Import Administration, International Trade Administration, Department of Commerce.
Notice of preliminary results of antidumping duty administrative review, request for revocation of the antidumping duty order, and determination not to revoke, in part.Start Printed Page 63061
We preliminarily find that helical spring lock washers from the People's Republic of China were being sold in the United States below normal value by the Hangzhou Spring Washer Co., Ltd. (also known as Zhejiang Wanxin Group, Ltd. (ZWG)) (collectively, Hangzhou) during the period October 1, 2001 through September 30, 2002. We have also preliminarily determined not to revoke the antidumping duty order on the subject merchandise with respect to this company. Interested parties are invited to comment on these preliminary results.
November 7, 2003.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Ryan Langan and Audrey Twyman, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-2613 or (202) 482-3534.
On October 19, 1993, the Department published the antidumping duty order on certain helical spring lock washers (HSLWs) from the People's Republic of China (PRC) (58 FR 53914), as amended on November 23, 1993 (58 FR 61859). The Department notified interested parties of the opportunity to request an administrative review of this order on October 2, 2002 (67 FR 61849). The petitioner, Shakeproof Assembly Components Division of Illinois Tool Works, Inc. (Shakeproof), requested that the Department conduct an administrative review of Hangzhou on October 22, 2002. Hangzhou requested an administrative review and revocation of the antidumping duty order with respect to itself on October 31, 2002. The notice of initiation of this administrative review was published on November 22, 2002 (67 FR 70402).
On January 21 and 22, 2003, Hangzhou responded to the Department's December 5, 2002 questionnaire. Next, on February 4, 2003, the Department provided parties with an opportunity to submit information regarding appropriate surrogate values. On February 28, 2003, Hangzhou submitted surrogate value comments. The petitioner submitted factual information, including surrogate value comments, on March 20, 2003. The Department received petitioner's comments on Hangzhou's questionnaire responses on March 14, 2003, and its additional deficiency comments and verification comments on March 26, 2003.
The Department issued its first supplemental questionnaire to Hangzhou on March 31, 2003, and received Hangzhou's responses on April 11 and 15, 2003. On April 22, 2003, Hangzhou submitted additional information about its platers. Shakeproof submitted its second and third sets of deficiency comments on April 29 and May 15, 2003, respectively.
On June 4, 2003, the Department published Certain Helical Spring Lock Washers from the People's Republic of China: Notice of Extension of Time Limit for the Preliminary Results of the Ninth Antidumping Administrative Review, 68 FR 33472. The petitioner filed pre-preliminary determination comments on June 20, 2003. On August 12, 2003, the Department issued its second supplemental questionnaire. Hangzhou submitted its response to that questionnaire on August 27, 2003.
The Department verified Hangzhou's questionnaire response on September 1 through 4, 2003, in Xiaoshan City, Xinjie Town, People's Republic of China (PRC). Hangzhou submitted its pre-verification corrections on September 9, 2003, and new databases on October 17, 2003. The Department issued its verification report on October 23, 2003.
Scope of the Order
The products covered by the order are HSLWs of carbon steel, of carbon alloy steel, or of stainless steel, heat-treated or non-heat-treated, plated or non-plated, with ends that are off-line. HSLWs are designed to: (1) Function as a spring to compensate for developed looseness between the component parts of a fastened assembly; (2) distribute the load over a larger area for screws or bolts; and, (3) provide a hardened bearing surface. The scope does not include internal or external tooth washers, nor does it include spring lock washers made of other metals, such as copper.
HSLWs subject to the order are currently classifiable under subheading 7318.21.0030 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of this proceeding is dispositive.
Period of Review
This review covers the period October 1, 2001, through September 30, 2002.
Separate Rates Determination
To establish whether a company operating in a state-controlled economy 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 by the 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). Under this policy, exporters in non-market economy countries (NMEs) 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 export activities. Evidence supporting, though not requiring, a finding of de jure absence of government control over export activities includes: (1) An absence of restrictive stipulations associated with the 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 over exports is based on four factors: (1) Whether each exporter sets its own export prices independently of the government and without 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 or the financing of losses; (3) whether each exporter has the authority to negotiate and sign contracts and other agreements; and, (4) whether each exporter has autonomy from the government regarding the selection of management. (See Silicon Carbide, 59 FR at 22587 and Sparklers, 56 FR at 20589.)
