Notice of Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Negative Preliminary Critical Circumstances Determination: Diamond Sawblades and Parts Thereof from the Republic of Korea, 77135-77144 [E5-8091]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 70, Number 249 (Thursday, December 29, 2005)]
[Notices]
[Pages 77135-77144]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-8091]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-855]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value, Postponement of Final Determination, and Negative Preliminary 
Critical Circumstances Determination: Diamond Sawblades and Parts 
Thereof from the Republic of Korea

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: We preliminarily determine that diamond sawblades and parts 
thereof (DSB) from the Republic of Korea (Korea) are being, or are 
likely to be, sold in the United States at less than fair value (LTFV), 
as provided in section 733(b) of the Tariff Act of 1930, as amended 
(the Act). In addition, we preliminarily determine that there is not a 
reasonable basis to believe or suspect that critical circumstances 
exist with respect to the subject merchandise exported from Korea.
    Interested parties are invited to comment on this preliminary 
determination. Because we are postponing the final determination, we 
will make our final determination not later than 135 days after the 
date of publication of this preliminary determination in the Federal 
Register.

EFFECTIVE DATE: December 29, 2005.

FOR FURTHER INFORMATION CONTACT: Mark Manning or Maisha Cryor, AD/CVD 
Operations, Office 4, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
5253 or (202) 482-5831, respectively.

SUPPLEMENTARY INFORMATION:

Preliminary Determination

    We preliminarily determine that DSB from Korea are being, or are 
likely to be, sold in the United States at LTFV, as provided in section 
733 of the Act. The estimated margins of sales at LTFV are shown in the 
``Suspension of Liquidation'' section of this notice. In addition, we 
preliminarily determine that there is not a reasonable basis to believe 
or suspect that critical circumstances exist with respect to the 
subject merchandise exported from Korea. The critical circumstances 
analysis for the preliminary determination is discussed below under the 
section ``Critical Circumstances.''

Background

    Since the initiation of this investigation (see Initiation of 
Antidumping Duty Investigations: Diamond Sawblades and Parts Thereof 
from the People's Republic of China and the Republic of Korea, 70 FR 
35625 (June 21, 2005) (Initiation Notice)), the following events have 
occurred.
    The Department set aside a period for all interested parties to 
raise issues regarding product coverage of the scope of the 
investigation. See Initiation Notice, at 70 FR 35626. On September 16, 
2005, and October 6, 2005, Ehwa Diamond Industrial Co., Ltd. (Ehwa) 
submitted comments on product coverage. The petitioner\1\ submitted 
rebuttal comments in September 2005, October 2005, and November 2005. 
On November 23, 2005, Diamax Industries Inc. (Diamax) also submitted 
comments on product coverage. See ``Scope Comments'' section below.
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    \1\ The petitioner in this investigation is the Diamond Sawblade 
Manufacturers' Coalition.
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    On June 23, 2005, and June 29, 2005, respectively, the Department 
requested quantity and value (Q&V) information from a total of thirteen 
producers of DSB in Korea. The Korean DSB producers from which Q&V 
information was requested were identified in the Petition, as well as 
other sources. See Memorandum to the File, from Maisha Cryor, Import 
Compliance Specialist, through Mark Manning, Acting Program Manager, 
Regarding ``Investigation of Diamond Sawblades and Parts Thereof from 
the Republic of Korea; Release of Mini-section A Questionnaires,'' 
dated June 23, 2005. On June 30, 2005, and July 6, 2005, respectively, 
the Department received timely Q&V responses from seven Korean 
producers/exporters of DSB. See Memorandum to the File, from Maisha 
Cryor, Import Compliance Specialist, through Mark Manning, Acting 
Program Manager, Regarding ``Investigation of Diamond Sawblades and 
Parts Thereof from the Republic of Korea; Mini-section A Questionnaire 
Response Status,'' dated July 15, 2005.
    On July 14, 2005, the International Trade Commission (ITC) 
preliminarily determined that there is a reasonable indication that an 
industry in the United States is materially injured by reason of DSB 
imported from Korea that are alleged to be sold in the United States at 
LTFV. See ITC Investigation No. 731-TA-1093.
    On July 14, 2005, the Department issued its proposed draft product 
characteristics and model match criteria to the seven Korean producers/
exporters of DSB who submitted timely Q&V information. See ``Letter to 
All Interested Parties, Regarding Product Characteristics and Model 
Match Criteria for the Antidumping Investigation of Diamond Sawblades 
and Parts Thereof from the Republic of Korea,'' dated July 14, 2005. 
After setting aside a period of time for all interested parties to 
provide comments on the proposed product characteristics and model 
match criteria, the Department received comments from Ehwa, Shinhan 
Diamond Industrial Co., Ltd. (Shinhan) and the petitioner on July 22, 
2005. On July 29, 2005, Ehwa, Shinhan and the petitioner submitted 
rebuttal comments.
    On July 20, 2005, the Department selected Ehwa, Shinhan and BK 
Diamond Products (BK Diamond) (collectively, the respondents), as 
mandatory respondents in this investigation. See Memorandum from Maisha 
Cryor, Analyst, to Holly A. Kuga, Senior Office Director, ``Selection 
of Respondents for the Antidumping Duty Investigation of Diamond 
Sawblades and Parts Thereof from the Republic of Korea,'' dated July 
20, 2005 (Respondent Selection Memorandum), on file in the Central 
Records Unit (CRU), Room B-099 of the main Commerce building.
    On July 20, 2005, the Department issued sections A-E of its 
antidumping

[[Page 77136]]

