E7-8121. Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (“the Department”) is conducting the third administrative review of the antidumping duty order on non-malleable cast iron pipe fittings (“NMP fittings”) from the People's Republic of China (“PRC”) covering the period April 1, 2005, through March 31, 2006. We preliminarily determine to apply adverse facts available (“AFA”) with respect to Myland Industrial Co., Ltd. (“Myland”), and Buxin Myland (Foundry) Ltd. (“Buxin”), which failed to cooperate to the best of their ability and failed to demonstrate their eligibility for a separate rate.

If these preliminary results are adopted in our final results of this review, we will instruct U.S. Customs and Border Protection (“CBP”) to assess antidumping duties on all appropriate entries of subject merchandise during the period of review (“POR”). Interested parties are invited to comment on these preliminary results. We will issue the final results no later than 120 days from the date of publication of this notice.

EFFECTIVE DATE:

April 27, 2007.

FOR FURTHER INFORMATION CONTACT:

Karine Gziryan and Mark Manning, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: [phone] and [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

On April 7, 2003, the Department published in the Federal Register the antidumping duty order on NMP fittings from the PRC. See Notice of Antidumping Duty Order: Non-Malleable Cast Iron Pipe Filings (Sic.)From the People's Republic of China, 68 FR 16765 (April 7, 2003). On April 3, 2006, the Department published a notice of opportunity to request an administrative review of the antidumping duty order on NMP fittings from the PRC for the period April 1, 2005, through March 31, 2006. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 71 FR 16549 (April 3, 2006). On April 20, 2006, Myland and Buxin requested an administrative review of their sales of NMP fittings to the United States during the POR. No other party requested a review of shipments made by Myland or Buxin. On April 28, 2006, Ward Manufacturing, Inc. (“Ward”), a domestic producer of NMP fittings, requested an administrative review of the sales to the United States during the POR of subject merchandise produced and/or exported by Jinan Meide Corporation (“JMC”) and Shanghai Foreign Trade Enterprises Co., Ltd. (“SFTEC”). On May 31, 2006, the Department published in the Federal Register a notice of the initiation of the antidumping duty administrative review of NMP fittings from the PRC for the period April 1, 2005, through March 31, 2006. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 71 FR 30864 (May 31, 2006) (“Initiation Notice”).

On July 25, 2006, Ward timely withdrew its request for an administrative review of NMP fittings from the PRC regarding subject merchandise produced and/or exported by JMC and SFTEC. No other interested party requested a review of JMC and SFTEC. Therefore, the Department rescinded this review with respect to JMC and SFTEC, in accordance with 19 CFR 351.213(d)(1). See Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China: Notice of Partial Rescission of Antidumping Duty Administrative Review, 71 FR 55430 (September 22, 2006).

On July 24, 2006, the Department issued its antidumping questionnaire to Myland and Buxin. Myland and Buxin submitted a Section A questionnaire response on August 11, 2006, and Sections C and D responses on September 12, 2006. On December 7, 2006, the Department published a notice in the Federal Register extending the time limit for the preliminary results of review until April 30, 2007. See Non-Malleable Cast Iron Pipe Fittings from the Peoples'(Sic.) Republic of China; Notice of Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review, 71 FR 70957 (December 7, 2006). From November 2006 to February 2007, the Department issued, and Myland and Buxin responded to, six supplemental questionnaires.

The verification of the respondents' responses was scheduled from March 12 through March 17, 2007. On February 23, 2007, the Department released the verification agenda to Myland and Buxin. From March 12 through March 13, 2007, the Department conducted verification of Myland in Hong Kong. On March 14, 2007, the verification team arrived in Guangzhou, China, to continue verification at Buxin. On that day, Myland and Buxin refused to allow the verification team access to Buxin's factory, refused to provide the information requested in the verification agenda, informed the verification team that they were unable to continue participating in the verification, and withdrew from the verification. See Memorandum from Karina Gziryan and Melissa Blackledge, to the File, “Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China - Administrative Review,” dated March 27, 2007. Myland and Buxin destroyed the verification exhibits taken in Hong Kong, and did not serve those exhibits on the petitioner or the Department. Id. On March 21, 2007, Myland and Buxin filed a letter in which they withdrew their request to conduct the administrative review and consented to the assessment of antidumping duties at the PRC-wide rate.

Period of Review

The POR is April 1, 2005, through March 31, 2006.

