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Import Administration, International Trade Administration, Department of Commerce.
The Department of Commerce (“the Department”) is conducting an administrative review of the antidumping duty order on porcelain-on-steel cooking ware from the People's Republic of China (“PRC”). The Department has preliminarily determined that Shanghai Watex Metal Products Co. Ltd. (“Watex”), the only respondent in this review, is not entitled to a separate rate. In addition, the Department has determined to apply adverse facts available to Watex. If these preliminary results are adopted in the final results of this review, the Department will instruct U.S. Customs and Border Protection (“CBP”) to assess antidumping duties on entries of subject merchandise during the period of review (“POR”). Interested parties are invited to comment on these preliminary results. See the “Preliminary Results of Review” section of this notice.
December 22, 2005.Start Further Info
FOR FURTHER INFORMATION CONTACT:
P. Lee Smith or Scot Fullerton, AD/CVD Operations, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1655 or (202) 482-1386, respectively.End Further Info End Preamble Start Supplemental Information
In response to a request from Columbian Home Products, LLC (“petitioner”), the Department of Commerce (the “Department”) initiated an administrative review of Shanghai Watex Metal Products Co., Ltd.'s (“Watex”) exports of merchandise covered by the antidumping duty order on porcelain-on-steel cooking ware from the PRC. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 70 FR 4818 (January 31, 2005) (“Initiation Notice”).
On February 3, 2005, the Department issued its antidumping duty questionnaire to Watex, and received the company's response to section A on February 24, 2005, and sections C and D on March 14, 2005. The Department issued additional supplemental questionnaires to Watex and received responses on April 11, May 23, July 19, September 12, and October 5, 2005.
The Department conducted verification of Watex's questionnaire responses from October 24 to October 26, 2005. See “Verification Report for Shanghai Watex Metal Co., Ltd.,” dated December 12, 2005 (“Watex Verification Report”). The Department conducted verification of Watex's questionnaire responses regarding its producer Shanghai Ping An Enamel Products Co. (“Ping An”), from October 26 to October 28, 2005. See “Verification Report for Shanghai Ping An Enamel Products Co.,” dated December 12, 2005 (“Ping An Verification Report”). On December 13, 2005, petitioner submitted comments on the Department's verification reports.
Period of Review
The POR is December 1, 2003, through November 30, 2004.
Scope of Order
The merchandise covered by this order is porcelain-on-steel cooking ware from the PRC, including tea kettles, which do not have self-contained electric heating elements. All of the foregoing are constructed of steel and are enameled or glazed with vitreous glasses. The merchandise is currently classifiable under the United States Harmonized Tariff Schedule (“USHTS”) item 7323.94.00. USHTS item numbers are provided for convenience and customs purposes. The written description of the scope remains dispositive.
In every case conducted by the Department involving the PRC, the PRC has been treated as a non-market economy (“NME”). Pursuant to section 771(18)(C)(i) of Tariff Act of 1930, as amended (“the Act”), any determination that a foreign country is an NME country shall remain in effect until revoked by the administering authority. See Fresh Garlic from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review and Rescission in Part, 69 FR 70638 (December 7, 2004). None of the parties to this proceeding has contested such treatment. Accordingly, we calculated normal value (“NV”) in accordance with section 773(c) of the Act, which applies to NME countries.
On April 15, 2005, the Department provided interested parties the opportunity to submit comments regarding the selection of a surrogate country and factor valuation in these preliminary results. On July 1, 2005, Watex submitted publicly available information for factor valuation. In its submission, Watex included publicly available Indonesian import statistics obtained from the World Trade Atlas. On May 6, 2005, petitioner submitted publicly available information for surrogate country selection. In its submission, petitioner argued that India should be selected as the surrogate country in this review because India is at a comparable level of economic development to the PRC, a significant Start Printed Page 76028producer of comparable merchandise, and has better availability and quality of data to value the factors of production than Indonesia. On August 5, 2005, petitioner submitted publicly available information for factor valuation. In its submission, petitioner included the financial statements for Kishco Cutlery Ltd., an Indian producer of comparable merchandise, and publicly available Indian import statistics. On September 29, 2005, the Department issued a supplemental questionnaire requesting both petitioner and respondent to clarify their surrogate value submissions. On October 5, 2005, petitioner and respondent submitted their responses to the Department's surrogate value supplemental questionnaire. The Department received no other comments regarding surrogate country or factor valuation.
