[Federal Register: September 11, 2007 (Volume 72, Number 175)]
[Notices]
[Page 51781-51787]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11se07-30]
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DEPARTMENT OF COMMERCE
International Trade Administration
A-570-888
Floor-Standing, Metal-Top Ironing Tables and Certain Parts
Thereof from the People's Republic of China: Preliminary Results of
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to requests from interested parties, the
Department of Commerce (``the Department'') is conducting the an
administrative review of the antidumping duty order on floor-standing,
metal-top ironing tables and certain parts thereof from the People's
Republic of China (``PRC''). The period of review (``POR'') is August
1, 2005, through July 31, 2006. We have preliminarily determined that
Since Hardware (Guangzhou) Co., Ltd. (``Since Hardware''), the sole
company subject to this review, has not made sales to the United States
of the subject merchandise at prices below normal value. We invite
interested parties to comment on these preliminary results. Parties
filing comments are requested to submit with each argument (1) a
statement of the issue and (2) a brief summary of the argument(s).
EFFECTIVE DATE: September 11, 2007.
FOR FURTHER INFORMATION CONTACT: Anya Naschak or Bobby Wong, 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: (202) 482-
6375 or (202) 482-0409, respectively.
SUPPLEMENTARY INFORMATION:
Background
On August 6, 2004, the Department published in the Federal Register
the antidumping duty order regarding floor-standing, metal-top ironing
tables and certain parts thereof (``ironing tables'') from the PRC. See
Notice of Amended Final Determination of Sales at Less Than Fair Value
and Antidumping Duty Order: Floor-Standing, Metal-Top Ironing Tables
and Certain Parts Thereof From the People's Republic of China, 69 FR
47868 (August 6, 2004) (Amended Final FR).
On August 1, 2006, the Department published a notice of opportunity
to request an administrative review of the ironing tables antidumping
duty order. See Notice of Opportunity to Request Administrative Review
of Antidumping or Countervailing Duty Order, Finding, or Suspended
Investigation, 71 FR 43441 (August 1, 2006). On August 2, 2006, and
August 29, 2006, respectively, in accordance with 19 CFR 351.213(b)(2),
Foshan Shunde Yongjian Housewares & Hardware Co., Ltd. (``Foshan
Shunde'') and Since Hardware requested administrative reviews of their
sales under the antidumping duty order on ironing tables from the PRC.
On August 31, 2006, Home Products International Inc. (``Petitioner'')
also requested an administrative review of Since Hardware's sales. On
September 29, 2006, the Department initiated an administrative review
of Since Hardware and Foshan Shunde. See Initiation of Antidumping and
Countervailing Duty Administrative Reviews, 71 FR 57465 (September 29,
2006).
On December 21, 2006, Foshan Shunde filed a letter withdrawing its
request for review. On January 23, 2007, the Department rescinded this
administrative review with respect to Foshan Shunde. See Floor-
Standing, Metal-Top Ironing Tables and Certain Parts Thereof from the
People's Republic of China: Notice of Partial Rescission of Antidumping
Duty Administrative Review, 72 FR 2856 (January 23, 2007).
On April 17, 2007, in accordance with section 751(a)(3)(A) of the
Tariff Act of 1930, as amended (``the Act''), and 19 CFR 351.213(h)(2),
the Department extended the deadline for the preliminary results of
review until August 31, 2007. See Floor-Standing, Metal-Top Ironing
Tables and Parts Thereof from the People's Republic of China: Extension
of the Time Limit for the Preliminary Results of the 2005/2006
Administrative Review, 72 FR 19173 (April 17, 2007).
On April 19, 2007, Petitioner submitted comments regarding the
selection of appropriate surrogate values for valuing the factors of
production for these preliminary results. On April 26, 2007, we invited
interested parties to comment on the Department's surrogate country
selection and/or significant production in the other potential
surrogate countries and to submit publicly available information to
value the factors of production. On April 30, 2007, Since Hardware
submitted comments regarding Petitioner's April 19, 2007, submission.
On May 9, 2007, Petitioner submitted additional comments regarding
surrogate values for the preliminary results. On July 2, 2007,
Petitioner submitted comments on the Department's selection of a
surrogate country.
On July 11, 2007, we extended the time limit for submitting
publicly available surrogate values for consideration in these
preliminary results. On July 20, 2007, Petitioner submitted additional
comments on the appropriate surrogate values for valuing the factors of
production for these preliminary results. In addition, on July 27,
2006, Petitioner submitted Indian audited financial statements for the
2005-2006 fiscal year. Since Hardware submitted rebuttal comments to
Petitioner's July 20, 2007, comments on July 30, 2007.
The Department received timely filed original and supplemental
questionnaire responses from Since Hardware.
