[Federal Register Volume 64, Number 97 (Thursday, May 20, 1999)]
[Notices]
[Pages 27506-27515]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12785]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-501]


Natural Bristle Paintbrushes and Brush Heads 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

[[Page 27507]]

of natural bristle paintbrushes and brush heads from the People's 
Republic of China.

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SUMMARY: On January 13, 1999, the Department of Commerce (the 
Department) published the preliminary results of its administrative 
review of the antidumping order on natural bristle paintbrushes and 
brush heads (paintbrushes) from the People's Republic of China (PRC). 
This review covers one exporter of the subject merchandise, Hebei 
Animal By-Products Import and Export Corporation (HACO), during the 
period February 1, 1997 through January 31, 1998.
    We gave interested parties an opportunity to comment on our 
preliminary results. After considering comments presented by both 
parties, we have not 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).

EFFECTIVE DATE: May 20, 1999.

FOR FURTHER INFORMATION CONTACT: Andrew Nulman, Laurel LaCivita, 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, 482-4236, or 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 refer to the regulations 
codified at 19 CFR part 351 (April 1998).

Background

    The Department published the preliminary results of this 
antidumping duty administrative review on January 13, 1999 (64 FR 
2192). We received comments from HACO and from the Paint Applicator 
Division of the American Brush Manufacturers Association (the 
petitioner). We also received rebuttal comments from both parties. HACO 
requested a public hearing, which was held on February 19, 1999. The 
Department has now completed this administrative review in accordance 
with section 751(a) of the Act.

Scope of Review

    Imports covered by this review are shipments of natural bristle 
paintbrushes and brush heads from the PRC. Excluded from the order are 
paintbrushes and brush heads with a blend of 40% natural bristles and 
60% synthetic filaments. The merchandise under review is currently 
classifiable under item 9603.40.40.40 of the Harmonized Tariff Schedule 
of the United States (HTSUS). Although the HTSUS subheading is provided 
for convenience and customs purposes, the Department's written 
description of the merchandise is dispositive.
    This review covers the period February 1, 1997, through January 31, 
1998.

Analysis of the Comments Received

Comment #1: Application of Adverse Facts Available to HACO

    HACO argues that the facts of the case do not support the 
Department's preliminary determination that the margin for HACO should 
be based on total adverse facts available (AFA). HACO primarily 
contends that neither HACO nor its supplier failed verification and, 
therefore, application of total facts available is not appropriate (see 
discussion below). In addition, HACO maintains that both HACO and its 
supplier did act to the best of their ability to comply with the 
Department's request for information under the circumstances, and 
therefore the application of adverse facts available is also 
inappropriate (see discussion below).
    HACO contends that the Department will use AFA only when an 
interested party is wholly uncooperative, fails to submit sufficient or 
unverifiable responses to the Department's requests, or significantly 
impedes the proceeding, citing Certain Cut-to-Length Carbon Steel Plate 
From Mexico: Final Results of Administrative Review, 64 FR 76, 82 
(January 4, 1999). HACO also cites as support Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Preserved 
Mushrooms from Chile, 63 FR 56613, 56616 (October 22, 1998) (Chilean 
Mushrooms), where HACO claims that the Department did not apply AFA 
because the respondent met the Department's five-part test to 
demonstrate that it acted to the best of its ability in that 
investigation. HACO describes the five-part test as follows: (1) 
submissions of information were made timely, (2) respondent 
substantially cooperated with the Department's information requests, 
(3) some successful verification of the response was made, (4) for 
unverifiable information, there was alternative information available 
to allow appropriate adjustments to the submitted data, and (5) the 
Department was able to make adjustments for the identified deficiencies 
and was able to use the submitted information without undue 
difficulties.
    HACO argues that, even in cases where a party may not have acted 
``to the best of its ability'' in providing information requested by 
the Department, the Department will not use AFA if the party has been 
otherwise ``cooperative,'' citing Roller Chain, Other Than Bicycle, 
from Japan: Preliminary Results and Partial Rescission of Antidumping 
Administrative Review, 63 FR 25450, 25455 (May 8, 1998).
    HACO maintains that both HACO and its supplier fully cooperated 
with the Department at every stage of the review. HACO claims that all 
of its submissions in this review and information provided at 
verification more than substantially complied with the Department's 
requests, and that HACO and its supplier fully met the five part-test 
to avoid application of AFA, and therefore that the finding of AFA in 
this review is in error. HACO claims that at verification of HACO all 
terms of sale for this review were verified, and that HACO's supplier 
reported all factor inputs and promptly provided all information 
requested by the verifiers, causing the Department to have no basis to 
resort to AFA in the final results. HACO finally contends that, in this 
review, there is substantial evidence on the record that HACO acted 
``to the best of its ability'' at verification.
    As an alternative argument, HACO claims that where the Department 
could not verify a factor input, it should consider using partial facts 
available. HACO points out that in the case of electricity, where 
HACO's supplier did not report the correct figure, the Department 
should consider using a partial facts available figure such as the 
electricity charge for a prior review or the petition. HACO claims that 
in all other situations the factor values submitted by HACO were 
reasonable.
    The petitioner agrees with the Department's preliminary 
determination that the margin for HACO should be based on AFA, due to 
HACO's failure of verification in this review. The petitioner states 
that, according to 19 U.S.C. Sec. 1677(a)(2)(D) (section 776(a)(2)(D) 
of the Act), when a respondent has failed verification, the Department 
must base the margin on the facts otherwise available, and that the 
Department is authorized to make an adverse inference if it determines 
that

