[Federal Register Volume 64, Number 198 (Thursday, October 14, 1999)]
[Notices]
[Pages 55697-55700]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-26721]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-820]


Certain Compact Ductile Iron Waterworks Fittings and Glands From 
the People's Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review

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

SUMMARY: The Department of Commerce (``the Department'') is conducting 
an administrative review of the antidumping duty order on Certain 
Compact Ductile Iron Waterworks Fittings and Glands (``CDIW'') from the 
People's Republic of China in response to requests by the respondent, 
Beijing Metals and Minerals Import and Export Corporation, and its 
Cheng Hong Foundry (collectively known as ``BMMIEC''). The period of 
review is September 1, 1997, through August 31, 1998.
    We have preliminarily determined that U.S. sales of subject 
merchandise by BMMIEC have not been made below normal value. Since 
BMMIEC submitted full responses to the antidumping questionnaire and it 
has been established that it is sufficiently

[[Page 55698]]

independent, it is entitled to a separate rate.
    If these preliminary results are adopted in our final results of 
administrative review, we will instruct the U.S. Customs Service to 
assess no antidumping duties on entries from BMMIEC.
    Interested parties are invited to comment on these preliminary 
results.

EFFECTIVE DATE: October 14, 1999.

FOR FURTHER INFORMATION CONTACT: Lyman Armstrong, Jim Terpstra or Paige 
Rivas, AD/CVD Enforcement Group II, Office IV, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230; telephone: 
(202) 482-3601, (202) 482-3965, or (202) 482-0651 respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act. In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
regulations at 19 CFR part 351 (1998).

Background

    The Department received a request for review from BMMIEC on 
September 30, 1997. We published a notice of initiation of this review 
on October 29, 1997 (63 FR 58010).
    On December 1, 1998, we issued an antidumping questionnaire to 
BMMIEC. The Department received responses to Section A on January 6, 
1999 and Sections C and D on February 11, 1999.
    We issued a supplemental questionnaire to BMMIEC on March 18, 1999. 
The response to this supplemental questionnaire was received on April 
12, 1999. On April 27, 1999, the Department issued a second 
supplemental questionnaire to BMMIEC. The response to the second 
supplemental questionnaire was received on May 5, 1999.
    Under section 751(a)(3)(A) of the Act, the Department may extend 
the deadline for issuing a preliminary determination in an 
administrative review if it determines that it is not practicable to 
complete the preliminary review within the statutory time limit of 245 
days. On May 13, 1999, the Department published a notice of extension 
of the time limit for the preliminary results in this case to September 
30, 1999. See CDIW From the People's Republic of China: Antidumping 
Duty Administrative Review, Time Limit, 64 FR 27960 (May 24, 1999).
    In August 1999, BMMIEC submitted publicly available information and 
comments for consideration in valuing the factors of production. On 
August 16, 1999, BMMIEC submitted revised sales and factors of 
production data.

Scope of Review

    The products subject to this antidumping duty order are (1) certain 
compact ductile iron waterworks (CDIW) fittings of 3 to 16 inches 
nominal diameter regardless of shape, including bends, tees, crosses, 
wyes, reducers, adapters, and other shapes, whether or not cement line, 
and whether or not covered with bitumen or similar substance, 
conforming to American Water Works Association/American National 
Standards Institute (AWWA/ANSI) specification C153/A21.53, and rated 
for water working pressure of 350 PSI; and (2) certain CDIW standard 
ductile iron glands for fittings in sizes 3 to 16 inches, conforming to 
AWWA/ANSI specification C111/A21.11 and rated for water working 
pressure of 350 PSI. All accessory packs (including accessory packs 
containing glands), are excluded from the scope of this order.
    The types of CDIW fittings covered by this order are compact 
ductile iron mechanical joint waterworks fittings and compact ductile 
iron push-on joint waterwork fittings, both of which are used for the 
same application. CDIW fittings are used to join water main pressure 
pipes, valves, or hydrants in straight lines, and change, divert, 
divide, or direct the flow of raw and/or treated water in piping 
systems. CDIW fittings attach to the pipe, valve, or hydrant at a joint 
and are used principally for municipal water distribution systems. CDIW 
glands are used to join mechanical joint CDIW fittings to pipes.
    CDIW fittings with nominal diameters greater than 16 inches, are 
specifically excluded from the scope of the order. Nonmalleable cast 
iron fittings (also called gray iron fittings) and full-bodied ductile 
fittings are also specifically excluded from the scope of this order. 
Nonmalleable cast iron fittings have little ductility and are generally 
rated only 150 to 250 PSI. Full-bodied ductile fittings have a longer 
body design than a compact fitting because in the compact design the 
straight section of the body is omitted to provide a more compact and 
less heavy fitting without reducing strength or flow characteristics. 
In addition, the full-bodied ductile fittings are thicker walled than 
the compact fittings. Full-bodied fittings are made of either gray iron 
or ductile iron, in sizes of 3 to 48 inches, conform to AWWA/ANSI 
specification C110/C21.10, and are rated to a maximum of only 250 PSI. 
In addition, compact ductile iron flanged fittings are excluded from 
the scope of this order, as they have significantly different 
characteristics and uses than CDIW fittings.
    CDIW fittings are classifiable under subheading 7307.19.30.00 of 
the Harmonized Tariff Schedule of the United States (HTSUS). Standard 
ductile iron glands are classifiable under HTSUS subheading 
7325.99.10.00. Although the HTSUS subheadings are provided for 
convenience and customs purposes, our written description of the scope 
of this order is dispositive.

