[Federal Register Volume 62, Number 131 (Wednesday, July 9, 1997)]
[Notices]
[Pages 36764-36771]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17948]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-601]
Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, From the People's Republic of China; Preliminary Results of
Antidumping Administrative Review and Partial Termination of
Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review of tapered roller bearings and parts thereof,
finished and unfinished, from the People's Republic of China and
partial termination of administrative review.
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SUMMARY: In response to requests by the petitioner and by Peer Bearing
Company/Chin Jun Industrial, Ltd. (Chin Jun), the Department of
Commerce is conducting an administrative review of the antidumping duty
order on tapered roller bearings and parts thereof, finished and
unfinished, from the People's Republic of China. The period of review
is June 1, 1995, through May 31, 1996.
Although we included Shanghai General Bearing Co., Ltd. in our
initiation notice, we subsequently revoked the order with regard to
this respondent. Therefore, we are terminating this review with respect
to this respondent (see Background section below).
We have preliminarily determined that sales have been made below
normal
[[Page 36765]]
value by various companies subject to this review. If these preliminary
results are adopted in our final results of administrative review, we
will instruct U.S. Customs to assess antidumping duties on all
appropriate entries.
We invite interested parties to comment on these preliminary
results. Parties who submit comments in this proceeding are requested
to submit with each argument (1) a statement of the issue and (2) a
brief summary of the argument.
EFFECTIVE DATE: July 9, 1997.
FOR FURTHER INFORMATION CONTACT: Thomas O. Barlow or the appropriate
case analyst, for the various respondent firms listed below, at Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, N.W., Washington D.C.
20230; telephone (202) 482-4733: Andrea Chu: Jilin Machinery Import &
Export Corporation (Jilin), Wanxiang Group Corporation (Wanxiang),
China National Machinery & Equipment Import & Export Corporation
(CMEC); Mike Panfeld: Xiangfan Machinery Foreign Trade Corporation
(formerly Xiangfan International Trade Corporation) (Xiangfan), China
National Automotive Industry Import & Export Corporation (Guizhou
Automotive), Chin Jun; Charles Riggle: Shandong Machinery & Equipment
Import & Export Corporation (Shandong), Tianshui Hailin Import & Export
Corporation (Hailin), Zhejiang Machinery Import & Export Corporation
(Zhejiang); Tom Schauer: Premier Bearing & Equipment, Ltd. (Premier),
Shanghai General Bearing Co. Ltd. & General Bearing Corporation
(Shanghai), Guizhou Machinery Import & Export Corporation (Guizhou
Machinery); Kristie Strecker: China National Machinery Import & Export
Corporation (CMC), Luoyang Bearing Factory (Luoyang), Liaoning MEC
Group Co., Ltd. (Liaoning), Hangzhou Metals, Mineral, Machinery &
Chemical Import Export Corp. (Hangzhou), China Great Wall Industry
Corp. (Great Wall).
Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Act), are references to the provisions effective
January 1, 1995, the effective date of the amendments made to the Act
by the Uruguay Round Agreements Act (URAA). In addition, all references
to the Department's regulations are to 19 CFR 353 (1997).
Background
On May 27, 1987, the Department of Commerce (the Department)
published in the Federal Register (52 FR 19748) the antidumping duty
order on tapered roller bearings and parts thereof, finished and
unfinished (TRBs), from the People's Republic of China (PRC). On June
6, 1996, we published a notice of opportunity to request an
administrative review of the order for the period June 1, 1995 through
May 31, 1996 (61 FR 28840). In accordance with 19 CFR 353.22(a), the
petitioner, The Timken Company, and Chin Jun requested that we conduct
an administrative review. On August 8, 1996, in accordance with 19 CFR
353.22(c), we published a notice of initiation of this antidumping duty
administrative review (61 FR 41374) for the period of review (POR) June
1, 1995, through May 31, 1996 (the 9th review period).
On August 12, 1996, we sent a questionnaire to the secretary
general of the Basic Machinery Division of the Chamber of Commerce for
Import & Export of Machinery and Electronics Products (CCCME) and
requested that the CCCME identify all companies that manufactured or
exported the subject merchandise during the POR. We also requested that
the questionnaire be forwarded to all PRC companies identified in our
initiation notice for which we did not have addresses. In this letter
we also requested information relevant to the issue of whether the
companies named in the initiation request are independent from
government control. See Separate Rates below. Finally, on September 20,
1996, we sent questionnaires directly to the PRC companies for which we
had addresses on the record. We also sent questionnaires to the Hong
Kong companies listed in our initiation notice, using addresses
supplied in the petitioner's initiation request as well as information
from the Hong Kong branch of the U.S. & Foreign Commercial Service.
