Final Determination of Sales at Less Than Fair Value: Certain Automotive Replacement Glass Windshields 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.

EFFECTIVE DATE:

February 12, 2002.

FOR FURTHER INFORMATION CONTACT:

Brandon Farlander or Stephen Bailey, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue N.W., Washington, DC 20230; telephone: (202) 482-0182, 482-1102, respectively.

SUPPLEMENTARY INFORMATION:

THE 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 (“the Act”) by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department of Commerce's (“the Department”) regulations are to the regulations at 19 CFR part 351 (April 2000).

FINAL DETERMINATION

We determine that certain automotive replace glass windshields (“ARG windshields”) 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 (“LTFV”), as provided in section 735 of the Act. The estimated margin of sales is shown in the “Final Margin” section of this notice.

Case History

We published in the Federal Register the preliminary determination in this investigation on September 19, 2001. See Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Automotive Replacement Glass Windshields from the People's Republic of China, 66 FR 48233 (September 19, 2001) (“Preliminary Determination”). On October 4, 2001, we published in the Federal Register a postponement of the final determination in this investigation. See Notice of Postponement of Final Determination of Antidumping Duty Investigation: Automotive Replacement Glass Windshields from the People's Republic of China, 66 FR 50607 (October 4, 2001).

On September 21, 2001, the Department received timely filed allegations that we made ministerial errors in the preliminary determination from Fuyao Glass Industry Group Company, Ltd, (“FYG”) and PPG Industries, Inc., Safelite Glass Corporation, Apogee Enterprises, Inc., and its subsidiary Viracon/Curvelite, (collectively, “Petitioners”). We published in the Federal Register the amended preliminary determination in this investigation on October 24, 2001. See Notice of Amended Preliminary Antidumping Duty Determination of Sales at Less Than Fair Value: Automotive Replacement Glass Windshields from the People's Republic of China, 66 FR 53776 (October 24, 2002) (“Amended Preliminary Determination”). Since the publication of the Amended Preliminary Determination, the following events have occurred.

On October 18, 2001, Petitioners submitted a request for a public hearing in accordance with 19 CFR 351.310(c). On October 19, 2001, 2001, FYG submitted a request for a public hearing.

On November 4, 2001 through November 8, 2001, the Department conducted a sales and factors factor of production verification of FYG. On November 12, 2001 through November 16, 2001, the Department conducted sales and factors of production verification of Xinyi Automotive Glass (Shenzhen) Co., Ltd. (“Xinyi”). On December 5, 2001 through December 6, 2001, the Department conducted a sales verification of FYG's U.S. affiliate, Greenville Glass Industries, Inc. (“GGI”).

On December 27, 2001, Petitioners, FYG, Xinyi, Benxun, and TCGI International, Inc. (“TCGI”), submitted their case briefs with respect to the sales and factors of production verification and the Department's Preliminary Determination. On December 27, 2001, Petitioners submitted their case brief with respect to the sales and factors of production verification and the Department's Preliminary Determination. On January 4, 2002, FYG submitted its rebuttal brief with respect to the Department's Preliminary Determination. On January 7, 2002, Petitioners, Xinyi, Benxun and TCGI submitted their rebuttal brief with respect to the sales and factors of production verification and the Department's Preliminary Determination. On January 7, 2002, Changchun Pilkington Safety Glass Company Limited, Guilin Pilkington Safety Glass Company Limited, Wuhan Yaohua Pilkington Safety Glass Company Limited and Shanghai Guangda Trading Company (“the Pilkington Companies”) submitted their rebuttal brief with regard to critical circumstances.

On January 8, 2002, the Department held a public hearing in accordance with 19 CFR 351.310(d)(1). Representatives for Petitioners, FYG, Xinyi, TCGI, and the Pilkington Companies were present. All parties present were allowed an opportunity to make affirmative presentations only on arguments included in that party's case briefs and were also allowed to make rebuttal presentations only on arguments included in that party's rebuttal brief. Also, on January 8, 2002, at Petitioner's request, the Department held a closed hearing, in accordance with 19 CFR 351.310(f), to permit the discussion of issues involving business proprietary information.

Period of Investigation

The period of investigation is July 1, 2000, through December 31, 2000.

Non-Market Economy

The Department has treated the PRC as a non market economy (NME) country in all its past antidumping investigations. See Notice of Final Determination of Sales at Less Than Fair Value: Honey from the People's Republic of China, 66 FR 50608 (October 4, 2001) and Notice of Final Determination of Sales at Less Than Fair Value: Certain Folding Gift Boxes from the People's Republic of China, 66 FR 58115 (November 20, 2001). A designation as an NME country remains in effect until it is revoked by the Department. See section 771(18)(C) of the Act. The respondents in this investigation have not requested a revocation of the PRC's NME status. Therefore, we have continued to treat the PRC as an NME in this investigation. For further details, see the Department's Preliminary Determination.

