[Federal Register Volume 70, Number 131 (Monday, July 11, 2005)]
[Notices]
[Pages 39726-39733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3653]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-868]


Folding Metal Tables and Chairs from the People's Republic of 
China: Notice of Preliminary Results of Antidumping Duty Administrative 
Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to multiple requests, the Department of Commerce 
(the Department) is conducting an administrative review of the 
antidumping duty order on folding metal tables and chairs (FMTCs) from 
the People's Republic of China (PRC). The period of review (POR) is 
June 1, 2003, through May 31, 2004. Upon completion of this review, the 
Department will instruct U.S. Customs and Border Protection (CBP) to 
assess antidumping duties on all appropriate entries of subject 
merchandise that were exported by the companies under review and 
entered during the POR. Interested parties are invited to comment on 
these preliminary results.

EFFECTIVE DATE: July 11, 2005.

FOR FURTHER INFORMATION CONTACT: Marin Weaver at (202) 482-2336 or 
Catherine Feig at (202) 482-3962, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On June 27, 2002, the Department published the antidumping duty 
order on certain FMTCs from the PRC (67 FR 43277). On June 1, 2004, the 
Department published a notice of opportunity to request an 
administrative review of this order (69 FR 30873). In accordance with 
19 CFR 351.213(b)(1), the following requests were made: (1) on June 28, 
2004, Cosco Home and Office Products (Cosco), a domestic interested 
party, requested that the Department conduct administrative reviews of 
Feili Furniture Development Ltd. Quanzhou City, Feili Furniture 
Development Co., Ltd., Feili Group (Fujian) Co., Ltd., and Feili 
(Fujian) Co., Ltd. (collectively Feili), and New-Tec Integration 
(Xiamen) Co. Ltd. (New-Tec); (2) on June 28, 2004, Wok and Pan Industry 
Inc. (Wok and Pan), a Chinese producer and exporter of the merchandise 
under review, requested that the Department conduct an administrative 
review of Wok and Pan; (3) on June 29, 2004, Feili requested an 
administrative review of itself; (4) on June, 30, 2004, Meco 
Corporation (Meco), a domestic interested party, requested that the 
Department conduct administrative reviews of Feili, New-Tec, and 
Dongguan Shichang Metals Factory Ltd. (also known as Dongguang Shichang 
Metals Factory Co., Maxchief Investments Ltd.) (collectively Dongguan 
(Shichang)); (5) on June 30, 2004, Shichang and Lifetime, a Chinese 
exporter of the merchandise under review, requested that the Department 
conduct administrative reviews of Lifetime Hong Kong Ltd., and Lifetime 
(Xiamen) Plastic Producers Ltd. (collectively Lifetime), and Dongguan 
(Shichang).
    On July 28, 2004, the Department published a notice of initiation 
of this administrative review (69 FR 45010) for Feili, New-Tec, Wok and 
Pan, Dongguan (Shichang), and Lifetime. On September 2, 2004, Lifetime 
withdrew its request for an administrative review, on September 7, 
2004, Meco withdrew its request for an administrative review of 
Dongguan (Shichang), and on September 8, 2004, Dongguan (Shichang) 
withdrew its request for an administrative review. On February 15, 
2005, the Department extended the due date for the preliminary results 
of this review to June 30, 2005 (70 FR 7718). On March 22, 2005, the 
Department published a notice rescinding the review with regard to 
Lifetime and Dongguan (Shichang) (70 FR 14444) . While Feili submitted 
timely responses to all of the Department's requests for information in 
this review, Wok and Pan and New-Tec did not. See ``Adverse Facts 
Available'' section, below.

Scope of the Order

The products covered by this order consist of assembled and unassembled 
folding tables and folding chairs made primarily or exclusively from 
steel or other metal, as described below:
    1) Assembled and unassembled folding tables made primarily or 
exclusively from steel or other metal (folding metal tables). Folding 
metal tables include square, round, rectangular, and any other shapes 
with legs affixed with rivets, welds, or any other type of fastener, 
and which are made most commonly, but not exclusively, with a hardboard 
top covered with vinyl or fabric. Folding metal tables have legs that 
mechanically fold independently of one another, and not as a set. The 
subject merchandise is commonly, but not exclusively, packed singly, in 
multiple packs of the same item, or in five piece sets consisting of 
four chairs and one table. Specifically excluded from the scope of the 
order regarding folding metal tables are the following:
    a. Lawn furniture;
    b. Trays commonly referred to as ``TV trays'';
    c. Side tables;
    d. Child-sized tables;
    e. Portable counter sets consisting of rectangular tables 36'' high 
and matching stools; and
    f. Banquet tables. A banquet table is a rectangular table with a 
plastic or laminated wood table top approximately 28'' to 36'' wide by 
48'' to 96'' long and with a set of folding legs at each end of the 
table. One set of legs is composed of two individual legs that are 
affixed together by one or more cross-braces using welds or fastening 
hardware. In contrast, folding metal tables have legs that mechanically 
fold independently of one another,

