[Federal Register: October 28, 2003 (Volume 68, Number 208)]
[Notices]
[Page 61395-61398]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28oc03-35]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-881]
Final Determination of Sales at Less Than Fair Value and Critical
Circumstances: Certain Malleable Iron Pipe Fittings From the People's
Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final determination of sales at less than fair value
and critical circumstances.
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EFFECTIVE DATE: October 28, 2003.
FOR FURTHER INFORMATION CONTACT: Helen Kramer, Anya Naschak, or Ann
Barnett-Dahl, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
0405, 482-6375, or 482-3833, respectively.
Final Determination
We determine that certain malleable iron pipe fittings from the
People's Republic of China (PRC) are being, or are likely to be, sold
in the United States at less than fair value, as provided in section
735 of the Tariff Act of 1930, as amended (the Act). The estimated
margin of dumping is shown in the ``Continuation of Suspension of
Liquidation'' section of this notice.
Case History
On April 22, 2003, we published in the Federal Register a
preliminary determination that critical circumstances exist for imports
of malleable pipe fittings for one of the mandatory respondents, Jinan
Meide Casting Co. (JMC), and one of the non-selected respondents, SCE
Co., Ltd. (SCE), based on an increase in imports exceeding the required
15 percent, but that no massive imports exist for the other mandatory
respondents, Langfang Pannext Pipe Fitting Co., Ltd. (Pannext), and
Beijing Sai Lin Ke Hardware Co., Ltd. (SLK), and the other non-selected
respondents, Myland Industrial Co., Ltd. (Myland) and Chengde Malleable
Iron General Factory (Chengde). In addition, we found that imports of
subject merchandise were massive in the three-month comparison period
for the PRC-wide entity for which data are available.
We published the preliminary determination in this investigation on
June 6, 2003. See Notice of Preliminary Determination of Sales at Less
Than Fair Value: Certain Malleable Iron Pipe Fittings from the People's
Republic of China, 68 FR 33911 (June 6, 2003) (Preliminary
Determination). Since the publication of the Preliminary Determination,
the following events have occurred.
On June 3, 2003, in order to remedy deficiencies in respondents'
reporting of scrap inputs, the Department asked respondents to weigh
and keep accurate records of each ingredient that goes into the cupola
and to submit biweekly reports to the Department until two weeks before
verification. JMC and Pannext each submitted three production reports
covering a six-week period, and SLK submitted four reports covering an
eight-week period.
On June 4, 2003, SLK requested that the Department correct an
alleged ministerial error in SLK's margin calculation. On June 13,
2003, the Department determined that the error in the margin
calculation resulted from SLK's failure to indicate that it had
reported the weight of the fittings in its revised sales database in
pounds, although all other data were in kilograms. In addition, the
Department determined that this error was not ministerial in nature. As
a result, at that time we did not make the suggested correction.
However, SLK subsequently revised its reported weights, which are used
in the calculation of U.S. price, to kilograms, and we have used the
corrected weights for the final determination.
On July 3, 2003, the petitioners (Ward Manufacturing, Inc. and
Anvil International, Inc.) submitted a request for a public hearing in
accordance with 19 CFR 351.310(c). On July 7, 2003, respondents JMC and
Pannext requested a hearing. On September 2, 2003, the Department
informed all interested parties that a hearing would be held (see
Memorandum from Ann Barnett-Dahl to the File dated September 2, 2003).
On September 5, 2003, the petitioners requested that the Department
conduct a portion of the hearing in closed session. The hearing was
held on September 17, 2003. The petitioners and three respondents
submitted case briefs and rebuttal briefs on September 8 and 15, 2003,
respectively.
On July 16, 2003, JMC, Pannext and SLK placed on the record public
information for the purpose of providing the Department with additional
information that can be used in valuing the factors of production.
The Department conducted verifications on the following dates: June
25, 2003, Houston, Texas--Pannext Fittings Corp.; July 8-10, 2003,
Chicago, Illinois--LDR Industries, Inc.; July 28-August 1, 2003, Jinan,
PRC--JMC;
[[Page 61396]]
August 11-12, 2003, Beijing, PRC--SLK; August 13-15, 2003, Tianjin,
PRC--a supplier to SLK.
Period of Investigation
The period of investigation is April 1, 2002 through September 30,
2002.