Between July 31, 2007, and August 9, 2007, the Department received
the following pre-preliminary results comments: Petitioner's July 31,
2007, submission (``Petitioner Pre-Prelim Comments''); Since Hardware's
August 6, 2007, submission (``Since Hardware Pre-Prelim Comments'');
and Petitioner's August 9, 2007, submission (``Petitioner Additional
Prelim Comments'')
Scope of the Order
For purposes of this order, the product covered consists of floor-
standing, metal-top ironing tables, assembled or unassembled, complete
or incomplete, and certain parts thereof. The subject tables are
designed and used principally for the hand ironing or pressing of
garments or other articles of fabric. The subject tables have full-
height leg assemblies that support the ironing surface at an
appropriate (often adjustable) height above the floor. The subject
tables are produced in a variety of leg finishes, such as painted,
plated, or matte, and they are available with various features,
including iron rests, linen racks, and others. The subject ironing
tables may be sold with or without a pad and/or cover. All types and
configurations of floor-standing, metal-top ironing tables are covered
by this review.
Furthermore, this order specifically covers imports of ironing
tables, assembled or unassembled, complete or incomplete, and certain
parts thereof. For purposes of this order, the term ``unassembled''
ironing table means a product requiring the attachment of the leg
assembly to the top or the attachment of an included feature such as an
iron rest or linen rack. The term ``complete'' ironing table means
product
[[Page 51782]]
sold as a ready-to-use ensemble consisting of the metal-top table and a
pad and cover, with or without additional features, e.g. iron rest or
linen rack. The term ``incomplete'' ironing table means product shipped
or sold as a ``bare board'' - i.e., a metal-top table only, without the
pad and cover with or without additional features, e.g. iron rest or
linen rack. The major parts or components of ironing tables that are
intended to be covered by this order under the term ``certain parts
thereof'' consist of the metal top component (with or without assembled
supports and slides) and/or the leg components, whether or not attached
together as a leg assembly. The order covers separately shipped metal
top components and leg components, without regard to whether the
respective quantities would yield an exact quantity of assembled
ironing tables.
Ironing tables without legs (such as models that mount on walls or
over doors) are not floor-standing and are specifically excluded.
Additionally, tabletop or countertop models with short legs that do not
exceed 12 inches in length (and which may or may not collapse or
retract) are specifically excluded.
The subject ironing tables were previously classified under
Harmonized Tariff Schedule of the United States (``HTSUS'') subheading
9403.20.0010. Effective July 1, 2003, the subject ironing tables are
classified under new HTSUS subheading 9403.20.0011. The subject metal
top and leg components are classified under HTSUS subheading
9403.90.8040. Although the HTSUS subheadings are provided for
convenience and for Customs and Border Protection (``CBP'') purposes,
the Department's written description of the scope remains dispositive.
Non-Market-Economy Status
Pursuant to 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. In every case conducted by the
Department involving the PRC, the PRC has been treated as a NME. See,
e.g., Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, From the People's Republic of China: Preliminary Results
2001-2002 Administrative Review and Partial Rescission of Review, 68 FR
7500, 7500-01 (February 14, 2003), unchanged in Tapered Roller Bearings
and Parts Thereof, Finished and Unfinished, from the People's Republic
of China: Final Results of 2001-2002 Administrative Review and Partial
Rescission of Review, 68 FR 70488 (December 18, 2003). None of the
parties to these reviews has contested such treatment. Accordingly, we
calculated normal value (NV) in accordance with section 773(c) of the
Act, which applies to NME countries.
Separate Rates
In proceedings involving NME countries, the Department begins with
a rebuttable presumption that all companies within the country are
subject to government control and, thus, should be assigned a single
antidumping duty rate unless an exporter can affirmatively demonstrate
an absence of government control, both in law (de jure) and in fact (de
facto), with respect to its export activities. See Notice of Final
Determination of Sales at Less Than Fair Value: Sparklers from the
People's Republic of China, 56 FR 20588 (May 6, 1991) (``Sparklers'').
In this review, Since Hardware submitted information in support of its
claim for a company-specific rate.
Accordingly, we have considered whether Since Hardware is
independent from government control, and therefore eligible for a
separate rate. The Department's separate-rate test to determine whether
the exporters are independent from government control does not
consider, in general, macroeconomic/border-type controls, e.g., export
licenses, quotas, and minimum export prices, particularly if these
controls are imposed to prevent dumping. The test focuses, rather, on
controls over the investment, pricing, and output decision-making
process at the individual firm level. See Notice of Final Determination
of Sales at Less than Fair Value: Certain Cut-to-Length Carbon Steel
Plate from Ukraine, 62 FR 61754, 61757 (November 19, 1997), and Tapered
Roller Bearings and Parts Thereof, Finished and Unfinished, From the
People's Republic of China: Final Results of Antidumping Duty
Administrative Review, 62 FR 61276, 61279 (November 17, 1997).
To establish whether a firm is sufficiently independent from
government control of its export activities to be entitled to a
separate rate, the Department analyzes each entity exporting the
subject merchandise under a test arising from Sparklers, 56 FR 20588 at
Comment 1, further discussed 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''). In
accordance with the separate-rates criteria, the Department assigns
separate rates in NME cases only if respondents can demonstrate the
absence of both de jure and de facto government control over export
activities. See Sparklers, 56 FR 20588 at Comment 1 and Silicon
Carbide, 59 FR 22586-87.
