05-22893. Brake Rotors From the People's Republic of China: Final Results and Partial Rescission of the Seventh Administrative Review; Final Results of the Eleventh New Shipper Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On May 9, 2005, the Department of Commerce (“the Department”) published the preliminary results of this administrative review of the antidumping duty order on brake rotors from the People's Republic of China (PRC). See Brake Rotors From the People's Republic of China: Preliminary Results and Partial Rescission of the Seventh Administrative Review and Preliminary Results of the Eleventh New Shipper Review, 70 FR 24382 (“Preliminary Results”). At that time, we invited interested parties to comment on our preliminary results. Based on our analysis of the comments received, we have made certain changes to our calculations. The final dumping margins for this review are listed in the “Final Results of Review” section below.

EFFECTIVE DATE:

November 18, 2005.

FOR FURTHER INFORMATION CONTACT:

Thomas Killiam or Christopher Riker, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone [phone] and [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

The period of review (“POR”) is April 1, 2003, through March 31, 2004. We published the preliminary results in the 2003/2004 administrative review in the Federal Register on May 9, 2005. See Preliminary Results. On June 6, 2005, we invited the interested parties to comment on our preliminary determination that a Chinese Village Committee was an arm of the PRC Government, and affected export-related decisions at respondent, Shandong Huanri Group General Company, together with Laizhou Huanri Automobile Parts Co.,Co., Ltd. (collectively, “Huanri”). On June 14, 2005, we received comments from petitioners and Huanri in response to our June 6, 2005, letter. Additionally, on June 21, 2005, we received comments from petitioners in rebuttal to Huanri's June 14, 2005, letter.

On June 30, 2005, we received case briefs from the petitioners, the Coalition for the Preservation of American Brake Drum and Rotor Aftermarket Manufacturers, and from the following respondents: China National Industrial Machinery Import & Export Corporation (“CNIM”), Qingdao Gren (Group) Co. (“GREN”), Shanxi Fengkun Foundry Ltd., Co. and Shanxi Fengkun Metallurgical Limited Company (collectively, “Fengkun”), Zibo Luzhou Automobile Parts Co., Ltd. (“ZLAP”), Laizhou Automobile Brake Equipment Co., Ltd. (“LABEC”), Yantai Winhere Auto-Part Manufacturing Co., Ltd (“Winhere”), Longkou Haimeng Machinery Co., Ltd. (“Haimeng”), Laizhou Hongda Auto Replacement Parts Co., Ltd. (“Hongda”), Hongfa Machinery (Dalian) Co., Ltd. (“Hongfa”), Qingdao Meita Automotive Industry Co., Ltd (“Meita”), and Huanri.¹ On July 11, 2005, we received rebuttal briefs from the petitioners and from LABEC, Winhere, Haimeng, Hongda, Hongfa, Meita, and Huanri.

On August 24, 2005, we invited the interested parties to comment on revisions to the Department's calculations for the surrogate value of labor. On August 29, 2005, we received comments from petitioners and from respondents LABEC, Winhere, Haimeng, Hongda, Hongfa, Meita, and Huanri on this issue.

Based on the comments summarized below, we have made revisions to the data used for the final results. For further details, please see the Issues and Decision Memorandum for the Final Results in the 2003/2004 Administrative Review of Brake Rotors from the People's Republic of China, to Stephen J. Claeys, Acting Assistant Secretary for Import Administration, from Edward Yang, Senior Enforcement Coordinator / NME Unit, Import Administration (November 7, 2005) (“Decision Memorandum”) and the company-specific analysis memoranda, which are on file in Import Administration's Central Records Unit, room B-099 of the Department of Commerce building. The Decision Memorandum is also available at http://ia.ita.doc.gov.

