[Federal Register Volume 69, Number 89 (Friday, May 7, 2004)]
[Notices]
[Pages 25545-25559]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10487]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-867]


Automotive Replacement Glass Windshields From the People's 
Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review

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

DATES: Effective Date: May 7, 2004.

FOR FURTHER INFORMATION CONTACT: Jonathan Herzog, Jon Freed or Nazak 
Nikakhtar, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-4271, (202) 482-3818, and 
(202) 482-9079 respectively.

Preliminary Determination

    The Department of Commerce (``the Department'') is conducting an 
administrative review of the antidumping duty order on automotive 
replacement glass windshields (``ARG'') from the People's Republic of 
China (``PRC'') in response to a request by Pilkington North America 
(``PNA'') who requested a review of its Chinese joint ventures, 
Changchun Pilkington Safety Glass Company Limited (``Changchun''), 
Guilin Pilkington Safety Glass Company Limited (``Guilin''), Shanghai 
Yaohua Pilkington Autoglass Company Limited (``Shanghai''), and Wuhan 
Yaohua Pilkington Safety Glass Company Limited (``Wuhan'') 
(collectively ``the Pilkington JVs'') (with PNA, collectively 
``Pilkington''), the Fuyao Group (``Fuyao''), Dongguan Kongwan 
Automobile Glass Limited (``Dongguan Kongwan''), and Peaceful City 
Limited (``Peaceful City''). The period of review (``POR'') is 
September 19, 2001 through March 31, 2003.
    We preliminarily determine that Pilkington, Fuyao, and Peaceful 
City have sold subject merchandise at less than normal value (``NV'') 
during the POR. Further, we have preliminarily determined to apply an 
adverse facts available rate to all sales and entries of Peaceful 
City's subject merchandise during the POR. If these preliminary results 
are adopted in our final results of this administrative review, we will 
instruct U.S. Customs and Border Protection (``CBP'') to assess 
antidumping duties on entries of subject merchandise during the POR for 
which the importer-specific assessment rates are above de minimis.
    We invite interested parties to comment on these preliminary 
results. Parties who submit arguments in this segment of the proceeding 
are requested to submit with the argument: (1) A statement of the 
issue, and (2) a brief summary of the argument as provided in section 
733 of the Tariff Act of 1930, as amended (``the Act''). The estimated 
margins of sales at LTFV are shown in the ``Suspension of Liquidation'' 
section of this notice.

Case History

    On April 7, 2003, the Department published a notice of opportunity 
to request an administrative review of the antidumping duty order on 
ARG from the PRC for the period September 19, 2001 through March 31, 
2003. See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation: Opportunity to Request Administrative Review, 
68 FR 16761 (April 7, 2003). On April 15, 2003, Dongguan Kongwan and 
Peaceful City, requested an administrative review of their sales to the 
United States during the POR. On April 21, 2003, an importer, PNA, 
requested an administrative review of the sales of Changchun, Guilin, 
Shanghai, and Wuhan to the United States during the POR. On April 22, 
2003, TCG International Inc. (``TCGI''), requested an administrative 
review of its sales to the United States during the POR. On April 30, 
2003, Xinyi Automotive Glass (Shenzhen) Company, Limited (``Xinyi''), 
Shenzhen CSG Automotive Glass Company, Limited (``Shenzhen CSG'') 
(reported to be the former company Shenzhen Benxun Auto Glass Company, 
Limited) (``Benxun''), and Fuyao requested an administrative review of 
their sales to the United States during the POR.
    On May 21, 2003, the Department published in the Federal Register a 
notice of the initiation of the antidumping duty administrative review 
of ARG from the PRC for the period September 19, 2001 through March 31, 
2003. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 68 FR 27781 
(May 21, 2003). On June 3, 2003, the Department issued questionnaires 
to each Respondent. On September 8, 2003, the Department published a 
notice in the Federal Register rescinding the administrative reviews of 
TCGI, Xinyi, and Benxun.\1\ See Certain Automotive Replacement Glass 
Windshields from the People's Republic of China: Notice of Partial 
Rescission of the Antidumping Duty Administrative Review, 68 FR 52893 
(September 8, 2003). On October 24, 2003, the Department published a 
notice in the Federal Register extending the time limit for the 
preliminary results of review by 60 days. See Certain Automotive 
Replacement Glass Windshields from the People's Republic of China: 
Extension of Time Limit for Preliminary Results of Antidumping Duty 
Administrative Review, 68 FR 60911 (October 24, 2003). On January 30, 
2004, the Department published a notice in the Federal Register 
extending the time limit for the preliminary results of review until 
April 29, 2004. See Notice of Extension of Time Limit for Preliminary 
Results of the Antidumping Duty Administrative Review: Certain

[[Page 25546]]

Automotive Replacement Glass Windshields from the People's Republic of 
China, 69 FR 4488 (January 30, 2004).
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    \1\ During the investigation, the Department investigated a 
company called Benxun. When Shenzhen CSG requested review, it 
indicated it was the company formally known as Benxun, but that it 
had undergone a name change since the investigation. On July 8, 
2003, Shenzhen CSG withdrew its request for review. However, because 
Shenzhen CSG withdrew its request for review, the Department did not 
have the information necessary to make a successor-in-interest 
determination. Therefore the Department did not determine that 
Shenzhen CSG is entitled to receive the same antidumping cash 
deposit rate accorded Benxun within the context of this review. On 
March 8, 2004, the Department initiated a change of circumstance 
review, and is currently in the process of completing that review.
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Pilkington

    On June 3, 2003, the Department issued its antidumping 
questionnaire to Pilkington. Pilkington submitted its Section A 
questionnaire response on June 25, 2003, and its Sections C and D 
responses on August 5, 2003. To address concerns about separate rates 
and certain expense and factors of production variables, the Department 
issued several Sections A, C, and D supplemental questionnaires. The 
Department issued a Section A supplemental questionnaire to Pilkington 
on July 31, 2003, to which Pilkington responded on August 28, 2003. The 
Department issued a Sections C through D supplemental questionnaire to 
Pilkington on September 9, 2003, to which Pilkington responded on 
September 30, 2003. The Department issued a second Sections A-D 
supplemental questionnaire to Pilkington on October 17, 2003, to which 
Pilkington responded on November 5, 2003. The Department issued a third 
Sections A-D supplemental questionnaire on December 16, 2003, to which 
Pilkington responded on January 9, 2004. The Department issued a fourth 
Section A supplemental questionnaire to Pilkington on January 5, 2004, 
to which Pilkington responded on January 12, 2004. The Department 
issued a fifth Section A supplemental questionnaire to Pilkington on 
January 26, 2004, to which Pilkington responded on February 6, 2004. 
The Department issued a sixth Section A supplemental questionnaire to 
Pilkington on February 4, 2004, to which Pilkington responded on 
February 9, 2004.

Fuyao

    On June 3, 2003, the Department issued its antidumping 
questionnaire to Fuyao. On July 8, 2003, Fuyao reported that it made 
sales of subject merchandise to the United States during the POR in its 
response to Section A of the Department's questionnaire. On July 24, 
2003, Fuyao submitted its response to Sections C and D of the 
Department's questionnaire. To address concerns about separate rates 
and certain expense and factors of production variables, the Department 
issued several Sections A, C, and D supplemental questionnaires. On 
July 31, 2003, the Department issued a Section A supplemental 
questionnaire to Fuyao. Fuyao submitted its response to the 
Department's Section A supplemental questionnaire on August 14, 2003. 
On September 22, 2003, the Department issued a Sections C and D 
supplemental questionnaire to Fuyao. Fuyao submitted its response to 
the Sections C and D supplemental questionnaire on October 17, 2003. 
The Department issued a second Sections A, C, and D supplemental 
questionnaire on December 16, 2003. Fuyao submitted its response to the 
Sections A, C, and D supplemental questionnaire on January 9, 2004. On 
January 6, 2004, the Department issued a third supplemental 
questionnaire regarding Fuyao's quantity and value of sales and its 
financial statements. On January 21, 2004, Fuyao submitted its response 
to the supplemental questionnaire regarding the quantity and value of 
sales. On February 4, 2004, the Department issued a third Section D 
supplemental questionnaire. Fuyao submitted its response to the Section 
D supplemental questionnaire on February 23, 2004.

Peaceful City and Dongguan Kongwan

    On June 3, 2003, the Department issued its antidumping 
questionnaire to Peaceful City, the exporter of subject merchandise, 
and Dongguan Kongwan, the producer of subject merchandise, which is 
100% owned by Peaceful City. Due to issues concerning affiliation and 
factors of production, we issued several supplemental questionnaires to 
Peaceful City and Dongguan Kongwan. On July 8, 2003, Peaceful City 
reported that it exported subject merchandise to the United States 
during the POR, and Dongguan Kongwan reported that it produced the 
subject merchandise in their respective responses to the Section A 
questionnaire. On July 22, 2003, the Department issued a Section A 
supplemental questionnaire to Peaceful City and Dongguan Kongwan. 
Peaceful City and Dongguan Kongwan submitted their responses to the 
Department's Section A supplemental questionnaire on August 6, 2003. On 
September 16, 2003, the Department issued a second Section A 
supplemental and Sections C and D supplemental questionnaire to 
Peaceful City and Dongguan Kongwan. On October 15, 2003, the Department 
received Peaceful City and Dongguan Kongwan's responses to the Section 
A second supplemental and Sections C and D supplemental questionnaires. 
On December 15, the Department issued a third Section A supplemental 
and a second Section C and D supplemental questionnaire to Peaceful 
City and Dongguan Kongwan, for which the Department received Peaceful 
City and Dongguan Kongwan's responses on January 5, 2004. On January 
16, 2004, the Department issued to Dongguan Kongwan its third Section D 
supplemental questionnaire. On January 24, 2004, Dongguan Kongwan 
submitted its third Section D supplemental questionnaire response. On 
February 4, 2004, the Department issued to Dongguan Kongwan a fourth 
Section D supplemental questionnaire. On February 11, 2004, the 
Department received Dongguan Kongwan's fourth Section D supplemental 
questionnaire response. On February 23, 2004, the Department issued a 
fifth Section D supplemental questionnaire to Dongguan Kongwan 
addressing certain deficiencies in Dongguan Kongwan's fourth Section D 
supplemental questionnaire response. The Department received Dongguan 
Kongwan's fifth Section D supplemental questionnaire response on March 
2, 2004. On March 3, 2004, the Department submitted to Dongguan Kongwan 
a third Section C supplemental questionnaire and a sixth Section D 
supplemental questionnaire. On March 5, 2004, the Department received 
Dongguan Kongwan's third Section C and sixth Section D supplemental 
questionnaire response. On March 15, 2004, the Department issued to 
Peaceful City a fourth Section A supplemental questionnaire, and the 
Department received Peaceful City's response on March 22, 2004, at the 
verification of Peaceful City and on March 23, 2004 at the Department.

Period of Review

    The POR is September 19, 2001 through March 31, 2003.