Section 773(c)(4) of the Act requires the Department to value an NME producer's factors of production (“FOP”), 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. Import Administration's Office of Policy issued a memorandum listing appropriate surrogate countries. See Memorandum from Ron Lorentzen to Carrie Blozy regarding the Administrative Review of Porcelain-on-Steel Cooking Ware (“Cooking Ware”) from the People's Republic of China (PRC): Request for a List of Surrogate Countries, dated April 5, 2005. The memorandum lists five countries, including India and Indonesia. In previous reviews of this order the Department has chosen Indonesia as a surrogate country for the PRC. However, during this review, information was placed on the record demonstrating that India was a more appropriate surrogate country. Based on this information, the Department has selected India as the primary surrogate country for purposes of this review. For further discussion of our surrogate country selection, see Memorandum from Joshua T. Pierce through Christopher Riker and James C. Doyle to the File regarding the Antidumping Duty Administrative Review of Porcelain-on-Steel Cooking Ware from the People's Republic of China: Selection of a Surrogate Country, dated December 9, 2005.
As provided in section 782(i) of the Act, the Department conducted verification of the responses of Watex. The Department verified the questionnaire responses of Watex from October 24, 2005, through October 26, 2005, and its affiliated producer, Ping An, from October 26, 2005, through October 28, 2005, using standard verification procedures, including on-site inspection of the manufacturer's facilities and the examination of relevant sales and financial records. For more information, see Watex Verification Report, Ping An Verification Report, and the “Application of Adverse Facts Available” section below.
The verification results are on file in the main Department of Commerce building, in the Central Records Unit, Room B-099.
To establish whether a company operating in an NME is sufficiently independent from government control 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), 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). Under the separate rates criteria, the Department assigns separate rates in NME cases only if the respondent can demonstrate the absence of both de jure and de facto governmental control over export activities.
De Jure Control
Evidence supporting, though not requiring, a finding of absence of de jure government control over export activities includes: (1) an absence of restrictive stipulations associated with an individual exporter's business and export licenses; (2) any legislative enactments decentralizing control of companies; and (3) any other formal measures by the government decentralizing control of companies.
In its questionnaire responses, Watex stated that it is an independent legal entity. The business license of Watex indicates that it is permitted to engage in the exportation of porcelain-on-steel cooking ware. Evidence placed on the record provides no indication of de jure governmental control restricting Watex's exportation of porcelain-on-steel cooking ware. Specifically, the Company Law of the People's Republic of China, made effective on July 1, 1994, with the amended version promulgated on August 28, 2004, states that a company is an enterprise legal person, that shareholders shall assume liability towards the company to the extent of their shareholdings and that the company shall be liable for its debts to the extent of all its assets. Therefore, based on the record evidence, the Department preliminarily determines that there is an absence of de jure control over the export activities of Watex.
De Facto Control
A determination of absence of de facto government control over exports is based on the following 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 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 Final Determination of Sales at Less than Fair Value: Certain Cut-to-Length Carbon Steel Plate from Ukraine, 62 FR 61754, 61758 (November 19, 1997).
Watex asserted the following: (1) it establishes its own export prices; (2) it negotiates contracts without guidance from any governmental entities or organizations; (3) it makes its own personnel decisions; and (4) it retains the proceeds of its export sales, uses profits according to its business needs, and has the authority to sell its assets and to obtain loans. However, Watex provided the Department with information about its corporate structure and ownership that could not be verified and withheld information regarding an affiliate. See Memorandum from James C. Doyle to Stephen J. Claeys: Porcelain-On-Steel Cooking Ware from the People's Republic of China: Preliminary Application of Adverse Facts Available to Shanghai Watex Metal Products Co., Ltd., dated December 15, 2005 (“AFA Memo”). Because we have been unable to fully analyze Watex's corporate structure due to the respondent's uncooperativeness, and have been unable to establish who the true owners of the respondent are, the Department must conclude that the company has not satisfactorily demonstrated it has the ability to select its own management and make personnel decisions, as well as to make its own decisions on the use of its profits, independent of any governmental authority. Therefore, the Department has determined that Watex has not demonstrated that it qualifies for a separate rate. Because Watex did not Start Printed Page 76029demonstrate its eligibility for a separate rate, we have preliminarily determined that it is part of the PRC-wide entity. In the initiation notice, the Department stated that if one of the companies that we initiated a review for does not qualify for a separate rate, all other exporters of porcelain-on-steel cooking ware from the PRC who have not qualified for a separate rate are deemed to be covered by this review as part of the single PRC-wide entity, of which the named exporter is a part. See Initiation Notice at footnote 3. Watex did not demonstrate its eligibility for a separate rate; therefore, the Department finds that Watex is part of the PRC-wide entity. As a result, we determine that it is necessary to review the single PRC entity, including Watex, in this segment of the proceeding. As adverse facts available (“AFA”), the Department is assigning the rate of 66.65 percent to the PRC entity, the highest rate determined in any previous segment of this proceeding.
