[Federal Register Volume 64, Number 24 (Friday, February 5, 1999)]
[Notices]
[Pages 5770-5775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2815]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-803]


Heavy Forged Hand Tools, Finished or Unfinished, With or Without 
Handles, From the People's Republic of China; Preliminary Results and 
Partial Recission of Antidumping Duty Administrative Reviews

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

ACTION: Notice of preliminary results and partial recission of 
antidumping duty administrative reviews.

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SUMMARY: We preliminarily determine that sales of heavy forged hand 
tools, finished or unfinished, with or without handles, from the 
People's Republic of China were made below normal value during the 
period February 1, 1997 through January 31, 1998. Interested parties 
are invited to comment on these preliminary results. Parties who submit 
arguments are requested to submit with each argument (1) a statement of 
the issue and (2) a brief summary of the argument.

EFFECTIVE DATE: February 5, 1999.

FOR FURTHER INFORMATION CONTACT: Paul Stolz or James Terpstra, AD/CVD 
Enforcement, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington DC 20230; telephone (202) 482-4474 or 482-3965, 
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 
regulations are to 19 CFR Part 351 (1998).

Background

    On February 19, 1991, the Department of Commerce (the Department) 
published in the Federal Register (56 FR 6622) the antidumping duty 
orders on heavy forged hand tools, finished or unfinished, with or 
without handles (certain heavy forged hand tools or HFHTs), from the 
People's Republic of China (PRC). On February 5, 1998, the Department 
published in the Federal Register (63 FR 5929) a notice of opportunity 
to request administrative reviews of these antidumping duty orders. On 
February 24, 1998, three exporters of the subject merchandise requested 
that the Department conduct administrative reviews of their exports of 
the subject merchandise. Specifically, Fujian Machinery & Equipment 
Import & Export Corporation (FMEC) requested that the Department 
conduct an administrative review of its exports of axes/adzes; hammers/
sledges; and picks/mattocks. Shandong Huarong General Group Corporation 
(Shandong Huarong) and Liaoning Machinery Import & Export Corporation 
(LMC) requested that the Department conduct administrative reviews of 
their exports of bars/wedges. On February 27, 1998, another exporter, 
Shandong Machinery Import & Export Corporation (SMC), requested that 
the Department conduct an administrative review of its exports of axes/
adzes; bars/wedges; hammers/sledges; and picks/mattocks. Also on 
February 27, 1998, the petitioner, O. Ames Co., requested 
administrative reviews of FMEC's, Shandong Huarong's, LMC's, SMC's, and 
Tianjin Machinery Import & Export Corporation's (TMC's) exports of 
axes/adzes; bars/wedges; hammers/sledges; and picks/mattocks.
    We published the notice of initiation of these reviews on March 23, 
1998 (63 FR 13837). In its June 23, 1998, Sections C and D 
questionnaire response,

[[Page 5771]]

Shandong Huarong stated that, of the subject merchandise, it exported 
only bars/wedges during the POR and requested that the Department 
terminate its review with respect to other HFHTs. Pending confirmation 
of this claim from the Customs Service, we are thus preliminarily 
rescinding our review of other HFHTs with respect to Shandong Huarong. 
In its June 23, 1998, Sections C and D questionnaire response, LMC 
stated that, of the subject merchandise, it exported only bars/wedges 
during the POR and requested that the Department terminate its review 
with respect to other HFHTs. Pending confirmation of this claim from 
the Customs Service, we are thus preliminarily rescinding our review of 
other HFHTs with respect to LMC. In its September 3, 1998, response to 
the Department's supplemental questionnaire, TMC stated that, of the 
subject merchandise, it exported only hammers and picks during the POR. 
Pending confirmation of this claim from the Customs Service, we are 
thus preliminarily rescinding our review of other HFHTs with respect to 
TMC. In its June 24, 1998, Sections C and D questionnaire response, 
FMEC stated that, of the subject merchandise, it exported only axes/
adzes; hammers/sledges; and picks/mattocks, and requested that the 
Department terminate its review with respect to bars/wedges. Pending 
confirmation of this claim from the Customs Service, we are thus 
preliminarily rescinding our review of bars/wedges with respect to 
FMEC. In its June 25, 1998, Sections C and D questionnaire response, 
SMC stated that, of the subject merchandise, it exported only axes/
adzes; hammers/sledges; and picks/mattocks, and requested that the 
Department terminate its review with respect to bars/wedges. Pending 
confirmation of this claim from the Customs Service, we are thus 
preliminarily rescinding our review of bars/wedges with respect to SMC.
    On September 28, 1998, the Department extended the time limits for 
completion of the preliminary results in these proceedings until 
January 29, 1999 (See 63 FR 51563). The Department is conducting these 
administrative reviews in accordance with Section 751 of the Act.

