2011-16498. Diamond Sawblades and Parts Thereof From the People's Republic of China: Preliminary Results and Preliminary Intent To Terminate, in Part, Antidumping Duty Changed Circumstances Review and Extension of Time Limit for Final Results

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (“Department”) is conducting a changed circumstances review (“CCR”) of the antidumping duty order on diamond sawblades and parts thereof from the People's Republic of China (“PRC”) pursuant to section 751(b) of the Tariff Act of 1930, as amended (“Act”), and 19 CFR 351.216(d). We preliminarily determine that Hebei Husqvarna-Jikai Diamond Tools Co., Ltd. (“Hebei Husqvarna”) is not the successor-in-interest to Hebei Jikai Industrial Group Co., Ltd. (“Hebei Jikai”), but is instead a new entity.

DATES:

Effective Date: June 30, 2011.

FOR FURTHER INFORMATION CONTACT:

Alan Ray, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone].

SUPPLEMENTARY INFORMATION:

Case History

On August 13, 2010, the Diamond Sawblades Manufacturers Coalition (“DSMC”) filed a submission to the Department requesting that it conduct a CCR of the antidumping duty order on diamond sawblades and parts thereof from the People's Republic of China (“PRC”) to determine whether Hebei Husqvarna is the successor-in-interest to Electrolux Construction Products (Xiamen) Co. Ltd. (“Electrolux”), Husqvarna Holding AB, or is an altogether new entity that would therefore be subject the PRC-wide rate. On August 20, 2010, the DSMC submitted further information supporting its claim that Hebei Husqvarna should be found to be the successor-in-interest to Electrolux, Husqvarna Holding AB, or found to be a new entity. On September 13, 2010, Respondent ^[1] submitted to the Department a request for a CCR, contending that Hebei Husqvarna should be considered the successor-in-interest to Hebei Jikai. On September 30, 2010, the Department initiated a CCR based on these two requests but did not expedite the review, as requested by Respondent, because the Department required additional information to perform the successor-in-interest analysis.^[2]

Between October 13, 2010, and April 12, 2011, Hebei Husqvarna and the DSMC submitted questionnaire responses and comments regarding the successor-in-interest factors that the Department considers in making a determination. In its April 12, 2011, submission, the DSMC argued that the Department should apply adverse facts available (“AFA”) to Hebei Husqvarna and terminate the review because Hebei Husqvarna failed to provide complete information for two of the four criteria (described below) that the Department typically examines in a successor-in-interest analysis.

Scope of the Order

The products covered by the order are all finished circular sawblades, whether slotted or not, with a working part that is comprised of a diamond segment or segments, and parts thereof, regardless of specification or size, except as specifically excluded below. Within the scope of the order are semifinished diamond sawblades, including diamond sawblade cores and diamond sawblade segments. Diamond sawblade cores are circular steel plates, whether or not attached to non-steel plates, with slots. Diamond sawblade cores are manufactured principally, but not exclusively, from alloy steel. A diamond sawblade segment consists of a mixture of diamonds (whether natural or synthetic, and regardless of the quantity of diamonds) and metal powders (including, but not limited to, iron, cobalt, nickel, tungsten carbide) that are formed together into a solid shape (from generally, but not limited to, a heating and pressing process).

Sawblades with diamonds directly attached to the core with a resin or electroplated bond, which thereby do not contain a diamond segment, are not included within the scope of the order. Diamond sawblades and/or sawblade cores with a thickness of less than 0.025 inches, or with a thickness greater than 1.1 inches, are excluded from the scope of the order. Circular steel plates that have a cutting edge of non-diamond material, such as external teeth that protrude from the outer diameter of the plate, whether or not finished, are excluded from the scope of the order. Diamond sawblade cores with a Rockwell C hardness of less than 25 are excluded from the scope of the order. Diamond sawblades and/or diamond segment(s) with diamonds that predominantly have a mesh size number greater than 240 (such as 250 or 260) are excluded from the scope of the order. Merchandise subject to the order is typically imported under heading 8202.39.00.00 of the Harmonized Tariff Schedule of the United States (“HTSUS”'). When packaged together as a set for retail sale with an item that is separately classified under headings 8202 to 8205 of the HTSUS, diamond sawblades or parts thereof may be imported under heading 8206.00.00.00 of the HTSUS. The tariff classification is provided for convenience and customs purposes; however, the written description of the scope of the order is dispositive.