[[Page 27508]]

the respondent did not act to the best of its ability in responding to 
the Department's requests for information. Id. 19 U.S.C. Sec. 1677e(c).
    The petitioner states that in this review the Department had 
determined that HACO's data could not be verified and that HACO had not 
acted to the best of its ability, and therefore that the Department was 
correct in selecting the facts otherwise available rate of 351.92%, 
HACO's own rate from a prior review as well as its current cash deposit 
rate.
    The petitioner further argues that the Department's determination 
that HACO was uncooperative, and therefore did not act to the best of 
its ability, is consistent with the Department's standard practice, as 
in Certain Welded Carbon Steel Pipes and Tubes From India: Final 
Results of Antidumping Duty Administrative Review, 63 FR 32825, 32826 
(June 16, 1998) (Steel Pipes from India), where a respondent did not 
act to the best of its ability because it failed to provide information 
at verification essential to the establishment of the accuracy of 
submitted data. The petitioner further argues that even if respondent 
provides timely comments to all prior requests for information, a 
respondent that fails verification has been determined uncooperative, 
and therefore the Department should apply AFA, as in Certain Welded 
Carbon Steel Pipes from Thailand: Final Results of Antidumping Duty 
Administrative Review, 62 FR 53808, 53820 (October 16, 1997).
    DOC Position: We agree with the petitioner. As we explained in the 
preliminary results of review, we were unable to verify substantial 
sections of the questionnaire response at the verification of HACO's 
supplier. Consequently, we found in our preliminary results that the 
discrepancies were so significant as to constitute a failure of 
verification. We also determined that HACO failed to provide the 
Department with adequate supporting documentation at verification so 
that a significant portion of its questionnaire response could be 
confirmed. (See Natural Bristle Paintbrushes and Brush Heads from the 
People's Republic of China; Preliminary Results and Partial Recission 
of Antidumping Duty Administrative Review, 64 FR 2192, 2193 (January 
13, 1999) (Preliminary Results).)
    Where a party provides information requested by the Department but 
the information cannot be verified as required by section 782(i) of the 
Act, section 776(a)(2)(D) of the Act requires the Department to use 
facts otherwise available (FA) in reaching the applicable 
determination. Therefore, in accordance with section 776(a) of the Act, 
the use of FA is appropriate for HACO. See Extruded Rubber Thread from 
Malaysia, Final Results of Antidumping Duty Administrative Review, 62 
FR 33588 (June 9, 1997).
    Section 776(b) of the Act authorizes the Department to use AFA 
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 
request for information. Because HACO failed to substantiate large 
portions of its questionnaire response, including the statutorily 
required factors of production information, such as number of labor 
hours worked and per unit quantities consumed of primary material 
inputs, we maintain our determination that HACO did not cooperate to 
the best of its ability with our requests for information. See 
Preliminary Results and the Determination of Adverse Facts Available 
Based on Verification Failure in the Administrative Review of Natural 
Bristle Paintbrushes and Brush Heads from the People's Republic of 
China (Facts Available Memorandum), dated December 30, 1998.
    We disagree with HACO's characterization of the Department's 
reasons for not applying AFA in the Chilean Mushrooms case cited above. 
In Chilean Mushrooms, the Department applied the criteria established 
in section 782(e) of the Act, under which the Department ``shall not 
decline to consider information that is submitted by an interested 
party,'' and found that the rejection of the responses in their 
entirety was inappropriate based on the facts of that proceeding. (See 
Chilean Mushrooms, 63 FR at 56617.) Section 782(e) of the Act instructs 
the Department to consider information if (1) the information is 
submitted within the established deadlines, (2) the information can be 
verified, (3) the information is not so incomplete that it cannot serve 
as a reliable basis for reaching a determination, (4) the interested 
party acted to the best of its ability in providing the required 
information, and (5) the information can be used without undue 
difficulties.
    Based on the facts of this proceeding, we disagree that HACO met 
all of the criteria established by section 782(e). Comment 5 through 
Comment 14 of this notice discuss why the information submitted by HACO 
could not be verified, and cannot be used as a reliable basis for 
calculating an antidumping duty margin. Because the information 
presented in the questionnaire responses differs so greatly from the 
information presented at verification, and because we were unable to 
establish that the data presented at verification were for the relevant 
sizes of brushes, neither the questionnaire responses nor the data 
presented at verification form a reliable basis for calculating a 
dumping margin. Furthermore, since HACO's supplier's responses did not 
reflect the information contained in the books and records of the 
company, it cannot be construed that HACO's supplier acted to the best 
of its ability to provide the requested information to the Department. 
(See Steel Pipes from India, 62 FR 32826.)
    We have carefully considered HACO's submitted information in the 
current review, but could not use it to calculate a dumping margin 
since we could not tie the submitted information to the records 
provided at verification. Therefore, pursuant to section 776(b) of the 
Act, we are using AFA to determine HACO's margin for these final 
results.
    With regard to HACO's argument to use partial facts available, we 
disagree because HACO's supplier failed to substantiate any of its 
factors of production. These discrepancies, detailed in the 
Department's Memorandum from Mike Strollo and Laurel LaCivita to Edward 
Yang: Verification of Factors of Production for HACO's Supplier in the 
Antidumping Administrative Review of Natural Bristle Paintbrushes and 
Brush Heads from the People's Republic of China (PRC) (Supplier's 
Verification Report), were so significant as to constitute a failure of 
verification. Therefore, for the reasons stated above, we are 
continuing to apply AFA in these final results of review.

Comment #2: Selection of Adverse Facts Available Margin

    The petitioner contends that the margin of 351.92% was the only 
reasonable selection available to the Department under the 
circumstances, because it was based on actual data HACO submitted in 
the 1994-1995 administrative review of this order; see Natural Bristle 
Paintbrushes from the People's Republic of China: Final Results of 
Antidumping Administrative Review, 61 FR 52917 (October 9, 1996). The 
petitioner also argues that, because this is HACO's current cash 
deposit rate, it cannot even be characterized as adverse to HACO. The 
petitioner cites 19 U.S.C. Sec. 1677e(c) (section 776(c) of the Act), 
and claims that, because this rate is HACO's own margin it is probative 
and can be corroborated, and any margin lower than 351.92% would 
effectively reward HACO for failure of verification.

[[Page 27509]]

    DOC Position: We agree with the petitioner. Under section 776(b) of 
the Act, AFA 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 (4) any other 
information placed on the record. To corroborate secondary information 
(items (1)-(3)), the Department will, to the extent practicable, 
examine the reliability and relevance of the information to be used. 
For a discussion on how the Department corroborated the secondary 
information applied as AFA in this review, see Preliminary Results, 64 
FR 2193.
    However, unlike other types of information, such as surrogate 
values, there are no independent sources for calculated antidumping 
margins. The only source for calculated margins is an administrative 
determination. In the preliminary results, we used the highest rate 
from any prior segment of the proceeding, 351.92%, which was the rate 
calculated for HACO in the review covering the period February 1, 1994 
through January 31, 1995. (See Preliminary Results, 64 FR 2193.) 
Because this margin is based on the rate calculated for a relatively 
recent review using HACO's own price data, and because there is no 
information that this rate is not appropriate, we continue to determine 
that a margin of 351.92% is appropriate to use as AFA.

