[Federal Register Volume 70, Number 245 (Thursday, December 22, 2005)]
[Notices]
[Pages 76027-76030]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-7703]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-506]


Porcelain-on-Steel Cooking Ware 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: The Department of Commerce (``the Department'') is conducting 
an administrative review of the antidumping duty order on porcelain-on-
steel cooking ware from the People's Republic of China (``PRC''). The 
Department has preliminarily determined that Shanghai Watex Metal 
Products Co. Ltd. (``Watex''), the only respondent in this review, is 
not entitled to a separate rate. In addition, the Department has 
determined to apply adverse facts available to Watex. If these 
preliminary results are adopted in the final results of this review, 
the Department will instruct U.S. Customs and Border Protection 
(``CBP'') to assess antidumping duties on entries of subject 
merchandise during the period of review (``POR''). Interested parties 
are invited to comment on these preliminary results. See the 
``Preliminary Results of Review'' section of this notice.

EFFECTIVE DATE: December 22, 2005.

FOR FURTHER INFORMATION CONTACT: P. Lee Smith or Scot Fullerton, AD/CVD 
Operations, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230; telephone: (202) 482-1655 or (202) 482-1386, 
respectively.

SUPPLEMENTARY INFORMATION:

Background

    In response to a request from Columbian Home Products, LLC 
(``petitioner''), the Department of Commerce (the ``Department'') 
initiated an administrative review of Shanghai Watex Metal Products 
Co., Ltd.'s (``Watex'') exports of merchandise covered by the 
antidumping duty order on porcelain-on-steel cooking ware from the PRC. 
See Initiation of Antidumping and Countervailing Duty Administrative 
Reviews, 70 FR 4818 (January 31, 2005) (``Initiation Notice'').
    On February 3, 2005, the Department issued its antidumping duty 
questionnaire to Watex, and received the company's response to section 
A on February 24, 2005, and sections C and D on March 14, 2005. The 
Department issued additional supplemental questionnaires to Watex and 
received responses on April 11, May 23, July 19, September 12, and 
October 5, 2005.
    The Department conducted verification of Watex's questionnaire 
responses from October 24 to October 26, 2005. See ``Verification 
Report for Shanghai Watex Metal Co., Ltd.,'' dated December 12, 2005 
(``Watex Verification Report''). The Department conducted verification 
of Watex's questionnaire responses regarding its producer Shanghai Ping 
An Enamel Products Co. (``Ping An''), from October 26 to October 28, 
2005. See ``Verification Report for Shanghai Ping An Enamel Products 
Co.,'' dated December 12, 2005 (``Ping An Verification Report''). On 
December 13, 2005, petitioner submitted comments on the Department's 
verification reports.

Period of Review

    The POR is December 1, 2003, through November 30, 2004.

Scope of Order

    The merchandise covered by this order is porcelain-on-steel cooking 
ware from the PRC, including tea kettles, which do not have self-
contained electric heating elements. All of the foregoing are 
constructed of steel and are enameled or glazed with vitreous glasses. 
The merchandise is currently classifiable under the United States 
Harmonized Tariff Schedule (``USHTS'') item 7323.94.00. USHTS item 
numbers are provided for convenience and customs purposes. The written 
description of the scope remains dispositive.

Non-Market Economy

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (``NME''). Pursuant to 
section 771(18)(C)(i) of Tariff Act of 1930, as amended (``the Act''), 
any determination that a foreign country is an NME country shall remain 
in effect until revoked by the administering authority. See Fresh 
Garlic from the People's Republic of China: Preliminary Results of 
Antidumping Duty Administrative Review and Rescission in Part, 69 FR 
70638 (December 7, 2004). None of the parties to this proceeding has 
contested such treatment. Accordingly, we calculated normal value 
(``NV'') in accordance with section 773(c) of the Act, which applies to 
NME countries.

Surrogate Country

    On April 15, 2005, the Department provided interested parties the 
opportunity to submit comments regarding the selection of a surrogate 
country and factor valuation in these preliminary results. On July 1, 
2005, Watex submitted publicly available information for factor 
valuation. In its submission, Watex included publicly available 
Indonesian import statistics obtained from the World Trade Atlas. On 
May 6, 2005, petitioner submitted publicly available information for 
surrogate country selection. In its submission, petitioner argued that 
India should be selected as the surrogate country in this review 
because India is at a comparable level of economic development to the 
PRC, a significant

