Antidumping: Natural bristle paintbrushes and brush heads from China,
[Federal Register: January 13, 1999 (Volume 64, Number 8)]
[Notices]
[Page 2192-2195]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ja99-35]
DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-501]
Natural Bristle Paintbrushes and Brush Heads From The People's Republic of China; Preliminary Results and Partial Recission of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration, Department of Commerce.
ACTION: Notice of preliminary results and partial recission of the antidumping duty administrative review of natural bristle paintbrushes and brush heads from the People's Republic of China.
SUMMARY: The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on natural bristle paintbrushes and brush heads (paintbrushes) from the People's Republic of China (PRC) in response to a request by petitioner, the Paint Applicator Division of the American Brush Manufacturers Association (the Paint Applicator Division) and by a PRC exporter of subject merchandise, the Hebei Animal By-Products Import & Export Corp. (HACO). This review covers shipments of this merchandise to the United States during the period February 1, 1997 through January 31, 1998. We are now rescinding this review in part with respect to the respondent who had no shipments of the subject merchandise during the period of review (POR).
We have preliminarily determined that sales by HACO have been made below normal value (NV). If these preliminary results are adopted in our final results, we will instruct the U.S. Customs Service to assess antidumping duties equal to the difference between export price and NV.
Interested parties are invited to comment on these preliminary results. Parties who submit arguments are requested to submit with each argument (1) a statement of the issue and (2) a brief summary of the argument.
EFFECTIVE DATE: January 13, 1999.
FOR FURTHER INFORMATION CONTACT: Eric Scheier, Laurel LaCivita, or Maureen Flannery, Antidumping/Countervailing Duty Enforcement, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, DC. 20230; telephone (202) 482-4052, 482-4236, or 482-3020, respectively.
Applicable Statute
Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department's regulations refer to the regulations codified at 19 CFR part 351 (April 1998).
Background
On February 18, 1986, the Department published in the Federal Register an antidumping duty order on paintbrushes from the PRC. See 51 FR 5580. On February 4, 1998, the Department published in the Federal Register (63 FR 5930) a notice of opportunity to request an administrative review of the antidumping order on paintbrushes from the PRC covering the period February 1, 1997, through January 31, 1998.
On February 27, 1998, in accordance with 19 CFR 351.213(b)(1), petitioner, the Paint Applicator Division, requested that we conduct an administrative review of Hunan Provincial Native Produce & Animal By- Products I/E Corporation (Hunan). On February 27, 1998, HACO submitted a request for a review. We published a notice of initiation of this antidumping duty administrative review on March 23, 1998 (63 FR 13837). The Department is conducting this administrative review in accordance with section 751 of the Act.
Partial Rescission
We initiated a review of HACO and Hunan. However, on March 5, 1998, Hunan informed the Department that it had no shipments of the subject merchandise to the United States during the POR. We have independently confirmed with the United States Customs Service that there were no shipments from Hunan during the POR. Therefore, in accordance with Sec. 351.213(d)(3) of the Department's regulations and consistent with Department practice, we are rescinding our review of Hunan (see, e.g., Certain Welded Carbon Steel Pipe and Tube
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from Turkey: Final Results and Partial Rescission of Antidumping Administrative Review, 63 FR 35191 (June 29, 1998) and Certain Fresh Cut Flowers From Colombia; Final Results and Partial Rescission of Antidumping Duty Administrative Review, 62 FR 53287, 53288 (October 14, 1997).
Scope of Review
Imports covered by this review are shipments of natural bristle paint brushes and brush heads from the PRC. Excluded from the order are paint brushes and brush heads with a blend of 40% natural bristles and 60% synthetic filaments. The merchandise under review is currently classifiable under item 9603.40.40.40 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheading is provided for convenience and customs purposes, the Department's written description of the merchandise is dispositive.
This review covers the period February 1, 1997, through January 31, 1998.
Verification
As provided in section 782(i) of the Act, we conducted a verification of information provided by HACO and its supplier by using standard verification procedures, including on-site inspection of the manufacturer's facilities, the examination of relevant sales and financial records, and the seclection of original documentation containing relevant information. Our verification results are outlined in the public version of the verification report.
Adverse Facts Available
We preliminarily determine, in accordance with sections 776(b) and (c) of the Act, that the use of adverse facts available (FA) is appropriate for HACO. See Determination of Adverse Facts Available Based on Verification Failure in the Administrative Review of Natural Bristle Paintbrushes and Brush Heads from the People's Republic of China (Adverse Facts Available Memorandum), dated December 30, 1998.
