[Federal Register Volume 65, Number 216 (Tuesday, November 7, 2000)]
[Notices]
[Pages 66691-66697]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-28571]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-803]
Heavy Forged Hand Tools, Finished or Unfinished, With or Without
Handles, From the People's Republic of China; Preliminary Results and
Preliminary Partial Recission of Antidumping Duty Administrative
Reviews and Notice of Intent Not To Revoke in Part
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Preliminary Results and Preliminary Partial Recission
of Antidumping Duty Administrative Reviews and Notice of Intent Not To
Revoke in Part of Heavy Forged Hand Tools, Finished or Unfinished, With
or Without Handles, From the People's Republic of China.
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SUMMARY: The Department of Commerce (``the Department'') has
preliminarily determined that sales by the respondents in these reviews
covering the period February 1, 1999 through January 31, 2000, have
been made below normal value (``NV''). If these preliminary results are
adopted in our final results of reviews, we will instruct the U.S.
Customs Service (``Customs'') to assess antidumping duties on all
appropriate entries.
The Department invites interested parties to comment on these
preliminary results.
EFFECTIVE DATE: November 7, 2000.
FOR FURTHER INFORMATION CONTACT: Frank Thomson or Howard Smith, AD/CVD
Enforcement, Office 4, Group II, Import Administration, International
[[Page 66692]]
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-
4793, and 482-5193, respectively.
SUPPLEMENTARY INFORMATION:
The 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 current regulations at 19 CFR Part 351 (1999).
Period of Review
The period of review (``POR'') is February 1, 1999 through January
31, 2000.
Background
On February 19, 1991, the Department published in the Federal
Register (56 FR 6622) the antidumping duty orders on heavy forged hand
tools, finished or unfinished, with or without handles (``certain heavy
forged hand tools'' or ``HFHTs''), from the People's Republic of China
(``PRC''). On February 14, 2000, the Department published in the
Federal Register (65 FR 7348) a notice of opportunity to request
administrative reviews of these antidumping duty orders. On February
28, 2000, four exporters of the subject merchandise requested that the
Department conduct administrative reviews of their exports of the
subject merchandise. Specifically, Tianjin Machinery Import & Export
Corporation (``TMC'') requested that the Department conduct
administrative reviews of its exports of HFHTs within the axes/adzes,
bars/wedges, hammers/sledges, and picks/mattocks classes or kinds of
merchandise. Shandong Huarong General Group Corporation (``Shandong
Huarong'') requested that the Department conduct an administrative
review of its exports of HFHTs within the bars/wedges class or kind of
merchandise. Liaoning Machinery Import & Export Corporation (``LMC'')
requested that the Department conduct an administrative review of its
exports of HFHTs within the bars/wedges class or kind of merchandise.
Shandong Machinery Import & Export Corporation (``SMC'') requested that
the Department conduct administrative reviews of its exports of HFHTs
within the axes/adzes, bars/wedges, hammers/sledges, and picks/mattocks
classes or kinds of merchandise.
In addition, on February 29, 2000, the petitioner, O. Ames Co.,
requested that the Department conduct administrative reviews of exports
within all four classes of subject merchandise by TMC, Fujian Machinery
& Equipment Import & Export Corp. (``FMEC''), Shandong Huarong, LMC,
and SMC. The Department published a notice of initiation of these
reviews on March 30, 2000 (65 FR 16875).
The Department is conducting these administrative reviews in
accordance with section 751 of the Act.
Partial Recission
In its June 12, 2000, Section A questionnaire response, Shandong
Huarong stated that during the POR, it sold only subject merchandise
within the bars/wedges and axes/adzes classes or kinds of merchandise.
Therefore, Shandong Huarong requested that it be excluded from the
review of the hammers/sledges and picks/mattocks classes or kinds of
merchandise. Based on our review of U.S. import data obtained from
Customs indicating no shipments of hammers/sledges and picks/mattocks,
we are preliminarily rescinding our review of Shandong Huarong with
respect to sales within these classes or kinds of merchandise.
