[Federal Register Volume 61, Number 66 (Thursday, April 4, 1996)]
[Notices]
[Pages 15028-15033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-8215]
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DEPARTMENT OF COMMERCE
[A-570-803]
Heavy Forged Hand Tools, Finished or Unfinished, With or Without
Handles, from the People's Republic of China; Final Results of
Antidumping Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Final Results of the Antidumping Duty Administrative
Review of Heavy Forged Hand Tools, Finished or Unfinished, With or
Without Handles, from the People's Republic of China.
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SUMMARY: On August 16, 1995, the Department of Commerce (the
Department) published in the Federal Register the preliminary results
of its administrative review of the antidumping duty orders on heavy
forged hand tools, finished or unfinished, with or without handles
(HFHTs) from the People's Republic of China (PRC) (60 FR 42516). This
review covers the period February 1, 1993, through January 31, 1994. We
gave interested parties an opportunity to comment on our preliminary
results. Based upon our analysis of the comments received, we have
changed the results from those presented in the preliminary results of
review.
EFFECTIVE DATE: April 4, 1996.
FOR FURTHER INFORMATION CONTACT: Tom Prosser or Maureen Flannery,
Office of Antidumping Compliance, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington D.C. 20230; telephone (202) 482-
4733.
Applicable Statute and Regulations
Unless otherwise stated, all citations to the statute and to the
Department's regulations are references to the provisions as they
existed on December 31, 1994.
SUPPLEMENTARY INFORMATION:
Background
On February 4, 1994, the Department published in the Federal
Register (59 FR 5390) a notice of opportunity to request administrative
reviews of these antidumping duty orders. On Februrary 28, 1994, in
accordance with 19 CFR 353.22(a), two resellers of the subject
merchandise to the United States, Fujian Machinery & Equipment Import &
Export Corporation (FMEC) and Shandong Machinery Import & Export
Corporation (SMC), requested that we conduct administrative reviews of
their exports of subject merchandise to the United States. We published
the notice of initiation of these antidumping duty administrative
reviews on March 14, 1994 (59 FR 11768). The notice of initiation was
amended on June 15, 1994 (59 FR 30770) and July 15, 1994 (59 FR 36160).
On August 16, 1995, the Department published in the Federal
Register the preliminary results of the administrative reviews of the
antidumping duty order on HFHTs from the PRC (60 FR 42516). A timely
request for a hearing was submitted by Woodings-Verona Tool Works, Inc.
(petitioner). The hearing was conducted on October 2, 1995. The
Department is conducting this adminstrative review in accordance with
section 751 of the Tariff Act of 1930, as amended (the Act).
Scope of Review
Imports covered by this review are shipments of HFHTs from the PRC
comprising the following classes or kinds of merchandise: (1) hammers
and sledges with heads over 1.5 kg (3.33 pounds) (hammers/sledges); (2)
bars over 18 inches in length, track tools and wedges (bars and
wedges); (3) picks/mattocks; and (4) axes/adzes.
HFHTs include heads for drilling, hammers, sledges, axes, mauls,
picks, and mattocks, which may or may not be painted, which may or may
not be finished, or which may or may not be imported with handles;
assorted bar products and track tools including wrecking bars, digging
bars and tampers; and steel woodsplitting wedges. HFHTs are
manufactured through a hot forge operation in which steel is sheared to
required length, heated to forging temperature, and formed to final
shape on forging equipment using dies specific to the desired product
shape and size. Depending on the product, finishing operations may
include shot-blasting, grinding, polishing and painting, and the
insertion of handles for handled products. HFHTs are currently provided
[[Page 15029]]
for under the following Harmonized Tariff System (HTS) subheadings:
8205.20.60, 8205.59.30, 8201.30.00, and 8201.40.60. Specifically
excluded are hammers and sledges with heads 1.5 kg (3.33 pounds) in
weight and under, hoes and rakes, and bars 18 inches in length and
under. This review covers two exporters of HFHTs from the PRC, FMEC and
SMC. The review period is February 1, 1993 through January 31, 1994.
