Hand Trucks and Certain Parts Thereof From the People's Republic of China; Preliminary Results and Partial Rescission of Administrative Review and Preliminary Results of New Shipper Review, 937-947 [E7-45]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 72, Number 5 (Tuesday, January 9, 2007)]
[Notices]
[Pages 937-947]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-45]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-891]


Hand Trucks and Certain Parts Thereof From the People's Republic 
of China; Preliminary Results and Partial Rescission of Administrative 
Review and Preliminary Results of New Shipper Review

AGENCY: Import Administration, International Trade Administration, 
Commerce.

SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review and a new shipper review of the antidumping duty 
order on hand trucks and certain parts thereof (hand trucks) from the 
People's Republic of China (PRC) covering the period December 1, 2004, 
through November 30, 2005. We have preliminarily determined that sales 
have been made below normal value (NV). If these preliminary results 
are adopted in the final results of these reviews, we will instruct 
U.S. Customs and Border Protection (CBP) to assess antidumping duties 
on all appropriate entries.
    Interested parties are invited to comment on these preliminary 
results. We will issue the final results no later than 120 days from 
the date of publication of this notice.

DATES: Effective Date: January 9, 2007.

FOR FURTHER INFORMATION CONTACT: Elizabeth Eastwood or Nichole Zink, 
AD/CVD Operations, Office 2, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
3874 or (202) 482-0049, respectively.

Background

    On December 1, 2005, the Department published a notice of 
opportunity to request an administrative review of the antidumping duty 
order on hand trucks from the PRC. See Antidumping or Countervailing 
Duty Order, Finding, or Suspended Investigation; Opportunity To Request 
Administrative Review, 70 FR 72109 (Dec. 1, 2005).
    In accordance with 19 CFR 351.214(c), on December 27, 2005, the 
Department received a request to conduct both an administrative review 
and a new shipper review of the antidumping duty order from Since 
Hardware (Guangzhou) Co., Ltd. (Since Hardware), a producer/exporter of 
subject merchandise in the PRC.
    In accordance with 19 CFR 351.213(b)(1), on December 30, 2005, the 
petitioners, Gleason Industrial Products, Inc. and Precision Products, 
Inc., requested that the Department conduct an administrative review 
for the following producers and/or exporters of the subject 
merchandise: Qingdao Huatian Hand Truck Co., Ltd. (Huatian); Qingdao 
Future Tool, Inc. (Future Tool); Qingdao Taifa Group Co. Ltd./Qindao 
Yinzhu Hang Truck Factory (collectively, ``Taifa''); True Potential 
Co., Ltd. (True Potential); and Shandong Machinery I&E Group Corp. 
(Shandong Machinery). Also on December 30, 2005, the Department 
received a request to conduct an administrative review from Aulita 
Quindao Manufacturing Co., Ltd. (Aulita), a producer/exporter of the 
subject merchandise, in accordance with 19 CFR 351.213(b)(2).
    On January 3, 2006, Clipper Products, Inc., a U.S. importer of the 
subject merchandise, requested that the Department conduct an 
administrative review of Forecarry Corp. (Forecarry), an exporter of 
subject merchandise located in a third country, and its PRC supplier, 
Formost Plastics & Metalworks (Jiaxing) Co., Ltd. (Formost).
    On February 1, 2006, the Department published in the Federal 
Register a notice of the initiation of the antidumping duty 
administrative review of hand trucks from the PRC for the period May 
24, 2004, through November 30, 2005. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Request for Revocation 
in Part, 71 FR 5241 (Feb. 1, 2006). On February 3, 2006, the Department 
also published in the Federal Register a notice of the initiation of 
the new shipper review of Since Hardware. See Hand Trucks and Certain 
Parts Thereof from the People's Republic of China: Initiation of New 
Shipper Review, 71 FR 5810 (Feb. 3, 2006).
    On February 8, 2006, we issued a new shipper questionnaire to Since 
Hardware. We received Since Hardware's response to Section A of this 
questionnaire on February 23, 2006.
    In February 2006 we issued quantity and value questionnaires to 
Aulita, Forecarry, Formost, Future Tool, Huatian, Shandong Machinery, 
True Potential, and Taifa. We received responses to these 
questionnaires between February 22 and March 3, 2006, from all 
companies except Aulita and Shandong Machinery.
    On February 13, 2006, Since Hardware stated that it did not object 
to a rescission of its requested administrative review, so long as its 
sale was examined in the context of the new shipper review. See the 
``Partial Rescission of Administrative Review'' section of this notice, 
below, for further discussion.
    On February 15, 2006, we issued letters to all parties in both the 
administrative review and the new shipper review informing them of the 
correct period of review (POR). The POR for this segment of the 
proceeding is December 1, 2004, through November 30, 2005. On February 
24, 2006, we published in the Federal Register a correction to the POR 
for the administrative review. *See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews, 71 FR 9519 (Feb. 24, 2006).
    On February 28, 2006, Aulita withdrew its request for an 
administrative review within the time limits specified under 19 CFR 
351.213(d)(1). See the ``Partial Rescission of Administrative Review'' 
section of this notice, below, for further discussion.
    On March 3, 2006, we issued a letter to Shandong Machinery 
providing a second opportunity to respond to the Department's request 
for quantity and value information. Shandong Machinery did not respond 
to the Department's March 3, 2006, letter. See the ``Facts Available'' 
section of this notice, below, for further discussion.
    On March 17, 2006, the Department determined that it was not 
practicable to examine individually all of the companies covered by the 
2004-2005 administrative review, and thus it limited its examination to 
the largest producers/exporters that could reasonably be reviewed, 
pursuant to section 777A(c)(2)(B) of the Tariff Act of 1930, as amended 
(the Act). Therefore, on this date the Department selected Taifa as the 
sole respondent required to submit a full questionnaire response in the 
administrative review. See the March 17, 2006, memorandum from Irene 
Darzenta Tzafolias, Acting Office Director, to Stephen Claeys, Deputy 
Assistant Secretary, entitled ``Antidumping Duty Administrative Review 
of Hand Trucks and Certain Parts Thereof from the People's Republic of 
China: Selection of Respondents.''
    On March 20, 2006, we issued the antidumping duty questionnaire to 
Taifa. Also on March 20, 2006, we issued a separate-rate questionnaire 
(i.e., section A of the antidumping duty questionnaire) to Future Tool, 
Huatian,

