61794 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

As noted above, we have determined,

based on facts available, that importers

knew or should have known that there

would be material injury to the U.S. cutto-length steel plate industry based on

the ITC’s preliminary determination of a

reasonable indication of present

material injury. In the absence of

shipment data for the Russia-wide

entity, we have determined based on

facts available and making the adverse

inference permitted under section

776(b) of the Act, that because this

entity did not provide an adequate

response to our questionnaire, there

were massive imports of subject

merchandise. We further note that the

record indicates a post-filing surge in

U.S. cut-to-length steel plate imports

from Russia which is not accounted for

by the cooperating respondent,

Severstal. Finally, the Russia-wide

margin of 185 percent exceeds the 25

percent threshold for imputing a

knowledge of dumping to the importers

of the merchandise. Therefore, for the

Russia-wide entity, critical

circumstances exist with respect to

imports of subject merchandise.

Therefore, we find that critical

circumstances exist for cut-to-length

carbon steel plate sales by all Russian

exporters.

Continuation of Suspension of

Liquidation

On October 24, 1997, the Department

signed a suspension agreement with the

Ministry of Foreign Economic Relations

and Trade of the Russian Federation

(the Agreement). Therefore, we will

instruct Customs to terminate the

suspension of liquidation of all entries

of cut-to-length carbon steel plate from

the Russian Federation. Any cash

deposits of entries of cut-to-length

carbon steel plate from the Russian

Federation shall be refunded and any

bonds shall be released.

On October 14, 1997, we received a

request from Petitioners requesting that

we continue the investigation. We

received a separate request from the

United Steelworkers of America, an

interested party under section 771(9)(D)

of the Act, on October 14, 1997.

Pursuant to these requests, we have

continued and completed the

investigation in accordance with section

734(g) of the Act. We have found the

following margins of dumping:

Manufacturer/producer/exporter

Weight-average margin percentage

Severstal ................................... 53.81

Russia-Wide Rate ..................... 185.00

ITC Notification

In accordance with section 735(d) of

the Act, we have notified the ITC of our

determination. As our final

determination is affirmative, the ITC

will determine, within 45 days, whether

these imports are causing material

injury, or threat of material injury, to an

industry in the United States. If the

ITC’s injury determination is negative,

the Agreement will have no force or

effect, and the investigation shall be

terminated. See section 734(f)(3)(A) of

the Act. If, on the other hand, the

Commission’s determination is

affirmative, the Agreement shall remain

in force but the Department shall not

issue an antidumping duty order so long

as (1) the Agreement remains in force,

(2) the Agreement continues to meet the

requirements of subsection (d) and (1) of

the Act, and the parties to the

Agreement carry out their obligations

under the Agreement in accordance

with its terms. See section 734(f)(3)(B)

of the Act.

This determination is published

pursuant to section 735(d) of the Act.

Dated: October 24, 1997.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 97–30396 Filed 11–18–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–570–822]

Certain Helical Spring Lock Washers

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 the

preliminary results of the administrative

review of the antidumping duty order

on certain helical spring lock washers

(HSLWs) from the People’s Republic of

China (PRC) in the Federal Register on

July 11, 1997 (62 FR 37192). This review

covers sales of this merchandise to the

United States during the period October

1, 1995 through September 30, 1996. We

gave interested parties an opportunity to

comment on our preliminary results.

Based upon analysis of the comments

received, we changed the results from

those presented in the preliminary

results of the review.

EFFECTIVE DATE: November 19, 1997.

FOR FURTHER INFORMATION CONTACT:

Tamara Underwood or Maureen

Flannery, Import Administration,

International Trade Administration,

U.S. Department of Commerce, 14th

Street and Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone:

(202) 482–4733.

Background

The Department published the

preliminary results of this review of the

antidumping duty order on HSLWs from

the PRC in the Federal Register on July

11, 1997 (62 FR 37192). On August 11,

1997, petitioner, Shakeproof Industrial

Products Division of Illinois Tool Works

(SIP), and respondent, Zhejiang Wanxin

Group, Co., Ltd. (ZWG), submitted

comments on the Department’s

preliminary results. On August 18,

1997, petitioner and respondent

submitted rebuttal comments. The

Department rejected respondent’s

August 11, 1997 submission because it

contained new information. Respondent

resubmitted comments on August 22,

1997. We held a hearing on September

22, 1997. On October 28, 1997, the

Department placed new information on

the record and gave interested parties an

opportunity to comment pursuant to 19

U.S.C. section 1677m(g). The

respondent submitted comments on

October 31, 1997. The Department has

now completed this review in

accordance with section 751 of the

Tariff Act of 1930, as amended (the Act).

Applicable Statute and Regulations

Unless otherwise stated, all citations

to the statute are references to the

provisions effective January 1, 1995, the

effective date of the amendments made

to the Act by the Uruguay Round of

Agreements Act. In addition, unless

otherwise stated, all citations to the

Department’s regulations are references

to the regulations as codified at 19 CFR

Part 353 (1996).

Scope of Review

The products covered by this review

are HSLWs of carbon steel, of carbon

alloy steel, or of stainless steel, heattreated or non-heat-treated, plated or

non-plated, with ends that are off-line.

HSLWs are designed to: (1) function as

a spring to compensate for developed

looseness between the component parts

of a fastened assembly; (2) distribute the

load over the larger area for screws or

bolts; and (3) provide a hardened

bearing surface. The scope does not

include internal or external tooth

washers, nor does it include spring lock

washers made of other metals, such as

copper.
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61795

HSLWs subject to this review are

currently classifiable under subheading

7318.21.0030 of the Harmonized Tariff

Schedule of the United States (HTS).

Although the HTS subheading is

provided for convenience and Customs

purposes, the written description of the

scope of this proceeding is dispositive.

This review covers one exporter of

HSLWs from the PRC, ZWG, and the

period October 1, 1995 through

September 30, 1996.

Analysis of Comments Received

Comment 1: Use of Import Prices to

Value Steel Inputs.

