E9-16096. Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from the People's Republic of China: Preliminary Results of the 2007-2008 Administrative Review of the Antidumping Duty Order

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (“Department”) is currently conducting the 2007-2008 administrative review of the antidumping duty order on tapered roller bearings and parts thereof, finished or unfinished (“TRBs”), from the People's Republic of China (“PRC”), covering the period June 1, 2007, through May 31, 2008. This administrative review covers one producer/exporter of the subject merchandise, i.e. Peer Bearing Company Changshan (“CPZ”). We preliminarily determine that CPZ made sales below normal value (“NV”). 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 final results no later than 120 days from the date of publication of this notice.

EFFECTIVE DATE:

July 8, 2009.

FOR FURTHER INFORMATION CONTACT:

Frances Veith or Brendan Quinn, 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.

SUPPLEMENTARY INFORMATION:

Background

On June 15, 1987, the Department published in the Federal Register the antidumping duty order on TRBs from the PRC.¹ On June 9, 2008, the Department published a notice of opportunity to request an administrative review of the antidumping duty order on tapered roller bearings from the PRC. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 73 FR 32557 (June 9, 2008). On June 30, 2008, CPZ, an exporter of TRBs, requested that the Department conduct an administrative review of its sales. Additionally, on June 30, 2008, the Timken Company, of Canton, Ohio (“Petitioner”) requested that the Department conduct an administrative review of all entries of subject merchandise produced and/or exported by CPZ. On July 30, 2008, the Department published in the Federal Register a notice of the initiation of the antidumping duty administrative review of TRBs from the PRC for the period June 1, 2007, through May 31, 2008, for CPZ. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, Request for Revocation in Part, and Deferral of Administrative Review, 73 FR 44220 (July 30, 2008).

On September 9, 2008, the Department issued its antidumping duty questionnaire to CPZ. CPZ submitted its Section A questionnaire response on October 8, 2008, a supplement to its Section A submission on October 15, 2008, its Section C questionnaire response on October 24, 2008, and its Section D questionnaire response on October 29, 2008. The Department issued CPZ a supplemental Section A questionnaire on January 29, 2009, a supplemental Section C questionnaire on February 17, 2009, and a supplemental Section D questionnaire and second supplemental Section A questionnaire on March 11, 2009. CPZ submitted its supplemental Section A questionnaire response on February 20, 2009, its supplemental Section C response on March 12, 2009, its second supplemental Section A questionnaire response on March 26, 2009, the first part of the supplemental Section D response and a revised Section C database on April 2, 2009, and the second part of the supplemental Section D response on April 16, 2009.

On February 19, 2009, the Department published a notice in the Federal Register extending the time limit for the preliminary results of review by 90 days until June 1, 2009. See Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from the People's Republic of China: Extension of Time Limit for the Preliminary Results of the 2007-2008 Administrative Review of the Antidumping Duty Order, 74 FR 7661 (February 19, 2009). On April 27, 2009, the Department published a notice in the Federal Register extending the time limit for the preliminary results of review by an additional 30 days until June 30, 2009. See Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from the People's Republic of China: Extension of Time Limit for the Preliminary Results of the 2007-2008 Administrative Review of the Antidumping Duty Order, 74 FR 19046 (April 27, 2009). The Department verified the accuracy of CPZ's submissions on April 29, 2009 and April 30, 2009 in Waukegan, Illinois, at the offices of Peer Bearing Company, CPZ's U.S. affiliate, and on May 28, 2009, through June 5, 2009, at CPZ's offices in Changshan, China. At the conclusion of the aforementioned verification, the Department verbally requested that CPZ submit a corrected U.S. sales and FOP database to include changes resulting from both the U.S. and Chinese verifications. On June 16, 2009, CPZ submitted the requested revised U.S. sales and FOP databases.

Period of Review

The POR is June 1, 2007, through May 31, 2008.

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 and 8708.99.80.80. Although the HTSUS item numbers are provided for convenience and customs purposes, the written description of the scope of the order is dispositive.