Comment #3: Sufficiency of Time Allowed for HACO to Prepare for 
Verification

    HACO claims that the Department did not allow HACO enough time to 
prepare for verification since it released the verification outline on 
Tuesday evening, September 22, 1998, while HACO's counsel was already 
in transit to China. As a result, HACO claims, its counsel did not see 
the verification outline for the first time until arriving at HACO on 
Saturday, September 26, 1998, and only then prepared for the 
Department's verification beginning on Monday, September 28, 1998.
    The petitioner notes that, although the Department issued its 
verification outline six days before verification, according to HACO's 
own account of the facts, HACO failed to obtain the outline until two 
days prior to verification. The petitioner further claims that the 
Department notified HACO seventeen days in advance of the date it 
intended to conduct verification and thus HACO could have begun 
preparation prior to receipt of the outline.
    DOC Position: We agree with the petitioner. Our standard 
verification outline was issued sufficiently in advance of verification 
to allow adequate preparation time. As the petitioner notes, HACO need 
not have waited for a standard verification outline to begin preparing 
for verification. For further details, see the Memorandum from Laurel 
LaCivita to Edward Yang: Proprietary Issues in the Final Results of 
Review,` dated May 6, 1999 (Proprietary Issues Memorandum). 
Furthermore, whenever HACO or its supplier was unprepared for a 
verification element, the verifier allowed company officials time to 
gather documentation while the verification took place. See, for 
example, the Supplier's Verification Report at pages 4 and 5. 
Therefore, HACO and its supplier were not denied the appropriate amount 
of time to prepare for verification, and cannot attribute verification 
failure to the date of issuance of the standard verification outline.

Comment #4: Sufficiency of Time Allowed for HACO to Comment on 
Verification Reports

    HACO claims that on December 31, 1998, the Department announced its 
preliminary results of review and provided copies of its verification 
reports in this review. HACO contends the Department did not allow HACO 
enough time to comment on the verification reports separately and to 
identify any errors and misstatements in them before the preliminary 
results of review were issued. As a result, HACO contends, the 
preliminary results of review were prejudiced by errors found in the 
verification report.
    DOC Position: On December 30, 1998 the Department released the 
Supplier's Verification Report, the Memorandum from Mike Strollo and 
Laurel LaCivita to Edward Yang: Verification of Sales for Hebei Animal 
By-Products Import and Export Corporation (HACO) in the Antidumping 
Administrative Review of Natural Bristle Paintbrushes and Brush Heads 
from the People's Republic of China (PRC); (HACO's Verification 
Report)) and its Facts Available Memorandum, dated December 30, 1998. 
On January 13, 1999, the Department published in the Federal Register 
its preliminary results of review. Upon publication of the preliminary 
results of review, interested parties were invited to comment on any 
aspect of the preliminary decision, including material contained in our 
verification reports or any other matter on the record of this review. 
We also held a public hearing on February 19, 1999, during which any 
interested party could voice comments regarding this review. The 
release of the verification reports and subsequent publication of the 
preliminary results of review and invitation for comments is a process 
intended to give interested parties the opportunity to identify errors 
made in this review. By submitting comments and participating in the 
hearing held at its request, HACO availed itself of the opportunity to 
identify any errors or misstatements in the verification reports or 
preliminary results prior to publication of these final results of 
review. HACO's specific comments with respect to the verification are 
addressed below. Therefore, this review has not been prejudiced by 
virtue of the date on which the reports were released.

Comment #5: Whether Failure of Verification Occurred at HACO

    HACO contends that, although the Department treats its verification 
as a single visit, it in fact conducted two separate verifications, one 
at HACO and one at HACO's supplier.
    HACO contends that evidence on the record in this review does not 
support the Department's conclusion that failure of verification 
occurred, with either HACO or HACO's supplier. HACO further argues that 
neither HACO nor its supplier at any time refused to undergo 
verification or failed to comply with the instructions or requests of 
the Department.
    HACO claims that the verification of HACO was successful. HACO 
states that although it provided complete information throughout the 
verification to support its prior submissions, the Department's 
verification at HACO went far beyond the requirements of verifying the 
factual information supporting HACO's antidumping submissions. HACO 
claims that the primary focus of the verifiers was to examine the 
separate rates issue, to determine the number of shipments occurring 
during the POR, and to determine whether there were Customs marking 
violations. HACO claims that despite this focus, the verification 
conducted at HACO did not produce any evidence that would favor the 
petitioner's claims. HACO also states that the verification provided 
evidence that HACO did not engage in any Customs fraud.
    HACO further notes that during verification at HACO there was 
confusion over how sales of subject merchandise were transported 
between HACO and the United States, and points to documentation already 
on the record of this review in support of its position on these 
issues.
    DOC Position: We agree that we conducted two separate 
verifications, one at HACO and one at HACO's

[[Page 27510]]

supplier. However, the cover letter to our standard questionnaire 
instructed HACO to send the factors of production questionnaire, 
Section D, to the companies responsible for the manufacture of the 
subject merchandise. Therefore, HACO was made aware of its 
responsibility to coordinate the responses of its suppliers.
    We agree that the verification at HACO itself was successful, 
despite the minor discrepancies noted in HACO's Verification Report 
between the information provided in HACO's questionnaire response and 
provided at verification. However, we disagree that HACO's verification 
went far beyond the requirements of substantiating the factual 
information provided in its antidumping submissions. The Department 
conducted verification using standard techniques and procedures which 
were set forth in the verification outline.
    We disagree with HACO's characterization of the Department's 
priorities during the verification. The primary focus of the verifiers 
during HACO's verification was to complete the tasks enumerated in the 
verification outline. These tasks include an examination of evidence of 
whether there is a de jure and de facto absence of PRC government 
control over HACO's export activities.
    With respect to the Customs marking issue, HACO placed information 
in Exhibit 6 of its August 27, 1998 submission which justifiably led to 
a number of questions on the part of the petitioners concerning the 
circumstances surrounding the sales under review. Consequently, these 
documents, and others, which are normally included in the 
correspondence file and examined as a standard part of the verification 
of completeness and volume and value, were examined at verification.
    Finally, as the HACO's Verification Report shows, HACO corrected 
the terms of sale reported in its questionnaire response prior to 
verification, so that its questionnaire response was in conformity to 
the evidence concerning the transportation of the subject merchandise 
from HACO to the United States. Consequently, we disagree with HACO's 
contention that any confusion whatsoever existed with respect to the 
matter. Furthermore, this issue was not among the problematic 
``findings'' of the verification. (See HACO's Verification Report at 
page 2.)