Petitioner, SIP, asserts that the

Department should limit the use of

imported steel prices to valuing the

imported steel actually used. Petitioner

argues that, in accordance with section

1677b(c)(1) of the Act, the Department

must determine normal value (NV) ‘‘on

the basis of the value of the factors of

production utilized in producing the

merchandise.’’ Petitioner contends that,

although the Department used nonsurrogate, market-economy actual prices

in Final Determination of Sales at Less

Than Fair Value: Oscillating Fans and

Ceiling Fans from the People’s Republic

of China (56 FR 55271, October 25,

1991)(Fans), and affirmed in Lasko

Metal Products v. United States, 43 F

.3d 1442 (Fed. Cir. 1994)(Lasko), the

Department only applied these values to

the actual imports. Petitioner states that

the Department relied on surrogate

values to value all non-imported inputs.

Petitioner claims that the use of import

prices to cover non-imported factor

inputs is an arbitrary extension of the

Department’s authority.

Petitioner contends that the import

quantities of steel are not the same as

the domestically-sourced quantities of

steel and that the Department should

value these quantities as two separate

factors of production. Petitioner states

that the Act defines ‘‘factors of

production’’ to include the ‘‘quantities

of raw materials employed.’’ Petitioner

contends that, although the Act and

Lasko affirm that the Department can

consider non-surrogate, marketeconomy actual prices to be the best

information and use those prices,

neither the Act nor Lasko provides

justification for the Department’s use of

values for one factor as the value for

another factor, even if both factors are

steel.

Petitioner asserts that accuracy is not

enhanced by using import prices for

valuing all steel inputs. Petitioner states

that the goal of the Act is to

approximate the costs where nonmarket economy (NME) costs do not

reflect market-determined prices.

Petitioner claims that the Department

cannot use import prices to accurately

and fairly reflect the value of the

domestically-sourced steel. Petitioner

takes issue with the proposed

antidumping duty regulations on this

point (Antidumping Duties;

Countervailing Duties; Notice of

Proposed Rulemaking (61 FR 7309,

7345, February 27, 1996)), and contends

that it is not enough to provide that the

market-economy price may be

disregarded ‘‘where the amount

purchased from a market economy

supplier is insignificant.’’ Petitioner

suggests that it should be the other way

around: at most, only if the amount

purchased within the NME is

insignificant, should the Department

use the non-surrogate, market-economy

actual price to value all steel. Petitioner

cites the Department’s practice of

valuing inputs based on the weighted

average of prices paid in constructed

value (CV) market economy cases.

Petitioner cites Notice of Final

Determination of Sales at Less Than

Fair Value: Collated Roofing Nails from

Korea (62 FR 25895, 25897, May 12,

1997) as an example of this practice.

Petitioner also asserts that, if the

Department values all steel at the import

price, it can drastically distort the NME

producer’s costs when, for example, the

NME producer uses imported steel to

fulfill half of its steel requirements and

domestic steel to fulfill the remainder of

its steel requirements. Petitioner adds

that the major defect in the

Department’s approach is that it fails to

recognize that an NME producer will

import factors at prices which are less

than the prices it would otherwise pay

for the input. Petitioner concludes that

the Department’s methodology does not

promote either accuracy or fairness.

Respondent asserts that the

Department correctly used the imported

steel price to value all of its steel inputs

in the preliminary results and should

continue to do so in the final results.

Respondent states that the imported

steel meets all criteria established by the

Department for using market-economy

prices and that the Department is

obliged to use the price paid for that

input to value all of the respondent’s

consumption of that input. Respondent

argues that the Department’s

methodology in the preliminary results

is fully supported by the Department’s

prior practice, the proposed and final

regulations, the court decisions, and the

statute. Respondent maintains that the

Department’s established practice of

valuing all of the production input

using the NME producer’s actual import

prices for that input is legitimate and

does enhance accuracy, as affirmed in

Lasko: ‘‘Where we can determine that an

NME producer’s input prices are market

determined, accuracy, fairness, and

predictability are enhanced by using

those prices. Therefore, using surrogate

values when market-based values are

available would, in fact be contrary to

the intent of the law.’’ 43 F.3d 1442,

1446 (Fed. Cir. 1994). Respondent

maintains that the decision in Lasko

confirms that surrogate values are

merely the best approximation of what

the NME producer might pay if the NME

producer were operating in a market

economy. Respondent also adds that the

court stated in Lasko that the

Department’s practice is a ‘‘legitimate

policy choice . . . in interpreting and

applying the statute.’’ 43 F.3d at 1446.

Respondent claims that Lasko upheld

the Department’s market-economy input

methodology as consistent with the

statute. Respondent also cites the

Department’s position in the Notice of

Final Determination of Sales at Less

Than Fair Value: Melamine Institutional

Dinnerware Products from the People’s

Republic of China (62 FR 1798, 1710,

January 13, 1997)(Melamine), which

states that ‘‘the market economy price is

the most appropriate basis for

determining the value of the [input]

purchased from the PRC suppliers.’’

Respondent concludes that when the

NME producer actually purchases a

market-economy input and pays in

market economy currency, there is no

need to use the best approximation.

Respondent asserts that the CV

calculation methodology referenced by

petitioner is irrelevant to NME cases.

Respondent states that, pursuant to 19

U.S.C. § 1677b(a)(2), CV applies to

market-economy cases and not to NME

cases. Respondent claims that, pursuant

to 19 U.S.C. § 1677b(c), the Department

is required to use a selected import

price or a surrogate price to value an

NME producer’s production costs.

Respondent asserts that petitioner’s

argument that the Department’s practice

distorts the NME producer’s costs

ignores commercial reality and is

contrary to the court rulings and the

basic principles underlying NME cases.

Respondent argues that, contrary to

petitioner’s argument, NME producers

will purchase domestic materials when

the domestic price is less than the

import price. Respondent claims that in

Sigma Corp. v. United States, 117 F.3d

1401 (Fed. Cir. 1997) (Sigma), the court

suggested that the Department may not

assume that the NME producers

purchase domestic materials at a higher

delivered price than that for imported

materials.
61796 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

Department’s Position

We disagree with petitioner. In

general, the purpose of the antidumping

statute is to ‘‘determine margins as

accurately as possible.’’ Rhone Poulenc,

Inc. v. United States, 899 F.2d 1185,

1190 (Fed. Cir. 1991). Section 773 (c)(4)

of the Act, the provision for factors of

production methodology, was intended

to be used when NME prices and costs

are unreliable, i.e., not market-based.

