[Federal Register Volume 73, Number 15 (Wednesday, January 23, 2008)]
[Notices]
[Pages 3928-3942]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-1106]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-909]


Certain Steel Nails From the People's Republic of China: 
Preliminary Determination of Sales at Less Than Fair Value and Partial 
Affirmative Determination of Critical Circumstances and Postponement of 
Final Determination

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

EFFECTIVE DATE: January 23, 2008.
SUMMARY: We preliminarily determine that certain steel nails 
(``nails'') 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. Interested 
parties are invited to comment on this preliminary determination. We 
will make our final determination within 135 days after the date of 
this preliminary determination.

FOR FURTHER INFORMATION CONTACT: Nicole Bankhead (respondent Paslode) 
or Matt Renkey (respondent Xingya Group), 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) 482-9068 or 482-2312, 
respectively.

SUPPLEMENTARY INFORMATION: 

Initiation

    On May 29, 2007, the Department of Commerce (``the Department'') 
received petitions on imports of nails from the PRC and United Arab 
Emirates (``UAE'') filed in proper form by Mid Continent Nail 
Corporation, Davis Wire Corporation, Gerdau Ameristeel Corporation 
(Atlas Steel & Wire Division), Maze Nails (Division of W.H. Maze 
Company), Treasure Coast Fasteners, Inc., and the United Steel, Paper 
and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and 
Service Workers International Union (collectively, ``Petitioners''). 
These investigations were initiated on July 9, 2007. See Certain Steel 
Nails from the People's Republic of China and the United Arab Emirates: 
Initiation of Antidumping Duty Investigations, 72 FR 38816 (July 16, 
2007) (``Initiation Notice'').
    On July 31, 2007, 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 and UAE of nails. The ITC's determination was 
published in the Federal Register on August 6, 2007. See Certain Steel 
Nails From China and the United Arab Emirates (Investigation No. 731-
TA-1114 and 1115) (Preliminary), Publication 3939 (August 2007) (``ITC 
Preliminary Determination'').

Scope Comments

    In accordance with the preamble to our regulations, 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. (See Antidumping Duties; 
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997) 
and Initiation Notice 72 FR at 38817.)
    In this investigation and the concurrent investigation of nails 
from the UAE, we received three scope exclusion requests during the 
period July 2007 through January 2008.
    On July 30, 2007, Stanley Fastening Systems, LP (Stanley), an 
interested party in this proceeding, requested that

[[Page 3929]]

banded brads and finish nails imported with a ``nailer kit'' or ``combo 
kit'' \1\ as a single package be excluded from this investigation as 
being outside the ``class or kind'' of merchandise. Stanley conducted a 
Diversified Products \2\ analysis in support of its position claiming 
that banded products imported in the same package as a pneumatic nailer 
and sold as a ``nailer kit'' or ``combo kit'' are not within the class 
of kind of merchandise covered in the scope of the instant 
investigation. In addition, Stanley states that, to the best of its 
information and belief, none of the petitioning companies in this 
investigation manufacture banded brads or finish nails.
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    \1\ A ``nailer kit'' consists of a pneumatic nailer, a ``starter 
box'' of branded products and a carrying case. A ``combo kit'' 
consists of an air compressor, a pneumatic nailer, a ``starter box'' 
of banded products and related accessories, such as an air hose.
    \2\ Prior to being codified in the regulations, these factors 
were identified by the Court of International Trade in Diversified 
Products Corp. v. United States, 572 F. Supp. 883 (CIT 1983), and 
therefore, they are also referred to as the ``Diversified Products 
factors.''
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    On August 9, 2007, Petitioners objected to this exclusion request, 
arguing that the scope of this proceeding is comprehensive and, while 
the scope contains specific exclusions, it does not exclude any nails 
based on their importation in combination with one or more other 
articles. Petitioners claimed that it is their intention that the scope 
of this proceeding include all certain steel nails exhibiting the 
physical characteristics identified in the written scope description, 
regardless of how imported. Furthermore, according to Petitioners, a 
Diversified Products analysis requires a determination that collated 
steel finish nails remain scope merchandise, whether imported on their 
own or with a nail gun. Finally, Petitioners cite several cases \3\ in 
support of their contention that Department precedent supports their 
argument that these finish nails are merchandise covered by the scope 
of investigation. According to Petitioners, these rulings address 
fundamentally different types of kits or sets of merchandise, in which 
the subject merchandise at issue is subsumed with a set of goods whose 
essential character is defined as something other than the merchandise 
itself.
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    \3\ See, e.g., Memorandum from Wendy J. Frankel, Director, AD/
CVD Operations, Office 8, to Barbara E. Tillman, Acting Deputy 
Assistant Secretary for Import Administration, Final Scope Ruling--
Antidumping Duty Order on Certain Cased Pencils from the People's 
Republic of China--Request by Fiskars Brands, Inc. (June 3, 2005); 
Memorandum from Laurie Parkhill, Director, Office 8, AD/CVD 
Enforcement, To Jeffrey A. May, Deputy Assistant Secretary for 
Import Administration, Final Scope Ruling--Antidumping Duty Order on 
Certain Cased Pencils from the People's Republic of China--Request 
by Target Corporation Regarding ``Hello Kitty Fashion Totes'' 
(September 29, 2004).
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    On August 15, 2007, Stanley responded to Petitioners' August 9, 
2007, submission claiming that none of Petitioners' arguments supports 
a conclusion that banded products imported in nailer kits are within 
the subject class of kind of merchandise.
    On December 12, 2007, Stanley revised its July 30, 2007, scope 
exclusion request arguing that its new request reflects a broader 
exclusion and is easily administered by U.S. Customs and Border 
Protection (``CBP'') because the description of the excluded brads and 
finish nails is framed solely in terms of their physical 
characteristics. On December 18, 2007, Petitioners filed a letter 
stating that they agree with Stanley's December 12, 2007, scope 
exclusion request.
    Therefore, based on the scope exclusion request from Stanley, the 
fact that Petitioners are in agreement with this request, and that 
there appears to be no impediment to enforceability by CBP, \4\ we 
preliminarily determine that the above described products are not 
subject to the scope of this investigation.\5\
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    \4\ See Memorandum to the File from Kate Johnson, Senior Case 
Analyst, to The File entitled ``Proposed Scope Exclusion,'' dated 
January 15, 2008.
    \5\ On January 8, 2008, Illinois Tool Works Inc. (``ITW''), an 
interested party, opposed the exclusion request filed by Stanley, 
arguing that it is the only U.S. producer of the product at issue. 
While the Department notes ITW's objection, it strives to craft a 
scope that both includes the specific products for which Petitioners 
have requested relief, and excludes those products which may fall 
within the general scope definition, but for which Petitioners do 
not seek relief.
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    In addition, Petitioners requested that the Department modify the 
scope of these investigations to exclude certain trademarked products 
in submissions dated October 5, 2007, October 12, 2007, October 24, 
2007, and November 1, 2007.\6\ However, we found that the proposed 
scope modification language, which would exclude only specifically 
registered trademarked products, would provide an improper scope for 
this investigation because its effect would be to exclude only products 
of the parties controlling those trademarks, while the same products 
without the specified trademarks would be included, creating a scope 
that is neither impartial nor reasonable. Furthermore, the trademark 
requirement may cause significant administrability problems for CBP 
should an antidumping duty order be issued. Therefore, on November 15, 
2007, we determined it inappropriate to modify the scope of this 
investigation in accordance with Petitioners' request. See Memorandum 
to David M. Spooner, Assistant Secretary for Import Administration from 
Stephen J. Claeys, Deputy Assistant Secretary for Import 
Administration, AD/CVD Operations regarding ``Certain Steel Nails from 
the PRC) and the UAE: Scope Modification Request'' dated November 15, 
2007.
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    \6\ Each submission contained a revised version of the proposed 
scope modification.
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    On January 3, 2008, Hilti (China) Ltd. (``Hilti''), an interested 
party, requested that fasteners having a case hardness greater than or 
equal to 50 HRC, a carbon content greater than or equal to .5 percent, 
a round head, a secondary reduced-diameter raised head section, a 
centered shank, and a smooth symmetrical point, suitable for use in 
gas-actuated hand tools be excluded from the scope of this 
investigation.\7\ On January 9, 2008, Petitioners filed a letter 
stating that they agree with Hilti's January 4, 2008, scope exclusion 
request. However, we received this request too late to consider for 
purposes of the preliminary determination, but will consider it for the 
final determination.
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    \7\ On January 8, 2008, Illinois Tool Works Inc. (``ITW''), an 
interested party, opposed the exclusion request filed by Hilti, 
arguing that it is the only U.S. producer of the product at issue.
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Respondent Selection

    On July 10, 2007, the Department requested quantity and value 
(``Q&V'') information from a total of 121 companies \8\ that 
Petitioners identified as potential producers or exporters of nails 
from the PRC. Also, on July 10, 2007, 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 the POI.
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    \8\ Petitioners identified 123 companies in the Petition. 
However, Qingdao D&L and Shanhgai Suntec were each listed twice with 
slightly different names, but the same address, thus, we treated 
each as a single company.
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    Between July 25, 2007, and July 30, 2007, the Department received 
Q&V responses from 71 interested parties.\9\

[[Page 3930]]

