[Federal Register Volume 65, Number 15 (Monday, January 24, 2000)]
[Notices]
[Pages 3658-3660]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-1660]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-803, A-570-803]


Preliminary Results of Full Sunset Reviews: Bars and Wedges and 
Hammers and Sledges From the People's Republic of China

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

ACTION:  Notice of Preliminary Results of Full Sunset Reviews: Bars and 
Wedges and Hammers and Sledges from the People's Republic of China.

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SUMMARY:  On July 1, 1999, the Department of Commerce (``the 
Department'') initiated sunset reviews of the antidumping duty orders 
on bars and wedges and on hammers and sledges from the People's 
Republic of China (``PRC'') (64 FR 35588) pursuant to section 751(c) of 
the Tariff Act of 1930, as amended (``the Act''). On the basis of 
notices of intent to participate filed on behalf of domestic interested 
parties and adequate substantive comments filed on behalf of domestic 
and respondent interested parties, the Department determined to conduct 
full reviews. As a result of these reviews, the Department 
preliminarily finds that revocation of the antidumping orders would 
likely lead to continuation or recurrence of dumping at the levels 
indicated in the Preliminary Results of Reviews section of this notice.

EFFECTIVE DATE:  January 24, 2000.

FOR FURTHER INFORMATION CONTACT:  Darla D. Brown or Melissa G. Skinner, 
Office of Policy for Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
3207 or (202) 482-1560, respectively.

SUPPLEMENTARY INFORMATION:

Statute and Regulations

    These reviews are being conducted pursuant to sections 751(c) and 
752 of the Act. The Department's procedures for the conduct of sunset 
reviews are set forth in Procedures for Conducting Five-year 
(``Sunset'') Reviews of Antidumping and Countervailing Duty Orders, 63 
FR 13516 (March 20, 1998) (``Sunset Regulations'') and 19 CFR Part 351 
(1999) in general. Guidance on methodological or analytical issues 
relevant to the Department's conduct of sunset reviews is set forth in 
the Department's Policy Bulletin 98:3--Policies Regarding the Conduct 
of Five-year (``Sunset'') Reviews of Antidumping and Countervailing 
Duty Orders; Policy Bulletin, 63 FR 18871 (April 16, 1998) (``Sunset 
Policy Bulletin'').

Scope

    Although we provide the full scope language for the order on heavy 
forged hand tools (``HFHTs'') below, this determination applies only to 
the types of HFHTs which fall under the orders (A-570-803) on bars/
wedges and hammers/sledges from the PRC. 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 wool 
splitting wedges. HFHTs are manufactured through a hot forge operation 
in which steel is sheared to the 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'') item numbers 8205.20.60, 
8205.59.30, 8201.30.00, and 8201.40.60. Specifically excluded are 
hammers and sledges with heads 1.5 kilograms (3.33 pounds) in weight 
and under, and hoes and rakes, and bars 18 inches in length and under. 
The HTS item numbers are provided for convenience and customs purposes 
only. The written description of the scope remains dispositive.
    There has been one scope ruling with respect to the orders on HFHTs 
from the PRC in which the Forrest Tool Company's Max Multipurpose Tool 
was determined to be within the scope of the order (58 FR 59991; 
November 12, 1993).
    These reviews cover imports from all manufacturers and exporters of 
bars and wedges and hammers and sledges from the PRC.

