[Federal Register Volume 70, Number 249 (Thursday, December 29, 2005)]
[Notices]
[Pages 77121-77135]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-24627]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-570-900)


Preliminary Determination of Sales at Less Than Fair Value, 
Postponement of Final Determination, and Preliminary Partial 
Determination of Critical Circumstances: Diamond Sawblades and Parts 
Thereof from the People's Republic of China

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

EFFECTIVE DATE: December 29, 2005.
SUMMARY: We preliminarily determine that diamond sawblades and parts 
thereof (``diamond sawblades'') from the People's Republic of China 
(``PRC'') are being, or are likely to be, sold in the United States at 
less than fair value (``LTFV''), as provided in section 733 of the 
Tariff Act of 1930, as amended (``the Act''). The estimated margins of 
sales at LTFV are shown in the ``Preliminary Determination'' section of 
this notice.

FOR FURTHER INFORMATION CONTACT: Catherine Bertrand or Anya Naschak, 
AD/CVD Operations, Office 9, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC, 20230; telephone: (202)482-
3207 or 482-6375, respectively.

SUPPLEMENTARY INFORMATION:

Case History

    On May 3, 2005, the Department of Commerce (``Department'') 
received a petition on imports of diamond sawblades from the People's 
Republic of China (``PRC'') and the Republic of Korea (``Korea'') from 
the Diamond Sawblade Manufacturers' Coalition (``Petitioner'') on 
behalf of the domestic industry and workers producing diamond 
sawblades. This investigation was initiated on June 21, 2005. See 
Initiation of Antidumping Duty Investigations: Diamond Sawblades and 
Parts Thereof from the People's Republic of China and the Republic of 
Korea, 70 FR 35625 (June 21, 2005) (``Initiation Notice''). 
Additionally, in the Initiation Notice, the Department notified parties 
that it would apply a new process by which exporters and producers may 
obtain separate-rate status in non-market economy (``NME'') 
investigations. The new process requires exporters and producers to 
submit a separate-rate status application. See Policy Bulletin 05.1: 
Separate-Rates Practice and Application of Combination Rates in 
Antidumping Investigations involving Non-Market Economy Countries, 
(April 5, 2005), (``Policy Bulletin 05.1'') available at http://ia.ita.doc.gov. However, the standard for eligibility for a separate 
rate (which is whether a firm can demonstrate an absence of both de 
jure and de facto governmental control over its export activities) has 
not changed. Since the initiation of this investigation the following 
events have occurred.
    The Department set aside a period for all interested parties to 
raise issues regarding product coverage. Between September 16, 2005, 
and November 23, 2005, Petitioner, Ehwa Diamond Industrial Co., Ltd. 
(``Ehwa''), and Diamax Industries, Inc., filed comments and rebuttal 
comments proposing clarifications to the scope of this investigation.
    On June 21, 2005, the Department requested quantity and value 
(``Q&V'') information from a total of twenty-three companies that 
Petitioner identified as potential producers and/or exporters of 
diamond sawblades from the PRC. Also on June 21, 2005, the Department 
sent a letter requesting Q&V information to the China Bureau of Fair 
Trade for Imports & Exports (``BOFT'') of the Ministry of Commerce 
(``MOFCOM'') requesting that BOFT transmit the letter to all companies 
who manufacture and export subject merchandise to the United States, or 
produce the subject merchandise for the companies who were engaged in 
exporting the subject merchandise to the United States during

[[Page 77122]]

the POI. For a complete list of all parties from which the Department 
requested Q&V information, see Memorandum to James C. Doyle, Director, 
AD/CVD Operations, Office 9, from Carrie Blozy, Program Manager, AD/CVD 
Operations, Office 9: Selection of Respondents for the Antidumping 
Investigation of Diamond Sawblades and Parts Thereof from the People's 
Republic of China, dated July 19, 2005 (``Respondent Selection Memo''). 
Between July 5, 2005, and July 15, 2005, the Department received Q&V 
responses from twenty-five interested parties. For a list of the 
parties that responded to the Department's Q&V letter, see Respondent 
Selection Memo. The Department did not receive any type of 
communication from BOFT regarding its request for Q&V information. See 
Respondent Selection Memo.
    On July 18, 2005, the United States International Trade Commission 
(``ITC'') issued its affirmative preliminary determination that there 
is a reasonable indication that an industry in the United States is 
materially injured or threatened with material injury by reason of 
imports from the PRC of diamond sawblades. The ITC's determination was 
published in the Federal Register on July 29, 2005. See Investigation 
Nos. 731-TA-1093 (Preliminary), Diamond Sawblades and Parts Thereof 
from China and Korea, 70 FR 43903 (July 29, 2005).
    On July 19, 2005, the Department selected Bosun Tools Group Co., 
Ltd. (``Bosun''), Beijing Gang Yan Diamond Product Company (``BGY''), 
Hebei Jikai Industrial Group Co. Ltd. (``Hebei Jikai''), and Saint-
Gobain Abrasives (Shanghai) Co., Ltd. (``Saint Gobain'') as mandatory 
respondents in this investigation. See Respondent Selection Memo.
    On July 21, 2005, the Department determined that India, Indonesia, 
Sri Lanka, the Philippines, and Egypt are countries comparable to the 
PRC in terms of economic development. See Memorandum from Ron 
Lorentzen, Acting Director, Office of Policy, to Carrie Blozy, Program 
Manager, China/NME Group, Office 9: Antidumping Investigation of 
Diamond Sawblades and Parts Thereof from the People's Republic of China 
(PRC): Request for a List of Surrogate Countries, dated July 21, 2005 
(``Office of Policy Surrogate Countries Memorandum'').
    On July 14, 2005, the Department requested comments from all 
interested parties on proposed product characteristics and model match 
criteria to be used in the designation of control numbers (``CONNUMs'') 
to be assigned to the subject merchandise. The Department received 
comments from BGY, Bosun, Hebei Jikai, Petitioner, Shinhan Diamond 
Industrial Co., Ltd and SH Trading Inc. (collectively ``Shinhan''), and 
Ehwa Diamond Industrial Co., Ltd. (``Ehwa''). On August 5, 2005, the 
Department released the product characteristics and model match 
criteria to be used in the designation of CONNUMs to be assigned the 
subject merchandise.
    On August 8, 2005, the Department informed parties of an error in 
one of the model match fields, and corrected the mistake.
    On July 26, 2005, the Department invited interested parties to 
comment on the Department's surrogate country selection and/or 
significant production in the potential surrogate countries and to 
submit publicly available information to value the factors of 
production. On August 16, 2005, we received comments regarding the 
selection of a surrogate country from Petitioner. No other interested 
parties commented on the selection of a surrogate country. For a 
detailed discussion of the selection of the surrogate country, see 
``Surrogate Country'' section below, and the Memorandum to the File 
through James C. Doyle, Director, AD/CVD Operations, Office 9, from 
Carrie Blozy, Program Manager, AD/CVD Operations, Office 9: Antidumping 
Duty Investigation of Diamond Sawblades and Parts Thereof from the 
People's Republic of China: Selection of a Surrogate Country dated 
December 20, 2005 (``Surrogate Country Memo'').
    On November 15, 2005, Petitioner, BGY, Bosun, and Hebei Jikai 
submitted comments on surrogate information with which to value the 
factors of production in this proceeding. Petitioner filed additional 
comments on December 1, 2005, and December 2, 2005, December 5, 2005, 
December 14, 2005, and December 16, 2005. Bosun filed additional 
comments on December 1, 2005, and December 6, 2005. The Department was 
unable to take into account the comments submitted by Petitioner on 
December 14, 2005, and December 16, 2005, because they were filed less 
than one week before the preliminary determination.
    On July 21, 2005, we received separate rate applications from 
sixteen companies, including one mandatory respondent, Hebei Jikai. On 
August 12, 2005, the Department notified these firms that their 
applications were incomplete or otherwise deficient. Four additional 
companies received notification on August 12, 2005, that, as their 
applications were not filed by the thirty-day deadline set forth in the 
application, they would not receive a full deficiency letter, though 
these applicants received general guidelines upon which the Department 
would review their applications. On August 22, 2005, the Department 
received re-filings from the twenty applicants to which the Department 
sent either deficiency or guidelines letters, and an additional four 
applications. For a complete list of all applications received, see 
Memorandum to James C. Doyle, Director, AD/CVD Operations, Office 9, 
from Carrie Blozy, Program Manager, AD/CVD Operations, Office 9: 
Antidumping Investigation of Diamond Sawblades and Parts Thereof from 
the People's Republic of China: Deficient Separate Rate Applications, 
dated October 12, 2005 (``Deficient Applications Memo''), at Attachment 
1. On September 22, 2005 and September 23, 2005, the Department 
informed the seventeen applicants whose applications were considered 
complete by the sixty-day deadline established by the application 
(``Separate Rate Applicants''), that they would be considered for a 
separate rate,\1\ and requested that they file the addendum required by 
the application. See Letter to All Interested Parties from James C. 
Doyle, Director, AD/CVD Operations, Office 9, dated September 22, 2005 
(``Addendum Letter''); Memorandum to the File from Candice Weck, Case 
Analyst: Investigation of Diamond Sawblades and Parts Thereof from the 
People's Republic of China: Separate Rate Applications, dated September 
23, 2005. On October 12, 2005, the Department informed six companies 
that submitted applications of the reasons their applications were 
considered incomplete for purposes of a separate rates analysis. See 
Deficient Applications Memo.
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    \1\ Danyang NYCL Tools Manufacturing Co., Ltd., Danyang Youhe 
Manufacturing Co. Ltd., Fujian Quanzhou Wanlong Stone Co. Ltd., 
Guilin Tebon Superhard Material Co. Ltd., Huzhou Gu Import & Export 
Co., Ltd, Jiangsu Fengtai Diamond Tools Manufacturing Co. Ltd., 
Jiangyin LIKN Industry Co. Ltd., Quanzhou Zhongzhi Diamond Tool Co., 
Ltd., Rizhao Hein Saw Co. Ltd., Shanghai Deda Industry & Trading Co. 
Ltd., Sichuan Huili Tools Co., Weihai Xiangguang Mechanical 
Industrail Co., Ltd., Wuhan Wanbang Laser Diamond Tools Company, 
Ltd., Xiamen ZL Diamond Tools Co. Ltd., Zhejiang Tea Import & Export 
Co. Ltd., Zhejiang Wanli Tools Group Co., Ltd. (``Wanli''), and 
Zhenjiang Inter-China Import & Export Co., Ltd.
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    On July 28, 2005, the Department issued its Sections A, C, D, and 
E, questionnaire to Bosun, BGY, Hebei Jikai, and Saint Gobain. On 
September 1, 2005, the Department received a letter from Saint Gobain, 
informing the Department that Saint Gobain would not be responding to 
the Department's request for information in this investigation, and 
accordingly would