Scope of Investigation

    The products covered by this review are ARG windshields, and parts 
thereof, whether clear or tinted, whether coated or not, and whether or 
not they include antennas, ceramics, mirror buttons or VIN notches, and 
whether or not they are encapsulated. ARG windshields are laminated 
safety glass (i.e., two layers of (typically float) glass with a sheet 
of clear or tinted plastic in between (usually polyvinyl butyral)), 
which are produced and sold for use by automotive glass installation 
shops to replace windshields in automotive vehicles (e.g., passenger 
cars, light trucks, vans, sport utility vehicles, etc.) that are 
cracked, broken or otherwise damaged.
    ARG windshields subject to this review are currently classifiable 
under subheading 7007.21.10.10 of the Harmonized Tariff Schedules of 
the United States (HTSUS). Specifically excluded from the scope of this 
investigation are laminated automotive windshields sold for use in 
original assembly of vehicles. While HTSUS subheadings are provided for

[[Page 25547]]

convenience and Customs purposes, our written description of the scope 
of this investigation is dispositive.

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by Pilkington, Fuyao, and Peaceful City. We used standard 
verification procedures, including on-site inspection of the 
manufacturers' and exporters' facilities, and examination of relevant 
sales and financial records.
    The Department conducted a verification at Pilkington's facilities 
in both China and the United States. The Department conducted the U.S. 
verification at Pilkington's headquarters in Toledo, Ohio from March 10 
through March 12, 2004. The Department conducted the verification at 
Pilkington's facilities in Changchun, China from February 16 through 
February 20, 2004.
    The Department conducted a verification at Fuyao's facilities in 
both China and the United States. The Department conducted the U.S. 
verification at Greenville Glass Industry Inc. (``GGI'') in Greenville, 
South Carolina from February 26 through February 27, 2004. The 
Department conducted the verification at Fuyao's facilities in Fuqing 
City, Fujian Province of China from March 22 through March 26, 2004.
    The Department conducted a verification at Peaceful City's 
headquarters in Hong Kong, on March 22 and 23, 2004, and at Dongguan 
Kongwan's manufacturing plant in Dongguan City, China, on March 24, 25, 
and 26, 2004.
    Our verification results are outlined in the verification report 
for each company. For further details see Verification of Sales and 
Factors of Production of Pilkington North America (``PNA'') in the 
Antidumping Duty Administrative Review of Automotive Replacement Glass 
(``ARG'') Windshields from the People's Republic of China (``PRC''), 
dated April 29, 2004 (``Pilkington Chinese Verification Report''); 
Verification of Sales of Pilkington North America (``PNA'') in the 
Antidumping Duty Administrative Review of Automotive Replacement Glass 
(``ARG'') Windshields from the People's Republic of China (``PRC''), 
dated April 29, 2004 (``Pilkington U.S. Verification Report''); 
Verification of Sales and Factors of Production of the Fuyao Group in 
the Antidumping Duty Administrative Review of Automotive Replacement 
Glass (``ARG'') Windshields from the People's Republic of China 
(``PRC''), dated April 29, 2004 (``Fuyao Verification Report''); 
Verification of Sales of Greenville Glass Industries in the Antidumping 
Duty Administrative Review of Automotive Replacement Glass (``ARG'') 
Windshields from the People's Republic of China (``PRC''), dated April 
29, 2004 (``Greenville Verification Report''); and, Verification of 
Sales and Factors of Production of Peaceful City and Dongguan Kongwan 
in the Antidumping Duty Administrative Review of Automotive Replacement 
Glass (``ARG'') Windshields from the People's Republic of China 
(``PRC''), dated April 29, 2004 (``See Peaceful City and Dongguan 
Kongwan's Verification Report'').

Nonmarket Economy Country Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (``NME'') country. In 
accordance with to 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. See also Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished, From the People's 
Republic of China: Preliminary Results 2001-2002 Administrative Review 
and Partial Rescission of Review, 68 FR 7500 (February 14, 2003). None 
of the parties to this proceeding has contested such treatment. 
Accordingly, we calculated normal value (``NV'') in accordance with 
section 773(c) of the Act, which applies to NME countries.

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base normal value on the NME 
producer's factors of production, valued in a surrogate market economy 
country or countries considered to be appropriate by the Department. In 
accordance with section 773(c)(4) of the Act, the Department, in 
valuing the factors of production, shall utilize, to the extent 
possible, the prices or costs of factors of production 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 sources of the 
surrogate factor values are discussed under the ``normal value'' 
section below and in Preliminary Results of Review of the Order on 
Automotive Replacement Glass Windshields from the People's Republic of 
China: Factor Valuation, Memorandum from Jon Freed, Case Analyst, 
through Edward C. Yang, Program Manager, Office IX, to the File, dated 
April 29, 2004 (``Factor Valuation Memo'').
    The Department has determined that India, Pakistan, Indonesia, Sri 
Lanka, and the Philippines are countries comparable to the PRC in terms 
of economic development. See Memorandum from Ron Lorentzen to Robert 
Bolling: Antidumping Duty Administrative Review of Automotive 
Replacement Glass Windshields from the People's Republic of China 
(PRC): Request for a List of Surrogate Countries, (``Policy Letter''), 
dated July 29, 2003. Customarily, we select an appropriate surrogate 
country based on the availability and reliability of data from the 
countries that are significant producers of comparable merchandise. For 
PRC cases, the primary surrogate country has often been India if it is 
a significant producer of comparable merchandise. In this case, we have 
found that India is a significant producer of comparable merchandise. 
See Memo to File through Ed Yang from Robert Bolling and Nazak 
Nikahktar: Automotive Replacement Glass Windshields (``ARG'') from the 
People's Republic of China; Selection of a Surrogate Country, October 
15, 2003, (``Surrogate Country Memo'')
    The Department used India as the primary surrogate country, and, 
accordingly, has calculated normal value using Indian prices to value 
the PRC producers' factors of production, when available and 
appropriate. See Surrogate Country Memo and Factor Valuation Memo. We 
have obtained and relied upon publicly available information wherever 
possible.
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
in an antidumping administrative review, interested parties may submit 
publicly available information to value factors of production within 20 
days after the date of publication of this preliminary results.

Affiliation/Collapsing--The Pilkington Joint Ventures (``JVs'')

Affiliation--Pilkington JVs

    Pilkington is comprised of several different corporations and joint 
ventures including PNA and the Pilkington JVs. During the POR, the 
Pilkington JVs made sales to PNA and another U.S. customer.
    Section 771(33) of the Act, in part, states that the Department 
considers the following as affiliated: (E) Any person directly or 
indirectly owning, controlling, or holding with power to vote, 5 
percent or more of the outstanding voting stock or shares of any 
organization and such organization;

[[Page 25548]]

(F) Two or more persons directly or indirectly controlling, controlled 
by, or under common control with, any person; or (G) Any person who 
controls any other person and such other person. Section 771(33) 
further provides that, ``a person shall be considered to control 
another person if the person is legally or operationally in a position 
to exercise restraint or direction over the other person''. In order to 
find affiliation between companies, the Department must find that at 
least one of the criteria listed above is applicable to the 
respondents. To the extent that section 771(33) of the Act does not 
conflict with the Department's application of separate rates and 
enforcement of the non-market economy (``NME'') provision, section 
773(c) of the Act, the Department will determine that exporters and/or 
producers are affiliated if the facts of the case support such a 
finding. See Certain Preserved Mushrooms From the People's Republic of 
China: Preliminary Results of Sixth New Shipper Review and Preliminary 
Results and Partial Rescission of Fourth Antidumping Duty 
Administrative Review, 69 FR 10410, 10413 (March 5, 2004) 
(``Mushrooms'').
    The Department has analyzed the information regarding affiliation 
on the record in this administrative review, and considers the 
Pilkington JVs affiliated under sections 771(33)(E),(F) and (G) by 
virtue of Pilkington Plc's control over the four Pilkington JVs. 
Specifically, Pilkington reported that it controlled a majority 
interest or near parity-interest in all of the Pilkington JVs, either 
through outright ownership, or through its ownership share of its 
partner in the Pilkington JVs, Shanghai Yaohua Pilkington Glass Company 
Limited (``SYP''). Further, Pilkington also reported that it controls 
the Chairmanship or Vice-Chairmanship, and more than one director's 
positions on each of the boards of the Pilkington JVs. Additionally, 
Pilkington Plc's consolidated financial statements list the Pilkington 
JVs, as either an affiliated company, defined as a company in which 
Pilkington retains full control, or as an associated company, defined 
as a company in which Pilkington does not own a majority interest, but 
exercises control of the company. See Pilkington Chinese Verification 
Report at 6. Finally, Pilkington reported that sales to PNA by each of 
the Pilkington JVs were made through Pilkington (Asia) Limited 
(``Pilkington Asia''), which served as PNA's buying agent. While 
Pilkington reported that only the general managers of each of the 
Pilkington JVs had the authority to bind the Pilkington JVs to a sale, 
at verification, the Department found that Pilkington Asia's sales and 
marketing agent decided which of the Pilkington JVs would receive and 
order, and on occassion, could bind the Pilkington JVs to a sale. See 
Pilkington Section A response, dated June 25, 2003 (``Pilkington 
Section A response'') at A-8. See also Pilkington Chinese Verification 
Report at 7.
    The Department considers the affiliations provisions of Section 
771(33)(E), (F), and (G) to be met because (1) Pilkington has majority 
or near-parity ownership in all four of the Pilkington JVs, and 
Pilkington controls the Chairmanship or Vice-Chairmanship, and more 
than one director, on each of the Pilkington JVs' Board of Directors, 
(2) Pilkington considers each of the Pilkington JVs as an affiliated or 
associated company for its financial report purposes, and (3) 
Pilkington, through Pilkington Asia, may exercise control over the 
export sales of each of the Pilkington JVs. Therefore, the Department 
considers the four Pilkington JVs to be affilated, because Pilkington 
exercises control over the Pilkington JVs through its ownership and 
ability to influence the sales of the Pilkington JVs. Due to the 
proprietary nature of the information involved in this analysis, please 
see Antidumping Duty Administrative Review of Automotive Replacement 
Glass Windshields from the People's Republic of China: Collapsing of 
Affiliated Parties, dated April 29, 2004 (``Collapsing Memo'') for a 
full discussion of our determination.

