[Federal Register Volume 75, Number 10 (Friday, January 15, 2010)]
[Notices]
[Pages 2483-2486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-723]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-909]


Certain Steel Nails from the People's Republic of China: Notice 
of Preliminary Results of the New Shipper Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
Summary: The Department of Commerce (``Department'') is conducting a 
new shipper review (``NSR'') of the antidumping duty order on certain 
steel nails from the People's Republic of China (``PRC''). See Notice 
of Antidumping Duty Order: Certain Steel Nails From the People's 
Republic of China, 73 FR 44961 (August 1, 2008) (``Order''). We 
preliminarily find that Qingdao Denarius Manufacture Co., Ltd 
(``Qingdao Denarius'') sold subject merchandise at less than normal 
value (``NV'') during the period of review (``POR''), January 23, 2008, 
through January 31, 2009. If these preliminary results are adopted in 
our final results of review, we will instruct U.S. Customs and Border 
Protection (``CBP'') to assess antidumping duties on entries of subject 
merchandise during the POR for which the importer-specific assessment 
rates are above de minimis.

EFFECTIVE DATE: January 15, 2010.

FOR FURTHER INFORMATION CONTACT: Tim Lord or Matthew Renkey, Office 9, 
AD/CVD Operations, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
7425 and (202) 482-2312, respectively.

SUPPLEMENTARY INFORMATION:

General Background

    On February 25, 2009, pursuant to section 751(a)(2)(B)(i) of the 
Tariff Act of 1930, as amended (``Act''), and 19 CFR 351.214(c), the 
Department received a NSR request from Qingdao Denarius. Qingdao 
Denarius certified that it is a producer and exporter of the subject 
merchandise upon which the request was based. On March 20, 2009, the 
Department initiated the requested antidumping duty NSR. See Certain 
Steel Nails from the People's Republic of China: Initiation of 
Antidumping Duty New Shipper Review, 74 FR 11909 (March 20, 2009). On 
June 11, 2009, the Department extended the deadline for the preliminary 
results of this review by 120 days, to January 11, 2010. See Certain 
Steel Nails from the People's Republic of China: Extension of Time 
Limit for the Preliminary Results of the New Shipper Review 
(``Extension'')\1\, 74 FR 27777 (June 11, 2009).
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    \1\ Where a statutory deadline falls on a weekend, federal 
holiday, or any other day when the Department is closed, the 
Department will reach its determination on the next business day, 
pursuant to 19 CFR 351.303(b). In this instance, the preliminary 
results will be due no later than January 11, 2010.
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    Between April 3, 2009, and August 4, 2009, Qingdao Denarius 
submitted responses to the original sections A, C, and D questionnaires 
and supplemental sections A, C, and D questionnaires.

Surrogate Values

    On October 29, 2009, the Department sent interested parties a 
letter requesting comments on surrogate country selection and 
information pertaining to valuing factors of production (``FOP''). On 
November 24, 2009, Petitioner\2\ submitted surrogate value data. No 
other party submitted surrogate country or surrogate value data.
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    \2\ Mid-Continent Nail Corporation.
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Verification

    Pursuant to 19 CFR 351.307(b)(iv), we conducted verification of the 
sales and factors of production (``FOP'') for Qingdao Denarius between 
November 9-12, 2009. See Memorandum to the File from Tim Lord, Case 
Analyst through Alex Villanueva, Program Manager, Verification of the 
Sales and Factors Response of Qingdao Denarius Manufacture Co., Ltd in 
the Antidumping New Shipper Review of Certain Steel Nails from the 
People's Republic of China, dated, January 8, 2010 (``Qingdao Denarius 
Verification Report'').

Scope of the Order

    The merchandise covered by this order 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

[[Page 2484]]

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. 
Also excluded from the scope of this proceeding are fasteners having a 
case hardness greater than or equal to 50 HRC, a carbon content greater 
than or equal to 0.5 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.
    While the HTSUS subheadings are provided for convenience and 
customs purposes, the written description of the scope of this 
investigation is dispositive.

Non-Market Economy Country Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (``NME'') country. See 
Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Coated Free Sheet Paper from the 
People's Republic of China, 72 FR 30758 (June 4, 2007). See also 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. None of the parties to this 
proceeding have contested such treatment. Accordingly, we calculated NV 
in accordance with section 773(c) of the Act, which applies to NME 
countries.

