Chrome-Plated Lug Nuts From The People's Republic of China; Final Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-808]

Chrome-Plated Lug Nuts From The People's Republic of China; Final

Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, U.S.

Department of Commerce

ACTION: Notice of Final Results of the Antidumping Duty Administrative

Review of Chrome-Plated Lug Nuts from the People's Republic of China.

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SUMMARY: On June 10, 1998, the Department of Commerce (the Department)

published the preliminary results of its administrative review of the

antidumping order on chrome-plated lug nuts (lug nuts) from the

People's Republic of China (PRC). The review covers one exporter of the

subject merchandise and the period September 1, 1996 through August 31,

1997.

We gave interested parties an opportunity to comment on our

preliminary results. We received comments from Jiangsu Rudong Grease

Gun Factory (Rudong). We did not receive rebuttal comments. After

considering these comments, we have changed the final results from

those presented in the preliminary results of review and have

determined that sales have been made below normal value (NV), as

explained below.

EFFECTIVE DATE: October 7, 1998.

FOR FURTHER INFORMATION CONTACT: Eric Scheier, Thomas Gilgunn, or

Maureen Flannery, Antidumping/Countervailing Duty Enforcement, Import

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

Commerce, 14th Street and Constitution Avenue, N.W., Washington D.C.

20230; telephone (202) 482-4052, (202) 482-0648 and (202) 482-3020

respectively .

Applicable Statute

Unless otherwise indicated, all citations to the statute are

references to the provisions effective January 1, 1995, the effective

date of the amendments made to the Tariff Act of 1930 (the Act) by the

Uruguay Round Agreements Act. In addition, unless otherwise indicated,

all citations to the Department's regulations are to the provisions

codified at 19 CFR part 351.

Background

On June 10, 1998, the Department published the preliminary results

of review (63 FR 31719). The Department has now completed this

administrative review in accordance with section 751 of the Act.

Scope of Review

The products covered by the order and this review are one-piece and

two-piece chrome-plated and nickel-plated lug nuts from the PRC. The

subject merchandise includes chrome-plated and nickel-plated lug nuts,

finished or unfinished, which are more than \11/16\ inches (17.45

millimeters) in height and which have a hexagonal (hx) 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. Excluded from the order

are zinc-plated lug nuts, finished or unfinished, stainless steel

capped lug nuts, and chrome-plated lock nuts.

The merchandise under review is currently classifiable under item

7318.16.00 of the Harmonized Tariff Schedule of the United States

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

customs purposes, the written description of the merchandise is

dispositive.

This review covers the period September 1, 1996 through August 31,

1997.

Interested Party Comments

We gave interested parties an opportunity to comment on the

preliminary results of review. We received comments from Rudong. We did

not receive rebuttal comments from any party.

Comment 1. Rudong argues that the October 1996 Indian import

statistics used to value steel wire rod are aberrational. For the

preliminary results, the Department used the then available Indian

import statistics for September, October, November, and December 1996.

Rudong states that Indian imports of steel wire rod as valued by the

October 1996 data are 3.5 times greater than the value of steel wire

rod in the September, November, and December

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Indian import statistics, and that the values for imports into India

from Germany and Japan in the October Indian import statistics are ten

and four times greater, respectively, than the value of steel wire rod

in the September, November, and December Indian import statistics.

Rudong argues that October 1996 Indian import statistics, or, at a

minimum, values for imports from Germany and Japan in the October 1996

statistics, should be removed from the calculation of surrogate value

for steel wire rod. Rudong further argues that because the HTSUS

classification used by the Department to value steel wire rod is a

basket category of bars and rods, there is a significant possibility

that the imports from Germany and Japan were of more expensive, higher

specification merchandise than steel used in the production of lug

nuts. Rudong also notes the possibility of a clerical error in the

October 1996 statistics.

Rudong further argues that the September, November, and December

Indian import statistics are accurate when compared to the now

available import values of steel wire rod to India for January through

May 1997, and the values of steel wire rod derived from import

statistics for Indonesia, Canada, and the United States.

Lastly, Rudong argues that the Department has in the past rejected

aberrational values. Rudong cites to Certain Helical Spring Lock

Washers from the People's Republic of China; Final Results of

Antidumping Duty Administrative Review, 62 FR 61794 (November 19,

1997), in which the Department rejected aberrational values for

hydrochloric acid, and to Chrome-Plated Lug Nuts from the People's

Republic of China; Final Results of Antidumping Duty Administrative

Review, 61 FR 58514 (November 15, 1996) (Lug Nuts 1995-1996), in which

the Department rejected certain aberrational Indian import data for

steel wire rod.

Department's Position. We agree that the value for Indian imports

of German steel in October 1996, 168.9 rupees per kilogram, is

aberrational, based on a comparison of this value with other Indian

import values during the September 1996 through May 1997 period (the

portion of the period of review for which data is now available). The

value of these other imports ranged for 12.72 to 66.00 rupees per

kilogram, with a weighted average of 17.64 rupees per kilogram.

