[Federal Register Volume 69, Number 47 (Wednesday, March 10, 2004)]
[Notices]
[Pages 11371-11383]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-5385]


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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 of 
Administrative Reviews, Preliminary Partial Rescission of Antidumping 
Duty Administrative Reviews, and Determination Not To Revoke in Part

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

ACTION: Preliminary results of antidumping duty administrative reviews.

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SUMMARY: The Department of Commerce (the Department) is conducting 
administrative reviews of the antidumping duty orders on heavy forged 
hand tools, finished or unfinished, with or without handles (HFHTs), 
from the People's Republic of China (PRC). The period of review (POR) 
is February 1, 2002, through January 31, 2003. These reviews cover 
imports of subject merchandise from four manufacturers/exporters.
    We preliminarily determine that certain manufacturers/exporters 
sold subject merchandise at less than normal value (NV) during the POR. 
If these preliminary results are adopted in our final results of 
review, we will instruct U.S. Customs and Border Protection (CBP) to 
assess antidumping duties on all appropriate entries. We have also 
preliminarily determined not to revoke the antidumping duty order on 
hammers/sledges with respect to hammers/sledges produced by Shandong 
Jinma Industrial Group Co., Ltd. (Jinma) and exported by Shandong 
Machinery Import & Export Corporation (SMC).
    We invite interested parties to comment on these preliminary review 
results. We will issue the final review results no later than 120 days 
from the date of publication of this notice.

EFFECTIVE DATE: March 10, 2004.

FOR FURTHER INFORMATION CONTACT: Mark Manning or Thomas Martin; Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone (202) 482-5253 and (202) 482-3936, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 19, 1991, the Department published in the Federal 
Register (56 FR 6622) four antidumping orders on HFHTs from the PRC. 
Imports covered by these orders comprise 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. 
See the Scope of Reviews section below for the complete description of 
subject merchandise.
    On February 27, 2003, five exporters of the subject merchandise 
requested that the Department conduct administrative reviews of their 
exports of subject merchandise. Specifically, Tianjin Machinery Import 
& Export Corporation (TMC) requested that the Department conduct an 
administrative review of its exports of merchandise covered by the 
hammers/sledges order. Shangdong Huarong Machinery Co., Ltd. (Huarong) 
requested that the Department conduct an administrative review of its 
exports of merchandise covered by the bars/wedges order. Similarly, 
Liaoning Machinery Import & Export Corporation (LMC) and Liaoning 
Machinery Import & Export Corporation, Ltd. (LIMAC) also requested that 
the Department conduct an administrative review of their exports of 
merchandise covered by the bars/wedges order, and requested revocation 
pursuant to 19 CFR 351.222(b). Lastly, SMC requested that the 
Department conduct an administrative review of its exports of 
merchandise covered by the hammers/sledges and bars/wedges orders, and 
also requested revocation with respect to hammers/sledges pursuant to 
19 CFR 351.222(b).
    On February 28, 2003, the petitioner, Ames True Temper, requested 
administrative reviews of merchandise of 88 PRC producers/exporters 
covered by the axes/adzes, bars/wedges and hammers/sledges orders, in 
addition to the five companies identified above. Regarding the picks/
mattocks order, the petitioner requested administrative reviews for the 
following six PRC companies, which were also included in the 
petitioner's request for review of the other three HFHTs orders: Fujian 
Machinery & Equipment Import & Export Corporation (FMEC), Huarong, 
Jinma, LMC, SMC, and TMC. On March 25, 2003, the Department published a 
notice of initiation of administrative reviews of merchandise covered 
by the four orders on HFHTs, produced/exported by the PRC companies 
identified by the petitioner, which includes the five companies 
identified above that requested a review of their own sales of subject 
merchandise. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part, 68 FR 14394 
(March 25, 2003).
    On March 26, 2003, the Department issued a shortened section A 
questionnaire to all of the PRC producers/exporters identified in the 
notice of initiation. This questionnaire requested that these companies 
report the quantity and value of their sales of merchandise during the 
POR that are subject to the four HFHTs antidumping orders.\1\ In April 
and May 2003, we received letters from ten PRC producers/exporters 
stating that they had no shipments of subject merchandise during the 
POR. We received, on April 23, 2003, the shortened section A 
questionnaire responses from Huarong, LMC/LIMAC, SMC, TMC, and Jiangsu 
Guotai International Group Huatai Import & Export Company, Ltd. 
(Jiangsu). On May 6, 2003, the Department issued to interested parties 
the draft physical product characteristics for hand tools that we 
intend to use to make our fair value comparisons. From May 21, 2003 
through May 28, 2003, the Department received comments on these 
physical product characteristics. Also on May 6, 2003, the Department 
issued the full section A questionnaire to Huarong, LMC/LIMAC, SMC, 
TMC, and Jiangsu. We received responses from Huarong, LMC/LIMAC, SMC, 
and TMC on May 28, 2003, and from Jiangsu on June 12,

[[Page 11372]]

2003. On June 18, 2003, the Department issued sections C and D of the 
antidumping questionnaire to Huarong, LMC/LIMAC, SMC, TMC, and 
Jiangsu.\2\ Although Jiangsu's response to sections C and D of the 
questionnaire was due on July 25, 2003, the Department received no 
response from this company. On August 4, 2003, the Department notified 
Jiangsu that its response to sections C and D of the questionnaire was 
past due and requested that Jiangsu notify the Department if it had 
encountered unexpected difficulties in submitting its response. 
However, the Department never received a response to its August 4, 
2003, letter. We received responses to sections C and D of the 
antidumping questionnaire on August 11, 2003 from Huarong, LMC/LIMAC, 
and SMC, and on August 18, 2003 from TMC. The Department issued 
numerous supplemental questionnaires to Huarong, LMC/LIMAC, SMC, and 
TMC throughout the period June through November 2003. We received 
timely responses to these supplemental questionnaires.
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    \1\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under review that it sells, and the manner in which 
it sells that merchandise in all of its markets.
    \2\ Section C of the questionnaire requests a complete listing 
of U.S. sales. Section D requests information on the factors of 
production (FOP) of the merchandise under review.
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    On October 16, 2003, the Department extended the time limit for 
completion of these preliminary review results until no later than 
March 1, 2004. See Heavy Forged Hand Tools, Finished or Unfinished, 
With or Without Handles, From the People's Republic of China: Extension 
of Time Limit for Preliminary Results of Antidumping Duty 
Administrative Review, 68 FR 59583 (October 16, 2003).

Scope of Reviews

    The products covered by these reviews are 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 and mattocks (picks/mattocks); and (4) axes, adzes and 
similar hewing tools (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 provided 
for under the following Harmonized Tariff System of the United States 
(HTSUS) subheadings: 8205.20.60, 8205.59.30, 8201.30.00, and 
8201.40.60. Specifically excluded from these investigations 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. The HTSUS 
subheadings are provided for convenience and CBP purposes. The written 
description remains dispositive.
    The Department has issued five final scope rulings regarding the 
merchandise covered by these orders: (1) On August 16, 1993, the 
Department found the ``Max Multi-Purpose Axe,'' imported by the Forrest 
Tool Company, to be within the scope of the axes/adzes order; (2) on 
March 8, 2001, the Department found ``18-inch'' and ``24-inch'' pry 
bars, produced without dies, imported by Olympia Industrial, Inc. and 
SMC Pacific Tools, Inc., to be within the scope of the bars/wedges 
order; (3) on March 8, 2001, the Department found the ``Pulaski'' tool, 
produced without dies by TMC, to be within the scope of the axes/adzes 
order; (4) on March 8, 2001, the Department found the ``skinning axe,'' 
produced through a stamping process, imported by Import Traders, Inc., 
to be within the scope of the axes/adzes order; and (5) on September 
22, 2003, the Department found cast picks, produced through a casting 
process by TMC, to be within the scope of the picks/mattocks order.

LMC and LIMAC

    In 1998, LMC underwent a reorganization and was split into two 
companies--LMC and LIMAC. According to LMC/LIMAC, the purpose of this 
reorganization was to increase business efficiency and conform with 
Chinese state policy that required companies to change their corporate 
ownership from an ``all people's owned'' basis to a ``limited 
liability'' basis. See LMC/LIMAC's May 28, 2003, submission at page 3 
of Exhibit 7 and November 19, 2003, submission at 5. The part of the 
company that retained the name LMC is an ``all people's owned'' 
company, meaning that it belongs to the public, while the part of the 
company that became LIMAC is a ``limited liability'' company, which is 
owned by shareholders. In addition, pursuant to this reorganization, 
LIMAC received authorization to export merchandise, and the decision 
was made to move LMC's export/import business to LIMAC. See LMC/LIMAC's 
May 28, 2003, submission at page 4 of Exhibit 7. LMC and LIMAC state 
that, in light of the policy that corporate ownership should be on a 
``limited liability'' basis, and the decision to transfer business 
operations to LIMAC, most of LMC's staff has been transferred to LIMAC. 
The few remaining employees at LMC are there primarily for ``wrapping 
up'' operations. See LMC/LIMAC's November 19, 2003, submission at 5.
    LMC and LIMAC claim that they are, in effect, one company with two 
names. See LMC/LIMAC's September 29, 2003, submission at 3. According 
to LMC and LIMAC, (1) the two companies share the same suppliers; (2) 
all sales income is kept in LIMAC's bank account even if the sale is 
made in LMC's name; (3) all business is directed to LIMAC, except for 
long-time customers who are familiar with the LMC name; (4) both 
companies use the same chart of accounts; and (5) the same sales staff 
manages all of the trading company business for both LMC and LIMAC, 
makes all of the pricing decisions for both LMC and LIMAC, and 
maintains all of the sales records pertaining to both LMC and LIMAC. 
See LMC/LIMAC's September 29, 2003, response at A-3 and A-4, and LMC/
LIMAC's November 19, 2003, response at 1-5. Lastly, we note that 
comparing the export sales figures on LMC and LIMAC's income statements 
supports their assertion that export business is being directed to 
LIMAC. See LMC/LIMAC's May 28, 2003, submission at Exhibits 13-14.
    In light of the above, it appears that LMC is being dissolved and 
replaced by LIMAC. Moreover, the fact that the same personnel export 
subject merchandise and make pricing decisions, regardless of which 
company's invoice is used, indicates that a single sales staff knows 
the identify of both company's customers and has the discretion to 
assign sales to either company. Since LIMAC's operations are 
intertwined with LMC's operations, it would frustrate the purpose of 
the antidumping statute to grant LMC and LIMAC separate dumping 
margins. Given the shared personnel, operations, and decision making of 
LMC and LIMAC, we conclude that LMC and LIMAC did not operate 
independently of each other during the POR and they should receive a 
single antidumping duty rate. Therefore, we preliminarily determine 
that it is appropriate to treat LMC and