We received responses to our questionnaire from the following 15 of
the 324 companies named in the initiation notice: Jilin, Wanxiang,
Xiangfan, Guizhou Automotive, Chin Jun, Shandong, Hailin, Zhejiang,
Premier, Guizhou Machinery, CMC, Luoyang, Shanghai, CMEC and Liaoning.
We also received a response to the Separate Rates section of the
questionnaire from one company, Hangzhou, that was not named in the
initiation notice but which was included in the review by virtue of the
fact that our initiation was conditionally intended to include, in
addition to companies specifically named, all exporters of TRBs from
the PRC which were not entitled to rates separate from the PRC entity.
See Initiation of Antidumping and Countervailing Duty Administrative
Reviews and Request for Revocation In Part, 61 FR 41373, 41380 (August
8, 1996).
In addition, we received a response to the Separate Rates section
of the questionnaire from Great Wall, which had received a separate
rate in the 1994-95 review, but for which no review had been requested
for the 1995-96 period. Because we are not reviewing Great Wall's
entries for this POR we need not reconsider its separate-rates status
at this time. Great Wall's rate will continue to be 25.56 percent, the
rate established for that firm in the 1994-95 review.
Shanghai was included by name in our notice of initiation of this
review. However, on February 11, 1997, we published a notice of
revocation of the order with respect to Shanghai (62 FR 6189).
Therefore, we are terminating this review with respect to Shanghai.
The Department is now conducting this administrative review in
accordance with section 751 of the Act.
Scope of Review
Merchandise covered by this review includes TRBs and parts thereof,
finished and unfinished, from the PRC. This merchandise is classifiable
under the Harmonized Tariff Schedule (HTS) item numbers 8482.20.00,
8482.91.00.60, 8482.99.30, 8483.20.40, 8483.20.80, 8483.30.80,
8483.90.20, 8483.90.30 and 8483.90.80. Although the HTS item numbers
are provided for convenience and customs purposes, our written
description of the scope of the order and this review is dispositive.
Verification
As provided in section 782(i) of the Act, we verified information
provided by CMC, Guizhou Machinery, Liaoning and Luoyang, using
standard verification procedures, including on-site inspection of
manufacturers' facilities, the examination of relevant sales and
financial records, and selection of original documentation containing
relevant information. Because of the large number of producers and
resellers included in this review and the limited resources available
to the Department, it was impractical to verify factual information for
each company. In accordance with 19 CFR 353.36(a)(B) of the
regulations, we selected for verification companies for which we had
conducted no verification during either of the two immediately
preceding reviews. Our verification results are outlined in the
[[Page 36766]]
public versions of the verification reports.
Separate Rates
1. Background and Summary of Findings
It is the Department's standard policy to assign all exporters of
the merchandise subject to review in non-market-economy (NME) countries
a single rate unless an exporter can demonstrate an absence of
government control, both in law and in fact, with respect to exports.
To establish whether an exporter is sufficiently independent of
government control to be entitled to a separate rate, the Department
analyzes the exporter in light of the criteria established in 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
amplified in the Final Determination of Sales at Less Than Fair Value:
Silicon Carbide from the People's Republic of China (59 FR 22585, May
2, 1994) (Silicon Carbide). Evidence supporting, though not requiring,
a finding of de jure absence of government control over export
activities includes: (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) any other formal measures by the government decentralizing control
of companies. See Sparklers at 20589. Evidence relevant to a de facto
analysis of absence of government control over exports is based on four
factors--whether the respondent: (1) sets its own export prices
independent from the government and other exporters; (2) can retain the
proceeds from its export sales; (3) has the authority to negotiate and
sign contracts; and (4) has autonomy from the government regarding the
selection of management. See Silicon Carbide at 22587; see also
Sparklers at 20589.
The Department determined in prior reviews that Guizhou Machinery,
Jilin, Luoyang, Liaoning, Guizhou Automotive, CMC, Hailin, Zhejiang,
Xiangfan, Shandong and Wanxiang were entitled to separate rates. See,
e.g., Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, From the People's Republic of China; Final Results and
Partial Termination of Antidumping Administrative Review, 62 FR 6173
(February 11, 1997). Information submitted by these companies for the
record in the current review is consistent with these findings.
Further, there have been no allegations regarding changes in control of
these companies in this review. Therefore, we preliminarily determine
that the government does not exercise control over the export
activities of these firms.
As shown below, Hangzhou also meets both the de jure and de facto
criteria and is entitled, therefore, to a separate rate (see De Jure
Analysis and De Facto Analysis, infra). Accordingly, we preliminarily
determine to apply a rate separate from the PRC rate to Hangzhou.
