E7-17857. Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, from the People's Republic of China: Final Results and Rescissions of the 2005-2006 Administrative Reviews

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On March 8, 2007, the Department published the preliminary results of the 2005-2006 administrative reviews of the antidumping duty orders on heavy forged hand tools, finished or unfinished, with or without handles, from the People's Republic of China (PRC). See Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China: Preliminary Results and Partial Rescission of the 2005-2006 Administrative Reviews, 72 FR 10492 (March 8, 2007) (Preliminary Results). This review covers four classes or kinds: (1) Axes/Adzes; (2) Bars/Wedges; (3) Hammers/Sledges; and (4) Picks/Mattocks. This review covers nine exporters or producer/exporters: (1) Iron Bull Industrial Co., Ltd. (Iron Bull); (2) Jafsam Metal Products (Jafsam); (3) Shanghai Machinery Import & Export Corp. (Shanghai Machinery); (4) Shanghai Xinike Trading Company (Xinike); (5) Shandong Huarong Machinery Co., Ltd. (Huarong); (6) Shandong Jinma Industrial Group Co., Ltd. (Jinma); (7) Shandong Machinery Import and Export Corporation (SMC); (8) Tianjin Machinery Import and Export Corporation (TMC); and (9) Truper Herramientas S.A. de C.V. (Truper). The period of review (POR) is February 1, 2005, through January 31, 2006. Based on our analysis of the record, including factual information obtained since the Preliminary Results, we have reversed the decision to rescind the administrative review of the antidumping duty order on the class or kind Axes/Adzes covering SMC and have applied adverse facts available (AFA). Therefore, the final results differ from the Preliminary Results. See “Final Results of Review” section below.

EFFECTIVE DATE:

September 11, 2007.

FOR FURTHER INFORMATION CONTACT:

Mark Flessner or Robert James at [phone] or [phone], respectively; Antidumping and Countervailing Duty Enforcement Office 7, Import Administration, International Trade Administration, U.S. Department of Commerce, 14^th Street and Constitution Avenue, N.W., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

Since the Preliminary Results, we received a case brief from respondent SMC on April 9, 2007. Separate rebuttal briefs were received from both petitioners, Ames True Temper (Ames) and Council Tool Company (Council Tools), on April 16, 2007. On April 24, 2007, the Department's Customs Liaison Unit forwarded certain U.S. Customs and Border Protection (CBP) documents to the team. These were placed on the record of this review on April 24, 2007. See the Memorandum to the File from Mark Flessner, Case Analyst, entitled “Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China (A-570-803): U.S. Entry Documents and Opportunity to Comment” (April 24, 2007). SMC, Ames, and Council Tools all filed comments concerning these documents on May 9, 2007. SMC requested and was granted time to file a rebuttal to Ames' and Council Tools' comments; SMC filed its rebuttal comments on May 16, 2007. On July 6, 2007, the Department published in the Federal Register an extension of the time limit for the final results until August 6, 2007. See Notice of Extension of Time Limit for Final Results and Partial Rescission of the 2005-2006 Antidumping Duty Administrative Review of Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, from the People's Republic of China, 72 FR 36959 (July 6, 2007). On August 8, 2007, the Department published in the Federal Register a further extension of the time limit for the final results until September 4, 2007. See Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, from the People's Republic of China: Notice of Extension of Time Limit for Final Results of the 2005-2006 Antidumping Duty Administrative Review, 72 FR 44495 (August 8, 2007).

Scope of the Antidumping Duty Order

The products covered by these orders are heavy forged hand tools from the PRC, comprising the following classes or kinds of merchandise: (1) Hammers and sledges with heads over 1.5 kg (3.33 pounds); (2) bars over 18 inches in length, track tools and wedges; (3) picks and mattocks; and (4) axes, adzes and similar hewing tools. Heavy forged hand tools 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 wood splitting wedges. Heavy forged hand tools are manufactured through a hot forge operation in which steel is sheared to required length, heated to forging temperature, and 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. Heavy forged hand tools are currently provided for under the following Harmonized Tariff System of the United States (HTSUS) subheadings: 8205.20.60, 8205.59.30, 8201.30.00 and 8201.40.60. Specifically excluded from these orders 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. The HTSUS subheadings are provided for convenience and Customs purposes. The written description remains dispositive.

