Heavy Forged Hand Tools From the People's Republic of China: Final Results and Partial Rescission of Antidumping Duty Administrative Review and Determination Not To Revoke in Part

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final results and partial rescission of antidumping duty administrative review and determination not to revoke in part.

SUMMARY:

On March 6, 2002, 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). Imports covered by these orders comprise 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/mattocks; and (4) axes/adzes. On February 27, 2001, the petitioner, Ames True Temper, requested administrative reviews of all four classes or kinds of subject merchandise for the following companies: Shandong Machinery Import & Export Corporation (SMC), Fujian Machinery & Equipment Import & Export Corporation (FMEC), Tianjin Machinery Import & Export Corporation (TMC), Liaoning Machinery Import & Export Corporation (LMC), and Shandong Huarong General Group Corporation (Huarong). The petitioner also requested a review of hammers/sledges from Shandong Jinma Industrial Group Co., Ltd. (Jinma). The period of review (POR) is February 1, 2000, through January 31, 2001. Based on our analysis of the comments received, we have made changes in the margin calculations. Therefore, the final results differ from the preliminary results. The final weighted-average dumping margins for the reviewed firms are listed below in the section entitled Final Results of Reviews.

EFFECTIVE DATE:

September 12, 2002.

FOR FURTHER INFORMATION CONTACT:

Thomas E. Martin or Thomas F. Futtner, Office of AD/CVD Enforcement, Office 4, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-2305 and (202) 482-3814, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (the Act), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department's regulations are to 19 CFR part 351 (2001).

Background

On March 6, 2001, the Department published the preliminary results of the administrative reviews of the antidumping duty orders on 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 and Preliminary Partial Rescission of Antidumping Duty Administrative Reviews, Notice of Intent Not To Revoke in Part and Extension of Final Results of Reviews, 67 FR 10123 (March 6, 2001) (Preliminary Results). We conducted verifications of TMC, LMC and Huarong after publication of the preliminary results. See Verification of the Questionnaire Responses of Tianjin Machinery Import & Export Corp., in the Antidumping Duty Administrative Review of Certain Heavy Forged Hand Tools from the People's Republic of China (July 23, 2002); Verification of the Questionnaire Responses of (TMC hammer factory), in the Antidumping Duty Administrative Review of Certain Heavy Forged Hand Tools from the People's Republic of China (July 23, 2002); Verification of the Questionnaire Responses of Liaoning Machinery Import & Export Corporation in the Antidumping Duty Administrative Review of Heavy Forged Hand Tools from the PRC (July 23, 2002); Verification of the Questionnaire Responses of Shandong Huarong General Group Corporation in the Antidumping Duty Administrative Review of Heavy Forged Hand Tools from the PRC (July 23, 2002). After the verification reports, we invited parties to comment on our preliminary results of review. The petitioner and respondents filed case briefs on July 30, 2002, and July 31, 2002, and rebuttal briefs on August 6, 2002, and August 7, 2002, respectively. A hearing was held pursuant to a request from the respondents on August 8, 2002. Based on arguments raised in the briefs and information obtained by the Department since the preliminary results, the Department has made changes to the surrogate values used in this review which are discussed more fully in a memorandum dated concurrently with this notice (see Changes to Surrogate Values Used in Preliminary Results for the Final Results of the Tenth Administrative Reviews of Certain HeavyForged Hand Tools From the People's Republic of China—February 1, 2000 through January 31, 2001). The Department's analysis of the comments raised in the petitioner and respondents' briefs and rebuttal briefs are addressed in the Issues and Decision Memorandum from Bernard T. Carreau, Deputy Assistant Secretary, Import Administration, to Faryar Shirzad, Assistant Secretary for Import Administration (Decision Memorandum), dated concurrently with this notice, which is hereby adopted by this notice.

The Department has conducted this administrative review in accordance with section 751 of the Act.

Scope of Review

Imports covered by these reviews 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/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 wood splitting 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 classifiable under the following Harmonized Tariff Schedule (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.

Although the HTSUS subheading is provided for convenience and customs purposes our written description of the scope of the orders is dispositive.

Partial Rescission of Review

On March 29, 2001, Jinma informed the Department that it did not ship hammers/sledges to the United States during the POR, and requested rescission of its administrative review. Information on the record indicates that there were no entries of this merchandise from Jinma during the POR. We preliminarily rescinded the review with respect to Jinma in the preliminary results, and we have determined that no change to our rescission decision is warranted for these final results. Therefore, we are rescinding the hammers/sledges review for Jinma.