questionnaire to the mandatory respondents in this investigation.\2\
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    \2\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under investigation, and the manner in which it 
sells that merchandise in all of its markets. Section B requests a 
complete listing of all of the company's home market sales of 
foreign like product or, if the home market is not viable, of sales 
of the foreign like product in the most appropriate third-country 
market (this section is not applicable to respondents in non-market 
economy cases). Section C requests a complete listing of the 
company's U.S. sales of subject merchandise. Section D requests 
information on the cost of production of the foreign like product 
and the constructed value of the merchandise under investigation. 
Section E requests information on further manufacturing.
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    On July 22, 2005, in response to the Department's selection of BK 
Diamond as a mandatory respondent, BK Diamond submitted a letter 
requesting that the Department reconsider its selection, stating that 
it acted as a trading company and had no involvement in the production 
of subject merchandise. See BK Diamond's July 22, 2005, submission at 
page 2. On July 27, 2005, and August 4, 2005, respectively, the 
Department issued supplemental questionnaires to BK Diamond regarding 
its business activities, and received responses on August 2, 2005, and 
August 9, 2005, respectively. On August 10, 2005, the petitioner 
submitted comments in which it advocated retaining BK Diamond's status 
as a mandatory respondent; BK Diamond submitted rebuttal comments on 
August 16, 2005. See submission from the petitioner, ``Diamond 
Sawblades and Parts Thereof from South Korea: Selection of Mandatory 
Respondent - BK Diamond,'' dated August 10, 2005 (petitioner's 
comments); see also, submission from BK Diamond, ``Rebuttal to 
Petitioner's August 10\th\ Letter Regarding Selection of BK Diamond as 
Mandatory Respondent: Diamond Sawblades and Parts Thereof from Korea,'' 
dated August 16, 2005 (Rebuttal). After reviewing both BK Diamond and 
the petitioner's submissions, we determined that BK Diamond is a 
trading company and should not be a mandatory respondent in this 
investigation. See Memorandum to Holly A. Kuga, Senior Office Director, 
from Maisha Cryor, Import Compliance Specialist, through Mark Manning, 
Acting Program Manager, ``Change of Respondents in the Antidumping 
Investigation of Diamond Sawblades and Parts Thereof (DSB) from the 
Republic of Korea (Korea),'' dated August 18, 2005. After removing BK 
Diamond as a mandatory respondent in this investigation, the Department 
determined that it was appropriate to select an additional respondent. 
Id. Therefore, on August 18, 2005, the Department selected Hyosung 
Diamond Industrial Co. (Hyosung) as a mandatory respondent. Id.
    After reviewing interested parties' comments, the Department 
revised the proposed product characteristics and model match criteria 
issued in its July 14, 2005, letter, and instructed Ehwa and Shinhan to 
report their product characteristics accordingly for sections B and C 
of the Department's questionnaire. See ``Letter to All Interested 
Parties, Regarding Product Characteristics and Model Match Criteria for 
the Antidumping Investigation of Diamond Sawblades and Parts Thereof 
from the Republic of Korea,'' dated August 5, 2005.
    We issued sections A-E of the antidumping questionnaire to Hyosung 
on August 18, 2005, complete with the final product characteristics and 
model match criteria.
    On August 19, 2005, Ehwa requested that the Department exclude the 
following from its reporting requirement: (1) Resales by a downstream 
affiliated U.S. reseller; (2) home market (HM) and U.S. market sales of 
cores and segments; and (3) U.S. sales of further processed products. 
On September 7, 2005, the petitioner submitted rebuttal comments. On 
September 7, 2005, Shinhan requested that the Department exclude the 
following from Shinhan's reporting requirement: (1) Export price (EP) 
sales; (2) sales of merchandise produced by an unaffiliated Chinese 
producer; (3) U.S. further manufactured sales; and (4) sales of diamond 
segments. On September 9, 2005, the petitioner submitted rebuttal 
comments. On October 14, 2005, the Department denied Ehwa's request to 
exclude HM and U.S. market sales of cores and segments from its 
reporting requirement. See Letter from the Department to J. David Park, 
Esq. (counsel to Ehwa), ``Exclusion Requests,'' dated October 14, 2005. 
However, the Department granted Ehwa's request to exclude resales by a 
downstream affiliated U.S. reseller and U.S. sales of further processed 
products. Id. Similarly, the Department denied Shinhan's request to 
exclude EP sales and sales of diamond segments from its reporting 
requirement. See Letter from the Department to Raymond Paretzky, Esq. 
(counsel to Shinhan), ``Exclusion Requests,'' dated October 14, 2005. 
However, the Department granted Shinhan's request to exclude sales of 
merchandise produced by an unaffiliated Chinese producer and U.S. 
further manufactured sales. Id. Both Ehwa and Shinhan stated that their 
total sales of U.S. further manufactured products accounted for less 
than five percent of their total quantity of U.S. sales. The Department 
has a demonstrated history of excusing respondents from reporting sales 
of U.S. further manufactured sales, in an investigation, when the sales 
account for less than five percent of total U.S. quantity.\3\ See e.g., 
Notice of Preliminary Determination of Sales at Less Than Fair Value: 
Certain Cold-Rolled Carbon Steel Flat Products from South Africa, 67 FR 
31243 (May 9, 2002) (no change in the final determination); Notice of 
Preliminary Determination of Sales at Less Than Fair Value: Hot-Rolled 
Flat-Rolled Carbon-Quality Steel Products from Japan, 64 FR 8291 
(February 19, 1999) (no change in the final determination); Notice of 
Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Static Random Access Memory 
Semiconductors From the Republic of Korea, 62 FR 51437 (October 1, 
1997) (no change in the final determination). With respect to Hyosung, 
in its September 29, 2005, section A questionnaire response, Hyosung 
requested that it be excused from reporting its EP sales. On October 
17, 2005, the Department denied this request. See the Department's 
supplemental section A questionnaire, dated October 17, 2005.
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    \3\ While the Department granted requests by Ehwa and Shinhan to 
exclude certain sales from their reporting requirement, the 
Department also informed both parties that we reserved the right to 
request additional information regarding the sales subject to 
exclusion requests. See Letter from the Department to J. David Park, 
Esq. (counsel to Ehwa), ``Exclusion Requests,'' dated October 14, 
2005; see also, Letter from the Department to Raymond Paretzky, Esq. 
(counsel to Shinhan), ``Exclusion Requests,'' dated October 14, 
2005. Consequently, the Department issued supplemental 
questionnaires to Ehwa and Shinhan in September 2005 and October 
2005 regarding their exclusion requests and received responses in 
September 2005 and October 2005. Furthermore, the Department 
informed Ehwa and Shinhan that, if subsequent to verification, we 
determined that the data which Ehwa and Shinahn requested not to 
submit were mis-characterized or should have been used in our 
analysis, we may rely on facts available, as required by section 
776(a)(2)(B) of the Tariff Act of 1930, as amended. Id.
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    We received section A questionnaire responses from Shinhan and Ehwa 
on August 26, 2005. We received Hyosung's section A response on 
September 29, 2005.
    On September 8, 2005, and November 10, 2005, the Department issued 
supplemental section A questionnaires to Ehwa and Shinhan and received 
responses on September 29, 2005, November 10, 2005 and December 5, 
2005. We issued a supplemental section A questionnaire to Hyosung on 
October

[[Page 77137]]