Separate Rate Determinations

    A designation as a NME remains in effect until it is revoked by the 
Department. See section 771(18)(C) of the Act. Accordingly, there is a 
rebuttable presumption that all companies within the PRC are subject to 
government control and, thus, should be assessed a single antidumping 
duty rate. It is the Department's standard policy to assign all 
exporters of the merchandise subject to review in NME countries a 
single rate unless an exporter can affirmatively demonstrate an absence 
of government control, both in law (de jure) and in fact (de facto), 
with respect to exports. To establish whether a company is sufficiently 
independent to be entitled to a separate, company-specific rate, the 
Department analyzes each exporting entity in an NME country under the 
test established in the Final Determination of Sales at Less than Fair 
Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 
6, 1991) (``Sparklers''), as amplified by the 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'').

A. 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.
    In this review, Qingdao Denarius submitted a complete response to 
the separate rates section of the Department's NME questionnaire. The 
evidence submitted by Qingdao Denarius includes government laws and 
regulations on corporate ownership, business licenses, and narrative 
information regarding the company's operations and selection of 
management. The evidence provided by Qingdao Denarius supports a 
finding of a de jure absence of government control over its export 
activities. Thus, we believe that the evidence on the record supports a 
preliminary finding of an absence of de jure government control based 
on: (1) an absence of restrictive stipulations associated with the 
exporter's business license; (2) the legal authority on the record 
decentralizing control over the respondent; and (3) other formal 
measures by the government decentralizing control of companies.
B. Absence of De Facto Control
    The absence of de facto government control over exports is based on 
whether the respondent: (1) sets its own export prices independent of 
the government and other exporters; (2) retains the proceeds from its 
export sales and makes independent decisions regarding the disposition 
of profits or financing of losses; (3) has the authority to negotiate 
and sign contracts and other agreements; and (4) has autonomy from the 
government regarding the selection of management. See Silicon Carbide, 
59 FR at 22587; Sparklers, 56 FR at 20589; 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).
    In this review, Qingdao Denarius submitted evidence indicating an 
absence of de facto government control over their export activities. 
Specifically, this evidence indicates that: (1) the company sets its 
own export prices independent of the government and without the 
approval of a government authority; (2) the company retains the 
proceeds from its sales and makes independent decisions regarding the 
disposition of profits or financing of losses; (3) the company has a 
general manager, branch manager or division manager with the authority 
to negotiate and bind the company in an agreement; (4) the general 
manager is selected by the board of directors or company employees, and 
the general manager appoints the deputy managers and the manager of 
each department; and (5)

[[Page 2485]]

there is no restriction on any of the company's use of export revenues. 
Therefore, the Department preliminarily finds that Qingdao Denarius has 
established that it qualifies for a separate rate under the criteria 
established by Silicon Carbide and Sparklers.

New Shipper Review Bona Fide Analysis

    Consistent with the Department's practice, we investigated the bona 
fide nature of the sale made by Qingdao Denarius for this NSR. In 
evaluating whether a single sale in a NSR is commercially reasonable, 
and therefore bona fide, the Department considers, inter alia, such 
factors as: (1) timing of the sale; (2) price and quantity; (3) the 
expenses arising from the transaction; (4) whether the goods were sold 
at a profit; and (5) whether the transaction was made on an arms-length 
basis. See Tianjin Tiancheng Pharmaceutical Co. v. the United States, 
366 F. Supp. 2d R46, 1250 (CIT 2005). Accordingly, the Department 
considers a number of factors in its bona fide analysis, ``all of which 
may be specific to the commercial realities surrounding an alleged sale 
of subject merchandise.'' See Hebei New Donghua Amino Acid Co. v. the 
United States, 374 F. Supp. 2d 1333, 1342 (CIT 2005). In examining 
Qingdao Denarius' sale in relation to these factors, the Department 
observed no evidence that would indicate that this sale was not bona 
fide. Therefore, we preliminarily find that the new shipper sale by 
Qingdao Denarius was made on a bona fide basis.
    Based on our investigation into the bona fide nature of the sale, 
the questionnaire responses submitted by Qingdao Denarius, and our 
verification of Qingdao Denarius, as well the company's eligibility for 
separate rates (see Separate Rates Determination section above), we 
preliminarily determine that Qingdao Denarius has met the requirements 
to qualify as a new shipper during this POR. Therefore, for the 
purposes of these preliminary results of review, we are treating 
Qingdao Denarius' sale of subject merchandise to the United States as 
an appropriate transaction for this NSR.