Analysis of Comments Received

All issues raised in the briefs are addressed in the accompanying Issues and Decision Memorandum, which is hereby adopted by this notice. A list of the issues raised, all of which are in the Issues and Decision Memorandum, is as follows: (1) whether SMC demonstrated a lack of de jure and de facto government control to warrant receiving a separate rate; (2) whether the Department was correct in applying AFA to SMC's sales of Bars/Wedges and Hammers/Sledges; (3) whether the AFA rates applied to SMC's sales of Bars/Wedges, Hammers/Sledges, and Axes/Adzes were properly corroborated and reasonable; (4) whether the Department ought to reverse its preliminary rescission of the review for Axes/Adzes; (5) whether the Department ought to apply facts available for Axes/Adzes; and (6) whether the Department ought to apply AFA for Axes/Adzes. Parties can find a complete discussion of all issues raised in the briefs and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit (CRU), room B-099 of the main Department building. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly on the internet at http://ia.ita.doc.gov. The paper copy and electronic version of the Issues and Decision Memorandum are identical in content.

Changes Since the Preliminary Results

Based upon our analysis of the record (including factual information obtained since the Preliminary Results) and upon comments received from the interested parties, we are reversing our preliminary rescission of the administrative review covering the class or kind Axes/Adzes with respect to SMC. We are also basing our margin for SMC for Axes/Adzes on AFA. For a discussion of these changes, see the accompanying Issues and Decision Memorandum.

The PRC-wide Rate and Application of Facts Otherwise Available

The Department did not receive comments specifically pertaining to its Preliminary Results regarding the application of AFA to the PRC-wide entity for any of the four classes or kinds. (SMC did submit comments with regard to the rates it received as part of the PRC-wide entity for all classes or kinds except Picks/Mattocks; for details and a full discussion, see the accompanying Issues and Decision Memorandum.) As a result, we have not altered our decision to apply total AFA to the PRC-wide entity for all four classes or kinds for these final results, in accordance with sections 776(a)(2)(A) and (B), as well as section 776(b), of the Tariff Act of 1930, as amended (the Tariff Act). See “Final Results of Review” section below.

As stated in the Preliminary Results, by failing to adequately respond to the Department's requests for information, SMC (with respect to Axes/Adzes, Bars/Wedges, and Hammers/Sledges), TMC (with respect to Picks/Mattocks), Huarong (with respect to Hammers/Sledges and Picks/Mattocks), and Jafsam (with respect to all four classes or kinds) have not demonstrated they are free of government control, and are therefore not eligible to receive a separate rate. See, e.g., Natural Bristle Paint Brushes and Brush Heads From the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 62 FR 11823 (March 13, 1997); 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); and Final Determination of Sales at Less Than Fair Value: Certain Compact Ductile Iron Waterworks Fittings and Accessories Thereof From the People's Republic of China, 58 FR 37908 (July 14, 1993). Consequently, consistent with the Preliminary Results, we continue to find that, because these companies did not qualify for separate rates, they are deemed to be part of the PRC-entity. See Preliminary Results at 10494.

As stated above, the PRC-wide entity did not respond to our requests for information. Because the PRC-wide entity did not respond to our request for information, we find it necessary, under sections 776(a)(2) and 776(b) of the Tariff Act, to use AFA as the basis for these final results of review for the PRC-wide entity.

