[Federal Register Volume 61, Number 216 (Wednesday, November 6, 1996)]
[Notices]
[Pages 57384-57387]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28555]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-803]
Heavy Forged Hand Tools, Finished or Unfinished, With or Without
Handles, From the People's Republic of China; Preliminary Results and
Termination in Part of Antidumping Duty Administrative Reviews
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results and termination in part of
antidumping duty administrative reviews.
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SUMMARY: In response to requests by the petitioner and three exporters
of the subject merchandise, the Department of Commerce (the Department)
is conducting administrative reviews of the antidumping duty orders on
heavy forged hand tools, finished or unfinished, with or without
handles, (HFHTs) from the People's Republic of China (PRC). These
reviews cover three exporters of subject merchandise to the United
States and the period February 1, 1995 through January 31, 1996. The
reviews indicate the existence of dumping margins during the period of
review.
We have preliminarily determined that sales have been made below
normal value (NV). If these preliminary results are adopted in our
final results, we will instruct the U.S. Customs Service to assess
antidumping duties on appropriate entries.
Interested parties are invited to comment on these preliminary
results. Parties who submit argument are requested to submit with each
argument (1) a statement of the issue and (2) a brief summary of the
argument.
EFFECTIVE DATE: November 6, 1996.
FOR FURTHER INFORMATION CONTACT: Daniel Singer or Maureen Flannery, AD/
CVD Enforcement, 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.
Applicable Statute and Regulations
Unless otherwise stated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
current regulations, as amended by the interim regulations published in
the Federal Register on May 11, 1995 (60 FR 25130).
SUPPLEMENTARY INFORMATION:
Background
On February 19, 1991, the Department published in the Federal
Register (56 FR 6622) the antidumping duty orders on HFHTs from the
PRC. On February 9, 1996, the Department published in the Federal
Register (61 FR 4956) a notice of opportunity to request administrative
reviews of these antidumping duty orders. On February 29, 1996, in
accordance with 19 CFR 353.22(a), three exporters of the subject
merchandise to the United States, Fujian Machinery & Equipment Import &
Export Corporation (FMEC), Shandong Machinery Import & Export
Corporation (SMC), and Tianjin Machinery Import & Export Corporation
(TMC), requested that the Department conduct administrative reviews of
their exports of axes/adzes; bars/wedges; hammers/sledges; and picks/
mattocks to the United States. Also on February 29, 1996, the
petitioner, Woodings-Verona Tool Works, Inc., requested that the
Department conduct administrative reviews of FMEC's and SMC's exports
of axes/adzes; bars/wedges; hammers/sledges; and picks/mattocks.
We published the notice of initiation of these reviews on March 19,
1996 (61 FR 11184). The notice of initiation was amended on April 25,
1996 (61 FR 18378). The Department is conducting these administrative
reviews in accordance with section 751 of the Act.
Termination in Part of Antidumping Duty Administrative Reviews
On April 19, 1996, TMC withdrew its request for reviews of the
orders with respect to bars/wedges and picks/mattocks. This request was
received within 90 days of publication of the notice of initiation of
these reviews. We are hereby terminating the reviews of the orders on
bars/wedges and picks/mattocks with respect to TMC, in accordance with
section 353.22(a)(5) of our regulations.
Scope of Reviews
Imports covered by these reviews are shipments of HFHTs from the
PRC comprising the following classes or kinds of merchandise: (1)
Hammers and sledges with heads over 1.5 kg (3.33 pounds) (hammers/
sledges); (2) bars over 18 inches in length, track tools and wedges
(bars/wedges); (3) picks/mattocks; and (4) axes/adzes.
HFHTs include heads for drilling, hammers, sledges, axes, mauls,
picks, and mattocks, which may or may not be painted, which may or may
not be finished, or which may or may not be imported with handles;
assorted bar products and track tools including wrecking bars, digging
bars and tampers; and steel wood splitting wedges. HFHTs are
manufactured through a hot forge operation in which steel is sheared to
required length, heated to forging temperature, and formed to final
shape on forging equipment using dies specific to the desired product
shape and size. Depending on the product, finishing operations may
include shot-blasting, grinding, polishing and painting, and the
insertion of handles for handled products. HFHTs are currently provided
for under the following Harmonized Tariff System (HTS) subheadings:
8205.20.60, 8205.59.30, 8201.30.00, and 8201.40.60. Specifically
excluded are hammers and sledges with heads 1.5 kg (3.33 pounds) in
weight and under, hoes and rakes, and bars 18 inches in length and
under. Although the HTS
[[Page 57385]]
subheadings are provided for convenience and customs purposes, our
written description of the scope of these orders is dispositive.