Since Hardware provided complete separate-rate information in its
responses to our original and supplemental questionnaires. Accordingly,
we performed a separate-rates analysis to determine whether these
exporters are independent from government control.
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 20588 at Comment 1. As discussed below, our analysis
shows that the evidence on the record supports a preliminary finding of
an absence of de jure government control for the three fully responsive
companies based on each of these factors.
Since Hardware has placed on the record a number of documents to
demonstrate absence of de jure control, including documentation
substantiating its claims that it is a wholly foreign-owned enterprise
registered in China, the ``Foreign Trade Law of the People's Republic
of China'' (May 12, 1994) (``Foreign Trade Law''), and ``Administrative
Regulations of the People's Republic of China Governing the
Registration of Legal Corporations'' (June 3, 1988) (``Legal
Corporations Regulations''). See Since Hardware's Section A
questionnaire response dated November 8, 2006 (``Since Hardware Section
A'') at Exhibits A-2 and A-5. Since Hardware also submitted a copy of
its business license, which was issued by the Guangzhou Municipal
Industrial and Commercial Administration. See Since Hardware Section A
at Exhibit A-4. Since Hardware explained that its business license
ensures that Since Hardware maintains sufficient capital and operating
capacity to engage in normal business operations and that only Since
Hardware may use its business license. See Since Hardware Section A at
4. Since Hardware affirms that there are no limitations imposed on
Since Hardware by this license. See id. The license may be revoked,
according to Since Hardware, only if a situation arises where,
consistent with Article 30 of the
[[Page 51783]]
Legal Corporations Regulations, Since Hardware engages in prohibited
activities. See Since Hardware Section A at 4 and Exhibit A-5. Further,
Since Hardware states that to obtain a renewal of its business license,
it must submit balance sheets and profit and loss (`P&L'') statements
to the issuing authority. See id.
Since Hardware has placed on the record the Foreign Trade Law and
states that this law allows it full autonomy from the central authority
in governing its business operations. See Since Hardware Section A at
3. We have reviewed Article 11 of Chapter II of the Foreign Trade Law,
which states, ``foreign trade dealers shall enjoy full autonomy in
their business operation and be responsible for their own profits and
losses in accordance with the law.'' As in prior cases, we have
analyzed such PRC laws and found that they establish an absence of de
jure control. See, e.g., Preliminary Results of New Shipper Review:
Certain Preserved Mushrooms From the People's Republic of China, 66 FR
30695, 30696 (June 7, 2001), unchanged in Final Results of New Shipper
Review: Certain Preserved Mushrooms From the People's Republic of
China, 66 FR 45006 (August 27, 2001). Therefore, we preliminarily
determine that there is an absence of de jure control over the export
activities of Since Hardware.
Absence of De Facto Control
As stated in previous cases, there is some evidence that certain
enactments of the PRC central government have not been implemented
uniformly among different sectors and/or jurisdictions in the PRC. See
Silicon Carbide, 59 FR at 22587. Therefore, 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
government control, which would preclude the Department from assigning
separate rates. See id.
Typically, the Department considers four factors in evaluating
whether a respondent is subject to de facto government control of its
export functions: (1) whether the export prices are set by, or subject
to, the approval of a government authority; (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 its 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 id.
Since Hardware has asserted the following: (1) it is a wholly
foreign-owned company; (2) there is no government participation in its
setting of export prices; (3) its general manager has the authority to
bind sales contracts; (4) the company's general manager appoints the
company's management and it does not have to notify government
authorities of its management selection; (5) there are no restrictions
on the use of its export revenue; and (6) its board of directors
decides how profits will be used. See Since Hardware Section A at 4-8.
We have examined the documentation provided and noted no discrepancies
between the information on the record and Since Hardware's statements
on the record with respect to de facto control over its export
activities.
Consequently, because evidence on the record indicates an absence
of government control, both in law and in fact, over Since Hardware's
export activities, we preliminarily determine that Since Hardware has
met the criteria for the application of a separate rate.
Fair Value Comparisons
To determine whether the respondent's sales of the subject
merchandise to the United States were made at prices below normal
value, we compared its United States prices to normal values, as
described in the ``U.S. Price'' and ``Normal Value'' sections of this
notice. See section 773(a) of the Act.
U.S. Price
Export Price
We based U.S. price for Since Hardware on export price (``EP'') in
accordance with section 772(a) of the Act, because the first sale to an
unaffiliated purchaser was made prior to importation, and constructed
export price (``CEP'') was not otherwise warranted by the facts on the
record. We calculated EP based on the packed price from the exporter to
the first unaffiliated customer in the United States. We deducted
foreign inland freight, foreign brokerage and handling expenses from
the starting price (gross unit price), in accordance with section
772(c) of the Act. Also, we added billing adjustments for origin
receiving charges and freight revenue to the gross unit price, where
applicable. We have preliminarily determined to accept these billing
adjustments on the basis of the statements and documentation provided
by Since Hardware indicating that these charges were separately listed
on the sales invoice and paid for by the customer.