Finally, we note that Premier and Chin Jun are privately owned Hong
Kong trading companies. Because we have determined that these firms,
rather than their PRC-based suppliers, are the proper respondents with
respect to their sales of TRBs to the United States, no separate-rates
analyses of Premier's and Chin Jun's suppliers are necessary.
2. De Jure Analysis: Hangzhou
Information submitted during this review indicates that Hangzhou is
owned ``by all of the people.'' In Silicon Carbide (at 22586), we found
that the PRC central government had devolved control of state-owned
enterprises, i.e., enterprises owned ``by all of the people.'' As a
result, we determined that companies owned ``by all of the people''
were eligible for individual rates if they met the criteria developed
in Sparklers and Silicon Carbide.
The following laws, which have been placed on the record in this
case, indicate a lack of de jure government control over these
companies, and establish that the responsibility for managing companies
owned by ``all of the people'' has been transferred from the government
to the enterprises themselves. These laws include: ``Law of the
People's Republic of China on Industrial Enterprises Owned by the Whole
People,'' adopted on April 13, 1988 (1988 Law); ``Regulations for
Transformation of Operational Mechanism of State-Owned Industrial
Enterprises,'' approved on August 23, 1992 (1992 Regulations); and the
``Temporary Provisions for Administration of Export Commodities,''
approved on December 21, 1992 (Export Provisions). The 1988 Law states
that enterprises have the right to set their own prices (see Article
26). This principle was restated in the 1992 Regulations (see Article
IX). Finally, the 1992 ``Temporary Provisions for Administration of
Export Commodities'' list those products subject to direct government
control. TRBs do not appear on this list and are not subject,
therefore, to the constraints of these provisions.
Consistent with Silicon Carbide, we preliminarily determine that
the existence of these laws demonstrates that Hangzhou, a company owned
by ``all of the people,'' is not subject to de jure government control
with respect to export activities. In light of reports 1
indicating that laws shifting control from the government to the
enterprises themselves have not been implemented uniformly, an analysis
of de facto control is critical in determining whether respondents are,
in fact, subject to government control with respect to export
activities.
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\1\ See ``PRC Government Findings on Enterprise Autonomy,'' in
Foreign Broadcast Information Service--China--93-133 (July 14,
1993), and 1992 Central Intelligence Agency Report to the Joint
Economic Committee, Hearings on Global Economic and Technological
Change: Former Soviet Union and Eastern Europe and China, Pt. 2 (102
Cong., 2d Sess.).
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3. De Facto Analysis: Hangzhou
After we reviewed Hangzhou's original response to the separate-
rates section of our questionnaire we sent a supplemental questionnaire
in order to obtain additional information necessary for our
determination of Hangzhou's eligibility for a separate rate. The
following record evidence, which is contained in the questionnaire
responses, indicates a lack of de facto government control over the
export activities of Hangzhou. We have found that this respondent's
pricing and export strategy decisions with respect to subject
merchandise are not subject to any entity's review or approval and that
there are no government policy directives that affect these decisions.
There are no restrictions on the use of this respondent's revenues or
profits, including export earnings.
The company's general manager or chairman of the board has the
right to negotiate and enter into contracts, and he may delegate this
authority to other employees within the company. There is no evidence
that this authority is subject to any level of governmental approval.
The general manager is elected by an employees' assembly consisting
of representatives of Hangzhou's employees. The representatives are
elected by the general employees. The results of Hangzhou's management
elections are recorded with the Foreign Trade and Economic Cooperation
Commission. There is no evidence that this commission controls the
selection process or that it has rejected a general manager selected
through the election process.
Decisions made by Hangzhou concerning purchases of subject
[[Page 36767]]
merchandise from other suppliers are not subject to government
approval. Finally, Hangzhou's sources of funds are its own savings or
bank loans, and it has sole control over, and access to, its bank
accounts, which are held in Hangzhou's own name.
Based on the foregoing analysis of the evidence of record, we find
no evidence of either de jure or de facto government control over the
export activities of Hangzhou. Accordingly, we preliminarily determine
that Hangzhou is not part of the ``PRC enterprise'' under review and is
entitled to a separate rate. Because no interested party requested a
review of Hangzhou, it is not subject to this review. Therefore,
consistent with our established practice, we have not reviewed
Hangzhou's entries during the 1995-96 POR. See Tapered Roller Bearings
and Parts Thereof, Finished and Unfinished, From the People's Republic
of China; Final Results and Partial Termination of Antidumping Duty
Administrative Review, 62 FR 6173, 6176 (February 11, 1997). Hangzhou's
rate will remain 29.40 percent, the rate assigned to it as a part of
the PRC entity in the 1994-95 review.