Furthermore, in its June 12, 2000, Section A questionnaire
response, LMC noted that during the POR it sold only HFHTs within the
bars/wedges class or kind of merchandise. Based upon our review of U.S.
import data obtained from Customs indicating no shipments of axes/
adzes, hammers/sledges and picks/mattocks, we are preliminarily
rescinding our review of LMC with respect to sales within these classes
or kinds of merchandise.
Scope of Reviews
Imports covered by these reviews are shipments of HFHTs from the
PRC comprising the following classes or kinds of merchandise: (1)
hammers and sledges with heads over 1.5 kg (3.33 pounds) (hammers/
sledges); (2) bars over 18 inches in length, track tools and wedges
(bars/wedges); (3) picks/mattocks; and (4) axes/adzes.
HFHTs include heads for drilling, hammers, sledges, axes, mauls,
picks, and mattocks, which may or may not be painted, which may or may
not be finished, or which may or may not be imported with handles;
assorted bar products and track tools including wrecking bars, digging
bars and tampers; and steel wood splitting wedges. HFHTs are
manufactured through a hot forge operation in which steel is sheared to
required length, heated to forging temperature, and formed to final
shape on forging equipment using dies specific to the desired product
shape and size. Depending on the product, finishing operations may
include shot-blasting, grinding, polishing and painting, and the
insertion of handles for handled products. HFHTs are currently
classifiable under the following Harmonized Tariff Schedule (``HTS'')
subheadings: 8205.20.60, 8205.59.30, 8201.30.00, and 8201.40.60.
Specifically excluded are hammers and sledges with heads 1.5 kg (3.33
pounds) in weight and under, hoes and rakes, and bars 18 inches in
length and under. Although the HTS subheadings are provided for
convenience and Customs purposes, our written description of the scope
of these orders is dispositive.
Intent Not To Revoke
In their February 28, 2000 requests for review, TMC, Shandong
Huarong, and LMC submitted timely requests that the Department revoke
the order on certain classes or kinds of HFHTs with respect to their
sales of this merchandise. Specifically, TMC requested that we revoke
the orders with respect to its sales of hammers/sledges and picks/
mattocks, Shandong Huarong requested that we revoke the order with
respect to its sales of bars/wedges, and LMC requested that we revoke
the order with respect to its sales of bars/wedges.
Section 351.222(b)(2) of the Department's regulations notes that
the Secretary may revoke an antidumping order in part if the Secretary
concludes, inter alia, that one or more exporters or producers covered
by the order have sold the merchandise at not less than NV for a period
of at least three consecutive years. Thus, in determining whether a
requesting party is entitled to a revocation inquiry, the Department
must determine that the party received zero or de minimis margins for
three years forming the basis for the request. See, e.g., Notice of
Final Results of Antidumping Duty Administrative Review and
Determination Not to Revoke the Antidumping Duty Order: Brass Sheet and
Strip From the Netherlands, 65 FR 742, 743 (January 6, 2000). See also
the preamble of the Department's latest revision of the revocation
regulation stating: ``The threshold requirement for revocation
continues to be that respondent not sell at less than normal value for
at least three consecutive years . . .'' The respondents provided
certifications pursuant to 19 CFR 351.222(e) indicating that they based
their revocation requests on the results of the instant reviews and the
preceding two administrative reviews. However, with
[[Page 66693]]
respect to the classes or kinds of merchandise for which they requested
revocation, none of these respondents received zero or de minimis
margins in each of the reviews upon which they based their revocation
request. See, e.g., Heavy Forged Hand Tools From the People's Republic
of China; Amended Final Results of Antidumping Duty Administrative
Reviews, 65 FR 50499 (August 18, 2000). Consequently, we preliminarily
find that TMC, Shandong Huarong and LMC do not qualify for partial
revocation of the orders based upon section 351.222(b) of the
Department's regulations.
Verification
Following the publication of these preliminary results, we intend
to verify, as provided in section 782(i) of the Act, sales and cost
information submitted by respondents, as appropriate. At that
verification, we will use standard verification procedures, including
on-site inspection of the manufacturers' facilities, the examination of
relevant sales and financial records, and the selection of original
source documentation containing relevant information. We plan to
prepare verification reports outlining our verification results and
place these reports on file in the Central Records Unit, room B099 of
the main Commerce building (``CRU-Public File'').
