Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China: Preliminary Results and Partial Rescission of the 2005-2006 Administrative Reviews, 10492-10498 [E7-4166]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 72, Number 45 (Thursday, March 8, 2007)]
[Notices]
[Pages 10492-10498]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-4166]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-803]


Heavy Forged Hand Tools, Finished or Unfinished, With or Without 
Handles, From the People's Republic of China: Preliminary Results and 
Partial Rescission of the 2005-2006 Administrative Reviews

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

SUMMARY: The Department of Commerce (the Department) is currently 
conducting the 2005-2006 administrative review of the antidumping duty 
order on heavy forged hand tools, finished or unfinished, with or 
without handles, (heavy forged hand tools) from the People's Republic 
of China (PRC). We preliminarily determined to apply adverse facts 
available (AFA) with respect to four companies which failed to 
cooperate to the best of their ability and failed to demonstrate their 
eligibility for a separate rate, as follows: (a) Hammers/Sledges and 
Bars/Wedges exported by Shandong Machinery Import & Export Company 
(SMC); (b) Axes/Adzes, Bars/Wedges, Hammers/Sledges, and Picks/Mattocks 
(``all four classes or kinds'') exported by Jafsam Metal Products 
(Jafsam); (c) Picks/Mattocks exported by Tianjin Machinery Import and 
Export Corporation (TMC); and (d) Picks/Mattocks and Hammers/Sledges 
exported by Shandong Huarong Machinery Co. (Huarong).
    We are also preliminarily rescinding the following 2005-2006 
administrative reviews: (a) Axes/Adzes and Picks/Mattocks, with regard 
to SMC; (b) Axes/Adzes, Hammers/Sledges, and Picks/Mattocks, with 
regard to Iron Bull Industrial Co., Ltd. (Iron Bull); and (c) all four 
classes or kinds with regard to Shanghai Xinike Trading Company 
(Xinike).
    If these preliminary results are adopted in our final results of 
these reviews, we will instruct U.S. Customs and Border Protection 
(CBP) to assess antidumping duties on entries of subject merchandise 
during the period of review (POR) for which the importer-specific 
assessment rates are above de minimis. 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: March 8, 2007.

FOR FURTHER INFORMATION CONTACT: Mark Flessner or Robert James, AD/CVD 
Enforcement Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
6312 or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 19, 1991, the Department published in the Federal 
Register four antidumping duty orders on heavy forged hand tools from 
the PRC. See Antidumping Duty Orders: Heavy Forged Hand Tools, Finished 
or Unfinished, With or Without Handles From the People's Republic of 
China, 56 FR 6622 (February 19, 1991). Imports covered by these orders 
comprise the following classes or kinds of merchandise: (1) Hammers and 
sledges with heads over 1.5 kg (3.33 pounds) (Hammers/Sledges); (2) 
bars over 18 inches in length, track tools, and wedges (Bars/Wedges); 
(3) Picks/Mattocks; and (4) Axes/Adzes. See ``Scope of the Antidumping 
Duty Orders'' section below for the complete description of subject 
merchandise.
    On February 1, 2006, the Department published in the Federal 
Register a notice of ``Opportunity to Request an Administrative 
Review'' of the antidumping duty order on heavy forged hand tools from 
the PRC for the POR covering February 1, 2005, through January 31, 
2006. See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity to Request Administrative Review, 
71 FR 5239 (February 1, 2006). On February 24, 2006, respondents SMC 
and TMC requested administrative reviews. On February 27, 2006, 
respondents Shanghai Machinery Import & Export Corp. (Shanghai 
Machinery), Huarong, and Shandong Jinma Industrial Group Co., Ltd. 
(Jinma), requested administrative reviews. On February 28, 2006, 
petitioner Council Tool Company requested administrative reviews of 
Huarong, SMC, TMC, Xinike, Iron Bull, and Jafsam. Also on February 28, 
2006, another petitioner, Ames True Temper, requested administrative 
reviews of Huarong, SMC, TMC, Iron

[[Page 10493]]

Bull, and Truper Herramientas S.A. de C.V. (Truper).
    On April 5, 2006, the Department initiated an administrative review 
of the antidumping duty orders listed below covering the POR, February 
1, 2005, through January 31, 2006, with respect to the listed 
companies:

Axes/Adzes A-570-803

Iron Bull Industrial Co., Ltd.
Jafsam Metal Products
Shanghai Machinery Import & Export Corp.
Shanghai Xinike Trading Company
Shandong Huarong Machinery Co., Ltd.
Shandong Jinma Industrial Group Co., Ltd.
Shandong Machinery Import and Export Corporation
Tianjin Machinery Import and Export Corporation
Truper Herramientas S.A. de C.V.

