Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China: Preliminary Results of Administrative Reviews and Preliminary Partial Rescission of Antidumping Duty Administrative Reviews, 11934-11943 [E5-1017]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 70, Number 46 (Thursday, March 10, 2005)]
[Notices]
[Pages 11934-11943]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-1017]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-803]


Heavy Forged Hand Tools, Finished or Unfinished, With or Without 
Handles, From the People's Republic of China: Preliminary Results of 
Administrative Reviews and Preliminary Partial Rescission of 
Antidumping Duty Administrative Reviews

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

SUMMARY: The Department of Commerce (the ``Department'') is conducting 
administrative reviews of the antidumping duty orders on heavy forged 
hand tools, finished or unfinished, with or without handles, from the 
People's Republic of China. These reviews cover imports of subject 
merchandise from four manufacturers/exporters. We preliminarily find 
that

[[Page 11935]]

certain manufacturers/exporters sold subject merchandise at less than 
normal value during the POR. If these preliminary results are adopted 
in our final results of review, we will instruct U.S. Customs and 
Border Protection (``Customs'') to assess antidumping duties on all 
appropriate entries. We invite interested parties to comment on these 
preliminary review results. We will issue the final review results no 
later than 120 days from the date of publication of this notice.

EFFECTIVE DATE: March 10, 2005.

FOR FURTHER INFORMATION CONTACT: Julia Hancock (Huarong), Hallie Zink 
(Olympia Shanghai) and Paul Walker (TMC), AD/CVD Operations, Office 9, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-1394, (202) 482-6907 and 
(202) 482-0412, respectively.

SUPPLEMENTARY INFORMATION:

Case History

    On February 19, 1991, the Department published in the Federal 
Register four antidumping orders on heavy forged hand tools (``HFHTs'') 
from the People's Republic of China (``PRC''). See Antidumping Duty 
Orders: Heavy Forged Hand Tools, Finished or Unfinished, With or 
Without Handles From the People's Republic of China, 56 FR 6622 
(February 19, 1991). Imports covered by these orders comprise the 
following classes or kinds of merchandise: (1) Hammers and sledges with 
heads over 1.5 kg (3.33 pounds) (hammers/sledges); (2) bars over 18 
inches in length, track tools and wedges (bars/wedges); (3) picks/
mattocks; and (4) axes/adzes. See the ``Scope of the Antidumping Duty 
Orders'' section below for the complete description of subject 
merchandise.
    On February 3, 2004, the Department published an opportunity to 
request a review on all four antidumping orders on HFHTs from the PRC. 
See Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity To Request Administrative Review, 69 FR 5125 
(February 3, 2004). On February 27, 2004, Shandong Huarong Machinery 
Co., Ltd. (``Huarong'') requested an administrative review. On February 
27, 2004, Shanghai Xinike Trading Company, Ltd. (``Olympia Shanghai'') 
requested a new shipper review. On February 27, 2004, the Petitioner 
requested reviews of 302 companies, covering all four antidumping duty 
orders. On March 26, 2004, the Department initiated the 13th review of 
HFHTs from the PRC, covering all four antidumping duty orders for 194 
companies. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part 
(``Initiation''), 69 FR 15788 (March 26, 2004).
    On April 12 and 13, 2004, the Department issued shortened section A 
antidumping duty questionnaires to companies for which the Department 
initiated administrative reviews.\1\ On April 14, 2004, the Department 
issued sections A, C, D, and E of the General Antidumping Duty 
Questionnaire to Tianjin Machinery Import and Export Corporation 
(``TMC''), Huarong, Liaoning Machinery Import and Export Corporation 
(``LMC''), LIMAC, Shandong Machinery Import and Export Corp. (``SMC''), 
Shandong Jinma Industrial Group Company (``Jinma'') and Olympia 
Shanghai. On April 15, 2004, the Department requested the assistance of 
representatives of the government of the PRC in transmitting the 
shortened section A antidumping duty questionnaires to all companies 
who manufacture or export HFHTs to the United States.
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    \1\ These companies are not represented by any counsel to the 
best of the Department's knowledge.
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    On April 20, 2004, the Petitioner asked the Department to reject 
the request for review filed by Olympia Shanghai on February 27, 2004.
    On May 5, 2004, the Department issued shortened section A 
questionnaires to certain additional companies, for which the 
Department initiated administrative reviews.\2\
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    \2\ These questionnaires were sent via Federal Express 
(``FedEx''). Of these, FedEx returned 13 questionnaires due to area 
of delivery problems. The Department re-issued these 13 
questionnaires via DHL on May 7, 2004. Additionally, 22 
questionnaires were returned to the Department because of an 
incorrect address.
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    On May 6, 2004, TMC requested clarifications regarding the 
Department's April 14, 2004 questionnaire.
    On May 12, 2004, the Department received copies of Chinese laws and 
regulations that apply to the export activities of Huarong, Olympia 
Shanghai and TMC from the Respondents. On May 12, 2004, Huarong 
submitted its section A questionnaire response (``SAQR''). On May 12, 
2004, Ningbo Tiangong Great Star Tools Company, Ltd. notified the 
Department that they had no shipments of HFHTs to the United States 
during the period of review (``POR'').
    On May 13, 2004, TMC and Olympia Shanghai submitted their SAQRs. On 
May 13, 2004, Fexian Hualu Tool Company, Ltd. notified the Department 
that it had no shipments of HFHTs to the United States during the POR.
    On May 14, 2004, SMC requested an extension of time to respond to 
section A of the Department's April 14, 2004 questionnaire, which was 
due May 12, 2004.
    On May 15, 2004, Jinhua Twin-Star Tools Company, Ltd. notified the 
Department that they had no shipments of HFHTs to the United States 
during the POR.
    On May 17, 2004, the Department submitted a memo to the file noting 
that SMC requested two extensions, one on May 14 and one on May 17, 
2004, via telephone, for submitting SMC's SAQR which was due May 12, 
2004. On May 17, 2004, the Department notified SMC that its extension 
request was untimely. On May 17, 2004, ZhangJiagang Tianda Special 
Hardware Company, Ltd. notified the Department that it had no shipments 
of HFHTs to the United States during the POR.
    On May 18, 2004, the Department issued the remaining shortened 
section A questionnaires to companies for which the Department 
initiated administrative reviews.\3\
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    \3\ These questionnaires were sent via FedEx. Of these, FedEx 
returned 11 questionnaires as undeliverable.
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    On May 18, 2004, the Department responded to the Petitioner's April 
20, 2004, letter requesting that the Department reject Olympia 
Shanghai's February 27, 2004, request for a new shipper review. On May 
18, 2004, the Department addressed TMC's May 6, 2004, clarification 
letter concerning the Department's April 14, 2004 questionnaire.
    On May 19, 2004, the Petitioner submitted comments on TMC's May 6, 
2004, letter requesting clarifications on the Department's April 14, 
2004, questionnaire.
    On May 25, 2004, the Petitioner submitted an updated Summary of 
Antidumping Duty Margins at the Department's request.
    On June 9, 2004, Huarong submitted its section C&D questionnaire 
responses (``SCDQR'').
    On June 15, 2004, the Petitioner submitted comments on the SAQRs of 
Olympia Shanghai, TMC and Huarong.
    On July 8, 2004, the Department requested from the Office of Policy 
a memorandum listing surrogate countries.
    On July 13, 2004, the Department sent TMC a supplemental SAQ. On 
July 14, 2004, the Department sent Huarong and Olympia Shanghai 
supplemental SAQRs.

