[Federal Register Volume 61, Number 157 (Tuesday, August 13, 1996)]
[Notices]
[Pages 41994-42000]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20613]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-822]
Certain Helical Spring Lock Washers From The People's Republic of
China; Final Results of Antidumping Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of the antidumping duty administrative
review.
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SUMMARY: On August 16, 1995, the Department of Commerce (the
Department) published in the Federal Register the preliminary results
of the administrative review of the antidumping duty order on certain
helical spring lock washers (HSLWs) from the People's Republic of China
(PRC) (60 FR 42519). This review covers shipments of this merchandise
to the United States during the period October 15, 1993, through
September 30, 1994. We gave interested parties an opportunity to
comment on our
[[Page 41995]]
preliminary results. Based upon our analysis of the comments received
we have changed the results from those presented in the preliminary
results of review.
EFFECTIVE DATE: August 13, 1996.
FOR FURTHER INFORMATION CONTACT: Donald Little or Maureen Flannery,
Office of Antidumping Compliance, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington D.C. 20230; telephone (202) 482-
4733.
Background
The Department published in the Federal Register the antidumping
duty order on HSLWs from the PRC on October 19, 1993 (58 FR 53914). On
October 7, 1994, the Department published in the Federal Register (59
FR 51166) a notice of opportunity to request administrative review of
the antidumping duty order on HSLWs from the PRC covering the period
October 15, 1993, through September 30, 1994.
In accordance with 19 CFR 353.22(a) (1994), the respondent,
Zhejiang Wanxin Group Co. (ZWG), also known as Hangzhou Spring Washer
Plant, requested that we conduct an administrative review. We published
a notice of initiation of this antidumping duty administrative review
on November 14, 1994 (59 FR 56459).
On August 16, 1995, the Department published in the Federal
Register the preliminary results of this review of the antidumping duty
order on HSLWs from the PRC (60 FR 42519). We held a hearing on October
3, 1995. The Department has now completed this review in accordance
with section 751 of the Tariff Act of 1930, as amended (the Tariff
Act).
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute and the
Department's regulations are in reference to the provisions as they
existed on December 31, 1994.
Scope of Review
The products covered by this review are HSLWs of carbon steel, of
carbon alloy steel, or of stainless steel, heat- treated or non heat-
treated, plated or non-plated, with ends that are off-line. HSLWs are
designed to: (1) Function as a spring to compensate for developed
looseness between the component parts of a fastened assembly; (2)
distribute the load over a larger area for screws or bolts; and (3)
provide a hardened bearing surface. The scope does not include internal
or external tooth washers, nor does it include spring lock washers made
of other metals, such as copper.
HSLWs subject to this review are currently classifiable under
subheading 7318.21.0030 of the Harmonized Tariff Schedule of the United
States (HTS). Although the HTS subheading is provided for convenience
and Customs purposes, the written description of the scope of this
proceeding is dispositive.
This review covers one exporter of HSLWs from the PRC, ZWG, and the
period October 15, 1993, through September 30, 1994.
Analysis of Comments Received
We gave interested parties an opportunity to comment on the
preliminary results. We received case briefs and rebuttals from
Shakeproof Industrial Products of Illinois Works (petitioner), ZWG, and
the American Association of Fastener Importers (AAFI), an interested
party. At the request of the petitioner, we held a public hearing on
October 3, 1995.
Comment 1: ZWG asserts that the Department may not use Indian
import statistics because all of the values therein are for dumped or
subsidized steel. ZWG states that all of the countries supplying steel
bar and rod covered by the Indian import statistics are subject to
antidumping or countervailing duty orders. ZWG states that the
antidumping statute and court rulings prohibit the use of dumped or
subsidized prices to value factors of production. ZWG cites the House
Report to the Omnibus Trade and Competitiveness Act of 1988, with
respect to factors of production: ``In valuing such factors, Commerce
shall avoid using any prices which it has reason to believe or suspect
may be dumped or subsidized prices * * *.'' ZWG states that, in the
Final Determination of Sales at Less Than Fair Value: Certain Helical
Spring Lock Washers from the People's Republic of China (Lock Washers),
58 FR 48833, the Department said it will not consider pricing
information from any country found to be selling dumped or subsidized
merchandise. ZWG also notes that, in Final Results of Antidumping Duty
Administrative Review: Certain Iron Construction Castings from the
People's Republic of China (Construction Castings), 57 FR 10644, the
Department states it ``has consistently refused to base foreign market
value (FMV) upon surrogate countries prices for exports if those
exports may benefit from subsidies or are being dumped.'' ZWG states
that the Court of International Trade (CIT), in Tehnoimportexport, UCF
America Inc. v. U.S. (Tehnoimportexport), interpreted the House
Report's ``believe or suspect'' standard to mean that the Department
correctly rejected export values that were affected by industry-wide
subsidies. ZWG argues that the CIT upheld the Department's rejection of
particular Yugoslavian export prices in part because those prices were
tainted by industry-wide subsidies. ZWG argues that the Department's
published findings with respect to steel bar and rod and with respect
to generalized steel subsidies provide compelling reason to ``believe
or suspect'' that the Indian import statistics consist of dumped and
subsidized prices. ZWG contends that the findings of dumping and
subsidization pertain directly to those countries whose exports
constitute India's import data. ZWG states that the Department is
therefore legally precluded from using the Indian import data.
