2011-17480. Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, From the People's Republic of China: Preliminary Results of the 2009-2010 Administrative Review of the Antidumping Duty Order and Intent To Rescind Administrative Review, ...

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to requests from interested parties, the Department of Commerce (“Department”) is currently conducting the 2009-2010 administrative review of the antidumping duty order on tapered roller bearings and parts thereof, finished and unfinished (“TRBs”), from the People's Republic of China (“PRC”), covering the period June 1, 2009, through May 31, 2010. We have preliminarily determined that sales have been made below normal value (“NV”) by certain companies subject to this review. Additionally, we are announcing that we intend to rescind the review with respect to entries of TRBs exported by Tainshui Hailin Import and Export Corporation (“Hailin I&E”) produced by any manufacturer other than Hailin Bearing Factory (“HB Factory”). We have preliminarily determined that Gansu Hailin Zhongke Science & Technology Co., Ltd. (“Hailin Zhongke”) is successor-in-interest to HB Factory. If these preliminary results are adopted in our final results of this review, we will instruct U.S. Customs and Border Protection (“CBP”) to assess antidumping duties on entries of subject merchandise during the period of review (“POR”) for which the importer-specific assessment rates are above de minimis.

Interested parties are invited to comment on these preliminary results. We will issue the final results no later than 120 days from the date of publication of this notice.

DATES:

Effective Date: July 13, 2011.

FOR FURTHER INFORMATION CONTACT:

Demitri Kalogeropoulos or Frances Veith, AD/CVD Operations, Office 8, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone] or [phone], respectively.

Background

On June 15, 1987, the Department published in the Federal Register the antidumping duty order on TRBs from the PRC.^[1] On June 1, 2010, the Department published a notice of opportunity to request an administrative review of the antidumping duty order on TRBs from the PRC.^[2] On June 30, 2010, we received the following requests for review: (1) The Timken Company, of Canton, Ohio (“Petitioner”) requested that the Department conduct an administrative review of all entries of TRBs during the POR exported by Peer Bearing Co., Ltd.—Changshan (“CPZ/SKF”) and by Hailin I&E (produced by any manufacturer other than HB Factory); (2) CPZ/SKF and its affiliate Peer Bearing Company (“Peer/SKF”) requested that the Department conduct an administrative review of all entries of TRBs during the POR exported by CPZ/SKF; and (3) Bosda International USA LLC (“Bosda”), a U.S. importer of subject merchandise, requested that the Department conduct an administrative review of all entries of TRBs during the POR exported by Zhejiang Sihe Machine Co., Ltd. (“Sihe”) and Xinchang Kaiyuan Automotive Bearing Co., Ltd. (“Kaiyuan”).

On July 28, 2010, the Department initiated the administrative review of the antidumping duty order on TRBs from the PRC for the period June 1, 2009, through May 31, 2010.^[3] On August 31, 2010, we amended the Initiation Notice with respect to TRBs exported by Hailin I&E.^[4] In the Amended Initiation Notice, we clarified that this administrative review covers TRBs exported by Hailin I&E that were produced by any manufacturer other than HB Factory, because the Department previously revoked the order with respect to TRBs exported by Hailin I&E that had been produced by HB Factory.^[5]

On October 12, 2010, the Department exercised its authority to limit the number of respondents selected for individual examination pursuant to section 777A(c)(2) of the Tariff Act of 1930, as amended (“the Act”). The Department selected the two largest exporters by volume as our mandatory respondents for this review, that is, CPZ/SKF and Hailin I&E.^[6] On October 14, 2010, the Department issued its antidumping duty questionnaire to CPZ/SKF and Hailin I&E. Between November 15, 2010, and June 13, 2011, CPZ/SKF and Hailin I&E responded to the Department's original and supplemental questionnaires.

On February 24, 2011, the Department published a notice in the Federal Register extending the time limit for the preliminary results of review by the full 120 days allowed under section 751(a)(3)(A) of the Act, to June 30, 2011.^[7] Between June 15, and June 21, 2011, Petitioner and Hailin I&E submitted pre-preliminary comments.^[8] Given the timing and complexity of Petitioner's June 15, 2011 comments, the Department intends to address them fully in the context of the final results.

Period of Review

The POR is June 1, 2009 through May 31, 2010.

Scope of the Order

Imports covered by this order are shipments of tapered roller bearings and parts thereof, finished and unfinished, from the PRC; 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. These products are currently classifiable under Harmonized Tariff Schedule of the United States (“HTSUS”) item numbers 8482.20.00, 8482.91.00.50, 8482.99.15, 8482.99.45, 8483.20.40, 8483.20.80, 8483.30.80, 8483.90.20, 8483.90.30, 8483.90.80, 8708.99.80.15 ^[9] and 8708.99.80.80.^[10] Although the HTSUS item numbers are provided for convenience and customs purposes, the written description of the scope of the order is dispositive.

Successor in Interest and Intent To Rescind, in Part, the Administrative Review

In the 14th administrative review of the antidumping duty order on TRBs from the PRC (POR: June 1, 2000 through May 31, 2001), the Department revoked the order on entries or sales of TRBs exported by Hailin I&E that were produced by HB Factory.^[11] In response to questionnaires issued in the current review, Hailin I&E stated that HB Factory was no longer in existence, and during the POR covered by the current review, Hailin Zhongke was the producer of all of the TRBs that Hailin I&E exported to the United States. In addition, in its questionnaire responses, Hailin I&E stated that Hailin Zhongke is the successor-in-interest to HB Factory because: (1) In 2001 all of HB Factory's manufacturing assets were transferred to Hailin Zhongke; (2) Hailin Zhongke is located at the same physical location as HB Factory; and (3) Hailin Zhongke has the same management, suppliers, and customer base as HB Factory.