The Department did not receive any type of communication from BOFT 
regarding the request for Q&V information. See Respondent Selection 
Memorandum at 2. On July 25, 2007, Illinois Tool Works Inc. and Paslode 
Fasteners (Shanghai) Co., Ltd. (collectively, ``Paslode'') submitted a 
letter requesting that it be selected as a mandatory respondent. On 
August 10, 2007, Petitioners submitted comments on the Q&V responses. 
On August 13, 2007, Paslode rebutted Petitioners' Q&V comments. On 
August 24, 2007, we rejected untimely Q&V responses from six companies. 
See August 24, 2007, letters from Alex Villanueva, Program Manager, Re: 
Quantity and Value Questionnaire Response for Certain Steel Nails from 
the People's Republic of China Investigation: Rejection of Submission. 
On September 11, 2007, the Department selected Paslode and Suzhou 
Xingya Nail Co., Ltd, Senco-Xingya Metal Products (Taicang) Co., Ltd., 
Yunfa International Resources In., Senco Products, Inc., and Omnifast 
Inc. (collectively ``Xingya Group'') as mandatory respondents in this 
investigation (``Mandatory Respondents''). See Respondent Selection 
Memorandum at 5.
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    \9\ For a complete list of all parties from which the Department 
requested Q&V information, see Memorandum to Stephen J. Claeys, 
Deputy Assistant Secretary for Import Administration, through James 
C. Doyle, Director, AD/CVD Operations, Office 9, from Nicole 
Bankhead, Sr. International Trade Analyst, AD/CVD Operations, Office 
9: Selection of Respondents for the Antidumping Investigation of 
Certain Steel Nails from the People's Republic of China, dated 
September 11, 2007, (``Respondent Selection Memorandum'').
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Separate Rates Applications

    Between August 6, 2007, and September 10, 2007, we received 
separate rate applications from 68 companies \10\ (collectively, ``SR 
Applicants''), including the mandatory respondents: Paslode and Xingya 
Group \11\. On October 23, 2007, the Department rejected the separate 
rate application of Hilti because it was untimely. See Letter from Alex 
Villanueva, Program Manager, China/NME Group, Office 9: Rejection of 
Separate Rate Application, Including Quantity and Value Data, dated 
October 23, 2007. We issued deficiency questionnaires to Sinochem 
Tianjin Import and Export (``Sinochem'') on December 3, 2007, and 
Guangdong Foreign Trade Import & Export Corporation (``Guangong FT'') 
and Shouguang Meiqing (``Meiqing'') on December 27, 2007.\12\ We 
received responses from Sinochem on December 5, 2007, Guangong FT on 
December 27, 2007, and Meiqing on January 3, 2008.
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    \10\ The Department did not receive a separate rate application 
from Beijing Prouded Metal Group Co., Ltd. and Jiangsu SOHO 
International Group Corporation withdrew its separate rate request 
on September 7, 2007.
    \11\ This included Suzhou Xingya Nail Co., Ltd and Senco-Xingya 
Metal Products (Taicang) Co., Ltd.
    \12\ We also issued a deficiency questionnaire to Union 
Enterprise Co., Ltd. (``Union'') on December 7, 2007. However, upon 
further review we determined that Union is a wholly foreign-owned 
enterprise, and therefore the Department's deficiency questionnaire, 
which requested additional information on sections that wholly 
foreign-owned enterprises are not required to answer, was withdrawn 
on December 3, 2007. See Memorandum to: The File, From: Matthew 
Renkey, Senior Case Analyst, Re: Separate Rate Application for Union 
Enterprise (Kunshan) Co., Ltd., dated December 4, 2007.
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    On December 27, 2007, we sent all SR Applicants a letter requesting 
that companies that had submitted a separate rate application with the 
supplier name treated as business proprietary information (``BPI'') 
resubmit the names of their suppliers as public information. We 
received responses between December 31, 2007, and January 11, 2008 from 
the following companies: China Silk Trading & Logistics Co., Ltd., The 
Stanley Works (Langfang) Fastening Systems Co., Ltd., Besco Machinery 
Industry (Zhejiang) Co., Ltd., Shanghai Tengyu Hardware Products Co., 
Ltd., Shanghai Cuvet Hardware Products Co., Ltd., Shanghai Chengkai 
Hardware Product. Co., Ltd., Shandong Oriental Cherry Hardware Import 
and Export Co., Ltd., Shandong Oriental Cherry Hardware Group Co., 
Ltd., Mingguang Abundant Hardware Products Co., Ltd., Shanghai Yueda 
Nails Industry Co., Ltd., Shanghai Jade Shuttle Hardware Tools Co., 
Ltd., Jining Huarong Hardware Products Co., Ltd., Shandong Dinglong 
Import & Export Co., Ltd., SDC International Australia Pty. Ltd., S-
Mart (Tianjin) Technology Development Co., Ltd., Shanxi Hairui Trade 
Co., Ltd., PT Enterprise Inc., Shanxi Tianli Industries Co., Ltd., 
Tianjin Lianda Group Co., Ltd., Tianjin Xiantong Material & Trade Co., 
Ltd., Qingdao D&L, and Hebei Cangzhou New Century Foreign Trade Co., 
Ltd.\13\
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    \13\ Hilti also submitted a letter stating that it was the 
supplier of the merchandise it exported to the United States. 
However, as noted above, we rejected Hilti's separate application as 
untimely. Additional companies also resubmitted the names of their 
suppliers, however, they previously reported as public and therefore 
we are not listing the companies that already submitted their 
supplier names publically.
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Product Characteristics and Questionnaires

    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 in the Initiation Notice. On July 30, 2007, the 
Department received comments from Shanxi Yuci Broad Wire Products, Ltd. 
and its affiliated companies (``Shanxi Yuci''), Paslode, Stanley, and 
Petitioners. The Department also received rebuttal comments from 
Stanley, Shanxi Yuci, and Xingya Group on August 9, 2007.
    On September 11, 2007, the Department issued its sections A, C, D, 
and E, questionnaire with product characteristics and model match 
criteria used in the designation of CONNUMs and assigned to the 
merchandise under consideration to Paslode and Xingya Group. Between 
October 2, 2007, and January 4, 2008, the Department received section 
A, C, and D questionnaire responses from Paslode and Xingya Group. The 
Department also issued supplemental questionnaires to both companies 
and received responses during this time period. Petitioners submitted 
deficiency comments on the section C and D questionnaire responses of 
Paslode and Xingya Group between November 13, 2007 and December 6, 
2007. On December 19, 2007, the Department requested that Xingya Group 
clarify the quantity and value it reported in its supplemental section 
C response filed on December 18, 2007. Xingya Group responded to this 
letter on December 28, 2007.
    Petitioners submitted additional deficiency comments and surrogate 
value rebuttals on January 2, 2008, pertaining to both Xingya Group and 
Paslode. On January 8, 2008, Paslode rebutted Petitioners' January 2, 
2008, comments.

Surrogate Country

    On September 19, 2007, the Department determined that India, Sri 
Lanka, Egypt, Indonesia, and Philippines are countries comparable to 
the PRC in terms of economic development. See Memorandum from Ron 
Lorentzen, Director, Office of Policy, to Alex Villanueva, Program 
Manager, China/NME Group, Office 9: Antidumping Duty Investigation of 
Certain Steel Nails (``nails'') from the People's Republic of China 
(PRC): Request for a List of Surrogate Countries, dated September 19, 
2007 (``Surrogate Country List'').
    On September 27, 2007, the Department requested comments on the 
surrogate country selection from the interested parties in this 
investigation. Petitioners submitted surrogate country comments on 
November 1, 2007 (``Petitioners' Surrogate Country Letter''). 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.

[[Page 3931]]

Surrogate Value Comments

    On December 3, 2007, Petitioners, Xingya Group, and Paslode, 
submitted comments on surrogate information with which to value the 
factors of production in this proceeding. On December 13, 2007, 
Petitioners, Xingya Group, and Paslode filed rebuttal comments on 
surrogate information with which to value the factors of production in 
this proceeding. Between December 20, 2007, and January 8, 2008, both 
Paslode and Xingya Group submitted additional surrogate value comments.

Critical Circumstances

    On November 7, 2007, Petitioners alleged that there is a reasonable 
basis to believe or suspect critical circumstances exist with respect 
to the antidumping investigation of nails from the PRC. On November 19, 
2007, the Department issued questionnaires requesting data for monthly 
exports to the United States from January 2005 through October 2007 
from Paslode and Xingya Group, and received responses on December 3, 
2007. We also received comments regarding Petitioners critical 
circumstance allegations from Shanxi Yuci, Beijing Daruixing, Jinhai 
Hardware, and Certified Products International Inc. (``CPI'') and 
Stanley on November 19, 2007, and November 29, 2007, respectively. 
Paslode and Xingya Group submitted their responses on December 3, 2007. 
For a detailed discussion, see the ``Critical Circumstances'' section 
below.

Targeted Dumping

    On December 11, 2007, Petitioners filed an allegation of targeted 
dumping by Paslode based on a pattern of export prices for comparable 
merchandise that differ significantly among regions. On December 13, 
2007, Petitioners revised certain aspects of their allegation. On 
December 14, 2007, Petitioners filed an allegation of targeted dumping 
by Xingya Group based on a pattern of export prices for comparable 
merchandise that differ significantly among customers. Petitioners also 
submitted the programming code they used in their targeted dumping 
allegations on December 14, 2007. On December 20, 2007, Paslode 
submitted comments on Petitioners' targeted dumping allegation. On 
December 26, 2007, Xingya Group submitted comments on Petitioners' 
targeted dumping allegation. On December 31, 2007, Petitioners filed 
rebuttal comments to Paslode's targeted dumping comments. On January 3, 
2008, Petitioners filed rebuttal comments to Xingya Group's December 
26, 2007, comments. On January 9, 2008, Paslode submitted additional 
targeted dumping comments, which Petitioners responded to on January 
10, 2008. Petitioners and Paslode submitted additional targeted dumping 
comments on January 14, 2008. See ``Targeted Dumping'' section below 
for further discussion.

Postponement of Preliminary Determination

    On November 1, 2007, Petitioners made a timely request, pursuant to 
19 CFR 351.205(e), for a 50-day postponement of the preliminary 
determination in the instant investigation, pursuant to section 
733(c)(1)(A) of the Act. The Department extended the preliminary 
determination on November 5, 2007. See Certain Steel Nails from the 
People's Republic of China and the United Arab Emirates: Postponement 
of Preliminary Determinations of Antidumping Duty Investigations, 72 FR 
63558 (November 9, 2007).