Duty Absorption
On February 29, 2000, petitioner requested that the Department
conduct a duty absorption inquiry in order to determine whether
antidumping duties had been absorbed by a foreign producer or exporter
subject to the order. However, the Department's invitation for such
requests only applies to certain administrative reviews of orders that
were in effect before January 1995. For transition orders as defined in
section 751(c)(6)(C) of the Act, i.e., orders in effect as of January
1, 1995, section 351.213(j)(2) of the Department's antidumping
regulations provides that the Department will make a duty-absorption
determination, if requested, for any administrative review initiated in
1996 or 1998. This approach ensures that interested parties will have
the opportunity to request a duty-absorption determination prior to the
time for sunset review of the order under section 751(c) on entries for
which the second and fourth years following an order have already
passed. Because the antidumping duty orders on HFHTs from the PRC have
been in effect since 1991, they are ``transition orders'' in accordance
with section 751(c)(6)(C) of the Tariff Act. However, since this
administrative review was not initiated in 1996 or 1998, the Department
will not make a duty absorption determination.
Separate Rates Determination
To establish whether a company operating in a non-market economy
(``NME'') 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 test, 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 independent of the
government and without the approval of a government authority; (2)
whether each exporter retains the proceeds from its sales and makes
independent decisions regarding the disposition of profits or financing
of losses; (3) whether each exporter has the authority to negotiate and
sign contracts and other agreements; and (4) whether each exporter has
autonomy from the government regarding the selection of management. See
Silicon Carbide, 59 FR at 22587 and Sparklers 56 FR at 20589.
In the final results of the 1998-1999 reviews of HFHTs, the
Department granted separate rates to Shandong Huarong, SMC, LMC, and
TMC. See Notice of Final Results and Partial Rescission of Antidumping
Duty Administrative Reviews: Heavy Forged Hand Tools From the People's
Republic of China, 65 FR 43290 (July 13, 2000) (``Hand Tools''). While
these four companies received separate rates in previous segments of
these proceedings, it is the Department's policy to evaluate separate
rates questionnaire responses each time a respondent makes a separate
rates claim, regardless of any separate rate the respondent received in
the past. See Manganese Metal From the People's Republic of China,
Final Results and Partial Rescission of Antidumping Duty Administrative
Review, 63 FR 12441 (March 13, 1998). In the instant reviews, these
companies submitted complete responses to the separate rates section of
the Department's questionnaire. The evidence submitted in these reviews
by Shandong Huarong, SMC, LMC, and TMC includes government laws and
regulations on corporate ownership, business licences, and narrative
information regarding the companies' operations and selection of
management. This evidence is consistent with the Department's findings
in previous reviews and supports a finding that control of companies in
the PRC has been decentralized and that the respondent companies'
operations are, in fact, autonomous from the PRC government. We
therefore preliminarily determine that these companies continue to be
entitled to separate rates.
With respect to FMEC, since it has not provided any information on
the record in this review, we preliminarily determine that FMEC did not
establish its entitlement to a separate rate.
Facts Available
(1) Separate Rates Facts Available
In the instant review, SMC, FMEC, and Shandong Huarong failed to
provide certain information requested by the Department. SMC failed to
provide sales and factor of production information regarding its sales
of axes/adzes, bars/wedges and picks/mattocks. FMEC failed to respond
to the Department's questionnaire at all. Shandong Huarong failed to
provide sales and factor of production information regarding its sales
of axes/adzes. In accordance with section 776(b) of the Act, the
Department has determined that the use of adverse facts available is
appropriate for purposes of determining the preliminary dumping margins
for the classes or kinds of subject merchandise for which SMC and
Shandong Huarong failed to provide information.
Section 776(a)(2) of the Act provides that:
if an interested party or any other person (A) withholds
information that has been requested by the administering authority
or the Commission under this title; (B) fails to provide such
information by the deadlines for the submission of the information
or in the form and manner requested, subject to subsections (c)(1)
and (e) of section 782; (C) significantly impedes a proceeding under
this title; or (D) provides such information
[[Page 66694]]
but the information cannot be verified as provided in section
782(i), the administering authority and the Commission shall,
subject to section 782(d), use the facts otherwise available in
reaching the applicable determination under this title.
