E6-20631. Wooden Bedroom Furniture from the People's Republic of China: Final Results of the 2004-2005 Semi-Annual New Shipper Reviews

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (“the Department”) published its preliminary results of the 2004-2005 semi-annual new shipper reviews and the rescission of one new shipper of the antidumping duty order on wooden bedroom furniture (“WBF”) from the People's Republic of China (“PRC”) on July 6, 2006. See Wooden Bedroom Furniture from the People's Republic of China: Preliminary Results of 2004-2005 Semi-Annual New Shipper Reviews and Notice of Final Rescission of One New Shipper Review, 71 FR 38373 (July 6, 2006) (“Preliminary Results”). The period of review (“POR”) is June 24, 2004, through June 30, 2005. The Department invited interested parties to comment on our preliminary results. Based on its analysis of the comments received, the Department has made certain changes to our calculations. The final dumping margins for this review are listed in the “Final Results of Review” section below.

EFFECTIVE DATE:

December 6, 2006.

FOR FURTHER INFORMATION CONTACT:

Hilary E. Sadler, Esq. and Lilit Astvatsatrian, AD/CVD Operations, Office 8, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: [phone] and 482-6412, respectively.

SUPPLEMENTARY INFORMATION:

Background

On September 8, 2005, the Department published a notice of the initiation of new shipper reviews for the following companies: Meikangchi (Nantong) Furniture Company, Ltd. (“Meikangchi”), Shenyang Kunyu Wood Industry Co., Ltd. (“Kunyu”), WBE Industries (Hui-Yang) Co., Ltd. (“WBE”), and Dongguan Landmark Furniture Products Ltd., d/b/a Landmark Furniture Ltd. (“Landmark”). See Wooden Bedroom Furniture from the People's Republic of China; Initiation of New Shipper Reviews, 70 FR 53344 (September 8, 2005). The Department published its preliminary results of the 2004-2005 semi-annual new shipper reviews and its rescission of one new shipper review for the antidumping duty order on WBF from the PRC on July 6, 2006. See Preliminary Results. The Department invited parties to comment on its preliminary results. On August 7, 2006, the Department received case briefs from Petitioners^[1] and one respondent, Meikangchi. On August 14, 2006, the Department received rebuttal comments from Petitioners and Landmark. No other interested party provided comments. The Department has conducted these new shipper reviews in accordance with section 751 of the Tariff Act of 1930, as amended (“the Act”), and 19 CFR 351.214.

Period of Review

The POR is June 24, 2004 through June 30, 2005.

Scope of the Order

The product covered is wooden bedroom furniture. Wooden bedroom furniture is generally, but not exclusively, designed, manufactured, and offered for sale in coordinated groups, or bedrooms, in which all of the individual pieces are of approximately the same style and approximately the same material and/or finish. The subject merchandise is made substantially of wood products, including both solid wood and also engineered wood products made from wood particles, fibers, or other wooden materials such as plywood, oriented strand board, particle board, and fiberboard, with or without wood veneers, wood overlays, or laminates, with or without non-wood components or trim such as metal, marble, leather, glass, plastic, or other resins, and whether or not assembled, completed, or finished.

The subject merchandise includes the following items: (1) Wooden beds such as loft beds, bunk beds, and other beds; (2) wooden headboards for beds (whether stand-alone or attached to side rails), wooden footboards for beds, wooden side rails for beds, and wooden canopies for beds; (3) night tables, night stands, dressers, commodes, bureaus, mule chests, gentlemen's chests, bachelor's chests, lingerie chests, wardrobes, vanities, chessers, chifforobes, and wardrobe-type cabinets; (4) dressers with framed glass mirrors that are attached to, incorporated in, sit on, or hang over the dresser; (5) chests-on-chests^[2] , highboys^[3] , lowboys^[4] , chests of drawers^[5] , chests^[6] , door chests^[7] , chiffoniers^[8] , hutches^[9] , and armoires¹⁰; (6) desks, computer stands, filing cabinets, book cases, or writing tables that are attached to or incorporated in the subject merchandise; and (7) other bedroom furniture consistent with the above list.

