Certain Helical Spring Lock Washers From The People's Republic of China; Final Results of Antidumping Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-822]

Certain Helical Spring Lock Washers From The People's Republic of

China; Final Results of Antidumping Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of the antidumping duty administrative

review.

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SUMMARY: On August 16, 1995, the Department of Commerce (the

Department) published in the Federal Register the preliminary results

of the administrative review of the antidumping duty order on certain

helical spring lock washers (HSLWs) from the People's Republic of China

(PRC) (60 FR 42519). This review covers shipments of this merchandise

to the United States during the period October 15, 1993, through

September 30, 1994. We gave interested parties an opportunity to

comment on our

[[Page 41995]]

preliminary results. Based upon our analysis of the comments received

we have changed the results from those presented in the preliminary

results of review.

EFFECTIVE DATE: August 13, 1996.

FOR FURTHER INFORMATION CONTACT: Donald Little or Maureen Flannery,

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-

4733.

Background

The Department published in the Federal Register the antidumping

duty order on HSLWs from the PRC on October 19, 1993 (58 FR 53914). On

October 7, 1994, the Department published in the Federal Register (59

FR 51166) a notice of opportunity to request administrative review of

the antidumping duty order on HSLWs from the PRC covering the period

October 15, 1993, through September 30, 1994.

In accordance with 19 CFR 353.22(a) (1994), the respondent,

Zhejiang Wanxin Group Co. (ZWG), also known as Hangzhou Spring Washer

Plant, requested that we conduct an administrative review. We published

a notice of initiation of this antidumping duty administrative review

on November 14, 1994 (59 FR 56459).

On August 16, 1995, the Department published in the Federal

Register the preliminary results of this review of the antidumping duty

order on HSLWs from the PRC (60 FR 42519). We held a hearing on October

3, 1995. The Department has now completed this review in accordance

with section 751 of the Tariff Act of 1930, as amended (the Tariff

Act).

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute and the

Department's regulations are in reference to the provisions as they

existed on December 31, 1994.

Scope of Review

The products covered by this review are HSLWs of carbon steel, of

carbon alloy steel, or of stainless steel, heat- treated or non heat-

treated, plated or non-plated, with ends that are off-line. HSLWs are

designed to: (1) Function as a spring to compensate for developed

looseness between the component parts of a fastened assembly; (2)

distribute the load over a larger area for screws or bolts; and (3)

provide a hardened bearing surface. The scope does not include internal

or external tooth washers, nor does it include spring lock washers made

of other metals, such as copper.

HSLWs subject to this review are currently classifiable under

subheading 7318.21.0030 of the Harmonized Tariff Schedule of the United

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

and Customs purposes, the written description of the scope of this

proceeding is dispositive.

This review covers one exporter of HSLWs from the PRC, ZWG, and the

period October 15, 1993, through September 30, 1994.

Analysis of Comments Received

We gave interested parties an opportunity to comment on the

preliminary results. We received case briefs and rebuttals from

Shakeproof Industrial Products of Illinois Works (petitioner), ZWG, and

the American Association of Fastener Importers (AAFI), an interested

party. At the request of the petitioner, we held a public hearing on

October 3, 1995.

