Certain Steel Nails from the United Arab Emirates: Notice of Final Determination of Sales at Not Less Than Fair Value

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

We determine that certain steel nails (nails) from the United Arab Emirates (UAE) are not being, or are not likely to be, sold in the United States at less than fair value (LTFV), as provided in section 735(a) of the Tariff Act of 1930, as amended (the Act). The estimated margins of sales at not LTFV are shown in the “Final Determination” section of this notice.

EFFECTIVE DATE:

June 16, 2008.

FOR FURTHER INFORMATION CONTACT:

David Goldberger or Kate Johnson, AD/CVD Operations, Office 2, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-4136 or (202) 482-4929, respectively.

SUPPLEMENTARY INFORMATION:

Background

On January 23, 2008, the Department published in the Federal Register the preliminary determination of sales at LTFV in the antidumping duty investigation of nails from the UAE. See Certain Steel Nails From the United Arab Emirates: Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 73 FR 3945 (January 23, 2008) (Preliminary Determination).

In the Preliminary Determination, based on our examination of the petitioners'¹ targeted dumping allegation filed on October 26, 2007, we preliminarily determined that there is a pattern of export prices for comparable merchandise that differs significantly among purchasers. Therefore, based on the petitioners' allegation, we conducted an analysis to determine whether targeted dumping occurred. The Department further stated that it was in the process of re-assessing the framework and standards for both targeted dumping allegations and targeted dumping analyses, and that it intended to develop a new framework in the context of this proceeding. We invited comments regarding certain principles involved in targeted dumping allegations and analyses. Accordingly, we received comments from the petitioners and the respondent Dubai Wire FZE/Global Fasteners Ltd (Dubai Wire) on February 15, 2008. These parties submitted rebuttal comments on March 10, 2008.

From March 3 through March 12, 2008, we verified the constructed value (CV) and sales questionnaire responses of Dubai Wire. On March 31 and April 1, 2008, we issued the CV and sales verification reports, respectively. See Memorandum to the File entitled “Verification of the Cost Response of Dubai Wire FZE in the Antidumping Investigation of Certain Steel Nails from the UAE,” dated March 31, 2008 (CVR), and Memorandum to the File entitled “Verification of the Sales Response of Dubai Wire FZE and Its Affiliate Global Fasteners Ltd in the Antidumping Investigation of Certain Steel Nails from the United Arab Emirates,” dated April 1, 2008 (SVR).

On April 21, 2008, the Department issued a decision memorandum in this investigation and the companion investigation on nails from the People's Republic of China (PRC) (Nails from the PRC), in which the Department described the application of a new methodology to analyze targeted dumping. Based on this analysis, the Department did not find a pattern of export prices for identical merchandise that differed significantly among purchasers. See Memorandum to David Spooner, Assistant Secretary for Import Administration, entitled “Post-Preliminary Determinations on Targeted Dumping,” dated April 21, 2008; and Memorandum to James Maeder, Director, AD/CVD Operations, Office 2, entitled “Post-Preliminary Determination on Targeted Dumping: Results for Dubai Wire FZE/Global Fasteners Ltd,” dated April 21, 2008. As a result, we applied the average-to-average methodology to all U.S. sales and found a de minimis margin (0.09 percent) for Dubai Wire. On April 24, 2008, the Department issued a letter to all parties in the two investigations providing clarifications concerning the post-preliminary determinations.

On April 30, 2008, the petitioners and Hilti, Inc. (Hilti), an importer of the subject merchandise, filed case briefs. Dubai Wire filed a case brief on May 1, 2008. On May 7, 2008, the petitioners and Dubai Wire filed rebuttal briefs.

On May 6, 2008, National Nail Corp., an importer of subject merchandise in Nails from the PRC, requested that the Department confirm that the scope of this investigation excludes plastic cap roofing nails.² The Department rejected this request, and all submissions associated with this request, as untimely filed on June 2, 2008. See Letter from Irene Darzenta Tzafolias to White and Case, dated June 2, 2008.

On May 15, 2008, Illinois Tool Works, Inc. and Paslode Fasteners (Shanghai) Co., Ltd. (collectively, ITW) submitted the public version of their scope arguments contained in the public version of ITW's rebuttal brief filed on May 8, 2008, in Nails from the PRC. See “Scope Comments” section, below.

As the Department established a separate briefing schedule on targeted dumping issues, the petitioners and Suzhou Xingya Nail Co., Ltd., Senco-Xingya Metal Products (Taicang) Co., Ltd., Senco Products, Inc., and Omnifast LLC (collectively, Xingya Group), a respondent in Nails from the PRC, submitted case briefs with respect to these issues on May 7, 2008. On May 14, 2008, the Xingya Group, ITW, and Dubai Wire submitted rebuttal briefs to the petitioners' targeted dumping brief.⁴ On May 19, 2008, we held a joint public hearing on the targeted dumping issues raised in this investigation and Nails from the PRC.