4. Separate-Rate Determinations for Non-Responsive Companies
We have determined that those companies for which we initiated a
review and which did not respond to the questionnaire do not merit
separate rates. See Use of Facts Otherwise Available, below.
Use of Facts Otherwise Available
We preliminarily determine that, in accordance with section 776(a)
of the Act, the use of partial facts available is appropriate for Chin
Jun, Premier, Guizhou Machinery and Shandong and the use of total facts
available is appropriate for Hailin, Guizhou Automotive, Jilin, CMEC
and all companies which have not shown that they are independent of
government control and which did not respond to our requests for
information. Furthermore, we determine that, pursuant to section 776(b)
of the Act, it is appropriate to make inferences adverse to the
interests of the non-responding companies because they failed to
cooperate by not responding to the best of their abilities.
Where the Department must base its determination on facts available
because that respondent failed to cooperate by not acting to the best
of its ability to comply with a request for information, section 776(b)
of the Act authorizes the Department to use inferences adverse to the
interests of that respondent in choosing facts available. Section
776(b) of the Act also authorizes the Department to use as adverse
facts available information derived from the petition, the final
determination, a previous administrative review, or other information
placed on the record. Information from prior segments of the proceeding
constitutes secondary information and section 776(c) of the Act
provides that the Department shall, to the extent practicable,
corroborate that secondary information from independent sources
reasonably at its disposal. The Statement of Administrative Action
(SAA) provides that ``corroborate'' means simply that the Department
will satisfy itself that the secondary information to be used has
probative value. (See H.R. Doc. 316, Vol. 1, 103d Cong., 2d Sess. 870
(1994).)
To corroborate secondary information, the Department will, to the
extent practicable, examine the reliability and relevance of the
information to be used. However, unlike other types of information,
such as input costs or selling expenses, there are no independent
sources for calculated dumping margins. Thus, in an administrative
review, if the Department chooses as total adverse facts available a
calculated dumping margin from a prior segment of the proceeding, it is
not necessary to question the reliability of the margin for that time
period. With respect to the relevance aspect of corroboration, however,
the Department will consider information reasonably at its disposal as
to whether there are circumstances that would render a margin
inappropriate. Where circumstances indicate that the selected margin is
not appropriate as adverse facts available, the Department will
disregard the margin and determine an appropriate margin (see, e.g.,
Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty
Administrative Review, 61 FR 6812, 6814 (Feb. 22, 1996) (where the
Department disregarded the highest margin as adverse facts available
because the margin was based on another company's uncharacteristic
business expense resulting in an unusually high margin)).
1. Companies that did not respond to the questionnaire: We have
preliminarily assigned a margin of 29.40 percent to those companies for
which we initiated a review and which did not respond to the
questionnaire. This margin, calculated for sales by Wafangdian Bearing
Factory during the 1994-95 review, represents the highest overall
margin calculated for any firm during any segment of this proceeding.
As discussed above, it is not necessary to question the reliability of
a calculated margin from a prior segment of the proceeding. Further,
there are no circumstances indicating that this margin is inappropriate
as adverse facts available. Therefore, we preliminarily find that the
29.40 percent rate is corroborated. As noted in the Separate Rates
section above, we have also determined that the non-responsive
companies do not merit separate rates. Therefore, the facts available
for these companies forms the basis for the PRC rate, which is 29.40
percent for this review.
2. CMEC: The Department determined in the original investigation of
this case that CMEC was entitled to a separate rate. See Tapered Roller
Bearings From the People's Republic of China; Final Determination of
Sales at Less Than Fair Value, 52 FR 19748 (May 27, 1987), and Tapered
Roller Bearings From the People's Republic of China; Amendment to Final
Determination of Sales at Less Than Fair Value and Antidumping Duty
Order in Accordance With Decision Upon Remand, 55 FR 6669 (February 26,
1990). However, the Department made the prior separate-rate
determination before the development of its amplified analysis in
Silicon Carbide, which added de facto criteria (3) and (4) noted above.
Accordingly, for these preliminary results we have examined these two
additional criteria with respect to CMEC. Because CMEC failed in its
supplemental questionnaire response to provide information concerning
the company's management-selection process, we are unable to determine
that CMEC meets the de facto standards which would indicate an absence
of government control. Therefore, we preliminarily determine that CMEC
is not entitled to a separate rate and have applied the PRC rate of
29.40 percent.
3. Jilin: Jilin provided sufficient information in response to the
separate rates section of our questionnaire for us to determine that it
is entitled to a separate rate for this review. However, because Jilin
did not provide information related to factors of production or to its
U.S. sales during the POR as we requested, section 776(a) of the Act
requires us to use the facts otherwise available in determining Jilin's
margin for the 1995-96 review. Section 776(b) of the Act allows us to
use an adverse inference in selecting from the facts otherwise
available. As adverse facts available, we have selected 29.40 percent,
the highest overall margin calculated in any segment of this
proceeding.