See, e.g., S. Rep. No. 93–1298, 93d

Cong., 2d Sess. 174 (1974). The purpose

of section 773(c) is to determine what

the firm’s prices or costs would be if

such prices or costs were determined by

market forces.

Because the statute does not explicitly

address the situation in which an NME

producer imports some inputs from

market economies, cf. 19 U.S.C.

§ 1677b(c), the Department has

determined that if an NME producer

reports prices that are based on inputs

from market-economy suppliers, it is

appropriate to use those prices instead

of a surrogate value, if the amounts

purchased are meaningful, i.e., they are

not insignificant. The Department has

applied this practice consistently in

recent years, See Melamine, 62 FR at

1710, and has received affirmation of

this practice in court decisions. See,

e.g., Lasko, 43 F.3d at 1446, as cited by

respondents. The Department

subsequently codified this practice in

Section 351.408(c)(1) of the

Antidumping Duties; Countervailing

Duties; Final Rule, published in the

Federal Register on May 19, 1997 (62

FR 27296, 27413) (Final Rule). As

explained in the background section of

the those regulations, the only situation

in which we would not rely on the price

paid by an NME producer to a market

economy supplier is where the quantity

of the input purchased was

insignificant. See Final Rule, 62 FR at

27366.

In factor valuation, the Department

has developed practices which

emphasize accuracy, fairness, and

predictability. The Department stated

that ‘‘the simplest example of a value

based on market principles in a

proceeding involving an NME is a price

paid in convertible or market economy

currency for an input sourced from a

market economy country.’’ (See Fans,

Comment 1.) In this instant case, the

amount of steel imported is

approximately equal to one-third of the

amount used to produce the subject

merchandise during the period of

review. We consider this to be a

meaningful amount, i.e., it is not

insignificant, for purposes of using the

market-economy input price to value all

of the steel used to produce the subject

merchandise. In this respect, the

Department’s determination to value all

steel inputs using the market-economy

input prices respondent actually paid is

consistent with these goals and

practices.

Petitioner’s contention that imported

steel and domestically-produced steel

constitute separate factors of production

is, in effect, just another way of arguing

that we should value them separately.

There is no evidence that the imported

steel is physically different from the

domestically-sourced steel, such that

the imported steel should be considered

a different factor of production from the

domestically-sourced steel.

Therefore, in accordance with the

Department’s established practice, we

continue to use the actual imported

steel prices to value steel inputs because

these prices represent the actual marketbased prices incurred by the respondent

in producing the subject merchandise

and, as such, are the most accurate and

appropriate values for this particular

factor for the purpose of calculating NV.

Comment 2: Adjusting Imported Steel

Prices for Inflation.

Petitioner asserts that if the

Department uses import prices for the

final results, the Department should

adjust the import prices to reflect the

period of review (POR) where those

import prices are used to value nonimported steel used to produce HSLWs.

Petitioner recognizes that the

Department has not made adjustments

in the past to values based on marketeconomy prices, but argues that the

Department’s approach does not apply

to the facts of this case.

Respondent asserts that the prices for

imported steel already reflect the POR

price levels because ZWG imported the

steel during the POR and, therefore, the

prices do not need adjustment.

Department’s Position: We agree with

respondent. Because the prices for the

steel imports used to value the steel

factor are POR prices, there is no need

for any further adjustment to account for

inflation.

Comment 3: Movement Expenses for

Imported Steel.

Petitioner asserts that the Department

should value imported steel by

including all costs, such as brokerage

and handling fees and transportation

from the port to the factory, and adjust

these costs for inflation. Petitioner cites

Sebacic Acid from the People’s Republic

of China; Final Results of Antidumping

Duty Administrative Review (62 FR

10530, March 7, 1997) (Sebacic Acid),

where the Department added PRC

brokerage and freight from the port to

the factory for market-economy inputs.

Petitioner states that, although the

preliminary results mention that the

Department ‘‘made further adjustments

to account for the freight costs incurred

between the port and ZWG,’’ a review

of the calculations reveals that this

adjustment may have not be included.

Department’s Position: We agree with

petitioner in part. While we agree that

the Department should value the nonsurrogate, market-economy actual prices

by including all expenses such as

brokerage and handling and

transportation from the port to the

factory, the facts of this case make

changes to the preliminary results

unnecessary. See the proprietary version

of ‘‘Memo to the File: Analysis for the

Final Results of the Third

Administrative Review of Certain

Helical Spring Lock Washers from the

People’s Republic of China,’’ dated

November 10, 1997 (Final Analysis

Memo), for a discussion on movement

adjustments.

Comment 4: Steel Scrap.

Petitioner asserts that the Department

grossly distorted the net cost of the steel

input to the Chinese producer by using

a non-surrogate import price for steel

and a surrogate value for steel scrap.

Petitioner claims that scrap value is

based on a relationship between steel

(from which the scrap steel generated)

and scrap which can be recycled.

Petitioner maintains that the steel scrap

value in India (the surrogate country) is

different from the scrap value in the

United Kingdom (the non-surrogate

country from which ZWG purchased the

steel).

Petitioner suggests that the

Department correct this distortion by

using the scrap value in the United

Kingdom or applying the ratio of scrap

value-to-steel value in India to the

imported (U.K.) steel value in order to

value the Chinese producer’s scrap.

Respondent states that the

Department correctly valued steel scrap

in the preliminary results. Respondent

argues that petitioner failed to provide

any supporting evidence for its

arguments. Respondent maintains that

petitioner failed to provide any factual

evidence showing that Indian import

prices of steel scrap are not appropriate

to value the steel scrap generated by

ZWG from the consumption of steel

wire rod from the United Kingdom.

Respondent contends that petitioner

further failed to provide any links

between steel wire rod prices and steel

scrap prices.