[[Page 77123]]

not be filing questionnaire responses. The Department issued 
supplemental questionnaires to Bosun, BGY, and Hebei Jikai between 
September and December 2005, and received responses between September 
and December 2005.
    On September 2, 2005, and September 8, 2005, Petitioner requested 
that the Department select additional mandatory respondents in this 
investigation. The Department informed Petitioner on September 14, 
2005, that no additional companies would be selected as mandatory 
respondents. See Letter from Carrie Blozy, Program Manager, AD/CVD 
Operations, Office 9, to Daniel Pickard of Wiley Rein and Fielding, 
counsel for Petitioner, dated September 14, 2005.
    On September 26, 2005, Petitioner made a timely request pursuant to 
19 CFR Sec.  351.205(e) for a fifty-day postponement of the preliminary 
determination, until December 20, 2005. On October 13, 2005, the 
Department published a postponement of the preliminary antidumping duty 
determination on diamond sawblades from the PRC. See Notice of 
Postponement of Preliminary Determinations of Antidumping Duty 
Investigations: Diamond Sawblades and Parts Thereof from the People's 
Republic of China (A-570-900) and the Republic of Korea (A-580-855), 70 
FR 59719 (October 13, 2005).
    On November 21, 2005, Petitioner alleged that there is a reasonable 
basis to believe or suspect critical circumstances exist with respect 
to the antidumping investigation of diamond sawblades from the PRC. On 
November 22, 2005, the Department issued questionnaires requesting data 
for monthly exports to the United States from January 2002 through 
October 2005 from Bosun, BGY, and Hebei Jikai, and received responses 
on November 30, and December 2, 2005, from Bosun, BGY, and Hebei Jikai. 
See Critical Circumstances section, below.

Postponement of Final Determination

    Section 735(a) of the Act provides that a final determination may 
be postponed until no later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise or, in the event of a negative 
preliminary determination, a request for such postponement is made by 
the Petitioners. The Department's regulations at 19 CFR 351.210(e)(2) 
require that requests by respondents for postponement of a final 
determination be accompanied by a request for an extension of the 
provisional measures from a four-month period to not more than six 
months.
    On December 19, 2005, Bosun requested that, in the event of an 
affirmative preliminary determination in this investigation, the 
Department postpone its final determination by 60 days until 135 days 
after the publication of the preliminary determination. Additionally, 
Bosun requested that the Department extend the provisional measures 
under Section 733(d) of the Act. Accordingly, because we have made an 
affirmative preliminary determination and the requesting parties 
account for a significant proportion of the exports of the subject 
merchandise, pursuant to 735(a)(2) of the Act, we have postponed the 
final determination until no later than 135 days after the date of 
publication of the preliminary determination and are extending the 
provisional measures accordingly.

Period of Investigation

    The POI is October 1, 2004, through March 31, 2005. This period 
corresponds to the two most recent fiscal quarters prior to the month 
of the filing of the petition (May 3, 2005). See 19 CFR 351.204(b)(1).

Scope of Investigation

    The products covered by this investigation are all finished 
circular sawblades, whether slotted or not, with a working part that is 
comprised of a diamond segment or segments, and parts thereof, 
regardless of specification or size, except as specifically excluded 
below. Within the scope of this investigation are semifinished diamond 
sawblades, including diamond sawblade cores and diamond sawblade 
segments. Diamond sawblade cores are circular steel plates, whether or 
not attached to non-steel plates, with slots. Diamond sawblade cores 
are manufactured principally, but not exclusively, from alloy steel. A 
diamond sawblade segment consists of a mixture of diamonds (whether 
natural or synthetic, and regardless of the quantity of diamonds) and 
metal powders (including, but not limited to, iron, cobalt, nickel, 
tungsten carbide) that are formed together into a solid shape (from 
generally, but not limited to, a heating and pressing process).
    Sawblades with diamonds directly attached to the core with a resin 
or electroplated bond, which thereby do not contain a diamond segment, 
are not included within the scope of the investigation. Diamond 
sawblades and/or sawblade cores with a thickness of less than 0.025 
inches, or with a thickness greater than 1.1 inches, are excluded from 
the scope of the investigation. Circular steel plates that have a 
cutting edge of non-diamond material, such as external teeth that 
protrude from the outer diameter of the plate, whether or not finished, 
are excluded from the scope of this investigation. Diamond sawblade 
cores with a Rockwell C hardness of less than 25 are excluded from the 
scope of the investigation. Diamond sawblades and/or diamond segment(s) 
with diamonds that predominantly have a mesh size number greater than 
240 (such as 250 or 260) are excluded from the scope of the 
investigation.
    Merchandise subject to this investigation is typically imported 
under heading 8202.39.00.00 of the Harmonized Tariff Schedule of the 
United States (``HTSUS''). When packaged together as a set for retail 
sale with an item that is separately classified under headings 8202 to 
8205 of the HTSUS, diamond sawblades or parts thereof may be imported 
under heading 8206.00.00.00 of the HTSUS. The tariff classifications 
are provided for convenience and U.S. Customs and Border Protection 
purposes; however, the written description of the scope of this 
investigation is dispositive.

Scope Comments

    As described in the preamble to our regulations (see Antidumping 
Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997)), we 
set aside a period of time for parties to raise issues regarding 
product coverage and encouraged all parties to submit comments within 
20 calendar days of publication of the Initiation Notice.
    The Department received numerous scope comments from a variety of 
interested parties. As part of this process, the Department has fully 
summarized and addressed all of the comments received to date in a 
memorandum to the file. See Memorandum to Stephen J. Claeys from Thomas 
F. Futtner, Acting Office Director: Antidumping Investigation of 
Certain Diamond Sawblades and Parts Thereof from the Republic of Korea 
and the People's Republic of China: Consideration of Scope Exclusion 
and Clarification Requests, dated December 20, 2005 (``Scope 
Memorandum'').
    For this preliminary determination, the Department has determined 
not to revise the scope of the investigation.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual weighted-average dumping margins for

[[Page 77124]]

each known exporter and producer of the subject merchandise. Section 
777A(c)(2) of the Act gives the Department discretion, when faced with 
a large number of exporters/producers, to limit its examination to a 
reasonable number of such companies if it is not practicable to examine 
all companies. Where it is not practicable to examine all known 
producers/exporters of subject merchandise, this provision permits the 
Department to investigate either (A) a sample of exporters, producers, 
or types of products that is statistically valid based on the 
information available to the Department at the time of selection or (B) 
exporters/producers accounting for the largest volume of the 
merchandise under investigation that can reasonably be examined. After 
consideration of the complexities expected to arise in this proceeding 
and the resources available to it, the Department determined that it 
was not practicable in this investigation to examine all known 
producers/exporters of subject merchandise. Instead, we limited our 
examination to the four exporters accounting for the largest volume of 
shipments of the subject merchandise to the United States during the 
POI pursuant to section 777A(c)(2)(B) of the Act. Bosun, BGY, Hebei 
Jikai, and Saint Gobain, the exporters accounting for the largest 
volume of exports to the United States, account for a significant 
percentage of all exports of the subject merchandise from the PRC 
during the POI and were selected as mandatory respondents. See 
Respondent Selection Memo at 3.

Critical Circumstances

    On November 21, 2005, Petitioner alleged that there is a reasonable 
basis to believe or suspect critical circumstances exist with respect 
to the antidumping investigations of diamond sawblades and parts 
thereof from the PRC. On November 30, 2005, and December 2, 2005, 
Bosun, BGY, and Hebei Jikai submitted information on their exports from 
January 2002 through October 2005 as requested by the Department. In 
accordance with 19 C.F.R. 351.206(c)(2)(i), because Petitioner 
submitted critical circumstances allegations more than 20 days before 
the scheduled date of the preliminary determination, the Department 
must issue preliminary critical circumstances determinations not later 
than the date of the preliminary determination.
    Section 733(e)(1) of the Act provides that the Department will 
preliminarily determine that critical circumstances exist if there is a 
reasonable basis to believe or suspect that: (A)(i) there is a history 
of dumping and material injury by reason of dumped imports in the 
United States or elsewhere of the subject merchandise; or (ii) the 
person by whom, or for whose account, the merchandise was imported knew 
or should have known that the exporter was selling the subject 
merchandise at less than its fair value and that there was likely to be 
material injury by reason of such sales; and (B) there have been 
massive imports of the subject merchandise over a relatively short 
period. Section 351.206(h)(1) of the Department's regulations provides 
that, in determining whether imports of the subject merchandise have 
been ``massive,'' the Department normally will examine: (i) the volume 
and value of the imports; (ii) seasonal trends; and (iii) the share of 
domestic consumption accounted for by the imports. In addition, section 
351.206(h)(2) of the Department's regulations provides that an increase 
in imports of 15 percent during the ``relatively short period'' of time 
may be considered ``massive.'' Section 351.206(i) of the Department's 
regulations defines ``relatively short period'' as normally being the 
period beginning on the date the proceeding begins (i.e., the date the 
petition is filed) and ending at least three months later. The 
regulations also provide, however, that if the Department finds that 
importers, exporters, or producers had reason to believe, at some time 
prior to the beginning of the proceeding, that a proceeding was likely, 
the Department may consider a period of not less than three months from 
that earlier time.
    As discussed in detail in the Critical Circumstances Memo, the 
Department preliminarily finds that there is a reasonable basis to 
believe or suspect that the importer knew or should have known that 
there was likely to be material injury by means of sales at LTFV of 
subject merchandise from the PRC exported by Bosun and the PRC-wide 
entity. See Memorandum to Stephen Claeys, Deputy Assistant Secretary, 
AD/CVD Operations from James C. Doyle, Director, AD/CVD Operations, 
Office 9: Antidumping Duty Investigation of Diamond Sawblades and Parts 
Thereof from the People's Republic of China: Preliminary Affirmative 
Determination of Critical Circumstances (``Critical Circumstance 
Memo''). The Department has found preliminary margins of more than 25% 
for export price sales and more than 15% for constructed export price 
sales for Bosun and the PRC-wide entity. See Critical Circumstances 
Memo at Attachment at II.
    For the reasons set forth in the Critical Circumstances Memo, we 
also find that there have been massive imports of the subject 
merchandise over a relatively short period for the respondents, the 
Separate Rate Applicants, and the PRC-wide entity. See Critical 
Circumstance Memo at Attachment I. We find that importers, exporters, 
or producers knew or should have known an antidumping case was pending 
on diamond sawblades imports from the PRC by the date of the filing of 
the petition in May 2005 and relied on a period of six months as the 
period for comparison in preliminarily determining whether imports of 
the subject merchandise have been massive.
    Therefore, given the analysis summarized above, and described in 
more detail in the Critical Circumstances Memo, we preliminarily 
determine that critical circumstances exist for imports of diamond 
sawblades from Bosun and the PRC-wide entity. However, we do not find 
that critical circumstances exist for the Separate Rates Applicants, 
BGY, or Hebei Jikai.
    We will make a final determination concerning critical 
circumstances for all producers/ exporters of subject merchandise from 
the PRC when we make our final dumping determinations in this 
investigation, which will be 135 days after the date of the publication 
of the preliminary determination.