Bars/Wedges A-570-803

Iron Bull Industrial Co., Ltd.
Jafsam Metal Products
Shanghai Machinery Import & Export Corp.
Shanghai Xinike Trading Company
Shandong Huarong Machinery Co., Ltd.
Shandong Jinma Industrial Group Co., Ltd.
Shandong Machinery Import and Export Corporation
Tianjin Machinery Import and Export Corporation
Truper Herramientas S.A. de C.V.

Hammers/Sledges A-570-803

Iron Bull Industrial Co., Ltd.
Jafsam Metal Products
Shanghai Machinery Import & Export Corp.
Shanghai Xinike Trading Company
Shandong Huarong Machinery Co., Ltd.
Shandong Jinma Industrial Group Co., Ltd.
Shandong Machinery Import and Export Corporation
Tianjin Machinery Import and Export Corporation

Picks/Mattocks A-570-803

Iron Bull Industrial Co., Ltd.
Jafsam Metal Products
Shanghai Machinery Import & Export Corp.
Shanghai Xinike Trading Company
Shandong Huarong Machinery Co., Ltd.
Shandong Jinma Industrial Group Co., Ltd.
Shandong Machinery Import and Export Corporation

    See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Deferral of Administrative Reviews, 71 FR 
17077 (April 5, 2006) (Initiation Notice).

Partial Rescission of Review

    During the period specified in the Department's regulations, we 
received multiple withdrawals of requests for review by petitioners and 
respondents. See Memorandum from Mark Flessner to the Record entitled 
``Administrative Review (02/01/2005-01/31/2006) of Heavy Forged Hand 
Tools, Finished or Unfinished, With or Without Handles, from the 
People's Republic of China: Adverse Facts Available and 
Corroboration,'' (AFA and Corroboration Memo), dated February 28, 2007. 
On September 11, 2006, we published a notice rescinding the 
administrative review, in accordance with 19 CFR 351.213(d)(1), with 
respect to Jinma (all four classes or kinds); Shanghai Machinery (all 
four classes or kinds); Truper (all four classes or kinds); TMC (Axes/
Adzes, Hammers/Sledges, and Bars/Wedges); Huarong (Axes/Adzes and Bars/
Wedges); and Iron Bull (Bars/Wedges). See Administrative Review (02/01/
2005-01/31/2006) of Heavy Forged Hand Tools, Finished or Unfinished, 
With or Without Handles, from the People's Republic of China: Notice of 
Rescission of Antidumping Duty Administrative Reviews, 71 FR 53403 
(September 11, 2006) (Rescission Notice).

Preliminary Partial Rescission of 2005-2006 Administrative Review

    We are preliminarily rescinding the review with respect to SMC for 
Axes/Adzes and Picks/Mattocks. SMC reported that it made no shipments 
of subject Axes/Adzes or Picks/Mattocks during the POR and the 
Department was able to review CBP data which support the claim that SMC 
did not export Axes/Adzes and/or Picks/Mattocks during the POR. 
Furthermore, no party has placed evidence on the record demonstrating 
that SMC exported the merchandise identified above during the POR. 
Therefore, in accordance with 19 CFR 351.213(d)(3) and consistent with 
the Department's practice, we are preliminarily rescinding the 
administrative reviews on Axes/Adzes and Picks/Mattocks with respect to 
SMC.
    In addition, we are preliminarily rescinding the review with 
respect to Iron Bull for Axes/Adzes, Hammers/Sledges, and Picks/
Mattocks for the same reason described above.
    The questionnaires sent to Xinike were returned to the Department 
as undeliverable. Given that petitioners had requested this review, we 
requested that they provide an alternate address for this company, but 
they were unable to do so. See Memorandum to the File from Mark 
Flessner entitled, ``Administrative Review (02/01/2005-01/31/2006) of 
Heavy Forged Hand Tools, Finished or Unfinished, With or Without 
Handles, from the People's Republic of China: Attempts to Contact Party 
Shanghai Xinike Trading Company,'' dated May 22, 2006. Because the 
Department was unable to locate Xinike, we are also preliminarily 
rescinding the administrative review with respect to this company in 
all four classes or kinds.