[[Page 11936]]

    On July 15, 2004, the Department sent a letter to Huarong and TMC 
addressing certain formatting problems with its databases. On July 15, 
2004, the Petitioner submitted to the Department deficiency comments 
regarding the SCDQRs of Olympia Shanghai and Huarong. On July 15, 2004, 
the Department received from the Office of Policy a list of surrogate 
countries. On July 16, 2004, the Department sent a letter to Olympia 
Shanghai addressing certain formatting problems with its databases.
    On July 19, 2004, the Petitioner submitted to the Department 
comments on the TMC's SCDQRs. On July 19, 2004, Huarong, Olympia 
Shanghai and TMC responded to the Department's letter requesting 
revisions to the Respondents' databases.
    On July 22, 2004, the Department sent Huarong and TMC supplemental 
section C questionnaires.
    On July 23, 2004, the Petitioner submitted to the Department 
comments on surrogate country selection. On July 23, 2004, the 
Department sent Olympia Shanghai supplemental section C and D 
questionnaires.
    On July 26, 2004, the Department provided all interested parties 
the opportunity to submit information pertinent to valuing factors of 
production in this review.
    On August 2, 2004, TMC and Huarong submitted their supplemental 
SAQRs.
    On August 6, 2004, the Department sent TMC a supplemental section D 
questionnaire. On August 10, 2004, the Department sent Huarong a 
supplemental section D questionnaire.
    On August 10, 2004, Huarong and TMC requested guidance on the scope 
of the antidumping duty orders.
    On August 13, 2004, the Department selected India as the surrogate 
country. On August 13, 2004, Huarong submitted its supplemental section 
C questionnaire response.
    On August 20, 2004, the Department responded to TMC and Huarong's 
August 10, 2004, request for guidance regarding whether cast tampers 
are within the scope of the order.
    On August 25, 2004, the Petitioner submitted comments on sections A 
and C questionnaire responses of TMC.
    On August 30, 2004, Huarong submitted its supplemental section D 
questionnaire response.
    On September 20, 2004, the Petitioner requested that the Department 
reopen the administrative record to allow the Petitioner to submit new 
factual information. On September 22, 2004, the Petitioner submitted 
comments on the sections A and C supplemental questionnaire responses 
of Olympia Shanghai.
    On September 22, 2004, the Department sent Olympia Shanghai a 
second supplemental SAQ.
    On September 23, 2004, the Petitioner submitted comments on 
Huarong's sections A and D responses. On September 24, 2004, the 
Petitioner submitted comments on TMC's supplemental section D response.
    On September 28, 2004, the Department sent Huarong a second 
supplemental SAQ.
    On September 29, 2004, the Department sent the Petitioner a letter 
denying their request to reopen the record in order to submit new 
factual information.
    On September 30, 2004, the Petitioner requested that the Department 
place certain documents from the 12th Administrative Review on the 
administrative record of the instant review.
    On October 7, 2004, the Department sent Huarong a second 
supplemental section D questionnaire.
    On October 8, 2004, the Department sent TMC a second supplemental 
section A questionnaire. On October 8, 2004, the Department sent 
Olympia Shanghai a supplemental section D questionnaire.
    On October 15, 2004, the Department received Olympia Shanghai's 
second supplemental SAQR.
    On October 26, 2004, the Department sent TMC a second supplemental 
section C questionnaire. On October 27, 2004, Huarong submitted 
corrections to the exhibits accompanying Huarong's response to the 
Department's second supplemental section A questionnaire. On October 
28, 2004, the Department sent Huarong a supplemental section C 
questionnaire.
    On October 29, 2004, the Department extended the time limit for the 
preliminary results of the instant review on HFHTs from the PRC. See 
Heavy Forged Hand Tools, Finished or Unfinished, With or Without 
Handles, From the People's Republic of China: Extension of Time Limit 
for the Preliminary Results of the Antidumping Duty Administrative 
Review, 69 FR 63140 (October 29, 2004).
    On November 5, 2004, TMC submitted minor corrections to its 
response to the Department's second supplemental section A 
questionnaire. On November 15, 2004, TMC submitted its second 
supplemental section C questionnaire response.
    On November 12, 2004, Huarong submitted its second supplemental 
section C questionnaire response. On November 15, 2004, the Petitioner 
submitted comments on TMC's supplemental SAQR. On November 15, 2004, 
Huarong submitted its second supplemental section D questionnaire 
response. On November 17, 2004, TMC submitted the diskette with the 
section C database to accompany TMC's November 12, 2004, response to 
the Department's supplemental section C questionnaire. On November 22, 
2004, Huarong and TMC submitted additional documentation to accompany 
their November 12, 2004, response to the Department's second 
supplemental section C questionnaire.
    On November 29, 2004, TMC submitted comments responding to the 
Petitioner's comments regarding TMC's ownership.
    On December 14, 2004, the Department notified all interested 
parties that publicly available information to value factors of 
production must be submitted by December 28, 2004, for consideration in 
these preliminary results.
    On December 20, 2004 the Petitioner submitted comments on the 
supplemental sections A, C & D questionnaire responses of TMC.
    On December 23, 2004, the Department sent TMC a supplemental 
questionnaire regarding certain deficiencies in its section A, C and D 
questionnaire responses.
    On December 30, 2004, the Petitioner submitted comments on the 
supplemental questionnaire response of Huarong. On January 6, 2005, the 
Department sent Huarong a supplemental questionnaire addressing certain 
deficiencies in Huarong's section A, C and D questionnaire responses. 
On January 21, 2005, the Department sent Huarong a third supplemental 
section A questionnaire.
    On January 26, 2005, the Department sent TMC a letter requesting 
that TMC revise its databases. On January 26, 2005, Huarong submitted 
its third supplemental section A, C & D questionnaire response.
    On January 27, 2005, the Department sent Huarong a supplemental 
questionnaire. On January 28, 2005, the Department sent Olympia 
Shanghai a supplemental questionnaire. On February 1, 2005, Huarong 
requested an extension from February 2, 2005, until February 7, 2005, 
to respond to the Department's January 27, 2005 supplemental 
questionnaire. On February 1, 2005, the Department denied Huarong's 
extension request because the Department had already extended the 
deadline by two days from January 31, 2005, until February 2, 2005.