[[Page 39727]]

and not as a set.
    2) Assembled and unassembled folding chairs made primarily or 
exclusively from steel or other metal (folding metal chairs). Folding 
metal chairs include chairs with one or more cross-braces, regardless 
of shape or size, affixed to the front and/or rear legs with rivets, 
welds or any other type of fastener. Folding metal chairs include: 
those that are made solely of steel or other metal; those that have a 
back pad, a seat pad, or both a back pad and a seat pad; and those that 
have seats or backs made of plastic or other materials. The subject 
merchandise is commonly, but not exclusively, packed singly, in 
multiple packs of the same item, or in five piece sets consisting of 
four chairs and one table. Specifically excluded from the scope of the 
order regarding folding metal chairs are the following:
    a. Folding metal chairs with a wooden back or seat, or both;
    b. Lawn furniture;
    c. Stools;
    d. Chairs with arms; and
    e. Child-sized chairs.
    The subject merchandise is currently classifiable under subheadings 
9401.71.0010, 9401.71.0030, 9401.79.0045, 9401.79.0050, 9403.20.0010, 
9403.20.0030, 9403.70.8010, 9403.70.8020, and 9403.70.8030 of the 
Harmonized Tariff Schedule of the United States (HTSUS). Although the 
HTSUS subheadings are provided for convenience and customs purposes, 
the Department's written description of the merchandise is dispositive.

Separate Rates Determination for Feili

    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 an NME country a single rate 
unless an exporter can demonstrate an absence of government control, 
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); 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, 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.
    Based on a review of the responses, we have concluded that both 
Feili Group (Fujian) and Feili Furniture are owned by Hong Kong 
corporations and are registered and organized under the corporation and 
taxation laws of Hong Kong. Both companies operate freely in the PRC as 
foreign wholly-owned enterprises and, therefore, operate independently 
of control from central, provincial or local governments in the PRC. 
Therefore, based on the foregoing, we have preliminarily found an 
absence of de jure control for Feili.
    With regard to de facto control, Feili 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 PRC Chamber of Commerce does not 
coordinate the export activities of Feili; (4) Feili's general manager 
has the authority to contractually bind the company to sell subject 
merchandise; (5) the board of directors appoints the general manager; 
(6) there is no restriction on its use of export revenues; (7) Feili's 
shareholders ultimately determine the disposition of profits and Feili 
has not had a loss in the last two years; and (8) none of the board 
members or managers is a government official. Additionally, Feili's 
questionnaire responses do not suggest that pricing is coordinated 
among exporters. Furthermore, our analysis of Feili's questionnaire 
responses reveals no other information indicating government control of 
export activities. Therefore, based on the information provided, we 
preliminarily determine that there is an absence of de facto government 
control over Feili's export functions and that Feili has met the 
criteria for the application of separate rates.

Adverse Facts Available

    Section 776(a)(1) and (2) of the Act provides that the Department 
shall apply ``facts otherwise available'' if, inter alia, necessary 
information is not on the record or an interested party or any other 
person (A) withholds information that has been requested, (B) fails to 
provide information within the deadlines established, or in the form 
and manner requested by the Department, subject to subsections (c)(1) 
and (e) of section 782 of the Act, (C) significantly impedes a 
proceeding, or (D) provides information that cannot be verified as 
provided by section 782(I) of the Act.
    Where the Department determines that a response to a request for 
information does not comply with the request, section 782(d) of the Act 
provides that the Department will so inform the party submitting the 
response and will, to the extent practicable, provide that party the 
opportunity to remedy or explain the deficiency. If the party fails to 
remedy the deficiency within the applicable time limits and subject to 
section 782(e) of the Act, the Department may disregard all or part of 
the original and subsequent responses, as appropriate. Section 782(e) 
of the Act provides that the Department ``shall not decline to consider 
information that is submitted by an interested party and is necessary 
to the determination but does not meet all applicable requirements 
established by the administering authority'' if the information is 
timely, can be verified, is not so incomplete that it cannot be used, 
and if the interested party acted to the best of its ability in 
providing the information. Where all of these

