[Federal Register Volume 76, Number 150 (Thursday, August 4, 2011)]
[Notices]
[Pages 47151-47153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-19712]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-928]


Uncovered Innerspring Units From the People's Republic of China: 
Preliminary Intent To Rescind New Shipper Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On February 19, 2009, the Department of Commerce (the 
``Department'') published in the Federal Register the antidumping duty 
order on uncovered innerspring units (``innersprings'') from the 
People's Republic of China (``PRC'').\1\ The Department is conducting a 
new shipper review (``NSR'') of the Order, covering the period of 
review (``POR'') of February 1, 2010-July 31, 2010. As discussed below, 
we preliminarily determine that Foshan Nanhai Jiujiang Quan Li Spring 
Hardware Factory's (``Quan Li'') sale under review is not bona fide. As 
such, we are preliminarily rescinding the NSR for Quan Li.
---------------------------------------------------------------------------

    \1\ See Uncovered Innerspring Units from the People's Republic 
of China: Notice of Antidumping Duty Order, 74 FR 7661 (February 19, 
2009) (``Order'').

---------------------------------------------------------------------------
EFFECTIVE DATES: August 4, 2011.

FOR FURTHER INFORMATION CONTACT: Paul Walker, 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) 482-0413.

SUPPLEMENTARY INFORMATION:

Background

    On August 20, 2010, pursuant to section 751(a)(2)(B)(i) of the 
Tariff Act of 1930, as amended (the ``Act''), and section 351.214(c) of 
the Department's regulations, the Department received a NSR request 
from Quan Li and Foshan Yongnuo Import & Export Co., Ltd. 
(``Yongnuo''). Quan Li certified that it was the producer of the 
subject merchandise upon which the request was based. Yongnuo certified 
that it was the exporter of the subject merchandise upon which the 
request was based. On October 6, 2010, the Department issued its 
original antidumping duty questionnaire. On October 7, 2010, the 
Department published a notice of initiation of the NSR of the Order for 
Quan Li and Yongnuo.\2\ Between November 5, 2010, and April 29, 2011, 
Quan Li and Yongnuo submitted responses to the original and 
supplemental sections A, C, D and Importer antidumping duty 
questionnaires.
---------------------------------------------------------------------------

    \2\ See Uncovered Innerspring Units from the People's Republic 
of China: Initiation of Antidumping Duty New Shipper Review, 75 FR 
62107 (October 7, 2010).
---------------------------------------------------------------------------

    On January 18, 2011, the Department sent interested parties a 
letter requesting comments on surrogate country selection and 
information pertaining to valuing factors of production. On April 25, 
2011, we received surrogate country comments and surrogate value data 
from Quan Li and Yongnuo, as well as from Petitioner.\3\
---------------------------------------------------------------------------

    \3\ The petitioner is Leggett and Platt, Incorporated, hereafter 
referred to as ``Petitioner.''
---------------------------------------------------------------------------

    On March 28, 2011, the Department extended the deadline for the 
preliminary results of this review to June 1, 2011.\4\ On June 13, 
2011, the Department extended the deadline for the preliminary results 
of this review to July 15, 2011.\5\ On July 20, 2011, the Department 
extended the deadline for the preliminary results of this review to 
July 26, 2011.\6\
---------------------------------------------------------------------------

    \4\ See Uncovered Innerspring Units from the People's Republic 
of China: Extension of Preliminary Results of Antidumping Duty New 
Shipper Review, 76 FR 17107 (March 28, 2011).
    \5\ See Uncovered Innerspring Units from the People's Republic 
of China: Extension of Preliminary Results of Antidumping Duty New 
Shipper Review, 76 FR 34207 (June 13, 2011).
    \6\ See Uncovered Innerspring Units from the People's Republic 
of China: Extension of Preliminary Results of Antidumping Duty New 
Shipper Review, 76 FR 43263 (July 20, 2011).
---------------------------------------------------------------------------

Scope of the Order

    The merchandise subject to the order is uncovered innerspring units 
composed of a series of individual metal springs joined together in 
sizes corresponding to the sizes of adult mattresses (e.g., twin, twin 
long, full, full long, queen, California king and king) and units used 
in smaller constructions, such as crib and youth mattresses. All 
uncovered innerspring units are included in the scope regardless of 
width and length. Included within this definition are innersprings 
typically ranging from 30.5 inches to 76 inches in width and 68 inches 
to 84 inches in length. Innersprings for crib mattresses typically 
range from 25 inches to 27 inches in width and 50 inches to 52 inches 
in length.
    Uncovered innerspring units are suitable for use as the innerspring 
component in the manufacture of innerspring mattresses, including 
mattresses that incorporate a foam encasement around the innerspring.
    Pocketed and non-pocketed innerspring units are included in this 
definition. Non-pocketed innersprings are typically joined together 
with helical wire and border rods. Non-pocketed

