2010-23002. Certain Steel Nails From the People's Republic of China: Notice of Preliminary Results and Preliminary Rescission, in Part, of the Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (“Department”) is conducting the first administrative review of the antidumping duty order on certain steel nails (“nails”) from the People's Republic of China (“PRC”) for the period of review (“POR”) January 23, 2008, through July 31, 2009. The Department has preliminarily determined that sales have been made below normal value (“NV”) with respect to certain exporters who participated fully and are entitled to a separate rate in this administrative review. If these preliminary results are adopted in our final results of this review, the Department will instruct U.S. Customs and Border Protection (“CBP”) to assess antidumping duties on all appropriate entries of subject merchandise during the POR. Interested parties are invited to comment on these preliminary results.

DATES:

Effective Date: September 15, 2010.

FOR FURTHER INFORMATION CONTACT:

Emeka Chukwudebe or Matthew Renkey, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

Case Timeline

On September 22, 2009, the Department published in the Federal Register a notice of initiation of an administrative review of nails from the PRC, for 158 companies. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 74 FR 48224 (September 22, 2009) (“Initiation”). As explained in the memorandum from the Deputy Assistant Secretary for Import Administration, the Department has exercised its discretion to toll deadlines for the duration of the closure of the Federal Government from February 5, through February 12, 2010. See Memorandum to the Record regarding “Tolling of Administrative Deadlines As a Result of the Government Closure During the Recent Snowstorm,” dated February 12, 2010. Thus, all deadlines in this segment of the proceeding have been extended by seven days. Also, on March 26, 2010, the Department published a notice extending the time period for issuing the preliminary results by 120 days to September 7, 2010. See Certain Steel Nails from the People's Republic of China: Extension of Time Limit for the Preliminary Results of the First Antidumping Duty Administrative Review, 75 FR 14568 (March 26, 2010).

On July 23, 2010, the Department published a notice rescinding the administrative review with respect to 31 companies, due to withdrawals of requests for review. See Certain Steel Nails from the People's Republic of China: Notice of Partial Rescission of the First Antidumping Duty Administrative Review, 75 FR 43149 (July 23, 2010) (“Partial Rescission Notice”).

Respondent Selection

Section 777A(c)(1) of the Tariff Act of 1930, as amended (“Act”) directs the Department to calculate individual dumping margins for each known exporter or producer of the subject merchandise. However, section 777A(c)(2) of the Act gives the Department discretion to limit its examination to a reasonable number of exporters or producers if it is not practicable to examine all exporters or producers involved in the review.

The Department initiated a review for the 158 companies for which it received a timely request for review. See Initiation, 74 FR 48224. On September 24, 2009, the Department released CBP data for entries of the subject merchandise during the POR under administrative protective order (“APO”) to all interested parties with access to the APO, inviting comments regarding the CBP data and respondent selection. Between September 24, 2009, and October 26, 2009, Certified Products International, Inc. (“CPI”), Stanley ^[1] and Petitioner ^[2] submitted comments on the respondent selection process.

After assessing its resources, the Department issued on November 6, 2009, its respondent selection memorandum. In it, the Department determined that the number of companies (i.e., 158) was too large a number for individual reviews and that the Department could reasonably examine two exporters subject to this review. Pursuant to section 777A(c)(2)(B) of the Act, the Department selected Stanley and CPI as mandatory respondents, while noting that CPI had submitted evidence, arguing that it had no shipments of subject merchandise during the POR.^[3] On December 3, 2009, after receiving a no-shipments response from CPI and evaluating further comments submitted by CPI and Petitioner, the Department selected Tianjin Xiantong Material & Trade Co., Ltd. (“Tianjin Xiantong”) as a mandatory respondent in place of CPI, noting that we would continue to gather additional information to investigate CPI's claims that it had no shipments during the POR.^[4] On January 26, 2010, Tianjin Xiantong filed a letter stating that it would not be participating as an individually-examined respondent in this review.^[5] Also on January 26, 2010, Petitioner submitted additional comments regarding respondent selection. On February 4, 2010, the Department selected Shandong Minmetal Co., Ltd. (“Shandong Minmetal”) as a mandatory respondent in place of Tianjin Xiantong.^[6]

On November 17, 2009, the Department issued its original antidumping duty questionnaire to Stanley. Between December 18, 2009, and July 12, 2010, Stanley submitted responses to the Department's original and supplemental questionnaires. On January 28, 2010, the Department issued a supplemental questionnaire to CPI regarding its no-shipments status, and CPI responded on February 25, 2010. On February 16, 2010, the Department issued its original antidumping duty questionnaire to Shandong Minmetal. Between March 18, 2010, and August 20, 2010, Shandong Minmetal submitted responses to the Department's original and supplemental questionnaires.

Preliminary Partial Rescission of Administrative Review

Pursuant to 19 CFR 351.213(d)(3), we have preliminarily determined that the following companies made no shipments of subject merchandise during the POR: Besco Machinery Industry (Zhejiang) Co., Ltd.; CPI; CYM (Nanjing) Nail Manufacture Co., Ltd., (“CYM Nanjing”); Dagang Zhitong Metal Products Co., Ltd.; Hebei Super Star Pneumatic Nails Co., Ltd.; Hong Kong Yu Xi Co., Ltd.; Senco-Xingya Metal Products (Taicang) Co., Ltd.; Shanghai Chengkai Hardware Product Co., Ltd.; Shanghai March Import & Export Company Ltd.; Shaoxing Chengye Metal Production Co., Ltd.; Suzhou Yaotian Metal Products Co., Ltd.; Tianjin Chentai International Trading Co., Ltd.; Tianjin Jurun Metal Products Co., Ltd. (“Tianjin Jurun”); Tianjin Longxing (Group) Huanyu Imp. & Exp. Co., Ltd.; Tianjin Port Free Trade Zone Xiangtong Intl. Industry & Trade Corp.; Tianjin Shenyuan Steel Production Group Co., Ltd.; Wuhu Shijie Hardware Co., Ltd. (“Wuhu Shijie”); and Wuxi Chengye Metal Products Co., Ltd., (collectively, the “No Shipments Respondents”). The Department received no-shipment certifications from the aforementioned companies.