Comment #6: Verification Failure at HACO's Supplier

    HACO states that following the successful verification of HACO, the 
Department erroneously concluded that HACO's supplier failed to 
cooperate to the best of its ability because of the supplier's failed 
verification.
    HACO disagrees that discrepancies between the questionnaire 
response and information obtained at the verification of HACO's 
supplier were significant enough as to constitute a failure of 
verification. The sections of the questionnaire response which the 
Department reported it was unable to verify at HACO's supplier, HACO 
says, refer to factor inputs which were not at issue prior to 
verification. HACO claims that the factor values reported in 
questionnaire responses were consistent with the supplier company's 
records, but that the Department refused to accept these records, 
instead requiring that production factors be tied to a financial 
statement which HACO's supplier does not maintain in the regular course 
of business, and therefore could not provide. Thus, HACO claims, the 
Department acted inconsistently with the law at 19 CFR 353.307(d) which 
requires the person being verified to provide the information it used 
to prepare the data submitted in order to verify the accuracy and 
completeness of the submitted factual information.
    HACO cites five such discrepancies regarding factor inputs, as 
enumerated in the Facts Available Memorandum, including (1) the 
quantity and value of the supplier's sales and production, (2) product 
codes and sizes, (3) the reported weights of the inputs vs. the 
verified weights, (4) the labor hours, and (5) energy consumption. HACO 
points out that a financial statement would not serve the purpose of 
verifying factor inputs because, while it may help determine the number 
of nails or bristles purchased, it would not reveal their weights or 
how much were used in each manufactured brush. HACO points out that, as 
a small factory, HACO's supplier did not maintain a detailed financial 
statement, and the Department should consider verification in that 
context. Thus, HACO states, the Department's requirement that HACO 
provide a financial statement which could trace factor inputs was both 
incorrect and inconsistent with the law.
    DOC Position: We disagree with HACO that its supplier was able to 
substantiate its questionnaire response. We note that at no time during 
the verification or in the preliminary results of review, did the 
Department attribute the verification failure of HACO's supplier to the 
quality of its financial statements. For the reasons set forth in the 
Supplier's Verification Report, Adverse Facts Available Memorandum, and 
Preliminary Results, and reiterated below, HACO's supplier did not 
successfully substantiate its questionnaire response. At verification, 
the Department was not able to confirm the quantity of paintbrushes 
produced by the factory. We could not confirm which merchandise was 
actually shipped to the United States, nor confirm that the 
paintbrushes presented for the confirmation of factor values were the 
same as the merchandise shipped to the United States. We found that the 
weights of the paintbrush components examined at verification differed 
significantly from the reported weights. We noted that HACO's supplier 
could not confirm the reported number of labor hours required to 
produce the subject merchandise. We noted that the energy consumption 
rate could not be confirmed despite the fact that HACO accurately 
reported its total energy consumption, because the Department could not 
confirm the total quantity of brushes produced. (See Supplier's 
Verification Report at pages 1, 2 and 8.) In sum, HACO's supplier was 
not able to substantiate a single per-unit factor quantity that it 
provided to the Department in its questionnaire response. Therefore, we 
considered the verification of HACO's supplier to be a failed 
verification.

Comment #7: Verification Procedures

    HACO claims that the verifiers were not familiar with the subject 
merchandise and had unreasonable expectations regarding records kept in 
the ordinary course of business at HACO. HACO further argues that the 
Department's conclusion of AFA is unreasonable in that it imposes a 
requirement that HACO maintain records, in this case financial 
statements, to satisfy the verification methodology.
    The petitioner claims that this review was conducted in accordance 
with the Department's standard practice, and that when the verifiers 
encountered problems verifying factor data they gave HACO numerous 
opportunities to verify data by alternative means.
    DOC Position: The Department conducted HACO's verification using 
standard verification procedures and following the agenda provided in 
advance in the verification outline. See Supplier's Verification 
Report. HACO has failed to identify any verification procedure the 
Department used that was flawed, out of the ordinary, or inconsistent 
with the verification outline. HACO has failed to identify in what way 
the Department failed to understand the subject merchandise, which is a 
common household item, and what impact this alleged

[[Page 27511]]

misunderstanding had on the verification.
    HACO has failed to identify in what way the Department had 
unreasonable expectations concerning the records its supplier may have 
kept. The Department has never questioned the reasonableness of the 
records kept by HACO's supplier, but, rather, it has noted that those 
records either do not or cannot substantiate the information provided 
in the questionnaire response. (See Supplier's Verification Report, 
Facts Available Memorandum.)
    As the Department has previously stated in this notice, there is no 
evidence on the record that suggests that the Department required 
HACO's supplier to maintain a detailed financial statement or to use 
that financial statement to trace factor inputs. Therefore, the 
Department maintains that HACO's supplier did not fail verification as 
a result of flawed verification procedures.