Scope of Orders

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

[[Page 10494]]

and SMC Pacific Tools, Inc., to be within the scope of the Bars/Wedges 
order; (3) on March 8, 2001, the Department found the ``Pulaski'' tool, 
produced without dies by TMC, to be within the scope of the Axes/Adzes 
order; (4) on March 8, 2001, the Department found the ``skinning axe,'' 
imported by Import Traders, Inc., to be within the scope of the Axes/
Adzes order; (5) on December 9, 2004, the Department found the 
``MUTT,'' imported by Olympia Industrial, Inc., under HTSUS 
8205.59.5510, to be within the scope of the Axes/Adzes order; (6) on 
May 23, 2005, the Department found 8-inch by 8-inch and 10-inch by 10-
inch cast tampers, imported by Olympia Industrial, Inc. to be outside 
the scope of the orders; (7) on September 22, 2005, following remand, 
the U.S. Court of International Trade affirmed the Department's 
determination that cast picks are outside the scope of the order; and 
(8) on October 14, 2005, the Department found the Mean Green Splitting 
Machine, imported by Avalanche Industries, under HTSUS 8201.40.60, to 
be within the scope of the Bars/Wedges order.

TMC, Jafsam, and Huarong

    We issued our request for quantity and value data (Q&V), and 
sections A, C, and D antidumping questionnaire \1\ to all respondents 
for which an administrative review had been requested. Although the 
Department confirmed delivery of the questionnaires and extended to 
each company another opportunity to respond, Jafsam did not submit a 
response. See Letter from Robert James, Program Manager, entitled 
``Heavy Forged Hand Tools, Finished or Unfinished, With or Without 
Handles, from the People's Republic of China: 02/01/2005-01/31/2006 
Administrative Review,'' dated May 23, 2006.
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    \1\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under review that it sells, and the manner in which 
it sells that merchandise in all of its markets. Section C requests 
a complete listing of U.S. sales. Section D requests information on 
the cost of production of the foreign like product and the 
constructed value of the merchandise under review.
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    As noted above, the administrative review with regard to TMC was 
rescinded for Axes/Adzes, Hammers/Sledges, and Bars/Wedges, leaving TMC 
subject to review for Picks/Mattocks. Nevertheless, TMC failed to 
submit a questionnaire response with respect to its exports of Picks/
Mattocks. See Rescission Notice. Likewise, the administrative review 
with regard to Huarong was rescinded only for Axes/Adzes and Bars/
Wedges, leaving Huarong subject to review for Hammers/Sledges and 
Picks/Mattocks. However, Huarong failed to submit a response with 
respect to the two remaining classes or kinds of merchandise. See 
Rescission Notice.

SMC

    With respect to SMC, from April 2006 through January 2007, the 
Department issued its initial and supplemental questionnaires. 
Responses were received over the course of this period. In addition, 
parties were invited to submit comments on surrogate country selection 
and factors of production information. Parties submitted information 
with respect to these issues as well.

Non-Market Economy Country

    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 a NME country shall remain in effect until revoked by the 
administering authority. See, e.g., Heavy Forged Hand Tools, Finished 
or Unfinished, With or Without Handles, From the People's Republic of 
China: Final Results of Antidumping Duty Administrative Reviews and 
Final Rescission and Partial Rescission of Antidumping Duty 
Administrative Reviews, 71 FR 54269 (September 14, 2006) (Final Results 
of 14th Review). None of the parties to this proceeding has contested 
such treatment.

Separate Rates

    As discussed below, SMC (with respect to Hammers/Sledges and Bars/
Wedges) failed to adequately respond to the Department's requests for 
information. TMC (with respect to the class or kind of merchandise 
Picks/Mattocks), Huarong (with respect to Hammers/Sledges and Picks/
Mattocks), and Jafsam (with respect to all four classes or kinds) 
failed to respond to the Department's requests for information. See AFA 
and Corroboration Memo; see also Facts Available section below.
    To establish whether a company operating in a NME is sufficiently 
independent to be entitled to a separate rate, the Department analyzes 
each exporting entity under the test established in the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588 (May 6, 1991), as amplified by 
the Final Determination of Sales at Less Than Fair Value: Silicon 
Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994). 
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 governmental control over export 
activities.
    In the Initiation Notice, the Department stated, ``If one of the 
above-named companies does not qualify for a separate rate, all other 
exporters of Heavy Forged Hand Tools from the People's Republic of 
China who have not qualified for a separate rate are deemed to be 
covered by this review as part of the single PRC entity of which the 
named exporters are a part.'' See Initiation Notice, n.6.
    By failing to adequately respond to the Department's requests for 
information, SMC, TMC, Huarong, and Jafsam (pertaining to the classes 
or kinds identified above) have not demonstrated they are free of 
government control, are therefore not eligible to receive a separate 
rate, and are accordingly being treated as part of the PRC-wide entity. 
See AFA and Corroboration Memo.
    The PRC-wide entity including SMC, TMC, Huarong, and Jafsam 
(pertaining to the classes or kinds identified above) failed to 
adequately respond to the Department's requests for information. 
Because the PRC-wide entity did not cooperate to the best of its 
ability in the proceeding, the Department finds it appropriate, 
pursuant to sections 776(a)(2) and 776(b) of the Act, to use AFA as the 
basis for these preliminary results of review for the PRC-wide entity.

