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, Final Partial Rescission of Antidumping Duty Administrative Reviews, and Determination Not To Revoke in Part

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final results of antidumping duty administrative reviews.

SUMMARY:

On March 10, 2004, the Department of Commerce (the Department) published the preliminary results of the administrative reviews of the antidumping duty orders on heavy forged hand tools (HFHTs) from the People's Republic of China (PRC). These reviews cover HFHTs exported to the United States by multiple PRC manufacturers/exporters during the period February 1, 2002 through January 31, 2003. We provided interested parties with an opportunity to comment on the preliminary results of review. After analyzing the comments received, we made two changes in the margin calculations: (1) We are no longer applying total adverse facts available (AFA) to sales of products covered by the bars/wedges order made by Shandong Machinery Import & Export Corporation (SMC) and are instead calculating a margin using the reported sales and factors of production (FOP) data, and (2) we have applied partial AFA to SMC for its failure to report a FOP for finish coating. The final weighted-average dumping margins for the reviewed firms are listed below in the section entitled “Final Results of Review.” We will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on all appropriate entries.

DATES:

Effective September 15, 2004.

FOR FURTHER INFORMATION CONTACT:

Thomas Martin or Mark Manning, Office of AD/CVD Enforcement, Office 4, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-3936 and (202) 482-5253, respectively.

SUPPLEMENTARY INFORMATION:

Background

On March 10, 2004, the Department published in the Federal Register the preliminary results of the antidumping administrative reviews of HFHTs from the PRC. See Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China: Preliminary Results of Administrative Reviews, Preliminary Partial Rescission of Antidumping Duty Administrative Reviews, and Determination Not To Revoke in Part, 69 FR 11371 (March 10, 2004) (Preliminary Results). In response to the Department's invitation to comment on the Preliminary Results of these reviews, the petitioner, Ames True Temper, and the respondents filed case briefs on April 16, 2004 and rebuttal briefs on April 21, 2004. The respondents in these reviews are Shangdong Huarong Machinery Co., Ltd. (Huarong), Liaoning Machinery Import & Export Corporation and Liaoning Machinery Import & Export Corporation, Ltd. (LMC/LIMAC), SMC, and Tianjin Machinery Import & Export Corporation (TMC). No interested party requested a public hearing in these reviews.

Scope of Review

The products covered by these administrative reviews are HFHTs 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/wedges); (3) picks and mattocks (picks/mattocks); and (4) axes, adzes and similar hewing tools (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 for under the following Harmonized Tariff Schedule of the United States (HTSUS) subheadings: 8205.20.60, 8205.59.30, 8201.30.00, and 8201.40.60. Specifically excluded from these investigations 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.

The Department has issued four conclusive scope rulings regarding the merchandise covered by these orders: (1) On August 16, 1993, the Department found the “Max Multi-Purpose Axe,” imported by the Forrest Tool Company, to be within the scope of the axes/adzes order; (2) on March 8, 2001, the Department found “18-inch” and “24-inch” pry bars, produced without dies, imported by Olympia Industrial, Inc. and SMC Pacific Tools, Inc., to be within the scope of the bars/wedges order; (3) on March 8, 2001, the Department found the “Pulaski” tool, produced without dies by TMC, to be within the scope of the axes/adzes order; and (4) on March 8, 2001, the Department found the “skinning axe,” imported by Import Traders, Inc., to be within the scope of the axes/adzes order.

Period of Review

The period of review (POR) is February 1, 2002 through January 31, 2003.

