«A-570-900 Admin. Rev.: 1111/12-10/31/13 Public Document AD/CVD 1: DSBs Team June 2, 2015 Ronald K. Lorentzen MEMORANDUM TO: Acting Assistant ...»
UNITED STATES DEPARTMENT OF COMM ERCE
Internat ional Tra de Administration
Washrngtoo. O.C 20230
Admin. Rev.: 1111/12-10/31/13
AD/CVD 1: DSBs Team
June 2, 2015
Ronald K. Lorentzen
Acting Assistant Secretary
for Enforcement and Compliance
FROM: Christian Marsh
Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations SUBJECT: Issues and Decision Memorandum for the Administrative Review of the Antidumping Duty Order on Diamond Sawblades and Parts Thereof from the People's Republic of China Summary We analyzed the case and rebuttal briefs submitted by interested parties in the administrative review of the antidumping duty order on diamond sawblades and parts thereof (diamond sawblades) from the People's Republic of China (the PRC) covering the period November 1, 2012, through October 31,2013. As a result of our analysis, we made changes in the margin calculations. We recommend that you approve the positions we have developed in the Discussion ofthe Issues section of this memorandum. Below is a complete list of the issues for
which we have received comments and rebuttal comments from the interested parties:
1. Separate Rate a. ATM Single Entity - Separate Rate Status b. A TM Single Entity - Cash Deposit Rate c. A TM Single Entity - Whether AFA Is Appropriate d. ATM Single Entity - Presumption of Government Control e. Bosun - Transactions with SASAC
2. Untimely Filed Separate Rate Applications
3. Value-Added Tax
4. Differential Pricing a. Statutory Authority b. Withdrawn Targeted Dumping Regulations c. Cohen's d Test d. Denial of Offsets for Non-Dumped Sales When Using the A-T Method e. Aggregation of A-A and A-T Comparison Results
5. Surrogate Values a. Argon, Nitrogen, and Oxygen b. Cores TRA0 E c. Diamond Powder d. Financial Statements e. Weihai’s Steel Types 2 and 3 f. Tin Powder g. Truck Freight
6. Request To Apply Adverse Facts Available a. Weihai’s Metal Powders b. Bosun’s Diamond Powders c. Bosun’s Binder,Cut Fluid, Ink, and Mixed Gas Background On December 4, 2014, the Department of Commerce (the Department) published the preliminary results of the administrative review of the antidumping duty order on diamond sawblades from the PRC.1 We extended the due date for the final results of review to June 2, 2015. 2 We invited interested parties to comment on the Preliminary Results. We received case 3 and rebuttal 4 briefs from various parties to this administrative review. Pursuant to interested parties’ requests, we held a hearing on April 15, 2015.
Company Abbreviations ATM – Advanced Technology & Materials Co., Ltd.
ATMI – AT&M International Trading Co., Ltd ATM Single Entity – ATM, ATMI, BGY, Cliff, and HXF BGY – Beijing Gang Yan Diamond Products Co.
Bosun – Bosun Tools Co., Ltd.
CISRI – China Iron and Steel Research Institute Group Cliff – Cliff International Ltd.
Danyang Huachang – Danyang Huachang Diamond Tools Manufacturing Co., Ltd.
HXF – HXF Saw Co., Ltd.
KM – K.M. & A.A. Co., Ltd.
SASAC – State-Owned Assets Supervision and Administration Commission of the State Council of the People's Republic of China Shanghai Starcraft – Shanghai Starcraft Tools Company Limited The petitioner – Diamond Sawblades Manufacturers Coalition Trigger – Trigger Co. Philippines, Inc.
1 See Diamond Sawblades and Parts Thereof From the People’s Republic of China: Preliminary Results of Antidumping Duty Administrative Review; 2012–2013, 79 FR 71980 (December 4, 2014) (Preliminary Results), and the accompanying Preliminary Decision Memorandum.
2 See the memorandum to Associate Deputy Assistant Secretary Gary Taverman entitled “Diamond Sawblades and Parts Thereof from the People’s Republic of China: Extension of Deadline for Final Results of Antidumping Duty Administrative Review” dated April 1, 2015, and the memorandum to Deputy Assistant Secretary Christian Marsh entitled “Diamond Sawblades and Parts Thereof from the People’s Republic of China: Second Extension of Deadline for Final Results of Antidumping Duty Administrative Review” dated May 5, 2015.
