[Federal Register Volume 73, Number 152 (Wednesday, August 6, 2008)]
[Notices]
[Pages 45738-45741]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-18032]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-522-803]


Uncovered Innerspring Units from the Socialist Republic of 
Vietnam: Notice of Preliminary Determination of Sales at Less Than Fair 
Value

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

EFFECTIVE DATE: August 6, 2008.
SUMMARY: We preliminarily determine that uncovered innerspring units 
(``innersprings'') from the Socialist Republic of Vietnam (``Vietnam'') 
are being, or are likely to be, sold in the United States at less than 
fair value (``LTFV''), as provided in section 733 of the Tariff Act of 
1930, as amended (``the Act''). The estimated margins of sales at LTFV 
are shown in the ``Preliminary Determination'' section of this notice. 
Interested parties are invited to comment on this preliminary 
determination. We intend to make our final determination within 75 days 
after the date of this preliminary determination pursuant to section 
735 of the Act.

FOR FURTHER INFORMATION CONTACT: Eugene Degnan or Robert Bolling, 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 or 482-3434, respectively.

SUPPLEMENTARY INFORMATION:

Case History

    On December 31, 2007, Leggett and Platt, Incorporated 
(``Petitioner''), filed petitions in proper form on behalf of the 
domestic industry, concerning imports of innersprings from the People's 
Republic of China (``the PRC''), South Africa, and Vietnam 
(collectively, the Petitions). On January 28, 2008, the Department of 
Commerce (``the Department'') published in the Federal Register the 
initiation of a antidumping investigations on innersprings from the 
PRC, South Africa, and Vietnam. See Uncovered Innerspring Units From 
the People's Republic of China, South Africa, and the Socialist 
Republic of Vietnam: Initiation of Antidumping Duty Investigations, 73 
FR 4817 (January 28, 2008) (``Initiation Notice''). The Department set 
aside a period for all interested parties to raise issues regarding 
product coverage. See Initiation Notice, 73 FR at 4818. We did not 
receive comments regarding product coverage from any interested party. 
Additionally, in the Initiation Notice, the Department applied a 
process by which exporters and producers may obtain separate-rate 
status in non-market economy (``NME'') investigations. The process 
requires exporters and producers to submit a separate-rate status 
application (``SRA''),\1\ rather than a full response to Section A of 
the Department's Questionnaire. The standard for eligibility for a 
separate rate (which is whether a firm can demonstrate an absence of 
both de jure and de facto government control over its export 
activities), however, has not changed. The SRA for this investigation 
was posted on the Department's website at http://ia.ita.doc.gov/ia-highlights-and-news.html on January 28, 2008. The due date for filing 
an SRA was March 28, 2008. No party filed an SRA in this investigation.
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    \1\ See Policy Bulletin 05.1: Separate-Rates Practice and 
Application of Combination Rates in Antidumping Investigations 
involving Non-Market Economy Countries (April 5, 2005), available at 
http://ia.ita.doc.gov/policy/bull05-1.pdf.
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    In our Initiation Notice, we requested parties to provide comments 
regarding the physical characteristics of subject merchandise by 
February 11, 2008, and rebuttal comments by February 21, 2008. On 
February 8, 2008, we extended the deadline for submission of comments 
regarding physical characteristics to February 15, 2008, and the 
deadline for rebuttal comments to

[[Page 45739]]

