Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China: Final Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (“the Department”) published its preliminary results of administrative review of the antidumping duty order on non-malleable cast iron pipe fittings (“NMP fittings”) from the People's Republic of China (“PRC”) on May 25, 2006. See Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 71 FR 30116 (May 25, 2006) (“Preliminary Results”). The period of review (“POR”) is April 1, 2004, through March 31, 2005. We invited interested parties to comment on our preliminary results. Based on our analysis of the comments received, we have made changes to our calculations. The final dumping margins for this review are listed in the “Final Results of Review” section below.

EFFECTIVE DATE:

December 1, 2006

FOR FURTHER INFORMATION CONTACT:

Eugene Degnan, AD/CVD Operations, Office 8, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-0414.

SUPPLEMENTARY INFORMATION:

Background

On April 7, 2003, the Department published in the Federal Register the antidumping duty order on NMP fittings from the PRC. See Notice of Antidumping Duty Order: Non-Malleable Cast Iron Pipe Fittings From the People's Republic of China, 68 FR 16765 (April 7, 2003). On April 1, 2005, the Department published a notice of opportunity to request an administrative review of the antidumping duty order on NMP fittings from the PRC for the period April 1, 2004, through March 31, 2005. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation: Opportunity to Request Administrative Review, 70 FR 16799 (April 1, 2005). On April 25, 2005, Myland Industrial Co., Ltd. and Myland Buxin Foundry Ltd. (collectively “Myland”) requested an administrative review of their sales to the United States during the POR of merchandise produced by Buxin and exported by Myland. On May 27, 2005, the Department published in the Federal Register a notice of the initiation of the antidumping duty administrative review of NMP fittings from the PRC for the period April 1, 2004, through March 31, 2005. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 70 FR 30694 (May 27, 2005) (“Initiation Notice”).

The Department published the preliminary results on May 25, 2006. See Preliminary Results, 71 FR at 30116. We invited parties to comment on our preliminary results. See Preliminary Results, 71 FR at 30121. On June 23, 2006, Anvil International, Inc. and Ward Manufacturing (“Petitioners”) submitted a case brief, and on June 27, 2006, Myland submitted a case brief. On June 30, 2006, Petitioner submitted a rebuttal brief and on July 3, 2006, Myland submitted a rebuttal brief.

On September 12, 2006, the Department published a notice in the Federal Register extending the time limit for the final results of review until October 23, 2006. See Extension of Time Limit for the Final Results of the Antidumping Duty Administrative Review: Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China, 71 FR 53661 (September 12, 2006). Additionally, on October 30, 2006, the Department published a notice in the Federal Register further extending the time limit for the preliminary results of review until November 10, 2006. See Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China: Extension of Time Limit for the Final Results of the Antidumping Duty Administrative Review, 71 FR 63285 (October 30, 2006). Further, on November 16, 2006, the Department published a notice in the Federal Register further extending the time limit for the preliminary results of review until November 21, 2006. See Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China: Extension of Time Limit for the Final Results of the Antidumping Duty Administrative Review, 71 FR 66749 (November 16, 2006). We have conducted this administrative review in accordance with Section 751 of the Tariff Act of 1930, as amended (“the Act”), and 19 CFR 351.213.

Scope of Order

The products covered by the order are finished and unfinished non-malleable cast iron pipe fittings with an inside diameter ranging from 1/4 inch to 6 inches, whether threaded or un-threaded, regardless of industry or proprietary specifications. The subject fittings include elbows, ells, tees, crosses, and reducers as well as flanged fittings. These pipe fittings are also known as “cast iron pipe fittings” or “gray iron pipe fittings.” These cast iron pipe fittings are normally produced to ASTM A-126 and ASME B.l6.4 specifications and are threaded to ASME B1.20.1 specifications. Most building codes require that these products are Underwriters Laboratories (UL) certified. The scope does not include cast iron soil pipe fittings or grooved fittings or grooved couplings.

Fittings that are made out of ductile iron that have the same physical characteristics as the gray or cast iron fittings subject to the scope above or which have the same physical characteristics and are produced to ASME B.16.3, ASME B.16.4, or ASTM A-395 specifications, threaded to ASME B1.20.1 specifications and UL certified, regardless of metallurgical differences between gray and ductile iron, are also included in the scope of the order. These ductile fittings do not include grooved fittings or grooved couplings. Ductile cast iron fittings with mechanical joint ends (MJ), or push on ends (PO), or flanged ends and produced to the American Water Works Association (AWWA) specifications AWWA C110 or AWWA C153 are not included.

Imports of subject merchandise are currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers 7307.11.00.30, 7307.11.00.60, 7307.19.30.60 and 7307.19.30.85. HTSUS subheadings are provided for convenience and customs purposes. The written description of the scope of this proceeding is dispositive.

Analysis of Comments Received

All issues raised in the post-preliminary comments by parties in this review are addressed in the Issues and Decision Memorandum, dated November 10, 2006 (“Decision Memo”), which is hereby adopted by this notice. A list of the issues which parties raised and to which we responded in the Decision Memo is attached to this notice as an appendix. The Decision Memo is a public document which is on file in the Central Records Unit (“CRU”) in room B-099 in the main Department building, and is accessible on the Web at http://www.ia.ita.doc.gov/frn. The paper copy and electronic version of the memorandum are identical in content.