Separate Rates

In our Preliminary Determination, we found that the respondents had met the criteria for the application of separate antidumping duty rates. We have not received any other information since the Preliminary Determination which would warrant reconsideration of our separates rates determination with respect to the respondents. Therefore, we continue to find that the respondents should be assigned individual dumping margins. For a complete discussion of the Department's determination that the respondents are entitled to separate rates, see the Preliminary Determination.

The PRC-Wide Rate

For the reasons set forth in the Preliminary Determination, we continue to believe that use of adverse facts available for the PRC-wide rate is appropriate. See Preliminary Determination, 66 FR at 48237.

Surrogate Country

For purposes of the final determination, we find that India remains the appropriate primary surrogate country for the PRC. For further discussion and analysis regarding the surrogate country selection for the PRC, see the Department's Preliminary Determination.

Critical Circumstances

In the Department's Preliminary Determination, we determined that critical circumstances exist for imports of ARG windshields from the PRC manufactured and/or exported by the PRC-wide entity. We, however, preliminarily found that critical circumstances do not exist for FYG, Xinyi, Benxun, TCGI, Changchun, Guilin, and Wuhan based on lack of importer knowledge. For this final determination, we continue to find critical circumstances for imports of ARG windshields from the PRC manufactured and/or exported by the PRC-wide entity. Additionally, because the final calculated margin for FYG is below 15 percent, the Department's threshold for imputing knowledge of dumping for CEP sales is not met. For Xinyi because the final calculated margin for is below 25 percent, the Department's threshold for imputing knowledge of dumping for EP sales is not met. We therefore do not find critical circumstances with respect to these companies. Furthermore, the weighted-average margin we calculated for the non-mandatory respondents Benxun, TCGI, Changchun, Guilin and Wuhan, is less than either the 25 percent threshold for imputing knowledge for EP sales or the 15 percent threshold for CEP sales. Although the record as to these respondents does not indicate whether their sales were EP or CEP, neither threshold is met. See Notice of Final Determination of Sales at Less Than Fair: Certain Non-Frozen Apple Juice Concentrate from the People's Republic of China, 65 FR 19873 (April 13, 2000). Therefore, we do not consider critical circumstances to exist with regard to these non-mandatory respondents. For a discussion of interested party comments on this issue, see Issues and Decision Memorandum for the Less Than Fair Value Investigation of Certain Automotive Replacement Glass Windshields from the People's Republic of China: July 1, 2000 through December 31, 2001 from Joseph A. Spetrini, Deputy Assistant Secretary, Import Administration, to Faryar Shirzad, Assistant Secretary for Import Administration, dated February 1, 2002 (Issues and Decision Memorandum).

Analysis of Comments Received

All issues raised in the case briefs by parties to this investigation are addressed in the Issues and Decision Memorandum. A list of the issues which parties raised, and to which we have responded, all of which are in the Issues and Decision Memorandum, is attached to this notice as an Appendix. 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 the Central Records Unit, Room B-099 of the Main Department of Commerce Building. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly on the World Wide Web at www.ia.ita.doc.gov/. The paper copy and electronic version of the Issues and 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 and have surrogate value changes. See Analysis Memorandum Xinyi, Analysis Memorandum for FYG, and Factors of Production Valuation Memorandum for the Final Determination, dated February 1, 2002.

Verification

As provided in 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 Analysis Memorandum for Xinyi and Analysis Memo for FYG.

Scope of Investigation 

Interested parties requested that the Department clarify whether ARG windshields for buses, farm and heavy machinery are included in the scope of this investigation. Based on the information received, we clarified that ARG windshields for buses, farm and heavy machinery are included in the scope of this investigation. For further discussion, please see the Issues and Decision Memorandum for the Scope Clarification for the Antidumping Duty Investigation of Automotive Replacement Glass Windshields from the People's Republic of China: July 1, 2000 through December 31, 2001 from Edward C. Yang, Director, Office 9 to Joseph A. Spetrini, Deputy Assistant Secretary, AD/CVD Enforcement Group III, dated January 24, 2002.

The products covered by this investigation are ARG windshields, and parts thereof, whether clear or tinted, whether coated or not, and whether or not they include antennas, ceramics, mirror buttons or VIN notches, and whether or not they are encapsulated. ARG windshields are laminated safety glass (i.e., two layers of (typically float) glass with a sheet of clear or tinted plastic in between (usually polyvinyl butyral)), which are produced and sold for use by automotive glass installation shops to replace windshields in automotive vehicles (e.g., passenger cars, light trucks, vans, sport utility vehicles, etc.) that are cracked, broken or otherwise damaged.

