00-25271. Notice of Preliminary Determinations of Sales at Less Than Fair Value: Steel Wire Rope From India and the People's Republic of China; Notice of Preliminary Determination of Sales at Not Less Than Fair Value: Steel Wire Rope From Malaysia

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

EFFECTIVE DATE:

October 2, 2000.

FOR FURTHER INFORMATION CONTACT:

Jim Kemp or Keir Whitson at [phone] or [phone], respectively; AD/CVD Enforcement, Office 5, Group II, Import Administration, Room 1870, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230.

The Applicable Statute and Regulations

Unless otherwise indicated, 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 Department of Commerce (the Department) regulations refer to the regulations codified at 19 CFR part 351 (April 1999).

Preliminary Determinations

We preliminarily determine that steel wire rope from India and the People's Republic of China (the PRC) is being sold in the United States at less than fair value (LTFV), as provided in section 733 of the Act. We also preliminarily determine that steel wire rope from Malaysia is not being sold in the United States at LTFV. The estimated margins of sales at LTFV are shown in the Suspension of Liquidation section of this notice.

Case History

These investigations were initiated on March 17, 2000.^[1] See Initiation of Antidumping Duty Investigations: Steel Wire Rope from India, Malaysia, the People's Republic of China and Thailand, 65 FR 16173 (March 27, 2000) (Initiation Notice). Since the initiation of these investigations, the following events have occurred.

On April 26, 2000, the United States International Trade Commission (the ITC) preliminarily determined that there is a reasonable indication that imports of wire rope from India, Malaysia and the PRC are materially injuring the United States industry. With regard to Thailand, the ITC determined that either there is no reasonable indication that an industry in the United States is threatened with material injury by reason of imports of steel wire rope from Thailand or that such imports are negligible. See Steel Wire Rope from China, India, Malaysia, and Thailand, 65 FR 24505 (April 26, 2000). As a result, the investigation on Thailand was terminated.

The Department issued antidumping questionnaires to the respondents in India and Malaysia on May 9, 2000.^[2] For the PRC investigation, on April 28, 2000, we sent a letter to the Ministry of Foreign Trade & Economic Cooperation (MOFTEC) requesting information on exporters of steel wire rope from the PRC and the volume of merchandise that those exporters had shipped to the United States during the period of investigation (POI). On May 17, 2000, we sent the antidumping questionnaire to MOFTEC with a letter requesting that it forward the questionnaire to all exporters of steel wire rope who had shipments during the POI. In addition, on May 17, 2000, we sent the questionnaire to all Chinese exporters who had contacted us through counsel, with instructions to complete and return the questionnaire by the given deadline. We received responses from eight companies from the PRC, one from an Indian company and one from a Malaysian company. We issued supplemental questionnaires to our selected respondents, where appropriate.

On July 13, 2000, the Department postponed the preliminary determinations in these cases 50 days in accordance with section 733(c)(1) of the Act and 19 CFR 351.205(b)(2). See Notice of Postponement of Preliminary Antidumping Duty Determinations: Steel Wire Rope from India, Malaysia, and the People's Republic of China, 65 FR 45037 (July 20, 2000).

Postponement of the Final Determination for India

Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by the petitioners. The Department's regulations, at 19 CFR 351.210(e)(2), require that requests by respondents for postponement of a final determination be accompanied by a request for extension of provisional measures from a four-month period to not more than six months.

On September 8, 2000, Usha Martin Industries, Ltd (Usha), the respondent in the Indian case, requested that, in the event of an affirmative preliminary determination in this investigation, the Department postpone its final determination until 135 days after the publication of the preliminary determination. Usha also included a request to extend the provisional measures to not more than six months. Accordingly, since we have made an affirmative preliminary determination, we have postponed the final determination for India until not later than 135 days after the date of the publication of the preliminary determination.

Periods of Investigation

The POI for the Indian and Malaysian cases is January 1, 1999, through December 31, 1999. This period corresponds to the four most recent fiscal quarters prior to the month of the filing of the petition (i.e., March 2000). The POI for the China case is July 1, 1999, through December 31, 1999, the two most recent fiscal quarters prior to the month of filing the petition.

Scope of Investigations

For purposes of these investigations, the product covered is steel wire rope. Steel wire rope encompasses ropes, cables, and cordage of iron or carbon or stainless steel, other than stranded wire, not fitted with fittings or made up into articles, and not made up of brass-plated wire. Imports of these products are currently classifiable under subheadings: 7312.10.6030, 7312.10.6060, 7312.10.9030, 7312.10.9060, and 7312.10.9090 of the Harmonized Tariff Schedule of the United States (HTSUS). Although HTSUS subheadings are provided for convenience and Customs Service purposes, the written description of the scope of these investigations is dispositive.

Facts Available

In its home market sales database, Usha, the respondent in the Indian case, reported a code designated “other” for certain sales observations in response to the requested product characteristic category for “class of wire rope” (class). The Department issued a supplemental questionnaire requesting that Usha re-code these observations with the correct class designation. Usha complied in part and provided the class for the majority of sales in question. However, for the remaining sales, Usha stated that it produced certain products that were outside the specifications that it uses to determine the class for the merchandise. Therefore, Usha could only provide the “other” designation for certain sales. In order to avoid introducing any distortions from product misclassification in the fair value comparison of Usha's home market sales to its U.S. sales, we have determined that we cannot use the product characteristic with a code designated as “other” for certain home market sales and, therefore, the use of facts otherwise available is necessary in this situation, pursuant to section 776(a) of the Act.