[[Page 938]]

and True Potential. We did not issue separate-rate questionnaires to 
Forecarry or Formost, because the former company is a third-country 
reseller (and thus it automatically qualifies for a separate rate; see 
the ``Separate Rates'' section, below, for further discussion) and the 
latter company informed the Department in its response to the quantity 
and value questionnaire that it had no exports to the United States to 
unaffiliated customers during the POR. Also on March 20, 2006, we 
issued a section A supplemental questionnaire to Since Hardware.
    On March 31, 2006, the Department invited interested parties to 
comment on surrogate country selection and to provide publicly 
available information for valuing the factors of production (FOPs) in 
the new shipper review. Also on March 31, 2006, we received Since 
Hardware's responses to sections C and D of the Department's 
questionnaire.
    On April 10, 2006, we received responses to section A of the 
questionnaire from Future Tool, Huatian, and True Potential, as well as 
a response from Since Hardware to the supplemental section A 
questionnaire. On April 20, 2006, we issued a supplemental 
questionnaire regarding sections A, C, and D to Since Hardware.
    On May 1, 2006, Since Hardware agreed to waive the time limits 
applicable to the new shipper review and to permit the Department to 
conduct the new shipper review concurrently with the administrative 
review.
    On May 2, 2006, the petitioners withdrew their request for an 
administrative review of Taifa, the company chosen as the mandatory 
respondent, and Huatian. See the ``Partial Rescission of Administrative 
Review'' section of this notice, below, for further discussion.
    On May 4, 2006, we received a response from Since Hardware to the 
April 20, 2006, supplemental questionnaire.
    On May 9, 2006, the Department reconsidered its decision to select 
only one company to provide a full questionnaire response in this 
review, and named the remaining three participating respondents as 
mandatory respondents. See the May 9, 2006, memorandum from Elizabeth 
Eastwood to Irene Darzenta Tzafolias entitled, ``Antidumping Duty 
Administrative Review of Hand Trucks and Certain Parts Thereof from the 
People's Republic of China: Revised Selection of Respondents.'' As a 
result, on this date, we issued sections A, C, and D of the antidumping 
duty questionnaire to Forecarry and sections C and D of the 
questionnaire to Future Tool and True Potential. On May 30, 2006, we 
received Forecarry's response to section A of the Department's 
questionnaire.
    On May 31, 2006, the Department published in the Federal Register a 
notice indicating that it would conduct the new shipper review of Since 
Hardware concurrently with the 2004-2005 administrative review. See 
Hand Trucks and Certain Parts Thereof from the People's Republic of 
China: Notice of Postponement of Time Limits for New Shipper 
Antidumping Duty Review in Conjunction with Administrative Review, 71 
FR 30867 (May 31, 2006). On June 8 and 28, 2006, respectively, we 
received Forecarry's responses to sections C and D of the Department's 
questionnaire.
    On June 13 and June 23, 2006, we issued additional supplemental 
questionnaires to Since Hardware. On June 29, 2006, we received True 
Potential's response to sections C and D of the Department's 
questionnaire. Future Tool did not submit a response to sections C and 
D of the Department's questionnaire. See the ``Facts Available'' 
section of this notice, below, for further discussion.
    On June 29, 2006, the Department solicited comments on surrogate 
country selection and publicly available information to value FOPs in 
the administrative review.
    On June 30 and July 10, 2006, respectively, we received responses 
from Since Hardware to the Department's June 13 and 23, 2006, 
supplemental questionnaires.
    From July 17 through 21, 2006, the Department conducted 
verification of the responses of Since Hardware at its offices in the 
PRC.
    On August 3, 2006, the Department published in the Federal Register 
a notice of extension of time limits for the preliminary results of 
both the administrative and new shipper reviews until no later than 
January 2, 2007. See Hand Trucks and Certain Parts Thereof From the 
People's Republic of China; Notice of Extension of Time Limits for 
Preliminary Results in Antidumping Duty Administrative Review and New 
Shipper Review, 71 FR 44018 (Aug. 3, 2006).
    On August 4, 2006, we issued a supplemental questionnaire to True 
Potential regarding its section A and C responses. On August 8, 2006, 
we issued a supplemental questionnaire to Forecarry regarding its 
section A through D responses. On August 18, 2006, we received True 
Potential's response to the section A and C supplemental questionnaire. 
On August 24, 2006, we issued a supplemental questionnaire to True 
Potential regarding its section D response. We received True 
Potential's response to this questionnaire on September 5, 2006. On 
September 15, 2006, we received Forecarry's response to the section A 
through D supplemental questionnaire. Also on September 15, 2006, the 
petitioners, Since Hardware, and True Potential submitted publicly 
available information for valuing the FOPs in both the administrative 
and new shipper reviews.
    On October 19, 2006, we issued additional supplemental 
questionnaires regarding section D to Forecarry and True Potential. On 
October 24, 2006, we issued an additional supplemental questionnaire to 
Forecarry. On November 16, 2006, we received responses to these 
supplemental questionnaires from Forecarry and True Potential. On 
December 19, 2006, we issued a final supplemental questionnaire to 
Forecarry regarding outstanding deficiencies in its section D response. 
Forecarry's response to this questionnaire is due to the Department no 
later than January 3, 2007.

Period of Review

    The POR covers December 1, 2004, through November 30, 2005.

Scope of Order

    The product covered by this order consists of hand trucks 
manufactured from any material, whether assembled or unassembled, 
complete or incomplete, suitable for any use, and certain parts 
thereof, namely the vertical frame, the handling area and the 
projecting edges or toe plate, and any combination thereof.
    A complete or fully assembled hand truck is a hand-propelled barrow 
consisting of a vertically disposed frame having a handle or more than 
one handle at or near the upper section of the vertical frame; at least 
two wheels at or near the lower section of the vertical frame; and a 
horizontal projecting edge or edges, or toe plate, perpendicular or 
angled to the vertical frame, at or near the lower section of the 
vertical frame. The projecting edge or edges, or toe plate, slides 
under a load for purposes of lifting and/or moving the load.
    That the vertical frame can be converted from a vertical setting to 
a horizontal setting, then operated in that horizontal setting as a 
platform, is not a basis for exclusion of the hand truck from the scope 
of this petition. That the vertical frame, handling area, wheels, 
projecting edges or other parts of the hand truck can be collapsed or 
folded is not a basis for exclusion of the hand truck from the scope of 
the petition.

[[Page 939]]

That other wheels may be connected to the vertical frame, handling 
area, projecting edges, or other parts of the hand truck, in addition 
to the two or more wheels located at or near the lower section of the 
vertical frame, is not a basis for exclusion of the hand truck from the 
scope of the petition. Finally, that the hand truck may exhibit 
physical characteristics in addition to the vertical frame, the 
handling area, the projecting edges or toe plate, and the two wheels at 
or near the lower section of the vertical frame, is not a basis for 
exclusion of the hand truck from the scope of the petition.
    Examples of names commonly used to reference hand trucks are hand 
truck, convertible hand truck, appliance hand truck, cylinder hand 
truck, bag truck, dolly, or hand trolley. They are typically imported 
under heading 8716.80.50.10 of the Harmonized Tariff Schedule of the 
United States (HTSUS), although they may also be imported under heading 
8716.80.50.90. Specific parts of a hand truck, namely the vertical 
frame, the handling area and the projecting edges or toe plate, or any 
combination thereof, are typically imported under heading 8716.90.50.60 
of the HTSUS. Although the HTSUS subheadings are provided for 
convenience and customs purposes, the Department's written description 
of the scope is dispositive.
    Excluded from the scope are small two-wheel or four-wheel utility 
carts specifically designed for carrying loads like personal bags or 
luggage in which the frame is made from telescoping tubular material 
measuring less than \5/8\ inch in diameter; hand trucks that use 
motorized operations either to move the hand truck from one location to 
the next or to assist in the lifting of items placed on the hand truck; 
vertical carriers designed specifically to transport golf bags; and 
wheels and tires used in the manufacture of hand trucks.