Adverse Facts Available

1. Application of Adverse Facts Available

    For the reasons outlined below, we have applied total adverse facts 
available to the PRC-wide entity, which includes SMC (with respect to 
Hammers/Sledges and Bars/Wedges), TMC (with respect to Picks/Mattocks), 
Huarong (with respect to Hammers/Sledges and Picks/Mattocks), and 
Jafsam (with respect to all four classes or kinds). Section 776(a)(2) 
of the Act provides that, if an interested party: (A) Withholds 
information that has been requested by the Department; (B) fails to 
provide such information in a timely manner or in the form or manner 
requested subject to sections 782(c)(1) and (e) of the Act; (C) 
significantly impedes a proceeding under the antidumping statute; or 
(D) provides such information but the information cannot be verified, 
the Department shall, subject to section 782(d) of the

[[Page 10495]]

Act, use facts otherwise available in reaching the applicable 
determination.
    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 also Notice of Final 
Results of Antidumping Duty Administrative Review: Stainless Steel Bar 
from India, 70 FR 54023, 54025-26 (September 13, 2005); and 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 (August 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 
SAA at 870. 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, 1382-83 (Fed. Cir. 2003) 
(Nippon).
    We preliminarily find that SMC (with respect to Hammers/Sledges and 
Bars/Wedges), TMC (with respect to Picks/Mattocks), Huarong (with 
respect to Hammers/Sledges and Picks/Mattocks), and Jafsam (with 
respect to all four classes or kinds) did not act to the best of their 
abilities in this proceeding, within the meaning of section 776(b) of 
the Act, because they failed to respond to the Department's requests 
for information. Therefore, an adverse inference is warranted in 
selecting from the facts otherwise available with respect to these 
companies. See Nippon, 337 F.3d at 1382-83.
SMC
    From the start of this review, SMC has significantly impeded the 
Department's proceeding. SMC repeatedly either failed to answer, or 
provided contradictory answers to, many of the questions asked by the 
Department, calling into question the usability and reliability of the 
responses as a whole. For example, the May 11, 23, and 30, 2006, 
section A, C, and D responses were significantly deficient (with regard 
to all three sections), requiring the Department to issue an extensive 
first supplemental questionnaire. Likewise, SMC's September 15, 2006, 
responses were also deficient with regard to all three sections (A, C, 
and D), requiring the Department to issue another extensive 
supplemental questionnaire. SMC's January 22 and 24, 2007, responses 
also failed to provide adequate answers which would enable the 
Department (a) to understand the company's structure and ownership, (b) 
to compare the prices at which SMC's subject merchandise was sold in or 
to the United States with a constructed value, and (c) to value the 
factors of production necessary to calculate export price, constructed 
export price, or normal value. See AFA and Corroboration Memo.
    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 assigned a single 
antidumping duty deposit rate. It is the Department's policy to assign 
all exporters of merchandise subject to investigation in an NME country 
this single rate unless an exporter can demonstrate that it is 
sufficiently independent so as to be entitled to a separate rate. SMC 
did not adequately answer the questions posed by the Department 
regarding its eligibility for receiving a separate rate in this 
proceeding. Under the heading of ``Separate Rates'' in the original 
questionnaire, the Department asked SMC, among other things, three 
questions which are crucial to the separate rates determination. SMC 
was asked to describe and explain: (i) Who owns your company, (ii) who 
controls your company, and (iii) your company's relationship with the 
national, provincial, and local governments. Throughout three separate 
sets of responses, SMC never clearly answered these questions. See AFA 
and Corroboration Memo.
    SMC's section D response also had multiple deficiencies which 
prevented the Department from being able to calculate a surrogate 
normal value. For example, in the original section D questionnaire 
response, the entirety of SMC's section D data was based on activity 
prior to the beginning of the instant POR. See SMC's section D response 