[[Page 76028]]

producer of comparable merchandise, and has better availability and 
quality of data to value the factors of production than Indonesia. On 
August 5, 2005, petitioner submitted publicly available information for 
factor valuation. In its submission, petitioner included the financial 
statements for Kishco Cutlery Ltd., an Indian producer of comparable 
merchandise, and publicly available Indian import statistics. On 
September 29, 2005, the Department issued a supplemental questionnaire 
requesting both petitioner and respondent to clarify their surrogate 
value submissions. On October 5, 2005, petitioner and respondent 
submitted their responses to the Department's surrogate value 
supplemental questionnaire. The Department received no other comments 
regarding surrogate country or factor valuation.
    Section 773(c)(4) of the Act requires the Department to value an 
NME producer's factors of production (``FOP''), to the extent possible, 
in one or more market-economy countries that: (1) are at a level of 
economic development comparable to that of the NME country; and (2) are 
significant producers of comparable merchandise. Import 
Administration's Office of Policy issued a memorandum listing 
appropriate surrogate countries. See Memorandum from Ron Lorentzen to 
Carrie Blozy regarding the Administrative Review of Porcelain-on-Steel 
Cooking Ware (``Cooking Ware'') from the People's Republic of China 
(PRC): Request for a List of Surrogate Countries, dated April 5, 2005. 
The memorandum lists five countries, including India and Indonesia. In 
previous reviews of this order the Department has chosen Indonesia as a 
surrogate country for the PRC. However, during this review, information 
was placed on the record demonstrating that India was a more 
appropriate surrogate country. Based on this information, the 
Department has selected India as the primary surrogate country for 
purposes of this review. For further discussion of our surrogate 
country selection, see Memorandum from Joshua T. Pierce through 
Christopher Riker and James C. Doyle to the File regarding the 
Antidumping Duty Administrative Review of Porcelain-on-Steel Cooking 
Ware from the People's Republic of China: Selection of a Surrogate 
Country, dated December 9, 2005.

Verification

    As provided in section 782(i) of the Act, the Department conducted 
verification of the responses of Watex. The Department verified the 
questionnaire responses of Watex from October 24, 2005, through October 
26, 2005, and its affiliated producer, Ping An, from October 26, 2005, 
through October 28, 2005, using standard verification procedures, 
including on-site inspection of the manufacturer's facilities and the 
examination of relevant sales and financial records. For more 
information, see Watex Verification Report, Ping An Verification 
Report, and the ``Application of Adverse Facts Available'' section 
below.
    The verification results are on file in the main Department of 
Commerce building, in the Central Records Unit, Room B-099.

Separate Rates

    To establish whether a company operating in an NME is sufficiently 
independent from government control to be entitled to a separate rate, 
the Department analyzes each exporting entity under the test 
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), as amplified by the Final Determination of Sales at Less Than 
Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 
22585 (May 2, 1994). Under the separate rates criteria, the Department 
assigns separate rates in NME cases only if the respondent can 
demonstrate the absence of both de jure and de facto governmental 
control over export activities.

De Jure Control

    Evidence supporting, though not requiring, a finding of absence of 
de jure government control over export activities includes: (1) an 
absence of restrictive stipulations associated with an individual 
exporter's business and export licenses; (2) any legislative enactments 
decentralizing control of companies; and (3) any other formal measures 
by the government decentralizing control of companies.
    In its questionnaire responses, Watex stated that it is an 
independent legal entity. The business license of Watex indicates that 
it is permitted to engage in the exportation of porcelain-on-steel 
cooking ware. Evidence placed on the record provides no indication of 
de jure governmental control restricting Watex's exportation of 
porcelain-on-steel cooking ware. Specifically, the Company Law of the 
People's Republic of China, made effective on July 1, 1994, with the 
amended version promulgated on August 28, 2004, states that a company 
is an enterprise legal person, that shareholders shall assume liability 
towards the company to the extent of their shareholdings and that the 
company shall be liable for its debts to the extent of all its assets. 
Therefore, based on the record evidence, the Department preliminarily 
determines that there is an absence of de jure control over the export 
activities of Watex.

De Facto Control

    A determination of absence of de facto government control over 
exports is based on the following 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 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 
Final Determination of Sales at Less than Fair Value: Certain Cut-to-
Length Carbon Steel Plate from Ukraine, 62 FR 61754, 61758 (November 
19, 1997).
    Watex asserted the following: (1) it establishes its own export 
prices; (2) it negotiates contracts without guidance from any 
governmental entities or organizations; (3) it makes its own personnel 
decisions; and (4) it retains the proceeds of its export sales, uses 
profits according to its business needs, and has the authority to sell 
its assets and to obtain loans. However, Watex provided the Department 
with information about its corporate structure and ownership that could 
not be verified and withheld information regarding an affiliate. See 
Memorandum from James C. Doyle to Stephen J. Claeys: Porcelain-On-Steel 
Cooking Ware from the People's Republic of China: Preliminary 
Application of Adverse Facts Available to Shanghai Watex Metal Products 
Co., Ltd., dated December 15, 2005 (``AFA Memo''). Because we have been 
unable to fully analyze Watex's corporate structure due to the 
respondent's uncooperativeness, and have been unable to establish who 
the true owners of the respondent are, the Department must conclude 
that the company has not satisfactorily demonstrated it has the ability 
to select its own management and make personnel decisions, as well as 
to make its own decisions on the use of its profits, independent of any 
governmental authority. Therefore, the Department has determined that 
Watex has not demonstrated that it qualifies for a separate rate. 
Because Watex did not