Non-Market Economy Country Status
The Department has treated the PRC as a non-market economy (NME)
country in all its past antidumping investigations. A designation as an
NME country remains in effect until the Department revokes it. See
section 771(18)(C) of the Act. The respondents in this investigation
have not requested revocation of the PRC's NME status. We have
continued to treat the PRC as an NME in this investigation. For further
discussion, see the Department's Preliminary Determination, 68 FR
33391, 33913.
Separate Rates
In our Preliminary Determination, we determined that the
respondents had met the criteria for the application of separate
antidumping duty rates. We have not received any other information that
would warrant reconsideration of our separate rates determination with
respect to these companies. For a complete discussion of the
Department's determination that the respondents are entitled to a
separate rate, see Preliminary Determination.
The PRC-Wide Rate
For the reasons set forth in the Preliminary Determination, we
continue to find that the use of adverse facts available for the PRC-
wide rate is appropriate for other exporters in the PRC, based on our
presumption that those respondents who failed to demonstrate
entitlement to a separate rate constitute a single enterprise under
common control by the Chinese government. See Preliminary
Determination, 68 FR 33911, 33915-33916. The PRC-wide rate applies to
all entries of the merchandise under investigation except for entries
from the three mandatory respondents and the respondents that are
entitled to a separate rate.
When analyzing the petition for purposes of the initiation, the
Department reviewed all of the data upon which the petitioner relied in
calculating the estimated dumping margin and determined that the margin
in the petition was appropriately calculated and supported by adequate
evidence in accordance with the statutory requirements for initiation.
In order to corroborate the petition margin for purposes of using it as
adverse facts available, we examined the price and cost information
provided in the petition in the context of our preliminary
determination. For further details, see Memorandum from Ann Barnett-
Dahl to Richard Weible, Office Director, Total Facts Available
Corroboration Memorandum for All Others Rate, dated May 28, 2003.
Consistent with our Preliminary Determination, as adverse facts
available, we have used the rate from the petition, recalculated with
the new surrogate value information discussed in the Memorandum to the
File Regarding Total Facts Available Corroboration Memorandum for the
PRC-Wide Rate, October 20, 2003. See also the Issues and Decision
Memorandum for the Final Determination in the Less Than Fair Value
Investigation of Certain Malleable Iron Pipe Fittings from the People's
Republic of China: April 1, 2002 through September 30, 2002, at
Comments 4 through 10, accompanying this notice (Decision Memorandum).
The recalculated rate for the China-wide entity is 111.36 percent.
Surrogate Country
For purposes of the final determination, the Department continues
to find that India is the appropriate primary surrogate country. For
further discussion and analysis regarding the surrogate country
selection, see the Department's Preliminary Determination at 33916.
Use of Facts Available
Section 776(a) of the Act provides that, if necessary information
is not available on the record, or if an interested party fails to
provide such information in a timely manner or in the form or manner
requested, the Department shall use, subject to sections 782(d) and (e)
of the Act, facts otherwise available in reaching the applicable
determination. If an interested party is unable to submit the
information requested or in the requested form, that party is required
to notify the Department promptly and must suggest a reasonable
alternative. See section 782(c)(1).
In the Preliminary Determination, we relied on partial facts
available for the value of recycled scrap because the information on
the record did not satisfy the statute with respect to the unreported
inputs in the calculation of normal value. See Preliminary
Determination at 33918. After the Preliminary Determination, but prior
to verification, on June 3, 2003, the Department requested that
respondents ``weigh and keep accurate written records of each
ingredient that goes into the cupola for each charge on a CONNUM
specific basis * * * Provide the source of each input, e.g. purchased
or reprocessed material * * * {and{time} for each CONNUM, record (1)
The total casting weight, (2) the total weight of produced subject
merchandise, and (3) the total weight of generated scrap,'' in an
effort to allow respondents another opportunity to alleviate the
Department's concerns regarding the quantities of inputs reported to
date. On June 4, 2003, the Department also requested that respondents
address the Department's concerns regarding the underreporting of
metallic inputs during the POI. Although respondents submitted
additional information in response to each of these requests, the
information provided to the Department did not address the Department's
concern that respondents have failed to report sufficient quantities of
inputs to account for total production during the POI, and the reported
information continued to have significant discrepancies that have not
been explained. Therefore, the application of facts available is
appropriate pursuant to section 776(a), because the Department does not
have the necessary information needed to calculate its margin,
respondents did not provide the information, and respondents have not
proposed any reasonable alternatives to account for underreported or
unreported inputs, in accordance with section 782(c)(1).