Partial Rescission of Administrative Review

    Pursuant to 19 CFR 351.213(d)(1), the Secretary must rescind an 
administrative review if a party requesting a review withdraws the 
request within 90 days of the date of publication of the notice of 
initiation. As noted above, on April 28, 2006, Aulita timely withdrew 
its request for an administrative review, in accordance with 19 CFR 
351.213(d)(1). In addition, on May 2, 2006, the petitioners withdrew 
their requests for an administrative review of Huatian and Taifa, in 
accordance with 19 CFR 351.213(d)(1). Therefore, because no other 
interested party requested a review of these companies, in accordance 
with 19 CFR 351.213(d)(1) and consistent with our practice, we are 
rescinding the administrative review of Aulita, Huatian, and Taifa for 
the POR.
    Finally, as noted in the ``Background'' section of this notice, 
above, Since Hardware stated on February 13, 2006, that it did not 
object to the rescission of its requested administrative review, so 
long as its sale was examined in the context of the new shipper review. 
Therefore, because we are examining Since Hardware's sale in the 
context of the new shipper review, and in accordance with 19 CFR 
351.213(d)(1), we are rescinding the administrative review for Since 
Hardware for the POR.

Verification

    As provided in section 782(i) of the Act, we conducted verification 
of the sales and FOP information provided by Since Hardware. We used 
standard verification procedures, including on-site inspection of the 
manufacturer's facilities, and examination of relevant sales and 
financial records. Our verification results are set forth in the Since 
Hardware Verification Report. See the October 5, 2006, memorandum from 
Elizabeth Eastwood and Nichole Zink to James Maeder entitled, 
``Verification of Sales and Factors Responses of Since Hardware 
(Guangzhou) Co., Ltd. in the New Shipper Review of Hand Trucks and 
Certain Parts Thereof from the People's Republic of China'' (Since 
Hardware Verification Report) for further discussion.

Bona Fide Sale Analysis--Since Hardware

    For the reasons stated below, we preliminarily find that Since 
Hardware's reported U.S. sale during the POR is a bona fide sale, as 
required by 19 CFR 351.214(b)(2)(iv)(c), based on the totality of the 
facts on the record. Specifically, we find that the price reported for 
Since Hardware's hand truck sale was similar to the average unit value 
of U.S. imports of comparable hand trucks and certain parts thereof 
from the PRC during the POR. We also find that the quantity of the sale 
was within the range of shipment sizes of comparable goods imported 
from the PRC during the POR. Furthermore, Since Hardware provided 
documentation on a post-POR order at verification. The price of the 
post-POR order and the sale under review are identical. See the Since 
Hardware Verification Report at pages 9, 10, and Verification Exhibit 
18. Finally, we looked to see whether the importer involved in this 
transaction is an actual commercial entity, and we found no reason to 
doubt the legitimacy of either the importing party or its agents 
involved in this new shipper review. See the December 29, 2006, 
memorandum to James Maeder from Elizabeth Eastwood and Nichole Zink 
entitled, ``Analysis of Since Hardware (Guangzhou) Co., Ltd.'s Bona 
Fides As A New Shipper,'' for further discussion of our price and 
quantity analysis.
    Therefore, for the reasons mentioned above, the Department 
preliminarily finds that Since Hardware's sole U.S. sale during the POR 
was a bona fide commercial transaction.

Non-Market Economy Country Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (NME) country. Pursuant to 
section 771(18)(C)(i) of the Act, any determination that a foreign 
country is an NME country shall remain in effect until revoked by the 
administering authority. See e.g., Fresh Garlic from the People's 
Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review and Rescission in Part, 69 FR 70638 (Dec. 7, 
2004). None of the parties to this proceeding has contested such 
treatment. Accordingly, we calculated NV in accordance with section 
773(c) of the Act, which applies to NME countries.

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base NV on the NME 
producer's FOPs, valued in a surrogate market-economy country or 
countries considered to be appropriate by the Department. Section 
773(c)(4) of the Act requires the Department to utilize, to the extent 
possible, the prices or costs of FOPs in one or more market-economy 
countries that are: (1) At a level of economic development comparable 
to that of the NME country; and (2) significant producers of comparable 
merchandise. The Department has determined that Egypt, India, 
Indonesia, the Philippines, and Sri Lanka are countries comparable to 
the PRC in terms of economic development. See the February 9, 2006, 
memoranda from Ron Lorentzen, Director, Office of Policy, to Irene 
Darzenta Tzafolias, Acting Director, Office 2, entitled, ``New Shipper 
Review of Hand Trucks from the People's Republic of China (PRC); 
Request for a List of Surrogate Countries'' and ``Antidumping Duty 
Administrative Review of Hand Trucks from the People's Republic of 
China (PRC); Request for a List of Surrogate Countries.'' Customarily, 
we select an appropriate surrogate country based on the availability 
and reliability of data

[[Page 940]]

from the countries that are significant producers of identical or 
comparable merchandise. For PRC cases, the primary surrogate country 
has often been India if it is a significant producer of identical or 
comparable merchandise. In this case, based on publicly available 
information placed on the record (e.g., world production data), India 
is a significant producer of the subject merchandise. Accordingly, we 
have considered India the surrogate country for purposes of valuing the 
FOPs because it meets the Department's criteria for surrogate-country 
selection. See the December 12, 2006, memorandum from Jill Pollack to 
the file entitled, ``2004-2005 Antidumping Duty Administrative and New 
Shipper Reviews on Hand Trucks and Certain Parts Thereof from the 
People's Republic of China: Selection of a Surrogate Country,'' for 
further discussion.