Postponement of Final Determination

    On January 3, 2008, Xingya Group requested that, in the event of an 
affirmative preliminary determination in this investigation, the 
Department: (1) Postpone its final determination by 60 days in 
accordance with 19 CFR 351.210(2)(ii) and 735(a)(2)(A) of the Act; and 
(2) extend the application of the provisional measures prescribed under 
19 CFR 351.210(e)(2) from a 4-month period to a 6-month period.

Period of Investigation

    The period of investigation (``POI'') is October 1, 2006, through 
March 31, 2007. This period corresponds to the two most recent fiscal 
quarters prior to the month of the filing of the petition, May 2007. 
See 19 CFR 351.204(b)(1).

Scope of Investigation

    The merchandise covered by this investigation includes certain 
steel nails having a shaft length up to 12 inches. Certain steel nails 
include, but are not limited to, nails made of round wire and nails 
that are cut. Certain steel nails may be of one piece construction or 
constructed of two or more pieces. Certain steel nails may be produced 
from any type of steel, and have a variety of finishes, heads, shanks, 
point types, shaft lengths and shaft diameters. Finishes include, but 
are not limited to, coating in vinyl, zinc (galvanized, whether by 
electroplating or hot-dipping one or more times), phosphate cement, and 
paint. Head styles include, but are not limited to, flat, projection, 
cupped, oval, brad, headless, double, countersunk, and sinker. Shank 
styles include, but are not limited to, smooth, barbed, screw threaded, 
ring shank and fluted shank styles. Screw-threaded nails subject to 
this proceeding are driven using direct force and not by turning the 
fastener using a tool that engages with the head. Point styles include, 
but are not limited to, diamond, blunt, needle, chisel and no point. 
Finished nails may be sold in bulk, or they may be collated into strips 
or coils using materials such as plastic, paper, or wire. Certain steel 
nails subject to this proceeding are currently classified under the 
Harmonized Tariff Schedule of the United States (HTSUS) subheadings 
7317.00.55, 7317.00.65 and 7317.00.75.
    Excluded from the scope of this proceeding are roofing nails of all 
lengths and diameter, whether collated or in bulk, and whether or not 
galvanized. Steel roofing nails are specifically enumerated and 
identified in ASTM Standard F 1667 (2005 revision) as Type I, Style 20 
nails. Also excluded from the scope of this proceeding are corrugated 
nails. A corrugated nail is made of a small strip of corrugated steel 
with sharp points on one side. Also excluded from the scope of this 
proceeding are fasteners suitable for use in powder-actuated hand 
tools, not threaded and threaded, which are currently classified under 
HTSUS 7317.00.20 and 7317.00.30. Also excluded from the scope of this 
proceeding are thumb tacks, which are currently classified under HTSUS 
7317.00.10.00. Also excluded from the scope of this proceeding are 
certain brads and finish nails that are equal to or less than 0.0720 
inches in shank diameter, round or rectangular in cross section, 
between 0.375 inches and 2.5 inches in length, and that are collated 
with adhesive or polyester film tape backed with a heat seal 
adhesive.\14\
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    \14\ See ``Scope Comments'' section below for further 
discussion.
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    While the HTSUS subheadings are provided for convenience and 
customs purposes, the written description of the scope of these 
investigations is dispositive.

Non-Market-Economy Country

    For purposes of initiation, Petitioners submitted LTFV analyses for 
the PRC as a non-market economy (``NME''). See Initiation Notice, 72 FR 
at 38820. The Department considers the PRC to be a NME country. See, 
e.g., Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Coated Free Sheet Paper

[[Page 3932]]

from the People's Republic of China, 72 FR 30758, 30760 (June 4, 2007), 
unchanged in Final Determination of Sales at Less Than Fair Value: 
Coated Free Sheet Paper from the People's Republic of China, 72 FR 
60632 (October 25, 2007). 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. No 
party has challenged the designation of the PRC as an NME country in 
this investigation. Therefore, we continue to treat 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 NME producer's factors of production (``FOP'') 
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.
    The Department's practice is explained in Policy Bulletin 04.1,\15\ 
which states that ``Per capita GNI \16\ is the primary basis for 
determining economic comparability.'' The Department considers the five 
countries identified in its Surrogate Country List as ``equally 
comparable in terms of economic development.'' Id. Thus, we find that 
India, Sri Lanka, Egypt, Indonesia, and Philippines are all at an 
economic level of development equally comparable to that of the PRC.
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    \15\ See Policy Bulletin 04.1: Non-Market Economy Surrogate 
Country Selection Process, (March 1, 2004), (``Policy Bulletin 
04.1'') available at http://ia.ita.doc.gov.
    \16\ GNI stands for gross national income, which comprises GDP 
plus net receipts of primary income (compensation of employees and 
property income) from nonresident sources. See, e.g., http://www.finfacts.com/biz10/globalworldincomepercapita.htm.
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    Second, Policy Bulletin 04.1 provides some guidance on identifying 
comparable merchandise and selecting a producer of comparable 
merchandise. Based on the data provided by Petitioners, we find that 
India is a producer of comparable merchandise. See Petitioners' 
Surrogate Country Letter at 6. Petitioners provided a list of Indian 
steel nail companies that produce nails of varying complexity, i.e., 
collated nails, etc. Id. Additionally, the Department obtained 
worldwide export data for nails. Because the Department was unable to 
find production data, we are relying on export data as a substitute for 
overall production data in this case. Of the five countries listed in 
the Surrogate Country List, only two countries, India and Indonesia, 
are exporters of nails. Id. Consequently, at this time, the 
Philippines, Sri Lanka, and Egypt are not being considered as 
appropriate surrogate countries for the PRC because they are not 
exporters of nails. Moreover, India is a significant producer of 
comparable merchandise. Specifically, during 2006 United States imports 
of comparable merchandise from India were 560,043 pounds versus 80,935 
pounds from Indonesia.
    As noted above, the Department only received surrogate country 
comments from Petitioners. The Department is preliminarily selecting 
India as the surrogate country on the basis that: (1) It is at a 
similar level of economic development pursuant to 773(c)(4) of the Act; 
(2) it is a significant producer of comparable merchandise; and (3) we 
have reliable data from India that we can use to value the factors of 
production. Thus, we have calculated normal value using Indian prices 
when available and appropriate to value Paslode's and Xingya Group's 
factors of production. See Memorandum to the File from Matthew Renkey, 
through Alex Villanueva, Program Manager, AD/CVD Operations, Office 9, 
and James C. Doyle, Director, AD/CVD Operations, Office 9: Certain 
Steel Nails from the People's Republic of China: Surrogate Values for 
the Preliminary Determination, dated January 15, 2008 (``Surrogate 
Value Memorandum'').
    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 factors of 
production within 40 days after the date of publication of the 
preliminary determination.\17\
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    \17\ In accordance with 19 CFR 351.301(c)(1), for the final 
determination of this investigation, interested parties may submit 
factual information to rebut, clarify, or correct factual 
information submitted by an interested party less than ten days 
before, on, or after, the applicable deadline for submission of such 
factual information. However, the Department notes that 19 CFR 
351.301(c)(1) permits new information only insofar as it rebuts, 
clarifies, or corrects information recently placed on the record. 
The Department generally cannot accept the submission of additional, 
previously absent-from-the-record alternative surrogate value 
information pursuant to 19 CFR 351.301(c)(1). See Glycine from the 
People's Republic of China: Final Results of Antidumping Duty 
Administrative Review and Final Rescission, in Part, 72 FR 58809 
(October 17, 2007) and accompanying Issues and Decision Memorandum 
at Comment 2.
---------------------------------------------------------------------------

Affiliations

    We preliminarily find that the Xingya Group, comprised of Suzhou 
Xingya Nail Co., Ltd., Senco-Xingya Metal Products (Taicang) Co., Ltd., 
Wuxi Chengye Metal Products Co., Ltd., and Hong Kong Yu Xi Limited, to 
be affiliated parties within the meaning of section 771(33) of the Act, 
due to common ownership, shared management, and familial connections. 
See Xingya Group August 20, 2007, supplemental Q&V response at 2-3 and 
Exhibit 1 (``Xingya Group Supplemental Q&V Response''), and its 
November 13, 2007, supplemental Section A response at 7-8 and Exhibit 8 
(``Xingya Group November Response''). Furthermore, we find that they 
should be considered as a single entity for purposes of this 
investigation. See generally 19 CFR 401(f). In addition to being 
affiliated, we find that a significant potential for manipulation of 
price exists. See 19 CFR 401(f)(2). Specifically, there exists a level 
of common ownership, shared management, and an intertwining of business 
operations. See Xingya Group Supplemental Q&V Response at 2-3 and 
Exhibit 1 and Xingya Group November Response at 7-8 and Exhibit 8.
    Additionally, based on the evidence on the record in this 
investigation and presented in Paslode's questionnaire responses, we 
preliminarily find that Paslode Shanghai is affiliated with its U.S. 
customer ITW pursuant to section 771(33)(E) of the Act because of 
cross-ownership. See Paslode September 7, 2007, Separate Rate 
Application at Attachment 3. We note that no party has to date objected 
to these affiliation and collapsing decisions.