Section 776(a) of the Act provides that “if an interested party or any other person—(A) withholds information that has been requested by the administering authority, (B) fails to provide such information by the deadlines for the submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782, (C) significantly impedes a proceeding under this title, or (D) provides such information but the information cannot be verified as provided in section 782(i), the administering authority and the Commission shall, subject to section 782(d), use the facts otherwise available in reaching the applicable determination under this title.” The statute requires that certain conditions be met before the Department may resort to the facts otherwise available. Where the Department determines that a response to a request for information does not comply with the request, section 782(d) of the Act provides that the Department will so inform the party submitting the response and will, to the extent practicable, provide that party the opportunity to remedy or explain the deficiency. If the party fails to remedy the deficiency within the applicable time limits, the Department may, subject to section 782(e), disregard all or part of the original and subsequent responses, as appropriate. Briefly, section 782(e) provides that the Department “shall not decline to consider information that is submitted by an interested party and is necessary to the determination but does not meet all the applicable requirements established by the administering authority” if the information is timely, can be verified, is not so incomplete that it cannot be used, and if the interested party acted to the best of its ability in providing the information. Where all of these conditions are met, and the Department can use the information without undue difficulties, the statute requires it to do so.

As noted above, we determined that we cannot rely on home market sales for which the class product characteristic was designated as “other.” Therefore, we did not use such sales in matching to reported U.S. sales.

Critical Circumstances

In letters filed on August 25, 2000, the petitioner alleged that there is a reasonable basis to believe or suspect that critical circumstances exist with respect to imports of steel wire rope from India and the PRC. Under section 733(e)(1) of the Act, when critical circumstances allegations are submitted more than 20 days before the scheduled date of the preliminary determinations, the Department shall determine on the basis of information available to it at the time whether there is a reasonable basis to believe or suspect that critical circumstances exist. If critical circumstances are found to exist, then a preliminary finding will be issued. For the reasons discussed below, we are issuing preliminary critical circumstances determinations at this time in the investigations of imports of steel wire rope from India and the PRC.

Section 733(e)(1) of the Act provides that the Department will preliminarily determine that critical circumstances exist if there is a reasonable basis to believe or suspect that: (A)(i) There is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise, or (ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales, and (B) there have been massive imports of the subject merchandise over a relatively short period. Section 351.206(h)(1) of the Department's regulations provides that, in determining whether imports of the subject merchandise have been “massive,” the Department normally will examine: (i) The volume and value of the imports; (ii) seasonal trends; and (iii) the share of domestic consumption accounted for by the imports. In addition, section 351.206(h)(2) of the Department's regulations provides that an increase in imports of 15 percent during the “relatively short period” of time may be considered “massive.”

Section 351.206(i) of the Department's regulations defines “relatively short period” as normally being the period beginning on the date the proceeding begins (i.e., the date the petition is filed) and ending at least three months later. The regulations also provide, however, that if the Department finds that importers, exporters, or producers, had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely, the Department may consider a period of not less than three months from that earlier time.

In determining whether the above criteria have been satisfied, we examined: (1) The evidence presented in the petition; (2) recent import statistics released by the Census Bureau after the initiation of the LTFV investigations; and (3) the ITC preliminary injury determinations.

A. History of Dumping and Importer Knowledge

The petitioner has provided evidence on the record of at least one affirmative European Union antidumping and injury determination, announced in August 1999, on steel wire rope from India and the PRC. On this basis, we find a history of dumping and material injury from India and the PRC pursuant to section 733(e)(1)(A)(i) of the Act.

B. Massive Imports

In determining whether there are “massive imports” over a “relatively short period,” pursuant to section 733(e)(1)(B) of the Act, as stated above, the Department normally compares the import volume of the subject merchandise for at least three months immediately preceding the filing of the petition (i.e., the “base period”), and at least three months following the filing of the petition (i.e., the “comparison period”), see 19 CFR 351.206(i). Imports normally will be considered massive when imports during the comparison period have increased by 15 percent or more compared to imports during the base period.

Based on the most recent U.S. Census import data, we examined the increase in import volumes from November 1999 through February 2000, as compared to the import volume during March 2000 through June 2000. We found that imports of steel wire rope from India increased by 77.20 percent, and that imports from the PRC increased by 15.53 percent, over the periods in question.^[3] See Memorandum to the File, Critical Circumstances Analysis Regarding Massive Imports (September 25, 2000) (Memorandum to the File). Therefore, pursuant to section 733(e) of the Act and section 351.206(h) of the Department's regulations, we preliminarily determine that there have been massive imports of steel wire rope from India and the PRC over a relatively short time.

C. Conclusion

For the above-referenced reasons, we preliminarily determine that there is a reasonable basis to believe or suspect that critical circumstances exist for imports of steel wire rope from India and the PRC.

D. Final Critical Circumstances Determinations

We will make final determinations concerning critical circumstances for India and the PRC concurrently with our final determinations regarding sales at LTFV in those investigations. Our final determination in the PRC case will be issued no later than 75 days (unless extended) after the preliminary LTFV determination. The final determination for the Indian case, which has already been extended, will be issued 135 days after the publication of the preliminary determination.

