[Federal Register Volume 69, Number 100 (Monday, May 24, 2004)]
[Notices]
[Pages 29509-29517]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11676]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-891]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Hand Trucks and Certain 
Parts Thereof From the People's Republic of China

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: We preliminarily determine that hand trucks and certain parts 
thereof from the People's Republic of China are being, or are likely to 
be, sold in the United States at less than fair value, as provided in 
section 733 of the Tariff Act of 1930, as amended. Interested parties 
are invited to comment on this preliminary determination. We will make 
our final determination not later than 135 days after the date of 
publication of this preliminary determination. The estimated margins of 
sales at less than fair value are shown in the ``Suspension of 
Liquidation'' section of this notice.

DATES: Effective Date: May 24, 2004.

FOR FURTHER INFORMATION CONTACT: Daniel J. Alexy, Stephen Cho, or 
Audrey Twyman, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
1540, (202) 482-3798, or (202) 482-3534, respectively.

Preliminary Determination

    The Department of Commerce (``the Department'') has conducted this 
antidumping investigation in accordance with section 733 of the Tariff 
Act of 1930, as amended (``the Act''). We preliminarily determine that 
hand trucks and certain parts thereof (``hand trucks'') from the 
People's Republic of China ( the ``PRC'') are being, or are likely to 
be, sold in the United States at less than fair value (``LTFV''), as 
provided in section 733 of the Act. The estimated margins of sales at 
LTFV are shown in the ``Suspension of Liquidation'' section of this 
notice.

Petitioners

    The petitioners in this investigation are Gleason Industrial 
Products, Inc.

[[Page 29510]]

and Precision Products Inc. (collectively, the ``petitioners''). Both 
of these companies are members of the Gleason Group.

Case History

    We initiated this investigation on December 3, 2003. See Initiation 
of Antidumping Duty Investigation: Hand Trucks and Certain Parts 
Thereof from the People's Republic of China, 68 FR 68591 (December 9, 
2003) (``Initiation Notice''). Since the initiation of this 
investigation the following events have occurred.
    On December 22, 2003, we issued a letter to interested parties in 
this investigation providing an opportunity to comment on the 
characteristics that we should use in identifying the different models 
that the respondents sold in the United States. The petitioners and 
Qingdao Taifa Group Co. Ltd., a PRC producer of hand trucks, submitted 
comments between January 6 and January 28, 2004. No other party 
submitted comments.
    On January 5, 2004, the United States International Trade 
Commission (``ITC'') issued its affirmative preliminary determination 
that there is a reasonable indication that an industry in the United 
States is threatened with material injury by reason of imports of the 
subject merchandise from the PRC. See Hand Trucks and Certain Parts 
Thereof from China, 69 FR 1603 (January 9, 2004).
    On January 16, 2004, we sent a partial Section A questionnaire to 
all of the producers/exporters named in the petition and to the 
exporters who comprise the top 70 percent of exporters in terms of 
quantity imported (pieces) of the subject merchandise according to data 
from U.S. Customs and Border Protection (``CBP''). We requested 
information on the quantity and value of subject hand trucks sold by 
these producers/exporters during April 1, 2003 through September 30, 
2003, the period of investigation (``POI''), in order to identify 
potential respondents in the investigation.
    We received responses from six PRC producers/exporters of hand 
trucks. We did not receive responses from a number of firms in the PRC 
although the record indicates that these companies received our January 
16, 2004, questionnaire. Also, a number of our January 16, 2004, 
questionnaires were returned to us as ``undeliverable.'' On February 6, 
2004, we selected the following four mandatory respondents: Qingdao 
Huatian Hand Truck Co., Ltd. (``Huatian''), Qingdao Taifa Group Co., 
Ltd. (``Taifa''), Qingdao Xinghua Group Co., Ltd. (``Xinghua''), and 
True Potential Company (``True Potential''). See February 6, 2004 
respondent selection memorandum from John Brinkmann to Susan Kuhbach.
    On February 6, 2004, the Department issued its full antidumping 
questionnaire to the mandatory respondents. All of the companies 
responded to the questionnaire. In addition, we received Section A 
responses from the following companies: Qingdao Future Tool Inc. 
(``Future Tool''), Qingdao Zhenhua Industrial Group Co., Ltd. 
(``Zhenhua''), and Shandong Machinery Import & Export Group Corp. 
(``Shandong''). We issued supplemental questionnaires to the mandatory 
respondents between March and April of 2004, to which the respondents 
filed timely responses.
    On March 19, 2004, we received a submission from the petitioners 
requesting that the Department examine their allegations of significant 
government control over the hand trucks industry in Qingdao and issue a 
supplemental questionnaire to the Chinese central, provincial, and 
municipal governments to determine the role played by the respective 
governments in the development and expansion of the hand truck industry 
in Qingdao. We discuss this submission in more detail in the ``Separate 
Rates'' section below.
    On March 22, 2004, we requested publicly available information for 
valuing the factors of production and comments on surrogate-country 
selection. On April 8, 2004, we received surrogate-country selection 
comments and information for factor valuations from the petitioners and 
the mandatory respondents Huatian, Taifa, and True Potential.
    On April 6, 2004, pursuant to section 733(c)(1)(B) of the Act, we 
postponed the preliminary determination in this investigation by 26 
days to May 17, 2004, after determining that this investigation was 
``extraordinarily complicated'' and additional time was necessary. See 
Hand Trucks and Certain Parts Thereof from the People's Republic of 
China: Notice of Postponement of Preliminary Antidumping Duty 
Determination, 69 FR 19153 (April 12, 2004).