The Department also issued no-shipment inquiries to CBP, asking it to provide any information contrary to our preliminary findings of no entries of subject merchandise for merchandise manufactured and shipped by the aforementioned companies. For most companies, we did not receive any response from CBP, thus indicating that there were no entries of subject merchandise into the United States exported by these companies. CBP did indicate potential entries of nails during the POR for those companies, so the Department requested CBP entry packages for such instances. For a more detailed explanation of our preliminary no-shipments determinations, which concludes that neither CPI, CYM Nanjing, Tianjin Jurun, nor Wuhu Shijie had POR shipments of subject merchandise to the United States, see Memorandum to James C. Doyle, Office 9 Director, through Alex Villanueva, Office 9 Program Manager, from Matthew Renkey, Senior Case Analyst and Emeka Chukwudebe, Case Analyst, dated September 7, 2010, First Antidumping Duty Administrative Review of Certain Steel Nails from the People's Republic of China (“PRC”): Partial Rescission of the First Antidumping Duty Administrative Review (“No Shipments Rescission Memo”). Consequently, as none of the above companies had shipments of subject merchandise to the United States during the POR, we are preliminarily rescinding the reviews with respect to the No Shipments Respondents.

Yitian Nanjing Hardware Co., Ltd. (“Yitian Nanjing”) also reported that it had no shipments of subject merchandise during the POR. However, the Department has noted that CBP entry documentation indicates that Yitian Nanjing did in fact have POR shipments of subject merchandise to the United States. Therefore, we are not preliminarily rescinding this review with respect to Yitian Nanjing. Furthermore, as Yitian Nanjing submitted only a no-shipments response and did not submit a separate rate application or certificate certification, we consider it part of the PRC-wide entity for these preliminary results. See Memorandum to the File, from Emeka Chukwudebe, Case Analyst, dated September 7, 2010, First Antidumping Duty Administrative Review of Certain Steel Nails from the People's Republic of China (“PRC”): CBP Entry Documentation for Yitian Nanjing Hardware Co., Ltd. However, given that we have not yet released the CBP entry documentation to Yitian Nanjing, we will provide Yitian Nanjing with an opportunity to address the CBP entry documentation in a post-preliminary supplemental questionnaire.

Surrogate Country and Surrogate Value Data

On April 1, 2010, the Department sent interested parties a letter inviting comments on surrogate country selection and surrogate value data. No parties provided comments with respect to selection of a surrogate country. On June 15, 2010, the Department received surrogate value information from Petitioner, and on June 25, 2010, certain separate rate respondents filed rebuttal comments on Petitioner's surrogate value information. All the surrogate values placed on the record were obtained from sources in India. Between August 10, 2010, and August 24, 2010, parties submitted additional arguments and data regarding the selection and calculation of the surrogate values.

Scope of the Order

The merchandise covered by this order includes certain steel nails having a shaft length up to 12 inches. Certain steel nails include, but are not limited to, nails made of round wire and nails that are cut. Certain steel nails may be of one piece construction or constructed of two or more pieces. Certain steel nails may be produced from any type of steel, and have a variety of finishes, heads, shanks, point types, shaft lengths and shaft diameters. Finishes include, but are not limited to, coating in vinyl, zinc (galvanized, whether by electroplating or hot-dipping one or more times), phosphate cement, and paint. Head styles include, but are not limited to, flat, projection, cupped, oval, brad, headless, double, countersunk, and sinker. Shank styles include, but are not limited to, smooth, barbed, screw threaded, ring shank and fluted shank styles. Screw-threaded nails subject to this proceeding are driven using direct force and not by turning the fastener using a tool that engages with the head. Point styles include, but are not limited to, diamond, blunt, needle, chisel and no point. Finished nails may be sold in bulk, or they may be collated into strips or coils using materials such as plastic, paper, or wire. Certain steel nails subject to this proceeding are currently classified under the Harmonized Tariff Schedule of the United States (“HTSUS”) subheadings 7317.00.55, 7317.00.65 and 7317.00.75.

Excluded from the scope of this proceeding are roofing nails of all lengths and diameter, whether collated or in bulk, and whether or not galvanized. Steel roofing nails are specifically enumerated and identified in ASTM Standard F 1667 (2005 revision) as Type I, Style 20 nails. Also excluded from the scope of this proceeding are corrugated nails. A corrugated nail is made of a small strip of corrugated steel with sharp points on one side. Also excluded from the scope of this proceeding are fasteners suitable for use in powder-actuated hand tools, not threaded and threaded, which are currently classified under HTSUS 7317.00.20 and 7317.00.30. Also excluded from the scope of this proceeding are thumb tacks, which are currently classified under HTSUS 7317.00.10.00. Also excluded from the scope of this proceeding are certain brads and finish nails that are equal to or less than 0.0720 inches in shank diameter, round or rectangular in cross section, between 0.375 inches and 2.5 inches in length, and that are collated with adhesive or polyester film tape backed with a heat seal adhesive. Also excluded from the scope of this proceeding are fasteners having a case hardness greater than or equal to 50 HRC, a carbon content greater than or equal to 0.5 percent, a round head, a secondary reduced-diameter raised head section, a centered shank, and a smooth symmetrical point, suitable for use in gas-actuated hand tools.

While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.