[[Page 11373]]

LIMAC as a single entity for purposes of the margin calculations for 
these administrative reviews and the application of the antidumping 
law. See Freshwater Crawfish Tail Meat From the People's Republic of 
China: Final Results of Administrative Antidumping Duty and New Shipper 
Reviews, and Final Rescission of New Shipper Review, 65 FR 20948 (April 
19, 2000) and accompanying Issues and Decision Memorandum at Comment 16 
(where the Department considered the operations of two PRC trading 
companies to be sufficiently intertwined as to warrant receiving the 
same antidumping duty rate).

Preliminary Partial Rescission

    In accordance with 19 CFR 351.213(d)(3), we are preliminarily 
rescinding these reviews with respect to Zhenjiang All Joy Light 
Industrial Products & Textiles; Linshu Jinrun Ironware & Tools Co., 
Ltd.; Jinhua Runhua Foreign Trade Co., Ltd.; Tian Rui International 
Trade Co., Ltd.; Jinhua Twin-Star Tools Co., Ltd.; Jinma, Ltd.; Hebei 
Machinery Import & Export Corporation; Chenzhou Estar Enterprises Ltd.; 
China National Machinery Import & Export Corporation; and Ningbo 
Tiangong Tools Co., Ltd., who reported that they did not sell 
merchandise subject to any of the four HFHT antidumping orders during 
the POR. We are also preliminarily rescinding the review of Huarong and 
LMC/LIMAC with respect to the hammers/sledges and picks/mattocks 
orders, since Huarong and LMC/LIMAC reported that they made no 
shipments of subject hammers/sledges and picks/mattocks. No one has 
placed evidence on the record to indicate that these companies had 
sales of subject merchandise during the POR. In addition, we examined 
shipment data furnished by CBP for the producers/exporters identified 
above and are satisfied that the record does not indicate that there 
were U.S. entries of subject merchandise from these companies during 
the POR.

Preliminary Determination To Not Revoke in Part

    The Department ``may revoke, in whole or in part'' an antidumping 
duty order upon completion of a review under section 751 of the Tariff 
Act of 1930, as amended (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 commercial quantities in each of the three years 
forming the basis of the revocation request; and (3) an agreement to 
reinstatement in the order or suspended investigation, as long as any 
exporter or producer is subject to the order (or suspended 
investigation), if the Secretary concludes that the exporter or 
producer, subsequent to the revocation, sold the subject merchandise at 
less than NV. See 19 CFR 351.222(e)(1). Upon receipt of such a request, 
the Department will consider the following in determining whether to 
revoke the order in part: (1) Whether the producer or exporter 
requesting revocation has sold subject merchandise at not less than NV 
for a period of at least three consecutive years; (2) whether the 
continued application of the antidumping duty order is otherwise 
necessary to offset dumping; and (3) whether the producer or exporter 
requesting revocation in part has agreed in writing to immediate 
reinstatement of the order, as long as any exporter or producer is 
subject to the order, if the Department concludes that the exporter or 
producer, subsequent to revocation, sold the subject merchandise at 
less than NV. See 19 CFR 351.222(b)(2); see also Notice of Preliminary 
Results and Partial Rescission of Antidumping Duty Administrative 
Review and Intent to Revoke Antidumping Duty Order in Part: Certain 
Pasta From Italy, 66 FR 34414, 34420 (June 28, 2001).
    On February 27, 2003, SMC submitted a request, in accordance with 
19 CFR 351.222(e)(1), that the Department revoke the order covering 
hammers/sledges from the PRC with respect to its sales. In accordance 
with 19 CFR 351.222(e)(1), the request was accompanied by 
certifications from SMC that, for three consecutive years, including 
this review period, it sold the subject merchandise in commercial 
quantities at not less than NV, and would continue to do so in the 
future. SMC also agreed to its immediate reinstatement in this 
antidumping order, as long as any producer or exporter is subject to 
the order, if the Department concludes, subsequent to revocation, that 
SMC sold the subject merchandise at less than NV.
    For these preliminary results, the Department has relied upon SMC's 
sales activity during the 2000-2001, 2001-2002, and 2002-2003 PORs in 
making its decision regarding SMC's revocation request. In the final 
results of the 2000-2001 administrative review, SMC received a de 
minimis dumping margin on its sales of hammers/sledges produced by 
Jinma. See Notice of Amended Final Results of Antidumping Duty 
Administrative Reviews: Heavy Forged Hand Tools From the People's 
Republic of China (Hammers/Sledges), 68 FR 14943 (March 27, 2003) 
(HFHTs 2000-2001 Review). SMC withdrew its request for review in the 
intervening administrative review, which covered the 2001-2002 period. 
See Heavy Forged Hand Tools from the People's Republic of China: 
Partial Rescission of Antidumping Duty Administrative Review, 68 FR 352 
(January 3, 2003). In the instant review, covering the 2002-2003 
period, SMC is preliminarily receiving a de minimis dumping margin with 
respect to its sales of hammers/sledges produced by Jinma.
    In determining whether the absence of dumping over three 
consecutive years is a sufficient basis to revoke an order, in part, 
the Department must be able to determine that the company continued to 
participate meaningfully in the U.S. market during each of the three 
years at issue. See Certain Corrosion-Resistant Carbon Steel Flat 
Products and Certain Cut-to-Length Carbon Steel Plate From Canada; 
Final Results of Antidumping Duty Administrative Reviews and 
Determination To Revoke in Part, 64 FR 2173, 2175 (January 13, 1999); 
see also Pure Magnesium From Canada; Final Results of Antidumping Duty 
Administrative Review and Determination Not to Revoke Order in Part, 64 
FR 12977, 12979 (March 16, 1999); and Notice of Final Results of 
Antidumping Duty Administrative Review and Determination Not to Revoke 
the Antidumping Order: Brass Sheet and Strip from the Netherlands, 65 
FR 742 (January 6, 2000). This practice has been codified in 19 CFR 
351.222(d)(1), which states that, ``before revoking an order or 
terminating a suspended investigation, the Secretary must be satisfied 
that, during each of the three (or five) years, there were exports to 
the United States in commercial quantities of the subject merchandise 
to which a revocation or termination will apply.'' See 19 CFR 
351.222(d)(1); see also 19 CFR 351.222(e)(1)(ii). For purposes of 
revocation, the Department must be able to determine that past margins 
are reflective of a company's normal commercial activity. Sales during 
the POR which, in the aggregate, are of an abnormally small quantity, 
do not provide a reasonable basis for

[[Page 11374]]

determining that the order is no longer necessary to offset dumping.
    We preliminarily determine that SMC did not ship hammers/sledges 
produced by Jinma to the United States in commercial quantities during 
the three consecutive years under consideration. Specifically, we find 
that the quantity of SMC's sales to the United States in the HFHTs 
2000-2001 Review were a small percentage of the quantity of sales SMC 
made during the investigative period. See Memorandum from Jeff 
Pedersen, Case Analyst, to the File, ``Commercial Quantity Analysis of 
Shipments of Heavy Forged Hand Tools (Hammers/Sledges) to the United 
States by Shandong Machinery Import & Export Corporation,'' dated March 
1, 2004. Consequently, although SMC received a de minimis margin during 
the first review period, and is preliminarily receiving a de minimis 
margin in the instant review, the margin from the first administrative 
review was not based on commercial quantities within the meaning of the 
revocation regulation. The sales volume during the HFHTs 2000-2001 
Review is so small in comparison with the sales volume during the 
investigative period that it does not provide any meaningful 
information on SMC's normal commercial experience. Therefore, we 
preliminarily determine that SMC does not qualify for revocation from 
the order on hammers/sledges under 19 CFR 351.222 (b) and (e).
    On February 27, 2003, LMC/LIMAC submitted a request, in accordance 
with 19 CFR 351.222(e)(1), that the Department revoke the order 
covering bars/wedges from the PRC with respect to its sales. In 
accordance with 19 CFR 351.222(e)(1), the request was accompanied by 
certifications from LMC/LIMAC that, for three consecutive years, 
including this review period, it sold the subject merchandise in 
commercial quantities at not less than NV, and would continue to do so 
in the future. LMC/LIMAC also agreed to its immediate reinstatement in 
this antidumping order, as long as any producer or exporter is subject 
to the order, if the Department concludes, subsequent to revocation, 
that it sold the subject merchandise at less than NV.
    As discussed in the Use of Facts Available section below, we have 
preliminarily determined that the use of adverse facts available (AFA) 
is warranted with respect to LMC/LIMAC's sales of bars/wedges during 
the POR. Since LMC/LIMAC has not received a zero or de minimis margin 
in the instant review, we preliminarily determine not to revoke the 
order with respect to LMC/LIMAC's sales of bars/wedges to the United 
States.