Surrogate Country

In the Preliminary Results, we stated that we treat the PRC as a non-market economy (“NME”) country, and therefore, we calculated normal value in accordance with section 773(c) of the Act which applies to NME countries. Also, we stated that we had selected India as the appropriate surrogate country to use in this review for the following reasons: (1) it is a significant producer of comparable merchandise; and (2) provides contemporaneous publicly available data to value the factors of production, pursuant to section 773(c)(4) of the Act. See Preliminary Results. For the final results, we made no changes to our findings with respect to the selection of a surrogate country.

Separate Rates

In proceedings involving NME countries, the Department begins with a rebuttable presumption that all companies within the country are subject to government control and, thus, should be assigned a single antidumping duty deposit rate. It is the Department's policy to assign all exporters of merchandise subject to review in an NME country this single rate unless an exporter can demonstrate that it is free of de jure and de facto control over its export decisions, so as to be entitled to a separate rate.

In the Preliminary Results, we found that Myland demonstrated its eligibility for separate-rate status. For the final results, we continue to find that the evidence placed on the record of this administrative review by Myland demonstrates an absence of government control, both in law and in fact, with respect to its exports of the merchandise under review and thus determine Myland is eligible for separate-rate status.

Changes Since the Preliminary Results

Based on our analysis of comments received, we have made changes in the margin calculations for Myland. See Decision Memo at 4. In the preliminary results, the Department calculated a margin for Myland based on its reported data. However, for the final results, the Department has based its margin on total adverse facts available (“AFA”). See Application of Adverse Facts Available for Myland Industrial Ltd. & Myland Buxin Foundry Ltd. in the Final Results of Antidumping Duty Administrative Review of Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China Memorandum, from Eugene Degnan, Analyst, through Wendy J. Frankel, Director, dated November 21, 2006 (“Myland AFA Memorandum”).

Adverse Facts Available

Sections 776(a)(1) and (2) of the Act provide that the Department shall apply “facts otherwise available” if necessary information is not on the record or an interested party or any other person (A) withholds information that has been requested, (B) fails to provide information within the deadlines established, or in the form and manner requested by the Department, subject to subsections (c)(1) and (e) of section 782, (C) significantly impedes a proceeding, or (D) provides information that cannot be verified as provided by section 782(i) of the Act.

Where the Department determines that a response to a request for information does not comply with the request, section 782(d) of the Act provides that the Department will so inform the party submitting the response and will, to the extent practicable, provide that party the opportunity to remedy or explain the deficiency. If the party fails to remedy the deficiency within the applicable time limits and subject to section 782(e) of the Act, the Department may disregard all or part of the original and subsequent responses, as appropriate. Section 782(e) of the Act provides that the Department “shall not decline to consider information that is submitted by an interested party and is necessary to the determination but does not meet all applicable requirements established by the administering authority” if the information is timely, can be verified, is not so incomplete that it cannot be used, and if the interested party acted to the best of its ability in providing the information. Where all of these conditions are met, the statute requires the Department to use the information if it can do so without undue difficulties.

Section 776(b) of the Act further provides that the Department may use an adverse inference in applying the facts otherwise available when a party has failed to cooperate by not acting to the best of its ability to comply with a request for information. Section 776(b) of the Act also authorizes the Department to use as AFA, information derived from the petition, the final determination, a previous administrative review, or other information placed on the record.

The Department finds that the information necessary to calculate an accurate and otherwise reliable margin is not available on the record with respect to Myland. In addition, the Department finds that Myland withheld information, failed to provide information requested by the Department in a timely manner and in the form required, and significantly impeded the Department's ability to calculate an accurate margin for Myland. Specifically, we determine that the application of facts available is necessary in this case because Myland did not report all of the inputs necessary to produce the subject merchandise (i.e., record evidence indicates that raw material inputs have not been reported accurately because the total of Myland's reported raw material inputs is less than the finished quantity for certain products) and Myland's cost reconciliation is neither complete nor accurate. See Decision Memo at Comment 1; see also Application of Adverse Facts Available for Myland Industrial Ltd. & Myland Buxin Foundry Ltd. in the Final Results of Antidumping Duty Administrative Review of Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China Memorandum, from Eugene Degnan, Analyst, through Wendy J. Frankel, Director, dated November 21, 2006 (“Myland AFA Memorandum”). Therefore, pursuant to sections 776(a)(1) and (2)(A),(B) and (C) of the Act, the Department is resorting to facts otherwise available.

In addition, in accordance with section 776(b) of the Act, the Department is applying an adverse inference in selecting the facts available rate as it has determined that Myland did not act to the best of its ability to cooperate with the Department in this administrative review because it did not report all of its inputs of raw materials. See Myland AFA Memorandum. As AFA we are applying the highest rate from the history of this proceeding, 75.50 percent, the PRC-wide rate from the less-than-fair-value final determination. See Notice of Final Determination of Sales at Less Than Fair Value: Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China 68 FR 7765 (February 18, 2003) (“Final Determination”).