The scope of the order excludes the following items: (1) Seats, chairs, benches, couches, sofas, sofa beds, stools, and other seating furniture; (2) mattresses, mattress supports (including box springs), infant cribs, water beds, and futon frames; (3) office furniture, such as desks, stand-up desks, computer cabinets, filing cabinets, credenzas, and bookcases; (4) dining room or kitchen furniture such as dining tables, chairs, servers, sideboards, buffets, corner cabinets, china cabinets, and china hutches; (5) other non-bedroom furniture, such as television cabinets, cocktail tables, end tables, occasional tables, wall systems, book cases, and entertainment systems; (6) bedroom furniture made primarily of wicker, cane, osier, bamboo or rattan; (7) side rails for beds made of metal if sold separately from the headboard and footboard; (8) bedroom furniture in which bentwood parts predominate^[11] ; (9) jewelry armories^[12] ; (10) cheval mirrors^[13] (11) certain metal parts;¹⁴ and (12) mirrors that do not attach to, incorporate in, sit on, or hang over a dresser if they are not designed and marketed to be sold in conjunction with a dresser as part of a dresser-mirror set.

Imports of subject merchandise are classified under subheading 9403.50.9040 of the Harmonized Tariff Schedule of the United States (“HTSUS”) as “wooden...beds” and under subheading 9403.50.9080 of the HTSUS as “other...wooden furniture of a kind used in the bedroom.” In addition, wooden headboards for beds, wooden footboards for beds, wooden side rails for beds, and wooden canopies for beds may also be entered under subheading 9403.50.9040 of the HTSUS as “parts of wood” and framed glass mirrors may also be entered under subheading 7009.92.5000 of the HTSUS as “glass mirrors...framed.” This order covers all wooden bedroom furniture meeting the above description, regardless of tariff classification. Although the HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of this proceeding is dispositive.

New Shipper Status

Consistent with its practice, the Department investigated whether the sales made by Kunyu, Landmark, and Meikangchi for these new shipper reviews were bona fide. See, e.g., Notice of Rescission of Antidumping Duty New Shipper Review: Honey from the People's Republic of China, 70 FR 59031 (October 11, 2005). For Kunyu, Landmark, and Meikangchi, the Department found no evidence that the sale(s) in question are not bona fide sale(s). In the examination of Kunyu, Landmark, and Meikangchi's sales, the Department found the sales prices to be within the range of POR sales prices and that these entities received timely payment for their POR sales. Based on the investigation into the bona fide nature of the sales, the questionnaire responses submitted by Kunyu, Landmark, and Meikangchi, and the Department's verification thereof, the Department determines that Kunyu, Landmark, and Meikangchi have met the requirements to qualify as new shippers during the POR. See Memorandum to Wendy J. Frankel, Office Director, Antidumping Duty New Shipper Reviews of the Antidumping Duty Order on Wooden Bedroom Furniture from the People's Republic of China: Bona Fide Analysis of Shenyang Kunyu Wood Industry Co., Ltd. (“Kunyu”), Dongguan Landmark Furniture Products Ltd. (“Landmark”), and Meikangchi (Nantong) Furniture Company Ltd. (“Meikangchi”), dated June 26, 2006. In addition, the Department has determined that based on the information submitted, Kunyu, Landmark, and Meikangchi each made their first sale and/or shipment of subject merchandise to the United States during the POR, none of these firms exported subject merchandise during the period of investigation, and none was affiliated with any exporter or producer that had previously shipped subject merchandise to the United States. Therefore, for purposes of these final results of review, the Department is treating their respective sales of WBF to the United States as appropriate transactions to be examined in the context of these new shipper reviews. See section 751 (a)(2)(B) of the Act and 19 CFR 351.214(a); see also “Separate Rates” section below.