Affiliation

    Section 771(33) of the Act states that the Department considers the 
following entities to be affiliated: (a) Members of a family, including 
brothers and sisters (whether by whole or half blood), spouse, 
ancestors, and lineal descendants; (b) any officer or director of an 
organization and such organization; (c) partners; (d) employer and 
employee; (e) any person directly or indirectly owning, controlling, or 
holding with power to vote, five percent or more of the outstanding 
voting stock or shares of any organization and such organization; (f) 
two or more persons directly or indirectly controlling, controlled by, 
or under common control with, any person; and (g) any person who 
controls any other person and such other person.
    For purposes of affiliation, section 771(33) of the Act states that 
a person shall be considered to control another person if the person is 
legally or operationally in a position to exercise restraint or 
direction over the other person. In order to find affiliation between 
companies, the Department must find that at least one of the criteria 
listed above is applicable to the respondents.
    To the extent that the affiliation provisions in section 771(33) of 
the Act do not conflict with the Department's application of separate 
rates and the statutory NME provisions in section 773(c) of the Act, 
the Department will determine that exporters and/or producers are 
affiliated if the facts of the case support such a finding. See Certain 
Preserved Mushrooms From the People's Republic of China: Preliminary 
Results of Sixth New Shipper Review and Preliminary Results and Partial 
Rescission of Fourth Antidumping Duty Administrative Review, 69 FR 
10410, 10413 (Mar. 5, 2004) (Mushrooms), unchanged in Final Results and 
Final Rescission, in Part, of Antidumping Duty Administrative Review: 
Certain Preserved Mushrooms From the People's Republic of China, 70 FR 
54361 (Sept. 14, 2005).
    Following these guidelines, we preliminarily determine that 
Forecarry and Formost are affiliated pursuant to section 771(33) of the 
Act. We also preliminarily determine that Forecarry and Formost should 
be assigned a single dumping margin for the purposes of this 
antidumping duty administrative review. Because the details of our 
affiliation analysis are proprietary in nature, we are unable to 
discuss them in this notice. Therefore, for further discussion of this 
issue, see the December 29, 2006, memorandum to James Maeder, Director, 
Office 2, from Jill Pollack, Senior Analyst, entitled, ``Antidumping 
Duty Administrative Review of Hand Trucks and Certain Parts Thereof 
from the People's Republic of China: Affiliation of Forecarry 
Corporation and Formost Plastics & Metalworks (Jianxing) Co., Ltd.''

Facts Available

A. Application of Facts Available

    In accordance with section 776(a)(2)(A) of the Act, we 
preliminarily determine that the use of facts available is appropriate 
as the basis for the dumping margins for the following producers/
exporters: Forecarry, Future Tool, Shandong Machinery, and the PRC-wide 
entity. Section 776(a)(2) of the Act provides that, if an interested 
party: (1) Withholds information that has been requested by the 
Department; (2) fails to provide information in a timely manner or in 
the form and manner requested, subject to subsections 782(c) and (e) of 
the Act; (3) significantly impedes a determination under the 
antidumping statute; or (4) 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.
    Where the Department determines that a response to a request for 
information does not comply with the request, section 782(d) of the Act 
provides that the Department will so inform the party submitting the 
response and will, to the extent practicable, provide that party the 
opportunity to remedy or explain the deficiency. If the party fails to 
remedy the deficiency within the applicable time limits and subject to 
the requirements listed in section 782(e)(1-5) of the Act, the 
Department may disregard all or part of the original and subsequent 
responses, as appropriate. Section 782(e) of the Act provides that the 
Department ``shall not decline to consider information that is 
submitted by an interested party and is necessary to the determination 
but does not meet all applicable requirements established by the 
administering authority'' if the information is timely, can be 
verified, is not so incomplete that it cannot be used, and the 
interested party acted to the best of its ability in providing the 
information. Where all of these conditions are met, the statute 
requires the Department to use the information if it can do so without 
undue difficulties.
1. Forecarry/Formost
    As noted above, the Department selected Forecarry as a mandatory 
respondent in this administrative review on May 9, 2006, and at that 
time we issued the antidumping duty questionnaire to it. We received 
Forecarry's responses to the questionnaire on May 30, June 8, and June 
28, 2006.
    After analyzing these responses, we found that the company's FOP 
database was not reliable because it was not based on the books and 
records of the company's PRC supplier, Formost. Rather, this response 
was based primarily on estimated data and/or observed quantities that 
were unaccompanied by supporting calculation worksheets. Although we 
informed Forecarry of this deficiency and provided it several 
opportunities to correct it, as explained below, Forecarry failed to do 
so prior to the preliminary results.
    We note that, in its response to the second supplemental on this 
topic, Forecarry claimed that it revised its methodology to base its 
FOPs on Formost's books and records. However, Forecarry did not provide 
supporting documentation that linked the reported data to the amounts 
recorded in Formost's accounting system. Forecarry merely provided POR 
invoices for certain material and energy factors, as well as partially 
translated pages from Formost's inventory, production, and labor 
records, but failed to explain how these documents support its reported 
FOPs. The deficiencies in Forecarry's responses are discussed in more 
detail below.
    Throughout the course of this administrative review, we have 
requested that Forecarry reconcile its

[[Page 941]]

reported FOPs to the amounts recorded in Formost's normal books and 
records. The first request is contained in Appendix V of the May 9 
questionnaire, where the Department requested that Forecarry provide:

    Worksheets that illustrate how the costs reported on the audited 
financial statements (or, if your company does not have audited 
financial statements, on the tax filing) reconcile to the general 
ledger or trial balance and to the cost accounting system (i.e., the 
source used to derive the reported input quantities, e.g., materials 
sub-ledgers, production records, and inventory records). On the 
worksheets, identify the source documents for all major items shown 
and cross-reference the worksheets where appropriate (i.e., link 
between worksheets). If your company does not have a cost accounting 
system, reconcile the general ledger or trial balance to the books 
and records normally kept by the company which were used to derive 
the reported quantity of each input consumed in the production of 
merchandise covered by the scope of the antidumping investigation/
order.

See the Antidumping Duty Questionnaire at Appendix V (issued to 
Forecarry on May 9, 2006). Forecarry did not submit the reconciliation 
of its reported FOPs in its original questionnaire response.
    On August 8, 2006, the Department issued a supplemental 
questionnaire to Forecarry that instructed Forecarry to:

    Ensure that, in this and all future responses, you submit all 
worksheets with narrative responses that will allow the Department 
to follow the flow of the worksheet and any adjustments necessary to 
calculate the submitted FOPs. Further, ensure that your worksheets 
demonstrate how the data recorded in Formost's accounting and 
production records were adjusted in order to derive the amount 
reported.