Non-Market Economy Country Status

In every case conducted by the Department involving the PRC, the PRC has been treated as a non-market economy (“NME”) country.² In accordance with section 771(18)(C)(i) of the Tariff Act of 1930, as amended (“the Act”), any determination that a foreign country is an NME country shall remain in effect until revoked by the administering authority. See, e.g., Brake Rotors from the People's Republic of China: Final Results and Partial Rescission of the 2004/2005 Administrative Review and Notice of Rescission of 2004/2005 New Shipper Review, 71 FR 66304 (November 14, 2006). No party 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.

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 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 “Normal Value” section below.³

The Department's practice with respect to determining economic comparability is explained in Policy Bulletin 04.1,⁴ which states that “OP {Office of Policy} determines per capita economic comparability on the basis of per capita gross national income, as reported in the most current annual issue of the World Development Report (The World Bank).”

On December 22, 2008, 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, Colombia, Thailand, and Peru.⁵ The Department considers the six countries identified in the Surrogate Countries Memo as “equally comparable in terms of economic development.” See Policy Bulletin 04.1 at 2. Thus, we find that India, the Philippines, Indonesia, Colombia, Thailand, and Peru are all at an economic level of development equally comparable to that of the PRC.

On December 22, 2008, the Department invited all interested parties to submit comments on the surrogate country selection.⁶ We also invited all interested parties to submit publicly available information to value factors of production for consideration in the Department's preliminary results of review.

On January 9, 2009, both Petitioner and CPZ submitted comments regarding the Department's selection of a surrogate country for the preliminary results. Petitioner requested that India be considered as the primary surrogate country, while CPZ requested the Department also consider Indonesia as a potential surrogate. With regard to the valuation of individual factors, Petitioner submitted publicly available information for the Department to consider for the preliminary results on November 14, 2008, December 3, 2008, and January 29, 2009. CPZ submitted publicly available information for the Department to consider on January 30, 2009, and on February 04, 2009. In its February 4, 2009, submission, CPZ requested that the Department also consider surrogate value data from Thailand.

The Department's Policy Bulletin 04.1 provides guidance on identifying comparable merchandise and selecting a producer of comparable merchandise. The merchandise subject to the scope of the order is currently classifiable under subheadings 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 and 8708.99.80.80 of the HTSUS.⁷ For purposes of comparable merchandise analysis, the Department obtained world export data from World Trade Atlas, published by Global Trade Information Services, Inc. (“WTA”) for harmonized tariff schedule (“HTS”) subheadings 8482.20, 8482.20.00, 8482.91, 8482.91.00, 8482.99, 8482.99.00, 8483.20, 8483.20.00, 8483.20.90, 8483.30, 8483.30.00, 8483.30.90, 8483.90, 8483.90.00, 8708.99, 8708.99.99, 8708.99.19,⁸ which show that India, the Philippines, Indonesia, Colombia, Thailand, and Peru are producers of comparable merchandise.⁹ Thus, all countries listed in the Surrogate Countries Memo are considered as appropriate surrogates because each exported comparable merchandise. The Department used export data in its comparable merchandise analysis because the Department was unable to find production data for the potential surrogate countries. Therefore, we relied on each country's WTA export data of TRBs as a substitute for overall production data in the comparable merchandise analysis.

The Policy Bulletin 04.1 also provides some guidance on identifying significant producers of comparable merchandise and selecting a producer of comparable merchandise. Further analysis was required to determine whether any of the countries which produce comparable merchandise are significant producers of that comparable merchandise. The data we obtained show that, in 2007, worldwide exports for HTS 8482.20 and 8482.20.00 “Tapered roller bearings, including cone and roller assemblies” from: India was approximately 10,073,266 units; Indonesia was approximately 6,631 Kg; Colombia was 683 units; the Philippines was 0 Kg; Thailand was approximately 570,362 units, and Peru was 719 units. From this analysis, only India and Thailand appear to be significant producers of comparable merchandise. Although CPZ submitted information on the record to demonstrate that Indonesia is a significant producer of comparable merchandise and should be considered for use as the primary surrogate country, we find that, while the information submitted by CPZ does show Indonesia to be a producer of comparable merchandise, the aforementioned WTA data shows that Indonesia is not a significant producer of said merchandise. CPZ also submitted production information to demonstrate that Thailand is a significant producer of comparable merchandise. However, CPZ submitted this Thai production data in support of its contention that the Department should consider Thai information to value certain FOPs (see “Factor Valuations” section below), but did not request that Thailand be considered for use as the primary surrogate country.

