Antidumping: Wooden bedroom furniture from China,
[Federal Register: June 24, 2004 (Volume 69, Number 121)]
[Notices]
[Page 35312-35329]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24jn04-31]
DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-890]
Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Wooden Bedroom Furniture From the People's Republic of China
AGENCY: Import Administration, International Trade Administration, Department of Commerce.
EFFECTIVE DATE: June 24, 2004.
FOR FURTHER INFORMATION CONTACT: Catherine Bertrand or Robert Bolling, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-3207, or 482-3434, respectively.
Preliminary Determination
We preliminarily determine that wooden bedroom furniture from the People's Republic of China (``PRC'') is being, or is likely to be, sold in the United States at less than fair value (``LTFV''), as provided in section 733 of the Tariff Act of 1930, as amended (``the Act''). The estimated margins of sales at LTFV are shown in the ``Suspension of Liquidation'' section of this notice.
Interested parties are invited to comment on this preliminary determination. We will make our final determination not later than 135 days after the date of publication of this preliminary determination.
Case History
On October 31, 2003, the Department of Commerce (``Department'') received a petition for the Imposition of Antidumping Duties: Wooden Bedroom Furniture from the People's Republic of China (``Petition''), filed in proper form by the American Furniture Manufacturers Committee for Legal Trade and its individual members and the Cabinet Makers, Millmen, and Industrial Carpenters Local 721, UBC Southern Council of Industrial Worker's Local Union 2305, United Steel Workers of American Local 193U, Carpenters Industrial Union Local 2093, and Teamsters, Chauffeurs, Warehousemen and Helper Local 991 (collectively ``Petitioners'') on behalf of the domestic industry and workers producing wooden bedroom furniture. This investigation was initiated on December 17, 2003. See Notice of Initiation of Antidumping Duty Investigation: Wooden Bedroom Furniture from the People's Republic of China, 68 FR 70228 (December 17, 2003) (``Notice of
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Initiation''). The Department set aside a period for all interested parties to raise issues regarding product coverage. See Notice of Initiation, 68 FR at 70229. We received comments regarding product coverage from interested parties. For a detailed discussion of the comments regarding the scope of the merchandise under investigation, please see the ``Scope of the Investigation'' section below.
On January 9, 2004, the United States International Trade Commission (``ITC'') issued its affirmative preliminary determination that there is a reasonable indication that an industry in the United States is threatened with material injury by reason of imports from the PRC of wooden bedroom furniture, which was published in the Federal Register on January 28, 2004. See Wooden Bedroom Furniture from China, 69 FR 4178 (January 28, 2004).
On December 30, 2003, the Department requested quantity and value (``Q&V'') information from a total of 211 producers of wooden bedroom furniture in the PRC which were identified in the Petition and other sources and for which the Department was able to locate contact information. On December 30, 2003, the Department also sent a letter to the Government of the PRC requesting assistance locating all known producers/exporters of wooden bedroom furniture in the PRC which exported wooden bedroom furniture to the United States during the period April 1, 2003, through September 30, 2003.
On January 7, 8, and 9, 2004, the Department received Q&V responses from 137 Chinese producers/exporters of wooden bedroom furniture. The Department did not receive any type of communication from the Government of the PRC in response to the letter of December 30, 2003.
On January 14, 2004, PRC government officials and furniture industry representatives met with Department officials to discuss respondent selection and the criteria the Department considers regarding whether an industry is market-oriented.
On January 15, 2004, Markor International Furniture (Tianjin) Manufacture Co., Ltd. (``Markor Tianjin''), and Lacquer Craft Manufacturing Company, Ltd. (``Lacquer Craft''), notified the Department that they intend to seek market-oriented-industry (``MOI'') status on behalf of the wooden bedroom furniture industry in the PRC. For a further discussion of MOI status for this investigation, please see the ``Market-Oriented Industry'' section below. On January 22, 2004, the Department requested comments on surrogate-country and factor-valuation information in order to have sufficient time to consider such information for the preliminary determination. On January 30, 2004, the Department requested comments on its draft proposed product-control number (``CONNUM'') characteristics.
On January 14, 2004, Fine Furniture Limited (``Fine Furniture'') requested that the Department select it as a mandatory respondent. Also, on January 15, 2004, Petitioners stated that the Department should select Dalian Huafeng Furniture Co., Ltd. (``Dalian''), as a mandatory respondent. The Department received several letters regarding the selection of mandatory respondents. On February 17, 2004, Dalian requested designation as a voluntary respondent in this investigation. On March 11, 2004, Sanmu Wooden Furniture Group requested designation as a voluntary respondent in this investigation.
On January 30, 2004, the Department issued its respondent-selection memorandum, selecting the following seven companies as mandatory respondents in this investigation: Dongguan Lung Dong Furniture Co., Ltd., and Dongguan Dong He Furniture Co., Ltd. (collectively ``Dongguan Lung Dong''); Rui Feng Woodwork Co., Ltd., Rui Feng Lumber Development Co., Ltd., and Dorbest Limited (collectively ``Dorbest Group''); Lacquer Craft; Markor Tianjin; Shing Mark Enterprise Co., Ltd., Carven Industries Limited (BVI), Carven Industries Limited (HK), Dongguan Zhenxin Furniture Co., Ltd., and Dongguan Yongpeng Furniture Co., Ltd. (collectively ``Shing Mark''); Starcorp Furniture (Shanghai) Co., Ltd., Orin Furniture (Shanghai) Co., Ltd., and Shanghai Starcorp Furniture Co., Ltd. (collectively ``Starcorp''); and Tech Lane Wood Mfg. and Kee Jia Wood Mfg. (collectively ``Tech Lane''). See Memorandum from Edward Yang, Director, Office IX, to Joseph Spetrini, Deputy Assistant Secretary, Group III, Antidumping Duty Investigation of Wooden Bedroom Furniture from the People's Republic of China: Selection of Respondents (``Respondent Selection Memo''), dated January 30, 2004.
On January 20, 21, 23, 26, and 30, the Department received comments from Markor Tianjin, Lacquer Craft, and Petitioners regarding product- matching CONNUM characteristics. On January 30, 2004, the Department requested comments on its proposed product CONNUM characteristics from all interested parties. On February 4 and 9, 2004, we received comments on our product-matching CONNUM characteristics from Lacquer Craft, Markor Tianjin, Shing Mark, and Petitioners.
On February 2, 2004, the Department issued its Section A questionnaire to Dongguan Lung Dong, the Dorbest Group, Lacquer Craft, Markor Tianjin, Shing Mark, Starcorp, and Tech Lane. On February 2, 2004, we also issued a Section A questionnaire to the Chinese Government (i.e., Ministry of Commerce).
On February 3, 2004, the Department received a letter from Sunforce Furniture Co., Ltd. (``Sunforce''), requesting that the Department reconsider its decision with respect to the selection of mandatory respondents and designate Sunforce a mandatory respondent.
On February 5, 2004, we received comments regarding our selection of a surrogate country from Lacquer Craft, Markor Tianjin, Furniture Brands International, Inc. (``Furniture Brands''), an interested party, and Petitioners. Both Lacquer Craft and Markor Tianjin stated that Indonesia would be the appropriate surrogate country. Also, Furniture Brands stated that the bedroom furniture industry in Indonesia is more comparable to the PRC industry than the Indian industry and a possible candidate to be a surrogate country. Petitioners stated the Department should select India as the surrogate country.
On February 11, 2004, the Department issued its Section C, D, and E, as appropriate, questionnaire to Dongguan Lung Dong, the Dorbest Group, Lacquer Craft, Markor Tianjin, Shing Mark, Starcorp, and Tech Lane. On February 11, 2004, we also issued a Section C, D, and E questionnaire to the Chinese Government (i.e., Ministry of Commerce). On February 18, 2004, we issued a letter to all seven mandatory respondents and the Chinese Government in which we clarified and corrected (i.e., minor corrections in) only our Section C questionnaire.
On February 19, 2004, Yihua Timber Industries, Shenyang Shining Dongxing Furniture Co., Ltd. (``Shining Dongxing''), Fuzhou Huan Mei Furniture Co., Ltd. (``Fuzhou Huan Mei''), and Power Dekor Group Co. Ltd. (``Power Dekor'') requested selection as voluntary respondents.
For all interested parties that requested an extension for submitting a response to our Section A questionnaire, we provided a one-week extension until March 1, 2004. Additionally, we provided a two-week extension until March 26, 2004, to all mandatory respondents to respond to Sections C, D, and E of our questionnaire. On March 1, 2004, we received 126 Section A
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responses, including those from the mandatory respondents.
On March 5, 2004, the Department determined that India was the appropriate surrogate country to use in this investigation. See Memorandum to Edward C. Yang, Director, Office IX, from Jon Freed, Case Analyst, through Robert Bolling, Program Manager: Antidumping Duty Investigation on Wooden Bedroom Furniture from the People's Republic of China (``Surrogate-Country Memorandum''), dated March 5, 2004. We received comments regarding our selection of India as the surrogate country from interested parties. For a detailed discussion of the comments regarding the surrogate country, please see the ``Surrogate Country'' section below. Additionally, on March 5, 2004, we extended the time period for interested parties to provide surrogate values for the factors of production until March 26, 2004. On March 1 and 5, 2004, we received a request from Lacquer Craft, Markor Tianjin, and Furniture Brands, respectively, to extend the deadline for supplying surrogate- value information. On March 17, 2004, we informed all interested parties that we were again extending the time period for then to provide surrogate-value information until April 2, 2004. On March 31, 2004, Petitioners requested an additional extension. The Department extended the due date again until April 16, 2004.
On March 29, 2004, Petitioners requested that the Department remove from the record all untimely filed responses to the Department's Q&V questionnaire and its Section A questionnaire and apply total facts available to the PRC producers and exporters which have been less than fully cooperative. Also, on March 29, 2004, Petitioners filed two additional submissions; one submission contained a list of potential Indian surrogate companies and the other provided comments on the Section A only responses.
On March 31, 2004, Petitioners made a timely request pursuant to 19 CFR 351.205(e) for a fifty-day postponement of the preliminary determination, or until June 17, 2004. On April 13, 2004, the Department published a postponement of the preliminary antidumping duty determination on wooden bedroom furniture from the PRC. See Notice of Postponement of the Preliminary Determination of Wooded Bedroom Furniture from the People's Republic of China Antidumping Duty Investigation, 69 FR 19390 (April 13, 2004).
On April 16, 2004, we received surrogate-value information from the Dorbest Group, Dongguan Lung Dong, Lacquer Craft, Markor Tianjin, Shing Mark, Starcorp, Furniture Brands, and Petitioners. The Dorbest Group, Dongguan Lung Dong, Lacquer Craft, Markor Tianjin, Shing Mark, Starcorp, and Petitioners submitted surrogate-value information and financial data on India. Additionally, Lacquer Craft, Markor Tianjin, and Furniture Brands submitted surrogate-value information and financial data on Indonesia and requested that the Department revisit its decision on whether India is the appropriate surrogate country. On April 29, 2004, Petitioners submitted rebuttal comments to the surrogate values proposed by the mandatory respondents and Furniture Brands, claiming India is the appropriate surrogate country. Additionally, in this submission Petitioners provided additional Indian financial statements. Also, on April 29, 2004, the Dorbest Group, Lacquer Craft, Markor Tianjin, Dongguan Lung Dong, and Shing Mark submitted additional arguments and surrogate-value information.
On May 10, 2004, Lacquer Craft and Markor Tianjin rebutted Petitioners' submission of April 29, 2004, by stating that the submission does not challenge the accuracy of the values that they submitted on the record by Indian or Indonesian producers and Petitioners have put forth no evidence stating that these values are distortive of actual costs. Also, on May 10, 2004, Petitioners rebutted the April 29, 2004, submissions of Lacquer Craft, Markor Tianjin, Dongguan Lung Dong, and Shing Mark.