AAFI also argues that the Department cannot use Indian import
statistics from countries subject to past or current antidumping or
countervailing duty findings for purposes of calculating FMV.
Petitioner asserts that the Indian import statistics are not
tainted as claimed. Noting that ZWG cited Tehnoimportexport for the
proposition that the Department should reject the Indian import prices
as it rejected the use of Yugoslavian steel export prices, petitioner
quotes the CIT in that case:
Commerce's decision in this case, however, was based on final
antidumping determinations upon comparable merchandise and two final
countervailing duty determinations in which Commerce determined that
countervailable, non-product specific export subsidies were bestowed
upon exports of steel products. Their decision was also based on
several EC cases. In total, there was substantial evidence to allow
a reasonable mind to conclude that there were dumping and subsidies
favoring Yugoslavian steel exports.
Petitioner argues that in the case at hand the Department is not
looking at Indian exports but at Indian imports. Petitioner asserts
that the standard that the Department should use is whether the Indian
imports in fact benefitted from dumped or subsidized prices. Petitioner
argues that if India has imposed antidumping or countervailing duty
measures against steel imports, the decision would be different. Noting
a provision precluding the Department from using values because there
are antidumping or countervailing duty decisions on the same product or
there are countervailing duty decisions on general exports is not in
the statute, petitioner argues that the legislative intent does not
support the rigid
[[Page 41996]]
approach ZWG proposes. Petitioner argues that Congress was generally
opposed to having American firms compete with imports that use dumped
or subsidized inputs. Petitioner claims that, in the case of non-market
economies (NMEs), the same condition would apply indirectly if the
Department used dumped or subsidized prices to determine surrogate
values. Petitioner argues that the Department should look at the date
of any order, the nature of the subsidies, and the amount of the
antidumping or countervailing duties. Petitioner further argues that,
taken to its conclusion, ZWG's argument essentially restricts the
Department from using import statistics for steel-related NME cases.
Petitioner states that the Department rejected the argument that Indian
import values should be disregarded in Lock Washers.
Department's Position: We agree with petitioner. There is no
evidence that the Indian import statistics are ``tainted'' by dumping
or subsidies. We agree with the petitioner that the question is whether
Indian imports benefit from dumped or subsidized prices. There is no
evidence that India has found dumping or subsidizing of steel imports
into India. Although the Department determined there were sales to the
United States at less than fair value of steel wire rod from Japan and
Canada, these determinations alone are not sufficient bases for a
belief or suspicion that those countries also dumped imports into
India. Further, although the Department made affirmative countervailing
duty determinations on flat-rolled steel products from several
countries, there is no basis to conclude from those findings that the
production or export of carbon steel wire rod from those countries is
also subsidized. Therefore, we have no reason to ``believe or suspect''
that the Indian import statistics should not be used as a surrogate to
value carbon steel wire rod.
Comment 2: ZWG argues that the domestic Indian prices of the Steel
Authority of India Limited (SAIL) are preferable to Indian import
prices according to the Department's criteria for selecting surrogate
values. ZWG asserts that the Department is not obligated to use import
statistics merely because they were used in the original investigation
of sales at less than fair value (LTFV). ZWG argues that the Department
has never expressed a preference for import statistics, nor has the
Department ever announced a rule that it should adopt values from the
original LTFV investigation merely to be consistent. ZWG argues that
the Department's goal is to value non-market economy factors in as fair
and accurate a manner as possible. ZWG argues that, in Lasko Metal
Products v. United States, 43 F.3d 1442 (Lasko), the court stated that
the antidumping statute does not say anywhere that the factors of
production must be ascertained in a single fashion, and that the
statutory purpose is to facilitate the determination of dumping margins
as accurately as possible. ZWG contends that blindly following past
decisions in the name of consistency would violate the ruling in Lasko.