Separate Rates

    Additionally, in the Initiation Notice, the Department notified 
parties of the recent application process by which exporters and 
producers may obtain separate-rate status in NME investigations. See 
Initiation Notice, 72 FR at 38821. The process requires exporters and 
producers to submit a separate-rate status application. See also 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

[[Page 3933]]

http://ia.ita.doc.gov.\18\ 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.
---------------------------------------------------------------------------

    \18\ The Policy Bulletin 05.1, states: ``{w{time} 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 applied both to mandatory 
respondents receiving an individually calculated separate rate as 
well as the pool of non-investigated firms receiving the 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 6.
---------------------------------------------------------------------------

    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. As 
discussed fully below, Paslode and Xingya Group, and all but one of the 
SR 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.\19\
---------------------------------------------------------------------------

    \19\ All separate rate applicants receiving a separate rate are 
hereby referred to collectively as the ``SR Recipients.''
---------------------------------------------------------------------------

    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. 
See Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Preserved Mushrooms from the People's Republic of China, 63 FR 
72255, 72256 (December 31, 1998). 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, 61758 (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 further developed in 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. Additionally, 
if the Department determines that a company is wholly foreign-owned or 
located in a market economy, then a separate rate analysis is not 
necessary to determine whether it is independent from government 
control.

Wholly Foreign-Owned

    In its separate-rate application, Paslode reported that it is 
wholly foreign-owned. Paslode explained that it is ultimately owned by 
ITW, which is located in the United States. Additionally, 23 separate 
rate companies reported that they are wholly owned by individuals or 
companies located in a market economy in their separate-rate 
applications (collectively ``Foreign-owned SR Applicants''). See 
``PRELIMINARY DETERMINATION'' section below for companies marked with a 
``[caret]'' designating companies as wholly foreign-owned. Therefore, 
because there is no PRC ownership of Paslode and the above-mentioned 
separate rate companies, i.e. they are wholly foreign-owned, and we 
have no evidence indicating that they are under the control of the PRC, 
a separate rates analysis is not necessary to determine whether these 
companies are independent from government control. See Notice of Final 
Determination of Sales at Less Than Fair Value: Creatine Monohydrate 
from the People's Republic of China, 64 FR 71104-05 (December 20, 1999) 
(where the respondent was wholly foreign-owned, and thus, qualified for 
a separate rate). Accordingly, we have preliminarily granted a separate 
rate to Paslode and the Foreign-owned SR Applicants.

Located in a Market Economy

    Four of the responding exporters in this investigation are located 
outside the PRC (collectively ``Foreign SR Applicants''). See 
``PRELIMINARY DETERMINATION'' section below for companies marked with a 
``+'' designating companies as located in a market economy. Further, 
there is no PRC ownership in any of these companies. Therefore, we 
determine that no separate rates analysis is required for these 
exporters because they are beyond the jurisdiction of the PRC 
government. (See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value: Bicycles From the People's Republic of China, 61 FR 
19026, 19027 (April 30, 1996) citing Final Determination of Sales at 
Less Than Fair Value: Disposable Pocket Lighters from the People's 
Republic of China, 60 FR 22359, 22361 (May 5, 1995)).

Joint Ventures Between Chinese and Foreign Companies or Wholly Chinese-
Owned Companies

    Certain companies stated that they are either joint ventures 
between Chinese and foreign companies or are wholly Chinese-owned 
companies (collectively ``PRC SR Applicants''). See ``PRELIMINARY 
DETERMINATION'' section below for companies marked with a ``*'' 
designating companies as joint ventures between Chinese and foreign 
companies or wholly Chinese-owned companies. Therefore, the Department 
must analyze whether these 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 Xingya Group and the PRC SR Recipients 
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 exporters' business

[[Page 3934]]

and export licenses; (2) there are applicable legislative enactments 
decentralizing control of the companies; and (3) and there are formal 
measures by the government decentralizing control of companies. See, 
e.g., Suzhou Xingya Nail Co., Ltd. September 10, 2007, Separate Rate 
Application (``Suzhou Xingya SRA'').

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.
    We determine that, for Xingya Group and the PRC SR Recipients, 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 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. See Suzhou Xingya SRA.
    Therefore, the evidence placed on the record of this investigation 
by Xingya Group \20\ and the PRC SR Recipients demonstrate an absence 
of de jure and de facto government control with respect to each of the 
exporters' 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 a separate company-specific rate to 
Xingya Group. Additionally, we have granted all SR Applicants, except 
as identified below, a weighted-average margin, for the purposes of 
this preliminary determination. Finally, and as discussed previously, 
we granted Paslode a separate company-specific rate because it is 
wholly foreign-owned.
---------------------------------------------------------------------------

    \20\ Some companies within Xingya Group submitted a timely 
separate application, however, because these companies are 
considered part of Xingya Group single entity we did not consider 
their separate rate status on an individual basis.
---------------------------------------------------------------------------

Companies Not Receiving a Separate Rate

    The Department is not granting a separate rate to Tianjin Certified 
Products Inc. (``TCPI'') because it was not created nor did it export 
during the POI. Therefore, in accordance with Department practice, TCPI 
is not eligible for a separate rate.

 The PRC-Wide Entity \21\
---------------------------------------------------------------------------

    \21\ This includes the following six companies whose Q&V the 
Department rejected: Tianjin Master Fastener Co., Ltd., Wuxi Baolin 
Nail Enterprises, Zhejiang Jinhua Friendship Industry Co., Ltd., 
Tianjin Ever Win Metal Products Co., Ltd., Tianjin Jetcom 
Manufacturing Co., Ltd., Shanghai Shengxiang Hardware Industrial 
Co., Ltd. and Hilti, whose untimely separate rate application was 
rejected. It also includes the two companies that the Department 
received Q&V responses for but did not receive separate rate 
applications.
---------------------------------------------------------------------------

    The Department has data that indicates there were more exporters of 
nails from the PRC than those indicated in the response to our request 
for Q&V information during the POI. See Respondent Selection 
Memorandum. We issued our request for Q&V information to 121 potential 
Chinese exporters of the subject merchandise, in addition to BOFT and 
MOFCOM.\22\ We received 72 \23\ Q&V responses filed by the July 30, 
2007, deadline. See Respondent Selection Memorandum at 2. We did not 
receive Q&V responses from 71 of the companies to which we sent our 
request for Q&V information. However, out of the 71 companies that did 
not submit Q&V responses, 11 companies did not receive our Q&V 
questionnaire. See Memorandum to the File, from Irene Gorelik, senior 
trade analyst, Re: Companies Unresponsive to the Department's Request 
for Quantity and Value data for the Antidumping Investigation of 
Certain Steel Nails from the People's Republic of China, dated January 
15, 2008. Therefore, we are not including the companies that did not 
receive our Q&V questionnaires in our analysis. Furthermore, we note 
that there was no additional information on the record to allow for the 
Department to contact these entities.\24\
---------------------------------------------------------------------------

    \22\ For a list of companies to which the Department sent its 
request for Q&V information, see Respondent Selection Memorandum at 
Attachment 1.
    \23\ The Department inadvertently included Huanghua Jinhai 
Hardware Products Co., Ltd (``Jinhai'') as a company that did not 
respond to the Department's Q&V response in the Respondent Selection 
Memo; Jinhai submitted a timely Q&V response.
    \24\ Two companies also stated that they did not have shipments 
of subject merchandise during the POI and thus are preliminarily not 
subject to any further analysis in this investigation.
---------------------------------------------------------------------------

    Based upon our knowledge of the volume of imports of subject 
merchandise from the PRC, the companies which responded to the Q&V 
questionnaire, the SR Recipients, Paslode, and Xingya Group, do not 
account for all imports into the United States. Although all exporters 
were given an opportunity to provide Q&V information, not all exporters 
provided a response to the Department's Q&V letter. 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 that 
received the Department's Q&V request and did not respond to the 
Department's request for information. We have treated these PRC 
exporters as part of the PRC-wide entity because they did not qualify 
for a separate rate.
    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 did not respond to the 
Department's questionnaire, and, as previously noted, the Government of 
the PRC received our questionnaire and did not respond. See Respondent 
Selection Memorandum at Attachment II for a full list of non-responsive 
companies. As a result, pursuant to section 776(a)(2)(A) of the Act, we 
find that the use of facts

[[Page 3935]]

available is appropriate to determine the PRC-wide rate. See also 
Statement of Administration Action accompanying the Uruguay Round 
Agreements Act, H.R. Rep. No. 103-316 Vol. I at 869-70 (1994) reprinted 
in 1994 U.S.C.C.A.N. 4040, 4198-99 (``SAA''); 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, 4991 (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).
    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 
also SAA at 870, 19 U.S.C.C.A.N. at 4199; 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). 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 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 118.04 
percent.
    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.\25\ It is the Department's practice also to 
consider independent sources such as published price lists, official 
import statistics and customs data, and information obtained from 
interested parties during the particular investigation. See SAA at 870, 
19 U.S.C.C.A.N. at 4199.
---------------------------------------------------------------------------

    \25\ 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.
---------------------------------------------------------------------------

    To ``corroborate'' means that the Department will satisfy itself 
that the secondary information to be used has probative value. See SAA 
at 870, 19 U.S.C.C.A.N. at 4199. 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.
    Petitioners' methodology for calculating the export price and 
normal value in the petition is discussed in the initiation notice. See 
Initiation Notice, 72 FR at 38820. To corroborate the AFA margin 
selected, we compared the U.S. price and normal values from the 
petition to the U.S. price and normal values for the Xingya Group. See 
Memorandum to the File from Matthew Renkey, Senior Case Analyst: 
Program Analysis for the Preliminary Determination of Antidumping Duty 
Investigation of Certain Steel nails from the People's Republic of 
China: Xingya Group, dated January 15, 2008 (``Xingya Group Analysis 
Memorandum''). For the reasons discussed therein, we find that the rate 
of 118.04 percent is corroborated within the meaning of section 776(c) 
of the Act. Consequently, we are applying 118.04 percent as the single 
antidumping rate to the PRC-wide entity. The PRC-wide rate applies to 
all entries of the merchandise under investigation except for entries 
from Paslode, Xingya Group, and the SR Recipients.