Verification

    As provided in section 782(i) of the Act, we conducted 
verifications of the information provided by the trading company SMC, 
and one of its suppliers, Jinma. We used standard verification 
procedures, including on-site inspection of the manufacturer's 
facilities, the examination of relevant sales and financial records, 
and the selection of original source documentation as exhibits. Our 
verification findings are detailed in the memoranda dated December 24, 
2003, the public versions of which are in the Central Records Unit's 
Public File.
    Although section 782(i)(2) of the Act requires the Department to 
conduct a verification of the information relied upon in revoking an 
order, as stated above, we are preliminarily denying LMC/LIMAC's 
request for revocation. For this reason, the Department has not 
conducted a verification of LMC/LIMAC.

Separate Rates Determination

    The Department has treated the PRC as a non-market economy (NME) 
country in all previous antidumping cases. See, e.g., Notice of Final 
Determination of Sales at Less than Fair Value: Refined Brown Aluminum 
Oxide (Otherwise known as Refined Brown Artificial Corundum or Brown 
Fused Alumina) from the People's Republic of China, 68 FR 55589 
(September 26, 2003). It is the Department's policy to assign all 
exporters of the merchandise subject to review that are located in NME 
countries a single antidumping duty rate unless an exporter can 
demonstrate an absence of governmental control, both in law (de jure) 
and in fact (de facto), with respect to its export activities. To 
establish whether an exporter is sufficiently independent of 
governmental control to be entitled to a separate rate, the Department 
analyzes the exporter using the criteria established in the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588 (May 6, 1991) (Sparklers), as 
amplified in the Final Determination of Sales at Less Than Fair Value: 
Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 
2, 1994) (Silicon Carbide). Under the separate rates criteria 
established in these cases, the Department assigns separate rates to 
NME exporters only if they can demonstrate the absence of both de jure 
and de facto governmental control over their export activities.

Absence of De Jure Control

    Evidence supporting, though not requiring, a finding of the absence 
of de jure governmental control over export activities includes: (1) An 
absence of restrictive stipulations associated with an individual 
exporter's business and export licenses; (2) any legislative enactments 
decentralizing control of companies; and (3) any other formal measures 
by the government decentralizing control of companies. See Sparklers, 
56 FR at 20589.
    In previous reviews of the HFHTs orders, the Department granted 
separate rates to Huarong, LMC/LIMAC, SMC, and TMC. See, e.g., Heavy 
Forged Hand Tools From the People's Republic of China; Final Results 
and Partial Rescission of Antidumping Duty Administrative Review and 
Determination Not To Revoke in Part, 67 FR 57789 (September 12, 2002). 
However, it is the Department's policy to evaluate separate rates 
questionnaire responses each time a respondent makes a separate rates 
claim, regardless of whether the respondent received a separate rate 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, Huarong, 
LMC/LIMAC, SMC, and TMC submitted complete responses to the separate 
rates section of the Department's questionnaire. The evidence submitted 
in the instant reviews by these respondents includes government laws 
and regulations on corporate ownership, business licences, and 
narrative information regarding the companies' operations and selection 
of management. The evidence provided by Huarong, LMC/LIMAC, SMC, and 
TMC supports a finding of a de jure absence of governmental control 
over their export activities because: (1) there are no controls on 
exports of subject merchandise, such as quotas applied to, or licenses 
required for, exports of the subject merchandise to the United States; 
and (2) the subject merchandise does not appear on any government list 
regarding export provisions or export licensing.

Absence of De Facto Control

    The absence of de facto governmental control over exports is based 
on whether the respondent: (1) Sets its own export prices independent 
of the government and other exporters; (2) retains the proceeds from 
its export sales and makes independent decisions regarding the 
disposition of profits or financing of losses; (3) has the authority to 
negotiate

[[Page 11375]]

and sign contracts and other agreements; and (4) has autonomy from the 
government regarding the selection of management. See Silicon Carbide, 
59 FR at 22587; see Sparklers, 56 FR at 20589; see also Notice of Final 
Determination of Sales at Less Than Fair Value: Furfuryl Alcohol from 
the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995) 
(Furfuryl Alcohol).
    In their questionnaire responses, Huarong, LMC/LIMAC, SMC, and TMC 
submitted evidence indicating an absence of de facto governmental 
control over their export activities. Specifically, this evidence 
indicates that: (1) Each company sets its own export prices independent 
of the government and without the approval of a government authority; 
(2) each exporter retains the proceeds from its sales and makes 
independent decisions regarding the disposition of profits or financing 
of losses; (3) each exporter has a general manager, branch manager or 
division manager with the authority to negotiate and bind the company 
in an agreement; (4) the general manager is selected by the board of 
directors or company employees, and the general manager appoints the 
deputy managers and the manager of each department and (5) foreign 
currency does not need to be sold to the government. Therefore, the 
Department has preliminarily determined that Huarong, LMC/LIMAC, SMC, 
and TMC have established primae facie that they qualify for separate 
rates under the criteria established by Silicon Carbide and Sparklers.

Use of Facts Available

    Section 776(a)(2) of the Act, provides that, if an interested party 
(A) withholds information that has been requested by the Department; 
(B) fails to provide such information in a timely manner or in the form 
or manner requested, subject to sections 782(c)(1) and (e) of the Act; 
(C) significantly impedes a proceeding under the antidumping statute; 
or (D) provides such information but the information cannot be 
verified, the Department shall, subject to subsection 782(d) of the 
Act, use facts otherwise available in reaching the applicable 
determination.
    Furthermore, section 776(b) of the Act states that ``{i{time} f the 
administrating authority 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 ..., 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.'' See also Statement of 
Administrative Action (SAA) accompanying the Uruguay Round Agreements 
Act (URAA), H.R. Rep. No. 103-316 at 870 (1994).
    In the instant reviews, Huarong, LMC/LIMAC, and TMC significantly 
impeded our ability to complete the review of the bars/wedges order, 
which we conducted pursuant to section 751 of the Act, and to impose 
the correct antidumping duties, as mandated by section 731 of the Act. 
In addition, some of the respondents failed to provide certain 
information that was requested by the Department in the reviews of the 
axes/adzes (Huarong, LMC/LIMAC, SMC, and the PRC-wide entity), bars/
wedges (Huarong, SMC, TMC, and the PRC-wide entity), hammers/sledges 
(the PRC-wide entity), and picks/mattocks (SMC and PRC-wide entity) 
antidumping orders. As discussed below, although Huarong, LMC/LIMAC, 
SMC, and TMC are entitled to separate rates, we preliminarily determine 
that their failures warrant the use of AFA in determining dumping 
margins for their sales of merchandise subject to certain HFHTs orders.

Huarong

    Prior to the instant period under review, Huarong entered into an 
agreement with a PRC company under which the PRC company would act as 
an ``agent'' for the vast majority of Huarong's U.S. sales of bars/
wedges. Pursuant to this agreement, the ``agent'' supplied Huarong with 
blank invoices and packing lists, both of which were on the ``agent's'' 
letterhead and stamped by the ``agent's'' general manager. Huarong 
filled out these invoices and packing lists and used them when 
exporting subject bars/wedges to the United States during the POR. When 
making ``agent'' sales, Huarong conducted all of the negotiations with 
the U.S. customer regarding price and quantity, and arranged the 
foreign inland freight, international freight, and marine insurance 
associated with these sales. Additional proprietary information 
regarding these transactions is in the Memorandum from Thomas F. 
Futtner, Acting Office Director, to Holly A. Kuga, Acting Deputy 
Assistant Secretary, ``Application of Adverse Facts Available to 
Shandong Huarong Machinery Corporation Ltd. with Respect to Bars/
Wedges,'' dated March 1, 2004 (Huarong Bars/Wedges AFA Memorandum).
    After reviewing the record of this review, we find that Huarong has 
continually misrepresented the true nature of its relationship with the 
``agent'' during the POR. In its questionnaire responses, Huarong 
claimed that its relationship with the ``agent'' stemmed from a bona 
fide business arrangement whereby the ``agent'' provided commercial 
services in connection with Huarong's sales. However, only by issuing 
two supplemental questionnaires on this topic did the Department learn 
that the ``agent'' had no real commercial involvement in these sales. 
In fact, the ``agent'' was compensated by Huarong, not for commercial 
services normally associated with being a sales agent, but instead, for 
providing Huarong with blank invoices and packing lists, which Huarong 
used to make the vast majority of its sales to the United States. See 
Huarong Bars/Wedges AFA Memorandum.
    Section 776(a)(2)(C) of the Act states that the Department may, if 
an interested party ``significantly impedes a proceeding'' under the 
antidumping statute, use facts otherwise available in reaching the 
applicable determination. In this case, Huarong's invoice scheme with 
its ``agent'' has impeded our ability to complete the administrative 
review, pursuant to section 751 of the Act, and impose the correct 
antidumping duties, as required by section 731 of the Act. Therefore, 
pursuant to section 776(a)(2)(C) of the Act, we find it appropriate to 
base Huarong's dumping margin for bars/wedges on facts available.
    In selecting from among the facts available, pursuant to section 
776(b) of the Act, an adverse inference is warranted when the 
Department has determined that a respondent has failed to cooperate by 
not acting to the best of its ability to comply with our request for 
information. In this case, an adverse inference is warranted because 
(1) Huarong misrepresented the nature of its arrangement with the 
``agent'' by portraying the company as a bona fide agent for the vast 
majority of Huarong's sales of bars/wedges to the United States, (2) 
Huarong participated in a scheme that resulted in circumvention of the 
antidumping duty order, and (3) the existence of such a scheme during 
the POR undermined our ability to impose accurate antidumping duties, 
pursuant to our statutory mandate under section 731 of the Act. 
Moreover, section 776(b) of the Act indicates that an adverse inference 
may include reliance on information derived from the petition, the 
final determination in the less-than-fair-value (LTFV) investigation, 
any previous administrative review, or any other information placed on 
the record. As AFA, we are assigning to Huarong's

[[Page 11376]]

sales of bars/wedges the 139.31 percent PRC-wide rate for bars/wedges 
published in the most recently completed administrative review of this 
antidumping order. See Heavy Forged Hand Tools, Finished or Unfinished, 
With or Without Handles, From the People's Republic of China: Final 
Results of Antidumping Duty Administrative Review of the Order on Bars 
and Wedges, 68 FR 53347 (September 10, 2003) (HFHTs Final Results for 
Eleventh Review); see also Huarong Bars/Wedges AFA Memorandum.