Comment 1: ZWG asserts that the Department may not use Indian

import statistics because all of the values therein are for dumped or

subsidized steel. ZWG states that all of the countries supplying steel

bar and rod covered by the Indian import statistics are subject to

antidumping or countervailing duty orders. ZWG states that the

antidumping statute and court rulings prohibit the use of dumped or

subsidized prices to value factors of production. ZWG cites the House

Report to the Omnibus Trade and Competitiveness Act of 1988, with

respect to factors of production: ``In valuing such factors, Commerce

shall avoid using any prices which it has reason to believe or suspect

may be dumped or subsidized prices * * *.'' ZWG states that, in the

Final Determination of Sales at Less Than Fair Value: Certain Helical

Spring Lock Washers from the People's Republic of China (Lock Washers),

58 FR 48833, the Department said it will not consider pricing

information from any country found to be selling dumped or subsidized

merchandise. ZWG also notes that, in Final Results of Antidumping Duty

Administrative Review: Certain Iron Construction Castings from the

People's Republic of China (Construction Castings), 57 FR 10644, the

Department states it ``has consistently refused to base foreign market

value (FMV) upon surrogate countries prices for exports if those

exports may benefit from subsidies or are being dumped.'' ZWG states

that the Court of International Trade (CIT), in Tehnoimportexport, UCF

America Inc. v. U.S. (Tehnoimportexport), interpreted the House

Report's ``believe or suspect'' standard to mean that the Department

correctly rejected export values that were affected by industry-wide

subsidies. ZWG argues that the CIT upheld the Department's rejection of

particular Yugoslavian export prices in part because those prices were

tainted by industry-wide subsidies. ZWG argues that the Department's

published findings with respect to steel bar and rod and with respect

to generalized steel subsidies provide compelling reason to ``believe

or suspect'' that the Indian import statistics consist of dumped and

subsidized prices. ZWG contends that the findings of dumping and

subsidization pertain directly to those countries whose exports

constitute India's import data. ZWG states that the Department is

therefore legally precluded from using the Indian import data.

AAFI also argues that the Department cannot use Indian import

statistics from countries subject to past or current antidumping or

countervailing duty findings for purposes of calculating FMV.

Petitioner asserts that the Indian import statistics are not

tainted as claimed. Noting that ZWG cited Tehnoimportexport for the

proposition that the Department should reject the Indian import prices

as it rejected the use of Yugoslavian steel export prices, petitioner

quotes the CIT in that case:

Commerce's decision in this case, however, was based on final

antidumping determinations upon comparable merchandise and two final

countervailing duty determinations in which Commerce determined that

countervailable, non-product specific export subsidies were bestowed

upon exports of steel products. Their decision was also based on

several EC cases. In total, there was substantial evidence to allow

a reasonable mind to conclude that there were dumping and subsidies

favoring Yugoslavian steel exports.

Petitioner argues that in the case at hand the Department is not

looking at Indian exports but at Indian imports. Petitioner asserts

that the standard that the Department should use is whether the Indian

imports in fact benefitted from dumped or subsidized prices. Petitioner

argues that if India has imposed antidumping or countervailing duty

measures against steel imports, the decision would be different. Noting

a provision precluding the Department from using values because there

are antidumping or countervailing duty decisions on the same product or

there are countervailing duty decisions on general exports is not in

the statute, petitioner argues that the legislative intent does not

support the rigid

[[Page 41996]]

approach ZWG proposes. Petitioner argues that Congress was generally

opposed to having American firms compete with imports that use dumped

or subsidized inputs. Petitioner claims that, in the case of non-market

economies (NMEs), the same condition would apply indirectly if the

Department used dumped or subsidized prices to determine surrogate

values. Petitioner argues that the Department should look at the date

of any order, the nature of the subsidies, and the amount of the

antidumping or countervailing duties. Petitioner further argues that,

taken to its conclusion, ZWG's argument essentially restricts the

Department from using import statistics for steel-related NME cases.

Petitioner states that the Department rejected the argument that Indian

import values should be disregarded in Lock Washers.

Department's Position: We agree with petitioner. There is no

evidence that the Indian import statistics are ``tainted'' by dumping

or subsidies. We agree with the petitioner that the question is whether

Indian imports benefit from dumped or subsidized prices. There is no

evidence that India has found dumping or subsidizing of steel imports

into India. Although the Department determined there were sales to the

United States at less than fair value of steel wire rod from Japan and

Canada, these determinations alone are not sufficient bases for a

belief or suspicion that those countries also dumped imports into

India. Further, although the Department made affirmative countervailing

duty determinations on flat-rolled steel products from several

countries, there is no basis to conclude from those findings that the

production or export of carbon steel wire rod from those countries is

also subsidized. Therefore, we have no reason to ``believe or suspect''

that the Indian import statistics should not be used as a surrogate to

value carbon steel wire rod.

Comment 2: ZWG argues that the domestic Indian prices of the Steel

Authority of India Limited (SAIL) are preferable to Indian import

prices according to the Department's criteria for selecting surrogate

values. ZWG asserts that the Department is not obligated to use import

statistics merely because they were used in the original investigation

of sales at less than fair value (LTFV). ZWG argues that the Department

has never expressed a preference for import statistics, nor has the

Department ever announced a rule that it should adopt values from the

original LTFV investigation merely to be consistent. ZWG argues that

the Department's goal is to value non-market economy factors in as fair

and accurate a manner as possible. ZWG argues that, in Lasko Metal

Products v. United States, 43 F.3d 1442 (Lasko), the court stated that

the antidumping statute does not say anywhere that the factors of

production must be ascertained in a single fashion, and that the

statutory purpose is to facilitate the determination of dumping margins

as accurately as possible. ZWG contends that blindly following past

decisions in the name of consistency would violate the ruling in Lasko.

