[Federal Register Volume 60, Number 158 (Wednesday, August 16, 1995)]
[Notices]
[Pages 42516-42519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20207]
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DEPARTMENT OF COMMERCE
[A-570-803]
Heavy Forged Hand Tools, Finished or Unfinished, With or Without
Handles, From the People's Republic of China; Preliminary Results and
Termination in Part of Antidumping Duty Administrative Reviews
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results and termination in part of
antidumping duty administrative reviews.
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SUMMARY: In response to requests by two resellers of the subject
merchandise, the Department of Commerce (the Department) is conducting
administrative reviews of the antidumping duty orders on heavy forged
hand tools, finished or unfinished, with or without handles, (HFHTs)
from the People's Republic of China (PRC). The reviews cover two
exporters of subject merchandise to the United States and the period
February 1, 1993, through January 31, 1994. The reviews indicate the
existence of dumping margins during the period of review.
We have preliminarily determined that sales have been made below
the foreign market value (FMV). If these preliminary results are
adopted in our final results of administrative reviews, we will
instruct U.S. Customs to assess antidumping duties equal to the
difference between United States price (U.S. price) and FMV.
Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: August 16, 1995.
FOR FURTHER INFORMATION CONTACT: Karin Price 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.
SUPPLEMENTARY INFORMATION:
Background
On February 19, 1991, the Department published in the Federal
Register (56 FR 6622) the antidumping duty orders on HFHTs from the
PRC. On February 4, 1994, the Department published in the Federal
Register (59 FR 5390) a notice of opportunity to request administrative
reviews of these antidumping duty orders. On February 28, 1994, in
accordance with 19 CFR 353.22(a), two resellers of the subject
merchandise to the United States, Fujian Machinery & Equipment Import &
Export Corporation (FMEC) and Shandong Machinery Import & Export
Corporation (SMC), requested that we conduct administrative reviews of
their exports of subject merchandise to the United States. We published
the notice of initiation of these antidumping duty administrative
reviews on March 14, 1994 (59 FR 11768). The notice of initiation was
amended on June 15, 1994 (59 FR 30770) and July 15, 1994 (59 FR 36160).
The Department is conducting these administrative reviews in accordance
with section 751 of the Tariff Act of 1930, as amended (the Act).
Termination of Review in Part
On June 10, 1994, FMEC withdrew its request for a review of the
order on picks and mattocks (picks/mattocks), and SMC withdrew its
request for a review of the order on axes, adzes and other similar
hewing tools (axes/adzes). Given the early stage of review at the time
of FMEC's and SMC's withdrawal requests, we informed FMEC that it did
not need to respond to the questionnaire with respect to picks/
mattocks, and we informed SMC that it did not need to respond to the
questionnaire with regard to axes/adzes. See File Memorandum from Karin
Price, dated July 5, 1994, ``Telephone conversation regarding the
withdrawal requests of respondents in the third administrative reviews
of heavy forged hand tools, finished or unfinished, with or without
handles, from the People's Republic of China,'' which is on file in the
Central Records Unit (room B-099 of the Main Commerce Building). We
hereby are terminating the review of the order on picks/mattocks with
respect to FMEC and the review of the order on axes/adzes with respect
to SMC, in accordance with 19 CFR 353.22(a)(5).
Scope of These Reviews
Imports covered by these reviews are shipments of HFHTs from the
PRC comprising the following classes or kinds of merchandise: (1)
hammers and sledges with heads over 1.5 kg. (3.33 pounds) (hammers/
sledges); (2) bars over 18 inches in length, track tools and wedges
(bars and wedges); (3) picks/mattocks; and (4) axes/adzes.
HFHTs include heads for drilling, hammers, sledges, axes, mauls,
picks, and mattocks, which may or may not be painted, which may or may
not be finished, or which may or may not be imported with handles;
assorted bar products and track tools including wrecking bars, digging
bars and tampers; and steel woodsplitting wedges. HFHTs are
manufactured through a hot forge operation in which steel is sheared to
required length, heated to forging temperature and
[[Page 42517]]
formed to final shape on forging equipment using dies specific to the
desired product shape and size. Depending on the product, finishing
operations may include shot blasting, grinding, polishing and painting,
and the insertion of handles for handled products. HFHTs are currently
provided for under the following Harmonized Tariff System (HTS)
subheadings: 8205.20.60, 8205.59.30, 8201.30.00, and 8201.40.60.