Postponement of Final Determination

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise, or in the event of a negative 
preliminary determination, a request for such postponement is made by 
the petitioner. The Department's regulations, at 19 CFR 351.210(e)(2), 
require that requests by respondents for postponement of a final 
determination be accompanied by a request for extension of provisional 
measures from a four-month period to not more than six months.
    On May 11, 2004, we received requests to postpone the final 
determination from all the mandatory respondents. In their requests, 
the respondents consented to extend the provisional measures to not 
more than six months. Accordingly, since we have made an affirmative 
preliminary determination and no compelling reasons for denial exist, 
we have postponed the final determination until not later than 135 days 
after the publication of the preliminary determination.

Period of Investigation

    The POI corresponds to the two most recent fiscal quarters prior to 
the filing of the petition, i.e., April 1, 2003 through September 30, 
2003.

Scope Comments

    In accordance with the preamble to our regulations (see Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 
1997)), we set aside a period of time for parties to raise issues 
regarding product coverage and encouraged all parties to submit 
comments within 20 calendar days of publication of the Initiation 
Notice. We did not receive any scope comments from interested parties 
within the comment period. However, on May 4, 2004, Angelus 
Manufacturing, a hand trucks manufacturer based in California, 
requested that certain specific parts be excluded from the scope of 
this investigation. We did not receive this request in time for the 
preliminary determination. Therefore, we will address this scope 
request in the final determination.

Scope of Investigation

    For the purpose of this investigation, the product covered consists 
of hand trucks manufactured from any material, whether assembled or 
unassembled, complete or incomplete, suitable for any use, and certain 
parts thereof, namely the vertical frame, the handling area and the 
projecting edges or toe plate, and any combination thereof.
    A complete or fully assembled hand truck is a hand-propelled barrow 
consisting of a vertically disposed frame

[[Page 29511]]

having a handle or more than one handle at or near the upper section of 
the vertical frame; at least two wheels at or near the lower section of 
the vertical frame; and a horizontal projecting edge or edges, or toe 
plate, perpendicular or angled to the vertical frame, at or near the 
lower section of the vertical frame. The projecting edge or edges, or 
toe plate, slides under a load for purposes of lifting and/or moving 
the load.
    That the vertical frame can be converted from a vertical setting to 
a horizontal setting, then operated in that horizontal setting as a 
platform, is not a basis for exclusion of the hand truck from the scope 
of this petition. That the vertical frame, handling area, wheels, 
projecting edges or other parts of the hand truck can be collapsed or 
folded is not a basis for exclusion of the hand truck from the scope of 
the petition. That other wheels may be connected to the vertical frame, 
handling area, projecting edges, or other parts of the hand truck, in 
addition to the two or more wheels located at or near the lower section 
of the vertical frame, is not a basis for exclusion of the hand truck 
from the scope of the petition. Finally, that the hand truck may 
exhibit physical characteristics in addition to the vertical frame, the 
handling area, the projecting edges or toe plate, and the two wheels at 
or near the lower section of the vertical frame, is not a basis for 
exclusion of the hand truck from the scope of the petition.
    Examples of names commonly used to reference hand trucks are hand 
truck, convertible hand truck, appliance hand truck, cylinder hand 
truck, bag truck, dolly, or hand trolley. They are typically imported 
under heading 8716.80.50.10 of the Harmonized Tariff Schedule of the 
United States (``HTSUS''), although they may also be imported under 
heading 8716.80.50.90. Specific parts of a hand truck, namely the 
vertical frame, the handling area and the projecting edges or toe 
plate, or any combination thereof, are typically imported under heading 
8716.90.50.60 of the HTSUS. Although the HTSUS subheadings are provided 
for convenience and for the purposes of U.S. Customs and Border 
Protection, the Department's written description of the scope is 
dispositive.
    Excluded from the scope are small two-wheel or four-wheel utility 
carts specifically designed for carrying loads like personal bags or 
luggage in which the frame is made from telescoping tubular material 
measuring less than 5/8 inch in diameter; hand trucks that use 
motorized operations either to move the hand truck from one location to 
the next or to assist in the lifting of items placed on the hand truck; 
vertical carriers designed specifically to transport golf bags; and 
wheels and tires used in the manufacture of hand trucks.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual dumping margins for each known exporter and producer of the 
subject merchandise. Section 777A(c)(2) of the Act gives the Department 
discretion, when faced with a large number of producers or exporters, 
to limit its examination to a reasonable number of such companies if it 
is not practicable to examine all companies.
    On January 16, 2004, we sent a partial Section A questionnaire to 
all of the producers/exporters named in the petition and to the 
exporters who comprise the top 70 percent of exporters in terms of 
quantity imported (pieces) of the subject merchandise according to data 
from CBP. We also sent the partial questionnaire to the Chinese 
government and asked for its assistance in delivering the questionnaire 
to all producers and exporters of the subject merchandise. We received 
responses from six companies that reported exports of subject 
merchandise during the POI.
    There is no data on the record that indicates conclusively the 
number of producers or exporters from the PRC which exported the 
subject merchandise to the United States during the POI. Having 
received six responses from producers or exporters to our partial 
Section A questionnaire, we determined that we had the resources to 
examine a maximum of four of the companies. We found it appropriate to 
select the largest producers/exporters of the subject merchandise from 
the six companies in order to cover the greatest possible export volume 
of the merchandise. Thus, we selected Huatian, Taifa, True Potential, 
and Xinghua. See February 6, 2004 respondent selection memorandum from 
John Brinkmann to Susan Kuhbach.