4. Premier: Premier provided factors data from its suppliers for
some models which it sold to the United States. For
[[Page 36768]]
a majority of its U.S. sales (see Analysis Memo from analyst to the
file, June 23, 1997), Premier, a Hong Kong-based reseller, stated that
it was unable to provide factors data from any of its PRC suppliers.
However, for some models involved in those sales, Premier provided
factors data from other PRC suppliers of the same models. For the
remainder of its U.S. sales, Premier reported no factors data.
We have determined that there is little variation in factor-
utilization rates among the TRB producers from which we have received
factors-of-production data. For this reason we are using, as facts
available, the factors data provided by Premier, including information
from manufacturers which did not supply Premier during the POR, in
order to calculate CV. For Premier's U.S. sales of models for which it
reported no factors data, we have applied, as adverse facts available,
a margin of 25.56 percent, the highest overall margin ever applicable
to Premier. This margin was calculated for sales by Jilin during the
1993-94 review. As discussed above, it is not necessary to question the
reliability of a calculated margin from a prior segment of the
proceeding. Further, there are no circumstances indicating that this
margin is inappropriate as adverse facts are available. Therefore, we
preliminarily find that the 25.56 percent rate is corroborated.
5. Hailin: We find that Hailin failed to cooperate by not allowing
us to conduct an on-site verification of the information the company
supplied in its questionnaire responses. We have, therefore, rejected
Hailin's submissions in accordance with section 782(e)(4) of the Act.
Section 776(b) of the Act allows us to use an adverse inference in
selecting from the facts otherwise available when a firm does not
permit verification of the information contained in its response. As
adverse facts are available, we have determined that Hailin is not
entitled to a separate rate, and have applied the PRC rate of 29.40
percent.
6. Guizhou Automotive: Guizhou Automotive failed to respond to a
supplemental questionnaire in a timely manner. The firm's initial
questionnaire response was incomplete, particularly with regard to
separate rate issues, SG&A, overhead, packing, scrap, and expenses
related to CEP sales. Because Guizhou Automotive did not provide in a
timely manner sufficient information for the Department to determine
whether Guizhou Automotive is eligible to retain its separate rate, we
have determined that Guizhou Automotive is not entitled to a separate
rate and have applied the PRC rate of 29.40 percent.
7. Chin Jun: Chin Jun provided factors data from its PRC-based
supplier for substantially all of its U.S. sales during the POR, and we
have used these data to calculate CV for the applicable models. For
certain other models it sold to the United States, Chin Jun provided
factors data from other PRC suppliers of the same models. However, we
have determined that the data submitted by Chin Jun for two such
suppliers is unacceptable and have rejected these data. Because our
decision relies on business proprietary information it is discussed
further in the business proprietary analysis memo from analyst to the
file dated June 30, 1997. For the remainder of its U.S. sales, Chin Jun
reported no factors data.
We determined that there is little variation in factor-utilization
rates among the TRBs producers from which we have received factors-of-
production data. For this reason we have calculated CV using, as facts
available, the factors data provided by Chin Jun for PRC-based
suppliers from which Chin Jun did not purchase the models in question.
Chin Jun has stated that it attempted to obtain from its PRC-based
suppliers factors data for the remaining U.S. sales. Because we
preliminarily determine that Chin Jun cooperated to the best of its
ability to provide data, we are applying to Chin Jun's U.S. sales for
which no factors data were reported, as facts available, the weighted-
average margin calculated for those U.S. sales for which acceptable
data were reported. However, we intend to seek documentation of Chin
Jun's claim's that it attempted to solicit from all of its PRC-based
suppliers the information requested in our questionnaires.
8. Shandong: Shandong purchased TRBs for resale to the United
States from a supplier whose factors data we determined to be
unacceptable. Because our decision relies on business proprietary
information it is discussed further in the business proprietary
analysis memo from analyst to the file dated June 23, 1997. Therefore,
for Shandong's sales of TRBs purchased from this particular supplier we
have applied, as facts available, a margin of 29.40 percent, the
highest rate calculated during any segment of this proceeding.
9. Guizhou Machinery: Guizhou Machinery provided factors data from
its suppliers for models which represented most of its U.S. sales
during the POR. For some models, Guizhou Machinery failed to report
factors data. For Guizhou Machinery's U.S. sales of models for which it
did not provide factors data we have applied, as adverse facts
available, a margin of 17.65 percent, the highest overall margin ever
applicable to Guizhou Machinery.