Non-Market-Economy Country

    For purposes of initiation, Petitioner submitted LTFV analyses for 
the PRC as a non-market economy. See Initiation Notice 70 FR at 35627. 
In every case conducted by the Department involving the PRC, the PRC 
has been treated as an NME country. In accordance with section 
771(18)(C)(i) of the Act, any determination that a foreign country is 
an NME country shall remain in effect until revoked by the 
administering authority. See Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, (``TRBs'') From the People's Republic of 
China: Preliminary Results 2001-2002 Administrative Review and Partial 
Rescission of Review, 68 FR 7500 (February 14, 2003), unchanged in 
Final Results of 2001-2002 Administrative Review: TRBs from the 
People's Republic of China, 68 FR 70488 (December 18, 2003). No party 
has challenged the designation of the PRC as an NME country in this 
investigation. Therefore, we have treated the PRC as an NME country for 
purposes of this preliminary determination.

Surrogate Country

    When the Department is investigating imports from an NME, section 
773(c)(1) of the Act directs it to base normal value, in most 
circumstances, on the

[[Page 77125]]

NME producer's factors of production valued in a surrogate market-
economy country or countries considered to be appropriate by the 
Department. In accordance with section 773(c)(4) of the Act, in valuing 
the factors of production, the Department shall utilize, to the extent 
possible, the prices or costs of factors of production in one or more 
market-economy countries that are at a level of economic development 
comparable to that of the NME country and are significant producers of 
comparable merchandise. The sources of the surrogate values we have 
used in this investigation are discussed under the normal value section 
below.
    On August 16, 2005, the Department received comments from 
Petitioner on the appropriate surrogate country for valuing the factors 
of production (``FOP''). Petitioner argued that India is the most 
appropriate surrogate country in this investigation because India is at 
a comparable level of economic development with the PRC based on the 
Department's repeated use of India as a surrogate. Petitioner also 
provided evidence demonstrating that India is a significant producer of 
identical and comparable merchandise. Additionally, Petitioner contends 
that India provides publicly available information on which to base 
surrogate values. See Surrogate Country Memo for a complete description 
of Petitioner's surrogate country arguments.
    As detailed in the Surrogate Country Memo, the Department has 
preliminarily selected India as the surrogate country on the basis 
that: (1) it is a significant producer of comparable merchandise; (2) 
it is at a similar level of economic development pursuant to 733(c)(4) 
of the Act; and (3) we have reliable data from India that we can use to 
value the FOP. See Surrogate Country Memo. Thus, we have calculated 
normal value using Indian prices when available and appropriate to 
value the FOP of the diamond sawblade producers. We have obtained and 
relied upon publicly available information wherever possible. See 
Memorandum to the File from Catherine Betrand, through Carrie Blozy, 
Program Manager, AD/CVD Operations, Office 9, and James C. Doyle, 
Director, AD/CVD Operations, Office 9: Diamond Sawblades and Parts 
Thereof from the People's Republic of China: Surrogate Values for the 
Preliminary Determination, dated December 20, 2005 (``Factor Value 
Memo'').
    In accordance with 19 CFR 351.301(c)(3)(i), for the final 
determination in an antidumping investigation, interested parties may 
submit publicly available information to value the FOP within 40 days 
after the date of publication of the preliminary determination.

Affiliation

    Based on the evidence on the record in this investigation, we 
preliminarily find that BGY is affiliated with Advanced Technology & 
Materials Co., Ltd. (``AT&M''), and Yichang HXF Circular Saw Industrial 
Co., Ltd (``HXF'') (collectively with respondent, the ``AT&M Group'') 
pursuant to sections 771(33)(E), (F), and (G) of the Act. For a 
detailed discussion of our analysis, see Memorandum to the File from 
Anya Naschak through Carrie Blozy, Program Manager, AD/CVD Operations, 
Office 9, to James C. Doyle, Office Director, AD/CVD Operations, Office 
9: Affiliation and Treatment as a Single Entity of Beijing Gang Yan 
Diamond Product Company, Advanced Technology & Materials Co., Ltd., and 
Yichang HXF Circular Saw Industrial Co., Ltd.; Affiliation of Gang Yan 
Diamond Products, Inc. and Beijing Gang Yan Diamond Product Company; 
and Affiliation of Gang Yan Diamond Products, Inc., SANC Materials, 
Inc., and Cliff (Tianjin) International, Ltd., dated December 20, 2005 
(``BGY Affiliation Memo''). In addition, based on the evidence 
presented in BGY's questionnaire responses, we preliminarily find that 
the AT&M Group should be treated as a single entity for the purposes of 
the antidumping duty investigation of diamond sawblades from the PRC. 
This finding is based on the determination that BGY, HXF, and AT&M are 
affiliated, that BGY and HXF are both producers of ``identical 
products,'' and no retooling would be necessary in order to 
``restructure manufacturing priorities,'' and there is significant 
potential for manipulation of price or production between the parties. 
See 19 C.F.R. Sec. 351.401(f)(1); see also BGY Affiliation Memo for a 
discussion of the proprietary aspects of this relationship. With 
respect to the criterion of significant potential for manipulation of 
price or production, we note that the Department normally considers 
three criteria: (i) the level of common ownership; (ii) the extent to 
which managerial employees or board members of one firm sit on the 
board of directors of an affiliated firm; and (iii) whether operations 
are intertwined, such as through the sharing of sales information, 
involvement in production and pricing decisions, the sharing of 
facilities or employees, or significant transactions between the 
affiliated producers. See 19 C.F.R. Sec. 351.401(f)(2). Based on the 
information on the record of this proceeding, we preliminarily find 
that BGY, HXF, and AT&M meet these criteria. Nothing in this 
determination conflicts with the language of section 773(c) of the Act. 
Accordingly, the Department should include all of the AT&M Group's 
sales to the first U.S. unaffiliated customer and factors of production 
in its margin calculation analysis. However, the Department does not 
currently have this information on the record of the proceeding. 
Therefore, the Department will request this information from the AT&M 
Group after the issuance of this preliminary determination. Due to the 
proprietary nature of the information with respect to these 
affiliations, this information cannot be discussed herein. See BGY 
Affiliation Memo for a further discussion of this issue.
    In addition, we preliminarily find that Gang Yan Diamond Products, 
Inc. (``GYDP''), is affiliated with BGY, pursuant to section 771(33)(E) 
of the Act. In addition, the Department preliminarily finds that GYDP, 
SANC Materials, Inc. (``SANC''), and Cliff (Tianjin) International, 
Ltd. (``Cliff'') are affiliated with each other pursuant to sections 
771(33)(B), (E), and (F) of the Act. Due to the proprietary nature of 
the information with respect to these affiliations, this information 
cannot be discussed herein. See BGY Affiliation Memo for a further 
discussion of this issue.

Separate Rates

    In proceedings involving NME countries, the Department has a 
rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty rate. It is the Department's policy to assign all 
exporters of merchandise subject to investigation in an NME country 
this single rate unless an exporter can demonstrate that it is 
sufficiently independent so as to be entitled to a separate rate. 
Bosun, BGY, Hebei Jikai, and the Separate Rate Applicants have provided 
company-specific information to demonstrate that they operate 
independently of de jure and de facto government control, and therefore 
satisfy the standards for the assignment of a separate rate. One 
mandatory respondent, Saint Gobain, has not responded to the 
Department's requests for information nor requested a separate rate in 
this investigation.
    Six companies that filed applications that were incomplete by the 
sixty-day deadline have not been considered for a separate rate. The 
separate rate application for this investigation (see http://ia.ita.doc.gov/) explains that all applications are due sixty calendar 
days

[[Page 77126]]

after publication of the initiation notice, and the Department will not 
consider applications that remain incomplete by the deadline, which in 
this case was August 22, 2005.\2\ The Department's separate rates 
application also states, ``applicants must individually complete and 
submit this form with all the required supporting documentation by 
sixty calendar days after the date of publication of the initiation 
notice of this investigation and applies equally to NME-owned and 
wholly market-economy owned firms for completing the applicable 
provisions of the application and for submitting the required 
supporting documentation {and{time}  the Department will not consider 
applications that remain incomplete by the deadline.'' See Separate 
Rate Application at 3. The application further instructs, ``the 
Department only accepts applications that are completed in full and 
submitted with all the required supporting documentation filed timely 
and in proper form.''\3\ See Separate Rate Application at 4. Therefore, 
the six applications that were not completed in full by the sixty-day 
deadline have not been considered for a separate rate. See Deficient 
Applications Memo.
---------------------------------------------------------------------------

    \2\ This was the first business day after August 20, 2005. See 
section 351.303(b) of the Department's regulations.
    \3\ We note that the separate rate application requires wholly 
market-economy owned companies to provide information marked with an 
asterisk, pertaining to the firm's eligibility for separate rates 
consideration based on having sold subject merchandise during the 
POI and support the firm's claim that it is in fact wholly owned by 
a market-economy entity. Firms claiming to be wholly market-economy 
owned companies that submit applications without these required 
elements have also been considered incomplete. See Separate Rates 
Application at 3.
---------------------------------------------------------------------------

