Certain Helical Spring Lock Washers From the People's Republic of China; Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-822]

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

China; Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of Preliminary Results of Antidumping Duty

Administrative Review.

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SUMMARY: We preliminarily determine that sales of certain helical

spring lock washers from the People's Republic of China were made below

normal value during the period October 1, 1996 through September 30,

1997. Interested parties are invited to comment on these preliminary

results.

EFFECTIVE DATE: November 9, 1998.

FOR FURTHER INFORMATION CONTACT: Sally Hastings or Vincent Kane, Import

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

Commerce, 14th Street and Constitution Avenue, NW., Washington, DC

20230; telephone (202) 482-3464 or 482-2815, 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, as amended (the

Act) by the Uruguay Round Agreements Act (URAA). In addition, unless

otherwise indicated, all citations to the Department of Commerce's (the

Department's) regulations are to 19 CFR part 351 et. seq. Antidumping

Duties; Countervailing Duties; Final Rule, 62 FR 27296 (May 19, 1997).

Background

On October 19, 1993, the Department published the antidumping duty

order on certain helical spring lock washers (HSLWs) from the People's

Republic of China (PRC) (58 FR 53914). The Department notified

interested parties of the opportunity to request an administrative

review of this order on October 2, 1997 (62 FR 51628). The

[[Page 60300]]

petitioner, Shakeproof Industrial Products Division of Illinois Tool

Works, Inc., and the respondent, Zhejiang Wanxin Group Co. (ZWG) (also

known as Hangzhou Spring Washer Plant), requested that the Department

conduct an administrative review of ZWG. These requests were received

on October 24 and 27, 1997, respectively. The notice of initiation of

this administrative review was published on November 26, 1997 (62 FR

63069). On July 10, 1998, the Department extended the time limits for

completion of the preliminary results in this proceeding until October

31, 1998 (See 63 FR 37328).

The Department is conducting this administrative review in

accordance with Section 751 of the Act.

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 (HTSUS). Although the HTSUS subheading is provided for

convenience and customs purposes, the written description of the scope

of this proceeding is dispositive.

This review covers the period from October 1, 1996 through

September 30, 1997.

Verification

As provided in section 782(i) of the Act, we verified sales and

factor information provided by ZWG in Xiaoshan, PRC, using standard

verification procedures, including on-site inspection of its

facilities, the examination of relevant sales and financial records,

and selection of original documentation containing relevant

information. The findings at verification are detailed in the

verification report dated October 15, 1998, the public version of which

is on file in the Central Records Unit, Room B099 of the Main Commerce

building (CRU-Public File).

Separate Rates Determination

To establish whether a company operating in a state-controlled

economy is sufficiently independent to be entitled to a separate rate,

the Department analyzes each exporting entity under the test

established in the Final Determination of Sales at Less Than Fair

Value: Sparklers from the People's Republic of China, 56 FR 20588 (May

6, 1991) (Sparklers), as amplified by the Final Determination of Sales

at Less Than Fair Value: Silicon Carbide from the People's Republic of

China, 59 FR 22585 (May 2, 1994) (Silicon Carbide). Under this policy,

exporters in non-market economies (NMEs) are entitled to separate,

company-specific margins when they can demonstrate an absence of

government control, both in law and in fact, with respect to export

activities. Evidence supporting, though not requiring, a finding of de

jure absence of government control over export activities includes: (1)

An absence of restrictive stipulations associated with the individual

exporter's business and export licenses; (2) any legislative enactments

decentralizing control of companies; and, (3) any other formal measures

by the government decentralizing control of companies. De facto absence

of government control over exports is based on four factors: (1)

Whether each exporter sets its own export prices independently of the

government and without the approval of a government authority; (2)

whether each exporter retains the proceeds from its sales and makes

independent decisions regarding the disposition of profits or financing

of losses; (3) whether each exporter has the authority to negotiate and

sign contracts and other agreements; and, (4) whether each exporter has

autonomy from the government regarding the selection of management.

(See Silicon Carbide, 59 FR at 22587 and Sparklers, 56 FR at 20589.)

In each of the previous administrative reviews of the antidumping

duty order on HSLWs from the PRC, covering successive review periods

from October 1, 1993 through September 30, 1996, we determined that ZWG

merited a separate rate. We have found that the evidence on the record

of this review also demonstrates an absence of government control, both

in law and in fact, with respect to ZWG's export activities according

to the criteria identified in Sparklers, and an absence of government

control with respect to the additional criteria identified in Silicon

Carbide. Therefore, we have continued to assign ZWG a separate rate.

