[Federal Register Volume 61, Number 192 (Wednesday, October 2, 1996)]
[Notices]
[Pages 51427-51434]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25243]
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DEPARTMENT OF COMMERCE
[A-485-602]
Tapered Roller Bearings and Parts Thereof, Finished or
Unfinished, From the Republic of Romania; Final Results and Rescission
in Part of Antidumping Duty Administrative Review
AGENCY: International Trade Administration, Import Administration,
Department of Commerce.
ACTION: Notice of final results and rescission in part of antidumping
duty administrative review.
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SUMMARY: On April 8, 1996, the Department of Commerce (the Department)
published the preliminary results of its administrative review of the
antidumping duty order on tapered roller bearings and parts thereof,
finished or unfinished (TRBs), from Romania. This review covers the
period June 1, 1994 through May 31, 1995.
EFFECTIVE DATE: October 2, 1996.
FOR FURTHER INFORMATION CONTACT: Karin Price or Maureen Flannery,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington D.C. 20230; telephone (202) 482-4733.
Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
current regulations, as amended by the interim regulations published in
the Federal Register on May 11, 1995 (60 FR 25130).
Background
On April 8, 1996, the Department published in the Federal Register
(61 FR 15465) the preliminary results of its administrative review of
the antidumping duty order on TRBs from Romania (52 FR 23320, June 19,
1987). We conducted a hearing on May 22, 1996. On July 30, 1996, we
extended the time limit for the final results to September 25, 1996 (61
FR 39631). We have now completed the administrative review in
accordance with section 751 of the Act.
Scope of the Review
Imports covered by this review are shipments of TRBs from Romania.
These products include flange, take-up cartridge, and hanger units
incorporating tapered roller bearings, and tapered roller housings
(except pillow blocks) incorporating tapered rollers, with or without
spindles, whether or not for automotive use. This merchandise is
currently classifiable under Harmonized Tariff Schedule (HTS) item
numbers 8482.20.00, 8482.91.00, 8482.99.30, 8483.20.40, 8483.30.40, and
8483.90.20. Although the HTS item numbers are provided for convenience
and Customs purposes, the written description of the scope of this
order remains dispositive.
This review covers eight companies and the period June 1, 1994
through May 31, 1995. Of the eight companies for which petitioner
requested a review, only Tehnoimportexport (TIE) made shipments of the
subject merchandise to the United States during the period of review.
Analysis of Comments Received
We invited interested parties to comment on the preliminary
results. We received written comments from the respondent, TIE, and the
petitioner, The
[[Page 51428]]
Timken Company (Timken). At the request of both parties, a public
hearing was held on May 22, 1996.
Comment 1
TIE argues that the Department should not use surrogate data from
the Thailand bearing producers NMB Thai and Pelmec Thai (NMB/Pelmec)
for overhead and selling, general, and administrative (SG&A) expenses,
because the Thai producers manufacture ball bearings that are more
sophisticated than TIE bearings. TIE cites NMB/Pelmec's own catalogs as
evidence of the sophistication of those companies'' bearings, and notes
that the Department recognized, in a review of antifriction bearings
(AFBs) from Romania, that NMB/Pelmec may not be ideal for purposes of
comparison to TIE.
Timken counters that the rates from NMB/Pelmec used by the
Department are the only reasonable values on the record regarding costs
of producers of comparable merchandise in a country at a level of
economic development comparable to that of Romania.
Department's Position
We agree with Timken. As discussed in the preliminary results of
this review, we determined that Thailand is at a level of economic
development comparable to that of Romania and is a significant producer
of bearings. Therefore, we selected Thailand as a surrogate country.
Where we were unable to locate publicly available published information
(PAPI) to establish surrogate values from the primary surrogate
country, Poland, we used Thai values. Notwithstanding any differences
in the level of sophistication of bearings between the Thai and
Romanian companies, NMB/Pelmec was the best available source of
surrogate values from Thailand. Furthermore, the degree of
sophistication of the bearings sold by the Thai companies would not
directly impact the amount of SG&A expenses incurred by the company.
Comment 2
TIE argues that the Department's use of ranged Thai data to
establish SG&A and overhead rates violates due process. TIE notes that
the Department used ranged data based on the proprietary version of
NMB/Pelmec's response--data TIE cannot independently verify. Further,
TIE notes that the Department did not secure permission from NMB/Pelmec
to use its data for this particular review, as it did when the data was
used in a previous review of AFBs from Romania.
Timken responds that the rates are the best available, and should
be retained by the Department. Timken notes that in typical non-market
economy (NME) cases, the Department historically has relied on rates
supplied by the embassy of the surrogate country, without independently
verifying the underlying data. See transcript of the hearing, May 22,
1996, page 39.