Analysis of Comments Received

All issues raised in the post-preliminary comments by parties in these reviews are addressed in the memorandum from Stephen J. Claeys, Deputy Assistant Secretary for Import Administration, to David M. Spooner, Assistant Secretary for Import Administration, “Issues and Decision Memorandum for the Final Results of the New Shipper Reviews of the Antidumping Duty Order on Wooden Bedroom Furniture from the People's Republic of China,” dated November 21, 2006 (“Issues and Decision Memorandum”), which is hereby adopted by this notice. A list of the issues which parties raised and to which the Department responded in the Issues and Decision Memorandum is attached to this notice as an appendix. The Issues and Decision Memorandum is a public document that is on file in the Central Records Unit (“CRU”) in room B-099 in the main Department building and is accessible on the Web at http://ia.ita.doc.gov/​frn. The paper copy and electronic version of the memorandum are identical in content.

Changes Since the Preliminary Results

Based on its analysis of comments received, the Department has made changes in the margin calculations for Kunyu, Landmark, and Meikangchi.

• The Department is no longer using the Evergreen International Limited and Jayaraja Furniture Group financial statements in the calculation of the surrogate financial ratios. See Issues and Decision Memorandum at Comments 1 and 2.
• The Department included depreciation expense in the numerator of the factory overhead ratio and included interest expenses in the numerator of the selling, general, and administrative (“SG&A”) expense ratio in the calculation of Indian Furniture Products, Ltd. (“IFP”) 2004-2005 financial ratios. See Issues and Decision Memorandum at Comment 3.
• The Department excluded changes in finished goods inventory from the material portion of the cost of manufacturing and included the changes in “work in progress” in the material portion of the cost of manufacturing in the calculation of IFP's 2004-2005 numerator of factory overhead ratio. See Issues and Decision Memorandum at Comment 4.
• The Department moved IFP's 2004-2005 “Labour charges” from the labor portion of the cost of manufacturing to factory overhead in calculating of IFP's 2004-2005 numerator for the factory overhead ratio. See Issues and Decision Memorandum at Comment 6.
• The Department added the remaining portion of depreciation expense for Raghbir Interiors Pvt. Ltd.'s (“Raghbir”) “Furniture and Fixtures” and “Computers” to Raghbir's factory overhead. See Issues and Decision Memorandum at Comment 7.
• The Department did not offset the numerator of the SG&A ratio by the interest income for the surrogate companies where the Department could not confirm the short-term nature of interest income. See Issues and Decision Memorandum at Comment 9.
• The Department reversed the classification of “job work expenses” and “salaries” in Fusion Design Private, Ltd.'s financial statements by moving “job work expenses” into the labor portion of the cost of manufacturing and by moving “salaries” into SG&A expenses. See Issues and Decision Memorandum at Comment 10.
• The Department moved “Wages to staff” from factory overhead to the labor portion of cost of manufacturing in the calculation of D'nD Fine Furniture's financial ratios. See Issues and Decision Memorandum at Comment 12.
• The Department excluded packing materials from the calculation of IFP's 2004-2005 surrogate financial ratios. See Issues and Decision Memorandum at Comment 14.

Surrogate Country

In the preliminary results, the Department stated that it treats the PRC as a non-market economy (“NME”) country, and therefore, the Department calculated normal value in accordance with section 773(c) of the Act which applies to NME countries. Also, the Department stated that it had selected India as the appropriate surrogate country to use in this review for the following reasons: (1) It is at a similar level of economic development; and (2) it is a significant producer of comparable merchandise, pursuant to section 773(c)(4) of the Act. See Preliminary Results. For the final results, the Department made no changes to its findings with respect to the selection of a surrogate country.

Separate Rates

In proceedings involving NME countries, the Department begins with a rebuttable presumption that all companies within the country are subject to government control and thus should be assigned a single antidumping duty deposit rate. It is the Department's policy to assign all exporters of merchandise subject to review in an NME country this single rate unless an exporter can demonstrate that it is free of de jure and de facto control over its export decisions, so as to be entitled to a separate rate.