Non-Market Economy (“NME”) Country Status

In every case conducted by the Department involving the PRC, the PRC has been treated as an NME country. In accordance with section 771(18)(C)(i) of the Act, any determination that a foreign country is an NME country shall remain in effect until revoked by the administering authority. See, e.g., Brake Rotors from the People's Republic of China: Final Results and Partial Rescission of the 2004/2005 Administrative Review and Notice of Rescission of 2004/2005 New Shipper Review, 71 FR 66304 (November 14, 2006). None of the parties to this proceeding have contested such treatment. Accordingly, the Department calculated NV in accordance with section 773(c) of the Act, which applies to NME countries.

Surrogate Country

When the Department reviews imports from an NME country and the available information does not permit the Department to determine NV pursuant to section 773(a) of the Act, then pursuant to section 773(c)(4) of the Act, the Department bases NV on an NME producer's factors of production (“FOPs”) to the extent possible in one or more market-economy countries that (1) are at a level of economic development comparable to that of the NME country, and (2) are significant producers of comparable merchandise. The Department has determined that India, Philippines, Indonesia, Ukraine, Thailand, and Peru are countries comparable to the PRC in terms of economic development. See April 1, 2010, Letter to All Interested Parties, regarding “Antidumping Duty Administrative Review of Certain Steel Nails from the People's Republic of China: Surrogate Country List,” attaching February 16, 2010, Memorandum to Alex Villanueva, Program Manager, Office 9, AD/CVD Operations, from Kelly Parkhill, Acting Director, Office for Policy, regarding “Request for List of Surrogate Countries for an Administrative Review of the Antidumping Duty Order on Certain Steel Nails from the People's Republic of China” (“Surrogate Country List”).

Based on publicly available information placed on the record, the Department determines India to be a reliable source for surrogate values because India is at a comparable level of economic development, pursuant to section 773(c)(4) of the Act, is a significant producer of comparable merchandise, and has publicly available and reliable data with which to value FOPs. Furthermore, all the surrogate values placed on the record by the parties were obtained from sources in India. Accordingly, the Department has selected India as the surrogate country for purposes of valuing the FOPs because it meets the Department's criteria for surrogate country selection.

Separate Rates

In proceedings involving NME countries, there is a rebuttable presumption that all companies within the country are subject to government control and thus should be assessed a single antidumping duty rate. See, e.g., Polyethylene Terephthalate Film, Sheet, and Strip from the People's Republic of China: Final Determination of Sales at Less Than Fair Value, 73 FR 55039, 55040 (September 24, 2008) (“PET Film”). Exporters can demonstrate this independence through the absence of both de jure and de facto government control over export activities. Id. The Department analyzes each entity exporting the subject merchandise under a test arising from the Notice of Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588, 20589 (May 6, 1991) (“Sparklers”), as further developed in Notice of Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585, 22586-87 (May 2, 1994) (“Silicon Carbide”). However, if the Department determines that a company is wholly foreign-owned or located in a market economy, then a separate rate analysis is not necessary to determine whether it is independent from government control. See, e.g., PET Film. In addition to the two mandatory respondents, Stanley and Shandong Minmetal, the Department received separate rate applications (“SRAs”) or certifications (“SRCs”) from 26 companies (“Separate-Rate Applicants”).^[7] Because Stanley is wholly foreign-owned, a separate-rate analysis is not necessary to determine whether it is independent from government control, so we preliminarily grant Stanley a separate rate. Additionally, because Shandong Minmetal and the Separate-Rate Applicants have all stated that they are either joint ventures between Chinese and foreign companies, or are wholly Chinese-owned companies, the Department must analyze whether these companies can demonstrate the absence of both de jure and de facto governmental control over export activities.

(1) Absence of De Jure Control

The Department considers the following de jure criteria in determining whether an individual company may be granted a separate rate: (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) other formal measures by the government decentralizing control of companies. See Sparklers, 56 FR at 20589.

The evidence provided by Shandong Minmetal and the Separate-Rate Applicants supports a preliminary finding of de jure absence of governmental control based on the following: (1) An absence of restrictive stipulations associated with the individual exporter's business and export licenses; (2) applicable legislative enactments decentralizing control of the companies; and (3) other formal measures by the government decentralizing control of companies, i.e., each company's SRA, SRC, and/or Section A response, dated October 22, 2010, through March 18, 2010, where each individually-reviewed or separate-rate respondent stated that it had no relationship with any level of the PRC government with respect to ownership, internal management, and business operations.

2. Absence of De Facto Control

Typically the Department considers four factors in evaluating whether each respondent is subject to de facto governmental control of its export functions: (1) Whether the export prices are set by or are subject to the approval of a governmental agency; (2) whether the respondent has authority to negotiate and sign contracts and other agreements; (3) whether the respondent has autonomy from the government in making decisions regarding the selection of management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding disposition of profits or financing of losses. See Silicon Carbide, 59 FR at 22586-87; see also Notice of Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol From the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995). The Department has determined that an analysis of de facto control is critical in determining whether respondents are, in fact, subject to a degree of governmental control which would preclude the Department from assigning separate rates.

We determine that, for the individually-reviewed respondents and Separate-Rate Applicants, the evidence on the record supports a preliminary finding of de facto absence of governmental control based on record statements and supporting documentation showing the following: (1) Each exporter sets its own export prices independent of the government and without the approval of a government authority; (2) each exporter retains the proceeds from its sales and makes independent decisions regarding disposition of profits or financing of losses; (3) each exporter has the authority to negotiate and sign contracts and other agreements; and (4) each exporter has autonomy from the government regarding the selection of management. See, e.g., each company's SRA, SRC, and/or Section A response, dated October 22, 2010, through March 18, 2010.