Specifically excluded are hammers and sledges with heads 1.5 kg. (3.33
pounds) in weight and under, hoes and rakes, and bars 18 inches in
length and under.
These reviews cover two exporters of HFHTs from the PRC, FMEC and
SMC. The review period is February 1, 1993, through January 31, 1994.
Separate Rates
The business licenses of both FMEC and SMC indicate that they are
owned by ``all the people.'' As stated in the Notice of Final
Determination of Sales at Less Than Fair Value: Silicon Carbide from
the People's Republic of China (59 FR 22585, May 2, 1994) (Silicon
Carbide), ``ownership by `all of the people' does not require the
application of a single rate.'' Accordingly, FMEC and SMC are eligible
for consideration for separate rates.
To establish whether a company is sufficiently independent to be
entitled to a separate rate, the Department analyzes each exporting
entity under the test established in the Final Determination of Sales
at Less Than Fair Value: Sparklers from the People's Republic of China
(56 FR 20588, May 6, 1991) (Sparklers), as amplified in Silicon
Carbide. Under this policy, exporters in non-market-economy (NME)
countries are entitled to separate, company-specific margins when they
can demonstrate an absence of government control, both in law and in
fact, with respect to exports. Evidence supporting, though not
requiring, a finding of de jure absence of government control includes:
(1) an absence of restrictive stipulations associated with an
individual exporter's business and export licenses; (2) any legislative
enactments decentralizing control of companies; and (3) any other
formal measures by the government decentralizing control of companies.
De facto absence of government control with respect to exports is based
on four criteria: (1) whether the export prices are set by or subject
to the approval of a government authority; (2) whether each exporter
retains the proceeds from its sales and makes independent decisions
regarding the disposition of profits and financing of losses; (3)
whether each exporter has autonomy in making decisions regarding the
selection of management; and (4) whether each exporter has the
authority to negotiate and sign contracts.
We have found that the evidence on the record demonstrates an
absence of government control, both in law and in fact, with respect to
FMEC's and SMC's exports according to the criteria identified in
Sparklers and Silicon Carbide for this period of review. For further
discussion of the Department's preliminary determination that FMEC and
SMC are entitled to separate rates, see Decision Memorandum to Holly A.
Kuga, Director, Office of Antidumping Compliance, dated July 21, 1995,
``Separate rates for Fujian Machinery & Equipment Import & Export
Corporation and Shandong Machinery Import & Export Corporation in the
third administrative reviews of heavy forged hand tools, finished or
unfinished, with or without handles, from the People's Republic of
China,'' which is on file in the Central Records Unit (room B-099 of
the Main Commerce Building).
United States Price
The Department used purchase price and exporter's sales price
(ESP), in accordance with sections 772 (b) and (c) of the Act, in
calculating U.S. price. We made deductions from purchase price and ESP
sales, where appropriate, for brokerage and handling, foreign inland
freight, ocean freight, and marine insurance. Ocean freight services
were provided by both PRC-owned and non-PRC-owned companies. Where we
knew that the company providing the ocean freight services was not a
PRC-owned company, we used the actual rates charged; for ocean freight
services provided by PRC-owned companies, we applied a weighted-average
ocean freight rate derived from those sales for which we used actual
ocean freight rates. Since marine insurance services were provided by
PRC-owned companies, we based the deduction for marine insurance on
surrogate values. We also used surrogate data to value foreign inland
freight and brokerage and handling. We selected India as the surrogate
country for reasons explained in the ``Foreign Market Value'' section
of this notice.
Complete sales data for SMC's ESP sales have not been provided to
the Department, despite the Department's requests for such data. In its
original questionnaire response, SMC did not report its ESP sales,
stating that SMC did not sell the subject merchandise to its U.S.
subsidiary, CMC Pacific Tools, Inc. (Pacific Tools) during the period
of review, despite the request in the questionnaire that ESP sales,
i.e., sales made to unrelated purchasers in the United States after the
date the merchandise was imported into the United States by or for the
account of the exporter, be reported. In our supplemental
questionnaire, we asked SMC to report any ESP sales of subject
merchandise made by Pacific Tools to unrelated customers in the United
States during the period of review and to answer all questions in the
original questionnaire regarding these sales. When it reported these
ESP sales in its supplemental questionnaire response, SMC did not
report any movement expenses for these sales, stating that these
expenses had been reported in a questionnaire response submitted for
the previous administrative reviews of this case. Since movement
expenses were not reported for the record of these reviews, as best
information available (BIA), we applied a weighted-average ocean
freight rate derived from those PP sales for which we used actual ocean
freight rates to adjust for ocean freight, and we used surrogate values
to make deductions for all other applicable movement expenses. We also
made a deduction for U.S. duties.