Selection of Respondents

Section 777A(c)(1) of the Act directs the Department to calculate individual dumping margins for each known exporter and producer of the subject merchandise. Where it is not practicable to examine all known producers/exporters of subject merchandise, section 777A(c)(2) of the Act permits us to investigate either 1) a sample of exporters, producers, or types of products that is statistically valid based on the information available at the time of selection, or 2) exporters and producers accounting for the largest volume of the subject merchandise that can reasonably be examined. Usha and Kiswire SDN.BHD (Kiswire) are the only known significant producers in India and Malaysia, respectively. With regard to the PRC, on June 12, 2000, we received Section A questionnaire responses from eight Chinese exporters. However, due to limited resources we determined that we could investigate only the two largest producers. See Memorandum from Jim Kemp, dated June 16, 2000. Therefore, we chose Fasten Import-Export Company (Fasten) and Nantong Zhongde (Nantong) as mandatory respondents in this case.

Product Comparisons (India and Malaysia)

In accordance with section 771(16) of the Act, all products produced by the respondents covered by the description in the Scope of Investigation section, above, and sold in India or Malaysia during the POI are considered to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. We have relied on eight criteria to match U.S. sales of subject merchandise to comparison-market sales of the foreign like product or CV: type of steel wire, diameter, type of core, class of wire rope, grade of steel, number of wires per strand, design of strands and lay of rope. These characteristics have been weighted by the Department where appropriate. Where there were no sales of identical merchandise in the home market to compare to U.S. sales, we compared U.S. sales to the next most similar foreign like product on the basis of the characteristics listed above.

Product Comparisons (the People's Republic of China)

As described below, we relied upon CV, based on a NME analysis, for our comparisons to U.S. sales.

Fair Value Comparisons

To determine whether sales of steel wire rope from India and Malaysia were made in the United States at less than fair value, we compared the export price (EP) and the constructed export price (CEP) to the NV, as described in the Export Price and Constructed Export Price and Normal Value sections of this notice. To determine whether sales of steel wire rope from the PRC were made in the United States at less than fair value, we compared EP and CEP to a NV based on an NME analysis, as described below. In accordance with section 777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs and CEPs. We compared these to weighted-average home market prices or CVs, as appropriate, in the market economy cases and to CV in the NME case.

Export Price and Constructed Export Price

For the price to the United States, we used, as appropriate, EP or CEP as defined in sections 772(a) and 772(b) of the Act, respectively. Section 772(a) of the Act defines EP as the price at which the subject merchandise is first sold by the exporter or producer outside the United States to an unaffiliated purchaser for exportation to the United States, before the date of importation, or to an unaffiliated purchaser for exportation to the United States.

Section 772(b) of the Act defines CEP as the price at which the subject merchandise is first sold inside the United States before or after the date of importation, by or for the account of the producer or exporter of the merchandise, or by a seller affiliated with the producer or exporter, to an unaffiliated purchaser, as adjusted under subsections 772(c) and (d) of the Act.

For all respondents, we calculated EP and CEP, as appropriate, based on the packed prices charged to the first unaffiliated customer in the United States.

In accordance with section 772(c)(2) of the Act, we reduced the EP and CEP by movement expenses and export taxes and duties, where appropriate. For the PRC, where the respondent incurred NME movement expenses, including inland freight, insurance, brokerage and handling, marine insurance, and international ocean freight, we applied the appropriate surrogate value. See Memorandum from Salim Moiz Bhabhrawala to the File, dated September 25, 2000 (Surrogate Value Memorandum). Where the respondent incurred movement expenses through a market-economy provider, we utilized the per-unit expenses as reported in its section C questionnaire response.

Section 772(d)(1) of the Act provides for additional adjustments to CEP. Accordingly, where appropriate, we deducted direct and indirect selling expenses related to commercial activity in the United States. Pursuant to section 772(d)(3) of the Act, where applicable, we made an adjustment for CEP profit.

We determined the EP or CEP for each company as follows:

India

Usha

We calculated a CEP for all of Usha's sales because the merchandise was sold through Usha's affiliated reseller (Usha Martin Americas, Inc.) in the United States. CEP sales were based on packed pick up, FOB and delivered prices. We made deductions from the starting price for movement expenses in accordance with section 772(c)(2)(A) of the Act. These include foreign movement expense (inland freight), international freight, U.S. inland freight, U.S. brokerage, insurance and U.S. duties. We also deducted the amount for discounts from the starting price, and added the amount for duty drawback in accordance with section 772(c)(1)(B) of the Act. In addition, in accordance with section 772(d)(1) of the Act, we deducted from the starting price those selling expenses that were incurred in selling the subject merchandise in the United States, including indirect selling expenses, credit expense and warranty. Finally, we made a deduction for CEP profit.

Malaysia

Kiswire

During the POR, Kiswire made both EP and CEP transactions. We calculated an EP for sales where the merchandise was sold directly by Kiswire to the first unaffiliated purchaser in the United States prior to importation, and CEP was not otherwise warranted based on the facts of record. We calculated a CEP for sales made by Kiswire's affiliated reseller (Kiswire Trading Inc.) in the United States. EP and CEP sales were based on the packed delivered, ex-factory, CIF, CNF (cost, insurance and freight) and CIF (duty paid) prices. We made deductions from the starting price for movement expenses in accordance with section 772(c)(2)(A) of the Act. These include foreign movement expense (inland freight), international freight, U.S. inland freight, U.S. brokerage, insurance and U.S. duties.