Analysis of Comments Received
We gave interested parties an opportunity to comment on the
preliminary results. We received case briefs and rebuttal briefs from
petitioner and from both respondents.
Comment 1: Petitioner contests the Department's use of a trading
company's reported purchase price for steel from a market-economy
country to value steel used by the factories to make HFHTs. Petitioner
asserts that this is inconsistent with past decisions, and argues that
Department practice forbids the use of prices for inputs purchased by
trading companies from a market economy to value factors of production
when the trading company did not manufacture the subject merchandise,
citing Final Determination of Sales at Less Than Fair Value: Coumarin
from the People's Republic of China, 59 FR 66895 (December 28, 1994)
(Coumarin) and Notice of Final Determination of Sales at Less Than Fair
Value: Certain Partial-Extension Steel Drawer Slides with Rollers from
the People's Republic of China, 60 FR 54472 (October 24, 1995) (Drawer
Slides) in support of its argument. Petitioner contends that these
cases establish that only the price the producer negotiated directly
with a market-economy supplier is acceptable to value the factors of
production. Petitioner asserts that there is no record evidence on how
much or in what currency the suppliers paid the trading companies.
Petitioner maintains that the Department's use of trading company
purchase prices is inconsistent with respondents' claim that the
producers are separate from the trading companies. Petitioner argues
that in a market economy the trading company would receive a profit for
its service in the form of a commission or mark-up on the steel price.
Petitioner asserts that if the Department uses these prices, then it
must increase them by the reasonable commission or markup that a
market-economy importer would charge for its services.
Finally, petitioner argues that the Department cannot assume that
the market-economy purchase price adequately reflects the value of the
factors of production because the respondents failed to demonstrate
which of the subject products, if any, contained market-economy steel.
Respondents argue that, because both Coumarin and Drawer Slides
determinations postdate this period of review, they are inapplicable to
this case. Respondents assert that the Department's policy at the time
of the review period was that enunciated in Oscillating Fans and
Ceiling Fans from the People's Republic of China, 56 FR 55271, 55275
(October 25, 1991) (Fans), in which the Department stated that
``[w]here we can determine that an NME [(non-market economy)]
producer's input prices are market-determined, accuracy, fairness, and
predictability are enhanced by using those prices.''
Respondents claim that until Coumarin, the Department did not
distinguish between who purchased an input and who produced merchandise
with that input. Respondents claim that this qualification is without
statutory or regulatory support and has not been judicially reviewed.
Further, citing Final Determination of Sales at Less Than Fair Value:
Chrome Plated Lug Nuts from the People's Republic of China, 56 FR 46153
(September 10, 1991)(Lug Nuts), respondents contend that the buyer/
producer distinction runs counter to the Department's view that in
NMEs, trading companies and factories are treated as one entity.
In response to petitioner's claim that respondents failed to
identify which products were produced with imported steel, respondents
claim that since the steel is fungible, no records were kept regarding
the source of the steel used to make specific tools. Respondents claim
that a record of steel purchases is maintained by the manufacturer and
that a ratio of imports to domestically sourced steel was provided.
Department's Position: We agree with the petitioner. It is the
Department's normal practice in NME cases to value the factors of
production using surrogate country input prices. The Department
normally allows for the valuation of inputs based on the actual
purchase price of the input only when the NME manufacturer purchases
the inputs from a market economy supplier and pays in a convertible
currency. See, e.g., Final Determination of Sales at Less Than Fair
Value: Saccharin from the People's Republic of China, 59 FR 58818
(November 15, 1994) (Saccharin), and Fans. In this case, the inputs
were purchased from market-economy countries by a PRC trading company,
which then transferred these inputs to the PRC manufacturer. Thus, the
manufacturer obtained the inputs from a PRC source. As noted by the
petitioner, there is no information on the record indicating how much
or in what currency the manufacturers paid the trading companies.