ZWG also cites Final Results of Antidumping Duty Administrative Review:

Tapered Roller Bearings and Parts Thereof, Finished and Unfinished,

From the Republic of Hungary, 56 FR 41819, wherein the Department

stated that ``simply because a particular source was used in previous

reviews of this case does not preclude the Department from relying on

alternate sources if the circumstances necessitate a change.'' ZWG

argues that this case clearly necessitates a change.

ZWG states that the Department has adopted domestic Indian steel

prices as publicly available published information (PAPI) on numerous

occasions. ZWG argues that it has demonstrated that there is a stronger

factual basis for using the SAIL data than for using the Indian import

statistics. The record, ZWG claims, establishes that ZWG uses steel

wire rod in the production of HSLWs. ZWG argues the SAIL data is size-

specific price data for steel wire rods, while the import statistics

encompass a wide variety of steel wire rods and bars. ZWG states that

the Department has expressed a preference for PAPI that is specific to

the inputs actually used in the production of subject merchandise. ZWG

cites the Notice of Preliminary Determination of Sales at Less Than

Fair Value and Postponement of Final Determination: Certain Partial-

Extension Steel Drawer Slides with Rollers from the PRC (Drawer

Slides), 60 FR 29571 (June 5, 1995), where the Department adopted the

product-specific domestic Indian steel prices from the SAIL data, the

same data ZWG proposes, and rejected Indian import statistics and

domestic price data contained in a U.S. Embassy market research report

that was not product-specific. ZWG states that, in Drawer Slides, the

Department used domestic Indian prices from the same SAIL source ZWG

has proposed instead of using the Indian import statistics that covered

the period. According to ZWG, in Drawer Slides, the Department

preferred the SAIL information, which preceded the period of

investigation, because it was product-specific. ZWG asserts that the

SAIL data is also product-specific in this case. ZWG also argues that

the SAIL data is virtually contemporaneous with the review period. ZWG

asserts that surrogate information must be contemporaneous with the

period under consideration rather than comprehensively cover the period

under consideration.

ZWG argues that the Department has stated that the purpose of

application of surrogate country information is to construct a value

for the merchandise had it been manufactured in and exported from the

surrogate country, or India in this case, citing Certain Cased Pencils

from the People's Republic of China, 59 FR 55625, and Sebacic Acid from

the People's Republic of China, 59 FR 28053. ZWG asserts that lock

washer producers in India are far more likely to buy carbon steel wire

rod produced by SAIL than they are to use imported steel wire rod. ZWG

contends that SAIL accounts for 37.25 percent of the steel wire rod

production in India. ZWG also asserts that the ratio of domestic

production to imports of the same product is 132 to 1. ZWG argues the

Department has expressed a preference for tax-exclusive public

information and that the Department must deduct excise duties and

statutory levies from the reported SAIL steel wire rod prices.

Petitioner argues that the Department has not used the SAIL prices

in any case since the Omnibus Trade and Competitiveness Act of 1988,

with the exception of the preliminary determination in Drawer Slides.

Petitioner argues that the SAIL values are far below the Indian import

values and other Indian steel prices. Petitioner further argues that

the Department has found the Indian steel producers and exporters were

being subsidized. Petitioner states that the Department determined that

steel wire rope from India was being dumped and also that steel wire

rope exports were being subsidized, citing Final Determination of Sales

at Less Than Fair Value: Steel Wire Rope from India, 56 FR 46285, and

Final Affirmative Countervailing Duty Determination: Steel Wire Rope

from India, 56 FR 46292. Petitioner argues that the Department

specifically addressed the issue of steel wire rod in the

countervailing duty case. Petitioner contends that, while no

countervailing duty order was issued, the Department clearly has reason

to ``believe or suspect'' that the Indian prices for export are

``subsidized prices.'' Petitioner asserts that the effect of the Indian

subsidy argues against the Department's using the 1994 SAIL prices.

[[Page 41997]]

Department's Position: We disagree with ZWG. ZWG has not

established that there is a stronger factual basis for using the SAIL

data than there is for using the import statistics. The scope of this

review covers HSLWs made from stainless steel, carbon alloy steel, or

carbon steel. The grade or chemistry of the steel is an important

consideration, as evidenced by the range of HSLWs covered by the order.