    We have considered whether each PRC company that submitted a 
complete application is eligible for a separate rate. The Department's 
separate-rate test is not concerned, in general, with macroeconomic/
border-type controls, e.g., export licenses, quotas, and minimum export 
prices, particularly if these controls are imposed to prevent dumping. 
The test focuses, rather, on controls over the investment, pricing, and 
output decision-making process at the individual firm level. See 
Certain Cut-to-Length Carbon Steel Plate from Ukraine: Final 
Determination of Sales at Less than Fair Value, 62 FR 61754, 61757 
(November 19, 1997), and Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, from the People's Republic of China: Final 
Results of Antidumping Duty Administrative Review, 62 FR 61276, 61279 
(November 17, 1997).
    To establish whether a firm is sufficiently independent from 
government control of its export activities to be entitled to a 
separate rate, the Department analyzes each entity exporting the 
subject merchandise under a test arising from the Notice of 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 by Notice of Final Determination of Sales at Less Than 
Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 
22585 (May 2, 1994) (``Silicon Carbide''). In accordance with the 
separate-rates criteria, the Department assigns separate rates in NME 
cases only if respondents can demonstrate the absence of both de jure 
and de facto governmental control over export activities.
1. Absence of De Jure Control
    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) an absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) other formal 
measures by the government decentralizing control of companies. See 
Sparklers, 56 FR at 20589.
    The evidence provided by Bosun, BGY, Hebei Jikai, and the separate 
rate applicants supports a preliminary finding of de jure absence of 
governmental control based on the following: 1) an absence of 
restrictive stipulations associated with the individual exporter's 
business and export licenses; 2) the applicable legislative enactments 
decentralizing control of the companies; and 3) any other formal 
measures by the government decentralizing control of companies. See 
Memorandum to James C. Doyle, Director, AD/CVD Operations, Office 9, 
through Carrie Blozy, Program Manager, AD/CVD Operations, Office 9: 
Antidumping Duty Investigation of Diamond Sawblades and Parts Thereof 
from the People's Republic of China: Separate Rates Memorandum, dated 
December 20, 2005 (``Separate Rates Memo'').
2. Absence of De Facto Control
    Typically the Department considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) whether the export prices are set by or are 
subject to the approval of a governmental agency; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. See Silicon Carbide, 59 FR at 22586-87; see also 
Notice of Final Determination of Sales at Less Than Fair Value: 
Furfuryl Alcohol From the People's Republic of China, 60 FR 22544, 
22545 (May 8, 1995). The Department has determined that an analysis of 
de facto control is critical in determining whether respondents are, in 
fact, subject to a degree of governmental control which would preclude 
the Department from assigning separate rates.
    With respect to BGY, Petitioner argues that BGY should not be 
granted a separate rate because it is owned and controlled by the PRC 
government. Specifically, Petitioner argues in its September 2, 2005, 
submission that BGY is controlled by its parent company, Advanced 
Technology and Materials Co., Ltd. (``AT&M''), which in turn is owned 
and controlled by the PRC government. Petitioner argues that AT&M's 
controlling stockholder, the Central Iron & Steel Research Institute 
(``CISRI''), is wholly owned and controlled by the State-Owned Assets 
Supervision and Administration Commission of the State Council 
(``SASAC''), and that both BGY and AT&M have significant ties to CISRI 
(including common board and management between AT&M and CISRI), and 
thus a de facto control relationship between SASAC, CISRI, AT&M, and 
BGY exists. Petitioner has placed on the record AT&M's financial 
statements, which it argues further supports the conclusion that AT&M 
is de facto controlled by SASAC. See Petitioner's September 2, 2005, 
submission at 6-7 and Exhibit 7. Petitioner further argues that SASAC 
has authority to appoint and remove top management of companies that it 
supervises, including CISRI. Citing Coalition for the Preservation of 
American Brake Drum and Rotor Aftermarket Manufacturers v. United 
States, 318 F. Supp. 2d 1305, 1312 (CIT 2004), Petitioner argues that 
BGY's ultimate ownership by the PRC government is sufficient grounds to 
deny BGY a separate rate. Additionally, Petitioner argues that the PRC 
government has de facto control over BGY. Petitioner notes that BGY's 
management is appointed by its

[[Page 77127]]

president of the board, who is also the president of AT&M, and that 
these appointments were made in effect by AT&M. Further, Petitioner 
argues that AT&M controls BGY's export activities and income from BGY's 
export sales. See Petitioner's September 2, 2005, letter at 8-9. 
Petitioner asserts that because AT&M is controlled by the PRC 
government (which Petitioner argues includes SASAC and CISRI), and 
because AT&M controls BGY, BGY should be deemed controlled by the PRC 
government and ineligible for a separate rate by reason of de facto 
control.
    BGY argues that if the Department were to find that BGY should not 
be granted a separate rate it would be a departure from past practice, 
as AT&M is a publicly-held company, whose majority owner, CISRI, is a 
corporate entity owned by ``all the people,'' a designation 
consistently found by the Department to be eligible for a separate 
rate.
    BGY argues in its Supplemental Section A response dated September 
20, 2005, submission (``BGY's Supp A'') that in Silicon Carbide the 
Department determined that ownership ``by all the people'' is not 
sufficient in and of itself to a determination that a company should 
not receive a separate rate, and that the Department has found 
companies owned by ``all the people'' were not subject to de jure or de 
facto government control in numerous cases. In support, BGY cites 
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, 
From the People's Republic of China; Final Results of Antidumping Duty 
Administrative Review and Revocation in Part of Antidumping Duty Order, 
62 FR 6189 (February 11, 1997), Notice of Preliminary Determination of 
Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat 
Products From the People's Republic of China, 66 FR 22183 (May 3, 
2001). BGY argues that in Notice of Preliminary Determination of Sales 
at Less Than Fair Value: Foundry Coke From the People's Republic of 
China, 66 FR 13885 (March 8, 2001), the Department found that the 
companies at issue should be granted a separate rate, even though the 
government owned three of the companies. BGY further argues that the 
Department has found companies subject to export controls to be 
eligible for a separate rate, and that BGY is not subject to the 
decision in Brake Drums and Brake Rotors from the PRC, 62 FR 9160 
(February 28, 2005), as BGY has independent management control and has 
made a claim of independence from government control. See BGY's Supp A 
submission at 3-5.
    In its November 30, 2005, submission, Petitioner reiterates its 
arguments of September 2, 2005, and argues that BGY has provided 
incomplete responses to the Department to obscure the control exercised 
by the PRC government. Petitioner further argues that BGY has not 
appropriately demonstrated the de facto absence of government control, 
and that ownership by ``all the people'' in and of itself is not 
sufficient grounds on which to grant BGY a separate rate. Petitioner 
further argues that the Department's determinations to grant a separate 
rate to companies owned by ``all the people'' have been predicated upon 
these companies establishing de facto independence (i.e., ability to 
set their own export prices, negotiate contracts, distribute profit, 
etc.), which Petitioner argues BGY has failed to do. See Petitioner's 
November 30, 2005, submission at 6-11. Petitioner argues that the 
record evidence shows that BGY is owned and controlled by SASAC, which 
has the authority to hire and fire management and order asset sales and 
acquisitions, and that SASAC is an agency of the PRC central 
government. Petitioner maintains that SASAC maintains full control over 
200 Chinese companies, including CISRI, under the direct supervision of 
the State Council. Petitioner placed a number of documents on the 
record, which it argues demonstrates the power of SASAC over the 
companies under its jurisdiction. Petitioner argues that AT&M is a 
state-owned company and that BGY conceded that it is ultimately 
controlled by SASAC through CISRI and AT&M, and therefore BGY should be 
denied a separate rate based on both a de jure and de facto control by 
a state entity, SASAC.
    Both BGY and Petitioner submitted additional comments on this issue 
on December 13, 2005, and December 14, 2005, respectively. However, the 
Department did not have sufficient time to analyze this information for 
this preliminary determination. Therefore, the Department will further 
analyze the additional information for the final determination.
    As noted above, the Department considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) whether the export prices are set by or are 
subject to the approval of a governmental agency; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. In the instant case, BGY has certified in its 
response to Section A of the Department's questionnaire, dated
    August 25, 2005 (``BGY's Section A''), at 9 that its export prices 
are neither set by nor subject to the approval of a government agency. 
Further, BGY has placed on the record a number of documents that 
demonstrate a de facto absence of government control, including emails 
between its general manager and unaffiliated U.S. customers regarding 
price negotiation on U.S. sales, and documents demonstrating 
independent negotiation of contracts for purchases of raw materials 
(see BGY's Supp A at Exhibit SA-7). In addition, BGY also placed on the 
record, in BGY's Section A and BGY's Supp A, documentation that both 
BGY and AT&M select their own management and boards of directors, 
demonstrating that BGY and AT&M have autonomy over the selection of 
management. See BGY Section A at Exhibits A-8 and A-9 and BGY Supp A at 
Exhibit SA-6. BGY has also provided financial statements and board 
resolution minutes regarding the distribution of profit by both BGY and 
AT&M. See BGY Supp A at Exhibits SA-5 and SA-8. Although Petitioner has 
stated that SASAC has the authority to hire and fire management and 
order asset sales and acquisitions at CISRI, it has provided no 
evidence on the record of this proceeding that SASAC had the ability to 
exercise such control over AT&M and BGY during the POI. Specifically, 
we note that the documentation on the record in this review 
demonstrates that BGY has independence with respect to the setting of 
export prices and negotiation of contracts. Therefore, the Department 
preliminarily finds that BGY has both de jure and de facto control over 
its export activities. However, the Department will carefully examine 
the issue of BGY's and AT&M's independence with respect to its export 
activities at verification. In addition, the Department intends to 
collect additional information with respect to these issues after the 
issuance of this preliminary determination.
    We determine that, for Bosun, BGY, Hebei Jikai, and the Separate 
Rate Applicants, the evidence on the record supports a preliminary 
finding of de facto absence of governmental control based on record 
statements and supporting documentation showing the following: 1) each 
exporter sets its own export prices independent of the government and 
without the approval of a government authority; 2) each exporter

[[Page 77128]]

retains the proceeds from its sales and makes independent decisions 
regarding disposition of profits or financing of losses; 3) each 
exporter has the authority to negotiate and sign contracts and other 
agreements; and 4) each exporter has autonomy from the government 
regarding the selection of management.
    Therefore, the evidence placed on the record of this investigation 
by Bosun, BGY, Hebei Jikai, and the Separate Rate Applicants 
demonstrate an absence of de jure and de facto government control with 
respect to each of the exporter's exports of the merchandise under 
investigation, in accordance with the criteria identified in Sparklers 
and Silicon Carbide. As a result, for the purposes of this preliminary 
determination, we have granted separate, company-specific rates to 
Bosun, BGY, and Hebei Jikai, and granted the Separate Rate Applicants a 
weight-averaged margin. For a full discussion of this issue, see 
Separate Rates Memo.
    The Department has, as discussed above in the ``Affiliation'' 
section, determined that BGY, AT&M, and HXF, shall be treated as a 
single entity, the AT&M Group. With respect to the AT&M Group, as 
discussed above, the Department has determined that BGY has 
demonstrated de jure and de facto absence of government control with 
respect to its export activities and will preliminarily be granted a 
separate rate. HXF submitted a separate rate application, though the 
Department found HXF's application as submitted, contained substantial 
deficiencies and did not consider HXF for a separate rate in this 
investigation. See Deficient Applications Memo. As a result, the 
Department is not able to make a determination with respect to HXF's 
export activities at this time. However, because the Department has 
found that HXF should be properly considered part of a single entity 
with BGY, which has been preliminarily granted a separate rate, and 
because the Department has knowledge that HXF may have exported or 
caused to be exported subject merchandise during the POI (see HXF's 
Application), the Department has preliminarily determined to request 
additional and clarifying information with respect to HXF's de jure and 
de facto independence from government control with respect to its 
export activities, after the issuance of this preliminary 
determination.