Respondent also asserts that the

Department must use a surrogate value

for steel scrap because respondent sold

the steel scrap in the PRC in PRC

currency. Respondent adds that
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61797

petitioner failed to provide any

surrogate information on the value of

steel scrap.

Department’s Position: We disagree

with petitioner’s assertions that we

distorted the cost of the steel input by

valuing steel using actual prices

respondent paid for U.K. steel and

valuing scrap using surrogate prices

from India. Petitioner did not provide

any evidence to support its claim of a

clear relationship between the prices of

steel and scrap. Even if petitioner had

established that such a relationship

exists, there are no data on the price of

scrap imported from the United

Kingdom into the PRC.

Moreover, we compared the prices of

steel scrap imported into India,

Indonesia, Canada, the European

Community, the United Kingdom, and

the United States during a period

contemporaneous with the POR. We

were unable to obtain statistics on

prices of steel scrap imported into

Pakistan, Sri Lanka, and Egypt, which

were potential surrogate countries. Our

analysis of the Indian imports of steel

scrap from the Monthly Statistics of the

Foreign Trade of India (MFTI) show that

the price of steel scrap imports into

India are not aberrational. (See ‘‘Memo

to the File: Comparison of Steel Scrap

Values for the Final Results of the Third

Administrative Review of Certain

Helical Spring Lock Washers from the

People’s Republic of China’’ (Steel

Scrap Price Comparison Memo),

November 7, 1997.) Therefore, in

accordance with our established

practice of valuing factors of production

using surrogate values that are

demonstrated to be a reliable reflection

of prices during the POR, we are

continuing to use Indian import price

from MFTI to value steel scrap for the

final results.

Comment 5: Hydrochloric Acid.

Petitioner argues that the Department

included three aberrational values for

determining the average hydrochloric

acid (HCL) value. Petitioner claims that,

because the Department has consistently

avoided using aberrational values, these

aberrational values should be omitted in

the final results.

Respondent asserts that the

Department correctly valued HCL using

Chemical Weekly’s FOB prices, except

for freight costs associated with the

HCL. Respondent argues that because

petitioner failed to identify any specific

data as aberrational and failed to

provide any supporting evidence for its

argument, the Department should reject

petitioner’s argument.

Department’s Position: We agree with

petitioner. We analyzed the HCL values

published in each of the Chemical

Weekly issues used for this review and

found that two issues, February 14–20,

1996, and April 15–20, 1996, contained

values at least 12 times the average

value. The values of these two issues

seem to be related to exceptionally low

quantities of HCL exports. We excluded

these values from the final calculations.

We found a clerical error in the

transcription of one HCL price from the

July 27–31, 1996, issue, used to

calculate a surrogate value in the

preliminary results. Therefore, in the

final calculations, we have corrected

this price. (See Final Analysis Memo.)

Comment 6: Adjustments for

Chemical Purity.

Respondent asserts that the

Department should calculate the ratio of

the purity of chemical inputs consumed

to the purity of the chemicals as sold

commercially and apply this ratio to the

Indian import data. Respondent argues

that the Department adopted this

methodology in past NME cases and

refers to the calculation memoranda for

several proceedings, including Notice of

Final Determination of Sales at Less

Than Fair Value: Collated Roofing Nails

from the People’s Republic of China (62

FR 25899, May 12, 1997) and Notice of

Final Determination of Sales at Less

Than Fair Value: Beryllium and High

Beryllium Alloys from the Republic of

Kazakstan (62 FR 44293, January 17,

1997).

Petitioner asserts that there is

insufficient information on the record

for the Department to adjust values for

chemical concentration. Petitioner

argues that to adjust chemical

concentrations, the Department must

ascertain the actual chemical

concentration from which the value was

derived and must determine which

additional chemicals were used to

dilute or alter the concentration of the

chemical. Petitioner argues that the

Department must value the additional

chemicals. Petitioner adds that even this

suggested methodology may result in

underreporting the value of the diluted

chemical because of the additional costs

of performing the dilution, such as

labor, equipment, and energy.

Department’s Position: We agree, in

part, with respondent’s assertions that

we should make adjustments for

chemical purity, as we have done in

previous cases. For inputs where the

chemical concentration levels of the

HTS categories are defined in the Indian

import statistics, and where respondent

reported chemical concentration levels

used, we have made adjustments

accordingly.

However, there is no evidence on the

record with regard to the chemical

concentration levels associated with all

chemical inputs in the MFTI. Absent

any evidence that they do not reflect

standard concentrations commonly

sold, an adjustment is unwarranted.

Where the information regarding the

level of chemical concentration is

insufficient, we have not made any

adjustment. (See Final Analysis Memo.)

Comment 7: HCL Concentration.

Petitioner asserts that the Department

erred in adjusting HCL concentration.

Petitioner argues that the Department

purportedly adjusted HCL surrogate

values to match the reported

concentration although the surrogate

data did not indicate concentration

level.

Petitioner also asserts that, because

the HCL used to make HSLWs is already

diluted, the Department must, in

calculating the value of the diluted HCL,

include the value of the diluting water

or chemical.

Respondent contends that the

Department will double-count water if it

values the water for diluting HCL

separately from factory overhead and

electricity values, as suggested by

petitioner. Respondent claims that the

water inputs were included in factory

overhead for the production factory and

were included and valued in electricity

inputs for the plating factory in the

preliminary calculations.

Department’s Position

We agree, in part, with petitioner

regarding an adjustment to the value of

HCL based on concentration level. As

we mentioned in Comment 6, for inputs

where the chemical concentration levels

are defined in the surrogate value

source, and where respondent reported

chemical concentration levels used, we

have made adjustments. However, there

is no evidence on the record with regard

to the HCL concentration level

associated with the HCL prices in

Chemical Weekly. Absent any evidence

that they do not reflect standard

concentrations commonly sold, an

adjustment is unwarranted. Therefore,

we have not adjusted the surrogate

value for HCL for concentration level in

the final results. (See Notice of Final

Determination of Sales at Less Than

Fair Value: Saccharin from the People’s

Republic of China, 59 FR 58818,

Comment 4, November 15, 1994

(Saccharin).)