Preliminary Termination of CCR Based Upon DSMC's Request

In its August 13, 2010, and August 20, 2010, submissions, the DSMC requested that the Department initiate a CCR and find that Hebei Husqvarna is a successor-in-interest to Electrolux, Husqvarna Holding AB, or is an altogether new entity. Operationally, a finding that Hebei Husqvarna is the successor-in-interest to Electrolux, Husqvarna Holding AB, or an altogether new entity, would result in a continuation of the status quo in terms of cash deposit requirements. Unless the Department concludes that Hebei Husqvarna is the successor-in-interest to Hebei Jikai, all exports to the United States should be subject to the PRC-wide antidumping duty rate of 164.09 percent. Therefore, the Department is preliminarily terminating this review under the request submitted by the DSMC, as the completion of the review based upon its request would not result in any possible change with respect to Hebei Husqvarna's appropriate antidumping duty cash deposit rate.

Successor-in-Interest Determination Based Upon Respondent's Request

In making a successor-in-interest determination, the Department typically examines several factors including, but not limited to: (1) Management; (2) production facilities; (3) supplier relationships; and (4) customer base.^[3] While no single factor or combination of these factors will necessarily be dispositive, the Department will generally consider the new company to be the successor to the previous company if its resulting operation is not materially dissimilar to that of its predecessor.^[4] Respondent provided complete information with respect to management, production facilities, and Hebei Husqvarna's and Electrolux's suppliers and customers. The Department requested information regarding Hebei Jikai. Specifically, the Department requested the quantity and value of subject merchandise that it had sold to its largest customers, as well as the percentage of inputs accounted for by Hebei Jikai's largest suppliers. Hebei Husqvarna did not provide this information to the Department.^[5]

Preliminary Results

On September 14, 2006, Husqvarna Holding AB and Hebei Jikai agreed to form a joint venture company, Hebei Husqvarna, in China to produce and sell diamond tools, including diamond sawblades.^[6] Based on the facts surrounding the formation of the joint venture and the subsequent restructuring described in the accompanying memorandum, and in accordance with 19 CFR 351.221(c)(3)(i), we preliminarily determine that Hebei Husqvarna is not the successor-in-interest to Hebei Jikai but is instead a new entity.^[7] The Department disagreed with the DSMC in its request to terminate the review, given Respondent's failure to provide the Department with information regarding Hebei Jikai's customers and suppliers. The Department finds that Hebei Husqvarna's and Hebei Jikai's omission does not provide a sufficient basis to terminate the review, as the Department could continue to perform the successor-in-interest analysis. With respect to the four factors that the Department typically examines, we preliminarily find that, first, the management and board of directors that had been in place at Hebei Jikai have significantly changed. Second, we find that production facilities of Hebei Husqvarna are substantially the same as those of Hebei Jikai. Finally, because Respondent provided incomplete information regarding changes in customers and suppliers, we cannot conclude that for those two factors Hebei Husqvarna is materially the same as Hebei Jikai. We note that even with the limited information regarding Hebei Jikai's customers and suppliers on the record, there appears to have been a significant change in customer base. Therefore, in considering the totality of the information we have on the record, the Department preliminarily determines that Hebei Husqvarna is not the successor-in-interest to Hebei Jikai. Furthermore, the Department finds the application of AFA, as argued by the DSMC, is unnecessary.