ZWG also cites Final Results of Antidumping Duty Administrative Review:
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished,
From the Republic of Hungary, 56 FR 41819, wherein the Department
stated that ``simply because a particular source was used in previous
reviews of this case does not preclude the Department from relying on
alternate sources if the circumstances necessitate a change.'' ZWG
argues that this case clearly necessitates a change.
ZWG states that the Department has adopted domestic Indian steel
prices as publicly available published information (PAPI) on numerous
occasions. ZWG argues that it has demonstrated that there is a stronger
factual basis for using the SAIL data than for using the Indian import
statistics. The record, ZWG claims, establishes that ZWG uses steel
wire rod in the production of HSLWs. ZWG argues the SAIL data is size-
specific price data for steel wire rods, while the import statistics
encompass a wide variety of steel wire rods and bars. ZWG states that
the Department has expressed a preference for PAPI that is specific to
the inputs actually used in the production of subject merchandise. ZWG
cites the Notice of Preliminary Determination of Sales at Less Than
Fair Value and Postponement of Final Determination: Certain Partial-
Extension Steel Drawer Slides with Rollers from the PRC (Drawer
Slides), 60 FR 29571 (June 5, 1995), where the Department adopted the
product-specific domestic Indian steel prices from the SAIL data, the
same data ZWG proposes, and rejected Indian import statistics and
domestic price data contained in a U.S. Embassy market research report
that was not product-specific. ZWG states that, in Drawer Slides, the
Department used domestic Indian prices from the same SAIL source ZWG
has proposed instead of using the Indian import statistics that covered
the period. According to ZWG, in Drawer Slides, the Department
preferred the SAIL information, which preceded the period of
investigation, because it was product-specific. ZWG asserts that the
SAIL data is also product-specific in this case. ZWG also argues that
the SAIL data is virtually contemporaneous with the review period. ZWG
asserts that surrogate information must be contemporaneous with the
period under consideration rather than comprehensively cover the period
under consideration.
ZWG argues that the Department has stated that the purpose of
application of surrogate country information is to construct a value
for the merchandise had it been manufactured in and exported from the
surrogate country, or India in this case, citing Certain Cased Pencils
from the People's Republic of China, 59 FR 55625, and Sebacic Acid from
the People's Republic of China, 59 FR 28053. ZWG asserts that lock
washer producers in India are far more likely to buy carbon steel wire
rod produced by SAIL than they are to use imported steel wire rod. ZWG
contends that SAIL accounts for 37.25 percent of the steel wire rod
production in India. ZWG also asserts that the ratio of domestic
production to imports of the same product is 132 to 1. ZWG argues the
Department has expressed a preference for tax-exclusive public
information and that the Department must deduct excise duties and
statutory levies from the reported SAIL steel wire rod prices.
Petitioner argues that the Department has not used the SAIL prices
in any case since the Omnibus Trade and Competitiveness Act of 1988,
with the exception of the preliminary determination in Drawer Slides.
Petitioner argues that the SAIL values are far below the Indian import
values and other Indian steel prices. Petitioner further argues that
the Department has found the Indian steel producers and exporters were
being subsidized. Petitioner states that the Department determined that
steel wire rope from India was being dumped and also that steel wire
rope exports were being subsidized, citing Final Determination of Sales
at Less Than Fair Value: Steel Wire Rope from India, 56 FR 46285, and
Final Affirmative Countervailing Duty Determination: Steel Wire Rope
from India, 56 FR 46292. Petitioner argues that the Department
specifically addressed the issue of steel wire rod in the
countervailing duty case. Petitioner contends that, while no
countervailing duty order was issued, the Department clearly has reason
to ``believe or suspect'' that the Indian prices for export are
``subsidized prices.'' Petitioner asserts that the effect of the Indian
subsidy argues against the Department's using the 1994 SAIL prices.
[[Page 41997]]
Department's Position: We disagree with ZWG. ZWG has not
established that there is a stronger factual basis for using the SAIL
data than there is for using the import statistics. The scope of this
review covers HSLWs made from stainless steel, carbon alloy steel, or
carbon steel. The grade or chemistry of the steel is an important
consideration, as evidenced by the range of HSLWs covered by the order.