The chemistry of the steel determines the mechanical and physical

properties of the steel and therefore is the driving factor in

determining the end use. Therefore, in this case, the grade of steel is

a more important consideration for the Department than is size, when

choosing between different PAPI sources. Although the SAIL data is more

size-specific, it is less grade-specific than the Indian import

statistics. The Department used the SAIL data in Drawer Slides because

in that case the SAIL data provided prices for steel that most closely

resembled the specifications of the product used by the respondents.

Notice of Final Determination of Sales at Less Than Fair Value: Certain

Partial-Extension Steel Drawer Slides with Rollers from the PRC, 60 FR

54472, 54475 (October 24, 1995). Although ZWG argues that a lock

washers producer in India is far more likely to buy carbon steel wire

rod produced by SAIL than to use imported steel, our objective is to

value the surrogate steel at prices available to a producer in the

surrogate country which most closely reflect the type of steel used by

the PRC producer. As a result, ZWGs references to consumption of SAIL

steel vis-a-vis imported steel do not address our concerns on the

accuracy of the grades of steel in HSLW production. Therefore, we have

continued to use the Indian import statistics to value steel wire rod.

Comment 3: ZWG states that, in the preliminary results, the

Department assumed that the reported amount of ocean freight covered

only the ocean freight from Hong Kong to the United States and, as a

result, the Department incorrectly added an additional amount for

transportation from Ningbo or Shanghai to Hong Kong. ZWG argues that

this assumption contradicts verified information on the record

confirming that ZWG's ocean freight charges cover the entire shipment

from Ningbo or Shanghai to the United States. ZWG states that there is

record evidence that confirms the value of ocean freight charges

associated with the shipment from Hong Kong to the United States by

market economy carriers. ZWG also argues that at verification the

Department confirmed the amount of ocean freight charges paid to the

PRC carrier to bring an empty container from Hong Kong to Ningbo and to

send a container laden with HSLWs from Ningbo to Hong Kong. ZWG argues

that if the Department deducts the percentage of ocean freight costs

associated with the shipment from the PRC to Hong Kong from the

reported total ocean freight costs, the remainder will represent the

Hong Kong-to-United States portion provided by a market economy

carrier. These actual convertible currency expenses, ZWG argues, should

be used for the portion of freight handled by market economy carriers.

ZWG argues that the valuation of the PRC-to-Hong Kong ocean freight,

handled by PRC carriers, should then be based on surrogate data.

Petitioner asserts that ZWG apparently did not establish that the

price paid for the PRC-to-Hong Kong portion of the freight charge was

market-derived. Petitioner argues that the Department appropriately

assumed the entire shipping charge covered only the portion from the

PRC port to Hong Kong. Petitioner also argues that ZWG's claim that a

PRC carrier was also paid to bring an empty container from Hong Kong to

Ningbo and return the filled container to Hong Kong should be reflected

in any adjustment made by the Department.

Department's Position: We agree with ZWG in part. Ocean freight

from Hong Kong to the United States was provided by market-economy

carriers. We verified that the portion of the ocean freight expense

from Ningbo to Hong Kong was market-derived. Therefore, we have used

the reported total ocean freight expense for shipments from Ningbo to

the United States. Because we are using the total of the actual

expenses reported for ocean freight from Ningbo, the adjustment

suggested by petitioner is unnecessary.

ZWG was not able to provide evidence during verification that the

ocean freight expenses from Shanghai to Hong Kong were also market-

derived. Moreover, the reported ocean freight expense was not broken

down into Shanghai-to-Hong Kong and Hong Kong-to-the-United States

segments. Therefore, for shipments from Shanghai, we have continued to

treat the reported ocean freight expense as covering only the portion

of the transportation provided on market-economy carriers from Hong

Kong to the United States. We have calculated a separate charge using

surrogate data based on Indian costs to value shipment services from

Shanghai to Hong Kong provided by a PRC-owned carrier.

Comment 4: Petitioner argues that the Department used three steel

subcategories, 7213.41, 7213.49, and 7213.50, to establish the

surrogate value for steel wire rod in the LTFV investigation, and that

these three categories remain correct. Petitioner contends that,

according to industry standards, the steel grades used for lock washers

range from AISI 1055 to 1065. Petitioner asserts that ZWG would buy

steel available to meet specifications and that nominally referring to

the steel as ``1060 grade'' does not mean zero tolerance. Petitioner

argues that ZWG has not provided chemical analyses and established that

the steel was only 1060 or above. Petitioner argues that nothing is on

the record to indicate a change since the LTFV investigation where the

Department used the three subcategories. Petitioner argues that the

verification report does not mention the types of steel used to make

specific types of lock washers. Petitioner asserts there is no support

in the record to conclude that only 1060 grade steel was used.