In each of the previous administrative reviews of the antidumping duty order on HSLWs from the PRC, covering successive review periods from October 1, 1993, through September 30, 2001, we determined that Hangzhou and its predecessor, ZWG, merited separate rates. We found, in each review, an absence of government control, both in law and in fact, with respect to Hangzhou's export activities according to the criteria identified in Sparklers, and an absence of government control with respect to the additional criteria identified in Silicon Carbide. During this period of review (POR), we have no evidence of any change in either the Sparklers or Silicon Carbide criteria. Therefore, we have assigned Hangzhou a separate rate.
Pursuant to section 782(i) of the Tariff Act of 1930, as amended (“the Act”), we Start Printed Page 63062verified sales and factors of production information provided by Hangzhou in Xiaoshan City, Xinjie Town, PRC, on September 1 through 4, 2003. We used standard verification procedures, including the examination of relevant sales, accounting and production records, as well as original source documents provided by the respondents. Our verification results are outlined in the public version of the verification report, dated October 22, 2003, and located in the public file in the Central Records Unit, Room B-099 of the Department's main building (CRU).
Because Hangzhou sold the subject merchandise to unaffiliated purchasers in the United States prior to importation into the United States and constructed export price methodology is not otherwise indicated, we have used export price in accordance with section 772(a) of the Act.
We calculated export price based on the FOB price to unaffiliated purchasers. From this price, we deducted amounts for foreign inland freight, and brokerage and handling pursuant to section 772(c)(2)(A) of the Act. We valued these deductions using surrogate values. We selected India as the primary surrogate country for the reasons explained in the “Normal Value” section of this notice.
The Department has determined the PRC to be an NME country in all previous antidumping cases. In accordance with section 771(18)(C)(i) of the Act, any determination that a foreign country is an NME shall remain in effect until revoked by the administering authority. None of the parties to this proceeding has contested such treatment in this review. Moreover, parties to this proceeding have not argued that the PRC HSLW industry is a market-oriented industry and, consequently, we have no basis to determine that the information in this review would permit the calculation of normal value (NV) using PRC prices or costs.
Section 773(c)(1) of the Act provides that, in the case of an NME, the Department shall determine NV using a factors-of-production methodology if: (1) The merchandise is exported from an NME, and (2) 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. Because information on the record does not permit the calculation of NV using home-market prices, third-country prices, or constructed value, and no party has argued otherwise, we calculated NV based on factors of production in accordance with sections 773(c)(3) and (4) of the Act and 19 CFR 351.408(c).
Because we are using surrogate country factors-of-production prices to determine NV, section 773(c)(4) of the Act requires that the Department use values from a market economy (surrogate) country that (1) is at a level of economic development comparable to that of the PRC, and (2) is a significant producer of comparable merchandise. We have determined that India, Pakistan, Indonesia, Sri Lanka and the Philippines are market economy countries at a comparable level of economic development to that of the PRC. (See “Memorandum to Susan Kuhbach from Jeffrey May), dated January 27, 2003, “Ninth Administrative Review for Certain Helical Spring Lock Washers from the People's Republic of China,” which is available in the CRU.) In addition, we have found that India is a significant producer of comparable merchandise, i.e., fasteners. (See Memorandum to File from Sally Hastings, dated October 31, 2003, and available in the public file in the CRU.) As in the investigation and eight previous reviews, we have chosen India as the primary surrogate country. Thus, we have used Indian prices to value the factors of production.