Collapsing--the Pilkington JVs

    The Department examined whether to collapse the Pilkington JVs for 
margin calculation purposes.
    Pursuant to 19 CFR 351.401(f), the Department will collapse 
producers and treat them as a single entity where (1) those producers 
are affiliated, (2) the producers have production facilities for 
producing similar or identical products that would not require 
substantial retooling of either facility in order to restructure 
manufacturing priorities, and (3) there is a significant potential for 
manipulation of price or production. In determining whether a 
significant potential for manipulation exists, 19 CFR 351.401(F)(2) 
provides that the Department may consider various factors, including 
(1) the level of common ownership, (2) the extent to which managerial 
employees or board members of one firm sit on the board of directors of 
an affiliated firm, and (3) whether the operations of the affiliated 
firms are intertwined. See Gray Portland Cement and Clinker From 
Mexico: Final Results of Antidumping Duty Administrative Review, 63 FR 
12764, 12774 (March 16, 1998); Final Determination of Sales at Less 
Than Fair Value: Collated Roofing Nails from Taiwan, 62 FR 51427, 51436 
(October 1, 1997).
    To the extent that this provision does not conflict with the 
Department's application of separate rates and enforcement of the NME 
provision, section 773(c) of the Act, the Department will collapse two 
or more affiliated entities in a case involving an NME country if the 
facts of the case warrant such treatment. Furthermore, the Department 
notes that the factors listed in 19 CFR 351.401(f)(2) are not 
exhaustive, and in the context of an NME investigation or 
administrative review, other factors unique to the relationship of 
business entities within in the NME may lead the Department to 
determine that collapsing is either warranted or unwarranted, depending 
on the facts of the case. See Mushrooms, 69 FR10414 (citing Hontex 
Enterprises, Inc. v. United States, Slip Op. 03-17, 36 (February 13, 
2003) (noting that the application of collapsing in the NME context may 
differ from the standard factors listed in the regulation).
    As discussed in the ``affiliation'' section above, the Department 
considers the Pilkington JVs to be affiliated due to Pilkington's 
control of the Pilkington JVs. Thus, the Department finds that the 
first collapsing criterion (i.e., that companies be affiliated) to be 
met. Further, Pilkington reported that all four of the Pilkington JVs' 
production facilities produce similar or identical products, which 
would not require substantial retooling to restructure manufacturing 
priorities. See Collapsing Memo at 5. In fact, Pilkington reported at 
verification that it would likely shift its production to the 
Pilkington JV which receives the lowest dumping margin if the four 
Pilkington JVs are not collapsed. See Pilkington Chinese Verification 
Report at 5. See also Collapsing Memo at 5. Thus, because the 
Pilkington JVs produce similar or identical merchandise, which would 
not require substantial retooling to shift manufacturing priorities, 
the Department considers the second collapsing criterion under 19 CFR 
351.401(f)(1) to be met. Finally, as discussed above in the 
``affiliation'' section, Pilkington exercises control over the 
Pilkington JVs through its ownership positions on each of the 
Pilkington JVs' board of directors, and through the ability of 
Pilkington Asia to influence the export sales to PNA by the Pilkington 
JVs. Therefore, the Department finds there is a significant potential 
for manipulation of the

[[Page 25549]]

Pilkington JVs', price or production by Pilkington, due to the level of 
common ownership, the extent to which board members sit on the boards 
of each of the Pilkington JVs, and the intertwining of the operations 
of the Pilkington JVs through Pilkington. See Collapsing Memo at 5 and 
6. Accordingly, the Department considers the third collapsing criterion 
under 19 CFR 351.401(f)(1) to be met. Due to the proprietary nature of 
the information provided, please see Collapsing Memo for a more 
detailed discussion of our decision.
    The Department finds that the Pilkington JVs are affiliated and 
should be collapsed because (1) the Pilkington JVs are affiliated, (2) 
each has production facilities for producing similar or identical 
products that would not require substantial retooling of either 
facility in order to restructure manufacturing priorities, and (3) 
there is a significant potential for manipulation of price or 
production. Nothing in this determination conflicts with the language 
of 773(c) of the Act (``the NME statute''). Due to the proprietary 
nature of the information involved in this determination, please see 
Collapsing Memo for a full discussion of our analysis.

Separate Rates

    In an NME proceeding, the Department presumes that all companies 
within the country are subject to governmental control and should be 
assigned a single antidumping duty rate unless the respondent 
demonstrates the absence of both de jure and de facto governmental 
control over its export activities. See Notice of Final Determination 
of Sales at Less Than Fair Value: Bicycles from the People's Republic 
of China, 61 FR 19026 (April 30, 1996). The exporters that the 
Department selected to review, Pilkington, Fuyao, and Peaceful City, 
and the PRC producers of the exported goods each provided company-
specific separate rates information and stated that they met the 
standards for the assignment of separate rates. In determining whether 
companies should receive separate rates, the Department focuses its 
attention on the exporter, in this case the Pilkington JVs, Fuyao, and 
Peaceful City, rather than the manufacturer (i.e., Dongguan Kongwan), 
as our concern is the manipulation of dumping margins. See Notice of 
Final Determination of Sales at Less Than Fair Value: Manganese Metal 
from the People's Republic of China, 60 FR 56045 (November 6, 1995). 
Consequently, the Department analyzed whether the exporters of the 
subject merchandise, the Pilkington JVs, Fuyao and Peaceful City, 
should receive a separate rate.
    The Department's separate rate test is not concerned, in general, 
with macroeconomic, border-type controls (e.g., export licenses, 
quotas, and minimum export prices), particularly if these controls are 
imposed to prevent dumping. The test focuses, rather, on controls over 
the investment, pricing, and output decision-making process at the 
individual firm level. See Notice of Final Determination of Sales at 
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from 
Ukraine, 62 FR 61754 (November 19, 1997); Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, from the People's Republic of 
China; Final Results of Antidumping Duty Administrative Review, 62 FR 
61276 (November 17, 1997); and Notice of Preliminary Determination of 
Sales at Less than Fair Value: Honey from the People's Republic of 
China, 60 FR 14725 (March 20, 1995).
    To establish whether a firm is sufficiently independent from 
government control to be entitled to a separate rate, the Department 
analyzes each exporting entity under a test arising out of the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588, (May 6, 1991), as modified by 
Notice of 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, the 
Department assigns separate rates in NME cases only if the respondent 
can demonstrate the absence of both de jure and de facto governmental 
control over export activities. See Silicon Carbide and Notice of Final 
Determination of Sales at Less Than Fair Value: Furfuryl Alcohol from 
the People's Republic of China, 60 FR 22544 (May 8, 1995).
A. Absence of De Jure Control
    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) An absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; and (2) any 
legislative enactments decentralizing control of companies.
B. Absence of De Facto Control
    As stated in previous cases, there is some evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC. See 
Final Determination of Sales at Less Than Fair Value: Certain Preserved 
Mushrooms from the People's Republic of China, 63 FR 72255 (December 
31, 1998). Therefore, the Department has determined that an analysis of 
de facto control is critical in determining whether respondents are, in 
fact, subject to a degree of governmental control which would preclude 
the Department from assigning separate rates. The Department typically 
considers four factors in evaluating whether each respondent is subject 
to de facto governmental control of its export functions: (1) Whether 
the exporter sets its own export prices independent of the government 
and without the approval of a government authority; (2) whether the 
respondent has authority to negotiate and sign contracts, and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of its management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses.

Pilkington

    Pilkington placed on the record statements and documents to 
demonstrate absence of de jure control. In its questionnaire responses, 
Pilkington reported that it has no relationship with any level of the 
PRC government. Pilkington states that it has complete independence 
with respect to its export activities and that neither any PRC 
legislative enactments nor any other formal measures centralize any 
aspect of its export activities. Pilkington also reported that the 
subject merchandise is not subject to export quotas or export control 
licenses. Further, Pilkington reported that the subject merchandise 
does not appear on any government list regarding export provisions or 
export licensing. Furthermore, Pilkington stated that the local Chamber 
of Commerce in the PRC does not coordinate any export activities for 
the Pilkington JVs.
    Pilkington reported that it is required to obtain a business 
license, which is issued by the Changchun Industrial and Commercial 
Administration Bureau for Changchun; the Guilin Industrial and 
Commercial Administration Bureau for Guilin; the Shanghai Industrial 
and Commercial Administrative Bureau for Shanghai; and, the Wuhan 
Industrial and Commercial Administrative Bureau for Wuhan. According to 
Pilkington, the business license allows a business entity, such as the 
Pilkington JVs, to operate in the PRC and facilitates the Pilkington 
JVs export and import

[[Page 25550]]

business based in the PRC. In addition, Pilkington submitted the 
Company Law of the People's Republic of China (``PRC Company Law''), 
which includes the laws governing joint ventures. See Pilkington 
Chinese Verification Report at Exhibit 5D. We examined each of these 
laws and determine that they demonstrate an authority for establishing 
the de jure decentralized control over the export activities and 
evidence in favor of the absence of government control associated with 
each Pilkington JV's business license. See Memorandum to the File from 
Jonathan Herzog, Case Analyst to Edward C. Yang, Director, Office IX, 
Antidumping Duty Investigation of Automotive Replacement Glass 
Windshields from the People's Republic of China, dated April 29, 2004 
(``Separate Rates Memo'').
    In support of an absence of de facto control, Pilkington has 
asserted the following: (1) The Pilkington JVs established their own 
export prices; (2) the Pilkington JVs negotiated contracts without 
guidance from any governmental entities or organizations; (3) the 
Pilkington JVs made their own personnel decisions; and (4) the 
Pilkington JVs retained the proceeds of their export sales and used 
profits according to their business needs. Additionally, Pilkington's 
questionnaire responses indicate that the Pilkington JVs do not 
coordinate with other exporters in setting prices or in determining 
which companies will sell to which markets. This information supports a 
preliminary finding that there is an absence of de facto governmental 
control of the export functions of the Pilkington JVs. Consequently, we 
preliminarily determine that Pilkington has met the criteria for the 
application of separate rates.
    The evidence placed on the record of this administrative review by 
Pilkington demonstrates an absence of government control, both in law 
and in fact, with respect to the Pilkington JVs exports of the 
merchandise under review. As a result, for the purposes of these 
preliminary results, the Department is granting a separate, company-
specific rate to the Pilkington JVs, the exporters which shipped the 
subject merchandise, ARG, to the United States during the POR. Due to 
the proprietary nature of the information considered, please see the 
Separate Rates Memo for a full discussion of the Department's separate 
rates determination.

Fuyao

    Fuyao has placed on the record statements and documents to 
demonstrate absence of de jure control. In its questionnaire responses, 
Fuyao reported that it has no relationship with any level of the PRC 
government. Fuyao states that it has complete independence with respect 
to its export activities and that neither any PRC legislative 
enactments nor any other formal measures centralize any aspect of its 
export activities. Fuyao also reported that the subject merchandise is 
not subject to export quotas or export control licenses. Further, Fuyao 
reported that the subject merchandise does not appear on any government 
list regarding export provisions or export licensing. Furthermore, 
Fuyao stated that the local Chamber of Commerce in the PRC does not 
coordinate any export activities for Fuyao.
    Fuyao reported that it is required to obtain a business license, 
which is issued by the Fuzhou Industrial and Commercial Administration 
Bureau. According to Fuyao, the business license gives a business 
entity, such as Fuyao, the right to open bank accounts, conduct 
business activities, and sign contracts. In addition, Fuyao submitted 
the Foreign Trade Law of the PRC and the Administrative Regulations of 
the PRC Governing the Registration of Legal Corporations. We examined 
each of these laws and determine that they demonstrate an authority for 
establishing the de jure decentralized control over the export 
activities and evidence in favor of the absence of government control 
associated with Fuyao's business license. See Separate Rates Memo.
    In support of demonstrating an absence of de facto control, Fuyao 
has asserted the following: (1) Fuayo established their own export 
prices; (2) Fuyao negotiated contracts without guidance from any 
governmental entities or organizations; (3) Fuyao made their own 
personnel decisions; and (4) Fuyao retained the proceeds of their 
export sales and used profits according to their business needs. 
Additionally, Fuyao's questionnaire responses indicate that it does not 
coordinate with other exporters in setting prices. This information 
supports a preliminary finding that there is an absence of de facto 
governmental control of the export functions of Fuyao. Consequently, we 
preliminarily determine that Fuyao has met the criteria for the 
application of separate rates.
    The evidence placed on the record of this administrative review by 
Fuyao demonstrates an absence of government control, both in law and in 
fact, with respect to its exports of the merchandise under review. As a 
result, for the purposes of these preliminary results, the Department 
is granting a separate, company-specific rate to Fuyao, the exporter 
which shipped the subject merchandise, ARG, to the United States during 
the POR. Due to the proprietary nature of the information considered, 
please see the Separate Rates Memo for a full discussion of the 
Department's separate rates determination.