On May 13, 2004, Shing Mark submitted additional comments on the surrogate values of its April 16, 2004, submission and also responded to Petitioners' April 29, 2004, submission. Shing Mark stated that the Department should have a hierarchical approach when selecting from among the various surrogate values (i.e., independent sources, entry- specific import information, and the Monthly Statistics of the Foreign Trade of India (``MSFTI'') data). On May 20, 2004, Petitioners rebutted Lacquer Craft and Markor Tianjin's May 10, 2004, submission. On May 24, 2004, Petitioners responded to Shing Mark's May 13, 2004, surrogate- value submission by stating this submission was untimely and the Department should use the MSFTI data to value the mandatory respondents' factors of production and reject Shing Mark's proposal to use data from http://www.InfodriveIndia.com (``Infodrive'') and
International Business Information Services (``IBIS'').
On May 26, 2004, the Dorbest Group submitted comments to Petitioners'' April 29, 2004, surrogate-value rebuttal comments. In this submission the Dorbest Group stated that six of the seven financial statements submitted by Petitioners are not appropriate for the Department to use in its preliminary determination for a variety of reasons (e.g., not contemporaneous with POI, sick company, etc.). Further, on May 27, 2004, Tech Lane submitted comments to Petitioners' April 29, 2004, submission in which it stated that the Department should reject six of the seven financial statements submitted by Petitioners due to numerous problems with these financial statements and urged the Department not use them in its preliminary determination for a variety of reasons (e.g., sales were made on a retail basis, company is not a significant producer of wooden bedroom furniture, etc.). On June 2, 2004, Furniture Brands responded to Petitioners' rebuttal surrogate-value comments of May 10, 2004. On June 3, 2004, Shing Mark responded to Petitioners' rebuttal surrogate-value comments of May 24, 2004. On June 7, 2004, Petitioners' responded to the Dorbest Group's comments rebuttal on the Indian financial statements of May 26, 2004.
From May 10, 2004, to May 21, 2004, the Department issued supplemental Section A questionnaires to the 118 Section A respondents which submitted a section A questionnaire response. From May 21, 2004, to June 4, 2004, the Department received supplemental Section A responses from the Section A respondents.
On May 6, 2004, the Department requested that all interested parties provide comments on the unit-of-measure conversion tables and formulas located on the World Wide Web at http://www.allmeasures.com
because, it indicated, it planned on using this Web site to convert certain surrogate values for the preliminary determination. On May 12, 2004, we received comments from Lacquer Craft, Markor Tianjin, Shing Mark, Starcorp, and Petitioners on this proposal. In general, the parties stated that they were not in favor of using the all-measures Web site for a variety of reasons (e.g., conversions are not specific enough for practical application). Shing Mark and Starcorp provided an alternative unit-of-measure Web site: http://www.worldagroforestrycentre.org/sea/Products/AFDbases/WD/Index.htm .
On May 10, 2004, the Department requested that all mandatory respondents provide a chart indicating the Harmonized Tariff Schedule (``HTS'') heading and article description for each of the mandatory respondent's factors of production. On May 26, 2004,
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the Department received responses to its May 10, 2004, request from all the mandatory respondents. On June 7, 2004, Petitioners responded to Dongguan Lung Dong and Starcorp's May 26, 2004, submission and urged the Department to use adverse facts available to value Dongguan Lung Dong and Starcorp's factors of production because, they allege, its factor categories are overly broad and vague. Additionally, on June 8, 2004, Petitioners responded to Tech Lane's May 26, 2004, submission and stated that the Department should use adverse facts available to value Tech Lane's factors of production because its factor categories are overly broad and vague. Further, on June 9, 2004, Petitioners responded to the Dorbest Group's May 26, 2004, submission and stated that the Department should use adverse facts available to value its factors of production because its factor categories are overly broad and vague.
On May 19, 2004, Petitioners requested that the Department remove from the record untimely questionnaire responses from Section A respondents and apply facts available to these producers and exporters. On May 21, 2004, Starwood Furniture Manufacturing Co., Ltd. (``Starwood''), submitted a rebuttal to Petitioners' May 19, 2004, submission, stating that Starwood acted to the best of its ability in responding to the Department's requests for information.
On May 20, 2004, Lacquer Craft, Markor Tianjin, and Furniture Brands submitted for the record public financial statements for 2002 for Indonesian producers of wooden bedroom furniture for Goldfindo Intikayu Pratama (``Goldfindo''), PT. Sinarindo Megantara (``SIMA''), and PT Maitland-Smith and the 2001 financial statement for PT Maitland- Smith.
On June 4, 2004, Petitioners provided a submission that stated the Department should disregard certain categories of prices in its valuation of certain mandatory companies' factors of production: (1) Prices paid for wood products purchased from Russia; (2) import prices from Korea, Indonesia, and Thailand; (3) prices paid for goods purchased from market-economy trading companies but produced in a non- market-economy (``NME'') country. On June 7, 2004, Petitioners provided their comments for the preliminary determination (e.g., date of sale, factors of production, etc.). On June 9, 2004, Changshu HTC Import & Export Co., Ltd., Dongyin Huanghekou Furniture Industry Co., Ltd., Dream Rooms Furniture (Shanghai) Co., Ltd., Sheng Jing Wood Products Co., Ltd., and its affiliate, Telstar Enterprises Limited, responded to Petitioners' June 7, 2004, submission and stated that the Department should not apply facts available to companies that have cooperated and acted to the best of their abilities because they did not file a mini- Section A questionnaire.
Company-Specific Chronology
As described above, the Department staggered its issuance of sections of the antidumping questionnaire to the seven mandatory respondents. Upon receipt of the various responses, the Petitioners provided comments and the Department issued supplemental questionnaires. The chronology of this stage of the investigation varies by respondent. Therefore, the Department has separated the discussion of its information-gathering process after issuance of the questionnaire by company. Dongguan Lung Dong
On March 1, 2004, Dongguan Lung Dong submitted its Section A questionnaire response. On March 10, 2004, Petitioners submitted comments on Dongguan Lung Dong's Section A questionnaire response. On March 19, 2004, the Department issued a Supplemental Section A questionnaire covering Dongguan Lung Dong's March 1, 2004, response. On March 29, 2004, Dongguan Lung Dong submitted its response to Sections C and D of the Department's February 11, 2004, questionnaire. On March 30, 2004, Dongguan Lung Dong submitted a replacement page to its March 29, 2004, response. On April 9, 2004, Dongguan Lung Dong submitted its response to the Supplemental Section A questionnaire. On April 16, 2004, Petitioners submitted their deficiency comments on Dongguan Lung Dong's response to Section C and D of the questionnaire. On April 27, 2004, Petitioners submitted deficiency comments on Dongguan Lung Dong's Supplemental Section A response. On April 30, 2004, the Department issued its Supplemental Sections C and D questionnaire covering Dongguan Lung Dong's March 29, 2004, questionnaire response. On May 24, 2004, the Department issued a second Supplemental Section A questionnaire covering Dongguan Lung Dong's April 9, 2004, questionnaire response. Also, on the same date, Dongguan Lung Dong submitted its Supplemental Sections C and D questionnaire responses to the Department. On May 25, 2004, Dongguan Lung Dong submitted replacement pages to its May 24, 2004, response. On May 28, 2004, Petitioners submitted deficiency comments on Dongguan Lung Dong's May 24, 2004, Supplemental Sections C and D questionnaire responses. Dorbest Group
On March 1, 2004, the Dorbest Group submitted its Section A questionnaire response. On March 10, 2004, Petitioners submitted comments on the Dorbest Group's Section A questionnaire response. On March 23, 2004, the Department issued a Supplemental Section A questionnaire covering the Dorbest Group's March 1, 2004, response. On March 29, 2004, the Dorbest Group submitted its response to Sections C and D of the Department's February 11, 2004, questionnaire. On April 7, 2004, Petitioners submitted their deficiency comments on the Dorbest Group's response to Section D of the questionnaire. On April 14, 2004, the Dorbest Group submitted its response to Department's March 23, 2004, Supplemental Section A questionnaire. On April 20, 2004, Petitioners submitted deficiency comments on the Dorbest Group's Sections C and D questionnaire response. On April 27, 2004, Petitioners submitted deficiency comments on the Dorbest Group's Supplemental Section A response. On April 30, 2004, the Department issued a Supplemental Sections C and D questionnaire covering the Dorbest Group's March 29, 2004, questionnaire response. On May 11, 2004, the Department requested additional information for certain CONNUMs from Dorbest. On May 24, 2004, the Department issued a second Supplemental Section A questionnaire covering the Dorbest Group's April 14, 2004, questionnaire response. Also, on the same date, Dorbest submitted its Supplemental Sections C and D questionnaire responses to the Department. On May 28, 2004, Petitioners submitted deficiency comments on the Dorbest Group's May 24, 2004, Supplemental Sections C and D questionnaire responses. On June 3, 2004, the Dorbest Group submitted its response to the Second Supplemental Section A questionnaire. Also, on June 3, 2004, the Dorbest Group submitted response to Petitioners' May 28, 2004, comments on its Sections C and D questionnaire responses. On June 8, 2004, the Department issued a Second Supplemental Sections C and D questionnaire to the Dorbest Group. Lacquer Craft
On March 1, 2004, Lacquer Craft submitted its Section A questionnaire response. On March 11, 2004, Petitioners submitted comments on Lacquer Craft's Section A questionnaire response. On March 23, 2004, the
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Department issued Lacquer Craft a supplemental questionnaire concerning its Section A response. On March 29, 2004, Lacquer Craft submitted its Sections C and D questionnaire responses. On April 13, 2004, Petitioners submitted comments on Lacquer Craft's Sections C and D questionnaire responses. On April 13, 2004, Lacquer Craft submitted its response to the Department's Supplemental Section A Questionnaire. On April 30, 2004, the Department issued Lacquer Craft a supplemental questionnaire concerning its Sections C and D responses. On May 21, 2004, Lacquer Craft submitted its response to the Department's Sections C and D Supplemental Questionnaire. On May 21, 2004, the Department issued Lacquer Craft a second supplemental questionnaire concerning its Sections A and D responses. On May 27, 2004, Petitioners submitted comments on Lacquer Craft's Sections C and D Supplemental Questionnaire responses. On June 3, 2004, Lacquer Craft submitted its response to the Department's Sections A and D Second Supplemental Questionnaire. Markor Tianjin
On March 1, 2004, Markor Tianjin submitted its Section A questionnaire response. On March 11, 2004, Petitioners submitted comments on Markor Tianjin's Section A questionnaire response. On March 19, 2004, the Department issued a Supplemental Section A questionnaire covering Markor Tianjin's March 1, 2004, response. On March 29, 2004, Markor Tianjin submitted its response to Sections C and D of the Department's February 11, 2004, questionnaire. On April 7, 2004, Petitioners submitted deficiency comments on Markor Tianjin's responses to Section D of the questionnaire. On April 9, 2004, Markor Tianjin submitted its response to the Supplemental Section A questionnaire. On April 9, 2004, Petitioners submitted their deficiency comments on Markor Tianjin's response to Section C and D of the questionnaire. On April 12, 2004, Markor Tianjin and Lacquer Craft submitted rebuttal comments regarding Petitioners' April 7, 2004, submission. On April 21, 2004, the Department met with Markor Tianjin to discuss double- bracketed information contained in its April 9, 2004, Supplemental Section A response. On April 23, 2004, Markor Tianjin submitted a letter containing additional arguments for not releasing under the administrative protective order certain information in Markor Tianjin's April 9, 2004, submission. On April 29, 2004, Petitioners submitted deficiency comments on Markor Tianjin's Supplemental Section A response. On May 3, 2004, the Department issued a Supplemental Sections C and D questionnaire covering Markor Tianjin's March 29, 2004, questionnaire response. On May 5, 2004, Petitioners submitted a letter regarding the double-bracketing of information in Markor Tianjin's April 9, 2004, submission. On May 7, 2004, the Department issued a memorandum rejecting Markor Tianjin's request that certain information in its April 9, 2004, submission not be released under the administrative protective order. See Memorandum for Edward Yang from Ann M. Sebastian: Claim of Clear and Compelling Need to Withhold the Release of Business Proprietary Information Regarding Corporate Structure Issues Under Administrative Protective Order in the Antidumping Duty Investigation of Wooden Bedroom Furniture from the People's Republic of China, May 7, 2004. Pursuant to the Department's rejection of its request for double-bracketing of certain information, on May 12, 2004, Markor Tianjin submitted a revised response to the Department's March 19, 2004, Supplemental Section A questionnaire. On May 24, 2004, the Department issued a second Supplemental Section A questionnaire concerning Markor Tianjin's May 12, 2004, questionnaire response. Also, on the same date, Markor Tianjin submitted its Supplemental Sections C and D questionnaire responses to the Department. On May 28, 2004, Petitioners submitted deficiency comments to Markor Tianjin's May 24, 2004, supplemental Sections C and D questionnaire responses. Shing Mark