In accordance with section 772(d)(1) of the Act, for CEP sales, we deducted from the starting price those selling expenses that were incurred in selling the subject merchandise in the United States, including indirect selling expenses and other direct selling expenses (credit, warranty and royalties). Finally, we made a deduction for CEP profit.

The People's Republic of China

Fasten

During the POR, Fasten made both EP and CEP transactions. We calculated an EP for sales where the merchandise was sold directly by Fasten to the first unaffiliated purchaser in the United States prior to importation, and CEP was not otherwise warranted based on the facts of record. We calculated a CEP for sales made by Fasten's affiliated reseller (Fasten U.S.A. Inc.) in the United States. EP and CEP sales were based on the packed “delivered duty paid” (DDP) U.S. port and C&F U.S. port prices. We made deductions from the starting price for movement expenses in accordance with section 772(c)(2)(A) of the Act. These include foreign movement expense (inland freight), international freight, U.S. brokerage, insurance, U.S. duties and U.S. inland freight.

In accordance with section 772(d)(1) of the Act, for CEP sales, we deducted from the starting price indirect selling expenses. Finally, we made a deduction for CEP profit.

Nantong

We calculated an EP for all of Nantong's sales because the merchandise was sold directly by Nantong to the first unaffiliated purchaser in the United States prior to importation, and CEP was not otherwise warranted based on the facts of record. We made deductions from the starting price for movement expenses in accordance with section 772(c)(2)(A) of the Act. These include foreign movement expenses (inland freight and insurance), international freight, and brokerage and handling.

Normal Value for Market Economy Analysis

A. Selection of Comparison Markets for Market Economy Countries

Section 773(a)(1) of the Act directs that NV be based on the price at which the foreign like product is sold in the home market, provided that the merchandise is sold in sufficient quantities (or value, if quantity is inappropriate) and that there is no particular market situation that prevents a proper comparison with the EP or CEP. The statute contemplates that quantities (or value) will normally be considered insufficient if they are less than five percent of the aggregate quantity (or value) of sales of the subject merchandise to the United States.

For the Indian and Malaysian cases, we found that Usha and Kiswire have viable home markets of steel wire rope. The respondents submitted home market sales data for purposes of the calculation of NV.

In deriving NV, we made adjustments as detailed in the Calculation of Normal Value Based on Home Market Prices and Calculation of Normal Value Based on Constructed Value, sections below.

B. Cost of Production Analysis

On July 19, and August 8, 2000, petitioners made sales below cost allegations against Kiswire and Usha, respectively. Based on these allegations and in accordance with section 773(b)(2)(A)(i) of the Act, we found reasonable grounds to believe or suspect that sales of steel wire rope manufactured in India and Malaysia were made at prices below the COP. As a result, the Department has conducted an investigation to determine whether Usha and Kiswire made sales in their respective home markets at prices below their respective COPs during the POI within the meaning of section 773(b) of the Act. We conducted the COP analysis described below.

1. Calculation of Cost of Production

In accordance with section 773(b)(3) of the Act, we calculated a weighted-average COP based on the sum of the cost of materials and fabrication for the foreign like product, plus amounts for the home market general and administrative (G&A) expenses, selling expenses, commissions, packing expenses and interest expenses.

We relied on the COP data submitted by Usha and Kiswire in their cost questionnaire responses, except, as noted below, in specific instances where the submitted costs were not appropriately quantified or valued:

Usha. We made adjustments to Usha's direct materials costs and interest expense ratio. See Memorandum from Heidi Norris, dated September 25, 2000.

Kiswire. We adjusted Kiswire's interest expense ratio. See Memorandum from Laurens van Houten, dated September 25, 2000.

2. Test of Home Market Sales Prices

We compared the adjusted weighted-average COP to the home market sales of the foreign like product, as required under section 773(b) of the Act, in order to determine whether these sales had been made at prices below the COP within an extended period of time (i.e., a period of one year) in substantial quantities ^[4] and whether such prices were sufficient to permit the recovery of all costs within a reasonable period of time.

On a model-specific basis, we compared the revised COP to the home market prices, less any applicable movement charges, discounts and rebates.

3. Results of the COP Test

Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of a respondent's sales of a given product were at prices less than the COP, we did not disregard any below-cost sales of that product because we determined that the below-cost sales were not made in “substantial quantities.” Where 20 percent or more of a respondent's sales of a given product during the POI were at prices less than the COP, we determined such sales to have been made in “substantial quantities” within an extended period of time in accordance with section 773(b)(2)(B) or the Act. In such cases, because we compared prices to POI average costs, we also determined that such sales were not made at prices that would permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Act. Therefore, we disregarded the below-cost sales.

We found that, for certain models of steel wire rope, more than 20 percent of the home market sales by Usha and Kiswire were made within an extended period of time at prices less than the COP. Further, the prices did not provide for the recovery of costs within a reasonable period of time. We therefore disregarded these below-cost sales and used the remaining sales as the basis for determining NV, in accordance with section 773(b)(1) of the Act.

C. Calculation of Normal Value Based on Home Market Prices

We determined price-based NVs for respondent companies as follows. For both respondents, we made adjustments for any differences in packing, and we deducted movement expenses pursuant to section 773(a)(6)(B)(ii) of the Act. In addition, where applicable, we made adjustments for differences in circumstances of sale (COS) pursuant to section 773(a)(6)(C)(iii) of the Act. We also made adjustments, pursuant to 19 CFR 351.410(e), for indirect selling expenses incurred on comparison-market or U.S. sales where commissions were granted on sales in one market but not in the other (the commission offset).

