[Federal Register Volume 61, Number 222 (Friday, November 15, 1996)]
[Notices]
[Pages 58514-58519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29242]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
[A-570-808]
Chrome-Plated Lug Nuts From the People's Republic of China; Final
Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of antidumping administrative review.
-----------------------------------------------------------------------
SUMMARY: On August 16, 1995, the Department of Commerce (the
Department) published in the Federal Register the preliminary results
of its administrative review of the antidumping duty order on chrome-
plated lug nuts (lug nuts) from the People's Republic of China (PRC)
(60 FR 48687). This review covers shipments of this merchandise to the
United States during the period September 1, 1993, through August 31,
1994. We gave interested parties an opportunity to comment on our
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: November 15, 1996.
FOR FURTHER INFORMATION CONTACT: Donald Little, Elisabeth Urfer, 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.
Applicable Statute and Regulations
Unless otherwise stated, all citations to the statute and to the
Department's regulations are references to the provisions as they
existed on December 31, 1994.
SUPPLEMENTARY INFORMATION:
Background
The Department published in the Federal Register an antidumping
duty order on lug nuts from the PRC on April 24, 1992 (57 FR 15052). On
September 2, 1994, the Department published in the Federal Register (59
FR 45664) a notice of opportunity to request an administrative review
of the antidumping duty order on lug nuts from the PRC covering the
period September 1, 1993, through August 31, 1994.
On September 21, 1994, in accordance with 19 CFR 353.22(a)(1994),
the petitioner, Consolidated International Automotive, Inc., requested
that we conduct an administrative review of China National Automotive
Industry
I/E Corp. (China National); China National Machinery & Equipment Import
and Export Corporation, Jiangsu Co., Ltd. (Jiangsu); Rudong Grease Gun
Factory (Rudong); China National Automotive Industry I/E Corp., Nantong
Branch (Nantong); China National Automotive Industry Shanghai
Automobile Import & Export Corp. (Shanghai Automobile); Tianjin
Automotive Import & Export Co. (Tianjin); China National Automobile
Import and Export Corp., Yangzhou Branch (Yangzhou); and Ningbo Knives
& Scissors Factory (Ningbo). We published a notice of initiation of
this antidumping duty administrative review on October 13, 1994 (59 FR
51939).
On August 16, 1995, the Department published in the Federal
Register the preliminary results of its administrative review of the
antidumping duty order on lug nuts from the PRC (60 FR 48687). There
was no request for a hearing. The Department has now completed this
review in accordance with section 751 of the Tariff Act of 1930, as
amended (the Tariff Act).
Scope of Review
On April 19, 1994, the Department issued its ``Final Scope
Clarifications on Chrome-Plated Lug Nuts from Taiwan and the PRC.'' The
scope, as clarified, is described in the subsequent paragraph. All lug
nuts covered by this review conform to the April 19, 1994, scope
clarification.
Imports covered by this review are one-piece and two-piece chrome-
plated lug nuts, finished or unfinished. The subject merchandise
includes chrome-plated lug nuts, finished or unfinished, which are more
than \11/16\ inches (17.45 millimeters) in height and which have a
hexagonal (hx) size of at least \3/4\ inches (19.05 millimeters) but
not over one inch (25.4 millimeters), plus or minus \1/16\ of an inch
(1.59 millimeters). The term ``unfinished'' refers to unplated and/or
unassembled chrome-plated lug nuts. The subject merchandise is used for
securing wheels to cars, vans, trucks, utility vehicles, and trailers.
Zinc-plated lug nuts, finished or unfinished, and stainless-steel
capped lug nuts are not included in the scope of this review. Chrome-
plated lock nuts are also not subject to this review.
Chrome-plated lug nuts are currently classified under subheadings
7318.16.00.15, 7318.16.00.45, and 7318.16.00.80 of the Harmonized
Tariff Schedule (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 the period September 1, 1993, through August 31,
1994, and eight producers/exporters of Chinese lug nuts.
Analysis of Comments Received
We gave interested parties an opportunity to comment on the
preliminary results. We received case and rebuttal briefs from
petitioner and Rudong.
Comment 1: Petitioner concurs with the Department's decision to use
the best information available (BIA) for non-responding parties, and
argues that the Department should apply partial BIA to Rudong.