Scope of Order

The products subject to this administrative review are finished and unfinished non-malleable cast iron pipe fittings with an inside diameter ranging from 1/4 inch to 6 inches, whether threaded or un-threaded, regardless of industry or proprietary specifications. The subject fittings include elbows, ells, tees, crosses, and reducers as well as flanged fittings. These pipe fittings are also known as “cast iron pipe fittings” or “gray iron pipe fittings.” These cast iron pipe fittings are normally produced to ASTM A-126 and ASME B.l6.4 specifications and are threaded to ASME B1.20.1 specifications. Most building codes require that these products are Underwriters Laboratories (“UL”) certified. The scope does not include cast iron soil pipe fittings or grooved fittings or grooved couplings.

Fittings that are made out of ductile iron that have the same physical characteristics as the gray or cast iron fittings subject to the scope above or which have the same physical characteristics and are produced to ASME B.16.3, ASME B.16.4, or ASTM A-395 specifications, threaded to ASME B1.20.1 specifications and UL certified, regardless of metallurgical differences between gray and ductile iron, are also included in the scope of the order. These ductile fittings do not include grooved fittings or grooved couplings. Ductile cast iron fittings with mechanical joint ends (“MJ”), or push on ends (“PO”), or flanged ends and produced to the American Water Works Association (“AWWA”) specifications AWWA C110 or AWWA C153 are not included.

Imports of subject merchandise are currently classifiable in the Harmonized Tariff Schedule of the United States (“HTSUS”) under item numbers 7307.11.00.30, 7307.11.00.60, 7307.19.30.60 and 7307.19.30.85. HTSUS subheadings are provided for convenience and customs purposes. The written description of the scope of this proceeding is dispositive.

Nonmarket Economy Country Status

In every case conducted by the Department involving the PRC, the PRC has been treated as a nonmarket economy (“NME”) country. In accordance with section 771(18)(C)(i) of the the Tariff Act of 1930, as amended (“the Act”), any determination that a foreign country is an NME country shall remain in effect until revoked by the administering authority. See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China: Preliminary Results of 2001-2002 Administrative Review and Partial Rescission of Review, 68 FR 7500 (February 14, 2003) (unchanged in final results of review). None of the parties to this proceeding has contested such treatment. Therefore, we have treated the PRC as an NME country for purposes of these preliminary results.

Request for Withdrawal of Administrative Review

As noted above, Myland and Buxin submitted a letter to the Department withdrawing their request for an administrative review on March 21, 2007. Pursuant to 19 CFR 351.213(d)(1), “the Secretary will rescind an administrative review under this section, in whole or in part, if a party that requested a review withdraws the request within 90 days of the date of publication of notice of initiation of the requested review. The Secretary may extend this time limit if the Secretary decides that it is reasonable to do so.” The 90-day deadline for withdrawing from this administrative review expired on August 29, 2006. Therefore, Myland's and Buxin's request to withdraw from the administrative review was submitted after the deadline established by the Department.

The Department reviewed and analyzed Myland's and Buxin's response to the Department's original questionnaire. As a result of the respondents' deficient and/or incomplete questionnaire responses, the Department sent six supplemental questionnaires in an attempt to gather necessary information from the respondents. Because of the need to issue an extensive number of supplemental questionnaires, the Department extended the deadline for the preliminary results. In March 2007, the Department attempted to verify Myland's and Buxin's responses in their offices in Hong Kong and China. See Background section of this notice, above. The Department expended considerable effort and resources in its analysis of Myland and Buxin prior to their late withdrawal request during an advanced stage of the review. Therefore, the Department is not granting the respondents' request to withdraw their request for review. This is consistent with past Department practice. See Antifriction Bearings and Parts Thereof from France, Germany, Italy, Japan, Singapore, and the United Kingdom: Preliminary Results Of Antidumping Duty Administrative Reviews, Partial Rescission Of Administrative Reviews, Notice Of Intent to Rescind Administrative Reviews, And Notice Of Intent To Revoke Order In Part, 69 FR 5949, 5951 (February 9, 2004) (“Although we have accepted untimely withdrawals of requests for review elsewhere, the circumstances surrounding the review of INA are different from other situations . . . {because} we had expended effort and resources in our analysis of INA prior to the untimely withdrawal such that we were quite advanced in the review”) (unchanged in final results of review). See also, Petroleum Wax Candles From the People's Republic of China: Preliminary Results of the 2004-2005 Administrative Review, 71 FR 35613 (June 21, 2006) (unchanged in final results of review).

Facts Available

Sections 776(a)(1) and (2) of the Act provide that the Department shall apply “facts otherwise available” if necessary information is not on the record or an interested party or any other person (A) withholds information that has been requested, (B) fails to provide information within the deadlines established, or in the form and manner requested by the Department, subject to subsections (c)(1) and (e) of section 782 of the Act, (C) significantly impedes a proceeding, or (D) provides information that cannot be verified as provided by section 782(i) of the Act.