These reviews cover three exporters of HFHTs from the PRC, FMEC,
SMC, and TMC. The review period is February 1, 1995 through January 31,
1996.
Verification
From August 24 through August 30, 1996, the Department conducted
verification of the questionnaire responses submitted by TMC, as
provided in section 782(i) of the Act. We used standard verification
procedures, including on-site inspection of the manufacturers'
facilities, the examination of relevant accounting, sales, and other
financial records, and selection of original documentation containing
relevant information. Our verification results are outlined in the
public version of the verification report.
Separate Rates
To establish whether a company operating in a state-controlled
economy is sufficiently independent to be entitled to a separate rate,
the Department analyzes each exporting entity 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 in the 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). Under this policy,
exporters in non-market-economy (NME) countries are entitled to
separate, company-specific margins when they can demonstrate an absence
of government control, both in law (de jure) and in fact (de facto),
with respect to exports. Evidence supporting, though not requiring, a
finding of de jure absence of government control includes: (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) any other formal measures
by the government decentralizing control of companies. De facto absence
of government control with respect to exports is based on four
criteria: (1) Whether the export prices are set by or subject to the
approval of a government authority; (2) whether each exporter retains
the proceeds from its sales and makes independent decisions regarding
the disposition of profits and financing of losses; (3) whether each
exporter has autonomy in making decisions regarding the selection of
management; and (4) whether each exporter has the authority to
negotiate and sign contracts. See Silicon Carbide, 59 FR at 22587.
In our final results of review for the 1992-1993 reviews of these
orders, the Department determined that FMEC and SMC warranted company-
specific dumping margins according to the criteria identified in
Sparklers and Silicon Carbide. See Heavy Forged Hand Tools, Finished or
Unfinished, With or Without Handles, from the People's Republic of
China; Final Results of Antidumping Duty Administrative Reviews (60 FR
49251, September 22, 1995). Because no new information has been
submitted in these reviews to warrant reconsideration of this finding,
we preliminarily determine that these two companies continue to be
entitled to separate rates.
TMC responded to the Department's request for information regarding
separate rates. We have found that the evidence on the record
demonstrates an absence of government control, both in law and in fact,
with respect to TMC's export activities according to the criteria
identified in Sparklers and Silicon Carbide for this period of review,
and have assigned a separate rate to TMC. For further discussion of
this finding, see Decision Memorandum to Joseph A. Spetrini, Deputy
Assistant Secretary, Enforcement Group III, dated October 23, 1996,
``Assignment of a separate rate for Tianjin Machinery Import & Export
Corporation in the 1995/1996 administrative review of certain heavy
forged hand tools from the People's Republic of China,'' which is on
file in the Central Records Unit (room B-099 of the Main Commerce
Building).
Export Price
The Department used export price (EP), in accordance with section
772(a) of the Act. We made deductions from EP, where appropriate, for
brokerage and handling, foreign inland freight, ocean freight, and
marine insurance. Ocean freight services were provided by both PRC-
owned and non-PRC owned companies. Where the company providing ocean
freight services was not a PRC-owned company, we used the actual rates
charged; for ocean freight services provided by PRC-owned companies, we
applied a weighted-average ocean freight rate derived from those sales
for which we used actual ocean freight rates. Since marine insurance
services were provided by PRC-owned companies, we based the deduction
for marine insurance on surrogate values. We also used surrogate data
to value foreign inland freight and brokerage and handling.
Normal Value
For companies located in NME countries, section 773(c)(1) of the
Act provides that the Department shall determine NV using a factors of
production methodology if (1) the subject merchandise is exported from
an NME country, and (2) available information does not permit the
calculation of NV using home-market prices, third-country prices, or
constructed value, in accordance with 773(a) of the Act.
