[Federal Register Volume 68, Number 216 (Friday, November 7, 2003)]
[Notices]
[Pages 63060-63064]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-28123]


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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, request for revocation of the antidumping duty 
order, and determination not to revoke, in part.

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[[Page 63061]]

SUMMARY: We preliminarily find that helical spring lock washers from 
the People's Republic of China were being sold in the United States 
below normal value by the Hangzhou Spring Washer Co., Ltd. (also known 
as Zhejiang Wanxin Group, Ltd. (ZWG)) (collectively, Hangzhou) during 
the period October 1, 2001 through September 30, 2002. We have also 
preliminarily determined not to revoke the antidumping duty order on 
the subject merchandise with respect to this company. Interested 
parties are invited to comment on these preliminary results.

EFFECTIVE DATE: November 7, 2003.

FOR FURTHER INFORMATION CONTACT: Ryan Langan and Audrey Twyman, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone (202) 482-2613 or (202) 482-3534.

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), as amended on November 23, 1993 
(58 FR 61859). The Department notified interested parties of the 
opportunity to request an administrative review of this order on 
October 2, 2002 (67 FR 61849). The petitioner, Shakeproof Assembly 
Components Division of Illinois Tool Works, Inc. (Shakeproof), 
requested that the Department conduct an administrative review of 
Hangzhou on October 22, 2002. Hangzhou requested an administrative 
review and revocation of the antidumping duty order with respect to 
itself on October 31, 2002. The notice of initiation of this 
administrative review was published on November 22, 2002 (67 FR 70402).
    On January 21 and 22, 2003, Hangzhou responded to the Department's 
December 5, 2002 questionnaire. Next, on February 4, 2003, the 
Department provided parties with an opportunity to submit information 
regarding appropriate surrogate values. On February 28, 2003, Hangzhou 
submitted surrogate value comments. The petitioner submitted factual 
information, including surrogate value comments, on March 20, 2003. The 
Department received petitioner's comments on Hangzhou's questionnaire 
responses on March 14, 2003, and its additional deficiency comments and 
verification comments on March 26, 2003.
    The Department issued its first supplemental questionnaire to 
Hangzhou on March 31, 2003, and received Hangzhou's responses on April 
11 and 15, 2003. On April 22, 2003, Hangzhou submitted additional 
information about its platers. Shakeproof submitted its second and 
third sets of deficiency comments on April 29 and May 15, 2003, 
respectively.
    On June 4, 2003, the Department published Certain Helical Spring 
Lock Washers from the People's Republic of China: Notice of Extension 
of Time Limit for the Preliminary Results of the Ninth Antidumping 
Administrative Review, 68 FR 33472. The petitioner filed pre-
preliminary determination comments on June 20, 2003. On August 12, 
2003, the Department issued its second supplemental questionnaire. 
Hangzhou submitted its response to that questionnaire on August 27, 
2003.
    The Department verified Hangzhou's questionnaire response on 
September 1 through 4, 2003, in Xiaoshan City, Xinjie Town, People's 
Republic of China (PRC). Hangzhou submitted its pre-verification 
corrections on September 9, 2003, and new databases on October 17, 
2003. The Department issued its verification report on October 23, 
2003.

Scope of the Order

    The products covered by the order 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 the order 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, 2001, through September 
30, 2002.

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 economy countries (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 the 
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, 2001, we determined that 
Hangzhou and its predecessor, ZWG, merited separate rates. We found, in 
each review, 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. 
During this period of review (POR), we have no evidence of any change 
in either the Sparklers or Silicon Carbide criteria. Therefore, we have 
assigned Hangzhou a separate rate.

Verification

    Pursuant to section 782(i) of the Tariff Act of 1930, as amended 
(``the Act''), we

[[Page 63062]]

verified sales and factors of production information provided by 
Hangzhou in Xiaoshan City, Xinjie Town, PRC, on September 1 through 4, 
2003. We used standard verification procedures, including the 
examination of relevant sales, accounting and production records, as 
well as original source documents provided by the respondents. Our 
verification results are outlined in the public version of the 
verification report, dated October 22, 2003, and located in the public 
file in the Central Records Unit, Room B-099 of the Department's main 
building (CRU).

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 pursuant to section 772(c)(2)(A) of 
the Act. We valued these deductions using surrogate values. We selected 
India as the primary surrogate country for the reasons explained in the 
``Normal Value'' section of this notice.