Petitioner states that, while Rudong did respond to the Department's
requests for information, Rudong submitted erroneous cost information
relating to packing costs, reported out-of-date factors of production
values rather than actual factors-of-production and factory overhead
for the period of review (POR), and included a substantial additional
amount for electricity that is unexplained. Petitioner further asserts
that scrap amounts reported by Rudong were incorrect, and that the
Department could not verify the percentage of materials purchased from
each supplier.
For the six non-responding companies, petitioner contends that the
Department should apply a first-tier BIA rate of 44.99 percent from the
final results of the second administrative review (1992-1993).
Petitioner argues that the use of this rate is supported by the record
and follows applicable law and administrative practice.
[[Page 58515]]
Rudong disagrees with petitioner's assertion that partial BIA
should be administered with respect to its factors of production.
Rudong argues that it has been fully responsive and cooperative in this
review. Rudong contends that the Department was able to verify the data
used in the preliminary results and that no reason exists to reject
these verified data. Rudong states that this claim for BIA, or partial
BIA, is without any basis whatsoever, and the Department should reject
petitioner's claim that Rudong should be punished with BIA in this
administrative review.
Department's Position: We agree with petitioner, in part. As in the
preliminary results, we have determined that it is appropriate, in
accordance with Section 776(c) of the Tariff Act, to apply first-tier
BIA to the six non-responding firms. In deciding what to use as BIA,
the Department's regulations provide that the Department may take into
account whether a party refuses to provide requested information. 19
CFR 353.37 (b). Thus, the Department may determine, on a case-by-case
basis, what constitutes BIA. When a company refuses to cooperate with
the Department or otherwise significantly impedes the proceedings, we
use as BIA the higher of (1) the highest of the rates found for any
firm for the same class or kind of merchandise in the same country of
origin in the less-than-fair-value (LTFV) investigation or prior
administrative reviews; or (2) the highest rate found in this review
for any firm for the same class or kind of merchandise in the country
of origin. When a company substantially cooperates with our requests
for information and substantially cooperates in verification, but fails
to provide the information requested in a timely manner or in the form
required or is unable to substantiate it, we use as BIA the higher of
(1) the highest rate ever applicable to the firm for the same class or
kind of merchandise from either the LTFV investigation or a prior
administrative review; or (2) the highest calculated rate in this
review for the class or kind of merchandise for any firm from the same
country of origin. (See Final Results of Antidumping Duty
Administrative Reviews and Revocation in Part of an Antidumping Duty
Order: Antifriction Bearings (Other than Tapered Roller Bearings) and
Parts Thereof From France, et. al. (58 FR 39729, (July 26, 1993).)
We have applied BIA to sales made by China National, Jiangsu,
Yangzhou, Ningbo, Shanghai Automobile, and Tianjin. Because these firms
did not respond to our questionnaire, as BIA we have applied the
highest margin ever calculated in the investigation or this or the
prior review, which is 44.99 percent.
Contrary to petitioner's claim, Rudong did not report an
unexplained amount for electricity; however, at verification we did
find an additional charge for electricity. The question of whether to
make an adjustment for this additional amount is moot because we have
determined that it is appropriate to use factors of production rather
than cost to calculate foreign market value (FMV) (see comment 2). We
verified the amounts of electricity we used in our calculations.
Similarly, because we used factors of production, petitioner's comments
regarding packing costs are moot. We agree with petitioner that we
could not fully verify the exact percentage of material purchased from
each supplier; this was due to the way in which Rudong keeps its
records. These percentages are relevant to the calculation of the
transportation component of the materials factor for transportation of
materials to the factory. To value transportation we used ranges of
distance, e.g., up to 100 kilometers, up to 250 kilometers, etc. We
used this methodology because the best surrogate data for
transportation was in ranges of distance (see Memorandum to the File,
``Factor Values Used for the Preliminary Results of the Third
Administrative Review,'' dated August 3, 1995). For materials that fell
within a single distance range, the inability to verify the exact
percentage of material from each supplier is moot because there would
be no difference between the rates for each supplier. For those
materials which fell into more than one category of distance, as
partial BIA we used the longest distance range for all transportation
for that input.
We agree with petitioner that Rudong reported factors of production
that were out of date with respect to the POR, from schedules last
updated in 1992 and 1993, rather than its actual experience during the
POR. We found, at verification, that these were the most recent
schedules that Rudong had, and that Rudong used these schedules in its
normal course of business. We also agree with petitioner that Rudong
reported scrap amounts which were also incorrect. However, we disagree
that these errors were serious enough to warrant partial BIA. As is our
general practice, we were able to make minor corrections to the figures
reported by Rudong following verification. We replaced submitted
figures which were erroneous with verified figures. Therefore, we have
not applied partial BIA to Rudong with respect to these items.
