E7-14668. Wooden Bedroom Furniture from the People's Republic of China: Preliminary Results of Antidumping Duty Changed Circumstances Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to a joint request from Tradewinds Furniture Ltd. (“Tradewinds Furniture”) and Tradewinds International Enterprise Ltd. (“Tradewinds Intl.”), the Department of Commerce (“Department”) initiated a changed circumstances review of the antidumping duty order on wooden bedroom furniture (“WBF”) from the People's Republic of China (“PRC”). We preliminarily find that Tradewinds Furniture is the successor-in-interest to Nanhai Jiantai Woodwork Co. (“Nanhai Jiantai”), but that Tradewinds Intl. is not the successor-in-interest to Nanhai Jiantai's affiliated exporter, Fortune Glory Industrial Limited (“Fortune Glory”).

EFFECTIVE DATE:

July 30, 2007.

FOR FURTHER INFORMATION CONTACT:

Juanita H. Chen or Robert A. Bolling, AD/CVD Operations, Office 8, Import Administration, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue, NW, Washington, DC 20230; telephone: [phone] or 202-482-3434, respectively.

SUPPLEMENTARY INFORMATION:

Background

On January 4, 2005, the Department published in the Federal Register the antidumping duty order on WBF from the PRC. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Wooden Bedroom Furniture From the People's Republic of China, 70 FR 329 (January 4, 2005). As part of the antidumping duty order on WBF from the PRC, Nanhai Jiantai and Fortune Glory received a separate rate of 6.65 percent. See 70 FR at 331. On November 20, 2006, the Department published in the Federal Register an amended final determination and antidumping duty order on WBF from the PRC, as a result of litigation and a decision by the United States Court of International Trade (“CIT”). See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order/Pursuant to Court Decision: Wooden Bedroom Furniture From the People's Republic of China, 71 FR 67099 (November 20, 2006). As a result of the CIT's decision, Nanhai Jiantai and Fortune Glory received an amended separate rate of 7.24 percent. See 71 FR at 67101.

On November 22, 2006, Tradewinds Furniture and Tradewinds Intl. filed a joint submission requesting that the Department conduct a changed circumstances review of the antidumping duty order on WBF from the PRC to confirm that Tradewinds Furniture and Tradewinds Intl. are the successors-in-interest to Nanhai Jiantai and Fortune Glory, respectively (“Joint Request”). On November 30, 2006, Tradewinds Furniture and Tradewinds Intl. submitted a public version of a sales chart provided in their November 22, 2006, request.

On January 18, 2007, the Department published its notice of initiation of a changed circumstances review to determine whether Tradewinds Furniture and Tradewinds Intl. are successors-in-interest to Nanhai Jiantai and Fortune Glory, respectively. See Wooden Bedroom Furniture from the People's Republic of China: Initiation of Antidumping Duty Changed Circumstances Review, 72 FR 2262 (January 18, 2007). As part of the notice of initiation, the Department invited interested parties to submit comments on the request for a changed circumstances review within 15 days of publication of the notice. See 72 FR at 2264. No interested parties provided comments.

On March 30, 2007, the Department issued a questionnaire to Tradewinds Furniture and Tradewinds Intl. regarding their successor-in-interest changed circumstances review request. On April 20, 2007, Tradewinds Furniture and Tradewinds Intl. submitted their response to the Department's questionnaire (“Questionnaire Response”). On June 5, 2007, the Department issued a supplemental questionnaire to Tradewinds Furniture and Tradewinds Intl. On June 12, 2007, Tradewinds Furniture and Tradewinds Intl. submitted their response to the supplemental questionnaire (“Supplemental Response”).

Scope of Order

The product covered by the order 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^[1] , highboys^[2] , lowboys^[3] , chests of drawers^[4] , chests^[5] , door chests^[6] , chiffoniers^[7] , hutches^[8] , and armoires^[9] ; (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^[10] ; (9) jewelry armories^[11] ; (10) cheval mirrors^[12]  ; (11) certain metal parts^[13]  ; (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; and (13) upholstered beds¹⁴.

Imports of subject merchandise are classified under subheading 9403.50.9040 of the 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.

Preliminary Results of Review

In a changed circumstances review involving a successor-in-interest determination, the Department typically examines several factors including, but not limited to, changes in: (1) management; (2) production facilities; (3) supplier relationships; and (4) customer base. See Certain Cut-to-Length Carbon Steel Plate from Romania: Initiation and Preliminary Results of Changed Circumstances Antidumping Duty Administrative Review, 70 FR 22847 (May 3, 2005). While no single factor or combination of factors will necessarily be dispositive, the Department generally will consider the new company to be the successor to the predecessor if the resulting operations are essentially the same as those of the predecessor company. See, e.g., Notice of Initiation of Antidumping Duty Changed Circumstances Review: Certain Forged Stainless Steel Flanges from India, 71 FR 327 (January 4, 2006). Thus, if the record demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the predecessor company, the Department may assign the new company the cash deposit rate of its predecessor. See, e.g., Fresh and Chilled Atlantic Salmon from Norway: Final Results of Changed Circumstances Antidumping Duty Administrative Review, 64 FR 9979, 9980 (March 1, 1999).