On March 1, 2004, Shing Mark submitted its Section A questionnaire response. On March 11, 2004, Petitioners submitted comments on Shing Mark's Section A questionnaire response. On March 19, 2004, the Department issued Shing Mark a supplemental questionnaire concerning its Section A responses. On March 29, 2004, Shing Mark submitted its Sections C and D questionnaire responses. On April 9, 2004, Shing Mark submitted its response to the Department's Section A Supplemental Questionnaire. On April 12, 2004, Petitioners submitted comments to Shing Mark's Sections C and D questionnaire responses. On April 28, 2004, the Department issued Shing Mark a supplemental questionnaire concerning its Sections C and D responses. On April 30, 2004, Petitioners submitted comments regarding Shing Mark's Section A Supplemental Questionnaire responses. On May 24 and May 26, 2004, Shing Mark submitted its response to the Department's Sections C and D Supplemental Questionnaire. On May 19, 2004, the Department issued Shing Mark a second supplemental questionnaire concerning its Sections A and D responses. On May 26, 2004, Shing Mark submitted its response to the Department's Sections A and D Second Supplemental Questionnaire. On May 26, 2004, Petitioners submitted comments on Shing Mark's Sections C and D Supplemental Questionnaire responses. Starcorp
On March 1, 2004, Starcorp submitted its response to Section A of the questionnaire. On March 10, 2004, Petitioners submitted comments on Starcorp's Section A response. On March 19, 2004, the Department sent Starcorp a supplemental Section A questionnaire. On March 29, 2004, Starcorp submitted its response to Section C and D of the questionnaire. On April 9, 2004, Starcorp submitted its response to the Department's supplemental Section A questionnaire. On April 13, 2004, Petitioners submitted comments on Starcorp's Section C and D response. On April 28, 2004, the Department sent Starcorp a supplemental Sections C and D questionnaire. On April 30, 2004, Petitioners submitted comments on Starcorp's Supplemental Section A response. On May 21, 2004, Starcorp submitted its response to the Supplemental Sections C and D of the questionnaire. On May 24, 2004, the Department sent Starcorp a second supplemental Section A questionnaire. On May 28, 2004, Petitioners submitted comments on Starcorp's Supplemental Sections C and D response. On June 3, 2004, Starcorp submitted its response to the second supplemental Section A questionnaire. On June 9, 2004, Starcorp submitted its response to the second supplemental Sections C and D questionnaire. On June 10, 2004, Starcorp submitted additional clarifications regarding conversions of certain factors. Tech Lane
The Department received Tech Lane's Section A questionnaire response on March 1, 2004. The Department issued a Section A supplemental questionnaire to Tech Lane on March 22, 2004. On March 29, 2004, the Department received Tech Lane's Sections C and D response.
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The Department received Petitioners' comments to Tech Lane's Section A questionnaire response on March 29, 2004, and their comments to Tech Lane's Sections C and D questionnaire response on April 8, 2004. On April 15, 2004, we received Tech Lane's Section A supplemental questionnaire response. We received additional comments from Petitioners on Tech Lane's Section D questionnaire response on April 20, 2004, and Petitioners' comments on Tech Lane's Section A supplemental questionnaire response on April 27, 2004. The Department issued a Sections C and D supplemental questionnaire to Tech Lane on April 28, 2004.
On May 21, 2004, we received Tech Lane's Sections C and D supplemental questionnaire response and issued a second Sections A, C, and D supplemental questionnaire. On May 28, 2004, Tech Lane submitted additional exhibits it omitted in its May 21, 2004, Sections C and D supplemental questionnaire response. Also on May 28, 2004, we received Petitioners' comments on Tech Lane's Sections C and D supplemental questionnaire response. On June 4, 2004, we received Tech Lane's Sections A, C, and D second supplemental questionnaire response.
Postponement of Final Determination
Section 735(a) of the Act provides that a final determination may be postponed until no later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise or, in the event of a negative preliminary determination, a request for such postponement is made by the petitioners. The Department's regulations at 19 CFR 351.210(e)(2) require that requests by respondents for postponement of a final determination be accompanied by a request for an extension of the provisional measures from a four-month period to not more than six months.
On May 20, 2004, June 3, 2004, and June 7, 2004, Lacquer Craft, Markor Tianjin, and the Dorbest Group requested that, in the event of an affirmative preliminary determination in this investigation, the Department postpone its final determination until 135 days after the publication of the preliminary determination. Lacquer Craft, Markor Tianjin, and the Dorbest Group also included a request to extend the provisional measures to not more than six months after the publication of the preliminary determination. Accordingly, because we have made an affirmative preliminary determination and the requesting parties account for a significant proportion of the exports of the subject merchandise, we have postponed the final determination until no later than 135 days after the date of publication of the preliminary determination and are extending the provisional measures accordingly.
Period of Investigation
The period of investigation (``POI'') is April 1, 2003, through September 30, 2003. This period corresponds to the two most recent fiscal quarters prior to the month of the filing of the Petition (October 31, 2003). See 19 CFR 351.204(b)(1).
Scope of Investigation
For purposes of this investigation, the product covered is wooden bedroom furniture. Wooden bedroom furniture is generally, but not exclusively, designed, manufactured, and offered for sale in coordinated groups, or bedrooms, in which all of the individual pieces are of approximately the same style and approximately the same material and/or finish. The subject merchandise is made substantially of wood products, including both solid wood and also engineered wood products made from wood particles, fibers, or other wooden materials such as plywood, oriented strand board, particle board, and fiberboard, with or without wood veneers, wood overlays, or laminates, with or without non- wood components or trim such as metal, marble, leather, glass, plastic, or other resins, and whether or not assembled, completed, or finished.
The subject merchandise includes: (1) Wooden beds such as loft beds, bunk beds, and other beds; (2) wooden headboards for beds (whether stand-alone or attached to side rails), wooden footboards for beds, wooden side rails for beds, and wooden canopies for beds; (3) night tables, night stands, dressers, commodes, bureaus, mule chests, gentlemen's chests, bachelor's chests, lingerie chests, wardrobes, vanities, chessers, chifforobes, and wardrobe-type cabinets; (4) dressers with framed glass mirrors that are attached to, incorporated in, sit on, or hang over the dresser; (5) chests-on-chests,\1\ highboys,\2\ lowboys,\3\ chests of drawers,\4\ chests,\5\ door chests,\6\ chiffoniers,\7\ hutches,\8\ and armoires; \9\ (6) desks, computer stands, filing cabinets, book cases, or writing tables that are attached to or incorporated in the subject merchandise; and (7) other bedroom furniture consistent with the above list.
\1\ A chest-on-chest is typically a tall chest-of-drawers in two or more sections (or appearing to be in two or more sections), with one or two sections mounted (or appearing to be mounted) on a slightly larger chest; also known as a tallboy.
\2\ A highboy is typically a tall chest of drawers usually composed of a base and a top section with drawers, and supported on four legs or a small chest (often 15 inches or more in height).
\3\ A lowboy is typically a short chest of drawers, not more than four feet high, normally set on short legs.
\4\ A chest of drawers is typically a case containing drawers for storing clothing.
\5\ A chest is typically a case piece taller than it is wide featuring a series of drawers and with or without one or more doors for storing clothing. The piece can either include drawers or be designed as a large box incorporating a lid.
\6\ A door chest is typically a chest with hinged doors to store clothing, whether or not containing drawers. The piece may also include shelves for televisions and other entertainment electronics.
\7\ A chiffonier is typically a tall and narrow chest of drawers normally used for storing undergarments and lingerie, often with mirror(s) attached.
\8\ A hutch is typically an open case of furniture with shelves that typically sits on another piece of furniture and provides storage for clothes.
\9\ An armoire is typically a tall cabinet or wardrobe (typically 50 inches or taller), with doors, and with one or more drawers (either exterior below or above the doors or interior behind the doors), shelves, and/or garment rods or other apparatus for storing clothes. Bedroom armoires may also be used to hold television receivers and/or other audio-visual entertainment systems.
The scope of the Petition excludes: (1) Seats, chairs, benches, couches, sofas, sofa beds, stools, and other seating furniture; (2) mattresses, mattress supports (including box springs), infant cribs, water beds, and futon frames; (3) office furniture, such as desks, stand-up desks, computer cabinets, filing cabinets, credenzas, and bookcases; (4) dining room or kitchen furniture such as dining tables, chairs, servers, sideboards, buffets, corner cabinets, china cabinets, and china hutches; (5) other non-bedroom furniture, such as television cabinets, cocktail tables, end tables, occasional tables, wall systems, book cases, and entertainment systems; (6) bedroom furniture made primarily of wicker, cane, osier, bamboo or rattan; (7) side rails for beds made of metal if sold separately from the headboard and footboard; and (8) bedroom furniture in which bentwood parts predominate.\10\
\10\ As used herein, bentwood means solid wood made pliable. Bentwood is wood that is brought to a curved shape by bending it while made pliable with moist heat or other agency, and then set by cooling or drying. See Customs' Headquarters' Ruling Letter 043859, dated May 17, 1976.
Imports of subject merchandise are classified under statistical category 9403.50.9040 of the Harmonized Tariff Schedule of the United States (``HTSUS'') as ``wooden * * * beds''
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and under statistical category 9403.50.9080 of the HTSUS as ``other * * * wooden furniture of a kind used in the bedroom.'' In addition, wooden headboards for beds, wooden footboards for beds, wooden side rails for beds, and wooden canopies for beds may also be entered under statistical category 9403.50.9040 of the HTSUS as ``parts of wood'' and framed glass mirrors may also be entered under statistical category 7009.92.5000 of the HTSUS as ``glass mirrors * * * framed.'' This investigation covers all wooden bedroom furniture meeting the above description, regardless of tariff classification. Although the HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of this proceeding is dispositive.
Scope Comments
In accordance with the preamble to our regulations (see Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997)), we set aside a period of time for parties to raise issues regarding product coverage and encouraged all parties to submit comments within 20 calendar days of publication of the Notice of Initiation (see 68 FR at 70229).
The Department received numerous scope comments from a variety of interested parties. On January 12, 2004, LTD Commodities, LLC (``LTD''), and ABC Distributing, LLC (``ABC''), U.S. importers of wooden bedroom furniture from the PRC, provided scope comments concerning the exclusion of ready-to-assemble (``RTA'') wooden bedroom furniture from the PRC. On January 13, 2004, the Furniture Retailers of America (``FRA'') provided comments recommending that the scope of the investigation be limited to furniture sold in suites. On January 13, 2004, Shing Mark provided comments concerning whether daybeds are within the scope of the investigation and whether the description of wooden bedroom furniture as ``made substantially of wood'' is too broad. On January 13, 2004, Sunrise Medical Inc. (``Sunrise Medical'') provided comments concerning whether patient room furniture used in the long-term care, nursing home, or similar markets (collectively, the ``LTC market'') are within the scope of the investigation. On January 13, 2004, Markor Tianjin, Lacquer Craft, and the Committee for Free Trade in Furniture (``CFTF'') provided comments concerning whether parts and home office pieces are within the scope of the investigation.