Comment 2: Rudong argues that the Department incorrectly concluded
in the preliminary results that the lug nut industry in the PRC was not
market-oriented. Rudong contends that, based on the facts on the
record, the lug nut industry is market-oriented, and that the
Department should so determine for purposes of the final results.
Rudong notes that the Department held that Rudong had not demonstrated
that the lug nuts industry met the market-oriented industry (MOI) test
set forth, as follows, in the Amendment to Final Determination of Sales
at Less Than Fair Value and Amendment to Antidumping Duty Order:
Chrome-plated Lug Nuts from the People's Republic of China, 57 FR 15052
(April 24, 1992) (Amended Final):
(1) For the subject merchandise, there must be virtually no
government involvement in setting prices or amounts to be produced.
For example, state-owned production or allocation of production of
the merchandise, whether for export or domestic consumption in the
non-market economy country would be an almost insuperable barrier to
finding a market-oriented industry.
(2) The industry producing the merchandise under review should
be characterized by private or collective ownership. There may be
state-owned enterprises in the industry but substantial state
ownership would weight heavily against finding a market-oriented
industry.
(3) Market-determined prices must be paid for all significant
inputs, whether material or non-material (e.g. labor and overhead),
and for all but insignificant proportion of all the inputs
accounting for the total value of the merchandise under
investigation. For example, an input price will not be considered
market determined if the producers of the merchandise under
investigation pay a state-set price for the input or if the input is
supplied to the producers at government direction. Moreover, if
there is any state-required production in the industry producing the
input, the share of state-required production must be insignificant.
Rudong notes that the Department concluded that the lug nut
industry failed the MOI test for two reasons: first, the Department had
not received information from every producer of lug nuts in the PRC;
second, the Department found that Rudong did not submit evidence that
demonstrated that a significant portion of its suppliers' industries
are not subject to significant government control and state-required
production and demonstrated that the state involvement in these
industries has changed since the Amended Final.
Rudong notes that it has repeatedly made statements, which are
certified and on the record, that to its knowledge it is the only lug
nuts producer in the PRC. According to Rudong, petitioner's
[[Page 58516]]
argument regarding the need for government corroboration that Rudong is
the only lug nuts producer leads to a situation in which MOI status
itself prevents Rudong from proving its MOI status. Because the
industry is an MOI, Rudong contends, there is no government control,
and the government cannot certify who is part of that particular
industry. Rudong contends that, in the absence of any evidence
whatsoever of additional Chinese producers of lug nuts and given its
certifications of no additional producers, the Department should
conclude that Rudong was the sole lug nuts producer during the POR.
Rudong contests the Department's conclusion that it did not submit
evidence demonstrating that a significant portion of its supplier
industries are not subject to significant government control and state-
required production. Rudong argues that, in its supplemental
questionnaire response, it provided statements from its suppliers of
steel rod and chemicals, indicating that each particular supplier was
free of state control, that the industry of which that supplier was a
member was also free of state control, and that the supplier's prices
to Rudong were set without any government interference. Rudong argues
that the Department itself was able to verify that Rudong's suppliers
themselves are free of government control, and affirms that it already
has submitted certifications that the relevant industries in the PRC
are free of government control and interference, except for small
quantities of government purchases in unrelated sectors of the steel
industry.
Rudong further argues that the Department cannot conclude that no
individual sector of the huge PRC steel industry could be market-driven
simply because of the existence of possible state influence over a
minor sector. Rudong contends that this is contrary to the third
element of the Department's own three-part MOI test, which allows
insignificant state-required production in an MOI. Rudong contends that
if the Department were to examine the steel industry in any other
market-oriented country, it would undoubtedly find some mandatory
production of steel in every country that had even a minor defense
industry. Rudong argues that the relevant steel supplier industry for
purposes of an MOI determination is the steel rod industry in the
region in which Rudong manufactures lug nuts.
Petitioner states that the Department appropriately determined that
the PRC lug nut industry was not an MOI and properly applied factors of
production to determine Rudong's FMV. Petitioner contends that although
the Department has assigned Rudong a separate rate based on lack of
government control of its operations, this does not mean that the
entire PRC industry as a whole is market-oriented.