The evidence placed on the record of this investigation by the individually-reviewed respondents and the Separate Rate Applicants demonstrates an absence of de jure and de facto government control with respect to each of the exporter's exports of the merchandise under investigation, in accordance with the criteria identified in Sparklers and Silicon Carbide. As a result, we have preliminarily determined that it is appropriate to grant the Separate Rate Applicants a margin based on the experience of the individually-reviewed respondents. In calculating this margin, for the purposes of this preliminary determination we are excluding any de minimis or zero rates or rates based on total adverse facts available (“AFA”).

Calculation of Separate Rate

The statute and our regulations do not address directly how we should establish a rate to apply to imports from companies which we did not select for individual examination in accordance with section 777A(c)(2) of the Act in an administrative review. Generally, we have used section 735(c)(5) of the Act, which provides instructions for calculating the all-others rate in an investigation, as guidance when we establish the rate for respondents not examined individually in an administrative review. See Notice of Final Results and Partial Rescission Antidumping Duty Administrative Review: Certain Frozen Warmwater Shrimp from the People's Republic of China, 75 FR 49460 (August 13, 2010); Certain Pasta from Italy: Notice of Final Results of the Twelfth Administrative Review, 75 FR 6352 (February 9, 2010), and the accompanying I&D Memo at Comment 2. Section 735(c)(5)(A) of the Act provides that “the estimated all-others rate shall be an amount equal to the weighted average of the estimated weighted average dumping margins established for exporters and producers individually investigated, * * *”

Because using the weighted-average margin based on the calculated net U.S. sales values for Stanley and Shandong Minmetal would allow these two respondents to deduce each other's business-proprietary information and thus cause an unwarranted release of such information, we cannot assign to the separate rate companies the weighted-average margin based on the calculated net U.S. sales values from these two respondents.

For these preliminary results, we determine that using the ranged total U.S. sales values Stanley and Shandong Minmetal reported in the public versions of their Section A responses (dated August 25, 2010) to our request for information concerning the quantity and value of their exports to the United States, is more appropriate than applying a simple average. These publicly available figures provide the basis on which we can calculate a margin which is the best proxy for the weighted-average margin based on the calculated net U.S. sales values of Stanley and Shandong Minmetal. We find that this approach is more consistent with the intent of section 735(c)(5)(A) of the Act and our use of section 735(c)(5)(A) of the Act as guidance when we establish the rate for respondents not examined individually in an administrative review.

Because the calculated net U.S. sales values for Stanley and Shandong Minmetal are business-proprietary figures, we find that 13.31 percent, which we calculated using the publicly available figures of U.S. sales values for these two firms, is the best reasonable proxy for the weighted-average margin based on the calculated net U.S. sales values of Stanley and Shandong Minmetal. See Memorandum to the File from Emeka Chukwudebe, to the File: Calculation of Separate Rate, dated September 7, 2010.

PRC-Wide Entity

As discussed above, in this administrative review we limited the selection of respondents using CBP import data. See First, Second and Third Respondent Selection Memos at Attachment I. In this case, we made available to the companies who were not selected, the separate rates application and certification, which were put on the Department's Web site. See Initiation. Because some parties for which a review was requested did not apply for separate rate status, the PRC-Wide entity is considered to be part of this review. The following companies did not apply for separate rates and will continue to be part of the PRC-wide entity:

(1) Beijing Daruixing Global Trading Co., Ltd.

(2) Beijing Tri-Metal Co., Ltd.

(3) Beijing Yonghongsheng Metal Products Co., Ltd.

(4) Cana (Tiajin) Hardware Ind., Co., Ltd.

(5) China Silk Trading & Logistics Co., Ltd.

(6) Chongqing Hybest Nailery Co., Ltd.

(7) Dingzhou Ruili Nail Production Co. Ltd.

(8) Dong'e Fuqiang Metal Products Co., Ltd.

(9) Haixing Hongda Hardware Production Co., Ltd.

(10) Haixing Linhai Hardware Products Factory

(11) Handuk Industrial Co., Ltd.

(12) Hilti (China) Limited

(13) Huadu Jin Chuan Manufactory Co., Ltd.

(14) Huanghua Huarong Hardware Products Co., Ltd.

(15) Huanghua Jinhai Metal Products Co., Ltd.

(16) Huanghua Shenghua Hardware Manufactory Factory

(17) Huanghua Xinda Nail Production Co., Ltd.

(18) Huanghua Yufutai Hardware Products Co., Ltd.

(19) Jinding Metal Products Ltd.

(20) Joto Enterprise Co., Ltd.

(21) Kyung Dong Corp.

(22) Maanshan Longer Nail Product Co., Ltd.

(23) Nanjing Dayu Pneumatic Gun Nails Co., Ltd.

(24) Qingdao Denarius Manufacture Co. Limited

(25) Qingdao International Fastening Systems Inc.

(26) Qingdao Sino-Sun International Trading Company Limited

(27) Qingyuan County Hongyi Hardware Products Factory

(28) Qingyun Hongyi Hardware Factory

(29) Rizhao Changxing Nail-Making Co., Ltd.

(30) Rizhao Qingdong Electric Appliance Co., Ltd.

(31) Shandong Minimetals Co., Ltd.

(32) Shandong Oriental Cherry Hardware Group, Ltd.

(33) Shanghai Curvet Hardware Products Co., Ltd.

(34) Shanghai Nanhui Jinjun Hardware Factory

(35) Shanghai Tengyu Hardware Tools Co., Ltd.

(36) Sinochem Tianjin Imp & Exp Shenzhen Corp

(37) Tianjin Baisheng Metal Products Co., Ltd.

(38) Tianjin Bosai Hardware Tools Co., Ltd.