17, 2005, and received a response on November 14, 2005.
    On September 26, 2005, the petitioner submitted a letter in support 
of the postponement of the preliminary determination. The petitioner 
stated that a postponement of the preliminary determination was 
necessary in order to permit the Department and the petitioner time to 
fully analyze the information that had been submitted in the 
investigation. On October 13, 2005, pursuant to section 733(c)(1)(B) of 
the Act, the Department postponed the preliminary determination of this 
investigation by 50 days, from October 31, 2005, until December 20, 
2005. See Postponement of Preliminary Determinations of Antidumping 
Duty Investigations: Diamond Sawblades and Parts Thereof from the 
People's Republic of China (A-570-900) and the Republic of Korea (A-
580-855), 70 FR 59719 (October 13, 2005).
    We received section B and C questionnaire responses from Ehwa and 
Shinhan on October 3, 2005. We issued supplemental section B and C 
questionnaires to Shinhan on October 21, 2005, and received a response 
on November 21, 2005. We issued supplemental section B and C 
questionnaires to Ehwa on October 25, 2005, and October 28, 2005, 
respectively and received responses on December 2, 2005. We received 
section B and C questionnaire responses from Hyosung on October 28, 
2005. We issued supplemental section B and C responses to Hyosung on 
November 10, 2005, and received responses on December 8, 2005.
    On October 7, 2005, in accordance with 19 CFR 351.301(d)(2)(i)(B), 
the petitioner submitted allegations that HM sales were made at prices 
below the cost of production (COP) by Ehwa and Shinhan. After reviewing 
the petitioner's allegations, the Department, in accordance with 
section 773(b)(2)(A)(i) of the Act, concluded that there was a 
reasonable basis to suspect that Ehwa and Shinhan were selling DSB in 
Korea at prices below the COP and initiated cost investigations on 
October 28, 2005.\4\ On October 28, 2005, we requested that Ehwa and 
Shinhan respond to section D of the Department's questionnaire. See 
Letter from the Department to J. David Park, Esq. (counsel to Ehwa), 
``Section D Deadline,'' dated October 28, 2005; see also, Letter from 
the Department to Raymond Paretzky, Esq. (counsel to Shinhan), 
``Section D Deadline,'' dated October 28, 2005. On November 4, 2005, in 
accordance with 19 CFR 351.301(d)(2)(i)(B), the petitioner submitted 
allegations that HM sales were made at prices below the COP by Hyosung. 
After reviewing the petitioner's allegations, the Department, in 
accordance with section 773(b)(2)(A)(i) of the Act, concluded that 
there was a reasonable basis to suspect that Hyosung was selling DSB in 
Korea at prices below the COP and initiated a cost investigation on 
November 10, 2005.\5\
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    \4\ See Memorandum to Holly A. Kuga, Senior Office Director, 
from James Balog, Accountant and Maisha Cryor, Analyst, through Mark 
Manning, Acting Program Manager, ``Diamond Sawblades and Parts 
Thereof from Korea, RE: Petitioner's Allegation of Sales Below the 
Cost of Production for Ehwa (Ehwa Cost Memorandum),'' dated October 
28, 2005; see also Memorandum to Holly A. Kuga, Senior Office 
Director, from Nancy Decker, Accountant and Maisha Cryor, Analyst, 
through Mark Manning, Acting Program Manager, ``Diamond Sawblades 
and Parts Thereof from Korea, RE: Petitioner's Allegation of Sales 
Below the Cost of Production for Shinhan (Shinhan Cost 
Memorandum),'' dated October 28, 2005.
    \5\ See Memorandum to Holly A. Kuga, Senior Office Director, 
from Nancy Decker, Accountant and Maisha Cryor, Analyst, through 
Mark Manning, Acting Program Manager, ``Diamond Sawblades and Parts 
Thereof from Korea, RE: Petitioner's Allegation of Sales Below the 
Cost of Production for Hyosung (Hyosung Cost Memorandum),'' dated 
November 10, 2005.
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    Ehwa and Shinhan submitted their section D responses on November 
21, 2005, and November 22, 2005, respectively. Hyosung submitted its 
section D response on December 5, 2005. We issued supplemental section 
D responses to Ehwa, Shinhan and Hyosung on December 14, 2005. We note 
that the Department's supplemental D questionnaires were extensive and 
covered several fundamental issues, including transactions with 
affiliated parties, transactions with non-market economy companies, and 
specialized business contracts. In addition, two of the respondents 
departed from their normal cost accounting records and adopted another 
methodology for reporting purposes. The responses to these supplemental 
questionnaires will be submitted to the Department after this 
preliminary determination. The Department will analyze these issues, 
provide the results of our analysis to the respondents and petitioner, 
and allow the parties to comment on the results of our analysis of 
these issues prior to the final determination.
    On November 21, 2005, the petitioner alleged that critical 
circumstances exist with respect to imports of DSB from Korea. 
Accordingly, pursuant to section 732(e) of the Act, on November 29, 
2005, we requested information from Ehwa, Shinhan and Hyosung regarding 
monthly shipments to the United States during the period January 2002 
through October 2005.
    On December 6, 2005, we received monthly shipment information from 
Ehwa and Shinhan. Hyosung submitted its monthly shipment information on 
December 7, 2005. The critical circumstances analysis for the 
preliminary determination is discussed below in the ``Critical 
Circumstances'' section of this notice. On December 16, 2005, Ehwa 
requested that the Department postpone its final determination in the 
event of an affirmative preliminary determination, in accordance with 
section 735(a)(2) of the Act.
    On December 12, 2005, the petitioner submitted a major input 
allegation that Ehwa and Shinhan purchased certain major inputs from 
affiliated entities at prices that were below the affiliated parties' 
costs of production. Ehwa provided rebuttal comments on December 14, 
2005.
    On December 12, 2005, the petitioner also submitted a letter in 
which it raised a question concerning the business relationship between 
two of the respondents. We received rebuttal comments from the 
respondents on December 14, 15, and 16, 2005, and additional argument 
from the petitioner on December 16, 2005. However, as of the date of 
this preliminary determination, the nature of this topic is designated 
as business proprietary. Therefore, for further discussion of this 
matter, please see Memorandum from Thomas F. Futtner, Acting Office 
Director, to Stephen J. Claeys, Deputy Assistant Secretary for Import 
Administration, ``Investigation of Diamond Sawblades and Parts Thereof 
from the Republic of Korea; Petitioner's Allegation Regarding the 
Business Relationship Between Two Respondents,'' dated December 20, 
2005, a public version of which is on file in Department's CRU.

Postponement of Final Determination

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until not 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 petitioner. The Department's regulations, at 351.210(e)(2), require 
that requests by respondents for postponement of a final determination 
be accompanied by a

[[Page 77138]]

request for extension of provisional measures from a four-month period 
to not more than six months.
    Pursuant to section 735(a)(2) of the Act, on December 16, 2005, 
Ehwa requested that, in the event of an affirmative preliminary 
determination in this investigation, the Department postpone its final 
determination until not later than 135 days after the date of the 
publication of the preliminary determination in the Federal Register, 
and extend the provisional measures to not more than six months. In 
accordance with 19 CFR 351.210(b), because (1) our preliminary 
determination is affirmative, (2) Ehwa accounts for a significant 
proportion of exports of the subject merchandise, and (3) no compelling 
reasons for denial exist, we are granting the respondent's request and 
are postponing the final determination until no later than 135 days 
after the publication of this notice in the Federal Register. 
Suspension of liquidation will be extended accordingly.

Period of Investigation

    The period of investigation (POI) is April 1, 2004, through March 
31, 2005. This period corresponds to the four most recent fiscal 
quarters prior to the month of the filing of the petition.