Separate Rates

    It is the Department's policy to assign all exporters of the 
merchandise subject to review in non-market-economy (NME) countries a 
single rate, unless an exporter can demonstrate an absence of 
government control, both in law and in fact, with respect to exports. 
To establish whether an exporter is sufficiently independent of 
government control to be entitled to a separate rate, the Department 
analyzes the exporter in light of the criteria established in the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588 (May 6, 1991) (Sparklers), as 
amplified in 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). 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 an individual exporter's business and export licenses; 
(2) any legislative enactments decentralizing control of companies; and 
(3) any other formal measures by the government decentralizing control 
of companies. Evidence relevant to a de facto absence of government 
control with respect to exports is based on four factors, whether the 
respondent: (1) Sets its own export prices independent from the 
government and other exporters; (2) can retain the proceeds from its 
export sales; (3) has the authority to negotiate and sign contracts; 
and (4) has autonomy from the government regarding the selection of 
management. See Silicon Carbide, 59 FR at 22587; see also Sparklers, 56 
FR at 20589.

[[Page 55699]]

    BMMIEC responded to the Department's request for information 
regarding separate rates, by providing the requested documentation. We 
have determined that the evidence on the record demonstrates an absence 
of government control, both in law and in fact, with respect to 
BMMIEC's exports, in accordance with the criteria identified in 
Sparklers and Silicon Carbide. For further information, see Separate 
Rates Memo dated September 30, 1999. As a result, BMMIEC is entitled to 
a separate rate.

Export Price

    We calculated EP in accordance with section 772(a) of the Act, 
because the subject merchandise was sold directly to the first 
unaffiliated purchaser in the United States prior to importation and 
constructed export price (CEP) methodology was not otherwise warranted, 
based on the facts of record. We calculated EP based on packed, CIF 
U.S. port, or FOB PRC port, prices to unaffiliated purchasers in the 
United States, as appropriate. We made deductions from the starting 
price, where appropriate, for ocean freight services which were 
provided by market economy suppliers. We also deducted from the 
starting price, where appropriate, an amount for foreign inland 
freight, foreign brokerage and handling. As these movement services 
were provided by NME suppliers, we valued them using Indian rates. See 
``Normal Value'' section below for further discussion.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the normal value (NV) using a factors-of-production 
methodology if: (1) The merchandise is exported from an NME country; 
and (2) the information does not permit the calculation of NV using 
home-market prices, third-country prices, or constructed value under 
section 773(a) of the Act.
    The Department has treated the PRC as an NME country in all 
previous antidumping cases. In accordance with section 771(18)(C)(i) of 
the Act, any determination that a foreign country is an NME country 
shall remain in effect until revoked by the administering authority. 
None of the parties to this proceeding has contested such treatment in 
this review. Therefore, we treated the PRC as an NME country for 
purposes of this review. Furthermore, available information does not 
permit the calculation of NV using home market prices, third country 
prices, or constructed value under section 773(a) of the Act. As a 
result, we calculated NV by valuing the factors of production in a 
comparable market economy country which is a significant producer of 
comparable merchandise.
    Section 773(c)(4) of the Act and 19 CFR 351.408 direct us to select 
a surrogate country that is economically comparable to the PRC. On the 
basis of per capita gross domestic product (GDP), the growth rate in 
per capita GDP, and the national distribution of labor, we find that 
India is a comparable economy to the PRC. See Memorandum from Director, 
Office of Policy, to Office Director, AD/CVD Group II, Office IV, dated 
May 21, 1999.
    Section 773(c)(4) of the Act also requires that, to the extent 
possible, the Department use a surrogate country that is a significant 
producer of merchandise comparable to CDIW. For purposes of the LTFV 
investigation, we found that India was a significant producer of 
comparable merchandise. See Notice of Final Determination of Sales at 
Less Than Fair Value: CDIW Fittings and Accessories from the People's 
Republic of China, 58 FR 37908 (July 14, 1993) (CDIW Final 
Determination). For purposes of this administrative review, we find 
that India is a producer of CDIW based on information submitted by the 
respondents in their August 1999 submission. Therefore, we have 
continued to use India as the surrogate country and have used publicly 
available information relating to India, unless otherwise noted, to 
value the various factors of production.
    For purposes of calculating NV, we valued PRC factors of 
production, in accordance with section 773(c)(1) of the Act. Factors of 
production include, but are not limited to: hours of labor employed; 
quantities of raw materials required; amounts of energy and other 
utilities consumed; and representative capital cost, including 
depreciation. In examining surrogate values, we selected, where 
possible, the publicly available value which was: an average non-export 
value; representative of a range of prices within the POR or most 
contemporaneous with the POR; product-specific; and tax-exclusive. For 
a more detailed explanation of the methodology used in calculating 
various surrogate values, see Preliminary Results Factors Valuation 
Memorandum from the Team to the File, dated September 30, 1999 (Factors 
Memorandum). In accordance with this methodology, we valued the factors 
of production as follows:
    To value sand, bentonite, and graphite, we relied on import prices 
contained in the September and November 1997, as well as the March 
1998, issues of Indian Import Statistics. For pig iron, ferrosilicon, 
limestone, and perlite, we used the import prices contained in the 
September and November 1997, as well as the March 1998 issues of Indian 
Import Statistics. For ferrosilico manganese, we relied on import 
prices contained in the September 1997 and March 1998 issues of Indian 
Import Statistics. For coke (hard), we used the November 1997 issue of 
Indian Import Statistics. For firewood and cement, we relied on import 
prices contained in the April 1997 through March 1998 issues of Indian 
Import Statistics. For those values not contemporaneous with the POR, 
we adjusted for inflation using the wholesale price indices (WPI) 
published by the International Monetary Fund (IMF). We made further 
adjustments to account for freight costs between the suppliers and 
BMMIEC's manufacturing facilities.
    In accordance with our practice, we added to CIF import values from 
India a surrogate freight cost using the shorter of the reported 
distances from either the closest PRC port to the factory, or from the 
domestic supplier to the factory. See Final Determination of Sales at 
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From the 
People's Republic of China, 62 FR 61977 (November 20, 1997).
    We valued labor based on a regression-based wage rate, in 
accordance with 19 CFR 351.408(c)(3).
    For electricity, we relied upon public information from the 1995 
edition of IEA Energy Prices and Taxes to obtain an average price for 
electricity provided to industries in India. We adjusted the values to 
reflect inflation up to the POR using the WPI published by the IMF.
    For the reported packing materials (i.e., bituminous pitch, steel 
angles and straps, and welding rod), we relied upon Indian import data 
in the April 1997 through March 1998 issues of Indian Import 
Statistics. We adjusted the values to reflect inflation up to the POR 
using the WPI published by the IMF. Additionally, we adjusted these 
values to account for freight costs incurred between the suppliers and 
BMMIEC.
    For foreign inland freight, we used the August 1998 truck rate from 
Rahul Roadlines. 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. 
See Certain Stainless Steel Wire Rod from India; Preliminary Results of 
Antidumping Duty Administrative and New Shipper Review. 63 FR 48184 
(September 9, 1998); Factors Memorandum. We adjusted the values to 
reflect inflation