[[Page 11937]]

    On February 2, 2005, TMC submitted a revised database in response 
to the Department's January 25, 2005 letter. On February 2, 2005, the 
Department sent Olympia Shanghai a supplemental questionnaire.
    On February 3, 2005, TMC submitted a corrected database in response 
to the Department's January 26, 2005 letter. On February 3, 2005, the 
Department received Olympia Shanghai's response to the Department's 
supplemental questionnaire dated January 28, 2005. On February 3, 2005, 
the Department received Huarong's response to the Department's fourth 
and fifth supplemental questionnaire dated January 21, 2005 and January 
27, 2005, respectively. On February 4, 2005, the Department received 
Olympia Shanghai's response to the Department's February 2, 2005 
questionnaire.

Period of Review

    POR is February 1, 2003, through January 31, 2004.

Scope of the Antidumping Duty Orders

    The products covered by these orders are HFHTs from the PRC, 
comprising the following classes or kinds of merchandise: (1) Hammers 
and sledges with heads over 1.5 kg (3.33 pounds); (2) bars over 18 
inches in length, track tools and wedges; (3) picks and mattocks; and 
(4) axes, adzes and similar hewing tools. HFHTs include heads for 
drilling hammers, sledges, axes, mauls, picks and mattocks, which may 
or may not be painted, which may or may not be finished, or which may 
or may not be imported with handles; assorted bar products and track 
tools including wrecking bars, digging bars and tampers; and steel wood 
splitting wedges. HFHTs are manufactured through a hot forge operation 
in which steel is sheared to required length, heated to forging 
temperature, and formed to final shape on forging equipment using dies 
specific to the desired product shape and size. Depending on the 
product, finishing operations may include shot blasting, grinding, 
polishing and painting, and the insertion of handles for handled 
products. HFHTs are currently provided for under the following 
Harmonized Tariff System of the United States (``HTSUS'') subheadings: 
8205.20.60, 8205.59.30, 8201.30.00, and 8201.40.60. Specifically 
excluded from these investigations are hammers and sledges with heads 
1.5 kg. (3.33 pounds) in weight and under, hoes and rakes, and bars 18 
inches in length and under. The HTSUS subheadings are provided for 
convenience and Customs purposes. The written description remains 
dispositive.
    The Department has issued five final scope rulings regarding the 
merchandise covered by these orders: (1) On August 16, 1993, the 
Department found the ``Max Multi-Purpose Axe,'' imported by the Forrest 
Tool Company, to be within the scope of the axes/adzes order; (2) on 
March 8, 2001, the Department found ``18-inch'' and ``24-inch'' pry 
bars, produced without dies, imported by Olympia Industrial, Inc. and 
SMC Pacific Tools, Inc., to be within the scope of the bars/wedges 
order; (3) on March 8, 2001, the Department found the ``Pulaski'' tool, 
produced without dies by TMC, to be within the scope of the axes/adzes 
order; (4) on March 8, 2001, the Department found the ``skinning axe,'' 
produced through a stamping process, imported by Import Traders, Inc., 
to be within the scope of the axes/adzes order; and (5) on September 
22, 2003, the Department found cast picks, produced through a casting 
process by TMC, to be within the scope of the picks/mattocks order.

Verification

    Following the publication of these preliminary results, we intend 
to verify, as provided in section 782(i) of the Act, sales and cost 
information submitted by respondents, as appropriate. At that 
verification, we will use standard verification procedures, including 
on-site inspection of the manufacturers' facilities, the examination of 
relevant sales and financial records, and the selection of original 
source documentation containing relevant information. We plan to 
prepare verification reports outlining our verification results and 
place these reports on file in the Central Records Unit, room B099 of 
the main Commerce building.

Preliminary Partial Rescission

    In accordance with 19 CFR 351.213(d)(3), we are preliminarily 
rescinding these reviews with respect to Ningbo Tiangong Great Star 
Tools Company, Ltd., Fexian Hualu Tool Company, Ltd., Jinhua Twin-Star 
Tools Company, Ltd. and ZhangJiagang Tianda Special Hardware Company, 
Ltd., who reported that they did not sell merchandise subject to any of 
the four HFHT antidumping orders during the POR.
    In accordance with 19 CFR 351.213(d)(3), we are preliminarily 
rescinding the review of Huarong with respect to the hammers/sledges 
and picks/mattocks orders, since Huarong reported that they made no 
shipments of subject hammers/sledges and picks/mattocks.
    No one has placed evidence on the record to indicate that Huarong 
had sales of subject merchandise during the POR. In addition, we 
examined shipment data furnished by Customs for the producers/exporters 
identified above and are satisfied that the record does not indicate 
that there were U.S. entries of subject merchandise from these 
companies during the POR.
    In accordance with 19 CFR 351.213(d)(3), we are preliminarily 
rescinding the review of Olympia Shanghai with respect to all four 
orders. We have determined that Olympia Shanghai did not sell 
merchandise subject to any of the four HFHT antidumping orders during 
the POR. Memorandum from James Doyle, Director, Office 9, to Barbara E. 
Tillman, Acting Deputy Assistant Secretary, 13th Review of Heavy Forged 
Hand Tools from the People's Republic of China: Preliminary Partial 
Rescission of Olympia Shanghai, dated February 28, 2005. In addition, 
we examined shipment data furnished by Customs for Olympia Shanghai and 
are satisfied that the record does not indicate that there were U.S. 
entries of subject merchandise from Olympia Shanghai during the POR.

Separate Rates Determination

    The Department has treated the PRC as a non-market economy 
(``NME'') country in all previous antidumping cases. See, e.g., Notice 
of Final Determination of Sales at Less Than Fair Value: Certain Frozen 
and Canned Warmwater Shrimp from the People's Republic of China, 69 FR 
70997 (December 8, 2004). It is the Department's policy to assign all 
exporters of the merchandise subject to review that are located in NME 
countries a single antidumping duty rate unless an exporter can 
demonstrate an absence of governmental control, both in law (de jure) 
and in fact (de facto), with respect to its export activities. To 
establish whether an exporter is sufficiently independent of 
governmental control to be entitled to a separate rate, the Department 
analyzes the exporter using the criteria 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 in 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 the separate rates criteria 
established in these cases, the Department assigns separate rates to

[[Page 11938]]

NME exporters only if they can demonstrate the absence of both de jure 
and de facto governmental control over their export activities.