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 and subject to section 782(e) of the Act, the Department may disregard all or part of the original and subsequent responses, as appropriate. Section 782(e) of the Act 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 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, the statute requires the Department to use the information if it can do so without undue difficulties.

On March 14, 2007, Myland and Buxin refused to provide information requested in the verification agenda, and withdrew from verification. Moreover, Myland and Buxin destroyed the verification exhibits and did not serve these on the petitioner or the Department. Verification is integral to the Department's analysis because it allows the Department to satisfy itself that the information upon which the Department relies in calculating a margin is accurate and, therefore, enables the Department to comply with its mandate to calculate the dumping margin as accurately as possible. By refusing the Department's request for information in the verification agenda, failing to allow the Department to verify the reported data, and not serving the petitioner or Department with the verification exhibits taken in Hong Kong, Myland and Buxin withheld critical information to be used for the Department's separate rate analysis and margin calculation, significantly impeded the review, and provided information that cannot be verified, as provided by section 782(i) of the Act. Therefore, pursuant to sections 776(a)(2)(A), (C), and (D) of the Act, the Department must apply facts available to Myland and Buxin.

By failing to respond to the Department's request for information contained in the verification agenda and by not allowing the Department to conduct verification, Myland and Buxin have not proven they are free of government control and are, therefore, not eligible to receive a separate rate. For this reason, the Department has denied Myland's and Buxin's requests for separate rates. In the Initiation Notice, the Department stated that if one of the companies on which we initiated a review does not qualify for a separate rate, all other exporters of NMP fittings from the PRC who have not qualified for a separate rate are deemed to be covered by this review as part of the single PRC-wide entity of which the named exporter is a part. See Initiation Notice at footnote 2. For these preliminary results, Myland and Buxin will be part of the PRC-wide entity, subject to the PRC-wide rate. As a result, the Department determines that it is necessary to review the single PRC-wide entity, including Myland and Buxin, in this segment of the proceeding.

The PRC-wide entity, including Myland and Buxin, withheld information requested in the verification agenda, significantly impeded the review, and did not provide verifiable information to the Department. Pursuant to sections 776(a)(2)(A), (C), and (D) of the Act, the Department must resort to the facts otherwise available with respect to the PRC-wide entity.

Adverse Inferences

Section 776(b) of the Act further provides that the Department may use an adverse inference in applying the facts otherwise available when a party has failed to cooperate by not acting to the best of its ability to comply with a request for information. Adverse inferences are appropriate “to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.” See Statement of Administrative Action (“SAA”) accompanying the Uruguay Round Agreements Act (“URAA”), H.R. Rep. No. 103-316, Vol. 1 (1994) at 870. Section 776(b) of the Act also authorizes the Department to use as adverse facts available (“AFA”), information derived from the petition, the final determination, a previous administrative review, or other information placed on the record.

As explained above, the PRC-wide entity, including Myland and Buxin, refused to provide the Department with verification information and would not permit the Department to verify information placed on the record. Therefore, the PRC-wide entity did not cooperate to the best of its ability. Because the PRC-wide entity did not cooperate to the best of its ability in the proceeding, the Department finds it necessary, pursuant to section 776(b) of the Act, to use an adverse inference in applying facts available as the basis for these preliminary results of review for the PRC-wide entity.

In this segment of the proceeding, in accordance with Department practice (see, e.g., Brake Rotors From the People's Republic of China: Rescission of Second New Shipper Review and Final Results and Partial Rescission of First Antidumping Duty Administrative Review, 64 FR 61581, 61584 (November 12, 1999)), as AFA, we have assigned to exports of the subject merchandise by the PRC-wide entity (including Myland and Buxin) a rate of 75.50 percent, which is the rate established for the PRC-wide entity in the less than fair value investigation. See Notice of Final Determination of Sales at Less Than Fair Value: Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China, 68 FR 7765 (February 18, 2003) (“Final Determination”). The respondents, Myland and Buxin, consented to the assessment of antidumping duties for the period of April 1, 2005 to March 31, 2006, at the PRC-wide rate. See Letter from Myland and Buxin to the Department, “Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China - Administrative Review,” dated March 21, 2007.

Corroboration

Section 776(c) of the Act provides that, when the Department relies on secondary information rather than on information obtained in the course of an investigation or review, it shall, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. Secondary information is defined as information derived from the petition that gave rise to the investigation or review, the final determination concerning the subject merchandise, or any previous review under section 751 concerning the subject merchandise. See SAA accompanying the URAA at 870. Corroborate means that the Department will satisfy itself that the secondary information to be used has probative value. See SAA at 870. To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information to be used. The Department, however, need not prove that the selected facts available are the best alternative information. See SAA at 869.