[[Page 55700]]

up to the POR using the WPI published by the IMF.
    For factory overhead (FOH), selling, general, and administrative 
expenses (SG&A), and profit, we relied on the 1997 financial statements 
of Jayaswal Neco, Ltd, an Indian producer of certain compact ductile 
iron waterworks fittings and glands, which were submitted by the 
respondents, because this company is a producer of subject merchandise.

Preliminary Results of the Review

    We preliminarily determine that the following de minimis margin 
exists for the period September 1, 1997 through August 31, 1998:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Beijing Metals and Minerals Import and Export Corporation..          .09
------------------------------------------------------------------------

    Interested parties may request a hearing within 30 days of 
publication of this notice. See 19 CFR 351.310(c). Any hearing, if 
requested, will be held 44 days after the date of the publication of 
this notice or the first workday thereafter. Interested parties may 
submit case briefs within 30 days of publication. Rebuttal briefs, 
limited to issues raised in the case briefs, may be filed no later than 
35 days after the date of publication. Parties who submit case briefs 
or rebuttal briefs in this proceeding are requested to submit with each 
argument (1) a statement of the issue and (2) a brief summary of the 
argument. Parties are also encouraged to provide a summary of the 
arguments not to exceed five pages and a table of statutes, 
regulations, and cases cited.
    The Department will subsequently issue the final results of this 
administrative review, including the results of its analysis of issues 
raised in any such written briefs or at a hearing, not later than 120 
days after the date of publication of this notice.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Upon completion 
of this review, the Department will issue appraisement instructions 
directly to the U.S. Customs Service.
    Furthermore, the following deposit requirements will be effective 
upon publication of the final results of this antidumping duty 
administrative review for all shipments of the subject merchandise 
entered, or withdrawn from warehouse, for consumption on or after the 
publication date, as provided by section 751(a)(1) of the Act: (1) For 
BMMIEC, which has a separate rate, the cash deposit rate will be zero; 
(2) for any previously reviewed PRC and non-PRC exporter with a 
separate rate (including those companies and products where we 
terminated the review), the cash deposit rate will be the company- and 
product-specific rate established for the most recent period; (3) the 
cash deposit rate for non-PRC exporters of subject merchandise from the 
PRC will be the rate applicable to the PRC supplier of that exporter; 
and (4) the cash deposit rate for all other PRC exporters will continue 
to be 127.38 percent, the PRC-wide rate established in the LTFV 
investigation. These requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review is issued and published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: September 30, 1999.
Robert La Russa,
Assistant Secretary for Import Administration.
[FR Doc. 99-26721 Filed 10-13-99; 8:45 am]
BILLING CODE 3510-DS-P