With respect to data considerations in selecting a surrogate country, it is the Department's practice that, “if more than one country has survived the selection process to this point, the country with the best factors data is selected as the primary surrogate country.” For the purpose of assessing data sources from potential surrogate countries, “it is the Department's stated practice to use investigation or review period-wide price averages, prices specific to the input in question, prices that are net of taxes and import duties, prices that are contemporaneous with the period of investigation or review, and publicly available data.” See Policy Bulletin 04.1 at 4. Currently, the record contains surrogate value information from India, Thailand, and Indonesia. At present, the Indian information submitted to the record contains the most complete set of surrogate value information, as surrogate Indian import values have been submitted for nearly all of the relevant FOPs, and surrogate financial statements are available from an Indian producer of identical merchandise. Thus, 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 factors of production. Therefore, we have calculated normal value using Indian prices when available and appropriate to value CPZ's factors of production.¹⁰ 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 factors of production within 20 days after the date of publication of the preliminary results.¹¹

Separate Rates

In proceedings involving NME countries, the Department has a rebuttable presumption that all companies within the country are subject to government control and thus should be assigned 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.

The sole respondent in this review, CPZ, stated that it is a China-Foreign joint venture, owned by two shareholders: Changshan Jingmi Bearing Group Co., Ltd., a Chinese company, and Illinois Peer Bearing Company LLC, a U.S. company. Therefore, the Department must analyze whether CPZ has demonstrated the absence of both de jure and de facto government control over export activities, and is 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. See Sparklers, 56 FR at 20589.

The evidence provided by CPZ 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 company; and (3) there are formal measures by the government decentralizing control of the company. See CPZ's Section A Questionnaire Response, dated October 8, 2008.

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. 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).

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. We determine for CPZ 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) CPZ sets its own export prices independent of the government and without the approval of a government authority; (2) CPZ retains the proceeds from its sales and makes independent decisions regarding disposition of profits or financing of losses; (3) CPZ has the authority to negotiate and sign contracts and other agreements; and (4) CPZ has autonomy from the government regarding the selection of management. See CPZ's Section A Questionnaire Response, dated October 8, 2008.

The evidence placed on the record of this review by CPZ 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 CPZ a separate rate.

Fair Value Comparisons

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

U.S. Price

Constructed Export 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's sales where CPZ first sold subject merchandise to its affiliated company in the United States, which in turn sold subject merchandise to unaffiliated U.S. customers. We calculated CEP for CPZ 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 from the plant to the port of exportation, international freight, marine insurance, other U.S. transportation, U.S. customs duty, where applicable, U.S. inland freight from port to the warehouse, and U.S. inland freight from the warehouse to the customer. 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.¹²

In section D of its questionnaire response, dated October 29, 2008, CPZ requested that the Department compare NV to CEP on a Product Code (“PRODCOD”) basis, claiming that calculating dumping margins using Control Number (“CONNUM”) is distortive. Consistent with our determination in the prior review,¹³ we have preliminarily determined to use PRODCOD as a basis for comparing NV to CEP.

Additionally, we have preliminarily determined to exclude certain CEP sales transactions CPZ reported in its section C sales data file from CPZ's preliminary margin calculation. Due to the proprietary nature of the information pertaining to these sales transactions, see Program Analysis Memo.

Export Price

Because CPZ also sold subject merchandise to unaffiliated purchasers in the United States prior to importation into the United States and use of a CEP methodology was not otherwise appropriate, we used EP for these transactions in accordance with section 772(a) of the Act.¹⁴ We calculated EP based on the delivery method reported 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 charges in the PRC, international freight, and U.S. customs duty, where applicable, pursuant to section 772(c)(2)(A) and (B) of the Act. Where foreign inland freight, foreign brokerage and handling fees, or marine insurance 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 surrogate rates.

Normal Value

We compared NV to individual EP and CEP transactions in accordance with section 777A(d)(2) of the Act. 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 the respondent for materials, energy, labor and packing.

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 may value the factor using the actual price paid for the input. See 19 CFR 351.408(c)(1); see also Shakeproof Assembly Components Div of Ill v. United States, 268 F.3d 1376, 1382-1383 (Fed. Cir. 2001) (affirming the Department's use of market-based prices to value certain FOPs).