ZWG argues that the Department did confirm that ZWG uses 1060 steel

wire rod in the production of lock washers. ZWG provided a detailed

description of the process for producing lock washers in its April 3,

1995 response. ZWG states that it provided the grades and concentration

levels for all chemicals and materials used in the production of lock

washers. ZWG states that at verification the Department examined the

chemicals and other materials used by ZWG. ZWG argues that the grades

and concentration levels were not among the items for which

discrepancies were discovered during verification. ZWG argues that

there is no reason to assume that there were discrepancies, merely

because the Department did not explicitly state that the Department

found nothing that contradicted ZWG's submissions. ZWG argues that the

Department, rather than the petitioner, has the responsibility for

confirming the accuracy of a response, citing Micron Tech. v. United

States, Slip Op. 95-107, where the court stated that ``it is not

surprising that [petitioner] cannot duplicate Commerce's verification

using record documents because not all documents examined at

verification are normally made a part of the administrative record.''

ZWG contends that there is no requirement that the verification report

and exhibits document elements of the response for which there is no

controversy.

ZWG argues that the Department properly found that the alternative

7213.41 and 7213.49 subcategories suggested by the petitioner were not

[[Page 41998]]

specific to the 1060 steel wire rod used by ZWG. ZWG argues that, even

if petitioner were somehow justified in claiming these subcategories

should also be used in valuing 1060 carbon steel wire rod, the import

statistics are unusable because the countries listed are either non-

market economy countries or the imports are from countries which have

been found by the Department to contain dumped or subsidized prices.

ZWG asserts that the one remaining country from the import statistics

accounts for only one ton and cannot be used because its exports are

insignificant compared to the total quantity.

AAFI argues that, if the Department continues to use the Indian

import statistics, it should continue to use the one HTS subcategory

applicable to AISI 1060, which is the grade ZWG reported using. AAFI

disagrees with petitioner's assertion that, because the Department did

not verify ZWG's steel specifications for every purchase of steel and

because there is no statement in the verification report that the

Department specifically investigated the annealing, cleaning, coating,

and other specifications, the Department should assume ZWG's submission

was inaccurate and that all three categories of steel were purchased

during the period of review. AAFI argues that it would be improper to

assume that any element not specifically addressed in the verification

report compels a presumption of deficiency or inaccuracy. AAFI states

that no deficiencies were reported with respect to reported steel

grades; therefore, AAFI contends that the questionnaire response was

verified. AAFI argues that AISI grade 1060 non-alloy steel rod contains

more than .6 percent carbon. Consequently, AAFI states, HTS 7213.50

most accurately describes the raw material actually used by ZWG. AAFI

argues that the fact that three HTS categories were used in the

original LTFV investigation does not require the Department to continue

to use them, considering that there are apparent differences between

grades reported in the period of investigation and this period of

review.

Department's Position: We disagree with the petitioner that in this

review we must continue to use the three HTS subcategories used in the

LTFV investigation. If the circumstances necessitate a change, the

Department is not precluded from changing its surrogate data simply

because particular data were used in a previous segment of the

proceeding. We disagree with petitioner's conclusion that, because the

verification report does not mention the types of steel used, there was

a discrepancy with the grade reported in ZWG's response.

We verified ZWG's response and did not find any discrepancies with

respect to its steel specifications. We agree with ZWG that there is no

requirement that the verification report document the elements of the

response for which there is no controversy. The 1060 wire rod used by

ZWG is a high carbon steel. Although tolerance levels could allow a

carbon content slightly below .6 percent, 1060 grade steel wire rod

imports would be classified under HTS 7213.50. The HTS subcategories

7312.41 and 7213.49 suggested by the petitioner contain wire rod with a

carbon content between .25 and .59 percent carbon. Therefore, for these

final results we continued to use the HTS subcategory which contains

1060 steel wire rod.

Comment 5: Petitioner argues that the wholesale price indices

(WPIs) the Department used to adjust the surrogate values to reflect

prices during the period of review should not be rounded to one decimal

point. Petitioner asserts that the effect of rounding is significant

because the values to which the WPI is applied are large. Petitioner

asserts that, since the Department makes its margin calculation to the

multiple decimal point, the Department should not round off the

inflation factor. Petitioner argues that it is imperative that the

inflators be as accurate as possible.