Further, there is no information on the record indicating which models
were produced with imported steel, and which models were not. As
established in Coumarin, Drawer Slides, and Notice of Final
Determination of Sales at Less Than Fair Value: Disposable Pocket
Lighters from the People's Republic of China (Lighters), 60 FR 22359
(May 5, 1995), it is the Department's practice to apply surrogate
values to market economy inputs obtained from PRC trading companies. We
disagree with respondents' claim that both Coumarin and Drawer Slides
do not apply to this review because they postdate the period of review.
Because those two determinations predate these final results, they are
applicable.
In addition to the above, we note that there is no information on
the record indicating whether the price reported by the trading company
for the market economy-sourced steel is representative of the grades,
prices, and quantities of steel purchased by the trading company during
the period of review. Therefore, for these final results, we have used
surrogate values to value all inputs used in the production of HFHTs.
Comment 2: Petitioner argues that the Department should use the
Indian steel price quotation submitted by petitioner during the prior
administrative review, or the 1993 Indian import value for steel bar,
as the surrogate value for steel. Petitioner claims that the Indian
price quotation is particularly appropriate as it represents a price
for the grades, sizes, and shapes of steel used to produce HFHTs.
Petitioner claims that there is precedent supporting the use of the
price quotation to value the steel factor of production. Petitioner
contends that in Notice of Final Determination of Sales at Less Than
Fair Value: Furfuryl Alcohol from the People's Republic of China, 60 FR
22544, 22548 (May 8, 1995) (Furfuryl Alcohol), and Coumarin, the
Department used privately obtained price quotations to value factors of
production and to determine whether specific information was aberrant.
Arguing that the price quotation at issue has the added advantage of
falling roughly in the middle of the range of steel prices available to
the Department, the petitioner suggests that the Department use the
Indian price quotation, adjusted for inflation, as its steel value for
1992 and 1993. If the Department does not use the price quotation, then
the petitioner argues
[[Page 15030]]
that the only viable option is to use the roughly equivalent 1993
Indian steel bar import value.
Petitioner argues that the record does not support the Department's
alternative of using the lower 1992 unit value for Indian steel bar
imports. Citing the Department's August 8, 1995 factor values
memorandum, the petitioner contends that the logic behind rejecting the
1993 value is circular, and that one could use the same logic to reject
the 1992 value. Petitioner adds that it believes the 1992 value is the
aberrational value.
Respondents argue that the prices proposed by the petitioner are
not consistent with other prices, particularly those submitted in the
Drawer Slides case. Respondents argue that petitioner's prices do not
reflect the prices paid for steel used for exports.
Department's Position: We disagree with the petitioner. The use of
import statistics as surrogate values is both reasonable and conforms
to established Department practice. See, e.g., Heavy Forged Hand Tools,
Finished or Unfinished, With or Without Handles, from the People's
Republic of China; Final Results of Antidumping Duty Administrative
Reviews, 60 FR 49251 (September 22, 1995). In addition, the price
quotation to which petitioner refers was submitted for the record of
the February 1, 1992 through January 31, 1993 administrative review and
is not on the record of this review.
We also disagree with petitioner's claim that the only viable
alternative to the price quotes is to use the 1993 Indian steel bar
import value. As explained in our August 8, 1995 factor values
memorandum, the total quantity of steel imported into India in 1992 and
1993 under HTS category 7214.50 (``Forged Bars and Rods Containing
0.25% or Greater But Less Than 6% of Carbon'') was small. Therefore,
the Department compared the 1992 and the 1993 unit values to other
contemporaneous steel prices to determine whether the Indian import
values were aberrational. The 1992 value was found to be comparable to
1992 U.S. and Indonesian import values. The 1993 value was not
comparable to the 1993 U.S. value, and because the 1993 Indonesian
value was not available, we compared the 1993 Indian value with the
1992 Indian value and found a substantial difference. Therefore, we
concluded that the 1993 Indian value was aberrational and used the 1992
Indian value, adjusted for inflation, to value steel for 1993.
Finally, there is no record support for petitioner's claim that the
1992 Indian steel import value is aberrational. We note that these same
1992 Indian steel import values were used in the prior review, and
petitioner supported their use.