[[Page 76029]]

demonstrate its eligibility for a separate rate, we have preliminarily 
determined that it is part of the PRC-wide entity. In the initiation 
notice, the Department stated that if one of the companies that we 
initiated a review for does not qualify for a separate rate, all other 
exporters of porcelain-on-steel cooking ware from the PRC who have not 
qualified for a separate rate are deemed to be covered by this review 
as part of the single PRC-wide entity, of which the named exporter is a 
part. See Initiation Notice at footnote 3. Watex did not demonstrate 
its eligibility for a separate rate; therefore, the Department finds 
that Watex is part of the PRC-wide entity. As a result, we determine 
that it is necessary to review the single PRC entity, including Watex, 
in this segment of the proceeding. As adverse facts available 
(``AFA''), the Department is assigning the rate of 66.65 percent to the 
PRC entity, the highest rate determined in any previous segment of this 
proceeding.

Application of Adverse Facts Available

    Pursuant to sections 776(a)(2)(A), (C) and (D), and section 776(b) 
of the Act, the Department determines that the application of total AFA 
is warranted for the PRC-wide entity, including Watex. When an 
interested party withholds information that has been requested by the 
Department, significantly impedes the proceeding, or provides 
information, but that information cannot be verified, sections 
776(a)(2)(A), (C) and (D) of the Act provide for the use of facts 
otherwise available. Specifically, the Department could not verify the 
information regarding Watex's corporate structure and ownership due to 
the company's failure to provide the Department with a complete and 
official version of the capital verification report or signed copies of 
the company's articles of association and joint venture agreement that 
established Watex. Watex withheld specifically requested information 
concerning the existence of an affiliate. Finally, Watex significantly 
impeded the proceeding by repeatedly making inaccurate statements 
concerning the interests of various owners in both their questionnaire 
responses and at verification. See Watex Verification Report. The 
Department finds that facts available, pursuant to sections 
776(a)(2)(A), (C) and (D), is warranted.
    Section 776(b) of the Act provides that if the Department 
determines that a party has failed to cooperate to the best of its 
ability, in selecting from among the facts available, the Department 
may use an inference that is adverse to the interests of that party. 
The Department finds that by not providing accurate information 
regarding affiliates of Watex despite multiple opportunities to do so 
and by failing to provide the Department with information regarding its 
corporate structure and ownership that could be verified, Watex failed 
to cooperate to the best of its ability. For a detailed analysis of the 
Department's decision to apply AFA, see AFA Memo.

Selection of AFA 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. In reviews, it is the 
Department's practice to select, as AFA, the highest rate determined 
for any respondent in any segment of the proceeding. See, e.g., 
Freshwater Crawfish Tail Meat from the People's Republic of China; 
Notice of Final Results of Antidumping Duty Administrative Review, 68 
FR 19504 (April 21, 2003).
    The Court of International Trade (``CIT''') and 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''); NSK Ltd. v. United States, 346 F. Supp. 2d 1312, 1335 (Ct. 
Int'l Trade 2004) (upholding a 73.55% total AFA rate, the highest 
available dumping margin from a different respondent in a less than 
fair value investigation); see also Kompass Food Trading Int'l v. 
United States, 24 CIT 678, 689 (2000) (upholding a 51.16% total AFA 
rate, the highest available dumping margin from a different, fully 
cooperative respondent); and Shanghai Taoen International Trading Co., 
Ltd. v. United States, Slip Op. 05-22, at 16 (CIT February 17, 2005) 
(upholding a 223.01% 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 Statement of Administrative Action (``SAA'') 
accompanying the URAA, H.R. Rep. No. 103-316 at 870 (1994). 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 respondent's 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.
    Consistent with the statute, court precedent, and its practice, the 
Department has assigned the rate of 66.65 percent, the highest rate 
calculated in any segment of the proceeding, to Watex as AFA. See, 
e.g., Rescission of Second New Shipper Review and Final Results and 
Partial Rescission of First Antidumping Duty Administrative Review: 
Brake Rotors from the People's Republic of China, 64 FR 61581, 61584 
(November 12, 1999). As discussed further below, this rate has been 
corroborated.