The chemistry of the steel determines the mechanical and physical
properties of the steel and therefore is the driving factor in
determining the end use. Therefore, in this case, the grade of steel is
a more important consideration for the Department than is size, when
choosing between different PAPI sources. Although the SAIL data is more
size-specific, it is less grade-specific than the Indian import
statistics. The Department used the SAIL data in Drawer Slides because
in that case the SAIL data provided prices for steel that most closely
resembled the specifications of the product used by the respondents.
Notice of Final Determination of Sales at Less Than Fair Value: Certain
Partial-Extension Steel Drawer Slides with Rollers from the PRC, 60 FR
54472, 54475 (October 24, 1995). Although ZWG argues that a lock
washers producer in India is far more likely to buy carbon steel wire
rod produced by SAIL than to use imported steel, our objective is to
value the surrogate steel at prices available to a producer in the
surrogate country which most closely reflect the type of steel used by
the PRC producer. As a result, ZWGs references to consumption of SAIL
steel vis-a-vis imported steel do not address our concerns on the
accuracy of the grades of steel in HSLW production. Therefore, we have
continued to use the Indian import statistics to value steel wire rod.
Comment 3: ZWG states that, in the preliminary results, the
Department assumed that the reported amount of ocean freight covered
only the ocean freight from Hong Kong to the United States and, as a
result, the Department incorrectly added an additional amount for
transportation from Ningbo or Shanghai to Hong Kong. ZWG argues that
this assumption contradicts verified information on the record
confirming that ZWG's ocean freight charges cover the entire shipment
from Ningbo or Shanghai to the United States. ZWG states that there is
record evidence that confirms the value of ocean freight charges
associated with the shipment from Hong Kong to the United States by
market economy carriers. ZWG also argues that at verification the
Department confirmed the amount of ocean freight charges paid to the
PRC carrier to bring an empty container from Hong Kong to Ningbo and to
send a container laden with HSLWs from Ningbo to Hong Kong. ZWG argues
that if the Department deducts the percentage of ocean freight costs
associated with the shipment from the PRC to Hong Kong from the
reported total ocean freight costs, the remainder will represent the
Hong Kong-to-United States portion provided by a market economy
carrier. These actual convertible currency expenses, ZWG argues, should
be used for the portion of freight handled by market economy carriers.
ZWG argues that the valuation of the PRC-to-Hong Kong ocean freight,
handled by PRC carriers, should then be based on surrogate data.
Petitioner asserts that ZWG apparently did not establish that the
price paid for the PRC-to-Hong Kong portion of the freight charge was
market-derived. Petitioner argues that the Department appropriately
assumed the entire shipping charge covered only the portion from the
PRC port to Hong Kong. Petitioner also argues that ZWG's claim that a
PRC carrier was also paid to bring an empty container from Hong Kong to
Ningbo and return the filled container to Hong Kong should be reflected
in any adjustment made by the Department.
Department's Position: We agree with ZWG in part. Ocean freight
from Hong Kong to the United States was provided by market-economy
carriers. We verified that the portion of the ocean freight expense
from Ningbo to Hong Kong was market-derived. Therefore, we have used
the reported total ocean freight expense for shipments from Ningbo to
the United States. Because we are using the total of the actual
expenses reported for ocean freight from Ningbo, the adjustment
suggested by petitioner is unnecessary.
ZWG was not able to provide evidence during verification that the
ocean freight expenses from Shanghai to Hong Kong were also market-
derived. Moreover, the reported ocean freight expense was not broken
down into Shanghai-to-Hong Kong and Hong Kong-to-the-United States
segments. Therefore, for shipments from Shanghai, we have continued to
treat the reported ocean freight expense as covering only the portion
of the transportation provided on market-economy carriers from Hong
Kong to the United States. We have calculated a separate charge using
surrogate data based on Indian costs to value shipment services from
Shanghai to Hong Kong provided by a PRC-owned carrier.
Comment 4: Petitioner argues that the Department used three steel
subcategories, 7213.41, 7213.49, and 7213.50, to establish the
surrogate value for steel wire rod in the LTFV investigation, and that
these three categories remain correct. Petitioner contends that,
according to industry standards, the steel grades used for lock washers
range from AISI 1055 to 1065. Petitioner asserts that ZWG would buy
steel available to meet specifications and that nominally referring to
the steel as ``1060 grade'' does not mean zero tolerance. Petitioner
argues that ZWG has not provided chemical analyses and established that
the steel was only 1060 or above. Petitioner argues that nothing is on
the record to indicate a change since the LTFV investigation where the
Department used the three subcategories. Petitioner argues that the
verification report does not mention the types of steel used to make
specific types of lock washers. Petitioner asserts there is no support
in the record to conclude that only 1060 grade steel was used.
