[Federal Register Volume 64, Number 249 (Wednesday, December 29, 1999)]
[Notices]
[Pages 73007-73013]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33665]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-846]
Brake Rotors From the People's Republic of China: Preliminary
Results of Third New Shipper Review and Preliminary Results and Partial
Rescission of Second Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: On May 28, 1999, the Department of Commerce published notices
of initiation of the third new shipper review and second administrative
review of the antidumping duty order on brake rotors from the People's
Republic of China. The reviews cover nine exporters of the subject
merchandise to the United States. The period of review is April 1,
1998, through March 31, 1999. The Department of Commerce is also
rescinding the administrative review with respect to three exporters of
the subject merchandise which withdrew their requests for review in a
timely manner and for which no other interested party requested a
review. Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: December 29, 1999.
FOR FURTHER INFORMATION CONTACT: Brian Smith or Terre Keaton, Import
Administration, Internation Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C.
20230; telephone: (202) 482-1766 or (202) 482-1280, respectively.
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (``the Act''), are references to the provisions
effective January 1, 1995, the effective date of the amendments made to
the Act by the Uruguay Round Agreements Act. In addition, unless
otherwise indicated, all citations to the Department of Commerce's
(``the Department's'') regulations are to 19 CFR Part 351 (1998).
SUPPLEMENTARY INFORMATION: For the nine respondents that submitted full
responses to the antidumping questionnaire and have preliminarily been
found to be entitled to a separate rate, we have preliminarily
determined that U.S. sales have not been made below normal value
(``NV''). If these preliminary results are adopted in our
[[Page 73008]]
final results of these reviews, we will instruct the Customs Service to
assess no antidumping duties on entries from the nine exporters from
the People's Republic of China (``PRC'') that cooperated in these
reviews (including the one new shipper reviewed) for which the
importer-specific assessment rates are zero or de minimis (i.e., less
than 0.50 percent).
Background
On April 30, 1999, the following eleven exporters requested an
administrative review pursuant to section 751(a)(1) of the Act and 19
CFR 351.213(b): (1) Jilin Provincial Machinery & Equipment Import &
Export Corporation (``Jilin''); (2) Laizhou Auto Brake Equipments
Factory (``LABEF''); (3) Longjing Walking Tractor Works Foreign Trade
Import & Export Corporation (``Longjing''); (4) Longkou Haimeng
Machinery Co. (``Haimeng''); (5) Quingdao (Gren) Co. (``GREN''); (6)
Yantai Chen Fu Machinery Co., Ltd. (``Chen Fu''); (7) Yantai Import &
Export Corporation (``Yantai''); (8) Yantai Winhere Auto-Part
Manufacturing Co. (``Winhere''); (9) Yenhere Corporation (``Yenhere'');
(10) Zibo Botai Machinery Manufacturing Co. (``Zibo''); and (11) Zibo
Luzhou Automobile Parts Co. (``ZLAP'').
On April 30, 1999, the Department received a timely request from
Laizhou Hongda Auto Replacement Parts Co., Ltd. (``Laizhou Hongda''),
Auto Replacement Parts Co., Ltd. (``Laizhou Hongda''), in accordance
with section 751(a)(2)(B) of the Act and 19 CFR 351.214(c), for a new
shipper review of this antidumping duty order.
In its April 30, 1999, request for review, Laizhou Hongda certified
that it did not export the subject merchandise to the United States
during the period covered by the original less-than-fair-value
(``LTFV'') investigation, and that it is not affiliated with any
company which exported subject merchandise to the United States during
the period of investigation. Laizhou Hongda also certified that its
export activities are not controlled by the central government of the
PRC. Pursuant to 19 CFR 351.214(b)(2)(iv), Laizhou Hongda submitted
documentation establishing the date on which the merchandise was first
entered for consumption in the United States, the volume of that
shipment, and the date of the first sale to an unaffiliated customer in
the United States. Laizhou Hongda also agreed to waive the time limits
applicable to the new shipper review and to permit the Department to
conduct the new shipper review concurrently with the administrative
review.