With regard to both import-based SVs and market-economy import values, it is the Department's consistent practice that, where the facts developed in the United States or third country countervailing duty findings include the existence of subsidies that appear to be used generally (in particular, broadly available, non-industry-specific export subsidies), it is reasonable for the Department to find that it has particular and objective evidence to support a reason to believe or suspect that prices of the inputs from the country granting the subsidies may be subsidized. See China National Machinery Imp. & Exp. Corp. v. United States, 293 F. Supp. 2d 1334, 1338-39 (CIT 2003).

In avoiding the use of prices that may be subsidized, the Department does not conduct a formal investigation to ensure that such prices are not subsidized, but rather relies on information that is generally available at the time of its determination. See H.R. Rep. 100-576, at 590 (1988), reprinted in 1988 U.S.C.C.A.N. 1547, 1623-24. The Department has reason to believe or suspect that prices of inputs from Indonesia, South Korea, and Thailand may have been subsidized. Through other proceedings, the Department has learned that these countries maintain broadly available, non-industry-specific export subsidies and, therefore, preliminarily finds it reasonable to infer that all exports to all markets from these countries may be subsidized. See Brake Rotors From the People's Republic of China: Final Results of Antidumping Duty Administrative and New Shipper Reviews and Partial Rescission of the 2005-2006 Administrative Review, 72 FR 42386 (August 2, 2007), and accompanying Issues and Decision Memorandum at Comment 1. Accordingly, the Department has disregarded prices from Indonesia, South Korea and Thailand in calculating NV.

There are certain sales that were further manufactured or assembled in a third country. Because we preliminarily find that this further manufacture or assembly does not constitute a substantial transformation of the merchandise, the merchandise sold in this manner is subject merchandise. See Substantial Transformation Memo.¹⁵ Because CPZ knew at the time of sale that the merchandise was destined for exportation, we have determined normal value for such sales based on the country of origin (i.e., the PRC), pursuant to section 773(a)(3)(A) of the Act. For such merchandise, normal value also includes the cost of further manufacturing or assembly in the third country and the expense of transporting the merchandise from the factory in the PRC to the further manufacturing processing plant in the third country. See Program Analysis Memo for further discussion of this issue.

Factor Valuations

In accordance with section 773(c) of the Act, we calculated NV based on FOPs reported by CPZ for the POR. To calculate NV, the reported per-unit factor quantities were multiplied by publicly available Indian SVs (except as noted below). Unless indicated otherwise, we valued direct materials, energy, and packing materials purchased from NME sources using publicly available import data reported in WTA, utilizing data obtained from the Directorate General of Commercial Intelligence and Statistics, Ministry of Commerce of India. Among the FOPs for which the Department calculated SVs using Indian import statistics are cage steel, steel by-product, cone spacer, coal, anti-rust oil, and all packing materials. For a detailed description of all SVs used for respondents, see Surrogate Value Memo.

In selecting the SVs, we considered the quality, specificity, and contemporaneity of the data. As appropriate, we adjusted input prices by including freight costs to make them delivered prices. Specifically, we added to Indian 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 (i.e., where the sales terms for the market-economy inputs were not delivered to the factory). This adjustment is in accordance with the decision of the Federal Circuit in Sigma Corp. v. United States, 117 F.3d 1401 (Fed. Cir. 1997).

On May 21, 2009, CPZ submitted comments regarding SV selection for bearing quality steel bar, as well as roller quality wire rod. These comments reiterated CPZ's concerns that the SV data submitted by Petitioner for Indian HTS 7228.30.29 and 7228.50.90 are aberrational due to the relatively high value when benchmarked against similar bearing and roller quality steel HTS categories in both the U.S. and other potential surrogate country candidates. On June 9, 2009, Petitioner submitted a response to CPZ's comments. For the preliminary results, we have determined to use contemporaneous Indian import data from HTS category 7228.30.29 and contemporaneous Thai import data from HTS category 7228.50.90.00, to calculate an SV for bearing quality steel bar and roller quality wire rod, respectively. A review of the Indian import statistics for HTS category 7228.50.90 shows wide variations in the average unit values (“AUVs”) between the individual countries listed as exporters in the data. Alternatively, Thai import statistics, under Thai HTS category 7228.50.90.00, do not exhibit the wide level of AUV variance between individual exporters that is seen in the Indian data. Thus, we have determined to use comparable Thai data in the alternative. Using the same method of analysis, Indian import statistics for steel bar appear to be reasonably consistent. As it is our preference to use SVs from within the primary surrogate country, we preliminarily determine to value steel bar from Indian HTS category 7228.30.29. For further analysis, see Surrogate Value Memo.