Foreign Market Value
For companies located in NME countries, section 773(c)(1) of the
Act provides that the Department shall determine FMV using a factors of
production methodology if (1) the merchandise is exported from a NME
country, and (2) the information does not permit the calculation of FMV
using home market prices, third country prices, or constructed value
(CV) under section 773(a) of the Act.
In every case conducted by the Department involving the PRC, the
PRC has been treated as an NME country. None of the parties to these
proceedings has contested such treatment in these reviews. Accordingly,
we calculated FMV in accordance with section 773(c) of the Act and
section 353.52 of the Department's regulations. We determined that
India is comparable to the PRC in terms of per capita gross national
product (GNP), the growth rate in per capita GNP, and the national
distribution of labor, and is a significant producer of comparable
merchandise. For further discussion of the Department's selection of
India as the primary surrogate country, see File Memorandum from Karin
Price, dated June 13, 1994, ``Telephone conversations regarding the
surrogate country selection in the third administrative reviews of
heavy forged hand tools, finished or unfinished, with or without
handles, from the People's
[[Page 42518]]
Republic of China,'' which is on file in the Central Records Unit (room
B-099 of the Main Commerce Building), with attached Memorandum to
Laurie Lucksinger, dated March 18, 1993, ``AD Order on Heavy Forged
Hand Tools from the People's Republic of China (case #A-570-803):
Nonmarket-Economy Status and Surrogate Country Determinations.''
For purposes of calculating FMV, we valued PRC factors of
production in the year in which production occurred as follows, in
accordance with section 773(c)(1) of the Act:
To value all direct materials used in the production of
HFHTs, including steel, resin glue, paint, varnish, wood for handles,
iron wedges, anti-rust oil, scrap steel, and dilution, we used the
rupee per metric ton, per kilogram, or per cubic meter value of imports
into India during April-December 1992, for production in 1992, and
during April 1993-January 1994, for production in 1993, obtained from
the Monthly Statistics of the Foreign Trade of India, Volume II--
Imports, December 1992, and the Monthly Statistics of the Foreign Trade
of India, Volume II--Imports, March 1994, respectively (Indian Import
Statistics). Some of the factories in the PRC used imported steel for
producing HFHTS, and, in these instances, we used the import price of
the steel to value the relevant portion of steel which was imported. We
made adjustments to include freight costs incurred between the
suppliers and the HFHT factories. We also made an adjustment to the
steel input factor for scrap and waste steel which was sold.
For direct labor, we used the labor rates reported in the
Business International Corporation reports IL&T India, released
November 1992 and November 1993. This source breaks out labor rates
between skilled, unskilled, semi-skilled, and foreman labor for 1993
and provides information on the number of labor hours worked per week.
For factory overhead, we used information reported in the
December 1992 and September 1994 Reserve Bank of India Bulletin. From
this information, we were able to determine factory overhead as a
percentage of total cost of manufacture. We included steel pellets used
to remove oxidization from the tool heads and detergent used to clean
the tool heads in factory overhead as these materials are not
physically incorporated into the subject merchandise.
For selling, general and administrative (SG&A) expenses,
we used information obtained from the December 1992 and September 1994
Reserve Bank of India Bulletin. We calculated an SG&A rate by dividing
SG&A expenses by the cost of manufacture. Since the calculated SG&A
expense rate is less than 10 percent, we used the statutory minimum of
10 percent to calculate SG&A expenses.
To calculate a profit rate, we used information obtained
from the December 1992 and September 1994 Reserve Bank of India
Bulletin. We calculated a profit rate by dividing the before-tax profit
by the sum of those components pertaining to the cost of manufacturing
plus SG&A. Since the calculated profit rate is less than 8 percent, we
used the statutory minimum of 8 percent to calculate profit.
To value the packing materials, including cartons (except
for imported cartons used at some of the factories), pallets, anti-rust
paper, anti-damp paper, plastic and iron straps, plastic bags, iron
buttons and knots, synthetic fiber, and iron wire, we used import
statistics for India obtained from the Indian Import Statistics. We
adjusted these values to include freight costs incurred between the
suppliers and the HFHT factories. Some of the factories used imported
cartons for packing, and, in these instances, we used the import price
of the cartons to value the relevant percentage of cartons which was
imported.