On May 20, 1998, the Department initiated an administrative review
covering the eleven PRC exporters mentioned above (see Initiation of
Antidumping and Countervailing Duty Administrative Review and Request
for Revocation in Part (64 FR 28973, May, 1999)). In accordance with
section 751(a)(2)(B) of the Act and 19 CFR 351.214(d), we initiated a
new shipper review covering Laizhou Hongda. See Brake Rotors from the
People's Republic of China: Initiation of New Shipper Antidumping Duty
Review, 64 FR 28982 (May 28, 1999).
On June 8, 1999, we issued a questionnaire to each PRC company
which requested a new shipper or administrative review.
On July 1, 1999, the Department provided the parties an opportunity
to submit publicly available information (``PAI''), through August 16,
1999, for consideration in these preliminary results. On July 13, 1999,
GREN and Jilin requested an extension of time to file their responses
to the antidumping duty questionnaire. On July 14, 1999, the Department
granted the extension request made by GREN and Jilin. On July 15, 1999,
Chen Fu, Longjing and ZLAP withdrew their requests for review in
accordance with 19 CFR 351.213(d). On July 15, and 22, 1999, the
remaining nine PRC companies \1\ submitted their questionnaire
responses. On July 26, 1999, the petitioner \2\ submitted comments on
the questionnaire responses.
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\1\ These nine PRC exporters are (1) Jilin; (2) LABEF; (3)
Laizhou Hongda; (4) Haimeng; (5) GREN; (6) Yantai; (7) Winhere; (8)
Yenhere; and (9) Zibo.
\2\ The petitioner is the Coalition for the Preservation of
American Brake Drum and Rotor Aftermarket Manufacturers.
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On August 11, 1999, the respondents requested an extension of time
until August 31, 1999, to submit PAI in this proceeding. On August 12,
1999, the Department extended the time for both the respondents and the
petitioner to submit PAI to August 31, 1999. On August 13, 1999, the
petitioner objected to the extension arguing that the Department was
denying the petitioner due process. On August 26, 1999, the Department
responded to petitioner's concerns (see Memorandum to the File, dated
August 24, 1999).
On August 31, 1999, the respondents submitted PAI for use in
valuing the factors of production. The petitioner elected not to submit
PAI. Instead, the practitioner requested: (1) that the Department
conduct verification of all companies which submitted antidumping
questionnaire responses in this proceeding; (2) that the Department
conduct a verification at the Ministry of Foreign Trade and Economic
Cooperation (``MOFTEC'') and Ministry of Machinery Industry (``MMI'');
and (3) that the Department include in this proceeding the Department's
MMI verification report, and accompanying verification exhibits, from
the LTFV investigation.
On September 7, 1999, the petitioner submitted rebuttal comments on
PAI. On September 10, 1999, the Department notified the petitioner by
letter that the Department had rejected the petitioner's August 31,
1999, request to include in the record of this proceeding the MMI
verification report or exhibits obtained in the LTFV proceeding because
the information in question was not relevant to the separate rates
issue of whether government control existed with respect to the export
activities of the respondent companies involved in this proceeding. The
Department issued supplemental questionnaires to the respondents during
September 18-27, 1999. In October, November, and December 1999, the
Department received supplemental questionnaire responses from the
respondents.
Scope of Review
The products covered by these reviews 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
these reviews 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
[[Page 73009]]
plate, but otherwise meet the above criteria. Excluded from the scope
of the reviews 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 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 these reviews is dispositive.
Period of Reviews
The period of review (``POR'') covers the period April 1, 1998,
through March 31, 1999.
Rescission
The Department's regulations at 19 CFR 351.213(d)(1) provide that
the Department may rescind an administrative review if a party that
requested a review withdraws the request within 90 days of the date of
publication of the notice of initiation of the requested review. Chen
Fu, Longjing, and ZLAP withdrew their request for an administrative
review on July 15, 1999, which is within the 90-day deadline.
The Department has determined to grant the request to rescind this
administrative review with respect to Chen Fu, Longjing, and ZLAP,
because these companies withdrew their requests for review in a timely
manner and because no other interested party requested a review of
these companies. Accordingly, for POR entries made by these PRC
companies, the Department will instruct the Customs Service to assess
ad valorem duties at the rates applicable at the time of entry.