In the preliminary results, the Department found that Kunyu, Landmark, and Meikangchi demonstrated their eligibility for separate-rate status. For the final results, the Department continues to find that the evidence placed on the record of these new shipper reviews by Kunyu, Landmark, and Meikangchi demonstrates an absence of government control, both in law and in fact, with respect to their exports of the merchandise under review and thus determine Kunyu, Landmark, and Meikangchi are eligible for separate-rate status.

Weighted-Average Dumping Margins

The weighted-average dumping margins are as follows:

Wooden Bedroom Furniture from the PRC

Producer/Manufacturer/Exporter	Weighted-Average Margin (Percent)
Kunyu	216.01
Landmark	0.00
Meikangchi	1.17

Assessment Rates

The Department intends to issue assessment instructions to U.S. Customs and Border Protection (“CBP”) 15 days after the date of publication of these final results of review. In accordance with 19 CFR 351.212(b)(1), the Department has calculated importer-specific assessment rates for merchandise subject to this review. For Kunyu, Landmark, and Meikangchi, the Department divided the total dumping margins of each company's reviewed sales by the total entered value of its reviewed sales for each applicable importer to calculate ad valorem assessment rates. The Department will direct CBP to assess the resulting assessment rates against the entered customs values for the subject merchandise on Kunyu, Landmark, and Meikangchi's entries under the relevant order during the POR.

To determine whether the duty assessment rates were de minimis, in accordance with the requirement set forth in 19 CFR 351.106(c)(2), the Department calculated importer-specific ad valorem rates. For Kunyu, Landmark, and Meikangchi, the Department aggregated the dumping margins calculated for all U.S. sales to each importer and divided this amount by the entered value of the sales to each importer. For further details see Final Analysis Memorandum. Where an importer-specific ad valorem rate is de minimis, the Department will order CBP to liquidate appropriate entries without regard to antidumping duties.

Cash-Deposit Requirements

The following deposit requirements will be effective upon publication of this notice of final results of new shipper reviews for all shipments of wooden bedroom furniture from the PRC entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(2)(c) of the Act: (1) Because the cash deposit rate for Landmark is zero, no cash deposit shall be required. However, for Kunyu and Meikangchi, the cash deposit rates will be the rates shown above; (2) for previously reviewed or investigated companies not listed above that have a separate rate, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) the cash deposit rate for all other PRC exporters will be 198.08 percent, the current PRC-wide rate; and (4) the cash deposit rate for all non-PRC exporters will be the rate applicable to the PRC exporter that supplied that exporter. These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.

Notification to Importers

This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) 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 the 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 return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. 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 terms of an APO is a violation which is subject to sanction.

The Department is issuing and publishing this determination and notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: November 21, 2006.

David M. Spooner,

Assistant Secretary for Import Administration.

APPENDIX

List of Comments and Issues in the Decision Memorandum

Comment 1: Use of Financial Statements of Evergreen International Limited for Calculation of the Surrogate Financial Ratios

Comment 2: Use of Financial Statements of Jayaraja Furniture Group for Calculation of the Surrogate Financial Ratios

Comment 3: Exclusion of Certain Expenses from the Calculation of the Cost of Manufacturing and Selling, General, and Administrative Expenses

Comment 4: Exclusion of Finished Goods Inventory from the Cost of Manufacturing

Comment 5: Treatment of the Sale of Scrap Offset in the Surrogate Financial Statements

Comment 6: Reclassification of Certain Labor Charges as Selling, General, and Administrative Expenses

Comment 7: Omission of Depreciation Expenses from the Surrogate Financial Ratios

Comment 8: Reclassification of “Diesel & Petrol” Expense as Selling, General, and Administrative Expense

Comment 9: Inclusion of Interest Income in the Calculation of Cost of Manufacturing