Peaceful City and Dongguan Kongwan

    Peaceful City has provided the requested company-specific separate 
rates information and has indicated that there is no element of 
government ownership or control over their export operations. We have 
considered whether the mandatory respondent is eligible for a separate 
rate as discussed below. Because Peaceful City is a privately owned 
Hong Kong corporation, having its place of business in Hong Kong and 
being registered in Hong Kong, and because Hong Kong is considered by 
the Department to be a market economy, the Department determined that a 
separate rates analysis was not necessary for Peaceful City. As 
Dongguan Kongwan is wholly owned by Peaceful City, a separate rate 
analysis is not necessary.

Facts Available

    As further discussed below, pursuant to sections 776(a)(2)(A), (B), 
(C) and (D) and section 776(b) of the Act, the Department determines 
that the application of total adverse facts available is warranted for 
Peaceful City and Dongguan Kongwan.

I. Facts Otherwise Available

    The Department finds that the use of facts otherwise available is 
warranted pursuant to section 776(a) of the Act. In general, section 
776(a)(1) and (2) of the Act state that the Department may use facts 
otherwise available in reaching the applicable determination if: (1) 
The necessary information is not available on the record, or (2) an 
interested party or any other person (A) withholds information that has 
been requested by the administering authority or the Commission under 
this subtitle, (B) fails to provide such information by the deadlines 
for submission of the information or in the form and manner requested, 
(C) significantly impedes a proceeding under this subtitle, or (D) 
provides such information but the information cannot be verified.
    As discussed below, the Department determined that the use of total 
facts available is warranted because Peaceful City and Dongguan Kongwan 
withheld certain information that had been requested by the Department, 
failed to

[[Page 25551]]

provide certain information by the Department's and statutory 
deadlines, significantly impeded the Department's investigation, and 
failed to provide certain information that could be verified pursuant 
to section 776(a)(2) (A), (B), (C) and (D) of the Act. As a result of 
Peaceful City and Dongguan Kongwan's failure, the Department does not 
have sufficient information on the record to make its determination.

A. Withholding Information and Failure To Provide Certain Information 
Requested by the Department in a Timely Manner

    The Department finds that facts available is warranted pursuant to 
sections 776(a)(2)(A) and (B) of the Act because Peaceful City and 
Dongguan Kongwan withheld certain information both before verification 
and during verification, and failed to provide information requested by 
the Department in a timely manner and in the form required for 
verification.
    The Department submitted its verification outline to Peaceful City 
and Dongguan Kongwan on March 12, 2004, 10 days prior to the 
commencement of verification, thereby giving Peaceful City and Dongguan 
Kongwan sufficient time to prepare their verification exhibits. See 
Peaceful City and Dongguan Kongwan's Verification Outline, dated March 
12, 2004 (``Peaceful City and Dongguan Kongwan's Verification 
Outline''). The purpose of submitting a verification outline to 
respondents is to give respondents sufficient notice about the types of 
source documents that the Department will seek to examine during 
verification, and to afford respondents sufficient time to compile 
source documents and prepare them as verification exhibits. Peaceful 
City and Dongguan Kongwan failed to follow the instructions detailed in 
the Department's verification outline and failed to present source 
documents in a timely manner for verification. At no time prior to the 
verification did Peaceful City or Dongguan Kongwan contact the 
Department with questions about verification procedures, documents to 
prepare for verification, or the verification outline.
Peaceful City
    During verification, Peaceful City did not adequately present 
documents to demonstrate its corporate structure, accounting practices 
and sales process to the Department according to the instructions 
specified in the Department's verification outline. See Peaceful City 
and Dongguan Kongwan's Verification Outline at pp. 5-7, and 10-17. 
Certain source documents were not initially presented to the 
Department, and the Department found it necessary to make piecemeal 
requests for those documents in order to compile a verification record. 
See Peaceful City and Dongguan Kongwan's Verification Report at pp. 4-
6, 10-11, and 13-14.
    Peaceful City did not report a certain affiliate, which was owned 
by Peaceful City's shareholders prior to June 2002, in its 
questionnaire responses. Although Peaceful City stated that this 
affiliate is merely an automotive glass fitting service supplier and 
not an ARG producer, Peaceful City was unable to substantiate this 
claim through reliable evidence. See Peaceful City and Dongguan 
Kongwan's Verification Report at pp. 4-5 and Exhibit 1. Peaceful City 
also failed to report the brokerage and handling charge that it 
incurred for its U.S. sale during the POR. During verification, the 
Department discovered, among Peaceful City's U.S. sales trace 
documents, an invoice from a Chinese shipping company noting charges 
for hauling the subject merchandise from Dongguan Kongwan's facility to 
a certain PRC port, a customs charge for transporting subject 
merchandise from the certain PRC port to the PRC port of exit, and a 
handling charge for delivering the bill of lading from the shipping 
company to Peaceful City. See Peaceful City and Dongguan Kongwan's 
Verification Report at Exhibit 6. Peaceful City also failed to 
substantiate a related party accounting transaction reported in its 
Section A questionnaire response. The financial statements submitted in 
Peaceful City's questionnaire response references ``purchases'' from 
Peaceful City's reported affiliate, an automotive glass fitting service 
supplier. See Peaceful City's Section A Questionnaire Response, Exhibit 
10, dated June 24, 2003. However, Peaceful City was unable to 
substantiate this purchase amount with source documents. As a result, 
the record is unclear as to whether Peaceful City purchased subject 
merchandise from its affiliate for shipment to the United States during 
the POR or whether it purchased certain raw materials for consumption 
in the manufacture of subject merchandise and did not report this 
purchase as a market economy purchase in Dongguan Kongwan's 
questionnaire responses. See Peaceful City and Dongguan Kongwan's 
Verification Report at pp. 5, 10-11.
Dongguan Kongwan
    During verification, Dongguan Kongwan was unable to provide 
supporting documentation in a timely manner, to demonstrate its 
corporate structure, accounting practices, merchandise, sales process, 
production process, quantity and value of the U.S. sale of subject 
merchandise during the POR, certain factors of production usage rates, 
suppliers' freight distances, and certain market economy transportation 
charges. See Peaceful City and Dongguan Kongwan's Verification Report.
    During verification, the Department discovered that Dongguan 
Kongwan failed to report its use of float glass of a certain color in 
the production of subject merchandise during the POR. Dongguan Kongwan 
reported that float glass of a certain color ``was not used to produce 
the subject merchandise'' and reported the market economy and nonmarket 
economy purchases of float glass of only one color. See Dongguan 
Kongwan's Third Section D Supplemental Questionnaire response at p. 2, 
dated January 27, 2004. During verification, the Department examined 
Dongguan Kongwan's work shift records for the production of subject 
merchandise and discovered that a significant quantity of float glass 
used to produce the subject merchandise was of the unreported color. 
See Peaceful City and Dongguan Kongwan's Verification Report at Exhibit 
I. Further, Dongguan Kongwan did not present the Department with any 
documents demonstrating the usage rate for the float glass of the 
unreported color and the usage rate for the float glass of the reported 
color separately. See Peaceful City and Dongguan Kongwan's Verification 
Report at Exhibit I. Because float glass is the primary component in 
producing the subject merchandise, the correct reporting of float glass 
usage rates is integral to establishing a constructed value for subject 
merchandise and in determining an accurate dumping margin calculation.
    The Department's verification outline expressly requested source 
documents to corroborate Dongguan Kongwan's factor of production usage 
rates, as reported in its questionnaire responses. See Peaceful City 
and Dongguan Kongwan's Verification Outline at p. 17-21. However, 
Dongguan Kongwan did not provide the Department with source documents 
to reconcile the vast majority of its factor input usage rates, 
including one unreported factor of production and several unreported 
packing materials that the Department discovered during its plant tour 
of Dongguan Kongwan's production facility. Dongguan Kongwan also did 
not provide documents to substantiate the rate at which float glass by-
products are derived from the glass cutting process and invoices to 
substantiate the sales of the float glass

[[Page 25552]]

by-products. See Memorandum Detailing Peaceful City Limited (``Peaceful 
City'') and Dongguan Kongwan Automobile Glass, Limited's (``Dongguan 
Kongwan'') Lack of Preparation for Verification in the Antidumping 
Administrative Review of Automotive Replacement Glass (``ARG'') 
Windshields from the People's Republic of China (``PRC'') at p. 5-7, 
dated April 29, 2004 (``Verification Memorandum''); Peaceful City and 
Dongguan Kongwan's Verification Report at p. 29. Also, Dongguan 
Kongwan's indirect labor hours used in the production of subject 
merchandise during July 2002, as reported in its questionnaire 
responses, were not consistent with the total labor hours detailed in 
its attendance records for production management personnel during July 
2002. See Verification Memorandum at p. 6.
    Additionally, Dongguan Kongwan failed to provide source documents 
to corroborate its market economy purchases of float glass of the 
reported color and of PVB. Moreover, certain factors of production were 
not reported in Dongguan Kongwan's questionnaire responses as being 
purchased from market economy or nonmarket economy suppliers. At 
verification, Dongguan Kongwan did not provide supporting documents to 
indicate whether these certain factors were purchased from market 
economy or nonmarket economy suppliers. See Peaceful City and Dongguan 
Kongwan's Verification Report at p. 25-27. Additionally, Dongguan 
Kongwan did not provide documents to demonstrate whether the unreported 
factors discovered during the plant tour were purchased from market 
economy or nonmarket economy suppliers. See Verification Memorandum at 
p. 7. Furthermore, during the plant tour, the Department noted that a 
significant amount of PVB was purchased from Japan, a market economy 
supplier that was not reported in Dongguan Kongwan's questionnaire 
responses, and the Department was unable to examine the market economy 
purchases of PVB during the POR because the Department was not 
presented with supporting documents identifying such purchases. The 
Department also learned from a Dongguan Kongwan official that a certain 
float glass supplier is located in India even though Dongguan Kongwan's 
questionnaire responses reported this supplier as located in Thailand. 
See id.
    Moreover, Dongguan Kongwan failed to provide source documents to 
corroborate its purchase of market economy transportation services for 
the transportation of PVB from its supplier to Dongguan Kongwan's 
production facility. For the certain factors of production that were 
not identified as being purchased from market economy or nonmarket 
economy suppliers in Dongguan Kongwan's questionnaire responses, 
Dongguan Kongwan failed to provide documents to demonstrate whether 
these certain factors were transported to Dongguan Kongwan's facility 
using market economy transportation providers. Additionally, Dongguan 
Kongwan did not provide documents to indicate whether float glass of 
the unreported color was delivered to Dongguan Kongwan's facility by a 
market economy transportation provider, or whether the unreported 
factors discovered during the plant tour were delivered to Dongguan 
Kongwan by a market economy transportation provider. See Verification 
Memorandum at p. 27-29.
    During verification, Dongguan Kongwan stated that it did not keep 
any production specification documents for the various models of 
windshields that it produces, which would have allowed the Department 
to examine Peaceful City's control number allocation of the various 
models of subject merchandise. However, the Department discovered that 
Dongguan Kongwan does in fact keep product specifications records 
labeled ``processing requirements,'' which describe specific 
manufacturing techniques for producing windshields of various models. 
See Verification Memorandum, at p. 5.
    Lastly, Dongguan Kongwan failed to prepare documents demonstrating 
its accounting practice, as requested in the Department's verification 
outline and by the Department during the course of Dongguan Kongwan's 
verification. See Peaceful City and Dongguan Kongwan's Verification 
Outline at p. 6-7. Specifically, Dongguan Kongwan did not present 
source documents to substantiate the manner in which expenses are 
booked throughout the accounting process. See Verification Memorandum 
at p. 4; Peaceful City and Dongguan Kongwan's Verification Outline at 
p. 6-7; Peaceful City and Dongguan Kongwan's Verification Report at p. 
11.