Separate Rates
In proceedings involving non-market economy (``NME'') countries,
the Department begins with a rebuttable presumption that all companies
within the country are subject to government control and thus should be
assessed a single antidumping duty deposit rate. Of the nine
respondents that submitted questionnaire responses, one of the PRC
companies, Winhere, is wholly owned by private individuals. Three
respondents (i.e., Haimeng, Laizhou Hongda and Zibo) are joint ventures
between PRC and foreign companies. Another respondent, Yenhere, is a
limited liability corporation in the PRC. The four other respondents
are either wholly owned by ``all the people'' (i.e., Jilin and Yantai)
or collectively owned (i.e., GREN and LABEF). Thus, for all nine
respondents, a separate rates analysis is necessary to determine
whether the exporters are independent from government control (see
Notice of Final Determination of Sales at Less Than Fair Value:
Bicycles From the People's Republic of China (``Bicycles'') 61 FR 56570
(April 30, 1996)).
To establish whether a firm is sufficiently independent from
government control to be entitled to a separate rate, the Department
analyzes each exporting entity under a test arising out of the Final
Determination of Sales at Less than Fair Value: Sparklers from the
People's Republic of china, 56 FR 20588 (may 6, 1991) and amplified in
the Final Determination of Sales at Less Than Fair Value: Silicon
Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994)
(``Silicon Carbide''). Under this 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.
1. De Jure Control
Each respondent has placed on the administrative record documents
to demonstrate absence of de jure control, including the ``Law of the
People's Republic of China on Industrial Enterprises Owned by the Whole
People,'' adopted on April 13, 1988 (`'the Industrial Enterprises
Law''); ``The Enterprise Legal Person Registration Administrative
Regulations,'' promulgated on June 13, 1988; the 1990 ``Regulation
Governing Rural Collectively-Owned Enterprises of PRC''; the 1992
``Regulations for Transformation of Operational Mechanisms of State-
Owned Industrial Enterprises'' (``Business Operation Provisions''); and
the 1994 ``Foreign Trade Law of the People's Republic of China.''
As in prior cases, we have analyzed these laws and have found them
to establish sufficiently an absence of de jure control of companies
``owned by the whole people,'' privately owned enterprises, joint
ventures, stock companies including limited liability companies, and
collectively owned enterprises. See, e.g., Final Determination of Sales
at Less than Fair Value: Furfuryl Alcohol from the People's Republic of
China (``Furfuryl Alcohol'') 60 FR 22544 (May 8, 1995), and Preliminary
Determination of Sales at Less Than Fair Value: Certain Partial-
Extension Steel Drawer Slides with Rollers from the People's Republic
of China 60 FR 29571 (June 5, 1995). We have no new information in this
proceeding which would cause us to reconsider this determination with
regard to the nine respondents mentioned above.
2. De Facto Control
As stated in previous cases, there is some evidence that certain
enactments of the PRC central government have not been implemented
uniformly among different sectors and/or jurisdictions in the PRC. See
Silicon Carbide and Furfuryl Alcohol. Therefore, the Department has
determined that an analysis of de facto control is critical in
determining whether the respondents are, in fact, subject to a degree
of governmental control which would preclude the Department from
assigning separate rates.
The Department typically considers four factors in evaluating
whether each respondent is subject to de facto governmental control of
its export functions: (1) whether the export prices are set by, or
subject to the approval of, a governmental authority; (2) whether the
respondent has authority to negotiate and sign contracts and other
agreements; (3) whether the respondent has autonomy from the government
in making decisions regarding the selection of management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding the disposition of profits or
financing of losses (see Silicon Carbide and Furfuryl Alcohol).
Each of the nine respondents asserted the following: (1) It
establishes its own export prices; (2) it negotiates contracts without
guidance from any governmental entities or organizations; (3) it makes
its own personnel decisions; and (4) it retains the proceeds of its
export sales, uses profits according to its business needs, and has the
authority to sell its assets and to obtain loans. Additionally, the
respondents' questionnaire responses indicate that company-specific
pricing during the POR does not suggest coordination among exporters.
This information supports a preliminary finding that there is de facto
absence of governmental control of the export functions of the
respondents. See Pure Magnesium from the People's Republic of China:
Preliminary Results of Antidumping Duty New Shipper Administrative
Review, 62 FR 55215 (October 23, 1997). Consequently, we have
preliminarily determined that each
[[Page 73010]]
of the respondents has met the criteria for the application of separate
rates.