Where foreign inland freight or foreign brokerage and handling were
provided by PRC service providers or paid for in renminbi, we valued
these services using Indian surrogate values (see ``Factors of
Production'' section below for further discussion).
Treatment of Sample Transactions
During the course of this review, Since Hardware reported that it
provided a small number of samples to certain U.S. customers. See Since
Hardware's 2\nd\ Supplemental response dated July 30, 2007 (``2\nd\
Supplemental'') at 2-4. In determining whether to include these
transactions in Since Hardware's margin calculation, the Department
analyzed whether Since Hardware received consideration for these
samples, consistent with the Federal Circuit's decision that a sale
requires ``both a transfer of ownership to an unrelated party and
consideration. Consideration generally requires a bargained-for
exchange.'' See NSK Ltd. v. United States, 115 F.3d 965, 975 (Fed. Cir.
1997) (``NSK''). In the instant case, the Department notes that these
samples were provided by Since Hardware to unaffiliated parties in the
United States, and that none of the samples reported by Since Hardware
were provided for commercial value (i.e., samples shipped during the
POR were zero-price transactions). Further, we note that certain of the
reported samples were the first shipment of the applicable product code
made to that customer, and the remaining samples were made for no
commercial consideration in a non-commercial quantity, and shipped in a
manner inconsistent with the remainder of Since Hardware's sales during
the POR. Consequently, for these preliminary results, we find that
these reported samples were made for no commercial consideration and in
non-commercial quantities to unaffiliated customers in a manner
inconsistent with Since Hardware's other sales during the POR.
Therefore, consistent with the Federal Circuit's determination in NSK
(see NSK at 115 F.3d 965, 975), the Department preliminarily determines
that Since Hardware's transactions involving its samples do not
constitute sales. As a result, the Department is excluding these
transactions from Since Hardware's margin calculation.
Normal Value
Surrogate Country
Section 773(c)(1) of the Act directs the Department to base NV on
the NME producer's factors of production valued in a surrogate market
economy country
[[Page 51784]]
or countries. Section 773(c)(4) of the Act requires the Department to
value an NME producer's factors of production based on the prices or
costs of the factors of production, in one or more market-economy
countries that to the extent possible: (1) are at a level of economic
development comparable to that of the NME country, and (2) are
significant producers of comparable merchandise. India is among the
countries comparable to the PRC in terms of overall economic
development, as identified in the Memorandum from the Office of Policy
to James C. Doyle, Director, AD/CVD Operations, Office 9, dated April
18, 2007. See Memorandum to the File from Anya Naschak, Senior
International Trade Analyst, regarding Selection of a Surrogate Country
in the Second Antidumping Duty Administrative Review of Floor-Standing,
Metal-Top Ironing Tables and Parts Thereof from the People's Republic
of China, dated August 31, 2007 (``Surrogate Country Memorandum'') at
Attachment I. In addition, based on information from the investigation
of ironing tables, India is a significant producer of comparable
merchandise. See Notice of Initiation of Antidumping Investigation:
Floor-Standing, Metal-Top Ironing Tables and Certain Parts Thereof from
the People's Republic of China, 68 FR 44040, 44042 (July 25, 2003),
unchanged in Notice of Final Determination of Sales at Less Than Fair
Value: Floor-Standing, Metal-Top Ironing Tables and Certain Parts
Thereof From the People's Republic of China, 69 FR 35296, 35297 (June
24, 2004).
Accordingly, we considered India the surrogate country for purposes
of valuing the factors of production because it meets the Department's
criteria for surrogate-country selection. See Surrogate Country
Memorandum.
Market Economy Purchases
Certain of Since Hardware's inputs into the production of the
subject merchandise were purchased from market economy (``ME'')
suppliers and paid for in ME currencies. We used the weight-averaged ME
prices paid by Since Hardware when the inputs were obtained from a ME
supplier, paid for in a ME currency, were demonstrated to be consistent
with ME prices, and were a significant portion of the total purchases
of that input.
In the recently-completed final results of the first administrative
review of this order (see Floor-Standing, Metal-Top Ironing Tables and
Certain Parts Thereof from the People's Republic of China: Final
Results and Final Rescission, In Part, of Antidumping Duty
Administrative Review, 72 FR 13239 (March 21, 2007) (``AR1 Final
Results''), and accompanying Issues and Decision Memorandum at Comment
6 (``AR1 Decision Memorandum''),\1\ the Department determined that
``there is a potential, in situations where a supplier is physically
located in a ME, but overwhelmingly owned by an entity(ies) located in
an NME, that such a supplier may make pricing decisions based on NME
rather than ME principles.'' See AR1 Decision Memo at Comment 6. In
this case, Since Hardware has again purchased ME inputs from the same
NME-owned entity as discussed in the AR1 Final Results.