Non-Market-Economy Country Status

    The Department has treated the PRC as a non-market-economy 
(``NME'') country in all past antidumping investigations (see, e.g., 
Final Determination of Sales at Less Than Fair Value: Creatine 
Monohydrate from the People's Republic of China, 64 FR 71104 (December 
20, 1999), and 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)). A designation as an NME remains in effect 
until it is revoked by the Department (see section 771(18)(C) of the 
Act).
    No party in this investigation has requested a revocation of NME 
status for the PRC. Therefore, we have preliminarily determined to 
continue to treat the PRC as an NME. When we investigate imports from 
an NME, section 773(c)(1) of the Act directs us to base the normal 
value on the NME producer's factors of production, valued in a market 
economy that is at a comparable level of economic development and that 
is a significant producer of comparable merchandise. The sources used 
to value individual factors are discussed in the ``Factor Valuations'' 
section below.

Separate Rates

    In proceedings involving NME countries, the Department begins with 
a rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty deposit rate. In this case, the mandatory respondents 
Huatian, Taifa, True Potential, and Xinghua have requested separate 
company-specific rates. In addition, Future Tool, Shandong, and Zhenhua 
have requested separate rates.\1\
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    \1\ As explained in the ``Margins for Exporters Not Selected'' 
section below, Zhenhua is not entitled to a separate-rate analysis 
because it did not export the subject merchandise to the United 
States during the POI.
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    To establish whether a company operating in an NME country is 
sufficiently independent to be eligible for a separate rate, the 
company must establish an absence of governmental control on both a de 
jure and a de facto basis. In determining whether a company meets this 
requirement, the Department analyzes each exporting entity under the 
test established in Final Determination of Sales at Less Than Fair 
Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 
6, 1991), and Final Determination of Sales at Less Than Fair Value: 
Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 
2, 1994) (``Silicon Carbide''). Under this test, the Department assigns 
separate rates in NME cases only if an exporter can demonstrate the 
absence of both de jure and de facto governmental control over its 
export activities. See Silicon Carbide.

De Jure Control

    In determining whether there is an absence of de jure government 
control, the Department considers the following: (1) An absence of 
restrictive stipulations associated with an individual exporter's 
business and export licenses; (2) any

[[Page 29512]]

legislative enactments decentralizing control of companies; (3) any 
other formal measures by the government decentralizing control of 
companies. Id. In this case, the mandatory respondents Huatian, Taifa, 
True Potential, and Xinghua provided evidence on the record that 
indicates that their export activities are not controlled by the 
government. In addition, evidence on the record indicates that the 
export activities of the following companies are also not controlled by 
the government: Future Tool and Shandong (collectively the ``Section A 
respondents'').
    The mandatory respondents and the Section A respondents have placed 
a number of documents on the record to demonstrate absence of de jure 
government control, including the ``Foreign Trade Law of the People's 
Republic of China'' (``Foreign Trade Law''), the ``Company Law of the 
PRC'' (``Company Law''), the ``PRC's Enterprise Legal Person 
Registration Administrative Regulations'' (``Administrative 
Regulations''), the ``Law of the People's Republic of China on Chinese-
Foreign Equity Joint Ventures'' (``Joint Ventures Law''), the 
``Regulations for Transformation of Operational Mechanism of State-
Owned Industrial Enterprises'' (``State-Owned Industrial Enterprises 
Regulations''), and the ``Law of the People's Republic of China on 
Industrial Enterprises Owned by the Whole People'' (``Industrial 
Enterprise Law''). These laws indicate that the government lacks 
control over the mandatory respondents or any of the Section A 
respondents and that these enterprises retain control over themselves.
    The Department has analyzed these laws in prior cases and found 
that they establish an absence of de jure control. See, e.g., Notice of 
Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Certain Partial-Extension Steel 
Drawer Slides With Rollers From the People's Republic of China, 60 FR 
29571 (June 5, 1995), and 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). We have no new information in 
this proceeding which would cause us to reconsider this determination.
    Accordingly, we preliminarily determine that there is an absence of 
de jure government control over export pricing and marketing decisions 
of Future Tool, Huatian, Shandong, Taifa, True Potential, and Xinghua.

De Facto Control

    The Department typically considers the following four factors in 
evaluating whether a company is subject to de facto governmental 
control of its export functions: (1) Whether each exporter sets its own 
export prices independently of the government and without the approval 
of a government authority; (2) whether each exporter retains the 
proceeds from its sales and makes independent decisions regarding the 
disposition of profits or financing of losses; (3) whether each 
exporter has the authority to negotiate and sign contracts and other 
agreements; and (4) whether each exporter has autonomy from the 
government regarding the selection of management. Id.
    With respect to the absence of de facto government control over the 
export activities of the mandatory respondents and the Section A 
respondents, evidence on the record indicates that the government has 
no involvement in their determination of export prices, profit 
distribution, marketing strategy, and contract negotiations; nor is the 
government involved in the daily operations or the selection of 
management for these companies. In addition, we found that these 
companies' pricing and export strategy decisions are not subject to any 
governmental review or approval and that there are no governmental 
policy directives that affect these decisions.
    Consequently, because evidence on the record indicates an absence 
of government control, both in law and in fact, over the export 
activities of Future Tool, Huatian, Shandong, Taifa, True Potential, 
and Xinghua, we preliminarily determine that these companies have met 
the requirements for receiving a separate rate for purposes of this 
investigation.