Fair Value Comparisons
To determine whether sales of the subject merchandise by each
respondent to the United States were made at LTFV, we compared the
export price (``EP'') to the NV, as described in the ``Export Price''
and ``Normal Value'' sections of this notice, below.
Export Price
We used EP methodology in accordance with section 772(a) of the
Act, because the subject merchandise was sold directly to unaffiliated
customers in the United States prior to importation and constructed
export price methodology was not otherwise indicated.
1. Haimeng, Jilin, LABEF, Winhere, Yenhere and Zibo
We calculated EP based on packed, FOB foreign port prices to the
first unaffiliated purchaser in the United States. Where appropriate,
we made deductions from the starting price (gross unit price) for
foreign inland freight and foreign brokerage and handling in the PRC,
in accordance with section 772(c) of the Act. Because foreign inland
freight and foreign brokerage and handling fees were provided by NME
service providers or paid for in a NME currency, we based those charges
on surrogate rates from India (see ``Surrogate Country'' section
below). To value foreign inland trucking charges, we used the average
inflation-adjusted 1994 truck freight rate contained in the Indian
periodical The Times of India. We have used this same rate in numerous
NME cases in which India has been selected as the primary surrogate
(see, e.g., Notice of Final Determinations of Sales at Less Than Fair
Value: Brake Drums and Brake Rotors from the People's Republic of
China, 62 FR 9160, 9163 (February 28, 1997)). To value foreign
brokerage and handling expenses, we relied on public information
reported in the antidumping investigation of stainless steel wire rod
from India (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, 64 FR
61581, 61584 (November 12, 1999) (Brake Rotors First Administrative
Review)).
2. GREN and Yantai
We calculated EP based on packed, CIF, U.S. or FOB foreign port
prices to the first unaffiliated purchaser in the United States. Where
appropriate, we made deductions from the starting price (gross unit
price) for foreign inland freight and foreign brokerage and handling in
the PRC, marine insurance and international freight, in accordance with
section 772(c) of the Act. As all foreign inland freight and foreign
brokerage and handling fees were provided by NME service providers or
paid for in a NME currency, we valued these services using the Indian
surrogate values discussed above. For marine insurance, we used public
information reported in the antidumping investigation of sulfur dyes,
including sulfur vat dyes, from India (see Brake Rotors First
Administrative Review, 64 FR at 61584). For ocean freight, we used a
1996 price quote (adjusted for inflation) from a U.S. shipping company
to calculate an average price for shipping. We did so because GREN used
NME carriers and Yantai paid freight expenses to a U.S. freight
forwarder which then contracted with NME carriers to ship the subject
merchandise to the United States.
3. Laizhou Hongda
We calculated EP based on packed, CIF U.S. port prices to the first
unaffiliated purchaser in the United States. Where appropriate, we made
deductions from the starting price (gross unit price) for foreign
inland freight and foreign brokerage and handling in the PRC, marine
insurance and international freight, in accordance with section 772(c)
of the Act. As all foreign inland freight and foreign brokerage and
handling fees were provided by NME service providers or paid for in a
NME currency, we valued these services using the Indian surrogate
values discussed above. For marine insurance, we used public
information as reported in the antidumping investigation of sulfur
dyes, including sulfur vat dyes, from India (see Brake Rotors First
Administrative Review at 64 FR 61584). To value ocean freight, we used
Laizhou Hongda's reported expense because Laizhou Hongda used market-
economy freight carriers (see, e.g., Brake Rotors from the People's
Republic of China: Final Results of Antidumping Duty New Shipper
Review, 64 FR 9972, 9974 (March 1, 1999).
Normal Value
A. Non-Market Economy Status
In every case conducted by the Department involving the PRC, the
PRC has been treated as a NME country. None of the parties to this
proceeding has contested such treatment. Accordingly, we calculated NV
in accordance with section 773(c) of the Act, which applies to NME
countries.
B. Surrogate Country
Section 773(c)(4) of the Act requires the Department to value a NME
producer's factors of production, to the extent possible, in one or
more market economy countries that (1) are at a level of economic
development comparable to that of the NME country, and (2) are
significant producers of comparable merchandise. India and Indonesia
are among the countries comparable to the PRC in terms of overall
economic development (see Memorandum from the Office of Policy to Irene
Darzenta Tzafolias, dated June 24, 1999, which was included in the
Department's July 1, 1999, letter sent to the interested parties in
this proceeding for the submission of PAI). In addition, based on PAI
placed on the record, India is a significant producer of the subject
merchandise. Accordingly, we considered India the primary surrogate
country for purposes of valuing the factors of production as the basis
for NV because it meets the Department's criteria for surrogate country
selection. Where we could not find surrogate values from India, we
valued those factors using values from Indonesia.
