65 FR 5497 February 4, 2000 

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-803, A-570-803]

 
Final Results of Expedited Sunset Reviews: Axes and Adzes and 
Picks and Mattocks From the People's Republic of China

AGENCY:  Import Administration, International Trade Administration, 
Department of Commerce.

ACTION:  Notice of final results of expedited sunset reviews: Axes and 
adzes and picks and mattocks from the People's Republic of China.

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SUMMARY:  On July 1, 1999, the Department of Commerce (``the 
Department'') initiated sunset reviews of the antidumping duty orders 
on axes and adzes and on picks and mattocks from the People's Republic 
of China (``PRC'') (64 FR 35588) pursuant to section 751(c) of the 
Tariff Act of 1930, as amended (``the Act''). On the basis of notices 
of intent to participate and adequate substantive comments filed on 
behalf of domestic interested parties and inadequate responses from 
respondent interested parties, the Department determined to conduct 
expedited reviews. As a result of these reviews, the Department finds 
that revocation of the antidumping orders would likely lead to 
continuation or recurrence of dumping at the levels indicated in the 
Final Results of Reviews section of this notice.

EFFECTIVE DATE:  February 4, 2000.

FOR FURTHER INFORMATION CONTACT:  Darla D. Brown or Melissa G. Skinner, 
Office of Policy for Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
3207 or (202) 482-1560, respectively.

Statute and Regulations

    These reviews were conducted pursuant to sections 751(c) and 752 of 
the Act. The Department's procedures for the conduct of sunset reviews 
are set forth in Procedures for Conducting Five-year (``Sunset'') 
Reviews of Antidumping and Countervailing Duty Orders, 63 FR 13516 
(March 20, 1998) (``Sunset Regulations'') and 19 CFR Part 351 (1999) in 
general. Guidance on methodological or analytical issues relevant to 
the Department's conduct of sunset reviews is set forth in the 
Department's Policy Bulletin 98:3--Policies Regarding the Conduct of 
Five-year (``Sunset'') Reviews of Antidumping and Countervailing Duty 
Orders; Policy Bulletin, 63 FR 18871 (April 16, 1998) (``Sunset Policy 
Bulletin'').

Scope

    Although we provide the full scope language for the order on heavy 
forged hand tools (``HFHTs'') below, this determination applies only to 
the types of HFHTs which fall under the orders (A-570-803) on axes and 
adzes and picks and mattocks from the PRC. 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 wool 
splitting wedges. HFHTs are manufactured through a hot forge operation 
in which steel is sheared to the 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'') item numbers 8205.20.60, 
8205.59.30, 8201.30.00, and 8201.40.60. Specifically excluded are 
hammers and sledges with heads 1.5 kilograms (3.33 pounds) in weight 
and under, and hoes and rakes, and bars 18 inches in length and under. 
The HTS item numbers are provided for convenience and customs purposes 
only. The written description of the scope remains dispositive.
    There has been one scope ruling with respect to the order on HFHTs 
from the PRC in which the Forrest Tool Company's Max Multipurpose Tool 
was determined to be within the scope of the order (58 FR 59991; 
November 12, 1993).
    These reviews cover imports from all manufacturers and exporters of 
axes and adzes and picks and mattocks from the PRC.