For Pannext, as facts available for the under-reported purchased
scrap inputs, the Department is continuing to increase purchased scrap,
where necessary, to the POI-wide average quantity for steel scrap input
as reported in its response, when the reported metallic inputs
(including steel scrap and pig iron) to produce one kilogram of output
was less than one kilogram. For JMC, as facts available for the under-
reported purchased scrap inputs, the Department is increasing the
reported purchased and non-subject merchandise recycled scrap inputs
for those CONNUM where the sum of these inputs is less than one
kilogram to produce one kilogram of output. The factor used to increase
these CONNUMs is the average of the CONNUMs where the sum of the inputs
is greater than or equal to one. For SLK the Department has also
increased the inputs when the sum of the inputs are less than one
kilogram to produce one kilogram of output for certain suppliers. See
SLK Proprietary Analysis Memo.
Additionally, as facts available for recycled scrap that was not
reported in the ``form or manner requested'' (see section 776(a) of the
Act), the
[[Page 61397]]
Department is continuing to use an average of the adjustment ratios for
JMC and Pannext as calculated in petitioners' May 15th letter at
Exhibit 4, and increasing JMC, Pannext, and SLK's reported values for
metallic inputs by this average, 56.83%. For a complete discussion of
this issue, see accompanying Decision Memorandum at Comment 1.
For this final determination, given an increase in total inputs as
described above and in the Decision Memorandum at Comment 1, the
Department must increase respondents' energy inputs to a level that
corresponds to the increase in these inputs. Therefore the Department
has applied neutral facts available to value respondents' energy inputs
to determine normal value in accordance with section 773(c)(1) of the
Tariff Act. As facts available for these underreported energy inputs,
the Department has used respondents' reported energy data to find an
appropriate neutral facts available adjustment for these underreported
inputs. For a complete discussion of this issue, see accompanying
Decision Memorandum at Comment 2 and JMC, Pannext, and SLK's
Proprietary Analysis Memoranda.
Analysis of Comments Received
All issues raised in the case and rebuttal briefs by parties to
this investigation, and to which we have responded, are listed in the
Appendix to this notice and addressed in the Decision Memorandum, which
is hereby adopted by this notice. Parties can find a complete
discussion of all issues raised in this investigation and the
corresponding recommendations in this public memorandum, which is on
file in B-099. In addition, a complete version of the Decision
Memorandum can be accessed directly on the World Wide Web at http://ia.ita.doc.gov/frn/.
The paper copy and electronic version of the
Decision Memorandum are identical in content.
Changes Since the Preliminary Determination
Based on our findings at verification, and analysis of comments
received, we have made adjustments to the calculation methodology in
calculating the final dumping margin in this proceeding. See Final
Analysis Memorandum for JMC; Final Analysis Memorandum for Pannext; and
Final Analysis Memorandum for SLK.
Verification
Pursuant to section 782(i) of the Act, we verified the information
submitted by each respondent for use in our final determination. We
used standard verification procedures including examination of relevant
accounting and production records, and original source documents
provided by the respondents. For changes from the Preliminary
Determination as a result of verification, see Final Analysis
Memorandum for Pannext and Final Analysis Memorandum for SLK.
Scope of Investigation
For purposes of this investigation, the products covered are
certain malleable iron pipe fittings, cast, other than grooved
fittings, from the People's Republic of China. The merchandise is
classified under item numbers 7307.19.90.30, 7307.19.90.60 and
7307.19.90.80 of the Harmonized Tariff Schedule (HTSUS). Excluded from
the scope of this investigation are metal compression couplings, which
are imported under HTSUS number 7307.19.90.80. A metal compression
coupling consists of a coupling body, two gaskets, and two compression
nuts. These products range in diameter from \1/2\ inch to 2 inches and
are carried only in galvanized finish. HTSUS subheadings are provided
for convenience and Bureau of Customs and Border Protection (BCBP)
purposes, however, the written description of the scope of this
proceeding is dispositive.