History of the Orders

    The Department published its final affirmative determination of 
sales at less than fair value (``LTFV'') with respect to imports of 
HFHTs from the PRC on January 3, 1991 (56 FR 241). In this 
determination, the Department published four country-wide weighted-
average dumping margins, one each for hammers/sledges, bars/wedges, 
picks/mattocks and axes/adzes. These margins were all subsequently 
affirmed when the Department issued the antidumping duty orders on 
HFHTs from the PRC on February 19, 1991 (56 FR 6622). Since the 
imposition of the orders, the Department has conducted several 
administrative reviews. \1\ The orders remain in effect for all 
manufacturers and exporters of the subject merchandise from the PRC.
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    \1\ See Heavy Forged Hand Tools, Finished and Unfinished, With 
or Without Handles, from the People's Republic of China; Final 
Results of Antidumping Duty Administrative Reviews, 60 FR 49251 
(September 22, 1995); Heavy Forged Hand Tools, Finished and 
Unfinished, With or Without Handles, from the People's Republic of 
China; Final Results of Antidumping Duty Administrative Review, 61FR 
15028 (April 4, 1996); as amended, Heavy Forged Hand Tools, Finished 
and Unfinished, With or Without Handles, from the People's Republic 
of China; Amendment of Final Results of Antidumping Duty 
Administrative Review 61 FR 24285 (May 14, 1996); Heavy Forged Hand 
Tools, Finished and Unfinished, With or Without Handles, from the 
People's Republic of China; Final Results of Antidumping Duty 
Administrative Review, 61 FR 51269 (October 1, 1996); as amended, 
Heavy Forged Hand Tools from the People's Republic of China; Notice 
of Amendment of Final Results of Antidumping Duty Administrative 
Review, 62 FR 24416 (May 5, 1997); Heavy Forged Hand Tools from the 
People's Republic of China; Final Results of Antidumping Duty 
Administrative Reviews, 62 FR 11813 (March 13, 1997); Heavy Forged 
Hand Tools, Finished and Unfinished, With or Without Handles, from 
the People's Republic of China; Final Results of Antidumping Duty 
Administrative Reviews, 63 FR 16758 (April 6, 1998); as amended, 
Amended Final Results of Antidumping Duty Administrative Reviews 
Pursuant to Remand from the Court of International Trade: Heavy 
Forged Hand Tools, Finished and Unfinished, With or Without Handles, 
from the People's Republic of China, 63 FR 55577 (October 16, 1998) 
and Amended Final Results of Antidumping Duty Administrative Reviews 
Pursuant to Remand from the Court of International Trade: Heavy 
Forged Hand Tools, Finished and Unfinished, With or Without Handles, 
from the People's Republic of China: Correction, 64 FR 851 (January 
6, 1999); Heavy Forged Hand Tools, Finished and Unfinished, With or 
Without Handles, from the People's Republic of China; Final Results 
and Partial Recission of Antidumping Duty Administrative Reviews, 64 
FR 43659 (August 11, 1999).
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    To date, the Department has not issued any duty absorption findings 
in these cases.

Background

    On July 1, 1999, the Department initiated sunset reviews of the 
antidumping duty orders on bars and wedges and on hammers and sledges

[[Page 3659]]

from the PRC (64 FR 35588), pursuant to section 751(c) of the Act. For 
both of the reviews, the Department received notices of intent to 
participate on behalf of O. Ames Co. and its division, Woodings-Verona 
(collectively, ``domestic interested parties'') on July 16, 1999, 
within the deadline specified in section 351.218(d)(1)(i) of the Sunset 
Regulations. Pursuant to section 771(9)(C) of the Act, the domestic 
interested parties claimed interested party status as domestic 
manufacturers of the subject merchandise. The Department received 
complete substantive responses from the domestic interested parties on 
August 2, 1999, within the 30-day deadline specified in the Sunset 
Regulations under section 351.218(d)(3)(i). In addition, we received 
substantive responses on behalf of Fujian Machinery and Equipment 
Import and Export Corp., Shandong Huarong General Group Corp., Shandong 
Machinery Import and Export Corp., and Tianjin Machinery Import and 
Export Corp. (collectively, ``respondents''). The respondents claimed 
interested party status under section 771(9)(A) of the Act as exporters 
of the subject merchandise. The Department determined that the 
respondent's response constituted an adequate response to the notice of 
initiation. As a result, the Department determined, in accordance with 
section 351.218(e)(2) of the Sunset Regulations, to conduct a full (240 
day) review.
    In accordance with section 751(c)(5)(C)(v) of the Act, the 
Department may treat a review as extraordinarily complicated if it is a 
review of a transition order (i.e., an order in effect on January 1, 
1995). On October 26, 1999, the Department determined that the sunset 
reviews of the antidumping duty order on HFHTs are extraordinarily 
complicated and extended the time limit for completion of the final 
results of these reviews until not later than January 18, 2000, in 
accordance with section 751(c)(5)(B) of the Act. \2\
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    \2\See Extension of Time Limit for Final Results of Five-Year 
Reviews, 64 FR 57628 (October 26, 1999).
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Determination

    In accordance with section 751(c)(1) of the Act, the Department is 
conducting these reviews to determine whether revocation of the 
antidumping duty orders would be likely to lead to continuation or 
recurrence of dumping. Section 752(c) of the Act provides that, in 
making these determinations, the Department shall consider the 
weighted-average dumping margins determined in the investigation and 
subsequent reviews and the volume of imports of the subject merchandise 
for the period before and the period after the issuance of the 
antidumping order, and shall provide to the International Trade 
Commission (``the Commission'') the magnitude of the margins of dumping 
likely to prevail if the order were revoked.
    The Department's determinations concerning continuation or 
recurrence of dumping and the magnitude of the margins are discussed 
below. In addition, domestic interested parties' and respondents' 
comments with respect to continuation or recurrence of dumping and the 
magnitude of the margins are addressed within the respective sections 
below.