Scope of Investigation

    The products covered by this investigation are all finished 
circular sawblades, whether slotted or not, with a working part that is 
comprised of a diamond segment or segments, and parts thereof, 
regardless of specification or size, except as specifically excluded 
below. Within the scope of this investigation are semifinished diamond 
sawblades, including diamond sawblade cores and diamond sawblade 
segments. Diamond sawblade cores are circular steel plates, whether or 
not attached to non-steel plates, with slots. Diamond sawblade cores 
are manufactured principally, but not exclusively, from alloy steel. A 
diamond sawblade segment consists of a mixture of diamonds (whether 
natural or synthetic, and regardless of the quantity of diamonds) and 
metal powders (including, but not limited to, iron, cobalt, nickel, 
tungsten carbide) that are formed together into a solid shape (from 
generally, but not limited to, a heating and pressing process).
    Sawblades with diamonds directly attached to the core with a resin 
or electroplated bond, which thereby do not contain a diamond segment, 
are not included within the scope of this investigation. Diamond 
sawblades and/or sawblade cores with a thickness of less than 0.025 
inches, or with a thickness greater than 1.1 inches, are excluded from 
the scope of this investigation. Circular steel plates that have a 
cutting edge of non-diamond material, such as external teeth that 
protrude from the outer diameter of the plate, whether or not finished, 
are excluded from the scope of this investigation. Diamond sawblade 
cores with a Rockwell C hardness of less than 25 are excluded from the 
scope of the petition. Diamond sawblades and/or diamond segment(s) with 
diamonds that predominantly have a mesh size number greater than 240 
(such as 250 or 260) are excluded from the scope of this investigation. 
Merchandise subject to this investigation is typically imported under 
heading 8202.39.00.00 of the Harmonized Tariff Schedule of the United 
States (HTSUS). When packaged together as a set for retail sale with an 
item that is separately classified under headings 8202 to 8205 of the 
HTSUS, diamond sawblades or parts thereof may be imported under heading 
8206.00.00.00 of the HTSUS. The tariff classification is provided for 
convenience and U.S. Customs and Border Protection purposes; however, 
the written description of the scope of this investigation is 
dispositive.

Scope Comments

    In accordance with the preamble to our regulations, we set aside a 
period of time for parties to raise issues regarding product coverage 
and encouraged all parties to submit comments no later than 20 calendar 
days from the publication of the Initiation Notice (See Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 
1997) and Initiation Notice at 70 FR 35626).
    As noted in the ``Background'' section above, on September 16, 
2005, and October 6, 2005, Ehwa requested that the Department clarify 
the scope of the investigation. Specifically, Ehwa requested that the 
Department expressly state whether the term ``sawblades,'' as it 
appears in the scope of the investigation, refers only to blades that 
are used on saws and otherwise meets the physical parameters specified 
in the scope of the investigation. In addition, Ehwa requested that the 
Department confirm whether the scope of the investigation covers (1) 
sawblades with concave or convex cores, and (2) industrial-application, 
metal-bonded, diamond ``1A1R'' grinding wheels (grinding wheels). Ehwa 
submitted additional comment on its request concerning ``1A1R'' 
grinding wheels on December 14, 2005. We received rebuttal comments 
from the petitioner regarding Ehwa's scope clarification requests on 
September 23, 2005, October 28, 2005, and November 9, 2005. In 
addition, on November 23, 2005, Diamax, an importer of diamond 
sawblades, requested that the Department exclude granite contour 
diamond sawblades from the scope of the investigation. Specifically, 
Diamax stated that granite contour diamond sawblades should be excluded 
from the scope of investigation because: (1) the cores of the sawblades 
are concave instead of flat, (2) the core hardness of the sawblades 
falls below the requisite hardness stated in the scope of the 
investigation, and (3) application of the criteria contained in 19 CFR 
351.225(d)(2) indicates that granite contour diamond sawblades should 
not be covered by the scope of the investigation. We issued Diamax 
supplemental questions on December 9, 2005. We received Diamax's 
response on December 15, 2005. The petitioner provided rebuttal 
comments on December 16, 2005.
    Based upon the record evidence, we have neither changed the scope 
of the investigation, as proposed by Ehwa, nor excluded the products 
requested by Ehwa or Diamax from the scope of investigation. 
Specifically, neither Ehwa nor Diamax were able to demonstrate that the 
products for which they requested exclusion were not covered by the 
parameters of the scope of the investigation. For further details 
regarding the Department's decision, see Memorandum from Mark Manning, 
Acting Program Manager, to Thomas F. Futtner, Acting Office Director, 
Office 4, ``Consideration of Scope Exclusion and Clarification 
Requests,'' dated December 20, 2005 (Scope Exclusion Memorandum).

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

[[Page 77139]]

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 three exporters and producers accounting for the 
largest volume of the subject merchandise pursuant to section 
777A(c)(2)(B) of the Act. The three Korean producers/exporters (Ehwa, 
Shinhan, and Hyosung) that accounted for a significant percentage of 
all exports of the subject merchandise from Korea during the POI were 
selected as mandatory respondents. See Respondent Selection Memorandum 
at 3.

Country of Origin

    Certain information in this investigation has led the Department to 
make a preliminary finding regarding the country of origin of subject 
merchandise sold by the respondents in this investigation. As of the 
date of this preliminary determination, the nature of this information 
has been designated as business proprietary. However, based on this 
information, the Department has determined that the country of origin 
for completed DSB subject to this investigation is the location where 
the diamond sawblade is manufactured from a core and segments. For 
further discussion of this matter, please see Memorandum from Thomas F. 
Futtner, Acting Office Director, to Stephen J. Claeys, ``Investigation 
of Diamond Sawblades and Parts Thereof from the Republic of Korea; 
Country of Origin,'' dated December 16, 2005, a public version of which 
is on file in Department's CRU.

Fair Value Comparisons

    To determine whether sales of DSB from Korea to the United States 
were made at LTFV, we compared constructed export price (CEP) and EP to 
the normal value (NV), as described in the ``Export Price and 
Constructed Export Price'' and ``Normal Value'' sections of this 
notice, below. In accordance with section 777A(d)(1)(A)(i) of the Act, 
we compared POI weighted-average CEPs and EPs to POI weighted-average 
NVs.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced and sold by Ehwa, Shinhan, and Hyosung in the HM 
during the POI that fit the description in the ``Scope of 
Investigation'' section of this notice to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
We compared U.S. sales to sales made in the HM, where appropriate. We 
have relied upon fourteen criteria to match U.S. sales of subject 
merchandise to comparison-market sales of the foreign like product. 
These criteria, in order of importance are: (1) physical form; (2) 
diameter; (3) type of attachment; (4) cutting edge; (5) diamond mesh 
size; (6) diamond concentration; (7) diamond grade; (8) segment height; 
(9) segment thickness; (10) segment length; (11) number of segments; 
(12) core metal; (13) core type; and (14) core thickness. Where there 
were no sales of identical merchandise in the HM made in the ordinary 
course of trade to compare to U.S. sales, we compared U.S. sales to 
sales of the most similar foreign like product made in the ordinary 
course of trade. Where there were no sales of identical or similar 
merchandise made in the ordinary course of trade, we made product 
comparisons using constructed value (CV).

