Final Results of Antidumping Duty Administrative Review; Iron Construction Castings From Canada

DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-503]

Final Results of Antidumping Duty Administrative Review; Iron

Construction Castings From Canada

AGENCY: International Trade Administration/Import Administration,

Department of Commerce.

ACTION: Notice of Final Results of Antidumping Duty Administrative

Review.

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SUMMARY: On January 3, 1994, the Department of Commerce published in

the Federal Register the preliminary results of an administrative

review of the antidumping duty order on iron construction castings from

Canada. The review covered 11 manufacturers and/or exporters of the

subject merchandise to the United States during the period March 1,

1992, through February 28, 1993. Based on our analysis of comments

received, the dumping margins for the original 11 companies have not

changed from the margins presented in the preliminary results. However,

we have found that three additional companies are related to

respondents in this review and have assigned cash deposit rates to

reflect this relationship.

EFFECTIVE DATE: May 17, 1994.

FOR FURTHER INFORMATION CONTACT: Lisa Raisner, Office of Antidumping

Compliance, International Trade Administration, U.S. Department of

Commerce, Washington, DC 20230, telephone: (202) 482-3518.

SUPPLEMENTARY INFORMATION:

Background

On January 3, 1994, the Department of Commerce (the Department)

published in the Federal Register the preliminary results of an

administrative review (59 FR 65) of the antidumping duty order on iron

construction castings from Canada (51 FR 17220). The Department has now

completed this administrative review in accordance with section 751 of

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

Scope of the Review

Imports covered by this review are shipments of certain iron

construction castings from Canada, limited to manhole covers, rings,

and frames, catch basin grates and frames, cleanout covers and frames

used for drainage or access purposes for public utility, water, and

sanitary systems, classifiable as heavy castings under Harmonized

Tariff Schedule (HTS) item numbers 7325.10.0010 and 7325.10.0050 and to

valve, service, and meter boxes which are placed below ground to encase

water, gas, or other valves, or water and gas meters, classifiable as

light castings under HTS item numbers 8306.29.0000 and 8310.00.0000.

The HTS item numbers are provided for convenience and Customs purposes

only. The written description remains dispositive.

This review covers sales of certain Canadian iron construction

castings by Associated Foundry Ltd., Bibby Foundry Ltd., Bibby

Waterworks Inc., Dobney Foundry Ltd., Bibby St. Croix, LaPerle Foundry

Division (LaPerle), McCoy Foundry Company, Penticton Foundry Ltd.,

Titan Foundry Ltd., Titan Supply Ltd., and Trojan Industries, Inc.,

during the period March 1, 1992, through February 28, 1993. In

addition, based on our analysis, we have found that three other

companies, for which we did not initiate an administrative review, are

related to respondents in this review and have, therefore, been

assigned cash deposit rates to reflect this relationship.

Clerical Error

The first-tier BIA rate used in the notice of preliminary results

of review was listed as 9.9 percent. We have corrected this error for

the final results and have used the rate of 9.8 percent as listed in

Iron Construction Castings from Canada; Amendment to Final

Determination of Sales at Less than Fair Value and Amendment to

Antidumping Duty Order (51 FR 34110, September 25, 1986). We have also

corrected references to this rate in all comments addressed below.

Analysis of Comments Received

We gave interested parties an opportunity to comment on the

preliminary results. We received written comments and rebuttal briefs

from the Municipal Castings Fair Trade Council and its individually-

named members (petitioner) and LaPerle.

Comments Regarding the Collapsing of Related Parties

Comment 1: Petitioner supports the Department's analysis of the

relationship between LaPerle and other respondents in this review and

its use of the methodology outlined in the preliminary results, most

recently upheld in Nihon Cement Co., Ltd., et al. v United States, et

al., Slip Op. 93-80 (May 25, 1993), and argues that the Department

properly determined that LaPerle is related to other respondents in

this review.

LaPerle argues that the Department improperly determined that

LaPerle's response should be collapsed with responses of other

entities. Although it does not dispute the fact that it is related to

the other companies listed by the petitioner, LaPerle maintains that it

is an autonomous operation and further asserts that each of the related

companies covered by this review also operated as distinct and separate

entities during the period of review.

LaPerle also maintains that the decision to collapse in this

administrative review directly contradicts the Department's decision in

an earlier review not to require Bibby Ste-Croix to submit information

regarding sales of castings produced by Laperle because the two

companies operated as separate entities (see Iron Construction Castings

from Canada, 55 FR 460, January 5, 1990).