The PRC-Wide Rate

    The Department has data that indicate there were more exporters of 
diamond sawblades from the PRC during the POI than those indicated in 
the response to our request for Q&V information. See Respondent 
Selection Memorandum. We issued our request for Q&V information to 
twenty-three known Chinese exporters of the subject merchandise and 
BOFT and MOFCOM,\4\ and received twenty-five Q&V responses. We did not 
receive Q&V responses from thirteen of the companies to which we sent 
our request for Q&V information (see Respondent Selection Memo). We 
also received seventeen unsolicited Q&V questionnaires.\5\ Information 
on the record of this investigation indicates that there are numerous 
producers/exporters of diamond sawblades in the PRC. Based upon our 
knowledge of the volume of imports of subject merchandise from the PRC 
(see Initiation Notice), information on the record indicates that the 
companies which responded to the Q&V questionnaire, the Separate Rates 
Applicants, Bosun, BGY, and Hebei Jikai do not account for all imports 
into the United States from the PRC. Although all exporters, including 
the mandatory respondent Saint Gobain, were given an opportunity to 
provide Q&V information, not all exporters provided a response to the 
Department's Q&V letter or, in the case of Saint Gobain, to the 
Department's antidumping duty questionnaire. Further, the Government of 
the PRC did not respond to the Department's questionnaire. Therefore, 
the Department determines preliminarily that there were PRC exporters 
of the subject merchandise during the POI from PRC producers/exporters 
that did not respond to the Department's request for information. We 
have treated these PRC producers/exporters as part of the PRC-wide 
entity because they did not qualify for a separate rate.
---------------------------------------------------------------------------

    \4\ For a list of companies to which the Department sent its 
request for Q&V information, see Respondent Selection Memo at 1.
    \5\ For a list of companies from which the Department received 
Q&V information, see Respondent Selection Memo at Attachment 1.
---------------------------------------------------------------------------

    Section 776(a)(2) of the Act provides that, if an interested party 
(A) withholds information that has been requested by the Department, 
(B) fails to provide such information in a timely manner or in the form 
or manner requested, subject to subsections 782(c)(1) and (e) of the 
Act, (C) significantly impedes a proceeding under the antidumping 
statute, or (D) provides such information but the information cannot be 
verified, the Department shall, subject to subsection 782(d) of the 
Act, use facts otherwise available in reaching the applicable 
determination.
    Information on the record of this investigation indicates that the 
PRC-wide entity was non-responsive. Certain companies did not respond 
to our request for Q&V information and Saint Gobain, one of the largest 
exporters of the merchandise under investigation,\6\ did not respond to 
the Department's questionnaire. As a result, pursuant to section 
776(a)(2)(A) of the Act, we find that the use of facts available is 
appropriate to determine the PRC-wide rate. See Preliminary 
Determination of Sales at Less Than Fair Value, Affirmative Preliminary 
Determination of Critical Circumstances and Postponement of Final 
Determination: Certain Frozen Fish Fillets from the Socialist Republic 
of Vietnam, 68 FR 4986 (January 31, 2003), unchanged in Final 
Determination of Sales at Less Than Fair Value and Affirmative Critical 
Circumstances: Certain Frozen Fish Fillets from the Socialist Republic 
of Vietnam, 68 FR 37116 (June 23, 2003).
---------------------------------------------------------------------------

    \6\ See Respondent Selection Memo.
---------------------------------------------------------------------------

    Section 776(b) of the Act provides that, in selecting from among 
the facts otherwise available, the Department may employ an adverse 
inference if an interested party fails to cooperate by not acting to 
the best of its ability to comply with requests for information. See 
Final Determination of Sales at Less Than Fair Value: Certain Cold-
Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian 
Federation, 65 FR 5510, 5518 (February 4, 2000). See also ``Statement 
of Administrative Action'' accompanying the URAA, H.R. Rep. No. 103-
316, 870 (1994) (``SAA''). We find that, because the PRC-wide entity 
did not respond to our request for information, it has failed to 
cooperate to the best of its ability. Therefore, the Department 
preliminarily finds that, in selecting from among the facts available, 
an adverse inference is appropriate.
    Further, section 776(b) of the Act authorizes the Department to use 
as adverse facts available (``AFA'') information derived from the 
petition, the final determination from the LTFV investigation, a 
previous administrative review, or any other information placed on the 
record. In selecting a rate for adverse facts available, the Department 
selects a rate that is sufficiently adverse ``as to effectuate the 
purpose of the facts available rule to induce respondents to provide 
the Department with complete and accurate information in a timely 
manner.'' See Final Determination of Sales at Less Than Fair Value: 
Static Random Access Memory Semiconductors from Taiwan, 63 FR 8909, 
8932 (February 23, 1998). It is the

[[Page 77129]]

Department's practice to select, as AFA, the higher of the (a) 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 Cold-Rolled Carbon Quality Steel 
Products from the People's Republic of China, 65 FR 34660 (May 21, 
2000) and accompanying Issues and Decision Memorandum, at ``Facts 
Available.'' In the instant investigation, as AFA, we have assigned to 
the PRC-wide entity a margin based on information in the petition, 
because the margin derived from the petition is higher than the 
calculated margins for the selected respondents. In this case, we have 
applied the petition rate of 164.09 percent.

Corroboration

    Section 776(c) of the Act requires that, when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation as facts available, it must, to the extent 
practicable, corroborate that information from independent sources 
reasonably at its disposal.\7\ The SAA also states that the independent 
sources may include published price lists, official import statistics 
and customs data, and information obtained from interested parties 
during the particular investigation. See id.
---------------------------------------------------------------------------

    \7\ Secondary information is described in the SAA as 
``information derived from the petition that gave rise to the 
investigation or review, the final determination concerning subject 
merchandise, or any previous review under section 751 concerning the 
subject merchandise.'' See SAA at 870.
---------------------------------------------------------------------------

    The SAA also clarifies that ``corroborate'' means that the 
Department will satisfy itself that the secondary information to be 
used has probative value. See SAA at 870. As noted in Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished, from Japan, and 
Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and 
Components Thereof, from Japan; Preliminary Results of Antidumping Duty 
Administrative Reviews and Partial Termination of Administrative 
Reviews, 61 FR 57391, 57392 (November 6, 1996), unchanged in Final 
Results of Antidumping Duty Administrative Reviews and Termination in 
Part: 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, 62 FR 
11825 (March 13, 2005), to corroborate secondary information, the 
Department will, to the extent practicable, examine the reliability and 
relevance of the information used.
    Petitioner's methodology for calculating the export price and 
normal value in the petition is discussed in the initiation notice. See 
Initiation Notice, 70 FR at 35627-35628. To corroborate the AFA margin 
selected, we compared that margin to the margins we found for the 
respondents.
    As discussed in the Memorandum to the File regarding the 
corroboration of the AFA rate, dated December 20, 2005, we found that 
the margin of 164.09 percent has probative value. See Memorandum to the 
File through Carrie Blozy, Program Manager, AD/CVD Operations, Office 
9: Corroboration of the PRC-Wide Facts Available Rate for the 
Preliminary Determination in the Antidumping Duty Investigation of 
Diamond Sawblades and parts thereof from the People's Republic of 
China, dated December 20, 2005, (``Corroboration Memo''). Accordingly, 
we find that the rate of 164.09 percent is corroborated within the 
meaning of section 776(c) of the Act.
    Consequently, we are applying 164.09 as the single antidumping rate 
to the PRC-wide entity, including Saint Gobain and the companies that 
submitted incomplete separate rate applications. The PRC-wide rate 
applies to all entries of the merchandise under investigation except 
for entries from Bosun, BGY, Hebei Jikai, and the Separate Rate 
Applicants.
    The Department will consider all margins on the record at the time 
of the final determination for the purpose of determining the most 
appropriate AFA rate for the PRC-wide entity. See Preliminary 
Determination of Sales at Less Than Fair Value: Saccharin from the 
People's Republic of China, 67 FR 79049, 79054 (December 27, 2002), 
unchanged in Final Determination of Sales at Less Than Fair Value: 
Saccharin From the People's Republic of China, 68 FR 27530 (May 20, 
2003).

Margin for the Separate Rate Applicants

    The Department received timely and complete separate rates 
applications from the Separate Rates Applicants, who are all exporters 
of diamond sawblades from the PRC, which were not selected as mandatory 
respondents in this investigation. Through the evidence in their 
applications, these companies have demonstrated their eligibility for a 
separate rate, as discussed above in the ``Separate Rates'' section and 
in the Separate Rates Memo. Consistent with the Department's practice, 
as the separate rate, we have established a weight-averaged margin for 
the Separate Rates Applicants based on the rates we calculated for 
Bosun and Hebei Jikai, the companies for which the Department 
calculated an antidumping duty margin for this preliminary 
determination, excluding any rates that are zero, de minimis, or based 
entirely on AFA. Companies receiving this rate are identified by name 
in the ``Suspension of Liquidation'' section of this notice.

Date of Sale

    Section 351.401(i) of the Department's regulations state that, ``in 
identifying the date of sale of the subject merchandise or foreign like 
product, the Secretary normally will use the date of invoice, as 
recorded in the exporter or producer's records kept in the normal 
course of business.'' However, the Secretary may use a date other than 
the date of invoice if the Secretary is satisfied that a different date 
better reflects the date on which the exporter or producer establishes 
the material terms of sale. See 19 CFR 351.401(i); See also Allied Tube 
and Conduit Corp. v. United States, 132 F. Supp. 2d 1087, 1090-1093 
(CIT 2001) (``Allied Tube''). The date of sale is generally the date on 
which the parties agree upon all substantive terms of the sale. This 
normally includes the price, quantity, delivery terms and payment 
terms. In order to simplify the determination of date of sale for both 
the respondent and the Department and in accordance with 19 CFR 
351.401(i), the date of sale will normally be the date of the invoice, 
as recorded in the exporter's or producer's records kept in the 
ordinary course of business, unless satisfactory evidence is presented 
that the exporter or producer establishes the material terms of sale on 
some other date. In other words, the date of the invoice is the 
presumptive date of sale, although this presumption may be overcome. 
For instance, in Final Determination of Sales at Less Than Fair Value: 
Polyvinyl Alcohol from Taiwan, 61 FR 14067 (March 29, 1996), the 
Department used the date of the purchase order as the date of sale 
because the terms of sale were established at that point.
    After examining the questionnaire responses and the sales 
documentation that Bosun, BGY, and Hebei Jikai placed on the record, we 
preliminarily determine that invoice date is the most appropriate date 
of sale for Bosun, BGY, and Hebei Jikai. BGY and Hebei Jikai do not 
dispute that invoice date is the appropriate date of sale, and the 
information on the record supports this contention. Bosun, however, 
claims that the purchase order date is the most appropriate date of 
sale. Bosun has