Department's Position
We agree with Timken. The data used for this review were publicly
available information from producers in a comparable industry (NMB/
Pelmec), in a country deemed a suitable surrogate (Thailand). The fact
that the underlying data used to arrive at the publicly available rates
were proprietary is irrelevant; the ranged data are publicly available
on the record of the 1988-90 antidumping review of AFBs from Romania,
and we have placed these data on the record of this review. It is not
necessary for the Department to secure permission to use data that is
already in the public domain. Thus, the Department has continued to use
the NMB/Pelmec values.
Comment 3
TIE argues that the Department's use of the same Thai SG&A data in
the 1988-90 review of AFBs from Romania was based on application of
adverse best information available (BIA), which is not relevant to this
review. TIE notes that its alleged failure to provide certain
information regarding selling expenses during the course of the 1988-90
AFB review resulted in the Department's applying the SG&A rate as
adverse BIA. Further, this same rate was rejected in the subsequent AFB
review because adverse BIA was not warranted.
TIE further argues the rate should not be used as other than
adverse BIA, because certain expenses included in the NMB/Pelmec SG&A
calculation are not applicable to TIE. Since the Department has made no
findings in this review that TIE has not provided all necessary
information, TIE claims, adverse BIA is unwarranted, and by extension,
use of the NMB/Pelmec rate is inappropriate.
Timken notes that, unlike the numbers often used by the Department
from embassy correspondence, or estimates from companies'' annual
reports, the NMB/Pelmec rates are based on actual questionnaire
responses. Timken concludes that these rates are as accurate as, if not
more accurate than, any other rates used in NME antidumping duty
proceedings.
Department's Position
We recognize that, in the 1988-90 review of AFBs from Romania, the
Thai SG&A rate was applied as adverse BIA, and we recognize that this
rate includes non-SG&A expenses. As this rate was being used as adverse
BIA in that review, we did not consider whether the rate included non-
SG&A expenses at that time. However, we agree that, if a surrogate SG&A
value includes expenses that are generally not considered to be SG&A
expenses, these components should be excluded from the surrogate value.
After further analysis of the NMB/Pelmec SG&A rate, we find that the
rate included adjustments for inland freight and import duties on raw
materials, which generally are not categorized as SG&A expenses.
Furthermore, because we have already accounted for inland freight costs
elsewhere in our calculations, inclusion in the applied SG&A rate would
double-count this expense. Therefore, for the purposes of this review,
we have recalculated the Thai SG&A expense to exclude inland freight
and import duties on raw material inputs.
Comment 4
TIE argues that the Thai SG&A rate is aberrational, and that the
Department has an obligation not to use aberrational data.
According to TIE, because the SG&A expenses calculated by the
Department are the highest ever calculated in any NME case, the data
are aberrational, and should be rejected. TIE notes that the Department
has refused to use data in other cases because it determined that such
data conflicted with other publicly available data, and was, therefore,
unrepresentative.
Timken notes that because the NMB/Pelmec SG&A and overhead expense
data are derived from actual questionnaire responses, it is likely that
the rate is as accurate as, if not more accurate than, any other rates
used in previous antidumping proceedings. Furthermore, petitioner
claims, it is logical that overhead rates stated as a percentage of
total cost of production will be higher in countries in which labor
costs are lower, as is the case in developing countries such as
Thailand.
Department's Position
There is nothing on the record of this review to suggest that the
NMB/Pelmec SG&A expense is not reflective of the Thai bearings
industry. In fact, to our knowledge, NMB/Pelmec are the only bearing
producers in Thailand. Accordingly, we do not view the NMB/Pelmec SG&A
expense as aberrational.
[[Page 51429]]
Comment 5
TIE argues that, instead of using the NMB/Pelmec SG&A value, the
Department should use ``Yugoslavian or other data,'' and cites the data
it put on the record on March 28, 1996. TIE notes that the Department
used Yugoslavia as a surrogate country in the last completed review of
Romanian TRBs, and argues that the ten percent rate used in that review
is more logical than the NMB/Pelmec rate.
Timken notes that TIE admits that this Yugoslavian rate was simply
the former ten percent statutory minimum. Timken argues that, because
the statutory minimum is no longer valid, the ten percent rate should
be disregarded.
Department's Position
We agree with Timken. Yugoslavia is not a valid surrogate country
for this review, due to changed conditions since 1988-89, the period of
the review to which respondent refers. Therefore, it would not be
appropriate to use a Yugoslavian rate, except in the absence of a
publicly available SG&A rate from one of the suitable surrogate
countries, such as Thailand. Furthermore, although Yugoslavia was used
as a surrogate country in a past review, the SG&A rate used was
actually the ten percent statutory minimum, which is not valid under
the controlling statute.