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\1\ While the calculation was revised in the Notice of Amended
Final Results of Antidumping Duty Administrative Review: Floor-
Standing, Metal-Top Ironing Tables and Certain Parts Thereof from
the People's Republic of China, 72 FR 19689 (April 19, 2007) (``AR1
Amended Final''), the determination remained consistent with the AR1
Final Results.
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Both Petitioner and Since Hardware have submitted comments
regarding the treatment of Since Hardware's ME purchases and the
analysis of these purchases in the context of the above facts. See,
e.g., Petitioner Pre-Prelim Comments, Since Hardware Pre-Prelim
Comments, and Petitioner Additional Prelim Comments. Based on the
information on the record of this administrative review with respect to
the supplier of Since Hardware's ME inputs, the Department
preliminarily finds that a similar analysis of Since Hardware's ME
purchases is necessary to ensure that these purchases were made
according to ME principles. However, as a full discussion of these
issues is not possible here due to their business proprietary nature,
we have fully addressed the basis for this preliminary decision in
Since Hardware's analysis memo. See Memorandum to the File from Anya
Naschak Senior International Trade Analyst and Bobby Wong,
International Trade Analyst, regarding Since Hardware (Guangzhou) Co.,
Ltd. (Since Hardware) Analysis Memorandum for the Preliminary Results
of Review, dated August 31, 2007 (``Since Hardware Analysis Memo'').
Consistent with the methodology\2\ utilized in the AR1 Amended
Final, we have examined the average purchase price of each input
purchased by Since Hardware from the NME-owned supplier, and compared
the average purchase prices to weighted-average international market
prices derived from annualized export statistics obtained from World
Trade Atlas (``WTA'') for the country from which the input was
originally produced. As discussed in detail in the Since Hardware
Analysis Memo, the Department found that certain of Since Hardware's
purchases of cold rolled steel, hot rolled steel, powder coating, and
nails, were made at prices that were at or above the weighted-average
international market price based on WTA export statistics. Because
these prices are at or above the weighted-average international market
price, the Department finds that Since Hardware's purchases of these
inputs were made at prices reflective of ME principles, and have
utilized Since Hardware's ME purchases for these inputs. See Since
Hardware Analysis Memo for a detailed discussion of these prices.
However, certain of Since Hardware's purchases of cold rolled steel,
steel wire rod, cotton fabric, springs, bolts, and rivets from the same
supplier show that these purchases were made at prices below the
international market prices. Accordingly, the Department finds that
record evidence demonstrates that purchases of these inputs may not be
reflective of ME principles (i.e., the prices were below the weighted-
average international market price based on the WTA statistics). Thus,
the Department has disregarded these purchases in calculating normal
value. For those inputs for which no purchases were made consistent
with ME principles, the Department has relied upon its factors of
production methodology described below.
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\2\ Where modifications were made to the details of this
methodology, the Department has discussed these details in the Since
Hardware Analysis Memo, due to their proprietary nature.
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The Department recently changed its practice with respect to the
use of ME inputs in NME proceedings (see Antidumping Methodologies:
Market Economy Inputs, Expected Non Market Economy Wages, Duty
Drawback; and Request for Comments, 71 FR 61716 (October 19, 2006)
(``ME Input Policy'')). The Department stated that this practice ``will
take effect for all segments of NME proceedings that are initiated
after publication of this notice in the Federal Register'' (id. at 71
FR 61719), which was October 19, 2006. Given that the instant
administrative review was initiated on September 29, 2006, the
Department's new ME input policy will not be applied to this case.
Therefore, we have analyzed Since Hardware's inputs which were
purchased consistent with ME principles pursuant to our previous
practice, which entailed a case-by-case basis analysis of whether the
volume of ME inputs was meaningful. See e.g., Folding Metal Tables and
Chairs from the People's Republic of China: Final Results of
Antidumping Duty Administrative
[[Page 51785]]
Review, 71 FR 71509 (December 11, 2006) and accompanying Issues and
Decision Memorandum at Comment 1 (``T&C Final''); Hand Trucks and
Certain Parts Thereof From the People's Republic of China: Final
Results of Administrative Review and Final Results of New Shipper
Review: 72 FR 27287 (May 15, 2007) and accompanying Issues and Decision
Memorandum at Comment 12 (``Hand Trucks Final'').
Section IV of the Department's standard Section D questionnaire
requires respondents to report for each raw material the percentage
purchased from a ME country and the percentage purchased from an NME.
In its responses to the Department, Since Hardware reported the
percentages of each raw material purchased from ME countries and paid
for in a ME currency. For each of the inputs where Since Hardware's ME
purchases were found to be reflective of ME principles, the Department
found that the percentage purchased from market economy suppliers was
meaningful. Due to the proprietary nature of Since Hardware's ME
purchases and quantities, we are not able to discuss the details of
these purchases here. For a complete discussion, see Since Hardware
Analysis Memo. As a result, the Department found that Since Hardware's
ME purchases of cold rolled steel, hot rolled steel, powder coating,
and nails were a meaningful portion of total purchases of that input
and, in accordance with section 351.408(c)(1) of the Department's
regulations, have preliminarily valued these inputs using the actual ME
prices paid.
