[Federal Register Volume 71, Number 98 (Monday, May 22, 2006)]
[Notices]
[Pages 29310-29314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-7771]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-855]


Notice of Final Determination of Sales at Less Than Fair Value 
and Final Determination of Critical Circumstances: Diamond Sawblades 
and Parts Thereof from the Republic of Korea

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

EFFECTIVE DATE: May 22, 2006.
SUMMARY: On December 29, 2005, the Department of Commerce (the 
Department) published its preliminary determination of sales at less 
than fair value (LTFV) in the antidumping duty investigation of diamond 
sawblades and parts thereof from the Republic of Korea (Korea). The 
period of investigation (POI) is April 1, 2004, through March 31, 2005.
    Based on our analysis of the comments received, we have made 
changes in the margin calculations. Therefore, the final determination 
differs from the preliminary determination. The final weighted-average 
dumping margins for the investigated companies are listed below

[[Page 29311]]

in thesection entitled ``Final Determination Margins.'' Finally, we 
determine that critical circumstances do not exist with regard to 
certain exports of subject merchandise from Korea by Ehwa Diamond 
Industrial Co., Ltd. (Ehwa) and Hyosung Diamond Industrial Co. 
(Hyosung). However, we find that critical circumstances do exist with 
respect to Shinhan Diamond Industrial Co., Ltd. (Shinhan) and the 
companies covered by the ``All Others'' rate.

FOR FURTHER INFORMATION CONTACT: Maisha Cryor or Thomas Martin, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-5831 or (202) 482-3936, respectively.

SUPPLEMENTARY INFORMATION: We determine that diamond sawblades from 
Korea are being, or are likely to be, sold in the United States at 
LTFV, as provided in section 735 of the Tariff Act of 1930, as amended 
(the Act). The estimated margins of sales at LTFV are shown in the 
``Continuation of Suspension of Liquidation'' section of this notice. 
In addition, we determine that there is no reasonable basis to believe 
or suspect that critical circumstances exist with respect to imports of 
the subject merchandise produced by Ehwa and Hyosung. However, we find 
that there is a reasonable basis to believe or suspect that critical 
circumstances exist with respect to imports of the subject merchandise 
produced by Shinhan and companies covered by the ``All Others'' rate.

Case History

    The preliminary determination in this investigation was published 
on December 29, 2005. See Notice of Preliminary Determination of Sales 
at Less Than Fair Value, Postponement of Final Determination, and 
Negative Preliminary Critical Circumstances Determination: Diamond 
Sawblades and Parts Thereof from the Republic of Korea, 70 FR 77135 
(December 29, 2005) (Preliminary Determination).
    Since the preliminary determination, the following events have 
occurred.
    In February 2006 and March 2006, we verified the questionnaire 
responses of the three participating respondents in this case, Ehwa, 
Shinhan, and Hyosung.
    On April 17, 2006, we received case briefs from the petitioner,\1\ 
Ehwa, Shinhan, and Hyosung. We also received rebuttal briefs on April 
24, 2006, from the petitioner, Ehwa, Shinhan, and Hyosung. The 
Department held a public hearing on May 1, 2006, at the request of the 
petitioner, Ehwa, Shinhan, and Hyosung.
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    \1\ The petitioner in this investigation is the Diamond Sawblade 
Manufacturers' Coalition.
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Period of Investigation

    The period of investigation is April 1, 2004, through March 31, 
2005.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties in 
this investigation are addressed in the ``Issues and Decision 
Memorandum'' from Stephen J. Claeys, Deputy Assistant Secretary for 
Import Administration, to David M. Spooner, Assistant Secretary for 
Import Administration, dated May 15, 2006, which is adopted by this 
notice. Parties can find a complete discussion of the issues raised in 
this investigation and the corresponding recommendations in this public 
memorandum, which is on file in the Central Records Unit, room B-099 of 
the main Commerce Building. In addition, a complete version of the 
Issues and Decision Memorandum can be accessed directly on the Web at 
http://ia.ita.doc.gov/frn/index.html. The paper copy and electronic 
version of the Issues and Decision Memorandum are identical in content.

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 this 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 this 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 petition. 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 this 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 classification is provided for 
convenience and U.S. Customs and Border Protection purposes; however, 
the written description of the scope of this investigation is 
dispositive.