(39) Tianjin City Dagang Area Jinding Metal Products Factory

(40) Tianjin City Daman Port Area Jinding Metal Products Factory

(41) Tianjin City Jinchi Metal Products Co., Ltd.

(42) Tianjin Dagang Dongfu Metallic Products Co., Ltd.

(43) Tianjin Dagang Hewang Nail Factory

(44) Tianjin Dagang Hewang Nails Manufacture Plant.

(45) Tianjin Dagang Huasheng Nailery Co., Ltd.

(46) Tianjin Dagang Jingang Nail Factory

(47) Tianjin Dagang Jingang Nails Manufacture Plant.

(48) Tianjin Dagang Linda Metallic Products Co., Ltd.

(49) Tianjin Dagang Longhua Metal Products Plant.

(50) Tianjin Dagang Shenda Metal Products Co., Ltd.

(51) Tianjin Dagang Yate Nail Co., Ltd.

(52) Tianjin Foreign Trade (Group) Textile & Garment Co., Ltd.

(53) Tianjin Hewang Nail Making Factory

(54) Tianjin Huapeng Metal Company

(55) Tianjin Huachang Metal Products Co., Ltd.

(56) Tianjin Huasheng Nails Production Co., Ltd.

(57) Tianjin Jieli Hengyuan Metallic Products Co., Ltd.

(58) Tianjin Jietong Hardware Products Co., Ltd.

(60) Tianjin Jin Gang Metal Products Co., Ltd.

(61) Tianjin Jishili Hardware Co., Ltd.

(62) Tianjin JLHY Metal Products Co., Ltd.

(63) Tianjin Kunxin Hardware Co., Ltd.

(64) Tianjin Kunxin Metal Products Co., Ltd.

(65) Tianjin Linda Metal Company

(66) Tianjin Qichuan Metal Products Co., Ltd.

(67) Tianjin Ruiji Metal Products Co., Ltd.

(68) Tianjin Shishun Metal Product Co., Ltd.

(69) Tianjin Shishun Metallic Products Co., Ltd.

(70) Tianjin Xiantong Fucheng Gun Nail Manufacture Co., Ltd.

(71) Tianjin Xinyuansheng Metal Products Co., Ltd.

(72) Tianjin Yihao Metallic Products Co., Ltd.

(73) Tianjin Yongchang Metal Product Co., Ltd.

(74) Tianjin Yongxu Metal Products Co., Ltd.

(75) Tianjin Yongyi Standard Parts Production Co., Ltd.

(76) Unicatch Industrial Co., Ltd.

(77) Wuqiao County Huifeng Hardware Products Factory

(78) Wuqiao County Xinchuang Hardware Products Factory

(79) Wuqiao Huifeng Hardware Production Co., Ltd.

(80) Wuxi Baolin Nail-Making Machinery Co., Ltd.

(81) Zhangjiagang Longxiang Packing Materials Co., Ltd.

(82) Zhongshan Junlong Nail Manufactures Co., Ltd.

Date of Sale

The date of sale is generally the date on which the parties agree upon all substantive terms of the sale, which normally includes the price, quantity, delivery terms and payment terms. See Carbon and Alloy Steel Wire Rod from Trinidad and Tobago: Final Results of Antidumping Duty Administrative Review, 72 FR 62824 (November 7, 2007) and accompanying Issues and Decision Memorandum at Comment 1; see also Notice of Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon Quality Steel Products from Turkey, 65 FR 15123 (March 21, 2000) and accompanying Issues and Decision Memorandum at Comment 2.

19 CFR 351.401(i) states that, “{i}n identifying the date of sale of the merchandise under consideration or foreign like product, the Secretary normally will use the date of invoice, as recorded in the exporter or producer's records kept in the normal course of business. The Secretary may use a date other than the date of invoice if the Secretary is satisfied that a different date better reflects the date on which the exporter or producer establishes the material terms of sale.” See 19 CFR 351.401(i); see also Allied Tube & Conduit Corp. v. United States, 132 F. Supp. 2d 1087, 1090-1092 (CIT 2001) (“Allied Tube”). However, as noted by the Court of International Trade (“CIT”) in Allied Tube, a party seeking to establish a date of sale other than invoice date bears the burden of establishing that “ `a different date better reflects the date on which the exporter or producer establishes the material terms of sale.' ” See Allied Tube, 132 F. Supp. 2d at 1090 (quoting 19 CFR 351.401(i)).

Shandong Minmetal reported that its date of sale was determined by the invoice issued by it to the unaffiliated United States customer. In this case, as the Department found no evidence contrary to Shandong Minmetal's claims that invoice date was the appropriate date of sale upon which all substantive terms of sale were agreed upon, the Department used invoice date as the date of sale for these preliminary results. See, e.g., Shandong Minmetal's August 9, 2010 submission at 1.

Stanley reported that the earlier of invoice date or shipment date is the appropriate date of sale. See, e.g., Stanley's December 18, 2009 submission at 23-24. As the Department found no evidence on the record contrary to Stanley's claims, for these preliminary results, the Department used the invoice date as the date of sale. For those sales where shipment date preceded invoice date, the Department used the shipment date as the date of sale.

Fair Value Comparison

In accordance with section 751(a)(2)(A) of the Act, to determine whether sales of nails to the United States by Stanley or Shandong Minmetal were made at less than normal value, we compared the export price (“EP”) or constructed export price (“CEP”), as appropriate, to NV, as described in the “U.S. Price,” and “Normal Value” sections of this notice.