Export Price

Because ZWG sold the subject merchandise to unaffiliated purchasers

in the United States prior to importation into the United States and

Constructed Export Price methodology is not otherwise indicated, we

have used export price in accordance with section 772(a) of the Act.

We calculated export price based on the f.o.b. price to

unaffiliated purchasers. From this price, we deducted amounts for

foreign inland freight and brokerage and handling. We valued these

deductions using surrogate country cost data. We selected India as the

surrogate country for the reasons explained in the ``Normal Value''

section of this notice.

Normal Value

Section 773(c)(1) of the Act provides that the Department shall

determine normal value (NV) using a factors-of-production methodology

if: (1) The merchandise is exported from an NME, and (2) the

information does not permit the calculation of NV using home-market

prices, third-country prices, or constructed value under section 773(a)

of the Act. The Department has treated the PRC as an NME in all

previous antidumping cases. In accordance with section 771(18)(C)(i) of

the Act, any determination that a foreign country is an NME shall

remain in effect until revoked by the administering authority. None of

the parties to this proceeding has contested such treatment in this

review. Moreover, parties to this proceeding have not argued that the

PRC HSLWs industry is a market-oriented industry (MOI) and,

consequently, we have no basis to determine that the information would

permit the calculation of NV using PRC prices or costs. Therefore, we

calculated NV based on factors of production (FOP) in accordance with

sections 773(c)(3) and (4) of the Act and 19 CFR 351.408(c).

Under the FOP methodology, we are required to value the NME

producer's inputs in a comparable market economy country that is a

significant producer of comparable merchandise. We determined that

India is at a comparable level of economic development to that of the

PRC. Also, India is a significant producer of comparable merchandise.

Therefore, for this review, we have used Indian prices to value the FOP

except where the factor was purchased from a market economy supplier

and paid for in a market economy currency. (See Memorandum to Susan

Kuhbach from Jeff May, dated March 5, 1998, ``Certain Helical Spring

Lock Washers from the

[[Page 60301]]

PRC: Nonmarket Economy Status and Surrogate Country Selection,'' which

is on file in the CRU-Public File.)

We selected, where possible, publicly available values from India

which were: (1) Average non-export values; (2) representative of a

range of prices within the POR or most contemporaneous with the POR;

(3) product-specific; and, (4) tax-exclusive. We valued the factors of

production as follows:

A meaningful amount of the input carbon steel wire rod was

purchased from the United Kingdom, a market economy supplier, and paid

for in a market economy currency. Pursuant to 19 CFR 351.408(c)(1), we

valued this factor using the price paid to the market economy supplier.

Thus, for carbon steel wire rod values, we used the average cost per

metric ton of carbon steel wire rod imported from the United Kingdom by

ZWG during the period of review. We made further deductions to account

for the freight costs incurred between the port and ZWG.

For the value of chemicals used in the production and

plating process of HSLWs, we used per kilogram values obtained from the

Indian publication Chemical Weekly and from the Monthly Statistics of

the Foreign Trade of India-Imports (MFTI). We adjusted these values,

where appropriate, to reflect inflation through the POR using the

Wholesale Price Index (WPI) as reported in the International Financial

Statistics published by the International Monetary Fund (IMF). We also

adjusted these values to account for freight costs incurred between the

supplier and ZWG.

For labor, we used the regression-based wage rate for the

PRC in ``Expected Wages of Selected NME Countries,'' located on the

Internet at http://www.ita.doc.gov/import__admin/records/wages/.

Because of the variability of wage rates in countries with similar per

capita GDP's, 19 CFR 351.408(c)(3) of the Department's regulations

requires the use of a regression-based wage rate. The source for the

regression based-wage rates is ``Expected Wages of Selected NME

Countries--1995 Income Data,'' 1996 Year Book of Labour Statistics,

International Labour Office, (Geneva: 1996) Chapter 5B: Wages in

Manufacturing.

For factory overhead, selling, general, and administrative

expenses (SG&A), and profit values, we used information from the

January, 1997 Reserve Bank of India Bulletin for the Indian industry

group ``Processing and Manufacturing: Metals, Chemicals, and Products

Thereof.'' From this information, we were able to determine factory

overhead as a percentage of the total cost of manufacturing, SG&A as a

percentage of the total cost of manufacturing, and the profit rate as a

percentage of the cost of manufacturing plus SG&A.