C. Factors of Production
In accordance with section 773(c) of the Act, we calculated NV
based on the factors of production. We used factors reported by
companies in the PRC that produced brake rotors for export to the
United States during the POR through reviewed exporters. To calculate
NV, the reported unit factor quantities were multiplied by publicly
available Indian or Indonesia values.
In a September 7, 1999, submission, the petitioner alleged that
there is widespread tax evasion in India and, therefore, insisted that
the Department only subtract excise duties, levies and sales taxes from
Indian domestic material prices used by the Department if the Indian
brake rotor producers demonstrated that they paid their excise and
sales taxes related to such materials used in production during the
POR. In these preliminary results, we have not used Indian domestic
prices to value the material inputs (see discussion below). Therefore,
we do not deem it necessary to address the petitioner's allegation at
this time.
In addition, the petitioner requested that the Department not
deduct an amount for duty drawback from the cost of inputs used to
produce brake rotors which are exported from India, based on
information submitted by the respondents which indicates that Indian
[[Page 73011]]
brake rotor exporters are entitled to duty drawback if they used
imported inputs to produce the exported finished good. A ``duty
drawback'' is, by definition, a remission of an amount paid (or to be
paid) as an import ``duty'' (i.e., tax). Such a ``drawback'' is often
conditional upon exporting a certain volume of product using the
imported inputs. The input prices the Department uses do not include
Indian taxes because Indian government revenue-collection practices are
not relevant to the question of what it would cost a PRC producer to
produce the item in question, if the PRC were a market economy country.
In this case, the input prices the Department is using based on the PAI
specified below are already duty free. Therefore, we have not made any
adjustment to these prices for duty drawback.
Finally, to calculate surrogate percentages for selling, general
and administrative (``SG&A'') expenses, factory overhead and profit,
the petitioner requested that the Department use financial data from a
group of Indian brake rotor producers, rather than just one Indian
brake rotor producer, which are more representative of the experience
of the Indian brake rotor industry as a whole. We agree with the
petitioner on this point, and have used financial data from five known
Indian brake rotor producers to calculate these percentages (see
discussion below).
The Department's selection of the surrogate values applied in this
determination was based on the quality, specificity, and
contemporaneity of the data. As appropriate, we adjusted input prices
to make them delivered prices. For those values not contemporaneous
with the POR and quoted in a foreign currency, we adjusted for
inflation using wholesale price indices published in the International
Monetary Fund's International Financial Statistics.
To value pig iron, we used average values based on import
statistics for April 1997-March 1998 from Monthly Statistics of the
Foreign Trade of India (``Monthly Statistics'') rather than domestic
price data in India from the April 1996-March 1997 financial report of
Lamina Foundries (``Lamina'') or from the 1996 financial report of
Nagpur Alloy Castings Ltd. (``Nagpur''), because the import data was
more contemporaneous with the POR. For iron scrap, steel scrap,
ferrosilicon, ferromanganese, lubrication oil and limestone, we used
April 1997-March 1998 average values from Monthly Statistics.
Certain types of rotors use steel sheet, lug bolts and ball bearing
cups. To value steel sheet, we used an April 1997-March 1998 average
value from Monthly Statistics. Because we could not obtain a product-
specific price from India to value lug bolts (see Bicycles, 61 FR at
19026 (Comment 17)), we used January-October 1998 product-specific
import data from the Indonesian government publication Foreign Trade
Statistical Bulletin. To value ball bearing cups, we used April 1997-
July 1997 import price data from Monthly Statistics.
To value coking coal, we used an April 1997-March 1998 import price
from Monthly Statistics rather than a price applicable during the
fourth quarter of 1996 from the International Energy Agency's Energy
Price and Taxes, because the import price was more contemporaneous with
the POR. To value firewood, we used a 1990 domestic value from the
USAID publication Marketing Opportunities for Social Forestry in Uttar
Pradesh, which is the most recent value available for this input. To
value electricity, we calculated an average 1996 industrial rate based
on data contained in the financial reports of Lamina, Nagpur, and
Jayaswals Neco Limited (``Jayaswals''). For a complete analysis of
surrogate values, see the Preliminary Results Valuation Memorandum from
the Team to the File, dated December 17, 1999 (``Preliminary Results
Valuation Memorandum'').