Scope of the Order

The products covered by this order are brake rotors made of gray cast iron, whether finished, semifinished, or unfinished, ranging in diameter from 8 to 16 inches (20.32 to 40.64 centimeters) and in weight from 8 to 45 pounds (3.63 to 20.41 kilograms). The size parameters (weight and dimension) of the brake rotors limit their use to the following types of motor vehicles: automobiles, all-terrain vehicles, vans and recreational vehicles under “one ton and a half,” and light trucks designated as “one ton and a half.”

Finished brake rotors are those that are ready for sale and installation without any further operations. Semi-finished rotors are those on which the surface is not entirely smooth, and have undergone some drilling. Unfinished rotors are those which have undergone some grinding or turning.

These brake rotors are for motor vehicles, and do not contain in the casting a logo of an original equipment manufacturer (“OEM”) which produces vehicles sold in the United States. (e.g., General Motors, Ford, Chrysler, Honda, Toyota, Volvo). Brake rotors covered in this order are not certified by OEM producers of vehicles sold in the United States. The scope also includes composite brake rotors that are made of gray cast iron, which contain a steel plate, but otherwise meet the above criteria. Excluded from the scope of this order are brake rotors made of gray cast iron, whether finished, semifinished, or unfinished, with a diameter less than 8 inches or greater than 16 inches (less than 20.32 centimeters or greater than 40.64 centimeters) and a weight less than 8 pounds or greater than 45 pounds (less than 3.63 kilograms or greater than 20.41 kilograms).

Brake rotors are currently classifiable under subheading 8708.39.5010 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of this order is dispositive.

Partial Rescission of Administrative Review

We are rescinding the review of the following four exporter companies because they certified for this review that they did not export subject merchandise to the United States other than from the manufacturer/exporter combination specifically excluded from the order following the investigation, and the shipment data that we examined did not show U.S. entries of subject merchandise, during the POR, from the exempted producer/exporter combinations: China National Automotive Industry Import & Export Corporation, Laizhou CAPCO Machinery Co., Ltd., Laizhou Luyuan Automobile Fittings Co., and Shenyang Honbase Machinery Co., Ltd. See Preliminary Results 70 FR at 24382, 24383; see also Notice of Antidumping Duty Order: Brake Rotors from the People's Republic of China, 62 FR 18740, 18741 (April 17, 1997) (“Investigation”).

We are also rescinding the review of the following three exporter/producers because they also certified that they made no shipments of subject merchandise to the United States during the POR, and the shipment data that we examined did not show U.S. entries of subject merchandise during the POR from these companies: Laizhou City Luqi Machinery Co., Ltd., Shenyang Yinghao Machinery Co., Ltd., Xianghe Xumingyuan Auto Parts Co., Ltd.

Finally, in the Preliminary Results, and in accordance with section 351.213(d)(3) of the Department's regulations, we stated that we were rescinding the review of exports made by Xianjiang, which were manufactured by any company other than Zibo Botai Manufacturing Co., Ltd. (Zibo Botai). However, upon due consideration of the arguments of interested parties, and the facts of the case as summarized in the Decision Memorandum (comment 8), for the final results we have assigned to exports of Xianjiang, manufactured by any company other than Zibo Botai, the China-wide rate, because it failed to respond to our questionnaire. See id.

Separate Rates

In our Preliminary Results, we found that all respondents except Huanri and Rotec qualified for separate rates. We found in the course of the review that export-related decisions at Huanri were controlled by the Panjacun Village Committee, and we determined that this entity was subject to central government control. We continue to find that Huanri is not entitled to a separate rate in these final results. See Decision Memorandum at Comment 7; see also Preliminary Results at 24387-24389. Because the Department has determined that Huanri does not qualify for a separate rate, we determine that Huanri is part of the PRC-wide entity and will be subject to the PRC-wide rate. We received no comments with respect to Rotec. For these final results we continue to find that Rotec is not eligible to receive a separate rate and will be subject to the PRC-wide rate.