Application of Adverse Facts Available
Pursuant to sections 776(a)(2)(A), (C) and (D), and section 776(b) of the Act, the Department determines that the application of total AFA is warranted for the PRC-wide entity, including Watex. When an interested party withholds information that has been requested by the Department, significantly impedes the proceeding, or provides information, but that information cannot be verified, sections 776(a)(2)(A), (C) and (D) of the Act provide for the use of facts otherwise available. Specifically, the Department could not verify the information regarding Watex's corporate structure and ownership due to the company's failure to provide the Department with a complete and official version of the capital verification report or signed copies of the company's articles of association and joint venture agreement that established Watex. Watex withheld specifically requested information concerning the existence of an affiliate. Finally, Watex significantly impeded the proceeding by repeatedly making inaccurate statements concerning the interests of various owners in both their questionnaire responses and at verification. See Watex Verification Report. The Department finds that facts available, pursuant to sections 776(a)(2)(A), (C) and (D), is warranted.
Section 776(b) of the Act provides that if the Department determines that a party has failed to cooperate to the best of its ability, in selecting from among the facts available, the Department may use an inference that is adverse to the interests of that party. The Department finds that by not providing accurate information regarding affiliates of Watex despite multiple opportunities to do so and by failing to provide the Department with information regarding its corporate structure and ownership that could be verified, Watex failed to cooperate to the best of its ability. For a detailed analysis of the Department's decision to apply AFA, see AFA Memo.
Selection of AFA Rate
In deciding which facts to use as AFA, section 776(b) of the Act and 19 CFR 351.308(c)(1) authorize the Department to rely on information derived from: (1) the petition; (2) a final determination in the investigation; (3) any previous review or determination; or (4) any information placed on the record. In reviews, it is the Department's practice to select, as AFA, the highest rate determined for any respondent in any segment of the proceeding. See, e.g., Freshwater Crawfish Tail Meat from the People's Republic of China; Notice of Final Results of Antidumping Duty Administrative Review, 68 FR 19504 (April 21, 2003).
The Court of International Trade (“CIT”') and the Federal Circuit have consistently upheld the Department's practice. See Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190 (Fed. Cir. 1990) (“Rhone Poulenc”); NSK Ltd. v. United States, 346 F. Supp. 2d 1312, 1335 (Ct. Int'l Trade 2004) (upholding a 73.55% total AFA rate, the highest available dumping margin from a different respondent in a less than fair value investigation); see also Kompass Food Trading Int'l v. United States, 24 CIT 678, 689 (2000) (upholding a 51.16% total AFA rate, the highest available dumping margin from a different, fully cooperative respondent); and Shanghai Taoen International Trading Co., Ltd. v. United States, Slip Op. 05-22, at 16 (CIT February 17, 2005) (upholding a 223.01% total AFA rate, the highest available dumping margin from a different respondent in a previous administrative review).
The Department's practice when selecting an adverse rate from among the possible sources of information is to ensure that the margin is sufficiently adverse “as to effectuate the purpose of the facts available role to induce respondents to provide the Department with complete and accurate information in a timely manner.” See Static Random Access Memory Semiconductors from Taiwan; Final Determination of Sales at Less than Fair Value, 63 FR 8909, 8932 (February 23, 1998). The Department's practice also ensures “that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.” See Statement of Administrative Action (“SAA”) accompanying the URAA, H.R. Rep. No. 103-316 at 870 (1994). See also Final Determination of Sales at Less than Fair Value: Certain Frozen and Canned Warmwater Shrimp from Brazil, 69 FR 76910 (December 23, 2004); see also D&L Supply Co. v. United States, 113 F.3d 1220, 1223 (Fed. Cir. 1997). In choosing the appropriate balance between providing respondents with an incentive to respond accurately and imposing a rate that is reasonably related to the respondent's prior commercial activity, selecting the highest prior margin “reflects a common sense inference that the highest prior margin is the most probative evidence of current margins, because, if it were not so, the importer, knowing of the rule, would have produced current information showing the margin to be less.” Rhone Poulenc, 899 F.2d at 1190.
Consistent with the statute, court precedent, and its practice, the Department has assigned the rate of 66.65 percent, the highest rate calculated in any segment of the proceeding, to Watex as AFA. See, e.g., Rescission of Second New Shipper Review and Final Results and Partial Rescission of First Antidumping Duty Administrative Review: Brake Rotors from the People's Republic of China, 64 FR 61581, 61584 (November 12, 1999). As discussed further below, this rate has been corroborated.