Scope of Reviews

    Imports covered by these reviews are shipments of HFHTs from the 
PRC comprising the following classes or kinds of merchandise: (1) 
Hammers and sledges with heads over 1.5 kg (3.33 pounds) (hammers/
sledges); (2) bars over 18 inches in length, track tools and wedges 
(bars/wedges); (3) picks/mattocks; and (4) axes/adzes.
    HFHTs include heads for drilling, hammers, sledges, axes, mauls, 
picks, and mattocks, which may or may not be painted, which may or may 
not be finished, or which may or may not be imported with handles; 
assorted bar products and track tools including wrecking bars, digging 
bars and tampers; and steel wood splitting wedges. HFHTs are 
manufactured through a hot forge operation in which steel is sheared to 
required length, heated to forging temperature, and formed to final 
shape on forging equipment using dies specific to the desired product 
shape and size. Depending on the product, finishing operations may 
include shot-blasting, grinding, polishing and painting, and the 
insertion of handles for handled products. HFHTs are currently 
classifiable under the following Harmonized Tariff Schedule (HTS) 
subheadings: 8205.20.60, 8205.59.30, 8201.30.00, and 8201.40.60. 
Specifically excluded are hammers and sledges with heads 1.5 kg (3.33 
pounds) in weight and under, hoes and rakes, and bars 18 inches in 
length and under. Although the HTS subheadings are provided for 
convenience and customs purposes, our written description of the scope 
of these orders is dispositive.

Verification

    As provided in section 782(i) of the Act, we conducted a 
verification of information provided by SMC and its supplying 
factories, and by FMEC and its supplying factories by using standard 
verification procedures, including on-site inspection of the 
manufacturer's facilities, the examination of relevant sales and 
financial records, and the selection of original documentation 
containing relevant information. The findings at verification are 
detailed in the verification reports dated January 6, 1999, the public 
versions of which are on file in the Central Records Unit, Room B099 of 
the Main Commerce building (CRU-Public File).