Moreover, section 776(b) of the Act provides that:
if the administering authority or the Commission (as the case
may be) finds that an interested party has failed to cooperate by
not acting to the best of its ability to comply with a request for
information from the administering authority or the Commission, the
administering authority or the Commission (as the case may be), in
reaching the applicable determination under this title, may use an
inference that is adverse to the interests of that party in
selecting from among the facts otherwise available.
Consistent with section 776(a)(2)(B) of the Act, where SMC (axes/
adzes, bars/wedges and picks/mattocks) and Shandong Huarong (axes/
adzes) failed to provide requested information, we based the
preliminary margins on facts available. In the instant case, SMC chose
not to provide certain information requested by the Department.\1\
Section 782(c)(1) of the Act is not applicable for SMC because it did
not notify the Department that it could not respond and did not suggest
an alternative form by which to respond. Section 782(e) of the Act is
not applicable because no information was ever provided. Therefore, we
have determined for SMC for axes/adzes, bars/wedges and picks/mattocks
that use of the facts available is appropriate.
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\1\ SMC noted in its supplemental questionnaire response that it
has chosen to participate in this review only with respect to sales
of hammers/sledges and that it understands that its sales of subject
merchandise other than hammers/sledges will be subject to the
Department's use of facts available.
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In the instant case, Shandong Huarong did not respond to the
Department's questionnaire regarding axes/adzes. In its June 12, 2000
questionnaire response, Shandong Huarong stated that it did not have
access to the required information to participate in the review on
axes/adzes. We informed Shandong Huarong, in our August 31, 2000
supplemental questionnaire, that if it did not report its sales of
axes/adzes, then these sales would be subject to the facts available
for purposes of determining a dumping margin for the preliminary
results. In its September 18, 2000 supplemental response, Shandong
Huarong claimed that its supplier factory refused to provide the
information on axes/adzes. See Shandong Huarong's September 18, 2000
questionnaire response at page 1. Section 782(c)(1) of the Act is not
applicable for Shandong Huarong because it did not suggest an
alternative form by which to respond. Regarding Shandong Huarong's
supplier, because factors data for Shandong Huarong's U.S. sales were
not provided by its supplier with regard to axes/adzes, we
preliminarily determine that such party did not demonstrate that it
cooperated to the best of its ability. See Tapered Roller Bearings and
Parts Thereof, Finished and Unfinished, From the People's Republic of
China; Preliminary Results of 1998-1999 Administrative Review, Partial
Rescission of Review, and Notice of Intent To Revoke Order in Part, 65
FR 41944, 41946-41947 (July 7, 2000). Section 782(e) of the Act is not
applicable because no information was ever provided. Therefore, we have
determined for Shandong Huarong's sales of axes/adzes that use of the
facts available is appropriate. We intend to issue further supplemental
requests for information regarding the factory's refusal to provide
information on axes/adzes after the preliminary results.
Pursuant to section 776(b) of the Act, we have determined that SMC
and the supplier of Shandong Huarong have failed to cooperate to the
best of their ability with respect to the classes or kinds of
merchandise discussed above. Accordingly, we have used an adverse
inference in selecting facts available separate rate margin for the
classes or kinds of merchandise for which SMC and Shandong Huarong
failed to provide information and have not cooperated to the best of
their ability. As outlined in section 776(b) of the Act, adverse facts
available may include reliance on information derived from: (1) The
petition; (2) a final determination in the investigation; (3) any
previous review under section 751 of the Act or determination under
section 753 of the Act; or (4) any other information placed on the
record. Specifically, we based SMC's preliminary margin for bars/
wedges, axes/adzes, and picks/mattocks, and Shandong Huarong's
preliminary margin for axes/adzes on the highest margin for each
respective class or kind of merchandise from this or any prior segment
of this proceeding-- 1998-1999 POR: axes/adzes (70.15 percent), bars/
wedges (139.31 percent), picks/mattocks (98.77 percent) and 1999-2000
POR: hammers/sledges (72.04 percent). See Ferro Union v. United States
44 F. Supp. 2 1310 (CIT 1999) (``Ferro Union''). With respect to FMEC,
we preliminarily determine that FMEC is not entitled to a separate rate
and will be subject to the PRC country-wide rates, which are based on
adverse facts available. See Separate Rates Determination above; and
Country-Wide Rates Facts Available below.
