Certain Helical Spring Lock Washers From the People's Republic of China; Preliminary Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Preliminary Results of Antidumping Duty Administrative Review.

SUMMARY:

We preliminarily determine that sales of certain helical spring lock washers from the People's Republic of China were made below normal value during the period October 1, 1998 through September 30, 1999. Interested parties are invited to comment on these preliminary results.

EFFECTIVE DATE:

September 8, 2000.

FOR FURTHER INFORMATION CONTACT:

Sally Hastings or Craig Matney, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-3464 or 482-1778, respectively.

Applicable Statute

Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930, as amended (the Act) by the Uruguay Round Agreements Act. Unless otherwise indicated, all citations to the Department of Commerce's (the Department's) regulations are to 19 CFR part 351 (1999).

Background

On October 19, 1993, the Department published the antidumping duty order on certain helical spring lock washers (HSLWs) from the People's Republic of China (PRC) (58 FR 53914). The Department notified interested parties of the opportunity to request an administrative review of this order on October 20, 1999 (64 FR 56486). The petitioner, Shakeproof Assembly Components Division of Illinois Tool Works, Inc., requested that the Department conduct an administrative review of Zhejiang Wanxin Group Co. Ltd. (ZWG), the predecessor firm to Hang Zhou Spring Washer Co. (collectively Hangzhou) on October 28, 1999. The notice of initiation of this administrative review was published on December 3, 1999 (64 FR 67846).

On February 1, 2000, Hangzhou responded to the Department's December 9, 1999 questionnaire. On April 12, 2000, the Department provided parties with an opportunity to submit information regarding appropriate surrogate values. On May 12 and May 24, 2000, respectively, both Hangzhou and petitioner submitted initial and rebuttal surrogate value comments. On May 15, 2000, the Department issued a supplemental questionnaire to Hangzhou. Hangzhou submitted its supplemental questionnaire response on June 9, 2000.

On June 15, 2000, the Department extended the time limit for completion of the preliminary results in this proceeding until August 31, 2000 (See 65 FR 37521).

On June 23 and 24, 2000, we conducted verification of the sales and factors of production questionnaire responses submitted by Hangzhou in Xiaoshan City, PRC. We issued the verification report on August 14, 2000.

The Department is conducting this administrative review in accordance with Section 751 of the Act.

Scope of Review

The products covered by this review are HSLWs of carbon steel, of carbon alloy steel, or of stainless steel, heat-treated or non-heat-treated, plated or non-plated, with ends that are off-line. HSLWs are designed to: (1) Function as a spring to compensate for developed looseness between the component parts of a fastened assembly; (2) distribute the load over a larger area for screws or bolts; and, (3) provide a hardened bearing surface. The scope does not include internal or external tooth washers, nor does it include spring lock washers made of other metals, such as copper.

HSLWs subject to this review are currently classifiable under subheading 7318.21.0030 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of this proceeding is dispositive.

Period of Review

This review covers the period October 1, 1998, through September 30, 1999.

Verification

As provided in section 782(i) of the Act, we verified sales and factors of production information provided by Hangzhou in Xiaoshan City, PRC, using standard verification procedures, including an examination of relevant accounting and production records and original source documents provided by the respondents.

Separate Rates Determination

To establish whether a company operating in a state-controlled economy is sufficiently independent to be entitled to a separate rate, the Department analyzes each exporting entity under the test established in the Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991) (Sparklers), as amplified by the Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994) (Silicon Carbide). Under this policy, exporters in non-market economies (NMEs) are entitled to separate, company-specific margins when they can demonstrate an absence of government control, both in law and in fact, with respect to export activities. Evidence supporting, though not requiring, a finding of de jure absence of government control over export activities includes: (1) An absence of restrictive stipulations associated with the individual exporter's business and export licenses; (2) any legislative enactments decentralizing control of companies; and, (3) any other formal measures by the government decentralizing control of companies. De facto absence of government control over exports is based on four factors: (1) Whether each exporter sets its own export prices independently of the government and without the approval of a government authority; (2) whether each exporter retains the proceeds from its sales and makes independent decisions regarding the disposition of profits or financing of losses; (3) whether each exporter has the authority to negotiate and sign contracts and other agreements; and, (4) whether each exporter has autonomy from the government regarding the selection of management. (See Silicon Carbide, 59 FR at 22587 and Sparklers, 56 FR at 20589.)