Jiangsu

    In its section A quantity and value chart, Jiangsu reported its 
U.S. sales of axes/adzes, bars/wedges, and hammers/sledges. See 
Jiangsu's April 21, 2003, shortened section A questionnaire response. 
On June 18, 2003, the Department issued sections C and D of the 
antidumping questionnaire to Jiangsu. Although Jiangsu's response to 
sections C and D of the questionnaire was due on July 25, 2003, the 
Department never received a response from this company. On August 4, 
2003, the Department notified Jiangsu that its sections C and D 
questionnaire response was past due and requested that Jiangsu notify 
the Department if it had encountered unexpected difficulties in 
submitting its response. The Department never received a response to 
its August 4, 2003, letter.
    The evidence on the record of this review establishes that, 
pursuant to section 776(a)(2)(A) of the Act, the use of total facts 
available is warranted in determining the dumping margins for Jiangsu's 
sales of axes/adzes, bars/wedges and hammers/sledges because Jiangsu 
failed to provide either the U.S. sales information, or the FOP 
information for these three classes or kinds of subject merchandise. 
See Memorandum from Thomas F. Futtner, Acting Office Director, to Holly 
A. Kuga, Acting Deputy Assistant Secretary, ``Application of Adverse 
Facts Available to Jiangsu Guotai International Group Huatai Import & 
Export Company, Ltd.,'' dated March 1, 2004 (Jiangsu AFA Memorandum).
    Additionally, the record shows that Jiangsu has failed to cooperate 
by not acting to the best of its ability within the meaning of section 
776(b) of the Act. In reviewing the evidence on the record, the 
Department finds that Jiangsu failed to provide information necessary 
to allow the Department to calculate Jiangsu's dumping margin for its 
sales of axes/adzes, bars/wedges and hammers/sledges. The Department 
notified Jiangsu that it must report the U.S. sales and FOP data for 
the products subject to these three antidumping orders in its August 4, 
2003 letter. Despite reporting quantities and values of U.S. sales 
under these orders, Jiangsu did not respond to the Department's section 
C and D general questionnaires. See June 8, 2003 Jiangsu section C and 
D questionnaire response. By not supplying the U.S. sales and FOP 
information regarding its sales of axes/adzes, bars/wedges, and 
hammers/sledges, Jiangsu failed to cooperate to the best of its 
ability. As Jiangsu has failed to cooperate to the best of its ability, 
we are using an adverse inference in selecting from among the facts 
available, pursuant to section 776(b) of the Act. See Jiangsu AFA 
Memorandum.
    Pursuant to section 776(b) of the Act, the Department is 
preliminarily basing Jiangsu's dumping margin for sales of products 
subject to the antidumping orders on axes/adzes, bars/wedges, and 
hammers/sledges on AFA. Section 776(b) of the Act authorizes the 
Department to use, as AFA, information derived from the petition, the 
final determination in the LTFV investigation, any previous 
administrative review, or any other information placed on the record. 
Jiangsu has never established, in a prior segment of these proceedings, 
that it is entitled to a separate rate, and Jiangsu ceased to 
participate in this proceeding before the Department could issue a 
supplemental section A questionnaire addressing, among other things, 
Jiangsu's request for a separate rate. The information requested in the 
antidumping questionnaire is in the sole possession of the respondent, 
and could not be obtained otherwise. Thus, the Department is precluded 
from calculating a margin for Jiangsu or determining its eligibility 
for a separate rate. Because Jiangsu is not eligible for a separate 
rate, it is considered to be part of the PRC-wide entity.
    Because Jiangsu failed to respond to our request for information 
and it is considered to be part of the PRC-wide entity, in accordance 
with sections 776(a)(2)(A) and (B), as well as section 776(b) of the 
Act, we are assigning total AFA to the PRC-wide entity. Section 
776(b)(4) of the Act permits the Department to use as AFA information 
derived in the LTFV investigation or any prior review. Thus, in 
selecting an AFA rate, the Department's practice has been to assign 
respondents who fail to cooperate with the Department's requests for 
information the highest margin determined for any party in the LTFV 
investigation or in any administrative review. See, e.g., Stainless 
Steel Plate in Coils from Taiwan; Preliminary Results and Rescission in 
Part of Antidumping Duty Administrative Review, 67 FR 5789 (February 7, 
2002) (Plate from Taiwan) (``Consistent with Department practice in 
cases where a respondent fails to cooperate to the best of its ability, 
and in keeping with section 776(b)(3) of the Act, as adverse facts 
available, we have applied a margin based on the highest margin from 
any prior segment of the proceeding.''). As AFA, we are assigning to 
the PRC-wide entity's sales of axes/adzes, bars/wedges, hammers/
sledges, and picks/mattocks the rates of 55.74, 139.31, 45.42, and 
98.77 percent, respectively, published in the most recently completed 
review of the HFHTs orders. See HFHTs Final Results for Eleventh 
Review. The rate identified for hammers/sledges is from the LTFV 
investigation. See Final Determinations of Sales at Less Than Fair 
Value: Heavy Forged hand Tools, Finished or Unfinished, With or Without 
Handles, From the People's Republic of China, 56 FR 241 (January 3, 
1991) (HFHTs Final LTFV Notice). See also Jiangsu AFA Memorandum.

LMC/LIMAC

    LMC/LIMAC reported its U.S. sales of axes/adzes in its section C 
questionnaire response. See LMC/LIMAC's August 11, 2003, section C and 
D questionnaire response at C-6, and Exhibit 2. LMC/LIMAC also reported 
the FOP information regarding these axes/adzes sales in its section D 
questionnaire response. See LMC/LIMAC's August 11, 2003, section C and 
D questionnaire response at Exhibits 11-13.
    After reviewing LMC/LIMAC's questionnaire responses, the Department 
identified certain areas that required clarification and issued to a 
supplemental questionnaire to LMC/LIMAC covering sections A, C, and D 
of the questionnaire. In that supplemental questionnaire, we asked LMC/
LIMAC various questions regarding the reported sales and FOP data for 
axes/adzes. LMC/LIMAC responded to all of these questions by stating 
that it is no longer participating in the axes/adzes review because the 
manufacturer of that merchandise is no longer willing to provide the 
requested information. See LMC/LIMAC's November 19, 2003, response at 
6-7, 12-13, and 16.
    The evidence on the record of this review establishes that, 
pursuant to section 776(a)(2)(A) of the Act, the use of total facts 
available is warranted in determining the dumping margin for LMC/
LIMAC's sales of axes/adzes because LMC/LIMAC failed to provide 
supplemental sales and FOP information with respect to axes/adzes.

[[Page 11377]]