[[Page 39728]]

conditions are met, the statute requires the Department to use the 
information if it can do so without undue difficulties.
    Section 776(b) of the Act further provides that the Department may 
use an adverse inference in applying the facts otherwise available when 
a party has failed to cooperate by not acting to the best of its 
ability to comply with a request for information. Section 776(b) of the 
Act also authorizes the Department to use as adverse facts available 
(AFA) information derived from the petition, the final determination, a 
previous administrative review, or other information placed on the 
record.
    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 or review, it shall, to the extent 
practicable, corroborate that information from independent sources that 
are reasonably at its disposal. Secondary information is defined as 
``[i]nformation derived from the petition that gave rise to the 
investigation or review, the final determination concerning the subject 
merchandise, or any previous review under section 751 concerning the 
subject merchandise.'' See Statement of Administrative Action (``SAA'') 
accompanying the URAA, H. Doc. No. 316, 103d Cong., 2d Session at 870 
(1994). Corroborate means that the Department will satisfy itself that 
the secondary information to be used has probative value. See SAA at 
870. To corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information to be used. The SAA emphasizes, however, that the 
Department need not prove that the selected facts available are the 
best alternative information. See SAA at 869.
    For the reasons discussed below, we determine that, in accordance 
with sections 776(a)(2), 776(b) and 782(d) of the Act, the use of AFA 
is appropriate for the preliminary results for New-Tec, Wok and Pan, 
and the PRC-wide entity.
New-Tec
    1. Background
    The Department made several requests of New-Tec, asking for 
information on the samples that it gives to its customers. On August 9, 
2004, the Department issued an NME questionnaire to New-Tec. In section 
C (II), New-Tec was instructed to ``. . . prepare a separate computer 
data file containing each sale made during the POR of the subject 
merchandise, including sales of further manufactured merchandise.'' On 
December 9, 2005, the Department issued a supplemental questionnaire 
requesting (question 45) New-Tec to further explain what its product 
codes represent. In response New-Tec stated that ``{n{time} ormally, 
New-Tec's customer designs a new product and sends the drawings to New-
Tec for producing a sample. After making a sample, New-Tec delivers 
such sample to its customer for confirmation.''
    On May 19, 2005, the Department issued a fourth supplemental\1\ 
questionnaire to New-Tec, instructing New-Tec, at question two, to 
describe how it had accounted for its sample sales (i.e., the samples 
of subject merchandise New-Tec sent to its customer) in both the U.S. 
sales and factors-of-production (FOP) databases. The Department also 
asked New-Tec to ``. . . please provide all documentation related to 
your POR sample sales and explain, in detail, how the documentation 
demonstrates that the sales were of samples.''
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    \1\ On March 11, 2005, and April 20, 2005, the Department issued 
a second and third supplemental questionnaire. Neither of these had 
questions pertaining to samples.
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    In its June 7, 2005, response New-Tec stated that it did not report 
its samples in the U.S. sales file because it pays for all expenses 
related to the samples and the ``delivery of samples is not recorded as 
sales as New-Tec does not invoice its customer'' and that it recorded 
the expenses related to its samples as selling expenses. It also 
reported that the material, labor, and energy costs related to the 
samples were captured in the FOP database. However, New-Tec failed to 
provide any documentation on these samples, as explicitly requested by 
the Department.
    Despite New-Tec's claims that these samples were free and not 
recorded as ``sales,'' New-Tec provided no evidence to support this 
assertion. Therefore, on June 15, 2005, the Department issued a sixth 
supplemental.\2\ Questions one and two again requested specific 
information about New-Tec's purported samples. The Department 
instructed New-Tec to provide the total quantity of its POR sample 
sales by product code and for New-Tec to:
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    \2\ On May 27, 2005, the Department issued a fifth supplemental 
questionnaire which did not have questions pertaining to samples.
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    . . . please provide all documentation related to your POR sample 
sales and explain, in detail, how the documentation demonstrates that 
the sales were of samples. This would include, but is not limited 
{to{time} , general ledger entries, Chinese export forms, U.S. customs 
forms, and related invoices. Additionally, please state the disposition 
of the samples (e.g., whether they were returned, destroyed, resold, 
tested etc.)
In response to the Department's first question, New-Tec refused to 
provide the total quantity of its POR sample sales. Instead it 
reiterated what it had stated in its previous response, that it ``did 
not account for samples provided to its customers as sales'' because 
they are free and New-Tec does not invoice the customer for the sales. 
Additionally, New-Tec stated that the sales are not booked into its 
revenue account. Despite the Department's requests, New-Tec did not 
place any evidence on the record to even indicate how many samples it 
provided during the POR or what products and quantities were provided 
in those samples.
    In response to the Department's second question requesting 
documentation for the purported samples, New-Tec again failed to 
provide any of the requested documentation. Instead, New-Tec reiterated 
part of its answer to the first question, stating that the samples were 
treated as selling expenses. New-Tec also stated that it was unaware of 
the disposition of the samples but did not think that they were resold. 
Moreover, New-Tec claimed that the shipments were made by its 
``shipper'' and that it was unaware of any Chinese export forms or U.S. 
customs forms associated with these shipments notwithstanding its March 
25, 2005, response to the Department's second supplemental 
questionnaire, where New-Tec demonstrated specific knowledge of the 
documents required for export. In that response New-Tec stated, at page 
seven, that it was ``required to use Xiamen Municipal Invoice for 
export declaration purpose pursuant to local customs authority 
regulations.'' New-Tec has not demonstrated that it is unable to 
provide, for the shipment of the samples, the same documentation that 
it was able to provide for its sales for remuneration.
    2. Application of Facts Available
    As described above, New-Tec failed to respond to the Department's 
requests for information by the deadlines established or in the form 
required. The absence of this information has significantly impeded 
this review because the Department has been unable to determine how 
many sample sales were made (much less what the details of these sample 
sales were). New-Tec failed to properly respond to the Department's 
requests, pursuant to section 782(d) of the Act, when it refused to 
provide documentation related to its purported samples and failed to 
provide data on the quantity of its samples within the deadlines 
established in the questionnaires. New-