Analysis of Comments Received

A list of the issues which parties raised and to which we responded in the Decision Memorandum which accompanies this notice is attached as Appendix 1. The paper copy and electronic version of the Decision Memorandum are identical in content.

Changes Since the Preliminary Results

Based on the comments received from the interested parties, the Department has made company-specific changes to the margin calculations for CNIM, Winhere, GREN, and ZLAP. Additionally, based on information submitted since the Preliminary Results, some surrogate values have changed. Specifically, we have revised the surrogate values for labor, cartons, and lug nuts. See Decision Memorandum at comments 1, 2, 5 and 13.

For the final results, we have also revised the calculation of surrogate financial ratios for factory overhead and selling, general and administrative expenses (“SG&A”) and profit, excluding the scrap revenue offset which we had deducted from the cost of manufacture at two surrogate companies for the Preliminary Results. See Decision Memorandum at Comment 4.

The PRC-Wide Rate and Application of Facts Otherwise Available

The PRC-wide rate will apply to all entries of subject merchandise except for entries from PRC producers/exporters that have their own calculated rate. See “Separate Rates” section above.

Adverse Facts Available

Section 776(a) of the Tariff Act of 1930, as amended, (“the Act”) provides that, when (1) necessary information is not available on the record, the Department may use the facts otherwise available to reach a determination. Section 776(a)(2) of the Act provides that, if an interested party or any other person: (A) withholds information that has been requested by the administering authority; (B) fails to provide such information by the deadlines for the submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782; (C) significantly impedes a proceeding under this title; or (D) provides such information but the information cannot be verified as provided in section 782(i), the Department shall, subject to section 782(d) of the Act, use the facts otherwise available in reaching the applicable results under this title.

Where the Department determines that a response to a request for information does not comply with the request, section 782(d) of the Act provides that the Department shall promptly inform the party submitting the response of the nature of the deficiency and shall, to the extent practicable, provide that party with an opportunity to remedy or explain the deficiency. Section 782(d) further states that, if the party submits further information that is unsatisfactory or untimely, the administering authority may, subject to subsection (e), disregard all or part of the original and subsequent responses. Section 782(e) of the Act provides that the Department shall not decline to consider information that is submitted by an interested party and is necessary to make a determination but does not meet all the applicable requirements established by the administering authority if (1) the information is submitted by the deadline established for its submission, (2) the information can be verified, (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable results, (4) the interested party has demonstrated that it acted to the best of its ability in providing the information and meeting the requirements established by the administering authority with respect to the information, and (5) the information can be used without undue difficulties.

Section 776(b) of the Act provides that, in selecting from among the facts available, the Department may use an inference that is adverse to the interests of the respondent if it determines that a party has failed to cooperate to the best of its ability. Adverse inferences are appropriate “to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.” See Statement of Administrative Action (“SAA”) accompanying the URAA, H. Doc. No. 316, 103d Cong., 2d Session at 870 (1994).

In determining whether a party failed to cooperate to the best of its ability, the Department considers whether a party could comply with the request for information, and whether a party paid insufficient attention to its statutory duties. See Tung Mung Dev. Co. v. United States, 223 F. Supp. 2d 1336, 1342 (August 6, 2002). The focus of 776(b) of the Act is respondent's failure to cooperate to the best of its ability, rather than its failure to provide requested information. See Nippon Steel Corp. v. United States, 337 F. 3d 1373, 1382 (Fed. Cir. 2003). An adverse inference may include reliance on information derived from the petition, the final results in the investigation, any previous review, or any other information placed on the record. See Section 776(b) of the Act.

Rotec and Xianjiang

As noted above, section 776(a) of the Act provides that the Department may make a facts available (“FA”) determination if a party withholds information requested by the Department, significantly impedes a proceeding, and/or provides unverifiable information in a proceeding. By not responding to Department inquiries, Rotec and Xianjiang withheld requested information from the Department, impeded this proceeding, and precluded the Department from verifying information placed on the record in this case.

