[Federal Register Volume 69, Number 216 (Tuesday, November 9, 2004)]
[Notices]
[Pages 64903-64906]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-24952]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-822]


Certain Helical Spring Lock Washers from the People's Republic of 
China; Preliminary Results of Antidumping Duty Administrative Review

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

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review.

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SUMMARY: In response to a request by Shakeproof Assembly Components 
Division of Illinois Tool Works, Inc. (Shakeproof), a domestic 
interested party, the Department of Commerce (the Department) is 
conducting an administrative review of the antidumping duty order on 
certain helical spring lock washers from the People's Republic of 
China. The period of review (POR) is October 1, 2002, through September 
30, 2003. We preliminarily find that the cash deposit rate for this 
review is de minimis. Upon completion of this review, the Department 
will instruct CBP to assess antidumping duties on all appropriate 
entries of subject merchandise that was exported by Hangzhou Spring 
Washer Co., Ltd. (also known as Zhejiang Wanxin Group, Ltd.) 
(collectively, Hangzhou), and entered during the POR. Interested 
parties are invited to comment on these preliminary results.

EFFECTIVE DATE: November 9, 2004.

FOR FURTHER INFORMATION CONTACT: Marin Weaver, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230; telephone 
(202) 482-2336.

SUPPLEMENTARY INFORMATION:

Background

    On October 19, 1993, the Department published the antidumping duty 
order on certain helical spring lock washers (HSLWs) from the People's 
Republic of China (PRC) (58 FR 53914), as amended on November 23, 1993 
(58 FR 61859). On October 1, 2003, the Department published a notice of 
opportunity to request an administrative review of this order (68 FR 
56618). On October 20, 2003, in accordance with 19 CFR 351.213(b)(1), 
Shakeproof requested that the Department conduct an administrative 
review of Hangzhou, a producer/exporter of HSLWs from the PRC.

[[Page 64904]]

    The Department published a notice of initiation of this 
administrative review on November 28, 2003 (68 FR 66799). On June 25, 
2004, the Department extended the due date for the preliminary results 
of this review to November 1, 2004. See Certain Helical Spring Lock 
Washers from the People's Republic of China: Notice of Extension of 
Time Limit of Preliminary Results of Antidumping Administrative Review, 
69 FR 35583 (June 25, 2004). Hangzhou submitted timely responses to all 
of the Department's requests for information in this review.

Scope of the Order

    The products covered by the order are HSLWs of carbon steel, of 
carbon alloy steel, or of stainless steel, heat-treated or non-heat-
treated, plated or non-plated, with ends that are off-line. HSLWs are 
designed to: (1) function as a spring to compensate for developed 
looseness between the component parts of a fastened assembly; (2) 
distribute the load over a larger area for screws or bolts; and (3) 
provide a hardened bearing surface. The scope does not include internal 
or external tooth washers, nor does it include spring lock washers made 
of other metals, such as copper.
    HSLWs subject to the order are currently classifiable under 
subheading 7318.21.0030 of the Harmonized Tariff Schedule of the United 
States (HTSUS). Although the HTSUS subheading is provided for 
convenience and customs purposes, the written description of the scope 
of this proceeding is dispositive.