(2) Country-Wide Rates Facts Available
The Department has determined that the use of facts available is
appropriate for purposes of establishing the country-wide rate for
these preliminary results of reviews, pursuant to section 776(a)(2)(B)
of the Act. The Act provides that the administering authority shall use
facts otherwise available when an interested party ``fails to provide
such information by the deadlines for the submission of the information
or in the form and manner requested.'' On June 1, 2000, the Department
sent a questionnaire to the Ministry of Foreign Trade and Economic
Cooperation (``MOFTEC'') in order to collect information relevant to
the calculation of the PRC-wide rate. MOFTEC did not respond to our
questionnaire.
Section 776(b) of the Act authorizes the Department to use adverse
facts available whenever it finds that an interested party has failed
to cooperate by not acting to the best of its ability to comply with
the Department's requests for information. Because MOFTEC did not
respond to our questionnaire or direct us to send the questionnaire to
any other party, and because FMEC failed to respond to the Department's
questionnaire, we preliminarily determine that these entities did not
act to the best of their ability to comply with our requests.
Therefore, pursuant to section 776(b) of the Act, we are relying on
adverse facts available to determine the margins for the PRC-wide
entity. When applicable, for adverse facts available for the PRC-wide
rates we have applied the PRC-wide rates as follows--1998-1999 POR:
axes/adzes (70.15 percent), bars/wedges (139.31 percent), picks/
mattocks (98.77 percent) and 1999-2000 POR: hammers/sledges (72.04
percent)--because they are the highest rates from any segment of these
proceedings with respect to each class or kind of merchandise.
Corroboration
Section 776(c) of the Act provides that when the Department relies
on the facts otherwise available and relies on ``secondary
information,'' the Department shall, to the extent practicable,
corroborate that information from independent sources reasonably at the
Department's disposal. The Statement of Administrative Action (``SAA'')
(H.R. Doc. 103-316 (2nd Sess. 1994) states that ``corroborate'' means
to determine that the information used has probative value. See SAA at
870. To corroborate secondary information, the Department will, to the
extent
[[Page 66695]]
practicable, examine the reliability and relevance of the information
to be used. However, unlike other types of information, such as input
costs or selling expenses, there are no independent sources for
calculated dumping margins. The only source for margins is
administrative determinations. Thus, in an administrative review, if
the Department chooses as total adverse facts available a calculated
dumping margin from a prior segment of the proceeding, it is not
necessary to question the reliability of the margin for that time
period. See Grain-Oriented Electrical Steel From Italy; Preliminary
Results of Antidumping Duty Administrative Review, 61 FR 36551, 36552
(July 11, 1996). With respect to the relevance aspect of corroboration,
however, the Department will consider information reasonably at its
disposal to determine whether a margin continues to have relevance.
Where circumstances indicate that the selected margin is not
appropriate as adverse facts available, the Department will disregard
the margin and determine an appropriate margin. For example, in Fresh
Cut Flowers from Mexico: Final Results of Antidumping Administrative
Review, 61 FR 6812 (February 22, 1996), the Department disregarded the
highest margin in that case as adverse best information available (the
predecessor to facts available) because the margin was based on another
company's uncharacteristic business expense resulting in an unusually
high margin. Similarly, the Department does not apply a margin that has
been discredited. See D & L Supply Co. v. United States, 113 F.3d 1220,
1221 (Fed. Cir. 1997) (the Department will not use a margin that has
been judicially invalidated). None of these unusual circumstances are
present here. Accordingly, for each class or kind of HFHTs for which we
have resorted to adverse facts available, we have used the highest
margin from this or any prior segment of the proceeding as the margin
for these preliminary results because there is no evidence on the
record indicating that such margins are not appropriate as adverse
facts available.
Classification of U.S. Sales as Export Price (``EP'') vs.
Constructed Export Price (``CEP'')
For respondents SMC, LMC, and Shandong Huarong, we calculated an EP
for sales to the United States because the first sale was made before
the date of importation and the use of CEP was not otherwise warranted.