dated May 30, 2006. In the first supplemental questionnaire, SMC was 
asked to provide a detailed text explanation. SMC stated that all its 
sales to the United States during this POR were filled from stock from 
production for the previous POR (2004-2005). See SMC's 1st supplemental 
questionnaire responses dated September 15, 2006. The Department, in 
its second supplemental questionnaire, asked SMC to provide source 
documents which would show that the entirety of the stocks of subject 
merchandise SMC sold during the POR was acquired by SMC during the 
previous POR. SMC did not provide the requested documentation, 
rendering its entire section D database unreliable and unusable. See 
SMC's Second Supplemental Questionnaire response, dated January 24, 
2007; see also AFA and Corroboration Memo.
    SMC's section C database is also rendered unusable as a result of 
SMC's continued and repeated failure to provide data on U.S. sales. For 
example, SMC failed to report any expenses paid in market economy 
currencies. SMC reported in the original section C questionnaire 
response that it had incurred some, but not all, of its freight 
expenses in market economy currencies but failed to provide any details 
or documentation. See SMC's Section C Questionnaire Response, dated May 
23, 2006. In its first supplemental questionnaire response, SMC stated 
it had no market economy expenses on U.S. sales. See SMC's Section C 
Questionnaire Response, dated May 23, 2006. In its second supplemental 
questionnaire response, SMC stated that it incurred some freight 
expenses in market economy currencies, but continued to fail to provide 
any details or documentation. See SMC's 2nd supplemental A and C 
questionnaire responses dated January 22, 2007; see also AFA and 
Corroboration Memo. The Deaprtment was unable to evaluate any of the 
market economy inputs which are a critical portion of the NME section C 
questionnaire.
    As demonstrated above, SMC withheld requested information, failed 
to provide reliable and usable responses to the Department's 
questionnaires, and significantly impeded this proceeding, warranting 
the use of facts available under sections 776(a)(2)(A), (B), and (C) of 
the Act. Given that its own records (which, for example, would at a 
minimum have reflected any remaining stocks from the previous POR) were 
reasonably available to SMC, we preliminarily find that SMC has failed 
to cooperate by not acting to the best of its ability to comply with 
the Department's requests for information. Accordingly, we have 
preliminarily applied adverse facts available. See Section 776(b) of 
the Act.
Jafsam, TMC, and Huarong
    Although the Department confirmed delivery of the questionnaires 
and extended another opportunity to respond, Jafsam did not submit a 
response to any section of the Department's questionnaires. See Letter 
from Robert James, Program Manager, entitled ``Heavy Forged Hand Tools,

[[Page 10496]]

Finished or Unfinished, With or Without Handles, from the People's 
Republic of China: 02/01/2005-01/31/2006 Administrative Review,'' dated 
May 23, 2006. The administrative review with regard to TMC was 
rescinded only in Axes/Adzes, Hammers/Sledges, and Bars/Wedges. See 
Rescission Notice.
    The administrative review with regard to Huarong was rescinded only 
with respect to Axes/Adzes and Bars/Wedges. See Rescission Notice. 
Despite having requested these reviews, TMC and Huarong did not submit 
responses to the Department's Q&V or section A, C, and D questionnaires 
in their respective classes or kinds.
    By not responding to the Department's request for information, 
Jafsam, TMC, and Huarong each withheld information that had been 
requested by the administering authority (i.e., the Department), failed 
to provide such information by the deadline for submission of the 
information and in the form and manner requested, and significantly 
impeded the review.
    Therefore, pursuant to sections 776(a)(2)(A), (B), and (C) of the 
Tariff Act, the Department shall apply facts available to all three of 
these companies. Further, as the information was reasonably available 
to Jafsam, TMC, and Huarong, we preliminarily find that Jafsam, TMC, 
and Huarong have failed to cooperate by not acting to the best of their 
ability to comply with the Department's requests for information. 
Accordingly, we have preliminarily applied adverse facts available to 
these three companies. See section 776(b) of the Act.