U.S. Price

A. EP

For Shandong Minmetal, in accordance with section 772(a) of the Act, we based the U.S. price for certain sales on EP because the first sale to an unaffiliated purchaser in the United States was made prior to importation, and the use of CEP was not otherwise warranted. In accordance with section 772(c) of the Act, we calculated EP by deducting the applicable movement expenses and adjustments from the gross unit price. We based these movement expenses on surrogate values where a PRC company provided the service and was paid in Renminbi (“RMB”) (see “Factors of Production” section below for further discussion). For details regarding our EP calculations, see Memorandum to the File, through Alex Villanueva, Program Manager, Office 9, from Emeka Chukwudebe, Analyst, “First Antidumping Duty Administrative of Certain Steel Nails from the People's Republic of China: Shandong Minmetal Co., Ltd.,” dated concurrently with this notice (“Shandong Minmetal Prelim Analysis Memo”).

B. CEP

In accordance with section 772(b) of the Act, we based the U.S. price for Stanley's sales on CEP because the first sale to an unaffiliated customer was made by Stanley's U.S. affiliate. In accordance with section 772(c)(2)(A) of the Act, we calculated CEP by deducting the applicable expenses from the gross unit price charged to the first unaffiliated customer in the United States. Further, in accordance with section 772(d)(1) of the Act and 19 CFR 351.402(b), where appropriate, we deducted from the starting price the applicable selling expenses associated with economic activities occurring in the United States. In addition, pursuant to section 772(d)(3) of the Act, we made an adjustment to the starting price for CEP profit. We based movement expenses on either surrogate values or actual expenses, where appropriate. For details regarding our CEP calculations, and for a complete discussion of the calculation of the U.S. price for Stanley, see Memorandum to the File, through Alex Villanueva, Program Manager, Office 9, from Matthew Renkey, Senior Analyst, “First Antidumping Duty Administrative of Certain Steel Nails from the People's Republic of China: Stanley,” dated concurrently with this notice (“Stanley Prelim Analysis Memo”).

Normal Value

Section 773(c)(1) of the Act provides that the Department shall determine NV using a FOP methodology if the merchandise is exported from an NME and the information does not permit the calculation of NV using home-market prices, third-country prices, or constructed value under section 773(a) of the Act. The Department bases NV on FOPs because the presence of government controls on various aspects of NMEs renders price comparisons and the calculation of production costs invalid under the Department's normal methodologies. See, e.g., Preliminary Determination of Sales at Less Than Fair Value, Affirmative Critical Circumstances, In Part, and Postponement of Final Determination: Certain Lined Paper Products from the People's Republic of China, 71 FR 19695, 19703 (April 17, 2006) (“CLPP”) unchanged in Notice of Final Determination of Sales at Less Than Fair Value, and Affirmative Critical Circumstances, In Part: Certain Lined Paper Products From the People's Republic of China, 71 FR 53079 (September 8, 2006).

Factor Valuation Methodology

In accordance with section 773(c) of the Act, we calculated NV based on FOP data reported by the respondents. To calculate NV, we multiplied the reported per-unit factor-consumption rates by publicly available surrogate values. In selecting surrogate values, the Department is tasked with using the best available information on the record. See section 773(c) of the Act. To satisfy this statutory requirement, we compared the quality, specificity, and contemporaneity of the potential surrogate value data. See, e.g., Fresh Garlic From the People's Republic of China: Final Results of Antidumping Duty New Shipper Review, 67 FR 72139 (December 4, 2002) and accompanying Issues and Decision Memorandum at Comment 6; and Final Results of First New Shipper Review and First Antidumping Duty Administrative Review: Certain Preserved Mushrooms From the People's Republic of China, 66 FR 31204 (June 11, 2001) and accompanying Issues and Decision Memorandum at Comment 5.

The Department's practice is to select, to the extent practicable, surrogate values which are: publicly available; representative of non-export, broad market average values; contemporaneous with the POI; product-specific; and exclusive of taxes and import duties. See, e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value, Negative Preliminary Determination of Critical Circumstances and Postponement of Final Determination: Certain Frozen and Canned Warmwater Shrimp From the Socialist Republic of Vietnam, 69 FR 42672, 42682 (July 16, 2004), unchanged in Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned Warmwater Shrimp from the Socialist Republic of Vietnam, 69 FR 71005 (December 8, 2004). As appropriate, we adjusted input prices by including freight costs to make them delivered prices. Specifically, we added to the surrogate values derived from Indian Import Statistics a surrogate freight cost using the shorter of the reported distance from the domestic supplier to the factory or the distance from the nearest seaport to the factory where appropriate. This adjustment is in accordance with the Court of Appeals for the Federal Circuit's decision in Sigma Corp. v. United States, 117 F.3d 1401, 1407-08 (Fed. Cir. 1997). For a detailed description of all surrogate values selected in this preliminary determination, see Memorandum to the File through Alex Villanueva, Program Manager, Office 9, from Tim Lord, Analyst, “First Antidumping Duty Administrative Review of Certain Steel Nails from the People's Republic of China: Surrogate Values for the Preliminary Results,” dated concurrently with this notice (“Surrogate Values Memo”).

For these preliminary results, we concluded that data from Indian Import Statistics and other publicly available Indian sources constitute the best available information on the record for the surrogate values for respondents' raw materials, packing, by-products, energy, and the surrogate financial ratios. The record shows that data in the Indian Import Statistics, as well as those from the other publicly available Indian sources, are contemporaneous with the POI, product-specific, tax-exclusive, and represent a broad market average. See Surrogate Values Memo. In those instances where we could not obtain publicly available information contemporaneous with the POI, consistent with our practice, we adjusted the surrogate values using, where appropriate, the Indian Wholesale Price Index (“WPI”) as published in the International Financial Statistics of the International Monetary Fund. See, e.g., Fresh Garlic from the People's Republic of China: Final Results of Antidumping Duty New Shipper Reviews, 69 FR 46498, 46500 (August 3, 2004).