Department's Position: We disagree with the petitioner. The WPIs

published in the International Financial Statistics by the

International Monetary Fund are given to only one decimal point.

Therefore, it is most reasonable to round the average of the WPI for

the period to one decimal point.

Comment 6: Petitioner argues that the Department erred when it

rejected the selling, general and administrative (SG&A) figures, based

on information regarding the company Forbes Gokak, supplied to the

Department in a cable from the U.S. consulate in Bombay which the

Department used in the LTFV investigation.

Petitioner argues that the Reserve Bank of India (RBI) data for

1992 that the Department used in the preliminary results for

determining SG&A expenses are both less specific and less

contemporaneous than the Forbes Gokak information. Petitioner argues

that the main problem with the RBI data is that it does not reflect the

experience of the specific industry subject to the review. Petitioner

contends that firms included in the RBI data have different cost

structures than lock washers producers. Petitioner asserts that, on the

other hand, Forbes Gokak was producing lock washers in India in 1993,

concurrent with the period of review. Petitioner further argues that

expenses such as insurance and interest were missing from the

Departments calculation, and that an Indian business would include

these expenses in its SG&A.

ZWG argues that the Department properly discarded the Forbes Gokak

information and instead used the RBI information. ZWG argues that the

petitioners comment about the contemporaneity and specificity of the

RBI data is inapposite. ZWG contends that the contemporaneity and

specificity criteria only apply when the Department must select from

alternative PAPI values submitted by interested parties. As the State

Department cable regarding Forbes Gokak is not published information,

ZWG asserts that the criteria do not apply in this case. ZWG argues

that the Forbes Gokak cable data would still be inapplicable to this

proceeding even if the contemporaneity and specificity criteria

applied, since Forbes Gokak does not appear to manufacture lock

washers. ZWG argues that there was no concrete evidence that Forbes

Gokak has ever made lock washers, and that the information regarding

Forbes Gokak's SG&A and overhead costs contained in the cable from the

U.S. consulate in Bombay was never verified. ZWG asserts that, even if

Forbes Gokak produced lock washers, its operations and the financial

data based on its operations are overwhelmingly related to textile

production, not lock washers production. ZWG argues that other Indian

companies do manufacture lock washers.

Petitioner argues that the invalidity of the Forbes Gokak data has

not been shown. Petitioner challenges ZWGs arguments that Forbes Gokaks

primary business activities are in textile production and that the

Department should not base calculations on the financial performance of

only one of several lock washer producers. Petitioner argues that the

Forbes Gokak information specifically applies to lock washers.

Petitioner asserts that Forbes Gokak was identified as a producer and

that the Department routinely and appropriately uses unverified

information from State Department cables. Petitioner points out that in

this case State Department cables are being used for transportation

rates.

ZWG argues that the use of a separate State Department cable for

transportation costs does not validate the overhead, SG&A and profit

values of Forbes Gokak. ZWG explains that it proposed the use of the

State Department cable in valuing

[[Page 41999]]

transportation costs for lack of any alternative PAPI. ZWG argues that

the State Department cable information must fail when information

demonstrating the factual infirmity of the cable and appropriate PAPI

are on the record before the Department. ZWG argues that, unlike that

of the transportation costs, the credibility of the overhead, SG&A and

profit data are dependent on Forbes Gokaks status as a company devoted

to the production of lock washers. ZWG states that the Department has

used the RBI data in many proceedings subsequent to the LTFV

investigation of lock washers. ZWG argues that in each decision the

Department has held that the overhead, SG&A, and profit data from the

RBI bulletin were sufficiently specific to the subject merchandise for

use in the Departments dumping calculation.

With respect to petitioner's claim that the RBI data do not include

certain expenses, ZWG asserts that the petitioner implies that the

Department should tailor the SG&A surrogate value to fit the SG&A

expenses paid by ZWG during the period of review. ZWG cites Drawer

Slides to argue that the Department has a policy of not tailoring

surrogate country values to reflect respondents actual experience: ``in

NME proceedings, the FMV is normally based on factors valued in a

surrogate country (with regard to, for example, actual selling

expenses) on the premise that the actual experience cannot be

meaningfully considered.'' ZWG also cites Notice of Final Determination

of Sales at Less Than Fair Value: Disposable Pocket Lighters from the

PRC, 60 FR 22359: ``we disagree that we are required to customize

factor value to reflect conditions of certain PRC respondents.''