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base normal value (``NV''), 
in most circumstances, on the NME producer's FOPs, 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 FOPs, the Department shall utilize, to the 
extent possible, the prices or costs of FOPs in one or more market 
economy countries that are: (1) at a level of economic development 
comparable to that of the NME country; and (2) significant producers of 
comparable merchandise.
    The Department determined that India, Philippines, Indonesia, 
Colombia, Thailand, and Peru are countries comparable to the PRC in 
terms of economic development.\3\ Once it has identified economically 
comparable countries, the Department's practice is to select an 
appropriate surrogate country from the list based on the availability 
and reliability of data from the countries. See Department Policy 
Bulletin No. 04.1: Non-Market Economy Surrogate Country Selection 
Process (March 1, 2004). In this case, we have found that India is a 
significant producer of comparable merchandise. In the less-than-fair 
value investigation, we determined that India is comparable to the PRC 
in terms of economic development and has surrogate value data that is 
available and reliable. See Certain Steel Nails from the People's 
Republic of China: Final Determination of Sales at Less Than Fair Value 
and Partial Affirmative Determination of Critical Circumstances, 73 FR 
33977 (June 16, 2008). In this proceeding, we received comments 
regarding surrogate country selection only from the Petitioner, which 
supports the selection of India. Since no information has been provided 
in this review that would warrant a change in the Department's 
selection of India from the less-than-fair value investigation, we 
continue to find that India is the most appropriate surrogate country 
because it is at a similar level of economic development pursuant to 
section 773(c)(4) of the Act, is a significant producer of comparable 
merchandise, and has reliable, publicly available data representing a 
broad-market average.
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    \3\ See Memorandum from Kelly Parkhill, Acting Director of 
Office of Policy, to Alex Villanueva, Program Manager, China/NME 
Group, Office 9: Request for a List of Surrogate Countries for the 
New Shipper Review of the Antidumping Duty Order on Certain Steel 
Nails (``Steel Nails'') from the People's Republic of China 
(``PRC'') (October 28, 2009).
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    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
in an antidumping administrative review, interested parties may submit 
publicly available information to value FOPs within 20 days after the 
date of publication of these preliminary results.

U.S. Price

    For Qingdao Denarius' sale to the United States, we used the export 
price (``EP'') methodology, pursuant to section 772(a) of the Act, 
because the first sale to an unaffiliated purchaser was made prior to 
importation, and CEP was not otherwise warranted by the facts on the 
record. We calculated EP based on the price to unaffiliated purchasers 
in the United States.
    In accordance with section 772(c) of the Act, as appropriate, we 
deducted from the starting price to unaffiliated purchasers foreign 
inland freight and brokerage and handling. We have reviewed each of 
these services and expenses reported by Qingdao Denarius and find that 
they were provided by an NME vendor or paid for using PRC currency. 
Thus, we based the deduction of these movement charges on surrogate 
values. See Memorandum to the File through Alex Villanueva, Program 
Manager, Office 9 from Tim Lord, Case Analyst, Office 9: Antidumping 
Duty New Shipper Review of Certain Steel Nails from the People's 
Republic of China: Surrogate Values for the Preliminary Results, dated 
January 8, 2010 (``Surrogate Values Memo'') for details regarding the 
surrogate values for movement expenses.

Normal Value

1. Methodology
    Section 773(c)(1)(B) of the Act provides that the Department shall 
determine the NVusing a FOP methodology if the merchandise is exported 
from an NME country 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 
FOPs because the presence of government controls on various aspects of 
NMEs renders price comparisons and the calculation of production costs 
invalid under the Department's normal methodologies.
2. Factor Valuations
    In accordance with section 773(c) of the Act, we calculated NV 
based on FOPs reported by Qingdao Denarius during the POR. To calculate 
NV, we multiplied the reported per-unit factor-consumption rates by 
publicly available Indian surrogate values. In selecting the surrogate 
values, we considered the quality, specificity, and contemporaneity of 
the data. As appropriate, we adjusted input prices by including freight 
costs to make them delivered prices. Specifically, we added to Indian 
import surrogate values a

[[Page 2486]]

surrogate freight cost using the shorter of the reported distance from 
the domestic supplier to the factory of production or the distance from 
the nearest seaport to the factory of production 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). Where we did not use Indian Import 
Statistics, we calculated freight based on the reported distance from 
the supplier to the factory.
    Indian surrogate values denominated in foreign currencies were 
converted to USD using the applicable average exchange rate based on 
exchange rate data from the Department's website. For further details 
regarding the surrogate values used for these preliminary results, see 
the Surrogate Values Memo.