[[Page 39729]]

Tec's failure to provide the requested information prevented the 
Department from conducting the analysis necessary to determine the 
nature of these transactions and whether they should be excluded from 
the margin calculation.
    It is the Department, not the respondents, that makes the legal 
determination as to whether these transactions should be excluded from 
the database as samples. In order to do so, the Department must review 
the documentation pertaining to the samples, including documentation 
with respect to the quantities and values of the products classified as 
samples. Because New-Tec failed to provide any of this documentation, 
the Department has no reliable basis for reaching a decision as to the 
true transactional nature of the claimed samples. Typically, where the 
Department has found that there is insufficient evidence to prove that 
a transaction was a sample, it will include that sale in the sales 
database. See, e.g., Antifriction Bearings and Parts Thereof, From 
France, Germany, Italy, Japan, Singapore and the United Kingdom: Final 
Results of Antidumping Duty Administrative Reviews, 69 FR 55574, Issues 
and Decision Memorandum, at Comment 18 (September 15, 2004). However, 
by failing to provide even the quantity of its POR samples, New-Tec has 
given the Department no way to determine the volume of the purported 
sample transactions and their relevance to any margin calculations. As 
a result, New-Tec's entire U.S. sales database is unuseable for 
purposes of these preliminary results. Moreover, because there is no 
acceptable U.S. sales database to which we can compare New-Tec's FOP 
information, we are also unable to use that information. Therefore 
pursuant to section 782(e) of the Act, the Department must disregard 
all of New-Tec's U.S. sales and FOP data. Because we are basing New-
Tec's margin on total facts available, we have also rejected New-Tec's 
information regarding separate rates, for purposes of the preliminary 
results, and thus we preliminarily find that separate rates treatment 
is not warranted.
    Finally, we find that the application of section 782(e) of the Act 
does not overcome New-Tec's failure to respond. See sections 782(e)(1), 
(3), and (4) of the Act. Because the information that New-Tec failed to 
report is critical for purposes of the preliminary dumping 
calculations, the Department must resort to total facts otherwise 
available in determining the margin in its preliminary results, 
pursuant to sections 776(a)(2)(A)-(C) of the Act.
    3. Use of Adverse Inferences
    We also find that the application of an adverse inference in this 
review is appropriate, pursuant to section 776(b) of the Act. As 
discussed above, by refusing to provide any specific information about 
its purported samples, New-Tec has not acted to the best of its 
ability. Also, on June 7, 2005, New-Tec stated that it ``recorded'' 
expenses related to its samples as selling expenses. However, despite 
stating that such ``records'' exist, New-Tec did not provide them to 
the Department. Thus, New-Tec has failed to cooperate with the 
Department by not acting to the best of its ability to provide the 
requested information, and has hampered the Department's ability to 
evaluate whether or not the alleged sample transactions should be 
included in New-Tec's U.S. sales database, and if so what the 
corresponding data should be. Therefore, an adverse inference is 
warranted under section 776(b) of the Act. See, e.g., Final 
Determination of Sales at Less Than Fair Value; Stainless Steel Sheet 
and Strip in Coils From Germany, 64 FR 30710 (June 8, 1999), and 
accompanying Issues and Decision Memorandum at Comment 3; see also 
Stainless Steel Sheet and Strip From Taiwan; Final Results and Partial 