3 See the case briefs filed by various parties on March 10, 2015.
4 See the rebuttal briefs filed by various parties on March 20, 2015.
Other Abbreviations A-A – average-to-average A-T – average-to-transaction ACCESS – Enforcement and Compliance’s Antidumping and Countervailing Duty Centralized Electronic Service System APA – Administrative Procedure Act AUV – average unit value BOM – bill of material CAFC – Court of Appeals for the Federal Circuit CBP – U.S. Customs and Border Protection CEP – constructed export price CIT – Court of International Trade Company Law – the 1994 Company Law of the PRC CONNUM – control number CVD – countervailing duty Doing Business – Doing Business 2014 – Trading Across Borders in Thailand EP – export price FOPs – factors of production Georgetown Memorandum – the Department’s memorandum to Assistant Secretary David M.
Spooner entitled “Countervailing Duty Investigation of Coated Free Sheet Paper from the People’s Republic of China – Whether the Analytical Elements of the Georgetown Steel Opinion Are Applicable to China’s Present-Day Economy” dated March 29, 2007 GTA – Global Trade Atlas HTS – Harmonized Tariff Schedule I&D Memo – Issues and Decision Memorandum adopted by a Federal Register notice of final determination of an investigation or final results of review LTFV – less than fair value NME – non-market economy POR – period of review SAA – Statement of Administrative Action accompanying the URAA SG&A – selling, general, and administrative SRA- separate rate application SRC – separate rate certification SOE – State-Owned Enterprise The Act – The Tariff Act of 1930, as amended T-T – transaction-to-transaction URAA - Uruguay Round Agreements Act USTR – U.S. Trade Representative VAT – value-added tax WTO – World Trade Organization
3Diamond Sawblades Administrative Determinations and Results
LTFV Final – Diamond Sawblades and Parts Thereof from the People's Republic of China:
Final Determination of Sales at Less Than Fair Value and Final Partial Affirmative Determination of Critical Circumstances, 71 FR 29303 (May 22, 2006), as amended in Notice of Amended Final Determination of Sales at Less Than Fair Value: Diamond Sawblades and Parts Thereof from the People’s Republic of China, 76 FR 35864 (June 22, 2006).
Section 129 Partial Revocation – Certain Frozen Warmwater Shrimp From the People’s Republic of China and Diamond Sawblades and Parts Thereof From the People’s Republic of China: Notice of Implementation of Determinations Under Section 129 of the Uruguay Round Agreements Act and Partial Revocation of the Antidumping Duty Orders, 78 FR 18958 (March 28, 2013).
Diamond Sawblades 1 – Diamond Sawblades and Parts Thereof From the People’s Republic of China: Final Results of Antidumping Duty Administrative Review; 2009-2010, 78 FR 11143 (February 15, 2013).
Diamond Sawblades 2 – Diamond Sawblades and Parts Thereof From the People’s Republic of China: Final Results of Antidumping Duty Administrative Review; 2010-2011, 78 FR 36166 (June 17, 2013), as amended in Diamond Sawblades and Parts Thereof From the People’s Republic of China: Amended Final Results of Antidumping Duty Administrative Review; 2010FR 42930 (July 18, 2013).
Diamond Sawblades 3 - Diamond Sawblades and Parts Thereof From the People’s Republic of China: Final Results of Antidumping Duty Administrative Review; 2011-2012, 79 FR 35723 (June 24, 2014).
Scope of the Order The products covered by the order are all finished circular sawblades, whether slotted or not, with a working part that is comprised of a diamond segment or segments, and parts thereof, regardless of specification or size, except as specifically excluded below. Within the scope of the order are semifinished diamond sawblades, including diamond sawblade cores and diamond sawblade segments. Diamond sawblade cores are circular steel plates, whether or not attached to non-steel plates, with slots. Diamond sawblade cores are manufactured principally, but not exclusively, from alloy steel. A diamond sawblade segment consists of a mixture of diamonds (whether natural or synthetic, and regardless of the quantity of diamonds) and metal powders (including, but not limited to, iron, cobalt, nickel, tungsten carbide) that are formed together into a solid shape (from generally, but not limited to, a heating and pressing process).