B. Significantly Impeding Verification

    The Department additionally finds that the use of facts otherwise 
available is warranted pursuant to section 776(a)(2)(C) of the Act, 
which states that the Department may use facts otherwise available in 
reaching the applicable determination if, among other factors, the 
respondent ``significantly impedes a proceeding.''
    Peaceful City and Dongguan Kongwan were unprepared for verification 
and their unpreparedness significantly impeded the verification 
process. The Department afforded Peaceful City and Dongguan Kongwan 
sufficient opportunity to subject their documents to a full and 
complete verification by submitting the verification outline to 
Peaceful City and Dongguan Kongwan 10 days prior (i.e., March 12, 2004) 
to the commencement of verification. See Peaceful City and Dongguan 
Kongwan's Verification Outline. At no time prior to the verification 
did Peaceful City or Dongguan Kongwan contact the Department with 
questions about verification procedures, documents to prepare for 
verification, or the verification outline, nor did either company 
indicate that the time allocated for the verification was insufficient.
    During the first day of Peaceful City's two-day sales verification, 
the Department discovered that Peaceful City did not have many source 
documents prepared for review pertaining to its corporate structure, 
accounting process and sales process. The Department had specific 
instructions in its verification outline describing the items that will 
be subject to verification. As a result of Peaceful City's 
unpreparedness, the Department made piecemeal requests for documents in 
order to compile a verification record for each item subject to 
verification. See Verification Memorandum at p. 2.
    On the first day of Dongguan Kongwan's factors of production 
verification, the Department asked Dongguan Kongwan's counsel whether 
source document evidentiary packages were prepared for the Department's 
review. Dongguan Kongwan's counsel responded affirmatively. However, 
upon beginning verification, the Department discovered that Dongguan 
Kongwan had few source documents prepared for review and no evidentiary 
packages to submit to the Department as verification exhibits, despite 
the specific instructions given in the verification outline. Again, the 
Department found it necessary to help Dongguan Kongwan compile a 
verification record by requesting Dongguan Kongwan to provide certain 
source documents individually. See Peaceful City and Dongguan Kongwan's 
Verification Report at p. 2-3. Often, when the Department requested to 
review general documents related to a specific verification item, 
Dongguan Kongwan did not openly or promptly disclose the types of 
documents it ordinarily retained in relation to the Department's 
request, but did produce certain documents that were related to the 
Department's request, after repeated

[[Page 25553]]

requests for relevant documents. As a result, Dongguan Kongwan's lack 
of prompt disclosure delayed the verification process, and hindered the 
Department's ability to obtain many documents necessary for review of 
certain verification items in a timely manner. See Peaceful City and 
Dongguan Kongwan's Verification Report at p. 3. Moreover, many times 
during Dongguan Kongwan's verification, the Department requested 
certain source documents and waited for significant amounts of time for 
Dongguan Kongwan officials to search for the requested documents in 
their business files. Upon retrieving company documents, Dongguan 
Kongwan officials also spent a considerable amount of time selecting 
the relevant data, from multiple data sets in the documents, to present 
to the Department pursuant to its request. See id. Since Dongguan 
Kongwan was unprepared for verification in the manner requested by the 
Department, and since Dongguan Kongwan used much of the time allotted 
for verification to retrieve and review source documentation, there 
remained insufficient time to complete Dongguan Kongwan's factors of 
production verification. See Peaceful City and Dongguan Kongwan's 
Verification Report, at p. 20-29.

C. Information Could Not Be Verified

    The Department additionally finds that the use of facts otherwise 
available is warranted pursuant to section 776(a)(D) of the Act, which 
states that the Department may use facts otherwise available in 
reaching the applicable determination if, among other factors, the 
respondent ``provides * * * information but the information cannot be 
verified.'' The Department was unable to verify the usage rates for the 
majority of Dongguan Kongwan's factors of production reported in its 
questionnaire responses because Dongguan Kongwan did not present source 
documents to substantiate its reported usage rates for these factors. 
See Verification Memorandum. In addition, Dongguan Kongwan did not 
provide source documents to substantiate its market economy purchase of 
PVB, its suppliers' freight distances, and its purchases of market 
economy transportation services for the transportation of PVB from the 
supplier to Dongguan Kongwan's production facility. As a result, the 
Department was unable to substantiate any of these data as reported in 
Dongguan Kongwan's questionnaire responses. See Peaceful City and 
Dongguan Kongwan's Verification Report at p. 20-29.
    Moreover, as explained above, Peaceful City was unable to 
substantiate through source documents the amount paid to an affiliate 
for purchases that were reported in its audited financial statements, 
and Dongguan Kongwan did not provide source documents to demonstrate 
its accounting practices. See Peaceful City and Dongguan Kongwan's 
Verification Report at p. 9-11.

II. Adverse Facts Available

    The Department finds that both Peaceful City and Dongguan Kongwan 
failed to act to the best of their ability in supplying the Department 
with the requested information. Section 776(b) of the Act states that 
if an interested party has failed to cooperate by not acting to the 
best of its ability to comply with a request for information by the 
Department, the Department may use an inference that is adverse to the 
interests of that party in selecting from among the facts otherwise 
available, in reaching the applicable determination.

Peaceful City

    Peaceful City failed to act to the best of its ability in 
presenting documents, in the manner requested by the Department in its 
verification outline, to adequately demonstrate its corporate 
structure, accounting practices and sales process to the Department. 
See Peaceful City and Dongguan Kongwan's Verification Outline. The 
information necessary to prepare complete verification exhibits 
pertaining to corporate structure, accounting practices, and sales 
process was explained in the verification outline, and the verification 
outline was submitted to Peaceful City 10 days prior to Peaceful City's 
verification. However, despite having sufficient notice, Peaceful City 
failed to prepare its source documents prior to the commencement of 
verification. Peaceful City never contacted the Department with 
questions concerning the preparation of verification exhibits prior to 
the Department's verification. Further, the fact that Peaceful City was 
able to procure certain documents listed in the verification outline, 
after the Department's verbal requests for them during verification, 
evidences the fact that Peaceful City did have such documents available 
and had the ability to comply, but failed to promptly and voluntarily 
provide the necessary information to the Department. See Verification 
Memorandum at p. 2.
    Furthermore, the Department's Section A Questionnaire required 
Peaceful City to report all companies with which it was affiliated 
during the POR, and Peaceful City failed to report an affiliate. 
References to Peaceful City's affiliate are made in Peaceful City's 
accounting documents and financial statements. See Peaceful City and 
Dongguan Kongwan's Verification Report, Exhibits 3 and 6. Therefore, it 
is clear that Peaceful City had knowledge of this affiliate. Also, 
Peaceful City was able to produce a document showing the cancellation 
of the unreported affiliates' business license in 2002, suggesting that 
the manager of Peaceful City, who was conducting Peaceful City's 
verification, had knowledge of the unreported affiliate but failed to 
disclose this information in either Peaceful City's questionnaire 
responses or as a pre-verification correction. Moreover, the unreported 
affiliate was owned by Peaceful City's shareholders, one of whom is a 
director of Peaceful City and was present during Peaceful City's 
verification. This director also failed to disclose the affiliation in 
Peaceful City's questionnaire responses or as a pre-verification 
correction. See Verification Memorandum at p. 3-6. The facts on the 
record demonstrate that Peaceful City had knowledge of this affiliate 
and had the ability to report the affiliate to the Department. Peaceful 
City's failure to report its affiliate evidences a failure to cooperate 
to the best of its ability.
    Also, Peaceful City failed to act to the best of its ability when 
it failed to report the brokerage and handling charge that it incurred 
for its U.S. sale during the POR. The Department's Section C 
Questionnaire and the verification outline submitted to Peaceful City 
request documentation of brokerage and handling charges associated with 
the sale of subject merchandise during the POR. The Department 
discovered an invoice from a Chinese shipping company that referenced 
Peaceful City's brokerage and handling charges for the shipment of 
subject merchandise from Dongguan Kongwan to the port of exit. Although 
multiple references to this shipping company are made in Peaceful 
City's accounting records during the POR, this brokerage and handling 
charge was not reported in any of Peaceful City's responses or as a 
pre-verification correction. See Verification Memorandum at p. 19-20. 
Based on these failures, the Department determines that Peaceful City 
failed to cooperate to the best of its ability.