Sales classification (EP vs. CEP) is an issue that requires further
analysis for one respondent, TMC, because its affiliate in the United
States, CMC T.M., performs some selling functions in the United States
for TMC's sales. Specifically, CMC T.M. finds new U.S. customers,
transmits purchase orders from U.S. customers to TMC, receives and
processes warranty claims, and provides technical service. However, the
sales documentation on the record in these reviews indicates that the
material terms of TMC's U.S. sales were established in the PRC between
TMC and the unaffiliated U.S. purchaser. Specifically, we have found
the following facts from analyzing TMC's questionnaire responses: (1)
First contact with a U.S. customer may be made either by TMC or CMC
T.M., (2) all contracts are signed by TMC in the PRC, (3) TMC arranges
for shipping and other services in the PRC, (4) TMC issues the invoice
directly from the PRC to the U.S. customer, (5) title passes from TMC
to the U.S. customer upon shipment from the PRC, and (6) TMC accepts
payment from the U.S. customer. Given these facts, we preliminarily
determine that these sales were made in the PRC by TMC and, thus,
should be treated as EP transactions.
Export Price
In accordance with section 772(a) of the Act, the Department
calculated an EP for sales to the United States for all respondents
because the first sale was made before the date of importation and the
use of CEP was not otherwise warranted. When appropriate, we made
deductions from the selling price to unaffiliated parties for ocean
freight, marine insurance and foreign inland freight. Each of these
services, with one exception, was either provided by a NME vendor or
paid for using a NME currency. Thus, we based the deduction for these
movement charges on surrogate values. See Normal Value section of this
notice. The one exception referred to above concerns ocean freight.
Each respondent reported that a market economy vendor provided ocean
freight for a portion of their U.S. sales and that they paid for this
service using a market economy currency. Therefore, for all sales, we
applied the reported market economy ocean freight expense in
calculating EP.
We valued marine insurance using the rate in effect in India which
was reported in the public version of the questionnaire response placed
on the record in Stainless Steel Wire Rod From India; Final Results of
Administrative Review, 63 FR 48184 (September 9, 1998) (``India Wire
Rod''). We valued foreign brokerage and handling using the rate
reported in the questionnaire response in India Wire Rod. The sources
used to value foreign inland freight are identified below in the Normal
Value section of this notice.
To account for inflation or deflation between the time period that
the freight, brokerage, and insurance rates were in effect and the POR,
we adjusted the rates using the wholesale price indices (``WPI'') for
India as published in the International Monetary Fund's (``IMF'')
publication, International Financial Statistics. See Memorandum From
Frank Thomson Regarding Surrogate Values Used for the Preliminary
Results of the Ninth Administrative Reviews of Certain Heavy Forged
Hand Tools From the People's Republic of China, (October 31, 2000),
(``Surrogate Value Memorandum''), which is on file in the CRU-Public
File.
Normal Value
For exports from NMEs, section 773(c)(1) of the Act provides that
the Department shall determine NV using a factors of production
(``FOP'') methodology if (1) the subject merchandise is exported from
an NME country, and (2) available information does not permit the
calculation of NV using home-market prices, third-country prices, or
constructed value. Section 351.408 of the Department's regulations sets
forth the Department's methodology for calculating the NV of
merchandise from NME countries. In every case conducted by the
Department involving the PRC, the PRC has been treated as an NME. Since
none of the parties to these proceedings contested such treatment in
these reviews, we calculated NV in accordance with section 773(c) of
the Act and section 351.408 of the Department's regulations.
In accordance with section 773(c)(3) of the Act, the FOP utilized
in producing HFHTs include, but are not limited to: (A) Hours of labor
required; (B) quantities of raw materials employed; (C) amounts of
energy and other utilities consumed; and (D) representative capital
costs, including depreciation. In accordance with section 773(c)(4) of
the Act, the Department valued the FOP, to the extent possible, using
the costs of the FOP in a market economy that is (A) at a level of
economic development comparable to the PRC, and (B) a significant
producer of comparable merchandise. We determined that India is
comparable to the PRC in terms of per capita gross national product,
the growth rate in per capita income, and the national distribution of
labor. Furthermore, India is a significant producer of comparable
merchandise. See Memorandum From
[[Page 66696]]
Jeff May, Director, Office of Policy, to Thomas Futtner, Acting Office
Director, AD/CVD Enforcement Group II, dated August 31, 2000, which is
on file in the CRU-Public File.