Petitioners' March 19, 2004, Submission

    On March 19, 2004, we received a submission from the petitioners 
alleging that there has been a significant government role in and 
control over the establishment of the hand truck producers in Qingdao 
and the structure of the hand trucks industry, resulting in the Qingdao 
hand truck industry attaining its giant size and production 
capabilities. The petitioners request that the Department issue a 
supplemental questionnaire to the Chinese central, provincial, and 
municipal governments to determine the role played by the respective 
governments in the development and expansion of the hand truck industry 
in Qingdao. The petitioners contend that the Department should deny 
separate rates for the hand truck producers in Qingdao if the evidence 
on record shows that there is significant government involvement in the 
hand trucks industry.
    The Department's current separate rates test, as detailed above in 
this section, does not examine the types of government control alleged 
by the petitioners.
    The actions allegedly undertaken by the Chinese central, provincial 
and municipal governments are indicia that the PRC is a non-market 
economy, a point which is not contested in this case. In applying the 
separate rates test, however, we are seeking to identify governmental 
interference in the individual companies' export making decisions. We 
note that the Department recently issued a notice soliciting comments 
on the Department's current separate rates policy and whether the 
current policy appropriately measures whether exporters act, de facto, 
independently of the government in their export activities. See 
Separate Rates Practice in Antidumping Proceedings Involving Non-Market 
Economy Countries: Request for Comments, 69 FR 24119 (May 3, 2004) 
(``Separate Rates Notice''). The petitioners may wish to pursue their 
concerns by offering comments in that process.

Margins for Exporters Not Selected

    Future Tool, Shandong, and Zhenhua have requested separate rates. 
These parties responded to Section A of the Department's antidumping 
questionnaire but were not selected as mandatory respondents in this 
investigation. They provided information to the Department, in a timely 
manner, for a separate-rate analysis. Although we are unable to 
calculate a company-specific rate for these companies due to 
administrative constraints (see Memorandum from John Brinkmann to Susan 
Kuhbach regarding selection of respondents, dated February 6, 2004), 
they have cooperated in providing the information that we requested.
    However, based on record evidence, we determine that Zhenhua did 
not have any sales to the United States during the POI because all of 
its reported sales during the POI were made to a Chinese trading 
company. With respect to those sales, the Chinese trading company sets 
the terms of sale and negotiates prices with the U.S. buyer. See 
Zhenhua's April 7, 2004 questionnaire response at 3. Therefore, Zhenhua 
is not entitled to a separate rate because it did not export the 
subject merchandise to the United States during the POI. Thus, we have 
calculated a

[[Page 29513]]

separate dumping margin only for Shandong and Future Tool based on the 
rates we calculated for the mandatory respondents. See, e.g., Notice of 
Final Determination of Sales at Less Than Fair Value: Freshwater 
Crawfish Tail Meat From the People's Republic of China, 62 FR 41347, 
41350 (August 1, 1997).

The PRC-Wide Rate

    All exporters were given the opportunity to respond to the 
Department's questionnaire. As explained above, we received responses 
to the full questionnaire from Huatian, Taifa, True Potential, and 
Xinghua. We have received responses to Section A of our questionnaire 
from Future Tool, Shandong, and Zhenhua. We assume that the firms which 
received our January 16, 2004, questionnaire but did not respond to it 
(see the ``Case History'' section above) also exported the subject 
merchandise to the United States during the POI. Consequently, we are 
applying a single antidumping rate--the PRC-wide rate--to all other 
exporters in the PRC based on our presumption that those respondents 
which failed to demonstrate entitlement to a separate rate constitute a 
single enterprise under common control by the Chinese government. See, 
e.g., Notice of 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). The PRC-wide rate applies to all entries of 
subject merchandise except for entries from companies which we have 
preliminarily determined to have met the requirements for receiving a 
separate rate for purposes of this investigation.