As a consequence of the CAFC's ruling in Dorbest Limited et. al. v. United States, 2009-1257, -1266, CAFC (May 14, 2010), the Department is no longer relying on the regression-based wage rate described in 19 CFR 351.408(c)(3). The Department is continuing to evaluate options for determining labor values in light of the recent CAFC decision. For these preliminary results, we have calculated an hourly wage rate to use in valuing respondents' reported labor input by averaging earnings and/or wages in countries that are economically comparable to the PRC and that are significant producers of comparable merchandise. To calculate the hourly wage rate we used the International Labor Organization (“ILO”) wage rate data. Specifically, we averaged the ILO wage rate data from the following countries found to be economically comparable to the PRC: Albania, Ecuador, Egypt Arab Rep., El Salvador, Fiji, Guatemala, Guyana, Honduras, India, Indonesia, Jordan, Nicaragua, Paraguay, Peru, Philippines, Sri Lanka, Thailand, and Ukraine. For a further explanation of the Department's calculation of the surrogate value for labor, see the Surrogate Values Memo.

In accordance with the OTCA 1988 legislative history, the Department continues to apply its long-standing practice of disregarding surrogate values if it has a reason to believe or suspect the source data may be subsidized.^[8] In this regard, the Department has previously found that it is appropriate to disregard such prices from e.g., Indonesia, South Korea and Thailand, because we have determined that these countries maintain broadly available, non-industry specific export subsidies.^[9] Based on the existence of these subsidy programs that were generally available to all exporters and producers in these countries at the time of the POI, the Department finds that it is reasonable to infer that all exporters from Indonesia, South Korea and Thailand may have benefitted from these subsidies.

Additionally, we disregarded prices from NME countries. Finally, imports that were labeled as originating from an “unspecified” country were excluded from the average value, because the Department could not be certain that they were not from either an NME country or a country with general export subsidies.

Currency Conversion

Where necessary, the Department made currency conversions into U.S. dollars, in accordance with section 773A(a) of the Act, based on the exchange rates in effect on the dates of the U.S. sales, as certified by the Federal Reserve Bank.

Preliminary Results of Review

The Department preliminarily determines that the following weighted-average dumping margins exist:

Certain Steel Nails From the People's Republic of China

Manufacturer/exporter	Weighted average margin (percent)
(1) The Stanley Works (Langfang) Fastening Systems Co., Ltd.	6.48
(2) Shandong Minmetal Co., Ltd.	51.25
(3) Aironware (Shanghai) Co., Ltd.	13.31
(4) Chiieh Yung Metal Ind. Corp.	13.31
(5) China Staple Enterprise (Tianjin) Co., Ltd.	13.31
(6) Dezhou Hualude Hardware Products Co., Ltd.	13.31
(7) Faithful Engineering Products Co., Ltd.	13.31
(8) Hengshui Mingyao Hardware & Mesh Products Co., Ltd.	13.31
(9) Huanghua Jinhai Hardware Products Co., Ltd.	13.31
(10) Huanghua Xionghua Hardware Products Co., Ltd.	13.31
(11) Jisco Corporation	13.31
(12) Koram Panagene Co., Ltd.	13.31
(13) Nanjing Yuechang Hardware Co., Ltd.	13.31
(14) Qidong Liang Chyuan Metal Industry Co., Ltd.	13.31
(15) Qingdao D & L Group Ltd.	13.31
(16) Rizhao Handuk Fasteners Co., Ltd.	13.31
(17) Romp (Tianjin) Hardware Co., Ltd.	13.31
(18) Shandong Dinglong Import & Export Co., Ltd.	13.31
(19) Shanghai Jade Shuttle Hardware Tools Co., Ltd.	13.31
(20) Shouguang Meiqing Nail Industry Co., Ltd.	13.31
(21) Tianjin Jinchi Metal Products Co., Ltd.	13.31
(22) Tianjin Jinghai County Hongli Industry & Business Co., Ltd.	13.31
(23) Tianjin Zhonglian Metals Ware Co., Ltd.	13.31
(24) Wintime Import & Export Corporation Limited of Zhongshan	13.31
(25) Wuxi Qiangye Metalwork Production Co., Ltd.	13.31
(26) Zhejiang Gem-Chun Hardware Accessory Co., Ltd.	13.31
PRC-Wide Rate	118.04

Disclosure and Public Hearing

The Department will disclose to parties the calculations performed in connection with these preliminary results within five days of the date of publication of this notice. See 19 CFR 351.224(b).

In accordance with 19 CFR 351.301(c)(3)(ii), for the final results of this administrative review, interested parties may submit publicly available information to value FOPs within 20 days after the date of publication of these preliminary results. Interested parties must provide the Department with supporting documentation for the publicly available information to value each FOP. Additionally, in accordance with 19 CFR 351.301(c)(1), for the final results of this administrative review, interested parties may submit factual information to rebut, clarify, or correct factual information submitted by an interested party less than ten days before, on, or after, the applicable deadline for submission of such factual information. However, the Department notes that 19 CFR 351.301(c)(1) permits new information only insofar as it rebuts, clarifies, or corrects information recently placed on the record. The Department generally cannot accept the submission of additional, previously absent-from-the-record alternative surrogate value information pursuant to 19 CFR 351.301(c)(1). See Glycine from the People's Republic of China: Final Results of Antidumping Duty Administrative Review and Final Rescission, in Part, 72 FR 58809 (October 17, 2007) and accompanying Issues and Decision Memorandum at Comment 2.

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). Rebuttal briefs and rebuttals to written comments, limited to issues raised in such briefs or comments may be filed no later than five days after the deadline for filing case briefs. See 19 CFR 351.309(d). The Department urges interested parties to provide an executive summary of each argument contained within the case briefs and rebuttal briefs.