Factors of Production
In accordance with section 773(c) of the Act, we calculated NV
based on the factors of production which included, but were not limited
to: (A) hours of labor required; (B) quantities of raw materials
employed; (C) amounts of energy and other utilities consumed; and (D)
representative capital costs, including depreciation. We used the
factors of production reported by the producer for materials, energy,
labor, and packing. To calculate NV, we multiplied the reported unit
factor quantities by publicly available values in the surrogate
country, India.
Since Hardware reported by-product sales. With respect to the
application of the by-product offset to normal value, consistent with
the Department's determination in the investigation of diamond
sawblades from the PRC, because the surrogate financial statements on
the record of this administrative review contain no references to the
treatment of by-products and because Since Hardware reported that it
sold its by-products, we will deduct the surrogate value of the by-
product from normal value. See Final Determination of Sales at Less
Than Fair Value and Final Partial Affirmative Determination of Critical
Circumstances: Diamond Sawblades and Parts Thereof from the People's
Republic of China, 71 FR 29303 (May 22, 2006), and accompanying Issues
and Decision Memorandum at Comment 9, unchanged in Notice of Amended
Final Determination of Sales at Less Than Fair Value: Diamond Sawblades
and Parts Thereof from the People's Republic of China, 71 FR 35864
(June 22, 2006). This is consistent with accounting principles based on
a reasonable assumption that if a company sells a by-product, the by-
product necessarily incurs expenses for overhead, SG&A, and profit. See
id.
In selecting the surrogate Indian values, we considered the
quality, specificity, and contemporaneity of the data, in accordance
with our practice. 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 (``Garlic 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. When we used publicly available
import data from the Ministry of Commerce of India (``Indian Import
Statistics'') for August 2005 through July 2006 to value inputs sourced
domestically by PRC suppliers, we added to the Indian surrogate values
a surrogate freight cost calculated using the shorter of the reported
distance from the domestic supplier to the factory or the distance from
the closest seaport to the factory. This adjustment is in accordance
with the Federal Circuit's decision in Sigma Corp. v. United States,
117 F.3d 1401, 1408 (Fed. Cir. 1997). When we used non-import surrogate
values for factors sourced domestically by PRC suppliers, we based
freight for inputs on the actual distance from the input supplier to
the site at which the input was used. In addition, in instances where
we relied on Indian import data to value inputs, in accordance with the
Department's practice, we excluded imports from both NME countries and
countries deemed to maintain broadly available, non-industry-specific
subsidies which may benefit all exporters to all export markets (i.e.,
Indonesia, South Korea, and Thailand) from our surrogate value
calculations. 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 Issues and Decision Memorandum at
Comment 1. See Memorandum to the File: Factors of Production Valuation
Memorandum for the Preliminary Results of Antidumping Duty
Administrative Review of Floor-standing, Metal-top Ironing Tables and
Certain Parts Thereof from the People's Republic of China, dated August
31, 2007 (``Factor Valuation Memo''), for a complete discussion of the
import data that we excluded from our calculation of surrogate values.
Where we could not obtain publicly available information
contemporaneous with the POR to value factors, we adjusted the
surrogate values using the Indian Wholesale Price Index (``WPI'') as
published in the International Financial Statistics of the
International Monetary Fund, for those surrogate values in Indian
rupees. We made currency conversions, where necessary, pursuant to 19
CFR 351.415, to U.S. dollars using the daily exchange rate
corresponding to the reported date of each sale. We relied on the daily
exchanges rates posted on the Import Administration website (http://www.trade.gov/ia/
). See Factor Valuation Memo.
We valued the factors of production as follows:
The Department used the Indian Import Statistics to value the raw
material and packing material inputs that Since Hardware used to
produce the merchandise under review during the POR, except where noted
below. For a detailed description of all surrogate values used in this
administrative review, see Factor Valuation Memo.
To value water, we calculated the average rate of inside and
outside industrial water rates from various regions as reported by the
Maharashtra Industrial Development Corporation, http://midcindia.org,
dated June 1, 2003. We inflated the value for water using the POR
average WPI rate. See Factor Valuation Memo.
We valued electricity using the 2000 electricity price in India
reported by the International Energy Agency statistics for Energy
Prices& Taxes, Second Quarter 2003. We inflated the value for
[[Page 51786]]
electricity using the POR average WPI rate. See Factor Valuation Memo.
We valued diesel using the rates provided by the OECD's
International Energy Agency's publication: Key World Energy Statistics
from 2004 and 2005. The prices are based on 2004 and 2005 first quarter
prices of automotive diesel fuel retail prices. See Factor Valuation
Memo.
With respect to valuation of factory overhead, selling, general and
administrative expenses, and profit, in the AR1 Final Results the
Department relied on the 2004-2005 Infiniti Modules Pvt. Ltd.
(``Infiniti Modules'') financial statements, because they represented
the most specific, contemporaneous, and publicly available information.