Separate Rates Determination

    The Department has treated the PRC as a non-market-economy (NME) 
country in all past antidumping duty investigations and administrative 
reviews. See, e.g., Final Determination of Sales at Less Than Fair 
Value: Tetrahydrofurfuryl Alcohol From the People's Republic of China, 
69 FR 34130 (June 18, 2004). A designation as an NME country remains in 
effect until it is revoked by the Department. See section 771(18)(C)(i) 
of the Tariff Act of 1930, as amended (the Act).
    It is the Department's standard policy to assign all exporters of 
subject merchandise subject to review in a NME country a single rate 
unless an exporter can demonstrate an absence of government control, 
both in law and in fact, with respect to exports. To establish whether 
an exporter is sufficiently independent of government control to be 
entitled to a separate rate, the Department analyzes the exporter in 
light of the criteria established in the Final Determination of Sales 
at Less Than Fair Value: Sparklers from the People's Republic of China, 
56 FR 20588 (May 6, 1991) (Sparklers), as amplified in 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, exporters in NME countries are entitled to 
separate, company-specific margins when they can demonstrate an absence 
of government control over exports, both in law (de jure) and in fact 
(de facto). Evidence supporting, though not requiring, a finding of de 
jure absence of government control over export activities includes: (1) 
an absence of restrictive stipulations associated with the individual 
exporter's business and export licenses; (2) any legislative enactments 
decentralizing control of companies; and (3) any other formal measures 
by the government decentralizing control of companies. De facto absence 
of government control over exports is based on four factors: (1) 
whether each exporter sets its own export prices independently of the 
government and without the approval of a government authority; (2) 
whether each exporter retains the proceeds from its sales and makes 
independent decisions regarding the disposition of profits or the 
financing of losses; (3) whether each exporter has the authority to 
negotiate and sign contracts and other agreements; and (4) whether each 
exporter has autonomy from the government regarding the selection of 
management. (See Silicon Carbide, 59 FR at 22587, and Sparklers, 56 FR 
at 20589.)
    In May 1999 Hangzhou was sold at auction to five individuals and 
became a limited liability company. Hangzhou has placed on the record 
documents to demonstrate the absence of de jure control including its 
list of shareholders, business license, and the Company Law. Other than 
limiting Hangzhou to activities referenced in the business license, we 
found no restrictive stipulations associated with the license. In 
addition, in previous cases the Department has analyzed the Company Law 
and found that it establishes an absence of de jure control. See, e.g., 
Notice of Final Determination of Sales at Less Than Fair Value: Certain 
Partial-Extension Steel Drawer Slides with Rollers from the People's 
Republic of China, 60 FR 54472, 54474 (October 24, 1995). We have no 
information in this segment of the proceeding which would cause us to 
reconsider this determination. Therefore, based on the foregoing, we 
have preliminarily found an absence of de jure control for Hangzhou.
    With regards to de facto control, Hangzhou reported the following: 
(1) it sets prices to the United States through negotiations with 
customers and these prices are not subject to review by any government 
organization; (2) it does not coordinate with other exporters or 
producers to set the price or determine to which market companies sell 
subject merchandise; (3) the Chamber of Commerce does not coordinate 
the export activities of Hangzhou; (4) Hangzhou's general manager has 
the authority to contractually bind the company to sell subject 
merchandise; (5) the board of directors has appointed the general 
manager; (6) there is no restriction on its use of export revenues; (7) 
Hangzhou's management decides how to dispose of the profits and 
Hangzhou has never had a loss. Additionally, Hangzhou's questionnaire 
responses do not suggest that pricing is coordinated among exporters. 
Furthermore, our analysis of Hangzhou's questionnaire responses reveals 
no other information indicating governmental control of export 
activities. Therefore, based on the information provided, we 
preliminarily determine that there is an absence of de facto government 
control over Hangzhou's export functions.
    In the instant administrative review, we find an absence of 
government control, both in law and in fact, with respect to Hangzhou's 
export activities according to the criteria identified in Sparklers and 
an absence of government control with respect to the additional 
criteria identified in Silicon Carbide. Therefore, we have assigned 
Hangzhou a separate rate.

Export Price

    Because Hangzhou sold the subject merchandise to unaffiliated 
purchasers in the United States prior to importation into the United 
States (or to unaffiliated resellers outside the United States with 
knowledge that the merchandise was destined for the United States) and 
use of a constructed-export-price methodology is not otherwise 
indicated, we have used export price in accordance with section 772(a) 
of the Act.
    We calculated export price based on the FOB price to unaffiliated 
purchasers. From this price, we deducted amounts for foreign inland 
freight and brokerage and handling pursuant to section 772(c)(2)(A) of 
the Act. We valued these deductions using surrogate values. We selected 
India as the primary surrogate country for the

[[Page 64905]]

reasons explained in the ``Normal Value'' section of this notice.