Continuation or Recurrence of Dumping

    Drawing on the guidance provided in the legislative history 
accompanying the Uruguay Round Agreements Act (``URAA''), specifically 
the Statement of Administrative Action (``the SAA''), H.R. Doc. No. 
103-316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1 
(1994), and the Senate Report, S. Rep. No. 103-412 (1994), the 
Department issued its Sunset Policy Bulletin providing guidance on 
methodological and analytical issues, including the bases for 
likelihood determinations. In its Sunset Policy Bulletin, the 
Department indicated that determinations of likelihood will be made on 
an order-wide basis (see section II.A.2). In addition, the Department 
indicated that it normally will determine that revocation of an 
antidumping duty order is likely to lead to continuation or recurrence 
of dumping where (a) dumping continued at any level above de minimis 
after the issuance of the order, (b) imports of the subject merchandise 
ceased after the issuance of the order, or (c) dumping was eliminated 
after the issuance of the order and import volumes for the subject 
merchandise declined significantly (see section II.A.3).
    In their substantive responses, the domestic interested parties 
argue that revocation of the orders would likely lead to continuation 
or recurrence of dumping. They base their conclusion on the combined 
facts that dumping has continued over the life of the orders at levels 
well above de minimis and that import volumes declined significantly 
after the issuance of the orders. The domestic interested parties 
maintain that imports of hammers/sledges from the PRC declined 
dramatically since the imposition of the order. They argue that Chinese 
exporters shipped approximately 8,735 units of striking tools (e.g., 
hammers and sledges) in 1990, and this number fell to approximately 
3,810 units in 1997 and 3,835 units in 1998. Moreover, the domestic 
interested parties argue that since the imposition of the order, import 
volumes of bars/wedges have declined from approximately 2,429 tons in 
1989 to 2,233 tons in 1997. Therefore, they conclude that it is 
reasonable to assume that the PRC exporters could not sell in the 
United States without dumping, and in order to reenter to U.S. market, 
they would have to resume dumping (see August 2, 1999, substantive 
response of the domestic interested parties at 3-4).
    The respondents argue that if the order were revoked, shipments 
would likely continue at average levels as seen in 1996 through 1998. 
They maintain that there is greater competition from other supplying 
countries and that demand in the U.S. is fairly inelastic, indicating 
that even with lower prices (without dumping duties), demand for 
imports of the subject merchandise from the PRC is not likely to change 
much (see July 30, 1999, substantive response of the respondents at 2).
    As discussed in section II.A.3 of the Sunset Policy Bulletin, the 
SAA at 890, and the House Report at 63-64, if companies continue to 
dump with the discipline of an order in place, the Department may 
reasonably infer that dumping would continue if the discipline were 
removed. As pointed out above, dumping margins above de minimis 
continue to exist for shipments of the subject merchandise from the PRC 
for at least one producer/exporter.
    Consistent with section 752(c) of the Act, the Department also 
considers the volume of imports before and after issuance of the order. 
As mentioned above, the domestic interested parties maintain that 
imports of bars/wedges and hammers/sledges from the PRC declined 
significantly following the imposition of the order.
    Using the Department's statistics, including IM146 reports, on 
imports of the subject merchandise from the PRC, the Department 
concludes that imports of bars/wedges and hammers/sledges from the PRC 
have fluctuated over the life of the order, showing no overall trend.
    As noted above, in conducting its sunset reviews, the Department 
considers the weighted-average dumping margins and volume of imports 
when determining whether revocation of an antidumping duty order would 
lead to the continuation or recurrence of dumping. Based on this 
analysis, the Department finds that the existence of dumping margins 
above de minimis levels is highly probative of the

[[Page 3660]]

likelihood of continuation or recurrence of dumping. A deposit rate 
above a de minimis level continues in effect for exports of the subject 
merchandise by at least one Chinese manufacturer/exporter. Therefore, 
given that dumping has continued over the life of the order, the 
Department preliminarily determines that dumping is likely to continue 
if the orders were revoked.