See Memorandum from Thomas F. Futtner, Acting Office Director, to Holly 
A. Kuga, Acting Deputy Assistant Secretary, ``Application of Adverse 
Facts Available to Liaoning Machinery Import & Export Corporation and 
Liaoning Machinery Import & Export Corporation Limited with Respect to 
Axes/Adzes,'' dated March 1, 2004 (LMC/LIMAC AFA Memorandum for Axes/
Adzes). Moreover, pursuant to section 776(a)(2)(D) of the Act, we find 
that total facts available is warranted because, by ceasing to 
participate, LMC/LIMAC has denied the Department the ability to verify 
the sales and FOP data that would be used to calculate its dumping 
margin. See LMC/LIMAC AFA Memorandum for Axes/Adzes.
    Furthermore, the record shows that LMC/LIMAC failed to cooperate to 
the best of its ability, within the meaning of section 776(b) of the 
Act. In reviewing the evidence on the record, the Department finds that 
LMC/LIMAC failed to provide supplemental information necessary to allow 
the Department to accurately calculate EP and NV for LMC/LIMAC's sales 
of axes/adzes. Specifically, LMC/LIMAC stated that it stopped 
participating in the axes/adzes review, and failed to respond to 
supplemental questions related to its sales of axes, even though these 
questions involve information that is within LMC/LIMAC's control. For 
example, the Department requested a worksheet demonstrating how LMC/
LIMAC calculated the sole reported price adjustment. LMC/LIMAC did not 
provide the worksheet requested even though the request did not require 
information from the uncooperative supplier factory. Regarding the FOP 
data, the Department notified LMC/LIMAC that it must ``submit a 
separate section D response for each supplier/factory.'' Despite 
providing a separate section D response from its bars/wedges supplier, 
LMC/LIMAC reported that its supplier of axes/adzes refused to cooperate 
and did not provide the supplemental information requested by the 
Department. See November 19, 2003, LMC/LIMAC supplemental response at 
12. By not responding to our requests for supplemental sales and FOP 
information for axes/adzes, LMC/LIMAC failed to cooperate to the best 
of its ability. As LMC/LIMAC has failed to cooperate to the best of its 
ability, we are using an adverse inference in selecting from among the 
facts available, pursuant to section 776(b) of the Act. See LMC/LIMAC 
AFA Memorandum for Axes/Adzes.
    Pursuant to section 776(b) of the Act, the Department is 
preliminarily basing LMC/LIMAC's dumping margin for sales of products 
covered by the antidumping order on axes/adzes on AFA. Section 776(b) 
of the Act authorizes the Department to use, as AFA, information 
derived from the petition, the final determination in the LTFV 
investigation, any previous administrative review, or any other 
information placed on the record. As AFA, we are assigning to LMC/
LIMAC's sales of axes/adzes the 55.74 PRC-wide rate for axes/adzes that 
was published in the most recently completed administrative review of 
this antidumping order. See HFHTs Final Results for Eleventh Review.
    Additionally, prior to the instant period under review, LMC/LIMAC 
entered into an agreement with another PRC company under which LMC/
LIMAC would act as an ``agent'' for certain U.S. sales of that 
company's bars/wedges products. Even though LMC/LIMAC was the ``agent'' 
for these sales, LMC/LIMAC had no part in negotiating the price and 
quantity with the U.S. customer, nor in arranging the foreign inland 
freight, brokerage and handling, Chinese customs clearance, and 
international freight associated with these sales. Instead, all of 
these functions were performed by the other company. Additional 
proprietary information regarding these transactions is in the 
Memorandum from Thomas F. Futtner, Acting Office Director, to Holly A. 
Kuga, Acting Deputy Assistant Secretary, ``Application of Adverse Facts 
Available to Liaoning Machinery Import & Export Corporation and 
Liaoning Machinery Import & Export Corporation Limited with Respect to 
Bars/Wedges,'' dated March 1, 2004 (LMC/LIMAC AFA Memorandum for Bars/
Wedges).
    After reviewing the record of this review, we preliminarily find 
that LMC/LIMAC has continually misrepresented the true nature of its 
relationship with the other company during the POR. In its 
questionnaire responses, LMC/LIMAC claimed that its relationship with 
the other company stemmed from a bona fide business arrangement whereby 
LMC/LIMAC provided commercial services in connection with the other 
company's sales. However, only by issuing three supplemental 
questionnaires on this topic did the Department learn that LMC/LIMAC 
had no real commercial involvement in these sales. In fact, LMC/LIMAC 
was compensated by the other company, not for commercial services 
normally associated with being a sales agent, but instead for providing 
the other company with its invoices, which the other company used to 
make sales of subject merchandise to the United States. See LMC/LIMAC 
AFA Memorandum for Bars/Wedges.
    Section 776(a)(2)(C) of the Act states that the Department may, if 
an interested party ``significantly impedes a proceeding'' under the 
antidumping statute, use facts otherwise available in reaching the 
applicable determination. In this case, LMC/LIMAC's participation in an 
invoice scheme with the other company has impeded our ability to 
complete the administrative review pursuant to section 751 of the Act, 
and impose the correct antidumping duties, as required by section 731 
of the Act. Therefore, pursuant to section 776(a)(2)(C) of the Act, we 
find that it is appropriate to base LMC/LIMAC's dumping margin for 
bars/wedges on facts available.
    In selecting from among the facts available, pursuant to section 
776(b) of the Act, an adverse inference is warranted when the 
Department has determined that a respondent has failed to cooperate by 
not acting to the best of its ability to comply with a request for 
information. In this case, an adverse inference is warranted because 
(1) LMC/LIMAC misrepresented the nature of its arrangement with the 
other company by portraying itself as a bona fide sales agent for 
certain sales of bars/wedges made by the other company to the United 
States, (2) LMC/LIMAC participated in a scheme that resulted in 
circumvention of the antidumping duty order, and (3) the existence of 
such a scheme during the POR undermined our ability to impose accurate 
antidumping duties, pursuant to our statutory mandate under section 731 
of the Act. Moreover, section 776(b) of the Act indicates that an 
adverse inference may include reliance on information derived from the 
petition, the final determination in the LTFV investigation, any 
previous administrative review, or any other information placed on the 
record. As AFA, we are assigning to LMC/LIMAC's sales of bars/wedges 
the 139.31 PRC-wide rate for bars/wedges published in the most recently 
completed administrative review of this antidumping order. See HFHTs 
Final Results for Eleventh Review; see also LMC/LIMAC AFA Memorandum 
for Bars/Wedges.

SMC

    In its section A quantity and value chart, in addition to its 
section C questionnaire responses, SMC reported its U.S. sales of axes/
adzes and picks/mattocks. See SMC's May 28, 2003, section A 
questionnaire response at Exhibit 1; see SMC's August 11, 2003, section 
C questionnaire response at

[[Page 11378]]

Exhibit 2. However, SMC did not report any FOP information regarding 
axes/adzes and picks/mattocks in its section D response. See August 11, 
2003 SMC section D questionnaire response at Exhibit 12-13 
(demonstrating the absence of FOP data for these two classes or kinds 
of subject merchandise).
    In our September 11, 2003, supplemental questionnaire, the 
Department asked SMC several questions regarding its failure to report 
FOP data for axes/adzes and picks/mattocks. SMC responded by stating 
that, ``{b{time} ecause SMC is unable to participate in the 
administrative reviews under the separate antidumping orders on axes/
adzes and picks/mattocks, SMC has not reported data regarding the FOP 
for the axes/adzes and picks/mattocks categories.'' See SMC's October 
3, 2003, section C and D supplemental response at 15. SMC also stated 
that its ``suppliers of axes/adzes and picks/mattocks decided not to 
cooperate and without their cooperation, SMC is unable to supply the 
factors of production data.'' Id.
    The evidence on the record of this review establishes that, 
pursuant to section 776(a)(2)(A) of the Act, the use of total facts 
available is warranted in determining the dumping margin for SMC's 
sales of axes/adzes and picks/mattocks because SMC failed to provide 
the FOP information for these two classes or kinds of subject 
merchandise. In its questionnaire and supplemental questionnaire 
responses, SMC failed to provide the FOP information requested in the 
Department's March 25, 2003, antidumping questionnaire and September 
11, 2003, sections C and D supplemental questionnaire. See Memorandum 
from Thomas F. Futtner, Acting Office Director, to Holly A. Kuga, 
Acting Deputy Assistant Secretary, ``Application of Adverse Facts 
Available to Shandong Machinery Import & Export Corporation,'' dated 
March 1, 2004 (SMC AFA Memorandum).
    Moreover, the record shows that SMC has failed to cooperate by not 
acting to the best of its ability within the meaning of section 776(b) 
of the Act. In reviewing the evidence on the record, the Department 
finds that SMC failed to provide information necessary to allow the 
Department to calculate NV for SMC's sales of axes/adzes and picks/
mattocks. The Department notified SMC that it must report its FOP data. 
Despite reporting FOP data from multiple factories for sales of other 
products subject to the HFHTs orders (i.e., hammers/sledges and bars/
wedges), SMC reported that its suppliers of axes/adzes and picks/
mattocks refused to provide it with FOP data. See October 3, 2003 SMC 
section C and D supplemental response. By not supplying the FOP 
information for its sales of axes/adzes and picks/mattocks, SMC failed 
to cooperate to the best of its ability. As SMC has failed to cooperate 
to the best of its ability, we are using an adverse inference in 
selecting from among the facts available, pursuant to section 776(b) of 
the Act. See SMC AFA Memorandum.
    Pursuant to section 776(b) of the Act, the Department is 
preliminarily basing SMC's dumping margin for sales of products covered 
by the antidumping orders on axes/adzes and picks/mattocks on AFA. 
Section 776(b) of the Act authorizes the Department to use, as AFA, 
information derived from the petition, the final determination in the 
LTFV investigation, any previous administrative review, or any other 
information placed on the record. As AFA, we are assigning to SMC's 
sales of axes/adzes and picks/mattocks the 55.74 and 98.77 percent 
rates for axes/adzes and picks/mattocks published in the most recently 
completed administrative review of these antidumping orders. See HFHTs 
Final Results for Eleventh Review, see also SMC AFA Memorandum.

TMC

    Prior to the instant period under review, TMC entered into an 
agreement with another PRC company under which TMC would act as an 
``agent'' for the majority of this company's U.S. sales of bars/wedges. 
Pursuant to this agreement, TMC supplied the company with blank 
invoices, which were on TMC's letterhead and stamped by TMC's general 
manager. The other company filled out these invoices and used them when 
exporting the majority of its subject bars/wedges to the United States 
during the POR. When acting as the ``agent'' for these sales, TMC had 
no part in negotiating the price and quantity with the U.S. customer, 
nor in arranging the foreign inland freight, international freight, and 
marine insurance associated with these sales. Additional proprietary 
information regarding these transactions is in the Memorandum from 
Thomas F. Futtner, Acting Office Director, to Holly A. Kuga, Acting 
Deputy Assistant Secretary, ``Application of Adverse Facts Available to 
Tianjin Machinery Import and Export Corporation,'' dated March 1, 2004 
(TMC AFA Memorandum).
    After reviewing the record of this review, we preliminarily find 
that TMC has continually misrepresented the true nature of its 
relationship with the other company during the POR. In its 
questionnaire responses, TMC claimed that its relationship with the 
other company stemmed from a bona fide business arrangement whereby TMC 
provided commercial services in connection with the other company's 
sales. However, only by issuing three supplemental questionnaires on 
this topic did the Department learn that TMC had no real commercial 
involvement in these sales. In fact, TMC was compensated by the other 
company, not for commercial services normally associated with being a 
sales agent, but instead for providing the other company with blank 
invoices, which the other company used to make its sales to the United 
States. See TMC AFA Memorandum.
    Section 776(a)(2)(C) of the Act states that the Department may, if 
an interested party ``significantly impedes a proceeding'' under the 
antidumping statute, use facts otherwise available in reaching the 
applicable determination. In this case, TMC's participation in an 
invoice scheme with the other company has impeded our ability to 
complete the administrative review, pursuant to section 751 of the Act, 
and impose the correct antidumping duties, as required by section 731 
of the Act. Therefore, pursuant to section 776(a)(2)(C) of the Act, we 
find it is appropriate to base TMC's dumping margin for bars/wedges on 
facts available.
    In selecting from among the facts available, pursuant to section 
776(b) of the Act, an adverse inference is warranted when the 
Department has determined that a respondent has failed to cooperate by 
not acting to the best of its ability to comply with a request for 
information. In this case, an adverse inference is warranted because 
(1) TMC misrepresented the nature of its arrangement with the other 
company by portraying itself as a bona fide sales agent for the 
majority of the other company's sales of bars/wedges to the United 
States, (2) TMC participated in a scheme that resulted in circumvention 
of the antidumping duty order, and (3) the existence of such a scheme 
during the POR undermined our ability to impose accurate antidumping 
duties, pursuant to our statutory mandate under section 731 of the Act. 
Moreover, section 776(b) of the Act indicates that an adverse inference 
may include reliance on information derived from the petition, the 
final determination in the LTFV investigation, any previous 
administrative review, or any other information placed on the record. 
As AFA, we are assigning to TMC's sales of bars/wedges the 139.31 PRC-
wide rate for bars/wedges published in the most recently completed 
administrative review of this antidumping order. See

