Chrome-Plated Lug Nuts From Taiwan; Final Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

[A-583-810]

Chrome-Plated Lug Nuts From Taiwan; Final Results of Antidumping

Duty Administrative Review

AGENCY: Import Administration/International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of Antidumping Duty Administrative

Review and Partial Termination.

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SUMMARY: On February 17, 1994, the Department of Commerce published the

preliminary results of administrative review of the antidumpting duty

order on chrome-plated lug nuts from Taiwan. The review covers four

firms and the period April 18, 1991, through August 31, 1992. Based on

our analysis of the comments received, we have determined that the

dumping margins remain the same as those presented in the preliminary

results.

EFFECTIVE DATE: November 14, 1994.

FOR FURTHER INFORMATION CONTACT:

Todd Peterson or Thomas Futtner, Office of Antidumping Compliance,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone (202) 482-4195 or 482-3814,

respectively.

Background

On February 17, 1994, the Department of Commerce (the Department)

published the preliminary results (59 FR 7981) of its administrative

review of the antidumping duty order on chrome-plated lug nuts from

Taiwan (September 20, 1991, 56 FR 47737). No hearing was requested. On

March 18, 1994, the petitioner submitted a brief. On March 25, 1994,

the respondent submitted a rebuttal brief. 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

The merchandise covered by this review is one-piece and two-piece

chrome-plated lug nuts, finished or unfinished, which are more than

\11/16\ inches (17.45 millimeters) in height and which have a hexagonal

(hex) size of at least \3/4\ inches (19.05 millimeters) but not over

one inch (25.4 millimeters), plus or minus \1/16\ of an inch (1.59

millimeters). The term ``unfinished'' refers to unplated and/or

unassembled chrome-plated lug nuts. The subject merchandise is used for

securing wheels to cars, vans, trucks, utility vehicles, and trailers.

Zinc-plated lug nuts, finished or unfinished, and stainless-steel

capped lug nuts are not in the scope of this review. Chrome-plated lock

nuts are also not in the scope of this review.

During the period of review, chrome-plated lug nuts were provided

for under subheading 7318.16.00.00 of the Harmonized Tariff Schedule

(HTS). Although the HTS subheading is provided for convenience and

Customs purposes, our written description of the scope of this review

is dispositive.

This review covers four firms: King Kong Corporation; Gourmet

Equipment (Taiwan) Corporation (Gourmet); Chu Fong Metallic Industrial

Corporation (Chu Fong); and San Chien Electric Industrial Works (San

Chien). The period of review is April 18, 1991, through August 31,

1992.

For the two parties that refused to respond to our questionnaire,

Chu Fong and San Chien, we based our determination on best information

available (BIA). The First-tier BIA rate we applied is 10.67 percent,

which is the highest rate the Department found in the original less-

than-fair value investigation (LTFV). Gourmet provided us with

responses to our questionnaire, however the information it provided was

unverifiable (see verification report). Accordingly, we applied the

second-tier BIA rate of 6.47 percent. This rate represents the highest

rate ever applicable to Gourmet. King Kong Corporation received the

``all others'' rate because the Department attempted, but could not

locate, an address for it.

Analysis of Comments Received

We invited interested parties to comment on the preliminary

results. We received timely comments from the petitioner, Consolidated

International Automotive, Inc., and rebuttal comments from one

respondent, Gourmet.

Comment 1

Petitioner believes that the Department correctly applied best

information available (BIA) to both cooperative and uncooperative

firms. However, petitioner asserts that the rates assigned to

uncooperative firms do not accomplish the statute's two goals with

regard to BIA, which are: (1) To approximate the actual dumping

margins, and (2) to induce future compliance. Petitioner further

stresses that these rates may not be sufficient to encourage compliance

with the order by middlemen, which is especially important in this case

since the Department chose not to initiate a middleman dumping

investigation in response to petitioner's request for one. Accordingly,

petitioner asserts that the Department has the authority to apply a BIA

rate to the uncooperative firms based on a rate found in the petition.

Petitioner cites Brass Sheet and Strip from Sweden: Final Results

of Antidumping Duty Administrative Review (57 FR 29278, July 1, 1992)

for an explanation of the Department's BIA policy. In that case, the

Department stated: ``The primary purpose of the BIA rule is to induce

respondents to provide the Department with timely, complete or accurate

information, so that the agency can achieve the fundamental purpose of

the Tariff Act, namely, `determining current margins as accurately as

possible'.'' The Department also explained that ``to induce a

noncomplying respondent to provide the necessary response to a future

information request, the Department must select an appropriate BIA rate

to encourage future compliance.'' Petitioner stresses that encouraging

middlemen to cooperate is especially important, otherwise the issue of

middleman dumping cannot be addressed.

