Chrome-Plated Lug Nuts From Taiwan; Final Results of Antidumping Duty Administrative Review and Termination in Part

DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-810]

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

Duty Administrative Review and Termination in Part

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of antidumping duty administrative

review and termination in part.

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SUMMARY: On December 19, 1994, the Department of Commerce (the

Department) published the preliminary results of administrative review

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

The review covers seven firms and the period September 1, 1992, through

August 31, 1993. Based on our analysis of the comments received, we

determine the dumping margins have not changed from those presented in

the preliminary results.

EFFECTIVE DATE: August 29, 1995.

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.

Applicable Statute and Regulations

The Department is conducting this review in accordance with section

751(a) of the Tariff Act of 1930, as amended (Act). Unless otherwise

indicated, all citations to the statute and to the Department's

regulations are in reference to the provisions as they existed on

December 31, 1994.

Background

On December 19, 1994, the Department published the preliminary

results (59 FR 65317) of its administrative review of the antidumping

duty order on chrome plated lug nuts from Taiwan (September 20, 1991,

56 FR 47737). The Department has now completed this administrative

review in accordance with section 751 of the 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 mm).

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 seven firms; Gourmet Equipment

(Taiwan) Corporation (Gourmet), Buxton International Corporation

(Buxton), Chu Fong Metallic Industrial Works Co, Ltd, Transcend

International, Kuang Hong Industrial Works, San Chien Industrial Works,

Ltd, and Everspring Corporation, and the period September 1, 1993,

through August 31, 1994.

Analysis of Comments Received

We invited interested parties to comment on the preliminary

results. We received timely comments from one respondent, Buxton, and

rebuttal comments from the petitioner, Consolidated International

Automotive.

Comment

Respondent believes that the Department's use of overall best

information available (BIA) to determine Buxton's preliminary margin

was unsupported by the facts and not in accordance with the

Department's past practice.

Buxton believes that its disclosure of several ``minor pieces of

data'' not traceable to its audited financial statements is ``normal

business practice'' and should not be seen as a deficiency. Buxton

points to the Department's use of Sweaters Wholly or in Chief Weight of

Man-Made Fiber from Taiwan; Final Results of Changed Circumstances

Antidumping Duty Administrative Review, 58 FR 32644 (June 11, 1993) to

justify its claim that

[[Page 44836]]

use of BIA is incorrect because in Buxton's opinion, Sweaters from

Taiwan advocates the use of BIA only in cases of gross inconsistencies

or deficiencies.

Buxton cites Lasko Metal Products, Inc. v. United States, Slip Op.

93-1242 (Fed. Cir. December 29, 1994) to point out that the purpose of

the antidumping (AD) law is to determine the AD margin as accurately as

possible. Buxton charges that by basing the entire margin on BIA, the

Department has disregarded hundreds of verifiable items. Also, they

claim the total BIA margin does not accurately reflect the true dumping

margin.

Finally, Buxton cites National Steel Corp. v. United States, 18

CIT__, Slip. Op 94-194, at 11 (December 13, 1994), to emphasize that

the Department only applies total BIA when a respondent ``has failed to

submit information in a timely manner, or when part of the submitted

data is sufficiently flawed so that the response as a whole is rendered

unusable.'' Buxton claims that according to Usinor Sacilor v. United

States, Slip Op. 94-197 at 14 (CIT December 19, 1994) total BIA is

improper when data adjustments are minor or there is an inadvertent gap

in the record.

Petitioner believes that the Department correctly applied a BIA

margin to Buxton. Petitioner disagrees with Buxton's contention that

the ``problem areas are minor''. Petitioner states that the respondent

has the obligation to establish the validity and accuracy of all its

reported expenses.

Petitioner states that the cooperative BIA rate assigned in the

preliminary determination should be higher. Petitioner points to 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. There, 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'.'' Furthermore,

petitioner notes the Department stated in Final Results of Antidumping

Duty Administrative Review, Steel Jacks from Canada, 52 FR 32957

(September 1, 1987): ``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 cites section 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 further points to

Krupp Stahl A.G. v. United States, Slip Op. 93-84 (CIT May 26, 1993)

where the Court of International Trade affirmed the Department's broad

discretion in determining which BIA rate to apply.

Department's Position

As the Department previously explained in the Preliminary Results

of Antidumping Duty Administrative Review: Chrome-Plated Lug Nuts from

Taiwan, 59 FR 65317 (December 19, 1994), reliance on the accounting

system used for the preparation of the audited financial statements is

a key and vital part of the Department's determination that a company's

sales and constructed value data are credible. See Final Determination

of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat

Products, Certain Cold-Rolled Carbon Steel Flat Products, and Certain

Cut-To-Length Carbon Steel Plate from Korea, 58 FR 37176, 37186 (July

9, 1993). The reason for this is that use of internal documents that

have not been audited and are not used for preparation of the financial

statements or for any purpose outside internal deliberations of the

company does not guarantee the accuracy of the information contained in

the documents. Without such assurance, such costs are not verifiable.

Buxton used data from internal documents that could not be traced

to its audited financial statements. As a result, it was not possible

for the Department to follow its standard practice of reconciling a

company's sales and cost data to the company's audited financial

statements. See Notice of Preliminary Results of Antidumping Duty

Administrative Review: Chrome-Plated Lug Nuts from Taiwan, 59 FR 65317

(December 19, 1994).