In every case conducted by the Department involving the PRC, the
PRC has been treated as an NME country. Since none of the parties to
these proceedings contested such treatment in these reviews, we
calculated NV in accordance with section 773(c) of the Act and section
353.52 of the Department's regulations.
In accordance with section 773(c)(3) of the Act, the factors of
production utilized in producing HFHTs include, but are not limited
to--(A) Hours of labor required, (B) quantities of raw materials
employed, (C) amounts of energy and other utilities consumed, and (D)
representative capital cost, including depreciation. In accordance with
section 773(c)(4) of the Act, the Department valued the factors of
production to the extent possible, using the prices or cost of factors
of production in a market economy that is--(A) At a level of economic
development comparable to the PRC, and (B) a significant producer of
comparable merchandise. We determined that India is comparable to the
PRC in terms of per capita gross national product, the growth rate in
per capita income, and the national distribution of labor. Furthermore,
India is a significant producer of comparable merchandise. For a
further discussion of the Department's selection of India as the
surrogate country, see Memorandum from David Mueller, Director, Office
of Policy, to Laurie Parkhill, Director, Office 3, AD/CVD Enforcement
Group 1, dated July 5, 1996, ``Certain Heavy Forged Hand Tools
(`HFHTs') from the People's Republic of China (PRC): Nonmarket Economy
Status and Surrogate Country Selection,'' and File Memorandum from Case
Analyst, dated October 29, 1996, ``India as a significant producer of
comparable merchandise in the 1995/1996 administrative review of heavy
forged hand tools from the People's Republic of China,'' which are on
file in Room B-099 of the Commerce Department.
In accordance with section 773(c)(1) of the Act, for purposes of
calculating NV, we valued PRC factors of
[[Page 57386]]
production based on data for the period of review (POR). Where
appropriate, we applied inflators (deflators) to surrogate prices we
obtained to reflect prices during the POR. These inflators (deflators)
were derived from wholesale price indices (WPI) and consumer price
indices (CPI) obtained from International Financial Statistics,
published by the International Monetary Fund (IMF). We valued PRC
factors of production as follows:
To value all direct materials used in the production of
HFHTs, including steel, resin glue, paint, varnish, wood for handles,
iron wedges, anti-rust oil, scrap steel, and dilution, we used the
rupee per metric ton, per kilogram, or per cubic meter value of imports
into India in February 1995 and between April 1995 and July 1995
obtained from the February 1995 and July 1995 volumes of the Monthly
Statistics of the Foreign Trade of India, Volume II--Imports (Indian
Import Statistics). We adjusted direct material values to reflect
inflation, using WPI of India as published in International Financial
Statistics by the IMF.
For direct labor, we used the labor rates reported in the
International Labor Organization's Yearbook of Labor Statistics,
released in January 1995 by the International Labor Organization. This
source is based on actual wage rates. We adjusted the value of direct
labor to reflect inflation, using the CPI for India, as published by
the IMF.
For factory overhead, we used information reported in the
April 1995 Reserve Bank of India Bulletin. From this information, we
were able to determine factory overhead as a percentage of total cost
of manufacture. We included steel pellets used to remove oxidization
from the tool heads in factory overhead as these materials are not
physically incorporated into the subject merchandise.
For selling, general and administrative (SG&A) expenses,
we used information obtained from the April 1995 Reserve Bank of India
Bulletin. We calculated an SG&A rate by dividing SG&A expenses by the
cost of manufacture.
To calculate a profit rate, we used information obtained
from the April 1995 Reserve Bank of India Bulletin. We calculated a
profit rate by dividing the before-tax profit by the sum of those
components pertaining to the cost of manufacturing plus SG&A.
To value the packing materials, including cartons,
pallets, anti-rust paper, anti-damp paper, plastic and iron straps,
plastic bags, iron buttons and knots, synthetic fiber, and iron wire,
we used the rupee per metric ton, per kilogram, or per cubic meter
value of imports into India in February 1995 and between April 1995 and
July 1995, obtained from the February 1995 and July 1995 volumes of the
Indian Import Statistics. We adjusted these values to include freight
costs incurred between the suppliers and the HFHT factories. We also
adjusted packing material values to reflect inflation, using the WPI
published by the IMF.