For packing materials, we used the per kilogram values

obtained from the MFTI. Where necessary, we adjusted these values to

reflect inflation through the POR using the WPI published by the IMF.

We also adjusted them to account for freight costs incurred between the

PRC supplier and ZWG.

To value coal, we used a per kilogram value obtained from

the MFTI. We adjusted this value to reflect inflation through the POR

using the WPI published by the IMF. We also adjusted this amount to

account for freight costs incurred between the supplier and ZWG.

To value electricity, we used the price of electricity for

1995 reported in the 1995 Confederation of Indian Industries Handbook

of Statistics. We adjusted the value to reflect inflation through the

POR using the WPI published by the IMF.

To value water, we used the November, 1993 Water Utilities

Data Book for the Asian and Pacific Region published by the Asian

Development Bank. We adjusted the value to reflect inflation through

the POR using the WPI published by the IMF.

To value foreign brokerage and handling, we used

information reported in the Less Than Fair Value Investigation of

Stainless Steel Bar from India in a document dated April 22, 1994.

To value truck freight, we used a rate derived from the

April 20, 1994 issue of The Times of India. We adjusted the rate to

reflect inflation through the POR using the WPI published by the IMF.

To value rail freight, we used rate information published

by the Indian Railway Conference Association for rates in force from

April 1, 1995. We adjusted the rate to reflect inflation through the

POR using the WPI published by the IMF.

To value shipping freight, we used a rate reported to the

Department in the August, 1993 cable from the U.S. Embassy in India

which was submitted for and used in the Final Determination of Sales at

Less Than Fair Value: Certain Helical Spring Lock Washers from the

People's Republic of China, 58 FR 48833 (September 20, 1993). We

adjusted the rate to reflect inflation through the POR using the WPI

published by the IMF.

For a complete description of the factor values used, see

``Memorandum to File: Factor Values Used for the Preliminary Results of

the Fourth Administrative Review,'' dated November 2, 1998 (Factors

Memorandum) a public version of which is available in the Public File.

Additionally, we adjusted the reported figure for indirect labor

based on our findings at verification, see ``Memorandum to File:

Calculation Notes for Preliminary Results,'' dated November 2, 1998, a

public version of which is available in the Public File.

Preliminary Results of Review

We preliminarily determine that the following dumping margin

exists:

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

Margin

Manufacturer/exporter Time period (percent)

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Zhejiang Wanxin Group Co., Ltd.... 10/01/96-09/30/97 4.29

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Parties to the proceeding may request disclosure within 5 days of

the date of publication of this notice, in accordance with 19 CFR

351.224. Any interested party may request a hearing within 10 days of

publication of this notice. Any hearing, if requested, will be held

approximately 44 days after the publication of this notice. Interested

parties may submit written comments (case briefs) within 30 days of the

date of publication of this notice. Rebuttal comments (rebuttal

briefs), which must be limited to issues raised in the case briefs, may

be filed not later than 37 days after the date of publication. The

Department will publish a notice of the final results of this

administrative review, which will include the results of its analysis

of issues raised by the parties, within 120 days of publication of

these preliminary results.

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Pursuant to 19

CFR 351.212(b) (1), we have calculated an importer-

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specific ad valorem duty assessment rate based on the ratio of the

total amount of antidumping duties calculated for the examined sales

made during the POR to the total value of the subject merchandise

entered during the POR. In order to estimate the entered value, we

subtracted international movement expenses from the gross sales value.

This rate will be assessed uniformly on all entries of that specific

importer made during the POR. The Department will issue appraisement

instructions directly to the U.S. Customs Service.

Furthermore, the following cash deposit requirements will be

effective upon publication of the final results of this 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)(2)(C) of the Act: (1) For ZWG, which has

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

rate established in the final results of this administrative review;

(2) for all other PRC exporters, the cash deposit rate will be the PRC

rate, which is 128.63 percent, which is the All Other PRC

Manufacturers, Producers and Exporters rate from the Final

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

Lock Washers from the PRC, 58 FR 48833 (September 20, 1993); 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, when imposed, shall remain in effect until

publication of the final results of the next administrative review.

This notice also serves as a preliminary 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 the subsequent

assessment of doubled antidumping duties.

This administrative review and notice are in accordance with

sections 751(a)(1) and 771(i)(1) of the Act.

Dated: November 3, 1998.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 98-29995 Filed 11-6-98; 8:45 am]

BILLING CODE 3510-DS-P