See AR1 Decision Memorandum at Comment 1. In the instant case,
Petitioner placed on the record Infiniti Modules 2004-2005 and 2005-
2006 financial statements and the 2004-2005 Agew Steel Manufacturers
Private Limited (``Agew Steel'') financial statements in its April 19,
2007, submission at Exhibits 1-2, and argued that the Department should
rely on the 2004-2005 Agew Steel financial statements, utilizing the
2005-2006 Infiniti Modules' profit ratio in lieu of Agew Steel's
negative profit ratio to calculate factory overhead, selling, general,
and administrative expenses, and profit. Since Hardware also argued the
Department should rely on the Infiniti Modules 2004-2005 financial
statements.
In valuing factors of production, section 773(c)(1) of the Act
instructs the Department to use ``the best available information'' from
the appropriate market economy country. As discussed above, in choosing
the most appropriate surrogate value, the Department considers several
factors, including the quality, specificity, and contemporaneity of the
source information. See, e.g., Garlic Decision Memorandum at Comment 6.
For these preliminary results, the Department has determined that the
2004-2005 Infiniti Modules financial statements are complete, publicly
available, and reflect merchandise comparable to ironing tables. We
note that the 2004-2005 Infiniti Modules financial statements were
obtained from the Indian Registrar of Companies, and are publicly
available. See Petitioner's July 27, 2007, surrogate value submission.
With respect to quality, we note that the 2004-2005 Infiniti Modules
financial statements are complete, audited financial statements with
all auditors notes and schedules, as well a complete balance sheet and
P&L. Regarding specificity, we preliminarily find, consistent with the
AR1 Decision Memorandum at Comment 1, Infiniti Modules manufactures
merchandise that closely reflects merchandise comparable to ironing
tables. Therefore, we preliminarily find that the 2004-2005 Infinity
Modules financial statements are publicly available, quality, data, and
specific to the merchandise under review.
With respect to the Agew Steel and the 2005-2006 Infiniti Modules
financial statements, the Department finds that these statements are
less complete than the 2004-2005 Infiniti Modules statement. The
Department notes that both the Agew Steel and 2005-2006 Infiniti
Modules financial statements are missing the P&L. Irrespective of
whether the same surrogate financial ratios may be derived from the
schedules included in these statements, the function of an audit is to
audit the balance sheet and P&L of a company, not the schedules. See
e.g., 2004-2005 Infiniti Modules financial statements, included in
Petitioner's April 19, 2007, submission at Exhibit 2, which states ``we
have audited the attached balance sheet of M/s. Infiniti Modules Pvt.
Limited, as at 31\st\ March 2005 and the P&L account for the year ended
31\st\ March 2005.''\3\ In this case, the Department has on the record
a financial statement that includes all information upon which the
auditors relied to evaluate the potential surrogate company's financial
reports. As a result we preliminarily find, that the Agew Steel and
2005-2006 Infiniti Modules financial statements are less complete than
those of the 2004-2005 Infiniti Modules financial statements. In
addition, because these statements are less complete than the 2004-2005
Infiniti Modules financial statements, we find that the Agew Steel and
2005-2006 Infiniti Modules financial statements are less reliable than
the 2004-2005 Infiniti Modules financial statements. The Department has
evaluated the other potential sources for valuing surrogate financial
ratios placed on the record of this proceeding. None of these other
potential sources is as reliable or otherwise as appropriate for
surrogate value purposes as the 2004-2005 Infiniti Modules financial
statements. Thus, the Department preliminarily finds, consistent with
the AR1 Final Results, that the 2004-2005 Infiniti Modules financial
statements are the best information available on the record of this
review, pursuant to section 773(c)(1) of the Act, from which to value
the surrogate financial ratios of factory overhead, selling, general &
administrative expenses, and profit. See Factor Valuation Memo for
detail on the calculation of these ratios.
---------------------------------------------------------------------------
\3\ See also 2005-2006 Infiniti Modules financial statements,
included in Petitioner's July 27, 2007, submission at Exhibit 1,
auditors report at page 3; and Agew Steel financial statements,
included in Petitioner's April 19, 2007, submission at Exhibit 1,
page 8
---------------------------------------------------------------------------
Because of the variability of wage rates in countries with similar
levels of per capita gross domestic product, 19 CFR 351.408(c)(3)
requires the use of a regression-based wage rate. Therefore, to value
the labor input, we used the PRC's regression-based wage rate published
by Import Administration on its website, http://www.trade.gov/ia/. See
Factor Valuation Memo.
To value truck freight, we calculated a weighted-average freight
cost based on publicly available data from http://www.infreight.com, an Indian
inland freight logistics resource website. See Factor Valuation Memo.
To value brokerage and handling, the Department used a simple
average of the publicly summarized version of the average value for
brokerage and handling expenses reported in the U.S. sales listings in
the submission from Essar Steel Ltd. (``Essar Steel''), dated February
28, 2005, in the antidumping duty review of Certain Hot-Rolled Carbon
Steel Flat Products from India; the submission from Agro Dutch
Industries Limited (``Agro Dutch''), dated May 24, 2005, at Exhibit B-
1, in the antidumping duty administrative review of Certain Preserved
Mushrooms from India; and the submission from Kejriwal Paper Ltd.