Export Price and Constructed Export Price

    For the price to the United States, we used, as appropriate, EP or 
CEP as defined in sections 772(a) and (b) of the Act, respectively. 
Section 772(a) of the Act defines EP as the price at which the subject 
merchandise is first sold (or agreed to be sold) before the date of 
importation by the exporter or producer outside the United States to an 
unaffiliated purchaser for exportation to the United States. We based 
EP on packed and delivered prices to unaffiliated purchasers in the 
United States. In accordance with section 772(c)(2) of the Act, we 
reduced the starting price by movement expenses and export taxes and 
duties, if appropriate. These deductions included, where appropriate, 
foreign inland freight, foreign brokerage and handling, international 
freight, marine insurance and U.S. customs duties.
    Section 772(b) of the Act defines CEP as the price at which the 
subject merchandise is first sold in the United States before or after 
the date of importation, by, or for the account of the producer or 
exporter of the merchandise, or by a seller affiliated with the 
producer or exporter, to an unaffiliated purchaser, as adjusted under 
sections 772(c) and (d) of the Act. We based CEP on packed prices to 
unaffiliated purchasers in the United States. In accordance with 
section 772(c)(2) of the Act, we reduced the starting price by movement 
expenses, which include, where applicable, expenses incurred for 
foreign inland freight, international freight, marine insurance, 
foreign and U.S. brokerage and handling, U.S. customs duties (including 
harbor maintenance fees and merchandise processing fees), U.S. inland 
insurance, U.S. inland freight, and warehousing. In accordance with 
section 772(d)(1) of the Act, we made additional adjustments to the 
starting price in order to calculate CEP, by deducting direct and 
indirect selling expenses related to commercial activity in the United 
States. Pursuant to section 772(d)(3) of the Act, where applicable, we 
made an adjustment to the starting price for CEP profit.
    We determined EP and CEP for each company as follows:

A. Ehwa

    We calculated a CEP for all of Ehwa's U.S. sales because the 
subject merchandise was sold directly to General Tool, Ehwa's U.S. 
affiliate, prior to being sold to the first unaffiliated purchaser in 
the United States. We made deductions from the starting price for 
movement expenses in accordance with section 772(c)(2)(A) of the Act. 
These items include expenses incurred for inland freight, domestic 
brokerage and handling, U.S. brokerage and handling. In addition, we 
made deductions from the U.S. starting price for discounts and rebates. 
We also made adjustments to the U.S. starting price for billing 
adjustments. Pursuant to section 772(d)(3) of the Act, we further 
reduced the starting price by an amount for profit to arrive at CEP. In 
accordance with section 772(f) of the Act, we calculated the CEP profit 
rate using the expenses incurred by Ehwa and its U.S. affiliates on 
their sales of the subject merchandise in the United States and the 
profit associated with those sales.
    The Department interprets section 772(c)(1)(B) as requiring that 
any duty drawback be added to CEP if two criteria are met: (1) import 
duties and rebates are directly linked to, and dependent upon, one 
another, and; (2) raw materials were imported in sufficient quantities 
to account for the duty drawback received on exports of the 
manufactured product. The first prong of the test requires the 
Department ``to analyze whether the foreign country in question makes 
entitlement to duty drawback dependent upon the payment of import 
duties.'' See Far East Machinery, 699 F. Supp. at 311. This ensures 
that a duty drawback adjustment will be made only where the drawback 
received by the manufacturer is contingent on import duties paid or 
accrued. The second

[[Page 77140]]

prong requires the foreign producer to show that it imported a 
sufficient amount of raw material (upon which it paid import duties) to 
account for the exports upon which it claimed its rebates. Id. Ehwa 
reported that it received certain ``drawback'' amounts associated with 
duties paid on imported inputs pursuant to the Korean Government's 
individual application system, where the duty is rebated based upon 
each applicant's use of the imported input. Since the applicable 
criteria appear to have been met in this case, we made additions to the 
starting price for duty drawback in accordance with section 
772(c)(1)(B) of the Act.

B. Shinhan

    We calculated a CEP for a portion of Shinhan's U.S. sales because 
the subject merchandise was sold directly to SH Trading, Shinhan's U.S. 
affiliate, prior to being sold to the first unaffiliated purchaser in 
the United States. We made deductions from the starting price for 
movement expenses in accordance with section 772(c)(2)(A) of the Act. 
These items include expenses incurred for inland freight, domestic 
brokerage and handling, U.S. brokerage and handling. In addition, we 
made deductions from the U.S. starting price for discounts and rebates. 
We also made adjustments to the U.S. starting price for billing 
adjustments. In accordance with section 772(f) of the Act, we 
calculated the CEP profit rate using the expenses incurred by Shinhan 
and its U.S. affiliates on their sales of the subject merchandise in 
the United States and the profit associated with those sales.
    We calculated EP for a portion of Shinhan's U.S. sales because the 
merchandise was sold directly by Shinhan to the first unaffiliated 
purchaser in the United States prior to importation. We made deductions 
from the starting price for movement expenses in accordance with 
section 772(c)(2)(A) of the Act. These items include expenses incurred 
for foreign inland freight, foreign brokerage and handling, and U.S. 
customs duties, when applicable. In addition, we made deductions from 
the starting price for discounts, where appropriate.
    As mentioned above, the Department will add duty drawback to U.S. 
price only if the respondent demonstrates that it has satisfied the 
Department's two-prong test. Shinhan reported that it received certain 
``drawback'' amounts associated with duties paid on imported inputs 
pursuant to the Korean Government's individual application system, 
where the duty is rebated based upon each applicant's use of the 
imported input. Since the applicable criteria appear to have been met 
in this case, we made additions to the starting price for duty drawback 
in accordance with section 772(c)(1)(B) of the Act.