Petitioner maintains that, although Rudong asserts that it is the
only PRC producer of lug nuts, it has failed to provide objective
corroboration of this claim. Petitioner further maintains that the
Department's attempts to obtain further information on this point have
been frustrated by lack of response from both the PRC government and
the Chinese Chamber of Commerce for Imports & Exports of Machinery &
Electronics (China Chamber). Petitioner claims that, in spite of its
efforts, the Department has been unable to determine whether there are
additional PRC producers of lug nuts. Petitioner argues that it is
insufficient that Rudong alone has responded, and that the Department
must be certain that it has obtained responses from all PRC producers
before evaluating whether the PRC industry is market-oriented.
Petitioner states that, although Rudong claims its suppliers pay
market-determined prices for all inputs, Rudong has failed to produce
information that would allow evaluation of its claim despite having
been provided an extended opportunity to do so. Petitioner also states
that Rudong has provided conclusory, unsupported statements from
several of its suppliers claiming that they are free from government
control and that such statements are unverified.
Petitioner contends that Rudong's submission does not address the
overarching question of Chinese steel and chemical industries.
Petitioner argues that, regardless of the nominal ``independence'' of
Rudong's suppliers, the Department has properly recognized that the
industries supplying materials must be market-driven. Petitioner also
argues that Rudong has not provided any evidence that it pays market-
determined prices for steel or chemical inputs, that these two
industries that provide key inputs were free from state control, or
that the demand factors support a claim that the steel and chemical
industries in the PRC are demand-driven.
Department's Position: We disagree with Rudong. Rudong has not
demonstrated that the prices for steel and chemical inputs in the PRC
are market-determined. We further disagree that it is sufficient to
find a segment of a particular industry, such as the steel wire rod
manufacturers in a particular province, to be free of government
control, as price and quantity decisions made by the state for the PRC
steel industry could affect the local steel wire rod industry. Rudong
simply has not demonstrated that the central government did not direct
production or set prices in this case.
Rudong has focused narrowly on its suppliers, providing
certificates stating that its suppliers are free of government control;
however, even if its suppliers are free of government control, this
would not prove that there is no government control of the industry. We
concluded in the Amended Final that such a narrow focus on Rudong's
suppliers was not sufficient for determining that an industry was a
MOI. We stated:
The absence of explicit government involvement in these
transactions is not sufficient to warrant the conclusion that the
prices for these inputs are market-driven. Instead, it is necessary
to examine whether market forces are at work in determining the
steel and chemical prices in general within the PRC.
For example, it may be the case that the state purchases large
quantities of the input in question. Where this is so, it is
reasonable to assume that the state's purchases affect the quantity
available to non-state consumers and the prices they would pay.
Also, where the state owns many of the input producers and where the
input is an important commodity fundamental to the operation of the
larger economy, it is not at all clear that the pricing and
production of those input producers would mirror those of privately-
owned, profit maximizing enterprises.
For the [sic] reasons, it is necessary to look beyond direct
state involvement in the specific transactions between the
manufacturer under investigation and its suppliers to ascertain
whether market forces are actually at work in determining the input
prices.
Amended Final, 15053. For this administrative review, Rudong has
not demonstrated that there have been any changes to the industries
from which it sources its materials that would compel us to reconsider
the determination we made in the Amended Final.
Furthermore, Rudong has not put any information on the record to
support its claim that its suppliers do not pay state-set prices for
their input materials. In addition, Rudong has argued that there have
been only small quantities of government purchases in unrelated sectors
of the steel industry, but has not put any information on the record to
support this point.
We agree with petitioner's contention that the record lacks
objective corroboration of Rudong's claim that it is the only PRC
producer of lug nuts. We disagree with Rudong's deduction that the lack
of response from the PRC government is indicative of the lack of
government control in the industry. We
[[Page 58517]]
do not know why the government failed to respond to our request for
information. We note that we did not request information directly from
the China Chamber.
Based on the foregoing, we have not considered the lug nuts
industry to be an MOI for this review.
Comment 3: Rudong contends that the Department should select a more
accurate measure of surrogate steel prices. Rudong argues that the
Department should use the actual price for steel paid by Rudong under
an MOI analysis (see comment 2 above). Moreover, Rudong contends, for
the factors-of-production analysis conducted for preliminary results,
the Department used Indian import value statistics that overstated the
value of steel.