(``Kejriwal''), dated January 9, 2006, in the antidumping duty review
of Lined Paper from India. While none of these sources are
contemporaneous to the POR, these data represent the best information
available. Further, the Department's preference is to average these
data sources because they represent values for numerous transactions
that are available for a range of products and minimize the potential
distortions that might arise from a single price source. One value,
taken in isolation, could differ significantly when compared across a
range of products, values, and special circumstances of a single
transaction. See Final Determination of Sales at Less Than Fair Value
and Partial Affirmative Determination of Critical Circumstances:
Certain Polyester Staple Fiber from the People's Republic of China, 72
FR 19690 (April 19, 2007), and accompanying Issues and Decision memo at
Comment 5. See also Factor Valuation Memo.
In accordance with 19 CFR 351.301(c)(3)(ii), for the final results
of this administrative review, interested parties may submit publicly
available
[[Page 51787]]
information to value the factors of production until 20 days following
the date of publication of these preliminary results.
Preliminary Results of Review
We preliminarily determine that the following antidumping duty
margins exist:
------------------------------------------------------------------------
Margin
Exporter (percent)
------------------------------------------------------------------------
Since Hardware (Guangzhou) Co., Ltd......................... 0.31
[percnt]
(de
minimis)
------------------------------------------------------------------------
For details on the calculation of the antidumping duty weighted-
average margin for Since Hardware, see Since Hardware Analysis Memo. A
public version of this memorandum is on file in the Department's
central records unit (``CRU'').
Assessment Rates
Pursuant to 19 CFR 351.212(b), the Department will determine, and
Customs and Border Protection (``CBP'') shall assess, antidumping
duties on all appropriate entries. The Department will issue
appropriate assessment instructions directly to CBP 15 days after the
date of publication of the final results of this review. For assessment
purposes, where possible, we calculated importer-specific assessment
rates for ironing tables from the PRC via ad valorem duty assessment
rates based on the ratio of the total amount of the dumping margins
calculated for the examined sales to the total entered value of those
same sales. We will instruct CBP to assess antidumping duties on all
appropriate entries covered by this review if any assessment rate
calculated in the final results of this review is above de minimis. The
final results of this review shall be the basis for the assessment of
antidumping duties on entries of merchandise covered by the final
results of these reviews and for future deposits of estimated duties,
where applicable.
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 exporters
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 previously investigated or reviewed PRC and non-PRC
exporters not listed above that have separate rates, the cash deposit
rate will continue to be the exporter-specific rate published for the
most recent period; (3) 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 157.68 percent (see Amended
Final FR); and (4) 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 publication of the final results of the next
administrative review.
Schedule for Final Results of Review
The Department will disclose calculations performed in connection
with the preliminary results of this review within five days of the
date of publication of this notice in accordance with 19 CFR
351.224(b). Any interested party may request a hearing within 30 days
of publication of this notice in accordance with 19 CFR 351.310(c). Any
hearing would normally be held 37 days after the publication of this
notice, or the first workday thereafter, at the U.S. Department of
Commerce, 14\th\ Street and Constitution Avenue, NW, Washington, DC
20230. Individuals who wish to request a hearing must submit a written
request within 30 days of the publication of this notice in the Federal
Register to the Assistant Secretary for Import Administration, U.S.
Department of Commerce, Room 1870, 14\th\ Street and Constitution
Avenue, NW, Washington, DC 20230. Requests for a public hearing should
contain: (1) the party's name, address, and telephone number; (2) the
number of participants; and (3) to the extent practicable, an
identification of the arguments to be raised at the hearing.
Unless otherwise notified by the Department, interested parties may
submit case briefs within 30 days of the date of publication of this
notice in accordance with 19 CFR 351.309(c)(1)(ii). As part of the case
brief, parties are encouraged to provide a summary of the arguments not
to exceed five pages and a table of statutes, regulations, and cases
cited in accordance with 19 CFR 351.309(c)(2). Rebuttal briefs, which
must be limited to issues raised in the case briefs, must be filed
within five days after the case brief is filed in accordance with 19
CFR 351.309(d). If a hearing is held, an interested party may make an
affirmative presentation only on arguments included in that party's
case brief and may make a rebuttal presentation only on arguments
included in that party's rebuttal brief in accordance with 19 CFR
351.310(c). Parties should confirm by telephone the time, date, and
place of the hearing within 48 hours before the scheduled time. The
Department will issue the final results of this review, which will
include the results of its analysis of issues raised in the briefs, not
later than 120 days after the date of publication of this notice in
accordance with section 751(a)(3)(A) of the Act and 19 CFR
351.213(h)(1).
Notification to Importers
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 these review periods. 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 this notice are published in
accordance with sections 751(a)(1) and 777(i)(1) of the Act.
Dated: August 31, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-17865 Filed 9-10-07; 8:45 am]
BILLING CODE 3510-DS-S