Comment 3: The petitioner argues that the Department erred in using
the imported value of a finished pallet to value pallets built by the
factories under review. Petitioner argues that this represents a change
from that used in the less-than-fair-value (LTFV) investigation and the
previous administrative review. Petitioner further argues that it was
not given fair notice of the intended change, thereby depriving it of
its opportunity to participate in this proceeding because the deadline
for submission of new information had passed. Petitioner asserts this
denied it the opportunity to submit evidence that the existing
methodology did not produce aberrations. Petitioner claims that the
Department exacerbated this problem by providing no explanation of its
decision to deviate from past practice. Petitioner argues that this
effectively obstructs effective rebuttal of Departmental action.
Petitioner cites several Court of International Trade decisions,
claiming the Court held that the Department should provide due notice
of methodological changes as well as the opportunity to comment
thereon. Petitioner also contends that an administrative agency cannot
depart from established methodology without an explanation for doing
so, and it argues that the Department failed to provide such an
explanation. Petitioner cites Hussey Copper Ltd. v. United States, 834
F. Supp. 413, 418-419 (CIT 1993), and Krupp Stahl v. United States, 822
F. Supp. 789, 795 (CIT 1993) in support of this contention.
Finally, petitioner asserts that the methodological change violates
the statute. Citing Furfuryl Alcohol and Coumarin, petitioner contends
that the statute requires the Department to value each input at the
point at which it enters the producer's production process. Petitioner
contends that the Department may not shift its search for factor values
to the level of finished or intermediate material, but claims that this
is exactly what the Department did when it used the import value of
completed pallets to represent the wood, nail, and packing labor costs
borne by the producers. Petitioner asserts that the Department should
base its packing cost calculation on the inputs actually used by the
respondents.
Respondents argue that the preliminary notice was adequate
notification of the Department's methodological change. Respondents
also argue that petitioner was afforded an opportunity to comment and
that petitioner exercised its opportunity.
Respondents disagree with petitioner's assertion that the
Department's pallet valuation methodology is contrary to the statute.
Respondent argues that nothing in the legislative history, the statute
or the Department's regulations instructs the Department to undertake a
constructed value for packing materials. Citing 19 U.S.C. Sec.
1677b(c)(1), respondents argue that the Department is required to
determine a foreign market value based on factors of production for the
merchandise under review, but allows the Department to determine the
cost, rather than a constructed value, for containers, coverings, and
other expenses incidental to shipment to the United States.
Department's Response: We agree with petitioner that we should
value the pallets using factors and surrogate values for the wood,
nails and packing labor, separately, rather than for the completed
pallet. The information on the record at the time of the preliminary
results indicates that the factories make the pallets from wood and
nails rather than purchase the completed pallet. Therefore, we have
changed our valuation accordingly.
Comment 4: Respondents argue that the non-steel surrogate values
were not adjusted to reflect the period of review. Respondents note
that the Department used Indian import statistics for ten months--April
1993 through January 1994--but they argue that the Department should
have deflated the data to cover the first three months of the period of
review. Respondents assert that a significant portion of the production
of the subject merchandise occurred prior to April 1993, and that none
of the imports during the period of review were produced after December
1993.
Department's Position: We disagree with the respondents. The Indian
import data is contemporaneous with the period of review. See, e.g.,
Furfuryl Alcohol. In addition, the Indian import data on the record
includes all of the data reported by the Indian government for period
in question. As in the prior administrative review, we valued
production input based on the year in which production occurred. Thus,
1992 input production was valued using 1992 factor values, and 1993
input production was valued using 1993 factor values. Because the
Indian import data is both complete and contemporaneous, we have not
made the requested adjustment.
Comment 5: Respondents argue that the Department incorrectly valued
steel
[[Page 15031]]
by inflating import values by the 1992 calendar year wholesale price
index (WPI) rather than the index for April through December 1992.
Department's Position: We agree with respondents and we have
revised our inflator to reflect the period for which we have data
(April 1992 through December 1992) rather than the 1992 calendar year.