Use of Facts Otherwise Available

    Section 776(a)(2) of the Act provides that, if an interested party 
withholds information that has been requested by the Department, fails 
to provide such information in a timely manner or in the form or manner 
requested, significantly impedes a proceeding under the antidumping 
statute, or provides such information but the information cannot be 
verified, the Department shall, subject to sections 782(d) and (e) of 
the Act, use facts otherwise available in reaching the applicable 
determination.
    Section 776(a)(2)(B) of the Act requires the Department to use 
facts available when a party does not provide the Department with 
information by the established deadline or in the form and manner 
requested by the Department. In addition, section 776(b) of the Act 
provides that, if the Department finds that an interested party ``has 
failed to cooperate by not acting to the best of its ability to comply 
with a request for information,'' the Department may use information 
that is adverse to the interests of that party as facts otherwise 
available.
    As explained above, the exporters comprising the single PRC-wide 
entity failed to respond to the Department's requests for information. 
Pursuant to section 776(a) of the Act, in reaching our preliminary 
determination, we have used facts available for the PRC-wide rate 
because we did not receive the data needed to calculate a margin for 
that entity. Also, because the exporters comprising the PRC-wide entity 
failed to respond to our requests for information, we have found that 
the PRC-wide entity failed to cooperate to the best of its ability. 
Therefore, pursuant to section 776(b) of the Act, we have used an 
adverse inference in selecting from the facts available for the margin 
for that entity. As adverse facts available, we have recalculated the 
margins that the petitioners alleged in their November 13, 2003, 
petition using surrogate values in the petition, updated to the period 
of investigation and where appropriate, surrogate values from the 
preliminary determination and surrogate values derived from other 
information submitted by the petitioners. For the adverse facts 
available rate, we have selected the highest of the petition margins, 
since the margins derived from the information in the petition exceed 
those we calculated for the mandatory respondents. As discussed in the 
memorandum to file regarding the corroboration of facts available, 
dated May 17, 2004, we found that the margin of 346.94 percent has 
probative value. Accordingly, we find that the highest margin, based on 
petition information and adjusted as described in the May 17, 2004, 
corroboration of facts available memorandum, of 346.94 percent is 
corroborated within the meaning of section 776(c) of the Act. For 
details on this calculation, see the Memorandum from John Brinkmann to 
the File regarding calculation of the adverse-facts-available margins 
dated May 17, 2004.
    Regarding the mandatory respondents, the Department has observed 
significant deficiencies or inconsistencies between information 
presented in the sales responses and factors of production (``FOP'') 
responses by each producing respondent: Taifa, Huatian and Xinghua 
(True Potential does not produce the subject merchandise it exports to 
the United States). Specifically, in reporting their United States 
sales to the Department, among other information, each respondent was 
requested to report the net weight of the hand truck model or hand 
truck part sold to the United States. In their FOP responses, among 
other information, the producing respondents were requested to identify 
the raw material inputs used to produce each model/part sold in the 
United States and the amount of the input (by weight) needed to produce 
the model/part.
    We compared the total weight of the material inputs for the models/
parts sold to the United States that accounted for the largest total 
sales values to the weights reported in the sales responses. From this 
comparison, we found that, for many models/parts, the sum of the 
material input weights was significantly lower than the weight reported 
for that model/part. We then examined other sources of information 
submitted by the producing respondents in their questionnaire 
responses, such as respondent product catalogs and samples of sales and 
shipping documents. These sources also showed total product weights 
that were higher than the total weights of the material inputs used to 
produce the products.
    On May 7, 2004, we contacted counsel for Huatian, Taifa and Xinghua 
seeking explanations for these discrepancies. See the May 7, 2004, 
memoranda from John Brinkmann to File regarding questions related to 
reported FOP input weights. On May 10, counsel for Huatian and Taifa 
stated that the total weights reported in each company's sales response 
were supplied by the companies' sales staff while the input weight data 
was prepared by the production workshops. They stated that the weights 
reported in the sales responses were not necessarily the current actual 
weights of the hand truck or hand truck part but rather were based upon 
information available to the sales staff. Counsel claimed that the 
reported weights likely either came from information that was out of 
date or from estimates made by the sales staff and as such did not 
necessarily reflect the current construction of the hand trucks or hand 
truck parts. See the May 10, 2004, memoranda from John Brinkmann to 
File regarding the Department's follow-up on questions related to 
reported FOP input weights (``FOP Weight Memo'').
    Counsel for Xinghua stated that the discrepancy was likely due to 
the fact that several of the significant material input fields were 
reported in the company's response as U.S. dollar amounts. Xinghua's 
counsel stated that these U.S. dollar amounts reflected the prices 
Xinghua paid for its market economy purchases of these inputs. As

[[Page 29514]]

a result, Xinghua's FOP data did not reflect the physical amounts of 
these significant inputs. Counsel for Xinghua further advised the 
Department of an additional error in reporting FOP usage rates. See FOP 
Weight Memo for Xinghua.
    On the basis of our specific findings for each company, which are 
detailed below, we preliminarily determine that the use of facts 
otherwise available is appropriate for Huatian, Taifa and Xinghua 
because these companies have not provided certain information in the 
form or manner requested. Specifically, we have concluded that we are 
unable to calculate a normal value on the basis of the information 
provided by Taifa and Huatian because the FOP information is 
incomplete. For Xinghua, we have used the reported data to compute 
normal value despite certain deficiencies described below. Pursuant to 
section 351.301 (b)(1) of the Department's regulations, for a final 
determination in an antidumping investigation, parties may submit 
additional factual information seven days before the date on which the 
verification of any person is scheduled to commence. Pursuant to 
section 351.307(b)(1)(i), the Department will conduct verifications of 
the factual information submitted by parties and any factual 
information that is submitted in a timely manner will be subject to 
verification. If the respondents do not amend their responses to 
provide the information in the form or manner requested in a timely 
manner, the Department may resort to adverse facts available for the 
final determination.

Xinghua

    For Xinghua, we are applying partial facts available in our 
calculation of normal value because, as explained below, we are able to 
utilize the reported FOP data for each model/part sold to the U.S. 
using information on the record. We have found that adverse facts 
available is not warranted in the selection of facts available for 
Xinghua because Xinghua has provided timely responses to all of our 
requests for information.
    Xinghua reported certain significant raw material inputs as U.S. 
dollar amounts rather than as physical amounts (i.e., kilogram of 
inputs used to produce on unit of output), while other material inputs 
were reported in physical units. For those raw material inputs not 
reported as physical amounts, Xinghua claims that it has instead 
reported the U.S. dollar value per hand truck of their market economy 
inputs. Although the Department's questionnaire requested that the 
respondents report the amount of raw material utilized to produce one 
unit of the subject merchandise, for purposes of this preliminary 
determination, we are able to utilize these market economy values into 
our calculation of normal value. We note, however, that these U.S. 
dollar values may include purchases from other non-market economy 
countries or values from certain countries with export subsidies, which 
the Department typically would exclude from its calculation of market 
economy prices. This information will be verified by the Department and 
adjusted by the Department as necessary for the final determination. 
Similarly, for the other error in reported FOP usage rates, as facts 
available, we are utilizing the factor inputs as reported because, 
based on our understanding of the reporting error, it is not clear what 
effect (if any) this has on the results.

