5 FR 49540 August 14, 2000 A-580-811 Administrative Review: 98/99 Public Document II/5: JTK MEMORANDUM TO: Troy H. Cribb Acting Assistant Secretary for Import Administration FROM: Holly Kuga Acting Deputy Assistant Secretary, Group II Import Administration DATE: August 7, 2000 SUBJECT: Issues and Decision Memorandum for the Sixth Administrative Review of Steel Wire Rope from Korea Summary In Section I, we identify the issues in this administrative review for which we received comments from the interested parties. Section II sets out the scope, or product coverage, of this review. Section III identifies the changes made in the margin calculation since the preliminary results. Section IV analyzes the comments of the interested parties. Finally, we recommend approval of the positions developed for each of the issues. I. List of issues: 1. Inclusion of Jinyang as a Respondent 2. Sales Made Prior to the Period of Review 3. Total Facts Available for Jinyang's Packing Expense II. Scope of the Review The product covered by this review is steel wire rope. Steel wire rope encompasses ropes, cables, and cordage of iron or carbon steel, other than stranded wire, not fitted with fittings or made up into articles, and not made up of brass-plated wire. Imports of these products are currently classifiable under the following Harmonized Tariff Schedule (HTSUS) subheadings: 7312.10.9030, 7312.10.9060, and 7312.10.9090. Excluded from this review is stainless steel wire rope, i.e., ropes, cables and cordage other than stranded wire, of stainless steel, not fitted with fittings or made up into articles, which is classifiable under HTSUS subheading 7312.10.6000. Although HTSUS subheadings are provided for convenience and the Customs Service purposes, the written description of the scope of this review is dispositive. III. Changes in the Margin Calculation Since the Preliminary Results With respect to Jinyang, we have excluded two observations in the U.S. sales database from our margin calculation because they have dates of sale prior to the POR. See line 141 of the Margin Calculation Program and Comment 2, below. IV. Discussion of Interested Party Comments Comment 1: Inclusion of Jinyang as a Respondent Petitioners renew their argument that the Department should not accept Jinyang's request to respond to the Department's questionnaire. Jinyang made the request on September 8, 2000, after the deadline to respond to our questionnaire had passed. Petitioners argue that since Jinyang has continually failed to respond to the Department's requests for information in prior reviews, the Department should not accommodate a late request to respond to the questionnaire. Jinyang argues that due to a change of address it did not receive the questionnaire until August 1998 and, therefore, could not respond in a timely manner. Immediately upon receiving the questionnaire, Jinyang claims it sought permission from the Department to respond to it. The Department's Position: We reaffirm our decision to accept Jinyang's request to respond late in this review. Jinyang has submitted an affidavit for the record certifying that it closed its operations in Kimhae City in July 1998 and moved its administrative operations to Pusan effective August 1998, and therefore, did not receive the questionnaire until approximately two and one half months after it was issued by the Department. Additionally, as stated in the October 7, 1999, memorandum from Steven Presing and Jim Kemp to Bernard Carreau, we determined that we had the time and resources available to conduct a review of Jinyang's information even though it was submitted after the original deadline. Comment 2: Sales Made Prior to the POR Petitioners argue that the Department should exclude from its antidumping duty calculations two sales that Jinyang made prior to the POR but entered into the United States during the POR. Petitioners state that these sales should be liquidated at the rate of 136.72 percent assigned to Jinyang during the fifth review period (March 1, 1997 - February 28, 1998). According to petitioners, the Department's regulations do not specify whether the Department should conduct a review based on date of sale, date of entry or date of export. However, petitioners argue that since the questionnaire used in this review requests date of sale, and not date of entry, and Jinyang did not report date of entry, a sales-based administrative review is preferable for the final results of this review. Jinyang argues that section 751(a)(2)(A) of the Act indicates a preference for determinations based on entries, and that the Department should continue to include all reported transactions in its margin calculation. Jinyang argues that the Department may calculate margins based on sales rather than entries in situations where sales cannot be linked to entries. However, according to Jinyang, the company was able to link each entry it made during the POR to the corresponding sale, and this information was verified during the Department's verification of Jinyang. The Department's Position: We agree with petitioners in part and have excluded the sales in question from our analysis. The Department conducted this review of Jinyang based on the shipments made during the POR. Under certain circumstances, and if all the necessary information is available, the Department may consider basing a review on entries. However, in this situation, there is too much uncertainty regarding the sales in question for the Department to vary from its normal practice. Jinyang reported the sales, which were shipped from Korea in mid-February 1998, with the assumption that they entered the United States during the POR. Jinyang did not report a date of entry, nor could it, because Jinyang did not have the entry information available. While Jinyang knew the name of the buyer and the ultimate destination of the product, it did not know the identity of the importer of record nor did it have access to the documents that indicate the date of entry. Therefore, we cannot conclude definitively that the sales in question entered the United States during the POR and see no reason to include the sales in our analysis and thereby diverge from our normal practice of conducting reviews based on shipments during the POR where entry dates are unknown. We will liquidate the entries that correspond to the sales in question according to our normal practice, based on the following scenarios: (1) If the merchandise entered the United States prior to the POR, the entries have been, or will be, liquidated at 136.72%, Jinyang's rate in the previous administrative review, pursuant to the liquidation instructions issued to the Customs Service by the Department after the final determination in that review; or (2) If the merchandise entered the United States during the POR, the Customs Service will liquidate the entries, pursuant to the Department's instructions, at 3.25%, the rate calculated for Jinyang based on its shipments during this review. Comment 3: Total Facts Available for Jinyang's Packing Expense Petitioners argue that the Department should use total facts available for Jinyang's packing expense because Jinyang did not have the proper documentation at verification to support its packing expense calculation. Specifically, petitioners contend that the Department should increase Jinyang's home market price by the amount of U.S. packing expense, as adjusted for the preliminary results, without subtracting home market packing expense from home market price. Jinyang contends that it is the Department's policy to apply adverse facts available only when an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information. See, section 776(b) of the Act. Jinyang argues that in this case Jinyang fully cooperated with the Department's request for information but did not maintain the types of records necessary to support its calculation for packing expense. Therefore, according to Jinyang, there is no basis for the application of an adverse inference as to this issue. Additionally, Jinyang argues that petitioners' proposal to not adjust normal value for home market packing expense is contrary to the statutory language directing the Department to do so at section 773(a)(6)(B)(i) of the Act. Jinyang contends that the Department should for the final results use the same packing expense calculation used in the preliminary results. The Department's Position: We agree with Jinyang and have not changed the adjusted packing allocation from the preliminary results. At verification, we examined documentation that showed how much Jinyang had spent on packing during the POR. We also determined that Jinyang did not maintain the proper records needed to separate the expense between product types. Instead, Jinyang estimated its allocation based on industry experience. While we did not rely on Jinyang's allocation, we found no evidence that Jinyang failed to cooperate to the best of its ability in response to our requests for information, nor did we find evidence that Jinyang intentionally manipulated the packing expense to its own advantage by purposely calculating a higher expense in the home market than the U.S. market. Therefore, we have no basis to apply an adverse inference to our recalculation of packing expense. Instead, we have continued to rely on the verified packing expense allocation ratios of Kumho, the other respondent in this review. The impact of the use of this information, as non-adverse facts available, was to increase U.S. packing costs and decrease home market packing costs. Recommendation Based on our analysis of the comments received, we recommend adopting the positions described above. If these recommendations are accepted, we will publish the final results and the final weighted-average dumping margins in the Federal Register. Agree____ Disagree____ Troy H. Cribb Acting Assistant Secretary for Import Administration (Date)