The Department has instituted a rebuttable presumption that market economy input prices are the best available information for valuing an input when the total volume of the input purchased from all market economy sources during the POR exceeds 33 percent of the total volume of the input purchased from all sources during the same period. In these cases, unless case-specific facts provide adequate grounds to rebut the Department's presumption, the Department will use the weighted-average market economy purchase price to value the input. Alternatively, when the volume of an NME firm's purchases of an input from market economy suppliers during the period is equal to or below 33 percent of its total volume of purchases of the input during the period, but where these purchases are otherwise valid and there is no reason to disregard the prices, the Department will weight average the weighted-average market economy purchase price with an appropriate SV according to their respective shares of the total volume of purchases, unless case-specific facts provide adequate grounds to rebut the presumption. When a firm has made market economy input purchases that may have been dumped or subsidized, are not bona fide, or are otherwise not acceptable for use in a dumping calculation, the Department will exclude them from the numerator of the ratio to ensure a fair determination of whether valid market economy purchases meet the 33-percent threshold. See Antidumping Methodologies: Market Economy Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request for Comments, 71 FR 61716, 61717-19 (October 19, 2006). Also, where the quantity of the input purchased from market-economy suppliers is insignificant, the Department will not rely on the price paid by an NME producer to a market-economy supplier because it cannot have confidence that a company could fulfill all its needs at that price. Id. During the POR, CPZ purchased a certain quantity of steel from a market economy supplier in a market economy currency. Accordingly, the Department will weight average the market economy steel price with the appropriate surrogate value. For further analysis, see Surrogate Value Memo.

Where the Department could not obtain information contemporaneous with the POR with which to value FOPs, the Department adjusted the SVs using, where appropriate, the Indian Wholesale Price Index (“WPI”) as published by the International Monetary Fund (“IMF”).¹⁶

We used the truck freight rates published by www.infobanc.com,, “The Great Indian Bazaar, Gateway to Overseas Markets,” to value truck freight. See Surrogate Value Memo. Since the truck freight rates are not contemporaneous with the POR, we deflated the rates using Indian WPI.

We valued inland water freight using price data for barge freight reported in a March 19, 2007, article published in The Hindu Business Line. We inflated the inland water transportation rate using the appropriate WPI inflator. See Surrogate Value Memo.

We valued brokerage and handling using a simple average of the brokerage and handling costs that were reported in public submissions that were filed in three antidumping duty cases. Specifically, we averaged the public brokerage and handling expenses reported by Navneet Publications (India) Ltd. in the 2007-2008 administrative review of certain lined paper products from India, Essar Steel Limited in the 2006-2007 antidumping duty administrative review of hot-rolled carbon steel flat products from India, and Himalya International Ltd. in the 2005-2006 administrative review of certain preserved mushrooms from India. We inflated the brokerage and handling rate using the appropriate WPI inflator. See Surrogate Value Memo.

To value electricity, we used price data for small, medium, and large industries, as published by the Central Electricity Authority of the Government of India in its publication entitled “Electricity Tariff & Duty and Average Rates of Electricity Supply in India,” dated July 2006. These electricity rates represent actual country-wide, publicly-available information on tax-exclusive electricity rates charged to industries in India. See Surrogate Value Memo.

For direct labor, indirect labor and packing labor, consistent with 19 CFR 351.408(c)(3), we used the PRC regression-based wage rate as reported on Import Administration's web site.¹⁷ Because this regression-based wage rate does not separate the labor rates into different skill levels or types of labor, we have applied the same wage rate to all skill levels and types of labor reported by each respondent. See Surrogate Value Memo.

To value factory overhead, selling, general and administrative expenses and profit, the Department used audited financial statements for the years ending on December 31, 2007, for an Indian producer of bearings, SKF India Limited. See Surrogate Value Memo for a full discussion of the surrogate financial ratio calculations.