In its September 15, 2006, response to the August 8 supplemental 
questionnaire, Forecarry stated that it reported the weight of hand 
truck inputs based on the ``actual weight of a production sample of 
each part.'' However, Forecarry did not provide any worksheets 
demonstrating how the reported factors tied to the company's books and 
records, as requested.
    On October 19, 2006, the Department issued a second supplemental 
questionnaire to Forecarry, instructing Forecarry to provide source 
documentation to support its reported FOPs and to provide the cost 
reconciliation requested in Appendix V of the Department's original 
questionnaire. See the October 19, 2006, letter to Forecarry at pages 1 
and 2 of Attachment I. In response to the Department's second request 
for the FOPs reconciliation, Forecarry provided a worksheet that 
attempts to show a comparison between the weight of steel and aluminum 
tubing recorded as manufacturing costs, based on inventory records, to 
the weight recorded in the FOP database submitted to the Department, 
which was based on the actual weight of the various finished parts made 
from these materials. See Forecarry's November 16, 2006, supplemental 
response at page 4 and Exhibit 2. Forecarry also provided additional 
worksheets in response to the Department's request for a cost of 
production reconciliation. See Forecarry's November 16 supplemental 
response at Exhibit 1. However, Forecarry did not demonstrate how any 
of the records or worksheets provided in its November 16 response tie 
to Formost's normal books and records. As a result, the cost 
reconciliation was incomplete. Further, Forecarry did not explain how 
any of the reported FOPs were calculated or show how the reported FOPs 
tie to Formost's inventory or production records.
    Regarding labor, we note in both its June 28, 2006, section D 
response and its September 15, 2006, supplemental response that 
Forecarry stated that Formost's reported labor factors were based on 
manager estimates of the labor required to produce the subject 
merchandise. In its September 15, 2006, response, Forecarry stated that 
there was no source documentation to support these managers' estimates. 
See Forecarry's September 15, 2006, supplemental response at page 14. 
In the October 19, 2006, supplemental questionnaire, the Department 
required Forecarry to ``provide documentation to support these 
estimates (e.g., documents identifying the employees that work in a 
particular workshop, documents showing the number of hours worked 
within a specific amount of time (e.g., week or month) by employees for 
that particular workshop, documents submitted to Chinese authorities, 
or payment documentation).'' See the Department's October 19, 2006, 
letter to Forecarry at page 5 of Attachment I. In response to the 
Department's request, Forecarry provided some partially translated 
workshop records that it claimed supported the managers' estimates of 
labor factors reported in its FOP database. However, because these 
documents are not fully translated, as required by the Department's 
questionnaire, the Department cannot determine whether they in fact 
support Forecarry's reported labor.
    As described above, Forecarry failed to respond to the Department's 
requests for information in the form required. The absence of this 
information has significantly impeded this review because the 
Department has been unable to tie Forecarry's reported FOP database to 
Formost's books and records or any other appropriate source 
documentation. Forecarry failed to properly respond to the Department's 
requests, pursuant to section 782(d) of the Act, when it refused to 
provide documentation related to its reported FOPs. Forecarry's failure 
to provide the requested information prevented the Department from 
performing the calculations necessary to establish NV and determine 
whether Forecarry's U.S. sales were made at or below that NV.
    As a threshold matter, a respondent's submitted sales and cost data 
must reconcile to its audited financial statements or other 
documentation deemed appropriate by the Department (e.g., tax returns), 
in order for the Department to use that data in its margin calculations 
for that company. See, e.g., Notice of Final Results of Antidumping 
Duty Administrative Review:Steel Concrete Reinforcing Bars from Latvia, 
71 FR 74900 (Dec. 13, 2006), and accompanying Issues and Decision 
Memorandum at Comment 1. Because Forecarry has not demonstrated that 
its reported FOP data ties to its books and records or other 
appropriate source documentation, Forecarry's entire FOP database is 
unuseable for purposes of these preliminary results. Moreover, because 
there is no acceptable FOP database to which we can compare Forecarry's 
U.S. sales information, we are also unable to use that information. 
Therefore, pursuant to section 782(e) of the Act, the Department must 
disregard all of Forecarry's U.S. sales and FOP data.
    Finally, we find that the application of section 782(e) of the Act 
does not overcome Forecarry's failure to provide a useable response. 
See sections 782(e)(1), (3), and (4) of the Act. Because the 
information that Forecarry failed to supply is critical for purposes of 
the preliminary dumping calculations, the Department must resort to 
total facts otherwise available in determining the margin in its 
preliminary results, pursuant to sections 776(a)(2)(A)-(C) of the Act.
    Nonetheless, the Department is providing Forecarry with a final 
opportunity to substantiate its reported FOPs by: (1) Reconciling its 
reported FOPs to Formost's normal books and records; and (2) 
demonstrating how the reported FOPs were calculated. Documentation that 
would enable the Department to substantiate these items would include, 
but is not limited to, worksheets that reconcile the reported factors 
for material inputs to Formost's

[[Page 942]]

books and records, records from the relevant workshops and worksheets 
that tie these records to Formost's reported direct labor amounts, and 
worksheets that tie Formost's reported factors for electricity to meter 
readings or other appropriate source documentation. We are allowing 
Forecarry to provide this information no later than January 3, 2007. If 
we receive a timely response, we will consider this information for 
purposes of the final results.
2. Future Tool
    As noted in the ``Background'' section, above, Future Tool 
responded to the Department's request for quantity and value data on 
February 22, 2006, and it submitted a response to section A of the 
questionnaire on April 10, 2006.
    On May 9, 2006, the Department designated Future Tool as a 
mandatory respondent in this administrative review, and it issued the 
remaining sections of the questionnaire to the company on that date. 
However, Future Tool failed to respond to this request for information. 
Thus, pursuant to sections 776(a)(2)(A) and (C) of the Act, because 
this company did not respond to sections C and D of the Department's 
questionnaire, the Department preliminarily finds that the use of total 
facts available is appropriate.
    Moreover, as a result of its failure to respond to the Department's 
requests for information, Future Tool failed to establish its 
eligibility for a separate rate. Therefore, Future Tool is not eligible 
to receive a separate rate and will be part of the PRC-wide entity, 
subject to the PRC-wide rate. As noted above, this rate will be based 
on total facts available.
3. Shandong Machinery
    As discussed in the ``Background'' section, above, on February 7, 
2006, the Department requested that Shandong Machinery provide data on 
the quantity and value of its exports during the POR to the United 
States. The deadline to file a response was February 28, 2006. Because 
the Department did not receive a response from this company,\1\ on 
March 3, 2006, we again issued a letter to Shandong Machinery with a 
second opportunity to respond to the Department's request for quantity 
and value information. Shandong Machinery also did not respond to the 
Department's March 3, 2006, letter. Thus, pursuant to sections 
776(a)(2)(A) and (C) of the Act, because this company did not respond 
to the Department's questionnaire, the Department preliminarily finds 
that the use of total facts available is appropriate. Moreover, 
Shandong Machinery failed to establish its eligibility for a separate 
rate. Therefore, Shandong will be part of the PRC-wide entity, subject 
to the PRC-wide rate. As noted above, this rate will be based on total 
facts available.
---------------------------------------------------------------------------

    \1\ The Department included documentation confirming delivery of 
the initial quantity and value questionnaire to Shandong Machinery 
in its March 3, 2006, letter at Attachment II.
---------------------------------------------------------------------------