In order to determine whether Hailin I&E's exports of subject merchandise to the United States during the POR are subject to the review, the Department is conducting a successor-in-interest analysis to determine whether Hailin Zhongke is the successor-in-interest to HB Factory. In determining whether one company is the successor to another for purposes of applying the antidumping duty law, the Department examines a number of factors including, but not limited to, changes in: (1) Management, (2) production facilities, (3) supplier relationships, and (4) customer base.^[12] Although no single or even several of these factors will necessarily provide a dispositive indication of succession, generally the Department will consider one company to be a successor to another company if its resulting operation is not materially dissimilar to that of its predecessor.^[13] Thus, if the “totality of circumstances” demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the former company, the Department will treat the successor company the same as the predecessor for antidumping purposes.^[14]

In Hailin I&E's initial responses and subsequent responses to the Department's supplemental questionnaires, we found evidence that indicated that since the 14th review, ownership of the HB Factory was restructured on multiple occasions. Specifically, in the 14th review, HB Factory was a state owned enterprise, owned 100 percent by “all the people.” Based on our review of Hailin I&E's submissions, we found that, over an eight year period (2001-2008), the state owned assets in HB Factory and its successors were restructured to ultimately form Tianshui Hailin Bearing Co., Ltd. (“Hailin Bearing”) as the predominant owner of Hailin Zhongke.^[15]

Because the antidumping duty order has been revoked in part for the exporter/producer combination of Hailin I&E/HB Factory, and Hailin I&E's submissions indicate that HB Factory was restructured to form Hailin Zhongke, the Department has reviewed the information on the record to determine whether Hailin Zhongke is the successor-in-interest to HB Factory. The Department preliminarily finds, based on the totality of the circumstances, that Hailin Zhongke is the successor-in-interest to HB Factory. The record in this review indicates the following: (1) That several senior managers operating Hailin I&E and HB Factory continue to perform the same functions for Hailin I&E and Hailin Zhongke's; (2) that while in the 14th review HB Factory was state-owned (i.e., by “all the people”), SASAC later established Hailin Zhongke and transferred ownership of HB Factory's entire business complex, inclusive of physical plant and equipment, to Hailin Zhongke and that production continued virtually uninterrupted during and since the time of the transfer; (3) that Hailin Zhongke continued to purchase a significant portion of its steel bar and rod from the same supplier; (4) that Hailin Zhongke continued to supply essentially the same U.S. customer base it acquired from HB Factory's asset transfer, through Hailin I&E as HB Factory did during the 14th POR. Under these circumstances, the Department preliminarily finds that Hailin Zhongke is operating as the same business entity as HB Factory. As such, we preliminarily determine that Hailin Zhongke is the successor-in-interest to the producer HB Factory.^[16] However, for the final results, we intend to solicit additional information to further consider this issue, as well as information concerning whether Hailin Zhongke was the sole producer of the subject merchandise sold by Hailin I&E to the United States during the POR.

In its Amended Initiation Notice, the Department indicated that the administrative review covers entries of TRBs exported by Hailin I&E that were produced by any manufacturer other than HB Factory. Because we have preliminarily determined that all TRBs exported by Hailin I&E were produced by Hailin Zhongke, the successor-in-interest to HB Factory, we intend to rescind the review as to Hailin I&E on the basis of no shipments of merchandise subject to the review pursuant to 19 CFR 351.213(d)(3).

Non-Market Economy Country Status

Pursuant to section 771(18)(C)(i) of the Act, any determination that a foreign country is a non-market economy (“NME”) country shall remain in effect until revoked by the administering authority. In every case conducted by the Department involving the PRC, the PRC has been treated as an NME country.^[17] None of the parties to this review has contested such treatment. Accordingly, we calculated normal value in accordance with section 773(c) of the Act, which applies to NME countries.

Surrogate Country

Section 773(c)(1) of the Act directs the Department to base NV on the NME producer's factors of production (“FOPs”), valued in a surrogate market-economy (“ME”) country or countries considered to be appropriate by the Department. In accordance with section 773(c)(4) of the Act, in valuing the FOPs, the Department shall use, to the extent possible, the prices or costs of the FOPs in one or more market economy countries that are: (1) At a level of economic development comparable to that of the NME country; and (2) significant producers of comparable merchandise. The sources of the surrogate factor values are discussed under the “Factor Valuations” section below.^[18]

On November 3, 2010, the Department identified six countries as being at a level of economic development comparable to the PRC for the specified POR: India, the Philippines, Indonesia, Thailand, Ukraine, and Peru.^[19] On December 7, 2010, the Department invited all interested parties to submit comments on the surrogate country selection.^[20] On January 7, 2011, Petitioner and CPZ/SKF submitted comments regarding the Department's selection of a surrogate country for the preliminary results.

With respect to the Department's selection of surrogate country, both Petitioner and CPZ/SKF argue that India is the most appropriate surrogate country from which to derive surrogate factor values for the PRC because India is economically comparable to the PRC, is a significant producer of TRBs, and there is reliable information from India on the record that can be used to value respondents' FOPs.^[21] Both parties also state that the Department should rely on India to derive surrogate factor values for the PRC, as it did in the 2006-2007, 2007-2008, and 2008-2009 administrative reviews. Hailin I&E did not submit comments regarding surrogate country selection.