In each of the previous administrative reviews of the antidumping duty order on HSLWs from the PRC, covering successive review periods from October 1, 1993 through September 30, 1998, we determined that Hangzhou's predecessor, ZWG, merited a separate rate. We have found that the evidence on the record in this review, including information examined at verification, also demonstrates an absence of government control, both in law and in fact, with respect to Hangzhou's export activities according to the criteria identified in Sparklers, and an absence of government control with respect to the additional criteria identified in Silicon Carbide. Therefore, we have assigned Hangzhou a separate rate.

Export Price

Because Hangzhou sold the subject merchandise to unaffiliated purchasers in the United States prior to importation into the United States and constructed export price methodology is not otherwise indicated, we have used export price in accordance with section 772(a) of the Act.

We calculated export price based on the FOB price to unaffiliated purchasers. From this price, we deducted amounts for foreign inland freight and brokerage and handling. We valued these deductions using surrogate country cost data. We selected India as the surrogate country for the reasons explained in the “Normal Value” section of this notice.

Normal Value

Section 773(c)(1) of the Act provides that the Department shall determine normal value (NV) using a factors-of-production methodology if: (1) the merchandise is exported from an NME, and (2) the information does not permit the calculation of NV using home-market prices, third-country prices, or constructed value under section 773(a) of the Act. The Department has treated the PRC as an NME in all previous antidumping cases. In accordance with section 771(18)(C)(i) of the Act, any determination that a foreign country is an NME shall remain in effect until revoked by the administering authority. None of the parties to this proceeding has contested such treatment in this review. Moreover, parties to this proceeding have not argued that the PRC HSLWs industry is a market-oriented industry (MOI) and, consequently, we have no basis to determine that the information would permit the calculation of NV using PRC prices or costs. Therefore, we calculated NV based on factors of production (FOP) in accordance with sections 773(c)(3) and (4) of the Act and 19 CFR 351.408(c).

Under the FOP methodology, we are required to value the NME producer's inputs in a comparable market economy country that is a significant producer of comparable merchandise. We determined that India is at a comparable level of economic development to that of the PRC. Also, India is a significant producer of comparable merchandise. Therefore, for this review, we have used Indian prices to value the FOP except where a meaningful amount of the factor was purchased from a market economy supplier and paid for in a market economy currency. (See Memorandum to Susan Kuhbach from Jeff May, dated April 7, 2000, “Certain Helical Spring Lock Washers from the PRC: Nonmarket Economy Status and Surrogate Country Selection,” which is on file in the Central Records Unit—Public File.)

We selected, where possible, publicly available values from India which were: (1) Average non-export values; (2) representative of a range of prices within the POR or most contemporaneous with the POR; (3) product-specific; and, (4) tax-exclusive. We valued the factors of production as follows:

• A meaningful amount of the input carbon steel wire rod was purchased from the United Kingdom, a market economy supplier, and paid for in a market economy currency. Pursuant to 19 CFR 351.408(c)(1), we valued this factor using the price paid to the market economy supplier. Thus, for carbon steel wire rod values, we used the average cost per metric ton of carbon steel wire rod imported from the United Kingdom by Hangzhou during the POR. We made adjustments to account for the freight costs incurred between the port and Hangzhou.
• To value the scrap steel sold by Hangzhou, we used per kilogram values obtained from the Monthly Statistics of the Foreign Trade of India—Imports (MFTI) as a by-product offset.
• To value the chemicals used in the production and plating process of HSLWs, we used per kilogram import values obtained from MFTI and the Indian publication Chemical Weekly. We adjusted these values, where appropriate, to reflect inflation using the Wholesale Price Index (WPI) as reported in the International Financial Statistics published by the International Monetary Fund (IMF). We also adjusted these values to account for freight costs incurred between the supplier and Hangzhou.
• To value coal, we used a per kilogram value obtained from the MFTI. We adjusted this value to reflect inflation using the WPI published by the IMF. We also made adjustments to account for freight costs incurred between the supplier and Hangzhou.
• To value electricity, we used the electricity price data from two sources 1995 Conference of Indian Industries: Handbook of Statistics (CII Handbook) and data from the Center for Monitoring Indian Economy (CMIE). We adjusted the value to reflect inflation using the electricity sector-specific inflation index published in the RBI Bulletin.
• To value water, we used the Second Water Utilities Data Book for the Asian and Pacific Region published by the Asian Development Bank in 1997. We adjusted the value to reflect inflation using the WPI published by the IMF.
• For labor, we used the regression-based wage rate for the PRC in “Expected Wages of Selected NME Countries,” located on the Internet at http://www.ia.ita.doc.gov/wages/. Because of the variability of wage rates in countries with similar per capita gross domestic product's (GDP), section 351.408(c)(3) of the Department's regulations requires the use of a regression-based wage rate. The source for the regression wage rates is “Expected Wages of Selected NME Countries—1998 Income Data,” Year Book of Labour Statistics 1999, International Labour Office, (Geneva: 1999).
• For factory overhead, selling, general, and administrative expenses (SG&A), and profit values, we used information from the January, 1997 Reserve Bank of India Bulletin for the Indian industry group “Processing and Manufacturing: Metals, Chemicals, and Products Thereof.” From this information, we were able to determine factory overhead as a percentage of the total raw materials, labor and energy (ML&E) costs, SG&A as a percentage of ML&E plus overhead (i.e., cost of manufacture), and the profit rate as a percentage of the cost of manufacture plus SG&A.
• For packing materials, we used the per kilogram values obtained from the MFTI. Where necessary, we adjusted these values to reflect inflation using the WPI published by the IMF. We also made adjustments to account for freight costs incurred between the PRC supplier and Hangzhou.
• To value foreign brokerage and handling, we used information reported in Certain Stainless Steel Wire Rod from India in documents dated May 12, 1998. We adjusted this value to reflect inflation using the WPI published by the IMF.
• To value truck freight, we used a rate derived from an article in the Financial Express of India on November 16, 1998.
• To value shipping freight, we used a rate reported to the Department in the August, 1993 cable from the U.S. Embassy in India which was submitted for 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). We adjusted the rate to reflect inflation using the WPI published by the IMF.

For a complete description of the factor values used, see “Memorandum to File: Factor Values Used for the Preliminary Results of the Sixth Administrative Review,” dated August 31, 2000 (Factors Memorandum) a public version of which is available in the Public File.

Preliminary Results of Review

We preliminarily determine that the following dumping margin exists:

Public Comment

Interested parties may request a hearing within 30 days of the date of publication of this notice. Any hearing, if requested, will be held two days after the scheduled date for submission of rebuttal briefs (see below). Interested parties may submit written arguments in case briefs within 30 days of the date of publication of this notice. Rebuttal briefs, limited to issues raised in case briefs, may be filed no later than five days after the date of filing the case briefs. Parties who submit briefs in these proceedings should provide a summary of the arguments not to exceed five pages and a table of statutes, regulations, and cases cited. Copies of case briefs and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f)(3).

The Department will issue the final results of this administrative review within 120 days from the publication of these preliminary results.

Furthermore, the following cash deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of HSLWs from the PRC entered, or withdrawn from warehouse for consumption on or after the publication date, as provided for by section 751(a)(2)(C) of the Act: (1) for Hangzhou, which has a separate rate, the cash deposit rate will be the company-specific rate established in the final results of this administrative review; (2) for all other PRC exporters, the cash deposit rate will be the PRC rate, 128.63 percent, which is the All Other PRC Manufacturers, Producers and Exporters rate from the Final Determination of Sales at Less Than Fair Value: Certain Helical Spring Lock Washers from the PRC, 58 FR 48833 (September 20, 1993); and, (3) for non-PRC exporters of subject merchandise from the PRC, the cash deposit rate will be the rate applicable to the PRC supplier of that exporter.

This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties.

This administrative review and notice are in accordance with sections 751(a)(1) and 777(i)(1) of the Act.