Department's Position: During the questionnaire process, LaPerle

provided no evidence to demonstrate that it was an independent entity.

In fact, analysis of the information provided by LaPerle proved the

contrary. Further, LaPerle's comment does not cite to any relevant

factual information on record, other than the geographical distance

between several of the components and specific product-line

differences, in support of its claim that LaPerle and each of its

related parties were autonomous.

In this review, we received only one questionnaire response, and

that was from LaPerle. Based on our analysis of this response, for the

preliminary results we determined that LaPerle was related to other

respondents in this review. In doing so, we determined that LaPerle and

its related entities met all five criteria, in addition to ownership,

that the Department considers in determining whether to collapse

related parties, as laid out in the preliminary results and in Certain

Granite Products from Spain, 53 FR 24335, 1988; Certain Granite

Products from Italy, 53 FR 27187, 1988; Steel Wheels from Brazil, 54 FR

8780, 1989; Cellular Mobile Telephones and Subassemblies from Japan, 54

FR 48011, 1989; and Final Determinations of Sales at Less Than Fair

Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-

Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon

Steel Flat Products, and Certain Cut-to-Length Carbon Steel Plate from

Canada, 58 FR 37099 (July 9, 1993). The five criteria, in addition to

ownership, are as follows:

Interlocking boards of directors

Similar production processes, facilities or equipment so

as to facilitate shifting of production between facilities

Do not operate as separate and distinct entities

Share of marketing and sales information or offices

Involvement in the pricing or production decisions of the

other entity

In response to LaPerle's claim that we are contradicting our

earlier decision, we have determined that the record of this review

differs substantially from that of the previous review in the amount of

information we requested and the level of inter-relatedness which the

information in this review shows. We consider these relationships to be

sufficient to allow for price manipulation and involvement in pricing

and/or production decisions (see analysis and decision memoranda for

preliminary results). Therefore, we properly determined that LaPerle is

related to, and should be collapsed with, other respondents in this

review.

Comment 2: The petitioner asserts that the Department should also

collapse Grand Mere with LaPerle for these final results because public

information on the record of this review indicates that Grand Mere is

related to LaPerle.

LaPerle responds that the Department should not collapse Grand Mere

or any other related party with LaPerle for this review. LaPerle

further argues that petitioner's attempt to collapse a non-reviewed

firm with LaPerle in this review is untimely.

Department's Position: Based on our criteria, as listed above, the

information on the record indicates that three other companies, in

addition to those included in the notice of initiation of

administrative review, are sufficiently related to be collapsed with

LaPerle and will be included in this administrative review for purposes

of future entries and cash deposit rates. (For more information, see

the analysis memorandum for these final results.) Therefore, we will

instruct Customs to require cash deposits and assess estimated

antidumping duties in the amount of the rate assigned to the entire

entity.

The issue of timeliness is not relevant in this instance because we

are treating LaPerle and all its related companies as a single entity.

Therefore, in effect, we are now reviewing one single company,

comprised of various individual components, including LaPerle. The fact

that three of these individual components were not included in the

notice of initiation of this review is immaterial because we are

treating the various components as one entity.

Comment Regarding the Use of Best Information Available

Comment 3: Petitioner contends that despite the numerous

opportunities LaPerle was given to submit information to the Department

in support of its claim of being autonomous, the information LaPerle

submitted only indicated the contrary. Further, because it failed to

consolidate all information for itself, as outlined in the Department's

questionnaire, LaPerle's questionnaire response and additional

submissions do not constitute cooperation.

Therefore, the petitioner maintains that the Department properly

determined that LaPerle significantly impeded the proceedings and

correctly applied first-tier best information available (BIA) in this

review. The petitioner argues, however, that the BIA rate should be

higher than the BIA rate used for the preliminary results in order to

encourage compliance in future administrative reviews. The petitioner

further suggests the possibility that, following the Department's two-

tiered methodology, the respondents in this case could have predicted

the worst-case outcome of the administrative review.

