[Federal Register Volume 63, Number 49 (Friday, March 13, 1998)]
[Notices]
[Pages 12449-12451]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-6550]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-501]
Natural Bristle Paintbrushes and Brush Heads From the People's
Republic of China; Final Results of Antidumping Duty Administrative
Review
AGENCY: Import Administration, International Trade Administration, U.S.
Department of Commerce.
ACTION: Notice of final results of the antidumping duty administrative
review of natural bristle paintbrushes and brush heads from the
People's Republic of China.
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SUMMARY: On November 7, 1997, the Department of Commerce (the
Department) published the preliminary results of its administrative
review of the antidumping order on natural bristle paint brushes and
brush heads (paint brushes) from the People's Republic of China (PRC).
The review covers two exporters of the subject merchandise and the
period February 1, 1996 through January 31, 1997.
We gave interested parties an opportunity to comment on our
preliminary results. We received comments from Hunan Provincial Native
Produce and Animal By-Product Import and Export Corporation (Hunan). We
did not receive rebuttal comments. After considering these comments, we
have not changed the final results from those presented in the
preliminary results of review and have determined that sales have not
been made below normal value (NV), as explained below.
EFFECTIVE DATE: March 13, 1998.
FOR FURTHER INFORMATION CONTACT: Eric Scheier or Maureen Flannery,
Antidumping/Countervailing Duty Enforcement, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington D.C. 20230; telephone
(202) 482-4733.
[[Page 12450]]
Applicable Statute
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. In addition, unless otherwise indicated,
all citations to the Department's regulations are to the provisions
codified at 19 CFR part 353, as of April 1, 1996.
Background
On November 7, 1997, the Department published the preliminary
results of review (62 FR 60228). The Department has now completed this
administrative review in accordance with section 751 of the Act.
Scope of Review
Imports covered by this review are shipments of natural bristle
paint brushes and brush heads from the PRC. Excluded from the order are
paint brushes with a blend of 40 percent natural bristles and 60
percent synthetic filaments. The merchandise under review is currently
classifiable under item 9603.40.40.40 of the Harmonized Tariff Schedule
of the United States (HTSUS). Although the HTSUS subheading is provided
for convenience and Customs purposes, the written description of the
merchandise is dispositive.
This review covers the period February 1, 1996 through January 31,
1997.
Interested Party Comments
We gave interested parties an opportunity to comment on the
preliminary results of review. We received comments from Hunan. We did
not receive rebuttal comments from any party.
Comment 1
Hunan argues that the Department should correct the calculation of
the surrogate overhead rate to avoid double-counting certain overhead
expenses. While Hunan notes that all parties agree on the use of
Indonesia's Large and Medium Manufacturing Statistics: 1995, Volume II
as the source of information to be used in calculating a surrogate
factory overhead rate, Hunan disagrees with the Department's
methodology using these data to calculate the surrogate overhead rate.
Hunan states that it was inappropriate for the Department to add ``new
purchases,'' ``second-hand purchases,'' and ``constructions major
repairs and improvements'' to the expenses included for total factory
overhead. Hunan claims that ``new purchases,'' ``second-hand
purchases'' and ``constructions major repairs and improvements'' are
incorrectly classified as fixed overhead items, and maintains that
these items are properly classified as capital expenditures, which are
charged to asset accounts and are included only as a balance sheet
item.
Secondly, Hunan states that its own proposed methodology for
valuing factory overhead already includes fixed overhead expenses of
``repairs and industrial services received'' and ``rent of building,
machinery and equipment.'' Hunan alleges that the classification of
``repairs and industrial services received'' and ``rent of building,
machinery and equipment'' as variable overhead expenses is incorrect
because neither expense varies in proportion to the number of units
produced.
Furthermore, Hunan disagrees with the use of new and second-hand
purchases as a proxy for depreciation, which had not been accounted for
in Indonesia's Large and Medium Manufacturing Statistics: 1995, Volume
II. Hunan states that new and second-hand purchases and construction,
major repairs and improvements are capital expenses partially expensed
through depreciation, and are booked as assets on the balance sheet.
The value of fixed assets, Hunan states, is depreciated over time.
Hunan submits that, while the exclusion of depreciation from
overhead may artificially depress the surrogate overhead rate, it will
artificially inflate the surrogate profit rate calculated as the total
value for gross value added output less the amount for total
expenditures. Hunan states that, should the Department continue to use
the methodology it used in the preliminary results for the final
results, an adjustment must be made to the profit calculation to
compensate for the exclusion of depreciation from total expenditures.