To value coal, we used the price of steam coal reported
for 1990 in the International Energy Agency publication Energy Prices
and Taxes, 2nd Quarter 1994. We adjusted the value of coal to reflect
inflation through 1992 and 1993 using wholesale price indices of India
(WPI) as published in the International Financial Statistics by the
International Monetary Fund (IMF).
To value electricity, we used the price of electricity for
1990 reported in the Asian Development Bank publication Energy
Indicators of Developing Member Countries of Asian Development Bank,
July 1992. We adjusted the value of electricity to reflect inflation
through 1992 and 1993 using WPI published by the IMF.
To value truck freight, we used the rates reported in a
June 1992 cable from the U.S. Embassy in India submitted for the Final
Determination of Sales at Less Than Fair Value: Sulfanilic Acid from
the People's Republic of China (57 FR 29705, July 6, 1992) and an
August 1993 cable from the U.S. Embassy in India submitted for the
Final Determination of Sales at Less Than Fair Value: Certain Helical
Spring Lock Washers from the People's Republic of China (58 FR 48833,
September 20, 1993).
To value rail freight, we used the price reported in a
December 1989 cable from the U.S. Embassy in India submitted for the
Final Results of Antidumping Duty Administrative Review: Shop Towels of
Cotton from the People's Republic of China (56 FR 4040, February 1,
1991). We adjusted the rail freight rates to reflect inflation through
1992 and 1993 using WPI published by the IMF.
Currency Conversion
We made currency conversions in accordance with 19 CFR 353.60(a).
Currency conversions were made at the rates certified by the Federal
Reserve Bank.
Best Information Available
SMC did not provide factors-of-production data for one model, sales
of which were first reported to the Department in SMC's supplemental
questionnaire response. Since U.S. sales data for this model were
submitted without the data necessary for the calculation of FMV, we
must rely upon BIA, in accordance with section 776(1) of the Act, for
these sales. As BIA, we are assigning a rate of 31.76 percent, which is
the rate from the LTFV investigation for this class or kind of
merchandise.
Preliminary Results of the Reviews
As a result of our reviews, we preliminarily determine that the
following margins exist:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Time period (percent)
------------------------------------------------------------------------
Fujian Machinery & Equipment Import &
Export Corporation:
Axes/Adzes........................... 2/1/93-1/31/94 11.72
Bars/Wedges.......................... 2/1/93-1/31/94 30.40
Hammers/Sledges...................... 2/1/93-1/31/94 12.17
Shandong Machinery Import & Export
Corporation:
Bars/Wedges.......................... 2/1/93-1/31/94 28.54
[[Page 42519]]
Hammers/Sledges...................... 2/1/93-1/31/94 7.26
Picks/Mattocks....................... 2/1/93-1/31/94 36.92
------------------------------------------------------------------------
Parties to the proceedings may request disclosure within 5 days of
the date of publication of this notice. Any interested party may
request a hearing within 10 days of publication. Any hearing, if
requested, will be held 44 days after the publication of this notice,
or the first workday thereafter. Interested parties may submit case
briefs within 30 days of the date of publication of this notice.
Rebuttal briefs, which must be limited to issues raised in the case
briefs, may be filed not later than 37 days after the date of
publication. See section 353.38(d) of the Department's regulations. The
Department will publish a notice of final results of these
administrative reviews, which will include the results of its analysis
of issues raised in any such comments.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between U.S. 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 requirements will be effective
upon publication of the final results of these administrative reviews
for all shipments of HFHTs 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 Act: (1) The cash deposit
rates for the reviewed companies named above which have separate rates
will be the rates for those firms established in the final results of
these administrative reviews; (2) for all other PRC exporters, the cash
deposit rates will be the rates established in the LTFV investigations,
the all-China rates; and (3) the cash deposit rates for non-PRC
exporters of subject merchandise from the PRC will be the rates
applicable to the PRC supplier of that exporter. The rates established
in the LTFV investigations are 45.42 percent for hammers/sledges, 31.76
percent for bars/wedges, 50.81 percent for picks/mattocks, and 15.02
percent for axes/adzes. These deposit requirements, when imposed, shall
remain in effect until publication of the final results of the next
administrative reviews.
Notification of Interested Parties
This notice serves as a preliminary reminder to importers of their
responsibility under section 353.26 of the Department's regulations 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.
These administrative reviews and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22
of the Department's regulations.
Dated: August 8, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-20207 Filed 8-15-95; 8:45 am]
BILLING CODE 3510-DS-P