Comment 6: Respondents argue that the Department's reliance on
contemporaneous Indian import statistics is arbitrary because the data
was not available either when the merchandise was sold or when the
request for review was submitted. Respondents suggest that using 1992
Indian import values with a WPI adjustment would reduce such
arbitrariness.
Department's Position: We disagree with respondents' arguments that
use of import statistics from the April-December 1992 period is unfair
because they were not available when the merchandise was sold or the
reviews requested. It is the Department's standard practice to use
surrogate values from a time period which is contemporaneous to the
period of investigation or the period of review. See, e.g., Furfuryl
Alcohol, in which the surrogate value for furfuryl was selected because
it was more contemporaneous than other sources, and the Preliminary
Determination of Sales at Less Than Fair Value: Manganese Metal from
the People's Republic of China, 60 FR 31282, (June 14, 1995), in which
surrogate values within the period of investigation, or most
contemporaneous with the period of investigation, were selected.
Comment 7: SMC argues that the Department should not have resorted
to using best information available (BIA) for those instances where SMC
failed to provide factors-of-production data. SMC claims the use of BIA
in this case penalizes SMC, and SMC cites Badger-Powhatan v. U.S., CIT
1985, 608 F.Supp 653 (Badger-Powhatan), as support for its claim that
the purpose of the law is to be remedial, not punitive.
Department's Position: We disagree with the respondents. SMC failed
to submit for the record of this proceeding factors-of-production data
for one model, sales of which were first reported to the Department in
SMC's supplemental questionnaire response. Since U.S. sales data for
this model were submitted without the data necessary for the
calculation of foreign market value (FMV), we must rely upon BIA, in
accordance with section 776(1) of the Act, for these sales. As BIA, we
are assigning a rate of 31.76 percent, which is the rate from the LTFV
investigation for this class or kind of merchandise.
In addition, respondents' reference to Badger-Powhatan is misplaced
because, in that case, the Court was referring to the remedial nature
of the Act as a whole rather than to the administering agency's
authority to rely on BIA. See 608 F.Supp. 653, 656 (CIT 1985).
Comment 8: Respondents argue that the packing cost percentages used
by the Department (7.2 percent to 30 percent of production costs) are
unreasonably high. First, respondents argue that the HTS categories
used for Indian imports, by which the Department valued packing
factors, are basket categories which combine low-value packing
materials with high-value materials used for other purposes. Second,
respondents argue that because the subject merchandise has minimal
value added, the inflated values for packing materials represent a
higher proportion of the value of the subject merchandise than do
packing materials for most other products subject to antidumping duty
administrative reviews. Respondents provide two examples of cases where
products from NME countries required more extensive packing than HFHTs
but where packing costs represent a smaller percentage (one to two
percent) of production costs than do those the Department used for
HFHTs. See Certain Chrome-Plated Lug Nuts from the People's Republic of
China; Preliminary Results of Antidumping Duty Administrative Review,
60 FR 19719 (April 20, 1995) (Lug Nuts I), and a September 13, 1995
team concurrence memorandum regarding the final results of an
administrative review of the antidumping duty order on lock washers
from the PRC.
Petitioner asserts that each dumping case is fact-specific.
Therefore, the percentage cost of packing for lug nuts or lock washers
has no bearing on the packing costs for HFHTs.
Department's Position: We disagree with respondents. Rejecting
import values simply because they are high or low is potentially overly
subjective. See Final Determination of Sales at Less Than Fair Value:
Certain Helical Spring Lock Washers from the People's Republic of
China, 58 FR 48833 (September 20, 1993) (Lock Washers). Furthermore,
there is no record evidence that the HTS categories used by the
Department to value packing factors are inappropriate or that the
packing materials at issue are of disproportionately low value relative
to other products within those HTS categories.