February 25, 2008. On February 15, 2008, Petitioner submitted comments. 
No other party submitted comments, and no party submitted rebuttal 
comments.
    On February 14, 2008, the International Trade Commission (``ITC'') 
notified the Department of its affirmative preliminary determination 
that there is a reasonable indication that an industry in the United 
States is materially injured by reason of imports of innersprings from 
the PRC, South Africa, and Vietnam. See Uncovered Innerspring Units 
From China, South Africa, and Vietnam, USITC Pub. 3983, Inv. Nos. 731-
TA-1140-1142 (Preliminary) (February 2008).
    On February 21, 2008, the Department issued its Quantity and Value 
(``Q&V'') questionnaire to eleven potential exporters of innersprings 
from Vietnam identified in the petition. We received a response to our 
Q&V questionnaire from only three of the potential respondents (i.e., 
Yang Ching Enterprise Co., Ltd. (``Yang Ching''), Uu Viet Co., Ltd. 
(``Uu Viet''), and Dong Bang Stainless Steel Co. Ltd (``Dong Bang'')). 
Each potential respondent stated that they did not export innersprings 
to the United States during the period of investigation (``POI''). See 
Memorandum to the File, Response to the Department of Commerce's 
Quantity and Value Questionnaire from Yang Ching, March 13, 2008; 
Memorandum to the File, Response to the Department of Commerce's 
Quantity and Value Questionnaire from Uu Viet, March 20, 2008; and 
Memorandum to the File, Response to the Department of Commerce's 
Quantity and Value Questionnaire from Dong Bang, March 25, 2008.

Period of Investigation

    The POI is April 1, 2007, through September 30, 2007. This period 
corresponds to the two most recent fiscal quarters prior to the month 
of the filing of the petition, which was December 2007. See 19 CFR 
351.204(b)(1).

Scope of Investigation

    The merchandise covered by this investigation is uncovered 
innerspring units composed of a series of individual metal springs 
joined together in sizes corresponding to the sizes of adult mattresses 
(e.g., twin, twin long, full, full long, queen, California king, and 
king) and units used in smaller constructions, such as crib and youth 
mattresses. All uncovered innerspring units are included in this scope 
regardless of width and length. Included within this definition are 
innersprings typically ranging from 30.5 inches to 76 inches in width 
and 68 inches to 84 inches in length. Innersprings for crib mattresses 
typically range from 25 inches to 27 inches in width and 50 inches to 
52 inches in length.
    Uncovered innerspring units are suitable for use as the innerspring 
component in the manufacture of innerspring mattresses, including 
mattresses that incorporate a foam encasement around the innerspring.
    Pocketed and non-pocketed innerspring units are included in this 
definition. Non-pocketed innersprings are typically joined together 
with helical wire and border rods. Non-pocketed innersprings are 
included in this definition regardless of whether they have border rods 
attached to the perimeter of the innerspring. Pocketed innersprings are 
individual coils covered by a ``pocket'' or ``sock'' of a nonwoven 
synthetic material or woven material and then glued together in a 
linear fashion.
    Uncovered innersprings are classified under subheading 9404.29.9010 
and have also been classified under subheadings 9404.10.0000, 
7326.20.00.70, 7320.20.5010, or 7320.90.5010 of the Harmonized Tariff 
Schedule of the United States (``HTSUS''). The HTSUS subheadings are 
provided for convenience and customs purposes only; the written 
description of the scope of this proceeding is dispositive.

Non-Market-Economy (``NME'') Treatment

    The Department considers Vietnam to be an NME country. In 
accordance with section 771(18)(C)(i) of the Act, any determination 
that a country is an NME country shall remain in effect until revoked 
by the administering authority. See, e.g., Final Determination of Sales 
at Less Than Fair Value: Certain Frozen and Canned Warmwater Shrimp 
From the Socialist Republic of Vietnam, 69 FR 71005, 71007 (December 8, 
2004). The Department has not revoked Vietnam's status as an NME 
country. Therefore, in this preliminary determination, we have treated 
Vietnam as an NME country and applied our NME methodology.