Comment 6
TIE advocates the use of the former statutory minimum of ten
percent for the SG&A expense. TIE notes that the Department is using an
eight percent figure for profit, the former statutory minimum for
profit. Further, TIE notes that the Department has never used a figure
other than the former statutory minimum of ten percent for SG&A, except
where the Department selected an adverse BIA rate. Thus, TIE argues,
there is little or no evidence that the SG&A rate exceeds ten percent.
TIE claims that in market-economy bearings cases where SG&A has been
calculated, the expense has rarely exceeded ten percent.
Timken notes that as a result of Article 2.2.2 of the Uruguay
Round's Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade, the statute eliminates the minimum rate
for SG&A, and mandates use of actual rates where possible.
Department's Position
We agree with Timken. Under the controlling statute, the statutory
minimum of ten percent for SG&A is invalid, and the Department must use
actual rates when possible. See 19 U.S.C. 1677b(e)(2). Hence, the
Department has continued to use the actual SG&A rate from NMB/Pelmec,
two producers of comparable merchandise from a qualifying surrogate
country. Use of the former statutory minimum in previous reviews has no
bearing on this review. Furthermore, TIE incorrectly states that the
Department is using the former eight percent minimum for profit. We are
using eight percent as the profit margin in this review not because it
was formerly the statutory minimum profit figure, but because publicly
available information indicates that the profit figure is not less than
eight percent.
Comment 7
TIE argues that the Department fails to describe the expenses
included within the NMB/Pelmec overhead rate, and that the rate should
therefore be rejected. TIE claims a breakdown of overhead expenses is
impossible to generate, and that some components likely should be
excluded to match the overhead for TIE.
Department's Position
The Department generally does not dissect the overhead rate of a
surrogate country and apply only components relevant to the producer.
It is generally not possible to break the surrogate overhead value into
its individual components, at the level of detail that would be
necessary to value each individual component of the NME producer's
overhead. See Notice of Preliminary Determination of Sales at Less Than
Fair Value and Postponement of Final Determination: Certain Partial-
Extension Steel Drawer Slides with Rollers from the People's Republic
of China (60 FR 29571, June 5, 1995) (Drawer Slides) and Notice of
Final Determination of Sales at Less Than Fair Value: Disposable Pocket
Lighters from the People's Republic of China (60 FR 22359, 29575, June
5, 1995). Rarely, if ever, will it be known that there is an exact
correlation between overhead expense components of the NME producer and
the components of the surrogate overhead expenses. Therefore, as
discussed in Drawer Slides, the Department normally bases normal value
completely on factor values from a surrogate country on the premise
that the actual experience in the NME cannot meaningfully be
considered. Accordingly, Department practice is to accept a valid
surrogate overhead rate as wholly applicable to the NME producer in
question.
Comment 8
TIE contends the NMB/Pelmec overhead rate is an improper surrogate
for Romanian overhead costs. Because TIE uses technology and machinery
from the 1960s, its equipment is fully depreciated. TIE argues NMB/
Pelmec's factories, which utilize expensive, modern equipment, have
large depreciation expenses built into overhead. Therefore, the
overhead rates as a percentage of the cost of manufacturing (COM) are
not comparable to overhead rates for Romanian companies, or for
comparable companies in Thailand or other surrogate countries, and
should not be used as a surrogate for TIE's overhead.
Further, TIE argues that NMB/Pelmec's miniature, high-precision
bearings use less raw materials than do TIE's bearings, which are
larger. Therefore, TIE reasons, overhead as a percentage of the cost of
manufacturing is higher for smaller bearings. By extension, TIE argues,
the overhead rate for TIE, as a percentage of raw materials and labor,
should be lower than the rate from NMB/Pelmec.
Timken notes that while TIE may have depreciated its equipment to
zero, the rate at which an NME producer is able to depreciate equipment
is irrelevant in the identification of appropriate, market economy
surrogate values. Timken also notes that if machinery is old, then
though depreciation costs are low, maintenance and repair expenses
would be correspondingly high. Timken further argues that NMB/Pelmec's
overhead rates are driven by low labor rates indicative of a developing
country, and not by raw material costs.
Department's Position
We disagree with TIE, again for the same reasons cited in our
response to comment 7. The Department does not tailor surrogate
overhead rates to match the circumstances in the NME country.
Therefore, following Department practice, we have continued to use the
valid surrogate overhead rate from Thailand.
Comment 9
TIE suggests that, if the Department continues to use the NMB/
Pelmec data for overhead, it should use the lowest of the overhead
rates for NMB/Pelmec bearings listed in NMB/Pelmec's 1988-90 cost
printouts, as ranged by the Department. TIE points out that there is a
large range in the bearings-specific overhead rates. TIE claims that
the lowest of the overhead rates would more accurately reflect overhead
for the larger bearings sold by TIE to the United States.