Period of Investigation

The period of investigation (POI) is April 1, 2006, through March 31, 2007. This period corresponds to the four most recent fiscal quarters prior to the month of the filing of the petition (i.e., May 2007).

Scope of Investigation

The merchandise covered by this investigation includes certain steel nails having a shaft length up to 12 inches. Certain steel nails include, but are not limited to, nails made of round wire and nails that are cut. Certain steel nails may be of one piece construction or constructed of two or more pieces. Certain steel nails may be produced from any type of steel, and have a variety of finishes, heads, shanks, point types, shaft lengths and shaft diameters. Finishes include, but are not limited to, coating in vinyl, zinc (galvanized, whether by electroplating or hot-dipping one or more times), phosphate cement, and paint. Head styles include, but are not limited to, flat, projection, cupped, oval, brad, headless, double, countersunk, and sinker. Shank styles include, but are not limited to, smooth, barbed, screw threaded, ring shank and fluted shank styles. Screw-threaded nails subject to this proceeding are driven using direct force and not by turning the fastener using a tool that engages with the head. Point styles include, but are not limited to, diamond, blunt, needle, chisel and no point. Finished nails may be sold in bulk, or they may be collated into strips or coils using materials such as plastic, paper, or wire. Certain steel nails subject to this proceeding are currently classified under the Harmonized Tariff Schedule of the United States (HTSUS) subheadings 7317.00.55, 7317.00.65 and 7317.00.75.

Excluded from the scope of this proceeding are roofing nails of all lengths and diameter, whether collated or in bulk, and whether or not galvanized. Steel roofing nails are specifically enumerated and identified in ASTM Standard F 1667 (2005 revision) as Type I, Style 20 nails. Also excluded from the scope of this proceeding are corrugated nails. A corrugated nail is made of a small strip of corrugated steel with sharp points on one side. Also excluded from the scope of this proceeding are fasteners suitable for use in powder-actuated hand tools, not threaded and threaded, which are currently classified under HTSUS 7317.00.20 and 7317.00.30. Also excluded from the scope of this proceeding are thumb tacks, which are currently classified under HTSUS 7317.00.10. Also excluded from the scope of this proceeding are certain brads and finish nails that are equal to or less than 0.0720 inches in shank diameter, round or rectangular in cross section, between 0.375 inches and 2.5 inches in length, and that are collated with adhesive or polyester film tape backed with a heat seal adhesive. Also excluded from the scope of this proceeding are fasteners having a case hardness greater than or equal to 50 HRC, a carbon content greater than or equal to 0.5 percent, a round head, a secondary reduced-diameter raised head section, a centered shank, and a smooth symmetrical point, suitable for use in gas-actuated hand tools.

While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.

Scope Comments

Banded Brads and Finish Nails

On July 30, 2007, Stanley Fastening Systems, LP (Stanley), an interested party in this proceeding, requested that banded brads and finish nails imported with a “nailer kit” or “combo kit” as a single package be excluded from this investigation as being outside the “class or kind” of merchandise.⁷ Based on the scope exclusion request from Stanley, the fact that the petitioners are in agreement with this request, and that there appears to be no impediment to enforceability by CBP, we preliminarily determined that the above-described products are not subject to the scope of this investigation. Since the Preliminary Determination, no party to this proceeding has commented on this issue and we have found no additional information that would compel us to reverse our preliminary finding. Thus, for purposes of the final determination, we continue to find that the above-described products are not subject to the scope of this investigation.

Fasteners Suitable for Use in Gas-Actuated Hand Tools

In its case brief filed on April 30, 2008, Hilti, an interested party in this proceeding, reiterated its request, submitted on January 8, 2008, that the Department modify the scope of the investigation to exclude fasteners suitable for use in gas-actuated hand tools. Hilti claimed that modification of the scope to exclude these fasteners was supported by the petitioners⁹ and, additionally, because the description of the excluded nails is framed solely in terms of their physical characteristics, the exclusion could be easily administered by CBP. Furthermore, Hilti pointed out that the principles and rationale the Department applied to Stanley's scope request (see discussion above) in the Preliminary Determination applied equally to Hilti's scope request.

Hilti rebutted ITW's January 8, 2008, submission arguing that ITW offered no material reason for seeking the imposition of antidumping duties against the product at issue, other than its assertion that it is a U.S. manufacturer of such merchandise. Moreover, Hilti claimed that ITW has never opposed the petitioners' own initial exclusion of nails suitable for use in powder- actuated hand tools, which Hilti claimed are functionally similar and competitive with nails suitable for use in gas-actuated tools, but simply classified under a different HTSUS subheading.