Normal Value

    The Department has determined the PRC to be 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 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 HSLW industry is a market-oriented industry and, consequently, we 
have no basis to determine that the information in this review would 
permit the calculation of normal value (NV) using PRC prices or costs.
    Section 773(c)(1) of the Act provides that, in the case of an NME, 
the Department shall determine 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. Because information on the record does not permit the 
calculation of NV using home-market prices, third-country prices, or 
constructed value, and no party has argued otherwise, we calculated NV 
based on factors of production in accordance with sections 773(c)(3) 
and (4) of the Act and 19 CFR 351.408(c).
    Because we are using surrogate country factors-of-production prices 
to determine NV, section 773(c)(4) of the Act requires that the 
Department use values from a market economy (surrogate) country that 
(1) is at a level of economic development comparable to that of the 
PRC, and (2) is a significant producer of comparable merchandise. We 
have determined that India, Pakistan, Indonesia, Sri Lanka and the 
Philippines are market economy countries at a comparable level of 
economic development to that of the PRC. (See ``Memorandum to Susan 
Kuhbach from Jeffrey May), dated January 27, 2003, ``Ninth 
Administrative Review for Certain Helical Spring Lock Washers from the 
People's Republic of China,'' which is available in the CRU.) In 
addition, we have found that India is a significant producer of 
comparable merchandise, i.e., fasteners. (See Memorandum to File from 
Sally Hastings, dated October 31, 2003, and available in the public 
file in the CRU.) As in the investigation and eight previous reviews, 
we have chosen India as the primary surrogate country. Thus, we have 
used Indian prices to value the factors of production.
    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. Also, where we have 
relied upon import values, we have excluded imports from South Korea, 
Thailand, and Indonesia. The Department has found that these countries 
maintain broadly available, non-industry specific export subsidies, and 
that the existence of these subsidies provides sufficient reason to 
believe or suspect that export prices from these countries are 
distorted. See Final Determination of Sales at Less Than Fair Value: 
Certain Automotive Replacement Glass Windshields From the People's 
Republic of China, 67 FR 6482 (February 12, 2002) and accompanying 
Issues and Decision Memorandum (Replacement Glass Windshields). Our 
practice of excluding subsidized prices has been upheld in China 
National Machinery Import and Export Corporation v. United States and 
the Timken Company, Court No. 01-01114, slip op. 03-133 (CIT Oct. 15, 
2003) (Confidential version; public version not yet issued).
    In its submission of June 20, 2003, the petitioner argues that the 
Department should exclude any import values into India where the 
exporting country maintains subsidies, i.e., any subsidizing country in 
addition to Indonesia, South Korea, and Thailand. The petitioner 
provides a list of countries that are subject to U.S. countervailing 
duty orders, and countries that have been found to provide ``generally 
available subsidies'' or ``N.T.E. export subsidies.''
    In past proceedings, we disregarded input prices where particular 
and objective record evidence provided the Department with a reason to 
believe or suspect that these prices may be distorted by subsidies. 
See, e.g., Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, from the People's Republic of China; Final Results of 1999-
2000 Administrative Review, Partial Rescission of Review, and 
Determination Not to Revoke Order in Part, 66 FR 57420 (November 15, 
2001), and accompanying Decision Memorandum at Comment 1; Final 
Determination of Sales at Less Than Fair Value: Certain Automotive 
Replacement Glass Windshields from the Peoples Republic of China, 67 FR 
6482 (February 12, 2002) and accompanying Issues and Decision 
Memorandum at Comment 1. In those and a number of other prior 
proceedings, parties demonstrated, on the basis of record evidence, 
that certain countries maintained broadly available, non-industry 
specific export subsidies, or that certain countries provided industry-
specific subsidies which may have benefitted certain input products 
covered by the proceeding.
    The information provided by the petitioner in this proceeding (with 
the exception of certain steel products) does not identify the 
particular products or the particular subsidies which allegedly distort 
the prices of these products. Without such evidence, we cannot 
preliminarily conclude that these input prices should be disregarded. 
We acknowledge that there may be other information, outside the record 
of this proceeding, which may be material to the question of whether 
other input prices are distorted by subsidies. However, it would be 
impractical for the Department to attempt to identify and consider such 
information without the parties first having demonstrated, on the basis 
of record evidence, that certain countries maintained broadly 
available, non-industry specific export subsidies, or that certain 
countries provided industry-specific subsidies which may

[[Page 63063]]

have benefitted certain input products covered by the proceeding. 
Therefore, except for valuing steel and steel scrap (discussed further 
below), we have preliminarily determined not to exclude imports from 
countries beyond Indonesia, South Korea and Thailand.