Dongguan Kongwan

    The verification outline submitted to Dongguan Kongwan provided 
Dongguan Kongwan sufficient notice and time to prepare source documents 
to corroborate its questionnaire responses for verification, and 
Dongguan

[[Page 25554]]

Kongwan's failure to prepare source documents, despite having adequate 
notice, evidences its lack of cooperation with the Department's 
standard requests. Dongguan Kongwan failed to prepare documents in a 
timely manner to demonstrate its corporate structure. Dongguan Kongwan 
did not adequately prepare documents to demonstrate its accounting 
practices, the characteristics of merchandise produced, its sales and 
production process, its quantity and value of the U.S. sale of subject 
merchandise during the POR, certain factor of production usage rates, 
and certain market economy transportation charges. See Peaceful City 
and Dongguan Kongwan's Verification Outline at p. 17-21. Although 
information necessary to prepare complete verification exhibits 
pertaining to these verification topics was provided in the 
verification outline, Dongguan Kongwan did not comply with the requests 
to prepare all source documents prior to the commencement of 
verification. Additionally, Dongguan Kongwan never contacted the 
Department with questions concerning the preparation of verification 
exhibits prior to the Department's verification. See Verification 
Memorandum at p. 2. Furthermore, the fact that Dongguan Kongwan was 
able to procure certain documents listed in the verification outline, 
but only after the Department made a verbal request for them during 
verification, evidences the fact that Dongguan Kongwan had the ability 
to prepare the requested documentation, but failed to promptly and 
voluntarily provide it to the Department. See Verification Memorandum 
at p. 8-9. Therefore, the Department finds that Dongguan Kongwan failed 
to cooperate to the best of its ability by not providing adequate 
source documents prior to the commencement of verification.
    Specifically, Dongguan Kongwan did not act to the best of its 
ability in reporting the usage rate of float glass, by color, in its 
production of subject merchandise during the POR. Dongguan Kongwan 
stated that it used its work shift records to prepare Dongguan 
Kongwan's questionnaire responses about its float glass usage rate, and 
Dongguan Kongwan reported that float glass of a certain color ``was not 
used to produce the subject merchandise.'' See Third Section D 
Supplemental Questionnaire response at p. 2, dated January 27, 2004. 
However, during verification, the Department examined the same work 
shift records that Dongguan Kongwan used to prepare its questionnaire 
responses and discovered that a significant quantity of float glass 
used to produce subject merchandise during the POR was float glass of 
the unreported color. See Verification Memorandum at p. 5-6.
    Dongguan Kongwan also failed to report in its questionnaire 
responses the use of several additional factors of production, which 
the Department discovered during its plant tour of Dongguan Kongwan's 
production facility. These unreported factors were in plain view and 
easily detectable when conducting a simple survey of Dongguan Kongwan's 
production facility. See Verification Memorandum at p. 6.
    Although Dongguan Kongwan presumably used source documents to 
report its factors of production in its questionnaire responses, 
Dongguan Kongwan failed to prepare and present these source documents 
to the Department in a timely manner. See id. Dongguan Kongwan failed 
to present documents to reconcile the usage rates for 21 of 25 factors 
of production, including the unreported factors discovered during the 
course of verification. See Peaceful City and Dongguan Kongwan's 
Verification Report at p. 20-25. The Department requested to begin its 
verification of Dongguan Kongwan's factor usage rates and costs of 
production on the second day of verification. Upon learning that 
Dongguan Kongwan was unprepared for this segment of verification, the 
Department explained in detail the importance of having source 
documents with which to corroborate Dongguan Kongwan's questionnaire 
responses. The Department also explained to Dongguan Kongwan the 
process of compiling documents as verification exhibits. See 
Verification Memorandum at p. 9. The verification outline, which was 
submitted to Dongguan Kongwan 12 days prior to its verification, also 
detailed instructions on preparing verification packages and provided 
examples of source documents to be included in its verification 
package. As a result of its unpreparedness, Dongguan Kongwan had to use 
time during verification to compile source documents, and Dongguan 
Kongwan only provided documents to substantiate certain items from its 
questionnaire responses (e.g., float glass and indirect labor hours) 
and did not present many source documents until the final day of 
verification. See Verification Memorandum at p. 5-7. Also, Dongguan 
Kongwan's verification exhibits were inadequate in two respects. First, 
Dongguan Kongwan did not attempt to explain or evidence its usage rate 
of the float glass of the reported color for the production of subject 
merchandise during the POR. Second, Dongguan Kongwan understated its 
usage rate of indirect labor hours in its questionnaire responses by 
approximately 3% when compared with the actual indirect labor hours 
detailed in Dongguan Kongwan's attendance records for production 
management personnel. See Peaceful City and Dongguan Kongwan's 
Verification Report, Exhibit L.
    Dongguan Kongwan failed to follow the instructions detailed in the 
verification outline and comply with the Department's requests at 
verification by failing to substantiate its purchases of float glass of 
the reported color and of PVB from market economy suppliers. The 
Department's questionnaire also requires information about whether raw 
material inputs are purchased from market or nonmarket economy 
suppliers, and Dongguan Kongwan failed to report whether certain other 
inputs were purchased from market economy or nonmarket economy 
suppliers, in its questionnaire responses or as pre-verification 
correction. See Peaceful City and Dongguan Kongwan's Verification 
Report at p. 11. Further, Dongguan Kongwan never explained during 
verification nor provided source documents to evidence its usage rate 
of certain unreported factors, whether these factors were purchased 
from market economy or nonmarket economy suppliers, any market economy 
transportation costs paid for the shipment of the raw materials to 
Dongguan Kongwan's production facility, and the supplier's freight 
distances to Dongguan Kongwan. See Peaceful City and Dongguan Kongwan's 
Verification Report at p. 25-29.
    Dongguan Kongwan also failed to prepare documents demonstrating its 
accounting practice, as requested in the Department's verification 
outline and by the Department during the course of Dongguan Kongwan's 
verification. Even though Dongguan Kongwan was able to prepare a flow 
chart illustrating its accounting flow of source documents from the 
invoice level up to its financial statements, Dongguan Kongwan failed 
to evidence its accounting process through specific source documents. 
Moreover, during verification, Dongguan Kongwan stated that it would 
prepare its chart of accounts for the Department's review, but 
ultimately failed to provide the document before the end of 
verification. See Peaceful City and Dongguan Kongwan's Verification 
Report at p. 11.
    Additionally, Dongguan Kongwan did not cooperate with the 
Department's request during verification to examine its product 
specification documents,

[[Page 25555]]

which describe manufacturing techniques for producing various 
windshield models. Dongguan Kongwan replied that it did not possess 
such documents. However, the Department found that such documents did 
exist when it discovered product specification documents labeled 
``processing requirements'' during its verification of indirect labor 
hour usage rates. See Peaceful City and Dongguan Kongwan's Verification 
Report at p. 5.
    Dongguan Kongwan failed to follow instructions given in the 
verification outline to have company officials, who could discuss the 
production and sales processes of Dongguan Kogwan with the Department, 
available during verification. The Department also made this request 
during verification. See Peaceful City and Dongguan Kongwan's 
Verification Outline at p. 2-4; Peaceful City and Dongguan Kongwan's 
Verification Report at p. 15. However, Dongguan Kongwan's production 
and sales officials were not made available to speak to the Department 
until the afternoon of the first day and the morning of the second day 
of Dongguan Kongwan's verification. Although Dongguan Kongwan's 
accounting official and manager were available during the course of 
Dongguan Kongwan's entire verification, these officials refused to 
provide basic information about the manner in which orders arrive from 
Peaceful City, are relayed to the production department, and whether 
price lists or production specification lists exist in the ordinary 
course of business. See Peaceful City and Dongguan Kongwan's 
Verification Report at p. 5.
    The result of Peaceful City's and Dongguan Kongwan's verifications 
was that both companies failed to submit source documents in a timely 
manner in support of the information reported in their questionnaire 
responses, impeded verification by being unprepared and therefore 
slowing the progress of their respective verifications considerably, 
and did not provide the Department with documents to substantiate the 
vast majority of its factor usage rates, market economy purchases, 
suppliers' distances, and purchases of market economy transportation 
service that were reported in the questionnaire responses. In all of 
their failures to provide sufficient documentation to support their 
responses to the Department's questionnaires, Department officials made 
observations throughout verification that the companies had the ability 
to comply with the Department's requests but failed to do so. See 
Peaceful City and Dongguan Kongwan's Verification Report. Based on 
these failures at verification, Peaceful City and Dongguan Kongwan 
failed to cooperate to the best of their ability with the Department's 
requests for information. Therefore, the Department determines that the 
application of total adverse facts available is warranted for Peaceful 
City and Dongguan Kongwan, pursuant to Section 776(a) and (b) of the 
Act.

D. Adverse Facts Available

    In deciding which facts to use when an adverse inference is 
warranted under Section 776(b) of the Act, the Department is authorized 
to rely on information derived from (1) the petition, (2) a final 
determination in the investigation, (3) any previous review or 
determination, or (4) any information placed on the record. See 19 CFR 
351.308(C)(1).
    As adverse facts available, we have used the highest margin from 
any segment of the proceeding, which is the PRC-wide rate established 
in the less than fair value investigation. This was the highest rate 
calculated in the initiation stage of the investigation from 
information provided in the petition. The Department determines that 
this information is the most appropriate to use in assigning a dumping 
margin to respondents Peaceful City and Dongguan Kongwan, because the 
other rates from the investigation and this review are not adverse to 
the interests of respondents Peaceful City and Dongguan Kongwan, there 
is no information from a prior review, and the use of any other 
information placed on the record would yield distortive results, as 
explained below.
    In reaching this decision to use total adverse facts available, the 
Department has considered the significance of the information that was 
missing or unverifiable. Usage rates for many factors of production 
could not be reviewed or corroborated during verification, market 
economy purchases of certain factors were not substantiated, market 
economy transportation of certain raw material purchases were not 
demonstrated, and the suppliers' freight distances to Dongguan 
Kongwan's production facility were not substantiated. Therefore, the 
Department could not reasonably construct a reliable and accurate 
margin using any of respondents' information given that a vast amount 
of information is missing from the record and information on the record 
is unsupported by documentary evidence.

III. Corroboration of Secondary Information

    Section 776(c) of the Act provides that, when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation as facts available, it must, to the extent 
practicable, corroborate that information from independent sources 
reasonably at its disposal. Secondary information is defined in the SAA 
as ``information derived from the petition that gave rise to the 
investigation or review, the final determination concerning subject 
merchandise, or any previous review under section 751 concerning the 
subject merchandise.'' See SAA at 870. The SAA provides that to 
``corroborate'' means simply that the Department will satisfy itself 
that the secondary information to be used has probative value. See Id. 
The SAA also states that independent sources used to corroborate may 
include, for example, published price lists, official import statistics 
and customs data, and information obtained from interested parties 
during the particular investigation. See Id. As noted in Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished, from Japan, and 
Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and 
Components Thereof, from Japan; Preliminary Results of Antidumping Duty 
Administrative Reviews and Partial Termination of Administrative 
Reviews, 61 FR 57391, 57392 (November 6, 1996), to corroborate 
secondary information, the Department will, to the extent practicable, 
examine the reliability and relevance of the information used.
    The adverse facts available rate we are applying for the current 
review was corroborated in the investigation. See Memorandum from Jon 
Freed to Robert Bolling: Preliminary Results in the Antidumping 
Administrative Review of Automotive Replacement Glass Windshields from 
the People's Republic of China: First Administrative Review 
Corroboration Memorandum, dated April 29, 2004, (``First Review 
Corroboration Memo''), with attached, Memorandum from Edward Yang to 
Joseph Spetrini: Preliminary Determination in the Antidumping 
Investigation of Automotive Replacement Glass Windshields from the 
People's Republic of China: Total Facts Available Corroboration 
Memorandum for All Others Rate, dated September 10, 2001 
(``Corroboration Memo''). The Department received no information to 
date that warrants revisiting the issue of the reliability of the rate 
calculation itself. See e.g.,

[[Page 25556]]