Verification Failures of SMC and FMEC

    On October 5 and 6, 1998, the Department conducted a verification 
of SMC's questionnaire response at its sales offices, and on October 12 
and 13 at its suppliers' factories in the PRC. At SMC, we encountered 
serious problems such that we could not confirm that U.S. sales were 
properly reported. Because no accounting records were available as to 
one of SMC's departments that handles subject merchandise, we were 
unable to determine the sales volume from that Department. 
Additionally, with respect to another department for which accounting 
records were available, these records could not be reconciled with the 
company's overall financial statements. Finally, SMC was unable to 
provide substantiating documentation in response to several other 
requests by the Department. For further explanation of verification 
failures, see Determination of Adverse Facts Available Based on 
Verification Failure in the Administrative Review of Heavy Forged Hand 
Tools from the People's Republic of China (Adverse Facts Available 
Memorandum), dated January 29, 1999. Taken together, these failures 
resulted in our inability to determine whether U.S. sales were properly 
reported.
    We also encountered serious difficulties when attempting to verify 
SMC's supplier factories' information. Specifically, one factory was 
unable to provide any documentary link between the factor utilization 
figures reported and the overall company accounting records. Moreover, 
the incomplete records that were available revealed that: (1) The 
reported figures were often inaccurate (in varying degrees); and (2) 
other factors of production existed that were not reported in the 
original questionnaire response. Based upon these significant failures, 
we find that the reported factors of production (``FOP'') information 
is unreliable. Taken together, the problems are in fact so significant 
as to constitute a total failure of verification.
    On October 8 and 9, 1999, the Department conducted a verification 
of FMEC's questionnaire response at its sales offices. Additionally, on 
October 14 and 15 the Department conducted verification of FMEC's 
supplier factories in the PRC. At FMEC, we encountered serious problems 
such that we could not confirm that U.S. sales were properly reported. 
FMEC failed to provide accounting records for a large portion of the 
POR, which made it impossible to determine whether U.S. sales for that 
period, and possibly earlier or later periods, were properly reported. 
FMEC also failed to produce the financial records of two of its 
branches, which precluded us from verifying the volume of U.S. sales, 
if any, by those branches. Additionally, FMEC was unable to provide 
substantiating documentation in response to several other requests by 
the Department. For a further explanation of specific verification 
failures, see the Adverse Facts Available Memorandum, January 29, 1999. 
Taken together, these problems resulted in our inability to establish 
that U.S. sales were properly reported.
    We also encountered serious problems when verifying information at 
one of FMEC's supplier's factory. For

[[Page 5772]]

certain products, the factory was unable to reconcile the factor 
utilization figures reported with company accounting records. Moreover, 
with respect to the data that we were able to examine, the reported 
figures contained many errors. We also found that certain factor inputs 
had not been reported in the original response. These problems indicate 
that the reported FOP information is unreliable, and are so significant 
as to constitute a total failure of verification.

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 the final results of the 1996-1997 reviews of HFHTs, the 
Department granted separate rates to FMEC, Shandong Huarong, LMC, SMC 
and TMC. See Heavy Forged Hand Tools From the People's Republic of 
China; Final Results of Antidumping Duty Administrative Reviews (63 FR 
16758, April 6, 1998). While all five companies have received separate 
rates in several previous segments of these proceedings, it is the 
Department's policy that separate rates questionnaire responses must be 
evaluated each time a respondent makes a separate rate claim, 
regardless of any separate rate the respondent received in the past. 
See Manganese Metal from the People's Republic of China, Final Results 
and Partial Recission of Antidumping Duty Administrative Review, 63 FR 
12441 (March 13, 1998). In the instant reviews, these companies 
submitted complete responses to the separate rates section of the 
Department's questionnaire. The evidence submitted in these reviews by 
Shandong Huarong, LMC, and TMC, which is consistent with the 
Department's findings in previous reviews, is sufficient on its own 
merits in demonstrating independence from the government entity. We 
therefore preliminarily determine that these companies continue to be 
entitled to separate rates.
    With respect to SMC and FMEC, we preliminarily determine that, due 
to the nature of the verification failures of both companies and the 
inadequacy of their cooperation, the integrity of these companies' 
reported data on the whole is compromised. See Verification Failures of 
SMC and FMEC above. Therefore, we determine that SMC and FMEC did not 
adequately establish entitlement to rates separate from the government 
entity.