[[Page 51430]]
Department's Position
The record does not contain information which allows us to verify
TIE's assertion that the NMB/Pelmec models with the highest cost of
manufacture and lowest overhead are, in fact, the largest models made
by NMB/Pelmec. Therefore, the Department has continued to use the
average overhead rate of all NMB/Pelmec models.
Comment 10
TIE asks the Department to use overhead data TIE submitted in its
March 28, 1996 submission. In that submission, TIE asked the Department
to consider rates from a Portuguese bearings company, a Yugoslavian
metal processing company, and a Thai metal processor. TIE argues that
these rates are more timely than the NMB/Pelmec rate.
Timken points out that Romania is not at a level of economic
development comparable to that of Portugal--and that TIE actually
argued, in a previous review, that Romania's level of development has
never been as high as that of Portugal, and that the Department should
eliminate Portugal from consideration as a surrogate country. Timken
also notes that TIE's proposal to use surrogate values from metal
processors does not meet the comparable-merchandise requirement of the
statute (19 U.S.C. 1677b(e)(2)).
Department's Position
We agree with Timken. Neither Yugoslavia nor Portugal were found to
be appropriate as surrogate countries for this review. The Thai
overhead value submitted by TIE is from an industry other than
bearings, and therefore inferior to the NMB/Pelmec overhead rate.
Comment 11
TIE asks the Department to disregard the imported price of Swedish
steel in calculating cost of production for bearings produced at the
Alexandria factory. Because Alexandria purchased less than three
percent of its steel from Sweden, the amount purchased is
insignificant, and, consistent with Department practice and the
proposed regulations, the price should be disregarded. At the very
worst, argues TIE, only the corresponding percentage of Swedish steel
used by Alexandria should be used in the Department's calculations.
Timken argues that the amount of market economy steel purchased is
irrelevant; import prices selected by the Department represent the
price of steel available to TIE. Further, Timken argues that the
Swedish price should be applied to both factories, since they are part
of a single entity.
Department's Position
We agree with TIE. In calculating surrogate prices, the Department
routinely disregards quantities too small to be representative. See
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 (60 FR 49251, September 22,
1995). We have therefore recalculated steel costs for the Alexandria
plant using only surrogate prices from European Union (EU) exports to
Poland.
Comment 12
TIE argues that the number of hours worked per month, obtained from
the International Labor Office (ILO) Yearbook of Labor Statistics, 1995
and used to calculate surrogate wage rates in Poland, understates the
true hours worked per month in Poland. TIE notes that information
submitted by Timken, from Investing, Licensing & Trading Conditions
Abroad, Poland 1995 (IL&T), published by the Economist Intelligence
Unit, indicates a work week of 42 hours, and argues that the surrogate
wage rate should be recalculated to reflect this.
Timken responds that the IL&T referred to the statutory maximum
number of hours permitted under Polish law, and that the hours actually
worked may be lower in Polish industry.
Department's Position
We agree with TIE. The ILO data used in the preliminary results was
for actual hours worked, not paid hours (which would include, for
example, paid vacation leave). The monthly wage statistics we used in
the preliminary results, from the August 1995 issue of the Statistical
Bulletin, published by the Polish government, however, are based on
total compensation for paid hours, and not actual hours worked.
Therefore, for these final results we recalculated the wage rate using
the IL&T data, which represent paid hours.
Comment 13
TIE argues that Polish labor rates used by the Department
improperly included payments for bonuses from profits. According to
TIE, the use of a wage which includes bonus payments from profits is
improper, as it assumes profits were, in fact, made by Polish bearing
companies. TIE asks that the Department use wages exclusive of payments
from profit.
Timken maintains the Department's goal is to identify and apply the
fully-loaded labor costs (not just basic wages) of producers in the
surrogate country. Profit bonuses, a portion of the cost to the
employer, and of direct benefit to the employee, should be included in
the Department's calculation.
Department's Position
We agree with Timken. Wage rates should reflect, as accurately as
possible, the actual cost to employers. See Notice of Preliminary
Determination of Sales at Less Than Fair Value and Postponement of
Final Determination: Certain Partial-Extension Steel Drawer Slides With
Rollers From the People's Republic of China (60 FR 29571, 6/5/95). As
is the case with SG&A and overhead, the Department generally does not
dissect the wage rate of a surrogate country and apply only certain
components to the producing country. See our response to comment 7.
Department practice is to accept a valid surrogate wage rate as wholly
applicable to the NME respondent in question.
Comment 14
TIE argues that Polish labor rates are not representative of labor
rates in Romania or comparable countries, and should be rejected.