We valued labor based on a regression-based wage rate, in
accordance with 19 CFR 351.408(c)(3).
To value SG&A expenses, factory overhead and profit, we used the
1998-1999 financial data of Kalyanti Brakes Limited (``Kalyani'')
combined with the financial data of Indian producers whose data is less
contemporaneous with the POR (i.e., the 1996-1997 financial data of
Jayaswals, Krishna Engineering Works (``Krishna''), Nagpur, and Rico
Auto Industries Limited (``Rico'')). We did so because we determined
that it is more appropriate in this instance to calculate surrogate
percentage averages which are representative of the experience of known
Indian brake rotor producers, rather than to use the financial data of
a sole Indian brake rotor producer just because that data is more
contemporaneous with the POR as suggested by the respondents. In prior
brake rotor administrative reviews, both the petitioner and the
respondents have consistently submitted for the Department's
consideration financial statements from multiple Indian producers of
comparable merchandise which generally have been contemporaneous with
the POR. Therefore, we had no reason to question the representativeness
of the data being submitted. However, in this proceeding, the
respondents submitted the financial statement of only one Indian
producer of comparable merchandise (i.e., Kalyani). Because the
Department generally prefers surrogate ratios which are based on the
financial data of more than a single Indian producer and are more
representative of the experience of all known Indian brake rotor
producers, the Department has averaged the most recent financial data
available for Jayawals, Kalyani, Krishna, Nagpur and Rico to calculate
the surrogate ratios for factory overhead, SG&A, and profit.
Where appropriate, we removed from the surrogate overhead and SG&A
calculations the excise duty amount listed in the financial reports
(see Brake Rotors, 62 FR at 9164). We made certain adjustments to the
ratios calculated as a result of reclassifying certain expenses
contained in the financial reports. In utilizing the financial data of
the Indian companies, we treated the line item labeled ``stores and
spares consumed'' as part of factory overhead because stores and spares
are not direct materials consumed in the production progress. Based on
PAL, we considered the modeling materials (i.e., sand, bentonite, coal
powder, steel pellets, lead powder, waste oil) to be indirect materials
included in the ``stores and spares consumed'' category of the
financial statements. We based our factory overhead calculation on the
cost of manufacturing. We also included interest and/or financial
expenses in the SG&A calculation. In addition, we only reduced interest
and financial expenses by amounts for interest income if the Indian
financial report noted that the income was short-term in nature. Where
a company did not distinguish interest income as a line item within
total ``other income,'' we used the ratio of interest income to total
other income as reported for the Indian metals industry in the Reserve
Bank of India Bulletin to calculate the interest expense amount. For
example, if an Indian company's financial statement indicated that the
company had miscellaneous receipt or other income under the general
category ``other income,'' we applied a ratio (based on data contained
in Reserve Bank of India Bulletin) to that miscellaneous receipts or
other income figure in the financial statement to determine the amount
associated with short-term interest income. To avoid double-counting,
we treated the line item ``packing, freight and delivery charges'' as
expenses to be valued separately. Specifically, to determine the
packing expense, we used the respondents' reported packing factors.
[[Page 73012]]
We used the respondents' reported distances to determine the foreign
inland freight expense. For a further discussion of other adjustments
made, see the Preliminary Results Valuation Memorandum.
All inputs were shipped by truck. Therefore, to value PRC inland
freight, we used the April 1994 truck rate from the Times of India.
In accordance with the decision of the Court of Appeals for the
Federal Circuit in Sigma Corp. v. United States, 117 F. 3d 1401 (1997),
we revised our methodology for calculating source-to-factory surrogate
freight for those material inputs that are valued based on CIF import
values in the surrogate country. Therefore, we have added to CIF
surrogate values from India a surrogate freight cost using the shorter
of the reported distances from either the closest PRC port of
importation to the factory, or from the domestic supplier to the
factory on an input-specific basis.