Rudong argues that the steel surrogate price information the
Department used in its preliminary results is less accurate and
authoritative than the prices published in Steel Scenario, an Indian
journal, and submitted by Rudong for this review. Rudong claims that
the Department should rely on prices in Steel Scenario for several
reasons. First, Rudong contends that the Indian steel import statistics
the Department used are for a different period than this review,
necessitating a rough and potentially distortive inflation adjustment
based on the wholesale price index, while the Steel Scenario
information is for each month of the POR. Second, Rudong asserts that
the import data are for a less precise basket category of iron and
steel, and, therefore, may include products that are not used in the
production of lug nuts, while the Steel Scenario information is for the
precise product--iron and steel rounds approximately 16 mm in diameter
and steel and iron wire rods approximately 8 mm in diameter--that
Rudong used to make lug nuts in the PRC.
Rudong observes that it might be argued that, because the Indian
import statistics specify relatively low-grade low-carbon steel, and
the Steel Scenario data do not, the Indian import statistics are more
precise; however, Rudong argues, this leads to the conclusion that the
Steel Scenario pricing data are too high, not too low. Third, Rudong
asserts that the import data are for imports of steel into India, not
prevailing market rates in India, whereas it used local, and not
imported, steel. The Steel Scenario data, Rudong contends, show the
prevailing market rates in India. Rudong further contends that use of
the publicly-available-published-information (PAPI) from Steel
Scenario, unlike use of the import statistics, is consistent with the
Department's established policy, as stated in Notice of Preliminary
Determination of Sales at Less than Fair Value and Postponement of
Final Determination: Furfuryl Alcohol From the People's Republic of
China, 59 FR 65009 (December 16, 1994) (Furfuryl Alcohol).
Rudong argues that the Indian import statistics do not agree with
any other available data by a wide margin. Rudong argues that this
could be because either the imported steel is a very special steel,
used for particular purposes, and is, therefore, far more expensive, or
the merchandise has simply been misclassified under the HTS.
Petitioner asserts that the Department should continue to determine
steel wire rod values based on Indian import statistics. Petitioner
argues that the tariff descriptions provide narrow coverage for nearly
all raw materials and packing and avoid problems of over-inclusiveness.
Petitioner claims that the Department properly declined to rely on
Rudong's surrogate data for the preliminary results and argues that the
Department should continue to do so. Petitioner argues that rounds are
not the raw material used in producing lug nuts, and cites to the
verification report and factors memorandum. Petitioner further notes
that the steel scrap data the Department used in the preliminary
results indicate that Rudong's production process begins with wire rod,
not the further-fabricated rounds.
Petitioner also asserts that prices Rudong submitted cover both
iron and steel products, and that Rudong used steel rod, not iron rod,
in manufacturing lug nuts; therefore, in petitioner's view, reliance on
Rudong data would produce a distorted value for steel.
Petitioner argues that Rudong's proffered prices cover sales in
only two Indian cities and there is no way to determine whether they
are determinative of prices in India generally. Petitioner argues that,
by contrast, import data provide a nationwide average from which the
Department can determine the value of steel rod.
Rudong contends that petitioner's factual assertions are wrong;
furthermore, even under petitioner's analysis, the Department should
use Rudong's submitted surrogate prices. Rudong states that its
suggested surrogate prices were for wire rod, and notes that, while it
also submitted rounds price data, it does not assert that the
Department should use these data. In addition, Rudong contends that,
although the category of product it reported in its submission was
``iron and steel,'' it seems obvious that the category ``wire rod''
consists of steel, and not iron.
Petitioner alleges that Rudong submitted new factual information in
its case brief and that the Department should strike such information
from the record.
Department's Position: We agree with Rudong and petitioner, in
part. In Furfuryl Alcohol, cited by Rudong, the Department stated:
In determining which surrogate value to use for each factor of
production that was not sourced from a market-economy country, we
selected, where possible, from publicly available published
information that is: (1) An average non-export value; (2)
representative of a range of prices within the period of
investigation if submitted by an interested party, or most
contemporaneous with the POI; (3) product-specific; and (4) tax-
exclusive.
Furfuryl Alcohol, 65011 (December 16, 1994). We agree with Rudong
that the information in Steel Scenario is more contemporaneous with the
POR than are the import statistics; however, the latter are more
product-specific and are tax exclusive. Furthermore, the data Rudong
submitted do not indicate the grade and specifications of the metal in
the rounds and wire rods.