C. Hyosung

    We calculated a CEP for a portion of Hyosung's U.S. sales because 
the subject merchandise was sold directly to Western Diamond Tools 
Inc., Hyosung's U.S. affiliate, prior to being sold to the first 
unaffiliated purchaser in the United States. We made deductions from 
the starting price for movement expenses in accordance with section 
772(c)(2)(A) of the Act. These items include expenses incurred for 
inland freight, domestic brokerage and handling, international freight, 
U.S. brokerage and handling, and U.S. customs duties. Where applicable, 
we adjusted movement expenses to account for freight revenue. In 
addition, we made deductions from the U.S. starting price for discounts 
and rebates, such as early payment discounts, quantity discounts, and 
other discounts. Additionally, we made adjustments to the U.S. starting 
price for billing adjustments and the value of returned merchandise. In 
accordance with section 772(f) of the Act, we calculated the CEP profit 
rate using the expenses incurred by Hyosung and its U.S. affiliates on 
their sales of the subject merchandise in the United States and the 
profit associated with those sales.
    We calculated EP for a portion of Hyosung's U.S. sales because the 
merchandise was sold directly by Hyosung to the first unaffiliated 
purchaser in the United States prior to importation. We made deductions 
from the starting price for movement expenses in accordance with 
section 772(c)(2)(A) of the Act. These items include expenses incurred 
for inland freight, domestic brokerage, international freight, and U.S. 
customs duties, where applicable. In addition, we made deductions from 
the starting price for discounts, where appropriate.
    As mentioned above, the Department will add duty drawback to U.S. 
price only if the respondent demonstrates that it has satisfied the 
Department's two-prong test. Hyosung received drawback for certain 
duties it paid on inputs used to produce subject merchandise that was 
exported to the United States pursuant to the Korean government's 
fixed-rate system, rather than the individual application system used 
by Ehwa and Shinhan. While there have been cases where specific 
respondents have been able, on their own, to demonstrate an entitlement 
to an upward adjustment to U.S. price for duty drawback under the 
fixed-rate scheme, the Department has repeatedly found that the fixed-
rate system, by itself, does not meet the Department's two-prong test. 
See Polyester Staple Fiber from Korea: Final Results of Antidumping 
Duty Administrative Review, 67 FR 63616 (October 15, 2002) and Issues 
and Decision Memorandum at Comment 5. In this investigation, Hyosung 
reported that its own yield rates are not used in calculating the 
amount of duty drawback received from the Korean Government. Instead, 
the amount of drawback it receives derives from the fixed-rate of 
drawback published by the Commissioner of the Korean Customs Service. 
See Hyosung's December 8, 2005, submission at 17. According to Hyosung, 
the amount of drawback it receives is simply the fixed-rate of drawback 
established by the Korean Customs Service multiplied by the commercial 
invoice value from its export sales.
    Based on evidence on the record of the instant case, we find that 
Hyosung has not provided sufficient documentation to satisfy the first 
prong of the Department's duty drawback test. With regard to prong one, 
an analysis of the information on the record does not demonstrate that 
the import duties paid and the amount of duty rebated are directly 
linked. Record evidence indicates that in order to qualify for drawback 
under the fixed-rate duty drawback system, Hyosung has only to provide 
Korean Customs with a export permit and commercial invoice. See 
Hyosung's October 28, 2005, at page 31, and Attachment C-10. According 
to Hyosung, the duty refunded is a fixed percentage of the export 
invoice value, where the percent is determined by the Korean Customs 
Service. In other words, Hyosung's rebate is not based on the actual 
amount of duties paid on raw materials imported by Hyosung. Thus, the 
information submitted by Hyosung demonstrates only that the amount of 
duty rebated is tied to the FOB price of the exported merchandise. 
There is no evidence on the record that the amount of duty rebated and 
received by Hyosung is directly linked to or dependent upon import 
duties paid by Hyosung. Accordingly, for purposes of this preliminary 
determination, we are not granting Hyosung a duty drawback adjustment.

Normal Value

A. Home Market Viability

    In order to determine whether there is a sufficient volume of sales 
in the HM to serve as a viable basis for calculating NV (i.e., the 
aggregate volume of HM sales of the foreign like product is equal

[[Page 77141]]

to or greater than five percent of the aggregate volume of U.S. sales), 
we compared each respondent's volume of HM sales of the foreign like 
product to the volume of its U.S. sales of the subject merchandise, in 
accordance with section 773(a)(1)(C) of the Act.
    In this investigation, we determined that the aggregate volume of 
HM sales of the foreign like product for each respondent was sufficient 
to permit a proper comparison with its U.S. sales of the subject 
merchandise.

B. Affiliated Party Transactions and Arm's-Length Test

    Ehwa, Shinhan and Hyosung reported that they sold DSB in the 
comparison market only to unaffiliated customers. Therefore, 
application of the arm's-length test is unnecessary.

C. Level of Trade/Constructed Export Price Offset

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same LOT as the CEP. Pursuant to 19 CFR 351.412(c)(1), the NV LOT 
is that of the starting-price sales in the comparison market or, when 
NV is based on CV, that of the sales from which we derive selling, 
general and administrative expenses (SG&A) and profit. For CEP, it is 
the level of the constructed sale from the exporter to the importer.
    To determine whether NV sales are at a different LOT than U.S. 
sales, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. See 19 CFR 351.412(c)(2). If the comparison-
market sales are at a different LOT, and the difference affects price 
comparability, as manifested in a pattern of consistent price 
differences between the sales on which NV is based and comparison 
market sales at the LOT of the export transaction, we make an LOT 
adjustment under section 773(a)(7)(A) of the Act. Finally, for CEP 
sales, if the NV level is more remote from the factory than the CEP 
level and there is no basis for determining whether the difference in 
levels between NV and CEP affects price comparability, we adjust NV 
under section 773(a)(7)(B) of the Act (the CEP-offset provision). See 
Notice of Final Determination of Sales at Less Than Fair Value: Certain 
Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731 
(November 19, 1997). For CEP sales, if the LOT of the home market sale 
is more remote from the factory than the CEP level and there is no 
basis for determining whether the difference between the LOT of the 
home market sale and the CEP transaction affects price comparability, 
we adjust NV pursuant to section 773(a)(7)(B) of the Act (the CEP-
offset provision). See Final Determination of Sales at Less Than Fair 
Value: Greenhouse Tomatoes From Canada, 67 FR 8781 (February 26, 2002).
    In this investigation, we obtained information from each respondent 
regarding the marketing stages involved in making the reported HM and 
U.S. sales, including a description of the selling activities performed 
by each respondent for each channel of distribution. Company-specific 
LOT findings are summarized below.

Ehwa

    The Department analyzed Ehwa's sales data to make a company-
specific LOT finding. Based upon this analysis, the Department denied 
Ehwa a LOT adjustment, but did grant Ehwa a CEP-offset. As of the date 
of this preliminary determination, the nature of Ehwa's LOT data is 
designated as business proprietary. Therefore, for further discussion 
of this matter, please see Memorandum from Maisha Cryor, Senior 
International Trade Compliance Analyst, to Thomas F. Futtner, Acting 
Office Director, ``Level of Trade Analysis,'' dated December 20, 2005, 
a public version of which is on file in Department's CRU.

Shinhan

    The Department analyzed Shinhan's sales data to make a company-
specific LOT finding. Based upon this analysis, the Department denied 
Shinhan a LOT adjustment, but did grant Shinhan a CEP-offset. As of the 
date of this preliminary determination, the nature of Shinhan's LOT 
data is designated as business proprietary. Therefore, for further 
discussion of this matter, please see Memorandum from Maisha Cryor, 
Senior International Trade Compliance Analyst, to Thomas F. Futtner, 
Acting Office Director, ``Level of Trade Analysis,'' dated December 20, 
2005, a public version of which is on file in Department's CRU.