Company-specific adjustments are described below.

Usha. We based home market prices on the packed prices to unaffiliated purchasers in India. We adjusted the starting price for foreign inland freight, warehousing and insurance. We made COS adjustments by deducting direct selling expenses incurred for home market sales (credit expense, commissions, technical services and other directs selling expenses). No other adjustments to NV were claimed or allowed.

Kiswire. We based home market prices on the packed prices to unaffiliated purchasers in Malaysia. We adjusted the starting price for foreign inland freight, ocean freight, insurance, discounts, sales tax and billing adjustments. For comparisons made to EP sales, we made COS adjustments by deducting direct selling expenses incurred for home market sales (credit expense, commissions, warranty and bank charges) and adding U.S. direct selling expenses (e.g., credit, warranty and royalties ). For comparisons made to CEP sales, we did not add U.S. direct selling expenses. No other adjustments to NV were claimed or allowed.

D. Calculation of Normal Value Based on Constructed Value

Section 773(a)(4) of the Act provides that, where NV cannot be based on comparison-market sales, NV may be based on CV. Accordingly, for those models of steel wire rope for which we could not determine the NV based on comparison-market sales, either because there were no sales of a comparable product or all sales of the comparison products failed the COP test, we based NV on CV.

Section 773(e)(1) of the Act provides that CV shall be based on the sum of the cost of materials and fabrication for the imported merchandise plus amounts for selling, general, and administrative expenses (SG&A), profit, and U.S. packing costs. We calculated the cost of materials and fabrication based on the methodology described in the Calculation of Cost of Production section of this notice, above. We based SG&A and profit on the actual amounts incurred and realized by the respondent in connection with the production and sale of the foreign like product in the ordinary course of trade for consumption in the comparison market, in accordance with section 773(e)(2)(A) of the Act.

In addition, we used U.S. packing costs as described in the Export Price section of this notice, above.

We made adjustments to CV for differences in COS in accordance with section 773(a)(8) of the Act and 19 CFR 351.410. These involved the deduction of direct selling expenses incurred on home market sales from, and the addition of U.S. direct selling expenses to, CV.

E. Level of Trade/Constructed Export Price Offset

In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we determine NV based on sales in the comparison market at the same level of trade as the EP or CEP transaction. The NV level of trade is that of the starting-price sales in the comparison market or, when NV is based on CV, that of the sales from which we derive SG&A expenses and profit. For EP sales, the U.S. level of trade is also the level of the starting-price sale, which is usually from exporter to importer. For CEP transactions, it is the level of the constructed sale from the exporter to the importer.

To determine whether NV sales are at a different level of trade than EP or CEP transactions, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. If the comparison market sales are at a different level of trade and the difference affects price comparability, as manifested in a pattern of consistent price differences between the sales on which NV is based and comparison market sales at the level of trade of the export transaction, we make a level-of-trade adjustment under section 773(a)(7)(A) of the Act. For CEP sales, if the NV level is more remote from the factory than the CEP level and there is no basis for determining whether the difference in the levels between NV and CEP affects price comparability, we adjust NV under section 773(a)(7)(B) of the Act (the CEP-offset provision). See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731 (November 19, 1997).

In implementing these principles in this investigation, we obtained information from each respondent about the marketing stages involved in the reported U.S. and home market sales, including a description of the selling activities performed by the respondents for each channel of distribution. In identifying levels of trade for EP and home market sales we considered the selling functions reflected in the starting price before any adjustments. For CEP sales, we considered only the selling activities reflected in the price after the deduction of expenses pursuant to section 772(d) of the Act.

In the Malaysian and Indian investigations, Kiswire made both EP and CEP sales and Usha made only CEP sales. With respect to Kiswire's EP sales, we found a single level of trade in the United States, and a single, identical level of trade in the home market. Kiswire's EP sales and comparison market sales were made to distributors and end-users. In either case, the selling functions performed by Kiswire for the different customer types and channels of distribution were very limited, and almost identical in both markets. Other than warehousing, which was only provided in the home market, in both markets Kiswire provided the following services: price negotiation, order processing, freight and delivery arrangements and sales support. Therefore, it was thus unnecessary to make any level-of-trade adjustment for comparison of EP and home market prices.

Regarding Kiswire's and Usha's CEP sales, we found that both companies make CEP sales to the United States through their affiliates, Kiswire Trading Inc. (KTI) and Usha Martin Americas, Inc (UMA), respectively. KTI sells to unrelated distributors in the U.S. market. UMA sells to original equipment manufacturers (OEMs), distributors and end-users in the United States while Usha sells to OEMs, distributors, end-users and government buyers in the India. For Kiswire's CEP sales, KTI provides virtually all the sales functions, such as price negotiation, order processing, freight and delivery arrangements and sales support. Likewise, for Usha's CEP sales, UMA provides all the selling functions, such as warehousing, freight arrangements, advertising and product liability insurance. Since in our LOT analysis for CEP sales we only consider the selling activities reflected in the price after the deduction of the expenses incurred by the U.S. affiliate, the record indicates that for Kiswire's and Usha's CEP sales there are fewer services performed than for the sales in their home markets. Based on this analysis, we found that the level of trade of Kiswire's and Usha's home market sales involves substantially more selling functions than the level of trade of the CEP sales. Therefore, we have determined that Kiswire's and Usha's home market sales are made at a different, and more advanced, stage of marketing than the level of trade of the CEP sales.