Rescission of Review

We preliminarily rescinded these reviews with respect to Zhenjiang All Joy Light Industrial Products & Textiles; Linshu Jinrun Ironware & Tools Co., Ltd.; Jinhua Runhua Foreign Trade Co., Ltd.; Tian Rui International Trade Co., Ltd.; Jinhua Twin-Star Tools Co., Ltd.; Jinma, Ltd.; Hebei Machinery Import & Export Corporation; Chenzhou Estar Enterprises Ltd.; China National Machinery Import & Export Corporation; and Ningbo Tiangong Tools Co., Ltd., which reported that they did not sell merchandise subject to any of the four HFHT antidumping orders during the POR. We also preliminarily rescinded the review of Huarong and LMC/LIMAC with respect to the hammers/sledges and picks/mattocks orders, since Huarong and LMC/LIMAC reported that they made no shipments of subject hammers/sledges and picks/mattocks during the POR.

The Department reviewed CBP data, which supports the claims that these companies did not export subject merchandise during the POR. Furthermore, no party has placed evidence on the record demonstrating that these companies exported the merchandise identified above during the POR. We received comments on these preliminary rescissions from the petitioner, Huarong, and LMC/LIMAC. After analyzing these comments we continue to find that it is appropriate to rescind these reviews. For a discussion of these comments, see Memorandum from Jeffrey May, Deputy Assistant Secretary for Import Administration, to James J. Jochum, Assistant Secretary for Import Administration, “Issues and Decision Memorandum for the Twelfth Administrative Review of the Antidumping Duty Orders on Heavy Forged Hand Tools from the People's Republic of China,” dated concurrently with this notice (Issues and Decision Memorandum). Therefore, in accordance with 19 CFR 351.213(d)(3) and consistent with the Department's practice, we are rescinding these administrative reviews with respect to the companies and merchandise identified above.

Determination To Not Revoke in Part

We preliminarily determined that SMC does not qualify for revocation of the order on hammers/sledges under 19 CFR 351.222(b) and (e) because SMC did not ship hammers/sledges produced by its supplier to the United States in commercial quantities during the three consecutive years under consideration. Furthermore, we preliminarily determined that LMC/LIMAC does not qualify for revocation of the order on bars/wedges under 19 CFR 351.222(b) and (e) because the Department preliminarily found that the use of AFA was warranted with respect to LMC/LIMAC's sales of bars/wedges during the POR. The petitioner, SMC, and LMC/LIMAC submitted comments on these preliminary determinations not to revoke in part. After analyzing these comments, we continue to find that, pursuant to 19 CFR 351.222(b) and (e), SMC does not qualify for revocation of the order on hammers/sledges and LMC/LIMAC does not qualify for revocation of the order on bars/wedges. For a discussion of these comments, see Issues and Decision Memorandum.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to these administrative reviews are addressed in the Issues and Decision Memorandum, which is hereby adopted by this notice. A list of the issues that parties have raised is attached to this notice as an appendix. Parties can find a complete discussion of all issues raised in these reviews, and the corresponding recommendations, in the Issues and Decision Memorandum that is on file in the Central Records Unit, room B-099 of the main Department of Commerce building. In addition, the Issues and Decision Memorandum can be accessed directly on Import Administration's Web site at http://ia.ita.doc.gov . The paper copy and the electronic version of the Issues and Decision Memorandum are identical in content.

Facts Available

In the Preliminary Results, we based the dumping margins for the respondents Huarong, LMC/LIMAC, SMC, and TMC on total AFA for their sales of merchandise subject to certain HFHTs orders pursuant to sections 776(a) and 776(b) of the Tariff Act of 1930, as amended (the Act). See Preliminary Results, 69 FR at 11375. We continue to apply total AFA to Huarong, LMC/LIMAC, and TMC because these respondents significantly impeded our ability to (1) Complete the review of the bars/wedges order, pursuant section 751 of the Act, and (2) impose the correct antidumping duties, as mandated by section 731 of the Act. Huarong, LMC/LIMAC, and TMC participated in an “agent” sales scheme whereby one PRC company allowed another PRC company to enter subject merchandise under the first company's invoices. In addition, we continue to apply total AFA to certain respondents that failed to provide sales and FOP information that was requested by the Department in the reviews of the axes/adzes (Huarong, LMC/LIMAC, and SMC), bars/wedges (TMC), and picks/mattocks (SMC) antidumping orders. Lastly, we continue to find that the companies that constitute the PRC-wide entity, including Jiangsu Guotai International Group Huatai Import & Export Company, Ltd., which did not establish its entitlement to a separate rate, failed to provide certain requested information. For this reason, we continue to find that, in accordance with sections 776(a)(2)(A), (B), and (C) of the Act, it is appropriate to base the PRC-wide margin in these reviews on total AFA.