Corroboration of Secondary Information Used as AFA

    Section 776(c) of the Act provides that when the Department relies 
on 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. The SAA states that ``corroborate'' means to 
determine that the information used has probative value. See SAA at 
870. The Department has determined that to have probative value, 
information must be reliable and relevant. See Tapered Roller Bearings 
and Parts Thereof, Finished and Unfinished from Japan: Preliminary 
Results of Antidumping Duty Administrative Reviews and Partial 
Termination of Administrative Reviews, 61 FR 57391, 57392 (November 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

[[Page 76030]]

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).
    To be considered corroborated, information must be found to be both 
reliable and relevant. Unlike other types of information, such as input 
costs or selling expenses, there are no independent sources for 
calculated dumping margins. The only sources for calculated margins are 
administrative determinations. The information upon which the AFA rate 
we are applying for the current review was calculated during the Less 
Than Fair Value Investigation. See Porcelain-on-Steel Cooking Ware from 
the People's Republic of China; Final Determination of Sales at Less 
Than Fair Value, 51 FR 36419 (October 10, 1986) (``LTFV 
Investigation''). Furthermore, the AFA rate we are applying for the 
current review was applied in reviews subsequent to the LTFV 
Investigation and the Department received no information that warranted 
revisiting the issue. See, e.g., Porcelain-On-Steel Cookware from the 
People's Republic of China; Notice of Final Results of Antidumping Duty 
Administrative Review, 62 FR 54825 (October 22, 1997). No information 
has been presented in the current review that calls into question the 
reliability of this information. Thus, the Department finds that the 
information is reliable.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department will disregard the margin and determine an 
appropriate margin. Similarly, the Department does not apply a margin 
that has been discredited. See D &L Supply Co. v. United States, 113 
F.3d 1220, 1221 (Fed. Cir. 1997) (the Department will not use a margin 
that has been judicially invalidated). None of these circumstances are 
present here. Accordingly, we determine that the highest rate from any 
segment of this administrative proceeding, 66.65 percent, meets the 
corroboration criteria established in section 776(c) of the Act that 
secondary information have probative value.

Preliminary Results of the Review

    The Department preliminarily finds that the following margins exist 
for the following exporters under review during the period December 1, 
2003, through November 30, 2004:

              Porcelain-on-Steel Cooking Ware from the PRC
------------------------------------------------------------------------
                                                       Weighted-Average
                Manufacturer/Exporter                  Margin (Percent)
------------------------------------------------------------------------
PRC-wide Rate.......................................               66.65
------------------------------------------------------------------------

    Case briefs from interested parties may be submitted not later than 
January 17, 2006, pursuant to 19 CFR 351.309(c). Rebuttal briefs, 
limited to issues raised in the case briefs, will be due not later than 
January 24, 2006, pursuant to 19 CFR 351.309(d). Parties who submit 
case briefs or rebuttal briefs in this proceeding are requested to 
submit with each argument: (1) a statement of the issue; and (2) a 
brief summary of the argument. Parties are also encouraged to provide a 
summary of the arguments not to exceed five pages and a table of 
statutes, regulations and cases cited. Any interested party may request 
a hearing within 30 days of publication of this notice.
    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, Room B-099, within 30 days of the 
date of publication of this notice. Requests should include: (1) the 
party's name, address, and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed. See 19 CFR 
351.310(c). Issues raised in the hearing will be limited to those 
raised in case briefs and rebuttal briefs.
    The Department will issue the final results of this administrative 
review, including the results of its analysis of issues raised in any 
such written briefs or at the hearing, if held, no later than 120 days 
after the date of publication of this notice.

Assessment of Antidumping Duties

    The Department will determine, and CBP shall assess, antidumping 
duties on all appropriate entries. The Department will issue 
appropriate assessment instructions directly to CBP within 15 days of 
publication of the final results of this review.

Cash Deposits

    The following cash-deposit requirements will be effective upon 
publication of the final results for shipments of the subject 
merchandise entered, or withdrawn from warehouse, for consumption on or 
after the publication date of the final results, as provided by section 
751(a)(2)(C) of the Act: (1) For subject merchandise exported by the 
PRC, including Watex, the cash-deposit rate will be equal to 66.65 
percent; (2) the cash-deposit rate for PRC exporters who received a 
separate rate in a prior segment of the proceeding will continue to be 
the rate assigned in that segment of the proceeding; (3) for all other 
PRC exporters of subject merchandise which have not been found to be 
entitled to a separate rate, the cash-deposit rate will be the PRC-wide 
rate of 66.65 percent; (4) for all non-PRC exporters of subject 
merchandise, the cash-deposit rate will be the rate applicable to the 
PRC exporter that supplied that exporter.
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this 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 administrative review and notice is in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(4).

    Dated: December 15, 2005.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-7703 Filed 12-21-05; 8:45 am]
BILLING CODE 3510-DS-S