Absence of De Jure Control

    Evidence supporting, though not requiring, a finding of the absence 
of de jure governmental 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.
    In previous reviews of the HFHTs orders, the Department granted 
separate rates to Huarong and TMC. See, e.g., Heavy Forged Hand Tools, 
Finished or Unfinished, With or Without Handles, From the People's 
Republic of China: Final Results of Antidumping Duty Administrative 
Reviews, Final Partial Rescission of Antidumping Duty Administrative 
Reviews, and Determination Not To Revoke in Part, 69 FR 55581 
(September 15, 2004) (``Final Results of the 12th Review''). However, 
it is the Department's policy to evaluate separate rates questionnaire 
responses each time a Respondent makes a separate rates claim, 
regardless of whether the Respondent received a separate rate in the 
past. See Manganese Metal From the People's Republic of China, Final 
Results and Partial Rescission of Antidumping Duty Administrative 
Review, 63 FR 12441 (March 13, 1998). In the instant reviews, Huarong, 
and TMC submitted complete responses to the separate rates section of 
the Department's questionnaire. The evidence submitted in the instant 
review by these Respondents includes government laws and regulations on 
corporate ownership, business licences, and narrative information 
regarding the companies' operations and selection of management. The 
evidence provided by Huarong and TMC supports a finding of a de jure 
absence of governmental control over their export activities because: 
(1) There are no controls on exports of subject merchandise, such as 
quotas applied to, or licenses required for, exports of the subject 
merchandise to the United States; and (2) the subject merchandise does 
not appear on any government list regarding export provisions or export 
licensing.

Absence of De Facto Control

    The absence of de facto governmental control over exports is based 
on whether the Respondent: (1) Sets its own export prices independent 
of the government and other exporters; (2) retains the proceeds from 
its export sales and makes independent decisions regarding the 
disposition of profits or financing of losses; (3) has the authority to 
negotiate and sign contracts and other agreements; and (4) has autonomy 
from the government regarding the selection of management. See Silicon 
Carbide at 22587; Sparklers at 20589; 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).
    In their questionnaire responses, Huarong and TMC submitted 
evidence indicating an absence of de facto governmental control over 
their export activities. Specifically, this evidence indicates that: 
(1) Each company sets its own export prices independent of the 
government and without the approval of a government authority; (2) each 
company retains the proceeds from its sales and makes independent 
decisions regarding the disposition of profits or financing of losses; 
(3) each company has a general manager, branch manager or division 
manager with the authority to negotiate and bind the company in an 
agreement; (4) the general manager is selected by the board of 
directors or company employees, and the general manager appoints the 
deputy managers and the manager of each department; and (5) foreign 
currency does not need to be sold to the government. Therefore, the 
Department has preliminarily found that Huarong and TMC have 
established primae facie that they qualify for separate rates under the 
criteria established by Silicon Carbide and Sparklers.

Use of Facts Available

    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 sections 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.
    Furthermore, section 776(b) of the Act states that ``if the 
administrating authority finds that an interested party has failed to 
cooperate by not acting to the best of its ability to comply with a 
request for information from the administering authority or the 
Commission, the administering authority or the Commission * * *, in 
reaching the applicable determination under this title, may use an 
inference that is adverse to the interests of that party in selecting 
from among the facts otherwise available.'' See also Statement of 
Administrative Action (``SAA'') accompanying the Uruguay Round 
Agreements Act (``URAA''), H.R. Rep. No. 103-316 at 870 (1994).
    In the instant reviews, Huarong and TMC significantly impeded both 
our ability to complete the review of the bars/wedges order, the 
hammers/sledges order and the axes/adzes order which we conducted 
pursuant to section 751 of the Act, and to impose the correct 
antidumping duties, as mandated by section 731 of the Act. As discussed 
below, although Huarong and TMC are entitled to separate rates, we 
preliminarily find that their failure to cooperate with the Department 
to the best of their ability in responding to the Department's request 
for information warrant the use of AFA in determining dumping margins 
for their sales of merchandise subject to certain HFHTs orders.

Huarong

    Prior to the instant period under review, Huarong entered into an 
agreement with a PRC company under which the PRC company would act as 
an ``agent'' for the vast majority of Huarong's U.S. sales of bars/
wedges. Pursuant to this agreement, the ``agent'' supplied Huarong with 
blank invoices which were on the ``agent's'' letterhead. Huarong filled 
out these invoices and used them when exporting subject bars/wedges to 
the United States during the POR. The essential purpose of an invoice 
is to identify the seller and the quantity and value of a sale, 
primarily for the buyer, but in certain situations to Customs for 
proper assessment of AD duties. Permitting an invoice to reflect 
transactions materially made by another entity frustrates the essential 
purpose of the invoice. When making ``agent'' sales, Huarong conducted 
all of the negotiations with the U.S. customer regarding price and 
quantity, and arranged for the foreign inland freight, international 
freight, and marine insurance associated with these sales. Additional 
information regarding these transactions is in the Memorandum from 
James Doyle, Director, Office 9, to Barbara E. Tillman, Acting Deputy 
Assistant Secretary, 13th Review of Heavy Forged Hand Tools from the 
People's Republic of China: Application of Adverse Facts Available to 
Shandong Huarong Machinery Co., Ltd. (``Huarong AFA Memo'') dated 
February 28, 2005.

[[Page 11939]]

    After reviewing the record of this review, we find that Huarong has 
continually misrepresented the true nature of its relationship with the 
``agent'' during the POR. In its questionnaire responses, Huarong 
claimed that its relationship with the ``agent'' stemmed from a bona 
fide business arrangement whereby the ``agent'' provided commercial 
services in connection with Huarong's sales. However, after issuing 
several supplemental questionnaires on this topic, the Department 
learned that the ``agent'' had no real commercial involvement in these 
sales. The ``agent'' was financially compensated by Huarong, not for 
commercial services normally associated with being a sales agent, but 
instead, for providing Huarong with blank invoices--essentially selling 
its identity to Huarong--which Huarong used to make the vast majority 
of its sales to the United States. See Huarong AFA Memo. The result of 
this misrepresentation was that the invoices did not reflect the 
identity of the true producer/exporter which impact Customs ability to 
assess the proper cash deposit rates.
    Section 776(a)(2)(C) of the Act states that the Department may, if 
an interested party ``significantly impedes a proceeding'' under the 
antidumping statute, use facts otherwise available in reaching the 
applicable determination. In this case, Huarong's invoice scheme with 
its ``agent'' has impeded our ability to complete the administrative 
review, pursuant to section 751 of the Act, and calculate the correct 
antidumping duties, as required by section 731 of the Act. Therefore, 
pursuant to section 776(a)(2)(C) of the Act, we find it appropriate to 
base Huarong's dumping margin for bars/wedges on facts available.
    In selecting from among the facts available, pursuant to section 
776(b) of the Act, an adverse inference is warranted when the 
Department has determined that a Respondent has failed to cooperate by 
not acting to the best of its ability to comply with our request for 
information. In this case, an adverse inference is warranted because: 
(1) Huarong misrepresented the nature of its arrangement with the 
``agent'' by portraying that company as a bona fide agent for the vast 
majority of Huarong's sales of bars/wedges to the United States; and 
(2) Huarong participated in a scheme that resulted in circumvention of 
the antidumping duty order by evading the applicable cash deposit and 
assessment rates. By engaging in a scheme designed to avoid the 
Department's calculation, Huarong necessarily failed to cooperate to 
the best of its ability to respond to the Department's request for 
information. As a result, Huarong evaded Customs application of 
accurate and applicable cash deposit and assessment rates. Moreover, 
section 776(b) of the Act indicates that an adverse inference may 
include reliance on information derived from the petition, the final 
determination in the less-than-fair-value (``LTFV'') investigation, any 
previous administrative review, or any other information placed on the 
record. As AFA, we are assigning to Huarong's sales of bars/wedges the 
139.31 percent PRC-wide rate for bars/wedges published in the most 
recently completed administrative review of this antidumping order. See 
Final Results of the 12th Review as amended; see also Huarong AFA Memo.