Accordingly, for the purposes of these final results, we have excluded

October 1996 Indian imports of German steel from our calculation of

surrogate value because their value is many times higher than the value

of other Indian imports of steel. See ``Analysis for the Final Results

of the 1996-1997 Administrative Review of Chrome-plated Lug Nuts from

the Peoples Republic of China--Jiangsu Rudong Grease Gun Factory''

(``Final Analysis Memo for PRC Lug Nuts 1996-1997''). We also note that

the data for October 1996 Indian imports of German steel are

aberrational when compared to the value of similar steel imports into

other market economies such as Canada, Indonesia, and the United

States. In Lug Nuts 1994-1995, the Department discarded certain

surrogate Indian steel values because they were found to be

aberrational when compared to the steel values of these three market

economies.

Additionally, for these final results we have included in the

calculation of the surrogate value for steel Indian import data from

January 1997 through May 1997. This information was unavailable to the

Department for the preliminary results, and has since become available.

See memorandum to the file dated September 30, 1998 ``Final Analysis

Memo for PRC Lug Nuts 1996-1997.''

Comment 2. Rudong argues that the Department erred in using, as a

surrogate for marine insurance, a per-kilogram surrogate value derived

from actual insurance payments from the investigation of sulphur dyes

from India, rather than a surrogate rate representing a percentage of

the insurable value of the merchandise at issue. Rudong states that, in

practice, marine insurance is not paid on a per-weight basis but as a

percentage of value. Therefore, Rudong claims, it is this percentage,

not the actual payment for a shipment of different merchandise (in this

case sulphur dyes), that the Department should use to calculate

surrogate marine insurance. Rudong suggests that the Department use the

surrogate rate of 2.2 percent from Pakistan used in Final Determination

of Sales at Less Than Fair Value: Chrome-Plated Lug Nuts From the

People's Republic of China, 56 FR 46153 (September 10, 1991).

Department's Position. We agree with Rudong. Because marine

insurance is incurred as a percentage of value (see Page 5 of Rudong's

questionnaire response dated July 10, 1998), it is appropriate to apply

a surrogate rate on a value basis.

In Peer Bearing Company v. United States, No. 98-70, slip op., (CIT

May 27, 1998), the Department was instructed to recalculate the per-

kilogram surrogate value for marine insurance--the same value used in

the preliminary results for this segment of the proceeding--based on

value rather than weight. The Department, for those remand results,

recalculated a surrogate rate of 0.241 percent of value, based on data

used in the investigation of sulphur dyes from India, and applied this

rate to gross unit price to recalculate a surrogate value for marine

insurance. See memorandum to the file dated July 21, 1998:

``Recalculation of Marine Insurance Expense Pursuant to Remand on

Tapered Roller Bearings from the People's Republic of China,'' placed

on the record of this review by the Department on September 21, 1998.

For these final results, we are using the rate of 0.241 percent

rather than the 2.2 percent rate suggested by Rudong because the former

is a figure from the primary surrogate country in this segment of the

proceeding, India, while the latter is from Pakistan.

Comment 3. Rudong argues that the Department miscalculated the

surrogate rate for ocean freight incurred for shipment by a non-market

economy carrier. Rudong asserts that the Department apparently intended

to calculate the ocean freight rate for one non-market economy carrier

by applying a weighted average of the prices charged by the market-

economy carriers. In so doing, Rudong contends, the Department erred by

attempting to recalculate ocean freight on a weight basis. Rudong

asserts that the Department's calculation does not work, as shown by

the fact that the calculated amount is twice as high as any of the

market-economy invoices. Rudong argues that the Department's

calculations are unnecessary and that the Department should use the

data provided for the invoices shipped on market-economy carriers to

calculate a per-value surrogate rate for any invoices shipped on non-

market-economy carriers.

Department's Position. We agree, in part, with Rudong and have

recalculated ocean freight accordingly. Because ocean freight is

incurred on a container, and therefore weight, basis, the preferred

methodology to value ocean freight is on a weight basis. However, there

is no way to allocate the total freight cost to subject and non-subject

merchandise listed on Rudong's invoice by weight. Consequently, we have

no way to derive a weight-based ocean freight value from the

documentation provided by Rudong. Therefore, we have calculated an

alternative rate for the ocean freight incurred on Rudong's non-market-

economy forwarder based on a weighted-average per-value rate for the

shipments made on market-economy carriers.

Comment 4. Rudong argues that the Department based foreign inland

freight

[[Page 53874]]

on the midpoint for the range of weights specified for subject

merchandise in the CONNUM rather than the actual net weight of the

individual products analyzed. Rudong states that the Department

estimated the weight of each product by using a midpoint of the weight

range reported to create CONNUMs for matching purposes rather than

using a net weight equaling gross weight minus scrap, as done in prior

segments of this proceeding.