Hyosung

    The Department analyzed Hyosung's sales data to make a company-
specific LOT finding. Based upon this analysis, the Department found 
that because there is only one LOT in the HM, it is not possible to 
compare price differences between sales at different levels of trade. 
Therefore, pursuant to section 773(7)(A) of the Act, the Department 
determined that Hyosung does not qualify for a LOT adjustment. However, 
the Department did determine that Hyosung's LOT is at a more advanced 
stage of distribution than the LOT for CEP sales and granted Hyosung a 
CEP offset to NV. For a further discussion of our LOT analysis for 
Hyosung, please see Memorandum from Thomas Martin, International Trade 
Compliance Analyst, to Thomas F. Futtner, Acting Office Director, 
``Level of Trade Analysis: Hyosung D & P Co., Ltd. and Western Diamond 
Tools Inc.,'' dated December 20, 2005.

D. Cost of Production Analysis

    Based on our analysis of the petitioner's allegations, we found 
that there were reasonable grounds to believe or suspect that Ehwa, 
Shinhan, and Hyosung's sales of DSB in the HM were made at prices below 
their respective COP. Accordingly, pursuant to section 773(b) of the 
Act, we initiated sales-below-cost investigations to determine whether 
Shinhan, Ehwa and Hyosung's sales were made at prices below their 
respective COPs. See the Ehwa Cost Memorandum, the Shinhan Cost 
Memorandum, and the Hyosung Cost Memorandum.

1. Calculation of COP

    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of the cost of materials and fabrication for the 
foreign like product, plus an amount for SG&A, and interest expenses. 
See ``Test of Home Market Sales Prices'' section below for treatment of 
HM selling expenses. We relied on the COP data submitted by Ehwa, 
Shinhan, and Hyosung except for an adjustment made to Shinhan's 
reported general and administrative (G&A) expenses and interest 
expenses. Specifically, we deducted ``Loss on Disposal of Accounts 
Receivable,'' which is reported as a non-operating expense on Shinhan's 
financial statement from Shinhan's G&A calculation. For further details 
regarding these adjustments, please see the Memorandum from Nancy 
Decker, Case Accountant, to Neal M. Halper, Director of Accounting, 
``Cost of Production and Constructed Value Calculation Adjustments for 
the Preliminary Determination - Shinhan'' dated December 20, 2005.

2. Test of Home Market Sales Prices

    On a product-specific basis, we compared the adjusted weighted-
average COP to the HM sales of the foreign like product, as required 
under section 773(b) of the Act, in order to determine whether the sale 
prices were below the COP. The prices were exclusive of any applicable 
billing adjustments, movement charges, and

[[Page 77142]]

direct and indirect selling expenses. In determining whether to 
disregard HM sales made at prices less than its COP, we examined, in 
accordance with sections 773(b)(1)(A) and (B) of the Act, whether such 
sales were made (1) within an extended period of time in substantial 
quantities, and (2) at prices which permitted the recovery of all costs 
within a reasonable period of time.

3. Results of the COP Test

    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of the respondent's sales of a given product during the POI are 
at prices less than the COP, we do not disregard any below-cost sales 
of that product, because we determine that in such instances the below-
cost sales were not made in substantial quantities. Where 20 percent or 
more of the respondent's sales of a given product during the POI are at 
prices less than the COP, we determine that the below-cost sales 
represent substantial quantities within an extended period of time, in 
accordance with section 773(b)(1)(A) of the Act. In such cases, we also 
determine whether such sales were made at prices which would not permit 
recovery of all costs within a reasonable period of time, in accordance 
with section 773(b)(1)(B) of the Act.
    Our cost test revealed that more than twenty percent of Ehwa, 
Shinhan, and Hyosung's HM sales of certain products were made at below-
cost prices during the reporting period. Therefore, we disregarded 
those below-cost sales while retaining the above-cost sales for our 
analysis. Where there were no sales of any comparable product at prices 
above the COP, we used CV as the basis for determining NV.

E. Calculation of Normal Value Based on Comparison Market Prices

Ehwa
    For Ehwa, we calculated NV based on ex-factory prices to 
unaffiliated customers. We reduced the HM starting price for rebates in 
accordance with 19 CFR 351.401(c). In addition, we reduced the starting 
price for inland freight pursuant to section 773(a)(6)(B) of the Act. 
In accordance with 19 CFR 351.401(c), we increased the starting price 
for interest revenue and adjusted for billing adjustments and 
discounts. We also made circumstances of sale (COS) adjustments to the 
starting price for imputed credit expenses in accordance with section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. Finally, we deducted 
HM packing costs from, and added U.S. packing costs to, the starting 
price in accordance with sections 773(a)(6)(A) and (B) of the Act.
Shinhan
    We based NV for Shinhan on prices to unaffiliated customers. We 
reduced the HM starting price for rebates in accordance with 19 CFR 
351.401(c). In addition, we reduced the starting price for inland 
freight pursuant to section 773(a)(6)(B) of the Act. In accordance with 
19 CFR 351.401(c), we increased the starting price for interest revenue 
and adjusted for billing adjustments and discounts. We also made COS 
adjustments to the starting price for imputed credit expenses in 
accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 
351.410. Finally, we deducted HM packing costs from, and added U.S. 
packing costs to, the starting price in accordance with sections 
773(a)(6)(A) and (B) of the Act.
Hyosung
    We based NV for Hyosung on prices to unaffiliated customers. We 
reduced the HM starting price for rebates in accordance with 19 CFR 
351.401(c). In addition, we reduced the starting price for inland 
freight pursuant to section 773(a)(6)(B) of the Act. We also made COS 
adjustments to the starting price for imputed credit expenses in 
accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 
351.410. Finally, we deducted HM packing costs from, and added U.S. 
packing costs to, the starting price in accordance with sections 
773(a)(6)(A) and (B) of the Act.

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.