Lastly, Hunan notes that the methodology proposed by Hunan for the
calculation of factory overhead, the SG&A rate, and the profit rate was
used previously by the Department in Notice of Final Determination of
Sales at Less than Fair Value: Collated Roofing Nails from the People's
Republic of China 62 FR 51410 (Oct. 1, 1997) (Roofing Nails). Hunan
further notes that in the initiation of the antidumping investigation
on Bicycles from the People's Republic of China 60 FR 21065 (May 1,
1995) (Bicycles), the Department accepted this same data source and
acknowledged that new purchases, second-hand purchases and
constructions, major repairs and improvements were capital expenditures
that should not be included in factory overhead.
Department's Position
While we agree with Hunan that new and second-hand purchases and
construction, major repairs and improvements are generally considered
capital assets rather than overhead items, the fact that, in the data
used, they are not recognized as assets and depreciated indicates that
they are being recognized in the year in which the expense was
incurred, and therefore are appropriately considered overhead expenses.
Therefore, we have continued to include these items as overhead
expenses. Hunan's assertion that certain items characterized as
variable overhead items in our preliminary results are actually fixed
overhead items is moot, because for these final results we have not
differentiated fixed and variable overhead.
We disagree with Hunan's assertion that the Department must make an
adjustment to the profit calculation to compensate for the exclusion of
depreciation from total expenditures. As noted above, depreciation was
not one of the expense items reported on the income statement, however,
the income statement did include a line items for capital assets
expensed. These capital assets were expensed during the period rather
than capitalized and depreciated. Therefore, it is not appropriate to
include an additional amount for depreciation in total expenditures.
Furthermore, while we note that the absence of depreciation from
factory overhead would cause the factory overhead percentage to be less
and profit to be greater than if depreciation existed on the income
statement in question, we disagree that we should arbitrarily assign an
amount of depreciation to be deducted from profit when depreciation is
not recognized on the income statement, nor identified elsewhere.
Finally, we disagree with Hunan that because we used or accepted a
certain methodology in Roofing Nails and Bicycles, we should continue
to do so in this review. We have reviewed the methodology used in
Roofing Nails and Bicycles, and have more closely examined the
components from which factory overhead was constructed for the current
preliminary results. As discussed above, we have determined that ``new
purchases,'' ``second-hand purchases'' and ``constructions major
repairs and improvements'' are overhead items in that they were
recognized in the year in which the expenses were incurred and, as
stated in
[[Page 12451]]
the preliminary results, represent part of the costs incurred to
produce the subject merchandise. Therefore, we have determined that the
methodology used for the preliminary results, which includes these
items in factory overhead, is the most appropriate for the surrogate
data in question. Based on the foregoing we have not changed the
calculations for these final results.
Final Results of Review
We determine that the following dumping margins exist:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Time period (percent)
------------------------------------------------------------------------
Hunan Provincial Native Produce & Animal
By-Products I/E Corp................... 2/1/96-1/31/97 0.01
PRC-Wide rate........................... 2/1/96-1/31/97 351.92
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The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between export price and NV may vary from the percentage
stated above for Hunan. The Department will issue appraisement
instructions on each exporter directly to the Customs Service.
Furthermore, the following deposit rates will be effective upon
publication of this notice of final results of review for all shipments
of paint brushes from the PRC entered, or withdrawn from warehouse, for
consumption on or after the publication date, as provided for by
section 751(a)(2)(c) of the Act: (1) for Hunan, which was found to
merit a separate rate for the final results of this review, the cash
deposit rate will be zero, because the company-specific rate
established in the final results of this administrative review is, in
accordance with 19 CFR 353.6, de minimis, i.e., less than 0.5 percent;
(2) for all other PRC exporters, the cash deposit rate will be the PRC-
wide rate, which is 351.92 percent; (3) for previously reviewed non-PRC
exporters, the cash deposit rate will be the rate established in the
most recent segment of the proceeding; and (4) for all other 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, when imposed, shall remain in effect until
publication of the final results of the next administrative review.
This notice 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 subsequent assessment
of double antidumping duties.
Notification to Interested Parties
This notice also serves as a reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 353.34(d). Timely written notification of
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 Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: March 9, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-6550 Filed 3-12-98; 8:45 am]
BILLING CODE 3510-DS-P