[[Page 77130]]

requested that the Department use the purchase order date, because it 
argues that the terms of sale do not change after the purchase order is 
issued. The Department finds that based on the information on the 
record, Bosun has not rebutted the presumption that invoice date is the 
appropriate date of sale. See Preliminary Determination of Sales at 
Less Than Fair Value: Saccharin From the People's Republic of China, 67 
FR 79054 (December 27, 2005). This conclusion is based on the following 
four reasons.
    First, in its Supplemental Section C Response dated November 1, 
2005 (``Bosun Supp C''), Bosun states ``in cases in which any of the 
sales terms change after the initial date of the purchase order, the 
date of the purchase order does not change to the date of the change in 
the sales term.'' See Bosun Supp C at 15. The purchase order date 
therefore does not reflect the date upon which the material terms of 
sale are ultimately established. Second, Bosun also notes ``during the 
POI, there were a few instances'' in which the per-unit purchase price 
changed after the purchase order was issued by the U.S. customer. Ibid. 
at 15-16. Third, Bosun has explained that for some purchases by some 
customers, an actual purchase order is not actually issued. There is 
consequently no documentary evidence from the U.S. customer, other than 
the invoice date, to indicate the date upon which the terms of sale 
were ultimately established. See Bosun Supp C at 10.
    Finally, Bosun has also explained, ``the purchase order date is the 
date that the U.S. customers' purchase {orders were{time}  entered into 
Bosun's computerized sales order tracking system.'' See Bosun's Section 
C Response dated September 20, 2005 (``Bosun C'') at 1. While Bosun has 
also explained that the terms of sale are typically entered into its 
computerized sales order tracking system on the day that the purchase 
order is received, there is no evidence that the receipt date and the 
entry date are the same. Moreover, Bosun has also noted that in some 
instances, the date can differ by at least one business day.
    The Department therefore preliminarily finds that there were 
changes in the essential terms of sale after the issuance of the 
purchase order. Further, we also find that there were instances where 
Bosun did not have actual purchase orders for certain customers. See 
Bosun Supplemental Section C Response dated November 1, 2005 at 10.
    In Allied Tube the Court of International Trade (``CIT'') held that 
the existence of one sale beyond contractual tolerance levels 
``suggested sufficient possibility of changes in material terms of sale 
so as to render Commerce's date of sale determination supported by 
substantial evidence.'' Allied Tube 132 F. Supp. 2d at 1092. Further, 
the CIT found that a ``party seeking to establish a date of sale other 
than invoice date bears the burden of producing sufficient evidence to 
'satisfy' the Department that 'a different date better reflects the 
date on which the exporter or producer establishes the material terms 
of sale.''' See id. Therefore, the Department finds that Bosun has not 
rebutted the regulatory presumption that the more appropriate date of 
sale for Bosun is the sales invoice date.

Fair Value Comparisons

    To determine whether sales of diamond sawblades to the United 
States by Bosun, BGY, and Hebei Jikai were made at less than fair 
value, we compared export price (``EP'') or constructed export price 
(``CEP'') to normal value (``NV''), as described in the ``U.S. Price,'' 
and ``Normal Value'' sections of this notice. We compared NV to 
weighted-average EPs and CEPs in accordance with section 777A(d)(1) of 
the Act.
    As noted above, with respect to BGY, the Department has, as 
discussed above in the ``Affiliation'' section, determined that BGY, 
AT&M, and HXF shall be treated as a single entity, the AT&M Group. The 
Department has received and analyzed information from BGY with respect 
to its U.S. sales and FOPs. The Department has also received and 
analyzed FOPs for BGY's affiliated core supplier. Based on HXF's 
Application, the Department has knowledge that HXF may also have acted 
as the exporter on sales of subject merchandise to the United States. 
Because HXF is part of the single entity, the AT&M Group, any exports 
to the United States that HXF may have exported, or caused to be 
exported, are subject merchandise. Therefore, the Department will 
request that HXF provide U.S. sales information following the issuance 
of this preliminary determination.

U.S. Price

Export Price

    For Hebei Jikai, and certain sales by BGY, we based U.S. price on 
EP in accordance with section 772(a) of the Act, because the first sale 
to an unaffiliated purchaser was made prior to importation, and CEP was 
not otherwise warranted by the facts on the record. We calculated EP 
based on the packed price from the exporter to the first unaffiliated 
customer in the United States. Where applicable, we deducted foreign 
movement expenses, foreign brokerage and handling expenses, and 
international freight expenses from the starting price (gross unit 
price), in accordance with section 772(c) of the Act. In addition, for 
certain sales by BGY where BGY demonstrated that its U.S. customer 
reimbursed it for portions of airfreight expenses, the Department added 
these revenue amounts to U.S. price. Further, the Department found that 
BGY incorrectly reported its movement expenses on certain EP sales. For 
those sales where BGY incorrectly reported in its database movement 
expenses, the Department adjusted the reported amounts to comport with 
BGY's narrative explanation.
    Where foreign movement, international ocean freight, or 
international airfreight, was provided by PRC service providers or paid 
for in Renminbi (``RMB''), we valued these services using surrogate 
values (see ``Factors of Production'' section below for further 
discussion).

Constructed Export Price

    BGY states in BGY's Section A at 13 and in BGY's Supp A at 1 that 
it does not act as the exporter of record on U.S. sales transactions 
through its affiliated company, GYDP, and that on these sales Cliff 
acts as the exporter of record. BGY also states that Cliff has no role 
in the transaction other than as an export facilitator for GYDP and 
does not make sales, negotiate terms, or have any commercial role in 
the sales of subject merchandise. See BGY's Supp A at 1.
    As an initial matter, the Department is concerned with information 
placed on the record by BGY in its supplemental questionnaire dated 
December 5, 2005, which indicates that, contrary to BGY's statements in 
its prior submissions, GYDP issues purchase orders to Cliff, rather 
than to BGY, and BGY issues invoices and is paid by Cliff, which in 
turn issues invoices and receives payment from GYDP. However, because 
BGY has placed on the record documentation indicating that BGY 
negotiates the practical terms of sale with GYDP (see BGY's Supp A at 
Exhibit SA-7), the Department has preliminarily finds that BGY sold 
merchandise to its affiliated company GYDP, and these sales are 
classifiable as CEP sales. Therefore, for these sales, we calculated 
CEP in accordance with section 772(b) of the Act, because we 
preliminarily find these sales were made on behalf of the PRC-based 
company by its U.S. affiliate to unaffiliated purchasers. However, the 
Department will closely examine this

[[Page 77131]]

issue at verification to determine if BGY was in fact acting as the 
seller of merchandise sold by GYDP during the POI, or if in fact these 
sales should be more properly classified as sales made by Cliff to 
GYDP.
    The Department notes that Cliff has not applied for a separate 
rate. In the Department's September 6, 2005, Supplemental Section A 
Questionnaire (``DOC Supp A''), the Department noted that ``the 
Department has determined that it will assign specific exporter-
producer ``combination rates'' to both mandatory respondents and non-
investigated NME exporters that meet the Department's criteria for 
separate rate status in investigations.'' See Policy Bulletin 5.1 
(http://ia.ita.doc.gov/). The Department's separate rate application 
specifically states, ``Each applicant must submit a separate individual 
application regardless of any common ownership or affiliation between 
firms and regardless of foreign ownership.'' See Separate Rate 
Application for Diamond Sawblades and Parts Thereof from the People's 
Republic of China (http://ia.ita.doc.gov). Cliff has not placed on the 
record any documentation that would cause the Department to find that 
it qualifies for a separate rate. Therefore, the Department 
preliminarily finds that Cliff is appropriately considered part of the 
PRC-wide entity, and finds that exports of subject merchandise made by 
Cliff should be considered as made by the PRC-wide entity, and will 
apply the PRC-wide rate for merchandise exported by Cliff. See Separate 
Rates section above for a discussion of the PRC-wide entity and the 
PRC-wide rate.
    For sales by Bosun, we calculated CEP in accordance with section 
772(b) of the Act, because certain sales were made on behalf of the 
PRC-based company by its U.S. affiliate to unaffiliated purchasers.
    For BGY's and Bosun's sales classified as CEP sales, we based CEP 
on packed, delivered or ex-warehouse prices to the first unaffiliated 
purchaser in the United States. Where appropriate, we made deductions 
from the starting price (gross unit price) for foreign movement 
expenses, international movement expenses, and U.S. movement expenses, 
in accordance with section 772(c)(2)(A) of the Act.
    Bosun reported that it grants early payment, quantity, and other 
discounts on a case-by-case basis. Accordingly, the Department has 
subtracted these discounts from the gross unit price, where 
appropriate.
    BGY reported that it is reimbursed on certain terms of sale by its 
customers for the full amount of inland freight expenses from the 
warehouse to the customer, and has reported no such freight for these 
observations due to the burden associated with allocating these 
expenses. Therefore, for this preliminary determination the Department 
has not assessed this freight expense for those observations. Further, 
the Department finds that BGY incorrectly reported its movement 
expenses on certain CEP sales, based on the reported terms of sale. For 
those sales where BGY incorrectly reported in its database movement 
expenses, the Department adjusted the reported amounts to comport with 
BGY's narrative explanation of the terms of sale. BGY reported that it 
grants billing adjustments and other discounts on a case-by-case basis. 
Accordingly, the Department has subtracted these discounts from the 
gross unit price, where appropriate.
    In accordance with section 772(d)(1) of the Act, we also deducted 
those selling expenses associated with economic activities occurring in 
the United States. For Bosun, we deducted commissions, inventory 
carrying costs, credit expenses, warranty expenses, and indirect 
selling expenses. We also made an adjustment for profit in accordance 
with section 772(d)(3) of the Act. For BGY we deducted commissions, 
inventory carrying costs, credit expenses, interest revenue, warranty 
expenses, and indirect selling expenses, and made an adjustment for 
profit in accordance with section 772(d)(3) of the Act.
    Where foreign movement expenses, international movement expenses, 
or U.S. movement expenses were provided by PRC service providers or 
paid for in Renminbi, we valued these services using surrogate values 
(see ``Factors of Production'' section below for further discussion). 
For those expenses that were provided by a market-economy provider and 
paid for in market-economy currency, we used the reported expense.
    Due to the proprietary nature of certain adjustments to U.S. price, 
for a detailed description of all adjustments made to U.S. price for 
each company, see Memorandum to the File from John D. A. LaRose, Case 
Analyst: Program Analysis for the Final Results of Antidumping Duty 
Investigation of Diamond Sawblades and Parts Thereof from the People's 
Republic of China: Bosun Tools Group Co., Ltd. (``Bosun''), dated 
December 20, 2005 (``Bosun Analysis Memo''); Memorandum to the File 
from Anya Naschak, Senior Case Analyst: Program Analysis for the Final 
Results of Antidumping Duty Investigation of Diamond Sawblades and 
Parts Thereof from the People's Republic of China: Beijing Gang Yan 
Diamond Product Company (``BGY''), dated December 20, 2005 (``BGY 
Analysis Memo''); and Memorandum to The File from Candice Kenney Weck, 
Case Analyst: Program Analysis for the Final Results of Antidumping 
Duty Investigation of Diamond Sawblades and Parts Thereof from the 
People's Republic of China: Hebei Jikai Industrial Group Co. Ltd. 
(``Hebei Jikai''), dated December 20, 2005 (``Hebei Jikai Analysis 
Memo'').