Normal Value

    Section 773(c)(1) of the Act provides that, in the case of an NME, 
the Department shall determine normal value (NV) using a factors-of-
production methodology if the merchandise is exported from an NME and 
the information does not permit the calculation of NV using home-market 
prices, third-country prices, or constructed value under section 773(a) 
of the Act. Because information on the record does not permit the 
calculation of NV using home-market prices, third-country prices, or 
constructed value and no party has argued otherwise, we calculated NV 
based on factors of production in accordance with sections 773(c)(3) 
and (4) of the Act and 19 CFR 351.408(c).
    Because we are using surrogate country factors-of-production prices 
to determine NV, section 773(c)(4) of the Act requires that the 
Department use values from a market-economy (surrogate) country that is 
at a level of economic development comparable to that of the PRC and is 
a significant producer of comparable merchandise. We have determined 
that India, Indonesia, Sri Lanka, the Philippines, Morocco, and Egypt 
are market-economy countries at a comparable level of economic 
development to that of the PRC. (For a further discussion of our 
surrogate selection, see the July 15, 2004, memorandum entitled Request 
for a List of Surrogate Countries which is available in the 
Department's Central Records Unit, room B099, of the main Commerce 
building (CRU)). In addition, we have found that India is a significant 
producer of comparable merchandise, i.e., fasteners. See Memorandum to 
File from Paul Stolz, dated November 1, 2004, which is on file in the 
CRU. As in the investigation and the nine previous reviews of this 
order, we have chosen India as the primary surrogate country. Thus, we 
have used Indian prices to value the factors of production.
    We selected, where possible, publicly available values from India 
which were average non-export values, representative of a range of 
prices within the POR or most contemporaneous with the POR, product-
specific, and tax-exclusive. Also, where we have relied upon import 
values, we have excluded imports from South Korea, Thailand, and 
Indonesia. The Department has found that these countries maintain 
broadly available, non-industry-specific export subsidies and that the 
existence of these subsidies provides sufficient reason to believe or 
suspect that export prices from these countries are distorted. See 
Final Determination of Sales at Less Than Fair Value: Certain 
Automotive Replacement Glass Windshields From the People's Republic of 
China, 67 FR 6482 (February 12, 2002), and accompanying Issues and 
Decision Memorandum. Our practice of excluding subsidized prices has 
been upheld in China National Machinery Import and Export Corporation 
v. United States and the Timken Company, 293 F. Supp. 2d 1334 (CIT 
2003).

Steel Value

    During the POR, Hangzhou imported a portion of its steel input 
(carbon steel wire rod (CSWR)) from market economies and paid for this 
input in a market-economy currency. In the 2001-2002 administrative 
review, we disregarded certain steel import prices reported by Hangzhou 
because there was ``reason to believe or suspect'' the steel benefitted 
from subsidies and have continued to do so in this review. For further 
discussion of this issue, see Memorandum to the File, Hang Zhou Spring 
Washer Plant, also known as Zhejiang Wanxin Group Co., Ltd., 
Calculation Memorandum at 4 (November 1, 2004). Pursuant to 19 CFR 
351.408(c)(1) we have used Hangzhou's average purchase price for CSWR 
imported from a market-economy country during the POR to value CSWR in 
calculating Hangzhou's normal value.

Material Inputs

    We calculated a surrogate value for steel scrap using the value of 
imports of steel scrap into India based on information from the Monthly 
Statistics of the Foreign Trade of India - Imports (MSFTI). In 
computing this value, we have taken into account that we have made 
final affirmative countervailing duty determinations on steel products 
from numerous countries. Therefore, we have not included values for 
imports of steel scrap into India from Belgium, Canada, France, 
Germany, and the United Kingdom (as well as South Korea, Thailand and 
Indonesia).
    The remaining inputs are addressed below:
     To value hydrochloric acid used in the production of 
HSLWs, we used per-kilogram import values obtained from Chemical 
Weekly. We adjusted this value to account for freight costs incurred 
between the supplier and Hangzhou.
     To value all other the chemicals used in the production of 
HSLWs, we used per-kilogram import values obtained from the MSFTI. We 
also adjusted these values to account for freight costs incurred 
between the supplier and Hangzhou.
     To value plating, we used a March 14, 2003, price quote 
supplied by Shakeproof in the 2001-2002 administrative review. We 
adjusted the value to reflect inflation using the wholesale price index 
(WPI) published by the International Monetary Fund (IMF).
     To value coal, we used a per-kilogram value obtained from 
the MSFTI. We also made adjustments to account for freight costs 
incurred between the supplier and Hangzhou.
     To value electricity, we used the 1999/2000 electricity 
price data from the 2001-2002 Annual Report on the Working of State 
Electricity Boards and Electricity Departments published by the 
Planning Commission (Power and Energy Division) Government of India 
May, 2002. We adjusted the value to reflect inflation using the 
electricity sector-specific inflation index published in the Reserve 
Bank of India (RBI) Bulletin.
     To value water, we used the Second Water Utilities Data 
Book for the Asian and Pacific Region published by the Asian 
Development Bank in 1997. We adjusted the value to reflect inflation 
using the WPI published by the RBI.
     For labor, we used the regression-based wage rate for the 
PRC in ``Expected Wages of Selected NME Countries,'' located on the 
Internet at http://ia.ita.doc.gov/wages/index.html.
     For factory overhead, selling, general, and administrative 
expenses (SG&A), and profit values, we used information from the 
January 1997 RBI Bulletin report entitled ``Combined Income, Value of 
Production, Expenditure and Appropriation Accounts, Industry Group-
Wise, 1990 - 91 to 1992 - 93 (contd.).'' From this information, we were 
able to determine factory overhead as a percentage of the total raw 
materials, labor and energy (ML&E) costs, SG&A as a percentage of ML&E 
plus overhead (i.e., cost of manufacture), and the profit rate as a 
percentage of the cost of manufacture plus SG&A.
     For packing materials, we used the per-kilogram values 
obtained from the MSFTI. Where necessary, we adjusted these values to 
reflect inflation using the WPI published by the RBI. We also made 
adjustments to account for freight