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 nails 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. Consistent with the Department's practice, as 
the separate rate, we have established a weighted-average margin for 
the Separate Rates Applicants based on the rates we calculated for 
Paslode and Xingya Group. 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 states that, 
``{i{time} n 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 
ordinary 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 Allied Tube, the Court of International 
Trade (``CIT'') noted that a ``party seeking to establish a date of 
sale other than invoice date bears the burden of

[[Page 3936]]

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.'' Allied Tube 132 F. 
Supp. 2d at 1090 (citations omitted). 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 14064, 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 Paslode and Xingya Group placed on the record, we 
preliminarily determine that invoice date is the most appropriate date 
of sale for all Paslode sales and for all CEP sales made by Xingya 
Group. For the Xingya Group's EP sales, where shipment date preceded 
invoice date, we used shipment date as the date of sale. For EP sales 
where shipment date was the same as or after the invoice date, we used 
the invoice date as the date of sale. See Xingya Group October 23, 
2007, Section C questionnaire response at 11.

Fair Value Comparisons

    To determine whether sales of nails to the United States by Paslode 
and Xingya Group were made at less than fair value, we compared the 
export price (``EP'') or constructed export price (``CEP''), as 
appropriate, to normal value (``NV''), as described in the ``U.S. 
Price,'' and ``Normal Value'' sections of this notice.

U.S. Price

A. EP

    For Xingya Group, in accordance with section 772(a) of the Act, we 
based the U.S. price for certain sales on EP because the first sale to 
an unaffiliated purchaser was made prior to importation, and the use of 
CEP was not otherwise warranted. In accordance with section 772(c) of 
the Act, we calculated EP by deducting, where applicable, foreign 
inland freight, foreign brokerage and handling, international freight, 
and rebates from the gross unit price.
    We based these movement expenses on surrogate values where a PRC 
company provided the service and was paid in Renminbi (``RMB'') (see 
``Factors of Production'' section below for further discussion). For 
details regarding our EP calculation, see Xingya Group Analysis 
Memorandum.

B. CEP

    In accordance with section 772(b) of the Act, we based the U.S. 
price for certain sales on CEP because these sales were made by 
Paslode's and Xingya Group's U.S. affiliates. In accordance with 
section 772(c)(2)(A) of the Act, we calculated CEP by deducting, where 
applicable, the following expenses from the gross unit price charged to 
the first unaffiliated customer in the United States: Marine insurance, 
discounts, rebates, billing adjustments, foreign movement expenses, and 
international freight, and United States movement expenses, including 
brokerage and handling. Further, in accordance with section 772(d)(1) 
of the Act and 19 CFR 351.402(b), where appropriate, we deducted from 
the starting price the following selling expenses associated with 
economic activities occurring in the United States: Credit expenses, 
warranty expenses, other direct selling expenses, and indirect selling 
expenses. In addition, pursuant to section 772(d)(3) of the Act, we 
made an adjustment to the starting price for CEP profit. We based 
movement expenses on either surrogate values, actual expenses, or an 
average of the two as explained above in the ``EP'' section of this 
notice. For details regarding our CEP calculations, see Memorandum to 
the File from Nicole Bankhead, Senior Case Analyst: Program Analysis 
for the Preliminary Determination of Antidumping Duty Investigation of 
Certain Steel Nails from the People's Republic of China: Paslode, dated 
January 15, 2008 (``Paslode Analysis Memorandum''); Xingya Group 
Analysis Memorandum.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using a FOP methodology if the merchandise is exported 
from an NME and the information does not permit the calculation of NV 
using home-market prices, third-country prices, or constructed value 
under section 773(a) of the Act. 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 Valuation Methodology

    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 (except as discussed below). 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 the Indian 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). A detailed description of all surrogate values used for 
respondents can be found in the Surrogate Value Memorandum and company-
specific analysis memoranda. Additionally, for detailed descriptions of 
all actual values used for market-economy inputs, see the company-
specific analysis memoranda dated January 15, 2008. See Paslode 
Analysis Memorandum; Xingya Group Analysis Memorandum.
    For this preliminary determination, in accordance with the 
Department's practice, we used data from the Indian Import Statistics 
and other publicly available Indian sources in order to calculate 
surrogate values for the mandatory respondents' FOPs (direct materials, 
energy, and packing materials) and certain movement expenses. In 
selecting the best available information for valuing FOPs 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

[[Page 3937]]

71005 (December 8, 2004). The record shows that data in the Indian 
Import Statistics, as well as that from the other Indian sources, 
represent data that are contemporaneous with the POI, product-specific, 
and tax-exclusive. In those instances 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 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) and accompanying Issues and Decision Memorandum at Comment 7 
(``CTVs from the PRC''). Further, guided by the legislative history, it 
is the Department's practice not to conduct a formal investigation to 
ensure that such prices are not subsidized. See H.R. Rep. 100-576 at 
590 (1988). Rather, the Department bases 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 either in 
calculating the Indian import-based surrogate values or in calculating 
market-economy input values. In instances where a market-economy input 
was obtained solely from suppliers located in these countries, we used 
Indian import-based surrogate values to value the input. See Final 
Determination of Sales at Less Than Fair Value: Certain Automotive 
Replacement Glass Windshields From The People's Republic of China, 67 
FR 6482 (February 12, 2002), and accompanying Issues and Decision 
Memorandum at Comment 1.
    The Department used the Indian Import Statistics to value the raw 
material and packing material inputs that Paslode and Xingya Group used 
to produce the subject merchandise during the POI, except where listed 
below.
    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 January 2007, 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 Surrogate Value Memorandum.
    To value factory overhead, selling, general, and administrative 
expenses, and profit, we used the audited financial statements from 
Lakshmi Precision Screws' 2006-2007 Annual Report. While this company 
produces comparable rather than identical merchandise, it uses an 
integrated wire-drawing production process with steel wire rod as the 
main input, which closely mirrors that of the mandatory respondents. 
Lakshmi therefore possesses a more similar cost structure than that of 
a company which produces merchandise from higher value steel wire that 
does not undergo the wire-drawing stage.
    To value low and medium carbon steel wire rod, we used price data 
fully contemporaneous with the POI for 6mm and 8mm steel wire rod 
available on the Web site of the Indian Joint Plant Committee 
(``JPC''). The JPC is a joint industry/government board that monitors 
Indian steel prices. These data are publicly available, specific to the 
input in question, represent a broad market average, and are tax-
exclusive. See 19 CFR 351.408(c)(1).
    For a detailed discussion of all surrogate values used for this 
preliminary determination, see Surrogate Values Memorandum.

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.

Critical Circumstances

    On November 7, 2007, Petitioners alleged that there is a reasonable 
basis to believe or suspect critical circumstances exist with respect 
to the antidumping investigation of nails from the PRC. On December 3, 
2007, Paslode and Xingya Group submitted information on their exports 
of nails from January 2005 through September 2007 as requested by the 
Department (collectively, ``mandatory respondents'') (see mandatory 
respondents'' December 3, 2007 Critical Circumstances Questionnaire 
responses (``CCQR'')). In accordance with 19 CFR 351.206(c)(2)(i), 
because Petitioners 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 (i.e., the 
comparison period). The comparison period is normally compared to the 
three months prior to the filing of the petition (i.e., the base 
period). Id. 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 establish the base and 
comparison periods based on the earlier date. Id.

[[Page 3938]]

    In determining whether the above statutory criteria have been 
satisfied, we examined: (1) The evidence presented in Petitioners' 
November 7, 2007, submission; (2) new evidence obtained since the 
initiation of the LTFV investigation (i.e., additional import 
statistics released by the U.S. Customs and Border Protection); and (3) 
additional information obtained from Xingya and Paslode (see CCQR).
    In accordance with section 733(e)(1)(A)(ii) of the Act, to 
determine whether importers of nails from the PRC 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, the Department must rely on the facts before it 
at the time the determination is made. The Department generally bases 
its decision with respect to knowledge on the margins calculated in the 
preliminary antidumping duty determination and the ITC preliminary 
injury determination.
    The Department normally considers margins of 25 percent or more for 
export price EP sales and 15 percent or more for CEP sales sufficient 
to impute importer knowledge of sales at LTFV. See, e.g., Carbon and 
Alloy Steel Wire Rod From Germany, Mexico, Moldova, Trinidad and 
Tobago, and Ukraine: Notice of Preliminary Determination of Critical 
Circumstances, 67 FR 6224, 6225 (February 11, 2002) unchanged in Notice 
of Final Determination of Sales at Less Than Fair Value: Carbon and 
Certain Alloy Steel Wire Rod From Germany, 67 FR 55802 (August 30, 
2002). In this preliminary determination, Xingya Group has a margin of 
44.57 percent and Paslode has a margin of 20.77 percent. The SR 
Recipients, which have preliminarily received a separate rate, have a 
margin of 29.36 percent, based on a weighted-average of the margins of 
the Mandatory Respondents. The PRC-wide entity has a margin of 118.04. 
We find that the antidumping duty preliminary margins for Xingya Group, 
Paslode, the SR Recipients, and the PRC-wide entity support a finding 
that there is a reasonable basis to believe or suspect that the 
importers knew or should have known that there was likely to be 
material injury by reason of sales at LTFV of nails from the PRC from 
these respondents.
    In determining whether to find that an importer knew or should have 
known that there would be material injury by reason of dumped imports, 
the Department normally will look to the preliminary injury 
determination of the ITC. If the ITC finds a reasonable indication of 
present material injury to the relevant U.S. industry, the Department 
will determine that a reasonable basis exists to impute importer 
knowledge that there would be material injury by reason of dumped 
imports. See Notice of Final Determination of Sales at Less Than Fair 
Value: Stainless Steel Sheet and Strip in Coils From Japan, 64 FR 
30574, 30578 (June 8, 1999). On July 31, 2007, the ITC issued its 
preliminary affirmative injury determination for nails from the PRC. 
See ITC Preliminary Determination. As a result, the Department has 
determined that importers knew or should have known that there would be 
material injury by reason of dumped imports of subject merchandise from 
Japan.
    In accordance with section 733(e)(1)(B) of the Act, the Department 
must determine whether there have been massive imports of the subject 
merchandise over a relatively short period. Pursuant to 19 CFR 
351.206(h), we will not consider imports to be massive unless imports 
in the comparison period have increased by at least 15 percent over 
imports in the base period. As discussed above, the Department normally 
determines the comparison period for massive imports based on the 
filing date of the petition. Based on the May 29, 2007, filing date, we 
have determined that June 2007 is the month in which importers, 
exporters or producers knew or should have known an antidumping duty 
investigation was likely.
    It is our practice to base the critical circumstances analysis on 
all available data, using base and comparison periods of no less than 
three months. See Notice of Preliminary Determination of Sales at Less 
Than Fair Value, Postponement of Final Determination, and Affirmative 
Preliminary Determination of Critical Circumstances: Certain Frozen and 
Canned Warmwater Shrimp from India, 69 FR 47111 (Aug. 4, 2004) 
unchanged in the final determination, (Notice of Final Determination of 
Sales at Less Than Fair Value and Negative Final Determination of 
Critical Circumstances: Certain Frozen and Canned Warmwater Shrimp From 
India, 69 FR 76916 (December 23, 2004)); and 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 (Apr. 16, 
2004), and accompanying Issues and Decision Memorandum at Comment 3. We 
believe that a five-month period is most appropriate as the basis for 
our critical circumstances analysis because using five months capture 
all data available at this time, based on June 2007 as the beginning of 
the comparison period. Additionally, a five-month period properly 
reflects the ``relatively short period'' set forth in the statute for 
determining whether imports have been massive. See 733(e)(1)(B) of the 
Act. Therefore, in applying the five-month period, we used a comparison 
period of January 2007, to May 2007, and a base period of June 2007, to 
October 2007.