Taifa

    For Taifa, we are applying partial facts available in our 
calculation of normal value because, as explained below, we are able to 
adjust the reported FOP data for each model/part sold to the U.S. using 
information on the record. We have found that adverse facts available 
is not warranted in the selection of facts available for Taifa because 
Taifa has provided timely responses to all of our requests for 
information and the FOP information provided by Taifa is more complete 
than the FOP information provided by Huatian, where we are applying 
adverse facts available.
    For Taifa, we observed for selected U.S. models/parts that the 
total material input weights reported in Taifa's May 6, 2004, FOP 
response were significantly below the total weight of the model/part as 
reported in Taifa's May 6, 2004, sales response. Where a comparable 
model was listed in the product catalog submitted by Taifa on February 
23, 2004, the weight in the catalog corresponded to the total weight 
reported by Taifa in its sales response. We also examined sample 
shipping documents related to one U.S. sale that were submitted in 
Exhibit A-7 of Taifa's February 23, 2004, response and found that the 
weight for the model of hand truck covered by this shipment 
corresponded to the weight reported by Taifa in its sales response. 
This weight was listed on a detailed purchase order that was generated 
by Taifa's customer, a packing list generated by Taifa, and a 
forwarder's cargo receipt.
    Based upon these comparisons, we preliminarily find that Taifa's 
material input information is understated, and we preliminarily 
determine that the use of facts otherwise available is appropriate to 
remedy the apparent under-reporting of material usage rates. Because 
the information in Taifa's actual sales/shipping documents (i.e., the 
customer's purchase order, packing list, and forwarder's cargo receipt) 
indicated that the weights reported in Taifa's sales responses more 
accurately reflected the weight of the model being sold than did the 
material inputs reported by Taifa, as facts available, we have 
proportionately increased the reported material input weights to 
correspond to the total weight reported in the sales response. 
Specifically, for each model/part sold in the United States by Taifa, 
we have increased the reported material inputs for each material input 
by the percentage difference between the sum of the reported material 
input weights for that model/part (less packing and recoverable scrap) 
and the high end of the weight range reported for that model. We have 
used the high end of the total weight range to account for scrap loss 
that occurs in the production of one unit of subject merchandise.

Huatian

    We have determined that the use of a partial adverse facts 
available is warranted in our calculation of normal value for Huatian 
in order to remedy the apparent under-reporting of material usage 
rates.
    We have observed for selected models/parts that the total material 
input weights reported in Huatian's April 26, 2004, FOP response were 
significantly below the total weight of the model/part as reported in 
Huatian's April 26, 2004, sales response. Where a comparable model was 
listed in the product catalog submitted by Huatian on February 27, 
2004, the weight in the catalog corresponded to the total reported by 
Huatian in its sales response. We also examined sample shipping 
documents related to one U.S. sale that were submitted in Exhibit A-6 
of Huatian's February 27, 2004, response and found that the weight for 
the model of hand truck covered by this shipment was actually higher 
than the weight reported by Huatian in its sales response. This weight 
was listed on a packing list generated by Huatian and a bill of lading 
issued by the freight forwarder. Unlike the situation with Taifa, where 
the weights reported in Taifa's sales response corresponded to the 
weight of the model in the sales/shipping documents, the information in 
Huatian's actual sales/shipping documents indicated that the actual 
weight of the model exceeded both the

[[Page 29515]]

weight reported in the sales response and the total weight of the 
material inputs. The fact that three different weights were reflected 
for the same model in Huatian's response indicates that Huatian did not 
make any attempt to check the accuracy of its response to ensure that 
the Department had usable data. Therefore, as we are unable to adjust 
Huatian's reported material usage rates on a model/part specific basis, 
we preliminarily find that Huatian has not cooperated to the best of 
its ability in providing us with fully accurate information upon which 
to make a determination.
    As partial adverse facts available, we have taken the weight 
reported for the model described in the sample sales/shipping 
documents, and compared it to the sum of the material input weights for 
that model. We then computed a ratio that quantified the percentage 
difference between the actual net weight of that model and the reported 
sum of the material input weights (less packing and recoverable scrap) 
for that model. We applied that ratio to increase the reported input 
material usage rates for all models/parts.
    On May 10, 2004, Huatian submitted another revised sales and FOP 
response in which many of the total weights in the sales response have 
been revised. We have been unable to analyze and clarify that 
information before our preliminary determination. We will, however, 
verify this information prior to our final determination.