History of the Orders

    The Department published its final affirmative determination of 
sales at less than fair value (``LTFV'') with respect to imports of 
HFHTs from the PRC on January 3, 1991 (56 FR 241). In this 
determination, the Department published four country-wide weighted-
average dumping margins, one each for hammers/sledges, bars/wedges, 
picks/mattocks and axes/adzes. The Department subsequently issued the 
antidumping duty orders on HFHTs from the PRC on February 19, 1991 (56 
FR 6622). Since the imposition of the orders, the Department has 
conducted several administrative reviews.\1\ The orders remain in 
effect for all manufacturers and exporters of the subject merchandise 
from the PRC.
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    \1\ See Heavy Forged Hand Tools, Finished and Unfinished, With 
or Without Handles, from the People's Republic of China; Final 
Results of Antidumping Duty Administrative Reviews, 60 FR 49251 
(September 22, 1995); Heavy Forged Hand Tools, Finished and 
Unfinished, With or Without Handles, from the People's Republic of 
China; Final Results of Antidumping Duty Administrative Review, 61 
FR 15028 (April 4, 1996); as amended, Heavy Forged Hand Tools, 
Finished and Unfinished, With or Without Handles, from the People's 
Republic of China; Amendment of Final Results of Antidumping Duty 
Administrative Review, 61 FR 24285 (May 14, 1996); Heavy Forged Hand 
Tools, Finished and Unfinished, With or Without Handles, from the 
People's Republic of China; Final Results of Antidumping Duty 
Administrative Review, 61 FR 51269 (October 1, 1996); as amended, 
Heavy Forged Hand Tools from the People's Republic of China; Notice 
of Amendment of Final Results of Antidumping Duty Administrative 
Review, 62 FR 24416 (May 5, 1997); Heavy Forged Hand Tools from the 
People's Republic of China; Final Results of Antidumping Duty 
Administrative Reviews, 62 FR 11813 (March 13, 1997); Heavy Forged 
Hand Tools, Finished and Unfinished, With or Without Handles, from 
the People's Republic of China; Final Results of Antidumping Duty 
Administrative Reviews, 63 FR 16758 (April 6, 1998); as amended, 
Amended Final Results of Antidumping Duty Administrative Reviews 
Pursuant to Remand from the Court of International Trade: Heavy 
Forged Hand Tools, Finished and Unfinished, With or Without Handles, 
from the People's Republic of China, 63 FR 55577 (October 16, 1998) 
and Amended Final Results of Antidumping Duty Administrative Reviews 
Pursuant to Remand from the Court of International Trade: Heavy 
Forged Hand Tools, Finished and Unfinished, With or Without Handles, 
from the People's Republic of China: Correction, 64 FR 851 (January 
6, 1999); Heavy Forged Hand Tools, Finished and Unfinished, With or 
Without Handles, from the People's Republic of China; Final Results 
and Partial Recission of Antidumping Duty Administrative Reviews, 64 
FR 43659 (August 11, 1999).
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    To date, the Department has not issued any duty absorption findings 
in these cases.

Background

    On July 1, 1999, the Department initiated sunset reviews of the 
antidumping duty orders on axes and adzes and picks and mattocks from 
the PRC (64 FR 35588), pursuant to section 751(c) of the Act. For both 
of the reviews, the Department received notices of intent to 
participate on behalf of O. Ames Co. and its division, Woodings-Verona 
(collectively, ``domestic interested parties'') on July 16, 1999, 
within the deadline specified in section 351.218(d)(1)(i) of the Sunset 
Regulations. Pursuant to section 771(9)(C) of the Act, the domestic 
interested parties claimed interested

[[Page 5498]]

party status as domestic manufacturers of the subject merchandise. The 
Department received complete substantive responses from the domestic 
interested parties on August 2, 1999, within the 30-day deadline 
specified in the Sunset Regulations under section 351.218(d)(3)(i). In 
addition, we received substantive responses on behalf of Fujian 
Machinery and Equipment Import and Export Corp., Shandong Huarong 
General Group Corp., Shandong Machinery Import and Export Corp., and 
Tianjin Machinery Import and Export Corp. (collectively, 
``respondents''). The respondents claimed interested party status under 
section 771(9)(A) as exporters of the subject merchandise.
    Using information on the value of exports submitted by the 
respondents and the value of imports as reported in U.S. Census Bureau 
IM146 Reports, the Department determined that respondents' exports to 
the United States accounted for significantly less than fifty percent 
of the total volume of subject merchandise to the U.S. over the five 
calendar years preceeding the initiation of these sunset reviews. 
Therefore, respondents provided inadequate response to the notice of 
initiation and, pursuant to 19 CFR 351.218(e)(1)(ii)(C), the Department 
determined to conduct expedited, 120-day reviews of the orders.\2\
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    \2\ See memoranda concerning adequacy of respondent response 
dated October 19, 1999.
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    In accordance with section 751(c)(5)(C)(v) of the Act, the 
Department may treat a review as extraordinarily complicated if it is a 
review of a transition order (i.e., an order in effect on January 1, 
1995). On November 16, 1999, the Department determined that the sunset 
reviews of the antidumping duty orders on axes/adzes and picks/mattocks 
from the PRC are extraordinarily complicated and extended the time 
limit for completion of the final results of these reviews until not 
later than January 27, 2000, in accordance with section 751(c)(5)(B) of 
the Act.\3\
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    \3\ See Extension of Time Limit for Final Results of Five-Year 
Reviews, 64 FR 62167 (November 16, 1999).
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    Although the deadline for this determination was originally January 
27, 2000, due to the Federal Government shutdown on January 25 and 26, 
2000, resulting from inclement weather, the time-frame for issuing this 
determination has been extended by one day.