TMC

    Prior to the instant period under review, TMC entered into 
agreements with several other PRC companies under which TMC would act 
as an ``agent'' for these companies' U.S. sales of bars/wedges, 
hammers/sledges and axes/adzes. Pursuant to these agreements, TMC 
supplied these companies with blank invoices, with TMC's letterhead. 
These other companies filled out these invoices and used them when 
exporting their subject bars/wedges, hammers/sledges and axes/adzes to 
the United States during the POR. The essential purpose of an invoice 
is to identify the seller and the quantity and value of a sale, 
primarily for the buyer, but in certain situations to Customs for 
proper assessment of AD duties. Permitting an invoice to reflect 
transactions materially made by another entity frustrates the essential 
purpose of the invoice. When acting as the ``agent'' for these sales, 
TMC had no part in negotiating the price and quantity with the U.S. 
customer, nor in arranging the foreign inland freight, international 
freight, and marine insurance associated with these sales. Additional 
information regarding these transactions is in the Memorandum from 
James Doyle, Director, Office 9, to Barbara E. Tillman, Acting Deputy 
Assistant Secretary, 13th Review of Heavy Forged Hand Tools from the 
People's Republic of China: Application of Adverse Facts Available to 
Tianjin Machinery Import & Export Corporation (``TMC AFA Memo'') dated 
February 28, 2005.
    After reviewing the record of this review, we preliminarily find 
that TMC has continually misrepresented the true nature of its 
relationship with these other companies during the POR. In its 
questionnaire responses, TMC claimed that its relationship with these 
other companies stemmed from a bona fide business arrangement whereby 
TMC provided commercial services in connection with the other 
companies' sales. However, after issuing several supplemental 
questionnaires on this topic, the Department learned that TMC had no 
real commercial involvement in these sales. TMC was financially 
compensated by these other companies, not for commercial services 
normally associated with being a sales agent, but instead for providing 
these other companies with blank invoices, which the other companies 
used to make sales to the United States. See TMC AFA Memo. The result 
of this misrepresentation was that the invoices did not reflect the 
identity of the true producer/exporter which impact Customs ability to 
assess the proper cash deposit rates.
    In this case, TMC's participation in an invoice scheme with other 
companies has impeded our ability to identify the true producer/
exporter and to complete the administrative review, pursuant to section 
751 of the Act, and impose the correct antidumping duties, as required 
by section 731 of the Act. Therefore, pursuant to section 776(a)(2)(C) 
of the Act, we find it is appropriate to base TMC's dumping margin for 
bars/wedges, hammers/sledges and axes/adzes on facts available.
    Pursuant to section 776(b) of the Act, an adverse inference is 
warranted because: (1) TMC misrepresented the nature of its arrangement 
with these other companies by portraying itself as a bona fide sales 
agent for the majority of the other companies' sales of bars/wedges, 
hammers/sledges and axes/adzes to the United States; and (2) TMC 
participated in a scheme that resulted in circumvention of three 
antidumping duty orders. By engaging in a scheme designed to avoid the 
Department's calculation, TMC necessarily failed to cooperate to the 
best of its ability to respond to the Department's request for 
information. As a result, TMC evaded Customs application of accurate 
and applicable cash deposit and assessment rates. In accordance with 
Section 776(b) of the Act, as AFA, we are assigning an AFA rate of 
139.31 percent to TMC's sales of merchandise covered by the antidumping 
duty order on bars/wedges, an AFA rate of 45.42 percent to TMC's sales 
of merchandise covered by the antidumping duty order on hammers/sledges 
and an AFA rate of 147.36 percent to TMC's sales of merchandise covered 
by the antidumping duty order on axes/adzes. See Final Results of the 
12th Review; see also TMC AFA Memo.

[[Page 11940]]

PRC-Wide Entity

    As mentioned in the ``Case History'' section above, the Department 
initiated these administrative reviews of the axes/adzes, bars/wedges, 
hammers/sledges and picks/mattocks orders with respect to 194 PRC 
companies. On April 12-14, 2004 and May 5, 2004, we issued a shortened 
Section A questionnaire to all of the companies identified in the 
notice of initiation. See Initiation. Further, 187 of the 194 companies 
identified in our notice of initiation did not respond to our shortened 
Section A questionnaire nor did these companies provide any information 
demonstrating that they are entitled to a separate rate, therefore they 
are not entitled to a separate rate. Thus, we consider these companies 
to be part of the PRC-wide entity. See Memo to the File from Paul 
Walker, Case Analyst, dated February 28, 2005. In accordance with 
sections 776(a)(2)(A) and (B), as well as section 776(b) of the Act, we 
are assigning total AFA to the PRC-wide entity.
    Section 776(a)(2) of the Act provides that, if an interested party 
or any other person (A) withholds information that has been requested 
by the administering authority, or (B) fails to provide such 
information by the deadlines for the submission of the information or 
in the form and manner requested, subject to subsections (c)(1) and (e) 
of section 782 of the Act, the Department shall, subject to section 
782(d) of the Act, use the facts otherwise available in reaching the 
applicable determination under this title. Furthermore, under section 
782(c) of the Act, a Respondent has a responsibility not only to notify 
the Department if it is unable to provide the requested information but 
also to provide a full explanation as to why it cannot provide the 
information and suggest alternative forms in which it is able to submit 
the information. Because these 187 companies did not establish their 
entitlement to a separate rate and failed to provide requested 
information, we find that, in accordance with sections 776(a)(2)(A) and 
(B) of the Act, it is appropriate to base the PRC-wide margin in these 
reviews on facts available. See, e.g., Final Results of Antidumping 
Duty Administrative Review for Two Manufacturers/ Exporters: Certain 
Preserved Mushrooms from the People's Republic of China, 65 FR 50183, 
50184 (August 17, 2000).
    Section 776(b) of the Act provides that, if the Department finds 
that an interested party ``has failed to cooperate by not acting to the 
best of its ability to comply with a request for information,'' the 
Department may use information that is adverse to the interests of the 
party as the facts otherwise available. Adverse inferences are 
appropriate ``to ensure that the party does not obtain a more favorable 
result by failing to cooperate than if it had cooperated fully.'' See 
SAA accompanying the URAA, H. Doc. No. 103-316, at 870 (1994). Section 
776(b) of the Act authorizes the Department to use, as AFA, information 
derived from the petition, the final determination in the LTFV 
investigation, any previous administrative review, or any other 
information placed on the record.
    Section 776(b)(4) of the Act permits the Department to use as AFA 
information derived in the LTFV investigation or any prior review. 
Thus, in selecting an AFA rate, the Department's practice has been to 
assign Respondents who fail to cooperate with the Department's requests 
for information the highest margin determined for any party in the LTFV 
investigation or in any administrative review. See, e.g., Stainless 
Steel Plate in Coils from Taiwan; Preliminary Results and Rescission in 
Part of Antidumping Duty Administrative Review, 67 FR 5789 (February 7, 
2002). As AFA, we are assigning to the PRC-wide entity's sales of axes/
adzes, bars/wedges, hammers/sledges, and picks/mattocks the rates of 
147.36, 139.31, 45.42, and 129.93 percent, respectively. The rates 
selected for bars/wedges was published in the most recently completed 
review of the HFHTs orders. See Final Results of the 12th Review as 
amended. The rate selected as AFA for hammers/sledges is from the LTFV 
investigation. See Final Results of the 12th Review as amended. The 
rates for axes/adzes and picks/mattocks were calculated in the instant 
review.