Corroboration of Secondary Information Used as AFA
Section 776(c) of the Act provides that when the Department relies on the facts otherwise available and relies on “secondary information,” the Department shall, to the extent practicable, corroborate that information from independent sources reasonably at the Department's disposal. The SAA states that “corroborate” means to determine that the information used has probative value. See SAA at 870. The Department has determined that to have probative value, information must be reliable and relevant. See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished from Japan: Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews, 61 FR 57391, 57392 (November 6, 1996). The SAA also states that independent sources used to corroborate such evidence may include, for example, published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation. See Preliminary Start Printed Page 76030Determination of Sales at Less Than Fair Value: High and Ultra-High Voltage Ceramic Station Post Insulators from Japan, 68 FR 35627 (June 16, 2003); and Final Determination of Sales at Less Than Fair Value: Live Swine from Canada, 70 FR 12181 (March 11, 2005).
To be considered corroborated, information must be found to be both reliable and relevant. Unlike other types of information, such as input costs or selling expenses, there are no independent sources for calculated dumping margins. The only sources for calculated margins are administrative determinations. The information upon which the AFA rate we are applying for the current review was calculated during the Less Than Fair Value Investigation. See Porcelain-on-Steel Cooking Ware from the People's Republic of China; Final Determination of Sales at Less Than Fair Value, 51 FR 36419 (October 10, 1986) (“LTFV Investigation”). Furthermore, the AFA rate we are applying for the current review was applied in reviews subsequent to the LTFV Investigation and the Department received no information that warranted revisiting the issue. See, e.g., Porcelain-On-Steel Cookware from the People's Republic of China; Notice of Final Results of Antidumping Duty Administrative Review, 62 FR 54825 (October 22, 1997). No information has been presented in the current review that calls into question the reliability of this information. Thus, the Department finds that the information is reliable.
With respect to the relevance aspect of corroboration, the Department will consider information reasonably at its disposal to determine whether a margin continues to have relevance. Where circumstances indicate that the selected margin is not appropriate as AFA, the Department will disregard the margin and determine an appropriate margin. Similarly, the Department does not apply a margin that has been discredited. See D &L Supply Co. v. United States, 113 F.3d 1220, 1221 (Fed. Cir. 1997) (the Department will not use a margin that has been judicially invalidated). None of these circumstances are present here. Accordingly, we determine that the highest rate from any segment of this administrative proceeding, 66.65 percent, meets the corroboration criteria established in section 776(c) of the Act that secondary information have probative value.
Preliminary Results of the Review
The Department preliminarily finds that the following margins exist for the following exporters under review during the period December 1, 2003, through November 30, 2004:
|Manufacturer/Exporter||Weighted-Average Margin (Percent)|
Case briefs from interested parties may be submitted not later than January 17, 2006, pursuant to 19 CFR 351.309(c). Rebuttal briefs, limited to issues raised in the case briefs, will be due not later than January 24, 2006, pursuant to 19 CFR 351.309(d). Parties who submit case briefs or rebuttal briefs in this proceeding are requested to submit with each argument: (1) a statement of the issue; and (2) a brief summary of the argument. Parties are also encouraged to provide a summary of the arguments not to exceed five pages and a table of statutes, regulations and cases cited. Any interested party may request a hearing within 30 days of publication of this notice.
Interested parties who wish to request a hearing or to participate if one is requested, must submit a written request to the Assistant Secretary for Import Administration, Room B-099, within 30 days of the date of publication of this notice. Requests should include: (1) the party's name, address, and telephone number; (2) the number of participants; and (3) a list of issues to be discussed. See 19 CFR 351.310(c). Issues raised in the hearing will be limited to those raised in case briefs and rebuttal briefs.
The Department will issue the final results of this administrative review, including the results of its analysis of issues raised in any such written briefs or at the hearing, if held, no later than 120 days after the date of publication of this notice.
Assessment of Antidumping Duties
The Department will determine, and CBP shall assess, antidumping duties on all appropriate entries. The Department will issue appropriate assessment instructions directly to CBP within 15 days of publication of the final results of this review.
The following cash-deposit requirements will be effective upon publication of the final results for shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results, as provided by section 751(a)(2)(C) of the Act: (1) For subject merchandise exported by the PRC, including Watex, the cash-deposit rate will be equal to 66.65 percent; (2) the cash-deposit rate for PRC exporters who received a separate rate in a prior segment of the proceeding will continue to be the rate assigned in that segment of the proceeding; (3) for all other 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 66.65 percent; (4) for all non-PRC exporters of subject merchandise, the cash-deposit rate will be the rate applicable to the PRC exporter that supplied that exporter.
These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.
Notification to Importers
This notice 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.
This administrative review and notice is in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(4).Start Signature
Dated: December 15, 2005.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-7703 Filed 12-21-05; 8:45 am]
BILLING CODE 3510-DS-S