Steel Value

    During the POR, Hangzhou imported a portion of its steel input 
(carbon steel wire rod (CSWR)) from the United Kingdom (UK) and it paid 
for this input in a market economy currency. The petitioner, in its 
submission dated June 20, 2003, argues that the Department should 
disregard the steel import prices reported by Hangzhou because there is 
``reason to believe or suspect'' the steel benefitted from subsidies. 
In support of its claim, the petitioner points to the Department's 
finding in the sunset review of cut-to-length carbon steel plate from 
the UK, in which the Department found a subsidy rate of 12 percent for 
all UK producers and exporters (see Calculation of Net Countervailable 
Subsidy: Cut-to-Length Carbon Steel Plate from the United Kingdom, 
March 29, 2000). Consistent with the above-described practice of 
disregarding subsidized prices to value NME inputs, we have 
preliminarily determined not to use the market economy prices paid by 
Hangzhou for CSWR.
    Instead, we have used the value of imports of CSWR into India, 
based on information from the Monthly Foreign Trade Statistics of 
India--Imports (MSFTI). In computing this value, we have taken into 
account that the Department has made final affirmative countervailing 
duty determinations on steel products from numerous countries. 
Therefore, we have not included values for imports of CSWR into India 
from Belgium, Canada, France, Germany, and the UK (as well as South 
Korea and Thailand). Similarly, in valuing steel scrap, we have 
excluded values for imports into India from Belgium, France, Germany, 
South Africa and the UK (as well as Indonesia, South Korea and 
Thailand).
    The remaining inputs are addressed below:
    [sbull] To value the hydrochloric acid used in the production 
process, we used per kilogram values obtained from the Indian 
publication Chemical Weekly.
    [sbull] To value other chemicals used in the production of HSLWs, 
we used per kilogram import values obtained from MSFTI. We also 
adjusted these values to account for freight costs incurred between the 
supplier and Hangzhou.
    [sbull] To value plating, we used a March 14, 2003, price quote 
supplied by the petitioner in its submission dated March 20, 2003, 
subsequently resubmitted as a public document.
    [sbull] To value coal, we used a per kilogram value obtained from 
the MFSTI. We also made adjustments to account for freight costs 
incurred between the supplier and Hangzhou.
    [sbull] To value electricity, we used the electricity price data 
from the Energy Data Directory and Yearbook (1999/2000) published by 
the Tata Energy Research Institute. We adjusted the value to reflect 
inflation using the electricity sector-specific inflation index 
published in the Reserve Bank of India (RBI) Bulletin.
    [sbull] 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 wholesale price index (WPI) published by the International 
Monetary Fund (IMF).
    [sbull] 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://ia.ita.doc.gov.wages/corrected00wages/htm.
    [sbull] For factory overhead, selling, general, and administrative 
expenses (SG&A), and profit values, we used information from the 
September 12, 2002, RBI Bulletin report entitled ``Combined Income, 
Value of Production, Expenditure and Appropriations Accounts of the 
Selected 1,927 Public Limited Companies (2000-2001).'' 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.
    [sbull] For packing materials, we used the per kilogram values 
obtained from the MFSTI. 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.
    [sbull] To value foreign brokerage and handling, we used 
information reported in the New Shipper Review for Stainless Steel Wire 
Rod from India, 66 FR 27629 (May 18, 2001). See Meltroll Engineering 
Pvt. Ltd.'s submission dated September 12, 1999. We adjusted this value 
to reflect inflation using the WPI published by the IMF.
    [sbull] To value truck freight, we used the freight rates published 
in the Indian publication Chemical Weekly. We obtained distances 
between cities from the following Web sites: http://www.infreight.com; 
http://www.sitaindia.com/Packages/CityDistance.php; http://indiatravelinfo.com/distance.html; and, http://www/abcindia.com.
    [sbull] To value shipping freight, we used a rate reported in a 
July 14, 1997, letter from the Inland Waterways of India which was used 
in Certain Helical Spring Lock Washers from the People's Republic of 
China; Final Results of the Antidumping Duty Administrative Review, 67 
FR 8520 (February 25, 2002) (HSLWs-7) and Certain Helical Spring Lock 
Washers from the People's Republic of China; Final Results of the 
Antidumping Duty Administrative Review, 67 FR 69717 (November 19, 2002) 
(HSLWs-8). 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 Ninth Administrative Review,'' dated October 31, 2003 (Factors 
Memorandum), a public version of which is available in the Public File 
of the CRU.