[[Page 64906]]

costs incurred between the PRC supplier and Hangzhou.
     To value foreign brokerage and handling, we used 
information reported in the Final Determination of Sales at Less Than 
Fair Value; Certain Hot-Rolled Carbon Steel Flat Products from India, 
67 FR 50406 (October 3, 2001). We adjusted this value to reflect 
inflation using the WPI published by the RBI.
     To value truck freight, we used the freight rates 
published in the Great Indian Bazaar at http://www.infobanc.com/logtruck.htm. We obtained distances between cities from the following 
website: http://www.mapsofindia.com. We deflated this value using the 
WPI published by the RBI.
    For a complete description of the factor values we used, see 
``Memorandum to File: Factor Values Used for the Preliminary Results of 
the 2002-2003 Administrative Review,'' dated November 1, 2004 (Factors 
Memorandum), a public version of which is available in the Public File 
of the CRU.

Preliminary Results of Review

    We preliminarily determine that the following dumping margin 
exists:

----------------------------------------------------------------------------------------------------------------
                Manufacturer/exporter                          Time Period                Margin (percent)
----------------------------------------------------------------------------------------------------------------
Hang Zhou Spring Washer Co. Ltd./Zhejiang Wanxin                   10/1/02-9/30/03                          0.00
 Group, Ltd.........................................
----------------------------------------------------------------------------------------------------------------

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the publication date of this 
notice. See 19 CFR 351.224(b). Interested parties are invited to 
comment on the preliminary results. Interested parties may submit case 
briefs within 30 days of the date of publication of this notice. 
Rebuttal briefs, limited to issues raised in the case briefs, may be 
filed no later than 37 days after the date of publication of this 
notice. Parties who submit arguments are requested to submit with each 
argument a statement of the issue, a brief summary of the argument, and 
a table of authorities.
    Further, we would appreciate it if parties submitting written 
comments would provide an additional copy of the public version of any 
such comments on a diskette. Any interested party may request a hearing 
within 30 days of publication of this notice. See 19 CFR 351.310(c). If 
requested, a hearing will be held 44 days after the publication of this 
notice or the first workday thereafter. The Department will publish a 
notice of the final results of this administrative review, which will 
include the results of its analysis of issues raised in any written 
comments or hearing, within 120 days from publication of this notice.

Assessment

    Pursuant to 19 CFR 351.212(b), the Department calculated an 
assessment rate for each importer of subject merchandise. Upon 
completion of this review, the Department will instruct CBP to assess 
antidumping duties on all appropriate entries of subject merchandise. 
We have calculated each importer's duty-assessment rate based on the 
ratio of the total amount of antidumping duties calculated for the 
examined sales to the total quantity of sales examined. Where the 
assessment rate is above de minimis, the importer-specific rate will be 
assessed uniformly on all entries made during the POR.

Cash Deposit Requirements

    The following cash deposit rates will be effective upon publication 
of the final results for all shipments of HSLWs from the PRC entered, 
or withdrawn from warehouse, for consumption on or after the 
publication date, as provided for by section 751(a)(1) of the Act: (1) 
for Hangzhou, which has a separate rate, the cash deposit rate will be 
the company-specific rate established in the final results of review; 
(2) for all other PRC exporters, the cash deposit rate will be the PRC 
rate, 128.63 percent, which is the ``All Other PRC Manufacturers, 
Producers and Exporters'' rate from the Final Determination of Sales at 
Less Than Fair Value: Certain Helical Spring Lock Washers from the 
People's Republic of China, 58 FR 48833 (September 20, 1993); and (3) 
for non-PRC exporters of subject merchandise from the PRC, the cash 
deposit rate will be the rate applicable to the PRC supplier of that 
exporter. These deposit rates, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: November 1, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-24952 Filed 11-8-04; 8:45 am]
BILLING CODE 3510-DS-S