2. Selection of AFA Rate

    Section 776(b) of the Act provides that the Department may use as 
AFA, information derived from: (1) The petition; (2) the final 
determination in the investigation; (3) any previous review; or (4) any 
other information placed on the record.
    In administrative 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 (April 21, 2003); see also Stainless 
Steel Plate in Coils from Taiwan: Preliminary Results and Rescission in 
part of Antidumping Duty Administrative Review, 67 FR 5789 (February 7, 
2002). The U.S. Court of International Trade (CIT) and the Court of 
Appeals for the Federal Circuit have consistently upheld the 
Department's practice in several cases. See Rhone Poulenc, Inc. v. 
United States, 899 F. 2d 1185, 1190 (Fed. Cir. 1990) (Rhone Poulenc); 
see also 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 LTFV investigation); 
see also 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); see 
also Shanghai Taoen International Trading Co., Ltd. v. United States, 
Slip Op. 05-22, at 16 (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 adverse rate from among 
the possible sources of information is to ensure that the margin is 
sufficiently adverse so ``as to effectuate the purpose of the facts 
available role to induce respondents to provide the Department with 
complete and accurate information in a timely manner.'' See Static 
Random Access Memory Semiconductors from Taiwan; Final Determination of 
Sales at Less than Fair Value, 63 FR 8909, 8932 (February 23, 1998); 
see also Certain Steel Concrete Reinforcing Bars from Turkey; Final 
Results and Rescission of Antidumping Duty Administrative Review in 
Part, 71 FR 65082, 65084 (November 7, 2006). The Department's practice 
is to ensure ``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 D&L Supply Co. v. United States, 113 F. 3d 1220, 1223 
(Fed. Cir. 1997) (D&L Supply); see also Final Determination of Sales at 
Less than Fair Value: Certain Frozen and Canned Warmwater Shrimp from 
Brazil, 69 FR 76910 (December 23, 2004). 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.'' Rhone Poulenc, 899 
F. 2d at 1190.
    As AFA, we are preliminarily assigning to the PRC-wide entity's 
sales of Axes/Adzes, Bars/Wedges, Hammers/Sledges, and Picks/Mattocks 
the rates of 189.37, 139.31, 45.42, and 98.77 percent, respectively. 
See AFA and Corroboration Memo.

3. Corroboration

    Section 776(c) of the Act requires that the Department corroborate, 
to the extent practicable, secondary information used as facts 
available. Secondary information is defined as ``information derived 
from the petition that gave rise to the investigation or review, the 
final determination concerning the subject merchandise, or any previous 
review under section 751 concerning the subject merchandise.'' See SAA 
at 870; 19 CFR 351.308(d). Under section 776(c) of the Act, the 
Department is granted a wide discretion in its selection of secondary 
information, i.e., the AFA rate, as long as the Department can 
determine, to the extent practicable, that the AFA rate has probative 
value. See SAA at 870.
    The SAA further provides that the term ``corroborate'' means that 
the Department will satisfy itself that the secondary information to be 
used has probative value. See SAA at 870. Thus, to corroborate 
secondary information, the Department will, to the extent practicable, 
examine the reliability and relevance of the information used. However, 
unlike other types of information, such as input costs or selling 
expenses, there are no independent sources for calculated dumping 
margins. The only sources for calculated margins are administrative 
determinations. The rate selected as AFA for the PRC-wide entity's 
sales of Axes/Adzes is the highest calculated rate of any segment in 
this proceeding, which was calculated in the 14th administrative 
review. See Final Results of 14th Review. The rate selected as AFA for 
Bars/Wedges was calculated during the 1998-1999 administrative review, 
and was corroborated and used as the PRC-wide and AFA rate in the most 
recently completed administrative review. See Final Results of 14th 
Review. The AFA rate we are applying for the order on Hammers/Sledges 
was applied as ``best information available'' (the predecessor to AFA) 
during the LTFV investigation for the sole respondent China National 
Machinery Import & Export Corporation, and was again corroborated and 
used as the PRC-wide and AFA rate in the 14th review. Id. The AFA rate 
we are applying for the order on Picks/Mattocks was calculated in the 
fifth review, became the PRC-wide and AFA rate in the seventh review, 
and has been used since. Id. These rates are applied to the PRC-wide 
entity, i.e., those companies not eligible