According to TIE, the per capita gross national product (GNP) of Poland
is roughly double that of Romania. TIE argues it would, therefore, be
unfair to use the Polish wage rate. TIE advocates use of an average
wage rate, derived from rates placed on the record from Algeria and
Ecuador, and a rate for Poland revised in accordance with comment 12,
above. Even this average, TIE contends, far exceeds the Romanian labor
rate. TIE notes that the Department's proposed regulations direct the
Department to use what is essentially an average labor rate in
economically comparable market economy countries, and argues that the
Department should adopt this policy for this review.
Timken discounts TIE's argument that Polish labor rates are not
representative of Romanian labor rates, noting that the purpose of the
surrogate value exercise is to find a rate to replace the Romanian
rate, not to find a rate representative of the Romanian rate. Timken
further counters that the components of the average wage rate proposed
by TIE are invalid. Except for the rate for Poland, the other wage
rates are minimum wage rates, not prevailing wage rates. Moreover,
Algeria and Ecuador are not suitable surrogates, as they have no
comparable industry.
Department's Position
We agree with Timken. Although proposed regulations suggest use of
an
[[Page 51431]]
average labor rate, current Department practice is to use wage data
from the surrogate country. Of the countries suggested for use by TIE,
only Poland has a comparable industry. Poland, as the chosen surrogate
country, is the proper source for surrogate wage rates.
Comment 15
Timken claims that TIE does not meet the Department's existing
criteria for a separate rate determination. Timken contends that TIE
does not have autonomy from the government in the selection of key
management personnel, one of the criteria for determining de facto
absence of government control. Timken notes the State Ownership Fund
(SOF) owns seventy percent of TIE stock. Because of this, the SOF has a
seat on the Council of Administration, which selects TIE's executive
management. Its presence on the Council of Administration, Timken says,
reflects participation in what is, by comparison with market-economy
countries, the board of the company. According to Timken, presence on
that board permits de facto control, by the Romania government, over
the selection of TIE's key management personnel.
TIE counters that it has made a clear, steady progression toward
complete privatization over the years, and that changes effective in
this review clearly indicate a lack of de facto government control. TIE
compares the status of privatization in Romania with that of Poland, to
which the Department granted market-economy status despite government
stock ownership of Polish industry. TIE claims that, even in the
context of a test for market-economy status, the Department does not
determine that ``government ownership'' of state-owned enterprises
precludes their independence.
Department's Position
We agree with Timken. We have reexamined our position on this issue
and have determined that TIE is not entitled to a separate rate. The
record of the review indicates that the General Assembly of
Shareholders consists of a representative of the SOF and a
representative of the POF, and that voting power is commensurate with
stock ownership. Seventy percent of the vote goes to the SOF, and
thirty percent to the POF. The General Assembly of Shareholders chooses
the Council of Administration, which is responsible for the hiring and
firing of key personnel, such as the general director, and the
designation of the Executive Committee, which controls the day-to-day
running of TIE. The Council of Administration consists of three
members, each with equal voting power; one of the members is from the
SOF, one is from the POF, and one is from TIE. There is no record
information indicating who any of these members are and whether they
are representatives of the Romanian government or its ministries (see
hearing transcript, pages 59-60) or otherwise how closely they are tied
to the government. In addition, we note that TIE's management has
remained the same since the composition of the Council of
Administration changed. Accordingly, we find that TIE has not
established that it has autonomy in making decisions regarding the
selection of its management and, for this reason, there is insufficient
record evidence of the absence of de facto government control over TIE
to entitle TIE to a separate rate.
Comment 16
Timken argues the Department's separate rate analysis should be
made consistent with rules for evaluating affiliated parties and for
collapsing firms in market-economy countries. Timken says that, since
the Romanian government owns more than five percent of TIE, and of the
bearings factories, it is in a position to shift export activities from
TIE to the factories to avoid antidumping duties. Timken argues that
the Romanian government, as a majority shareholder, has the ability to
exercise restraint or direction over TIE and the producing factories.
Citing 19 U.S.C. 1677(33) and section 351.401(f) of the proposed
regulations, Timken contends that, in a market-economy review, the
Department would normally treat two or more similarly affiliated
companies as a single entity. Timken argues that TIE, the bearings
factories, and the Romanian government should be treated likewise.
TIE counters that, since the Romanian government does not exercise
de facto control of TIE, despite its more than five percent stock
ownership, the Department should not consider TIE and the Romanian
government as affiliated parties. Nor should the Department view the
factories as affiliated with the Romanian government. TIE notes there
is no coordination between the two major stock-holding groups--the SOF
and the POF--with regard to TIE and the two independent factories. TIE
also notes that if the Department precluded a separate rate for a
company because of more than five percent ownership by the government,
no company could ever obtain a separate rate if its stock were owned by
the government. This would contradict the Department's decisions in a
number of cases, where the Department granted separate rates to Chinese
trading companies owned by ``all the people'' when the supplying
factories were also owned by ``all the people.''