As in the Preliminary Results, we are assigning as AFA the PRC-wide rates published in the most recently completed administrative reviews of the HFHTs orders. See Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China: Final Results of Antidumping Duty Administrative Review of the Order on Bars and Wedges, 68 FR 53347 (September 10, 2003) (11th Review Final Results). As AFA, we are assigning the sales of (1) Axes/adzes made by Huarong, LMC/LIMAC, and SMC the current PRC-wide rate of 55.74 percent; (2) bars/wedges made by Huarong, LMC/LIMAC, and TMC the current PRC-wide rate of 139.31 percent; and (3) picks/mattocks made by SMC the current the PRC-wide rate of 98.77 percent. Although we are applying total AFA to the PRC-wide entity for all four classes or kinds of subject merchandise in this review, the rates assigned to this entity have not changed from the 11th Review Final Results.

A complete explanation of the selection, corroboration, and application of AFA can be found in the Preliminary Results. See Preliminary Determination, 69 FR at 11375-11380. The Department received comments and rebuttal comments with regard to certain aspects of our selection and application of AFA. See Issues and Decision Memorandum, at Comments 17-21. Based on our analysis of the comments received, we have made one change in our application of AFA from the Preliminary Results. For the final results, the Department will not apply AFA to SMC's sales of bars/wedges. See Issues and Decision Memorandum, at Comment 18. Other than this change, nothing has changed since the Preliminary Results that would affect the Department's selection, corroboration, and application of facts available for the above-referenced companies and orders. Accordingly, for the final results, we continue to apply AFA as noted above.

Final Results of Review

We determine that the following weighted-average percentage margins exist for the period February 1, 2002, through January 31, 2003:

Cash Deposit Requirements

The following deposit requirements will be effective upon publication of the final results of these administrative reviews for all shipments of HFHTs from the PRC entered, or withdrawn from warehouse, for consumption on or after the publication date of this notice, as provided for by section 751(a)(1) of the Act: (1) The cash deposit rates for the reviewed companies named above will be the rates for those firms established in the final results of these administrative reviews; (2) for any previously reviewed or investigated PRC or non-PRC exporter, not covered in these reviews, with a separate rate, the cash deposit rate will be the company-specific rate established in the most recent segment of these proceedings; (3) for all other PRC exporters, the cash deposit rates will be the PRC-wide rates established in the final results of these reviews; and (4) the cash deposit rate for any non-PRC exporter of subject merchandise from the PRC who does not have its own rate will be the rate applicable to the PRC exporter that supplied the non-PRC exporter. These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative reviews.

The PRC-Wide Cash Deposit Rates

The current PRC-wide cash deposit rates are 55.74 percent for Axes/Adzes, 139.31 percent for Bars/Wedges, 27.71 percent for Hammers/Sledges, and 98.77 percent for Picks/Mattocks. These rates are unchanged from the most recently completed administrative review. See 11th Review Final Results. These deposit requirements shall remain in effect until publication of the final results of the next administrative reviews.