We disagree with petitioner’s

assertions that the diluting agent, water

or another chemical, should be included

in calculating the value of the HCL. We

have no basis to conclude that

respondent did not report all input

amounts required to produce HSLWs,

regardless of the manner in which the

input enters the production process.
61798 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

Therefore, the value of the diluting

agent is accounted for in the values for

water and other chemical inputs.

Comment 8: Freight Costs.

Respondent disputes the

Department’s addition of freight costs to

the imported steel prices and to the

input prices obtained from MFTI

because these prices include foreign

inland freight and ocean freight costs.

Respondent asserts that, by adding the

freight costs to these prices, the

Department double-counted the freight

costs. Respondent argues that, in Sigma,

the court prohibited the Department

from such double-counting. Respondent

suggests that the Department value the

freight cost of PRC-sourced material

based on the reported distance and

method of transportation from the

importing seaport to the factory, where

that cost is lower than the calculated

freight costs based on actual distance

and method of transportation from the

domestic supplier. Respondent

contends that these adjustments are in

accordance with the Sigma ruling.

Petitioner asserts that a change to the

Department’s adjustment to material

inputs for domestic freight costs is not

warranted. Petitioner argues that

respondent has not indicated why or to

what extent any inland freight expense

should be adjusted to accord with

Sigma.

Department’s Position: We agree with

respondent that the Department should

adjust freight costs of the inputs in

accordance with Sigma. In Sigma, the

court ruled that the Department

overvalued freight when it added to the

surrogate value for a material input,

which was obtained from the import

statistics of the surrogate country, an

amount for freight from the NME

supplier factory to the NME factory. The

court reasoned that a manufacturer

would minimize its material and freight

costs by purchasing imported material if

the cost of transportation from the port

to the factory were less than the cost of

transportation from the domestic

supplier to the factory. For the final

results, we adjusted the CIF surrogate

values by revaluing freight expenses

based on the shorter of two distances:

the distance from the port of import to

the factory or the distance from the

actual supplier to the factory. (See

Notice of Final Determination of Sales

at Less Than Fair Value: Collated

Roofing Nails from the People’s

Republic of China (62 FR 51410, 51414,

October 1, 1997) (Roofing Nails).) In

situations where an input is purchased

from several suppliers, we adjusted the

value for inland freight by comparing

the distance from the port of import to

the factory to the distance from each

supplier to the factory. We then

multiplied the shorter of the distances

for each supplier by the proportion of

the input purchased from each supplier

to calculate the weighted average inland

freight expense for each input.

Comment 9: HCL Freight Expense.

Respondent asserts that the

Department should not add freight costs

for transporting HCl from PRC suppliers

to respondent’s factories to the

Chemical Weekly price because the

Chemical Weekly price is an FOB Indian

export price. Respondent argues that

because the price is an FOB Indian

seaport price, it includes both the exfactory price of HCl and the

transportation costs thereof from an

Indian factory to an Indian seaport.

Respondent maintains that the

Department double-counted freight

costs for HCl by adding PRC domestic

freight costs to the domestic

transportation costs included in the

surrogate value.

Respondent adds that the Department

did not include the domestic freight

costs in the respondent’s country when

the Department used Chemical Weekly’s

FOB Indian seaport price in past NME

cases. Respondent cites the April 22,

1996 Factors Valuation Memorandum

for the Notice of Final Determination of

Sales at Less Than Fair Value: Bicycles

from the People’s Republic of China (61

FR 19026, April 30, 1996) (Bicycles) and

the October 22, 1995 Valuation

Memorandum for the Notice of Final

Determination of Sales at Less Than

Fair Value: Polyvinyl Alcohol from the

People’s Republic of China (61 FR

14057, March 29, 1996) (Polyvinyl

Alcohol), in which the Department did

not add freight to the surrogate value.

Petitioner asserts that the Department

should continue to add domestic PRC

freight costs to the value for HCL

because specific distance and

transportation modes for moving the

HCL from the supplier to respondent’s

factory, and for moving the HCL in the

surrogate country from supplier to port

of export, are not identified on the

record. Petitioner argues that

respondent reported the HCL

transportation distance as short and the

mode as truck, while transportation

distance and mode are unknown for the

Indian HCL surrogate value.

Department’s Position

We agree with respondent that freight

costs for transporting HCL from the PRC

suppliers to the factory should not be

added to the surrogate value. When we

use, as a surrogate for respondent’s

materials costs, the cost of the material

in a surrogate country, this cost should

include the cost of transporting the

merchandise to the consumer in the

surrogate country. In the preliminary

results, we relied on Chemical Weekly

for a surrogate value for HCL. The HCL

prices in Chemical Weekly are based

upon FOB export prices from the

surrogate country, India. FOB export

prices by definition include the cost of

transporting the merchandise from the

Indian supplier to the Indian port. We

consider this cost to be equivalent to the

cost of transporting the merchandise

from the Indian supplier to the Indian

consumer. See the factor valuation

memos for Bicycles and Polyvinyl

Alchohol. Therefore, for these final

results we have not added any

additional freight to the FOB value.

Petitioner’s assertions that the record

does not provide specific information

from which the Department can

calculate freight costs is moot because

there is no need to calculate such costs.

Comment 10: Wood Pallets.

Respondent asserts that the

Department should value the wood

pallet input by using HTS 4403.2000,

‘‘sawlogs and veneerlogs in rough w/n

striped of bark or merely rough down,’’

instead of HTS 4415.1000, ‘‘cases,

boxes, crate, drum and similar

packings—cable drums of wood,’’

because respondent produces finished

pallets itself. Respondent states that

because it uses the same wood to

produce wood brackets and wood

pallets, the Department should value

wood for pallets using the same HTS

number it used to value wood brackets,

HTS 4403.2000. Respondent argues that,

during the investigation, the Department

verified that respondent produces

finished pallets. Respondent contends

that because the Department added the

value for finished wood pallets, using

HTS 4415.1000, and the values for

wood, nails, and packing labor in the

NV calculation, the Department doublecounted the costs of wood, nails, and

packing labor.