Adverse Facts Available

    On April 23, 1998, the Department sent a questionnaire to the 
Ministry of Foreign Trade and Economic Cooperation (``MOFTEC'') in 
order to collect information relevant to the calculation of the PRC-
wide rate. MOFTEC did not respond. SMC and FMEC likewise did not 
provide a consolidated response representing all non-independent 
exporters of HFHTs. In addition, as discussed above in the section 
entitled ``Verification Failures,'' the accuracy of SMC's and FMEC's 
individual responses could not be substantiated at verification. The 
verification failures resulted from these companies' repeated failure 
to supply a wide variety of requested information. Therefore, the 
Department finds that, pursuant to sections 776(a)(2)(D) and 776(b), 
the use of an adverse inference is appropriate in determining a dumping 
margin, as the PRC entity has not acted ``to the best of its ability to 
comply with [our] request for information.'' As explained in the 
section entitled ``Separate Rates,'' the PRC entity includes both SMC 
and FMEC.
    Furthermore, section 776(b) of the Act authorizes the Department to 
use adverse facts available (FA) whenever it finds that an interested 
party has failed to cooperate by not acting to the best of its ability 
to comply with the Department's requests for information. Because 
MOFTEC did not respond and because SMC and FMEC failed to substantiate 
large portions of their questionnaire responses, we determine that the 
PRC-wide entity did not cooperate to the best of its ability with our 
requests for information. See the Adverse Facts Available Memorandum, 
January 29, 1999. Therefore, pursuant to section 776(b) of the Act, we 
are relying on adverse FA to determine the margin for the PRC-wide 
entity, which includes SMC and FMEC. As outlined in section 776(b) of 
the Act, adverse facts available may include reliance on information 
derived from: (1) The petition, (2) a final determination in the 
investigation, (3) any previous review under section 751 of the Act or 
determination under section 753 of the Act, or (4) any other 
information placed on the record.
    For each of these proceedings, we have used as adverse FA for the 
PRC-wide rate the highest rate from this or previous segments of the 
proceeding. In this case, we have used the PRC-wide rates from the most 
recent review, which are also the highest rates from any segment of the 
respective proceedings. Specifically, the PRC-wide rates are: 21.93 
percent for axes/adzes; 66.32 percent for bars/wedges; 44.41 percent 
for hammers/sledges; and 108.2 percent for picks/mattocks. The margins 
selected are calculated rates that have been used consistently in 
recent segments of these proceedings. See Adverse Facts Available 
Memorandum, January 29, 1999. We have determined that these margins are 
appropriate to use as FA.
    Section 776(c) of the Act provides that the Department shall, to 
the extent practicable, corroborate secondary information from 
independent sources reasonably at its disposal. The Statement of 
Administrative Action, H.R. Doc. 316, Vol. 1, 103d Cong., 2d Sess. 870 
(1994) (SAA) provides that ``corroborate'' means simply that the 
Department will satisfy itself that the secondary information to be 
used has probative value. See Statement of Administrative Action, at 
870.
    To corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information to be used. However, unlike other types of information, 
such as surrogate values,

[[Page 5773]]

there are no independent sources for calculated dumping margins. The 
only source for calculated margins is an administrative determination. 
Thus, in an administrative review, if the Department chooses as adverse 
FA a calculated dumping margin from a prior segment of the proceeding, 
it is not necessary to question the reliability of the margin for that 
time period. With respect to the relevance aspect of corroboration, 
however, the Department will consider information reasonably at its 
disposal as to whether there are circumstances that would render a 
margin not relevant. Where circumstances indicate that the selected 
margin is not appropriate as adverse FA, the Department will disregard 
the margin and determine an appropriate margin. See, e.g., Fresh Cut 
Flowers from Mexico; Preliminary Results of Antidumping Duty 
Administrative Review, 60 FR 49567, 49568 (September 26, 1995) (the 
Department disregarded the highest margin as best information available 
because that margin was based on an extraordinarily high business 
expense resulting from uncharacteristic investment activities, which 
resulted in the high margin). Because the selected margin has been 
consistently applied in previous segments of these proceedings, and 
because there is no evidence to suggest that the margin is not 
relevant, the Department finds no need to disregard such information as 
appropriate FA.