We noted in Chrome-Plated Lug Nuts From the People's Republic of
China; Final Results of Antidumping Administrative Review, 60 FR 48687
(September 20, 1995), covering the 1991-1992 and 1992-1993
administrative reviews of the antidumping duty order, that the Indian
import statistics are more specific in that they indicate the carbon
content of the steel, whereas by contrast, Steel Scenario does not
specify either the carbon content of the steel or other chemicals
present in the steel. Carbon content is a more important determinant of
price than size. We further note that Steel Scenario prices include
taxes and levies, without indicating the amount of taxes and levies
included. Our objective is to value steel at prices at which it is
available in the surrogate country.
With respect to the petitioner's argument that Rudong submitted new
information in its case brief, we disagree. The information Rudong
submitted supported its argument, rather than presented new facts for
the record.
However, we agree with Rudong that the prices of the imported steel
wire rod are out of line with other data. We compared the same
``basket'' HTS number for the United States, the European Union,
Canada, and Indonesia and found that steel wire rod import prices to be
relatively the same in these
[[Page 58518]]
countries, and significantly lower than Indian steel wire rod import
prices. Indonesia is also comparable to the PRC in terms of level of
economic development and Indonesia has some lug nut production, albeit
not as great as India. (See Memorandum to Laurie Parkhill from David
Mueller, dated June 9, 1995, ``Chrome-Plated Lug Nuts from the People's
Republic of China: Non-market Economy Status and Surrogate Country
Selection,'' and Memorandum to the File from Donald Little, dated July
20, 1995, ``India: Significant Production of Comparable Merchandise,''
which are on file in the Central Records Unit (room B099 of the Main
Commerce Building).)
Therefore, for these final results we have used Indonesian steel
wire rod import prices. These import prices are also for a basket
category of steel wire rod imports, as are the Indian import prices,
but are consistent with steel wire rod prices in other countries. They
also do not include taxes. (See memorandum to the file from Elisabeth
Urfer, ``Comparison of Import Statistics in the 1993-1994
Administrative Review of Chrome-plated Lug Nuts from the PRC,'' dated
November 5, 1996.)
Comment 4: Rudong alleges that the Department made a number of
clerical errors in its preliminary results. Rudong states that, for a
series of observations for the factor amounts of chromium acid and
sulfuric acid nickel, the Department omitted one zero after the
decimal, and for the factor amounts of polisher the Department erred in
the quantity consumed. Rudong further argues that the Department erred
by not allowing for scrap and waste for certain group numbers.
Department's Position: We agree with Rudong, in part. We have
corrected clerical errors for chromium acid, polisher, and scrap and
waste; however, we disagree that we made a clerical error for sulfuric
acid nickel. We have reexamined the figures for sulfuric acid nickel in
the verification exhibits and in the calculation and have not found an
omitted zero after the decimal.
Therefore, we have continued to use the verified amount for
sulfuric acid nickel (see verification exhibit 19).
Comment 5: Rudong argues that the Department should remove an
amount for ``research and development'' from surrogate factory overhead
because, as a mature industry, Rudong incurs no research and
development expense. Rudong argues that, similarly, surrogate selling,
general and administrative expenses should not include royalties,
selling commissions or advertising, but notes that these amounts have
no impact on the results.
Department's Position: We disagree with Rudong. Factory overhead is
a combination of elements; while Rudong may not incur research and
development, there may be other factory overhead expenses it does incur
which are not included in the surrogate factory overhead. Because we do
not have detailed knowledge of the components of Rudong's factory
overhead, and thus cannot make an adjustment for all differences, it
would be inappropriate to make a partial adjustment for research and
development. The Department has rejected item-by-item evaluation of
overhead components in the past. (See Notice of Final Determinations of
Sales at Less Than Fair Value: Pure Magnesium and Alloy Magnesium From
the Russian Federation, 60 FR 16440 (March 30, 1995), and Final
Determination of Sales at Less Than Fair Value; Tapered Roller Bearings
and Parts Thereof, Finished or Unfinished, From the Hungarian People's
Republic, 52 FR 17428 (May 8, 1987).) Based on the foregoing, we have
not excluded research and development expense from factory overhead.
Comment 6: Rudong contends that there are calculation errors in the
use of import statistics for steel and adhesive tape factor values.