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 covered by this review. The Department intends to issue assessment instructions to CBP 15 days after the publication date of the final results of this review excluding any reported sales that entered during the gap period. In accordance with 19 CFR 351.212(b)(1), we calculated exporter/importer (or customer)-specific assessment rates for the merchandise subject to this review. Because we do not have entered values for all U.S. sales, we calculated an ad valorem assessment rate by aggregating the antidumping duties due for all U.S. sales to each importer (or customer) and dividing this amount by the total quantity sold to that importer (or customer). See 19 CFR 351.212(b)(1). To determine whether the duty assessment rates are de minimis, in accordance with the requirement set forth in 19 CFR 351.106(c)(2), we calculated importer (or customer)-specific ad valorem ratios based on the estimated entered value. Where an importer (or customer)-specific ad valorem rate is zero or de minimis, we will instruct CBP to liquidate appropriate entries without regard to antidumping duties. See 19 CFR 351.106(c)(2).

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) For the exporter listed above, the cash deposit rate will be established in the final results of this review (except, if the rate is zero or de minimis, i.e., less than 0.5 percent, no cash deposit will be required for that company); (2) for all PRC exporters of subject merchandise which have not been found to be entitled to a separate rate, the cash deposit rate will be the PRC-wide rate of 118.04 percent; and (3) for all non-PRC exporters of subject merchandise which have not received their own rate, the cash deposit rate will be the rate applicable to the PRC exporters that supplied that non-PRC exporter. These 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.

These preliminary results are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(4).

Dated: September 7, 2010.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

Footnotes

1.  The Stanley Works (Langfang) Fastening Systems Co., Ltd. and the Stanley Works/Stanley Fastening Systems, LP (collectively “Stanley”).

2.  Mid Continent Nail Corporation.

3.  See Memorandum to James C. Doyle, Office 9 Director, through Alex Villanueva, Office 9 Program Manager, from Matthew Renkey, Senior Case Analyst and Emeka Chukwudebe, Case Analyst, dated November 6, 2009, First Antidumping Duty Administrative Review of Certain Steel Nails from the People's Republic of China (“PRC”): Selection of Respondents for Individual Review (“First Respondent Selection Memo”).

4.  See Memorandum to the File, through Alex Villanueva, Office 9 Program Manager, from Emeka Chukwudebe, Case Analyst, dated December 3, 2009, First Antidumping Duty Administrative Review of Certain Steel Nails from the People's Republic of China (“PRC”): Selection of Second Respondent for Individual Review (“Second Respondent Selection Memo”).

5.  The Department also rescinded the review of Tianjin Xiantong because Petitioner withdrew its request for review with respect to this company. See Partial Rescission Notice.

6.  Memorandum to the File, through Alex Villanueva, Office 9 Program Manager, from Emeka Chukwudebe, Case Analyst, dated December 3, 2009, First Antidumping Duty Administrative Review of Certain Steel Nails from the People's Republic of China (“PRC”): Replacement of Respondent Selected for Individual Examination (“Third Respondent Selection Memo”).

7.  Those companies include: (1) Aironware (Shanghai) Co., Ltd.; (2) Chiieh Yung Metal Ind. Corp.; (3) China Staple Enterprise (Tianjin) Co., Ltd.; (4) Dezhou Hualude Hardware Products Co., Ltd.; (5) Faithful Engineering Products Co., Ltd.; (6) Hengshui Mingyao Hardware & Mesh Products Co., Ltd.; (7) Huanghua Jinhai Hardware Products Co., Ltd.; (8) Huanghua Xionghua Hardware Products Co., Ltd.; (9) Jisco Corporation; (10) Koram Panagene Co., Ltd.; (11) Nanjing Yuechang Hardware Co., Ltd.; (12) Qidong Liang Chyuan Metal Industry Co., Ltd.; (13) Qingdao D & L Group Ltd.; (14) Rizhao Handuk Fasteners Co., Ltd.; (15) Romp (Tianjin) Hardware Co., Ltd.; (16) Shandong Dinglong Import & Export Co., Ltd.; (17) Shanghai Jade Shuttle Hardware Tools Co., Ltd.; (18) Shouguang Meiqing Nail Industry Co., Ltd.; (19) Tianjin Jinchi Metal Products Co., Ltd.; (20) Tianjin Jinghai County Hongli Industry & Business Co., Ltd.; (21) Tianjin Zhonglian Metals Ware Co., Ltd.; (22) Wintime Import & Export Corporation Limited of Zhongshan; (23) Wuxi Qiangye Metalwork Production Co., Ltd.; and (24) Zhejiang Gem-Chun Hardware Accessory Co., Ltd.

8.  Omnibus Trade and Competitiveness Act of 1988, Conf. Report to Accompany H.R. 3, H.R. Rep. No. 576, 100th Cong., 2nd Sess. (1988) (“OTCA 1988”) at 590.

9.  See, e.g., Expedited Sunset Review of the Countervailing Duty Order on Carbazole Violet Pigment 23 from India, 75 FR 13257 (March 19, 2010) and accompanying Issues and Decision Memorandum at pages 4-5; Expedited Sunset Review of the Countervailing Duty Order on Certain Cut-to-Length Carbon Quality Steel Plate from Indonesia, 70 FR 45692 (August 8, 2005) and accompanying Issues and Decision Memorandum at page 4; See Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea: Final Results of Countervailing Duty Administrative Review, 74 FR 2512 (January 15, 2009) and accompanying Issues and Decision Memorandum at pages 17, 19-20; See Certain Hot-Rolled Carbon Steel Flat Products from Thailand: Final Results of Countervailing Duty Determination, 66 FR 50410 (October 3, 2001) and accompanying Issues and Decision Memorandum at page 23.