Scope Rulings

    During the course of this investigation, the Department issued 
several scope rulings, all of which are affirmed through this final 
determination. Specifically, in the Preliminary Determination, the 
Department ruled that concave and convex cores, and finished diamond 
sawblades produced from such cores, are within the scope of this 
investigation. See Memorandum from Maisha Cryor, Senior International 
Trade Compliance Analyst, to Thomas F. Futtner, Acting Office Director, 
``Consideration of Scope Exclusion and Clarification Requests,'' dated 
December 20, 2005, at page 8. The Department also ruled that metal-
bonded, diamond 1A1R grinding wheels are within the scope of this 
investigation. Id. at 11. On April 7, 2006, the Department found 
granite contour diamond sawblades within the scope of the 
investigation. See Memorandum from Maisha Cryor, Senior International 
Trade Compliance Analyst, to Thomas F. Futtner, Acting Office Director, 
``Consideration of Scope Exclusion Request,'' dated April 7, 2006. In 
this decision, the Department confirmed that the Rockwell C hardness 
threshold contained in the scope of the investigation applies only to 
cores, and not to finished diamond sawblades. Id. at 7. Lastly, the 
term ``sawblade'' is

[[Page 29312]]

defined as those products that meet the 1A1R specification, where the 
segment thickness is larger than the thickness of the core. See the 
petitioner's May 3, 2005, submission at Exhibit I-10 (``The segment or 
rim is slightly wider than the steel blade to allow the attacking edge 
to penetrate the material without the steel blade rubbing against 
it''); the petitioner's May 10, 2005, submission, at page 14 (``the 
segment or rim is slightly wider than the steel blade to allow the 
attacking edge to penetrate the material without the steel blade 
rubbing against it''); Transcript to April 25, 2006, Public Hearing in 
the companion investigation of diamond sawblades from the People's 
Republic of China (statement by the petitioner that the ``international 
codes for ... sawblades are 1A1R, 1A1RS, and 1A1RSS, where the R means 
recessed. And that refers to the core, {where{time}  the core is 
thinner than the segments''); and ITC Investigation No. 731-TA-1093, 
August 2005 (``The segment, or rim, is slightly wider than the steel 
blade to permit the leading edge to penetrate the material without the 
steel blade rubbing against it and to discourage blade binding'').

Changes Since the Preliminary Determination

    Based on our analysis of the comments received and our findings at 
verification, we have made certain changes to the margin calculations. 
For a discussion of these changes, see the ``Margin Calculations'' 
section of the Issues and Decision Memorandum.
Critical Circumstances
    In our preliminary determination, we found that critical 
circumstances did not exist for any mandatory respondent or any company 
subject to the ``All Others'' rate. See Preliminary Determination, 70 
FR at 77142-77144. We received comments on our critical circumstances 
determination from the petitioner, Ehwa, and Shinhan. Based upon those 
comments, we have revised our analysis to include the margins listed in 
the ``Final Determination Margins'' section below, and we based our 
analysis of whether imports were massive according to the value of 
shipments, rather than quantity. See Memorandum from Mark J. Manning, 
Acting Program Manager, to Thomas F. Futtner, Acting Office Director, 
``Final Determination of Critical Circumstances,'' dated May 15, 2006. 
Due to the changes made in our analysis, we determine that critical 
circumstances do not exist for imports of subject merchandise from Ehwa 
and Hyosung because, as required section 735(a)(3)(A)(ii) of the Act, 
there is no evidence that importers knew, or should have known, that 
the exporter was selling subject merchandise at LTFV. In addition, we 
also note that the requirements of section 735(a)(3)(B) of Act are not 
met for Ehwa and Hyosung because their imports were not massive. 
However, we find that critical circumstances do exist for imports of 
subject merchandise from Shinhan and the ``All Others'' companies 
because, pursuant to section 735(a)(3)(A)(ii) of the Act, there is 
evidence that importers knew, or should have known, that the exporter 
was selling subject merchandise at LTFV. In addition, we also note that 
Shinhan and the ``All Others'' companies satisfy section 735(a)(3)(B) 
of Act because their imports were massive. Id.

Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by Ehwa, Shinhan and Hyosung for use in our final 
determination. We used standard verification procedures including 
examination of relevant accounting and production records, and original 
source documents provided by the respondents.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Act, we are 
directing U.S. Customs and Border Protection (CBP) to continue to 
suspend liquidation of all imports of subject merchandise that are 
entered, or withdrawn from warehouse, for consumption on or after 
December 29, 2005, the date of publication of the preliminary 
determination in the Federal Register. However, since we have 
determined that critical circumstances exist with respect to subject 
merchandise produced by Shinhan and the companies covered by the ``All 
Others'' rate, we will instructed CBP to suspend liquidation of all 
unliquidated entries of merchandise produced and/or exported by these 
companies that entered on or after September 30, 2005, which is 90 days 
before the date of publication of the Preliminary Determination. See 
section 735(c)(4)(B). We will instruct CBP to continue to require a 
cash deposit or the posting of a bond for all companies based on the 
estimated weighted-average dumping margins shown below. The suspension 
of liquidation instructions will remain in effect until further notice.