Respondent also asserts that, even if

the Department determines not to use

input values under HTS 4403.2000, the

Department should use HTS 4415.2000

to minimize double-counting.

Respondent argues that MFTI classifies

wood pallets under HTS 4415.2000,

which states ‘‘pallet box, pallets, and

other load boards of wood.’’ Respondent

maintains that in comparison to the

MFTI definition of HTS 4415.1000,

‘‘cases, boxes, crates, drums, and similar

packing cable drums of wood,’’ it is

clear that MFTI includes a wood pallet

in HTS 4415.2000.

Petitioner asserts that the Department

correctly valued pallets using the

surrogate value for the finished pallet.

Petitioner states that the Department can
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61799

choose to value the finished pallets or

construct the value of the pallet from

labor, material (including scrap), tools,

energy, transportation, and overhead.

Petitioner argues that, if all the inputs

are not available, the Department must

use surrogate values. Petitioner adds

that the Department should include the

cost of brackets and labor, etc., to

account for additional packing expense

in addition to using surrogate values for

pallets.

Department’s Position: We agree with

respondent that we should value pallets

using HTS 4403.2000, a surrogate value

for the wood used to construct the wood

pallets, because respondent constructs

the pallets, instead of HTS 4415.100, a

surrogate value for the finished pallet,

as used in the preliminary results. In the

preliminary results, because we valued

finished pallets, as well as materials

used to construct the pallets, such as

nails and wood brackets, we overstated

the value of pallets. This change in

methodology is in accordance with the

Department’s determination in the Final

Results of Antidumping Administrative

Review of Heavy Forged Hand Tools,

Finished or Unfinished, With or Without

Handles, from the People’s Republic of

China (61 FR 15028, Comment 3, April

4, 1996) (Hand Tools). In Hand Tools,

the Department determined that ‘‘we

should value the pallets using the factor

and surrogate values for wood, nails,

and packing labor, separately, rather

than for the complete pallet. The

information on the record at the time of

the preliminary results indicates that

the factories make the pallets from wood

and nails rather than purchase the

completed pallet.’’

We agree with petitioner’s assertions

that the Department should include the

cost of labor, material, tools, energy,

transportation, and overhead in

constructing the value for the pallet.

Respondent separately reported

consumption amounts for wood,

depending upon its application, and for

nails; thus, respondent reported

materials used to construct the finished

pallet. (See Respondent’s January 21,

1997 and February 21, 1997

submissions.) We have no basis in the

record to conclude that the packing

labor amounts required to construct the

pallets is not included in the reported

input amounts for packing labor, or that

the energy amounts required to

construct the pallets are not included in

the reported amounts for energy. We

also consider, in this instant case, that

expenses for tools and transportation of

pallet materials are included in

overhead. Therefore, because the

expenses for labor, tools, energy,

transportation, and overhead incurred

in the construction of wood pallets have

been valued as mentioned above, we

find that further adjustments are not

warranted.

Comment 11: Error in Valuing Wood

Pallets and Coal.

In the preliminary results, the

Department used data from the February

1995 (April 1994 to February 1995) and

August 1996 (April 1995 to August

1996) issues of MFTI to value wood

pallets and coal inputs. Respondent

asserts that the Department should

value inputs using data most

contemporaneous with the POR when

determining the final results.

Specifically, respondent requests that

the Department use data from the March

1996 (April 1995 to March 1996) issue

of MFTI, rather than the April 1994 to

February 1995 data, to value wood

pallets. Respondent argues that the

April 1995 to March 1996 data are most

contemporaneous with the POR.

Petitioner asserts that the Department

should use only the April 1995 to

August 1995 data from MFTI to value

coal and wood pallets. Petitioner argues

that these values for a five-month period

most closely reflect the values for the

POR.

Petitioner also asserts that the

Department included the wholesale

price index (WPI) for March 1995 when

inflating the value, although March

1995 was not included in either data

source used in the preliminary results.

Petitioner argues that if the Department

uses both data sources, the Department

should not include the WPI for March

1995 in the inflator calculation.

Department’s Position: We agree with

both respondent’s and petitioner’s

premise that the Department should use

data most contemporaneous with the

POR to value inputs for the final results.

For the final results, we obtained and

used Indian import statistics from MFTI

for the period September 1995 through

June 1996 to value wood for pallets and

coal for the final results. Therefore, we

have used values for a ten-month period

that most closely reflects the POR.

We agree with petitioner’s assertion

that the Department should not have

included the WPI for March 1995 in the

calculation of the inflator for coal and

wood. However, because we have not

used the March 1995 data in the final

results, we have not included the March

1995 WPI in the calculation of the

inflator.

Comment 12: Labor.

Petitioner asserts that the Department

should use a different category for

valuing plating labor if the Department

bases labor values from the 1995

Yearbook of Labour Statistics (YLS).

Petitioner argues that the plating labor

should be valued using categories 351,

‘‘manufacture of industrial chemicals,’’

and 352, ‘‘manufacture of other

chemical products,’’ instead of using

category 381, ‘‘manufacture of fabricated

metal products.’’

Petitioner also asserts that the

Department should use different values

for skilled and unskilled labor.

Petitioner argues that the use of one

average labor value does not accurately

reflect the cost of labor mix used to

produce HSLWs. Petitioner references

Sulfanilic Acid from China; Preliminary

Results of Antidumping Duty

Administrative Review (62 FR 25917,

May 12, 1997) (Sulfanilic Acid), where

the Department selected surrogate

values broken out into skilled labor and

unskilled labor from the Economist

Intelligence Unit’s Investing, Licensing

and Trading Conditions Abroad (ILT).

Petitioner further asserts that the

Department should reject labor values

used in the preliminary results because

these values do not include fringe

benefits and bonuses. Petitioner

suggests that the Department use ILT

because it was used in other cases

covering the same POR and does

include those benefits.

Respondent states that the

Department correctly selected category

381 in the YLS as the labor category

equivalent to ZWG’s plating labor.