On January 21, 2004, Petitioners provided two separate documents responding to the above-mentioned comments on patient room furniture, the exclusion of pieces not sold in suites, the inclusion of parts, the exclusion of day beds, the standard of ``made substantially of wood,'' and RTA furniture.
On January 26, 2004, LTD and ABC submitted rebuttal comments concerning RTA furniture. On January 29, 2004, the FRA submitted rebuttal comments concerning products not sold in suites. On February 4, 2004, Sunrise Medical provided rebuttal comments concerning patient room furniture in the LTC market. On March 23, 2004, LTD and ABC provided further comments proposing specific language to exclude RTA wooden bedroom furniture from the scope of the investigation.
Due to the extraordinary detail and length of these comments, the Department will continue to analyze them for purposes of the final determination. As part of this process, the Department has fully summarized all of the comments received to date in a memorandum to the file. See Memorandum to the File from Laurel LaCivita, Analyst, to Laurie Parkhill, Office Director, Antidumping Duty Investigation of Wooden Bedroom Furniture from the People's Republic of China: Summary on Comments to the Scope, dated June 17, 2004. Therefore, we will afford interested parties an opportunity to address only the comments summarized in our memorandum as this memorandum contains all of the comments received. Interested parties have until July 30, 2004, to submit additional comments on the scope of the investigation. We will address all of the scope comments in our final determination.
Selection of Respondents
Section 777A(c)(1) of the Act directs the Department to calculate individual dumping margins for each known exporter and producer of the subject merchandise. Section 777A(c)(2) of the Act gives the Department discretion, when faced with a large number of exporters/producers, however, to limit its examination to a reasonable number of such companies if it is not practicable to examine all companies. Where it is not practicable to examine all known producers/exporters of subject merchandise, this provision permits the Department to investigate either (1) a sample of exporters, producers, or types of products that is statistically valid based on the information available to the Department at the time of selection or (2) exporters/producers accounting for the largest volume of the merchandise under investigation that can reasonably be examined. After consideration of the complexities expected to arise in this proceeding and the resources available to it, the Department determined that it was not practicable in this investigation to examine all known producers/exporters of subject merchandise. Instead, we limited our examination to the seven exporters and producers accounting for the largest volume of the subject merchandise pursuant to section 777A(c)(2)(B) of the Act. The seven Chinese producers/exporters (Dongguan Lung Dong; Dorbest, Lacquer Craft, Markor Tianjin, Shing Mark, Starcorp, and Tech Lane) accounted for a significant percentage of all exports of the subject merchandise from the PRC during the POI and were selected as mandatory respondents. See Respondent Selection Memo at 5.
Non-Market-Economy Country
For purposes of initiation, the Petitioners submitted LTFV analyses for the PRC as a non-market economy. See Notice of Initiation, 69 FR at 70230. In every case conducted by the Department involving the PRC, the PRC has been treated as an NME country. In accordance with section 771(18)(C)(i) of the Act, any determination that a foreign country is an NME country shall remain in effect until revoked by the administering authority. See also Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China: Preliminary Results 2001-2002 Administrative Review and Partial Rescission of Review, 68 FR 7500 (February 14, 2003). Therefore, we have treated the PRC as an NME country for purposes of this preliminary determination.
Surrogate Country
When the Department is investigating imports from an NME, section 773(c)(1) of the Act directs it to base normal value (``NV''), in most circumstances, on the NME producer's factors of production, valued in a surrogate market-economy country or countries considered to be appropriate by the Department. In accordance with section 773(c)(4) of the Act, in valuing the factors of production, the Department shall utilize, to the extent possible, the prices or costs of factors of production in one or more market-economy countries that are at a level of economic development comparable to that of the NME country and are significant producers of comparable merchandise. The sources of the surrogate values we have used in this investigation are discussed under the NV section below.
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The Department determined that India, Pakistan, Indonesia, Sri Lanka, and the Philippines are countries comparable to the PRC in terms of economic development. See Memorandum from Ron Lorentzen to Robert Bolling: Antidumping Duty Investigation on Wooden Bedroom Furniture from the People's Republic of China, dated January 16, 2004. Customarily, we select an appropriate surrogate country based on the availability and reliability of data from the countries. In this case, we have found that India is a significant producer of comparable merchandise, wooden bedroom furniture, and is at a similar level of economic development pursuant to 733(c)(4) of the Act. See Surrogate- Country Memorandum.
On April 16, 2004, Lacquer Craft, Markor Tianjin, and Furniture Brands submitted surrogate-value information and financial data on Indonesia and requested that the Department revisit its decision on whether India is the appropriate surrogate country. On April 29, 2004, Petitioners submitted rebuttal comments to the interested parties' April 16, 2004, submission, stating that the Department should continue to determine that India is the appropriate surrogate country for this investigation. On May 13, 2004, representatives for the interested parties met with James Jochum, Assistant Secretary for Import Administration, and discussed the Department's selection of a surrogate country as well as the selection of surrogate values to be applied in this investigation. See Memorandum to the File from John Herrmann, Senior Advisor to the Assistant Secretary, dated May 13, 2004. On May 21, 2004, representatives for Petitioners met with Assistant Secretary Jochum and discussed the Department's selection of a surrogate country as well as the selection of surrogate values to be applied in this investigation. See Memorandum to the File from John Herrmann, Senior Advisor to the Assistant Secretary, dated May 21, 2004. The Department has evaluated all parties' concerns and comments and has determined India is the appropriate surrogate country to use in this investigation. The Department based its decision on the following facts: (1) India is at a level of economic development comparable to the PRC; (2) Indian manufacturers produce comparable merchandise and are significant producers of wooden furniture; (3) India provides the best opportunity to use appropriate, publicly available data to value the factors of production. See Surrogate-Country Memorandum.
Therefore, we have used India as the surrogate country and, accordingly, we have calculated NV using Indian prices to value the respondents' factors of production, when available and appropriate. We have obtained and relied upon publicly available information wherever possible. See Memorandum to the File from Michael Holton, Case Analyst, through Robert Bolling, Program Manager, and Laurie Parkhill, Office Director, Factors Valuation Memorandum for Dongguan Lung Dong, the Dorbest Group, Lacquer Craft, Markor Tianjin, Shing Mark, Starcorp, and Tech Lane (``Factor-Valuation Memo''), dated June 17, 2004.
In accordance with 19 CFR 351.301(c)(3)(i), for the final determination in an antidumping investigation, interested parties may submit publicly available information to value the factors of production within 40 days after the date of publication of the preliminary determination.
Market-Oriented Industry
On January 15, 2004, Markor Tianjin and Lacquer Craft informed the Department that they intended to seek MOI status on behalf of the wooden bedroom furniture industry in the PRC. On February 2, 2004, Petitioners submitted a letter to the Department stating that the wooden bedroom furniture industry in the PRC does not warrant MOI status because there are NME forces at work in the PRC that distort the wooden bedroom furniture's cost of production. On April 20, 2004, the Furniture Sub-chamber of China Chamber of Commerce for Import & Export of Light Industrial Products and Arts-Crafts (``CCCLA'') and the China National Furniture Association (``CNFA'') requested as representatives of the wooden bedroom furniture industry that the Department initiate an inquiry to determine whether the wooden bedroom furniture industry in the PRC is an MOI. On May 5, 2004, Petitioners rebutted the submission by CCCLA and CNFA, stating that the request to initiate an MOI inquiry is untimely given the Department's statutory deadline for issuing its preliminary determination. On May 12, 2004, the Department placed on the record of this investigation a facsimile message from the U.S. Embassy in Beijing, China, which was a letter in Chinese and a translated version of the letter from the Chinese Ministry of Commerce requesting that the Department treat the furniture industry as an MOI industry. On May 14, 2004, the Department issued letters to the CCCLA, CNFA, and the Chinese government which informed the parties that it did not have sufficient substantive evidence to support the initiation of an MOI inquiry. On May 28, 2004, the CCCLA and CNFA submitted information they believe meets the Department's criteria for initiating an MOI inquiry. On June 8, 2004, Petitioners responded to CCCLA and CNFA's May 28, 2004, submission, stating that the Department should not initiate an MOI inquiry.
In order to consider an MOI claim, the Department requires information on each of the three prongs of the MOI test regarding the situation and experience of the PRC wooden bedroom furniture industry as a whole. Specifically, the MOI test requires that information supports the following conclusions: (1) There is virtually no government involvement in production or prices for the industry; (2) the industry is marked by private or collective ownership that behaves in a manner consistent with market considerations; and (3) producers pay market-determined prices for all major inputs and for all but an insignificant proportion of minor inputs. Even in those cases where the Department limits the number of firms it investigates, a MOI allegation must cover all (or virtually all) of the producers in the industry in question. See Notice of Final Determination of Sales at Less Than Fair Value and Negative Final Determination of Critical Circumstances: Certain Color Television Receivers from the People's Republic of China, 69 FR 205494 (April 16, 2004), and Accompanying Issues and Decision Memorandum at Comment 1. See also Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Synthetic Indigo from the People's Republic of China, 64 FR 69723, 59725 (December 14, 1999). See also Notice of Final Determination of Sales at Less Than Fair Value: Freshwater Crawfish Tail Meat from the People's Republic of China, 62 FR 41347, 41353 (August 1, 1997).
On May 28, 2004, CCCLA and CNFA provided further information for the Department to evaluate. Because we received the MOI allegation and supporting information so recently and so close to the fully extended due date of the preliminary determination, we have not had adequate time to consider this information. We will continue to evaluate the request and address it as soon as possible.
Separate Rates
In proceedings involving NME countries, the Department has a rebuttable presumption that all companies within the country are
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subject to government control and thus should be assigned a single antidumping duty deposit rate. It is the Department's policy to assign all exporters of merchandise subject to investigation in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. The seven mandatory respondents and the Section A respondents have provided company-specific information and each has stated that it meet the standards for the assignment of a separate rate.
It is the Department's policy to treat Hong Kong companies as market-economy companies. See Application of U.S. Antidumping and Countervailing Duty Law to Hong Kong, 62 FR 42965 (August 11, 1997). Further consistent with our practice, we do not conduct a separate- rates test for respondents wholly owned by companies outside the PRC. Based on a review of the responses we have concluded that the Dorbest Group, Shing Mark, Tech Lane, and Lacquer Craft are companies not based in an NME. Therefore, we determine that no separate-rate analysis is required for these companies.
We have considered whether each company based in the PRC is eligible for a separate rate. The Department's separate-rate test to determine whether the exporters are independent from government control does not consider, in general, macroeconomic/border-type controls, e.g., export licenses, quotas, and minimum export prices, particularly if these controls are imposed to prevent dumping. The test focuses, rather, on controls over the investment, pricing, and output decision- making process at the individual firm level. See Certain Cut-to-Length Carbon Steel Plate from Ukraine: Final Determination of Sales at Less than Fair Value, 62 FR 61754, 61757 (November 19, 1997), and Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 62 FR 61276, 61279 (November 17, 1997).
To establish whether a firm is sufficiently independent from government control of its export activities to be entitled to a separate rate, the Department analyzes each entity exporting the subject merchandise under a test arising from the Notice of 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 Notice of 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''). In accordance with the separate-rates criteria, the Department assigns separate rates in NME cases only if respondents can demonstrate the absence of both de jure and de facto governmental control over export activities.
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Absence of De Jure Control
The Department considers the following de jure criteria in determining whether an individual company may be granted a separate rate: (1) An absence of restrictive stipulations associated with an individual exporter's business and export licenses; (2) any legislative enactments decentralizing control of companies; and (3) other formal measures by the government decentralizing control of companies. See Sparklers, 56 FR at 20589.