Mandatory Respondents

    The Department used the shipment data of Paslode and Xingya Group 
to examine the relevant comparison period of five months before June 
2007 and five months following that period. When we compared Xingya 
Group's import data during the base period with the comparison period, 
it had an increased volume of exports over the base period of greater 
than 15 percent and consequently, we find their imports to be massive. 
See Memorandum to the File from Paul Walker, Senior Case Analyst: 
Critical Circumstances Data for the Preliminary Determination of 
Antidumping Duty Investigation of Certain Steel Nails from the People's 
Republic of China, dated January 15, 2008, at Attachment II (``CC 
MTF'') for the exact percentage changes. Additionally, when we compared 
Paslode's import data during the base period with the comparison 
period, it did not have an increased volume of exports over the base 
period of greater than 15 percent and consequently, we find their 
exports not to be massive.

SR Recipients

    For the SR Recipients, we did not request the monthly shipment 
information necessary to determine if there were massive imports. As 
the basis to measure whether massive imports existed for purposes of 
critical circumstances, we relied on the experience of the Mandatory 
Respondents receiving a separate rate. When we compared the weight-
averaged import data during the base period with the comparison period 
from the Mandatory Respondents, we found that the weight-averaged 
volume of imports of nails for the SR Recipients did not increase 15 
percent over the base period. See CC MTF at Attachment II for the exact 
percentage changes.

PRC Entity

    Because the PRC entity failed to respond to the Department's 
antidumping questionnaire, we were unable to obtain shipment data from 
the PRC entity for purposes of our critical circumstances analysis, and 
there is no

[[Page 3939]]

information on the record with respect to its export volumes. We relied 
on the ITC Dataweb site (http://databweb.usitc.gov) to determine 
whether there were imports of nails from the PRC during the base and 
the comparison periods not accounted for in the shipment data for the 
Mandatory Respondents. See CC MTF at Attachment I. We found that there 
were such imports and we were able to rely on such data to quantify the 
imports attributed to the PRC-wide entity because the HTSUS article 
codes covering imported nails from China contain mostly data for 
subject merchandise, allowing us to segregate the Mandatory 
Respondents' data from the China-wide import data.
    We have deducted the Mandatory Respondents' data from the China-
wide import data as to avoid possible double-counting. When we compared 
the PRC-wide entity import data during the adjusted base period with 
the adjusted comparison period, we found that the volume of imports of 
nails for the PRC-wide entity during the comparison period was greater 
than 15 percent over the base period. See CC MTF at Attachment II. 
Consequently, we find that the PRC-wide entity did have an increased 
volume of exports over the base period of greater than 15 percent, and 
therefore, we find their imports to be massive.
    In accordance with section 733(e)(1)(A)(ii) of the Act, the 
Department preliminarily determines that importers knew or should have 
known that the PRC entity was selling nails at LTFV because the PRC 
entity's preliminary dumping margin was greater than 15 percent. See 
Xingya Group Analysis Memo. In addition, as a result of the ITC's 
affirmative preliminary determination in the instant LTFV 
investigation, the Department preliminarily finds there is a reasonable 
basis to believe or suspect that importers knew or should have known 
that there was likely to be material injury by reason of dumped 
imports, consistent with section 733(e)(1)(A)(ii) of the Act. See ITC 
Preliminary Determination. As discussed above, the volume of imports of 
nails from the PRC-wide entity was massive within the meaning of 
section 733(e)(1)(B) of the Act. The volumes of imports of nails for 
Xingya Group was above 15 percent, and were thus massive within the 
meaning of 733(e)(1)(B) of the Act. However, for Paslode and the SR 
Recipients, the volume of imports was below 15 percent, and were thus 
not massive within the meaning of section 733(e)(1)(B) of the Act. As a 
result, we preliminarily find that critical circumstances exist for the 
PRC-wide entity and Xingya Group, but do not exist for imports of nails 
from Paslode and the SR Recipients.
    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 determination in this 
investigation, which is currently 135 days after the preliminary 
determination.

Targeted Dumping

    Based on our examination of the targeted dumping allegations filed 
by Petitioners on December 10, 2007, December 14, 2007,\26\ and 
consideration of the rebuttal comments submitted by Paslodes and the 
Xingya Group, we have determined that the allegations indicate that 
there is a pattern of export prices for comparable merchandise that 
differs significantly. See Notice of Final Determination of Sales at 
Less than Fair Value: Coated Free Sheet Paper from the Republic of 
Korea, 72 FR 60630 (October 17, 2007), and accompanying Issues and 
Decision Memorandum at Comments 1-8. Therefore, for purposes of this 
preliminary determination, we have preliminarily accepted the 
Petitioner's allegation that Paslode targeted certain regions and 
Xingya targeted certain customers during the POI.\27\ See Memorandum To 
The File from Alex Villanueva, Program Manager To James C. Doyle, 
Director, Office 9, regarding ``Antidumping Duty Investigation of 
Certain Steel Nails from the People's Republic of China--Preliminary 
Analysis on Targeting,'' dated January 15, 2008.
---------------------------------------------------------------------------

    \26\ On January 10, 2008, Petitioners provided an almost 
identical targeted dumping allegation with the exception of 
converting the export price from kilograms to a per-carton basis.
    \27\ The Department made certain adjustments to Petitioner's 
allegations. See Id.
---------------------------------------------------------------------------

    We note, however, that the Department is in the process of re-
assessing the framework and standards for both targeted dumping 
allegations and targeted dumping analyses. Accordingly, we intend to 
develop a new framework in the context of this proceeding and to apply 
it in time for parties to have an opportunity to comment before the 
final determination.
    In formulating this new methodology the Department requests 
comments by February 15, 2008, regarding certain principles: (1) 
Whether it is appropriate to collapse into one test the assessment of 
patterns of low prices and of significant price differentials; (2) if 
so, whether the test for a pattern of low prices ought to be 
established on the basis of a simple comparison of the average price to 
the alleged target with an average non-targeted price; and (3) whether 
any test for a significant price difference ought to simply be based on 
an absolute, bright-line threshold or whether it should account for 
other aspects of the non-targeted group's data.
    In preliminarily accepting the allegation of targeted dumping, we 
find that the price differences cannot be taken into account using the 
average-to-average comparison methodology for targeted sales because 
that methodology, by averaging the high prices with the low prices, has 
the effect of masking the extent of sales at LTFV. See section 
777A(d)(1)(B) of the Act. Accordingly, we used the average-to-
transaction methodology for these sales in accordance with 19 CFR 
351.414(f)(1).
    When calculating the weighted-average margin for Paslode and Xingya 
Group, we combined the margin calculated for the targeted sales using 
the average-to-transaction methodology with the margin calculated for 
the non-targeted sales using the average-to-average methodology. In 
combining the margins for the targeted and non-targeted U.S. sales 
databases, we have not offset any margins found among the targeted U.S. 
sales.

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, 72 FR 
38821, 38822. This change in practice is described in Policy Bulletin 
05.1, available at http://ia.ita.doc.gov/.
    The weighted-average dumping margins are as follows: \28\
---------------------------------------------------------------------------

    \28\ Companies designated with a ``[supcaret]'' are wholly 
foreign owned, ``+'' are located in a market economy, and 
a ``*'' are joint-venture companies between Chinese and foreign 
companies or are wholly Chinese owned, as explained above in the 
``SEPARATE RATES'' section.