Certain Preserved Mushrooms from the People's Republic of China: Final 
Results and Partial Rescission of the New Shipper Review and Final 
Results and Partial Rescission of the Third Antidumping Duty 
Administrative Review, 68 FR 41304, 41307-41308 (July 11, 2003) (The 
Department relied on the corroboration memorandum from the 
investigation to assess the reliability of the petition rate as the 
basis for an adverse facts available rate in the administrative 
review). No information has been presented in the current review that 
calls into question the reliability of this information. Thus, the 
Department finds that the information is reliable.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
adverse facts available, the Department will disregard the margin and 
determine an appropriate margin. For example, in Fresh Cut Flowers from 
Mexico: Final Results of Antidumping Administrative Review, 61 FR 6812 
(February 22, 1996), the Department disregarded the highest margin in 
that case as adverse best information available (the predecessor to 
facts available) because the margin was based on another company's 
uncharacteristic business expense resulting in an unusually high 
margin. Similarly, the Department does not apply a margin that has been 
discredited. See D&L Supply Co. v. United States, 113 F.3d 1220, 1221 
(Fed. Cir. 1997) (the Department will not use a margin that has been 
judicially invalidated).
    To assess the relevancy of the rate used, the Department compared 
the margin calculations of other respondents in this administrative 
review with the petition rate. The Department found that the petition 
rate was within the range of the highest margins reported on the record 
of this administrative review. See First Review Corroboration Memo at 
Attachment 2. Since the record of this administrative review contains 
margins within the range of the petition margin, we determine that the 
rate from the petition continues to be relevant for use in this 
administrative review. Further, the rate used is currently applicable 
to all exporters subject to the PRC-wide rate.
    As the petition rate is both reliable and relevant, we determine 
that it has probative value. As a result, the Department determines 
that the petition rate is corroborated for the purposes of this 
administrative review and may reasonably be applied to Peaceful City 
and Dongguan Kongwan as a total adverse facts available rate. 
Accordingly, we determine that the highest rate from any segment of 
this administrative proceeding (i.e., the calculated rate of 124.50 
percent) is in accord with section 776(c)'s requirement that secondary 
information be corroborated (i.e., have probative value).
    Consequently, we are applying a single antidumping rate--the 
highest rate from any segment of this administrative proceeding--to 
Peaceful City and Dongguan Kongwan's exports based on Peaceful City and 
Dongguan Kongwan's failure to be reasonably prepared during the 
verification and their resulting failure to substantiate the majority 
of their factors and costs of productions, which were reported in their 
questionnaire responses. See, e.g., Final Determination of Sales at 
Less Than Fair Value: Synthetic Indigo from the People's Republic of 
China, 65 FR 25706, 25707 (May 3, 2000).
    Because this is a preliminary margin, the Department will consider 
all margins on the record at the time of the final results for the 
purpose of determining the most appropriate final margin based on total 
adverse facts available. See Notice of Preliminary Determination of 
Sales at Less Than Fair Value: Solid Fertilizer Grade Ammonium Nitrate 
From the Russian Federation, 65 FR 1139 (January 7, 2000).

Date of Sale

    Section 351.401(i) of the Department's regulations state that ``in 
identifying the date of sale of the subject merchandise or foreign like 
product, the Secretary normally will use the date of invoice, as 
recorded in the exporter or producer's records kept in the normal 
course of business.''

Pilkington

    After examining the sales documentation placed on the record by the 
respondent, we preliminarily determine that invoice date is the most 
appropriate date of sale for this respondent. We made this 
determination based on evidence on the record which demonstrates that 
the contracts used by the respondent establish the material terms of 
sale to the extent required by our regulations in order to rebut the 
presumption that invoice date is the proper date of sale. See Notice of 
Preliminary Determination of Sales at Less Than Fair Value: Saccharin 
From the People's Republic of China, 67 FR 79054 (December 27, 2002).

Fuyao

    After examining the questionnaire responses and the sales 
documentation placed on the record by this respondent, we preliminarily 
determine that invoice date is the most appropriate date of sale for 
the respondent. The purchase order date is the only other point on 
which the date of sale could be based for Fuyao's U.S. sales. However, 
the record of this administrative review indicates that the material 
terms of Fuyao's U.S. transactions do change between the purchase order 
date and the invoice date. Thus, the Department preliminarily 
determines that invoice date is the most appropriate date of sale for 
Fuyao.

Fair Value Comparisons

    To determine whether sales of ARG to the United States by 
Pilkington and Fuyao were made at less than fair value, we compared 
export price (``EP'') or constructed export price (``CEP'') to normal 
value, as described in the ``Export Price,'' ``Constructed Export 
Price'' and ``Normal Value'' sections of this notice.

Export Price

    In accordance with section 772(a) of the Act, EP is the price at 
which the subject merchandise is first sold (or agreed to be sold) 
before the date of importation by the producer or exporter of the 
subject merchandise outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States, as adjusted under section 772(c) of 
the Act.

Constructed Export Price

    In accordance with section 772(b) of the Act, CEP is the price at 
which the subject merchandise is first sold (or agreed to be sold) 
after the date of importation by the producer or exporter of the 
subject merchandise outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States, as adjusted under section 772(c) of 
the Act.
    In accordance with section 772(a) of the Act, we used EP for those 
sales of Pilkington and Fuyao where the subject merchandise was sold 
directly to the unaffiliated customers in the United States prior to 
importation and because CEP was not otherwise indicated for those 
transactions. In accordance with section 772(b) of the Act, we used CEP 
for those sales of Pilkington and Fuyao where the subject merchandise 
was first sold to the unaffiliated U.S. customer after importation to 
the United States. We compared normal value to

[[Page 25557]]

individual EP and CEP transactions, in accordance with section 
777A(d)(2) of the Act.

Pilkington

    We calculated EP for Pilkington based on delivered prices to 
unaffiliated purchasers in the United States. We made deductions from 
the U.S. sale price for movement expenses in accordance with section 
772(c)(2)(A) of the Act. These included foreign inland freight from the 
plant to the port of exportation.
    For Pilkington's CEP sales, we based the CEP on FOB, or delivered, 
prices to unaffiliated purchasers in the United States and, where 
appropriate, we deducted discounts. In accordance with section 
772(d)(1) of the Act, the Department deducted credit expenses, 
inventory carrying costs, and indirect selling expenses, which related 
to commercial activity in the United States. We also made deductions 
for movement expenses, which included foreign inland freight from the 
plant to the port of exportation, domestic brokerage, ocean freight, 
marine insurance, U.S. brokerage, and inland freight from warehouse to 
unaffiliated U.S. customer. Where appropriate, in accordance with 
sections 772(d)(3) and 772(f) of the Act, we deducted CEP profit. In 
addition, at the U.S. verification of PNA's sales data, the Department 
found that Pilkington had short-term loans and kept subject merchandise 
in a warehouse in the United States during the POR. Based on these 
findings, the Department has calculated U.S. credit expenses and U.S. 
inventory carrying costs from information provided by PNA during 
verification and deducted these expenses from the reported CEP sales 
price. See Pilkington U.S. Verification Report at pp 7 and 11, Analysis 
Memo at 2.

Fuyao

    We calculated EP for Fuyao based on delivered prices to 
unaffiliated purchasers in the United States. We made deductions from 
the U.S. sale price for movement expenses in accordance with section 
772(c)(2)(A) of the Act. These included foreign inland freight from the 
plant to the port of exportation, domestic brokerage, ocean freight, 
marine insurance, U.S. brokerage, inland freight from port to 
unaffiliated U.S. customer, and other freight revenue.
    For Fuyao's CEP sales, we based the CEP on FOB, or delivered, 
prices to unaffiliated purchasers in the United States and, where 
appropriate, we deducted discounts. In accordance with section 
772(d)(1) of the Act, the Department deducted credit expenses and 
indirect selling expenses, which related to commercial activity in the 
United States. We also made deductions for movement expenses, which 
included foreign inland freight from the plant to the port of 
exportation, domestic brokerage, ocean freight, marine insurance, U.S. 
brokerage, inland freight from port to unaffiliated U.S. customer, and 
other freight revenue. Finally, where appropriate, in accordance with 
sections 772(d)(3) and 772(f) of the Act, we deducted CEP profit.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the normal value using a factors-of-production methodology 
if: (1) The merchandise is exported from an non-market economy country; 
and (2) the information does not permit the calculation of normal value 
using home-market prices, third-country prices, or constructed value 
under section 773(a) of the Act. The Department will base normal value 
on factors of production because the presence of government controls on 
various aspects of these economies renders price comparisons and the 
calculation of production costs invalid under our normal methodologies.
    Factors of production include: (1) Hours of labor required; (2) 
quantities of raw materials employed; (3) amounts of energy and other 
utilities consumed; and (4) representative capital costs. We used 
factors of production reported by respondents for materials, energy, 
labor, by-products, and packing.
    In accordance with 19 CFR 351.408(c)(1), the Department will 
normally use publicly available information to value factors of 
production, but when a producer sources an input from a market economy 
and pays for it in market economy currency, the Department will 
normally value the factor using the actual price paid for the input. 
See 19 CFR 351.408(c)(1); see also Lasko Metal Products v. United 
States, 43 F. 3d 1442, 1445-1446 (Fed. Cir. 1994). However, when the 
Department has reason to believe or suspect that such prices may be 
distorted by subsidies, the Department will disregard the market 
economy purchase prices and use surrogate values to determine the 
normal value. See Notice of Amended Final Determination of Sales at 
Less than Fair Value: Automotive Replacement Glass Windshields from the 
People's Republic of China (``PRC''), 67 FR 11670 (March 15, 2002).
    Fuyao and Pilkington reported that some of their inputs were 
sourced from market economies and paid for in a market economy 
currency. See Factor Valuation Memorandum for a listing of these 
inputs. Pursuant to section 351.408(c)(1) of our regulations, we used 
the actual price paid by respondents for inputs purchased from a 
market-economy supplier and paid for in a market-economy currency, 
except when prices may have been distorted by subsidies. Specifically, 
we did not include any market economy purchases from Indonesia, 
Thailand or South Korea (nor import statistics from the these 
countries, i.e., for material inputs and packing materials, by-product 
credits) because the Department determined in the investigation that 
Indonesia, Korea, and Thailand maintain broadly available, non-industry 
specific export subsidies that may benefit all exporters to all 
markets. The Department is not in a position to verify whether or not 
the reported market economy purchases were distorted in fact by these 
non-industry specific export subsidies. However, the fact that each of 
these countries maintain non-industry specific export subsidies to all 
exporters gives rise to the Department's presumption that the exporters 
of float glass and other reported market economy inputs to Fuyao and 
Pilkington may have benefitted from these non-industry specific export 
subsidies. Therefore, we will not use export prices from these 
countries, either as market economy purchases or import statistics into 
India, the surrogate country. See Final Determination of Sales at Less 
Than Fair Value: Certain Automotive Replacement Glass Windshields From 
The People's Republic of China, 67 FR 6482 (February 12, 2002), and 
accompanying Issues and Decision Memorandum at Comment 1.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by respondents for the POR. To 
calculate NV, the reported per-unit factor quantities were multiplied 
by publicly available Indian surrogate values (except as noted below). 
In selecting the surrogate values, we considered the quality, 
specificity, and contemporaneity of the data. As appropriate, we 
adjusted input prices by including freight costs to make them delivered 
prices. Specifically, we added to Indian import surrogate values a 
surrogate freight cost using the shorter of the reported distance from 
the domestic supplier to the factory or the

[[Page 25558]]

distance from the nearest seaport to the factory where appropriate 
(i.e., where the sales terms for the market economy inputs were not 
delivered to the factory). This adjustment is in accordance with the 
Court of Appeals for the Federal Circuit's decision in Sigma Corp. v. 
United States, 117 F. 3d 1401 (Fed. Cir. 1997). For a detailed 
description of all surrogate values used for respondents, see Factor 
Valuation Memorandum.
    Except as noted below, we valued raw material inputs using the 
weighted-average unit import values derived from the World Trade Atlas 
[reg] online (``Indian Import Statistics''). See Factor Valuation 
Memorandum. The Indian Import Statistics obtained from the World Trade 
Atlas were published by the DGCI&S, Ministry of Commerce of India in 
August 2003 and were reported in U.S. dollars. Where we could not 
obtain publicly available information contemporaneous to the POR with 
which to value factors, we adjusted the surrogate values using the 
Indian Wholesale Price Index (``WPI'') as published in the 
International Financial Statistics of the International Monetary Fund.