In conclusion, as a result of this determination, we preliminarily find that Hebei Husqvarna remains subject to the PRC-wide antidumping duty cash deposit rate of 164.09 percent with respect to the subject merchandise. If the above preliminary results are affirmed in the Department's final results, the cash deposit rate resulting from this changed circumstances review will apply to all entries of the subject merchandise from Hebei Husqvarna, entered or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this changed circumstances review.^[8] Finally, we note that the 48.5 percent rate that Hebei Jikai received in the investigation continues to apply only to subject merchandise that was both produced and exported by Hebei Jikai and would not be applicable to merchandise produced by Hebei Husqvarna and exported by Hebei Jikai.

Public Comment

Interested parties are invited to comment on these preliminary results. Written comments may be submitted no later than seven days after the publication of these preliminary results.^[9] Rebuttals to written comments, limited to issues raised in such comments, may be filed no later than 12 days after the publication of these preliminary results.^[10] All written comments shall be submitted in accordance with 19 CFR 351.303. Any interested party may request a hearing within 14 days of publication of this notice.^[11] Any hearing, if requested, will be held no later than 30 days after the date of publication of this notice, or the first workday thereafter.^[12] Persons interested in attending the hearing, if one is requested, should contact the Department for the date and time of hearing.

Extension of Time Limit for the Final Results

In the Initiation, the Department stated that it would issue the final results of the review within 270 days after the date on which the changed circumstances review was initiated. However, it is not practicable to complete the review within this time period. Accordingly, pursuant to 19 CFR 351.302(b), we are extending the time limit by 55 days.

The Department finds that it is not practicable to complete this review within the original time frame as it is granting interested parties seven days from the date of publication of this notice to submit comments, five additional days to submit rebuttal comments. Furthermore, the Department is providing parties the opportunity to request a hearing pertaining to these preliminary results. Consequently, in accordance with 19 CFR 351.302(b), the Department is extending the time period for issuing the final results in this review by 55 days. Therefore, the final results will be due no later than August 18, 2011.

We are issuing and publishing these preliminary results and notice in accordance with sections 751(b)(1) and 777(i)(1) and (2) of the Act and 19 CFR 351.216 and 351.221(c)(3).

Dated: June 24, 2011.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

Footnotes

1.  The second request for initiation of a changed circumstances review was submitted on behalf of Husqvarna Construction Products North America, Inc., Hebei Jikai, and Hebei Husqvarna, collectively (“Respondent”). However, because the Department requested and received information from individual companies that compose Respondent, in certain instances the Department will refer to specific companies.

2.  See Diamond Sawblades and Parts Thereof From the People's Republic of China: Initiation of Antidumping Duty Changed Circumstances Review, 75 FR 60409 (September 30, 2010) (“Initiation”).

3.  See Certain Frozen Fish Fillets From the Socialist Republic of Vietnam: Final Results of the Antidumping Duty Administrative Review and New Shipper Reviews, 75 FR 12726 (March 17, 2010) and accompanying Issues and Decision Memorandum at Comment 7.

4.  See Fresh and Chilled Atlantic Salmon From Norway: Final Results of Changed Circumstances Antidumping Duty Administrative Review, 64 FR 9979, 9980 (March 1, 1999).

5.  See Respondent's April 4, 2011, submission.

6.  See Respondent's September 13, 2010, submission at page 7.

7.  For a complete discussion involving the business proprietary information involving the four criteria noted above, see Memorandum to James C. Doyle, Office Director, Through Matthew Renkey, Acting Program Manager, From Alan Ray, Case Analyst, Diamond Sawblades and Parts Thereof from the People's Republic of China: Successor-in-Interest Analysis, dated concurrently with the signature of this notice.

8.  See Pressure Sensitive Plastic Tape from Italy: Final Results of Antidumping Duty Changed Circumstances Review, 75 FR 27706 (May 18, 2010).

9.  See 19 CFR 351.309(c)(ii).

10.  See 19 CFR 351.309(d).

11.  See 19 CFR 351.309(d)(i).

12.  See 19 CFR 351.310(d)(1).