[[Page 3940]]



                                      Certain Steel Nails From the PRC \28\
----------------------------------------------------------------------------------------------------------------
                                                                                                       Weighted-
                                                                                                        average
                             Exporter                                           Producer                 margin
                                                                                                       (percent)
----------------------------------------------------------------------------------------------------------------
Paslode Fasteners (Shanghai) Co., Ltd.[supcaret]                   Paslode Fasteners (Shanghai) Co.,       20.77
                                                                    Ltd.
Xingya Group:*
    Suzhou Xingya Nail Co., Ltd                                    Suzhou Xingya Nail Co., Ltd.......      44.57
    Senco-xingya Metal Products (Taicang) Co., Ltd                 Senco-xingya Metal Products
                                                                    (Taicang) Co., Ltd.
    Hong Kong Yu Xi Co., Ltd                                       Wuxi Chengye Metal Products Co.,
                                                                    Ltd.
Jisco Corporation[supcaret]                                        Qingdao Jisco Co., Ltd............      29.36
Koram Panagene Co., Ltd.[supcaret]                                 Qingdao Koram Steel Co., Ltd......      29.36
Handuk Industrial Co., Ltd.[supcaret]                              Rizhao Handuk Fasteners Co., Ltd.;      29.36
                                                                    Rizhao Changxing Nail-making Co.,
                                                                    Ltd.
Kyung Dong Corp.*                                                  Rizhao Qingdong Electric Appliance      29.36
                                                                    Co., Ltd.
Xi'an Metals & Minerals Import and Export Co., Ltd.*               Huanghua Jinhai Hardware Products       29.36
                                                                    Co., Ltd.
Hebei Cangzhou New Century Foreign Trade Co., Ltd.*                Huanghua Jinhai Hardware Products       29.36
                                                                    Co., Ltd.; Beijing Hongshen Metal
                                                                    Products Co., Ltd.; Tianjin
                                                                    Dagang Huasheng Nailery Co., Ltd.
Chongqing Hybest Tools Group Co., Ltd.*                            Chongqing Hybest Nailery Co., Ltd.      29.36
China Silk Trading & Logistics Co., Ltd.*                          Maanshan Longer Nail Product Co.,       29.36
                                                                    Ltd.; Wuxi Qiangye Metalwork
                                                                    Production Co., Ltd.
Beijing Daruixing Global Trading*                                  Beijing Tri-metal Co., Ltd.;            29.36
                                                                    Beijing Daruixing Nail Products
                                                                    Co., Ltd.; Tianjin Kunxin
                                                                    Hardware Co., Ltd.; Tianjin
                                                                    Hewang Nail Making Factory.
Huanghua Jinhai Hardware Products Co.*                             Huanghua Jinhai Hardware Products       29.36
                                                                    Co.
Beijing Daruixing Nail Products Co., Ltd.*                         Beijing Tri-metal Co., Ltd.;            29.36
                                                                    Beijing Daruixing Nail Products
                                                                    Co., Ltd.
Beijing Tri-metal Co., Ltd.*                                       Beijing Daruixing Nail Products         29.36
                                                                    Co., Ltd.
Cana (Tianjin) Hardware Inc., Co., Ltd.[supcaret]                  Cana (Tianjin) Hardware Inc., Co.,      29.36
                                                                    Ltd..
China Staple Enterprise (Tianjin) Co., Ltd.[supcaret]              ChinaStaple Enterprise (Tianjin)        29.36
                                                                    Co., Ltd.
Hengshui Mingyao Hardware & Mesh Products Co, Ltd.[supcaret]       Hengshui Mingyao Hardware & Mesh        29.36
                                                                    Products Co, Ltd.
Nanjing Dayu Pneumatic Gun Nails Co., Ltd.[supcaret]               Nanjing Dayu Pneumatic Gun Nails        29.36
                                                                    Co., Ltd..
Qidong Liang Chyuan Metal Industry Co., Ltd.[supcaret]             Qidong Liang Chyuan Metal Industry      29.36
                                                                    Co., Ltd..
Romp (Tianjin) Hardware Co., Ltd.[supcaret]                        Romp (Tianjin) Hardware Co., Ltd..      29.36
Shandong Dinglong Import & Export Co., Ltd.*                       Qingyun Hongyi Hardware Factory...      29.36
Tianjin Jinchi Metal Products Co., Ltd.*                           Tianjin Jinchi Metal Products Co.,      29.36
                                                                    Ltd.
Tianjin Jinghai County Hongli Industry and Business Co., Ltd.*     Tianjin Jinghai County Hongli           29.36
                                                                    Industry and Business Co., Ltd.
Tianjin Jurun Metal Products Co., Ltd.*                            Tianjin Jurun Metal Products Co.,       29.36
                                                                    Ltd.
Zhejiang Gem-chun Hardware Accessory Co., Ltd.[supcaret]           Zhejiang Gem-chun Hardware              29.36
                                                                    Accessory Co., Ltd.
Huanghua Xionghua Hardware Products Co., Ltd.[supcaret]            Huanghua Xionghua Hardware              29.36
                                                                    Products Co., Ltd.
Zhaoqing Harvest Nails Co., Ltd.[supcaret]                         Zhaoqing Harvest Nails Co., Ltd...      29.36
SDC International Australia Pty., Ltd.[supcaret]                   S-mart Tianjin Technology               29.36
                                                                    Development Co., Ltd.; Tianjin
                                                                    Jishili Hardware Co., Ltd.
                                                                    Tianjin Baisheng Metal Product
                                                                    Co., Ltd.; Tianjin Foreign Trade
                                                                    (Group) Textile & Garment Co.,
                                                                    Ltd.; Dagang Zhitong Metal
                                                                    Products Co., Ltd.
Tianjin Universal Imp & Exp Corporation*                           Huanghua Shenghua Hardware              29.36
                                                                    Manufactory Factory; Tianjin
                                                                    Dagang Dongfu Metallic Products
                                                                    Co., Ltd.; Tianjin Dagang Jingang
                                                                    Nail Factory; Tianjin Dagang
                                                                    Linda Metallic Products Co.,
                                                                    Ltd.; Tianjin Dagang Yate Nail
                                                                    Co., Ltd.; Tianjin Jieli Hengyuan
                                                                    Metallic Products Co., Ltd.
                                                                    Tianjin Shishun Metallic Products
                                                                    Co., Ltd. Tianjin Yihao Metallic
                                                                    Products Co., Ltd. Tianjin
                                                                    Yongcang Metallic Products Co.,
                                                                    Ltd.
Certified Products International Inc.+                             Huanghua Jinhai Hardware Products       29.36
                                                                    Co., Ltd.; Shanxi Yuci Broad Wire
                                                                    Products Co., Ltd.; Hengshui
                                                                    Mingyao Hardware & Mesh Products
                                                                    Co., Ltd.; Tianjin Zhonglian
                                                                    Metals Ware Co., Ltd.; Beijing
                                                                    Daruixing Nail Products Co.,
                                                                    Ltd.; Huanghua Xionghua Hardware
                                                                    Products Co., Ltd.; Tianjin Port
                                                                    Free Trade Zone Xiangtong Intnl.
                                                                    Industry & Trade Corp. Shangdong
                                                                    Dinglong Import & Export Co.,
                                                                    Ltd.; Wuhu Shijie Hardware Co.,
                                                                    Ltd.; Romp (Tianjin) Hardware
                                                                    Co., Ltd.; Tianjin Jurun Metal
                                                                    Products Co., Ltd.; Yitian
                                                                    (Nanjing) Hardware Co., Ltd.;
                                                                    Nanjing Da Yu Pneumatic Gun Nails
                                                                    Co., Ltd.; Wintime Import &
                                                                    Export Corporation Limited of
                                                                    Zhongshan; Tianjin Chentai
                                                                    International Trading Co., Ltd.;
                                                                    Tianjin Longxing (Group) Huanyu
                                                                    Imp. & Exp. Co., Ltd.; Zhejiang
                                                                    Gem-chun Hardware Accessory Co.,
                                                                    Ltd.; Shanxi Pioneer Handware
                                                                    Industrial Co., Ltd.; Wuhu Xin
                                                                    Lan De Industrial Co., Ltd.;
                                                                    Tianjin Zhitong Metal Products;
                                                                    Suntec Industries Co., Ltd.;
                                                                    China Staple Enterprise (Tianjin)
                                                                    Co., Ltd.; Tianjin Jinghai
                                                                    Country Hongli Industry &
                                                                    Business Co., Ltd.; Hebei Super
                                                                    Star Pneumatic Nails Co., Ltd.;
                                                                    Shanghai Chengkai Hardware
                                                                    Products Co., Ltd.; Tianjin
                                                                    Jinchi Metal Products Co., Ltd.;
                                                                    Shaoxing Chengye Metal Producting
                                                                    Co., Ltd.; Tianjin Shenyuan Steel
                                                                    Producting Group Co., Ltd.;
                                                                    Shanghai Jade Shuttle Hardware
                                                                    Tools Co., Ltd.