Determination

    In accordance with section 751(c)(1) of the Act, the Department 
conducted these reviews to determine whether revocation of the 
antidumping duty order would be likely to lead to continuation or 
recurrence of dumping. Section 752(c) of the Act provides that, in 
making these determinations, the Department shall consider the 
weighted-average dumping margins determined in the investigation and 
subsequent reviews and the volume of imports of the subject merchandise 
for the period before and the period after the issuance of the 
antidumping order, and shall provide to the International Trade 
Commission (``the Commission'') the magnitude of the margins of dumping 
likely to prevail if the order were revoked.
    The Department's determinations concerning continuation or 
recurrence of dumping and the magnitude of the margins are discussed 
below. In addition, domestic interested parties' and respondents' 
comments with respect to continuation or recurrence of dumping and the 
magnitude of the margins are addressed within the respective sections 
below.

Continuation or Recurrence of Dumping

    Drawing on the guidance provided in the legislative history 
accompanying the Uruguay Round Agreements Act (``URAA''), specifically 
the Statement of Administrative Action (``the SAA''), H.R. Doc. No. 
103-316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt. 1 
(1994), and the Senate Report, S. Rep. No. 103-412 (1994), the 
Department issued its Sunset Policy Bulletin providing guidance on 
methodological and analytical issues, including the bases for 
likelihood determinations. In its Sunset Policy Bulletin, the 
Department indicated that determinations of likelihood will be made on 
an order-wide basis (see section II.A.2). In addition, the Department 
indicated that it normally will determine that revocation of an 
antidumping duty order is likely to lead to continuation or recurrence 
of dumping where (a) dumping continued at any level above de minimis 
after the issuance of the order, (b) imports of the subject merchandise 
ceased after the issuance of the order, or (c) dumping was eliminated 
after the issuance of the order and import volumes for the subject 
merchandise declined significantly (see section II.A.3).
    In their substantive responses, the domestic interested parties 
argue that revocation of the orders would likely lead to continuation 
or recurrence of dumping. They base their conclusion on the combined 
facts that dumping has continued over the life of the orders at levels 
well above de minimis and that import volumes, in the case of axes/
adzes, declined significantly after the issuance of the orders. The 
domestic interested parties maintain that imports of axes/adzes from 
the PRC declined significantly from approximately $1.9 million worth of 
subject merchandise in 1989 to approximately $1.5 million worth of 
merchandise in 1997 and to roughly $1.2 million in 1998. They argue 
that although import quantities are not publicly available, the decline 
in total value of imports indicates that volume also declined 
substantially. The domestic interested parties, however, do not discuss 
import volumes for picks/mattocks in their substantive response. They 
conclude that it is reasonable to assume that the PRC exporters could 
not sell in the United States without dumping and that, to reenter to 
U.S. market, they would have to increase or continue dumping (see 
August 2, 1999, substantive response of the domestic interested parties 
at 3-4).
    The respondents argue that if the orders were revoked, shipments 
would likely continue at average levels as seen in 1996 through 1998. 
They maintain that there is greater competition from other supplying 
countries and that demand in the U.S. is fairly inelastic, indicating 
that even with lower prices (without dumping duties), demand for 
imports of the subject merchandise from the PRC is not likely to change 
much (see July 30, 1999, substantive response of the respondents at 2).
    As discussed in section II.A.3 of the Sunset Policy Bulletin, the 
SAA at 890, and the House Report at 63-64, if companies continue to 
dump with the discipline of an order in place, the Department may 
reasonably infer that dumping would continue if the discipline were 
removed. As pointed out above, dumping margins above de minimis 
continue to exist for shipments of the subject merchandise from China.
    Consistent with section 752(c) of the Act, the Department also 
considers the volume of imports before and after issuance of the order. 
As mentioned before, the domestic interested parties maintain that 
imports of axes/adzes from the PRC declined significantly from 
approximately $1.9 million worth of subject merchandise in 1989 to 
approximately $1.5 million worth of merchandise in 1997 and roughly 
$1.2 million in 1998.
    Using the Department's statistics, including IM146 reports, on 
imports of the subject merchandise from the PRC, the Department 
concludes that imports of axes/adzes and picks/mattocks from the PRC 
have fluctuated over the life of the orders, showing no overall trend.