It is not enough for Buxton simply to claim that it reported its

normal business practices with respect to certain expenses because this

can in no way compensate for the fact that certain expenses cannot be

traced to its independently audited financial statements. In this

respect, a claim of ``normal business practices'' cannot overcome the

deficiencies and inconsistencies present in its response. See Sweaters

Wholly or in Chief Weight of Man-Made Fiber from Taiwan; Final Results

of Changed Circumstances Antidumping Duty Administrative Review, 58 FR

32644, 32652 June 11, 1993.

Buxton misinterprets Sweaters from Taiwan as advocating use of BIA

only in cases of gross inconsistencies or deficiencies. Rather, the

Department determined that BIA was appropriate in Sweaters from Taiwan

because the respondent's financial records were unreliable, as in the

present case with Buxton. Because Buxton's records cannot be reconciled

to its audited financial statements, the Department cannot be assured

that all sales and costs have been appropriately reported. Similarly,

in this respect, in Sweaters from Taiwan the Department was unable to

determine to what extent transactions of a company were not recorded,

and thus, ``the Department could not confirm that these transactions

totaled only a few hundred dollars nor could we confirm that these were

minor expenses,'' 58 FR at 32651. Because the Department was unable to

verify the accuracy or completeness of Buxton's response, the

Department was compelled by section 776(c) of the Act to use BIA. See

Memorandum to Holly Kuga, Director, Office of Antidumping Compliance:

``Chrome-Plated Lug Nuts from Taiwan 9/1/92-8/31/93 Use of Best

Information Available'' (Jan. 12, 1995), in the proprietary file of

this case in the Central Records Unit, Room B-099.

Buxton's reliance on National Steel Corps is also misplaced. For

the reasons explained above, the Department determined that Buxton's

submission was sufficiently flawed so as to be unreliable because

Buxton could not reconcile that submission to its audited financial

statements. Thus, contrary to Buxton's assertions, National Steel Corps

supports the Department's determination to use BIA because in both

cases, ``part of the submitted data is sufficiently flawed, so that the

response as a whole is rendered unusable.'' Slip Op. 94-194 at 11.

While we do not disagree with Buxton's reference to Lasko Metal for

the general statutory proposition that dumping margins should be

determined as accurately as possible, that statutory purpose cannot be

carried out when part of the data submitted by the responding party is

so flawed that it cannot be used. Thus, the court's statement in

National Steel Corp. that the purpose of BIA is ``to induce respondents

to provide Commerce with requested information

[[Page 44837]]

in a timely, complete, and accurate manner * * *'' is more to the point

in this case. Slip OP. 94-194 at 8. Furthermore, when the Department

must resort the BIA, the courts have recognized that ``[the best

information available is not necessarily the most accurate information;

rather it is information that has become usable due to a respondent's

failure to provide accurate information.'' Usinor Sacilor v. United

States, Slip op. 94-197 at 12 (CIT December 19, 1994) (citations

omitted). Accordingly, because Buxton's submission could not be

reconciled to its audited financial statements, we have determined to

continue to apply BIA to Buxton.

In choosing a BIA rate it is the Department's policy to select a

rate which will encourage respondents to provide the necessary response

to future requests. The Department uses the following two-tier

hierarchy to separate cooperative firms from non-cooperative firms (see

Final Results of Antidumping Administrative Review of Antifriction

Bearings and Parts Thereof from France, et al., 58 FR 39739, July 26,

1993):

1. When a company refuses to cooperate with the Department or

otherwise significantly impedes these proceedings, we use as BIA the

higher of (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 investigation 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.

2. When a company substantially cooperates with our requests for

information and, substantially cooperates in verification, but fails

to provide the information requested in a timely manner or in the

form required or was unable to substantiate it, we used as BIA the

highest of (1) The highest rate ever applicable to the firm for the

same class or kind of merchandise from either the LTFV investigation

or a prior administrative review or if the firm has never before

been investigated or reviewed, the all others rate from the LTFV

investigation; or (2) the highest calculated rate in this review for

the class or kind of merchandise for any firm from the same country

of origin.

In this instance, second-tier BIA applies to Buxton because it

cooperated, but nevertheless failed to provide data which could be

verified. As the Department is unable to compute a margin from

verifiable information in this review, we determine that use of the all

others rate established in the LTFV investigation is reasonable.

We are not convinced that there is justification in this case to

depart from our past practice in determining the cooperative BIA rate.

Final Results of Review

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

preliminary results.

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Percent

Manufacturer/exporter margin

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

Buxton International Corporation............................. 6.93

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

Transcend International...................................... 10.67

Kuang Hong Industrial Works.................................. 10.67

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

Everspring................................................... 6.93

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*No shipments or sales subject to this review. The firm had no

individual rate from any segment of this proceeding, so we are

applying the all others rate from the LTFV investigation.

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. Customs 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 the rates outlined above; and (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, a prior review, or in 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)

if neither the exporter nor the manufacturer is a firm covered in this

or any previous review conducted by the Department, the cash deposit

rate will be 6.93%, the all others rate established in the LTFV

investigation.

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 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 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: August 4, 1995.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 95-21431 Filed 8-28-95; 8:45 am]

BILLING CODE 3510-DS-M