Comment #8: Verification of Total Production Quantities

    HACO claims that the Department examined production records at 
verification and confirmed that the number of brushes produced was 
similar to the figure reported in the questionnaire response. HACO 
further argues that although it provided its entire 1997 production 
records at verification and even though the reported total quantity of 
production at HACO's supplier was verified in terms of total quantity 
of orders produced, the Department rejected this data because the 
factory was unable to provide a reflection of this production data in a 
financial statement. HACO contends that the Department's conclusion 
that HACO's supplier was unable to demonstrate the total quantity of 
sales in a financial statement is unreasonable because it required 
HACO's supplier to provide documentation not produced in the ordinary 
course of business.
    HACO disagrees that its supplier's inventory records were ``not 
kept with sufficient accuracy to determine quantity sold since finished 
goods usually were not entered into inventory,'' because, it contends, 
the record shows that HACO's supplier produces to order. HACO points 
out that at HACO's supplier, the verifiers found no discrepancies 
between production orders and the quantities written on work orders, 
and claims that the production orders verified at HACO's supplier were 
consistent with the questionnaire responses.
    HACO also claims that the Department could not identify production 
orders for the sales covered by this review and that it reviewed 
evidence at verification as to why this was not possible. HACO further 
contends that the production records that it presented to the 
Department for its demonstration of the per-unit calculation for labor 
represent the production records for the merchandise that was produced, 
since it is the only time in 1997 when both two- and four-inch brushes 
were produced.
    Finally, HACO claims that the verifiers concluded that, since 
HACO's supplier did not have production records for the actual brushes 
that were shipped, the information provided at verification did not 
confirm the information reported in the questionnaire response. HACO 
claims that its supplier reported, and the Department verified, the 
total quantity of paintbrush production during the POR, including the 
records for October 1997, the only month when both two-and four-inch 
brushes, were produced.
    The petitioner notes an apparent inconsistency in HACO's comments, 
calling into question HACO's claim that the factory produces only to 
order and does not sell from stock.
    DOC Position: We disagree with HACO that the best measure of the 
total quantity of production at HACO's supplier is the total number of 
paintbrushes reflected in the completed production orders during the 
POR. Page 5 of the Supplier's Verification Report notes that HACO's 
supplier did not have production orders for all of its purchase orders, 
and that the production orders for the merchandise which was shipped to 
the United States were specifically missing. The Supplier's 
Verification Report delineates the Department's attempt to tie the 
total number of paintbrushes reflected in the completed production 
orders to some other independent record kept in the company, such as 
the total quantity of paintbrushes entered into finished goods 
inventory, shipped, or sold during the POR. As documented in the 
Supplier's Verification Report, HACO's supplier did not have adequate 
inventory records to show the quantity of brushes entered into finished 
goods inventory, or the quantity of brushes shipped during the POR. In 
addition, HACO's supplier did not have picking tickets, shipping 
vouchers, packing lists or truck manifests that could confirm the 
number of brushes shipped during the POR. See Supplier's Verification 
Report at pages 4 and 5. The report further details the Department's 
efforts to use the daily production reports to confirm the number of 
brushes completed during the POR, and to trace from the purchase order 
to the production order, and from the production order back to the 
purchase order. None of these records were kept in sufficient detail, 
accuracy or completeness to allow us to confirm the total number of 
paintbrushes produced. As a result, the Department concluded that it 
could not verify the total number of paintbrushes produced by HACO's 
supplier during the POR.
    The Department did not require HACO's supplier to produce or to 
maintain any financial documents that it does not keep in the ordinary 
course of business. HACO's supplier placed a copy of its financial 
statements for both calendar year 1996 and calendar year 1997 in 
exhibit 4 of its July 20, 1998 supplemental questionnaire response. 
HACO's supplier presented original copies of these (unaudited) 
financial statements upon request at verification. Consequently, HACO's 
protests that the financial statements had been prepared only one time 
in its history contradict record evidence in this review.

Comment #9: Verification of Product Codes and Sizes

    HACO disagrees that the verifiers were unable to verify product 
codes and sizes, and claims that although the brushes sold to the 
United States were distinguishable on the sales documentation between 
HACO and its supplier by both product code number and size, the 
verifiers erroneously confused the product codes that HACO used with 
its customer with the product codes used by its supplier. HACO further 
claims that because the brushes are sold not by code number, but by 
dimensions (i.e., size), the confusion resulting from the verifiers' 
lack of familiarity with the product codes cannot be the basis for 
HACO's supplier failing verification.
    DOC Position: We disagree that the product codes were a source of 
confusion resulting in the Department's inability to confirm which 
merchandise was actually shipped to the United States. All of the sales 
documentation presented at HACO confirmed the information reported in 
the questionnaire response concerning the product codes and the 
composition of the sales covered by this review. See Supplier's 
Verification Report at page 5. However, HACO's supplier, the 
manufacturer of the merchandise, claimed at verification that the 
merchandise shipped to the United States differed slightly from the 
merchandise that was reported in HACO's May 13, 1998 submission. HACO's 
supplier provided the codes of the brushes that were shipped and those 
that were originally ordered. Although

[[Page 27512]]

these were different, HACO's supplier claimed that the brushes were of 
similar product models and were somewhat interchangeable. (See 
Supplier's Verification Report at page 5.) We noted in our report that 
we could not substantiate the company's statement because no samples of 
the brushes shipped to the United States were on hand to compare to the 
samples given to the Department for the purpose of weighing. We noted 
that HACO's supplier had no existing product code list to which we 
could compare descriptions of the product codes noted on the invoices 
of the reported shipments with the product codes that HACO's supplier 
claimed it had sold to HACO. Finally, we note that HACO's explanation 
that the difference in product codes was due to the fact that HACO used 
different product codes with its customer and its supplier is not 
substantiated by record evidence. Therefore, for these final results of 
review, we maintain that the Department cannot ascertain the product 
codes and sizes of the merchandise that HACO shipped to the United 
States. (See Proprietary Issues Memorandum for additional discussion.)

Comment #10: Verification of Factor Input Values

    HACO disagrees that the reported weights of brushes or individual 
component factors were unable to be confirmed at verification, claiming 
that, with the exception of some variance, the actual weights recorded 
at verification generally confirmed the submission data. HACO also 
disagrees with the verifiers' claim that problems in confirming these 
weights at verification were due to the absence of ongoing production, 
since the record shows production of brushes at the factory. HACO 
further argues that the record indicates verifiers did not ask to check 
this production. Had the verifiers checked the standard costs of 
brushes in assembly during verification, HACO claims, this would have 
corroborated the standard cost methodology.
    DOC Position: There is no evidence on the record that HACO's 
supplier uses a standard cost system for paintbrushes produced in the 
factory. Rather, at HACO's supplier, ``a computer accounting program 
produces worksheets to show costs for each order,'' which indicates 
that HACO's supplier uses a job order cost accounting system rather 
than a standard cost system for its own purposes. See Supplier's 
Verification Report at 3.
    HACO's supplier provided a cost sheet at verification (verification 
exhibit 23), but this was worked out specifically for the shipments 
covered by this review in preparation for the verification. This 
worksheet does not constitute a standard cost for this product, nor 
does it indicate that HACO's supplier has any other standard cost 
system in place.
    The Supplier's Verification Report demonstrates that there is a 
substantial difference between the reported weight of each input and 
the weight found at verification. The verifiers could not confirm 
whether the single two-inch and four-inch brushes presented at 
verification were identical to the ones that were shipped. See 
Supplier's Verification Report at 5. As noted in the Supplier's 
Verification Report at page 7, because HACO's supplier provided only 
one sample each of a two-inch and four-inch brush, and two samples of 
each of the component parts found in a two-inch and four-inch brush, 
the Department was precluded from using a sound methodological approach 
in determining the actual weight of the factor inputs. Nevertheless, 
the Department weighed the brushes and components presented at 
verification and determined that they were not the brushes or component 
parts that were used to prepare the questionnaire response.
    HACO's argument that the standard costs of brushes could be checked 
during the assembly and would have corroborated the standard cost 
methodology of HACO's supplier contradicts the record. As we noted 
above, there is no evidence on the record to suggest that HACO's 
supplier used a standard cost system to determine its cost of 
production. Furthermore, the evidence on the record indicates that the 
subject merchandise was not in production during the verification. 
Consequently, an examination of any records of the brushes in assembly 
during the verification would not substantiate the information 
presented in the questionnaire response.