Accordingly, for both respondents, we determined that a level-of-trade adjustment may be appropriate for CEP sales. However, Kiswire and Usha do not sell wire rope in their respective home markets at the same level of trade as that of their U.S. sales. Therefore, because the data available do not permit a determination that there is a pattern of consistent price differences between sales at different levels of trade in the comparison markets and because the respondents' home market sales are made at a different, and more advanced, stage of marketing than the level of trade of the CEP sales, we have made a CEP offset to NV for both companies in accordance with section 773(a)(7)(B) of the Act. This offset is equal to the amount of indirect expenses incurred in the comparison market not exceeding the amount of the deductions made from the U.S. price in accordance with 772(d)(1)(D) of the Act.

Normal Value for Non-Market Economy Analysis

A. Non-Market Economy Status for the People's Republic of China

The Department has treated the PRC as a NME country in all past antidumping investigations (see, e.g., Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Cold-Rolled Flat-Rolled Carbon Quality Steel Products from the People's Republic of China, 65 FR 1121 (January 7, 2000) (Cold-Rolled Steel from the PRC). A designation as a NME remains in effect until it is revoked by the Department (see section 771(18)(C) of the Act).

The respondents in this investigation have not requested a revocation of the PRC's NME status. We have, therefore, preliminarily determined to continue to treat the PRC as a NME.

When the Department is investigating imports from a NME, section 773(c)(1) of the Act directs us to base NV on the NME producer's factors of production, valued in a comparable market economy that is a significant producer of comparable merchandise. The sources of individual factor prices are discussed under the Normal Value section, below.

B. Separate Rates

With regard to the PRC case, it is the Department's policy to assign all exporters of merchandise subject to investigation in a NME country a single rate, unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. The eight companies that have submitted section A responses have provided the requested company-specific separate rates information and have stated that for each company, there is no element of government ownership or control. All eight companies have requested a separate company-specific rate, including Fasten and Nantong, the two companies selected as mandatory respondents.

In its questionnaire response, Fasten states that it is an independent company “owned by all the people” and controlled by the general assembly of workers and employees. Fasten further claims that it does not maintain any corporate relationship with the central, provincial, and local government in terms of production, management, and operations. Nantong is owned by Nantong Municipal Light Industry Bureau (an agency of the local government of Nantong City), the Municipal Collective Industrial Association, and by the employees of the company. Aside from this tie to the local government, Nantong does not maintain any corporate relationship with the central or provincial government.

As stated in 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), and Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol 60 FR 22545 (May 8, 1995) (Furfuryl Alcohol), ownership of a company by “all the people” does not require the application of a single rate.

The Department's separate rate test is not concerned, in general, with macroeconomic/border-type controls (e.g., export licenses, quotas, and minimum export prices), particularly if these controls are imposed to prevent dumping. Rather, the test focuses on controls over the investment, pricing, and output decision-making process at the individual firm level. See Certain Cut-to-Length Carbon Steel Plate from Ukraine: Final Determination of Sales at Less than Fair Value, 62 FR 61754, 61757 (November 19, 1997); Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 62 FR 61276, 61279 (November 17, 1997); and Honey from the People's Republic of China: Preliminary Determination of Sales at Less Than Fair Value, 60 FR 14725, 14726 (March 20, 1995) (Honey).

To establish whether a firm 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), and amplified in Silicon Carbide. Under this test, the Department assigns separate rates in NME cases only if an exporter can affirmatively demonstrate the absence of both (1) de jure and (2) de facto governmental control over export activities. See Silicon Carbide and Furfuryl Alcohol.

Fasten and Nantong have placed on the record a number of documents to demonstrate absence of de jure control, including the “Foreign Trade Law of the People's Republic of China” and the “Law of the People's Republic of China on Industrial Enterprises Owned By the Whole People.” In prior cases, the Department has analyzed these laws and found that they establish an absence of de jure control. (See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Certain Partial-Extension Steel Drawer Slides with Rollers from the People's Republic of China, 60 FR 54472 (October 24, 1995)). We have no new information in this proceeding which would cause us to reconsider this determination.

The Department typically considers four factors in evaluating whether each respondent is subject to de facto governmental control of its export functions: (1) Whether the export prices are set by or are subject to the approval of a governmental agency; (2) whether the respondent has authority to negotiate and sign contracts and other agreements; (3) whether the respondent has autonomy from the government in making decisions regarding the selection of management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding disposition of profits or financing of losses. See, e.g., Silicon Carbide and Furfuryl Alcohol.

Fasten and Nantong asserted the following: (1) they established their own export prices independently of the government and without the approval of a government authority; (2) they negotiate contracts, without guidance from any governmental entities or organizations; (3) they make their own personnel decisions including the selection of management; and (4) they retain the proceeds of their export sales, and utilize profits according to their business needs.

We have preliminarily determined that Fasten and Nantong have met the criteria for the application of separate rates. We will examine this matter further at verification. Each of the other six companies that submitted separate rates information, but were not selected as respondents in this investigation, have asserted the following: (1) It establishes its own export prices; (2) it negotiates contracts without guidance from any governmental entities or organizations; (3) it makes its own personnel decisions; and (4) it retains the proceeds from export sales and uses profits according to its business needs without any restrictions. Additionally, these six companies have stated that they do not coordinate or consult with other exporters regarding their pricing. This information supports a preliminary finding that there is an absence of de facto governmental control of the export functions of these companies. Consequently, we preliminarily determine that all responding exporters have met the criteria for the application of separate rates. For non-responsive producers/exporters, we preliminarily determine, as facts available, that they have not met the criteria for application of separate rates.