The Department uses per capita Gross National Income (“GNI”) as the primary basis for determining economic comparability.^[22] Once the countries that are economically comparable to the PRC have been identified, the Department selects an appropriate surrogate country by determining whether an economically comparable country is a significant producer of comparable merchandise and whether data for valuing FOPs are both available and reliable. Therefore, the Department is preliminarily selecting India as the surrogate country on the basis that: (1) It is at a similar level of economic development to the PRC, pursuant to 773(c)(4) of the Act; (2) it is a significant producer of comparable merchandise; and (3) we have reliable data from India that we can use to value the FOPs. Accordingly, we have calculated NV using Indian prices when available and appropriate to value each respondent's FOPs.^[23] In certain instances where Indian surrogate values (“SV”) were not deemed to be the best available data, we have relied on Thai SVs in the alternative. Thailand is also at a similar level of economic development to the PRC and is a significant producer of comparable merchandise. In accordance with 19 CFR 351.301(c)(3)(ii), for the final results of an administrative review, interested parties may submit publicly available information to value the FOPs within 20 days after the date of publication of these preliminary results.^[24]

Separate Rates

In antidumping proceedings involving NME countries, it is the Department's practice to begin with a rebuttable presumption that the export activities of all companies within the country are subject to government control and thus should be assessed a single antidumping duty rate. It is the Department's policy to assign all exporters of merchandise subject to review in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. Exporters can demonstrate this independence through the absence of both de jure and de facto government control over export activities. The Department analyzes each entity exporting the subject merchandise under a test arising from the Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991) (“Sparklers”), as further developed 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”). However, if the Department determines that a company is wholly foreign-owned or located in a market economy, then a separate-rate analysis is not necessary to determine whether it is independent from government control.

CPZ/SKF submitted information indicating that CPZ/SKF is a wholly foreign-owned limited liability company. Therefore, for the purposes of these preliminary results, the Department finds that it is not necessary to perform a separate-rate analysis for CPZ/SKF. Sihe and Kaiyuan each have submitted information indicating that they are limited liability PRC companies that have no foreign ownership. Therefore, the Department must analyze whether Sihe and Kaiyuan have demonstrated the absence of both de jure and de facto government control over export activities, and are therefore entitled to a separate rate.

a. Absence of De Jure Control

The Department considers the following de jure criteria in determining whether an individual company may be granted a separate rate: (1) An absence of restrictive stipulations associated with an individual exporter's business and export licenses; (2) any legislative enactments decentralizing control of companies; and (3) other formal measures by the government decentralizing control of companies.^[25]

The evidence provided by Sihe and Kaiyuan supports a preliminary finding of de jure absence of government control based on the following: (1) An absence of restrictive stipulations associated with the individual exporter's business and export licenses; (2) there are applicable legislative enactments decentralizing control of the companies; and (3) there are formal measures by the government decentralizing control of the companies.^[26]

b. Absence of De Facto Control

Typically the Department considers four factors in evaluating whether each respondent is subject to de facto government control of its export functions: (1) Whether the export prices are set by or are subject to the approval of a government agency; (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 disposition of profits or financing of losses.^[27]

The Department has determined that an analysis of de facto control is critical in determining whether respondents are, in fact, subject to a degree of government control over export activities which would preclude the Department from assigning separate rates. For Sihe and Kaiyuan, we determine that the evidence on the record supports a preliminary finding of de facto absence of government control based on record statements and supporting documentation showing the following: (1) Each respondent sets its own export prices independent of the government and without the approval of a government authority; (2) each respondent retains the proceeds from its sales and makes independent decisions regarding disposition of profits or financing of losses; (3) each respondent has the authority to negotiate and sign contracts and other agreements; and (4) each respondent has autonomy from the government regarding the selection of management.^[28]

The evidence placed on the record of this review by each respondent demonstrates an absence of de jure and de facto government control with respect to its exports of the merchandise under review, in accordance with the criteria identified in Sparklers and Silicon Carbide. Therefore, we are preliminarily granting Sihe and Kaiyuan a separate rate.

Margin for Separate Rate Companies

The Act and the Department's regulations do not address the establishment of a rate to be applied to individual companies not selected for examination where the Department limited its examination in an administrative review pursuant to section 777A(c)(2) of the Act. Generally, we have looked to section 735(c)(5) of the Act, which provides instructions for calculating the all-others rate in an investigation, for guidance when calculating the rate for respondents we did not examine in an administrative review. For the exporters subject to a review that were determined to be eligible for separate rate status, but were not selected as mandatory respondents, the Department generally weight-averages the rates calculated for the mandatory respondents, excluding any rates that are zero, de minimis, or based entirely on adverse facts available.

As discussed above, the Department received a timely and complete separate rate certification from Sihe and Kaiyuan, exporters of TRBs from the PRC during the POR and neither Sihe nor Kaiyuan were selected as mandatory respondents in this review. These companies have demonstrated their eligibility for a separate rate, as discussed above. Consistent with the Department's practice, as the separate rate, we have established a margin for Sihe and Kaiyuan based on the rate we calculated for the individually examined respondent, CPZ/SKF.

Fair Value Comparisons

To determine whether sales of TRBs to the United States by CPZ/SKF were made at less than fair value, we compared constructed export price (“CEP”) to NV, as described in the “U.S. Price” and “Normal Value” sections of this notice, below, pursuant to section 771(35) of the Act.

U.S. Price

In accordance with section 772(b) of the Act, CEP is the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter, as adjusted under sections 772(c) and (d) of the Act. In accordance with section 772(b) of the Act, we used CEP for CPZ/SKF's sales because the exporter first sold subject merchandise to its affiliated company in the United States, Peer/SKF, which in turn sold subject merchandise to unaffiliated U.S. customers. We calculated CEP based on delivered prices to unaffiliated purchasers in the United States. We made deductions from the U.S. sales price for movement expenses in accordance with section 772(c)(2)(A) of the Act. These included foreign inland freight and foreign brokerage and handling from the plant to the port of exportation, international freight, U.S. brokerage and handling, marine insurance, other U.S. transportation, U.S. customs duty, U.S. warehousing expenses, where applicable, U.S. inland freight from port to the warehouse, and U.S. inland freight from the warehouse to the customer.