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the 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. The Department 
bases NV on the FOP because the presence of government controls on 
various aspects of non-market economies renders price comparisons and 
the calculation of production costs invalid under the Department's 
normal methodologies.

Factor Methodology

    Respondents Bosun and BGY reported that they purchased a small 
quantity of cores from PRC suppliers that were used in the production 
of the finished diamond sawblades exported to the United States. In 
their original questionnaire responses, where the core was purchased, 
Bosun and BGY reported the usage of the intermediate input. In our 
supplemental questionnaires, we requested that Bosun and BGY report 
their suppliers' inputs into producing the purchased cores. Bosun 
provided this information for certain of its core suppliers and BGY 
provided the core factors from its single core supplier.\8\ Bosun has 
argued that the Department should rely on the suppliers' cores factors 
whereas BGY has argued that it is inappropriate for the Department to 
use such data as a matter of law and practice.
---------------------------------------------------------------------------

    \8\ Other of Bosun's core suppliers are affiliated with Bosun 
through stock ownership of Bosun's owners. For information on BGY's 
core supplier, see BGY Affiliation Memo.
---------------------------------------------------------------------------

    Respondents have reported that the purchased cores are utilized in 
the production of the finished diamond sawblades (i.e., not sold as is 
to the United States). Therefore, in this instance we find that the 
purchased core is properly treated as an input into the finished 
product rather than as subject merchandise itself. The Department's 
normal practice is to apply a surrogate

[[Page 77132]]

value to a purchased factor unless it finds that the supplier is the 
same entity as the respondent. In such a case, the Department will rely 
on the factors of the supplier.\9\
---------------------------------------------------------------------------

    \9\ See e.g., Certain Preserved Mushrooms From the People's 
Republic of China: Final Results and Final Rescission, in Part, of 
Antidumping Duty Administrative Review, 70 FR 54361 (September 14, 
2005) and accompanying Issues and Decision Memorandum at Comment 9 
(where the Department determined to treat the Jiufa Group as a 
single entity).
---------------------------------------------------------------------------

    Bosun has reported it is affiliated with certain of its core 
suppliers. However, the percentage of cores purchased from the 
affiliated supplier(s) to total cores consumed by Bosun is 
insignificant. As recently articulated in an administrative review of 
Polyvinyl Alcohol, one of the Department's exceptions to relying on the 
reported factors of production for an input is where the percentage of 
the self-produced input accounts for a small or insignificant share of 
the total output and the Department recognizes that the increased 
accuracy in its overall calculations that would result from valuing 
(separately) each of those factors may be so small so as to not justify 
the burden of doing so. Accordingly, in such a case the Department will 
value the intermediate input. See Polyvinyl Alcohol, 70 FR at 67438 
(citing Notice of Final Determination of Sales at Less Than Fair Value: 
Polyvinyl Alcohol from the People's Republic of China, 68 FR 47358 
(August 11, 2003)). We find that this exception also applies where the 
level of purchases is small or insignificant, as in this case where the 
level of purchases from Bosun's affiliated supplier(s) is insignificant 
when compared to the additional burden on the Department and parties 
associated with analyzing the factors of production from this supplier, 
and where limited accuracy is gained. Therefore, we find that it is 
appropriate to value the purchased core from affiliated supplier(s) as 
an intermediate input. Accordingly, for purposes of this preliminary 
determination we are valuing all of Bosun's purchased cores using a 
surrogate value.
    With respect to BGY, the Department is unable to discuss issues 
related to its core supplier in this notice due to the proprietary 
nature of this information. Therefore, for a discussion of this issue, 
see BGY Analysis Memo.
    During the POI, Bosun did not have production of all types of 
merchandise for which it had POI sales. Consequently, the FOP databases 
filed by Bosun that cover the six-month POI do not contain factors of 
production for a number of CONNUMs sold by Bosun during the POI. Bosun, 
therefore, also filed FOP databases covering a fifteen-month period 
inclusive of the POI. These fifteen-month FOP databases provide factors 
of production data for the vast majority of the CONNUMs sold by Bosun 
during the POI. For the valuation of the factors of production, the 
Department has therefore determined to use the fifteen-month FOP 
database provided by Bosun. For the CONNUMs for which FOPs are not 
included in the fifteen-month FOP database, the Department has assigned 
FOPs for similar subject merchandise that was produced by Bosun in the 
fifteen-month FOP, as neutral facts available.\10\ In assigning FOPs, 
the Department relied on the first three product characteristics of the 
CONNUM (physical form of the product as sold, the diameter of the 
finished sawblade, and the type of attachment used to attach segments 
to the core) to identify unique product groupings. The Department 
determined that the first three product groupings were most appropriate 
because 1) the first characteristics are the most important, and 2) 
three characteristics are the greatest number of distinct 
characteristics which would provide FOPs for 100 percent of the CONNUMs 
which had missing FOPs. The Department then calculated a weighted-
average of the FOPs for each product grouping and assigned the product-
group weighted-average FOPs to CONNUMs where no FOPs were reported by 
Bosun. See Bosun Analysis Memo.
---------------------------------------------------------------------------

    \10\ See section 776(a)(1) of the Act.
---------------------------------------------------------------------------

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on FOP data reported by respondents for the POI. To calculate NV, 
we multiplied the reported per-unit factor-consumption rates by 
publicly available surrogate values. In selecting the surrogate values, 
we considered the quality, specificity, and contemporaneity of the 
data. As appropriate, we adjusted input prices by including freight 
costs to make them delivered prices. Specifically, we added to Indian 
import surrogate values a surrogate freight cost using the shorter of 
the reported distance from the domestic supplier to the factory or the 
distance from the nearest seaport to the factory where appropriate. 
This adjustment is in accordance with the Court of Appeals for the 
Federal Circuit's decision in Sigma Corp. v. United States, 117 F. 3d 
1401, 1407-1408 (Fed. Cir. 1997).
    For this preliminary determination, in accordance with the 
Department's practice, we used data from the Indian Import Statistics 
in order to calculate surrogate values for the mandatory respondents' 
material inputs. In selecting the best available information for 
valuing FOP in accordance with section 773(c)(1) of the Act, the 
Department's practice is to select, to the extent practicable, 
surrogate values which are non-export average values, most 
contemporaneous with the POI, product-specific, and tax-exclusive. See 
e.g., Notice of Preliminary Determination of Sales at Less Than Fair 
Value, Negative Preliminary Determination of Critical Circumstances and 
Postponement of Final Determination: Certain Frozen and Canned 
Warmwater Shrimp From the Socialist Republic of Vietnam, 69 FR 42672, 
42682 (July 16, 2004), unchanged in Final Determination of Sales at 
Less Than Fair Value: Certain Frozen and Canned Warmwater Shrimp from 
the Socialist Republic of Vietnam, 69 FR 71005 (December 8, 2004). The 
record shows that data in the Indian Import Statistics represents 
import data that is contemporaneous with the POI, product-specific, and 
tax-exclusive. Where we could not obtain publicly available information 
contemporaneous to the POI with which to value factors, we adjusted the 
surrogate values using, where appropriate, the Indian Wholesale Price 
Index (``WPI'') as published in the International Financial Statistics 
of the International Monetary Fund.
    Furthermore, with regard to the Indian import-based surrogate 
values, we have disregarded import prices that we have reason to 
believe or suspect may be subsidized. We have reason to believe or 
suspect that prices of inputs from Indonesia, South Korea, and Thailand 
may have been subsidized. We have found in other proceedings that these 
countries maintain broadly available, non-industry-specific export 
subsidies and, therefore, it is reasonable to infer that all exports to 
all markets from these countries may be subsidized. See Amended Final 
Determination of Sales at Less than Fair Value: Automotive Replacement 
Glass Windshields from the People's Republic of China, 67 FR 11670 
(March 15, 2002); see also Notice of Final Determination of Sales at 
Less Than Fair Value and Negative Final Determination of Critical 
Circumstances: Certain Color Television Receivers From the People's 
Republic of China, 69 FR 20594 (April 16, 2004) (``CTVs from the 
PRC''). We are also directed by the legislative history not to conduct 
a formal investigation to ensure that such prices are not subsidized. 
See

[[Page 77133]]

H.R. Rep. 100-576 at 590 (1988). Rather, Congress directed the 
Department to base its decision on information that is available to it 
at the time it makes its determination. Therefore, we have not used 
prices from these countries in calculating the Indian import-based 
surrogate values.
    Certain of BGY's inputs into the production of the merchandise 
under investigation were purchased from market economy suppliers and 
paid for in market economy currencies. For two inputs all purchases 
were made from a market economy supplier and paid in a market economy 
currency, and the Department has therefore used the weight-averaged POI 
price experienced by BGY for these inputs. We used the market economy 
prices experienced by BGY when the inputs were obtained from a market 
economy, paid for in a market economy currency, and were a significant 
portion of the total purchases of that input.
    The Department used the Indian Import Statistics to value the raw 
material and packing material inputs that Bosun, BGY, and Hebei Jikai 
used to produce the subject merchandise during the POI, except where 
listed below. For a detailed description of all surrogate values used 
for respondents, see Factor Value Memo.
    To value electricity, the Department used rates from Key World 
Energy Statistics 2003, published by the International Energy Agency. 
Because these data were not contemporaneous to the POI, we adjusted for 
inflation using WPI. See Factor Value Memo.
    For direct, indirect, and packing labor, consistent with 19 CFR 
351.408(c)(3), we used the PRC regression-based wage rate as reported 
on Import Administration's home page, Import Library, Expected Wages of 
Selected NME Countries, revised in November 2005, http://ia.ita.doc.gov/wages/index.html. The source of these wage-rate data on 
the Import Administration's web site is the Yearbook of Labour 
Statistics 2002, ILO (Geneva: 2002), Chapter 5B: Wages in 
Manufacturing. Because this regression-based wage rate does not 
separate the labor rates into different skill levels or types of labor, 
we have applied the same wage rate to all skill levels and types of 
labor reported by the respondent. See Factor Value Memo.
    The Department valued water using data from the Maharashtra 
Industrial Development Corporation (www.midcindia.org) since it 
includes a wide range of industrial water tariffs. This source provides 
386 industrial water rates within the Maharashtra province from June 
2003: 193 for the ``inside industrial areas'' usage category and 193 
for the ``outside industrial areas'' usage category. Because the value 
was not contemporaneous with the POI, we adjusted the rate for 
inflation. See Factor Value Memo.
    We used Indian transport information in order to value the freight-
in cost of the raw materials. The Department determined the best 
available information for valuing truck freight to be from 
www.infreight.com. This source provides daily rates from six major 
points of origin to five destinations in India during the POI. The 
Department obtained a price quote on the first day of each month of the 
POI from each point of origin to each destination and averaged the data 
accordingly. See Factor Value Memo. To value rail freight, the 
Department used an average of rail freight prices based on the publicly 
available freight rates reported by the official website of the Indian 
Ministry of Railways at www.indianrailways.gov.in/railway/freightrates/
freight--charges.htm. The Department used an average of the price-per-
kilogram rates for classes 190 and 200 based on the freight distances 
between cities. As the prices were denoted in quintals, the Department 
divided the price by 100 to derive a value in Rupees per kilogram. 
Consistent with the calculation of inland truck freight, the Department 
used the same freight distances used in the calculation of inland truck 
freight, as reported by www.infreight.com to derive a value in Rupees 
per kilogram per kilometer. See Factor Value Memo.
    The Department used two sources to calculate a surrogate value for 
domestic brokerage expenses. The Department averaged December 2003-
November 2004 data contained in Essar Steel's February 28, 2005, public 
version response submitted in the AD administrative review of Hot-
Rolled Carbon Steel Flat Products from India with October 2002-
September 2003 data contained in Pidilite Industries' March 9, 2004, 
public version response submitted in the AD investigation of Carbazole 
Violet Pigment 23 from India (see Notice of Final Determination of 
Sales at Less Than Fair Value: Carbazole Violet Pigment 23 From India, 
69 FR 67306 (November 17, 2004)). The brokerage expense data reported 
by Essar Steel and Pidilite Industries in their public versions is 
ranged data. The Department first derived an average per-unit amount 
from each source. Then the Department adjusted each average rate for 
inflation. Finally, the Department averaged the two per-unit amounts to 
derive an overall average rate for the POI. See Factor Value Memo.
    To value marine insurance, the Department obtained a price quote 
from http://www.rjgconsultants.com/insurance.html, a market-economy 
provider of marine insurance. See Factor Value Memo. To value 
international seafreight, the Department obtained price quotes from 
http://www.maersksealand.com/HomePage/appmanager/, a market-economy 
provider of international freight services. See Factor Value Memo. To 
value international airfreight, the Department obtained price quotes 
from Hong Kong to the United States from DHL. See Factor Value Memo. To 
value factory overhead, selling, general, and administrative expenses, 
and profit, we used the Reserve Bank of India publication Reserve Bank 
of India Bulletin, August 2005. See Factor Value Memo for a full 
discussion of the calculation of the ratios from these data.