Separate Rates

    In proceedings involving NME countries, the Department has a 
rebuttable presumption that all companies within the country are 
subject to government control and should be assessed a single 
antidumping duty rate. It is the Department's policy to assign all 
exporters of merchandise subject to an investigation involving an NME 
country this single rate unless an exporter can demonstrate that it is 
sufficiently independent so as to be entitled to a separate rate. 
Exporters must demonstrate the absence of both de jure and de facto 
government control over export activities, under a test developed by 
the Department and described in the Notice of Final Determination of 
Sales at Less Than Fair Value: Sparklers from the People's Republic of 
China, 56 FR 20588 (May 6, 1991); and Notice of Final Determination of 
Sales at Less Than Fair Value: Silicon Carbide from the People's 
Republic of China, 59 FR 22585, 22587 (May 2, 1994).
    No party filed separate rate information in this investigation. 
Absent separate rate information, the Department has presumed that all 
companies within Vietnam exporting the subject merchandise are subject 
to government control and are part of the Vietnam-wide entity and 
should be assessed a single, Vietnam-wide, antidumping duty rate.

Application of Facts Available

    Sections 776(a)(1) and (2) of the Act provides that the Department 
shall apply ``facts otherwise available'' if, inter alia, 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

[[Page 45740]]

information. Where all of these conditions are met, the statute 
requires the Department to use the information supplied 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. Such an adverse 
inference may include reliance on information derived from the 
petition, the final determination, a previous administrative review, or 
other information placed on the record.
    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 
``[i]nformation derived from the petition that gave rise to the 
investigation or review, the final determination concerning the subject 
merchandise, or any previous review under section 751 concerning the 
subject merchandise.'' Statement of Administrative Action accompanying 
the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, at 870 (1994) 
(``SAA''). Corroborate means that the Department will satisfy itself 
that the secondary information to be used has probative value. See id. 
To corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information to be used.

Application of Total Adverse Facts Available

The Vietnam-Wide Entity

    The Department issued a Q&V questionnaire to all exporters 
identified in the petition. Out of the eleven exporters to whom the 
Department issued its Q&V questionnaire, only three responded. Each of 
the responding exporters stated that they did not export innersprings 
to the United States during the POI. See Memorandum to the File, 
Response to the Department of Commerce's Quantity and Value 
Questionnaire from Yang Ching, March 13, 2008; Memorandum to the File, 
Response to the Department of Commerce's Quantity and Value 
Questionnaire from Uu Viet, March 20, 2008, and Memorandum to the File, 
Response to the Department of Commerce's Quantity and Value 
Questionnaire from Dong Bang, March 25, 2008. However, the remaining 
eight companies did not respond to the Department's Q&V questionnaire. 
The Department issued and tracked its Q&V questionnaire via DHL. 
According to DHL's tracking system the remaining eight exporters 
received the Department's Q&V questionnaire. Record evidence indicates 
there were imports into the United States of innersprings from Vietnam. 
Based on the above facts, the Department preliminarily determines that 
there were exports of the subject merchandise under investigation from 
Vietnam producers/exporters that did not respond to the Department's 
questionnaire, and we are treating these Vietnam producers/exporters as 
part of the countrywide entity. Additionally, because we have 
determined that the companies named above are part of the Vietnam-wide 
entity, the Vietnam-wide entity is now under investigation. Further, 
pursuant to section 776(a)(2)(A) of the Act, we find that because the 
Vietnam-wide entity (including the eight companies discussed above) 
failed to respond to the Department's Q&V questionnaire, withheld or 
failed to provide information in a timely manner or in the form or 
manner requested by the Department, and otherwise impeded the 
proceeding, it is appropriate to apply a dumping margin to the Vietnam-
wide entity using the facts otherwise available on the record pursuant 
to section 776(a)(2)(A) of the Act. Additionally, because these parties 
failed to respond to our requests for information, we find an adverse 
inference is appropriate.