We valued foreign brokerage and handling using a price list of export procedures necessary to export a standardized cargo of goods from India where foreign brokerage and handling fees were provided by PRC service providers or paid for in renminbi. The price list is compiled based on a survey case study of the procedural requirements for trading a standard shipment of goods by ocean transport in India as reported in “Doing Business 2010: India” published by the World Bank.^[29] Where foreign inland freight or international freight were provided by PRC service providers or paid for in renminbi, we based those charges on surrogate rates from India. See “Factor Valuations” section below for further discussion of these surrogate values.

In accordance with section 772(d)(1) of the Act, the Department deducted credit expenses, inventory carrying costs and indirect selling expenses from the U.S. price, all of which relate to commercial activity in the United States. Finally, we deducted CEP profit, in accordance with sections 772(d)(3) and 772(f) of the Act.^[30]

Normal Value

We compared NV to individual CEP transactions in accordance with section 777A(d)(2) of the Act, as appropriate. Section 773(c)(1) of the Act provides that the Department shall determine NV using an FOP methodology if: (1) The merchandise is exported from an NME country; and (2) the information does not permit the calculation of NV using home market prices, third country prices, or constructed value under section 773(a) of the Act. When determining NV in an NME context, the Department will base NV on FOPs because the presence of government controls on various aspects of these economies renders price comparisons and the calculation of production costs invalid under our normal methodologies. Under section 773(c)(3) of the Act, FOPs include but are not limited to: (1) Hours of labor required; (2) quantities of raw materials employed; (3) amounts of energy and other utilities consumed; and (4) representative capital costs. The Department used FOPs reported by CPZ/SKF for materials, energy, labor and packing.

In the instant review, CPZ/SKF reported sales that were further manufactured or assembled in a third country. Consistent with TRBs 2007-2008 and TRBs 2008-2009,^[31] the Department has determined that the finishing operations in the third country do not constitute substantial transformation and, hence, do not confer a new country of origin for antidumping purposes. As such, we have determined NV for such sales based on the country of origin (i.e., the PRC), pursuant to section 773(a)(3)(A) of the Act, because CPZ/SKF knew at the time of the sale of merchandise to the third country that it was destined for export to the United States. The Department also included the further manufacturing and assembly costs incurred in the third country in the NV calculation, as well as the expense of transporting the merchandise from the factory in the PRC to the further manufacturing plant in the third country.^[32]

Factor Valuations

In accordance with section 773(c) of the Act, we calculated NV based on FOPs reported by CPZ/SKF for the POR. In accordance with 19 CFR 351.408(c)(1), the Department will normally use publicly available information to find an appropriate SV to value FOPs, but when a producer sources an input from a market economy and pays for it in market economy currency, the Department normally will value the factor using the actual price paid for the input if the quantities were meaningful and where the prices have not been distorted by dumping or subsidies.^[33] To calculate NV, we multiplied the reported per-unit factor-consumption rates by publicly available SVs (except as discussed below). In selecting the best available information for valuing FOPs in accordance with section 773(c)(1) of the Act, the Department's practice is to select, to the extent practicable, SVs which are non-export average values, most contemporaneous with the POR, product-specific, and tax-exclusive.^[34] We considered the quality, specificity, and contemporaneity of the data.^[35] As appropriate, we adjusted input prices by including freight costs to make them delivered prices. Specifically, we added to import SVs a surrogate freight cost using the shorter of the reported distance from the domestic supplier to the factory or the distance from the nearest seaport to the factory where appropriate. This adjustment is in accordance with the Court of Appeals for the Federal Circuit's decision in Sigma Corp. v. United States, 117 F.3d 1401, 1407-08 (Fed. Cir. 1997).

On December 7, 2010, the Department invited all interested parties to submit publicly available information to value FOPs for consideration in the Department's preliminary results of review.^[36] On January 14, 2011, Petitioner and CPZ/SKF each submitted publicly available information to value FOPs for the preliminary results and CPZ/SKF submitted rebuttal comments on January 24, 2011. A detailed description of all surrogate values used for CPZ/SKF can be found in the Surrogate Value Memorandum.

For the preliminary results, in accordance with the Department's practice, except where noted below, we used data from the Indian import statistics in the Global Trade Atlas (“GTA”), published by Global Trade Information Services, Inc. (“GTIS”) and other publicly available Indian sources to calculate SVs for CPZ/SKF's FOPs (i.e., direct materials, energy, and packing materials) and certain movement expenses. The GTA reports import statistics, such as from India, in the original reporting currency and thus this data corresponds to the original currency value reported by each country. The record shows that data in the Indian import statistics, as well as those from the other Indian sources, are contemporaneous with the POR, product-specific, and tax-exclusive.^[37] In those instances where we could not obtain publicly available information contemporaneous to the POR with which to value factors, we adjusted the SVs using, where appropriate, the Indian Wholesale Price Index (“WPI”) as published in the International Monetary Fund's International Financial Statistics.^[38]

As explained in the legislative history of the Omnibus Trade and Competitiveness Act of 1988, the Department continues to apply its long-standing practice of disregarding SVs if it has a reason to believe or suspect the source data may reflect subsidized prices.^[39] In this regard, the Department has previously found that it is appropriate to disregard such prices from India, Indonesia, South Korea and Thailand because we have determined that these countries maintain broadly available, non-industry specific export subsidies.^[40] Based on the existence of these subsidy programs that were generally available to all exporters and producers in these countries at the time of the POR, the Department finds that it is reasonable to infer that all exporters from India, Indonesia, South Korea and Thailand may have benefitted from these subsidies. Additionally, we disregarded prices from NME countries.^[41] Finally, imports that were labeled as originating from an “unspecified” country were excluded from the average value, because the Department could not be certain that they were not from either an NME country or a country with generally available export subsidies.^[42]

CPZ/SKF claimed that certain of its reported raw material inputs were sourced from an ME country and paid for in ME currencies. When a respondent sources inputs from an ME supplier in meaningful quantities, we use the actual price paid by respondent for those inputs, except when prices may have been distorted by dumping or subsidies.^[43] Where we found ME purchases to be of significant quantities (i.e., 33 percent or more), in accordance with our statement of policy as outlined in Antidumping Methodologies: Market Economy Inputs,^[44] we used the actual purchase prices of these inputs to value the full input.