Rescission of Antidumping Duty Administrative Review, 67 FR 6682 
(February13, 2002), and accompanying Issues and Decision Memorandum at 
Comment 24. Because New-Tec failed to act to the best of its ability, 
we have made the adverse inference that New-Tec is part of the PRC-wide 
entity.
    4. Request for Substantiating Documentation
    It is the Department's practice to review all transactions in which 
samples are provided to U.S. customers. See, e.g., Final Determination 
of Sales at Less Than Fair Value: Hand Trucks and Certain Parts Thereof 
from the People's Republic of China, 69 FR 60980 (Oct. 14, 2004), and 
accompanying Issues and Decision Memorandum at Comment 5; and Honey 
From the People's Republic of China: Final Results of First Antidumping 
Duty Administrative Review, 69 FR 25060 (May 5, 2004), and accompanying 
Issues and Decision Memorandum at Comment 2. Although the NME 
questionnaire indicated that parties were to report all sales, implying 
that the provisions of samples should also be included, it did not 
explicitly reference the reporting of samples. Therefore, the 
Department sent New-Tec two additional supplemental questionnaires 
specifically requesting information on New-Tec's sample sales. New-Tec 
continued to deny the existence of sample ``sales,'' arguing that its 
purported samples transactions were at zero value and, therefore, do 
not constitute sales.
    Further, the Department recognizes that the reference to ``sample 
sales'' in our supplemental questionnaires in this case may have been a 
potential source of confusion because parties may have understood the 
term ``sales'' to refer only to transactions involving remuneration. 
Therefore, the Department will be amending its NME questionnaire to 
address this issue. In the future, the questionnaire will specifically 
request information on ``sample transactions'' to clarify that the 
Department requires information on any sample product provided to U.S. 
customers, regardless of whether the U.S. customer paid for that 
sample.
    Because New-Tec has responded to the rest of the Department's 
requests for information, and in view of the Department's concern 
regarding potential for confusion based on the terminology used in our 
questionnaires, the Department is providing New-Tec with a final 
opportunity to substantiate its claim that these are in fact sample 
transactions at zero value by: 1) providing the total POR quantity of 
samples transactions for each product code and; 2) providing all 
documentation related to its POR sample transactions. Such 
documentation would include, but is not limited to, general ledger 
entries, records from the workshop providing the samples, Chinese 
export forms, U.S. customs forms, and related invoices. In addition, 
New-Tec must explain, in detail, how the documentation demonstrates 
that the transactions involved samples for which no payment was 
required, not sales transactions, and why they should not be included 
in the sales database. Finally, the Department is asking New-Tec to 
explain why it was able to provide the Xiamen Municipal Invoice for 
export declaration purposes for its reported sales, but has claimed it 
is unable to do so for its sample transactions. Due to the unique 
circumstances of this case, the Department is allowing New-Tec to 
provide this information to the Department no later than 14 days after 
receipt of our questionnaire, and will consider New-Tec's response in 
reaching the final determination.
Wok and Pan
    1. Background
    Wok and Pan failed to respond to any of the following: the initial 
questionnaire (August 9, 2004); a letter from the Department to Wok and 
Pan, specifically requesting a response to the Department's 
questionnaire (September, 15, 2004); and the Department's request

[[Page 39730]]