Comment #11: Verification of Material Factor Input Values

    HACO states that although the physical dimensions of the subject 
merchandise were shown on the invoices and purchase orders at issue, 
the verifiers did not measure the physical dimensions of any sample 
inputs that they weighed. Thus, HACO argues, the record does not 
indicate how great the differences were between reported and sample 
inputs. HACO further states that the weights of the sample inputs 
varied, and that the record does not indicate that the verifiers tested 
the accuracy of the scale.
    HACO notes the following problems and discrepancies in the 
verification of each of the factor inputs below: (a) Brushes: HACO 
notes that the verifiers weighed two sample brushes, and the difference 
between reported and sample brush weights was negligible; HACO states 
that the reported weights were greater than the sample weights, 
indicating HACO did not underreport the weight of the brushes; (b) 
Bristles: HACO states that the verifiers weighed the bristles but did 
not measure the bristles for length, and states that the bristle 
weights varied each time they were weighed, calling into question the 
accuracy of the scale; (c) Ferrule: HACO states that the ferrule is the 
most important sample weight because HACO's supplier produced it, 
making it the only material factor over which it had control. HACO 
further states that the weights taken of the ferrule were consistent, 
and that the sample weights were less than the reported weights. HACO 
claims that ferrule weights suffered from the same errors as those for 
bristles, indicating that the scale was not precise; (d) Handles: HACO 
claims that the verifiers never measured the physical dimensions of the 
handles, and that the handle weights recorded at verification suffer 
from the same problems as the other inputs; (e) Nails: HACO submits 
that nails should be disregarded because the verifiers failed to 
measure them and failed to note that different brush sizes use 
different size nails. HACO further submits that the substantial 
differences between reported and sample weights render the weighed 
nails incomparable to those used on the subject merchandise; (f) Epoxy: 
HACO states that the verifiers did not attempt to weigh the per-unit 
amount of epoxy consumed, and that the amount of epoxy used on a brush 
would be difficult to determine by weighing. HACO notes that the 
purchase and consumption records of epoxy were available to the 
verifiers; (g) Weighing: HACO claims that discrepancies in the weights 
indicate a flawed verification methodology. HACO disagrees with the 
statement in the Supplier's Verification Report that the scale was 
accurate to a gram, stating that the scale was calibrated in grams, but 
not accurate or tested to determine accuracy. HACO claims that factory 
officials offered to provide a more accurate scale but the verifiers 
did not accept the offer. HACO also submits that variations between 
sample and reported weights were small and that weights varied 
depending on

[[Page 27513]]

