[Federal Register Volume 65, Number 175 (Friday, September 8, 2000)]
[Notices]
[Pages 54493-54495]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23124]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-822]


Certain Helical Spring Lock Washers From the People's Republic of 
China; Preliminary Results of Antidumping Duty Administrative Review

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

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review.

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SUMMARY: We preliminarily determine that sales of certain helical 
spring lock washers from the People's Republic of China were made below 
normal value during the period October 1, 1998 through September 30, 
1999. Interested parties are invited to comment on these preliminary 
results.

EFFECTIVE DATE: September 8, 2000.

FOR FURTHER INFORMATION CONTACT: Sally Hastings or Craig Matney, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone (202) 482-3464 or 482-1778, respectively.

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930, as amended (the 
Act) by the Uruguay Round Agreements Act. Unless otherwise indicated, 
all citations to the Department of Commerce's (the Department's) 
regulations are to 19 CFR part 351 (1999).

Background

    On October 19, 1993, the Department published the antidumping duty 
order on certain helical spring lock washers (HSLWs) from the People's 
Republic of China (PRC) (58 FR 53914). The Department notified 
interested parties of the opportunity to request an administrative 
review of this order on October 20, 1999 (64 FR 56486). The petitioner, 
Shakeproof Assembly Components Division of Illinois Tool Works, Inc., 
requested that the Department conduct an administrative review of 
Zhejiang Wanxin Group Co. Ltd. (ZWG), the predecessor firm to Hang Zhou 
Spring Washer Co. (collectively Hangzhou) on October 28, 1999. The 
notice of initiation of this administrative review was published on 
December 3, 1999 (64 FR 67846).
    On February 1, 2000, Hangzhou responded to the Department's 
December 9, 1999 questionnaire. On April 12, 2000, the Department 
provided parties with an opportunity to submit information regarding 
appropriate surrogate values. On May 12 and May 24, 2000, respectively, 
both Hangzhou and petitioner submitted initial and rebuttal surrogate 
value comments. On May 15, 2000, the Department issued a supplemental 
questionnaire to Hangzhou. Hangzhou submitted its supplemental 
questionnaire response on June 9, 2000.
    On June 15, 2000, the Department extended the time limit for 
completion of the preliminary results in this proceeding until August 
31, 2000 (See 65 FR 37521).
    On June 23 and 24, 2000, we conducted verification of the sales and 
factors of production questionnaire responses submitted by Hangzhou in 
Xiaoshan City, PRC. We issued the verification report on August 14, 
2000.
    The Department is conducting this administrative review in 
accordance with Section 751 of the Act.

Scope of Review

    The products covered by this review are HSLWs of carbon steel, of 
carbon alloy steel, or of stainless steel, heat-treated or non-heat-
treated, plated or non-plated, with ends that are off-line. HSLWs are 
designed to: (1) Function as a spring to compensate for developed 
looseness between the component parts of a fastened assembly; (2) 
distribute the load over a larger area for screws or bolts; and, (3) 
provide a hardened bearing surface. The scope does not include internal 
or external tooth washers, nor does it include spring lock washers made 
of other metals, such as copper.
    HSLWs subject to this review are currently classifiable under 
subheading 7318.21.0030 of the Harmonized Tariff Schedule of the United 
States (HTSUS). Although the HTSUS subheading is provided for 
convenience and customs purposes, the written description of the scope 
of this proceeding is dispositive.

Period of Review

    This review covers the period October 1, 1998, through September 
30, 1999.

Verification

    As provided in section 782(i) of the Act, we verified sales and 
factors of production information provided by Hangzhou in Xiaoshan 
City, PRC, using standard verification procedures, including an 
examination of relevant accounting and production records and original 
source documents provided by the respondents.

Separate Rates Determination

    To establish whether a company operating in a state-controlled 
economy is sufficiently independent to be entitled to a separate rate, 
the Department analyzes each exporting entity under the test 
established in the Final Determination of Sales at Less Than Fair 
Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 
6, 1991) (Sparklers), as amplified by the Final Determination of Sales 
at Less Than Fair Value: Silicon Carbide from the People's Republic of 
China, 59 FR 22585 (May 2, 1994) (Silicon Carbide). Under this policy, 
exporters in non-market economies (NMEs) are entitled to separate, 
company-specific margins when they can demonstrate an absence of 
government control, both in law and in fact, with respect to export 
activities. Evidence supporting, though not requiring, a finding of de 
jure absence of government control over export activities includes: (1) 
An absence of restrictive stipulations associated with the individual 
exporter's business and export licenses; (2) any legislative enactments 
decentralizing control of companies; and, (3) any other formal measures 
by the government decentralizing control of companies. De facto absence 
of government control over exports is based on four factors: (1) 
Whether each exporter sets its own export prices independently of the 
government and without the approval of a government authority; (2) 
whether each exporter retains the proceeds from its sales and makes 
independent decisions regarding the disposition of profits or financing 
of losses; (3) whether each exporter has the authority to negotiate and 
sign contracts and other agreements; and, (4) whether each exporter has 
autonomy from the government regarding the selection of management. 
(See Silicon Carbide, 59 FR at 22587 and Sparklers, 56 FR at 20589.)
    In each of the previous administrative reviews of the antidumping 
duty order on HSLWs from the PRC, covering successive review periods 
from October 1, 1993 through September 30, 1998, we determined that 
Hangzhou's predecessor, ZWG, merited a separate