We selected, where possible, publicly available values from India which were: (1) Average non-export values; (2) representative of a range of prices within the POR or most contemporaneous with the POR; (3) product-specific; and, (4) tax-exclusive. Also, where we have relied upon import values, we have excluded imports from South Korea, Thailand, and Indonesia. The Department has found that these countries maintain broadly available, non-industry specific export subsidies, and that the existence of these subsidies provides sufficient reason to believe or suspect that export prices from these countries are distorted. See Final Determination of Sales at Less Than Fair Value: Certain Automotive Replacement Glass Windshields From the People's Republic of China, 67 FR 6482 (February 12, 2002) and accompanying Issues and Decision Memorandum (Replacement Glass Windshields). Our practice of excluding subsidized prices has been upheld in China National Machinery Import and Export Corporation v. United States and the Timken Company, Court No. 01-01114, slip op. 03-133 (CIT Oct. 15, 2003) (Confidential version; public version not yet issued).
In its submission of June 20, 2003, the petitioner argues that the Department should exclude any import values into India where the exporting country maintains subsidies, i.e., any subsidizing country in addition to Indonesia, South Korea, and Thailand. The petitioner provides a list of countries that are subject to U.S. countervailing duty orders, and countries that have been found to provide “generally available subsidies” or “N.T.E. export subsidies.”
In past proceedings, we disregarded input prices where particular and objective record evidence provided the Department with a reason to believe or suspect that these prices may be distorted by subsidies. See, e.g., Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China; Final Results of 1999-2000 Administrative Review, Partial Rescission of Review, and Determination Not to Revoke Order in Part, 66 FR 57420 (November 15, 2001), and accompanying Decision Memorandum at Comment 1; Final Determination of Sales at Less Than Fair Value: Certain Automotive Replacement Glass Windshields from the Peoples Republic of China, 67 FR 6482 (February 12, 2002) and accompanying Issues and Decision Memorandum at Comment 1. In those and a number of other prior proceedings, parties demonstrated, on the basis of record evidence, that certain countries maintained broadly available, non-industry specific export subsidies, or that certain countries provided industry-specific subsidies which may have benefitted certain input products covered by the proceeding.
The information provided by the petitioner in this proceeding (with the exception of certain steel products) does not identify the particular products or the particular subsidies which allegedly distort the prices of these products. Without such evidence, we cannot preliminarily conclude that these input prices should be disregarded. We acknowledge that there may be other information, outside the record of this proceeding, which may be material to the question of whether other input prices are distorted by subsidies. However, it would be impractical for the Department to attempt to identify and consider such information without the parties first having demonstrated, on the basis of record evidence, that certain countries maintained broadly available, non-industry specific export subsidies, or that certain countries provided industry-specific subsidies which may Start Printed Page 63063have benefitted certain input products covered by the proceeding. Therefore, except for valuing steel and steel scrap (discussed further below), we have preliminarily determined not to exclude imports from countries beyond Indonesia, South Korea and Thailand.
During the POR, Hangzhou imported a portion of its steel input (carbon steel wire rod (CSWR)) from the United Kingdom (UK) and it paid for this input in a market economy currency. The petitioner, in its submission dated June 20, 2003, argues that the Department should disregard the steel import prices reported by Hangzhou because there is “reason to believe or suspect” the steel benefitted from subsidies. In support of its claim, the petitioner points to the Department's finding in the sunset review of cut-to-length carbon steel plate from the UK, in which the Department found a subsidy rate of 12 percent for all UK producers and exporters (see Calculation of Net Countervailable Subsidy: Cut-to-Length Carbon Steel Plate from the United Kingdom, March 29, 2000). Consistent with the above-described practice of disregarding subsidized prices to value NME inputs, we have preliminarily determined not to use the market economy prices paid by Hangzhou for CSWR.
Instead, we have used the value of imports of CSWR into India, based on information from the Monthly Foreign Trade Statistics of India—Imports (MSFTI). In computing this value, we have taken into account that the Department has made final affirmative countervailing duty determinations on steel products from numerous countries. Therefore, we have not included values for imports of CSWR into India from Belgium, Canada, France, Germany, and the UK (as well as South Korea and Thailand). Similarly, in valuing steel scrap, we have excluded values for imports into India from Belgium, France, Germany, South Africa and the UK (as well as Indonesia, South Korea and Thailand).
The remaining inputs are addressed below:
- To value the hydrochloric acid used in the production process, we used per kilogram values obtained from the Indian publication Chemical Weekly.