Consistent with Section 776(a) of the Act, the Department has determined to apply total facts available to Rotec and Xianjiang for the final results. The application of total facts available is warranted in this case because the unresponsiveness of Rotec and Xianjiang made it impossible for the Department to review or verify information on their U.S. sales, if any.

The Department further finds that by not responding to our inquiries, Rotec and Xianjiang failed to cooperate to the best of their abilities in this proceeding. Therefore, pursuant to section 776(b) of the Act, we find it appropriate to use an inference that is adverse to the interests of Rotec and Xianjiang in selecting from among the facts otherwise available with respect to its request for a separate rate. By doing so, we ensure that the companies that fail to cooperate will not obtain a more favorable result than those companies that complied fully with the Department's requests in this review. See below for a discussion of the probative value of the 42.32 percent rate. Pursuant to section 776(b) of the Act, we have applied total adverse facts available with respect to the PRC-wide entity, including Rotec and Xianjiang.

Corroboration

In accordance with the Department's practice, we have assigned the rate for the PRC-wide entity to Rotec and Xianjiang as adverse facts available. See, e.g., Rescission of Second New Shipper Review and Final Results and Partial Rescission of First Antidumping Duty Administrative Review: Brake Rotors from the People's Republic of China, 64 FR 61581, 61584 (November 12, 1999).

In selecting a rate for adverse facts available, the Department selects a rate that is sufficiently adverse “as to effectuate the purpose of the facts available rule to induce respondents to provide the Department with complete and accurate information in a timely manner.” See Final Results of Sales at Less Than Fair Value: Static Random Access Memory Semiconductors from Taiwan, 63 FR 8909, 8932 (February 23, 1998). Consistent with section 776(c) of the Act, this rate is the highest dumping margin from any segment of this proceeding and was established in the less-than-fair-value investigation based on information contained in the petition, and corroborated in the final results of the first administrative review. See Brake Rotors From the People's Republic of China: Rescission of Second New Shipper Review and Final Results and Partial Rescission of First Antidumping Duty Administrative Review, 65 FR 61581 (November 12, 1999).

For the reasons stated in the Preliminary Results, the Department continues to find this rate to be both reliable and relevant, and, therefore, to have probative value in accordance with the SAA. See SAA at 870; see also Preliminary Results at 70 FR 10965. We received no comments on our preliminary analysis of this rate for purposes of these final results. Therefore, we determine that the rate of 43.32 percent is still reliable, relevant, and, has probative value within the meaning of section 776(c) of the Act.

Final Results of Review

We determine that the following percentage margins exist on exports of brake rotors from the PRC for the period April 1, 2003, through March 31, 2004:

Brake Rotors from the PRC

Producer/Manufacturer/Exporter	Weighted-Average Margin (Percent)
CNIM	0.28% (de minimis)
Fengkun	1.43%
GREN	0.32% (de minimis)
Haimeng	0.20% (de minimis)
Hengtai	0.00%
Hongda	0.04% (de minimis)
Hongfa	0.00% (de minimis)
Jinzheng	0.00%
LABEC	0.09% (de minimis)
Longkou TLC	0.10% (de minimis)
Meita	0.00%
Winhere	0.31% (de minimis)
ZGOLD	0.00%
ZLAP	0.17% (de minimis)
PRC-Wide Entity	43.32%

For details on the calculation of the antidumping duty weighted-average margin for each company, see the respective company's Analysis Memorandum for the Final Results of the Seventh Administrative Review of the Antidumping Duty Order on Brake Rotors from the People's Republic of China, dated November 7, 2005.

Assessment Rates

The Department shall determine, and US Customs and Border Protection (“CBP”) shall assess, antidumping duties on all appropriate entries. Pursuant to 19 CFR 351.212(b)(1), we calculated importer- or customer-specific ad valorem duty assessment rates based on the ratio of the total amount of the dumping margins calculated for the examined sales to the total entered value of those same sales. Where the respondent did not report actual entered value, we calculated individual importer- or customer-specific assessment rates by aggregating the dumping margins calculated for all of the U.S. sales examined and dividing that amount by the total quantity of the sales examined.