Export Price

    In accordance with section 772(a) of the Act, the Department 
calculated an export price (EP) on sales to the United States, because 
use of constructed export price was not warranted. We made deductions 
from the selling price to unaffiliated parties, where appropriate, for 
ocean freight, marine insurance, foreign brokerage and handling, and 
foreign inland freight. Each of these services, with one exception, was 
either provided by a NME vendor or paid for using a NME currency. Thus, 
we based the deduction for these movement charges on surrogate values. 
See the discussion regarding companies located in NME countries and the 
Department's surrogate country selection in the Normal Value section of 
this notice. The one exception concerns Shandong Huarong, which 
reported ocean freight that was provided by a market economy vendor and 
paid for using a market economy currency. The affected transactions 
accounted for a small portion of its U.S. sales. Therefore, we used the 
market economy ocean freight rate only for those sales.
    For Shandong Huarong's other sales and for the other respondents, 
we valued ocean freight using the official tariff rates published for 
hand tools by the Federal Maritime Commission. Where possible we used 
the rates for 20 and 40 foot container shipments between the ports 
reported in the respondents' Bills of Lading. If port-specific rates 
were not available, we used the regional rates calculated in the Final 
Determination of Sales at Less Than Fair Value: Brake Drums and Brake 
Rotors From the People's Republic of China (Brake Drums and Brake 
Rotors), 62 FR 9160 (February 28, 1997). We converted per container 
rates by dividing the container rate by 18 metric tons. This conversion 
was used in the previous two HFHTs reviews. We valued marine insurance 
using the average rate in effect during the period of review. This rate 
was reported in the public version of the questionnaire response placed 
on the record in Stainless Steel Wire Rod From India, 63 FR 48184 
(September 9,1998).
    For foreign brokerage and handling, we used the average of the 
rates reported in the questionnaire response in the antidumping duty 
investigation of Stainless Steel Wire Rod From India, 63 FR 48184 
(September 9, 1998). These rates were in effect between February 1997 
and January 1998.
    The sources used to value foreign inland freight are identified 
below in the Normal Value section of this notice. To account for price 
changes between the time period that the freight, brokerage, and 
insurance rates were in effect and the period of review (POR), we 
inflated the rates using the wholesale price indices (WPI) for India as 
published in the International Monetary Fund's (IMF) publication, 
International Financial Statistics. For further discussion of the 
surrogate values used in these reviews see the File Memorandum From the 
Team, Surrogate Values Used for the Preliminary Results of the Seventh 
Administrative Reviews of Certain Heavy Forged Hand Tools From the 
People's Republic of China (``Surrogate Value Memorandum''), (January 
29, 1999), which is on file in the CRU--Public File.

Normal Value

    For companies located 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, third-country prices, or constructed value, in accordance with 
section 773(a) of the Act. Section 351.408 of the Department's 
regulations sets forth the Department's methodology for calculating the 
NV of merchandise from NME countries.
    In every case conducted by the Department involving the PRC, the 
PRC has been treated as an NME country. Since none of the parties to 
these proceedings contested such treatment in these reviews, we 
calculated NV in accordance with section 773(c) of the Act and 
Sec. 351.408 of the Department's regulations.
    In accordance with section 773(c)(3) of the Act, the FOP utilized 
in producing HFHTs include, but are not limited to--(A) hours of labor 
required, (B) quantities of raw materials employed, (C) amounts of 
energy and other utilities consumed, and (D) representative capital 
cost, including depreciation. In accordance with section 773(c)(4) of 
the Act, the Department valued the FOP, to the extent possible, using 
the cost of the FOP in a market economy that is--(A) at a level of 
economic development comparable to the PRC, and (B) a significant 
producer of comparable merchandise. We determined that India is 
comparable to the PRC in terms of per capita gross national product, 
the growth rate in per capita income, and the national distribution of 
labor. Furthermore, India is a significant producer of comparable 
merchandise. For a further discussion of the Department's selection of 
India as the surrogate country, see the Memorandum From Jeff May, 
Director, Office of Policy, to Holly Kuga, Senior Office Director, AD/
CVD Enforcement Group II, dated June 23, 1998, ``Certain Heavy Forged 
Hand Tools (``Hand Tools'') from the People's Republic of China: 
Nonmarket Economy Status and Surrogate Country Selection'' which is on 
file in the CRU--Public File.
    In accordance with section 773(c)(1) of the Act, for purposes of 
calculating NV, we valued PRC FOP based on data for the POR. Surrogate 
values that were in effect during periods other than the POR were 
inflated or deflated, as appropriate, to account for price changes 
between the effective period and the POR. We calculated the inflation 
or deflation adjustments for all factor values, except labor, using the 
wholesale price indices for India that were reported in the IMF's 
publication, International Financial Statistics. We valued PRC FOP as 
follows:
    (1) We valued direct materials used to produce HFHTs (i.e., steel, 
steel scrap, wood, paint, paint thinner (dilution), and anti-rust oil) 
and the steel scrap