Pilkington

    Pilkington reported that it sourced all of its raw material inputs 
from market economy suppliers and paid for them in market economy 
currencies. Pilkington reported market economy purchases for clear 
float glass, colored float glass, PVB, ceramic ink, mirror buttons, 
silver paste, and powder. For these preliminary results, the Department 
has used the market economy prices for the inputs listed above, in 
accordance with 19 CFR 351.408(c)(1), with one exception. At 
verification, the Department found that Pilkington's reported market 
economy purchases of float glass were made from suppliers based in 
Thailand, and Indonesia. See Pilkington Chinese Verification Report at 
18. Based on the fact that the Department has reason to believe or 
suspect that market economy prices from Indonesia, Thailand, and South 
Korea may be subsidized, we have disallowed the use of the companies' 
reported actual prices for float glass and have valued clear float 
glass and colored float glass using Indian Import Statistics.
    Pilkington reported that it recovers shattered glass. The 
Department has offset the respondents' cost of production by the amount 
of a reported by-product (or a portion thereof) where respondents 
indicated that the by-product was sold and/or where the record evidence 
clearly demonstrates that the by-product was re-entered into the 
production process. See Factor Valuation Memorandum for a complete 
discussion of by-product credits given and the surrogate values used. 
To value recovered shattered glass, the Department inflated the values 
used in the investigation. In the investigation, the Department valued 
recovered scrap glass by using data from India Infoline for the period 
of April 1999-March 2000. See Factor Valuation Memorandum for a full 
discussion.
    To value electricity, we used values from the International Energy 
Agency to calculate a surrogate value in India for 1997, and adjusted 
for inflation. The Department used these figures in the investigation. 
No interested parties submitted information or comments regarding 
surrogate values and the Department was unable to find a more 
contemporaneous surrogate value. Therefore, the Department inflated the 
values used in the investigation, which results in a surrogate value 
for electricity of $0.0759/kilowatt-hour.
    To value water, we used the same information as used in the 
investigation. In the investigation, the Department used the average 
water tariff rate as reported in the Asian Development Bank's Second 
Water Utilities Data Book: Asian and Pacific Region (published in 
1997), based on the average of the Indian rupee per cubic meter rate 
for three cities in India during 1997. No interested parties submitted 
information or comments regarding surrogate values and the Department 
was unable to find a more contemporaneous surrogate value. Therefore, 
the Department inflated the values used in the investigation, which 
results in a surrogate value for water of $0.4416/metric ton.
    For direct, indirect, crate building labor, and packing labor, 
consistent with section 351.408(c)(3) of the Department's regulations, 
we used the PRC regression-based wage rate as reported on Import 
Administration's home page, Import Library, Expected Wages of Selected 
NME Countries, revised in September 2003, http://ia.ita.doc.gov/wages/01wages/01wages.html. The source of these wage rate data on the Import 
Administration's web site is the Yearbook of Labour Statistics 2002, 
ILO, (Geneva: 2002), Chapter 5B: Wages in Manufacturing. The years of 
the reported wage rates range from 1996 to 2001. Because this 
regression-based wage rate does not separate the labor rates into 
different skill levels or types of labor, we have applied the same wage 
rate to all skill levels and types of labor reported by the respondent.
    To value factory overhead, and selling, general and administrative 
expenses (``SG&A''), we used the audited financial statements for the 
2002 financial statement from an Indian producer of laminated and 
tempered automotive safety glass, Saint-Gobain Sekurit India Limited 
(``St.-Gobain''). See Factor Valuation Memorandum for a full discussion 
of the calculation of these ratios from St.-Gobain's financial 
statements.
    To value profit, we used the profit experience of Asahi India 
Safety Glass Limited (``Asahi'') for the period April 2002-March 2003, 
because St.-Gobain's 2002 financial statement shows that it experienced 
a loss for that time period. St.-Gobain's financial statement was the 
only surrogate financial statement submitted on the record of this 
administrative review by an interested party. In order to account for 
an element of profit in the normal value calculation, the Department 
obtained Asahi's financial statement from http://www.asahiindia.com. We 
note that the decision to use Asahi's profit experience only (i.e., as 
opposed to using an average of all profit figures from the financial 
statements on the record) is in accordance with Department practice. 
See Notice of Final Determination of Sales at Less Than Fair Value: 
Steel Concrete Reinforcing Bars from the People's Republic of China, 66 
FR 33522 (June 22, 2001) and accompanying Issues and Decision 
Memorandum at Comment 8. The Department disregarded the use of SAIL's 
financial statements in order to derive ``an element of profit as 
intended by the Statement of Administrative Action (SAA) accompanying 
the Uruguay Agreements Act.''). Furthermore, this practice has been 
affirmed by the Court of International Trade (``CIT''). See also Rhodia 
Inc. v. United States, 240 F. Supp. 2d 1247, 1251, 1254 (CIT 2002). For 
a further discussion of the surrogate value for profit, see Factor 
Valuation Memorandum.
    Finally, we used Indian Import Statistics to value material inputs 
for packing. We used Indian Import Statistics data for the period 
September 2001 through March 31, 2003. See Factor Valuation Memorandum.

Fuyao

    Fuyao reported that it sourced all of its raw material inputs from 
market economy suppliers and paid for them in market economy 
currencies. See Factor Valuation Memorandum at page 3. For these 
preliminary results, in accordance with 19 CFR 351.408(c)(1), the 
Department has used the market economy prices for Fuyao's inputs with

[[Page 25559]]

one exception. Specifically, based on the fact that the Department has 
reason to believe or suspect that market economy prices from Indonesia, 
Thailand, and South Korea may be subsidized, we have disallowed the use 
of the companies' reported actual prices for clear float glass and have 
valued it using Indian Import Statistics.
    As explained in the preamble to 19 CFR 351.408(c)(1), where the 
quantity of the input purchased from market economy suppliers was 
insignificant, we do not rely on the price paid by an NME producer to a 
market economy supplier. See Antidumping Duties; Countervailing Duties; 
Final Rule, 62 FR 27296, 27366 (May 19, 1997). Fuyao's reported 
information demonstrates that the quantity of one of its inputs which 
it sourced from market economy suppliers was so small as to be 
insignificant when compared to the quantity of the same input it 
sourced from PRC suppliers. See Factor Valuation Memorandum for Fuyao's 
reported percentage from market economy suppliers. Therefore, as the 
amount of this reported market economy input is insignificant, we did 
not use the price paid by Fuyao for this input and instead used Indian 
Import Statistics data.
    Fuyao reported that it recovered scrap PVB, glass pieces, and 
shattered glass. The Department has offset the respondents' cost of 
production by the amount of a reported by-product (or a portion 
thereof) where Fuyao indicated that the by-product was sold and/or 
where the record evidence clearly demonstrates that the by-product was 
re-entered into the production process. See Factor Valuation Memorandum 
for a complete discussion of by-product credits given and the surrogate 
values used. To value recovered shattered glass and glass pieces, the 
Department inflated the values used in the investigation. In the 
investigation, the Department valued recovered scrap glass and glass 
pieces by using data from India Infoline for the period of April 1999-
March 2000. See Factor Valuation Memorandum for a full discussion. In 
finding surrogate values for recovered scrap PVB, the Department used 
the HTS number for Recovered PVB that was used in the investigation to 
derive a surrogate value from Indian Import Statistics.
    The surrogate values for packing, labor, electricity, water, 
overhead, SG&A, and profit were applied in the same manner as explained 
above in the Pilkington section.

Weighted-Average Dumping Margin

    The weighted-average dumping margins are as follows:

          Automotive Replacement Glass Windshields From the PRC
------------------------------------------------------------------------
                                                              Weighted-
                                                               average
               Producer/manufacturer/exporter                   margin
                                                              (percent)
------------------------------------------------------------------------
Fuyao......................................................         0.13
Peaceful City/Dongguan Kongwan.............................       124.50
Pilkington.................................................         3.18
------------------------------------------------------------------------

Disclosure

    The Department will disclose calculations performed for these 
preliminary results to the parties within five days of the date of 
publication of this notice in accordance with 19 CFR 351.224(b). Any 
interested party may request a hearing within 30 days of publication of 
these preliminary results. See 19 CFR 351.310(c). Any hearing, if 
requested, will be held two days after the scheduled date for 
submission of rebuttal briefs. See 19 CFR 351.310(d). Interested 
parties may submit case briefs and/or written comments no later than 30 
days after the date of publication of these preliminary results of 
review. See 19 CFR 351.309(c)(ii). Rebuttal briefs and rebuttals to 
written comments, limited to issues raised in such briefs or comments, 
may be filed no later than 35 days after the date of publication. See 
19 CFR 351.309(d). Further, we would appreciate that parties submitting 
written comments also provide the Department with an additional copy of 
those comments on diskette. The Department will issue the final results 
of this administrative review, which will include the results of its 
analysis of issues raised in any such comments, within 120 days of 
publication of these preliminary results, pursuant to section 
751(a)(3)(A) of the Act.

Assessment Rates

    Upon issuance of the final results, the Department will determine, 
and Customs and Border Protection shall assess, antidumping duties on 
all appropriate entries. The Department will issue appropriate 
assessment instructions directly to Customs and Border Protection upon 
completion of this review. If these preliminary results are adopted in 
our final results of review, we will direct Customs and Border 
Protection to assess the resulting rate against the entered customs 
value for the subject merchandise on each importer's/customer's entries 
during the POR.

Cash-Deposit Requirements

    The following cash-deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(2)(C) of the Act: (1) The cash deposit 
rate for each of the reviewed companies will be the rate listed in the 
final results of review (except that if the rate for a particular 
company is de minimis, i.e., less than 0.5 percent, no cash deposit 
will be required for that company); (2) for previously investigated 
companies not listed above, the cash deposit rate will continue to be 
the company-specific rate published for the most recent period; (3) if 
the exporter is not a firm covered in this review, a prior review, or 
the original LTFV investigation, but the manufacturer is, the cash 
deposit rate will be the rate established for the most recent period 
for the manufacturer of the merchandise; and (4) the cash deposit rate 
for all other manufacturers or exporters will continue to be the ``PRC-
wide'' rate of 124.5 percent, which was established in the LTFV 
investigation. These deposit requirements, when imposed, shall remain 
in effect until publication of the final results of the next 
administrative review.

Notification To Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing these preliminary results of review 
in accordance with sections 751(a)(2)(B) and 777(i)(1) of the Act, and 
19 CFR 351.221(b).

    Dated: April 29, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-10487 Filed 5-6-04; 8:45 am]
BILLING CODE 3510-DS-P