On March 29, 2001, FMEC requested that the Department rescind its administrative reviews with respect to axes/adzes; bars/wedges; hammers/sledges; and picks/mattocks, because it had no sales, entries, or shipments of subject merchandise during the POR. See FMEC Request for Rescission of Administrative Reviews Letter (March 29, 2001). Information on the record indicates that there were no entries of subject merchandise from FMEC during the review period. We preliminarily rescinded the reviews with respect to FMEC in the preliminary results, and we have determined that no changes to our rescission decisions are warranted for these final results. Therefore, we are rescinding the axes/adzes, bars/wedges, hammers/sledges, and picks/mattocks reviews for FMEC.

In its May 25, 2001, Section A questionnaire response, Huarong stated that during the POR it sold only subject merchandise within the bars/wedges class of merchandise. Information on the record indicates that there were no entries of axes/adzes, hammers/sledges, and picks/mattocks from Huarong during the POR. (See Memorandum from Thomas Martin through Ronald Trentham to The File, dated August 16, 2002). We preliminarily rescinded the reviews for these products with respect to Huarong and have determined that no changes to our recision decisions are warranted for these final results. Therefore, we are rescinding the axes/adzes, hammers/sledges, and picks/mattocks reviews for Huarong.

In its May 25, 2001, Section A questionnaire response, LMC stated that during the POR, it sold only subject merchandise within the bars/wedges class of merchandise. Information on the record indicates that there were no entries of axes/adzes and picks/mattocks from LMC during the POR, but record information indicates that LMC made one sale of hammers/sledges during the review period. (See Memorandum from Thomas Martin through Ronald Trentham to The File, dated August 16, 2002). We preliminarily rescinded the reviews with respect to axes/adzes, picks/mattocks, and hammers/sledges from LMC in the preliminary results, and we have determined that no changes to our rescission decisions are warranted with respect to axes/adzes and picks/mattocks for these final results. Therefore, we are rescinding the axes/adzes and picks/mattocks reviews for LMC. With respect to hammers/sledges from LMC, based on our determination that LMC failed to report its sale of hammers/sledges during the POR, we applied a separate adverse facts available (AFA) rate to imports of this merchandise. See Application of Adverse Facts Available to Liaoning Machinery Import & Export Corporation (LMC), dated concurrently with this notice.

In its May 25, 2001, Section A questionnaire response, SMC stated that during the POR, it sold only subject merchandise within the hammers/sledges class of merchandise. Information on the record indicates that there were no entries of axes/adzes, picks/mattocks, and bars/wedges from SMC during the POR. We preliminarily rescinded the reviews with respect to SMC in the preliminary results, and we have determined that no changes to our rescission decisions are warranted for these final results. Therefore, we are rescinding the axes/adzes, picks/mattocks, and bars/wedges reviews for SMC.

Intent Not To Revoke

In its February 27, 2001, review requests, TMC requested revocation for all four HFHT orders. In the preliminary results, the Department found that TMC did not qualify for revocation for any of the four orders because it did not receive zero or de minimis margins for each of the reviews upon which it based its revocation request. In its July 31, 2002, case brief, TMC argued that it satisfies the conditions for revocation for two of the orders, hammers/sledges and picks/mattocks. Section 351.222(b)(2) of the Department's regulations provides that the Secretary may revoke an antidumping order in part if the Secretary concludes, inter alia, that one or more exporters or producers covered by the order have sold the merchandise at not less than NV for a period of at least three consecutive years. Thus, in determining whether a requesting party is entitled to a revocation inquiry, the Department must determine that the party received zero or de minimis margins for the three consecutive years forming the basis for the revocation request. See Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate From Canada; Final Results of Antidumping Duty Administrative Reviews and Determination To Revoke in Part, 64 FR 2173, 2175 (January 13, 1999); see also Pure Magnesium From Canada; Final Results of Antidumping Duty Administrative Review and Determination Not to Revoke Order in Part, 64 FR 12977, 12979 (March 16, 1999); and Notice of Final Results of Antidumping Duty Administrative Review and Determination Not to Revoke the Antidumping Order: Brass Sheet and Strip from the Netherlands, 65 FR 742 (January 6, 2000). In the instant reviews, TMC's final results are above de minimis for the HFHT antidumping duty orders. Consequently, we find that TMC does not qualify for revocation of any of the HFHTs antidumping duty orders based upon section 351.222(b) of the Department's regulations.

Facts Available (FA)

1. Application of Facts Available

Section 776(a)(2) of the Act provides that if an interested party or any other person: (A) Withholds information that has been requested by the administering authority or the Commission under this title; (B) fails to provide such information by the deadlines for the submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782; (C) significantly impedes a proceeding under this title; or (D) provides such information but the information cannot be verified as provided in section 782(i), the administering authority and the Commission shall, subject to section 782(d), use the facts otherwise available in reaching the applicable determination under this title.