Petitioner cites Sec. 353.37(b) of the Department's regulations

which defines the Department's latitude in assigning BIA rates: ``The

best information available may include the factual information

submitted in support of the petition or subsequently submitted by

interested parties. * * *. If an interested party refuses to provide

factual information requested by the Secretary or otherwise impedes the

proceeding, the Secretary may take that into account in determining

what is the best information available.'' Petitioner also cites Krupp

Stahl A.G. v. United States, 822 F. Supp. 789 (CIT 1993) (Krupp Stahl)

where the Court of International Trade (CIT) affirmed the Department's

broad discretion in determining which BIA rate to apply. Petitioner

states that Krupp Stahl supports its argument that ``[o]nce Commerce

has exercised its discretion to use the best information available rule

against a respondent, it is for Commerce, not the respondent, to

determine what is the best information.''

The respondent, Gourmet, argues that Chu Fong and San Chien, should

be assigned the cooperative second-tier BIA rate because they are

trading companies. Gourmet claims that, according to the Department's

own policy, trading companies are not required to respond. Gourmet

points to the Final Determination of Sales at Less Than Fair Value:

Chrome-Plated Lug Nuts from Taiwan (56 FR 36130, 36132 (July 31,

1991)), which states that ``it is the Department's longstanding

practice to look at prices charged by the manufacturer, as opposed to

the trading company, where the manufacturer knows the destination of

the merchandise.'' According to Gourmet, the Department was aware of

Gourmet's relationship with trading companies during the original

investigation. In addition, Gourmet provided one trading company's

invoices of lug nuts manufactured by Gourmet in the questionnaire

response and at verification. Respondent claims the Department

therefore had all the necessary information to cover Gourmet's and all

trading company sales. It refers to Allied-Signal Aerospace Co. v.

United States, 996 F.2nd 1185 (Fed. Cir. 1993) (Allied-Signal), where

the CIT found that the Department cannot apply punitive BIA when a firm

did provide the requested information, although not in the form

requested by the Department.

Respondent claims that the Department cannot apply adverse BIA to

the trading companies based on the margins contained in the petition.

Following the Department's two-tiered BIA methodology, respondent

argues that the rate assigned to an uncooperative firm may be based on

either (1) the highest of the rates found for any firm for the same

class or kind of merchandise in the same country of origin in the LTFV

or prior administrative reviews, or (2) the highest rate found in this

review for any firm for the same class or kind of merchandise in the

same country of origin. Furthermore, the respondent claims that the

petition-based rate may not be considered because the petition is not

part of this administrative review.

Department's Position

In our preliminary results of review, we determined in accordance

with section 776(c) of the Tariff Act that the use of BIA was

appropriate for San Chien and Chu Fong because they failed to respond

to our questionnaires. Each firm was sent a questionnaire and a follow-

up letter. The questionnaire stated, ``[a]ny undue delay or lack of

response may result in our proceeding with appraisements based on the

best information available'' (from Laurie Lucksinger, Division

Director, Office of Antidumping Compliance, March 24, 1993). The

follow-up letter stated, ``[t]he Department has received no response.

If you are still intending to respond, we must receive your response by

June 19, 1993. Otherwise the Department must conclude that your firm is

not responding to the questionnaire. As stated in the questionnaire

sent to you, the Department will use the best information otherwise

available to determine your antidumping margin'' (from Laurie

Lucksinger, Division Director, Office of Antidumping Compliance, June

1, 1993). Neither firm responded to the questionnaire nor to the

follow-up letter.

While trading companies normally are not required to participate in

a review when the manufacturer knows the ultimate destination of the

merchandise, it is necessary for a firm to respond to a questionnaire

in order for the Department to be able to establish the fact that it is

a trading company. The nature of Chu Fong's and San Chien's business

has not been established in this review, because neither firm responded

to a questionnaire. Therefore, we cannot determine that these firms are

in fact trading companies, manufacturing companies, or a combination of

both.

The LTFV investigation is not part of this review. Therefore,

information submitted during the LTFV investigation cannot be used in

this review unless it is placed on the record of this review by the

Department or an interested party. Furthermore, business relationships

and practices established during the LTFV investigation may or may not

be the same during subsequent administrative reviews. Thus, it is

necessary for respondents to respond to questionnaires.