[[Page 5499]]

    As noted above, in conducting its sunset reviews, the Department 
considers the weighted-average dumping margins and volume of imports 
when determining whether revocation of an antidumping duty order would 
lead to the continuation or recurrence of dumping. Based on this 
analysis, the Department finds that the existence of dumping margins 
above de minimis levels is highly probative of the likelihood of 
continuation or recurrence of dumping. A deposit rate above a de 
minimis level continues in effect for exports of the subject 
merchandise by at least one Chinese manufacturer/exporter. Therefore, 
given that dumping has continued over the life of the orders, the 
Department determines that dumping is likely to continue if the orders 
were revoked. Because we are basing our determination on the fact that 
dumping has continued throughout the life of the orders, it is not 
necessary to address respondent's arguments concerning demand.

Magnitude of the Margin

    In the Sunset Policy Bulletin, the Department stated that it 
normally will provide to the Commission the margin that was determined 
in the final determination in the original investigation. Further, for 
companies not specifically investigated or for companies that did not 
begin shipping until after the order was issued, the Department 
normally will provide a margin based on the ``all others'' rate from 
the investigation. (See section II.B.1 of the Sunset Policy Bulletin.) 
Exceptions to this policy include the use of a more recently calculated 
margin, where appropriate, and consideration of duty absorption 
determinations. (See sections II.B.2 and 3 of the Sunset Policy 
Bulletin.) We note that, to date, the Department has not issued any 
duty absorption findings in either of these cases.
    In their substantive responses, the domestic interested parties 
recommend that the Department deviate from its normal practice of using 
margins from the original investigation and instead use margins from a 
more recent administrative review. In the case of axes/adzes, the 
domestic interested parties recommend using the PRC-wide margin of 
21.92 calculated in the fourth administrative review. For picks/
mattocks, the domestic interested parties argue that the dumping 
margins likely to prevail if the orders were revoked would be 98.77 
percent for Fujian Machinery & Equipment Import & Export Corp., as 
calculated in the fifth administrative review; 70.31 percent for 
Shandong Machinery Import & Export Corp., as calculated in the fourth 
administrative review; and 50.81 percent for Tianjin Machinery Import & 
Export Corp., Liaoning Machinery Import & Export Corp. and Shandong 
Huarong General Group Corp., as calculated in the original 
investigation. The domestic interested parties argue further that, in 
the case of picks/mattocks, while the dumping margins calculated by the 
Department have fluctuated, the margins have increased for most of the 
PRC producers.
    The respondents argue that the dumping margin likely to prevail if 
the orders were revoked would be zero, but no higher than the average 
margin for the latest reviews.
    The Department disagrees with both domestic and respondent 
interested parties. As noted in the Sunset Regulations and Sunset 
Policy Bulletin, the Department may provide to the Commission a more 
recently calculated margin for a particular company where dumping 
margins increased after the issuance of the order where that particular 
company increased dumping to maintain or increase market share. In 
these cases, the domestic interested parties do not provide any 
company-specific argument or evidence that any Chinese companies have 
increased dumping in order to maintain or gain market share or increase 
import volumes. Moreover, while it is true that dumping margins have 
increased for some Chinese companies, we have no company-specific 
information demonstrating that imports of the subject merchandise have 
increased over the life of the orders. Since we have no company-
specific information correlating an increase in exports for one company 
with an increase in the dumping margin for that particular company, we 
cannot conclude that the use of more recently calculated margins is 
warranted in this case. Further, we do not agree with the respondents 
that a more recently calculated margin is appropriate, because we have 
no company-specific information demonstrating that the lower, more 
recent rates are associated with steady or increasing imports.
    Therefore, consistent with the Sunset Policy Bulletin, the 
Department finds that the margins calculated in the original 
investigation are probative of the behavior of Chinese producers/
exporters if the orders were revoked as they are the only margins which 
reflect their behavior absent the discipline of the orders. As such, 
the Department will report to the Commission the PRC-wide rates from 
the original investigations as contained in the Final Results of 
Reviews section of this notice.

Final Results of Reviews

    As a result of these reviews, the Department finds that revocation 
of the antidumping orders would likely lead to continuation or 
recurrence of dumping at the margins listed below:

------------------------------------------------------------------------
                                                                Margin
                          PRC-wide                            (percent)
------------------------------------------------------------------------
Axes/adzes.................................................        15.02
Picks/mattocks.............................................        50.81
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    This notice serves as the only 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 of the Department's regulations. 
Timely 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 five-year (``sunset'') reviews and notices are in accordance 
with sections 751(c), 752, and 777(i)(1) of the Act.

    Dated: January 28, 2000.
Holly A. Kuga,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-2581 Filed 2-3-00; 8:45 am]
BILLING CODE 3510-DS-P