In accordance with section 773(c)(1) of the Act, for purposes of
calculating NV, we attempted to value FOP using surrogate values that
were in effect during the POR. However, this data was not available.
Therefore, we utilized surrogate values that were in effect during
periods prior to the POR, and adjusted the values, as appropriate, to
account for inflation or deflation between the effective period and the
POR. We calculated the inflation or deflation adjustments for all
factor values, except labor, using the wholesale price indices for
India that were reported in the IMF's publication, International
Financial Statistics. We valued the FOP as follows:
(1) We valued direct materials used to produce HFHTs (i.e., steel,
steel scrap, paint, wood handles, resin glue, fibreglass handles and
anti-rust oil) and the steel scrap generated from the production of
HFHTs (except as noted below) using the rupee per metric ton or rupee
per kilogram value of imports that entered India during the period
February 1998 through January 1999 as published in the Monthly
Statistics of the Foreign Trade of India, Volume II--Imports (``Indian
Import Statistics''). We valued steel for SMC using the company's
average reported purchase price because it purchased steel from a
market economy vendor using a market economy currency. For wood
handles, resin glue and fibreglass handles, we used the rupee per
metric ton or rupee per kilogram value of imports that entered India
during the period February 1998 through July 1998 as published in the
Indian Import Statistics.
(2) We valued labor using a regression-based wage rate, in
accordance with 19 CFR 351.408(c)(3). This rate is identified on the
Import Administration's web site (See http://ia.ita.doc.gov/wages/).
(3) We derived ratios for factory overhead, selling, general and
administrative (``SG&A'') expenses, and profit using information
reported for 1992-1993 in the January 1997 Reserve Bank of India
Bulletin. From this information, we were able to calculate factory
overhead as a percentage of direct materials, labor, and energy
expenses; SG&A expenses as a percentage of the total cost of
manufacturing; and profit as a percentage of the sum of the total cost
of manufacturing and SG&A expenses.
(4) We valued packing materials, including cartons, pallets, iron
straps, anti-damp paper, anti-rust paper, plastic strips, iron knots,
plastic bags, iron wire, and metal clips, using the rupee per metric
ton or rupee per kilogram value of imports that entered India during
the period February 1998 through January 1999 as published in Indian
Import Statistics. We valued hessian cloth (a packing material) using
the rupee per kilogram value of imports that entered India during the
period April 1998 through January 1999 as published in Indian Import
Statistics.
(5) We valued coal using the price of steam coal in India in 1996
as reported in the International Energy Agency's publication, Energy
Prices and Taxes, Second Quarter 1999 (``EPT'').
(6) We valued electricity using the 1997 Indian electricity prices
for industrial use as reported in EPT.
(7) We used the following sources to value truck and rail freight
services incurred to transport direct materials, packing materials, and
coal from the suppliers of the inputs to the factories producing HFHTs:
Truck Freight: If a respondent used its own trucks to transport
material or subject merchandise, we valued freight services using the
average cost of operating a truck, which we calculated from information
published in The Times of India on April 24, 1994. If a respondent did
not use its own trucks or the respondent did not state that it used its
own trucks, we valued freight services using the rates reported in an
August 1993 cable from the U.S. Embassy in India to the Department. See
Final Determination of Sales at Less Than Fair Value: Certain Helical
Spring Lock Washers from the People's Republic of China, 58 FR 48833
(September 20, 1993).
Rail Freight: We valued rail freight services using the April 1995
rates published by the Indian Railway Conference Association. These
rates were used in Brake Drums and Brake Rotors. For further discussion
of the surrogate values used in these reviews, see Surrogate Value
Memorandum, dated October 31, 2000, which is on file in the CRU-Public
File.