In addition, we used partial facts available for other factors data
provided by Guizhou Machinery. However, because of the proprietary
nature of this situation, we have discussed this use of partial facts
available in Guizhou Machinery's preliminary analysis memorandum dated
June 23, 1997.
Duty Absorption
On September 6, 1996, the Timken Company requested that the
Department determine with respect to all respondents whether
antidumping duties had been absorbed during the POR. This request was
filed pursuant to section 751(a)(4) of the Act. On June 11, 1997, the
Timken Company withdrew its request for a duty absorption determination
in this review. Accordingly, we have not made a determination as to
whether antidumping duties have been absorbed by a foreign producer or
exporter subject to the order.
United States Sales
Both Premier and Chin Jun reported that they maintain inventories
in Hong Kong and, therefore, their PRC-based suppliers have no
knowledge when they sell to these firms that the shipments are destined
for the United States. Accordingly, Premier and Chin Jun are the first
parties to sell the merchandise to the United States and export price
(EP) and constructed export price (CEP) are properly based on their
respective U.S. sales.
For sales made by Guizhou Machinery, Liaoning, Luoyang, Premier,
Xiangfan, Shandong and Zhejiang, we based the U.S. sales on export
price (EP), in accordance with section 772(a) of the Act, because the
subject merchandise was sold to unrelated purchasers in the United
States prior to importation into the United States and because the
constructed export price (CEP) methodology was not indicated by other
circumstances. For sales made by Chin Jun we based the U.S. sales on
CEP in accordance with section 772(b) of the Act because the first sale
to an unrelated purchaser occurred after importation of the merchandise
into the United States. CMC had a combination of EP and CEP sales
subject to review.
We calculated EP based on, as appropriate, the FOB, CIF or C&F port
price to unrelated purchasers. We made deductions for brokerage and
handling, foreign inland freight, ocean freight, and marine insurance.
When marine insurance and ocean freight were provided by PRC-owned
companies, we based the deduction on surrogate
[[Page 36769]]
values. See Final Determination of Sales at Less Than Fair Value:
Saccharin from the People's Republic of China, 59 FR 58818, 58825
(November 15, 1994). For Premier and Chin Jun, because marine insurance
and ocean freight were provided by market-economy companies, we based
the deduction on the actual expense values reported by Premier and Chin
Jun for these services. We valued foreign inland freight deductions
using surrogate data based on Indian freight costs. We selected India
as the surrogate country for the reasons explained in the Normal Value
section of this notice.
We calculated CEP based on the packed, ex-warehouse price from the
U.S. subsidiary to unrelated customers. We made deductions from the
starting price for CEP for international freight, foreign brokerage &
handling, foreign inland freight, marine insurance, customs duties,
U.S. brokerage, U.S. inland freight insurance and U.S. inland freight.
In accordance with section 772(d)(1) of the Act, we made further
deductions from the starting price for CEP for the following selling
expenses that related to economic activity in the United States:
commissions; direct selling expenses, including advertising,
warranties, and credit expenses; and indirect selling expenses,
including inventory carrying costs. In accordance with section
772(d)(3) of the Act, we have deducted from the starting price an
amount for profit.
Normal Value
Section 773(c) of the Act provides that the Department shall
determine the normal value (NV) using a factors-of-production
methodology if (1) the merchandise is exported from an NME country, and
(2) available information does not permit the calculation of NV using
home market prices, third-country prices, or constructed value (CV)
under section 773(a). In such cases, the factors 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 cost, including depreciation.
The Department has treated the PRC as an NME country in all
previous cases. In accordance with section 771(18)(C)(i), any
determination that a foreign country is an NME country shall remain in
effect until revoked by the administering authority. Furthermore,
available information does not permit the calculation of NV using home
market prices, third-country prices, or CV under section 773(a).
Therefore, except as noted below, we calculated NV based on factors of
production in accordance with section 773(c) of the Act and section
353.52 of our regulations. See Memorandum from the analyst to the file,
dated June 20, 1997.
Although Premier and Chin Jun are Hong Kong companies, we also
calculated NV for Premier and Chin Jun based on factors-of-production
data. We did not use these respondents' third-country sales (they had
no Hong Kong sales) in calculating NV because their PRC-based suppliers
knew at the time of sale that the subject merchandise was destined for
exportation. See section 773(a)(3)(A) of the Act, providing that under
such conditions NV of a product exported from an intermediate country
to the United States may be determined in the country of origin of the
subject merchandise. Accordingly, we calculated NV for Premier and Chin
Jun on the basis of PRC production inputs and surrogate country factor
prices. For certain models for which Premier and Chin Jun reported no
factors data we based NV on the facts available in this review. See Use
of Facts Otherwise Available above.