- To value other chemicals used in the production of HSLWs, we used per kilogram import values obtained from MSFTI. We also adjusted these values to account for freight costs incurred between the supplier and Hangzhou.
- To value plating, we used a March 14, 2003, price quote supplied by the petitioner in its submission dated March 20, 2003, subsequently resubmitted as a public document.
- To value coal, we used a per kilogram value obtained from the MFSTI. We also made adjustments to account for freight costs incurred between the supplier and Hangzhou.
- To value electricity, we used the electricity price data from the Energy Data Directory and Yearbook (1999/2000) published by the Tata Energy Research Institute. We adjusted the value to reflect inflation using the electricity sector-specific inflation index published in the Reserve Bank of India (RBI) Bulletin.
- To value water, we used the Second Water Utilities Data Book for the Asian and Pacific Region published by the Asian Development Bank in 1997. We adjusted the value to reflect inflation using the wholesale price index (WPI) published by the International Monetary Fund (IMF).
- For labor, we used the regression-based wage rate for the PRC in “Expected Wages of Selected NME Countries,” located on the Internet at http://ia.ita.doc.gov.wages/corrected00wages/htm.
- For factory overhead, selling, general, and administrative expenses (SG&A), and profit values, we used information from the September 12, 2002, RBI Bulletin report entitled “Combined Income, Value of Production, Expenditure and Appropriations Accounts of the Selected 1,927 Public Limited Companies (2000-2001).” From this information, we were able to determine factory overhead as a percentage of the total raw materials, labor and energy (ML&E) costs, SG&A as a percentage of ML&E plus overhead (i.e., cost of manufacture), and the profit rate as a percentage of the cost of manufacture plus SG&A.
- For packing materials, we used the per kilogram values obtained from the MFSTI. Where necessary, we adjusted these values to reflect inflation using the WPI published by the IMF. We also made adjustments to account for freight costs incurred between the PRC supplier and Hangzhou.
- To value foreign brokerage and handling, we used information reported in the New Shipper Review for Stainless Steel Wire Rod from India, 66 FR 27629 (May 18, 2001). See Meltroll Engineering Pvt. Ltd.'s submission dated September 12, 1999. We adjusted this value to reflect inflation using the WPI published by the IMF.
- To value truck freight, we used the freight rates published in the Indian publication Chemical Weekly. We obtained distances between cities from the following Web sites: http://www.infreight.com; http://www.sitaindia.com/Packages/CityDistance.php; http://indiatravelinfo.com/distance.html; and, http://www/abcindia.com.
- To value shipping freight, we used a rate reported in a July 14, 1997, letter from the Inland Waterways of India which was used in Certain Helical Spring Lock Washers from the People's Republic of China; Final Results of the Antidumping Duty Administrative Review, 67 FR 8520 (February 25, 2002) (HSLWs-7) and Certain Helical Spring Lock Washers from the People's Republic of China; Final Results of the Antidumping Duty Administrative Review, 67 FR 69717 (November 19, 2002) (HSLWs-8). We adjusted the rate to reflect inflation using the WPI published by the IMF.
For a complete description of the factor values used, see “Memorandum to File: Factor Values Used for the Preliminary Results of the Ninth Administrative Review,” dated October 31, 2003 (Factors Memorandum), a public version of which is available in the Public File of the CRU.
The Department “may revoke, in whole or in part” an antidumping duty order upon completion of a review under section 751 of the Act. While Congress has not specified the procedures that the Department must follow in revoking an order, the Department has developed a procedure for revocation that is described in 19 CFR 351.222. This regulation requires, inter alia, that a company requesting revocation must submit the following: (1) A certification that the company has sold the subject merchandise at not less than NV in the current review period and that the company will not sell at less than NV in the future; (2) a certification that the company sold the subject merchandise in each of the three years forming the basis of the request in commercial quantities; and, (3) an agreement to reinstatement of the order if the Department concludes that the company, subsequent to the revocation, sold subject merchandise at less than NV. See 19 CFR 351.222(e)(1).