It is the Department's standard practice to use surrogate values to
value packing costs. See, e.g., Notice of Preliminary Determination of
Sales at Less Than Fair Value and Postponement of Final Determination:
Certain Partial-Extension Steel Drawer Slides With Rollers from the
People's Republic of China, (60 FR 29571, June 5, 1995), and Notice of
Final Determination of Sales at Less Than Fair Value: Certain Cased
Pencils from the People's Republic of China, 59 FR 55625 (November 8,
1994) (Pencils), for which Indian import statistics were used to value
packing materials. Moreover, in Lock Washers, the Department valued
packing materials using Indian import statistics. For this review,
unlike in Lug Nuts I, the information needed to calculate packing costs
using surrogate values is on the record. Therefore, for these final
results, we have continued to value these packing inputs using
surrogate values. In addition, pursuant to our determination concerning
market economy-sourced inputs obtained from PRC trading companies (see
Comment 1), we have valued cartons using only Indian import values.
Comment 9: Respondents argue that the values used for pallets are
unreasonably high. Respondents do not dispute the selection of HTS
subcategory 4415.10, ``Cases, Boxes, Crates, Drums, and Similar Packing
of Wood,'' to value the wood used to make the pallets, but they assert
that the resulting values are not reasonable. Citing a substantial
increase in the average value for this category from 1991 to 1993,
respondents suggest that the increase was due to the product mix in
this category rather than an increase in price of the wood. Respondents
suggest that the Department examine the 1993 IM-145 U.S. import
statistics for the above-noted HTS category to determine the
reasonableness of the Department's pallet values.
Petitioner argues that respondents' claim regarding the cause of
the average value increase is sheer speculation and is not supported by
record information. Petitioner notes that data concerning U.S. import
values for pallets is not on the record.
Department's Position: We disagree with respondents. See our
response to Comment 8. Rejecting certain import values simply because
they are high or low is potentially overly subjective. In addition,
there is nothing on the record indicating that the pallets are of low
value compared to other items within the same HTS category. Finally, as
noted by the petitioner, data concerning U.S. import values for pallets
is not on the record.
[[Page 15032]]
Comment 10: Respondents argue that incidental packing items (those
not directly involved as direct inputs of the subject merchandise, such
as plastic bags, iron wire, anti rust paper, anti-damp paper, and the
big iron button) should be disregarded because the individual values of
these items are de minimis and because the collective value of these
items is also de minimis.
Petitioner argues that the Department is required to calculate
margins as accurately as possible, citing Rhone Poulenc, Inc. v. United
States, 899 F.2d 1185, 1191 (Fed. Cir. 1990) as support. Petitioner
asserts that the Department's regulations allow insignificant data to
be ignored in calculating adjustments to prices, but the regulations do
not allow the exclusion of such data from constructed value, cost of
production, or the factors of production.
Department's Position: We disagree with respondents that certain
factor inputs should be eliminated from the analysis because of their
small value. The items identified by respondents as being incidental
items are all materials used to pack the subject merchandise, and, as
such, it is appropriate that we value them, absent a compelling reason
to the contrary.
Comment 11: Respondents assert that the Indian labor rates used by
the Department are overly narrow because they are based on a limited
survey. Respondents also argue that the rates used do not reflect the
values for the types of workers in the Chinese factories producing the
subject merchandise. Respondents note that the Department relied upon
the November 1992 and November 1993 editions of Investing, Licensing &
Trading Conditions Abroad: India (IL&T India). These reports are
published by a non-governmental organization which provides estimates
of Indian labor rates for various types of positions in India based on
available data. The Department adjusted these wages by 45 percent to
account for bonuses and fringe benefits, based on an estimated range in
IL&T India of 40-50 percent. The respondents maintain that the scope of
the survey on which these estimates were based is very narrow.
Respondents also argue that the resulting values do not conform with
Indian law. Respondents assert that the Department should revise the
adjustment for fringe benefits and bonuses to reflect rates required by
Indian law. Respondents maintain that the bonuses for unskilled and
semi-skilled workers should be much smaller, and that no bonus should
be added for higher wage positions.
Petitioner argues that while many labor laws in India cover only
unionized workers, there is no evidence that the data used by the
Department is based only upon unionized employers, or that unionized
employees earned higher wages than non-unionized employees, as implied
by respondents. Petitioner further argues that if the data did only
cover unionized employees, its usefulness would be increased because
the tool producers are collectively-owned enterprises controlled 100
percent by workers and managers.