Accordingly, we valued certain of CPZ/SKF's inputs using the ME currency prices paid where the total volume of the input purchased from all ME sources during the POR exceeds or is equal to 33 percent of the total volume of the input purchased from all sources during the period. Where the quantity of the reported input purchased from ME suppliers was below 33 percent of the total volume of the input purchased from all sources during the POR, and were otherwise valid, we weight-averaged the ME input's purchase price with the appropriate surrogate value for the input according to their respective shares of the reported total volume of purchases.^[45] Where appropriate, we added freight to the ME prices of inputs. For a detailed description of the actual values used for the ME inputs reported, see CPZ/SKF Program Analysis Memorandum.

Among the FOPs for which the Department calculated SVs using Indian import statistics are steel tube, cage steel, steel scrap, anti-rust oil, and all packing materials.

With respect to the valuation of wire rod, Petitioner submitted data from two HTS categories, Indian HTS 7228.50.90—Other steel bars, not cold formed, other, and Thai HTS 7228.50.10—Other steel bars, not cold formed, of circular cross-section. CPZ/SKF recommended that Thai import data be used to value its wire rod, citing the preceding antidumping review of TRBs in which the Department chose Thai data because the Indian data were determined to be aberrational and less specific to the input.^[46] CPZ/SKF argues that similar circumstances are present in this segment of the proceeding and so the Department should again reject the Indian import data in favor of the Thai import data.

For the preliminary results, we have determined to use contemporaneous Thai import data from HTS category 7228.50.10 to calculate an SV for wire rod because these data are more specific to the input than the Indian import data. Specifically, the Indian HTS category contains rod of a type identified as “other,” whereas the Thai HTS category identifies a particular type of rod that is of “circular cross-section,” corresponding to the shape of CPZ/SKF's actual wire rod input.^[47]

We valued truck freight expenses using a per-unit average rate calculated from data on the infobanc Web site: http://www.infobanc.com/​logistics/​logtruck.htm. The logistics section of this Web site contains inland freight truck rates between many large Indian cities.^[48]

We valued electricity using the updated electricity price data for small, medium, and large industries, as published by the Central Electricity Authority, an administrative body of the Government of India, in its publication titled “Electricity Tariff & Duty and Average Rates of Electricity Supply in India,” dated March 2008. These electricity rates represent actual country-wide, publicly-available information on tax-exclusive electricity rates charged to small, medium, and large industries in India.^[49] Because the rates listed in this source became effective on a variety of different dates, we are not adjusting the average value for inflation. In other words, the Department did not inflate this value to the POR because the utility rates represent current rates, as indicated by the effective date listed for each of the rates provided.^[50]

Because CPZ/SKF had shipments of subject merchandise to a third country for further manufacturing during the POR, we added the additional international freight cost to NV, and applied the SV for international freight from the PRC to the third country. The Department valued ocean freight using publicly available data collected from Maersk Line.^[51]

Section 733(c) of the Act provides that the Department will value the FOPs in NME cases using the best available information regarding the value of such factors in a ME country or countries considered to be appropriate by the administering authority. The Act requires that when valuing FOPs, the Department utilizes, to the extent possible, the prices or costs of FOPs in one or more ME countries that are: (1) At a comparable level of economic development and (2) significant producers of comparable merchandise.^[52]

Previously, the Department used regression-based wages that captured the worldwide relationship between per capita GNI and hourly manufacturing wages, pursuant to 19 CFR 351.408(c)(3), to value the respondent's cost of labor. However, on May 14, 2010, the Court of Appeals for the Federal Circuit (“CAFC”), in Dorbest Ltd. v. United States, 604 F.3d 1363, 1372 (Fed. Cir. 2010) (“Dorbest”), invalidated 19 CFR 351.408(c)(3). As a consequence of the CAFC's ruling in Dorbest, the Department no longer relies on the regression-based wage rate methodology described in its regulations. On February 18, 2011, the Department published in the Federal Register a request for public comment on the interim methodology, and the data sources.^[53]

On June 21, 2011, the Department revised its methodology for valuing the labor input in NME antidumping proceedings.^[54] In Labor Methodologies, the Department determined that the best methodology to value the labor input is to use industry-specific labor rates from the primary surrogate country. Additionally, the Department determined that the best data source for industry-specific labor rates is Chapter 6A: Labor Cost in Manufacturing, from the International Labor Organization (ILO) Yearbook of Labor Statistics (“Yearbook”).

In these preliminary results, the Department calculated the labor input using the wage method described in Labor Methodologies. To value the respondent's labor input, the Department relied on data reported by India to the ILO in Chapter 6A of the Yearbook. The Department further finds the two-digit description under ISIC-Revision 3 (“29—Manufacture of machinery and equipment”) to be the best available information on the record because it is specific to the industry being examined, and is therefore derived from industries that produce comparable merchandise. This two-digit category contains the sub-category for class 2913—“manufacture of bearings, gears, gearing and driving elements.” Accordingly, relying on Chapter 6A of the Yearbook, the Department calculated the labor input using labor data reported by India to the ILO under Sub-Classification 29 of the ISIC-Revision 3 standard, in accordance with Section 773(c)(4) of the Act. For these preliminary results, the calculated industry-specific wage rate is $1.66. Because this wage rate does not separate the labor rates into different skill levels or types of labor, the Department has applied the same wage rate to all skill levels and types of labor reported by CPZ/SKF.^[55] A more detailed description of the wage rate calculation methodology is provided in the preliminary surrogate value memorandum.^[56]