In accordance with section 773(c)(4), we valued PRC factors of
production, to the extent possible, using the prices or costs of
factors of production in a market-economy country that is: (1) at a
level of economic development comparable to that of the NME country,
and (2) a significant producer of comparable merchandise.
We chose India as the most comparable surrogate on the basis of the
criteria set out in 19 CFR 353.52(b). See Memorandum from Director,
Office of Policy to Office Director, AD/CVD Enforcement Group I, Office
3, dated May 28, 1997. We chose Indonesia as the second-choice
surrogate based on the same memorandum. Information on the record
indicates that both India and Indonesia are significant producers of
TRBs. See Memorandum from the analyst to the file, dated June 3, 1997.
We used publicly available information relating to India to value the
various factors of production with the exception of steel inputs and
scrap. For valuing steel inputs and scrap we used publicly available
information relating to Indonesia because we determined that publicly
available information related to India was unreliable.
We valued the factors of production as follows:
For hot-rolled alloy steel bars used in the production of cups and
cones, cold-rolled steel rods used in the production of rollers, cold-
rolled steel sheet, cold-rolled steel sheet used in the production of
cages, and steel scrap, we used import prices obtained from Foreign
Trade Statistical Bulletin, Imports, Jakarta, Indonesia. We used data
from the November 1995 issue, which included cumulative data covering
the period January 1995 through November 1995. We subtracted cumulative
data from the May 1995 issue, covering the period January 1995 through
May 1995, because these data were not within the POR. We applied data
for the period June 1995 through November 1995, the first six months of
the POR, to the entire POR because we were unable to obtain more recent
information. However, for steel bar used to produce cups and cones, the
steel rod used to produce rollers and for the relevant steel scrap
category, interested parties provided data through December 1995, on a
country-specific basis. We used these data because we were able to
eliminate from our calculation steel imports sourced from NME countries
and small quantities sourced from market-economy countries. We made
adjustments to include freight costs incurred between the PRC-based
steel suppliers and the TRB factories.
For direct labor, we used 1996 data from Investing, Licensing &
Trading Conditions Abroad, India, published in November 1996 by the
Economist Intelligence Unit. We then adjusted the 1996 labor value to
the POR to reflect inflation using consumer price indices (CPI) of
India as published in the International Financial Statistics by the
International Monetary Fund (IMF). We calculated the labor cost for
each component by multiplying the labor time requirement by the
surrogate labor rate. Indirect labor is reflected in the selling,
general and administrative (SG&A) and overhead rates.
For factory overhead, we used information obtained from the 1995-96
annual report of SKF Bearings India, Ltd. (SKF India), a producer of
similar merchandise in India. See SKF Bearings India, Ltd. Annual
Report 1995-96. From this source, we were able to calculate factory
overhead as a percentage of total cost of manufacture.
For SG&A expenses, we used information obtained from the same
financial report used to obtain factory overhead. This information
showed SG&A expenses as a percentage of the cost of manufacture.
For profit, we used SKF India's profit rate. The annual report
showed profit as a percentage of cost of production.
For export packing, we used the facts available because the
respondents did not supply sufficient factor information for us to
calculate packing costs. As facts available we used 1 percent of the
sum of total ex-factory costs and SG&A expenses. This percentage,
obtained from publicly available data, was used
[[Page 36770]]
in the Final Determination of Sales at Less than Fair Value: Tapered
Roller Bearings from Italy, 52 FR 24198 (June 29, 1987). This
methodology is consistent with the Department's valuation of packing in
the Final Results of Antidumping Duty Administrative Review: Tapered
Roller Bearings from the People's Republic of China, 56 FR 67590
(December 31, 1991), and subsequent reviews of this order. We used this
percentage because there was no publicly available information from a
comparable surrogate country.
For foreign inland freight, as the most recent publicly available
published source, we used a rate derived from a newspaper article in
the April 20, 1994 issue of The Times of India, as submitted in the
antidumping duty investigation on honey from the PRC. We adjusted the
value of freight to the POR using a wholesale price index (WPI)
published by the International Monetary Fund (IMF).
We made no adjustments to CV for selling expenses because the
surrogate SG&A information we used did not allow a breakout of selling
expenses.
Partial Termination of Review
Shanghai was included in our notice of initiation of this review.
However, on February 11, 1997, we published a notice of revocation of
the order with respect to Shanghai (62 FR 6189). Therefore, we are
terminating this review with respect to Shanghai.