B. Adverse Facts Available (AFA)

    According to section 776(b) of the Act, if the Department finds 
that an interested party fails to cooperate by not acting to the best 
of its ability to comply with requests for information, the Department 
may use an inference that is adverse to the interests of that party in 
selecting from the facts otherwise available. See, e.g., Notice of 
Final Results of Antidumping Duty Administrative Review: Stainless 
Steel Bar from India, 70 FR 54023, 54025-26 (Sept. 13, 2005); see also 
Notice of Final Determination of Sales at Less Than Fair Value and 
Final Negative Critical Circumstances: Carbon and Certain Alloy Steel 
Wire Rod from Brazil, 67 FR 55792, 55794-96 (Aug. 30, 2002). 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 Statement of Administrative Action accompanying the 
Uruguay Round Agreements Act, H.R. Rep. No. 103-316, Vol. 1, at 870 
(1994) (SAA). Furthermore, ``affirmative evidence of bad faith on the 
part of a respondent is not required before the Department may make an 
adverse inference.'' See Antidumping Duties; Countervailing Duties; 
Final Rule, 62 FR 27296, 27340 (May 19, 1997); see also Nippon Steel 
Corp. v. United States, 337 F.3d 1373, 1382 (Fed. Cir. 2003) (Nippon).
    Each of the respondents was notified in the Department's 
questionnaires that failure to submit the requested information by the 
date specified might result in the use of facts available. Generally, 
it is reasonable to assume that Forecarry/Formost and the PRC-wide 
entity (including Shandong Machinery and Future Tool) possessed the 
records necessary for this administrative review and that, by not 
supplying the information the Department requested, these companies 
failed to cooperate to the best of their ability. In addition, none of 
the companies in this review argued that they were incapable of 
providing the information the Department requested, or requested that 
the Department modify its reporting requirements in accordance with 
782(c)(1) of the Act. Accordingly, because Forecarry/Formost failed to 
submit useable FOP information, which was not only specifically 
requested by the Department, but was also fundamental to the dumping 
analysis, and PRC-wide entity (including Future Tool and Shandong 
Machinery) failed to respond to the Department's requests for 
information, we preliminarily find that these companies have not acted 
to the best of their abilities in this proceeding, within the meaning 
of section 776(b) of the Act. Therefore, an adverse inference is 
warranted in selecting from the facts otherwise available. See Nippon, 
337 F.3d at 1382-83.

C. Selection of an AFA Rate

    In deciding which facts to use as AFA, section 776(b) of the Act 
and 19 CFR 351.308(c)(1) authorize the Department to rely on 
information derived from: (1) The petition; (2) a final determination 
in the investigation; (3) any previous review or determination; or (4) 
any information placed on the record. In reviews, the Department 
normally selects as AFA the highest rate determined for any respondent 
in any segment of the proceeding. See, e.g., Freshwater Crawfish Tail 
Meat from the People's Republic of China: Notice of Final Results of 
Antidumping Duty Administrative Review, 68 FR 19504 (Apr. 21, 2003). 
The Court of International Trade (CIT) and the Court of Appeals for the 
Federal Circuit have consistently upheld the Department's practice. See 
Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190 (Fed. Cir. 
1990) (Rhone Poulenc); NSK Ltd. v. United States, 346 F. Supp. 2d 1312, 
1335 (CIT 2004) (upholding a 73.55 percent total AFA rate, the highest 
available dumping margin from a different respondent in a less-than-
fair-value (LTFV) investigation);
    Kompass Food Trading Int'l v. United States, 24 CIT 678, 689 (2000) 
(upholding a 51.16 percent total AFA rate, the highest available 
dumping margin from a different, fully cooperative respondent); and 
Shanghai Taoen International Trading Co., Ltd. v. United States, 360 F. 
Supp. 2d 1339 at 1348 (CIT 2005) (upholding a 223.01 percent total AFA 
rate, the highest available dumping margin from a different respondent 
in a previous administrative review). The Department's practice, when 
selecting an AFA rate from among the possible sources of information, 
has been to ensure that the margin is sufficiently adverse ``as to 
effectuate the statutory purposes of the adverse facts available rule 
to induce respondents to provide the Department with complete and 
accurate information in a timely

[[Page 943]]

manner.'' See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value: Static Random Access Memory Semiconductors from 
Taiwan, 63 FR 8909, 8932 (Feb. 23, 1998). The Department's practice 
also ensures ``that the party does not obtain a more favorable result 
by failing to cooperate than if it had cooperated fully.'' See SAA at 
870; see also Final Determination of Sales at Less than Fair Value: 
Certain Frozen and Canned Warmwater Shrimp from Brazil, 69 FR 76910 
(Dec. 23, 2004); and D&L Supply Co. v. United States, 113 F.3d 1220, 
1223 (Fed. Cir. 1997). In choosing the appropriate balance between 
providing respondents with an incentive to respond accurately and 
imposing a rate that is reasonably related to the respondent's prior 
commercial activity, selecting the highest prior margin ``reflects a 
common sense inference that the highest prior margin is the most 
probative evidence of current margins, because, if it were not so, the 
importer, knowing of the rule, would have produced current information 
showing the margin to be less.'' See Rhone Poulenc, 899 F.2d at 1190. 
Consistent with the statute, court precedent, and its normal practice, 
the Department has assigned the rate of 383.60 percent to the PRC-wide 
entity (including Shandong Machinery and Future Tool) and Forecarry/
Formost as AFA. This rate was assigned in the investigation of this 
proceeding and is the highest rate determined for any party in any 
segment of this proceeding. See Amended Final Determination of Sales at 
Less Than Fair Value: Hand Trucks and Certain Parts Thereof From the 
People's Republic of China, 69 FR 65410 (Nov. 12, 2004) (Hand Trucks 
Amended Final Determination). As discussed below, this rate has been 
corroborated.