AAFI agrees that the Department properly used the RBI data for

overhead and SG&A in the preliminary results. AAFI argues that the SG&A

figure provided in the State Department cable is deficient for several

reasons, not the least of which is the fact that a 30 percent SG&A for

a fastener manufacturer is so abnormally high that its credibility is

manifestly suspect. AAFI argues that, while the Department stated in

the LTFV investigation that it was using the Forbes Gokak data because

that company was the only major producer of HSLWs in India, this

premise has now been proven incorrect. AAFI argues that what has become

less clear is the assertion that Forbes Gokak is even engaged in lock

washer production. AAFI argues that it is appropriate to use the RBI

data under these circumstances. AAFI argues further that it has been

Department policy to use alternative data when a particular surrogate

value is deemed aberrational, citing Preliminary Determination of Sales

at Less Than Fair Value: Sulfanilic Acid From the Republic of Hungary,

57 FR 48293. AAFI argues that the 30 percent figure is clearly

aberrational when compared to the metal working industry average as a

whole as reflected in the RBI data.

Departments Position: During the LTFV investigation, the Department

used the Forbes Gokak information contained in the cable from the U.S.

consulate in Bombay because it ``indicate[d] that Forbes Gokak is the

only major producer of helical spring lock washers in India.'' In the

preliminary results of this review, we declined to use Forbes Gokak's

data because information submitted on the record by ZWG indicated that

Forbes Gokak was not a producer of lock washers. In response to

comments by both petitioner and respondent, we decided to request

clarifying information after the preliminary results. We received a

letter from Forbes Gokak and the company's 1994/1995 consolidated

annual report. This information indicated that Forbes Gokak did in fact

produce lock washers. However, the proportion of lock washer sales in

relation to sales of other products, mostly textiles, was minuscule.

Because the SG&A, overhead, and profit figures in Forbes Gokak's

financial statement were reported on a company-wide basis, and could

not be segregated according to product line, we cannot determine

whether the SG&A, overhead, and profit figures are representative of

lock washer production. Therefore, we determine that information from

the Reserve Bank of India is more appropriate in this case.

We agree with petitioner that an Indian producer would include

interest and insurance in its SG&A. We have recalculated the surrogate

SG&A percentage to include interest and insurance.

Comment 7: Petitioner argues that the overhead rate that the

Department used, based on the RBI data, is also less specific and less

contemporaneous than the Forbes Gokak information. Petitioner argues

that the Forbes Gokak overhead figure is comparable to the RBI number,

and that this shows that the Forbes Gokak information is reliable.

Petitioner argues that ZWGs attempt, in its June 30, 1995 submission,

to show that its machines are old and have little value avoids the

question of what the situation would be in the surrogate country.

Petitioner argues that the ``cost'' in the PRC is distinctly different

from that in a market economy country and that expenses incurred by ZWG

are not relevant to determining the cost in a market economy country.

AAFI argues that ZWG made the point, in a submission filed prior to

the preliminary results, that lock washer production is not capital-

intensive or does not have high-R&D cost anywhere. AAFI argues that a

manufacturer of this product in a country which has achieved a level of

economic development comparable to that of the PRC will probably

operate a lock washer facility of a nature comparable to that of a

manufacturer in the PRC. AAFI argues that such a facility will likely

not be characterized by high SG&A and overhead costs relative to

output. AAFI argues that there is no indication that either Indian or

Chinese lock washer production is so capital intensive that the

discredited Forbes Gokak data should be used.

AAFI argues the Department should continue to use the RBI

information, rather than the Forbes Gokak figure, for overhead in its

final calculation. AAFI argues that consistency and logic dictate that,

under the circumstances of record for this period of review, the same

source should be used for the SG&A and overhead figures.

Departments Position: We disagree with the petitioner, in part. For

the reasons stated in our response to Comment 6, we find that the RBI

data is more appropriate to use than the Forbes Gokak information

supplied in the cable from the consulate in India. We do not agree that

the similarity between the RBI and Forbes Gokak overhead percentages

support the use of the information in the cable. Further, there is no

evidence to support petitioners assertion that the data in the cable is

more contemporaneous with the period of review than is the RBI data. We

do agree with the petitioner that the costs incurred between PRC

parties are not relevant to costs in a market-economy country and have

not made specific adjustments to overhead or SG&A for the experience of

the PRC producer.