Preliminary Results of the Review

    As a result of our review, we preliminarily find that the following 
margins exist for the period January 23, 2008, through January 31, 
2009:

                      Certain Steel Nails from PRC
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                                                       Weighted-Average
                Manufacturer/Exporter                  Margin (Percent)
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Qingdao Denarius....................................               38.13
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Disclosure

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

Comments

    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
of this administrative review, interested parties may submit publicly 
available information to value FOPs within 20 days after the date of 
publication of these preliminary results. Interested parties must 
provide the Department with supporting documentation for the publicly 
available information to value each FOP. Additionally, in accordance 
with 19 CFR 351.301(c)(1), for the final results of this NSR, 
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.\4\
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    \4\ 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.
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    Interested parties may submit case briefs and/or written comments 
no later than 30 days after the date of publication of these 
preliminary results of this NSR. See 19 CFR 351.309(c)(ii). Rebuttal 
briefs and rebuttals to written comments, limited to issues raised in 
such briefs or comments, may be filed no later than 5 days after the 
deadline for submitting the case briefs. See 19 CFR 351.309(d). The 
Department requests that interested parties provide an executive 
summary of each argument contained within the case briefs and rebuttal 
briefs.
    Any interested party may request a hearing within 30 days of 
publication of these preliminary results. See 19 CFR 351.310(c). 
Requests should contain the following information: (1) The party's 
name, address, and telephone number; (2) the number of participants; 
and (3) a list of the issues to be discussed. Oral presentations will 
be limited to issues raised in the briefs. If we receive a request for 
a hearing, we plan to hold the hearing seven days after the deadline 
for submission of the rebuttal briefs at the U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230.
    The Department intends to issue the final results of this NSR, 
which will include the results of its analysis raised in any such 
comments, within 90 days of publication of these preliminary results, 
pursuant to section 751(a)(2)(B)(iv) of the Act.

Assessment Rates

    Upon completion of the final results, pursuant to 19 CFR 
351.212(b), the Department will determine, and CBP shall assess, 
antidumping duties on all appropriate entries on a weighted-average 
basis. The Department intends to issue assessment instructions to CBP 
15 days after the date of publication of the final results of review. 
If these preliminary results are adopted in our final results of 
review, the Department shall determine, and CBP shall assess, 
antidumping duties on all appropriate entries. Pursuant to 19 CFR 
351.212(b)(1), we will calculate importer-specific (or customer) per-
unit duty assessment rates. We will instruct CBP to assess antidumping 
duties on all appropriate entries covered by this review if any 
importer-specific assessment rate calculated in the final results of 
this NSR is above de minimis.

Cash-Deposit Requirements

    The following cash deposit requirements, when imposed, will be 
effective upon publication of the final results of this NSR for all 
shipments of subject merchandise from Qingdao Denarius entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date, as provided for by section 751(a)(2)(C) of the Act: (1) for 
subject merchandise produced and exported by Qingdao Denarius, the cash 
deposit rate will be the rate that is established in the final results 
of this NSR; (2) for subject merchandise exported by Qingdao Denarius 
but not manufactured by Qingdao Denarius, the cash deposit rate will 
continue to be the PRC-wide rate (i.e., 118.04 percent); and (3) for 
subject merchandise manufactured by Qingdao Denarius, but exported by 
any other party, the cash deposit rate will be the rate applicable to 
the exporter. If the cash deposit rate calculated in the final results 
is zero or de minimis, no cash deposit will be required for those 
entries of subject merchandise both produced and exported by Qingdao 
Denarius. These cash deposit requirements, when imposed, shall remain 
in effect until further notice.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this POR. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing this determination in accordance with 
sections 751(a)(2)(B) and 777(i) of the Act, and 19 CFR 351.214(h) and 
351.221(b)(4).

    Dated: January 8, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-723 Filed 1-14-10; 8:45 am]
BILLING CODE 3510-DS-S