an item's location on the scale. HACO further states that the 
Department's worksheet from the actual weighing was omitted from the 
record without explanation.
    The petitioner comments that any deficiencies in either the 
paintbrush samples or the scale provided by HACO to weigh inputs at 
verification were within HACO's power to control. The petitioner states 
that the Department was precluded from using a sound methodological 
approach because it was unable to verify HACO's factors of production 
data, citing 19 U.S.C. Sec. 1677m(i) (section 782(i) of the Act) where 
the statute precludes the Department from using data that cannot be 
verified, and Extruded Rubber Thread From Malaysia, Final Results of 
Antidumping Administrative Review 63 FR 33588, 33589 (June 20, 1997) 
(Rubber Thread) where the Department stated that `` using [erroneous 
and unverified] information would require the Department to use 
information that it knows is incorrect, unverified, or both.'' Thus, 
the petitioner concludes, the record demonstrates that the Department 
conducted verification in accordance with standard procedures and 
treated HACO fairly.
    DOC Position: HACO's claim that the Department did not measure the 
actual physical dimensions of the brushes presented at verification is 
true but irrelevant to the success of the verification, since the 
factor values for all components of the paintbrushes were reported in 
kilograms. If, for example, the brushes had identical dimensions, but 
different weights, based on the use of harder or softer wood in the 
handle, HACO's supplier would still fail the verification. HACO was 
free to ask the Department to measure the physical dimension of the 
brushes at verification, if it thought such a measurement might be 
relevant, but it did not do so.
    The Department used HACO's supplier's scale at the verification. It 
was a balance type of scale, used for objects which weigh less than one 
kilogram and accurate to the nearest tenth of a gram. The Department 
had no reason to question the accuracy of the scale and no ability to 
calibrate it if its measurements were inaccurate. Furthermore, there is 
no evidence on the record to support HACO's claim that its supplier 
offered to provide a more accurate scale during the verification.
    With respect to the problems and discrepancies outlined above, we 
note the following: (a) Brushes: HACO failed to demonstrate that the 
brushes presented at verification were the same product model as the 
brushes that were shipped to the United States. In addition, since the 
weight of these brushes differed significantly from the weight reported 
in the questionnaire response, HACO failed to demonstrate that the 
brushes presented at verification were the same ones that were used to 
prepare the questionnaire response. If there were only one sample brush 
of the merchandise shipped to the United States, it should weigh just 
as much at verification as it did when the response was prepared. 
Contrary to HACO's claims, the percentage difference in the weights 
reported in the questionnaire response and found at verification are 
significant and call into question the integrity of the entire 
questionnaire response, regardless of whether the weights measured at 
verification were higher or lower than the ones reported in the 
questionnaire response; (b) Bristles: The Department did not measure 
the length of the bristles presented to the verifiers during 
verification since bristle length was not reported to the Department 
prior to verification, or relevant to verify the bristle weight 
reported. All factors of production, including the material factors for 
brush bristles, were reported in kilograms in the questionnaire 
response. Therefore, the Department did not have any reason to measure 
bristle length at verification. The Department weighed the sample 
bristles provided by HACO's supplier at verification. If these were the 
incorrect type of bristles, they were nevertheless presented to the 
Department as the same bristles that were used to make the merchandise 
shipped to the United States and for preparation of the questionnaire 
response. There is no evidence on the record to suggest that the 
bristles were weighed more than one time. Finally, the difference 
between the figures found at verification and those reported in the 
questionnaire response was significant and further called into question 
the integrity of the questionnaire response; (c) Ferrule: Since 
ferrules are made by cutting long strips of metal into ten or more 
shorter widths by manually pushing the strips through a guillotine-like 
press, they are subject to large variations in size and weight from one 
piece to another. Consequently, it was up to HACO's supplier to have 
sufficient ferrules on hand to determine an average weight, or to 
otherwise demonstrate that the figures reported in the questionnaire 
response were accurate. At verification, we found a significant 
difference between the figures reported in the response and the weights 
of the ferrules measured at verification. This difference calls into 
question the integrity of the preparation of the questionnaire 
response, so that it is immaterial whether the weight reported in the 
questionnaire response is higher or lower than the weight found at 
verification; (d) Handles: Whether the Department measured the physical 
dimensions of the handles is irrelevant to this case. At verification, 
the Department examined HACO's inventory room and found a wide 
variation in the type of wood that is used in producing paintbrushes. 
Two brushes with the same dimensions could have significantly different 
weights, depending on whether one used a heavy-weight or light-weight 
wood. HACO failed to present the Department with the production orders 
for the merchandise under review, or to otherwise provide the technical 
specifications of the merchandise that was shipped to the United 
States. Consequently, we cannot know whether the handles presented to 
us at verification were the same as the ones that were shipped to the 
United States or which were used to prepare the questionnaire response; 
(e) Nails: We disagree that we failed to measure the nails and failed 
to note that different brushes use different size nails. We made 
separate measurement of the nails used to produce two-inch and four-
inch brushes. The results are recorded in the Supplier's Verification 
Report. The difference between the reported figures and the figures 
found at verification is so great as to call into question whether the 
correct nails were measured. However, since we have no production 
orders telling the factory exactly which materials to use in the 
production of the merchandise that was shipped to the United States, we 
cannot further ascertain which nails should have been measured. 
Consequently, we weighed the nails that were presented to us at 
verification as representing those that were used in the production of 
the subject merchandise. That these weights could be so significantly 
different from what was reported further casts doubt on the methods 
that were used to prepare the questionnaire response; (f) Epoxy: Epoxy 
cannot be segregated from the brush to which it adheres for weighing 
purposes. Thus, the only way to verify per-unit epoxy consumption is to 
verify total epoxy consumed per brush type, and divide that figure by 
the total quantity of brushes of that type produced. HACO's supplier 
did not have the appropriate data available with which to support the 
per-unit figure reported in the questionnaire response. The Department 
was unable to verify the total number of brushes produced by the 
factory, and HACO's supplier did

[[Page 27514]]

not have a further breakdown of its brush production by size or product 
model. Therefore, even if we had reasonable figures for HACO's 
supplier's total factory-wide epoxy glue consumption, we would have no 
denominator with which to calculate a per-brush consumption rate. 
However, HACO's supplier did not report its total factory-wide epoxy 
glue consumption prior to verification and there is no evidence to 
suggest that such figures were presented at verification; (g) Weighing: 
HACO's supplier provided the scale that was used to weigh the 
paintbrushes and components at verification, and neither HACO officials 
nor officials from its supplier raised any concerns about the scale. 
HACO's claim, in its case brief, that the verifiers were offered ``a 
more accurate'' scale is not supported on the record.
    For the foregoing reasons, we agree with the petitioner that the 
information presented at verification could not be verified and that it 
is the Department's practice not to use information that it knows is 
incorrect, unverified, or both (See Rubber Thread). Consequently, we 
have not used HACO's information in calculating a dumping margin in 
this review.

Comment #12: The Use of ``Caps'' as the Basis of Labor Factor Reporting

    HACO states that labor figures provided in its August 27, 1998 
submission are based on what it refers to as ``caps'' because they 
apparently represent a sufficiently accurate standard cost for HACO's 
supplier's accounting and production purposes. HACO notes that its 
supplier's workers are paid on a piece-work basis, not an hourly basis. 
HACO disagrees that its supplier could not show how it had obtained the 
reported figures, because, HACO claims, its supplier reported total 
labor used for total number of brushes in calendar year 1997, and 
provided that information at verification. HACO disagrees that the 
figures presented at verification were far less than reported figures, 
and claims that data presented at verification was just over the cap 
estimate. HACO further argues that brushes are produced in cumulative 
stages and that the verifiers failed to add the provided labor inputs 
data for each stage of the production process.
    DOC Position: We disagree that what HACO refers to as ``caps'' 
constitute a sufficiently accurate basis to confirm the labor factor 
values reported in this review. HACO explained in its submission of 
August 27, 1998, that caps were ``estimates.'' No further explanation 
of how caps were determined was provided during the course of this 
review. At verification, HACO's supplier was not able to confirm any of 
the reported values for labor inputs.
    HACO's counsel attempted to duplicate the reported figures using 
HACO's supplier's daily production log for each step in the production 
process. However, since no production records were available for the 
month in which production actually occurred, HACO's supplier selected 
October 1997, the only month for which HACO's supplier had labor 
records for two- and four-inch brush production, and demonstrated how 
such per-unit labor input figures could, in theory, be derived. As page 
7 of the Supplier's Verification Report noted, the resulting figures 
differed significantly from those reported in the questionnaire 
response. In addition, the figures were not taken from the month in 
which production of the subject merchandise occurred, as evidenced by 
verification exhibit 25 and discussed in the Proprietary Issues 
Memorandum. As the report also noted, the Department tested the 
reasonableness of the labor rate provided at verification and found 
that it was not consistent with the labor rate required to produce the 
total number of paintbrushes that HACO's supplier claimed that it 
produced in its June 2, 1998 response.
    The Department disagrees that what HACO's supplier refers to as 
``caps'' constitute standard costs. Neither HACO's questionnaire 
responses information presented at verification made any reference to a 
standard cost system. HACO explained, in its verification response and 
at verification, that its supplier pays its workers on a piece-work 
basis, and all records presented to the Department were based on the 
actual number of pieces produced during a given shift. Hence, by 
definition, actual and not standard costs were used to prepare the 
questionnaire response. Furthermore, contrary to HACO's claims, the 
Department evaluated at great length and in great detail all of the 
labor data presented for each step in the production process. Since the 
figures presented at verification did not match the information 
provided in HACO's questionnaire responses, the labor factor value was 
not verified.
    Finally, HACO's proposal that the Department test the labor time 
required to produce brushes in production at the time of verification 
would not satisfy the Department's need to verify the questionnaire 
response since none of the sizes of the merchandise sold to the United 
States during the POR were under production at the time of the 
verification.