Respondent argues that categories 351

and 352, suggested by petitioner, only

include labor information related to the

manufacture of industrial chemicals and

other chemical products. Respondent

states that its plating factory did not

manufacture any chemicals or chemical

products. Rather, respondent argues, the

plating factory consumes chemicals and

chemical products in plating HSLWs,

which are metal products. Respondent

contends that the plating factory is

engaged in the manufacture of metal

products, which is classified as category

381 in YLS.

Respondent agrees with the

Department’s use of one labor value.

Respondent asserts that petitioner did

not provide any information showing

separate values for skilled and unskilled

labor and that no such data are available

to the Department.

Respondent agrees with the

Department’s use of YLS to value labor

inputs. Respondent argues that the

Department should not use ILT because

the Department has consistently rejected

it as a source for surrogate labor values

because the data are not based on actual

data.

Finally, respondent requests that the

Department value labor for the final

results using updated labor rates.
61800 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

Department’s Position: We disagree

with petitioner’s suggestion that the

Department should use categories 351

and 352 for valuing plating labor. The

labor used in plating HSLWs represents

labor used in the manufacture of

fabricated metal products. Though the

labor used in plating utilizes chemicals,

it is not used to manufacture chemicals.

We have continued to value all labor

using category 381.

We disagree with petitioner’s

assertion that the Department should

use ILT to value labor because it

provides different values for skilled and

unskilled labor and includes fringe

benefits and bonuses. The Department

has routinely used YLS to value labor

because the ILT reports labor rate

estimates based on rates stipulated in

various Indian laws and not based upon

actual wage rates.

Additionally, we disagree with

petitioner’s assertion that the YLS data

used in the preliminary results does not

include fringe benefits and bonuses. The

Department considers the ILO statistics,

such as the YLS data, to be fully loaded

with respect to all labor expenses. (See

Polyvinyl Alcohol, 61 FR at 14061.)

Accordingly, because the use of YLS is

consistent with the Department’s

established practice, the YLS has been

determined to include all expenses

associated with labor, and the ILT data

have been determined to be an

inappropriate source for wage rates, we

have continued to use YLS for the final

results. (See Certain Helical Spring Lock

Washers From the People’s Republic of

China; Final Results of Antidumping

Administrative Review, 61 FR 66255,

66259, December 17, 1996, ChromePlated Lug Nuts from the People’s

Republic of China; Final Results of

Antidumping Duty Administrative

Review, 61 FR 58519, 58522, November

15, 1996.)

Comment 13: Water.

Respondent requested that the

Department calculate ZWG’s production

cost without valuing water. Respondent

asserts that the Department doublecounted the water input by valuing

water in addition to valuing factory

overhead for ZWG. Respondent

contends that the reported water input

for ZWG represents water used at the

HSLW production factory, not at the

plating factory. Respondent claims that

because the HSLW factory’s water was

supplied by a public utility during the

POR, was not physically incorporated

into the HSLWs, and was not a major

indirect material input which could be

separately valued, ZWG’s water

consumption meets the criteria

established in Saccharin for inclusion

in factory overhead. Respondent argues

that the Department has established the

practice of including the value of water

inputs in the value of factory overhead

where water is supplied by a public

utility or by a nearby body of water and

refers to Saccharin, Sebacic Acid,

Sulfanilic Acid from the People’s

Republic of China (61 FR 53711,

October 15, 1996), Polyvinyl Alcohol,

Disposable Lighters from the People’s

Republic of China (60 FR 22359, May 5,

1995), Silicon Carbide from the PRC ( 59

FR 22585, May 2, 1994), and Coumarin.

Respondent adds that in Sebacic Acid,

the Department stated that it presumes

factory overhead values obtained from

the Reserve Bank of India Bulletin, the

factory overhead source used in the

instant review, to include values for

water.

Petitioner asserts that the Department

correctly valued water in the

preliminary determination. Petitioner

states that respondent correctly cited

Saccharin where the Department

considered water an overhead item.

Petitioner argues that respondent failed

to mention that the Department also

stated in Saccharin that water required

for a particular segment of the

production process may ‘‘be more

typical of items that are accounted for

as direct material inputs, rather than as

overhead item, and as such, valued

separately.’’ Petitioner asserts that the

Department should value water as a

separate input factor in plating because

water is directly incorporated into the

final product.

Department’s Position: We disagree

with respondent and have continued to

include the water inputs as material

inputs in the calculations of production

cost of ZWG’s factory. Following the

Department’s criteria in Saccharin, we

value water if it is required for a

particular segment of the production

process. (See Saccharin, 59 FR 58818,

Comment 7, November 15, 1994.) Based

upon respondent’s description of the

production process, we consider

respondent’s use of water in the acid

treatment as required for that particular

segment, because the steel wire rod

must be rinsed with water after an acid

bath. (See Exhibit 5 of respondent’s

January 21, 1997 submission.) Because

the water for ZWG’s HSLW production

factory is a required input for a

particular segment of the HSLW

production process, the Department’s

practice is to value it separately like

other direct material inputs required in

the production process. Moreover, in

determining whether an input should be

valued separately or considered valued

in overhead, the Department stated in

Bicycles that, the input in question

should be valued separately if it is

‘‘* * * essential for producing the

finished product * * *.’’ and if this

input appears ‘‘* * * to be [a]

significant input[s] into the

manufacturing process rather than

miscellaneous or occasionally used

materials, i.e., cleaning supplies which

might normally be included in

consumables.’’ Based upon respondent’s

submission, water is a significant input

into the manufacturing process. (See

Exhibit 9 of the proprietary versions of

respondent’s January 21, 1997

submission and Final Analysis Memo.)

Unlike the instant case, in Sulfanilic

Acid, the Department included the

water value in the factory overhead

value because respondents pumped

water from their own wells for use in

the production process and recirculated

the water. (See Sulfanilic Acid, 61 FR at

53716.) However, in Saccharin, the

Department valued water purchased by

respondent separately, because it was

considered to be a direct input in the

production of the finished product. (See

Saccharin, Comment 7.) Also, in

Porcelain-on-Steel Cooking Ware From

the People’s Republic of China; Final

Results of Antidumping Duty

Administrative Review, 62 FR 32757,

32759, 32762, June 17, 1997, the

Department considered water consumed

in the production process as a direct

material input and valued it as such.