Preliminary Results of the Reviews
As a result of our reviews, we preliminarily determine that the
following margins exist for the period February 1, 1999 through January
31, 2000:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Shandong Huarong General Group Corporation:
Axes/Adzes......................................... 70.15
Bars/Wedges........................................ 0.44
Liaoning Machinery Import & Export Corporation:
Bars/Wedges........................................ 0.01
Tianjin Machinery Import & Export Corporation:
Axes/Adzes......................................... 31.11
Bars/Wedges........................................ 0.84
Picks/Mattocks..................................... 3.48
Hammers/Sledges.................................... 72.04
Shandong Machinery Import & Export Corporation:
Axes/Adzes......................................... 70.15
Bars/Wedges........................................ 139.31
Picks/Mattocks..................................... 98.77
Hammers/Sledges.................................... 2.84
PRC-wide rates:
Axes/Adzes......................................... 70.15
Bars/Wedges........................................ 139.31
Picks/Mattocks..................................... 98.77
Hammers/Sledges.................................... 72.04
------------------------------------------------------------------------
The Department will disclose to parties to this proceeding the
calculations performed in reaching the preliminary results within ten
days of the date of announcement of these preliminary results. An
interested party may request a hearing within 30 days of publication of
these preliminary results. See 19 CFR 351.310(c). We will issue a
memorandum detailing the dates of a hearing, if any, and deadlines for
submission of case briefs/written comments and rebuttal briefs or
rebuttals to written comments, limited to issues raised in such briefs
or comments, after verification. Parties who submit arguments are
requested to submit with the argument (1) A statement of the issue, (2)
a brief summary of the argument and (3) a table of authorities.
Further, the Department requests that parties submitting written
comments provide the Department with a diskette containing the public
version of those comments. The Department will issue the final results
of these administrative reviews, which will include the results of its
analysis of issues raised in interested party comments, within 120 days
of publication of these preliminary results.
The final results of these reviews shall be the basis for the
assessment of antidumping duties on entries of merchandise covered by
these reviews and for future deposits of estimated duties.
Duty Assessment Rates
The Department shall determine, and Customs shall assess,
antidumping duties on all appropriate entries. Pursuant to 19 CFR
351.212(b)(1), we
[[Page 66697]]
have calculated importer-specific ad valorem duty assessment rates
based on the ratio of the total amount of the dumping margins
calculated for the examined sales to the total entered value of those
same sales. In order to estimate the entered value, we subtracted
international movement expenses from the gross sales value. For those
respondents or classes or kinds of merchandise with margins based on
facts available, we based the importer-specific assessment rates on the
facts available margin percentages. These importer-specific rates will
be assessed uniformly on all entries of each importer that were made
during the POR. In accordance with 19 CFR 351.106 (c)(2), we will
instruct Customs to liquidate without regard to antidumping duties any
entries for which the assessment rate is de minimis, i.e., less than
0.5 percent. The Department will issue appraisement instructions
directly to Customs.
Cash Deposit Requirements
The following deposit requirements will be effective upon
publication of the final results of these administrative reviews for
all shipments of HFHTs from the PRC entered, or withdrawn from
warehouse, for consumption on or after the publication date of this
notice, as provided for by section 751(a)(1) of the Act: (1) The cash
deposit rates for the reviewed companies named above which have
separate rates (Shandong Huarong, LMC, SMC and TMC) will be the rates
for those firms established in the final results of these
administrative reviews for the classes or kinds of merchandise listed
above; (2) for any previously reviewed PRC or non-PRC exporter with a
separate rate not covered in these reviews, the cash deposit rates will
be the company-specific rates established for the most recent period;
(3) for all other PRC exporters, the cash deposit rates will be the
PRC-wide rates established in the final results of these reviews; and
(4) the cash deposit rates for non-PRC exporters of subject merchandise
from the PRC will be the rates applicable to the PRC supplier of that
exporter. These deposit requirements, when imposed, shall remain in
effect until publication of the final results of the next
administrative reviews.
Notification to Interested Parties
This notice serves as a preliminary reminder to importers of their
responsibility under section 351.402(f)(2) 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.
We are issuing and publishing this determination in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: October 31, 2000.
Troy H. Cribb,
Assistant Secretary for Import Administration.
[FR Doc. 00-28571 Filed 11-6-00; 8:45 am]
BILLING CODE 3510-DS-P