66 FR 54503, October 29, 2001 A-570-803 POR: 2/01/00-7/31/00 Public Document AD/CVD GIIO4: JDP October 23, 2001 MEMORANDUM TO: Faryar Shirzad Assistant Secretary for Import Administration FROM: Bernard T. Carreau Deputy Assistant Secretary for Import Administration, Group II SUBJECT: Issues and Decision Memorandum for the New Shipper Review of Heavy Forged Hand Tools from the People's Republic of China -- February 1, 2000 through July 31, 2000 Summary We have analyzed the comments of interested parties in the new shipper review of the antidumping duty order on heavy forged hand tools (HFHTs) covering hammers/sledges from the People's Republic of China (PRC) sold by Shandong Jinma Industrial Group Co., Ltd. (Jinma) during the review period, February 1, 2000 through July 31, 2000. As a result of our analysis, we have made changes in the margin calculations, including corrections resulting from verification. We recommend that you approve the positions presented below in the Discussion of Issues section of this memorandum. The following is a complete list of the issues raised in the briefs submitted by the parties in this administrative review: 1. Excluding aberrational data from Indian import data used in valuing wooden tool handles 2. Use of the "Energy Data Directory & Yearbook 1999-2000" (TEDDY), published by Tata Energy Research Institute for Indian electricity surrogate values Background The Department published in the Federal Register the antidumping duty orders on HFHTs from the PRC on February 19, 1991. See Antidumping Duty Orders: Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles From the People's Republic of China, 56 FR 6622 (February 19, 1991). On July 20, 2000, the Department received a request from Jinma for a new shipper review of the antidumping duty order on HFHTs covering hammers/sledges pursuant to section 751(a)(2)(B) of the Act and section 351.214(b) of the Department's regulations. These provisions state that, if the Department receives from an exporter or producer of the subject merchandise a request for review, which states that it did not export the merchandise to the United States during the period covered by the original less-than-fair-value (LTFV) investigation and that such exporter or producer is not affiliated with any exporter or producer who exported the subject merchandise during that period, then the Department shall conduct a new shipper review to establish an individual weighted-average dumping margin for the requesting exporter or producer, if the Department has not previously established such a margin for the exporter or producer. The regulations require the exporter or producer to include in its request: (1) documentation establishing the date on which the merchandise was first entered, or withdrawn from the warehouse, for consumption, or, if it cannot establish the date of the first entry, the date on which it first shipped the merchandise for export to the United States, or if the merchandise has not yet been shipped or entered, the date of sale; (2) a list, with appropriate certifications, of the firms with which it is affiliated; (3) a certification from such exporter or producer, and from each affiliated firm, that they did not, under their current or former names, export the merchandise during the LTFV period of investigation (POI), and (4) in an antidumping proceeding involving inputs from a nonmarket economy country, a certification that the export activities of such exporter or producer are not controlled by the central government. See 19 CFR 351.214(b)(2)(ii), (iii), and (iv), SAA p. 875. Jinma's request was accompanied by information and certifications establishing the date on which it first shipped the subject merchandise. Jinma also claimed it had no affiliated companies which exported hammers/sledges from the PRC during the POI. In addition, Jinma certified that its export activities are not controlled by the central government. Based on the above information, the Department initiated a new shipper review covering Jinma. See Heavy Forged Hand Tools From the People's Republic of China; Initiation of New-Shipper Antidumping Administrative Review, 65 FR 59824 (September 28, 2000). On March 26, 2001, the Department published an extension of the deadline for completion of the preliminary results of this new shipper review until July 25, 2001. See Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China: Notice of Extension of Time Limit for Preliminary Results of New Shipper Antidumping Review, 66 FR 16444 (October 6, 2000). The Department has now completed this administrative review in accordance with section 751 of the Act. A complete discussion of the issues raised in this review and our proposed positions follow. Comment 1: Excluding aberrational data from the Indian import data used in valuing wooden tool handles The respondent asserts that, in order to determine current antidumping margins as accurately as possible, the Department should follow its stated policy of excluding aberrational data from the import statistics used in factor valuation. While the Department excluded small quantity imports into India in valuing wooden tool handles for the preliminary review results, respondent claims that the Department did not examine whether the remaining imports from Germany and the United States were aberrational in any way. Respondent notes that imports into India from the United States during the review period totaled 133 kilograms and averaged 501.820 rupees per kilogram ($11.2264), differing significantly from the German average import value of 114.090 rupees ($2.5524) per kilogram, based on imports of 100 kilograms. As further proof that the U.S. figure is aberrational, respondent notes that Indian