Although respondent’s HSLW factory

purchased water from a public utility,

that alone is not dispositive as to how

it should be valued. Here, as in

Saccharin and Porcelain-on-Steel, the

water was also a required input in a

particular segment of the production

process. Therefore, we have valued it as

a separate input.

Disposable Pocket Lighters and the

other cases on which respondent relies,

do not indicate whether respondent

purchased the water, consumed the

water as a direct input, or required the

water for producing the finished

product. Moreover, with regard to

considering the Reserve Bank of India

Bulletin (RBIB) factory overhead values

as inclusive of water values, the

Department stated in Disposable Pocket

Lighters that, ‘‘the RBIB data did not

indicate to the contrary.’’ (See

Disposable Pocket Lighters, 60 FR at

22367.)

In the instant case, as we have

explained, water purchased from the

public utility is not an incidental input

into the production process. Rather, it is

a direct input required for a particular

segment of the production process.

Additionally, there is no basis for
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61801

determining whether water is included

in the factory overhead value in the

RBIB, and thus no basis for an

adjustment. Therefore, in the final

results, we are continuing to value water

for ZWG’s factory in accordance with

the Department’s practice in the

previous segments of this case, as well

as its position in previous cases.

Comment 14: Aberrational Factor

Values.

Respondent asserts that the

Department should not use data from

the June 1996 MFTI to value trisodium

phosphate (HTS 2835.23.00), cases,

boxes, crates, and drums (HTS

4415.10.00), and pallets and load boards

(HTS 4415.20.00), because respondent

claims that the data are aberrational.

Department’s Position: We agree with

respondent’s assertion that the value in

the June 1996 MFTI for trisodium

phosphate, HTS 2835.23.00, is

aberrational, apparently due to the

extraordinarily low quantity reported.

Because we could not obtain more

contemporaneous data to value

trisodium phosphate, we have

continued to use the March 1996 issue

of MFTI, covering the period April 1995

through March 1996.

Respondent’s comments regarding the

issue of the valuation of pallets using

data in the June 1996 MFTI for cases,

boxes, crates, and drums (HTS

4415.10.00), and pallets and load boards

(HTS 4415.20.00), are moot because we

did not value pallets using HTS

4415.10.00 or HTS 4415.20.00 in the

final results. (See Comment 10.)

Additional Changes for the Final

Results

For the final results of this review, we

have updated most surrogate values

based on MFTI. Additionally, we have

updated the labor surrogate value using

the 1996 YLS. (See Final Analysis

Memo.)

Final Results of the Review

As a result of the comments received,

we have changed the results from those

presented in the preliminary results of

the review:

Manufacturer/

exporter

Time

period

Margin

(percent)

Zhejiang

Wanxin

Group

Co.,

Ltd .... 10/01/95–09/30/96 14.15

The Department shall determine, and

the Customs service shall assess,

antidumping duties on all appropriate

entries.

Individual differences between

Untied States price and normal value

may vary from the percentages stated

above. The Department will issue

appraisement instructions directly to

the Customs service.

Furthermore, the following deposit

rates will be effective upon publication

of these final results for all shipments of

HSLWs from the PRC entered, or

withdrawn from warehouse, for

consumption on or after the publication

date, as provided for by section

751(a)(1) of the Act: (1) for ZWG, which

has a separate rate, and all ZWG exports

through market-economy trading

companies, the cash deposit rate will be

the company-specific rate established in

these final results of review; (2) for all

other PRC exporters, the cash deposit

rate will be 128.63 percent, the PRC rate

established in the less-than-fair-value

investigation of this case; and (3) for

non-PRC exporters of subject

merchandise from the PRC, the cash

deposit rate will be the rate applicable

to the PRC supplier of that exporter.

These deposit rates shall remain in

effect until publication of the final

results of the next administrative

review.

This notice also serves as a final

reminder to importers of their

responsibility under 19 CFR 353.26 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 double

antidumping duties.

This notice also serves as a reminder

to parties subject to administrative

protective orders (APOs) of their

responsibility concerning the

disposition of proprietary information

disclosed under APO in accordance

with 19 CFR 353.34.(d)(1). 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 the terms of an

APO is a sanctionable violation.

This administrative review and notice

are in accordance with section 751(a)(1)

of the Act (19 U.S.C. 1675(a)(1)) and 19

CFR 353.22.

Dated: November 10, 1997.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 97–30397 Filed 11–18–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–580–807]

Polyethylene Terephthalate Film, Sheet

and Strip From the Republic of Korea,

Initiation and Preliminary Results of

Changed Circumstances Antidumping

Duty Administrative Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of Initiation and

Preliminary Results of Changed

Circumstances Antidumping Duty

Administrative Review.

SUMMARY: The Department of Commerce

(the Department) has received

information sufficient to warrant

initiation of a changed circumstances

administrative review of the

antidumping duty order on

polyethylene terephthalate film, sheet,

and strip from Korea (56 FR 25669 (June

5, 1991)). On July 5, 1996, Cheil

Synthetics, Inc. (Cheil) was revoked

from the order based on three

consecutive years of no dumping. (See

Polyethtylene Terephthalate Film,

Sheet, and Strip from the Republic of

Korea; Final Results of Antidumping

Duty Administrative Reviews and Notice

of Revocation in Part, 61 FR 35177 (July

5, 1996).) Based on information

provided in its September 29, 1997

letter, we preliminarily determine that

Saehan Industries, Inc. (Saehan) is the

successor firm to Cheil, and therefore,

the Department’s revocation of Cheil

applies to Saehan.

Interested parties are invited to

comment on these preliminary results.

EFFECTIVE DATE: November 19, 1997.

FOR FURTHER INFORMATION CONTACT:

Michael J. Heaney at (202) 482–4475 or

Linda Ludwig at (202) 482–3833, AD/

CVD Enforcement Office Eight, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, N.W., Washington, DC 20230.

The Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Tariff Act by the Uruguay