[[Page 11379]]

HFHTs Final Results for Eleventh Review; see also TMC AFA Memorandum.

PRC-Wide Entity

    As mentioned in the Background section above, the Department 
initiated these instant administrative reviews of the axes/adzes, bars/
wedges, and hammers/sledges orders with respect to 93 PRC companies. We 
also initiated an administrative review of six PRC companies with 
respect to the picks/mattocks order. On March 26, 2003, we issued a 
shortened section A questionnaire to all of the companies identified in 
the notice of initiation. Although Jiangsu responded to our shortened 
and full section A questionnaires, this company did not respond to 
sections C or D of the questionnaire, and ceased participating in the 
instant reviews. As stated above, we have preliminarily not granted 
Jiangsu a separate rate and thus we consider it to be a part of the 
PRC-wide entity. Further, 77 of the 93 companies identified in our 
notice of initiation did not respond to our shortened section A 
questionnaire nor did these companies provide any information 
demonstrating that they are entitled to a separate rate. Thus, we 
consider these companies to be part of the PRC-wide entity.
    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 (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 of the Act, the Department shall, subject to section 
782(d) of the Act, use the facts otherwise available in reaching the 
applicable determination under this title. Furthermore, under section 
782(c) of the Act, a respondent has a responsibility not only to notify 
the Department if it is unable to provide the requested information but 
also to provide a full explanation as to why it cannot provide the 
information and suggest alternative forms in which it is able to submit 
the information. Because Jiangsu and these 77 companies did not 
establish their entitlement to a separate rate and failed to provide 
certain requested information, we find that, in accordance with 
sections 776(a)(2)(A) and (B) of the Act, it is appropriate to base the 
PRC-wide margin in these reviews on facts available. See, e.g., Final 
Results of Antidumping Duty Administrative Review for Two 
Manufacturers/Exporters: Certain Preserved Mushrooms from the People's 
Republic of China, 65 FR 50183, 50184 (August 17, 2000).
    Section 776(b) of the Act provides that, if the Department 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,'' the 
Department may use information that is adverse to the interests of the 
party as the facts otherwise available. Adverse inferences are 
appropriate ``to ensure that the party does not obtain a more favorable 
result by failing to cooperate than if it had cooperated fully.'' See 
SAA accompanying the URAA, H. Doc. No. 103-316, at 870 (1994). Section 
776(b) of the Act authorizes the Department to use, as AFA, information 
derived from the petition, the final determination in the LTFV 
investigation, any previous administrative review, or any other 
information placed on the record.
    Because Jiangsu and these 77 companies failed to respond to the 
Department's request for information and they are considered to be part 
of the PRC-wide entity, in accordance with sections 776(a)(2)(A) and 
(B), as well as section 776(b) of the Act, we are assigning total AFA 
to the PRC-wide entity. Section 776(b)(4) of the Act permits the 
Department to use as AFA information derived in the LTFV investigation 
or any prior review. Thus, in selecting an AFA rate, the Department's 
practice has been to assign respondents who fail to cooperate with the 
Department's requests for information the highest margin determined for 
any party in the LTFV investigation or in any administrative review. 
See, e.g., Plate from Taiwan. As AFA, we are assigning to the PRC-wide 
entity's sales of axes/adzes, bars/wedges, hammers/sledges, and picks/
mattocks the rates of 55.74, 139.31, 45.42, and 98.77 percent, 
respectively. The rates selected for axes/adzes, bars/wedges, and 
picks/mattocks were published in the most recently completed review of 
the HFHTs orders. See HFHTs Final Results for Eleventh Review. The rate 
selected as AFA for hammers/sledges is from the LTFV investigation. See 
HFHTs Final LTFV Notice.

Sales of Scrapers and Tampers by Huarong, SMC, and TMC

    On July 9, 2003, Huarong, SMC, and TMC asked the Department to 
provide ``guidance'' as to whether sales of scrapers and tampers should 
be reported to the Department. See respondents' July 9, 2003, 
submission at 2-3. On July 10, 2003, the Department replied that U.S. 
sales of scrapers with sale dates within the POR should be reported. At 
that time, the Department also noted that if the respondents disagree 
with our guidance, they could request a formal scope ruling pursuant to 
19 CFR 351.225(c). See Letter from Ron Trentham, Acting Program 
Manager, to the respondents, dated July 10, 2003. On July 11, 2003, the 
Department informed the respondents that they should also report U.S. 
sales of tampers with sales dates within the POR, as tampers are 
specifically mentioned in the scope of the HFHTs orders. See Memorandum 
from Mark Manning, Case Analyst, to the File, ``Tampers are identified 
as subject merchandise in the scope of the order,'' dated July 11, 
2003.
    Huarong reported its U.S. sales of scrapers in its section C 
questionnaire response and the FOP data for scrapers in its section D 
questionnaire response. After reviewing Huarong's responses, the 
Department issued a supplemental questionnaire to Huarong covering 
sections A, C, and D of the questionnaire. In that supplemental 
questionnaire, we asked Huarong to confirm that it reported all of its 
sales of subject merchandise. Moreover, we asked several questions 
regarding the sales and FOP information for scrapers that Huarong 
reported in its questionnaire responses. In its supplemental 
questionnaire response, Huarong noted that an interested party to these 
proceedings requested a scope inquiry as to whether scrapers are within 
the scope of the HFHTs orders. Because of this scope request, Huarong 
stated that it will not report any additional information regarding its 
U.S. sales of scrapers, nor the FOP data for scrapers, until the 
question of whether scrapers are within the scope of the HFHTs orders 
has been settled. See Huarong's November 21, 2003, submission at 2-3. 
We note that the only sales Huarong reported for the axes/adzes order 
are its sales of scrapers.
    Furthermore, Huarong, SMC, and TMC stated in their response and 
supplemental responses to section C of the questionnaire that they did 
not report their sales of tampers with dates of sale within the POR. In 
addition, Huarong, SMC, and TMC refused to report the FOP data for 
tampers in their responses and supplemental responses to section D of 
the questionnaire. These respondents refused to provide the sales and 
FOP data regarding tampers because, as with scrapers, there is an on-
going scope inquiry on whether tampers

[[Page 11380]]

are within the scope of the HFHTs orders.\3\
---------------------------------------------------------------------------

    \3\ The Department initiated scope inquiries on tampers on 
August 4, 2003, and on scrapers on December 2, 2003. The final 
results of the inquiries are currently pending.
---------------------------------------------------------------------------

    The evidence on the record of this review establishes that, 
pursuant to section 776(a)(2) of the Act, the use of total facts 
available is warranted in determining the dumping margin for Huarong's 
sales of scrapers and tampers, in addition to SMC and TMC's sales of 
tampers, because these respondents refused to provide complete sales 
and FOP information for their sales of these products. See Memorandum 
from Thomas F. Futtner, Acting Office Director, to Holly A. Kuga, 
Acting Deputy Assistant Secretary, ``Application of Adverse Facts 
Available to Sales of Scrapers and Tampers,'' dated March 1, 2004 (AFA 
Memorandum for Scrapers and Tampers). In their questionnaire and 
supplemental responses, these respondents refused to provide the 
requested information on scrapers and tampers because the Department 
has not yet issued a final ruling in the separate, on-going scope 
inquiries regarding these products. However, 19 CFR 351.225(l)(4) 
states that, ``notwithstanding the pendency of a scope inquiry, if the 
Secretary considers it appropriate, the Secretary may request 
information concerning the product that is the subject of the scope 
inquiry for purposes of a review under this subpart.'' Thus, even 
though the Department has not yet issued its final scope rulings in 
response to these inquires, the Department may ask for the information 
regarding sales of these products during the course of an 
administrative review. Thus, it is appropriate to use facts available.
    Moreover, the record shows that Huarong, SMC, and TMC failed to 
cooperate to the best of their ability, within the meaning of section 
776(b) of the Act. In reviewing the evidence on the record, the 
Department finds that there is no information on the record indicating 
that Huarong, SMC, and TMC ever attempted to provide the sales 
information on tampers, nor did Huarong attempt to provide the 
additional information on scrapers requested by the Department, despite 
the fact that the sales information for scrapers and tampers is 
completely within their control. Moreover, Huarong failed to provide 
its FOP data for scrapers even though it is the producer of this 
merchandise. Although Huarong, SMC, and TMC do not produce tampers, 
none of these respondents provided any reason as to why the supplying 
factories for tampers would not provide the FOP data. Thus, Huarong, 
SMC, and TMC failed to provide information necessary to allow the 
Department to accurately calculate EP and NV for their respective sales 
of scrapers and tampers. By not responding to our requests for 
supplemental information for scrapers, and by providing no information 
whatsoever for tampers, these respondents failed to cooperate to the 
best of their ability. As Huarong, SMC, and TMC have failed to 
cooperate to the best of their ability, we are using an adverse 
inference in selecting from among the facts available, pursuant to 
section 776(b) of the Act. See AFA Memorandum for Scrapers and Tampers.
    Pursuant to section 776(b) of the Act, the Department is 
preliminarily basing Huarong's dumping margin for products covered by 
the antidumping orders on axes/adzes and bars/wedges, in addition to 
SMC and TMC's dumping margin for products covered by the antidumping 
order on bars/wedges, on AFA. Section 776(b) of the Act authorizes the 
Department to use, as AFA, information derived from the petition, the 
final determination in the LTFV investigation, any previous 
administrative review, or any other information placed on the record. 
As AFA, we are assigning to Huarong's sales of products covered by the 
axes/adzes and bars/wedges orders the 55.74 and 139.31 PRC-wide rates 
for axes/adzes and bars/wedges published in the most recently completed 
administrative reviews of these antidumping orders. See HFHTs Final 
Results for Eleventh Review. For SMC and TMC's sales of products 
covered by the bars/wedges order, we are assigning the PRC-wide rate 
for bars/wedges of 139.31 percent published in HFHTs Final Results for 
Eleventh Review.