import data over a longer time period, April 1999 to March 2000, results in import levels of about 19,507 kilograms (excluding small quantities) and an average U.S. import value of 102.205 rupees per kilogram. Respondent further argues that the Harmonized Tariff Schedule (HTS) item number used to value the handle input in this review, HTS 4417.00.00, is a basket category in the Indian HTS that is not divided further into subheadings; therefore, it must include merchandise other than wooden tool handles. In contrast, the U.S. HTS contains 4417.00.8010, an item number which specifically provides for "Tool handles." According to the respondent, the import quantities under the U.S. item number for tool handles for the year 2000 totaled 4,069,758 kilograms with an average import value of $1.8235 per kilogram (CIF terms). Respondent emphasizes that the input being valued is a semi- finished, unvarnished handle and asserts that the difference between the U.S. and Indian figures suggests that the Indian import data probably includes finished merchandise and specialty items other than wooden tool handles. The respondent attributes the Department's higher surrogate value from the review period (U.S. $7.5036 per kilogram) relative to the April 1999 to July 2000 average value of U.S. $2.2738 per kilogram to these factors, and argues that the surrogate value should be based upon either a broader period of Indian imports, or upon the value of Indian imports from Germany alone. Department's Position: We agree with the respondent and have decided to base the surrogate value for wooden tool handles on import data from the Monthly Statistics of the Foreign Trade of India (MSFTI) for the time period, April 1999 through February 2000. The respondent has not provided any specific information with respect to HTS item number 4417.00.00 that would diminish the reliability of the Indian import data generally with respect to this category of merchandise. However, as the MSFTI data results in an average value of 99.13 rupees per kilogram (U.S. $2.2177 per kilogram) for all imports into India under this HTS item number for the period April 1999 to February 2000, the Department accepts that the preliminary surrogate value of $7.5036 per kilogram for this component, based upon import data for the review period, was probably based on aberrational data. We note that in its review of imports during the April 1999 - February 2000 time period, the Department found no aberrational values. Moreover, imports into India under HTS 4417.00.00 during this longer time period totaled 19,324 kilograms, a quantity which should yield a more representative outcome than the 293 kilograms imported into India under this item number from all countries during the review period. Relying on the longer time period in this case is consistent with the Department's preference to value factors using prices that are broad market averages whenever possible. See Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbo-Steel Plate From the People's Republic of China, 62 FR 61964, 61981 (November 20, 1997), wherein the Department rejected Indian domestic prices in favor of a larger sample of Indian import prices. Furthermore, the import data cited by the respondent for U.S. imports of tool handles under HTS item number 4417.00.8010 generally corresponds to the data the Department relies upon to calculate the surrogate value for this HFHT component in these final review results. Although this correspondence is not necessary to validate surrogate values, it provides some reassurance that the data is not aberrational. In any event, we do not believe that a value that differs significantly from both the Indian and U.S. average import values for the same input during reasonably contemporaneous time periods, based upon relatively low quantities of merchandise, is a representative or reliable value to use as a surrogate value in our calculations. See Issues and Decision Memorandum for the Final Determination in the Antidumping Duty Investigation of Steel Concrete Reinforcing Bars from Belarus, 66 FR 33528 (June 22, 2001) Therefore, the Department is using imports into India under HTS item number 4417.00.00 during the period of April 1999 through February 2000 to value the wooden tool handles for these final review results. Comment 2: Use of TEDDY for Indian electricity surrogate values The respondent contends that more contemporaneous Indian electricity surrogate values can be obtained from the TEDDY. The respondent notes that in prior reviews of this and other proceedings, the Department has valued electricity inputs using an average of rates obtained from this source. Department's Position: We agree with the respondent. The TEDDY information is more contemporaneous with the period of this review than the information used in the preliminary review results and it is representative of electricity costs that a company in India would incur. Further, as indicated by the respondent, the Department has used this data in other recent reviews. See also Heavy Forged Hand Tools From the People's Republic of China; Final Results and Partial Rescission of Antidumping Duty Administrative Review and Determination Not To Revoke in Part, 66 FR 48026 (September 27, 2001) and accompanying Decision Memorandum at Comment 17. Recommendation Based upon our analysis of the comments received, we recommend adopting the positions discussed above. If these recommendations are accepted, we will publish the final results of review and the final weighted-average dumping margin for the reviewed firm, Jinma, in the Federal Register. Agree ____________ Disagree_______________ Let's Discuss___________ Faryar Shirzad Assistant Secretary for Import Administration (Date)