Initiation of Antidumping Duty Investigation: Wheel Inserts from Taiwan

DEPARTMENT OF COMMERCE

(A-583-823)

Initiation of Antidumping Duty Investigation: Wheel Inserts from

Taiwan

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: October 12, 1994.

FOR FURTHER INFORMATION CONTACT: Michelle Frederick or John Brinkmann,

Office of Antidumping Investigations, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue, N.W., Washington, D.C. 20230;

telephone: (202) 482-0186 or (202) 482-5288, respectively.

Initiation of Investigation

The Petition

On September 15, 1994, we received a petition filed in proper form

by Consolidated International Automotive, Inc. (petitioner). At the

request of the Department of Commerce (the Department), petitioner

filed supplements to support and clarify the petition's data on

September 30 and October 3, 1994. In accordance with 19 CFR 353.12

(1994), petitioner alleges that wheel inserts from Taiwan are being, or

are likely to be, sold in the United States at less than fair value

within the meaning of section 731 of the Tariff Act of 1930, as amended

(the Act), and that these imports are materially injuring, or threaten

material injury to, a U.S. industry.

Petitioner states that it has standing to file the petition because

it is an interested party, as defined under section 771(9)(C) of the

Act, and because the petition is filed on behalf of the U.S. industry

producing the product subject to this investigation. If any interested

party, as described under paragraphs (C), (D), (E), or (F) of section

771(9) of the Act, wishes to register support for, or opposition to,

this petition, such party should file a written notification with the

Assistant Secretary for Import Administration.

Under the Department's regulations, any producer or reseller

seeking exclusion from a potential antidumping duty order must submit

its request for exclusion within 30 days of the date of publication of

this notice. The procedures and requirements regarding the filing of

such requests are contained in 19 CFR 353.14.

Scope of Investigation

The products covered by this investigation are wheel inserts, also

referred to as lug hole inserts and insert bushings, made from steel,

aluminum, brass or zinc. A wheel insert is a washer-like product with a

circular collar that protrudes into a stud hole to provide a protective

seat between a lug nut and an aluminum or alloy wheel mounted on ground

transportation vehicles. A wheel insert can be heat-treated or non

heat-treated, with or without knurls, and with or without surface

coatings. Surface coatings include, but are not limited to, chrome

plating, nickel plating, zinc plating (with or without wax coating),

oxide coating and powder coating.

The products under investigation are currently classifiable under

subheading 8708.70.6060 of the Harmonized Tariff Schedule of the United

States (HTSUS). Although the HTSUS subheading is provided for

convenience and customs purposes, our written description of the scope

of this investigation is dispositive.

United States Price and Foreign Market Value

Petitioner based United States Price (USP) on a November 1993 price

quotation obtained for a standard black zinc plated wheel insert. The

terms of the price quotation were FOB Kaohsiung, Taiwan, with payment

based on an irrevocable sight letter of credit (L/C). Petitioner made a

deduction for credit. Credit was calculated using the short term

interest rate published by Taiwanese banks for September of 1993 and a

credit period of 55 days, the average of the 50-60 days stated on the

price quotation for delivery after receipt of the L/C.

Petitioner based its estimate of foreign market value (FMV) on

constructed value (CV) claiming that no producers in Taiwan sell the

subject merchandise in Taiwan or to any third country markets.

According to 19 CFR 353.12(b)(7), if petitioner is unable to

furnish information on foreign sales or costs, it must provide

information on production costs in the United States and then adjust

these costs to reflect for differences in the production costs between

the United States and the home market country of exportation.

To calculate constructed value, petitioner adjusted its own

manufacturing costs for a standard black zinc plated wheel insert for

known differences in costs between the United States and Taiwan. We

adjusted the reported material costs to account for revenue received by

petitioner from the sale of scrap material. Because the plating costs

included selling, general and administrative expenses as well as the

profit of petitioner's plater, we have adjusted the plating expenses to

exclude these amounts.

For overhead, utilities were adjusted using a ratio of Taiwanese to

U.S. electricity costs. Other components of petitioner's overhead were

adjusted using the ratio of Taiwanese to U.S. labor costs. Certain

components of overhead were not adjusted by petitioner. Because we view

this industry sufficiently labor intensive to justify using the ratio

of Taiwanese to U.S. labor costs to adjust overhead, we have applied

the labor ratio uniformly to all components of overhead (except

utilities). Additionally, because petitioner allocated overhead

expenses (inclusive of expenses related to petitioner's plating

operation) over payroll expenses (exclusive of plating wages), we have

added plating wages to petitioner's calculation of payroll expenses.

Petitioner provided two hourly wage rates for Taiwanese

manufacturing workers, one obtained from private research, the other

obtained from a public source. Because of the Department's preference

for publicly available information, we selected the latter and adjusted

it as follows: 1) we disallowed petitioner's inclusion of an annual

bonus because petitioner's wage rate calculation did not include

bonuses; and 2) we inflated the wage rate for one year instead of two,

as calculated by petitioner, because we determined that the wage rate

was from 1992. The statutory minimum percentages of 10 percent for

selling, general and administrative expenses and eight percent for

profit were relied upon in petitioner's calculation.

After the above adjustments were made, the recalculated dumping

margin for wheel inserts produced on a screw machine is 46.28 percent.

Initiation of Investigation

Pursuant to section 732(c) of the Act, the Department must

determine, within 20 days after a petition is filed, whether a petition

sets forth an allegation necessary for the initiation of an antidumping

duty investigation, and whether the petition contains information

reasonably available to the petitioner supporting the allegation.

We have examined the petition for wheel inserts from Taiwan, as

amended, and have found that it meets the requirements of section

732(b) of the Act. Therefore, we are initiating an antidumping duty

investigation to determine whether imports of wheel inserts from Taiwan

are being, or are likely to be, sold in the United States at less than

fair value. If this investigation proceeds normally, we will make our

preliminary determination by February 22, 1995.

International Trade Commission (ITC) Notification

Section 732(d) of the Act requires us to notify the ITC of these

actions and we have done so.

Preliminary Determinations by the ITC

The ITC will determine by October 30, 1994, whether there is a

reasonable indication that imports of wheel inserts from Taiwan are

materially injuring, or threaten material injury to, a U.S. industry.

Pursuant to section 733(a) of the Act, a negative ITC determination

will result in the investigation being terminated; otherwise, the

investigation will proceed according to statutory and regulatory time

limits.

This notice is published pursuant to section 732(c)(2) of the Act

and 19 CFR 353.13(b).

Dated: October 5, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-25221 Filed 10-11-94; 8:45 am]

BILLING CODE 3510-DS-P