Corroboration

    Section 776(c) of the Act requires the Department to corroborate, 
to the extent practicable, secondary information used as facts 
available. Secondary information is defined as ``{i{time} nformation 
derived from the petition that gave rise to the investigation or 
review, the final determination concerning the subject merchandise, or 
any previous review under section 751 concerning the subject 
merchandise.'' See SAA accompanying the URAA, H.R. Doc. No. 103-316 at 
870 (1994) and 19 CFR 351.308(d).
    The SAA further provides that the term ``corroborate'' means that 
the Department will satisfy itself that the secondary information to be 
used has probative value. See SAA at 870. Thus, to corroborate 
secondary information, the Department will, to the extent practicable, 
examine the reliability and relevance of the information used. However, 
unlike other types of information, such as input costs or selling 
expenses, there are no independent sources for calculated dumping 
margins. Thus, in an administrative review, if the Department chooses, 
as total AFA, a calculated dumping margin from a prior segment of the 
proceeding, it is not necessary to question the reliability of the 
margin. See Heavy Forged Hand Tools From the People's Republic of 
China: Final Results and Partial Rescission of Antidumping Duty 
Administrative Review and Determination Not To Revoke in Part, 67 FR 
57789, 57791 (September 12, 2002).
    All of the AFA rates selected above were calculated using 
information provided during the LTFV investigation or a past 
administrative review. Furthermore, none of these rates were judicially 
invalidated. Therefore, we consider these rates to be reliable. See the 
respective AFA memoranda identified above for further details.
    When circumstances warrant, the Department may diverge from its 
standard practice of selecting as the AFA rate the highest rate in any 
segment of the proceeding. For example, in Fresh Cut Flowers From 
Mexico; Final Results of Antidumping Duty Administrative Review, 61 FR 
6812 (February 22, 1996) (Flowers from Mexico), the Department did not 
use the highest margin in the proceeding as best information available 
(the predecessor to facts available) because that margin was based on 
another company's aberrational business expenses and was unusually 
high. See Flowers from Mexico, 61 FR 6812, at 6814. In other cases, the 
Department has not used the highest rate in any segment of the 
proceeding as the AFA rate because the highest rate was subsequently 
discredited, or the facts did not support its use. See also Allegheny 
Ludlum Corp., et al. v. United States, Slip Op 03-89 (July 24, 2003) at 
22-26, currently on appeal, and 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 with respect to the rates being used here. 
Moreover, the rates selected for axes/adzes, bars/wedges, and picks/
mattocks are the rates currently applicable to the PRC-wide entity.

[[Page 11381]]

    The rate selected as AFA for the PRC-wide entity's sales of 
hammers/sledges is from the LTFV investigation. As discussed in the AFA 
memorandum for Jiangsu, the previous PRC-wide rate for hammers/sledges 
of 27.71 percent has not encouraged cooperation. A review of the 
company-specific rates that have been calculated for hammers/sledges in 
prior administrative reviews indicates that there are no company-
specific rates for hammers/sledges higher than the previous PRC-wide 
rate of 27.71 percent. The selected rate of 45.42 has relevance because 
it, and a nearly equivalent rate, were the PRC-wide rates for hammers/
sledges during the first six administrative reviews of this order. See 
Jiangsu AFA Memorandum.
    Accordingly, we have corroborated the AFA rates identified above in 
accordance with the requirement of section 776(c) of the Act that 
secondary information be corroborated (i.e., that it have probative 
value). See the respective AFA memoranda identified above for further 
details.

Export Price

    In accordance with section 772(a) of the Act, the Department 
calculated EPs for sales to the United States for the participating 
respondents receiving calculated rates because the first sale to an 
unaffiliated party was made before the date of importation and the use 
of constructed EP was not otherwise warranted. We calculated EP based 
on the price to unaffiliated purchasers in the United States. In 
accordance with section 772(c) of the Act, as appropriate, we deducted 
from the starting price to unaffiliated purchasers foreign inland 
freight, foreign warehousing, brokerage and handling, ocean freight, 
and marine insurance. For the respondents receiving calculated rates, 
each of these services was either provided by a NME vendor or paid for 
using a NME currency, with one exception. Thus, we based the deduction 
for these movement charges on surrogate values. See the Normal Value 
section of this notice for details regarding these surrogate values.
    The one exception, referred to above, concerns ocean freight 
expenses incurred by SMC and TMC. These respondents, which are the only 
respondents receiving calculated rates, reported that during the POR 
they used both market economy ocean freight vendors, whom they paid in 
a market economy currency, and NME vendors. For SMC and TMC, we used, 
on a separate basis, the weighted average of each respondent's market 
economy ocean freight expenses to value ocean freight for all of their 
respective U.S. sales.
    We valued foreign warehousing using the storage charges on export 
cargo stored in covered sheds at bulk terminals at Jawaharlal Nehru 
Port, as set by the Board of Trustees of Jawaharlal Nehru Port, 
effective March 17, 1997. We valued brokerage and handling and marine 
insurance using the rates reported in the public version of the 
questionnaire response in Stainless Steel Wire Rod From India; Final 
Results of Administrative Review, 63 FR 48184 (September 9, 1998) 
(India Wire Rod). The source used to value foreign inland freight is 
identified below in the Normal Value section of this notice. See 
Memorandum from Thomas Martin, Case Analyst, to the File, ``Surrogate 
Values Used for the Preliminary Results of the Twelfth Administrative 
Reviews of Certain Heavy Forged Hand Tools From the People's Republic 
of China--February 1, 2002 through January 31, 2003,'' dated March 1, 
2004 (Surrogate Value Memorandum).
    To account for inflation or deflation between the time period that 
the freight, brokerage and handling, and insurance rates were in effect 
and the POR, we adjusted the rates using the wholesale price index 
(WPI) for India from the International Monetary Fund (IMF) publication, 
International Financial Statistics. See Surrogate Value Memorandum.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using a FOP methodology if: (1) the merchandise is 
exported from an NME country; and (2) the available information does 
not permit the calculation of NV using home-market prices, third-
country prices, or constructed value (CV) under section 773(a) of the 
Act.
    As discussed in the separate rates section, the Department 
considers the PRC to be an NME country. The Department has treated the 
PRC as an NME country in all previous antidumping proceedings. 
Furthermore, available information does not permit the calculation of 
NV using home-market prices, third-country prices, or CV under section 
773(a) of the Act. In accordance with section 771(18)(C)(i) of the Act, 
any determination that a foreign country is an NME country shall remain 
in effect until revoked by the administering authority. We have no 
evidence suggesting that this determination should be changed. 
Therefore, we treated the PRC as an NME country for purposes of these 
reviews and calculated NV by valuing the FOP in a surrogate country.
    Section 773(c)(4) of the Act requires the Department to value the 
NME producer's FOP, to the extent possible, in one or more market 
economy countries that (1) are at a level of economic development 
comparable to that of the NME country, and (2) are significant 
producers of comparable merchandise. The Department has determined that 
India, Pakistan, Indonesia, Sri Lanka, and the Philippines are 
countries comparable to the PRC in terms of overall economic 
development. See Memorandum from Ron Lorentzen, Acting Director, Office 
of Policy, to Thomas F. Futtner, Acting Office Director, AD/CVD 
Enforcement Group II, ``Recommended Surrogate Countries,'' dated August 
14, 2003.
    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, according to the World 
Trade Atlas, \4\ published by Global Trade Information Services, 
Incorporated, India exported a significant quantity of merchandise to 
the United States classified under HTSUS subheadings 8205.20, 8205.59, 
8201.30, and 8201.40, the subheadings applicable to subject hand tools. 
These exports indicate that India is a significant producer of 
comparable merchandise. Accordingly, where possible, we have calculated 
NV using publicly available Indian surrogate values for the PRC 
producers' FOP. Consistent with the 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 at Comment 1, we excluded 
from the surrogate country import data used in our calculations imports 
from Korea, Thailand and Indonesia. See Surrogate Value Memorandum.