To value coal, we used the price of steam coal reported
for 1990 in the International Energy Agency publication Energy Prices
and Taxes, 2nd Quarter 1995. We adjusted the value of coal to reflect
inflation, using the WPI published by the IMF.
To value electricity, we used the price of electricity on
March 1, 1995 reported in Current Energy Scene in India, July 1995,
published by the Centre for Monitoring the Indian Economy.
To value truck freight, we used the rates reported in an
August 1993 embassy cable from the U.S. Embassy in India submitted for
the Final Determination of Sales at Less Than Fair Value: Certain
Helical Spring Lock Washers from the People's Republic of China (58 FR
48833, September 20, 1993). We adjusted truck freight rates to reflect
inflation, using the WPI published by the IMF.
To value rail freight, we used the price reported in a
December 1989 cable from the U.S. Embassy in India submitted for the
Final Results of Antidumping Duty Administrative Review: Shop Towels of
Cotton from the People's Republic of China (56 FR 4040, February 1,
1991). We adjusted rail freight rates to reflect inflation, using the
WPI published by the IMF.
Preliminary Results of the Reviews
As a result of our reviews, we preliminarily determine that the
following margins exist for the period February 1, 1995 through January
31, 1996:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Time period (percent)
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Fujian Machinery & Equipment
Import & Export Corporation:
Axes/Adzes............... 2/1/95-1/31/96.............. 33.38
Bars/Wedges.............. 2/1/95-1/31/96.............. 57.08
Hammers/Sledges.......... 2/1/95-1/31/96.............. 33.84
Picks/Mattocks........... 2/1/95-1/31/96.............. 124.04
Shandong Machinery Import &
Export Corporation:
Bars/Wedges.............. 2/1/95-1/31/96.............. 57.90
Hammers/Sledges.......... 2/1/95-1/31/96.............. 12.99
Picks/Mattocks........... 2/1/95-1/31/96.............. 84.24
Tianjin Machinery Import &
Export Corporation:
Axes/Adzes............... 2/1/95-1/31/96.............. 10.72
Hammers/Sledges.......... 2/1/95-1/31/96.............. 33.84
------------------------------------------------------------------------
Parties to the proceedings may request disclosure within 5 days of
the date of publication of this notice. Any interested party may
request a hearing within 10 days of publication. Any hearing, if
requested, will be held 44 days after the publication of this notice,
or the first workday thereafter. Interested parties may submit case
briefs within 30 days of the date of publication of this notice.
Rebuttal briefs, which must be limited to issues raised in the case
briefs, may be filed not later than 37 days after the date of
publication. Parties who submit argument in these proceedings are
requested to submit with the argument (1) a statement of the issue and
(2) a brief summary of the argument. The Department will publish a
notice of final results of these administrative reviews, which will
include the results of its analysis of issues raised in any such
comments.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between U.S. price and NV may vary from the percentages
stated above. The Department shall issue appraisement instructions
directly to the Customs Service.
[[Page 57387]]
Furthermore, the following deposit requirements will be effective
upon publication of the final results of these administrative reviews
for all shipments of HFHTs 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 Act: (1) the cash deposit
rates for the reviewed companies named above which have separate rates
(FMEC, SMC, and TMC) will be the rates for those firms established in
the final results of these administrative reviews for the classes or
kinds listed above; (2) for all other PRC exporters, the cash deposit
rates will be the PRC-wide rates established in the final results of
the previous administrative reviews; and (3) the cash deposit rates for
non-PRC exporters of subject merchandise from the PRC will be the rates
applicable to the PRC supplier of that exporter. The PRC-wide rates
are: 21.92 percent for axes/adzes; 66.32 percent for bars/wedges; 44.41
percent for hammers/sledges; and 108.20 percent for picks/mattocks.
These deposit requirements, when imposed, shall remain in effect until
publication of the final results of the next administrative reviews.
Notification of Interested Parties
This notice serves as a preliminary reminder to importers of their
responsibility under section 353.26 of the Department's regulations 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.
These administrative reviews and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22
of the Department's regulations.
Dated: October 30, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-28555 Filed 11-05-96; 8:45 am]
BILLING CODE 3510-DS-P