Section 782(e) of the Act states that the Department shall not decline to consider information deemed “deficient” under section 782(d) if: (1) The information is submitted by the established deadline; (2) the information can be verified; (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination; (4) the interested party has demonstrated that it acted to the best of its ability; and (5) the information can be used without undue difficulties.

Pursuant to sections 776(a)(2)(A) and (C) of the Act, the Department has determined that it is appropriate to apply FA for purposes of determining the dumping margin for hammers/sledges for LMC in the instant review. Pursuant to 776(a)(2)(A), we have determined that LMC did not report sales of hammers to the United States during the POR as requested by the Department in the antidumping duty questionnaire. Pursuant to section 782(i) of the Act, the Department conducted an on-site verification of the information submitted by LMC at its sales headquarters in the PRC. After analyzing LMC's record information pursuant to section 782(e) of the Act, we determined that LMC made one sale of hammers/sledges to the United States within the POR. Furthermore, we were able to confirm this with Customs' data. See Memorandum from Thomas Martin through Ronald Trentham to The File, dated August 16, 2002. For further discussion, please see memorandum regarding Application of Adverse Facts Available to Liaoning Machinery Import & Export Corporation (LMC), dated concurrently with this notice.

Because LMC failed to provide necessary information regarding its U.S. sales of hammers/sledges as requested by the Department, pursuant to section 776(a)(2)(B) of the Act, we must establish the margin for this company based totally on facts otherwise available.

2. Selection of AFA

We have determined that the AFA rate for hammers/sledges is the calculated margin of 36.55 percent, the margin for TMC in the instant review, and the highest rate in this proceeding. Because LMC had control of the information related to sales of hammers/sledges during the POR, yet failed to cooperate to the best of its ability by providing this information, we have applied an adverse inference in accordance with section 776(b) of the Act. For a discussion of the Department's selection of the AFA rates to be applied to LMC, see the memorandum regarding Application of Adverse Facts Available to Liaoning Machinery Import & Export Corporation (LMC), dated concurrently with this notice.

3. Corroboration

Section 776(b) of the Act authorizes the Department to use as AFA information derived from the petition, the final determination from the less than fair value (LTFV) investigation, a previous administrative review, or any other information placed on the record.

Section 776(c) of the Act requires the Department to corroborate, to the extent practicable, secondary information used as FA. Secondary information is defined as “[i]nformation derived from the petition that gave rise to the investigation or review, the final determination concerning the subject merchandise, or any previous review under section 751 concerning the subject merchandise.” See Statement of Administrative Action (SAA) accompanying the URAA, H.R. Doc. No. 103-316 at 870 (1994) and 19 CFR 351.308(d).

The SAA further provides that the term “corroborate” means that the Department will satisfy itself that the secondary information to be used has probative value (see SAA at 870). Thus, to corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used.

The rate used as AFA in this segment was calculated using verified information from the instant POR. The source for calculated margin is a company-specific administrative determination. Thus, in an administrative review, if the Department chooses as AFA a calculated dumping margin from a segment of the proceeding, it is not necessary to question the reliability of the margin for that time period. Furthermore, we have no new information that would lead us to reconsider the reliability of the rate being used in this case.

As to the relevance of the margin used for AFA, the courts have stated that “[b]y requiring corroboration of adverse inference rates, Congress clearly intended that such rates should be reasonable and have some basis in reality.” F.Lli De Cecco Di Filippo Fara S. Martino S.p.A., v. U.S., 216 F.3d 1027, 1034 (Fed. Cir. 2000).

The rate selected is the highest calculated rate calculated in this proceeding. In determining a relevant AFA rate, the Department assumes that if the non-responding parties could have demonstrated that their dumping margins were lower, they would have participated in this review and attempted to do so. See Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190-91 (Fed. Cir. 1990). Therefore, given LMC's failure to cooperate to the best of its ability in this review, we have no reason to believe that its dumping margins would be any less than the highest calculated rate in this proceeding. This rate ensures that LMC does not benefit by failing to cooperate fully. Therefore, we consider the rate of 36.55 percent relevant and appropriate to use as AFA for LMC.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to these administrative reviews are addressed in the Decision Memorandum. A list of the issues which parties have raised and to which we have responded, all of which are in the Decision Memorandum, is attached to this notice as an appendix. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum, which is on file in the Central Record 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 Import Administration's Web site at http//ia.ita.doc.gov. The paper copy and electronic version of the Decision Memorandum are identical in content.