Comment 8: Petitioner argues that even if ZWG (or the plating

factory) used its own trucks to pick up and deliver materials, the cost

of these trips should have been reflected as part of transportation

expenses and not included as part of overhead expenses. Petitioner

argues that including the cost of transportation to and from the

plating plant as part of factory overhead is at variance with the

approach the Department has taken in this and other cases where

deliveries are involved. Petitioner argues that, although the

Department accepted ZWGs argument in

[[Page 42000]]

the LTFV investigation, the Department has not used this approach in

any other proceeding of which petitioner is aware.

ZWG argues that petitioner erroneously criticizes the Department

for its decision not to add inland freight costs for expenses

associated with trucking lock washers to and from the plating

subcontractor. ZWG argues that the Department properly found such

expenses to be included in the overhead expenses of ZWG. ZWG argues

that this is consistent with the use of the RBI data for overhead,

which includes power and fuel, repairs to machinery, depreciation, and

rates and taxes. ZWG argues that all of these expenses are associated

with the operation of motor vehicles in India, the surrogate country.

ZWG contends that the Department correctly did not add such

transportation costs to the material costs, as in the original LTFV

investigation.

Departments Position: We agree with ZWG. As in the LTFV

investigation, we determined that the costs associated with this type

of transportation are included in the surrogate value for factory

overhead. Therefore, we did not calculate a separate transportation

cost for trucking the lock washers to and from the plating

subcontractor. See Notice of Preliminary Determination of Sales at Less

Than Fair Value: Honey From the People's Republic of China, 60 FR

14725, 14729 (March 20, 1995).

Comment 9: FI argues that the Department used the per kilogram

value of production and plating chemicals but made no apparent

adjustments to reflect the difference between the concentration levels

reported by respondents and those in the import statistics. AAFI argues

that, in the amended final determination for the LTFV investigation of

lock washers from the PRC, the Department adjusted certain chemical

prices obtained from the Indian import statistics to reflect the

concentrations reported by ZWG and verified by the Department. AAFI

argues that similar adjustments were made in other cases, citing Notice

of Final Determination of Sales at Less Than Fair Value: Certain Paper

Clips from the PRC, 59 FR 51168.

Petitioner states that during the LTFV investigation several

adjustments were made to reflect concentration levels. Petitioner

argues that in this case neither AAFI nor ZWG has claimed on the record

that specific adjustments reflecting concentration levels should be

made.

Departments Position: We agree with AAFI in part. ZWG claimed in

its June 6, 1995 submission that the surrogate values used by the

Department should be adjusted to the actual concentration levels used

by ZWG. Where we have been able to determine the concentration of the

surrogate input, we have adjusted for differences between the surrogate

and the actual material. ZWG has not provided any information

concerning the concentration levels of the surrogate values and the

Department has been unable to determine the concentration levels of

imports shown in the Indian import statistics. Therefore, we have made

no adjustment for concentration levels where the surrogate

concentration is not known.

Final Results of Reviews

As a result of the comments received, we have changed the results

from those presented in our preliminary results of review:

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

Margin

Manufacturer/Exporter Time period (percent)

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

Zhejiang Wanxin Group Co., Ltd.................. 10/15/93-

09/30/94 26.08

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

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between U.S. price and FMV may vary from the percentage

stated above. The Department will issue appraisement instructions

directly to the Customs Service.

Furthermore, the following deposit rates will be effective upon

publication of these final results of administrative review for all

shipments of HSLWs from the PRC entered, or withdrawn from warehouse,

for consumption on or after the publication date, as provided for by

section 751(a)(1) of the Tariff Act: (1) For ZWG, which has a separate

rate, the cash deposit rate will be the company-specific rate

established in these final results of review; (2) for all other PRC

exporters, the cash deposit rate will be 128.63 percent, the PRC rate

established in the LTFV investigation of this case; and (3) for non-PRC

exporters of subject merchandise from the PRC, the cash deposit rate

will be the rate applicable to the PRC supplier of that exporter.

These deposit rates shall remain in effect until publication of the

final results of the next administrative review.

This notice also 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 orders (APOs) of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with 19 CR 353.34(d)(1). Timely written notification

of the return/destruction of APO materials or conversion to judicial

protective order is hereby requested. Failure to comply with the

regulations and the terms of an 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 6, 1996.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-20613 Filed 8-12-96; 8:45 am]

BILLING CODE 3510-DS-P