Corroboration

    Section 776(c) of the Act requires the Department to corroborate, 
to the extent practicable, secondary information used as facts 
available. Secondary information is defined as ``information derived 
from the petition that gave rise to the investigation or review, the 
final determination concerning the subject merchandise, or any previous 
review under section 751 concerning the subject merchandise.'' See SAA 
accompanying the URAA, H.R. Doc. No. 103-316 at 870 (1994); see also 19 
CFR 351.308(d).
    The SAA further provides that the term ``corroborate'' means that 
the Department will satisfy itself that the secondary information to be 
used has probative value. See SAA at 870. Thus, to corroborate 
secondary information, the Department will, to the extent practicable, 
examine the reliability and relevance of the information used. However, 
unlike other types of information, such as input costs or selling 
expenses, there are no independent sources for calculated dumping 
margins. Thus, in an administrative review, if the Department chooses, 
as total AFA, a calculated dumping margin from a prior segment of the 
proceeding, it is not necessary to question the reliability of the 
margin. See Heavy Forged Hand Tools From the People's Republic of 
China: Final Results and Partial Rescission of Antidumping Duty 
Administrative Review and Determination Not To Revoke in Part, 67 FR 
57789, 57791 (September 12, 2002).
    All of the AFA rates selected above were calculated using 
information provided during the LTFV investigation, a past 
administrative review, or the instant review. Furthermore, none of 
these rates were judicially invalidated. Therefore, we consider these 
rates to be reliable. See TMC AFA Memo and Huarong AFA Memo for further 
details.
    When circumstances warrant, the Department may diverge from its 
standard practice of selecting as the AFA rate the highest rate in any 
segment of the proceeding. For example, in Fresh Cut Flowers From 
Mexico; Final Results of Antidumping Duty Administrative Review, 61 FR 
6812 (February 22, 1996) (``Flowers from Mexico''), the Department did 
not use the highest margin in the proceeding as best information 
available (the predecessor to facts available) because that margin was 
based on another company's aberrational business expenses and was 
unusually high. See Flowers from Mexico at 6814. In other cases, the 
Department has not used the highest rate in any segment of the 
proceeding as the AFA rate because the highest rate was subsequently 
discredited, or the facts did not support its use. See D&L Supply Co. 
v. United States, 113 F.3d 1220, 1221 (Fed. Cir. 1997) (the Department 
will not use a margin that has been judicially invalidated). None of 
these unusual circumstances are present with respect to the rates being 
used here. Moreover, the rates selected for axes/adzes, bars/wedges, 
and picks/mattocks are the rates currently applicable to the PRC-wide 
entity.
    The rate selected as AFA for the PRC-wide entity's sales of 
hammers/sledges is from the LTFV investigation. The previous PRC-wide 
rate for hammers/sledges of 27.71 percent has not encouraged 
cooperation. A review of the company-specific rates that have been 
calculated for hammers/sledges in prior

[[Page 11941]]

administrative reviews indicates that there are no company-specific 
rates for hammers/sledges higher than the previous PRC-wide rate of 
27.71 percent. The selected rate of 45.42 has relevance because it, and 
a nearly equivalent rate, were the PRC-wide rates for hammers/sledges 
during the first six administrative reviews of this order. See Final 
Results of the 12th Review; see also F. lli De Cecco di Filippo Fara S. 
Martino S.p.A. v. United States, 216 F. 3d 1027 (Fed. Cir. 2000) (rate 
is reasonably accurate with some built-in increase to encourage 
cooperation).
    The rates selected as AFA for the PRC-wide entity's sales of bars/
wedges is from the 11th review and was corroborated again in the 12th 
review. See Final Results of the 12th Review.
    The rate selected as AFA for the PRC-wide entity's sales of axes/
adzes and picks/mattocks wedges are the highest calculated rates in the 
instant review.
    Accordingly, we have corroborated the AFA rates identified above, 
as required, in accordance with the requirement of section 776(c) of 
the Act that secondary information be corroborated (i.e., that it have 
probative value). See TMC AFA Memo and Huarong AFA Memo for further 
details.

Surrogate Country

    When the Department is investigating imports from an NME country, 
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 ``Normal Value'' Section below.
    As discussed in the ``Separate Rates'' section, the Department 
considers the PRC to be an NME country. The Department has treated the 
PRC as an NME country in all previous antidumping proceedings. 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. We have no evidence suggesting 
that this determination should be changed. Therefore, we treated the 
PRC as an NME country for purposes of these reviews and calculated NV 
by valuing the FOP in a surrogate country.
    The Department determined that India, Indonesia, Sri Lanka, 
Philippines, Morocco and Egypt are countries comparable to the PRC in 
terms of economic development. See Memorandum from Ron Lorentzen, 
Office of Policy, Acting Director, to James C. Doyle, Program Manager: 
Antidumping Duty Administrative Review of Heavy Forged Hand Tools 
(``Hand Tools'') from the People's Republic of China (PRC): Request for 
a List of Surrogate Countries, dated July 15, 2004. We select an 
appropriate surrogate country based on the availability and reliability 
of data from the countries. See Department Policy Bulletin No. 04.1: 
Non-Market Economy Surrogate Country Selection Process (``Policy 
Bulletin''), dated March 1, 2004. In this case, we have found that 
India is a significant exporter of comparable merchandise, merchandise 
classified under HTSUS subheadings 8205.20, 8205.59, 8201.30, and 
8201.40, the subheadings applicable to subject hand tools, and is at a 
similar level of economic development pursuant to 733(c)(4) of the Act. 
See Memorandum from Paul Walker, Case Analyst, through Edward C. Yang, 
Office Director, Office IX, to The File, 13th Administrative Review of 
Heavy Forged Hand Tools from the People's Republic of China (``PRC''): 
Selection of a Surrogate Country (``Surrogate Country Memo''), dated 
August 13, 2004. Since our issuance of the Surrogate Country Memo, we 
have not received comments from interested parties.