ZWG argues that the Department did confirm that ZWG uses 1060 steel
wire rod in the production of lock washers. ZWG provided a detailed
description of the process for producing lock washers in its April 3,
1995 response. ZWG states that it provided the grades and concentration
levels for all chemicals and materials used in the production of lock
washers. ZWG states that at verification the Department examined the
chemicals and other materials used by ZWG. ZWG argues that the grades
and concentration levels were not among the items for which
discrepancies were discovered during verification. ZWG argues that
there is no reason to assume that there were discrepancies, merely
because the Department did not explicitly state that the Department
found nothing that contradicted ZWG's submissions. ZWG argues that the
Department, rather than the petitioner, has the responsibility for
confirming the accuracy of a response, citing Micron Tech. v. United
States, Slip Op. 95-107, where the court stated that ``it is not
surprising that [petitioner] cannot duplicate Commerce's verification
using record documents because not all documents examined at
verification are normally made a part of the administrative record.''
ZWG contends that there is no requirement that the verification report
and exhibits document elements of the response for which there is no
controversy.
ZWG argues that the Department properly found that the alternative
7213.41 and 7213.49 subcategories suggested by the petitioner were not
[[Page 41998]]
specific to the 1060 steel wire rod used by ZWG. ZWG argues that, even
if petitioner were somehow justified in claiming these subcategories
should also be used in valuing 1060 carbon steel wire rod, the import
statistics are unusable because the countries listed are either non-
market economy countries or the imports are from countries which have
been found by the Department to contain dumped or subsidized prices.
ZWG asserts that the one remaining country from the import statistics
accounts for only one ton and cannot be used because its exports are
insignificant compared to the total quantity.
AAFI argues that, if the Department continues to use the Indian
import statistics, it should continue to use the one HTS subcategory
applicable to AISI 1060, which is the grade ZWG reported using. AAFI
disagrees with petitioner's assertion that, because the Department did
not verify ZWG's steel specifications for every purchase of steel and
because there is no statement in the verification report that the
Department specifically investigated the annealing, cleaning, coating,
and other specifications, the Department should assume ZWG's submission
was inaccurate and that all three categories of steel were purchased
during the period of review. AAFI argues that it would be improper to
assume that any element not specifically addressed in the verification
report compels a presumption of deficiency or inaccuracy. AAFI states
that no deficiencies were reported with respect to reported steel
grades; therefore, AAFI contends that the questionnaire response was
verified. AAFI argues that AISI grade 1060 non-alloy steel rod contains
more than .6 percent carbon. Consequently, AAFI states, HTS 7213.50
most accurately describes the raw material actually used by ZWG. AAFI
argues that the fact that three HTS categories were used in the
original LTFV investigation does not require the Department to continue
to use them, considering that there are apparent differences between
grades reported in the period of investigation and this period of
review.
Department's Position: We disagree with the petitioner that in this
review we must continue to use the three HTS subcategories used in the
LTFV investigation. If the circumstances necessitate a change, the
Department is not precluded from changing its surrogate data simply
because particular data were used in a previous segment of the
proceeding. We disagree with petitioner's conclusion that, because the
verification report does not mention the types of steel used, there was
a discrepancy with the grade reported in ZWG's response.
We verified ZWG's response and did not find any discrepancies with
respect to its steel specifications. We agree with ZWG that there is no
requirement that the verification report document the elements of the
response for which there is no controversy. The 1060 wire rod used by
ZWG is a high carbon steel. Although tolerance levels could allow a
carbon content slightly below .6 percent, 1060 grade steel wire rod
imports would be classified under HTS 7213.50. The HTS subcategories
7312.41 and 7213.49 suggested by the petitioner contain wire rod with a
carbon content between .25 and .59 percent carbon. Therefore, for these
final results we continued to use the HTS subcategory which contains
1060 steel wire rod.
Comment 5: Petitioner argues that the wholesale price indices
(WPIs) the Department used to adjust the surrogate values to reflect
prices during the period of review should not be rounded to one decimal
point. Petitioner asserts that the effect of rounding is significant
because the values to which the WPI is applied are large. Petitioner
asserts that, since the Department makes its margin calculation to the
multiple decimal point, the Department should not round off the
inflation factor. Petitioner argues that it is imperative that the
inflators be as accurate as possible.