Selection of the Adverse Facts Available Rate

    In sum, because the Vietnam-wide entity failed to respond to our 
request for information, it has failed to cooperate to the best of its 
ability. Therefore, the Department preliminarily finds that, in 
selecting from among the facts available, an adverse inference is 
appropriate pursuant to section 776(b) of the Act for the Vietnam-wide 
entity.
    In deciding which facts to use as adverse facts available 
(``AFA''), section 776(b) of the Act and 19 CFR 351.308(c)(1) authorize 
the Department to rely on information derived from: (1) the petition; 
(2) a final determination in the investigation; (3) any previous review 
or determination; or (4) any information placed on the record. In 
selecting a rate for AFA, the Department selects a rate that is 
sufficiently adverse ``as to effectuate the purpose of the facts 
available rule to induce respondents to provide the Department with 
complete and accurate information in a timely manner.'' See Notice of 
Final Determination of Sales at Less than Fair Value: Static Random 
Access Memory Semiconductors From Taiwan, 63 FR 8909, 8932 (February 
23, 1998). The Department's practice also ensures ``that the party does 
not obtain a more favorable result by failing to cooperate than if it 
had cooperated fully.'' See SAA at 870. See also Brake Rotors From the 
People's Republic of China: Final Results and Partial Rescission of the 
Seventh Administrative Review; Final Results of the Eleventh New 
Shipper Review, 70 FR 69937, 69939 (November 18, 2005).
    Generally, it is the Department's practice to select, as AFA, the 
highest rate in any segment of the proceeding. See, e.g., Certain Cased 
Pencils from the People's Republic of China; Notice of Preliminary 
Results of Antidumping Duty Administrative Review and Intent to Rescind 
in Part, 70 FR 76755, 76761 (December 28, 2005) (unchanged in the final 
results, 71 FR 38366 (July 6, 2006)).
    The Court of International Trade (``CIT'') and the Court of Appeals 
for the Federal Circuit (``Fed. Cir.'') have consistently upheld the 
Department's practice. See Rhone Poulenc, Inc. v. United States, 899 
F.2d 1185, 1190 (Fed. Cir. 1990) (upholding the Department's 
presumption that the highest margin was the best information of current 
margins) (``Rhone Poulenc''); NSK Ltd. v. United States, 346 F. Supp. 
2d 1312, 1335 (CIT 2004) (upholding a 73.55 percent total AFA rate, the 
highest available dumping margin from a different respondent in an LTFV 
investigation); Kompass Food Trading International v. United States, 24 
CIT 678, 683-84 (CIT 2000) (upholding a 51.16 percent total AFA rate, 
the highest available dumping margin from a different, fully 
cooperative respondent); and Shanghai Taoen International Trading Co., 
Ltd. v. United States, 360 F. Supp. 2d 1339, 1348 (CIT 2005) (upholding 
a 223.01 percent total AFA rate, the highest available dumping margin 
from a different respondent in a previous administrative review).
    In choosing the appropriate balance between providing respondents 
with an incentive to respond accurately and imposing a rate that is 
reasonably related to the respondents' prior commercial activity, 
selecting the highest prior margin ``reflects a common sense inference 
that the highest prior margin is the most probative evidence of current 
margins, because, if it were not so, the importer, knowing of the rule, 
would have produced current information showing the margin to be 
less.'' See Rhone Poulenc, 899 F. 2d at 1190 (emphasis removed). In 
this case,

[[Page 45741]]

as AFA, the Department has selected 116.31 percent, the highest margin 
alleged in the petition, as revised in the Petitioner's supplemental 
responses, and the margin the Department used in the Initiation Notice.