Petitioner disagrees with respondents' assertion that the fringe
benefits and bonuses reported in IL&T India are inappropriate because
they exceed Indian legal minimums. Petitioner notes that in the
previous review the Department used data indicating that fringe
benefits and bonuses could exceed statutory minimums.
Department's Position: We disagree with respondents. As noted by
petitioner, there could be benefit levels beyond what is statutorily
required. Historical data concerning fringe benefits and bonuses are
more indicative of fringe benefits and bonuses actually paid to workers
in India than are statutory minima. For this reason, we have continued
to rely on wage rates and fringe benefit and bonus rates used in the
preliminary results.
Comment 12: Respondents argue that the wage rates the Department
used in the preliminary determination were unreasonably high.
Respondents note that, in Lighters and Furfuryl Alcohol, the Department
used Indonesian wage rates of $0.27/hour for unskilled labor and $1.65/
hour for skilled labor, which are lower than those used by the
Department in the preliminary results of this review. Respondents
further note that the time period covered by these rates (December 1993
through May 1994) is contemporaneous with this review period.
Respondents further argue that both Indonesia and India are surrogate
countries for the PRC and that the wage rates in the two countries are
comparable. Respondents suggest that the Department review Foreign
Labor Trends, India, published by the U.S. Department of Labor.
Respondents argue that this report shows 1992 wage rates for factory
workers in Delhi to be much lower for skilled and unskilled workers
than rates used by the Department.
Petitioner argues that the cases cited by the respondents involve
different industries and a different surrogate country (Indonesia), and
do not offer a reliable benchmark for this review.
Department's Position: We disagree with respondents. The cases
cited by the respondents involve different industries, a different
surrogate country, and a different time period than is covered by this
review. It is the Department's practice to use, whenever possible, the
same surrogate for all elements of a factor valuation. Moreover, the
publication cited by respondents is not on the record of this
proceeding.
Comment 13: Respondents argue that the rail freight values used by
the Department are dated (the rates come from a 1989 cable from the
U.S. Embassy in Delhi) and should be replaced with more contemporaneous
data such as those provided in Doing Business in India--An Economic
Profile, published by the Indian Ministry of External Affairs.
Respondents aver that this data is superior to that used by the
Department because it is official Indian government data, it is more
current than the data used by the Department, and provides specific
rates on a per kilometer basis. Respondents add that rail rates from
non-contemporaneous periods could be adjusted using inflation factors.
Petitioner argues in favor of using the information gathered and
verified by the U.S. embassy in India. Petitioner favors this
information because it provides specific rates for particular ranges of
shipping distances, with long distances having a lower per kilometer
cost than short hauls. The petitioner argues against the use of an
average figure, such as that suggested by respondents, because it would
distort freight costs by overstating the per-kilometer cost for long
hauls and understating the cost for short hauls. Petitioner contends
that the figure suggested by respondents represents a guess, as no
source for the data was provided, and it includes no indication of how
the total distance shipped could affect the rate.
Department's Position: The rail freight rate suggested by the
respondents was submitted for the record of this review after the
preliminary results were issued, and therefore was returned as untimely
filed, pursuant to 19 C.F.R. 353.31(a)(3)(1994). Therefore, for these
final results, we have continued to use the cable data to value rail
freight.
Comment 14: Respondents argue that, for distances of 25 kilometers
or less, no freight charge, or a reduced freight charge, should be used
for 1993 truck freight. (This is freight for raw materials transported
from a railyard or port to the factory). Respondents contend that the
costs for these trucks are already reflected in the company's overhead
expenses, and the freight charge double-counts these costs. Respondents
argue that, if the Department does add a freight charge, it should not
arbitrarily assume that truck freight cost in India for 1 kilometer is
the same as for 25
[[Page 15033]]
kilometers. Rather, the Department should use the 1992 rate of 0.75 Rs/
MT for one kilometer plus an adjustment factor. This is the rate
reported to the Department in the June 1992 embassy cable for the Final
Determination of Sales at Less Than Fair Value: Sulfanilic Acid from
the People's Republic of China, 57 FR 29705 (July 6, 1992) (Sulfanilic
Acid), and used in the Final Determination of Sales at Less Than Fair
Value: Certain Helical Spring Lock Washers from the People's Republic
of China, 58 FR 48833 (September 20, 1993) (Lock Washers).