Department's Position
The separate rates test for non-market economies is separate and
distinct from the test to determine whether related producers in market
economies should be treated as a single enterprise. Even the preamble
to the proposed regulations, cited by Timken, specifically notes that
section 351.401(f) ``does not address the issue of whether a producer
or exporter in a nonmarket economy country is entitled to an individual
antidumping rate.'' As set forth 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), the NME separate rates test focuses
on government control over export activities. As discussed above in our
response to Comment 15, we have found that TIE is not eligible for a
separate rate in this review.
Comment 17
Timken argues that a separate, non-zero rate for TIE, while the
Romania-wide rate remains at zero, is contrary to the purpose of the
antidumping duty law. Such a determination would encourage the shifting
of production and export activities to avoid the reach of the
antidumping duty law. Timken argues this is contrary to congressional
intent and is an absurd conclusion, which should be rejected.
Timken further argues that, if the Department maintains a separate
rate for TIE, it should apply the margin from the investigation, 8.70
percent, not the rate from the previous review, to all other firms. In
UCF America v. United States, Ct. No. 92-01-00049, Slip Op. 96-42 (CIT
February 27, 1996) (UCF), Timken argues, the Court of International
Trade (the Court) held that companies that have never been individually
reviewed should receive the margin found in the original investigation.
Department's Position
The Department acknowledges the recent decision of the Court, cited
by Timken, in UCF. In this decision, the Court affirmed the
Department's remand results for reinstatement of the relevant cash
deposit rate, but expressed disagreement with use of the ``PRC-wide''
rate as the underlying basis for reinstatement. The Court raised
various concerns with the Department's application of a ``PRC-wide''
rate.
[[Page 51432]]
The Court suggested that the Department lacks authority for
applying a ``PRC-wide'' rate in lieu of an ``all others'' rate. We
note, however, that section 777A(c) of the Act requires the Department
to determine individual dumping margins for each known exporter or
producer. Pursuant to this authority, the Department implements a
policy in NME cases whereby all exporters or producers are presumed to
comprise a single entity, the ``NME entity.'' The Court has upheld our
NME policy in previous cases. See e.g., UCF America, Inc. v. United
States, 870 F. Supp. 1120, 1126 (CIT 1994); Sigma Corp. v. United
States, 841 F. Supp. 1255, 1266-67 (CIT 1993); Tianjin Machinery Import
& Export Corp. v. United States, 806 F. Supp. 1008, 1013-15 (CIT 1992).
The ``NME-wide'' rate is consistent with section 735(c)(1)(B)(i)(I)
of the Act. This provision directs the agency to assign a dumping
margin for each exporter or producer individually investigated. As
discussed above, in NME cases, all producers and exporters comprise a
single entity. Thus, we assign the NME rate to the NME entity just as
we assign an individual rate to a single exporter or producer operating
in a market economy. As a result, all exporters and producers that are
part of the NME entity are assigned the ``NME-wide'' rate. Because the
``NME-wide'' rate is the equivalent of a company-specific rate, it
changes only when we review the NME entity (i.e., all NME producers and
exporters that have not qualified for a separate rate).
To qualify for a separate rate, an NME exporter or producer must
provide evidence showing both de jure and de facto absence of
government control. See Final Determination of Sales at Less Than Fair
Value; Silicon Carbide from the People's Republic of China (59 FR
22585, May 2, 1994). Until such evidence is presented, a company is
presumed to be part of the NME entity and receives the ``NME-wide''
rate. Consequently, whenever the NME enterprise has been investigated
or reviewed, calculation of an ``all others'' rate under section
735(c)(1)(B)(i)(II) of the Act is unnecessary. All exporters or
producers will either qualify for a separate company-specific rate, or
be part of the NME enterprise, and receive the ``NME-wide'' rate. Thus,
there can be no exporters or producers who have never been investigated
or reviewed.
In this review, we have determined that TIE is, and always has
been, the sole exporter of the subject merchandise to the United
States. The Romanian government stated in its response to our
questionnaire, and we have confirmed with the U.S. Customs Service,
that TIE was the only Romanian exporter of the subject merchandise to
the United States during this period of review (POR). In addition, in
past administrative reviews of this case, TIE has been the only
exporter of the subject merchandise to the United States. However, we
have determined that TIE is not eligible for a separate rate. Since
TIE's exports represent the only exports of this merchandise to the
United States, we have calculated a rate for TIE based on its exports
to the United States during the POR, and TIE's rate becomes the all-
Romanian rate, or the ``NME-wide'' rate, and will be applied to all
companies in Romania.