Our analysis shows that the evidence on the record supports a preliminary finding of de jure absence of governmental control based on the following: (1) An absence of restrictive stipulations associated with the individual exporter's business and export licenses; (2) the applicable legislative enactments decentralizing control of the companies; and (3) any other formal measures by the government decentralizing control of companies. See Memorandum to Laurie Parkhill, Office Director, Import Administration, from Eugene Degnan, Case Analyst, through Robert Bolling, Program Manager, Wooden Bedroom Furniture from the People's Republic of China: Separate Rates for Producers/Exporters that Submitted Questionnaire Responses (``Separate- Rates Memo''), dated June 17, 2004.
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Absence of De Facto Control
Typically the Department considers four factors in evaluating whether each respondent is subject to de facto governmental control of its export functions: (1) Whether the export prices are set by or are subject to the approval of a governmental agency; (2) whether the respondent has authority to negotiate and sign contracts and other agreements; (3) whether the respondent has autonomy from the government in making decisions regarding the selection of management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding disposition of profits or financing of losses. See Silicon Carbide, 59 FR at 22586-87; see also Notice of Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol From the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995). The Department has determined that an analysis of de facto control is critical in determining whether respondents are, in fact, subject to a degree of governmental control which would preclude the Department from assigning separate rates.
We determine that, for the mandatory respondents located in the PRC and certain Section A respondents, the evidence on the record supports a preliminary finding of de facto absence of governmental control based on record statements and supporting documentation showing the following: (1) Each exporter sets its own export prices independent of the government and without the approval of a government authority; (2) each exporter retains the proceeds from its sales and makes independent decisions regarding disposition of profits or financing of losses; (3) each exporter has the authority to negotiate and sign contracts and other agreements; and (4) each exporter has autonomy from the government regarding the selection of management.
Therefore, the evidence placed on the record of this investigation by the mandatory respondents and certain Section A respondents demonstrates an absence of government control, both in law and in fact, with respect to each of the exporter's exports of the merchandise under investigation, in accordance with the criteria identified in Sparklers and Silicon Carbide. As a result, for the purposes of this preliminary determination, we have granted separate, company-specific rates to the mandatory respondents and certain Section A respondents which shipped bedroom furniture to the United States during the POI. For a full discussion of this issue and list of Section A respondents, please see the Separate-Rates Memo.
PRC-Wide Rate
The Department has data that indicates there were more exporters of wooden bedroom furniture from the PRC during the POI than those which responded to the Q&V questionnaire. See Respondent Selection Memo. Although we issued the Q&V questionnaire to 211 known Chinese exporters of subject merchandise, we received only 137 Q&V questionnaire responses, including those from the seven mandatory respondents. Also, on February 2, 2004, we issued a Section A questionnaire to the Chinese Government (i.e., Ministry of Commerce). Although all exporters were given an opportunity to provide information showing they qualify for
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separate rates, not all of these other exporters provided a response to either the Department's Q&V questionnaire or its Section A questionnaire. Therefore, the Department determines preliminarily that there were exports of the merchandise under investigation from PRC producers/exporters that did not respond to the Department's questionnaire. We treated these PRC producers/exporters as part of the countrywide entity. Further, the Government of the PRC did not respond to the Department's questionnaire.
Section 776(a)(2) of the Act provides that, if an interested party (A) withholds information that has been requested by the Department, (B) fails to provide such information in a timely manner or in the form or manner requested, subject to subsections 782(c)(1) and (e) of the Act, (C) significantly impedes a proceeding under the antidumping statute, or (D) provides such information but the information cannot be verified, the Department shall, subject to subsection 782(d) of the Act, use facts otherwise available in reaching the applicable determination.
Pursuant to section 782(e) of the Act, the Department shall not decline to consider submitted information if all of the following requirements are met: (1) The information is submitted by the established deadline; (2) the information can be verified; (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination; (4) the interested party has demonstrated that it acted to the best of its ability; and (5) the information can be used without undue difficulties.
Information on the record of this investigation indicates that there are numerous producers/exporters of the wooden bedroom furniture in the PRC. As described above, all exporters were given the opportunity to respond to the Department's questionnaire. Based upon our knowledge of the volume of imports of subject merchandise from the PRC and the fact that information indicates that the responding companies did not account for all imports into the United States from the PRC, we have preliminarily determined that certain PRC exporters of wooden bedroom furniture failed to respond to our questionnaires. As a result, use of adverse facts available (``AFA'') pursuant to section 776(a)(2)(A) of the Act is appropriate. Additionally, in this case, the Government of the PRC did not respond to the Department's questionnaire, thereby necessitating the use of AFA to determine the PRC-wide rate. See Notice of Preliminary Determination of Sales at Less Than Fair Value, Affirmative Preliminary Determination of Critical Circumstances and Postponement of Final Determination: Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, 68 FR 4986 (January 31, 2003).
Section 776(b) of the Act provides that, in selecting from among the facts available, the Department may employ adverse inferences if an interested party fails to cooperate by not acting to the best of its ability to comply with requests for information. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian Federation, 65 FR 5510, 5518 (February 4, 2000). See also ``Statement of Administrative Action'' accompanying the URAA, H.R. Rep. No. 103-316, 870 (1994) (``SAA''). We find that, because the PRC-wide entity did not respond at all to our request for information, they have failed to cooperate to the best of their ability. Therefore, the Department preliminarily finds that, in selecting from among the facts available, an adverse inference is appropriate.
Section 776(b) of the Act authorizes the Department to use AFA information derived from the petition, the final determination from the LTFV investigation, a previous administrative review, or any other information placed on the record. As AFA, we have assigned to the PRC- wide entity a margin based on information in the petition, because the margins derived from the petition are higher than the calculated margins for the selected respondents. In this case, we have applied a rate of 198.08 percent.
Section 776(c) of the Act provides that, when the Department relies on secondary information rather than on information obtained in the course of an investigation as facts available, it must, to the extent practicable, corroborate that information from independent sources reasonably at its disposal. Secondary information is described in the SAA as ``information derived from the petition that gave rise to the investigation or review, the final determination concerning subject merchandise, or any previous review under section 751 concerning the subject merchandise.'' See SAA at 870. The SAA provides that to ``corroborate'' means simply that the Department will satisfy itself that the secondary information to be used has probative value. See id. The SAA also states that independent sources used to corroborate may include, for example, published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation. See id. As explained in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, from Japan; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews, 61 FR 57391, 57392 (November 6, 1996), to corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used.
The Petitioners' methodology for calculating the export price and NV in the petition is discussed in the initiation notice. See Initiation Notice, 68 FR at 70229. To corroborate the AFA margin we have selected, we compared that margin to the margins we found for the respondents.
As discussed in the Memorandum to the File regarding the corroboration of the AFA rate, dated June 17, 2004, we found that the margin of 198.08 percent has probative value. See Memorandum to the File from Brian Ledgerwood, Analyst, through Robert Bolling, Program Manager, and Laurie Parkhill, Office Director, Preliminary Determination in the Investigation of Wooden Bedroom Furniture from the People's Republic of China, Corroboration Memorandum (``Corroboration Memo''), dated June 17, 2004. Accordingly, we find that the rate of 198.08 percent is corroborated within the meaning of section 776(c) of the Act.
Consequently, we are applying a single antidumping rate--the PRC- wide rate--to producers/exporters that failed to respond to the Q&V questionnaire or Section A questionnaire. This rate will also apply to exporters which did not demonstrate entitlement to a separate rate. See, e.g., Final Determination of Sales at Less Than Fair Value: Synthetic Indigo from the People's Republic of China, 65 FR 25706, 25707 (May 3, 2000). The PRC-wide rate applies to all entries of the merchandise under investigation except for entries from the seven mandatory respondents and certain Section A respondents.
Because this is a preliminary margin, the Department will consider all margins on the record at the time of the final determination for the purpose of determining the most appropriate final PRC-wide margin. See Notice of Preliminary Determination of Sales at Less Than Fair Value: Saccharin from the People's Republic of China, 67 FR 79049, 79054 (December 27, 2002).
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Partial Adverse Facts Available
We have preliminarily determined that the use of a partial adverse inference is warranted for certain sales by Markor Tianjin.
According to section 771(33)(E) of the Act, as amended by the Uruguay Round Agreements Act (``URAA''), ``any person directly or indirectly owning, controlling, or holding with power to vote, five percent or more of the outstanding voting stock or shares of any organization and such organization'' shall be considered affiliated. For purposes of section 771(33), ``a person shall be considered to control another person if the person is legally or operationally in a position to exercise restraint or direction over the other person.'' According to section 771(33)(F) of the Act, as amended by the URAA, ``two or more persons directly or indirectly controlling, controlled by, or under common control with, any person'' shall be considered affiliated.
The Department has concluded that Markor Tianjin and Lacquer Craft are likely affiliated because strong evidence on the record indicates Markor Tianjin and Lacquer Craft were affiliated during the POI by virtue of common ownership and shared stock interest through a third party (i.e., Company A). See Memorandum for Laurie Parkhill, Office Director, from Jon Freed, Case Analyst, Affiliation between Markor Tianjin and Lacquer Craft, dated June 17, 2004. Thus, an analysis of record evidence demonstrates that there is a strong likelihood that under section 771(33)(E) of the Act Markor Tianjin and Lacquer Craft are affiliated.
Lacquer Craft has acknowledged that it is affiliated, by virtue of common ownership, with a party in the United States (Company B). Markor Tianjin sold subject merchandise to Company B during the POI. Because we have determined that Markor Tianjin is likely affiliated with Lacquer Craft, this also raises issues of potential affiliation between Markor Tianjin and its customer, Company B. If Markor Tianjin were, in fact, affiliated with Company B, the appropriate sales to use in our dumping analysis would be sales of Markor Tianjin's affiliated customer in the United States to its unaffiliated U.S. customers. Those sales would be classified as constructed export price (``CEP'') transactions because they would have been made in the United States after the date of importation. See section 772(b) of the Act. Further, for CEP sales, the Department deducts from the U.S. resale price to an unaffiliated purchaser all selling, distribution, and manufacturing expenses incurred in the United States and an amount for profit allocable to these expenses. See section 772(c) of the Act. Therefore, the Department cannot calculate an accurate dumping margin based on export price (``EP'') sales when there is strong evidence for the Department to determine that the respondent should have reported the affiliates' CEP sales.
Although Markor Tianjin responded to the Department's questionnaire and supplemental questionnaires regarding affiliation, it failed to disclose the nature of its relationship during the POI to Company A. Sections 776(a)(2)(A) and 776(a)(2)(B) of the Act provide for the use of facts available when an interested party withholds information that has been requested by the Department or when an interested party fails to provide the information requested in a timely manner and in the form required. Additionally, section 776(b) of the Act provides for the use of AFA when an interested party has failed to cooperate by not acting to the best of its ability. We have concluded that Markor Tianjin did not cooperate to the best of its ability because it neither disclosed the nature of its affiliation with Company A and with its U.S. customer, Company B, nor provided the correct sales information for its U.S. customer, as we requested in the questionnaire. Markor Tianjin's failure to cooperate to the best of its ability has inhibited the Department's ability to conduct a meaningful analysis of its sales to Company B. As long recognized by the CIT, the burden is on the respondent, not the Department, to create a complete and accurate record. See Pistachio Group of Association Food Industries v. United States, 671 F. Supp. 31, 39-40 (CIT 1987). Therefore, because it did not disclose the true nature of its affiliation with Company A and Company B, nor did it report the sales of the affiliated reseller (i.e., Company B), we find that the application of AFA is warranted. Because Markor Tianjin did not provide this information, section 782(d) of the Act is not applicable. Further, absent this information, i.e., the sales price to the unaffiliated customer and the expenses incurred in making those sales, the Department cannot calculate CEP and therefore cannot calculate an accurate dumping margin. Thus, the information on the record cannot serve as a reliable basis for this determination under section 782(e) of the Act. Therefore, in accordance with sections 776(a)(2) and 776(b) of the Act, we have applied AFA for each of Markor Tianjin's sales that should have been reported as CEP sales. As AFA we have applied the highest individual weighted-average margin for Markor Tianjin after dismissing the aberrational margins. Because we have used primary information as AFA (i.e., information Markor Tianjin submitted), the corroboration requirements of section 776(c) do not apply.