In accordance with the Department's practice, we have assigned to the PRC-wide entity (including Jafsam and SMC) the rate of 189.37 percent as AFA for Axes/Adzes. This is the highest calculated rate of any segment in this proceeding, which was calculated in the 2004-2005 administrative review. See Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China: Final Results of Antidumping Duty Administrative Reviews and Final Rescission and Partial Rescission of Antidumping Duty Administrative Reviews, 71 FR 54269 (September 14, 2006) (Final Results of 14^th Review). We have assigned to the PRC-wide entity (including Jafsam and SMC) the rate of 139.31 percent as AFA for Bars/Wedges. This rate is the highest dumping margin from any segment of this proceeding and was calculated during the 1998-1999 administrative review. See the accompanying Issues and Decision Memorandum at Comment 3; see also Notice of Final Results and Partial Recission of Antidumping Duty Administrative Reviews: Heavy Forged Hand Tools From the People's Republic of China, 65 FR 43290 (July 13, 2000); Heavy Forged Hand Tools From the People's Republic of China; Amended Final Results of Antidumping Duty Administrative Reviews, 65 FR 50499 (August 18, 2000). We have assigned to the PRC-wide entity (including Huarong, Jafsam, and SMC) the rate of 45.42 percent as AFA for Hammers/Sledges. This rate is the highest dumping margin from any segment of this proceeding and was applied as “best information available” (the predecessor to AFA) during the less-than-fair-value (LTFV) investigation for the sole respondent China National Machinery Import & Export Corporation, and was again corroborated and used as the PRC-wide and AFA rate in the 2004-2005 review. See Final Results of 14^th Review. We have assigned to the PRC-wide entity (including TMC, Huarong, and Jafsam) the rate of 98.77 percent as AFA for Picks/Mattocks. This rate is the highest dumping margin from any segment of this proceeding; it was calculated in the fifth review, became the PRC-wide and AFA rate in the seventh review, and has been used since. Id. This is consistent with our practice in, e.g., Freshwater Crawfish Tail Meat from the People's Republic of China; Notice of Final Results of Antidumping Duty Administrative Review, 68 FR 19504 (April 21, 2003); see also Stainless Steel Plate in Coils From Taiwan: Final Results and Rescission in Part of Antidumping Duty Administrative Review, 67 FR 40914 (June 14, 2002). The U.S. Court of International Trade (CIT) and the Court of Appeals for the Federal Circuit have consistently upheld the Department's practice to assign AFA to non-cooperative respondents in several cases. See Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190 (Fed. Cir. 1990); see also Shanghai Taoen International Trading Co., Ltd. v. United States, Slip Op. 05-22, at 16 (CIT 2005) (upholding a 223.01 percent total AFA rate, the highest available dumping margin from a different respondent in a previous administrative review); NSK Ltd. v. United States, 346 F.Supp.2d 1312, 1335 (CIT 2004) (upholding a 73.55 percent total AFA rate, the highest available dumping margin from a different respondent in a LTFV investigation); Kompass Food Trading Int'l v. United States, 24 CIT 678, 689 (2000) (upholding a 51.16 percent total AFA rate, the highest available dumping margin from a different, fully cooperative respondent).

Corroboration of Secondary Information Applied as AFA

Section 776(c) of the Act requires that the Department corroborate, to the extent practicable, secondary information used as facts available. Secondary information has been interpreted 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 Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Doc 103-316, Vol. 1, 103d Cong. (1994) (SAA) at 870. Under section 776(c) of the Act, the Department is granted a wide discretion in its selection of secondary information, i.e., the AFA rate, as long as the Department can determine, to the extent practicable, that the AFA rate has probative value. See generally SAA at 870.

The term “corroborate” has been interpreted to mean that the Department will satisfy itself that the secondary information to be used has probative value. See SAA at 870. Thus, to corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used. However, unlike other types of information, such as input costs or selling expenses, there are no independent sources for calculated dumping margins per se other than are administrative determinations. These rates are applied to the PRC-wide entity, i.e., those companies not eligible for a separate rate with regard to the individual class or kind of merchandise. No information has been presented in the current review that calls into question the reliability of the information used for these AFA rates. Thus, the Department finds that the information is reliable. See the accompanying Issues and Decision Memorandum at Comment 3.

Reversal of Preliminary Rescission

Based upon CBP information received subsequent to the publication of the Preliminary Results (see the Memorandum to the File from Mark Flessner, Case Analyst, entitled “Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China (A-580-803): U.S. Entry Documents and Opportunity to Comment,” dated April 24, 2007), we have determined that the review for Axes/Adzes with respect to SMC should not be rescinded. We based our margin for Axes/Adzes with respect to SMC on AFA because of SMC's failure to report sales and factor information for this class or kind, which prevented the Department from being able to calculate a margin. See the accompanying Issues and Decision Memorandum at Comments 4, 5, and 6.