Magnitude of the Margin

    In the Sunset Policy Bulletin, the Department stated that it 
normally will provide to the Commission the margin that was determined 
in the final determination in the original investigation. Further, for 
companies not specifically investigated or for companies that did not 
begin shipping until after the order was issued, the Department 
normally will provide a margin based on the ``all others'' rate from 
the investigation. (See section II.B.1 of the Sunset Policy Bulletin.) 
Exceptions to this policy include the use of a more recently calculated 
margin, where appropriate, and consideration of duty absorption 
determinations. (See sections II.B.2 and 3 of the Sunset Policy 
Bulletin.) We note that, to date, the Department has not issued any 
duty absorption findings in either of these cases.
    In their substantive responses, the domestic interested parties 
recommend that the Department deviate from its normal practice of 
forwarding margins from the original investigation and instead 
recommend using margins from more recent administrative reviews. In the 
case of bars/wedges, the domestic interested parties recommend 
forwarding to the Commission a margin of 36.76 percent for Fujian 
Machinery & Equipment Import & Export Corp. and 38.30 percent for 
Shandong Machinery Import & Export Corp., as calculated in the second 
administrative review; 31.76 percent for Tianjin Machinery Import & 
Export Corp. and Liaoning Machinery Import & Export Corp., as 
calculated in the original investigation; and 34 percent for Shandong 
Huarong General Group Corp., as calculated in the sixth administrative 
review. The domestic interested parties argue that since the imposition 
of the order, the dumping margins have increased for three companies as 
well as for the PRC as a whole. They argue further that because import 
volumes of bars/wedges have declined since the imposition of the order, 
the Department should use a more recently calculated rate for several 
PRC companies.
    For hammers/sledges, the domestic interested parties recommend 
forwarding to the Commission the margin of 45.42 percent calculated in 
the original investigation.
    The respondents argue that the dumping margin likely to prevail if 
the order were revoked would be zero, but no higher than the average 
margin for the latest reviews. They base this argument on the fact that 
recent reviews conducted by the Department confirm that different 
surrogate steel values than were used in the original investigation 
significantly reduce the dumping margin (see July 30, 1999, substantive 
response of respondents at 3).
    As noted in the Sunset Regulations and Sunset Policy Bulletin, the 
Department may provide to the Commission a more recently calculated 
margin for a particular company where dumping margins increased after 
the issuance of the order where that particular company increased 
dumping to maintain or increase market share. In this case, the 
domestic interested parties did not provide any company-specific 
argument or evidence that any Chinese companies have increased dumping 
in order to gain or maintain market share or increase import volumes. 
Moreover, while it is true that the dumping margins have increased for 
some Chinese companies, we have no company-specific information 
demonstrating that imports of the subject merchandise have not 
increased substantially over the life of the order. Since we have no 
company-specific information correlating an increase in exports for one 
company with an increase in the dumping margin for that particular 
company, we cannot conclude that use of more recently calculated 
margins is warranted in this case.
    Additionally, the Department disagrees with the respondents' 
argument that a dumping margin of zero percent is likely to prevail 
were the order to be revoked. Specifically, as noted in the Sunset 
Policy Bulletin, the Department will consider forwarding to the 
Commission more recently calculated margins where dumping margins have 
declined over the life of the order and imports have remained steady or 
increased or where a company increases dumping in order to maintain or 
increase market share. The respondent's argument concerning changes in 
methodology (e.g., different surrogate steel values) does not fit 
either criteria. Therefore, consistent with the Sunset Policy Bulletin, 
the Department preliminarily finds that the margins calculated in the 
original investigation are probative of the behavior of Chinese 
producers/exporters if the order were to be revoked as they are the 
only margins which reflect their behavior absent the discipline of the 
order. As such, the Department will report to the Commission the PRC-
wide rates from the original investigation as contained in the 
Preliminary Results of Reviews section of this notice.

Preliminary Results of Reviews

    As a result of these reviews, the Department preliminarily finds 
that revocation of the antidumping order would likely lead to 
continuation or recurrence of dumping at the margins listed below:

------------------------------------------------------------------------
                                                                Margin
                          PRC-wide                            (percent)
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Bars/Wedges................................................        31.76
Hammers/Sledges............................................        45.42
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    Any interested party may request a hearing within 30 days of 
publication of this notice in accordance with19 CFR 351.310(c). Any 
hearing, if requested, will be held on March 15, 2000. Interested 
parties may submit case briefs no later than March 7, 2000, in 
accordance with 19 CFR 351.309(c)(1)(i). Rebuttal briefs, which must be 
limited to issues raised in the case briefs, may be filed not later 
than March 13, 2000. The Department will issue a notice of final 
results of this sunset review, which will include the results of its 
analysis of issues raised in any such comments, no later than June 26, 
2000.
    These five-year (``sunset'') reviews and notices are in accordance 
with sections 751(c), 752, and 777(i)(1) of the Act.

    Dated: January 18, 2000.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 00-1660 Filed 1-21-00; 8:45 am]
BILLING CODE 3510-DS-P