From September 28 through September 30, 1998, the Department conducted a verification of HACO's questionaire response at HACO's sales office and its supplier's factory in the PRC. We were unable to verify substantial sections of the questionnaire response at HACO's supplier, including the statutorily required factors of production information, such as the number of labor hours worked and the per unit quantities consumed of primary material inputs. These discrepancies are detailed in HACO's verification report, dated December 30, 1998. These discrepancies are so significant as to constitute a failure of verification.
Where a party provides information requested by the Department but the information cannot be verified as required by section 782(i) of the Act, section 776(a)(2)(D) of the Act requires the Department to use facts otherwise available in reaching the applicable determination. Therefore, in accordance with section 776(a) of the Act, the use of FA is appropriate for HACO. See Extruded Rubber Thread from Malaysia, Final Results of Antidumping Duty Administrative Review, 62 FR 33588 (June 9, 1997).
Section 776(b) of the Act authorizes the Department to use adverse FA whenever it finds that an interested party has failed to cooperate by not acting to the best of its ability to comply with the Department's requests for information. Because HACO failed to substantiate large portions of its questionnaire response, including the statutorily required factors of production information, such as the number of labor hours worked and the per unit quantities consumed of primary material inputs, we determine that HACO did not cooperate to the best of its ability with our requests for information. See Adverse Facts Available Memorandum. Therefore, pursuant to section 776(b) of the Act, we are using adverse FA to determine HACO's margin. Under section 776(b) of the Act, adverse facts available may include reliance on information derived from : (1) The petition, (2) a final determination in the investigation, (3) any previous review under section 751 of the Act or determination under section 753 of the Act, or (4) any other information placed on the record. We have found that the adverse FA rate appropriate for HACO is the highest rate from a previous review or the original LTFV investigation, which in this case is 351.92 percent, the rate calculated for HACO in the review covering the period February 1, 1994 through January 31, 1995 (the 1994-1995 review).
Section 776(c) of the Act provides that the Department shall, to the extent practicable, corroborate secondary information from independent sources reasonably at its disposal. The Statement of Administrative Action, H.R. Doc. 316, Vol. 1, 103d Cong., 2d Sess. 870 (1994) (SAA) provides that ``corroborate'' means simply that the Department will satisfy itself that the secondary information to be used has probative value. See SAA at 870.
To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information to be used. However, unlike other types of information, such as surrogate values, there are no independent sources for calculated dumping margins. The only source for calculated margins is an administrative determination. Thus, in an administrative review, if the Department chooses as adverse FA a calculated dumping margin from a prior segment of the proceeding, it is not necessary to question the reliability of the margin for that time period. With respect to the relevance aspect of corroboration, however, the Department will consider information reasonably at its disposal as to whether there are circumstances that would render a margin not relevant. Where circumstances indicate that the selected margin is not appropriate as adverse facts available, the Department will disregard the margin and determine an appropriate margin. (See e.g., Fresh Cut Flowers from Mexico; Preliminary Results of Antidumping Duty Administrative Review, 60 FR 49567, 49568 (September 26, 1995), where the Department disregarded the highest margin as best information available because that margin was based on an extraordinarily high business expense resulting from uncharacteristic investment activities, which resulted in the high margin.)
In this case, we have used the highest rate from any prior segment of the proceeding, 351.92 percent, which was the rate calculated for HACO in the 1994-1995 review. Because this margin is based on the rate calculated for the relatively recent 1994-95 review using HACO's own price data, and because there is no information that indicates that this rate is not appropriate, we have determined that a margin of 351.92 percent is appropriate to use as facts available.
Separate Rates
We have conducted a separate rate analysis of HACO despite its overall verification failure for the following reasons: (1) The separate rate test is exporter-specific; (2) the verification failure as described above resulted from the Department's inability to verify the information provided by HACO's supplier, the producer of the subject merchandise imported into the U.S. during the POR, and not from any discrepancies in the information provided by HACO, the exporter of the subject merchandise imported into the U.S. during the POR; (3) our verification of the separate rate information provided in HACO's responses revealed that a separate rate is warranted and; (4) the Department granted HACO a
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separate rate for the 1994-95 review of paintbrushes from the PRC, which is the most recent review in which HACO participated. See Natural Bristle Paint Brushes and Brush Heads From the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 61 FR 52917 (October 1, 1996). See also Verification of Sales for Hebei Animal By-Products Import and Export Corporation (HACO) in the Antidumping Administrative Review of Natural Bristle Paintbrushes and Brush Heads from the People's Republic of China (PRC) (Verification Report).