Petitioner argues that there is no evidence that the percentage
used by the Department included company-owned freight services.
Petitioner contends that the Department's decision to use the rate for
25-100 kilometers for distances under 25 kilometers is both reasonable
and logical. Petitioner notes that rail shippers in India pay the same
rate for all shipments of less than 500 kilometers, and concludes that
the grouping of all truck shipments under 100 kilometers is reasonable.
Petitioner also notes that on short hauls the fixed costs of loading
and unloading will form a higher proportion of the total cost than on
long hauls, so minor differences in the distance shipped should not
have a significant effect on the total cost.
Department's Position: We disagree with respondents that certain
truck costs should be considered as factory overhead. There is nothing
on the record to indicate that factory-owned trucks are used to pick up
raw materials from the rail yards. In addition, there is no record
evidence that the Department's grouping of all truck freight under 100
kilometers is inappropriate or unreasonable. As the petitioner
correctly points out, the fixed costs of loading and unloading short
hauls will form a higher proportion of the total cost than long hauls,
so minor differences in the distance shipped should not have a
significant effect on the total cost. For these reasons, we have
continued to value truck freight for these final results as we did for
the preliminary results.
Final Results of Review
As a result of our review, we have determined that the following
margins exist:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Time period (percent)
------------------------------------------------------------------------
Fujian Machinery & Equipment
Import & Export
Corporation:
Axes/Adzes.............. 2/1/93-1/31/94............... 19.15
Bars/Wedges............. 2/1/93-1/31/94............... 41.21
Hammers/Sledges......... 2/1/93-1/31/94............... 25.74
Shandong Machinery Import &
Export Corporation:
Bars/Wedges............. 2/1/93-1/31/94............... 57.03
Hammers/Sledges......... 2/1/93-1/31/94............... 23.17
Picks/Mattocks.......... 2/1/93-1/31/94............... 80.32
------------------------------------------------------------------------
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between United States price and foreign market value may
vary from the percentages stated above. The Department will issue
appraisement instructions directly to the Customs Service.
Furthermore, the following deposit requirements will be effective
upon publication of this notice of final results of reviews for all
shipments of HFHTs from the PRC entered, or withdrawn from warehouse,
for consumption on or after the publication date, as provided for by
section 751(a)(1) of the Act: (1) the cash deposit rates for the
reviewed companies named above which have separate rates will be the
rates for those firms as stated above for the classes or kinds of
merchandise listed above; (2) for picks/mattocks from FMEC and axes/
adzes from SMC, which are not covered by this review, the cash deposit
rates will be the rates established in the most recent review of those
classes or kinds of merchandise in which those companies recieved
separate rates--that is, the February 1, 1992 through January 31, 1993
review; (3) for all other PRC exporters, the cash deposit rates will be
the PRC rates established in the LTFV investigation; and (4) the cash
deposit rates for non-PRC exporters of the subject merchandise from the
PRC will be the rate applicable to the PRC supplier of that exporter.
The PRC rates established in the LTFV investigations are 45.42 percent
for hammers/sledges, 31.76 percent for bars/wedges, 50.81 percent for
picks/mattocks, and 15.02 percent for axes/adzes. These deposit
requirements shall remain in effect until publication of the final
results of the next administrative review.
This notice serves as a final reminder to importers of their
responsibility under section 353.26 of the Department's regulations 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 notice also serves as a reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with section 353.34(d) of the Department's
regulations. Timely notification of return/destruction of APO materials
or conversion to judicial protective order is hereby requested. Failure
to comply with the regulations and the terms of an APO is a
sanctionable violation.
This administrative review and notice is in accordance with section
751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22 of the
Department's regulations.
Dated: March 27, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-8215 Filed 4-3-96; 8:45 am]
BILLING CODE 3510-DS-P