Comment #13: The Department's Acceptance of Caps

    HACO claims that the verifiers' unfamiliarity with the use of 
``caps'' as a standard cost for labor should not serve as a basis for 
failure of verification, and that the Department has accepted caps in 
the past, citing Heavy Forged Hand Tools, Finished or Unfinished, With 
or Without Handles, From the People's Republic of China; Final Results 
of Antidumping Duty Administrative Reviews 63 FR 16758 16761 (April 6, 
1998), where, HACO argues, the Department recognized that discrepancies 
between reported and actual figures are acceptable as long as the 
verified weights are reasonable.
    DOC Position: We disagree that ``caps'' have been regularly 
accepted in the past. HACO provided only one case as a reference. In 
this one case, the Department found discrepancies between the reported 
and actual figures. The Department, in that one case, found the actual 
figures to be acceptable and reasonable. In the current case, the 
Department found discrepancies between the reported figures and the 
figures presented at verification. The Department examined the 
information, considered its reasonableness, and concluded that it 
varied so greatly from the information presented in the questionnaire 
response that it could not infer or deduce how the information 
presented in the questionnaire response was derived. Consequently, the 
Department did not consider the information presented in the 
questionnaire response as verified. (See Supplier's Verification Report 
at pages 7 and 8.)

Comment #14: Verification of Energy Values

    HACO disagrees that the Department could not verify the energy 
figure provided by HACO's supplier, claiming that the electricity rate 
was reasonable and verified because the Department verified the total 
amount of brushes produced in calendar year 1997 and verified the 
amount of electricity used during that time, allowing a per unit 
calculation. HACO notes that the verifiers understood the brush 
operation to be the only process involving use of electricity other 
than factory overhead.
    DOC Position: We disagree that HACO's energy rate was verified. We 
examined all of HACO's supplier's electricity bills for the POR and 
were able to confirm the total consumption for the POR. See Supplier's 
Verification Report at 8. However, the determination of the per-unit 
rate of electricity consumption requires an accurate

[[Page 27515]]

determination of the number of brushes produced during the POR. The 
Department was unable to confirm the number of brushes produced during 
the POR; consequently, it could not confirm the accuracy of the 
reported per-unit electricity consumption figures. Therefore, this item 
was not verified. For further explanation, see Supplier's Verification 
Report at page 8 and Facts Available Memorandum.

Comment #15: Disregarding HACO's U.S. Sales as Non-Bona Fide

    The petitioner raised an alternative argument in the event that the 
Department were to reconsider its use of AFA and use HACO's data to 
calculate HACO's margin for this review, that the Department should 
disregard any U.S. sales that are not the result of bona fide arm's-
length transactions, as it did in Certain Cut-To-Length Carbon Steel 
Plate from Romania: Notice of Rescission of Antidumping Duty 
Administrative Review, 63 FR 47232 (September 4, 1998) (Romanian 
Plate). The petitioner asserts that evidence on the record of this 
review is substantially similar to that in Romanian Plate, which 
demonstrated that the sales were not commercially reasonable, and 
therefore not bona fide. As a result, the petitioner argues, the sales 
of the subject merchandise cannot be used to calculate a new cash 
deposit rate for HACO, and should therefore lead the Department to 
rescind this administrative review.
    HACO claims that the basis for determining that the transaction was 
not bona fide in Romanian Plate was that the subject merchandise was 
resold at a substantial loss, making the sale commercially 
unreasonable, and that the exporter and importer were affiliated 
parties. In the instant review, HACO contends, there is no evidence to 
show that sales were atypical or not commercially reasonable. On the 
contrary, HACO claims, the sales were made at arm's-length, and that 
the record in this review clearly demonstrates the transaction at issue 
was bona fide.
    DOC Position: We continue to find that the use of AFA is 
appropriate for these final results of review. Therefore, the 
Department did not find it necessary to consider petitioner's 
alternative argument to disregard HACO's U.S. sales for the purpose of 
this review.

Final Results of Review

    As a result of our review, we determine that the following dumping 
margin exists:

------------------------------------------------------------------------
                                                                Margin
        Manufacturer/exporter               Time period       (percent)
------------------------------------------------------------------------
Hebei Animal By-Products I/E Corp....     02/01/97-01/31/98       351.92
------------------------------------------------------------------------

    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
will issue appraisement instructions on each exporter directly to the 
Customs Service.
    Furthermore, the following deposit rates will be effective upon 
publication of this notice of final results of administrative review 
for all shipments of paintbrushes 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 HACO, which 
has a separate rate, the cash deposit rate will be 351.92 percent; (2) 
for previously-reviewed PRC and non-PRC exporters with separate rates, 
the cash deposit rate will be the company-specific rate established for 
the most recent period; (3) for all other PRC exporters, the rate will 
be the PRC country-wide rate, which is 351.92 percent; and (4) for all 
other 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 final reminder to importers of their 
responsibility under 19 CFR 351.401(f) 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.

Notification to Interested Parties

    This notice also serves as the only 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 353.34(d). Timely written notification of 
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 published in accordance 
with Sections 751(a)(1) and 777(i)(1) of the Act and Sections 351.213 
and 351.221 of the Department's Regulations.

    Dated: May 11, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-12785 Filed 5-19-99; 8:45 am]
BILLING CODE 3510-DS-P