Sawblades with diamonds directly attached to the core with a resin or electroplated bond, which thereby do not contain a diamond segment, are not included within the scope of the order.
Diamond sawblades and/or sawblade cores with a thickness of less than 0.025 inches, or with a thickness greater than 1.1 inches, are excluded from the scope of the order. Circular steel plates 4 that have a cutting edge of non-diamond material, such as external teeth that protrude from the outer diameter of the plate, whether or not finished, are excluded from the scope of the order.
Diamond sawblade cores with a Rockwell C hardness of less than 25 are excluded from the scope of the order. Diamond sawblades and/or diamond segment(s) with diamonds that predominantly have a mesh size number greater than 240 (such as 250 or 260) are excluded from the scope of the order.
Merchandise subject to the order is typically imported under heading 8202.39.00.00 of the Harmonized Tariff Schedule of the United States (HTSUS). When packaged together as a set for retail sale with an item that is separately classified under headings 8202 to 8205 of the HTSUS, diamond sawblades or parts thereof may be imported under heading 8206.00.00.00 of the HTSUS. On October 11, 2011, the Department included the 6804.21.00.00 HTSUS classification number to the customs case reference file, pursuant to a request by CBP. 5 The tariff classification is provided for convenience and customs purposes; however, the written description of the scope of the order is dispositive.
Surrogate Country In the Preliminary Results, we treated the PRC as an NME country and, therefore, we calculated normal value in accordance with section 773(c) of the Act. We selected Thailand as the primary surrogate country, pursuant to 19 CFR 351.408(c)(2), because it is at the level of economic development of the PRC, because it is a significant producer of merchandise comparable to subject merchandise, and because of the availability and quality of Thai data for valuing FOPs. 6 For the final results of review, we continued to treat the PRC as an NME country and have continued to use Thailand as the primary surrogate country.
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. 7 It is the Department’s policy to assign all exporters of merchandise subject to review 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. 8 In the Preliminary Results, we found that, in addition to two of the companies we selected for individual examination, certain companies demonstrated their eligibility for separate rate status by demonstrating that they operated free of de jure and de facto government control. Based on 5 See Diamond Sawblades and Parts Thereof From the Republic of Korea: Preliminary Results of Antidumping Duty Administrative Review, 76 FR 76128 (December 6, 2011).
6 See Preliminary Results and the accompanying Preliminary Decision Memorandum at 12-14.
7 See, e.g., LTFV Final, 71 FR at 29307, and Notice of Final Determination of Sales at Less Than Fair Value, and Affirmative Critical Circumstances, In Part: Certain Lined Paper Products From the People’s Republic of China, 71 FR 53079 (September 8, 2006).
8 See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 78 FR 79392 (December 30, 2013) (Initiation Notice).
5 the information on the record of this review, we continue to find that the respondents that received separate rates in the Preliminary Results are eligible for separate rates.
Neither the statute nor the Department’s regulations addresses the establishment of a rate to be applied to companies not selected for individual examination when the Department limits its examination in an administrative review pursuant to section 777A(c)(2) of the Act. Our practice in this regard has been to average the margins for the selected companies, excluding margins that are zero, de minimis, or based entirely on facts available. Consistent with that practice and the Preliminary Results, we have assigned the weighted average of the two selected respondents’ rates based on their ranged U.S. sales values. The two selected respondents for which we calculated individual margins in this review are Bosun and Weihai. For the final results of this review, because we changed the dumping margins for Bosun and Weihai, the rate assigned to the eligible non-selected separate rate companies likewise changes to 2.34 percent. 9 Discussion of the Issues Separate Rate ATM Single Entity – Separate Rate Status Comment 1: The ATM Single Entity argues that the Department’s preliminary denial of the separate rate status for the ATM Single Entity based on Advanced Technology & Materials Co., Ltd. v. United States, Court No. 2014-1154, 2014 U.S. App. LEXIS 20800 (Fed. Cir. 2014) (Advanced Technology & Materials Co., Ltd.) should be reversed. In particular, the ATM Single Entity argues that record evidence does not support denial of its separate rate status and the denial amounts to the application of an adverse inference to a cooperative respondent. The petitioner disagrees and argues that the Department should maintain its decision to deny the ATM Single Entity a separate rate because the ATM Single Entity has not supplied information to rebut the presumption of government control determined in the prior review.