Final Rescissions

In accordance with 19 CFR 351.213(d)(3) and consistent with the Department's practice, we finally rescind the following administrative reviews: (a) with respect to SMC for Picks/Mattocks; (b) with respect to Iron Bull for Axes/Adzes, Hammers/Sledges, and Picks/Mattocks; and (c) with respect to Xinike in all four classes or kinds. For rescission of these reviews with respect to Jinma (all four classes or kinds), Shanghai Machinery (all four classes or kinds), Truper (all four classes or kinds), TMC (Axes/Adzes, Hammers/Sledges, and Bars/Wedges), Huarong (Axes/Adzes and Bars/Wedges), and Iron Bull (Bars/Wedges), see Administrative Review (02/01/2005 01/31/2006) of Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, from the People's Republic of China: Notice of Rescission of Antidumping Duty Administrative Reviews, 71 FR 53403 (September 11, 2006).

Final Results of Review

As a result of our reviews, we determine that the following antidumping margins exist for the period February 1, 2005, through January 31, 2006:

Manufacturer/exporter	Weighted-average margin (percent)
Heavy Forged Hand Tools from the PRC: Axes/Adzes
PRC-Wide Rate	189.371
Heavy Forged Hand Tools from the PRC: Bars/Wedges
PRC-Wide Rate	139.312
Heavy Forged Hand Tools from the PRC: Hammers/Sledges
PRC-Wide Rate	45.423
Heavy Forged Hand Tools from the PRC: Picks/Mattocks
PRC-Wide Rate	98.774
1 The PRC-wide entity for Axes/Adzes includes SMC and Jafsam.
2 The PRC-wide entity for Bars/Wedges includes SMC and Jafsam.
3 The PRC-wide entity for Hammers/Sledges includes SMC, Jafsam, and Huarong.
4 The PRC-wide entity for Picks/Mattocks includes Jafsam, TMC, and Huarong.

Cash Deposit Requirements

The following deposit requirements will be effective upon publication of these final results for this administrative review for all shipments of heavy forged hand tools, finished or unfinished, with or without handles, from the PRC, entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(a)(2)(c) of the Tariff Act: (1) for SMC, Jafsam, Huarong, and TMC, the cash deposit rate will be the rates listed above under the “Final Results of Review” section for each class or kind and for each company as set forth in Footnotes 1-4; (2) for previously-reviewed PRC and non-PRC exporters with separate rates, the cash deposit rate will be the company-specific rate established for the most recent period; (3) for all other PRC exporters (including the exporters named as part of the PRC-wide entity above), the cash deposit rates will be the PRC-wide rates established in the final results of this review; and (4) for all other non-PRC exporters of the subject merchandise, the cash deposit rate will be the rate applicable to the PRC exporter that supplied that non-PRC exporter. These deposit requirements shall remain in effect until further notice.

Assessment of Antidumping Duties

The Department will determine, and CBP will assess, antidumping duties on all appropriate entries. We will direct CBP to assess the resulting assessment rates against the CBP values for the subject merchandise on each of the exporter's entries during the POR. In accordance with 19 CFR 351.106(c)(2), we will instruct CBP to liquidate any entries without regard to antidumping duties for which the assessment rate is de minimis. The Department will issue appropriate assessment instructions directly to CBP within 15 days of publication of the final results of review.

Notification to Importers

This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f) 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.

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 351.305(a)(3). 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 the terms of an APO is a sanctionable violation.

This administrative review and notice are in accordance with sections 751(a)(1) and 777(i)(1) of the Tariff Act.

Dated: September 4, 2007.

David M. Spooner,

Assistant Secretary for Import Administration.

Appendix—Issues in Decision Memorandum

1: SMC and de facto and de jure government control

2: Use of adverse facts available (AFA) for Bars/Wedges and Hammers/Sledges

3: Corroboration of AFA rates for Bars/Wedges, Hammers/Sledges, and Axes/Adzes

4: Preliminary rescission of review for Axes/Adzes

5: Use of facts available if Preliminary rescission of review for Axes/Adzes is reversed

6: Use of adverse facts available if Preliminary rescission of review for Axes/Adzes is reversed