To establish whether a company operating in a state-controlled economy is sufficiently independent to be entitled to a separate rate, the Department analyzes each exporting entity under the test established in the Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991) (Sparklers), as amplified by the Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994) (Silicon Carbide). Under this policy, exporters in non-market economies (NMEs) are entitled to separate, company-specific margins when they can demonstrate an absence of government control, both in law and in fact, with respect to export activities. Evidence supporting, though not requiring, a finding of de jure absence of government control over export activities includes: (1) An absence of restrictive stipulations associated with an individual exporter's business and export licenses; (2) any legislative enactments decentralizing control of companies; and (3) any other formal measures by the government decentralizing control of companies. See Sparklers at 20589. A de facto analysis of absence of government control over exports is based on four factors: (1) Whether each exporter sets its own export prices independently of the government or without the approval of a government authority; (2) whether each exporter retains the proceeds from its export sales and makes independent decisions regarding the disposition of profits or financing of losses; (3) whether each exporter has the authority to negotiate and sign contracts and other agreements; and (4) whether each exporter has autonomy from the government regarding the selection of management. See Silicon Carbide at 22587, and Sparklers at 20589.
With respect to the absence of de jure government control over export activities, evidence on the record indicates that HACO is a collectively-owned enterprise. The ``All People's Ownership Business Law'' of the PRC identifies rules and regulations pertaining to collectively-owned enterprises, and gives collective enterprises the right to sell the subject merchandise for export without any restrictive stipulations. (See Exhibits 3 and 4 of HACO's August 27, 1998, questionnaire response.)
Additionally, HACO has reported in its May 13, 1998 questionnaire response that the subject merchandise does not appear on any government list regarding export provisions or export licensing, and that there are no export quotas on the subject merchandise or export licenses required to export subject merchandise. (See Questionnaire Response of May 13, 1998, at A-5.)
With respect to the absence of de facto control over export activities, HACO's management is elected by HACO's staff, and is responsible for all decisions, such as the determination of its export prices, profit distribution, employment policy, marketing strategy, and contract negotiations. HACO has also reported that it maintains an independent foreign exchange account at the Bank of China. At verification we found that the provincial government has no control over pricing, business practices, salary, payroll, or bonuses. At verification we also found that HACO's relevant department head negotiated sales of paintbrushes, that HACO did not coordinate prices with other exporters, and that employees could be fired and salaries could be reduced. See Separate Rate Analysis in the Administrative Review of Natural Bristle Paintbrushes and Brush Heads from the People's Republic of China dated December 30, 1998 (Separate Rate Memorandum), and the public version of Verification Report dated December 30, 1998, which is on file in the Central Records Unit (room B099 of the Main Commerce Building).
Because evidence on the record demonstrates an absence of government control, both in law and in fact, over HACO's export activities, the Department preliminarily grants HACO a separate rate. For further discussion of the Department's preliminary determination that HACO is entitled to a separate rate, see Separate Rate Memorandum.
Preliminary Results of Review
We preliminarily determine that the following dumping margin exists:
Margin Manufacturer/exporter
Time period (percent)
Hebei Native, Product & Animal By- Products I/E Corp................... 02/01/97-01/31/98 351.92
Parties to the proceeding may request disclosure within 5 days of the date of publication of this notice in accordance with 19 CFR 351.224(b). Any interested party may request a hearing within 30 days of publication in accordance with 19 CFR 351.310(c). Any hearing, if requested, will be held 37 days after the publication of this notice, or the first workday thereafter. Interested parties may submit case briefs within 30 days of the date of publication of this notice in accordance with 19 CFR 351.309(c)(2). Rebuttal briefs, which must be limited to issues raised in the case briefs, may be filednot later than 35 days after the date of publication. The Department will publish a notice of final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, within 120 days from the publication of these preliminary results.
The Department shall determine, and the U.S. Customs Service shall assess, antidumping duties on all appropriate entries. For assessment purposes, we intend to instruct Customs to collect duties equal to 351.92 percent of the entered value of the subject merchandise. Furthermore, the following deposit rates will be effective upon publication of the final results of this administrative review for all shipments of paintbrushes from the PRC entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(C) of the Act: (1) For HACO, which has a separate rate, the cash deposit rate will be 351.92 percent; (2) for previously-reviewed PRC and non-PRC exporters with separate rates, the cash deposit rate will be the company-specific rate established for the most recent period; (3) for all other PRC exporters, the rate will be the PRC country-wide rate, which is 351.92 percent; and (4) for all other non-PRC exporters of subject merchandise from the PRC, the cash deposit rate will be
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the rate applicable to the PRC supplier of that exporter.
These deposit rates, when imposed, shall remain in effect until publication of the final results of the next administrative review.
This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.401(f) of the Department's regulations to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This administrative review and notice are published in accordance with section 751(a)(1) of the Act and Secs. 351.213 and 351.221 of the Department's regulations.
Dated: December 30, 1998. Richard W. Moreland, Acting Assistant Secretary for Import Administration.
[FR Doc. 99-692Filed1-12-99; 8:45 am]
BILLING CODE 3510-DS-M