Further, we have preliminarily determined that the use of a partial adverse inference is warranted for certain surrogate values for Tech Lane. As described earlier, on May 10, 2004, the Department requested all mandatory respondents to provide a chart indicating the HTS heading and article description for each of their factors of production. On May 26, 2004, Tech Lane submitted its response and stated that it is not familiar with the Indian tariff schedule but it submitted only certain surrogate values. Additionally, Tech Lane stated it incorporated submissions by Lacquer Craft on HTS information by reference.
Through its incomplete response, Tech Lane has not met its burden of providing adequate information for the Department to value the factors of production. In other words, because Tech Lane provided no HTS headings for certain of its factors of production, the Department has no way of determining where in the spectrum of factors of production Tech Lane's factors fall. We have concluded that, because Tech Lane has not submitted an entire listing of its HTS heading and article descriptions for its submitted factors of production, it is appropriate to use the highest surrogate values on the record to calculate certain of Tech Lane's factors of production. See Tech Lane Preliminary Determination Analysis Memorandum dated June 17, 2004. Further, we have determined that an adverse inference is warranted pursuant to section 776(b) of the Act. Tech Lane did not cooperate to the best of its ability by providing its HTS heading and article descriptions for its factors of production and certain of its factors of production have multiple HTS headings for the same or similar products (i.e., as submitted by mandatory respondents). Therefore, for the preliminary determination, we have used the highest surrogate values on the record to value certain factors of production for Tech Lane.
For those companies that did not report a sandpaper usage rate, for the preliminary determination, the Department has used facts available to estimate the amount of sandpaper used in the production of subject merchandise. We made this determination based on the fact that sandpaper is essential to the production
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process of the subject merchandise and because there is no indication that the cost of sandpaper is included in the overhead figures of the Indian surrogate companies. For the companies that did not report sandpaper usage rates, we calculated a simple average of the combined consumption of sandpaper and sand cloth from the respondents that did report sandpaper and/or sandcloth usage rates.
Margins for Section A Respondents
The exporters which submitted responses to Section A of the Department's antidumping questionnaire and had sales of the subject merchandise to the United States during the POI but were not selected as mandatory respondents in this investigation (``Section A respondents'') have applied for separate rates and provided information for the Department to consider for this purpose. Therefore, for the Section A respondents which provided sufficient evidence that they are separate from the state-controlled entity and answered other questions in Section A of the questionnaire, we have established a weighted- average margin based on the rates we have calculated for the seven mandatory respondents, excluding any rates that are zero, de minimis, or based entirely on adverse facts available. That rate is 10.92 percent. Companies receiving this rate are identified by name in the ``Suspension of Liquidation'' section of this notice.
Because Power Dekor Group Co. Ltd. and Fuzhou Huan Mei Furniture Co., Ltd., reported that they did not have sales of the merchandise under investigation to the United States during the POI, these companies are not eligible to receive a separate rate.
Date of Sale
Section 351.401(i) of the Department's regulations state that, ``in identifying the date of sale of the subject merchandise or foreign like product, the Secretary normally will use the date of invoice, as recorded in the exporter or producer's records kept in the normal course of business.'' After examining the sales documentation placed on the record by the mandatory respondents, we preliminarily determine that invoice date is the most appropriate date of sale for the Dorbest Group, Lacquer Craft, Markor Tianjin, and Starcorp. We made this determination because, at this time, there is insufficient evidence on the record to determine whether the contracts used by the respondents establish the material terms of sale to the extent required by our regulations in order to rebut the presumption that invoice date is the proper date of sale. See Saccharin from China, 67 FR at 79054.
Furthermore, after examining the sales documentation placed on the record by Dongguan Lung Dong, we also preliminarily determine that invoice date is the most appropriate date of sale for Dongguan Lung Dong. Dongguan Lung Dong claimed that its purchase-order date is the appropriate date of sale because its sales terms do not change. We have determined that, based on record evidence, its sales terms did change after the purchase-order date, and thus we have used invoice date as the date of sale for the preliminary determination for Dongguan Lung Dong.
Shing Mark reported shipment date as the date of sale. Shipment date typically falls on or about the invoice date. There is no record evidence to indicate otherwise, and thus we have used shipment date as the date of sale for the preliminary determination for Shing Mark. Additionally, Tech Lane provided record evidence that indicated its purchase-order date was the appropriate date of sale and there is no record evidence to indicate otherwise; thus, we have used purchase- order date as the date of sale for the preliminary determination for Tech Lane.
The Department intends to examine the date-of-sale issue at verification thoroughly and may reconsider its position for the final determination based on the results of verification.
Fair Value Comparisons
To determine whether sales of wooden bedroom furniture to the United States by the seven mandatory respondents were made at less than fair value, we compared EP or CEP to NV, as described in the ``Export Price,'' ``Constructed Export Price,'' and ``Normal Value'' sections of this notice.
U.S. Price
In accordance with section 772(a) of the Act, we used EP for the seven mandatory respondents, as appropriate, because the subject merchandise was first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States and because the use of CEP was not otherwise indicated. In accordance with section 772(b) of the Act, we used CEP for certain sales by Lacquer Craft and Shing Mark because the subject merchandise was sold in the United States after the date of importation by a U.S. seller affiliated with the producer.
We calculated EP and CEP based on the packed F.O.B., C.I.F., or delivered price to unaffiliated purchasers in, or for exportation to, the United States. We made deductions, as appropriate, for any movement expenses (e.g., foreign inland freight from the plant to the port of exportation, domestic brokerage, ocean freight, marine insurance, U.S. brokerage, and inland freight from warehouse to unaffiliated U.S. customer) in accordance with section 772(c)(2)(A) of the Act. For a detailed description of all adjustments, see the company-specific Analysis Memoranda dated June 17, 2004.
In accordance with section 772(d)(1) of the Act and the SAA at 823- 824, we calculated the CEP by deducting selling expenses associated with economic activities occurring in the United States, which includes credit, commissions, direct selling expenses, inventory carrying costs, and other indirect selling expenses. We compared NV to weighted-average EPs and CEPs, in accordance with section 777A(d)(1) of the Act. Where appropriate, in accordance with sections 772(d)(3) and 772(f) of the Act, we deducted CEP profit. For a detailed description of all adjustments, see the company-specific Analysis Memoranda dated June 17, 2004.
For the Dorbest Group, the Department has denied its claim for billing adjustments for this preliminary determination because the Dorbest Group did not provide sufficient information for these adjustments in its responses. The Dorbest Group provided a billing- adjustments field in the database, but it did not provide a narrative explanation for these adjustments.
In the U.S. sales database it submitted with the original response, the Dorbest Group reported commissions that it paid to some of its customers. In the database that the Dorbest Group submitted with its supplemental response, however, it removed a portion of commissions from its database, claiming that those commissions were actually other types of expenses. We disagree with the Dorbest Group's classification of its commissions as other types of expenses. Therefore, for the preliminary determination, we have applied the commissions reported in the Dorbest Group's original U.S. sales database to the sales reported in the database submitted with its supplemental response.
For some sales observations, Lacquer Craft and Markor Tianjin combined multiple invoices for a single observation in their respective U.S. sales listings. Both explained that this was
[[Page 35324]]
the most reasonable method for reporting these items because the component pieces making up the furniture item sold were not always captured on the same invoice. In these instances, Lacquer Craft and Markor Tianjin explained, they combined the total gross unit price and total quantity of subject merchandise sold to a particular customer where the price for the subject merchandise was the same on each invoice. Generally, it is the Department's preference to evaluate each sale on a single invoice basis but the Department does not have any information on the record to indicate that Markor Tianjin and Lacquer Craft's method would cause a distortion in the comparison of U.S. price to NV. Therefore, for the preliminary determination, the Department has accepted this reporting methodology. The Department intends to examine this issue at verification thoroughly and may reconsider its position for the final determination based on the results of verification.
Normal Value
Section 773(c)(1) of the Act provides that the Department shall determine the NV using a factors-of-production methodology if the merchandise is exported from an NME and 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 bases NV on the factors of production because the presence of government controls on various aspects of these economies renders price comparisons and the calculation of production costs invalid under its normal methodologies.
Factor Valuations
In accordance with section 773(c) of the Act, we calculated NV based on factors of production reported by respondents for the POI. To calculate NV, we multiplied the reported per-unit factor quantities by publicly available Indian surrogate values (except as discussed below). In selecting the surrogate values, we considered the quality, specificity, and contemporaneity of the data. As appropriate, we adjusted input prices by including freight costs to make them delivered prices. Specifically, we added to Indian import surrogate values a surrogate freight cost using the shorter of the reported distance from the domestic supplier to the factory or the distance from the nearest seaport to the factory where appropriate. This adjustment is in accordance with the Court of Appeals for the Federal Circuit's decision in Sigma Corp. v. United States, 117 F. 3d 1401 (Fed. Cir. 1997). Due to the extensive number of surrogate values it was necessary to assign in this investigation, we present a discussion of the main factors. For a detailed description of all surrogate values used for respondents, see Factor-Valuation Memo. For a detailed description of all actual values used for market-economy inputs, see the company-specific analysis memoranda dated June 17, 2004.
Except as discussed below, we valued raw material inputs using the weighted-average unit import values derived from the World Trade Atlas[reg] online (``Indian Import Statistics''). See Factor-Valuation Memo. The Indian Import Statistics we obtained from the World Trade Atlas were published by the DGCI&S, Ministry of Commerce of India, which were reported in rupees and are contemporaneous with POI. Where we could not obtain publicly available information contemporaneous to the POI with which to value factors, we adjusted the surrogate values using the Indian Wholesale Price Index (``WPI'') as published in the International Financial Statistics of the International Monetary Fund.
On May 13, 2004, Shing Mark provided comments stating that, if the Department chooses India as the surrogate country, it should use InfodriveIndia to calculate surrogate values. On May 24, 2004, Petitioners responded to Shing Mark's May 13, 2004, submission and stated that the Department should not use InfodriveIndia to value the surrogate data.
For this preliminary determination, in accordance with past practice, we used data from the Indian Import Statistics in order to calculate surrogate values for the mandatory respondents' material inputs. In selecting the best available information for valuing factors of production in accordance with section 773(c)(1) of the Act, the Department's practice is to select, to the extent practicable, surrogate values which are non-export average values, most contemporaneous with the POI, product-specific, and tax-exclusive. The record shows that data in the Indian Import Statistics represents import data, is contemporaneous with the POI, is product-specific, and is tax-exclusive. See Manganese Metal From the People's Republic of China; Final Results and Partial Rescission of Antidumping Duty Administrative Review, 63 FR 12441, 12442 (March 13, 1998). Additionally, there is no record evidence which indicates that any of the factors being valued are of low value compared to other items in the basket categories; thus, our use of these statistics does not result in a distortion in favor of higher values. Further, the Indian Import Statistics contain values at both ends of the spectrum (i.e., high value and low value), further indicating that the Indian Import values are not distorted when taken as an average, as we are doing in this case. Therefore the Department has determined that the Indian Import Statistics provide the best available information for valuing the factors of production.
Additionally, we have determined not to use InfodriveIndia data because we found InfodriveIndia data does not account for all imports into India (i.e., it only accounts for 60% of the imports), and the information is not reported uniformly (e.g., units of measure and descriptions of items). Due to the statistics not being reported uniformly, the Department would be required to select items in InfodriveIndia subjectively and then correlate these items with respondent's reported inputs. Additionally, due to the lack of uniformity, there would be numerous occasions where the Department would be unable to use the data because InfodriveIndia may report individual imports in different units of measurements (e.g., pieces, kilograms, meters squared, etc.) for a given HTS number, whereas Indian Import Statistics are reported using a single uniform measurement (e.g., meters squared, kilograms).