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs that normal value, in most 
circumstances, be based on the NME producer's factors of production, 
valued in a surrogate market-economy country or countries selected in 
accordance with section 773(c)(4) of the Act. In accordance with that 
provision, the Department shall utilize, to the extent possible, the 
prices or costs of factors of production in one or more market-economy 
countries that are at a level of economic development comparable to the 
NME country and are significant producers of comparable merchandise. 
The sources of the surrogate factor values are discussed in the 
``Normal Value'' section below.
    The Department has determined that India, Indonesia, Sri Lanka, 
Philippines, Morocco, and Egypt are countries comparable to the PRC in 
terms of overall economic development. See the March 9, 2004 memorandum 
from Ron Lorentzen to Susan Kuhbach regarding surrogate-country 
selection. Customarily, we select an appropriate surrogate based on the 
availability and reliability of data from these countries. In this 
case, we have found that India is a significant producer of hand trucks 
and that we have reliable data from India that we can use to value the 
factors of production. Furthermore, every party that submitted factor-
valuation data provided data from India and no party argued that we 
should use another country as the surrogate country.
    We have selected India as the surrogate country and, accordingly, 
we have calculated normal value using Indian prices when available and 
appropriate to value the factors of production of the PRC producers. We 
have obtained and relied upon publicly available information wherever 
possible. See the May 17, 2004 memorandum from the team to Susan 
Kuhbach regarding surrogate-country selection; see also the May 17, 
2004 memorandum from the team to Susan Kuhbach regarding factor 
valuations for the preliminary determination (``Factor Valuation 
Memorandum'').
    In accordance with section 351.301(c)(3)(i) of the Department's 
regulations, for the final determination in an antidumping 
investigation, interested parties may submit publicly available 
information to value factors of production within 40 days of the date 
of publication of this preliminary determination.

Fair Value Comparisons

    To determine whether sales of hand trucks to the United States were 
made at less than fair value, we compared export price (``EP'') to 
normal value (``NV''), as described in the ``U.S. Price'' and ``Normal 
Value'' sections of this notice below. In accordance with section 
777A(d)(1)(A)(i) of the Act, we compared POI-wide weighted-average EPs 
by product to the appropriate product-specific NV.

U.S. Price

    In accordance with section 772(a) of the Act, we used export price 
for Huatian, Taifa, True Potential, and Xinghua because the subject 
merchandise was sold directly to unaffiliated customers in the United 
States prior to importation and because constructed export price was 
not otherwise indicated. We calculated export price based on the packed 
F.O.B. PRC port or C.I.F. U.S. port to unaffiliated purchasers in the 
United States, as appropriate. We made deductions for any movement 
expenses in accordance with section 772(c)(2)(A) of the Act.

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 NME 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.
    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 
reported factors of production for materials, energy, labor, and 
packing. We valued all input factors not obtained from market economies 
using publicly available published information as discussed in the 
``Surrogate Country'' and ``Factor Valuations'' sections of this 
notice.
    In accordance with 19 CFR 351.408(c)(1), where a producer sources 
an input from a market economy and pays for it in market-economy 
currency, the Department employs the actual price paid for the input to 
calculate the factors-based normal value. See also Lasko Metal Products 
v. United States, 43 F.3d 1442, 1445-1446 (Fed. Cir. 1994). Huatian, 
Taifa, and Xinghua reported that some of their inputs were purchased 
from market economies and paid for in market-economy currency. See the 
``Factor Valuations'' section below. Where respondents were unable to 
provide sufficient documentation that certain inputs were purchased 
from market-economy suppliers, we valued these inputs using surrogate 
values.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by each respondent for the POI. 
To calculate NV, we multiplied the reported per-unit factor quantities 
by publicly available Indian surrogate values. 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. For a 
detailed description of all surrogate values used for respondents, see 
the ``Factor Valuation Memorandum.'' For a detailed description of all 
actual values used for market-economy inputs, see the company-specific 
calculation memoranda dated May 17, 2004.
    Because we used Indian import values to value inputs purchased 
domestically by the Chinese producers, we added

[[Page 29516]]

surrogate freight costs to the calculated surrogate values. We 
calculated the freight costs by selecting the shorter of the reported 
distances from a domestic supplier to the factory or the distance from 
the nearest seaport to the factory in accordance with the decision by 
the Court of Appeals for the Federal Circuit in Sigma Corp. v. United 
States, 117 F. 3d 1401 (Fed. Cir. 1997). Because some of the values 
were not contemporaneous with the POI, we adjusted those values for 
inflation using wholesale price indices published in the International 
Monetary Fund's International Financial Statistics.
    Except as described below, we valued raw material inputs using the 
weighted-average unit import values derived from Indian import data 
available from the World Trade Atlas (Internet Version, maintained by 
Global Trade Information Services, Incorporated) (``Indian Import 
Statistics'') for the period April through August 2003.\2\
---------------------------------------------------------------------------

    \2\ At the time of this determination, data for the month of 
September 2003 is not yet avaialble.
---------------------------------------------------------------------------