Currency Conversion

    We made currency conversions into U.S. dollars, in accordance with 
section 773A(a) of the Act, based on the exchange rates in effect on 
the dates of the U.S. sales as certified by the Federal Reserve Bank.

Verification

    As provided in section 782(i)(1) of the Act, we intend to verify 
the information upon which we will rely in making our final 
determination.

Combination Rates

    In the Initiation Notice, the Department stated that it would 
calculate combination rates for certain respondents that are eligible 
for a separate rate in this investigation. See Initiation Notice, 70 FR 
35625, 35629. This change in practice is described in Policy Bulletin 
05.1, available at http://ia.ita.doc.gov/. The Policy Bulletin 05.1, 
states:
    ``[w]hile continuing the practice of assigning separate rates only 
to exporters, all separate rates that the Department will now assign in 
its NME investigations will be specific to those producers that 
supplied the exporter during the period of investigation. Note, 
however, that one rate is calculated for the exporter and all of the 
producers which supplied subject merchandise to it during the period of 
investigation. This practice applies both to mandatory respondents 
receiving an individually calculated separate rate as well as the pool 
of non-investigated firms receiving the

[[Page 77134]]

weighted-average of the individually calculated rates. This practice is 
referred to as the application of ``combination rates'' because such 
rates apply to specific combinations of exporters and one or more 
producers. The cash-deposit rate assigned to an exporter will apply 
only to merchandise both exported by the firm in question and produced 
by a firm that supplied the exporter during the period of 
investigation.'' See Policy Bulletin 05.1, at page 6.

Preliminary Determination

    The weighted-average dumping margins are as follows:

                        Diamond Sawblades from the PRC - Weighted-average Dumping Margins
----------------------------------------------------------------------------------------------------------------
                                                                                              Weighted-Average
               Exporter                                      Producer                           Deposit Rate
----------------------------------------------------------------------------------------------------------------
Beijing Gang Yan Diamond Products                Beijing Gang Yan Diamond Products Company                0.11 %
 Company.............................
Bosun Tools Group Co., Ltd...........                          Bosun Tools Group Co., Ltd.                16.34%
Hebei Jikai Industrial Group Co.,                   Hebei Jikai Industrial Group Co., Ltd.                10.07%
 Ltd.................................
Danyang NYCL Tools Manufacturing Co.,           Danyang NYCL Tools Manufacturing Co., Ltd.                14.96%
 Ltd.................................
Danyang Youhe Manufacturing Co. Ltd..                 Danyang Youhe Manufacturing Co. Ltd.                14.96%
Fujian Quanzhou Wanlong Stone Co.,                 Fujian Quanzhou Wanlong Stone Co., Ltd.                14.96%
 Ltd.................................
Guilin Tebon Superhard Material Co.,             Guilin Tebon Superhard Material Co., Ltd.                14.96%
 Ltd.................................
Huzhou Gu's Import & Export Co., Ltd.            Danyang Aurui Hardware Products Co., Ltd.                14.96%
Jiangsu Fengtai Diamond Tool             Jiangsu Fengtai Diamond Tool Manufacture Co. Ltd.                14.96%
 Manufacture Co. Ltd.................
Jiangyin LIKN Industry Co., Ltd......   Jiangsu Fengtai Diamond Tool Manufacture Co., Ltd.                14.96%
Jiangyin LIKN Industry Co., Ltd......                Wuhan Wanbang Laser Diamond Tools Co.                14.96%
Quanzhou Zhongzhi Diamond Tool Co.,               Quanzhou Zhongzhi Diamond Tool Co., Ltd.                14.96%
 Ltd.................................
Rizhao Hein Saw Co., Ltd.............                            Rizhao Hein Saw Co., Ltd.                14.96%
Shanghai Deda Industry & Trading Co.       Hua Da Superabrasive Tools Technology Co., Ltd.                14.96%
 Ltd.................................
Sichuan Huili Tools Co...............              Chengdu Huifeng Diamond Tools Co., Ltd.                14.96%
Sichuan Huili Tools Co...............                              Sichuan Huili Tools Co.                14.96%
Weihai Xiangguang Mechanical             Weihai Xiangguang Mechanical Industrial Co., Ltd.                14.96%
 Industrial Co., Ltd.................
Wuhan Wanbang Laser Diamond Tools          Wuhan Wanbang Laser Diamond Tools Company, Ltd.                14.96%
 Company, Ltd........................
Xiamen ZL Diamond Tools Co., Ltd.....                    Xiamen ZL Diamond Tools Co., Ltd.                14.96%
Zhenjiang Inter-.....................       China Import & Export Co., Ltd.Danyang Weiwang                14.96%
                                                             Tools Manufacturing Co., Ltd.
Zhejiang Tea Import & Export Co.,       Danyang Dida Diamond Tools Manufacturing Co., Ltd.                14.96%
 Ltd.................................
Zhejiang Tea Import & Export Co.,                   Danyang Tsunda Diamond Tools Co., Ltd.                14.96%
 Ltd.................................
Zhejiang Tea Import & Export Co.,          Wuxi Lianhua Superhard Material Tools Co., Ltd.                14.96%
 Ltd.................................
Zhejiang Wanli Tools Group Co., Ltd..        Zhejiang Wanli Super-hard Materials Co., Ltd.                14.96%
PRC-Wide Rate........................  ...................................................               164.09%
----------------------------------------------------------------------------------------------------------------

Disclosure

    We will disclose the calculations performed within five days of the 
date of publication of this notice to parties in this proceeding in 
accordance with 19 CFR 351.224(b).

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we will instruct U.S. 
Customs and Border Protection (``CBP'') to suspend liquidation of all 
entries of diamond sawblades from the PRC from Bosun and the PRC-wide 
entity that are entered, or withdrawn from warehouse, for consumption 
on or after 90 days prior to the date of publication in the Federal 
Register of our preliminary determination of sales at LTFV. The 
Department does not require any cash deposit or posting of a bond for 
this preliminary determination for BGY. Accordingly, we will not direct 
CBP to suspend liquidation of any entries of diamond sawblades from the 
PRC that are exported by BGY and entered, or withdrawn from warehouse, 
for consumption on or after the date of publication of this notice in 
the Federal Register. We will also instruct CBP to suspend liquidation 
of entries of diamond sawblades that are entered, or withdrawn from 
warehouse, for consumption that are exported by the Separate Rates 
Applicants and Hebei Jikai, on or after the date of publication of this 
preliminary determination in the Federal Register. CBP shall require a 
cash deposit or posting of a bond equal to the estimated preliminary 
dumping margins, where applicable, as published in the Federal 
Register. This suspension of liquidation will remain in effect until 
further notice.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our preliminary affirmative determination of sales at less than 
fair value. Section 735(b)(2) of the Act requires the ITC to make its 
final determination as to whether the domestic industry in the United 
States is materially injured, or threatened with material injury, by 
reason of imports of diamond sawblades, or sales (or the likelihood of 
sales) for importation, of the subject merchandise within 45 days of 
our final determination.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than seven days 
after the date of the final verification report is issued in this 
proceeding and rebuttal briefs limited to issues raised in case briefs 
no later than five days after the deadline date for case briefs. A list 
of authorities used and an executive summary of issues should accompany 
any briefs submitted to the Department. This summary should be limited 
to five pages total, including footnotes.
    In accordance with section 774 of the Act, we will hold a public 
hearing, if requested, to afford interested parties an opportunity to 
comment on arguments raised in case or rebuttal briefs. If a request 
for a hearing is made, we intend to hold the hearing three days after 
the deadline of submission of rebuttal briefs at the U.S. Department of 
Commerce, 14th Street and Constitution Ave, NW, Washington, DC 20230, 
at a time and location to be determined. Parties should confirm by 
telephone the date, time, and location of the hearing two days before 
the scheduled date.

[[Page 77135]]

    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days after the date of publication of this notice. See 
19 CFR 351.310(c). Requests should contain the party's name, address, 
and telephone number, the number of participants, and a list of the 
issues to be discussed. At the hearing, each party may make an 
affirmative presentation only on issues raised in that party's case 
brief and may make rebuttal presentations only on arguments included in 
that party's rebuttal brief.
    We will make our final determination no later than 135 days after 
the date of publication of this preliminary determination, pursuant to 
section 735(a)(2) of the Act.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: December 20, 2005.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.
[FR Doc. 05-24627 Filed 12-28-05; 8:45 am]
BILLING CODE 3510-DS-S