As stated above, the Department used India's ILO data reported under Chapter 6A of Yearbook, which reflects all costs related to labor, including wages, benefits, housing, training, etc. Since the financial statements used to calculate the surrogate financial ratios include itemized detail of indirect labor costs, the Department made adjustments to the surrogate financial ratios.^[57]

Pursuant to 19 CFR 351.408(c)(4), the Department valued factory overhead, selling, general and administrative expenses and profit using non-proprietary information gathered from producers of identical or comparable merchandise in the surrogate country. The Department's practice is to disregard financial information containing evidence that the company received subsidies that the Department has previously found to be countervailable, and where there are other reliable data on the record for purposes of calculating the surrogate financial ratios.^[58] For these preliminary results, we used the average of the ratios derived from the financial statements of three Indian producers of TRBs: ABC Bearings Limited (for the year ending on March 31, 2009), FAG Bearings India Limited (for the year ending on December 31, 2009), and NRB Bearing (for the year ending on March 31, 2010). We did not use financial statements from three other Indian producers, SKF India, Timken India, and Austin Bearing, because they each contained evidence of receipt of a subsidy which the Department has found to be countervailable.^[59] Specifically, these three Indian producers received benefits under the Duty Entitlement Pass Book, a program that the Department has previously determined to be countervailable.^[60]

CPZ/SKF reported that steel scrap was recovered as a by-product of the production of subject merchandise and successfully demonstrated that the scrap has commercial value. Therefore, we have granted a by-product offset for the quantities of the reported by-product, valued using Indian GTA data.^[61]

Currency Conversion

Where appropriate, we made currency conversions into U.S. dollars, in accordance with section 773A(a) of the Act, based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank.

Preliminary Results of Review

We preliminarily determine that the following weighted-average dumping margin exists for the period June 1, 2009, through May 31, 2010:

TRBs From the PRC

Exporters	Weighted- average percent margin
Changshan Peer Bearing Co., Ltd.	5.61
Zhejiang Sihe Machine Co., Ltd.	5.61
Xinchang Kaiyuan Automotive Bearing Co., Ltd.	5.61

Disclosure and Public Comment

The Department will disclose calculations performed for these preliminary results to the parties within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). Interested parties may submit written comments no later than 30 days after the date of publication of these preliminary results of review.^[62] Rebuttals to written comments may be filed no later than five days after the written comments are filed.^[63] Further, parties submitting written comments and rebuttal comments are requested to provide the Department with an additional copy of those comments on diskette.

Any interested party may request a hearing within 30 days of publication of this notice.^[64] Hearing requests should contain the following information: (1) The party's name, address, and telephone number; (2) the number of participants; and (3) a list of the issues to be discussed. Oral presentations will be limited to issues raised in the briefs. If a request for a hearing is made, parties will be notified of the time and date for the hearing to be held at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.^[65]

The Department will issue the final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, within 120 days of publication of these preliminary results, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

The Department will determine, and CBP shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this review. For assessment purposes, we calculated exporter/importer (or customer) -specific assessment rates for merchandise subject to this review. Where appropriate, we calculated an ad valorem rate for each importer (or customer) by dividing the total dumping margins for reviewed sales to that party by the total entered values associated with those transactions. For duty-assessment rates calculated on this basis, we will direct CBP to assess the resulting ad valorem rate against the entered customs values for the subject merchandise. Where appropriate, we calculated a per-unit rate for each importer (or customer) by dividing the total dumping margins for reviewed sales to that party by the total sales quantity associated with those transactions. For duty-assessment rates calculated on this basis, we will direct CBP to assess the resulting per-unit rate against the entered quantity of the subject merchandise. Where an importer (or customer) -specific assessment rate is de minimis (i.e., less than 0.50 percent), the Department will instruct CBP to assess that importer (or customer's) entries of subject merchandise without regard to antidumping duties. We intend to instruct CBP to liquidate entries containing subject merchandise exported by the PRC-wide entity at the PRC-wide rate we determine in the final results of this review. The Department intends to issue appropriate assessment instructions directly to CBP 15 days after publication of the final results of this review.

With regard to Hailin I&E, if we continue to find in our final results of review that Hailin Zhongke (1) Is the successor-in-interest to HB Factory, and (2) was Hailin I&E's sole supplier of TRBs sold to the United States during the POR, we will instruct CBP to liquidate Hailin I&E's entries of subject merchandise produced by Hailin Zhongke without regard to antidumping duties.

Cash Deposit Requirements

The following cash deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise from the PRC entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(2)(C) of the Act: (1) For CPZ/SKF, Sihe, and Kaiyuan, the cash deposit rate will be their respective rates established in the final results of this review, except if the rate is zero or de minimis no cash deposit will be required; (2) for previously investigated or reviewed PRC and non-PRC exporters not listed above that have separate rates, the cash deposit rate will continue to be the exporter-specific rate published for the most recent period; (3) for all PRC exporters of subject merchandise which have not been found to be entitled to a separate rate, the cash deposit rate will be the PRC-wide rate of 92.84 percent; and (4) for all non-PRC exporters of subject merchandise which have not received their own rate, the cash deposit rate will be the rate applicable to the PRC exporters that supplied that non-PRC exporter. These deposit requirements, when imposed, shall remain in effect until further notice.

Notification to Importers

This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) 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.

We are issuing and publishing these preliminary results of review in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.213.

Dated: June 30, 2011.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

Footnotes

1.  See Notice of Antidumping Duty Order: Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, From the People's Republic of China, 52 FR 22667 (June 15, 1987).

2.  See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 75 FR 30383 (June 1, 2010).

3.  See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 75 FR 44224 (July 28, 2010) (“Initiation Notice”).

4.  See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Deferral of Initiation of Administrative Review, 75 FR 53274, 53276 (August 31, 2010) (“Amended Initiation Notice”).