for information to be considered when valuing the FOPs (September, 30, 
2004).
    2. Application of Facts Available
    After requesting a review, Wok and Pan failed to respond to the 
Department's questionnaire. Because Wok and Pan has not responded to 
any of our requests for information, including information regarding 
separate rates, we preliminarily find that separate rates treatment is 
not warranted. Consequently, consistent with the statement in our 
notice of initiation, we find that, because Wok and Pan does not 
qualify for a separate rate, it is deemed to be part of the PRC-wide 
entity.
PRC-Wide Entity
    1. Application of Facts Available
    Because some companies which are part of the PRC-wide entity were 
reviewed in this segment of the proceeding, the Department determines 
that the PRC-wide entity has also been reviewed with respect to this 
POR. Because some companies which are part of the PRC-wide entity 
failed to respond to one or more of our requests for information, we 
find it necessary, under section 776(a)(2) of the Act, to use facts 
otherwise available as the basis for the preliminary results of review 
for the PRC-wide entity (including New-Tec and Wok and Pan).
    2. Use of Adverse Inferences
    In addition, because the PRC-wide entity failed to cooperate by not 
acting to the best of its ability to comply with our requests for 
information, it is appropriate, pursuant to section 776(b) of the Act, 
to use an inference that is adverse to the interests of the PRC-wide 
entity in selecting from among the facts otherwise available. By doing 
so, companies that are part of the PRC-wide entity (including New-Tec 
and Wok and Pan) will not obtain a more favorable result by failing to 
cooperate than had they cooperated fully in this review.
    The Department has assigned the highest rate from any segment of 
the proceeding as total AFA because the PRC-wide entity (including New-
Tec and Wok and Pan) failed to cooperate to the best of its ability. 
This is in accord with the Department's practice where respondents 
refuse to cooperate to the best of their ability. See, e.g., Stainless 
Steel Wire Rods from India, Final Results and Partial Rescission of 
Antidumping Duty Administrative Review, 69 FR 29923, 29924 (May 26, 
2004).
Selection of the Adverse Facts Available Rate
    In deciding which facts to use as AFA, section 776(b) of the Act 
and 19 CFR 351.308(c)(1) authorize the Department 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. It is the Department's practice to 
select, as AFA, the higher of (a) the highest margin alleged in the 
petition, or (b) the highest calculated rate of any respondent in the 
investigation. See Final Determination of Sales at Less Than Fair 
Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-
Rolled Carbon Steel Flat Products, and Certain Cut-to-Length Carbon 
Steel Plate From Belgium, 58 FR 37083 (July 9, 1992).
    The Court of International Trade (CIT) and the Court of Appeals for 
the Federal Circuit have consistently upheld the Department's practice. 
See Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190 (Fed. 
Cir. 1990) (Rhone Poulenc); See also NSK Ltd. v. United States, 346 F. 
Supp. 2d 1312, 1335 (Ct. Int'l Trade 2004)(upholding a 73.55 percent 
total AFA rate, the highest available dumping margin from a different 
respondent in a less-than-fair-value (LTFV) investigation); See also 
Kompass Food Trading Int'l v. United States, 24 CIT 678, 689 (2000) 
(upholding a 51.16 percent total AFA rate, the highest available 
dumping margin from a different, fully cooperative respondent); and 
Shanghai Taoen International Trading Co., Ltd. v. United States, 2005 
Ct. Int'l. Trade 23 *23; Slip Op. 05-22 (February 17, 2005) (upholding 
a 223.01 percent total AFA rate, the highest available dumping margin 
from a different respondent in a previous administrative review).
    The Department's practice when selecting an adverse rate from among 
the possible sources of information is to ensure that the margin is 
sufficiently adverse ``as to effectuate the purpose of the facts 
available role to induce respondents to provide the Department with 
complete and accurate information in a timely manner.'' See Static 
Random Access Memory Semiconductors from Taiwan; Final Determination of 
Sales at Less than Fair Value, 63 FR 8909, 8932 (February 23, 1998). 
The Department's practice also ensures ``that the party does not obtain 
a more favorable result by failing to cooperate than if it had 
cooperated fully.'' See SAA at 890. See also Final Determination of 
Sales at Less than Fair Value: Certain Frozen and Canned Warmwater 
Shrimp from Brazil, 69 FR 76910 (December 23, 2004); See also D&L 
Supply Co. v. United States, 113 F. 3d 1220, 1223 (Fed. Cir. 1997). In 
choosing the appropriate balance between providing respondents with an 
incentive to respond accurately and imposing a rate that is reasonably 
related to the respondents prior commercial activity, selecting the 
highest prior margin ``reflects a common sense inference that the 
highest prior margin is the most probative evidence of current margins, 
because, if it were not so, the importer, knowing of the rule, would 
have produced current information showing the margin to be less.'' 
Rhone Poulenc, 899 F. 2d at 1190.
    Where we must base the entire dumping margin for a respondent in an 
administrative review on facts available because that respondent failed 
to cooperate by not acting to the best of its ability to comply with a 
request for information, section 776(b) of the Act authorizes the use 
of inferences adverse to the interests of that respondent in choosing 
facts available. Section 776(b) of the Act also authorizes the 
Department to use as AFA information derived from the petition, the 
final determination, a previous administrative review, or other 
information placed on the record. Due to New-Tec's and Wok and Pan's 
failure to cooperate, we have preliminarily assigned the PRC-wide 
entity, of which they are deemed to be a part, an AFA rate of 70.71 
percent, the PRC-wide rate calculated in the investigation. See Amended 
Final Determination of Sales at Less Than Fair Value: Folding Metal 
Tables and Chairs from the PRC, (FMTC Investigation) 67 FR 34898, (May 
16, 2002).
    The Department preliminarily determines that this information is 
the most appropriate, from the available sources, to effectuate the 
purposes of AFA. The Department's reliance on secondary information to 
determine an AFA rate is subject to the requirement to corroborate. See 
section 776(c) of the Act and the ``Corroboration of Secondary 
Information'' section below.
Corroboration of Secondary Information
    Section 776(c) of the Act provides that, where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' the Department shall, to the extent 
practicable, corroborate that information from independent sources 
reasonably at the Department's disposal. Secondary information is 
described in the SAA as ``{i{time} nformation derived from the petition 
that gave rise to the investigation or review, the final determination 
concerning the subject merchandise, or any previous review under 
section 751 concerning the subject merchandise.'' See SAA at 870. The 
SAA states that ``corroborate'' means to determine that the information 
used has probative value. The