Rudong argues that the Department should exclude steel imports from
North Korea, and adhesive tape imports from the PRC, Croatia, and North
Korea.
Department's Position: We agree with Rudong that there was a
clerical error in our calculations with respect to adhesive tape. The
allegation of a clerical error with respect to steel is moot since we
are using Indonesian import statistics for the final results (see
comment 3 above). For these final results, we have excluded PRC and
North Korean imports of adhesive tape, and recalculated the value for
adhesive tape accordingly. We included import values for Croatia
because we consider Croatia to be a market-economy country. This is
because Croatia was part of Yugoslavia before its division into
independent states, and Yugoslavia was considered to be a market-
economy country.
Comment 7: Rudong asserts that the Department should use gross
rather than standard weights for steel. Rudong notes that at
verification the Department collected actual net, actual gross, and
standard weights of steel and chemicals consumed in the lug nut
production process. Rudong notes that the Department determined that
gross weights should have been used in the response, and substituted
gross weights for chemicals in the preliminary results, but apparently
inadvertently did not do this for steel. Rudong argues that, for the
sake of consistency, for the final results the Department should use
the gross figures for actual steel consumed, as shown in verification
exhibit 21.
Department's Position: We disagree with Rudong. For steel
consumption Rudong submitted what it labeled ``standard'' and ``gross''
weights. These were both standard amounts from schedules which Rudong
uses in its normal course of business. ``Standard'' weight represents
the weight of a piece of rod that will be cut into several smaller rods
before being finished into lug nuts. The ``gross'' weight is the weight
of the smaller pieces of rod cut from the larger rods. The ``standard''
steel weight is more appropriate for purposes of evaluating steel usage
because it includes amounts for the ends of the larger steel wire rods,
whereas ``gross'' weights do not. At verification, we tested these
amounts and found that they reflected Rudong's actual experience. (See
verification report at page 16.)
We disagree with Rudong that we made any substitutions to chemicals
beyond breaking ``other chemicals'' into the appropriate chemicals used
in the production of lug nuts. We used exhibit 19, a schedule of
chemical material consumption, to do so. We note that this exhibit did
not distinguish chemical consumption by gross and standard weights.
Additional Change for the Final Results
For these final results we have recalculated labor using data from
the Yearbook of Labor Statistics (YLS). As we stated in the 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, the IL&T
reports estimates based not on actual wage rates, but on rates
stipulated in various Indian laws. Therefore, we have not used IL&T
data for the final results. The YLS provides wage rates on an industry-
specific basis. We used the daily wage rate specified for SIC code 381,
``manufacture of fabricated metal products, except machinery and
equipment,'' because the description of the various industries this
category covers was the best match for the lug nut industry. Having
found the IL&T data to be an inappropriate source for wage rates, it
would be inappropriate to use the IL&T data to differentiate among
skill levels. Because the YLS provides wage rates from 1990, we
inflated the data for the review period, using the consumer price
index, published in the International Monetary Fund's International
Financial Statistics.
[[Page 58519]]
Final Results of Review
As a result of the comments received, we have changed the results
from those presented in our preliminary results of review. Therefore,
we determine that the following margins exist as a result of our
review:
----------------------------------------------------------------------------------------------------------------
Margin
Manufacturer/exporter Time period (percent)
----------------------------------------------------------------------------------------------------------------
Jiangsu Rudong Grease Gun Factory, also known as China Nantong HuangHai Auto
Parts Group Co., Ltd........................................................ 09/01/93-08/31/94 5.93
China National Machinery & Equipment Import & Export Corp., Nantong Branch... 09/01/93-08/31/94 \1\44.99
PRC Rate..................................................................... 09/01/93-08/31/94 44.99
----------------------------------------------------------------------------------------------------------------
\1\ No shipments subject to this review. Rate is from the last relevant segment of the proceeding in which the
firm had shipments.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries.
Individual differences between United States price and FMV may vary
from the percentages 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 for all shipments of lug nuts 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 Rudong and Nantong, which have separate rates, the
cash deposit rates will be the company-specific rates indicated above;
(2) for the companies named above which did not respond to our
questionnaire (China National, Jiangsu, Yangzhou, Ningbo, Shanghai
Automobile, and Tianjin) and for all other PRC exporters, the cash
deposit rate will be the PRC rate for the 1993-1994 period; (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: November 6, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-29242 Filed 11-14-96; 8:45 am]
BILLING CODE 3510-DS-P