Assessment Rates

Upon completion of these administrative reviews, the Department will determine, and CBP shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), for the respondents receiving calculated dumping margins, we calculated importer-specific per-unit duty assessment rates based on the ratio of the total amount of the dumping duties calculated for the examined sales to the total quantity of those same sales. These importer-specific per-unit rates will be assessed uniformly on all entries of each importer that were made during the POR. In accordance with 19 CFR 351.106(c)(2), we will instruct CBP to liquidate without regard to antidumping duties any entries for which the importer-specific assessment rate is de minimis (i.e., less than 0.5 percent ad valorem). In testing whether any importer-specific assessment rate is de minimis, we used the reported data to calculate the freight on board at the port of export (FOB) price of U.S. sales and used this FOB price as an estimate for the entered value. For all shipments of subject merchandise for the four antidumping orders covering HFHTs from the PRC, exported by the respondents and imported by entities not identified by the respondents in their questionnaire responses, we will instruct CBP to assess antidumping duties at the cash deposit rate in effect on the date of the entry. Lastly, for the respondents receiving dumping rates based upon AFA, the Department, upon completion of these reviews, will instruct CBP to liquidate entries according to the AFA ad valorem rate. The Department will issue appraisement instructions directly to CBP upon the completion of the final results of these administrative reviews.

Reimbursement of Duties

This notice also serves as a final 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.

Administrative Protective Orders

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 written 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.

These final results of administrative reviews are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Appendix—Issues in Decision Memorandum

Part I—Surrogate Value Issues

Comment 1: The Department should use hexagonal steel bar as a surrogate for certain FOP.

Comment 2: The Department should value marine insurance at 110 percent of invoice value.

Comment 3: The Department did not apply the proper surrogate value for railroad rails.

Comment 4: The Department should value pallets using hot- and cold-rolled sheet/strip because respondents' claims regarding the use of scrap metal for pallet manufacturing are unsupported.

Comment 5: The Department should recalculate the finished weight of shipped goods.

Comment 6: The Department should recalculate movement charges to include additional expenses.

Comment 7: The Department should value the coating on tool heads/bodies.

Part II—Company Specific Issues

1. Huarong

Comment 8: The Department should calculate a margin and assign it to Huarong if Huarong is benefitting from the rate that it has been assigned as AFA.

2. LMC/LIMAC

Comment 9: The Department should revoke the dumping order for bars/wedges produced by the Lishu factory and exported by LMC/LIMAC.

3. SMC

Comment 10: The Department should apply AFA to SMC's ocean freight expense.

Comment 11: The Department should find that SMC shipped commercial quantities and revoke the hammers/sledges order with respect to SMC.

Comment 12: The Department should include sales made by SMC through an agent that are outside the POR.

4. TMC

Comment 13: The Department should label a PRC supplier as an uncooperative interested party with respect to the axes/adzes and picks/mattocks it supplied to SMC and apply AFA to TMC's sales of axes/adzes, hammers/sledges, and bars/wedges produced by this PRC supplier.

Comment 14: The Department should perform a Shakeproof analysis for TMC, which will show market economy purchases of ocean freight services to be insignificant.

Comment 15: The Department should increase TMC's normal value (NV) to account for the commission paid to its U.S. sales office.

Comment 16: The Department should disregard the variable Style (3.21) used by TMC in reporting hammer sales.

Part III—Issues Regarding the Use of Total AFA and Rescission of Certain Reviews

Comment 17: The Department should not apply AFA while scope inquiries are pending.

Comment 18: The Department should not apply AFA for the failure to report cast products.

Comment 19: The Department should not apply AFA to agent sales made by Huarong, LMC/LIMAC, and TMC.

Comment 20: The Department should establish “combination” cash deposit rates and utilize “master list” assessment rates.

Comment 21: The Department should recalculate the AFA and PRC-wide rate of 139.31 percent for bars/wedges because this rate contains subsidized prices.

Comment 22: The Department should reconsider its determination to rescind the review of hammers/sledges and picks/mattocks with respect to Huarong and LMC/LIMAC.

Part IV—Issues Regarding Assessment Instructions

Comment 23: The Department should deny the request by Olympia Industrial Incorporated to instruct CBP to liquidate entries of scrapers and tampers.

Comment 24: The Department should correct the ministerial error in the draft assessment instructions.