The Dorbest Group and Lacquer Craft purchased certain raw-material inputs from NME suppliers and paid for them in market-economy currencies. Consistent with Final Determination of Sales at Less Than Fair Value in Polyethylene Retail Carrier Bags from the People's Republic of China (``PRCBs'') at Comment 4, issued on June 9, 2004, the Department has used its surrogate-value methodology to value inputs produced in an NME.
Furthermore, with regard to both the Indian import-based surrogate values and the market-economy input values, we have disregarded prices that we have reason to believe or suspect may be subsidized. We have reason to believe or suspect that prices of inputs from Indonesia, South Korea, and Thailand may have been subsidized. We have found in other proceedings that these countries maintain broadly available, non- industry-specific export subsidies and, therefore, it is reasonable to infer that all exports to all markets from these countries are subsidized. See Notice of Amended Final Determination of Sales at Less than Fair Value: Automotive Replacement Glass Windshields from
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the People's Republic of China, 67 FR 11670 (March 15, 2002). We are also directed by the legislative history not to conduct a formal investigation to ensure that such prices are not subsidized. See H.R. Rep. 100-576 at 590 (1988). Rather, Congress directed the Department to base its decision on information that is available to it at the time it makes its determination. Therefore, we have not used prices from these countries either in calculating the Indian import-based surrogate values or in calculating market-economy input values. In instances where a market-economy input was obtained solely from suppliers located in these countries, we used Indian import-based surrogate values to value the input. See Final Determination of Sales at Less Than Fair Value: Certain Automotive Replacement Glass Windshields From The People's Republic of China, 67 FR 6482 (February 12, 2002), and accompanying Issues and Decision Memorandum at Comment 1.
Where appropriate, we adjusted surrogate values to reflect inflation up to the POI using the WPI or the PPI published by the IMF, as appropriate.
For wood inputs (e.g., logs and lumber of various species), wood veneer of various species, processed woods (e.g., fiberboard, particleboard, plywood, etc.), adhesives and finishing materials (e.g., glue, paints, stains, lacquer, etc.), hardware (e.g., nails, staples, screws, bolts, knobs, pulls, drawer slides, hinges, clasps, etc.), other materials (e.g., mirrors, glass, leather, marble, cloth, foam, etc.), and packing materials (e.g., cardboard, cartons, styrofoam, bubblewrap, plastic bags, labels, tape, etc.), we used import values from the World Trade Atlas when respondents purchased these inputs from suppliers in the PRC. For a complete listing of all the inputs and the valuation for each mandatory respondent see the Factor-Valuation Memo.
On June 4, 2004, Petitioners asserted that the Department should disregard prices paid for wood products purchased from Russia because the Russian timber prices are distorted by illegal activities and NME conditions in the timber industry in Russia. Petitioners stated that illegal logging, false documentation of commercial grade timber as ``salvage'' or other forged documents, smuggling of timber, and control of many Russian timber firms by PRC nationals result in NME prices for timber imported into the PRC. Additionally, Petitioners commented that stumpage fees are far lower than in neighboring European countries.
For the preliminary determination, the Department has rejected Petitioners' argument and has used the market prices of Russian wood for the following reasons. First, we designated Russia as a market economy on August 6, 2002, with an effective date of April 1, 2002. Like many market economies, Russia's market economy has imperfections, which should not preclude use of its export prices. If establishing documenting imperfections in a market economy were sufficient cause to abandon using a country's export price, prices from many market economies would be unusable.
Second, the Department excludes prices that are subsidized by the foreign government, but it has no policy of excluding prices that are low because of evasion of that government's policy. Petitioners have made no allegations of a subsidy program in Russia.
Third, the sources cited by Petitioners are dated and the conditions that may have prevailed when the reports were issued may no longer hold today. None of the sources cited by Petitioners reflects the POI (i.e., they refer to 1998 through January 2003 whereas the POI is April 2003 through September 2003) and, in fact, most of the reports cited pre-date the Department's graduation of Russia to market-economy status. Given the pace of change in Russia over the last several years, reliance on dated information may not be representative of the timber market in Russia during the POI. Additionally, allegations of illegal logging and smuggling in Russia without evidence that demonstrate respondents' wood products are, in fact, obtained from these sources provide an insufficient basis on which to reject these prices as NME prices.
For the purposes of the preliminary determination, the Department has decided to use http://www.allmeasures.com and other publicly
available information where interested parties did not submit alternative conversion values for specific factors of production. Shing Mark and Starcorp submitted an alternative website for wood measurement conversions. Due to the complexity and number of the conversions, however, the Department has preliminarily determined to use the allmeasures website to convert certain values. For the final determination, the Department will continue to consider other appropriate conversion ratios.
As stated above, the Dorbest Group claimed that it had market- economy purchases for certain inputs produced in the PRC and shipped from the supplier's plant(s) in the PRC to the Dorbest Group's plants. Consistent with PRCBs, the Department has used its surrogate-value methodology to value inputs produce in an NME.
Additionally, as stated above, Lacquer Craft claimed that it had market-economy purchases of various paints and finishing materials produced in the PRC and shipped from the supplier's plant(s) in the PRC to Lacquer Craft's plant. Consistent with PRCBs, the Department has used its surrogate-value methodology to value inputs produce in an NME.
For the preliminary determination with respect to Shing Mark, the Department has relied generally upon its submitted factor inputs. Shing Mark reported that certain of its inputs were subcontracted. The Department's normal practice is to use a surrogate value for the production of subcontracted items, because the overhead, selling, general and administrative expenses (``SG&A''), and profit are reflected in the surrogate value and not the subcontracted factor inputs. For the preliminary determination, the Department has used Shing Mark's factor inputs to value these subcontracting costs. For the final determination, we will evaluate Shing Mark's subcontracted factor inputs further to determine whether these costs are distortive and examine this issue more closely at verification.
As the basis for NV, Starcorp provided factors-of-production data based on log processing and lumber purchases as Starcorp has its own log-processing facility. For each type of reported species of wood, Starcorp stated that it purchases both lumber and logs which are then processed internally into lumber. In response to a supplemental questionnaire, Starcorp provided factors-of-production information based only on lumber consumption. Although Starcorp reported the inputs (i.e., logs) used to produce lumber, for the purposes of this preliminary determination, we have not valued those inputs when calculating NV. Rather, our NV calculation begins with a valuation of lumber consumption used to produce the merchandise under investigation for the following reasons.
Consistent with section 773(c)(1)(B) of the Act, our general policy is to value the factors of production that a respondent uses to produce the subject merchandise. To the extent that the NME respondent is an integrated producer, we take into account the factors utilized in each stage of the production process. For example, in the case of preserved canned mushrooms produced by a grower of mushrooms, the Department valued the factors used to grow the mushrooms, the factors used
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to further process and preserve the mushrooms, and any additional factors used to can and package the mushrooms, including any used to manufacture the cans (if produced in-house). If, on the other hand, the firm was simply a processor that bought fresh mushrooms to preserve and can, the Department valued the purchased mushrooms and not the factors used to grow them. See final results valuation memorandum for Final Results of First New Shipper Review and First Antidumping Duty Administrative Review: Certain Preserved Mushrooms From the People's Republic of China, 66 FR 31204 (June 11, 2001) (Final Results Valuation Memorandum). This policy has been applied to both agricultural and industrial products. See, e.g., Persulfates From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review and Notice of Partial Recision, 67 FR 50866 (August 6, 2002) (unchanged in final), and Notice of Final Determinations of Sales at Less Than Fair Value: Brake Drums and Brake Rotors From the People's Republic of China, 62 FR 9160 (February 28, 1997). Accordingly, our standard NME questionnaire asks respondents to report the factors used in the various stages of production.
There are two limited exceptions to this general rule. First, in some cases a respondent may report factors used to produce an intermediate input that accounts for a small or insignificant share of total output. The Department recognizes that, in those cases, the increased accuracy in its overall calculations that would result from valuing each of those factors separately may be so small so as to not justify the burden of doing so. Therefore, in those situations, the Department would value the intermediate input directly.
Second, in certain circumstances, it is clear that attempting to value the factors used in a production process yielding an intermediate product may lead to an inaccurate result because the constructed value would not reflect a significant element of cost adequately. For example, in a recent case, we addressed whether we should value the respondent's factors used in extracting iron ore, an input to its wire rod factory. The Department determined that, if it were to use those factors, it would not account sufficiently for the capital costs associated with the iron ore mining operation, given that the surrogate company the Department used for valuing production overhead did not have mining operations. Therefore, because ignoring this important cost element would distort the calculation, the Department declined to value the inputs used in mining iron ore and valued the iron ore instead. See Notice of Final Determination of Sales at Less Than Fair Value: Carbon and Certain Alloy Steel Wire Rod From Ukraine, 67 FR 55785 (August 30, 2002), Final Determination of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products From the People's Republic of China, 66 FR 49632 (September 28, 2001), Final Determination of Sales at Less Than Fair Value; Certain Cut-to-Length Carbon Steel Plate From the People's Republic of China, 62 FR 61964 (November 20, 1997), and Notice of Final Determination of Sales at Less Than Fair Value; Furfuryl Alcohol From the People's Republic of China, 60 FR 22544 (May 8, 1995).
In this investigation, we have determined that the second exception discussed above applies here. We have reviewed and analyzed the information submitted by Starcorp and find that the data pertaining to the log processing cannot be used for purposes of the preliminary determination. Starcorp reported that, for some of the solid wood used in the manufacture of subject merchandise, it purchased logs and processed the logs internally into lumber. Additionally, Starcorp reported the electricity, water, and labor associated with the log- processing facility. The Department has determined that, if it were to value the logs, it would not account for the capital costs associated with processing the logs into lumber due to the fact that the overhead costs (i.e., overhead ratio) of the surrogate companies do not indicate that these surrogate companies process logs into lumber. Therefore, for the preliminary determination, we have declined to value the inputs used in production of logs and have instead valued the lumber because this methodology yields a more accurate result.
For Tech Lane, the Department has denied its claim for a by-product offset to its board inputs for this preliminary determination, because Tech Lane did not provide sufficient information in order for the Department to adjust for this by-product offset. Tech Lane only submitted per-unit inputs used to produce recycled boards sold to unaffiliated third parties, but Tech Lane provided no record evidence of how it calculated its per-unit inputs for recycled boards. Additionally, Tech Lane did not explain the methodology it used to calculate the by-product offset it claimed. Furthermore, Tech Lane did not provide sufficient evidence that it sold board to unaffiliated third parties during the POI. Thus, for the preliminary determination, we have not applied a by-product offset adjustment to its board inputs. We intend to examine this issue more closely at verification.
Tech Lane purchased oak and cherry logs from the United States and had them processed into veneer in Vietnam by an unaffiliated Taiwanese company. The unaffiliated Taiwanese company received the logs, processed them, paid all costs incurred in Vietnam and all transportation expenses and insurance from Vietnam to Tech Lane's factory in the PRC. Tech Lane paid the Taiwanese company a flat fee for these services based on the square feet of veneer processed. Tech Lane reported this veneer as a market-economy input.
Because we valued ``veneer'' in the production of subject merchandise, not ``logs,'' and because the majority of Tech Lane's oak veneer and a significant portion of Tech Lane's cherry veneer was purchased from market-economy suppliers, we have not used the price paid to the Taiwanese company for the processing in Vietnam and have valued Tech Lane's oak and cherry veneer using market-economy prices.