[[Page 5774]]

generated from the production of HFHT's using the rupee per metric ton, 
per kilogram, or per cubic meter value of India imports between 
February 1997 through September 1997. We used imports into India 
between April 1995 and March 1996 to value steel bars used to produce 
HFHTs because the HTS subheading that we selected for the steel 
surrogate value, HTS 7214.50, does not appear in the Indian import 
statistics for February 1997 and September 1997.
    In the prior reviews of HFHTs, the Department used the HTS category 
7214.50 as a surrogate value for steel. This category was for ``Forged 
Bars and Rods Containing 0.25% or Greater But Less Than 0.6% Carbon.'' 
The use of this category was based on the fact that it was the closest 
HTS category known to the Department in terms of carbon content and 
other input material. However, this HTS category is for steel purchased 
in finished rod and bars. In our search for the best possible surrogate 
value in this review we uncovered an HTS category for unfinished steel, 
7207.20.09. We found that this steel has the same carbon content as 
7214.50, but is unfinished. For further discussion regarding the HTS 
category used to value steel, see Decision Memorandum to Holly A. Kuga, 
Senior Director, Enforcement Group II, dated January 29, 1999, ``Issues 
Concerning Surrogate Values for Steel: 1997/1998 Antidumping Duty 
Administrative Review of Certain Heavy Forged Hand Tools From the 
People's Republic of China,'' which is on file in the CRU. We used 
import statistics in our valuations that were published in the Monthly 
Statistics of the Foreign Trade of India, Volume II--Imports (Indian 
Import Statistics).
    (2) We valued labor based on a regression-based wage rate, in 
accordance with 19 CFR 351.408(c)(3).
    (3) We derived ratios for factory overhead, selling, general and 
administrative (SG&A) expenses, and profit using information reported 
for 1995-1996 in the Reserve Bank of India Bulletin. From this 
information, we were able to calculate factory overhead as a percentage 
of direct material, labor, and energy expenses; SG&A as a percentage of 
the total cost of manufacturing; and profit as a percentage of the sum 
of the total cost of manufacturing and SG&A.
    (4) We valued packing materials, including cartons, pallets, anti-
rust paper, anti-damp paper, plastic straps, plastic bags, iron buttons 
and knots, and iron wire, using the rupee per metric ton, per kilogram, 
or per cubic meter value of imports into India between February 1997 
and September 1997. The import values were sourced from the Monthly 
Statistics of the Foreign Trade of India, Volume II--Imports (Indian 
Import Statistics). We used the Indian Import data for February 1995 to 
value pallets because the HTS subheading that we selected for pallets, 
HTS 4415.20, was not available in kilograms.
    (5) We valued coal using the price of steam coal in India in 1996 
as reported in the International Atomic Energy Agency's publication, 
Energy Prices and Taxes, Second Quarter 1998 (EPT).
    (6) We valued electricity using the 1995 Indian electricity prices 
for industrial use as reported in the EPT.
    (7) We used the following sources to value truck and rail freight 
services incurred to transport direct materials, packing materials, and 
coal from the suppliers of the inputs to the factories producing HFHTs:
    Truck Freight--If a respondent used its own trucks to transport 
material or subject merchandise, we valued freight services using the 
average cost of operating a truck, which we calculated from information 
published in the Times of India on April 24, 1994. If a respondent did 
not use its own trucks or the respondent did not state that it used its 
own trucks, we valued freight services using the rates reported in an 
August 1993 cable from the U.S. Embassy in India to the Department. See 
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).
    Rail Freight--We valued rail freight services using the April 1, 
1995 rates published by the Indian Railway Conference Association. 
These rates were recently used in Brake Drums and Brake Rotors. For 
further discussion of the surrogate values used in these reviews, see 
the Surrogate Value Memorandum, January 29, 1999, which is on file in 
the CRU--Public File.