To satisfy itself that the secondary information has probative value the Department will, to the extent practicable, examine the reliability and relevance of the information used. See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished From Japan, and Tapered Roller Bearings Four Inches or Less in Outside Diameter, and Components Thereof, From Japan; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews, 61 FR 57391, 57392 (November 6, 1996) (unchanged in final results of review). Independent sources used to corroborate such evidence may include, for example, published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation. See Notice of Preliminary Determination of Sales at Less Than Fair Value: High and Ultra-High Voltage Ceramic Station Post Insulators from Japan, 68 FR 35627 (June 16, 2003) (unchanged in final determination); Notice of Final Determination of Sales at Less Than Fair Value: Live Swine From Canada, 70 FR 12181 (March 11, 2005).

The reliability of the AFA rate was determined in the final determination of the investigation. See Final Determination. The Department has received no information to date that warrants revisiting the issue of the reliability of the rate calculation itself. See, e.g., Certain Preserved Mushrooms From the People's Republic of China: Final Results and Partial Rescission of the New Shipper Review and Final Results and Partial Rescission of the Third Antidumping Duty Administrative Review, 68 FR 41304, 41307-41308 (July 11, 2003). No information has been presented in the current review that calls into question the reliability of this information. Thus, the Department finds that the information contained in the investigation is reliable.

With respect to the relevance aspect of corroboration, the Department will consider information reasonably at its disposal to determine whether a margin continues to have relevance. Where circumstances indicate that the selected margin is not appropriate as AFA, the Department will disregard the margin and determine an appropriate margin. For example, in Fresh Cut Flowers From Mexico: Final Results of Antidumping Administrative Review, 61 FR 6812 (February 22, 1996), the Department disregarded the highest margin in that case as adverse best information available (the predecessor to facts available) because the margin was based on another company's uncharacteristic business expense resulting in an unusually high margin. Similarly, the Department does not apply a margin that has been discredited. See D&L Supply Co. v. United States, 113 F.3d 1220, 1221 (Fed. Cir. 1997) (ruling that the Department will not use a margin that has been judicially invalidated). Nothing on the record of this review calls into question the relevance of the margin selected as AFA. Further, the selected margin is currently the PRC-wide rate. Moreover, this rate has not been invalidated judicially. Thus, it is appropriate to use the selected rate as AFA in the instant review. Therefore, we determine that the rate from the Final Determination continues to be relevant for use in this administrative review.

As the recalculated Final Determination rate is both reliable and relevant, we determine that it has probative value. As a result, the Department determines that the Final Determination rate of 75.50 percent, which is the highest rate from any segment of this administrative proceeding, has probative value and, thus, meets the corroboration requirement of section 776(c) of the Act. As noted above, Myland and Buxin consented to the assessment of antidumping duties for the period of April 1, 2005 to March 31, 2006, at the PRC-wide rate.

Weighted-Average Dumping Margin

As a result of our review, we preliminarily determine that the following margin exists for the period April 1, 2005, through March 31, 2006:

Manufacturer/Exporter	Period	Margin (percent)
PRC-Wide Entity(including Myland Industrial Co., Ltd., and Buxin Myland (Foundry) Ltd.)	4/1/2005 - 3/31/2006	75.50

Disclosure

The Department will disclose all documents relied upon in these preliminary results to the parties within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). Any interested party may request a hearing within 30 days of publication of these preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, will be held two days after the scheduled date for submission of rebuttal briefs. See 19 CFR 351.310(d). Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of these preliminary results of review. See 19 CFR 351.309(c)(ii). Rebuttal briefs and rebuttals to written comments, limited to issues raised in such briefs or comments, may be filed no later than 35 days after the date of publication. See 19 CFR 351.309(d). Further, parties submitting written comments should provide the Department with an additional copy of those comments on diskette. The Department will issue the final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, within 120 days of publication of these preliminary results, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

Upon issuance of the final results, the Department will determine, and CBP shall assess, antidumping duties on all appropriate entries. The Department intends to issue appropriate assessment instructions directly to CBP 15 days after the date of publication of the final results of this administrative review. If these preliminary results are adopted in our final results of review, we will direct CBP to assess the resulting rate against the entered customs value for the subject merchandise on each importer's/customer's entries during the POR.

Cash-Deposit Requirements

The following cash-deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise 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) the cash deposit rate for Myland and Buxin will be the rate listed in the final results of review; (2) for previously investigated companies not listed above, 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 75.50 percent; 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 cash deposit requirements, when imposed, shall remain in effect until further notice.

Notification to Importers

This notice also serves as a preliminary 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 antidumping duties occurred and the subsequent assessment of double antidumping duties.

We are issuing and publishing these preliminary results of review in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b).

Dated: April 23, 2007.

David M. Spooner,

Assistant Secretary for Import Administration.