Comment 18
Timken argues that the Department should use European HTS
subheading 7204.41 to classify nonalloy scrap generated in the
production process. Cold-rolled steel is nonalloy steel; scrap produced
from nonalloy steel is less costly, and should be reflected in the
Department's scrap adjustment to material costs. If there are no
significant exports of 7204.41 steel to Poland during the POR, it would
be reasonable to use exports for a period preceding the POR.
TIE argues that there is an insignificant variation in the scrap
values between HTS subheading 7204.29, which the Department used in its
preliminary results, and subheading 7204.41. Further, use of data from
prior periods would be less accurate, and should be rejected.
Department's Position
We agree with Timken. For these final results, we have calculated
the portion of nonalloy scrap steel generated from the cold-rolled
steel used, and have used HTS subheading 7204.41 for that portion in
our calculation of the surrogate value for nonalloy scrap. For the
remaining hot-rolled scrap steel, we have continued to use a surrogate
price from the POR for subheading 7204.29.
Comment 19
Timken requests the Department use different HTS classifications
for the steel bar used by the Romanian factories. Timken claims that
European HTS 7228.30.89, the category used by the Department in the
preliminary results, excludes steel with a chemical composition
suitable for manufacturing bearings. This category, according to
Timken, also excludes steel bars and rods with a circular cross-
section, the same type of steel used in bearings production. Timken
suggests the Department use the European HTS 7228.30.40 (for bearings
produced in 1994) and 7228.30.41 and 7228.30.49 (for bearings produced
in 1995). These classifications, Timken claims, are the closest matches
with the U.S. definition of bearing-quality steel.
TIE notes that, in prior reviews of this order, Timken advocated
the use of category 7228.30.89, the predecessor to the Department's
steel bar selection for the preliminary results of this review. TIE
notes there is no indication on the record that the Romanian factories
use steel precisely corresponding to the category 7228.30.40, and that
Timken has not asserted that European HTS 7228.30.89 is aberrational.
Furthermore, Timken has not provided any data or documentation
regarding category 7228.30.89. In addition, recent EU data show
virtually no exports of steel to Poland under Timken's suggested
categories. Therefore, TIE concludes, the Department should continue to
use category 7228.30.89 in steel calculations.
Department's Position
We agree with TIE. We previously have found, in Tapered Roller
Bearings and Parts Thereof, Finished or Unfinished, From the Republic
of Romania; Final Results of Antidumping Duty Administrative Review (56
FR 41518, August 21, 1991), that SAE 52100 steel, the type reported
used by TIE, best corresponds with European HTS 7228.30.89. While other
European HTS categories may closely match what the U.S. considers
bearing-quality steel, there is no evidence on record that the Romanian
factories used this type of steel. Since the steel type reported by TIE
is SAE 52100, and since we have previously found this type matches most
closely with European HTS 7228.30.89, we have continued to use this
category in our calculations.
Comment 20
Timken argues that the Department should use International Standard
Industrial Classification (ISIC) category 382 instead of 381 when
referring to the International Labour Office Yearbook of Labor
Statistics to determine the number of hours worked in Poland. In
Timken's February 26, 1996 submission, Timken provided the detailed
descriptions of the ISIC categories. Ball and roller bearings, Timken
points out, are classified in ISIC 3829, a subgroup of Major Group 382.
Hence, Timken claims, the Department should use ISIC Group 382 instead
of 381.
TIE argues that, since the Department used information from the
government of Poland which specifically lists the labor rate for the
manufacture of metal
[[Page 51433]]
products (except machinery and equipment), to the extent that the
Department continues to use ILO data, it should continue to use ISIC
group 381: Manufacture of Fabricated Metal Products, Except Machinery
and Equipment. To calculate wage rates using monthly income from one
category and hours worked from another would, TIE claims, lead to an
inaccurate valuation. TIE argues that industry group 381 has been used
by the Department in previous bearings cases.
Department's Position
We agree with Timken that the proper group for bearings is ISIC
group 382 because bearings are included in one of its subgroups.
However, for these final results we are using data on hours worked from
the IL&T that are not industry-specific (see our response to comment
12). With respect to monthly income data, we used, in the preliminary
results, ISIC group 381 data from the Statistical Bulletin, published
by the Polish government. For these final results, we have recalculated
the wage rate using monthly incomes in the Statistical Bulletin from
ISIC group 382.
Comment 21
Timken argues that the Department should adjust its materials
factor prices to account for insurance and freight costs incurred in
shipping to Poland. The EUROSTAT export data used by the Department in
the preliminary results reflected FOB values. Therefore, according to
Timken, an appropriate adjustment must be made to reflect the cost of
the materials when delivered to the importing country. Timken suggests
the Department use the CIF-FOB conversion factor published by the
International Monetary Fund in the International Financial Statistics
Yearbook. Timken notes that the Department made such an adjustment in
Final Results of Antidumping Duty Administrative Review: Tapered Roller
Bearings and Parts Thereof from the People's Republic of China (56 FR
67590, December 31, 1991).