Department's Position. We agree with Rudong and have recalculated

inland freight on the basis of net weight and distance. For the

calculation of freight, we prefer to use actual weight instead of

estimated weight based on the range of weights within each CONNUM. We

calculated actual weight by subtracting scrap from the gross weight of

steel wire rod. This was the methodology used in the prior review of

this order. See the public version of ``Analysis for the Preliminary

Results of the Fourth Administrative Review of Chrome-plated Lug Nuts

from the People's Republic of China covering the period September 1,

1994 through August 31, 1995--Jiangsu Rudong Grease Gun Company.''

Comment 5. Rudong argues that the Department incorrectly calculated

the tax-exclusive price for chemicals by setting the tax-exclusive

price equal to the tax-inclusive price divided by the sum of one plus

excise tax rate plus sales tax rate. Rudong states that the correct

equation is: tax-exclusive price=tax-inclusive price/[(1+excise tax

rate)*(1+sales tax rate)]. Rudong notes that their proposed formula was

used consistently in past cases.

Department's Position. We agree with Rudong. According to Indian

Customs Tariffs, as presented on the Department's Trade Information

Center web page, Indian excise and sales taxes are assessed

sequentially. See Attachment 4 of the ``Final Analysis Memo for PRC Lug

Nuts 1996-1997.'' Therefore, the correct equation is: tax-exclusive

price=tax-inclusive price/[(1+excise tax rate)*(1+sales tax rate)].

Comment 6. Rudong argues that the Department applied an incorrect

formula in the calculation of factory overhead. Rudong states that the

Department calculated overhead by multiplying the overhead rate by the

sum of materials, labor and energy, and then dividing that product by

the difference of one minus the overhead rate. Rudong argues that

because the surrogate overhead rate was originally calculated as a

percentage of materials, labor and energy, the factor for overhead in

this segment of the proceeding should be calculated by multiplying the

overhead rate by the sum of Rudong's materials, labor, and energy.

Department's Position. We disagree with Rudong. In the calculation

of the surrogate overhead rate, the Department used the same

methodology as used in previous reviews of chrome-plated lug nuts. See

``Analysis for the Preliminary Results of the Fourth Administrative

Review of Chrome-plated Lug Nuts from the People's Republic of China

covering the Period September 1, 1994 through August 31, 1995--Jiangsu

Rudong Grease Gun Factory.'' This methodology is based on an industry

income statement published in the April 1995 Reserve Bank of India

Bulletin; see Attachment eight of the memorandum to the file dated June

2, 1998: ``Factor Values Used for the Preliminary Results of the 1996-

97 Administrative Review of Chrome-Plated Lug Nuts from the PRC.'' The

Department divided total overhead, less power and fuel, by a cost of

manufacturing (COM) amount that already included total factory overhead

as a component. Thus, in calculating Rudong's surrogate overhead cost

we had to allow for the inclusion of total factory overhead as a part

of the overhead rate equation's denominator. We did this by deducting

that overhead percentage from a factor of one in the calculation of

Rudong's surrogate overhead cost.

Final Results of Review

We determine that the following dumping margins exist:

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Margin

Manufacturer/exporter Time period (percent)

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Jiangsu Rudong Grease Gun Factory.......... 9/1/96-8/31/97 1.29

PRC-Wide rate.............................. 9/1/96-8/31/97 44.99

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The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between export price and NV may vary from the percentage

stated above for Rudong. We have calculated importer-specific duty

assessment rates for lug nuts by dividing the total dumping margins

(calculated as the difference between NV and EP) for each importer/

customer by the total number of units sold to that importer/customer.

We will direct Customs to assess the resulting per-unit dollar amount

against each unit of merchandise in each of the importer's/customer's

entries during the review period. The Department will issue

appraisement instructions directly to the Customs Service.

Furthermore, the following deposit rates will be effective upon

publication of this notice of final results of review for all shipments

of lug nuts from the PRC entered, or withdrawn from warehouse, for

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

section 751(a)(2)(C) of the Act: (1) for Rudong, which was found to

merit a separate rate for the final results of this review, the cash

deposit rate will be 1.29 percent; (2) for all other PRC exporters, the

cash deposit rate will be the PRC-wide rate; and (3) for non-PRC

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

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

These deposit rates, when imposed, 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 351.402(f) 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 subsequent assessment

of double antidumping duties.

Notification to Interested Parties

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 351.306. See 63 FR 24391, 24403 (May 4,

1998). 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 Act (19 U.S.C. 1675(a)(1)) and 19 CFR 351.221.

Dated: September 30, 1998.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 98-26917 Filed 10-6-98; 8:45 am]

BILLING CODE 3510-DS-P