CPZ reported it recovered steel scrap as a by-product of the production of subject merchandise. We found in this administrative review, as confirmed at verification, that CPZ has appropriately reported its by-products and, therefore, we have granted CPZ a by-product offset for the quantities of these reported by-products, valued using Indian WTA data. See Surrogate Value Memo.

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, 2007, through May 31, 2008:

TRBs from the PRC

Exporter	Weighted-Average Margin
Peer Bearing Company Changshan	32.02 Percent

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. See 19 CFR 351.309(c). Rebuttals to written comments may be filed no later than five days after the written comments are filed. See 19 CFR 351.309(d). 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. See 19 CFR 351.310(c). 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. See 19 CFR 351.310(d).

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.

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, the cash deposit rate will be that 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)(2)(B) and 777(i)(1) of the Act, and 19 CFR 351.221(b).

Dated: June 30, 2009.

John M. Andersen,

Acting Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations.

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, e.g., Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 74 FR 3987 (January 22, 2009).

3.  See also the Department's memorandum entitled, “Preliminary Results of the 2007-2008 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 June 30, 2009 (“Surrogate Value Memo”).

4.  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 Website at http://ia.ita.doc.gov/​policy/​bull04-1.html.

5.  See the Department's Memorandum from Carol Showers, Acting Director, Office of Policy, to Wendy Frankel, Office Director, AD/CVD Operations, Office 8, regarding, “Request for a List of Surrogate Countries for an Administrative Review of the Antidumping Duty Order on Tapered Roller Bearings (“TRB”) from the People's Republic of China (“PRC”),” dated December 22, 2008 (“Surrogate Countries Memo”).

6.  See the Department's letter regarding, “2007-2008 Administrative Review of the Antidumping Duty Order on Tapered Roller Bearings from the People's Republic of China” requesting all interested parties to provide comments on surrogate-country selection and provide surrogate FOP values from the potential surrogate countries (i.e., India, Indonesia, the Philippines, Thailand, Colombia, and Peru), dated December 22, 2008.

7.  See Harmonized Tariff Schedule of the United States (2007) (Rev. 2), available at www.usitc.gov.

8.  WTA export statistics for India, the Philippines, Indonesia, Colombia, Thailand, and Peru only offer a basket category for all categories other than 8482.20.00 “Tapered roller bearings, including cone and tapered roller assemblies.” In the case of the categories beginning with the four digit 8482 and 8483 heading, similar `NESOI' or `Other' subheadings were used in the alternative, though typically not as specific as that of the HTSUS category. However, in the case of the categories beginning with the four digit 8708 heading, WTA export statistics for each of the potential surrogate country candidates could only be found to the broadly defined 8708.99 subheading. Furthermore, WTA data showed that the Philippines did not have any exports for HTS categories 8482.20 (“Tapered roller bearings, including cone and tapered roller assemblies") or 8482.91 (“Balls needles and rollers for bearings”).

9.  See Surrogate Value Memo.

10.  See Surrogate Value Memo.

11.  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 Issues and Decision Memorandum at Comment 2.

12.  See the Department's memorandum entitled, “2007-2008 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 June 30, 2009 (“Program Analysis Memo”).

13.  See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China: Final Results of the Administrative Review, 74 FR 3987 (January 22, 2009), and accompanying Issues and Decision Memorandum at Comment 3.

14.  See Program Analysis Memo.

15.  See The Department's memorandum entitled, “Tapered Roller Bearings from the People's Republic of China, Country of Origin Decision for Tapered Roller Bearings Finished in a Third Country,” dated June 30, 2009 (“Substantial Transformation Memo”).

16.  See “International Financial Statistics,” by the International Monetary Fund (IMF), available at: http://www.imfstatistics.org/​imf/​output/​067EDEA8-7166-48F5-B357-1462F20A0BEF/​IFS_​Table_​38775.0625136.xls. See also Surrogate Value Memo for further discussion.

17.  See Expected Wages of Selected NME Countries (May 14, 2008) (available at http://ia.ita.doc.gov/​wages). The source of these wage rate data on the Import Administration's web site is the Yearbook of Labour Statistics 2005, ILO, (Geneva: 2005), Chapter 5B: Wages in Manufacturing. The years of the reported wage rates range from 2004 to 2005.