Petitioner requested reviews for East Sea Bearing Co., Ltd. (East
Sea), and Changshan Bearing Factory (Changshan). On August 26, 1996,
East Sea and Changshan both reported no shipments of subject
merchandise to the United States during the POR. We independently
confirmed with U.S. Customs that there were no shipments from these two
companies. Therefore, we have terminated the review with respect to
East Sea. See Calcium Hypochlorite From Japan: Termination of
Antidumping Duty Administrative Review, 62 FR 18086 (April 14, 1997).
However, because Changshan has not been granted a separate rate the
deposit rate applicable to Changshan will continue to be the PRC rate
as established in the final results of this review.
Currency Conversion
We made currency conversions in accordance with section 773A of the
Act. Currency conversions were made at the rates certified by the
Federal Reserve Bank. Section 773A(a) directs the Department to use a
daily exchange rate to convert foreign currencies into U.S. dollars
unless the daily rate involves a ``fluctuation.'' It is our practice to
find that a fluctuation exists when the daily exchange rate differs
from a benchmark rate by 2.25 percent or more. See Preliminary Results
of Antidumping Duty Administrative Review: Certain Welded Carbon Steel
Pipe and Tube from Turkey, 61 FR 35188, 35192 (July 5, 1996). The
benchmark rate is defined as the rolling average of the rates for the
past 40 business days.
Preliminary Results of the Review
As a result of our comparison of the EP or CEP, as applicable, to
NV, we preliminarily determine that the following dumping margins exist
for the period June 1, 1995, through May 31, 1996:
------------------------------------------------------------------------
Margin
Manufacturer/Exporter 2 3 (percent)
------------------------------------------------------------------------
Wanxiang................................................... 8.70
Shandong................................................... 14.65
Luoyang.................................................... 3.16
CMC........................................................ 0.00
Xiangfan................................................... 1.55
Guizhou Machinery.......................................... 20.19
Zhejiang................................................... 0.10
Jilin...................................................... 29.40
Liaoning................................................... 0.03
Premier.................................................... 5.42
Chin Jun................................................... 3.41
------------------------------------------------------------------------
\2\ Although Hangzhou has not been assigned a rate for this review we
note that its independent rate will continue to be 29.40 percent, the
rate assigned in the 1994-95 review, in which Hangzhou was considered
part of the PRC entity and was not specifically named.
\3\ The PRC rate applies to CMEC, Hailin, Guizhou Automotive and all
firms which did not respond to the questionnaire and which are not
entitled to a separate rate.
Parties to the proceeding may request disclosure within five days
of the date of publication of this notice. Any interested party may
request a hearing within 10 days of publication. Any hearing, if
requested, will be held approximately 44 days after the publication of
this notice. Interested parties may submit written comments (case
briefs) within 30 days of the date of publication of this notice.
Rebuttal comments (rebuttal briefs), which must be limited to issues
raised in the case briefs, may be filed not later than 37 days after
the date of publication. The Department will issue a notice of final
results of this administrative review, including the results of its
analysis of issues raised in any such written comments, within 120 days
of publication of these preliminary results.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between EP or CEP, as applicable, and NV may vary from the
percentages stated above. The Department will issue appraisement
instructions directly to the Customs Service.
Furthermore, 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 entered, or
withdrawn from warehouse, for consumption on or after the publication
date, as provided for by section 751(a)(1) of the Act: (1) For the PRC
companies named above that have separate rates and were reviewed
(Guizhou Machinery, Luoyang, Jilin, Liaoning, CMC, Zhejiang, Xiangfan,
Shandong, Wanxiang), the cash deposit rates will be the rates for these
firms established in the final results of this review, except that for
exporters with de minimis rates, i.e., less than 0.50 percent, no
deposit will be required; (2) for Hangzhou, which we preliminarily
determine to be entitled to a separate rate, the rate will continue be
29.40 percent, the rate which currently applies to this company; (3)
for PRC companies (e.g., Great Wall) which established eligibility for
a separate rate in a previous review and for which no review was
requested, the cash deposit rate will continue to be the rate assigned
in the previous review; (4) for all remaining PRC exporters, all of
which were found to not be entitled to separate rates, the cash deposit
will be 29.40 percent; and (5) for non-PRC exporters Premier and Chin
Jun the cash deposit rates will be the rates established in the final
results of this review; (6) for non-PRC exporters of subject
merchandise from the PRC, other than Premier and Chin Jun, the cash
deposit rate will be the rate applicable to the PRC supplier of that
exporter. These deposit requirements, when imposed, shall remain in
effect until publication of the final results of the next
administrative review.
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 353.26 to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during this review period. Failure to comply
with this requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
[[Page 36771]]
Dated June 30, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-17948 Filed 7-8-97; 8:45 am]
BILLING CODE 3510-DS-P