Gourmet is incorrect in claiming that the Department has all of the

information necessary to conduct a review that covers both the trading

company's and Gourmet's sales. In this review, we had only the invoices

of the subject merchandise that related to Gourmet's sale to the United

States through one trading company. There is no information concerning

U.S., home market, or third country sales by the trading companies of

subject merchandise produced by manufacturers other than Gourmet. In

addition, there is no general information relating to corporate

structure, ownership, corporate functions, accounting practices, and

quantity and value of sales of the two trading companies.

The respondent is also incorrect in citing Allied Signal to support

its claim that first-tier BIA is inappropriate. In Allied Signal, the

court stated, ``[t]he ITA may well have been justified in resorting to

the first tier in selecting the best information available for bearings

produced by INA Roulements S.A. after it announced that it would not

participate in the administrative review and accordingly did not

respond to the questionnaire at all.'' In this review, San Chien and

Chu Fong submitted nothing, unlike the respondent in Allied Signal,

which has submitted a response to the questionnaire and demonstrated

its willingness to cooperate to the extent that it could.

Because San Chien and Chu Fong failed to respond to our

questionnaire, we assigned them the highest rate of any company from

the LTFV investigation. In assigning this BIA rate, we were following

our two-tiered methodology under which we impose the most adverse rates

upon those who refuse to cooperate or otherwise significantly impede

the proceeding, and less adverse rates upon those who were cooperative

but failed to provide requested information in a timely manner or in

the form required (see Final Results of Antidumping Duty Administrative

Review of Antifriction bearings and Parts Thereof from France, et al.,

58 FR 39739, July 26, 1993, and section 776 (c) of the Tariff Act.

The application of the two-tiered methodology used in the

preliminary results does achieve the intended results of using BIA. The

threat of application of first-tier BIA induces respondents to provide

the Department with timely, complete, and accurate factual information.

therefore, we have determined to continue our use of the two-tiered

methodology. Accordingly, we have applied the highest margin from the

LTFV investigation to San Chien and Chu Fong. The rate is 10.67

percent.

Comment 2

With respect to Gourmet, petitioner questions whether the

cooperative BIA rate assigned in the preliminary results of review

actually reflects the true dumping margins. Petitioner believes that

this is an important criterion for the Department to consider in

selecting a rate.

Department's Position

We have determined that the cooperative second-tier BIA rate of

6.47 percent is appropriate for Gourmet for the period of review,

pursuant to section 776(c) of the Tariff Act. Although, Gourmet

submitted all requested information in a timely manner, we were unable

to reconcile its response with its audited financial statements.

The BIA rate is Gourmet's rate from the LTFV investigation. As we

are unable to compute a margin from verifiable information in this

review, the Department determines that the rate Gourmet received in the

LTFV investigation is a reasonable approximation of Gourmet's actual

dumping margins.

Final Results of Review

As a result of comments received, we have not revised our

preliminary results. Therefore, we find the following margins exist for

the period April 18, 1991 through August 31, 1992:

------------------------------------------------------------------------

Margin

Manufacturing/exporter (percent)

------------------------------------------------------------------------

Gourmet Equipment (Taiwan) Corporation....................... 6.47

Chu Fong Metallic Industrial Works Co, Ltd................... 10.67

San Chien Industrial Works, Ltd.............................. 10.67

King Kong Corporation........................................ 6.93

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The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. The Department

will issue appraisement instructions concerning all respondents

directly to the U.S. Customers Service.

Furthermore, the following deposit requirements will be effective

for all shipments of the subject merchandise, entered, or withdrawn

from warehouse, for consumption on or after the publication date of

these final results of administrative review, as provided for by

section 751(a)(1) of the Tariff Act: (1) The cash deposit rate for the

reviewed firms will be those firms' rates established above; (2) for

previously reviewed or investigated companies not listed above, the

cash deposit rate will continue to be the company-specific rate

published for the most recent period; (3) if the exporter is not a firm

covered in this review, or the original LTFV 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)

the ``all others'' rate will remain at 6.93 percent as established in

the LTFV investigation (see Floral Trade Council versus United States,

Slip Op. 93-79).

These deposit requirements shall remain in effect until publication

of the final results of the next administrative review.

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 a final 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 or

conversion to judicial protective order is hereby requested. Failure to

comply with regulations and the terms of 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: November 4, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-28051 Filed 11-10-94; 8:45 am]

BILLING CODE 3510-DS-M