[[Page 54494]]

rate. We have found that the evidence on the record in this review, 
including information examined at verification, also demonstrates an 
absence of government control, both in law and in fact, with respect to 
Hangzhou's export activities according to the criteria identified in 
Sparklers, and an absence of government control with respect to the 
additional criteria identified in Silicon Carbide. Therefore, we have 
assigned Hangzhou a separate rate.

Export Price

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

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine normal value (NV) using a factors-of-production methodology 
if: (1) the merchandise is exported from an NME, and (2) the 
information does not permit the calculation of NV using home-market 
prices, third-country prices, or constructed value under section 773(a) 
of the Act. The Department has treated the PRC as an NME in all 
previous antidumping cases. In accordance with section 771(18)(C)(i) of 
the Act, any determination that a foreign country is an NME shall 
remain in effect until revoked by the administering authority. None of 
the parties to this proceeding has contested such treatment in this 
review. Moreover, parties to this proceeding have not argued that the 
PRC HSLWs industry is a market-oriented industry (MOI) and, 
consequently, we have no basis to determine that the information would 
permit the calculation of NV using PRC prices or costs. Therefore, we 
calculated NV based on factors of production (FOP) in accordance with 
sections 773(c)(3) and (4) of the Act and 19 CFR 351.408(c).
    Under the FOP methodology, we are required to value the NME 
producer's inputs in a comparable market economy country that is a 
significant producer of comparable merchandise. We determined that 
India is at a comparable level of economic development to that of the 
PRC. Also, India is a significant producer of comparable merchandise. 
Therefore, for this review, we have used Indian prices to value the FOP 
except where a meaningful amount of the factor was purchased from a 
market economy supplier and paid for in a market economy currency. (See 
Memorandum to Susan Kuhbach from Jeff May, dated April 7, 2000, 
``Certain Helical Spring Lock Washers from the PRC: Nonmarket Economy 
Status and Surrogate Country Selection,'' which is on file in the 
Central Records Unit--Public File.)
    We selected, where possible, publicly available values from India 
which were: (1) Average non-export values; (2) representative of a 
range of prices within the POR or most contemporaneous with the POR; 
(3) product-specific; and, (4) tax-exclusive. We valued the factors of 
production as follows:
     A meaningful amount of the input carbon steel wire rod was 
purchased from the United Kingdom, a market economy supplier, and paid 
for in a market economy currency. Pursuant to 19 CFR 351.408(c)(1), we 
valued this factor using the price paid to the market economy supplier. 
Thus, for carbon steel wire rod values, we used the average cost per 
metric ton of carbon steel wire rod imported from the United Kingdom by 
Hangzhou during the POR. We made adjustments to account for the freight 
costs incurred between the port and Hangzhou.
     To value the scrap steel sold by Hangzhou, we used per 
kilogram values obtained from the Monthly Statistics of the Foreign 
Trade of India--Imports (MFTI) as a by-product offset.
     To value the chemicals used in the production and plating 
process of HSLWs, we used per kilogram import values obtained from MFTI 
and the Indian publication Chemical Weekly. We adjusted these values, 
where appropriate, to reflect inflation using the Wholesale Price Index 
(WPI) as reported in the International Financial Statistics published 
by the International Monetary Fund (IMF). We also adjusted these values 
to account for freight costs incurred between the supplier and 
Hangzhou.
     To value coal, we used a per kilogram value obtained from 
the MFTI. We adjusted this value to reflect inflation using the WPI 
published by the IMF. We also made adjustments to account for freight 
costs incurred between the supplier and Hangzhou.
     To value electricity, we used the electricity price data 
from two sources 1995 Conference of Indian Industries: Handbook of 
Statistics (CII Handbook) and data from the Center for Monitoring 
Indian Economy (CMIE). We adjusted the value to reflect inflation using 
the electricity sector-specific inflation index published in the RBI 
Bulletin.
     To value water, we used the Second Water Utilities Data 
Book for the Asian and Pacific Region published by the Asian 
Development Bank in 1997. We adjusted the value to reflect inflation 
using the WPI published by the IMF.
     For labor, we used the regression-based wage rate for the 
PRC in ``Expected Wages of Selected NME Countries,'' located on the 
Internet at http://www.ia.ita.doc.gov/wages/. Because of the 
variability of wage rates in countries with similar per capita gross 
domestic product's (GDP), section 351.408(c)(3) of the Department's 
regulations requires the use of a regression-based wage rate. The 
source for the regression wage rates is ``Expected Wages of Selected 
NME Countries--1998 Income Data,'' Year Book of Labour Statistics 1999, 
International Labour Office, (Geneva: 1999).
     For factory overhead, selling, general, and administrative 
expenses (SG&A), and profit values, we used information from the 
January, 1997 Reserve Bank of India Bulletin for the Indian industry 
group ``Processing and Manufacturing: Metals, Chemicals, and Products 
Thereof.'' From this information, we were able to determine factory 
overhead as a percentage of the total raw materials, labor and energy 
(ML&E) costs, SG&A as a percentage of ML&E plus overhead (i.e., cost of 
manufacture), and the profit rate as a percentage of the cost of 
manufacture plus SG&A.
     For packing materials, we used the per kilogram values 
obtained from the MFTI. Where necessary, we adjusted these values to 
reflect inflation using the WPI published by the IMF. We also made 
adjustments to account for freight costs incurred between the PRC 
supplier and Hangzhou.
     To value foreign brokerage and handling, we used 
information reported in Certain Stainless Steel Wire Rod from India in 
documents dated May 12, 1998. We adjusted this value to reflect 
inflation using the WPI published by the IMF.
     To value truck freight, we used a rate derived from an 
article in the Financial Express of India on November 16, 1998.
     To value shipping freight, we used a rate reported to the 
Department in the August, 1993 cable from the U.S. Embassy in India 
which was submitted for and used in the Final Determination