D. Corroboration of Secondary Information

    Section 776(c) of the Act provides that when the Department relies 
on the facts otherwise available and on ``secondary information,'' the 
Department shall, to the extent practicable, corroborate that 
information from independent sources reasonably at the Department's 
disposal. The SAA states that ``corroborate'' means to determine that 
the information used has probative value. See SAA at 870. The 
Department has determined that to have probative value, information 
must be reliable and relevant. See SAA at 870; see also Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished, From Japan, and 
Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and 
Components Thereof, From Japan; Preliminary Results of Antidumping Duty 
Administrative Reviews and Partial Termination of Administrative 
Reviews, 61 FR 57391, 57392 (Nov. 6, 1996). The SAA also states that 
independent sources used to corroborate such evidence may include, for 
example, published price lists, official import statistics and customs 
data, and information obtained from interested parties during the 
particular investigation. See SAA at 870. See also Preliminary 
Determination of Sales at Less Than Fair Value: High and Ultra-High 
Voltage Ceramic Station Post Insulators from Japan, 68 FR 35627 (June 
16, 2003), unchanged in Notice of Final Determination of Sales at Less 
Than Fair Value: High and Ultra-High Voltage Ceramic Station Post 
Insulators from Japan, 68 FR 62560, 62561 (Nov. 5, 2003); and Final 
Determination of Sales at Less Than Fair Value: Live Swine from Canada, 
70 FR 12181 (Mar. 11, 2005).
    We are applying as AFA the highest rate from any segment of this 
administrative proceeding, which is the rate currently applicable to 
all exporters subject to the PRC-wide rate. The information upon which 
the AFA rate is based in the current review (i.e., the PRC-wide rate of 
383.60 percent) was the highest rate calculated based on information 
contained in the petition in the LTFV investigation. See Hand Trucks 
Amended Final Determination, 69 FR at 65411. This AFA rate is the same 
rate that the Department assigned to certain hand truck companies in 
the original LTFV determination. In the investigation, the Department 
determined the reliability of the margin contained in the petition by 
comparing the U.S. prices from the price quotes in the petition to 
prices of comparable products sold by Huatian, a mandatory respondent 
in the LTFV investigation, and found them to be comparable. The 
Department also compared the surrogate values used in the petition to 
the surrogate values selected for the final determination, and then 
adjusted and replaced certain values to make them more accurate. 
*Finally, the Department replaced the surrogate value ratios in the 
petition with those used in the final investigation. Therefore, in the 
investigation, we found this margin to be reliable. See Notice of 
Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Hand Trucks and Certain Parts 
Thereof From the People's Republic of China, 69 FR 29509 (May 24, 
2004), as amended by Hand Trucks Amended Final Determination, 69 FR at 
65411. Further, the application of this margin was subject to comment 
from interested parties in that segment of the proceeding. The 
Department has received no information to date that warrants revisiting 
the issue of the reliability of the rate and no party has submitted 
comments challenging the reliability of this margin. Thus, the 
Department finds that the margin calculated in the LTFV investigation 
is reliable.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department will disregard the margin and determine an 
appropriate margin. For example, in Fresh Cut Flowers from Mexico: 
Final Results of Antidumping Administrative Review, 61 FR 6812 (Feb. 
22, 1996), the Department disregarded the highest margin in that case 
as adverse best information available (the predecessor to facts 
available) because the margin was based on another company's 
uncharacteristic business expense resulting in an unusually high 
margin. Similarly, the Department does not apply a margin that has been 
discredited. See D & L Supply Co. v. United States, 113 F.3d 1220, 1222 
(Fed. Cir. 1997) (the Department will not use a margin that has been 
judicially invalidated). None of these unusual circumstances are 
present here. Further, the selected margin is currently the PRC-wide 
rate. As there is no information on the record of these reviews that 
indicates that this rate is not relevant as AFA for Forecarry/Formost 
and the PRC-wide entity, we determine that this rate is relevant.
    Because the rate is both reliable and relevant, it has probative 
value. Accordingly, we determine that the highest rate determined in 
any segment of this administrative proceeding (i.e., 383.60 percent) is 
corroborated (i.e., it has probative value). We have assigned this AFA 
rate to exports of the subject merchandise by Forecarry/Formost and the 
PRC-wide entity, including Future Tool and Shandong Machinery.

Separate Rates

    In proceedings involving NME countries, the Department begins with 
a rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty deposit rate (i.e., a PRC-wide rate).
    Of the three respondents participating in these reviews, two of the 
companies (i.e., Forecarry and Since Hardware) are owned wholly by 
entities located in

[[Page 944]]

market-economy countries. Thus, for these two companies, because we 
have no evidence indicating that they are under the control of the PRC 
government, a separate-rate analysis is not necessary to determine 
whether they are independent from government control. See Brake Rotors 
From the People's Republic of China: Final Results and Partial 
Rescission of Fifth New Shipper Review, 66 FR 44331 (Aug. 23, 2001), 
citing Brake Rotors From the People's Republic of China: Preliminary 
Results and Partial Rescission of Fifth New Shipper Review, 66 FR 29080 
(May 29, 2001) (where the respondent was wholly owned by a U.S. 
registered company); Brake Rotors From the People's Republic of China: 
Preliminary Results and Partial Rescission of the Fourth New Shipper 
Review and Rescission of the Third Antidumping Duty Administrative 
Review, 66 FR 1303, 1306 (Jan. 8, 2001) (where the respondent was 
wholly owned by a company located in Hong Kong); and Notice of Final 
Determination of Sales at Less Than Fair Value: Creatine Monohydrate 
from the People's Republic of China, 64 FR 71104, 71105 (Dec. 20, 1999) 
(where the respondent was wholly owned by persons located in Hong 
Kong).
    The remaining participating respondent, True Potential, is a 
privately owned company in the PRC. Thus, for True Potential, a 
separate-rate analysis is necessary to determine whether the export 
activities of this company is independent from government control. See 
Notice of Final Determination of Sales at Less Than Fair Value: 
Bicycles From the People's Republic of China, 61 FR 56570 (Apr. 30, 
1996). To establish whether a firm is sufficiently independent in its 
export activities from government control to be entitled to a separate 
rate, the Department utilizes a test arising from the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588 (May 6, 1991), and 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, the Department 
assigns separate rates in NME cases only if the respondent can 
demonstrate the absence of both de jure and de facto government control 
over its export activities.

1. De Jure Control

    Evidence supporting, though not requiring, a finding of de jure 
absence of government control over export activities includes: (1) An 
absence of restrictive stipulations associated with the 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.
    True Potential has placed on the administrative record documents to 
demonstrate an absence of de jure control (i.e., the 1999 ``Company Law 
of the People's Republic of China''). As in prior cases, we have 
analyzed this law and have found it to establish sufficiently an 
absence of de jure control over privately owned companies in the PRC. 
See, e.g., Final Determination of Sales at Less than Fair Value: 
Furfuryl Alcohol from the People's Republic of China, 60 FR 22544, 
22546-47 (May 8, 1995) (Furfuryl Alcohol); and Preliminary 
Determination of Sales at Less Than Fair Value: Certain Partial-
Extension Steel Drawer Slides with Rollers from the People's Republic 
of China, 60 FR 29571, 29573 (June 5, 1995) (unchanged in the final 
determination). We have no new information in this proceeding that 
would cause us to reconsider this determination with regard to True 
Potential.