Revocation

    The Department ``may revoke, in whole or in part'' an antidumping 
duty order upon completion of a review under section 751 of the Act. 
While Congress has not specified the procedures that the Department 
must follow in revoking an order, the Department has developed a 
procedure for revocation that is described in 19 CFR 351.222. This 
regulation requires, inter alia, that a company requesting revocation 
must submit the following: (1) A certification that the company has 
sold the subject merchandise at not less than NV in the current review 
period and that the company will not sell at less than NV in the 
future; (2) a certification that the company sold the subject 
merchandise in each of the three years forming the basis of the request 
in commercial quantities; and, (3) an agreement to reinstatement of the 
order if the Department concludes that the company, subsequent to the 
revocation, sold subject merchandise at less than NV. See 19 CFR 
351.222(e)(1).
    Pursuant to 19 CFR 351.222(e)(1), Hangzhou requested revocation of 
the antidumping duty order as it pertains to that company. According to 
19 CFR 351.222(b)(2), upon receipt of such a request, the Department 
may revoke an order, in part, if it concludes that (1) the company in 
question has sold subject merchandise at not less than NV for a period 
of at least three consecutive

[[Page 63064]]

years; (2) the continued application of the antidumping duty order is 
not otherwise necessary to offset dumping; and, (3) the company has 
agreed to its immediate reinstatement in the order if the Department 
concludes that the company, subsequent to the revocation, sold subject 
merchandise at less than NV.
    Based on our analysis of the sales and factors of production 
information submitted by Hangzhou, we preliminarily determine that 
Hangzhou sold the subject merchandise in the United States below normal 
value during the POR. Thus, we find that Hangzhou has not sold the 
subject merchandise below NV for a period of at least three consecutive 
years. Therefore, pursuant to 19 CFR 351.222(b)(2), we preliminarily 
determine that Hangzhou does not qualify for revocation of the order on 
HSLWs from the PRC and that the order, with respect to Hangzhou, should 
not be revoked.

Preliminary Results of Review

    We preliminarily determine that the following dumping margin 
exists:

------------------------------------------------------------------------
                                                               Margin
        Manufacturer/exporter              Time period        (percent)
------------------------------------------------------------------------
Hang Zhou Spring Washer Co. Ltd./         10/1/01-9/30/02         29.03
 Zhejiang Wanxin Group, Ltd..........
------------------------------------------------------------------------

    The Department shall determine, and the U.S. Customs and Border 
Protection (CBP) shall assess, antidumping duties on all appropriate 
entries. Upon completion of this administrative review, the Department 
will determine, and the CBP shall assess, antidumping duties on all 
appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have 
calculated an exporter/importer (or customer)-specific assessment rate 
for merchandise subject to this review. We calculated importer (or 
customer)-specific ad valorem rates by aggregating the dumping duties 
due for all U.S. sales to each importer (or customer) and dividing this 
amount by the total entered value of the sales to that importer (or 
customer). In accordance with the requirement set forth in 19 CFR 
351.106(c)(2), where an importer (or customer)-specific ad valorem rate 
is less than de minimis, we will direct the CBP to liquidate without 
regard to antidumping duties. Where an importer (or customer)-specific 
ad valorem rate is greater than de minimis, we will direct the CBP to 
apply the ad valorem assessment rates against the entered value of each 
of the importer's/customer's entries during the review period. All 
other entries of the subject merchandise during the POR will be 
liquidated at the antidumping duty rate in place at the time of entry.
    Furthermore, the following cash deposit rates will be effective 
upon publication of the final results 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)(1) 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 
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 People's Republic of China, 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. These deposit rates, 
when imposed, shall remain in effect until publication of the final 
results of the next administrative review.
    This notice also serves as a 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.

Public Comment

    Pursuant to 19 CFR 351.224, the Department will disclose to parties 
the calculations performed in connection with these preliminary results 
within five days of the date of any public announcement, or, if there 
is no public announcement, within five days of the date of publication 
of this notice. Interested parties may request a hearing within 30 days 
of the date of publication of this notice (See 19 CFR 351.310). Any 
hearing, if requested, will be held two days after the scheduled date 
for submission of rebuttal briefs (see below). According to 19 CFR 
351.309, 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 publish the final results of this 
administrative review, including the results of its analysis of issues 
raised in any such briefs or hearing, within 120 days of publication of 
these preliminary result.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: October 31, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-28123 Filed 11-6-03; 8:45 am]
BILLING CODE 3510-DS-P