Preliminary Results of the Reviews

    As a result of our reviews, we preliminarily determine that the 
following margins exist for the period February 1, 1997 through January 
31, 1998:

------------------------------------------------------------------------
      Manufacturer/exporter           Time period      Margin (percent)
------------------------------------------------------------------------
Shandong Huarong General Group
 Corporation, Bars/Wedges.......      2/1/97-1/31/98                3.48
Liaoning Machinery Import &
 Export Corporation, Bars/Wedges      2/1/97-1/31/98                0.00
Tianjin Machinery Import &
 Export Corporation:
    Hammers/Sledges.............      2/1/97-1/31/98                2.78
    Picks/Mattocks..............      2/1/97-1/31/98                0.00
PRC-wide rates:
    Axes/Adzes..................      2/1/97-1/31/98               21.93
    Bars/Wedges.................      2/1/97-1/31/98               66.32
    Hammers/Sledges.............      2/1/97-1/31/98               44.41
    Picks/Mattocks..............      2/1/97-1/31/98               108.2
------------------------------------------------------------------------

    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 30 days of 
publication of this notice in accordance with 19 CFR 351.310(c). Any 
hearing, if requested, will be held 37 days after the publication of 
this notice, or the first workday thereafter. Interested parties may 
submit written comments (case briefs) within 30 days of the date of 
publication of this notice in accordance with 19 CFR 351.309(c)(2). 
Rebuttal comments (rebuttal briefs), which must be limited to issues 
raised in the case briefs, may be filed not later than 35 days after 
the date of publication. The Department will publish a notice of the 
final results of these administrative reviews, which will include the 
results of its analysis of issues raised by the parties, within 120 
days of publication of these preliminary results.
    The final results of these reviews shall be the basis for the 
assessment of antidumping duties on entries of merchandise covered by 
this review and for future deposits of estimated duties.

Duty Assessment Rates

    The Department shall determine, and the Customs Service shall 
assess,

[[Page 5775]]

antidumping duties on all appropriate entries. Pursuant to 19 CFR 
351.212(b) (1), we have calculated an importer-specific ad valorem duty 
assessment rate based on the ratio of the total amount of the dumping 
margins calculated for the examined sales to the total entered value of 
those same sales. 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. In accordance with 19 CFR 351.106 (c)(2), we will 
instruct the Customs Service to liquidate without regard to antidumping 
duties any entries for which the assessment rate is de minimis, i.e., 
less than 0.5 percent. The Department will issue appraisement 
instructions directly to the Customs Service.

Cash Deposit Requirements

    The following deposit requirements will be effective upon 
publication of the final results of these administrative reviews for 
all shipments of HFHTs from the PRC entered, or withdrawn from 
warehouse, for consumption on or after the publication date of this 
notice, as provided for by section 751(a)(1) of the Act: (1) The cash 
deposit rates for the reviewed companies named above which have 
separate rates (Shandong Huarong, LMC, and TMC) will be the rates for 
those firms established in the final results of these administrative 
reviews for the classes or kinds listed above; (2) for any previously 
reviewed PRC and non-PRC exporter with a separate rate, the cash 
deposit rate will be the company-specific rate established for the most 
recent period; (3) for all other PRC exporters, the cash deposit rates 
will be the PRC-wide rates established in the final results of these 
reviews; and (4) 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. These deposit requirements, when 
imposed, shall remain in effect until publication of the final results 
of the next administrative reviews.

Notification of Interested Parties

    This notice serves as a preliminary reminder to importers of their 
responsibility under Sec. 351.402 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.
    These administrative reviews and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 1675(a)(1) and 
1677f(i)(1)).

    Dated: January 29, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-2815 Filed 2-4-99; 8:45 am]
BILLING CODE 3510-DS-P