[[Page 39731]]

Department has determined that to have probative value information must 
be reliable and relevant. 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 (Nov. 
6, 1996). The SAA also states that independent sources used to 
corroborate such evidence may include, for example, published price 
lists, official import statistics and customs data, and information 
obtained from interested parties during the particular investigation. 
See Preliminary Determination of Sales at Less Than Fair Value: High 
and Ultra-High Voltage Ceramic Station Post Insulators from Japan, 68 
FR 35627 (June 16, 2003); and, Final Determination of Sales at Less 
Than Fair Value: Live Swine From Canada, 70 FR 12181 (March 11, 2005).
    The reliability of the AFA rate was determined in the first 
administrative review of this case. See Folding Metal Tables and Chairs 
from the People's Republic of China: Final Results and Partial 
Rescission of the First Antidumping Duty Administrative Review, 69 FR 
75913, (December 20, 2004). The Department has received no information 
to date that warrants revisiting the issue of the reliability of the 
rate calculation itself. See e.g., 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). 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 contained in the LTFV 
investigation 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 
AFA, 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), which ruled that 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 Feili in this administrative review with 
PRC-wide entity margin from the LTFV investigation and used in the 
first administrative review of this case. The Department found that the 
margin of 70.71 percent was within the range of the highest margins 
calculated on the record of this administrative review. See memorandum 
to the file from Marin Weaver and Cathy Feig, International Trade 
Compliance Analysts, through Charles Riggle, Program Manager, Folding 
Metal Tables and Chairs from the PRC: Corroboration of the PRC-wide 
Adverse Facts-Available Rate, dated June 30, 2005. Because the record 
of this administrative review contains margins within the range of 
70.71 percent, we determine that the rate from LTFV investigation 
continues to be relevant for use in this administrative review.
    As the LTFV investigation margin is both reliable and relevant, we 
determine that it has probative value. As a result, the Department 
determines that the LTFV investigation margin is corroborated for the 
purposes of this administrative review and may reasonably be applied to 
the PRC-wide entity (including New-Tec and Wok and Pan), as AFA. 
Accordingly, we determine that the highest rate from any segment of 
this administrative proceeding, 70.71 percent, meets the corroboration 
criteria established in section 776(c) of the Act that secondary 
information have probative value.
    Because these are the preliminary results of review, the Department 
will consider all margins on the record at the time of the final 
results of review for the purpose of determining the most appropriate 
final margin for the PRC-wide entity. See Preliminary Determination of 
Sales at Less Than Fair Value: Solid Fertilizer Grade Ammonium Nitrate 
From the Russian Federation, 65 FR 1139 (January 7, 2000).
Export Price
    Because Feili sold 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 for Feili. From this price, we deducted amounts for foreign 
inland freight and brokerage and handling pursuant to section 
772(c)(2)(A) of the Act. We valued these deductions using surrogate 
values. We selected India as the primary surrogate country for the 
reasons explained in the ``Normal Value'' section of this notice.
Normal Value
    Section 773(c)(1) of the Act provides that, in the case of an NME, 
the Department shall determine normal value (NV) using an FOP 
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 FOP in accordance with sections 773(c)(3) and (4) of the Act 
and 19 CFR 351.408(c).
    Because we are using surrogate country FOP 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, 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 
September 28, 2004, memorandum entitled Request for a List of Surrogate 
Countries, which is available in the Department's Central Records Unit 
(CRU), room B099 of the main Commerce building). In addition, looking 
at United Nations export statistics, we found that India exported 
4,551,694 kilograms of comparable merchandise (i.e., FMTCs based on HTS 
numbers 9401.71, 9401.79, 9403.20, 9403.70) valued at USD 6,731,202. 
See http://unstats.un.org/unsd/comtrade. Therefore, India is a 
significant producer of comparable merchandise. Additionally, we are 
able to access Indian data that are contemporaneous