Department's Position: We disagree with the petitioner. The WPIs
published in the International Financial Statistics by the
International Monetary Fund are given to only one decimal point.
Therefore, it is most reasonable to round the average of the WPI for
the period to one decimal point.
Comment 6: Petitioner argues that the Department erred when it
rejected the selling, general and administrative (SG&A) figures, based
on information regarding the company Forbes Gokak, supplied to the
Department in a cable from the U.S. consulate in Bombay which the
Department used in the LTFV investigation.
Petitioner argues that the Reserve Bank of India (RBI) data for
1992 that the Department used in the preliminary results for
determining SG&A expenses are both less specific and less
contemporaneous than the Forbes Gokak information. Petitioner argues
that the main problem with the RBI data is that it does not reflect the
experience of the specific industry subject to the review. Petitioner
contends that firms included in the RBI data have different cost
structures than lock washers producers. Petitioner asserts that, on the
other hand, Forbes Gokak was producing lock washers in India in 1993,
concurrent with the period of review. Petitioner further argues that
expenses such as insurance and interest were missing from the
Departments calculation, and that an Indian business would include
these expenses in its SG&A.
ZWG argues that the Department properly discarded the Forbes Gokak
information and instead used the RBI information. ZWG argues that the
petitioners comment about the contemporaneity and specificity of the
RBI data is inapposite. ZWG contends that the contemporaneity and
specificity criteria only apply when the Department must select from
alternative PAPI values submitted by interested parties. As the State
Department cable regarding Forbes Gokak is not published information,
ZWG asserts that the criteria do not apply in this case. ZWG argues
that the Forbes Gokak cable data would still be inapplicable to this
proceeding even if the contemporaneity and specificity criteria
applied, since Forbes Gokak does not appear to manufacture lock
washers. ZWG argues that there was no concrete evidence that Forbes
Gokak has ever made lock washers, and that the information regarding
Forbes Gokak's SG&A and overhead costs contained in the cable from the
U.S. consulate in Bombay was never verified. ZWG asserts that, even if
Forbes Gokak produced lock washers, its operations and the financial
data based on its operations are overwhelmingly related to textile
production, not lock washers production. ZWG argues that other Indian
companies do manufacture lock washers.
Petitioner argues that the invalidity of the Forbes Gokak data has
not been shown. Petitioner challenges ZWGs arguments that Forbes Gokaks
primary business activities are in textile production and that the
Department should not base calculations on the financial performance of
only one of several lock washer producers. Petitioner argues that the
Forbes Gokak information specifically applies to lock washers.
Petitioner asserts that Forbes Gokak was identified as a producer and
that the Department routinely and appropriately uses unverified
information from State Department cables. Petitioner points out that in
this case State Department cables are being used for transportation
rates.
ZWG argues that the use of a separate State Department cable for
transportation costs does not validate the overhead, SG&A and profit
values of Forbes Gokak. ZWG explains that it proposed the use of the
State Department cable in valuing
[[Page 41999]]
transportation costs for lack of any alternative PAPI. ZWG argues that
the State Department cable information must fail when information
demonstrating the factual infirmity of the cable and appropriate PAPI
are on the record before the Department. ZWG argues that, unlike that
of the transportation costs, the credibility of the overhead, SG&A and
profit data are dependent on Forbes Gokaks status as a company devoted
to the production of lock washers. ZWG states that the Department has
used the RBI data in many proceedings subsequent to the LTFV
investigation of lock washers. ZWG argues that in each decision the
Department has held that the overhead, SG&A, and profit data from the
RBI bulletin were sufficiently specific to the subject merchandise for
use in the Departments dumping calculation.
With respect to petitioner's claim that the RBI data do not include
certain expenses, ZWG asserts that the petitioner implies that the
Department should tailor the SG&A surrogate value to fit the SG&A
expenses paid by ZWG during the period of review. ZWG cites Drawer
Slides to argue that the Department has a policy of not tailoring
surrogate country values to reflect respondents actual experience: ``in
NME proceedings, the FMV is normally based on factors valued in a
surrogate country (with regard to, for example, actual selling
expenses) on the premise that the actual experience cannot be
meaningfully considered.'' ZWG also cites Notice of Final Determination
of Sales at Less Than Fair Value: Disposable Pocket Lighters from the
PRC, 60 FR 22359: ``we disagree that we are required to customize
factor value to reflect conditions of certain PRC respondents.''