5.  See id. at n 5 (citing Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of 2000-2001 Administrative Review, Partial Rescission of Review, and Determination to Revoke Order, in Part, 67 FR 68990 (November 14, 2002)).

6.  See the Department's Memorandum entitled, “Administrative Review of the Antidumping Duty Order on Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Respondent Selection,” dated October 12, 2010.

7.  See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China: Extension of Time Limit for the Preliminary Results of the 2009-2010 Administrative Review of the Antidumping Duty Order, 76 FR 10336 (February 24, 2011).

8.  See Petitioner's June 15, 2011, letter titled “Administrative Review of the Antidumping Duty Order Covering Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China (6/1/2009-5/31/2010); The Timken Company's Comments on the Department's Preliminary Results for SKF;” and Petitioner's June 21, 2011, letter titled “Administrative Review of the Antidumping Duty Order Covering Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China (6/1/2009-5/31/2010); The Timken Company's Comments on the Department's Preliminary Results for Tianshui Hailin;” and Hailin I&E's June 16, 2011, letter titled “Tapered Roller Bearings from the PRC.”

9.  Effective January 1, 2007, the HTSUS subheading 8708.99.8015 is renumbered as 8708.99.8115. See United States International Trade Commission (“USITC”) publication entitled, “Modifications to the Harmonized Tariff Schedule of the United States Under Section 1206 of the Omnibus Trade and Competitiveness Act of 1988,” USITC Publication 3898 (December 2006) found at http://www.usitc.gov.

10.  Effective January 1, 2007, the USHTS subheading 8708.99.8080 is renumbered as 8708.99.8180; see id.

11.  See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of 2000-2001 Administrative Review, Partial Rescission of Review, and Determination to Revoke Order, in Part, 67 FR 68990 (November 14, 2002).

12.  See, e.g., Ball Bearings and Parts Thereof from France: Final Results of Changed-Circumstances Review, 75 FR 34688 (June 18, 2010), and accompanying Issues and Decision Memorandum (“IDM”) at Comment 1.

13.  See, e.g., Fresh and Chilled Atlantic Salmon From Norway; Final Results of Changed Circumstances Antidumping Duty Administrative Review, 64 FR 9979 (March 1, 1999).

14.  See id. at 9980; see also Brass Sheet and Strip from Canada: Final Result of Administrative Review, 57 FR 20461 (May 13, 1992) at Comment 1.

15.  See Hailin I&E's section A and supplemental section A submissions dated November 18, 2010, and May 20, 2011, respectively; see also the Department's Memorandum entitled “2009-2010 Administrative Review of the Antidumping Duty Order on Tapered Roller Bearings from the People's Republic of China: Preliminary Successor-In-Interest Determination,” dated concurrently with this notice (“Preliminary Successor-In-Interest Memorandum”).

16.  See Preliminary Successor-In-Interest Memorandum.

17.  See, e.g., Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, From the People's Republic of China: Preliminary Results of the 2008-2009 Administrative Review of the Antidumping Duty Order, 75 FR 41148 (July 15, 2010), unchanged in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of the 2008-2009 Antidumping Duty Administrative Review, 76 FR 3086 (January 19, 2011).

18.  See also the Department's memorandum entitled, “Preliminary Results of the 2009-2010 Administrative Review of the Antidumping Duty Order on Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from the People's Republic of China: Surrogate Value Memorandum,” dated concurrently with this notice (“Surrogate Value Memorandum”).

19.  See Attachment I of the Department's letter dated December 7, 2010, in which we requested all interested parties to provide comments on surrogate-country selection and provide FOP values from the potential surrogate countries (i.e., India, Indonesia, the Philippines, Thailand, Ukraine, and Peru) (“Surrogate Countries Letter”). Attachment I contains the Department's Memorandum from Carole Showers, Director, Office of Policy, to Erin Begnal, Program Manager, AD/CVD Operations, Office 8, entitled, “Request for a List of Surrogate Countries for an Administrative Review of the Antidumping Duty Order on Tapered Roller Bearings and Parts Thereof, Finished and Unfinished (“TRBs”) from the People's Republic of China (“PRC”),” dated November 3, 2010 (“Surrogate Countries Memorandum”); see the Department's Policy Bulletin No. 04.1, regarding, “Non-Market Economy Surrogate Country Selection Process,” (March 1, 2004) (“Policy Bulletin 04.1”), available on the Department's Web site at http://ia.ita.doc.gov/​policy/​bull04-1.html.

20.  See Surrogate Countries Letter.

21.  See Petitioner's and CPZ/SKF's submissions dated January 7, 2011, regarding the appropriate surrogate country to be used for purposes of valuing FOPs in this administrative review.

22.  See Policy Bulletin 04.1.

23.  See Surrogate Value Memorandum; see also “Factor Valuations” section, below.

24.  In accordance with 19 CFR 351.301(c)(1), for the final results of this administrative review, interested parties may submit factual information to rebut, clarify, or correct factual information submitted by an interested party less than ten days before, on, or after, the applicable deadline for submission of such factual information. However, the Department notes that 19 CFR 351.301(c)(1) permits new information only insofar as it rebuts, clarifies, or corrects information recently placed on the record. The Department generally will not accept the submission of additional, previously absent-from-the-record alternative surrogate value information pursuant to 19 CFR 351.301(c)(1). See Glycine from the People's Republic of China: Final Results of Antidumping Duty Administrative Review and Final Rescission, in Part, 72 FR 58809 (October 17, 2007), and accompanying IDM at Comment 2.

25.  See Sparklers, 56 FR at 20589.

26.  See Sihe's Separate Rate Application (“SRA”), dated October 21, 2010, and Kaiyuan's SRA, dated October 21, 2010.

27.  See Silicon Carbide, 59 FR at 22586-87; see also Notice of Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol From the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995).