Comment 10: Treatment of “Job Work Expenses” in the Calculation of Surrogate Financial Ratios

Comment 11: Treatment of “Sawing Charges Expenses” in the Calculation of Surrogate Financial Ratios

Comment 12: Treatment of “Wages to Staff” in the Calculation of Surrogate Financial Ratios

Comment 13: Treatment of Certain Labor Costs in the Calculation of Surrogate Financial Ratios

Comment 14: Inclusion of Packing Materials in Selling, General, and Administrative Expense Using a Surrogate Company's Financial Statements

Footnotes

1.  The Petitioners are American Furniture Manufacturers Committee for Legal Trade and its individual members and the Cabinet Makers, Millmen, and Industrial Carpenters Local 721; UBC Southern Council of Industrial Workers Local Union 2305; United Steel Workers of America Local 193U; Carpenters Industrial Union Local 2093; and Teamsters, Chauffeurs, Warehousemen and Helpers Local 991.

2.  A chest-on-chest is typically a tall chest-of-drawers in two or more sections (or appearing to be in two or more sections), with one or two sections mounted (or appearing to be mounted) on a slightly larger chest; also known as a tallboy.

3.  A highboy is typically a tall chest of drawers usually composed of a base and a top section with drawers, and supported on four legs or a small chest (often 15 inches or more in height).

4.  A lowboy is typically a short chest of drawers, not more than four feet high, normally set on short legs.

5.  A chest of drawers is typically a case containing drawers for storing clothing.

6.  A chest is typically a case piece taller than it is wide featuring a series of drawers and with or without one or more doors for storing clothing. The piece can either include drawers or be designed as a large box incorporating a lid.

7.  A door chest is typically a chest with hinged doors to store clothing, whether or not containing drawers. The piece may also include shelves for televisions and other entertainment electronics.

8.  A chiffonier is typically a tall and narrow chest of drawers normally used for storing undergarments and lingerie, often with mirror(s) attached.

9.  A hutch is typically an open case of furniture with shelves that typically sits on another piece of furniture and provides storage for clothes.

10.  An armoire is typically a tall cabinet or wardrobe (typically 50 inches or taller), with doors, and with one or more drawers (either exterior below or above the doors or interior behind the doors), shelves, and/or garment rods or other apparatus for storing clothes. Bedroom armoires may also be used to hold television receivers and/or other audio-visual entertainment systems.

11.  As used herein, bentwood means solid wood made pliable. Bentwood is wood that is brought to a curved shape by bending it while made pliable with moist heat or other agency and then set by cooling or drying. See Customs' Headquarters' Ruling Letter 043859 dated May 17, 1976.

12.  Any armoire, cabinet or other accent item for the purpose of storing jewelry, not to exceed 24'' in width, 18'' in depth, and 49'' in height, including a minimum of 5 lined drawers lined with felt or felt-like material, at least one side door (whether or not the door is lined with felt or felt-like material), with necklace hangers, and a flip-top lid with inset mirror. See Memorandum from Laurel LaCivita to Laurie Parkhill, Office Director, Issues and Decision Memorandum Concerning Jewelry Armoires and Cheval Mirrors in the Antidumping Duty Investigation of Wooden Bedroom Furniture from the People's Republic of China dated August 31, 2004. See Wooden Bedroom Furniture from the People's Republic of China: Notice of Final Results of Changed Circumstances Review and Revocation in Part, (71 FR 38621).

13.  Cheval mirrors, i.e., any framed, tiltable mirror with a height in excess of 50'' that is mounted on a floor-standing, hinged base.

14.  Metal furniture parts and unfinished furniture parts made of wood products (as defined above) that are not otherwise specifically named in this scope (i.e., wooden headboards for beds, wooden footboards for beds, wooden side rails for beds, and wooden canopies for beds) and that do not possess the essential character of wooden bedroom furniture in an unassembled, incomplete, or unfinished form. Such parts are usually classified under HTSUS subheading 9403.90.7000.