AAFI agrees that the Department properly used the RBI data for
overhead and SG&A in the preliminary results. AAFI argues that the SG&A
figure provided in the State Department cable is deficient for several
reasons, not the least of which is the fact that a 30 percent SG&A for
a fastener manufacturer is so abnormally high that its credibility is
manifestly suspect. AAFI argues that, while the Department stated in
the LTFV investigation that it was using the Forbes Gokak data because
that company was the only major producer of HSLWs in India, this
premise has now been proven incorrect. AAFI argues that what has become
less clear is the assertion that Forbes Gokak is even engaged in lock
washer production. AAFI argues that it is appropriate to use the RBI
data under these circumstances. AAFI argues further that it has been
Department policy to use alternative data when a particular surrogate
value is deemed aberrational, citing Preliminary Determination of Sales
at Less Than Fair Value: Sulfanilic Acid From the Republic of Hungary,
57 FR 48293. AAFI argues that the 30 percent figure is clearly
aberrational when compared to the metal working industry average as a
whole as reflected in the RBI data.
Departments Position: During the LTFV investigation, the Department
used the Forbes Gokak information contained in the cable from the U.S.
consulate in Bombay because it ``indicate[d] that Forbes Gokak is the
only major producer of helical spring lock washers in India.'' In the
preliminary results of this review, we declined to use Forbes Gokak's
data because information submitted on the record by ZWG indicated that
Forbes Gokak was not a producer of lock washers. In response to
comments by both petitioner and respondent, we decided to request
clarifying information after the preliminary results. We received a
letter from Forbes Gokak and the company's 1994/1995 consolidated
annual report. This information indicated that Forbes Gokak did in fact
produce lock washers. However, the proportion of lock washer sales in
relation to sales of other products, mostly textiles, was minuscule.
Because the SG&A, overhead, and profit figures in Forbes Gokak's
financial statement were reported on a company-wide basis, and could
not be segregated according to product line, we cannot determine
whether the SG&A, overhead, and profit figures are representative of
lock washer production. Therefore, we determine that information from
the Reserve Bank of India is more appropriate in this case.
We agree with petitioner that an Indian producer would include
interest and insurance in its SG&A. We have recalculated the surrogate
SG&A percentage to include interest and insurance.
Comment 7: Petitioner argues that the overhead rate that the
Department used, based on the RBI data, is also less specific and less
contemporaneous than the Forbes Gokak information. Petitioner argues
that the Forbes Gokak overhead figure is comparable to the RBI number,
and that this shows that the Forbes Gokak information is reliable.
Petitioner argues that ZWGs attempt, in its June 30, 1995 submission,
to show that its machines are old and have little value avoids the
question of what the situation would be in the surrogate country.
Petitioner argues that the ``cost'' in the PRC is distinctly different
from that in a market economy country and that expenses incurred by ZWG
are not relevant to determining the cost in a market economy country.
AAFI argues that ZWG made the point, in a submission filed prior to
the preliminary results, that lock washer production is not capital-
intensive or does not have high-R&D cost anywhere. AAFI argues that a
manufacturer of this product in a country which has achieved a level of
economic development comparable to that of the PRC will probably
operate a lock washer facility of a nature comparable to that of a
manufacturer in the PRC. AAFI argues that such a facility will likely
not be characterized by high SG&A and overhead costs relative to
output. AAFI argues that there is no indication that either Indian or
Chinese lock washer production is so capital intensive that the
discredited Forbes Gokak data should be used.
AAFI argues the Department should continue to use the RBI
information, rather than the Forbes Gokak figure, for overhead in its
final calculation. AAFI argues that consistency and logic dictate that,
under the circumstances of record for this period of review, the same
source should be used for the SG&A and overhead figures.
Departments Position: We disagree with the petitioner, in part. For
the reasons stated in our response to Comment 6, we find that the RBI
data is more appropriate to use than the Forbes Gokak information
supplied in the cable from the consulate in India. We do not agree that
the similarity between the RBI and Forbes Gokak overhead percentages
support the use of the information in the cable. Further, there is no
evidence to support petitioners assertion that the data in the cable is
more contemporaneous with the period of review than is the RBI data. We
do agree with the petitioner that the costs incurred between PRC
parties are not relevant to costs in a market-economy country and have
not made specific adjustments to overhead or SG&A for the experience of
the PRC producer.