28.  See Sihe's SRA, dated October 21, 2010, and Kaiyuan's SRA dated October 21, 2010.

29.  See Surrogate Value Memorandum.

30.  See the Department's memorandum entitled, “2009-2010 Administrative Review of the Antidumping Duty Order on Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from the People's Republic of China: Analysis of the Preliminary Determination Margin Calculation for Peer Bearing Company—Changshan,” dated concurrently with this notice (“CPZ/SKF Program Analysis Memorandum”).

31.  See Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from the People's Republic of China: Final Results of 2007-2008 Administrative Review of the Antidumping Duty Order, 75 FR 844 (January 6, 2010) (“TRBs 2007-2008”), and accompanying IDM at Comment 1; and Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China: Final Results of the 2008-2009 Antidumping Duty Administrative Review, 76 FR 3086 (January 19, 2011) (“TRBs 2008-2009”), and accompanying IDM at Comment 6.

32.  See CPZ/SKF's Program Analysis Memorandum.

33.  See Shakeproof Assembly Components Div of Ill Tool Works v. United States, 268 F. 3d 1376, 1382-83 (Fed. Cir. 2001) (affirming the Department's use of market-based prices to value certain FOPs).

34.  See, e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value, Negative Preliminary Determination of Critical Circumstances and Postponement of Final Determination: Certain Frozen and Canned Warmwater Shrimp From the Socialist Republic of Vietnam, 69 FR 42672, 42682 (July 16, 2004), unchanged in Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned Warmwater Shrimp from the Socialist Republic of Vietnam, 69 FR 71005 (December 8, 2004).

35.  See, e.g., Fresh Garlic From the People's Republic of China: Final Results of Antidumping Duty New Shipper Review, 67 FR 72139 (December 4, 2002), and accompanying IDM at Comment 6; and Final Results of First New Shipper Review and First Antidumping Duty Administrative Review: Certain Preserved Mushrooms From the People's Republic of China, 66 FR 31204 (June 11, 2001), and accompanying IDM at Comment 5.

36.  See Surrogate Countries Letter.

37.  See Surrogate Value Memorandum.

38.  See, e.g., Certain Kitchen Appliance Shelving and Racks From the People's Republic of China: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 74 FR 9600 (March 5, 2009), unchanged in Certain Kitchen Appliance Shelving and Racks From the People's Republic of China: Final Determination of Sales at Less than Fair Value, 74 FR 36656 (July 24, 2009).

39.  Omnibus Trade and Competitiveness Act of 1988, Conf. Report to Accompany H.R. 3, H.R. Rep. No. 576, 100th Cong., 2nd Sess. (1988) (“OTCA 1988”) at 590, reprinted in 1988 U.S.C.C.A.N. 1547, 1623-24.

40.  See, e.g., Expedited Sunset Review of the Countervailing Duty Order on Carbazole Violet Pigment 23 from India, 75 FR 13257 (March 19, 2010), and accompanying Issues and Decision Memorandum at 4-5; Expedited Sunset Review of the Countervailing Duty Order on Certain Cut-to-Length Carbon Quality Steel Plate from Indonesi a, 70 FR 45692 (August 8, 2005), and accompanying Issues and Decision Memorandum at 4; Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea: Final Results of Countervailing Duty Administrative Review, 74 FR 2512 (January 15, 2009), and accompanying Issues and Decision Memorandum at 17, 19-20; Final Results of Countervailing Duty Determination: Certain Hot-Rolled Carbon Steel Flat Products from Thailand, 66 FR 50410 (October 3, 2001), and accompanying Issues and Decision Memorandum at 23.

41.  See Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, From the People's Republic of China: Preliminary Results of the 2008-2009 Administrative Review of the Antidumping Duty Order, 76 FR 34048, unchanged in TRBs 2008-2009.

42.  See id.

43.  See Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27366 (May 19, 1997).

44.  See Antidumping Methodologies: Market Economy Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request for Comments, 71 FR 61716, 61717-18 (October 19, 2006) (“Antidumping Methodologies: Market Economy Inputs”).

45.  See Antidumping Methodologies: Market Economy Inputs, 71 FR at 61718.

46.  TRBs 2008-2009 and IDM at Comment 15.

47.  See Surrogate Value Memorandum.

48.  See id.

49.  See id.

50.  See, e.g., Wire Decking from the People's Republic of China: Final Determination of Sales at Less Than Fair Value, 75 FR 32905 (June 10, 2010), and accompanying IDM at Comment 3.

51.  See Surrogate Value Memorandum.

52.  See section 773(c)(4) of the Act.

53.  See Antidumping Methodologies in Proceedings Involving Non-Market Economies: Valuing the Factor of Production: Labor, Request for Comment, 76 FR 9544 (Feb. 18, 2011).

54.  See Antidumping Methodologies in Proceedings Involving Non-Market Economies: Valuing the Factor of Production: Labor, 76 FR 36092 (June 21, 2011) (“Labor Methodologies”).

55.  See Surrogate Value Memorandum.

56.  See id.

57.  See Surrogate Value Memorandum.

58.  See First Administrative Review of Steel Wire Garment Hangers From the People's Republic of China: Final Results and Final Partial Rescission of Antidumping Duty Administrative Review, 76 FR 27994 (May 13, 2011) and IDM at Comment 2.

59.  See Surrogate Value Memorandum.

60.  See, e.g., Certain Iron-Metal Castings from India: Preliminary Results and Partial Rescission of Countervailing Duty Administrative Review, 64 FR 61592 (Nov. 12, 1999), unchanged in Certain Iron-Metal Castings from India: Final Results of Countervailing Duty Administrative Review, 65 FR 31515 (May 18, 2000).

61.  See Surrogate Value Memorandum.

62.  See 19 CFR 351.309(c).

63.  See 19 CFR 351.309(d).

64.  See 19 CFR 351.310(c).

65.  See 19 CFR 351.310(d).