Factors of Production

    In accordance with section 773(c) of the Act, we calculated NV 
based on FOP reported by the respondents for the POR. To calculate NV, 
we valued the reported FOP by multiplying the per-unit factor 
quantities by publicly available Indian surrogate values. In selecting 
surrogate values, we considered the quality, specificity, and 
contemporaneity of the available values. As appropriate, we adjusted 
the value of material inputs to account for delivery

[[Page 11382]]

costs. Where appropriate, we increased Indian surrogate values by 
surrogate inland freight costs. We calculated these inland freight 
costs using the reported distances from the PRC port to the PRC 
factory, or from the domestic supplier to the factory. This adjustment 
is in accordance with the United States Court of Appeals for the 
Federal Circuit's (CAFC) decision in Sigma Corp. v. United States, 117 
F. 3d 1401, 1407-1408 (Fed.Cir. 1997). For those values not 
contemporaneous with the POR, we adjusted for inflation or deflation 
using the appropriate wholesale or producer price index published in 
the IMF's International Financial Statistics. We valued the FOP as 
follows:
    (1) We valued direct materials used to produce HFHTs, packing 
materials, coal, acetylene gas, oxygen, and steel scrap generated from 
the production of HFHTs using, where available, the rupee per kilogram, 
per piece, or per cubic meter value of imports that entered India 
during the period February 2002 through January 2003, based upon data 
obtained from the World Trade Atlas. See Surrogate Value Memorandum.
    (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/). 
See Surrogate Value Memorandum.
    (3) We derived ratios for factory overhead, selling, general and 
administrative (SG&A) expenses, and profit using information reported 
for 2,024 Public Limited Companies for the period 2001-2002, in the 
Reserve Bank of India Bulletin for October 2003. 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 (TOTCOM); and profit as a percentage of 
the sum of TOTCOM and SG&A expenses. See Surrogate Value Memorandum.
    Whenever possible, the Department will use producer-specific data 
to calculate financial ratios. Unlike industry-specific data, which 
tends to be broader in terms of merchandise included, product-specific 
data obtained from specific producers of merchandise identical or 
similar to the subject merchandise pertains directly to the subject 
merchandise. See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value: Pure Magnesium in Granular Form From the People's 
Republic of China, 66 FR 49345 (September 27, 2001), and accompanying 
Issues and Decision Memorandum at Comment 3. However, when the 
Department and the parties are unable to obtain surrogate information 
for valuing overhead, SG&A, and profit from manufacturers of 
merchandise identical or comparable to the subject merchandise, the 
Department must rely upon surrogate information derived from broader 
industry groupings. See Notice of Final Results of New Shipper Review: 
Petroleum Wax Candles from the People's Republic of China, 67 FR 41395 
(June 18, 2002), and accompanying Issues and Decision Memorandum, at 
Comment 6.
---------------------------------------------------------------------------

    \4\ The World Trade Atlas is a secondary electronic source that 
contains Indian import data obtained from the publication Monthly 
Statistics of the Foreign Trade of India, Volume II--Imports (Indian 
Import Statistics).
---------------------------------------------------------------------------

    In the instant reviews, neither the petitioner nor the respondents 
have placed any financial statements on the record. Moreover, the 
Department has been unable to locate financial statements specific to 
hand tools producers in India. Therefore, the Department is using 
broader financial data from the RBI Bulletin to calculate the financial 
ratios. See, e.g., Notice of Final Determination of Sales at Less Than 
Fair Value: Non-Malleable Cast Iron Pipe Fittings from the People's 
Republic of China, 68 FR 7765 (February 18, 2003) and the accompanying 
Issues and Decision Memorandum at Comment 4; Final Results of 
Antidumping New Shipper Review: Potassium Permanganate from the 
People's Republic of China, 66 FR 46775 (September 7, 2001), and the 
accompanying Issues and Decision Memorandum, at Comment 20; Final 
Results and Partial Rescission of Antidumping Duty Administrative 
Review and Determination Not To Revoke in Part: Heavy Forged Hand Tools 
from the People's Republic of China, 66 FR 48026 (September 17, 2001), 
and the accompanying Issues and Decision Memorandum at Comment 18; 
Notice of Initiation of Antidumping Duty Investigation: Lawn and Garden 
Steel Fence Posts From the People's Republic of China, 67 FR 37388, 
37391 (May 29, 2002 ), and the accompanying Issues and Decision 
Memorandum, at Comment 6.
    (4) We valued electricity using 2001-2002 data from the Annual 
Report on The Working of State Electricity Boards & Electricity 
Departments, published in May 2002 by the Power & Energy Division of 
the Planning Commission of the Government of India. We used the average 
tariff rate for Indian industry, as opposed to the commercial tariff 
rate or agricultural tariff rate. See Surrogate Value Memorandum.
    (5) 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: We valued road freight services using the rates used 
by the Department in the Notice of Final Determination of Sales at Less 
Than Fair Value: Bulk Aspirin From the People's Republic of China, 65 
FR 33805 (May 25, 2000). See Surrogate Value Memorandum.
    Rail Freight: We valued rail freight services using average 2001-
2002 rates published in the Railway Budget 2003-2004 by the Reserve 
Bank of India Bulletin, on May 19, 2003. See Surrogate Value 
Memorandum.

Preliminary Results of the Review

    As a result of our reviews, we preliminarily determine that the 
following margins exist for the period February 1, 2002 through January 
31, 2003:

------------------------------------------------------------------------
                                                                Margin
          Manufacturer/Exporter                 Period        (percent)
------------------------------------------------------------------------
Shandong Huarong Machinery Corporation
 Limited (Huarong):
    Axes/Adzes..........................     2/1/02-1/31/03        55.74
    Bars/Wedges.........................     2/1/02-1/31/03       139.31
Liaoning Machinery Import & Export
 Corporation (LMC)/ Liaoning Machinery
 Import & Export Corporation Ltd.
 (LIMAC):
    Axes/Adzes..........................     2/1/02-1/31/03        55.74
    Bars/Wedges.........................     2/1/02-1/31/03       139.31
Shandong Machinery Import & Export
 Corporation (SMC):
    Axes/Adzes..........................     2/1/02-1/31/03        55.74
    Bars/Wedges.........................     2/1/02-1/31/03       139.31
    Hammers/Sledges.....................     2/1/02-1/31/03         0.02
    Picks/Mattocks......................     2/1/02-1/31/03        98.77

[[Page 11383]]

 
Tianjin Machinery Import & Export
 Corporation (TMC):
    Axes/Adzes..........................     2/1/02-1/31/03        10.49
    Bars/Wedges.........................     2/1/02-1/31/03       139.31
    Hammers/Sledges.....................     2/1/02-1/31/03         6.46
    Picks/Mattocks......................     2/1/02-1/31/03         4.76
PRC-Wide Entity:
    Axes/Adzes..........................     2/1/02-1/31/03        55.74
    Bars/Wedges.........................     2/1/02-1/31/03       139.31
    Hammers/Sledges.....................     2/1/02-1/31/03        45.42
    Picks/Mattocks......................     2/1/02-1/31/03        98.77
------------------------------------------------------------------------

Public Comment

    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 the preliminary results. An 
interested party may request a hearing within 30 days of publication of 
the preliminary results. See 19 CFR 351.310(c). Interested parties may 
submit written comments (case briefs) within 30 days of publication of 
the preliminary results and rebuttal comments (rebuttal briefs), which 
must be limited to issues raised in the case briefs, within five days 
after the time limit for filing case briefs. See 19 CFR 
351.309(c)(1)(ii) and 19 CFR 351.309(d). 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. We will issue a memorandum identifying the 
date of a hearing, if one is requested. Unless the deadline is extended 
pursuant to section 751(a)(3)(A) of the Act, the Department will issue 
the final results of this administrative review, including the results 
of our analysis of the issues raised by the parties in their comments, 
within 120 days of publication of the preliminary results. The 
assessment of antidumping duties on entries of merchandise covered by 
this review and future deposits of estimated duties shall be based on 
the final results of this review.

Assessment Rates

    Upon completion of these administrative reviews, the Department 
will determine, and CBP shall assess, antidumping duties on all 
appropriate entries. In accordance with 19 CFR 351.212(b)(1), for the 
respondents receiving calculated dumping margins, we calculated 
importer-specific per-unit duty assessment rates based on the ratio of 
the total amount of the dumping duties calculated for the examined 
sales to the total quantity of those same sales. These importer-
specific per-unit 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 CBP to liquidate without regard to 
antidumping duties any entries for which the importer-specific 
assessment rate is de minimis (i.e., less than 0.5 percent ad valorem). 
For all shipments of subject merchandise for the four antidumping 
orders covering HFHTs from the PRC, exported by the respondents and 
imported by entities not identified by the respondents in their 
questionnaire responses, we will instruct CBP to assess antidumping 
duties at the cash deposit rate in effect on the date of the entry. 
Lastly, for the respondents receiving dumping rates based upon AFA, the 
Department, upon completion of these reviews, will instruct CBP to 
liquidate entries according to the AFA ad valorem rate. The Department 
will issue appraisement instructions directly to CBP upon the 
completion of the final results of these administrative reviews.

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 will be the rates 
for those firms established in the final results of these 
administrative reviews; (2) for any previously reviewed or investigated 
PRC or non-PRC exporter, not covered in these reviews, with a separate 
rate, the cash deposit rate will be the company-specific rate 
established in the most recent segment of these proceedings; (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 rate for any non-PRC exporter of subject merchandise from 
the PRC who does not have its own rate will be the rate applicable to 
the PRC exporter that supplied the non-PRC 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 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this POR. 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: March 1, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-5385 Filed 3-9-04; 8:45 am]
BILLING CODE 3510-DS-P