The petitioner argues that the Department's selection of 9.8

percent applied as BIA in the preliminary results is not significantly

greater than the rates that currently apply and therefore will not

encourage future compliance. As such, the Department would be justified

in departing from its normal BIA methodology by selecting a higher

rate. The petitioner points out that the courts have held that the

Department is not required to choose a rate that is precisely accurate

but instead is to choose a rate that is ``usable'', citing Allied-

Signal Aerospace Co. v. United States, 13 CIT 13, 28, 704 F.Supp. 1114,

1126 (1989), appeal after remand, 13 CIT 526, 717 F.Supp. 834 (1989),

aff'd, 901 F.2d 1089 (Fed. Cir. 1990), cert.denied sub nom, and

Floramerica, S.A. v. United States, 498 U.S. 848 (1990). Petitioner

also points out that the Department has departed from its two-tiered

approach when necessary in Cold-Rolled Stainless Steel Sheet from

Germany; Final Results of Antidumping Duty Administrative Review, (59

FR 15888, April 5, 1994 ), aff'd Krupp Stahl A.G. v. United States, 822

F.Supp. 789 (CIT 1993). Accordingly, the petitioner argues the

Department should apply the higher rate of 33.46 percent, which is the

rate determined for a respondent in the preliminary results of the

1985-1987 administrative review of the subject merchandise (Iron

Construction Castings from Canada, 56 FR 274, May 21, 1991), as BIA.

LaPerle states that the Department should not have resorted to BIA,

particularly punitive BIA, for purposes of its preliminary results

because LaPerle fully cooperated with the Department in every respect,

responded to all requests for information, and was preparing for

verification. LaPerle argues that, if the Department still deems use of

BIA is necessary for the final results, the Department should use the

second-tier rate.

LaPerle argues that petitioner's reference to Allied-Signal, while

it does lend support to the Department's use of 9.8 percent as BIA,

does not offer a precedent for use of a preliminary results margin

rate. LaPerle further argues petitioner's cite to Krupp Stahl is also

misleading because the factual situation in this administrative review

is distinctly different. In addition, in Krupp Stahl, the respondent

was clearly uncooperative and impeded the proceeding by failing to

respond to a new questionnaire and destroying the records necessary to

verify the adequacy of the information submitted in the earlier

response.

LaPerle also refutes petitioner's allegation that it could have

predicted the worst-case outcome of the administrative review,

suggesting it would have been more efficient, in that case, to refuse

to respond to any requests for information. Finally, LaPerle argues

that the 9.8 percent rate used by the Department in its preliminary

results is highly punitive in comparison to LaPerle's existing cash

deposit rate of 3.16 percent from the most recent final results of

administrative review.

Department's Position: While LaPerle provided information during

the review, our analysis of information on the record indicated that

LaPerle was not independent, but was, in fact, one of many components

of a single entity. Therefore, the single entity, comprised of many

components including LaPerle, became, in effect, the respondent in this

review.

In Allied-Signal, the Court affirmed our two-tiered BIA

methodology, noting that

Whether the first or second tier properly applies to a

nonresponsive respondent essentially turns on the level of

cooperation exhibited by the respondent during the review. In order

to apply the first tier to a particular respondent, the ITA must

conclude that the respondent ``refused to cooperate with the [ITA]

or otherwise significantly impeded'' the review.

(See Allied-Signal, p.15.) Once the Department determined that the

related parties in this case must be collapsed, LaPerle was given the

opportunity, through two supplemental questionnaires, to supply the

additional data. However, LaPerle failed to provide complete

information on the related parties. The other named respondents, who

were also collapsed with LaPerle, did not respond. Therefore, only a

small fraction of the required information was provided while a

significant quantity remained unreported. Accordingly, the application

of first-tier BIA is appropriate because LaPerle impeded the proceeding

by failing to give the Department the information necessary to conduct

the review and by failing to provide any support for its position that

LaPerle was independent.

Finally, we believe the 9.8 percent rate we have chosen is

consistent with a first-tier BIA approach. The 33.46 percent rate

suggested by the petitioner was from a notice of preliminary results.

Because the factual situation in this administrative review differs

from that in Krupp Stahl, we do not consider this rate appropriate to

be used for these final results. In Krupp Stahl, because it was the

first administrative review, the only rates available for BIA were from

the preliminary and final results of the less-than-fair-value (LTFV)

investigation. In order to assign a rate higher than the calculated

rate that Krupp had received in the LTFV investigation, where Krupp had

cooperated, the Department had no choice but to resort to the

preliminary results; otherwise, Krupp would have been in a better

position as a result of its noncompliance (see Krupp Stahl at 793) than

if it had responded to the Department's questionnaire. However, in this

case, we do have other final rates available and appropriate for BIA.