C. Surrogate Country

With regard to the Chinese case, section 773(c)(4) of the Act requires the Department to value the NME producer's factors of production, to the extent possible, in one or more market economy countries that: (1) Are at a level of economic development comparable to that of the NME country; and (2) are significant producers of comparable merchandise. The Department initially determined that India, Indonesia, Pakistan, Philippines and Sri Lanka were the countries most comparable to the PRC in terms of overall economic development (see the May 30, 2000, memorandum, Antidumping Duty Investigation of Steel Wire Rope (SWR) from the People's Republic of China (PRC): Nonmarket Economy Status and Surrogate Country Selection).

Because of a lack of the necessary factor price information from the other potential surrogate countries that are significant producers of comparable products to the subject merchandise, we have relied, where possible, on information from India, the source of the most complete information from among the potential surrogate countries. Accordingly, we have calculated normal value (NV) by applying Indian values to the PRC's producers' factors of production for virtually all factors. See Surrogate Value Memorandum.

D. Factors of Production

In accordance with section 773(c) of the Act, we calculated NV based on factors of production reported by the companies in the PRC which produced steel wire rope for the exporters that sold steel wire rope to the United States during the POI. To calculate NV, the reported unit factor quantities were multiplied by publicly available Indian values.

In selecting the surrogate values, we considered the quality, specificity, and contemporaneity of the data. As appropriate, we adjusted input prices to make them delivered prices. We added to Indian surrogate values a surrogate freight cost using the reported distance from the domestic supplier to the factory where this distance was shorter than the distance from the nearest seaport to the factory. 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 (Fed. Cir. 1997). Where a producer did not report the distance between the material supplier and the factory, we used as facts available the longest distance reported, i.e., the distance between the PRC seaport and the producer's location. For those values not contemporaneous with the POI, we adjusted for inflation using wholesale price indices published in the International Monetary Fund's International Financial Statistics.

We valued material inputs and packing materials (i.e., where applicable, steel wire rod, acid, zinc, zinc sulfate, paper, wooden pallets, and wooden reels) by Harmonized Tariff Schedule (HTS) number, using imports statistics from the Monthly Statistics of the Foreign Trade of India. Where a material input was purchased in a market-economy currency from a market-economy supplier, we valued such a material input at the actual purchase price in accordance with section 351.408 (c)(1) of the Department's regulations. For a complete analysis of surrogate values, see Surrogate Value Memorandum, dated September 25, 2000.

E. Antidumping Deposit Rate for Those Producers/Exporters That Responded Only to the Separate Rates Questionnaire

For those PRC producers/exporters that responded to our separate rates questionnaire but did not respond to the full antidumping questionnaire (because they were not selected to respond or because they did not submit a voluntary response), we have calculated a weighted-average margin based on the rates calculated for those producers/exporters that were selected to respond. (See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Bicycles from the People's Republic of China, 61 FR 19026 (April 30, 1996) (“Bicycles from the PRC”)).

F. The People's Republic of China-Wide Rate

Information on the record of this investigation indicates that there are numerous producers/exporters of the subject merchandise in the PRC. All exporters were given the opportunity to respond to the separate rates questionnaire. We received timely responses from Fasten, Haicheng Greatx Industry Co. Ltd., Liaoning Metals & Minerals Import & Export Corp., Jiangsu COFCO, Jiangsu Guo Tai, Henan Baoi Wire Rope Factory, Nantong and Nantong Wire Rope Company. As explained above, we selected Fasten and Nantong as our respondents and have calculated a company-specific rate for them. However, based upon our knowledge of PRC exporters and the fact that U.S. import statistics show that responding companies did not account for all imports into the United States from the PRC, we have preliminarily determined that some PRC exporters of steel wire rope failed to respond to our questionnaire.

Section 776(a)(2) of the Act provides that “if an interested party or any other person—(A) withholds information that has been requested by the administering authority or the Commission under this title, (B) fails to provide such information by the deadlines for submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782, (C) significantly impedes a proceeding under this title, or (D) provides such information but the information cannot be verified as provided in section 782(i), the administering authority and the Commission shall, subject to section 782(d), use the facts otherwise available in reaching the applicable determination under this title.”

Section 776(b) of the Act further provides that adverse inferences may be used when a party has failed to cooperate by not acting to the best of its ability to comply with a request for information. The producers/exporters that decided not to respond to the separate rates questionnaire failed to act to the best of their ability in this investigation. Therefore, the Department has determined that, in selecting from among the facts otherwise available, an adverse inference is warranted.

In accordance with our standard practice, as adverse facts available, we are assigning to those companies that did not respond to the Department's separate rates questionnaire the higher of: (1) The highest margin stated in the notice of initiation; or (2) the highest margin calculated for any respondent in this investigation (see, e.g., Cold Rolled Steel from the PRC, 65 FR 1125). In this case, the adverse facts available margin is 118.78 percent, which is the highest margin calculated for a respondent in this investigation. The margin for those companies that did respond to the Department's section A questionnaire, but were not selected as respondents in this proceeding is 56.54 percent, which is the weighted average of the dumping margins for the two mandatory respondents.