[[Page 10497]]

for a separate rate with regard to the individual class or kind of 
merchandise. No information has been presented in the current review 
that calls into question the reliability of the information used for 
these AFA rates. Thus, the Department finds that the information 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. See Fresh Cut Flowers from Mexico: Final Results of 
Antidumping Administrative Review, 61 FR 6812 (February 22, 1996) 
(where 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, 113 F.3d at 1221 (the Department will not use a margin that has 
been judicially invalidated). None of these unusual circumstances are 
present with respect to the rates being used here.
    The 139.31 percent rate for Bars/Wedges calculated in the eighth 
review was affirmed by the Court of Appeals for Federal Circuit, and is 
therefore a final margin. See Shandong Huarong General Corp v. United 
States, 159 F.Supp.2d 714 (CIT 2001) (remanding final results); see 
also Shandong Huarong General Corp v. United States, 177 F.Supp.2d 1304 
(CIT 2001) (sustaining remand), aff'd 60 Fed. Appx. 797 (Fed. Cir. 
2003). This rate is also the PRC-wide rate for Bars/Wedges published in 
the most recently completed administrative review of this antidumping 
order. See Final Results of 14th Review. Thus, this rate is the highest 
rate in the proceeding and was calculated using verified information 
provided by TMC during the 8th administrative review of the Bars/Wedges 
order. Accordingly, we continue to find that this rate, instead of 
other recently calculated rates, is an appropriate AFA rate for the 
PRC-wide entity because it offers a more adequate incentive to induce 
the PRC-wide entity, including SMC, Jafsam, and Huarong, to cooperate 
in this proceeding. We note that this rate has been applied in the 
11th, 12th, 13th, and 14th reviews as an AFA rate. See Heavy Forged 
Hand Tools, Finished or Unfinished, With or Without Handles, From the 
People's Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review of the Order on Bars and Wedges, 68 FR 10690 
(March 6, 2003); see also Heavy Forged Hand Tools, Finished or 
Unfinished, With or Without Handles, From the People's Republic of 
China: Final Results of Antidumping Duty Administrative Reviews, Final 
Partial Rescission of Antidumping Duty Administrative Reviews, and 
Determination Not To Revoke in Part, 69 FR 55581 (September 15, 2004); 
see also Heavy Forged Hand Tools, Finished or Unfinished, With or 
Without Handles, From the People's Republic of China: Notice of Amended 
Final Results of Antidumping Duty Administrative Reviews, 69 FR 69892 
(December 1, 2004); see also Heavy Forged Hand Tools, Finished or 
Unfinished, With or Without Handles, From the People's Republic of 
China: Final Results of Antidumping Duty Administrative Reviews and 
Final Rescission and Partial Rescission of Antidumping Duty 
Administrative Reviews, 70 FR 54897 (September 19, 2005); see also 
Final Results of 14th Review.
    As stated above, the rates selected for Axes/Adzes, Bars/Wedges, 
Hammers/Sledges, and Picks/Mattocks are the rates currently applicable 
to the PRC-wide entity and they are not being applied to companies 
which have demonstrated their eligibility for a separate rate. The 
Department assumes that if an uncooperative respondent could have 
demonstrated a lower rate, it would have cooperated. See Rhone Poulenc, 
899 F. 2d at 1190; cf. Ta Chen Stainless Steel Pipe, Inc. v. United 
States, 24 CIT 841 (2000) (respondents should not benefit from failure 
to cooperate).
    The information used in calculating these margins was based on 
sales and production data of respondents in a prior review, together 
with the most appropriate surrogate value information available to the 
Department, chosen from submissions by the parties in that review, as 
well as gathered by the Department itself, or on ``best information 
available'' from the LTFV investigation. Furthermore, the calculations 
were subject to comment from interested parties in the proceeding. See 
Final Results of 14th Review at page 54270. Moreover, as there is no 
information on the record of this review that demonstrates that these 
rates are not appropriate to use as AFA, we determine that these rates 
have relevance. As these rates are both reliable and relevant, we 
determine that they have probative value. Accordingly, the selected 
rates of 189.37 percent for Axes/Adzes, 139.31 percent for Bars/Wedges, 
45.42 percent for Hammers/Sledges, and 98.77 percent for Picks/
Mattocks, the highest rates from any segment of this administrative 
proceeding (i.e., the calculated and current PRC-wide rate for each 
order) have been corroborated, to the extent practicable and as 
necessary, in accordance with section 776(c) of the Act.