    As explained above, a number of respondents purchased certain raw 
material inputs from market-economy suppliers and paid for them in 
market-economy currencies. The respondents provided evidence that 
indicated they paid for their market-economy purchases of inputs in a 
market-economy currency. Therefore, in accordance with 19 CFR 
351.408(c)(1), the Department has determined to use the market-economy 
prices as reported by the respondents in order to value these inputs in 
instances where the inputs were obtained from both market-economy and 
NME suppliers because the market-economy inputs represent a significant 
quantity of the inputs and they were paid for in a market-economy 
currency.
    Furthermore, with regard to the market-economy input values, we 
have disregarded prices that we have reason to believe or suspect may 
be subsidized. We have reason to believe or suspect that prices of 
inputs from India, Indonesia, South Korea, and Thailand may have been 
subsidized. We have found in other proceedings that these countries 
maintain broadly available, non-industry-specific export subsidies and, 
therefore, it is reasonable to infer that all exports to all markets 
from these countries are subsidized. See Certain Helical Spring Lock 
Washers from the People's Republic of China; Final Results of 
Administrative Review, 61 FR 66255 (December 17, 1996), at Comment 1. 
We are also directed by the legislative history not to conduct a formal 
investigation to ensure that such prices are not subsidized. See H.R. 
Rep. 100-576 at 590 (1988). Rather, the Department was instructed by 
Congress to base its decision on information that is available to it at 
the time it is making its determination. Therefore, based on the 
information currently available, we have not used prices from these 
countries in calculating market-economy input values. In instances 
where a market-economy input was obtained solely from suppliers located 
in these countries, we used Indian import-based surrogate values to 
value the input. Similarly, because of the export subsidies maintained 
by Indonesia, South Korea, and Thailand, in calculating Indian import-
based surrogate values, we have not used prices from these countries.
    We valued electricity using the International Energy Agency, Energy 
Prices & Taxes--Quarterly Statistics, First Quarter 2003. The most 
recent price reported for electricity in India was for the year 2000 
and we adjusted the price for inflation using the U.S. producer price 
index.
    The respondents also reported packing inputs. We used Indian import 
data to value these inputs.
    We used Indian transport information in order to value the 
transportation of raw materials. To calculate domestic inland freight 
for trucking services, we used an April 2002, article from the Iron and 
Steel Newsletter which quotes http://www.infreight.com. We calculated 
the total distance in kilometers (``km'') for each city listed to 
Mumbai. The distances were listed on the World Wide Web at http://www.mapsofindia.com/distances/mumbai.html. We adjusted the rate for 
inflation and converted the Rupee value to U.S. dollars.
    For NME-supplied marine insurance, we used a POI price quote from a 
U.S. insurance provider, as we have in past PRC cases. See July 1, 
2002, memorandum to Susan Kuhbach, ``Factors of Production Values used 
for the Preliminary Results,'' in the 14th administrative review of 
tapered roller bearings and parts thereof, finished and unfinished, 
from the People's Republic of China.
    To value factory overhead expenses, selling, general, and 
administrative expenses (``SG&A''), and profit we calculated a rate 
based on publicly available financial statements from three Indian 
producers of comparable merchandise, Jay Equipment and Systems Private 
Limited, Nagori Engineers Private Limited, and Rexello Castors Private 
Limited. For a detailed discussion of the surrogate values for 
overhead, SG&A, and profit, see the Factor Valuation Memorandum.
    For labor, consistent with 19 CFR 351.408(c)(3), we used the PRC 
regression-based wage rate at Import Administration's Web site, http://ia.ita.doc.gov/wages/corrected00wages/corrected00wages.htm. The source 
of the wage-rate data on the Import Administration's Web site is the 
International Labour Organization's Yearbook of Labour Statistics 2001.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A(a) of the Act based on the monthly average exchange rates 
as published in the International Monetary Fund's International 
Financial Statistics.

Verification

    As provided in section 782(i) of the Act, we will verify the 
information upon which we will rely in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing CBP 
to suspend liquidation of all imports of subject merchandise from the 
PRC that are entered, or withdrawn from warehouse, for consumption on 
or after the date of publication of this notice in the Federal 
Register. We will instruct CBP to require a cash deposit or the posting 
of a bond equal to the weighted-average amount by which the normal 
value exceeds the export price, as indicated in the chart below. These 
suspension-of-liquidation instructions will remain in effect until 
further notice. The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                               Weighted-
                                                                average
                    Exporter or producer                        percent
                                                                margin
------------------------------------------------------------------------
Xinghua.....................................................      216.36
Taifa.......................................................       31.87
True Potential..............................................       24.62
Huatian.....................................................       74.88
Shandong....................................................       76.15
Future Tool.................................................       76.15
PRC-wide Rate...............................................      346.94
------------------------------------------------------------------------

    The PRC-wide rate applies to all entries of the subject merchandise 
produced in the PRC except for entries from exporters or producers that 
are identified individually above.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination of sales at LTFV. Section 735(b)(2) requires 
that the ITC make a

[[Page 29517]]

final determination before the later of 120 days after the date of the 
Department's preliminary determination or 45 days after the 
Department's final determination whether the domestic industry in the 
United States is materially injured, or threatened with material 
injury, by reason of imports, or sales (or the likelihood of sales) for 
importation, of the subject merchandise.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than seven days 
after the date of the final verification report issued in this 
proceeding and rebuttal briefs, limited to issues raised in case 
briefs, no later than five days after the deadline date for case 
briefs. A list of authorities used and an executive summary of issues 
should accompany any briefs submitted to the Department. This summary 
should be limited to five pages total, including footnotes. In 
accordance with section 774 of the Act, we will hold a public hearing, 
if requested, to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs. Tentatively, any hearing 
will be held three days after the deadline for submission of the 
rebuttal briefs at the U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230, at a time and location 
to be determined. Parties should confirm by telephone the date, time, 
and location of the hearing two days before the scheduled date. 
Interested parties who wish to request a hearing, or to participate if 
one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the date of publication of this notice. See 19 
CFR 351.310(c). Requests should contain (1) the party's name, address, 
and telephone number, (2) the number of participants, and (3) a list of 
the issues to be discussed. At the hearing, each party may make an 
affirmative presentation only on issues raised in that party's case 
brief and may make rebuttal presentations only on arguments included in 
that party's rebuttal brief. See 19 CFR 351.310(c).
    We will make our final determination no later than 135 days after 
the date of publication of the preliminary determination.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: May 17, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-11676 Filed 5-21-04; 8:45 am]
BILLING CODE 3510-DS-P