign inland freight and brokerage and handling. We valued these 
deductions using surrogate country cost data. We selected India as the 
surrogate country for the reasons explained in the ``Normal Value'' 
section of this notice.

Normal Value

    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 merchandise is exported from an NME, and (2) the 
information does not permit the calculation of NV using home-market 
prices, third-country prices, or constructed value under section 773(a) 
of the Act. The Department has treated the PRC as an NME in all 
previous antidumping cases. In accordance with section 771(18)(C)(i) of 
the Act, any determination that a foreign country is an NME shall 
remain in effect until revoked by the administering authority. None of 
the parties to this proceeding has contested such treatment in this 
review. Moreover, parties to this proceeding have not argued that the 
PRC HSLWs industry is a market-oriented industry (MOI) and, 
consequently, we have no basis to determine that the information would 
permit the calculation of NV using PRC prices or costs. Therefore, we 
calculated NV based on factors of production (FOP) in accordance with 
sections 773(c)(3) and (4) of the Act and 19 CFR 351.408(c).
    Under the FOP methodology, we are required to value the NME 
producer's inputs in a comparable market economy country that is a 
significant producer of comparable merchandise. We determined that 
India is at a comparable level of economic development to that of the 
PRC. Also, India is a significant producer of comparable merchandise. 
Therefore, for this review, we have used Indian prices to value the FOP 
except where the factor was purchased from a market economy supplier 
and paid for in a market economy currency. (See Memorandum to Susan 
Kuhbach from Jeff May, dated March 5, 1998, ``Certain Helical Spring 
Lock Washers from the

[[Page 60301]]

PRC: Nonmarket Economy Status and Surrogate Country Selection,'' which 
is on file in the CRU-Public File.)
    We selected, where possible, publicly available values from India 
which were: (1) Average non-export values; (2) representative of a 
range of prices within the POR or most contemporaneous with the POR; 
(3) product-specific; and, (4) tax-exclusive. We valued the factors of 
production as follows:
     A meaningful amount of the input carbon steel wire rod was 
purchased from the United Kingdom, a market economy supplier, and paid 
for in a market economy currency. Pursuant to 19 CFR 351.408(c)(1), we 
valued this factor using the price paid to the market economy supplier. 
Thus, for carbon steel wire rod values, we used the average cost per 
metric ton of carbon steel wire rod imported from the United Kingdom by 
ZWG during the period of review. We made further deductions to account 
for the freight costs incurred between the port and ZWG.
     For the value of chemicals used in the production and 
plating process of HSLWs, we used per kilogram values obtained from the 
Indian publication Chemical Weekly and from the Monthly Statistics of 
the Foreign Trade of India-Imports (MFTI). We adjusted these values, 
where appropriate, to reflect inflation through the POR using the 
Wholesale Price Index (WPI) as reported in the International Financial 
Statistics published by the International Monetary Fund (IMF). We also 
adjusted these values to account for freight costs incurred between the 
supplier and ZWG.
     For labor, we used the regression-based wage rate for the 
PRC in ``Expected Wages of Selected NME Countries,'' located on the 
Internet at http://www.ita.doc.gov/import__admin/records/wages/. 
Because of the variability of wage rates in countries with similar per 
capita GDP's, 19 CFR 351.408(c)(3) of the Department's regulations 
requires the use of a regression-based wage rate. The source for the 
regression based-wage rates is ``Expected Wages of Selected NME 
Countries--1995 Income Data,'' 1996 Year Book of Labour Statistics, 
International Labour Office, (Geneva: 1996) Chapter 5B: Wages in 
Manufacturing.
     For factory overhead, selling, general, and administrative 
expenses (SG&A), and profit values, we used information from the 
January, 1997 Reserve Bank of India Bulletin for the Indian industry 
group ``Processing and Manufacturing: Metals, Chemicals, and Products 
Thereof.'' From this information, we were able to determine factory 
overhead as a percentage of the total cost of manufacturing, SG&A as a 
percentage of the total cost of manufacturing, and the profit rate as a 
percentage of the cost of manufacturing plus SG&A.
     For packing materials, we used the per kilogram values 
obtained from the MFTI. Where necessary, we adjusted these values to 
reflect inflation through the POR using the WPI published by the IMF. 
We also adjusted them to account for freight costs incurred between the 
PRC supplier and ZWG.
     To value coal, we used a per kilogram value obtained from 
the MFTI. We adjusted this value to reflect inflation through the POR 
using the WPI published by the IMF. We also adjusted this amount to 
account for freight costs incurred between the supplier and ZWG.
     To value electricity, we used the price of electricity for 
1995 reported in the 1995 Confederation of Indian Industries Handbook 
of Statistics. We adjusted the value to reflect inflation through the 
POR using the WPI published by the IMF.
     To value water, we used the November, 1993 Water Utilities 
Data Book for the Asian and Pacific Region published by the Asian 
Development Bank. We adjusted the value to reflect inflation through 
the POR using the WPI published by the IMF.
     To value foreign brokerage and handling, we used 
information reported in the Less Than Fair Value Investigation of 
Stainless Steel Bar from India in a document dated April 22, 1994.
     To value truck freight, we used a rate derived from the 
April 20, 1994 issue of The Times of India. We adjusted the rate to 
reflect inflation through the POR using the WPI published by the IMF.
     To value rail freight, we used rate information published 
by the Indian Railway Conference Association for rates in force from 
April 1, 1995. We adjusted the rate to reflect inflation through the 
POR using the WPI published by the IMF.
     To value shipping freight, we used a rate reported to the 
Department in the August, 1993 cable from the U.S. Embassy in India 
which was submitted for and used in the Final Determination of Sales at 
Less Than Fair Value: Certain Helical Spring Lock Washers from the 
People's Republic of China, 58 FR 48833 (September 20, 1993). We 
adjusted the rate to reflect inflation through the POR using the WPI 
published by the IMF.
    For a complete description of the factor values used, see 
``Memorandum to File: Factor Values Used for the Preliminary Results of 
the Fourth Administrative Review,'' dated November 2, 1998 (Factors 
Memorandum) a public version of which is available in the Public File.
    Additionally, we adjusted the reported figure for indirect labor 
based on our findings at verification, see ``Memorandum to File: 
Calculation Notes for Preliminary Results,'' dated November 2, 1998, a 
public version of which is available in the Public File.