TIE replies that applying the CIF-FOB conversion factor to import
prices into Poland would lead to distorted prices. First, TIE states
that there is no evidence on record that Romanian factories insured
their imports of raw materials. The CIF-FOB factor includes an
adjustment for insurance that is not relevant in determining a
surrogate value. Second, TIE argues that use of the CIF-FOB conversion
factor would overstate freight costs between the EU and Poland. The
CIF-FOB conversion factor is based on all imports into Poland, from all
countries, and therefore includes ocean and air freight from distant
countries. The EU and Poland, however, are contiguous, and most of the
steel imported by Poland was from Germany, a contiguous country;
therefore, freight methods and rates would be cheaper.
Department's Position
We agree with Timken that the FOB prices of EU exports to Poland do
not state the true costs to Poland for raw materials. Although there is
no evidence on record indicating whether Romanian factories insure
their imports of raw materials, producers do incur costs to ship inputs
to the factory. Therefore, the Department has used the CIF-FOB
conversion factor suggested by Timken, as the best available surrogate
information. This factor can not be separated into distinct rates for
freight and insurance. Similarly, although freight distances for steel
imported into Poland might differ from the average freight distance
reflected in the conversion factor, we have no way to ascertain that
difference.
Comment 22
Timken asks the Department to recalculate factor prices to exclude
data involving small quantities of a product. Specifically, Timken asks
the Department to disregard a country's exports to Poland if the total
quantity from that country during the POR is less than ten metric tons.
Smaller quantities, Timken claims, often involve special products or
peculiar transactions that yield unit values unrepresentative of
overall price levels for that HTS category.
Department's Position
We agree with Timken. In the preliminary results, we derived raw
material surrogate prices based in part on quantities too small to be
representative. Accordingly, the Department has recalculated factor
prices after eliminating any data from a country exporting an
insignificant amount to Poland during the POR. See Memorandum from Case
Analyst to the File, dated September 25, 1996, ``Analysis for the final
results of the 1994-1995 administrative review of tapered roller
bearings and parts thereof, finished or unfinished, from Romania--
Tehnoimportexport, S.A. (TIE),'' which is on file in the Central
Records Unit (room B-099 of the Main Commerce Building) for the amounts
considered to be insignificant.
Clerical Errors
TIE identified a clerical error with respect to the reporting of
packing costs in its original submission. Review of the data shows that
an obvious error was made in the reporting of a packing factor for one
model. Accordingly, we have decided to correct the error, and
recalculate the margins for the affected observations.
TIE also identified clerical errors made by the Department in its
preliminary results of review. Although the submission alleging the
clerical errors was submitted to the Department after the deadlines for
submission of case and rebuttal briefs, and after the public hearing,
we have determined that we made such errors, and have corrected them
for the final results.
Currency Conversion
During the interim between the publication of the preliminary
results and these final results, the Department was able to obtain
daily exchange rates certified by the Federal Reserve Bank for the Thai
Baht. Accordingly, we used these rates in place of the monthly rates
used in the preliminary results.
Non-Shippers
Tehnoforestexport, S.C. Rulmenti S.A. Alexandria, S.C. Rulmentul
S.A. Brasov, S.C. Rulmenti S.A. Barlad, S.C. Rulmenti Grei S.A.
Ploiesti, S.C. Rulmenti S.A. Slatina, and S.C. URB Rulmenti Suceava
S.A. stated that they did not have shipments during the period of
review, and we confirmed this with the United States Customs Service.
Therefore, we are treating them as non-shippers for this review, and
are rescinding this review with respect to these companies.
Final Results of Review
As a result of our review of the comments received, we have
determined the margin to be:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Time period (percent)
------------------------------------------------------------------------
Romania Rate.............................. 6/1/94-5/31/95 14.89
------------------------------------------------------------------------
The Department will instruct the Customs Service to assess
antidumping duties on all appropriate entries. The Department will
issue appraisement instructions directly to the Customs Service.
Furthermore, the following deposit requirements will be effective
upon publication of these final results for all shipments of TRBs from
Romania 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) The cash deposit rate for TIE and all other exporters will
be 14.89 percent; and (2)
[[Page 51434]]
for non-Romanian exporters of subject merchandise from Romania, the
cash deposit rate will be the rate applicable to the Romanian supplier
of that exporter. These deposit requirements shall remain in effect
until publication of the final results of the next administrative
review.
This notice also serves as a final reminder to importers of their
responsibility under 19 CFR 353.26 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.
This notice also serves as a reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 353.34(d)(1). Timely written notification
of the return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulations and terms of an APO is a sanctionable violation.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: September 25, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-25243 Filed 10-1-96; 8:45 am]
BILLING CODE 3510-DS-P