[[Page 54495]]

of Sales at Less Than Fair Value: Certain Helical Spring Lock Washers 
from the People's Republic of China, 58 FR 48833 (September 20, 1993). 
We adjusted the rate to reflect inflation using the WPI published by 
the IMF.
    For a complete description of the factor values used, see 
``Memorandum to File: Factor Values Used for the Preliminary Results of 
the Sixth Administrative Review,'' dated August 31, 2000 (Factors 
Memorandum) a public version of which is available in the Public File.

Preliminary Results of Review

    We preliminarily determine that the following dumping margin 
exists:

------------------------------------------------------------------------
                                                              Margin
     Manufacturer/exporter             Time period           (percent)
------------------------------------------------------------------------
Hang Zhou Spring Washer Co.            10/01/98-09/30/99            2.62
 Ltd./Zhejiang Wanxin Group
 Co., Ltd......................
------------------------------------------------------------------------

Public Comment

    Interested parties may request a hearing within 30 days of the date 
of publication of this notice. Any hearing, if requested, will be held 
two days after the scheduled date for submission of rebuttal briefs 
(see below). Interested parties may submit written arguments in case 
briefs within 30 days of the date of publication of this notice. 
Rebuttal briefs, limited to issues raised in case briefs, may be filed 
no later than five days after the date of filing the case briefs. 
Parties who submit briefs in these proceedings should provide a summary 
of the arguments not to exceed five pages and a table of statutes, 
regulations, and cases cited. Copies of case briefs and rebuttal briefs 
must be served on interested parties in accordance with 19 CFR 
351.303(f)(3).
    The Department will issue the final results of this administrative 
review within 120 days from the publication of these preliminary 
results.
    Furthermore, the following cash deposit requirements will be 
effective upon publication of the final results of this administrative 
review for all shipments of HSLWs from the PRC entered, or withdrawn 
from warehouse for consumption on or after the publication date, as 
provided for by section 751(a)(2)(C) of the Act: (1) for Hangzhou, 
which has a separate rate, the cash deposit rate will be the company-
specific rate established in the final results of this administrative 
review; (2) for all other PRC exporters, the cash deposit rate will be 
the PRC rate, 128.63 percent, which is the All Other PRC Manufacturers, 
Producers and Exporters rate from the Final Determination of Sales at 
Less Than Fair Value: Certain Helical Spring Lock Washers from the PRC, 
58 FR 48833 (September 20, 1993); and, (3) for non-PRC exporters of 
subject merchandise from the PRC, the cash deposit rate will be the 
rate applicable to the PRC supplier of that exporter.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of doubled antidumping duties.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: August 31, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-23124 Filed 9-7-00; 8:45 am]
BILLING CODE 3510-DS-P