Preliminary Results of Review

    We preliminarily determine that the following dumping margin 
exists:

------------------------------------------------------------------------
                                                              Margin
       Manufacturer/exporter             Time period         (percent)
------------------------------------------------------------------------
Zhejiang Wanxin Group Co., Ltd....     10/01/96-09/30/97            4.29
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    Parties to the proceeding may request disclosure within 5 days of 
the date of publication of this notice, in accordance with 19 CFR 
351.224. Any interested party may request a hearing within 10 days of 
publication of this notice. Any hearing, if requested, will be held 
approximately 44 days after the publication of this notice. Interested 
parties may submit written comments (case briefs) within 30 days of the 
date of publication of this notice. Rebuttal comments (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. The 
Department will publish a notice of the final results of this 
administrative review, which will include the results of its analysis 
of issues raised by the parties, within 120 days of publication of 
these preliminary results.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Pursuant to 19 
CFR 351.212(b) (1), we have calculated an importer-

[[Page 60302]]

specific ad valorem duty assessment rate based on the ratio of the 
total amount of antidumping duties calculated for the examined sales 
made during the POR to the total value of the subject merchandise 
entered during the POR. In order to estimate the entered value, we 
subtracted international movement expenses from the gross sales value. 
This rate will be assessed uniformly on all entries of that specific 
importer made during the POR. The Department will issue appraisement 
instructions directly to the U.S. Customs Service.
    Furthermore, the following cash deposit requirements will be 
effective upon publication of the final results of this administrative 
review for all shipments of HSLWs 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 ZWG, 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 
rate, which is 128.63 percent, which is the All Other PRC 
Manufacturers, Producers and Exporters rate from the Final 
Determination of Sales at Less Than Fair Value: Certain Helical Spring 
Lock Washers from the PRC, 58 FR 48833 (September 20, 1993); and (3) 
for non-PRC exporters of subject merchandise from the PRC, the cash 
deposit rate will be the rate applicable to the 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 also serves as a preliminary 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 the subsequent 
assessment of doubled antidumping duties.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 771(i)(1) of the Act.

    Dated: November 3, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-29995 Filed 11-6-98; 8:45 am]
BILLING CODE 3510-DS-P