Tradewinds Furniture Ltd.

In the Joint Request, Tradewinds Furniture claims that it is the successor-in-interest to Nanhai Jiantai. Tradewinds Furniture submitted documentation showing that in February 2004, a government change in administrative boundaries resulted in a change in name for Nanhai Jiantai to Foshan Jiantai Woodwork Co. (“Foshan Jiantai”). Tradewinds Furniture provided documentation showing that this change was in name only, including the State Council of the PRC's approval of the adjustment to the administrative region in Foshan City (see Joint Request, at Exhibit 1), the People's Government of Guangdong Province's mandate for implementation of the change (see Joint Request, at Exhibit 2), and the alteration detail (see Joint Request, at Exhibit 4). Tradewinds Furniture also provided the business licenses and certificates of approval for both Nanhai Jiantai and Foshan Jiantai, in support of its claim that, other than a name change, all other information remained the same. See Joint Request, at Exhibits 3 and 5.

Tradewinds Furniture reported that, thereafter, a company (whose name is reported as proprietary, hereinafter referred to as “Company A”) purchased the majority of assets of Foshan Jiantai in August 2004. See Joint Request, at Exhibit 6; Questionnaire Response, at Exhibit 22 (Asset Transfer Contract). Company A established Tradewinds Furniture to take over Foshan Jiantai's furniture production operations. Tradewinds Furniture provided the PRC certificate of approval, as well as the Foshan City registration and business license, in support of this contention. See Joint Request, at Exhibits 7-8; Questionnaire Response, at 1. Tradewinds Furniture reported that Foshan Jiantai is no longer producing WBF or providing any services. See Questionnaire Response, at 3. Tradewinds Furniture also stated that it has taken over complete operational control of the furniture production operations from Foshan Jiantai. See Supplemental Response, at 1.

Tradewinds Furniture gave a written description of the ownership and management changes from Nanhai Jiantai through to Tradewinds Furniture, which included a discussion of the board of director changes, and noted that 16 out of 19 key management employees of Nanhai Jiantai remain with Tradewinds Furniture. See Joint Request, at 6-7 and Exhibits 11-12; Questionnaire Response, at 2; Supplemental Response, at 2-3. Tradewinds Furniture also provided flowcharts in support, which outline these changes from Nanhai Jiantai, through the name change to Foshan Jiantai, and its subsequent acquisition by Company A, through to the establishment of Tradewinds Furniture. See Joint Request, at Exhibit 10; Questionnaire Response, at Exhibit 23; Supplemental Response, at Exhibit 28. Tradewinds Furniture also provided charts and descriptions of the changes to the organizational structure, lists of the assets and equipment that were part of Company A's acquisition of Foshan Jiantai, and compared the production facilities and offices used by Nanhai Jiantai to those used by Tradewinds Furniture. See Joint Request, at 8-9 and Exhibits 13-16; Questionnaire Response, at 4-5.

In addition, Tradewinds Furniture provided a comparison chart of the international suppliers for Nanhai Jiantai and Tradewinds Furniture, as well as copies of purchase orders placed by both, explaining that changes in suppliers were due to standard reevaluations of the relationship, as well as non-competitive pricing. See Joint Request, at 9-10 and Exhibits 17-18. Further, Tradewinds Furniture stated that it has “substantially the same” customer base as Nanhai Jiantai, provided a customer comparison chart, and explained that the loss of customers and addition of new customers is typical for any company. See Joint Request, at 10 and Exhibit 19. Finally, Tradewinds Furniture provided shipping records for Foshan Jiantai and Tradewinds Furniture and stated that there is “significant parity of shipment quantities and values” (both in pieces and in sales). See Joint Request, at 11-12 and Exhibits 20-21.

Upon review of the submitted information and material, we preliminarily find that Tradewinds Furniture has provided sufficient evidence in support of its claim that it is the successor-in-interest to Nanhai Jiantai. The name change from Nanhai Jiantai to Foshan Jiantai, Company A's acquisition of the majority of Foshan Jiantai's assets, the creation of Tradewinds Furniture by Company A, and Tradewinds Furniture's current operational control of the furniture production resulted in minimal changes. In their totality, we preliminarily find that Tradewinds Furniture's management, production facilities, supplier relationships and customer base remain essentially the same as that of Nanhai Jiantai. Based upon the above, we preliminarily determine that Tradewinds Furniture is the successor-in-interest to Nanhai Jiantai and, therefore, should be given the same antidumping duty treatment as Nanhai Jiantai.

The cash deposit determination from this changed circumstances review will apply to all entries of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this changed circumstances review. See Notice of Final Results of Antidumping Duty Changed Circumstances Review; Certain Forged Stainless Steel Flanges From India, 71 FR 31156 (June 1, 2006). This cash deposit rate shall remain in effect until further notice.

Tradewinds International Enterprise Ltd.