Comment 8: Petitioner argues that even if ZWG (or the plating
factory) used its own trucks to pick up and deliver materials, the cost
of these trips should have been reflected as part of transportation
expenses and not included as part of overhead expenses. Petitioner
argues that including the cost of transportation to and from the
plating plant as part of factory overhead is at variance with the
approach the Department has taken in this and other cases where
deliveries are involved. Petitioner argues that, although the
Department accepted ZWGs argument in
[[Page 42000]]
the LTFV investigation, the Department has not used this approach in
any other proceeding of which petitioner is aware.
ZWG argues that petitioner erroneously criticizes the Department
for its decision not to add inland freight costs for expenses
associated with trucking lock washers to and from the plating
subcontractor. ZWG argues that the Department properly found such
expenses to be included in the overhead expenses of ZWG. ZWG argues
that this is consistent with the use of the RBI data for overhead,
which includes power and fuel, repairs to machinery, depreciation, and
rates and taxes. ZWG argues that all of these expenses are associated
with the operation of motor vehicles in India, the surrogate country.
ZWG contends that the Department correctly did not add such
transportation costs to the material costs, as in the original LTFV
investigation.
Departments Position: We agree with ZWG. As in the LTFV
investigation, we determined that the costs associated with this type
of transportation are included in the surrogate value for factory
overhead. Therefore, we did not calculate a separate transportation
cost for trucking the lock washers to and from the plating
subcontractor. See Notice of Preliminary Determination of Sales at Less
Than Fair Value: Honey From the People's Republic of China, 60 FR
14725, 14729 (March 20, 1995).
Comment 9: FI argues that the Department used the per kilogram
value of production and plating chemicals but made no apparent
adjustments to reflect the difference between the concentration levels
reported by respondents and those in the import statistics. AAFI argues
that, in the amended final determination for the LTFV investigation of
lock washers from the PRC, the Department adjusted certain chemical
prices obtained from the Indian import statistics to reflect the
concentrations reported by ZWG and verified by the Department. AAFI
argues that similar adjustments were made in other cases, citing Notice
of Final Determination of Sales at Less Than Fair Value: Certain Paper
Clips from the PRC, 59 FR 51168.
Petitioner states that during the LTFV investigation several
adjustments were made to reflect concentration levels. Petitioner
argues that in this case neither AAFI nor ZWG has claimed on the record
that specific adjustments reflecting concentration levels should be
made.
Departments Position: We agree with AAFI in part. ZWG claimed in
its June 6, 1995 submission that the surrogate values used by the
Department should be adjusted to the actual concentration levels used
by ZWG. Where we have been able to determine the concentration of the
surrogate input, we have adjusted for differences between the surrogate
and the actual material. ZWG has not provided any information
concerning the concentration levels of the surrogate values and the
Department has been unable to determine the concentration levels of
imports shown in the Indian import statistics. Therefore, we have made
no adjustment for concentration levels where the surrogate
concentration is not known.
Final Results of Reviews
As a result of the comments received, we have changed the results
from those presented in our preliminary results of review:
------------------------------------------------------------------------
Margin
Manufacturer/Exporter Time period (percent)
------------------------------------------------------------------------
Zhejiang Wanxin Group Co., Ltd.................. 10/15/93-
09/30/94 26.08
------------------------------------------------------------------------
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between U.S. price and FMV may vary from the percentage
stated above. The Department will issue appraisement instructions
directly to the Customs Service.
Furthermore, the following deposit rates will be effective upon
publication of these final results of administrative review for all
shipments of HSLWs from the PRC entered, or withdrawn from warehouse,
for consumption on or after the publication date, as provided for by
section 751(a)(1) of the Tariff Act: (1) For ZWG, which has a separate
rate, the cash deposit rate will be the company-specific rate
established in these final results of review; (2) for all other PRC
exporters, the cash deposit rate will be 128.63 percent, the PRC rate
established in the LTFV investigation of this case; and (3) for non-PRC
exporters of subject merchandise from the PRC, the cash deposit rate
will be the rate applicable to the PRC supplier of that exporter.
These deposit rates shall remain in effect until publication of the
final results of the next administrative review.
This notice also serves as a final reminder to importers of their
responsibility under 19 CFR 353.26 to file a certificate regarding the
reimbursement of antidumping duties prior to liquidation of the
relevant entries during this review period. 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.
This notice also serves as a reminder to parties subject to
administrative protective orders (APOs) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CR 353.34(d)(1). Timely written notification
of the return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulations and the terms of an APO is a sanctionable violation.
This administrative review and notice are in accordance with
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR
353.22.
Dated: August 6, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-20613 Filed 8-12-96; 8:45 am]
BILLING CODE 3510-DS-P