Final Determination Margins

    We determine that the following weighted-average dumping margins 
exist for the period April 1, 2004, through March 31, 2005:

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       Exporter/Manufacturer               Weighted-Average Margin Percentage          Critical Circumstances
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Ehwa...............................                                         12.76%                            No
Shinhan............................                                         26.55%                           Yes
Hyosung............................                                          6.43%                            No
All Others.........................                                         16.39%                           Yes
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    In accordance with section 735(c)(5)(A) of the Act, we have based 
the ``All Others'' rate on the weighted-average of the dumping margins 
calculated for the exporters/manufacturers investigated in this 
proceeding. The ``All Others'' rate is calculated exclusive of all de 
minimis margins and margins based entirely on adverse facts available.

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
ITC of our determination. As our final determination is affirmative, 
the ITC will determine within 45 days whether these imports are causing 
material injury, or threat of material injury, to an industry in the 
United States. If the ITC determines that material injury or threat of 
injury does not exist, the proceeding will be terminated and all 
securities posted will be refunded or canceled. If the ITC determines 
that such injury does exist, the Department will issue an antidumping 
duty order directing CBP officials to assess antidumping duties on all 
imports of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the effective date of the 
suspension of liquidation.
    This notice serves as the only reminder to parties subject to 
administrative protective order (APO) of

[[Page 29313]]

their responsibility concerning the disposition of proprietary 
information disclosed under APO in accordance with 19 CFR 
351.305(a)(3). Timely written notification of return/destruction of APO 
materials or conversion to judicial protective order is hereby 
requested. Failure to comply with the regulations and the terms of an 
APO is a sanctionable violation.
    We are issuing and publishing this determination and notice in 
accordance with sections 735(d) and 777(i) of the Act.

    Dated: May 15, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.