Preliminary Results of the Review

    As a result of our reviews, we preliminarily find that the 
following margins exist for the period February 1, 2005, through 
January 31, 2006:

------------------------------------------------------------------------
                                                       Weighted-average
          Manufacturer/exporter  (percent)                  margin
------------------------------------------------------------------------
            Heavy Forged Hand Tools from the PRC: Axes/Adzes
------------------------------------------------------------------------
PRC-Wide Rate......................................           \2\ 189.37
------------------------------------------------------------------------
            Heavy Forged Hand Tools from the PRC: Bars/Wedges
------------------------------------------------------------------------
PRC-Wide Rate......................................           \3\ 139.31
------------------------------------------------------------------------
          Heavy Forged Hand Tools from the PRC: Hammers/Sledges
------------------------------------------------------------------------
PRC-Wide Rate......................................            \4\ 45.42
------------------------------------------------------------------------

[[Page 10498]]

 
          Heavy Forged Hand Tools from the PRC: Picks/Mattocks
------------------------------------------------------------------------
PRC-Wide Rate......................................            \5\ 98.77
------------------------------------------------------------------------

    Case briefs from interested parties may be submitted not later than 
30 days of the date of publication of this notice, pursuant to 19 CFR 
351.309(c). Rebuttal briefs, limited to issues raised in the case 
briefs, will be due five days later, pursuant to 19 CFR 351.309(d). 
Parties who submit case or rebuttal briefs in this proceeding are 
requested to submit with each argument (1) a statement of the issue and 
(2) a brief summary of the argument not to exceed five pages. Parties 
are also encouraged to provide a table of statutes, regulations, and 
cases cited, and a diskette containing the electronic version.
---------------------------------------------------------------------------

    \2\ The PRC-wide entity for Axes/Adzes includes Jafsam.
    \3\ The PRC-wide entity for Bars/Wedges includes SMC and Jafsam.
    \4\ The PRC-wide entity for Hammers/Sledges includes SMC, 
Jafsam, and Huarong.
    \5\ The PRC-wide entity for Picks/Mattocks includes Jafsam, TMC, 
and Huarong.
---------------------------------------------------------------------------

    Any interested party may request a hearing within 30 days of 
publication of this notice. Interested parties who wish to request a 
hearing or to participate if one is requested, must submit a written 
request to the Assistant Secretary for Import Administration within 30 
days of the date of publication of this notice. Requests should 
contain: (1) The party's name, address, and telephone number; (2) the 
number of participants; and (3) a list of issues to be discussed. See 
19 CFR 351.310(c). Issues raised in the hearing will be limited to 
those raised in the briefs. Any hearing will normally be held 37 days 
after the publication of this notice, or the first business day 
thereafter, unless the Department alters the date per 19 CFR 
351.310(d).
    The Department will issue the final results of these reviews, 
including the results of its analysis of issues raised in any such 
written briefs or at the hearing, if held, not later than 120 days 
after the date of publication of this notice.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. The Department intends to issue 
appropriate appraisement instructions for the companies subject to 
these reviews directly to CBP within 15 days of publication of the 
final results of these reviews. However, the final results of this 
review shall be the basis for the assessment of antidumping duties on 
entries of merchandise covered by the final results of these reviews 
and for future deposits of estimated duties, where applicable.

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of the final results of these reviews for all shipments of 
the subject merchandise entered, or withdrawn from warehouse, for 
consumption on or after the publication date, as provided for by 
section 751(a)(2)(C) of the Act: (1) For the exporters listed above, 
the cash deposit rate will be that established in the final results of 
this review (except, if the rate is zero or de minimis, no cash deposit 
will be required); (2) for previously investigated or reviewed PRC and 
non-PRC exporters not listed above that have separate rates, the cash 
deposit rate will continue to be the exporter-specific rate published 
for the most recently completed review; (3) for all PRC exporters of 
subject merchandise which have not been found to be entitled to a 
separate rate, the cash deposit rate will be the PRC-wide rate for each 
class or kind of merchandise as follows: (a) Axes/Adzes, 189.37 
percent; (b) Hammers/Sledges, 45.42 percent; (c) Picks/Mattocks, 98.77 
percent; and (d) Bars/Wedges, 139.31 percent; and (4) for all non-PRC 
exporters of subject merchandise which have not received their own 
rate, the cash deposit rate will be the rate applicable to the PRC 
exporters that supplied that non-PRC exporter. These deposit 
requirements, when imposed, shall remain in effect until further 
notice.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    These administrative reviews and notice are in accordance with 
sections 751(a)(1), 751(a)(2)(B), and 777(i) of the Act and 19 CFR 
351.213 and 351.214.

    Dated: February 28, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-4166 Filed 3-7-07; 8:45 am]
BILLING CODE 3510-DS-P