U.S. Price

    The Department is calculating dumping margins for the picks/
mattocks order for TMC and the axes/adzes order for Huarong. There is 
no record evidence that these companies engaged in the ``agent'' sale 
scheme as described above with respect to these sales. In accordance 
with section 772(a) of the Act, the Department calculated export prices 
(``EPs'') for sales to the United States for the participating 
Respondents receiving calculated rates because the first sale to an 
unaffiliated party was made before the date of importation and the use 
of constructed EP (``CEP'') was not otherwise warranted. We calculated 
EP based on the price to unaffiliated purchasers in the United States. 
In accordance with section 772(c) of the Act, as appropriate, we 
deducted from the starting price to unaffiliated purchasers foreign 
inland freight, brokerage and handling, international freight, and 
marine insurance. For the Respondents receiving calculated rates, each 
of these services was either provided by a NME vendor or paid for using 
a NME currency, with one exception. For international freight, provided 
by a market economy provider and paid is U.S. dollars, we used the 
actual cost per kg. of the freight. For international freight, provided 
by a NME provider, we used a surrogate value. Thus, we based the 
deduction for these movement charges on surrogate values. See the 
``Normal Value'' section of this notice for details regarding these 
surrogate values.
    We valued brokerage and handling and marine insurance using the 
rates reported in the public version of the questionnaire response in 
Stainless Steel Wire Rod From India; Final Results of Administrative 
Review, 63 FR 48184 (September 9, 1998) (``India Wire Rod''). The 
source used to value foreign inland freight is identified below in the 
``Normal Value'' section of this notice. See Memorandum from Paul 
Walker, Case Analyst, through James Doyle, Director, Office 9, to the 
File, 13th Administrative Review of Heavy Forged Hand Tools from the 
People's Republic of China: Selection of Factor Values for the 
Preliminary Results (``Surrogate Values Memo''), dated February 28, 
2005.
    To account for inflation or deflation between the time period that 
the freight, brokerage and handling, and insurance rates were in effect 
and the POR, we adjusted the rates using the wholesale price index 
(``WPI'') for India from the International Monetary Fund (``IMF'') 
publication, International Financial Statistics. See Surrogate Values 
Memo.

Normal Value

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production (``FOP'') reported by the Respondents 
for the POR. To calculate NV, we valued the reported FOP by multiplying 
the per-unit factor quantities by publicly available Indian surrogate 
values. In selecting surrogate values, we considered the quality, 
specificity, and contemporaneity of the available values. As 
appropriate, we adjusted the value of material inputs to account for 
delivery costs. Where appropriate, we increased Indian surrogate values 
by surrogate inland freight costs. We calculated these inland freight 
costs using the reported distances from the PRC port to the PRC 
factory, or from the domestic supplier to the factory. This adjustment 
is in accordance with the United States Court of Appeals for the 
Federal Circuit's (``CAFC'') decision in Sigma Corp. v.

[[Page 11942]]