Because the 9.8 percent BIA rate we have chosen is higher than any

individual rate that currently applies to LaPerle and its related

entities, we believe that the rate is adverse and will achieve the

objective of encouraging complete responses in future reviews.

Therefore, we believe that the 9.8 percent rate chosen is both

appropriate and consistent with a first-tier BIA rate approach.

Comment 4: The petitioner argues that, apart from impeding the

proceeding in connection with the respondents' business relationships,

additional grounds exist for the Department to apply BIA: inconsistent

product codes; incorrect model match methodology; incorrect dates of

sales; and missing information regarding COP data, product matches,

difference-in-merchandise (difmer) adjustments, level of trade

information, and general and administrative expenses in COP incurred on

behalf of LaPerle by its related companies.

LaPerle counters that its response is not grossly deficient: COP

data, product concordance, and difmer adjustments were provided;

LaPerle maintains that its model match methodology is correct and its

level-of-trade information and dates of sale are appropriate; and,

finally, because its operations were independent of the other

companies, LaPerle thought it inappropriate to include general and

administrative costs for these entities in its COP (and thought that

even if it were appropriate, some of LaPerle's expenses would have to

be allocated to those entities).

Department's Position: Because LaPerle failed to submit a

consolidated response, the information provided was inadequate for

purposes of our analysis. Therefore, the issue of deficiencies in what

information was, in fact, submitted is moot.

Final Results of the Review

After analysis of the comments received, we determine that the

following weighted-average margins exist, and have been applied based

on relationship and/or failure to respond, for the period March 1, 1992

through February 28, 1993:

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Percent

Manufacturer/exporter margin

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Associated Foundry Ltd..................................... 9.8

Bibby Foundry Ltd.......................................... 9.8

Bibby Waterworks Inc....................................... 9.8

Dobney Foundry Ltd......................................... 9.8

Bibby St. Croix (to include: Bibby Ste-Croix Founderies,

Inc. and Bibby Ste-Croix Division)........................ 9.8

LaPerle Foundry, Inc....................................... 9.8

McCoy Foundry Company...................................... *7.5

Penticton Foundry Ltd...................................... 9.8

Titan Foundry Ltd.......................................... 9.8

Titan Supply Ltd........................................... 9.8

Trojan Industries, Inc..................................... 9.8

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*No shipments during the period; since there was no prior review of this

company, we assigned the all other rate from the less-than-fair-value

(LTFV) investigation.

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. The Department

will issue appraisement instructions on each exporter directly to the

Customs Service. We will also instruct Customs to collect cash deposits

for the three additional companies, which were collapsed with LaPerle

for purposes of these final results, at the rate assigned to LaPerle.

Furthermore, the following deposit requirements will be effective,

upon publication of this notice of final results of administrative

review, for all shipments of the subject merchandise from Canada that

are entered, or withdrawn from warehouse, for consumption on or after

the publication date of this notice, as provided by section 751(a)(1)

of the Tariff Act: (1) The cash deposit rates for the reviewed

companies will be those rates outlined above; (2) for previously

reviewed or investigated companies not listed above, the cash deposit

rate will continue to be their company-specific rate published for the

most recent period; (3) if the exporter is not a firm covered in this

review or the original investigation, but the manufacturer is, the cash

deposit rate will be the rate established for the most recent period

for the manufacturer of the merchandise; and (4) if neither the

exporter nor the manufacturer is a firm covered in this or any previous

review, the cash deposit rate will be 7.5 percent, which is the ``all

other'' rate established in the LTFV investigation, as discussed below.

On May 25, 1993, the Court of International Trade (CIT), in Floral

Trade Council v. United States, Slip Op. 93-79, and Federal-Mogul

Corporation and the Torrington Company v. United States, Slip Op. 93-

83, decided that once an ``all others'' rate is established for a

company, it can only be changed through an administrative review. The

Department has determined that in order to implement these decisions,

it is appropriate to reinstate the ``all others'' rate from the LTFV

investigation (or that rate as amended for correction of clerical

errors or as a result of litigation) in proceedings governed by

antidumping duty orders.

This notice 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 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 353.34(d). Timely written notification of

return/destruction of APO materials or conversion to judicial

protective order is hereby requested. Failure to comply with the

regulations and the terms of the APO is a sanctionable violation.

This administrative review and notice are in accordance with

section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR

353.22.

Dated: May 9, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-11968 Filed 5-16-94; 8:45 am]

BILLING CODE 3510-DS-P