Corroboration

    Section 776(c) of the Act provides that, when the Department relies 
on secondary information in using the facts otherwise available, it 
must, to the extent practicable, corroborate that information from 
independent sources that are reasonably at its disposal. We have 
interpreted ``corroborate'' to mean that we will, examine the 
reliability and relevance of the information submitted. See, e.g. 
Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From 
Brazil: Notice of Final Determination of Sales at Less Than Fair Value, 
65 FR 5554, 5568 (February 4, 2000). Because there are no mandatory 
respondents, to corroborate the 116.31 percent margin used as AFA for 
the Vietnam-wide entity, to the extent appropriate information was 
available, we revisited our pre-initiation analysis of the adequacy and 
accuracy of the information in the petition. See Antidumping 
Investigation Initiation Checklist: Uncovered Innersprings from the 
Socialist Republic of Vietnam (``Initiation Checklist'') (January 22, 
2008). We examined evidence supporting the calculations in the petition 
and the supplemental information provided by Petitioner prior to 
initiation to determine the probative value of the margins alleged in 
the petition. During our pre-initiation analysis, we examined the 
information used as the basis of export price and normal value (``NV'') 
in the petition, and the calculations used to derive the alleged 
margins. Also during our pre-initiation analysis, we examined 
information from various independent sources provided either in the 
petition or, based on our requests, in supplements to the petition, 
which corroborated key elements of the export price and NV 
calculations. See id. We received no comments as to the relevance or 
probative value of this information. Therefore, the Department finds 
that the rates derived from the petition and used for purposes of 
initiation have probative value for the purpose of being selected as 
the AFA rate assigned to the Vietnam-wide entity.

Preliminary Determination

    The weighted-average dumping margin is as follows:

------------------------------------------------------------------------
                Manufacturer/exporter                  Margin (percent)
------------------------------------------------------------------------
Vietnam-Wide Rate...................................              116.31
------------------------------------------------------------------------

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing 
U.S. Customs and Border Protection (``CBP'') to suspend liquidation of 
all entries of innersprings from Vietnam, as described in the ``Scope 
of the Investigation'' section of this notice, that are entered, or 
withdrawn from warehouse, for consumption on or after the date of 
publication of this notice in the Federal Register. We will instruct 
CBP to require a cash deposit or the posting of a bond equal to the 
weighted-average dumping margin indicated in the chart above. The 
suspension of liquidation will remain in effect until further notice.

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of the Department's preliminary affirmative determination. Under 
section 735(b)(2) of the Act, if the Department's final determination 
is affirmative, the ITC will determine whether the domestic industry in 
the United States is materially injured, or threatened with material 
injury, by reason of imports of the subject merchandise, or sales (or 
the likelihood of sales) for importation of the subject merchandise 
within 45 days of our final determination.

Public Comment

    Case briefs or other written comments on the preliminary 
determination may be submitted to the Assistant Secretary for Import 
Administration no later than 50 days after the date of publication of 
this preliminary determination. See 19 CFR 351.309(c)(1)(i). Rebuttal 
briefs, the content of which is limited to the issues raised in the 
case briefs, must be filed within five days after the deadline for the 
submission of case briefs. See 19 CFR 351.309(d). A list of authorities 
used, a table of contents, and an executive summary of issues should 
accompany any briefs submitted to the Department. See 19 CFR 351.309. 
Executive summaries should be limited to five pages total, including 
footnotes. See id. Further, we request that parties submitting briefs 
and rebuttal briefs provide the Department with an electronic copy of 
the public version of such briefs.
    In accordance with section 774 of the Act, the Department will hold 
a public hearing, if requested, to afford interested parties an 
opportunity to comment on arguments raised in case and rebuttal briefs. 
If a request for a hearing is made in this investigation, the hearing 
will tentatively be held two days after the deadline for submitting 
rebuttal briefs at the U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230, at a time and in a room 
to be determined. See 19 CFR 351.310(d)(1). Parties should confirm by 
telephone, the date, time, and location of the hearing 48 hours before 
the scheduled date. Interested parties who wish to request a hearing, 
or to participate in a hearing if one is requested, must submit a 
written request to the Assistant Secretary for Import Administration, 
U.S. Department of Commerce, Room 1870, within 30 days of the 
publication of this notice. See 19 CFR 351.310(c). Requests should 
contain: (1) the party's name, address, and telephone number; (2) the 
number of participants; and (3) a list of the issues to be discussed. 
At the hearing, oral presentations will be limited to issues raised in 
the briefs. See id.
    This determination is issued and published pursuant to sections 
733(f) and 777(i)(1) of the Act.

    Dated: July 30, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-18032 Filed 8-5-08; 8:45 am]
BILLING CODE 3510-DS-S