[[Page 47152]]

innersprings are included in this definition regardless of whether they 
have border rods attached to the perimeter of the innerspring. Pocketed 
innersprings are individual coils covered by a ``pocket'' or ``sock'' 
of a nonwoven synthetic material or woven material and then glued 
together in a linear fashion.
    Uncovered innersprings are classified under subheading 
9404.29.9010, 9404.29.9005 and 9404.29.9011 and have also been 
classified under subheadings 9404.10.0000, 7326.20.0070, 7320.20.5010, 
or 7320.90.5010 of the Harmonized Tariff Schedule of the United States 
(``HTSUS''). The HTSUS subheadings are provided for convenience and 
customs purposes only; the written description of the scope of the 
order is dispositive.

Bona Fides Analysis

    Consistent with Department practice, we examined the bona fides of 
Quan Li's sale.\7\ In evaluating whether a sale in an NSR is 
commercially reasonable or typical of normal business practices, and 
therefore bona fide, the Department considers, inter alia, such factors 
as (a) The timing of the sale, (b) the price and quantity, (c) the 
expenses arising from the transaction, (d) whether the goods were 
resold at a profit, and (e) whether the transaction was made on an 
arm's length basis.\8\ Accordingly, the Department considers a number 
of factors in its bona fides analysis, ``all of which may speak to the 
commercial realities surrounding an alleged sale of subject 
merchandise.'' \9\ In TTPC, the court also affirmed the Department's 
decision that any factor which indicates that the sale under 
consideration is not likely to be typical of those which the producer 
will make in the future is relevant,\10\ and found that the weight 
given to each factor investigated will depend on the circumstances 
surrounding the sale.\11\ Finally, in New Donghua, the CIT affirmed the 
Department's practice of evaluating the circumstances surrounding an 
NSR sale, so that a respondent does not unfairly benefit from an 
atypical sale and obtain a lower dumping margin than the producer's 
usual commercial practice would dictate.\12\ Where the Department finds 
that a sale is not bona fide, the Department will exclude the sale from 
its export price calculations.\13\
---------------------------------------------------------------------------

    \7\ See, e.g., Honey from the People's Republic of China: 
Rescission and Final Results of Antidumping Duty New Shipper 
Reviews, 71 FR 58579 (October 4, 2006) and accompanying Issues and 
Decision Memorandum at Comment 1b.
    \8\ See Tianjin Tiancheng Pharmaceutical Co., Ltd. v. United 
States, 366 F. Supp. 2d 1246, 1249-1250 (CIT 2005) (``TTPC'').
    \9\ See Hebei New Donghua Amino Acid Co., Ltd. v. United States, 
374 F. Supp. 2d 1333, 1342 (CIT 2005) (`` New Donghua'') (citing 
Fresh Garlic From the People's Republic of China: Final Results of 
Antidumping Administrative Review and Rescission of New Shipper 
Review, 67 FR 11283 (March 13, 2002), and accompanying Issues and 
Decision Memorandum: New Shipper Review of Clipper Manufacturing 
Ltd.).
    \10\ See TTPC, 366 F. Supp. 2d at 1250.
    \11\ Id. at 1263.
    \12\ New Donghua, 374 F. Supp. 2d at 1344.
    \13\ See TTPC, 366 F. Supp. 2d at 1249.
---------------------------------------------------------------------------

    Based on the totality of circumstances, we preliminarily find that 
the sale made by Quan Li during the POR was not a bona fide commercial 
transaction and should be excluded from the Department's calculations. 
Quan Li's POR quantity was atypical and its price was high. In 
addition, we sought information from the importer in order to evaluate 
the commercial reasonableness of the sale and to consider whether this 
sale is predictive of future commercial activity. The importer provided 
conflicting information, it has not substantiated its claims that the 
subject merchandise was resold for profit; and it has also said that it 
has no other purchases of subject merchandise. Because much of the 
factual information used in our analysis of the bona fides of the 
transaction involves business proprietary information, a full 
discussion of the basis for our preliminary finding that the sale is 
not bona fide is set forth in the Quan Li Bona Fides Memo.\14\ Because 
we have found Quan Li's sole sale to be not bona fide, we cannot rely 
on this sale to calculate a dumping margin and, therefore, there is no 
sale on which we can base this review and we are preliminarily 
rescinding Quan Li's NSR.\15\
---------------------------------------------------------------------------