Corroboration

Section 776(c) of the Act provides that, when the Department relies on secondary information rather than on information obtained in the course of an investigation or review, it shall, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. Secondary information is defined as information 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 Uruguay Round Agreements Act, H. Doc. No. 316, 103d Cong., 2d Sess. Vol.1 at 870 (1994). Corroborate means that the Department will satisfy itself that the secondary information to be used has probative value. See SAA at 870. To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information to be used. The Department, however, need not prove that the selected facts available are the best alternative information. See SAA at 869.

To satisfy itself that the secondary information has probative the Department will, to the extent practicable, examine the reliability and relevance of the information used. See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished from Japan, and Tapered Roller Bearings Four Inches or Less in Outside Diameter, and Components Thereof, from Japan: Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews, 61 Fed. Reg. 57391, 57392 (Nov. 6, 1996) (unchanged in the final determination). Independent sources used to corroborate such evidence may include, for example, published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation. See Notice of Preliminary Determination of Sales at Less Than Fair Value: High and Ultra-High Voltage Ceramic Station Post Insulators from Japan, 68 FR 35627 (June 16, 2003) (unchanged in final determination); and, Notice of Final Determination of Sales at Less Than Fair Value: Live Swine From Canada, 70 FR 12181 (March 11, 2005).

The reliability of the AFA rate was determined in the final determination of the investigation. See Final Determination. The Department has received no information to date that warrants revisiting the issue of the reliability of the rate calculation itself. See e.g., Certain Preserved Mushrooms from the People's Republic of China: Final Results and Partial Rescission of the New Shipper Review and Final Results and Partial Rescission of the Third Antidumping Duty Administrative Review, 68 FR 41304, 41307-41308 (July 11, 2003). No information has been presented in the current review that calls into question the reliability of this information. Thus, the Department finds that the information contained in the order is reliable.

With respect to the relevance aspect of corroboration, the Department will consider information reasonably at its disposal to determine whether a margin continues to have relevance. Where circumstances indicate that the selected margin is not appropriate as AFA, the Department will disregard the margin and determine an appropriate margin. For example, in Fresh Cut Flowers from Mexico: Final Results of Antidumping Administrative Review, 61 FR 6812 (February 22, 1996), the Department disregarded the highest margin in that case as adverse best information available (the predecessor to facts available) because the margin was based on another company's uncharacteristic business expense resulting in an unusually high margin. Similarly, the Department does not apply a margin that has been discredited. See D&L Supply Co. V. United States, 113 F.3d 1220, 1221 (Fed. Cir. 1997) which ruled that the Department will not use a margin that has been judicially invalidated. Nothing in the record of this review calls into question the relevance of the margin selected as AFA. Further, the selected margin is currently the PRC-wide rate. Moreover, this rate has not been invalidated judicially. Thus, it is appropriate to use the selected rate as AFA in the instant review. Therefore, we determine that the rate from the Final Determination continues to be relevant for use in this administrative review.

As the recalculated Final Determination rate is both reliable and relevant, we determine that it has probative value. As a result, the Department determines that the Final Determination rate is corroborated for the purposes of this administrative review and may reasonably be applied to Myland as AFA. Accordingly, we determine that the Final Determination rate of 75.50 percent, which is the highest rate from any segment of this administrative proceeding, meets the corroboration criteria established in section 776(c) that secondary information have probative value.

Final Results of Review

We determine that the following percentage margin exists on exports of Non-Malleable Cast Iron Pipe Fittings from the PRC for the period April 1, 2004 through March 31, 2005:

Assessment Rates

The Department intends to issue assessment instructions to U.S. Customs and Border Protection (“CBP”) 15 days after the date of publication of these final results of administrative review.

Cash Deposit Requirements

The following deposit requirements will be effective upon publication of this notice of final results of administrative review for all shipments of NMP fittings 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) for Myland, which has a separate rate, the cash deposit rate will be the company-specific rate shown above; (2) for previously reviewed or investigated companies not listed above that have a separate rate, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) the cash deposit rate for all other PRC exporters will be 75.50 percent, the current PRC-wide rate; and (4) the cash deposit rate for all non-PRC exporters will be the rate applicable to the PRC exporter that supplied that exporter. These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.

Notification of Interested Parties

This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) 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 the antidumping duties occurred and the subsequent assessment of double antidumping duties.

This notice also serves as a reminder to parties subject to administrative protective orders (“APOs”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305, which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

We are issuing and publishing this determination and notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Appendix 1

Issues in the Decision Memorandum

Comment 1: Adverse Facts Available for Missing Factors of Production

Comment 2: Freight: Application of Sigma Rule

Comment 3: Treatment of Sand and Riverbed Sand in Normal Value

Comment 4: Treatment of Additional U.S. Inland Freight Revenues and Expenses

Comment 5: Clerical Error in the Calculation of the Cost of Freight on Incoming Materials