2. De Facto Control

    As stated in previous cases, there is evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC. See 
Silicon Carbide, 60 FR at 29573; and Furfuryl Alcohol, 60 FR at 22546-
47. Therefore, the Department has determined that an analysis of de 
facto control is critical in determining whether the respondents are, 
in fact, subject to a degree of government control that would preclude 
the Department from assigning separate rates.
    The Department typically considers four factors in evaluating 
whether each respondent is subject to de facto government control of 
its export functions: (1) Whether the export prices are set by, or 
subject to the approval of, a government authority; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding the disposition of profits or 
financing of losses. See Silicon Carbide, 60 FR at 29573; and Furfuryl 
Alcohol, 60 FR at 22546-47.
    True Potential has asserted the following: (1) It establishes its 
own export prices; (2) it negotiates orders without guidance from any 
government entities or organizations; (3) it makes its own personnel 
decisions; and (4) it retains the proceeds of its export sales and uses 
profits according to its business needs. Additionally, True Potential's 
questionnaire responses indicate that it did not coordinate its pricing 
during the POR with other exporters of the subject merchandise.
    Consequently, we have preliminarily determined that True Potential 
has met the criteria for the application of a separate rate based on 
the documentation it has submitted on the record of this review.

Normal Value Comparisons

    To determine whether sales of the subject merchandise by Since 
Hardware and True Potential to the United States were made at prices 
below NV, we compared each company's export prices (EPs) to NV, as 
described in the ``Export Price'' and ``Normal Value'' sections of this 
notice, below.

Export Price

    For Since Hardware and True Potential, we used EP methodology in 
accordance with section 772(a) of the Act for sales in which the 
subject merchandise was first sold prior to importation by the exporter 
outside the United States directly to an unaffiliated purchaser in the 
United States and for sales in which constructed export price was not 
otherwise indicated.
    We calculated EP based on packed, FOB foreign port prices to the 
first unaffiliated purchaser in the United States. Where appropriate, 
we made deductions from the starting price (gross unit price) for 
foreign inland freight and foreign brokerage and handling charges in 
the PRC, in accordance with section 772(c)(2) of the Act. Because 
foreign inland freight and foreign brokerage and handling fees were 
provided by PRC service providers or paid for in renminbi, we based 
those charges on surrogate rates from India (see the ``Surrogate 
Country'' section, above, for further discussion of our surrogate-
country selection).
    To value foreign inland trucking charges, we used truck freight 
rates published in an Indian logistics Web site that tracks freight 
rates for all of India (i.e., https://www.infreight.com). To value 
foreign brokerage and handling expenses, we calculated an average rate 
based on two different sources: (1) The December 2003-November 2004 
data contained in Essar Steel's (Essar) February 28, 2005, public 
version

[[Page 945]]

response submitted in the antidumping administrative review of Hot-
Rolled Carbon Steel Flat Products from India; and (2) the November 
2002-September 2003 data contained in Pidilite Industries' (Pidilite) 
March 9, 2004, public version response submitted in the antidumping 
duty investigation of Carbazole Violet Pigment 23 from India. See 
Certain Hot-Rolled Carbon Steel Flat Products From India: Preliminary 
Results of Antidumping Duty Administrative Review, 71 FR 2018 (Jan. 12, 
2006) (unchanged in the final results); and Notice of Final 
Determination of Sales at Less Than Fair Value: Carbazole Violet 
Pigment 23 From India, 69 FR 67306 (Nov. 17, 2004). Because the data 
from both Essar and Pidilite were outside of the POR, we applied Indian 
wholesale price index (WPI) inflators to them to make them 
contemporaneous with the POR before calculating an average foreign 
brokerage and handling expense rate. See the December 29, 2006, 
memorandum from Elizabeth Eastwood to the file entitled, ``Factors of 
Production Valuation Memorandum for the Preliminary Results of the 
First Administrative Review and Preliminary Results of the First New 
Shipper Review'' (Factor Valuation Memorandum) for a detailed 
description of the calculation of these surrogate values.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine NV using a FOP methodology if the merchandise is exported 
from an NME country and the information does not permit the calculation 
of NV using home-market prices, third-country prices, or constructed 
value under section 773(a) of the Act. The Department will base NV on 
the FOPs because the presence of government controls on various aspects 
of the PRC economy renders price comparisons and the calculation of 
production costs invalid under its normal methodologies.
    For purposes of calculating NV, we valued the PRC FOPs in 
accordance with section 773(c)(1) of the Act. The FOPs include, but are 
not limited to, hours of labor required, quantities of raw materials 
employed, amounts of energy and other utilities consumed, and 
representative capital costs, including depreciation. See section 
773(c)(3) of the Act. In examining surrogate values, we selected, where 
possible, the publicly available value which was an average non-export 
value, representative of a range of prices within the POR or most 
contemporaneous with the POR, product-specific, and tax-exclusive. See, 
e.g., Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Chlorinated 
Isocyanurates from the People's Republic of China, 69 FR 75294, 75300 
(Dec. 16, 2004) (unchanged in the final results).
    In accordance with section 773(c) of the Act, we calculated NV 
based on the FOPs reported by Since Hardware (adjusted as appropriate 
for our findings at verification) and True Potential for the POR for 
materials, energy, labor, by-products, and packing. See the Factor 
Valuation Memorandum. As the basis for NV, Since Hardware and True 
Potential reported FOP information for each separate stage of 
production, including the factors used in the production of all self-
produced material and energy inputs, and by-products. We have valued 
the factors reported for each self-produced input for purposes of the 
preliminary results, in accordance with our practice. See Polyvinyl 
Alcohol from the People's Republic of China; Final Results of 
Antidumping Duty Administrative Review, 71 FR 62086 (Oct. 23, 2006).
    In accordance with 19 CFR 351.408(c)(1), where a producer sources 
an input from a market economy and pays for it in a market-economy 
currency, the Department employs the actual price paid to calculate the 
factors-based NV. See Lasko Metal Products v. United States, 43 F.3d 
1442, 1445-1446 (Fed. Cir. 1994). Since Hardware reported that some of 
its inputs were purchased from market economies and paid for in market-
economy currencies. See the ``Factor Valuations'' section of this 
notice, below, for further discussion.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on the FOPs reported by the respondents for the POR. We relied on 
the factor specification data submitted by the respondents for the 
above-mentioned inputs in their questionnaire and supplemental 
questionnaire responses, where applicable, for purposes of selecting 
surrogate values.
    To calculate NV, we multiplied the reported per-unit factor 
quantities by publicly available Indian surrogate values (except where 
noted below). In selecting the surrogate values, we considered the 
quality, specificity, and contemporaneity of the data. As appropriate, 
we adjusted input prices by including freight costs to make them 
delivered prices. Specifically, we added to Indian import surrogate 
values a surrogate freight cost using the shorter of the reported 
distance from the domestic supplier to the factory or the distance from 
the nearest seaport to the factory, where appropriate. This adjustment 
is in accordance with the Court of Appeals for the Federal Circuit's 
decision in Sigma Corp. v. United States, 117 F.3d 1401 (Fed. Cir. 
1997). For a detailed description of all surrogate values used for the 
respondents, see the Factor Valuation Memorandum.
    As explained above, Since Hardware provided evidence that it had 
purchased certain ra