To value adhesive tape, corrugated cartons, nails, polyethylene
material for bags, steel strap and steel strip, we used April 1997-
March 1998 import values from Monthly Statistics. To value pallet wood,
we selected an April 1995-March 1996 import value from Monthly
Statistics rather than values obtained after March 1996, because the
more contemporaneous values appeared aberrational relative to the
overall value of the subject merchandise (see Preliminary Results
Valuation Memorandum for further discussion).
Preliminary Results of the Review
We preliminarily determine that the following margins exist for the
nine respondents during the period April 1, 1998, through March 31,
1999:
------------------------------------------------------------------------
Manufacturer/producer/exporter Margin percent
------------------------------------------------------------------------
Jilin Provincial Machinery & 0.00
Equipment Import & Export
Corporation.
Laizhou Auto Brake Equipments 0.00
Factory.
Laizhou Hongda Auto Replacement 0.00
Parts Co., Ltd.
Longkou Haimeng Machinery Co........ 0.10 (de minimis)
Qingdao (Gren) Co................... 0.49(de minimis)
Yantai Import & Export Corporation.. 0.30(de minimis)
Yantai Winhere Auto-Part 0.00
Manufacturing Co.
Yenhere Corporation................. 0.00
Zibo Botai Machinery Manufacturing 0.00
Co.
PRC-Wide Rate....................... 43.32
------------------------------------------------------------------------
Parties to the proceeding may request disclosure within five days
of the date of publication of this notice. Any interested party may
request a hearing within 30 days of publication of this notice. Any
hearing, if requested, will be held on March 31, 2000.
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, Room B-099, 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
case briefs and rebuttal briefs. Case briefs from interested parties
may be submitted not later than March 24, 2000. Rebuttal briefs,
limited to issues raised in the case briefs, will be due on March 29,
2000. Parties who submit case briefs 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. Parties are also
encouraged to provide a summary of the arguments not to exceed five
pages and a table of statutes, regulations and cases cited.
The Department will issue the final results of this administrative
and new shipper review, 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 the Customs Service shall
assess, antidumping duties on all appropriate entries. Pursuant to 19
CFR 351.212(b)(1), we will calculate importer-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. In order to estimate the entered value, we will
subtract international movement expenses from the gross sales value. In
accordance with 19 CFR 351.106(c)(2), we will instruct the Customs
Service 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).
For entries of subject merchandise from those PRC companies for which
the Department has rescinded the review, the Customs Service shall
assess ad valorem duties at the rates applicable at the time of entry,
as stated in the ``Rescission'' section of this notice. For entries
subject to the PRC-wide rate, the Customs Service shall assess ad
valorem duties at the rate established in the LTFV investigation. The
Department will issue appropriate appraisement instructions directly to
the Customs Service upon completion of this review.
Cash Deposit Requirements
Upon completion of this new shipper review, for entries from
Laizhou Hongda, we will require cash deposits at the rate established
in the final results pursuant to section 751(a)(2)(B)(iii) of the Act
and 19 CFR 351.214(e) and as further described below.
The following deposit requirements will be effective upon
publication of the final results of these administrative and new
shipper antidumping duty administrative reviews for all shipments of
brake rotors from the PRC entered, or withdrawn from warehouse, for
consumption on or after the publication date, as provided by section
751(a)(1) of the Act: (1) the cash deposit rate for each reviewed
company will be the rate established in the final results; (2) the cash
deposit rate for PRC exporters who received a separate rate in a prior
segment of the proceeding but for whom the Department has rescinded the
review (i.e., Longjing and ZLAP) will continue to be the rate assigned
in that segment of the proceeding; (3) the cash deposit rate for the
PRC NME entity (i.e., all other exporters including Chen Fu) will
continue to be 43.32 percent; and (4) the cash deposit rate for non-PRC
exporters of subject merchandise from the PRC will be the rate
applicable to the PRC supplier of that exporter. These requirements,
when imposed, shall remain in effect until publication of the final
results of the next administrative review.
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 and new shipper administrative reviews and
notice are in accordance with section 751(a)(1) and (2)(B) of the Act
(19 U.S.C. 1675(a)(1) and (2)(B)) and 19 CFR 351.213 and 351.214.
[[Page 73013]]
Dated: December 21, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-33665 Filed 12-28-99; 8:45 am]
BILLING CODE 3510-DS-M