United States, 117 F. 3d 1401, 1407-1408 (Fed.Cir. 1997). For those 
values not contemporaneous with the POR, we adjusted for inflation or 
deflation using the appropriate wholesale or WPI published in the IMF's 
International Financial Statistics. Consistent with the 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, we excluded from the surrogate country import 
data used in our calculations imports from Korea, Thailand and 
Indonesia due to subsidies. See Surrogate Values Memo.
    The Department prefers to rely upon the Respondents' HTS 
classification for its inputs during the POR. On July 26, 2004, the 
Department requested factor value data from all interested parties by 
August 23, 2004. No parties submitted comments. On December 14, 2004 
the Department again made a request for factor value data from 
interested parties, however, only the Petitioner responded to this 
request. In addition to using information provided in the Petitioner's 
comments, the Department conducted its own search for the HTS heading 
and article description which best captured the factors of production 
described by TMC and Huarong.
    We valued direct materials used to produce HFHTs: Steel, handles, 
paint, labels and anti-rust oil, using USD/kilogram value of imports 
that entered India during the period January 2003 through December 
2003, based upon data obtained from the World Trade Atlas. See 
Surrogate Values Memo at Exhibits 3 & 4.
    We valued coal to produced HFHTs using USD/kilogram value of 
imports that entered India during the period January 2003 through 
December 2003, based upon data obtained from the World Trade Atlas. See 
Surrogate Values Memo at Exhibit 5. We valued electricity using rates 
from Key World Energy Statistics 2003, published by the International 
Energy Agency (``IEA''). We adjusted the electricity rates for the POR 
by using the WPI inflator. See Surrogate Values Memo at Exhibit 5. We 
have used previous editions of this report in other antidumping 
proceedings. See, e.g., Notice of Final Results and Rescission, in 
Part, of the Antidumping Duty Administrative Review: Petroleum Wax 
Candles From the People's Republic of China Monday, 69 FR 12121, 12126 
(March 15, 2004).
    Section 351.408(c)(3) of the Department's regulations requires the 
use of a regression-based wage rate. Therefore, to value the labor 
input, the Department used the regression-based wage rate for China 
published by Import Administration on our website. The source of the 
wage rate data is the Yearbook of Labour Statistics 2001, published by 
the International Labour Office (``ILO''), (Geneva: 2001), Chapter 5B: 
Wages in Manufacturing. See the Import Administration Web site: https://
ia.ita.doc.gov/wages/01wages/01wages.html.
    To value packing materials, the Department used Indian Import 
Statistics published by World Trade Atlas. See Surrogate Values Memo at 
Exhibit 7.
    Our treatment of by-products is in accordance with the Department's 
practice. ``We allowed recovery/by-product credits where the company 
provided information demonstrating that the recoveries/by-products were 
sold and/or reused in the production process.'' See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Hot-Rolled 
Steel Flat Products from the Peoples' Republic of China, 66 FR 49632 
(September 28, 2001) and accompanying Issues and Decision Memo at 
Comment 3. To value the by-products, the Department used a surrogate 
value for scrap rail using Indian Import Statistics published by World 
Trade Atlas. See Surrogate Values Memo at Exhibit 6.
    Whenever possible, the Department will use producer-specific data 
to calculate financial ratios. Unlike industry-specific data, which 
tends to be broader in terms of merchandise included, product-specific 
data obtained from specific producers of merchandise identical or 
similar to the subject merchandise pertains directly to the subject 
merchandise. See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value: Pure Magnesium in Granular Form From the People's 
Republic of China, 66 FR 49345 (September 27, 2001), and accompanying 
Issues and Decision Memorandum at Comment 3. However, when the 
Department and the parties are unable to obtain surrogate information 
for valuing overhead, selling, general and administrative (``SG&A'') 
expenses, and profit from manufacturers of merchandise identical or 
comparable to the subject merchandise, the Department must rely upon 
surrogate information derived from broader industry groupings. See 
Notice of Final Results of New Shipper Review: Petroleum Wax Candles 
from the People's Republic of China, 67 FR 41395 (June 18, 2002), and 
accompanying Issues and Decision Memorandum, at Comment 6.
    In the instant reviews, neither the Petitioner nor the Respondents 
have placed any financial statements on the record. Moreover, the 
Department has been unable to locate public financial statements 
specific to hand tools producers in India. Therefore, the Department is 
using broader financial data from the RBI Bulletin to calculate the 
financial ratios. See, e.g., Notice of Final Determination of Sales at 
Less Than Fair Value: Non-Malleable Cast Iron Pipe Fittings from the 
People's Republic of China, 68 FR 7765 (February 18, 2003) and the 
accompanying Issues and Decision Memorandum at Comment 4; Final Results 
of Antidumping New Shipper Review: Potassium Permanganate from the 
People's Republic of China, 66 FR 46775 (September 7, 2001), and the 
accompanying Issues and Decision Memorandum, at Comment 20; Notice of 
Initiation of Antidumping Duty Investigation: Lawn and Garden Steel 
Fence Posts From the People's Republic of China, 67 FR 37388, 37391 
(May 29, 2002 ), and the accompanying Issues and Decision Memorandum, 
at Comment 6.
    Therefore, we derived ratios for factory overhead, SG&A expenses, 
and profit using information reported for 2,031 Public Limited 
Companies for the period 2002-2003, in the Reserve Bank of India 
Bulletin for August 2004. From this information, we were able to 
calculate factory overhead as a percentage of direct materials, labor, 
and energy expenses; SG&A expenses as a percentage of the total cost of 
manufacturing (``TOTCOM''); and profit as a percentage of the sum of 
TOTCOM and SG&A expenses. See Surrogate Values Memo at Exhibit 9.
    We used rates used by the Department in the Notice of Final 
Determination of Sales at Less Than Fair Value: Bulk Aspirin From the 
People's Republic of China, 65 FR 33805 (May 25, 2000) to value truck 
and rail freight services incurred to transport direct materials, 
packing materials, and coal from the suppliers of the inputs to the 
factories producing HFHTs. See Surrogate Value Memo at Exhibit 8.

Preliminary Results of the Review

    As a result of our reviews, we preliminarily find that the 
following margins exist for the period February 1, 2003 through January 
31, 2004:

[[Page 11943]]



------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Manufacturer/exporter                        margin
                                                              (percent)
------------------------------------------------------------------------
            Heavy Forged Hand Tools from the PRC: Axes/Adzes
------------------------------------------------------------------------
TMC........................................................       147.36
Huarong....................................................       147.36
PRC-Wide Rate..............................................       147.36
------------------------------------------------------------
          Heavy Forged Hand Tools from the PRC: Hammers/Sledges
------------------------------------------------------------------------
TMC........................................................        45.42
PRC-Wide Rate..............................................        45.42
------------------------------------------------------------
          Heavy Forged Hand Tools from the PRC: Picks/Mattocks
------------------------------------------------------------------------
TMC........................................................       129.93
PRC-Wide Rate..............................................       129.93
------------------------------------------------------------
            Heavy Forged Hand Tools from the PRC: Bars/Wedges
------------------------------------------------------------------------
TMC........................................................       139.31
Huarong....................................................       139.31
PRC-Wide Rate..............................................       139.31
------------------------------------------------------------------------

Public Comment

    The Department will disclose to parties to this proceeding the 
calculations performed in reaching the preliminary results within ten 
days of the date of announcement of the preliminary results. An 
interested party may request a hearing within 30 days of publication of 
the preliminary results. See 19 CFR 351.310(c). Interested parties may 
submit written comments (case briefs) within 30 days of publication of 
the preliminary results and rebuttal comments (rebuttal briefs), which 
must be limited to issues raised in the case briefs, within five days 
after the time limit for filing case briefs. See 19 CFR 
351.309(c)(1)(ii) and 19 CFR 351.309(d). Parties who submit arguments 
are requested to submit with the argument: (1) A statement of the 
issue; (2) a brief summary of the argument; and (3) a table of 
authorities. Further, the Department requests that parties submitting 
written comments provide the Department with a diskette containing the 
public version of those comments. Unless the deadline is extended 
pursuant to section 751(a)(3)(A) of the Act, the Department will issue 
the final results of this administrative review, including the results 
of our analysis of the issues raised by the parties in their comments, 
within 120 days of publication of the preliminary results. The 
assessment of antidumping duties on entries of merchandise covered by 
this review and future deposits of estimated duties shall be based on 
the final results of this review.

Assessment Rates

    Upon completion of these administrative reviews, the Department 
will determine, and Customs shall assess, antidumping duties on all 
appropriate entries. In accordance with 19 CFR 351.212(b)(1), for the 
Respondents receiving calculated dumping margins, we calculated 
importer-specific per-unit duty assessment rates based on the ratio of 
the total amount of the dumping duties calculated for the examined 
sales to the total quantity of those same sales. These importer-
specific per-unit rates will be assessed uniformly on all entries of 
each importer that were made during the POR. In accordance with 19 CFR 
351.106(c)(2), we will instruct Customs to liquidate without regard to 
antidumping duties any entries for which the importer-specific 
assessment rate is de minimis (i.e., less than 0.5 percent ad valorem). 
For all shipments of subject merchandise for the four antidumping 
orders covering HFHTs from the PRC, exported by the Respondents and 
imported by entities not identified by the Respondents in their 
questionnaire responses, we will instruct Customs to assess antidumping 
duties at the cash deposit rate in effect on the date of the entry. 
Lastly, for the Respondents receiving dumping rates based upon AFA, the 
Department, upon completion of these reviews, will instruct Customs to 
liquidate entries according to the AFA ad valorem rate. The Department 
will issue appraisement instructions directly to Customs upon the 
completion of the final results of these administrative reviews.