In its rebuttal brief submitted on May 8, 2008, in Nails from the PRC,¹⁰ ITW reiterated its arguments in its January 8, 2008, submission that, because it is the only U.S. producer of the product at issue, the petitioners' agreement to the proposed exclusion is not relevant in light of ITW's opposition. In addition, ITW claimed that it is perfectly reasonable and legitimate for it to oppose a petition generally, while at the same time opposing certain exclusions to that petition.

Based on the scope exclusion request from Hilti, the fact that the petitioners are in agreement with this request, and that there appears to be no impediment to enforceability by CBP, we have determined that the above-described products are not subject to the scope of this investigation.¹²

Aluminum Nails and Stainless Steel Nails

On February 27, 2008, Duo-Fast Northeast (Duo-Fast), an interested party in this proceeding, requested that the Department exclude two types of nails from the scope of this proceeding: (1) aluminum nails, and (2) stainless steel nails.¹³ The plain language of the scope indicates that the scope does not cover aluminum nails because nails made from aluminum are not made from steel and are, thus, not subject merchandise. However, stainless steel nails are explicitly covered in the scope of this proceeding, as the plain language of the scope covers nails produced from any type of steel, without limitation. Therefore, we have not modified the scope of investigation in accordance with Duo-Fast's requests.

Targeted Dumping

We have analyzed the case and rebuttal briefs with respect to targeted dumping issues submitted for the record in this investigation and in Nails from the PRC. As a result of our analysis, we made certain changes in the targeted dumping test we applied in the post-preliminary determination for purposes of the final determination. These changes continued to result in a negative targeted dumping finding for Dubai Wire. For further discussion, see Comments 1 through 9 in the “Issues and Decision Memorandum” (Decision Memo) from Stephen J. Claeys, Deputy Assistant Secretary for Import Administration, to David M. Spooner, Assistant Secretary for Import Administration, dated June 6, 2008, which is hereby adopted by this notice. See also Memorandum to The File entitled “Dubai Wire FZE/Global Fasteners Ltd. Final Determination Margin Calculation,” dated June 6, 2008.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs submitted by the parties to this investigation are addressed in the Decision Memo. A list of the issues that parties have raised and to which we have responded, all of which are in the Decision Memo, 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 1117 of the main Department building. In addition, a complete version of the Decision Memo can be accessed directly on the Web at http://ia.ita.doc.gov/frn. The paper copy and electronic version of the Decision Memo are identical in content.

Verification

As provided in section 782(i) of the Act, we verified the sales and cost information submitted by Dubai Wire for use in our final determination. We used standard verification procedures including an examination of relevant accounting and production records, and original source documents provided by Dubai Wire. See CVR and SVR.

Changes Since the Preliminary Determination

Based on our analysis of the comments received and our findings at verification, we have made certain changes to the margin calculation for Dubai Wire. For a discussion of these changes, see the “Margin Calculations” section of the Decision Memo.

Final Determination Margins

We determine that the weighted-average dumping margins are as follows:

Disclosure

We will disclose the calculations performed within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).

Termination of Suspension of Liquidation

Because the estimated weighted-average dumping margin for the sole investigated company is 0.00 percent (de minimis), we will direct CBP to terminate the suspension of liquidation of all imports of subject merchandise that are entered, or withdrawn from warehouse, for consumption on or after January 23, 2008, and to release any bond or other security, and refund any cash deposit.

ITC Notification

In accordance with section 735(d) of the Act, we have notified the ITC of our final determination.

Return or Destruction of Proprietary Information

This notice will serve as the only reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). 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.

We are issuing and publishing this determination and notice in accordance with sections 735(d) and 777(i) of the Act.

Appendix - Issues in Decision Memorandum

Targeted Dumping Issues

Comment 1: Appropriateness of Implementing New Methodology in this Investigation

Comment 2: Identifying Alleged Targets

Comment 3: Statistical Validity of Standard Deviation Test

Comment 4: Reliance on Identical Products for Determining Targeted Dumping

Comment 5: Alleged Masking of Dumping Under 33-Percent Pattern Test Threshold

Comment 6: Flaws of “Gap Test"

Comment 7: Alleged Masking of Dumping by Respondents Under Standard Deviation Test

Comment 8: Statistical Validity of P/2 Test

Comment 9: Programming Errors

Company-Specific Calculation Issues

Comment 10: Addition of G&A, Financial and Selling Expenses to GFL Processing Costs

Comment 11: Weight-Averaging of Dubai Wire and GFL Expenses for G&A and Financial Expense Ratios

Comment 12: Scrap Offset Revisions

Comment 13: Affiliated Party Loans and Leases

Comment 14: Calculation of Financial Expense Offset

Comment 15: Adjustment of GFL CV Profit Ratio for COM Revisions

Comment 16: Calculation of CV Selling Expenses and Profit Based on GFL Screw Sales

Comment 17: LOT Adjustment for CV Comparisons