Final Determination of Critical Circumstances
On April 22, 2003, before the Preliminary Determination, we made a
preliminary finding of critical circumstances with respect to JMC, SCE,
and the PRC-wide entity on the basis of massive imports of the subject
merchandise over a relatively short period and a history of injurious
dumping from the PRC based on a current antidumping duty order on the
subject merchandise imposed by the European Community. See Notice of
Preliminary Determination of Critical Circumstances: Certain Malleable
Iron Pipe Fittings from the People's Republic of China, 68 FR 19779,
19780. We received no comments on this issue from any of the parties.
Based on our final determination of sales at less than fair value,
pursuant to section 735(a)(3)(A)(i) and (B), we therefore determine
that critical circumstances exist with respect to JMC, SCE, and the
PRC-wide entity.
Continuation of Suspension of Liquidation
In accordance with section 735(c)(1)(B) of the Act, we are
directing the BCBP to continue to suspend liquidation of all entries of
subject merchandise from the PRC, that are entered, or withdrawn from
warehouse, for consumption as follows: for Pannext, SLK, or Chengde, on
or after the date of publication of the Preliminary Determination in
the Federal Register, June 6, 2003; for JMC, SCE and companies subject
to the PRC-wide rate, on or after the date which is 90 days prior to
the date of publication of the Preliminary Determination, i.e., March
8, 2003, due to the Final Determination of Critical Circumstances. BCBP
shall continue to require a cash deposit or posting of a bond equal to
the estimated amount by which the normal value exceeds the U.S. price
as shown below. These suspension of liquidation instructions will
remain in effect until further notice.
The weighted-average dumping margins are as follows:
------------------------------------------------------------------------
Percent
Manufacturer/exporter \1\
------------------------------------------------------------------------
Jinan Meide Casting Co., Ltd.................................. 11.35
Beijing Sai Lin Ke Hardware Co., Ltd.......................... 14.32
Langfang Pannext Pipe Fitting Co., Ltd........................ 7.35
Chengde Malleable Iron General Factory........................ 10.96
SCE Co., Ltd.................................................. 10.96
PRC-Wide...................................................... 111.36
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\1\ Weighted-average margin percent.
ITC Notification
In accordance with section 735(d) of the Act, we have notified the
International Trade Commission (ITC) of our determination. As our final
determination is affirmative, the ITC will, within 45 days, determine
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry. If the ITC determines that material
injury, or threat of material injury does not exist, the proceeding
will be terminated and all securities posted will be refunded or
canceled. If the ITC determines that such injury does exist, the
Department will issue an antidumping duty order directing Customs
officials to assess antidumping duties on all imports of the subject
merchandise entered for consumption on or after the effective date of
the suspension of liquidation.
This determination is issued and published in accordance with
sections 735(d) and 777(i)(1) of the Act.
[[Page 61398]]
Dated: October 20, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
Appendix I
General Issues
Comment 1: Whether to Apply Facts Available for Material Inputs
Comment 2: Whether to Apply Facts Available for Energy Inputs
Comment 3: Financial Ratios
Comment 4: Surrogate Values--Whether to Update Information for the
POI
Comment 5: Surrogate Values--Recycled Iron Scrap
Comment 6: Surrogate Values--Iron and Steel Shavings
Comment 7: Surrogate Values--Ferrosilicon
Comment 8: Surrogate Values--Firewood
Comment 9: Surrogate Values--Wood Pallets
Comment 10: Surrogate Values--Zinc Dust and Zinc Powder
Comment 11: Whether to Consider Certain Inputs as Overhead Items
Comment 12: Whether the Department Correctly Calculated the Distance
for the Non-Market Economy (``NME'') Inland Freight Charge for
Respondents
Comment 13: Calculate Cost of Production (``COP'') on a per-piece
basis
Comment 14: Whether to Add Surrogate Freight to the Surrogate Values
of Recycled Scrap
Company Specific Issues
A. JMC
Comment 15: Whether Certain Sales by JMC should be considered CEP
Comment 16: Ministerial Errors
B. Pannext
Comment 17: Whether to Correct Items found at Verification
C. SLK
Comment 18: Use of Yield-Adjusted Factors of Production for SLK
supplier
Comment 19: Weight-Averaging in the Normal Value calculation
Comment 20: Use of the Correct Weight of the Finished Product
[FR Doc. 03-27165 Filed 10-27-03; 8:45 am]
BILLING CODE 3510-25-P