Critical Circumstances

    On November 21, 2005, the petitioner alleged that there is a 
reasonable basis to believe or suspect critical circumstances exist 
with respect to the antidumping investigation of diamond sawblades and 
parts thereof from Korea. In accordance with 19 CFR 351.206(c)(2)(i), 
because the petitioner submitted its critical circumstances allegation 
more than 20 days before the scheduled date of the preliminary 
determination, the Department must issue a preliminary critical 
circumstances determination not later than the date of the preliminary 
determination.
    Section 733(e)(1) of the Act provides that the Department will 
preliminarily determine that critical circumstances exist if there is a 
reasonable basis to believe or suspect that: (A)(i) there is a history 
of dumping and material injury by reason of dumped imports in the 
United States or elsewhere of the subject merchandise; or (ii) the 
person by whom, or for whose account, the merchandise was imported knew 
or should have known that the exporter was selling the subject 
merchandise at less than its fair value and that there was likely to be 
material injury by reason of such sales; and (B) there have been 
massive imports of the subject merchandise over a relatively short 
period. Section 351.206(h)(1) of the Department's regulations provides 
that, in determining whether imports of the subject merchandise have 
been ``massive,'' the Department normally will examine: (i) the volume 
and value of the imports; (ii) seasonal trends; and (iii) the share of 
domestic consumption accounted for by the imports. In addition, 19 CFR 
351.206(h)(2) provides that an increase in imports of 15 percent during 
a ``relatively short period'' of time may be considered ``massive.'' 
Section 351.206(i) of the Department's regulations defines ``relatively 
short period'' as normally being the period beginning on the date the 
proceeding begins (i.e., the date the petition is filed) and ending at 
least three months later. The regulations also provide, however, that 
if the Department finds that importers, exporters, or producers had 
reason to believe, at some time prior to the beginning of the 
proceeding, that a proceeding was likely, the Department may consider a 
period of not less than three months from that earlier time.
    In determining whether the above statutory criteria have been 
satisfied, we examined: (1) the evidence presented in the petitioner's 
submission of November 21, 2005, and (2) additional information 
obtained from Ehwa, Shinhan, and Hyosung.
    To determine whether there is a history of injurious dumping of the 
merchandise under investigation, in accordance with section 
733(e)(1)(A)(i) of the Act, the Department normally considers evidence 
of an existing antidumping duty order on the subject merchandise in the 
United States or elsewhere to be sufficient. See Preliminary 
Determination of Critical Circumstances: Steel Concrete Reinforcing 
Bars From Ukraine and Moldova, 65 FR 70696 (Nov. 27, 2000). With regard 
to imports of DSB from Korea, the petitioner makes no specific mention 
of a history of dumping for Korea. As we are not aware of any 
antidumping order in any country on diamond sawblades and parts thereof 
from Korea, the Department does not

[[Page 77143]]

find a history of injurious dumping of the subject merchandise from 
Korea pursuant to section 733(e)(1)(A)(i) of the Act.
    To determine whether the person by whom, or for whose account, the 
merchandise was imported knew or should have known that the exporter 
was selling the subject merchandise at less than its fair value and 
that there was likely to be material injury by reason of such sales in 
accordance with section 733(e)(1)(A)(ii) of the Act, the Department 
normally considers margins of 25 percent or more for EP sales, or 15 
percent or more for CEP transactions, sufficient to impute knowledge of 
dumping. See, e.g., Preliminary Determination of Sales at Less Than 
Fair Value: Certain Cut-to-Length Carbon Steel Plate from the People's 
Republic of China, 62 FR 31972, 31978 (October 19, 2001). In 
determining whether an importer knew or should have known that there 
was likely to be material injury caused by reason of such imports, the 
Department normally will look to the preliminary injury determination 
of the ITC. If the ITC finds a reasonable indication of present 
material injury to the relevant U.S. industry, the Department will 
determine that a reasonable basis exists to impute importer knowledge 
that material injury is likely by reason of such imports. See 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).
    In the instant case, the respondents reported both EP and CEP 
sales. The preliminary dumping margins calculated for Ehwa, Shinhan, 
and Hyosung's EP sales are below 25 percent, while the preliminary 
dumping margins for Ehwa, Shinhan, and Hyosung's CEP sales are below 15 
percent. See Memorandum from Mark J. Manning, Acting Program Manager, 
to Thomas F. Futtner, Acting Office Director, ``Preliminary Negative 
Determination of Critical Circumstances,'' dated December 20, 2005 
(Critical Circumstances Memorandum). As the preliminary margins are 
below the level we use to impute knowledge of sales at LTFV, we find 
that Ehwa, Shinhan, and Hyosung do not satisfy section 733(e)(1)(A)(ii) 
of the Act.
    In determining whether there are ``massive imports'' over a 
``relatively short period,'' pursuant to section 733(e)(1)(B) of the 
Act, the Department normally compares the import volume of the subject 
merchandise for three months immediately preceding the filing of the 
petition (i.e., the base period), and three months following the filing 
of the petition (i.e., the comparison period). However, as stated in 
section 351.206(i) of the Department's regulations, if the Secretary 
finds that importers, exporters, or producers had reason to believe, at 
some time prior to the beginning of the proceeding, that a proceeding 
was likely, then the Secretary may consider a time period of not less 
than three months from that earlier time. Imports normally will be 
considered massive when imports during the comparison period have 
increased by 15 percent or more compared to imports during the base 
period.
    In this case, the petitioner asserts that it was well known in the 
industry that a coalition was formed to file a petition, and that 
certain respondents were in contact with the petitioner regarding the 
petition status. However, in its November 21, 2005, submission, the 
petitioner submitted no evidence or documentation to support this 
assertion. For this reason, we find that importers, exporters, or 
producers of diamond sawblades from Korea had knowledge that a 
proceeding was likely as of May 3, 2005, the date of the filing of the 
petition. On November 22, 2005, the Department requested from Ehwa, 
Shinhan, and Hyosung monthly shipment data for January 2002 through 
October 2005 (the most recently completed month for which the 
respondents have shipment data). In determining whether imports were 
massive, we selected a five-month period as the basis of our 
comparison. Specifically, we compared the volume of shipments reported 
by each respondent from May 2005 through September 2005 (the comparison 
period) to the volume of shipments by that respondent during December 
2004 through April 2005 (the base period). We found that Ehwa's 
shipments increased by more than 15 percent, while shipment's from 
Shinhan and Hyosung did not. See Critical Circumstances Memorandum at 5 
and Attachment 1. Since imports were massive from Ehwa, we find that 
Ehwa satisfies section 733(e)(1)(B) of the Act while Shinhan and 
Hyosung do not.
    With respect to the companies covered by the ``all others'' rate, 
it is the Department's normal practice to conduct its critical 
circumstances analysis of companies in the ``all others'' group based 
on the experience of investigated companies. See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Steel Concrete 
Reinforcing Bars from Turkey, 62 FR 9737, 9741 (March 4, 1997) (Rebar 
from Turkey) (the Department found that critical circumstances existed 
for the majority of the companies investigated, and therefore concluded 
that critical circumstances also existed for companies covered by the 
``all others'' rate). However, the Department does not automatically 
extend an affirmative critical circumstances determination to companies 
covered by the ``all others'' rate. See Notice of Final Determination 
of Sales at Less Than Fair Value: Stainless Steel Sheet and Strip in 
Coils from Japan, 64 FR 30574 (June 8, 1999) (Stainless Steel from 
Japan). Instead, the Department considers the usual critical 
circumstances criteria with respect to the companies covered by the 
``all others'' rate. Consistent with Stainless Steel from Japan, the 
Department has, in this case, applied the usual critical circumstances 
criteria to the ``all others'