[[Page 3941]]

 
Dezhou Hualude Hardware Products Co., Ltd.*                        Tianjin Bosai Hardware Tools Co.,       29.36
                                                                    Ltd.; Beijing Yonghongsheng Metal
                                                                    Products Co., Ltd.; Tianjin City
                                                                    Jinchi Metal Products Co., Ltd.;
                                                                    Huanghua Huarong Hardware
                                                                    Products Co., Ltd.; Huanghua
                                                                    Yufutai Hardware Products Co.,
                                                                    Ltd.; Qingyuan County Hongyi
                                                                    Hardware Products Factory;
                                                                    Tianjin Zhitong Metal Products
                                                                    Co., Ltd.; Tianjin Baisheng Metal
                                                                    Products Co., Ltd.; Tianjin
                                                                    Dagang Hewang Nails Factory.
Shanxi Tianli Industries Co., Ltd.*                                Dingzhou Ruili Nail Production          29.36
                                                                    Co., Ltd.; Haixing Hongda
                                                                    Hardware Production Co., Ltd.;
                                                                    Huanghua Xinda Nail Production
                                                                    Co., Ltd.; Tianjin Huachang Metal
                                                                    Products Co., Ltd.; Tianjin
                                                                    Huapeng Metal Company; Tianjin
                                                                    Huasheng Nails Production Co.,
                                                                    Ltd.; Tianjin Jin Gang Metal
                                                                    Products Co., Ltd.; Tianjin
                                                                    Kunxin Metal Products Co., Ltd.;
                                                                    Tianjin Linda Metal Company;
                                                                    Tianjin Xinyaunsheng Metal
                                                                    Products Co., Ltd.; Tianjin
                                                                    Yongyi Standard Parts Production
                                                                    Co., Ltd.; Wuqiao Huifeng
                                                                    Hardware Production Co., Ltd..
Suntec Industries Co., Ltd.*                                       Wuqiao County Huifeng Hardware          29.36
                                                                    Products Factory; Wuqiao County
                                                                    Xinchuang Hardware Products
                                                                    Factory; Huanghua Jinhai Hardware
                                                                    Products Co., Ltd.; Haixin Linhai
                                                                    Hardware Products Factory;
                                                                    Tianjin Baisheng Metal Products
                                                                    Co., Ltd.; Tianjin City Jinchi
                                                                    Metal Products Co., Ltd.; Tianjin
                                                                    City Dagang Area Jinding Metal
                                                                    Products Factory; Tianjin Jishili
                                                                    Hardware Products Co., Ltd.;
                                                                    Tianjin Jietong Hardware Products
                                                                    Co., Ltd.; Tianjin Ruiji Metal
                                                                    Products Co., Ltd.; Tianjin
                                                                    Yongxu Metal Products Co., Ltd.;
                                                                    Wuxi Baolin Nail-making Machinery
                                                                    Co., Ltd.; Suzhou Xinya Nail Co.,
                                                                    Ltd.
Sinochem Tianjin Imp & Exp Shenzhen Corp.*                         Tianjin Jlhy Metal Products Co.,        29.36
                                                                    Ltd..
Qingdao D&L Group Ltd.*                                            Tianjin City Daman Port Area            29.36
                                                                    Jinding Metal Products Factory;
                                                                    Tianjin Yongxu Metal Products
                                                                    Co., Ltd.; Huanghua Jinhai Metal
                                                                    Products Co., Ltd.; Dong'e
                                                                    Fuqiang Metal Products Co., Ltd.
Tianjin Xiantong Material & Trade Co., Ltd.*                       Tianjin Xiantong Fucheng Gun Nail       29.36
                                                                    Manufacture Co., Ltd.
Zhongshan Junlong Nail Manufactures Co., Ltd.+                     Zhongshan Junlong Nail                  29.36
                                                                    Manufactures Co., Ltd.
Shandong Minmetals Co., Ltd.*                                      Shouguang Meiqing Nail Industry         29.36
                                                                    Co., Ltd.
Shouguang Meiqing Nail Industry Co., Ltd.[supcaret]                Shouguang Meiqing Nail Industry         29.36
                                                                    Co., Ltd.
S-mart (Tianjin) Technology Development Co., Ltd.[supcaret]        Tianjin Jishili Hardware Co.,           29.36
                                                                    Ltd.; Tianjin Baisheng Metal
                                                                    Product Co., Ltd.; Tianjin Dagang
                                                                    Hewang Nail Factory; Tianjin
                                                                    Shishun Metal Products Co., Ltd.;
                                                                    Tianjin Xinyuansheng Metal
                                                                    Product Co., Ltd.; Tianjin
                                                                    Yongchang Metal Product Co., Ltd.
Tianjin Liande Group Co., Ltd.*                                    Tianjin Dagang Hewang Nails             29.36
                                                                    Manufacture Plant; Tianjin Dagang
                                                                    Jingang Nails Manufacture Plant;
                                                                    Tianjin Dagang Longhua Nails
                                                                    Manufacture Plant; Tianjin Dagang
                                                                    Shenda Metal Products Co., Ltd.;
                                                                    Tianjin Jietong Metal Products
                                                                    Co., Ltd.; Tianin Qichuan Metal
                                                                    Products Co., Ltd.; Tianjin
                                                                    Yongxu Metal Products Co., Ltd.;
                                                                    Zhangjiagang Longxiang Packing
                                                                    Materials Co., Ltd.
Union Enterprise Co., Ltd.[supcaret]                               Union Enterprise Co., Ltd.........      29.36
Beijing Hong Sheng Metal Co., Ltd.*                                Beijing Hong Sheng Metal Co., Ltd.      29.36
PT Enterprise Inc.+                                                Shanxi Hairui Trade Co., Ltd.;          29.36
                                                                    Shanxi Pioneer Hardware
                                                                    Industrial Co., Ltd.; Shanxi Yuci
                                                                    Broad Wire Products Co., Ltd.
Shanxi Hairui Trade Co., Ltd.*                                     Shanxi Pioneer Hardware Industrial      29.36
                                                                    Co., Ltd.; Shanxi Yuci Broad Wire
                                                                    Products Co., Ltd.
Shanxi Pioneer Hardware Industrial Co., Ltd.*                      Shanxi Pioneer Hardware Industrial      29.36
                                                                    Co., Ltd.
Shanxi Yuci Broad Wire Products Co., Ltd.*                         Shanxi Yuci Broad Wire Products         29.36
                                                                    Co., Ltd.
Yitian Nanjing Hardware Co., Ltd.[supcaret]                        Yitian Nanjinghardware Co., Ltd...      29.36
Chiieh Yung Metal Ind. Corp.+                                      Cym (Nanjing) Nail Manufacture          29.36
                                                                    Co., Ltd.
Shanghai Seti Enterprise International Co., Ltd.*                  Suzhou Yaotian Metal Products Co.       29.36
                                                                    Ltd.
Shanghai Curvet Hardware Products Co., Ltd.[supcaret]              Shanghai Tengyu Hardware Tools          29.36
                                                                    Co., Ltd.
Shanghai Tengyu Hardware Tools Co., Ltd.*                          Shanghai Curvet Hardware Products       29.36
                                                                    Co., Ltd.
Xuzhou CIP International Group Co., Ltd.[supcaret]                 Xuzhou Cip International Group          29.36
                                                                    Co., Ltd.
Wuhu Shijie Hardware Co., Ltd.*                                    Wuhu Shijie Hardware Co., Ltd.....      29.36
Wuhu Xin Lan De Industrial Co., Ltd.*                              Wuhu Xin Lan De Industrial Co.,         29.36
                                                                    Ltd.
Tianjin Zhonglian Metals Ware Co., Ltd.*                           Tianjin Zhonglian Metals Ware Co.,      29.36
                                                                    Ltd.
Jining Huarong Hardware Products Co., Ltd.*                        Jining Huarong Hardware Products        29.36
                                                                    Co., Ltd.
Mingguang Abundant Hardware Products Co., Ltd.*                    Mingguang Abundant Hardware             29.36
                                                                    Products Co., Ltd.
Shandong Oriental Cherry Hardware Group Co., Ltd.*                 Shandong Oriental Cherry Hardware       29.36
                                                                    Group Co., Ltd.

[[Page 3942]]

 
Shandong Oriental Cherry Hardware Import and Import Co., Ltd.*     Shandong Oriental Cherry Hardware       29.36
                                                                    Import and Import Co., Ltd.
Shanghai Chengkai Hardware Product. Co., Ltd.[supcaret]            Shanghai Chengkai Hardware              29.36
                                                                    Product. Co., Ltd.
Shanghai Jade Shuttle Hardware Tools Co., Ltd.[supcaret]           Shanghai Jade Shuttle Hardware          29.36
                                                                    Tools Co., Ltd.
Shanghai Yueda Nails Industry Co., Ltd.*                           Shanghai Yueda Nails Industry Co.,      29.36
                                                                    Ltd.
Besco Machinery Industry (Zhejiang) Co., Ltd.+                     Besco Machinery Industry                29.36
                                                                    (Zhejiang) Co., Ltd.
The Stanley Works (Langfang) Fastening Systems Co.,                The Stanley Works (Langfang)            29.36
 Ltd.[supcaret]                                                     Fastening Systems Co., Ltd.
Guangdong Foreign Trade Import & Export Corporation*               Shanghai Nanhui Jinjun Handware         29.36
                                                                    Factory.
PRC-wide                                                           ..................................     118.04
----------------------------------------------------------------------------------------------------------------

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 nails from the PRC as described in the ``Scope of 
Investigation'' section, entered, or withdrawn from warehouse, for 
consumption from Paslode and the SR Recipients on or after the date of 
publication of this notice in the Federal Register. We will instruct 
CBP to require a cash deposit or the posting of a bond equal to the 
weighted-average amount by which the normal value exceeds U.S. price, 
as indicated above. For Xingya Group and the PRC-wide entity, we will 
direct CBP to suspend liquidation of any entries of nails from the PRC 
as described in the ``Scope of Investigation'' section, 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. The 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 nails, 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 (see 
351.309(d)). 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, and if requested, we 
will hold a public hearing, 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 shortly 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.
    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.

Postponement of Final Determination and Extension of Provisional 
Measures

    Pursuant to section 735(a)(2) of the Act, on January 3, 2008, 
Xingya Group requested that in the event of an affirmative preliminary 
determination in this investigation, the Department postpone its final 
determination by 60 days. At the same time, Xingya Group requested that 
the Department extend the application of the provisional measures 
prescribed under 19 CFR 351.210(e)(2) from a 4-month period to a 6-
month period. In accordance with section 733(d) of the Act and 19 CFR 
351.210(b), because (1) our preliminary determination is affirmative, 
(2) the requesting exporter accounts for a significant proportion of 
exports of the subject merchandise, and (3) no compelling reasons for 
denial exist, we are granting the request and are postponing the final 
determination until no later than 135 days after the publication of 
this notice in the Federal Register. Suspension of liquidation will be 
extended accordingly.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: January 15, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-1106 Filed 1-22-08; 8:45 am]
BILLING CODE 3510-DS-P