Separate Rates Determination

As in the preliminary results, TMC, SMC, Huarong and LMC are entitled to separate rates.

Changes Since the Preliminary Results

In calculating the final results, the Department has made the following changes since the Preliminary Results:

1. We corrected errors in the calculation of SG&A expenses and profit for all reviewed companies.

2. We corrected errors in the calculation of the surrogate values for steel billet and steel scrap.

3. We applied total AFA to LMC with respect to the hammers/sledges order.

4. We applied reported market economy ocean carrier charges to LMC's nonmarket economy (NME) ocean carrier shipments, pursuant to current practice.

5. We adjusted certain Huarong sales for discounts.

6. We applied as facts available (FA) the highest labor rate calculated at verification for bars produced by Huarong.

7. We applied as FA the highest packing and freight costs reported for TMC hammers to all hammers sold by TMC.

8. We applied a weighted-average of the surrogate values of the three types of steel consumed by the verified TMC hammer supplier to all of TMC's hammers.

9. We increased the consumption rate for paint, coal and electricity for all TMC hammers.

10. We corrected errors with respect to TMC's calculated margins.

11. We corrected the adjustment made to one of TMC's sales.

12. We corrected TMC's minor errors.

Final Results of Reviews

We determine that the following weighted-average percentage margins exist for the period February 1, 2000, through January 31, 2001:

Assessment Rates

The Department will determine, and the Customs Service shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have calculated an exporter/importer (or customer)-specific assessment rate for merchandise subject to this review. Where the importer-specific assessment rate is above de minimis, we will instruct Customs to assess antidumping duties on that importer's entries of subject merchandise. The Department will issue appropriate assessment instructions directly to the Customs Service within 15 days of publication of these final results of review. We will direct the Customs Service to assess the resulting assessment rates against the entered customs values for the subject merchandise on each of the importer's/customer's entries during the review period.

Cash Deposit Requirements

The following deposit requirements will be effective upon publication of this notice of final results of administrative reviews for all shipments of HFHTs from the PRC entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(a)(1) of the Act: (1) The cash deposit rates for the reviewed companies will be the rates shown above except that, for firms whose weighted-average margins are less than 0.5 percent, and therefore, de minimis, the Department shall require no deposit of estimated antidumping duties; (2) for previously reviewed or investigated companies with a separate rate not listed above, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) for all other PRC exporters, the cash deposit rates will be the PRC-wide rates; (4) for all non-PRC exporters of the subject merchandise, the cash deposit rate will be the rate applicable to the PRC supplier of that exporter. These deposit requirements shall remain in effect until publication of the final results of the next administrative reviews.

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.

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 review are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 1675(a)(1) and 19 U.S.C. 1677f(i)(1)).

Appendix—Issues in Decision Memorandum

Part I—General Issues

1. “Zeroing” Methodology

2. Inland Freight Distances

3. Calculation of Overhead, Selling, General and Administrative Expenses (SG&A) and Profit

4. Calculation of Marine Insurance

Part II—General Surrogate Value Issues

5. Aberrational Data

6. Harmonized Tariff System (HTS) Classification of Steel Billet

7. Surrogate Value for Tool Handles

8. HTS Classification for Steel Scrap for Scrap Offset

9. HTS Classification of Steel Scrap for Factors of Production

Part III—LMC Comments

10. LMC's Unreported Hammer Sale

11. LMC Ocean Freight

12. Agency Sales

13. LMC Unreported Port Charges

Part IV—Huarong Comments

14. Huarong Unreported Axe/Adze and Pick/Mattock Sales

15. Huarong Unreported Bar/Wedge Sales

16. Huarong Discounts

17. Huarong Inland Freight Distances

18. Huarong Labor Rate

19. Huarong Packing FOP

20. Huarong Steel FOP Input

Part V—TMC Comments

21. TMC Unreported Sales

22. TMC FOP Verification and Application of Adverse Facts Available (AFA)

23. Verification of TMC Steel Consumption

24. TMC Scrap Offset

25. TMC Type of Steel

26. TMC Paint Consumption

27. TMC Coal and Electricity Consumption

28. TMC Margin Calculation Errors

29. TMC Inland Freight Distances

30. TMC Inland Freight Calculation Errors

31. TMC Packing

32. TMC Discount

33. TMC Marine Insurance Charges

34. TMC Ocean Freight

35. TMC Steel Tool Handles and Steel Wedges

36. TMC Revocation

37. TMC Minor Errors and Corrections Presented at Verification