Pursuant to 19 CFR 351.222(e)(1), Hangzhou requested revocation of the antidumping duty order as it pertains to that company. According to 19 CFR 351.222(b)(2), upon receipt of such a request, the Department may revoke an order, in part, if it concludes that (1) the company in question has sold subject merchandise at not less than NV for a period of at least three consecutive Start Printed Page 63064years; (2) the continued application of the antidumping duty order is not otherwise necessary to offset dumping; and, (3) the company has agreed to its immediate reinstatement in the order if the Department concludes that the company, subsequent to the revocation, sold subject merchandise at less than NV.
Based on our analysis of the sales and factors of production information submitted by Hangzhou, we preliminarily determine that Hangzhou sold the subject merchandise in the United States below normal value during the POR. Thus, we find that Hangzhou has not sold the subject merchandise below NV for a period of at least three consecutive years. Therefore, pursuant to 19 CFR 351.222(b)(2), we preliminarily determine that Hangzhou does not qualify for revocation of the order on HSLWs from the PRC and that the order, with respect to Hangzhou, should not be revoked.
Preliminary Results of Review
We preliminarily determine that the following dumping margin exists:
|Manufacturer/exporter||Time period||Margin (percent)|
|Hang Zhou Spring Washer Co. Ltd./Zhejiang Wanxin Group, Ltd||10/1/01-9/30/02||29.03|
The Department shall determine, and the U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries. Upon completion of this administrative review, the Department will determine, and the CBP shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have calculated an exporter/importer (or customer)-specific assessment rate for merchandise subject to this review. We calculated importer (or customer)-specific ad valorem rates by aggregating the dumping duties due for all U.S. sales to each importer (or customer) and dividing this amount by the total entered value of the sales to that importer (or customer). In accordance with the requirement set forth in 19 CFR 351.106(c)(2), where an importer (or customer)-specific ad valorem rate is less than de minimis, we will direct the CBP to liquidate without regard to antidumping duties. Where an importer (or customer)-specific ad valorem rate is greater than de minimis, we will direct the CBP to apply the ad valorem assessment rates against the entered value of each of the importer's/customer's entries during the review period. All other entries of the subject merchandise during the POR will be liquidated at the antidumping duty rate in place at the time of entry.
Furthermore, the following cash deposit rates will be effective upon publication of the final results for all shipments of HSLWs 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) For Hangzhou, which has a separate rate, the cash deposit rate will be the company-specific rate established in the final results of review; (2) for all other PRC exporters, the cash deposit rate will be the PRC rate, 128.63 percent, which is the “All Other PRC Manufacturers, Producers and Exporters” rate from 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); and, (3) for non-PRC exporters of subject merchandise from the PRC, the cash deposit rate will be the rate applicable to the PRC supplier of that exporter. These deposit rates, when imposed, shall remain in effect until publication of the final results of the next administrative review.
This notice also serves as a preliminary 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 the subsequent assessment of double antidumping duties.
Pursuant to 19 CFR 351.224, the Department will disclose to parties the calculations performed in connection with these preliminary results within five days of the date of any public announcement, or, if there is no public announcement, within five days of the date of publication of this notice. Interested parties may request a hearing within 30 days of the date of publication of this notice (See 19 CFR 351.310). Any hearing, if requested, will be held two days after the scheduled date for submission of rebuttal briefs (see below). According to 19 CFR 351.309, interested parties may submit written arguments in case briefs within 30 days of the date of publication of this notice. Rebuttal briefs, limited to issues raised in case briefs, may be filed no later than five days after the date of filing the case briefs. Parties who submit briefs in these proceedings should provide a summary of the arguments not to exceed five pages and a table of statutes, regulations, and cases cited. Copies of case briefs and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f)(3).
The Department will publish the final results of this administrative review, including the results of its analysis of issues raised in any such briefs or hearing, within 120 days of publication of these preliminary result.
This administrative review and notice are in accordance with sections 751(a)(1) and 777(i)(1) of the Act.Start Signature
Dated: October 31, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-28123 Filed 11-6-03; 8:45 am]
BILLING CODE 3510-DS-P