[[Page 39732]]

with this POR. As in the investigation and the previous review of this 
order, we have chosen India as the primary surrogate country and are 
using Indian prices to value the FOP.
    We selected, where possible, publicly available values from India 
that 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 NME countries as well as from 
South Korea, Thailand, and Indonesia. The Department has found that 
South Korea, Thailand, and Indonesia maintain broadly available, non-
industry-specific export subsidies. The existence of these subsidies 
provides sufficient reason to believe or suspect that export prices 
from these countries may be subsidized. 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 (Feb. 12, 
2002), and accompanying Issues and Decision Memorandum at Comment 1. 
Our practice of excluding subsidized prices has been upheld in China 
National Machinery Import and Export Corporation v. United States, 293 
F. Supp. 2d 1334, 1136 (CIT 2003).
Material Inputs
     To value hydrochloric acid used in the production of 
FMTCs, we used per-kilogram import values obtained from Chemical 
Weekly. We adjusted this value for taxes and to account for freight 
costs incurred between the supplier and each respondent, respectively.
     Where Feili had usable market-economy purchases that 
represented a meaningful portion of total purchases of each respective 
input (e.g., cold-rolled steel, polypropylene plastic resin, powder 
coating, and cartons), we valued these inputs with their respective 
per-kilogram purchase prices. Where applicable we also adjusted these 
values to account for freight costs incurred between the supplier and 
respondent.
     To value all other material inputs and carbon dioxide used 
in the production of FMTCs, we used per-kilogram import values obtained 
from the Monthly Statistics of the Foreign Trade of India (MSFTI), as 
published by the Directorate General of Commercial Intelligence and 
Statistics of the Ministry of Commerce and Industry, Government of 
India, and available from World Trade Atlas (WTA).\3\ We also adjusted 
these values to account for freight costs incurred between the supplier 
and respondent.
---------------------------------------------------------------------------

    \3\ Available at http://www.gtis.com/wta.htm.
---------------------------------------------------------------------------

     To value diesel oil, we used a per-kilogram value obtained 
from Bharat Petroleum for December 2003. See Memorandum to File: Factor 
Values Used for the Preliminary Results of the 2003-2004 Administrative 
Review'' (Factors Memorandum) (June 30, 2005). We also made adjustments 
to account for freight costs incurred between the supplier and 
respondent.
     To value electricity, we used the 2000 electricity price 
data from International Energy Agency, Energy Prices and Taxes - 
Quarterly Statistics (First Quarter 2003), available at http://www.eia.doe.gov/emeu/international/elecprii.html.
     To value water, we used the Revised Maharashtra Industrial 
Development Corporation (MIDC) water rates for June 1, 2003, available 
at http://www.midcindia.com/water_supply.
     For labor, we used the regression-based wage rate for the 
PRC in ``Expected Wages of Selected NME Countries,'' available 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 Godrej and 
Boyce Manufacturing Co. Ltd (2003-2004). 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 and made adjustments to account for freight 
costs incurred between the PRC supplier and respondent.
     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 (Oct. 3, 2001).
     To value truck freight, we used the freight rates 
published by Indian Freight Exchange available at http://www.infreight.com.
    Where necessary, we adjusted the surrogate values to reflect 
inflation/deflation using the Indian Wholesale Price Index (WPI) as 
published on the Reserve Bank of India (RBI) website, available at 
www.rbi.org.in. For a complete description of the factor values we 
used, see the 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 margins 
exist:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Feili......................................................         7.02
PRC-Wide (including New-Tec and Wok and Pan)...............        70.71
------------------------------------------------------------------------

    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 and 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

[[Page 39733]]

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 FMTCs 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 Feili, which has a separate rate, the cash deposit rate will be the 
company-specific rate established in the final results of the review; 
(2) the cash deposit rates for any other companies, that have separate 
rates established in the investigation or first administrative review 
of this case, but were not reviewed in this proceeding, will not 
change; (3) for all other PRC exporters, the cash deposit rate will be 
the PRC rate, 70.71 percent, which is the ``All Other PRC 
Manufacturers, Producers and Exporters'' rate from the Notice of Final 
Determination of Sales of Less Than Fair Value: Folding Metal Tables 
and Chairs from the People's Republic of China, 67 FR 20090 (Apr. 24, 
2002); and (4) 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: June 30, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-3653 Filed 7-8-05; 8:45 am]
BILLING CODE 3510-DS-S