For Lacquer Craft, Shing Mark, and Tech Lane, the Department valued their stain paint, thinner paint, glaze paint, lacquer paint, and sealer paint (collectively ``paints'') by using a single HTS for the these paints. These companies either did not provide the Department with an HTS classification for their paint inputs or they provided the Department with multiple HTS classifications that represent the necessary ingredients for making the paints. Additionally, each company reported a usage rate for the final product and did not provide usage rates for the specific ingredients that make up the paints. Because there is no record evidence with respect to the usage rates for the HTS classifications component that make up the paints and because other information indicates that these components are mixed to create a single product, the Department has determined that best surrogate value to use for the paints in the preliminary determination is a single value for paint. For the final determination, the Department will evaluate whether usage rates for the component parts should be reported and whether to value each component.
Regarding certain minor factors of production (e.g., cabinet lights, covers, paper covers, etc.) reported by the mandatory respondents, we did not value these factors because surrogate-value information was not available and conversion factors were not available. For a detailed list of the factors we did
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not value for the preliminary determination, see the company-specific analysis memoranda dated June 17, 2004.
To value electricity, we used data from the International Energy Agency (``IEA'') Key World Energy Statistics (2003 edition), submitted by the Petitioners in Exhibit 4 of their April 16, 2004, submission. Because the value was not contemporaneous with the POI, we adjusted the rate for inflation. See Factor-Valuation Memo.
To value water, we used the average water tariff rate as reported in the Asian Development Bank's Second Water Utilities Data Book: Asian and Pacific Region (published in 1997), based on the average rupee per cubic meter rate for three cities in India during 1997. Because the value was not contemporaneous with the POI, we adjusted the rate for inflation. See Factor-Valuation Memo.
To value diesel fuel, we used data from IEA's Key World Energy Statistics (2003 edition) which was submitted by petitioners in their April 16, 2004, submission. Because the value was not contemporaneous with the POI, we adjusted the rate for inflation. See Factor-Valuation Memo.
For direct, indirect, crate-building and packing labor, consistent with 19 CFR Sec. 351.408(c)(3), we used the PRC regression-based wage rate as reported on Import Administration's home page, Import Library, Expected Wages of Selected NME Countries, revised in September 2003, http://ia.ita.doc.gov/wages/01wages/01wages.html. The source of these
wage-rate data on the Import Administration's Web site is the Yearbook of Labour Statistics 2002, ILO (Geneva: 2002), Chapter 5B: Wages in Manufacturing. Because this regression-based wage rate does not separate the labor rates into different skill levels or types of labor, we have applied the same wage rate to all skill levels and types of labor reported by the respondent.
The respondents also reported packing inputs. We used Indian Import Statistics data from the period April 2003 through September 2003 to value these inputs except where respondents obtained the inputs from market-economy suppliers and paid for them in a market-economy currency. See Factor-Valuation Memo.
We used Indian transport information in order to value the transportation of raw materials. To calculate domestic inland freight for trucking services, we selected freight values from Chemical Weekly. Some inputs were transported by market-economy transportation firms and paid for in a market-economy currency. Where this was the case, we added the actual market-economy transportation expense to the valuation of the factor of production.
We used Indian rail freight information in order to value the transportation of raw materials. To value the rail freight, we used two price quotes from November 1999 for steel shipments within India. Because the value was not contemporaneous with the POI, we adjusted the rate for inflation. See Factor-Valuation Memo.
To value factory overhead, SG&A and profit, we used the audited financial statements for the fiscal year ending March 31, 2003, from the following producers of wooden furniture: Indian Furniture Products Ltd., Raghbir Interiors Pvt. Ltd., Nizamuddin Furnitures Pvt. Ltd., Fusion Design Private Ltd., Jayaraja Furniture Group, and Akriti Perfections India Pvt. Ltd. See Factor-Valuation Memo for a full discussion of the calculation of these ratios from these financial statements.
Currency Conversion
We made currency conversions into U.S. dollars in accordance with section 773A(a) of the Act based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank.
Verification
As provided in section 782(i)(1) of the Act, we intend to verify the information upon which we will rely in making our final determination.
Preliminary Determination
The weighted-average dumping margins are as follows:
Weighted- Manufacturer/exporter
average margin (percent)
Dongguan Lung Dong....................................
7.04 The Dorbest Group.....................................
19.24 Lacquer Craft.........................................
4.90 Markor Tianjin........................................
8.38 Shing Mark............................................
6.59 Starcorp..............................................
24.34 Tech Lane.............................................
9.36 Cheng Meng Furniture (PTE) Ltd., et al................
10.92 Classic Furniture Global Co., Ltd.....................
10.92 Dalian Guangming Furniture Co., Ltd...................
10.92 Dalian Huafeng Furniture Co., Ltd.....................
10.92 Dongguan Cambridge Furniture Co., et al...............
10.92 Dongguan Creation Furniture Co., Ltd et al............
10.92 Dongguan Great Reputation Furniture Co., Ltd..........
10.92 Dongguan Hung Sheng Artware Products Co., Ltd et al...
10.92 Dongguan Kin Feng Furniture Co., Ltd..................
10.92 Dongguan Kingstone Furniture Co., Ltd et al...........
10.92 Dongguan Qingxi Xinyi Craft Furniture Factory (Joyce
10.92 Art Factory)......................................... Dongguan Singways Furniture Co., Ltd..................
10.92 Eurosa (Kunshan) Co., Ltd et al.......................
10.92 Ever Spring Furniture Company Ltd, et al..............
10.92 Fine Furniture (Shanghai) Limited.....................
10.92 Fujian Lianfu Forestry Co., Ltd, et al................
10.92 Garri Furniture (Dong Guan) Co., Ltd et al............
10.92 Guangming Group Wumahe Furniture Co., Ltd.............
10.92 Hainan Jong Bao Lumber Co., Ltd.......................
10.92 Hamilton & Spill Ltd..................................
10.92 Dongguan Grand Style Furniture et al..................
10.92 Hang Hai Woodcraft's Art Factory......................
10.92 Hualing Funriture (China) Co., Ltd et al..............
10.92
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Jardine Enterprise, Ltd...............................
10.92 Jiangsu Weifu Group Fullhouse Furniture Mfg. Corp.....
10.92 Jiangsu Yuexing Funriture Group Co., Ltd..............
10.92 Jiedong Lehouse Furntiure Co., Ltd....................
10.92 King Way Furniture Industries Co., Ltd et al..........
10.92 Kunshan Summit Furniture Co., Ltd.....................
10.92 Langfang Tiancheng Furniture Co., Ltd.................
10.92 Leefu Wood (Dongguan) Co., Ltd........................
10.92 Link Silver Ltd et al.................................
10.92 Locke Furniture Factory (dba Kai Chan Furniture) et al
10.92 Nantong Dongfang Orient Furniture Co., Ltd............
10.92 Nantong Yushi Furniture Co., Ltd......................
10.92 Nathan International Ltd et al........................
10.92 Perfect Line Furniture Co., Ltd.......................
10.92 Qingdao Liangmu Co., Ltd..............................
10.92 Restonic (Dongguan) Furniture Ltd et al...............
10.92 RiZhao SanMu Woodworking Co., Ltd.....................
10.92 Season Furniture Manufacturing Co. et al..............
10.92 Sen Yeong International Co., Ltd et al................
10.92 Shanghai Maoji Imp and Exp Co., Ltd...................
10.92 Shanghai Aosen Furniture Co., Ltd.....................
10.92 Shenyang Shining Dongxing Furniture Co., Ltd..........
10.92 Shenzhen Forest Furniture Co., Ltd....................
10.92 Shenzhen Jiafa High Grade Furniture Co., Ltd et al....
10.92 Shenzhen New Fudu Furniture Co., Ltd..................
10.92 Shenzhen Wonderful Furniture Co., Ltd.................
10.92 Shenzhen Xingli Furniture Co., Ltd....................
10.92 Shun Feng Furniture Co., Ltd..........................
10.92 Songgang Jasonwood Furniture Factory et al............
10.92 Starwood Furniture Manufacturing Co. Ltd..............
10.92 Starwood Industries Ltd...............................
10.92 Strongson Furniture (Shenzhen) Co., Ltd et al.........
10.92 Sunforce Furniture (Hui-Yang) Co., Ltd et al..........
10.92 Tarzan Furniture Industries Ltd et al.................
10.92 Teamway Furniture (Dong Guan) Ltd, et al..............
10.92 Techniwood Industries Limited.........................
10.92 Sheng Jing Wood Products (Beijing) Co., Ltd et al.....
10.92 Tianjin Fortune Funriture Co., Ltd....................
10.92 Tianjin Phu Shing Woodwork Enterprise Co., Ltd........
10.92 Tianjin Sande Fairwood Furniture Co., Ltd.............
10.92 Tube-Smith Enterprise (ZhangZhou) Co., Ltd et al......
10.92 Union Friend International Trade Co., Ltd.............
10.92 U-Rich Furniture (Zhangzhou) Co., Ltd et al...........
10.92 Wanhengtong Nueevder (Furniture) Manufacture Co., Ltd
10.92 et al................................................ Woodworth Wooden Industries (Dong Guan) Co., Ltd......
10.92 Xiamen Yongquan Sci-Tech Development Co., Ltd.........
10.92 XiangSheng Bedtime Furniture Co., Ltd.................
10.92 Xingli Arts & Crafts Factory of Yangchun..............
10.92 Yangchun Hengli Company Limited.......................
10.92 Yeh Brothers World Trade, Inc.........................
10.92 Yichun Guangming Furniture Co., Ltd...................
10.92 Yihua Timber Industry Co., Ltd........................
10.92 Zhang Zhou Sanlong Wood Product Co., Ltd..............
10.92 Zhangjiagang Zheng Yan Decoration Co., Ltd............
10.92 Zhangzhou Guohui Industrial & Trade Co. Ltd...........
10.92 Zhong Shan Fullwin Funriture Co., Ltd.................
10.92 Zhongshan Fookyik Furniture Co., Ltd..................
10.92 Zhongshan Golden King Furniture Industrial Co., Ltd...
10.92 Zhoushan For-Strong Wood Co., Ltd.....................
10.92 PRC-Wide Rate.........................................
198.08
Disclosure
We will disclose the calculations performed within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).
Suspension of Liquidation
In accordance with section 733(d) of the Act, we will instruct U.S. Customs and Border Protection (``CBP'') to suspend liquidation of all entries of subject merchandise, entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. We will instruct CBP to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the normal value exceeds U.S. price, as indicated above. The suspension of liquidation will remain in effect until further notice.
[[Page 35329]]
International Trade Commission Notification
In accordance with section 733(f) of the Act, we have notified the ITC of our preliminary affirmative determination of sales at less than fair value. Because we have postponed the deadline for our final determination to 135 days from the date of publication of this preliminary determination, section 735(b)(2) of the Act requires the ITC to make its final determination as to whether domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of wooden bedroom furniture, or sales (or the likelihood of sales) for importation, of the subject merchandise within 45 days of our final determination.
Public Comment
Case briefs or other written comments may be submitted to the Assistant Secretary for Import Administration no later than seven days after the date of the final verification report issued in this proceeding and rebuttal briefs limited to issues raised in case briefs, no later than five days after the deadline date for case briefs. A list of authorities used and an executive summary of issues should accompany any briefs submitted to the Department. This summary should be limited to five pages total, including footnotes.
In accordance with section 774 of the Act, we will hold a public hearing, if requested, to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs. If a request for a hearing is made, we will intend to hold the hearing three days after the deadline of submission of rebuttal briefs at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230, at a time and location to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.
Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request to the Assistant Secretary for Import Administration, U.S. Department of Commerce, Room 1870, within 30 days after the date of publication of this notice. See 19 CFR 351.310(c). Requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues to be discussed. At the hearing, each party may make an affirmative presentation only on issues raised in that party's case brief and may make rebuttal presentations only on arguments included in that party's rebuttal brief.
We will make our final determination no later than 135 days after the date of publication of this preliminary determination, pursuant to section 735(a)(2) of the Act.
This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act.
Dated: June 17, 2004. James J. Jochum, Assistant Secretary for Import Administration.
[FR Doc. 04-14361 Filed 6-23-04; 8:45 am]