Appendix

List of Issues in the Issues and Decision Memorandum

Comment 1: Whether the Department Should Revise the Physical 
Characteristics and Model Match Criteria.
Comment 2: Whether the Department Should Reaffirm Its Preliminary Scope 
Conclusions In the Final Determination And Include These Conclusions in 
Instructions to Customs.
Comment 3: Whether the Department Should Treat the Location of Segment 
Manufacture As the Country of Origin for DSB.
Comment 4: Whether U.S. Repacking Expenses, U.S. Warehousing Expenses, 
and U.S. Movement Expenses Should Be Treated as Selling Expenses for 
Purposes of Calculating CEP Profit.
Comment 5: Whether Further Manufacturing Costs Should be Deducted from 
the Calculation of Net U.S. Price When Such Sales are Not Reported.
Comment 6: Whether Further Manufacturing Costs and Revenues Should be 
Included in the Calculation of CEP Profit When Such Sales are Not 
Reported.
Comment 7: Whether the Department Should Use the Adjustments to 
Respondents' Costs to Account for NME Inputs in the Calculation of CEP 
Profit.
Comment 8: Whether the Department Should Correct VCOM and TCOM for any 
Changes it Makes to the Reported Costs.
Comment 9: Whether the Department Should Reconsider its Preliminary 
Critical Circumstances Determination.
Comment 10: Whether the Department Should Adjust Ehwa's and Shinhan's 
Purchases from Affiliated Suppliers.
Comment 11: Whether the Department Should Provide Offsets to Dumping.
Comment 12: Whether the Department Should Adjust the Reported Costs for 
Purchases from Unaffiliated NME Suppliers.
Comment 13: Whether the Department's Preliminary Decision to Collapse 
Ehwa and Shinhan was Contrary to Law and the Department's Longstanding 
and Consistent Past Practice.
Comment 14: Whether the Department Should Treat Information Regarding a 
Particular Relationship Between Ehwa and Shinhan as Public Information.
Comment 15: Whether the Department Should Collapse Ehwa with its 
Chinese Affiliates.
Comment 16: Whether Ehwa's Other Discounts and Certain Billing 
Adjustments Should be Treated As Selling Expenses for Purposes of 
Calculating CEP Profit.
Comment 17: Whether Ehwa Placed Conflicting Values Related to its 
Indirect Selling Expenses on the Record.
Comment 18: Whether the Department Should Correct Formulas Used in 
Ehwa's Calculation of Indirect Selling Expenses.
Comment 19: Whether the Department Should Disallow Ehwa's Allocation of 
Indirect Selling Expenses Between the Industrial and the Stone & 
Construction Divisions because Ehwa's Sales of 1A1R Merchandise are 
from the Industrial Division.
Comment 20: Whether the Department Should Calculate the Indirect 
Selling Expense Ratio for Each of Ehwa's U.S. Affiliates.
Comment 21: Whether Ehwa Properly Excluded its Sales of Refurbished 
Products from its HM Sales Database.
Comment 22: Whether the Department Should Adjust Costs Related to the 
Allocation of Costs Between Indirect Selling and G&A Expenses.
Comment 23: Whether Ehwa's Use of Surrogate Costs Was Appropriate.
Comment 24: Whether the Department Should Adjust G&A Expenses to 
Account for the Over-Accrual of the Provision for Retirement Expenses.
Comment 25: Whether Shinhan Failed to Report COM for SHINUS04 and 
SHINHM04.
Comment 26: Whether the Department Should Base Shinhan's Starting Price 
on INVNPRU Rather than GRSUPRU.
Comment 27: Whether the Department Should Apply AFA to Shinhan's Inland 
Freight Expenses.
Comment 28: Whether the Department Should Allocate Shinhan's Freight 
Revenue on the Same Basis as Inland Freight.
Comment 29: Whether the Department Double-Counted Shinhan's Freight 
Revenue.
Comment 30: Whether the Department Should Recalculate Shinhan's HM and 
International Movement Expenses.
Comment 31: Whether the Department Should Exclude Shinhan's Sales of 
Refurbished DSB from Shinhan's HM Sales Database or Weight-Average the 
Sales and Costs Databases for Refurbished and Non-Refurbished DSB.
Comment 32: Whether the Department Should Collapse Shinhan With Its 
Korean Affiliates.
Comment 33: Whether the Department Should Collapse Shinhan with Its 
Chinese Affiliate.
Comment 34: Whether the Department Should Make Symmetric Adjustments to 
Shinhan's Reported Sales and Cost Data.
Comment 35: Whether the Department Should Ensure that Segments are not 
Compared with DSB in the Dumping Margin Calculations.
Comment 36: Whether the Department Should Allow Shinhan's Residual Cost 
Variance Adjustment.
Comment 37: Whether the Department Should Use SG&A Methodology 
Submitted During the Cost Verification.
Comment 38: Whether the Department Should Adjust for Items in Shinhan's 
G&A Expense Rate Calculation.
Comment 39: Whether the Department Should Correct Certain Minor Errors 
in Its Proposed Cost Adjustments.
Comment 40: Whether the Department Should Use the Costs Based on 
Shinhan's Normal Accounting System.
Comment 41: Whether the Department Should Adjust Shinhan's Costs for 
Certain CONNUMs.
Comment 42: Whether the Department Should Reduce Shinhan's Materials 
Rebate Adjustment.
Comment 43: Whether the Department Should Adjust the Production 
Quantities of CONNUMS not Produced in the POI.
Comment 44: Whether the Department Should Base Shinhan's Financial 
Expense Rate on Facts Available.
Comment 45: Whether The Department Should Revise Certain Freight 
Expenses in Hyosung's U.S. Sales Database.
Comment 46: Whether the Department Should Apply AFA to Hyosung's 
Reported HM Inland Freight.
Comment 47: Whether the Department Should Revise the Indirect Selling 
Expense Ratio for Domestic and Export Sales.
Comment 48: Whether Hyosung Fully and Accurately Reported all HM and 
U.S. Sales of Subject Merchandise.
Comment 49: Whether the Department Should Allow a Duty Drawback 
Adjustment for Hyosung.
Comment 50: Whether the Department Should Recalculate Credit Expense 
for the EP Sales with Revised Shipment Dates in the Final 
Determination.
Comment 51: Whether the Department Should Use Hyosung's Originally 
Reported Costs of Production.

[[Page 29314]]

Comment 52: Whether the Department Should Adjust Hyosung's Reported 
Costs for Unreconciled Differences.
Comment 53: Whether the Department Should Exclude Hyosung's Prior 
Period Income Tax Payments From G&A Expenses.
Comment 54: Whether the Department Should Allow the Short-Term Income 
Generated From Investment Securities as an Offset to Hyosung's 
Financial Expenses.
Comment 55: Whether the Department Should Correct the Surrogate CONNUM 
for two Products on the COP Database.
Comment 56: Whether the Department Should Ensure that the Products 
Purchased from Unaffiliated Suppliers Should be Assigned the Reported 
Costs of Production for Those Products.
Comment 57: Whether the Department Should Reject the Petitioner's Case 
Brief for Failure To Comply With the Department's Regulations.
[FR Doc. E6-7771 Filed 5-19-06; 8:45 am]
BILLING CODE 3510-DS-S