    \14\ See Memorandum to James C. Doyle, Director, Office 9, 
through Scot T. Fullerton, Program Manager, Office 9, from Paul 
Walker, Case Analyst, Office 9, First New Shipper Review of 
Uncovered Innerspring Units from the People's Republic of China: 
Bona Fide Analysis of Foshan Nanhai Jiujiang Quan Li Spring Hardware 
Factory's New Shipper Sale (``Quan Li Bona Fide Memo'').
    \15\ See Quan Li Bona Fide Memo, TTPC and New Donghua.
---------------------------------------------------------------------------

Preliminary Rescission of NSR

    For the foregoing reasons, the Department preliminarily finds that 
Quan Li's sale is not bona fide and that this sale does not provide a 
reasonable, or reliable, basis for calculating a dumping margin. 
Because this non-bona fide sale was the only sale of subject 
merchandise during the POR, the Department is preliminarily rescinding 
the NSR of Quan Li.

Assessment Rates

    Upon issuance of the final results, the Department will determine, 
and U.S. Customs and Border Protection (``CBP'') shall assess, 
antidumping duties on all appropriate entries. If we proceed to a final 
rescission of Quan Li's NSR, Quan Li's entry will be assessed at the 
rate entered.\16\ If we do not proceed to a final rescission of Quan 
Li's NSR, pursuant to section 351.212(b)(1) of the Department's 
regulations, we will calculate importer-specific (or customer) ad 
valorem 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 review is above de minimis. In either case, the Department 
intends to issue appropriate assessment instructions directly to CBP 15 
days after publication of the final results of this review.
---------------------------------------------------------------------------

    \16\ See section 351.212(c) of the Department's regulations.
---------------------------------------------------------------------------

Cash Deposit Requirements

    Effective upon publication of the final rescission of this NSR, or 
the final result of this NSR, we will instruct CBP to discontinue the 
option of posting a bond or security in lieu of a cash deposit for 
entries of subject merchandise by Quan Li, pursuant to section 
751(a)(2)(B)(iii) of the Act and section 351.214(e) of the Department's 
regulations. If we proceed to a final rescission of this NSR, the cash 
deposit rate will continue to be the PRC-wide rate for Quan Li because 
the Department will not have determined an individual margin of dumping 
for Quan Li. If we issue final results for this NSR, we will instruct 
CBP to collect cash deposits, effective upon the publication of the 
final results, at the rates established therein.

Disclosure

    The Department intends to disclose to parties of this proceeding 
the calculation performed in reaching the preliminary results within 
five days of the date of publication of this notice in accordance with 
section 351.224(b) of the Department's regulations.

Public Comment and FOP Data

    In accordance with section 351.301(c)(3)(ii) of the Department's 
regulations, for the final results, interested parties may submit 
publicly available information to value factors of production (``FOP'') 
within 20 days after the date of publication of these preliminary 
results. Interested parties must provide the Department with supporting 
documentation for the

[[Page 47153]]

publicly available information to value each FOP. Additionally, in 
accordance with section 351.301(c)(1) of the Department's regulations, 
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 within ten days of the applicable 
deadline for submission of such factual information. However, the 
Department notes that section 351.301(c)(1) of the Department's 
regulations permits new information only insofar as it rebuts, 
clarifies, or corrects information recently placed on the record.\17\
---------------------------------------------------------------------------

    \17\ 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.
---------------------------------------------------------------------------

    In accordance with section 351.309(c)(1)(ii) of the Department's 
regulations, interested parties may submit case briefs and/or written 
comments no later than 30 days after the date of publication of the 
preliminary results of this NSR. In accordance with section 351.309(d) 
of the Department's regulations, rebuttal briefs and rebuttals to 
written comments, limited to issues raised in such briefs or comments, 
may be filed no later than five days after the deadline for submitting 
the case briefs. 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.\18\ 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 intend 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.
---------------------------------------------------------------------------

    \18\ See section 351.310(c) of the Department's regulations.
---------------------------------------------------------------------------

    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 and section 351.214(i) 
of the Department's regulations.

Notification to Importers

    This notice serves as a preliminary reminder to importers of its 
responsibility under section 351.402(f)(2) of the Department's 
regulations 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 these preliminary results in 
accordance with sections 751(a)(2)(B) and 777(i) of the Act, and 
sections 351.214(h) and 351.221(b)(4) of the Department's regulations.

    Dated: July 26, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2011-19712 Filed 8-3-11; 8:45 am]
BILLING CODE 3510-DS-P