In the Joint Request, Tradewinds Intl. claims that it is the successor-in-interest to Fortune Glory. Tradewinds Intl. states that “Fortune Glory continues to operate as the exporter for Tradewinds Furniture” and outlined its current functions and operations. See Joint Request, at 2; Questionnaire Response, at 3 and Exhibit 25. Tradewinds Intl. provided a flowchart that indicated board of director changes from Fortune Glory to Tradewinds Intl. See Questionnaire Response, at Exhibit 23; Supplemental Response, at Exhibit 28. Tradewinds Intl. elaborated on and provided various documentation on certain name changes, which resulted in the name Tradewinds Intl. See Joint Request, at 5 and Exhibit 9; Questionnaire Response, at 4 and Exhibit 26. Tradewinds Intl. also provided the business registration certificates for Fortune Glory and Tradewinds Intl. See Questionnaire Response, at 3-4 and Exhibits 24 and 27. Tradewinds Intl. claims that Fortune Glory will transfer its export functions to Tradewinds Intl. when it is named as the successor-in-interest to Fortune Glory, and that “{n}o structural, management, employee, supplier, customer, or other changes are anticipated as a result of the transfer.” See Questionnaire Response, at 4.

Upon review of the submitted information and material, we preliminarily find that Tradewinds Intl. has failed to provide sufficient evidence in support of its claim that it is the successor-in-interest to Fortune Glory. Tradewinds Intl. admits that Fortune Glory remains the exporter for Tradewinds Furniture and has not transferred its export functions to Tradewinds Intl. The Department generally will consider the new company to be the successor to the predecessor if the resulting operations are essentially the same as those of the predecessor company. See Stainless Steel Flanges From India, 71 FR 31156. As Tradewinds Intl. has not yet taken over the export functions of Fortune Glory, its current operations are not essentially the same as those of Fortune Glory. While Tradewinds Intl. claims that no changes are anticipated to the structure, management, employees, suppliers, customers, or otherwise, such a claim is speculative at this time, and therefore premature. Based upon the above, we preliminarily determine that Tradewinds Intl. is not the successor-in-interest to Fortune Glory at this time and, therefore, should not be given the same antidumping duty treatment as Fortune Glory.

Public Comment

Interested parties are invited to submit case briefs on these preliminary results no later than seven days after publication of this notice. Rebuttal briefs, limited to arguments raised in the case briefs, may be filed no later than five days after the case brief deadline. Parties are requested to submit with their briefs: (1) a statement of the issue, and (2) a brief summary of the argument. Briefs must be served on interested parties in accordance with 19 C.F.R. 351.309. Any interested party may request a hearing within 20 days of publication of this notice. Any hearing, if requested, will be held no later than 25 days after publication of this notice, unless the Department alters this time limit, pursuant to 19 C.F.R. 351.310(d).

In accordance with 19 C.F.R. 351.216(e), the Department intends to issue the final results of this changed circumstances review no later than 270 days after the date on which this review was initiated.

This notice is issued and published in accordance with sections 751(b)(1) and 777(i)(1) of the Tariff Act of 1930, as amended, and 19 C.F.R. 351.216 and 19 C.F.R. 351.221(c)(3).

Dated: July 23, 2007.

David M. Spooner,

Assistant Secretary for Import Administration.

Footnotes

1.  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.

2.  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).

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

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

5.  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.

6.  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.

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

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

9.  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.

10.  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.

11.  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 Issues and Decision Memorandum from Laurel LaCivita to Laurie Parkhill, Office Director, 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 also 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 (July 7, 2006).

12.  Cheval mirrors are, i.e., any framed, tiltable mirror with a height in excess of 50″ that is mounted on a floor-standing, hinged base. Additionally, the scope of the order excludes combination cheval mirror/jewelry cabinets. The excluded merchandise is an integrated piece consisting of a cheval mirror, i.e., a framed tiltable mirror with a height in excess of 50 inches, mounted on a floor-standing, hinged base, the cheval mirror serving as a door to a cabinet back that is integral to the structure of the mirror and which constitutes a jewelry cabinet lined with fabric, having necklace and bracelet hooks, mountings for rings and shelves, with or without a working lock and key to secure the contents of the jewelry cabinet back to the cheval mirror, and no drawers anywhere on the integrated piece. The fully assembled piece must be at least 50 inches in height, 14.5 inches in width, and 3 inches in depth. See Wooden Bedroom Furniture From the People's Republic of China: Final Results of Changed Circumstances Review and Determination To Revoke Order in Part, 72 FR 38621 (January 9, 2007).

13.  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 the Harmonized Tariff Schedule of the United States (“HTSUS”) subheading 9403.90.7000.

14.  Upholstered beds that are completely upholstered, i.e., containing filling material and completely covered in sewn genuine leather, synthetic leather, or natural or synthetic decorative fabric. To be excluded, the entire bed (headboards, footboards, and side rails) must be upholstered except for bed feet, which may be of wood, metal, or any other material and which are no more than nine inches in height from the floor. See Wooden Bedroom Furniture from the People's Republic of China: Final Results of Changed Circumstances Review and Determination to Revoke Order in Part, 72 FR 7013 (February 14, 2007).