In accordance with 19 CFR 351.106(c)(2), we will instruct CBP to liquidate, without regard to antidumping duties, all entries of subject merchandise during the POR for which the importer-specific assessment rate is zero or de minimis (i.e., less than 0.50 percent). To determine whether the per-unit duty assessment rates are de minimis (i.e., less than 0.50 percent), in accordance with the requirement set forth in 19 CFR 351.106(c)(2), we calculated importer- or customer - specific ad valorem ratios based on export prices.

The Department will issue appropriate assessment instructions directly to CBP within 15 days of publication of these final results of review. We will instruct CBP to liquidate entries of the subject merchandise during the POR from companies not subject to this review at the cash deposit rate in effect at the time of entry. Bonding will no longer be permitted to fulfill security requirements for shipments of brake rotors from the PRC that are manufactured and exported by Jinzheng, and entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of the new shipper review.

The following deposit rates shall be required for merchandise subject to the order, entered, or withdrawn from warehouse, for consumption on or after the publication date of these final results, as provided by section 751(a)(1) and (a)(2)(B) of the Act: (1) the cash deposit rate for CNIM,, GREN, Haimeng, Hengtai, Hongda, Hongfa, Jinzheng (i.e., for subject merchandise manufactured and exported by Jinzheng), LABEC, Meita, Winhere, ZGOLD, ZLAP, and Longkou TLC will be zero; (2) the cash deposit rate for Fengkun will be the rate indicated above; (3) the cash deposit rate for PRC exporters who received a separate rate in a prior segment of the proceeding will continue to be the rate assigned in that segment of the proceeding; (4) the cash deposit rate for the PRC NME entity and for subject merchandise exported by Jinzheng but not manufactured by it will continue to be the PRC-wide rate (i.e., 43.32 percent); and (5) the cash deposit rate for non-PRC exporters of subject merchandise from the PRC will be the rate applicable to the PRC exporter that supplied the exporter.

These deposit requirements shall remain in effect until publication of the final results of the next administrative review.

Notification to Interested Parties

This notice also serves as the final 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 in the subsequent assessment of double antidumping duties.

This notice also serves as the only reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the return/destruction or conversion to judicial protective order of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Failure to comply is a violation of the APO.

These results are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: November 7, 2005.

Stephen J. Claeys,

Acting Assistant Secretary for Import Administration.

Appendix I

List of Issues in Decisions Memorandum

General Issues

General Issues

Comment 1: Labor Rate

Comment 2: Surrogate Value Calculations for Cartons

Comment 4: Scrap Offset in Surrogate Financial Ratios

Comment 5: Financial Ratios Applied to Inputs Supplied by Customers

Comment 6: Surrogate Value for Lug Nuts

Company-Specific Issues

Comment 7: Huanri-Separate Rate

Comment 8: Xianjiang-Non-Responsive

Comment 9: CNIM-Margin Calculation

Comment 10: Winhere-Plywood Valuation

Comment 11: GREN-Returned Sales

Comment 12: Fengkun-Customs Instructions

Comment 13: ZLAP-Surrogate Value for Lug Nuts

Footnotes

1.  The Department did not receive briefs from the following respondents: Zibo Golden Harvest Machinery Limited Co. (“ZGOLD”), Xianfeng Hengtai Brake System Co., Ltd. (“Hengtai”), Longkou Jinzheng Machinery Co., Ltd. (“Jinzheng”), Longkou TLC Machinery Co. Ltd. (“Longkou TLC”), Qingdao Rotec Auto Parts Co., Ltd. (“Rotec”), and China National Machinery and Equipment Import & Export (Xianjiang) Corporation (“Xianjiang”).