ARG windshields subject to this investigation are currently classifiable under subheading 7007.21.10.10 of the Harmonized Tariff Schedules of the United States (HTSUS). Specifically excluded from the scope of this investigation are laminated automotive windshields sold for use in original assembly of vehicles. While HTSUS subheadings are provided for convenience and Customs purposes, our written description of the scope of this investigation is dispositive.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B)(ii) of the Act, we are directing the Customs Service to continue to suspend liquidation of all entries of subject merchandise from the PRC, that are entered, or withdrawn from warehouses, for consumption on or after the date of publication of the Amended Preliminary Determination in the Federal Register. The Customs Service 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 margin is as follows:

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.

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 19 CFR 351.305. Timely notification of return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of APO is a sanctionable violation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

APPENDIX I

Discussion of the Issues

Petitioners' Issues

Comment 1: Whether Import Prices Paid by FYG and Xinyi for Float Glass from Korea may be Subsidized

Comment 2: Whether Import Prices Paid by FYG and Xinyi for Float Glass from Thailand may be Subsidized

Comment 3: Whether Import Prices Paid by FYG and Xinyi for Float Glass from Korea and Thailand may be Dumped

Comment 4: Whether Xinyi's Prices for Imports of Float Glass From India May be Subsidized

Comment 5: Whether Chinese Prices for Indonesian Float Glass May Be Subsidized and/or Dumped

Comment 6: Whether the Department Should Continue to Use Indian Import Statistics as the Surrogate Value for Float Glass

Comment 7: Whether the Department Should Use as its Surrogate Value the Electricity rate Paid by the Indian Auto Glass Producers

Comment 8: Whether the Department Should Use Actual Molding Prices and Mirror Brackets/Button Prices as the Surrogate Value for Xinyi's Moldings and Mirror Brackets/Buttons

Comment 9: Whether the Department Should Use the Updated Surrogate Value Information Provided by Petitioners for Certain Inputs and Also Use a More Appropriate HTS Number for Scrap Iron Input

Comment 10: Whether the Department Should Calculate Factory Overhead, Selling, General and Administrative Expenses, and Profit in Accordance with Petitioners Proposed Methodology

Comment 11: Whether the Department Should Value the Labor Factor of Production on the Basis of Fully-Loaded Labor Costs

Comment 12: Whether Xinyi's Market Economy Based Inland Freight Expenses Are Controlled by the Chinese Government

Comment 13: Whether the Department Should Make Certain Adjustments to Freight for FYG

Comment 14: Whether Respondents Reported Usage Rates for Float Glass and PVB Are Understated

Comment 15: Whether Respondents Reported U.S. Selling Prices are Reliable

Comment 16: Critical Circumstances

Comment 17: Whether the Scope Includes ARG Windshields for Buses, Recreational Vehicles and Farm Machinery

Comment 18: Whether the Department Used Incorrect Inflation Figures

Company Specific Issues 

FYG's Comments 

Comment 19: Whether the Department Should Use the Remaining Average Float Glass Costs Specific to the Thickness and Type Required for the CONNUM

Comment 20: Whether the Department Should Calculate the Profit Ratio Based on the 1999-2000 Financial Report of Asahi India Safety Glass Ltd.

Comment 21: Whether the Net Profit Ratio Should be Based on a Simple Average of the Financial Results of Saint-Gobain Sekurit and Asahi

Comment 22: Whether the Asahi India Profit Ratio Contains a Clerical Error

Comment 23: Whether the Department's Calculation of the Factory Overhead Ratio Should Exclude the Cost of Stores and Spare Parts

Comment 24: Whether the Department's Calculation of the SG&A Expense Ratio Contains Errors

Comment 25: Whether Water as Part of Energy in the Cost of Manufacturing Results in Double-Counting

Comment 26: Whether the Department Should Value Water Using the Asian Development Bank Data

Comment 27: Whether the Department Erred in Including U.S. Duty and International Freight Charges Among the CEP Selling Expenses

Comment 28: Whether the Department Double-Counted Molding

Comment 29: Updated Labor Rate for 1999 

Comment 30: Surrogate Value for Styrofoam

Comment 31: Whether the Department Should Remove International Freight and Insurance Costs from Indian Surrogate Values

Xinyi's Comments

Comment 32: Whether Market Economy Expenditures Should be Used in Place of Surrogate Values

Comment 33: Verification Issues

Comment 34: Whether Negative Margins Should be Taken into Consideration in Calculating Certain Overall Weighted Average Margins

Comment 35: Whether the Department Should Calculate a Margin for Non-Mandatory Respondent Benxun Based on Its Data

Comment 36: Whether Recent Changes to the Antidumping Statute have Transformed the Law into a Penal Statute, thereby Violating Certain Respondent Parties' Procedural Due Process Rights