Currency Conversions

We made currency conversions into U.S. dollars in accordance with section 773A of the Act based on exchange rates in effect on the dates of the U.S. sales, as obtained from the Federal Reserve Bank (the Department's preferred source for exchange rates).

Verification

In accordance with section 782(i) of the Act, we intend to verify all information relied upon in making our final determinations.

Suspension of Liquidation

Because of our preliminary affirmative critical circumstances findings in the cases involving India and the PRC, we are directing the Customs Service to suspend liquidation of any unliquidated entries of steel wire rope from India and the PRC entered, or withdrawn from warehouse, for consumption on or after the date which is 90 days prior to the date on which this notice is published in the Federal Register. We are instructing the Customs Service to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds the EP or CEP, as indicated in the chart below for imports from India and the PRC. These instructions suspending liquidation will remain in effect until further notice.

Because we preliminarily determined that steel wire rope from Malaysia is not being sold at LTFV, we are not suspending liquidation of such merchandise at this time.

The weighted-average dumping margins are provided below:

Manufacturer/exporter	Margin (percent)
India:
Usha Martin Industries, Ltd	21.14
All Others	21.14
Malaysia:
Kiswire SDN.BHD	0.18 (de minimis)
All Others	0.18
People's Republic of China:
Fasten Group Import and Export Co., Ltd	24.22
Haicheng Greatx Industry Co. Ltd.*	56.54
Henan Baoi Wire Rope Factory*	56.54
Jiangsu COFCO*	56.54
Jiangsu Guo Tai*	56.54
Liaoning Metals & Minerals Import & Export Corp.*	56.54
Nantong Wire Rope Company*	56.54
Nantong Zhongde	118.78
PRC-Wide Rate	118.78
*All Others

The PRC-wide rate applies to all entries of the subject merchandise except for entries from exporters/factories that are identified individually above.

Disclosure

The Department will disclose calculations performed within five days of the date of publication of this notice to the parties of the proceedings in these investigations in accordance with 19 CFR 351.224(b).

International Trade Commission Notification

In accordance with section 733(f) of the Act, we have notified the ITC of our sales at less than fair value and critical circumstances preliminary determinations. If any of our final antidumping determinations is affirmative, the ITC will determine whether the imports covered by that (those) determination(s) are materially injuring, or threaten material injury to, the U.S. industry. The deadline for that ITC determination would be the later of 120 days after the date of these preliminary determinations or 45 days after the date of our final determinations.

Public Comment

Case briefs for this investigation must be submitted no later than one week after the issuance of the verification reports. Rebuttal briefs must be filed within five days after the deadline for submission of case briefs. A list of authorities used, a table of contents, and an executive summary of issues should accompany any briefs submitted to the Department. Executive summaries should be limited to five pages total, including footnotes. Further, we would appreciate it if parties submitting written comments would provide the Department with an additional copy of the public version of any such comments on diskette.

Section 774 of the Act provides that the Department will hold a hearing to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs, provided that such a hearing is requested by any interested party. If a request for a hearing is made in an investigation, the hearing will tentatively be held two 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. In the event that the Department receives requests for hearings from parties to more than one steel wire rope case, the Department may schedule a single hearing to encompass all those cases. Parties should confirm by telephone the time, date, and place of the hearing 48 hours before the scheduled time.

Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request within 30 days of the publication of this notice. Requests should specify the number of participants and provide a list of the issues to be discussed. Oral presentations will be limited to issues raised in the briefs.

If this investigation proceeds normally for the Malaysian and PRC cases, we will make our final determinations no later than 75 days after the date of the preliminary determinations. As noted above, the final determination for the Indian case will be issued 135 days after the date of the publication of the preliminary determination.

These determinations are issued and published pursuant to sections 733(f) and 777(i)(1) of the Act.

Dated: September 25, 2000.

Troy H. Cribb,

Acting Assistant Secretary for Import Administration.

Footnotes

1.  The petitioner in this investigation is the Committee of Domestic Steel Wire Rope and Specialty Cable Manufacturers.

2.  Section A of the questionnaire requests general information concerning a company's corporate structure and business practices, the merchandise under investigation that it sells, and the manner in which it sells that merchandise in all of its markets. Section B requests a complete listing of all home market sales, or, if the home market is not viable, of sales in the most appropriate third-country market (This section is not applicable to respondents in non-market economy (NME) cases). Section C requests a complete listing of U.S. sales. Section D requests information on the cost of production (COP) of the foreign like product and the constructed value (CV) of the merchandise under investigation. Section E requests information on further manufacturing.

3.  We received company-specific shipment data from the two respondents in the PRC case, Fasten Group Import and Export, Co., Ltd. (Fasten) and Nantong Zhongde. Fasten's shipment figures support our finding of massive imports of steel wire rope into the United States, in that they demonstrate an increase of greater than 30 percent. See Memorandum to the File. Nantong Zhongde filed shipment figures on September 11, 2000. However, because the figures were not reported on a monthly basis, the shipment data could not be used in this preliminary determination. Nantong filed a subsequent submission containing monthly shipment data. This submission was filed too late to be used in this determination. Usha, the Indian respondent, filed shipment figures on September 11, 2000. The submission, however, was not properly filed and the data contained therein could not be used in this preliminary determination.

4.  In accordance with section 773(b)(2)(C)(i) of the Act, we determined that sales made below the COP were made in substantial quantities if the volume of such sales represented 20 percent or more of the volume of sales under consideration for the determination of NV.