[Federal Register Volume 61, Number 126 (Friday, June 28, 1996)]
[Notices]
[Pages 33711-33714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16614]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-549-801]


Antifriction Bearings (Other Than Tapered Roller Bearings) and 
Parts Thereof from Thailand; Final Results of Antidumping Duty 
Administrative Review and Revocation of Antidumping Duty Order

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of Final Results of Antidumping Duty Administrative 
Review and Revocation of Antidumping Duty Order.

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SUMMARY: On December 7, 1995, the Department of Commerce (the 
Department) published the preliminary results of the administrative 
review of the antidumping duty order on antifriction bearings (other 
than tapered roller bearings) and parts thereof from Thailand. The 
class or kind of merchandise covered by this order is ball bearings. 
This review covers one producer and/or exporter of antifriction 
bearings to the United States for the period May 1, 1993, through April 
30, 1994.
    We gave interested parties an opportunity to comment on the 
preliminary results. Based on our analysis of the comments received, we 
have made certain changes for the final results. We have determined the 
margins for NMB Thai Ltd., Pelmec Thai Ltd., NMB Hi-Tech Bearings Ltd., 
and NMB Corporation (collectively, NMB/Pelmec) to be de minimis. We 
have also determined that NMB/Pelmec has met the requirements for 
revocation.

EFFECTIVE DATE: June 28, 1996.

FOR FURTHER INFORMATION CONTACT: Lyn Johnson or Rich Rimlinger, Office 
of Antidumping Compliance, 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.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute and to the 
Department's regulations are references to the provisions as they 
existed on December 31, 1994.

Background

    On May 15, 1989, the Department published in the Federal Register 
(54 FR 20909) the antidumping duty order on ball bearings and parts 
thereof from Thailand. On June 22, 1994, in accordance with 19 C.F.R. 
353.22(c), we initiated an administrative review of this order for the 
period May 1, 1993, through April 30, 1994 (59 FR 32180). The 
Department conducted a verification of NMB/Pelmec's response for this 
period of review.
    On May 31, 1994, NMB/Pelmec submitted a request, in accordance with 
19 C.F.R.353.25(b), to revoke the order with respect to NMB/Pelmec's 
sales of this merchandise. In accordance with 19 C.F.R. 
353.25(a)(2)(iii), this request was accompanied by certifications from 
the firm that it had not sold the relevant class or kind of merchandise 
at less than foreign market value (FMV) for a three-year period, 
including this review period, and would not do so in the future. NMB/
Pelmec also agreed to its immediate reinstatement in the relevant 
antidumping order, as long as any firm is subject to this order, if the 
Department concludes under 19 C.F.R. 353.22(f) that, subsequent to 
revocation, it sold the subject merchandise at less than FMV.
    On December 7, 1995, we published in the Federal Register the 
preliminary results of our administrative reviews of the antidumping 
duty orders on antifriction bearings (other than tapered roller 
bearings) and parts thereof (AFBs) from France, Germany, Japan, 
Singapore, Sweden, and Thailand (60 FR 62817) wherein we gave notice of 
our intent to revoke the order on Thailand and invited interested 
parties to comment. On January 31, 1996, and February 8, 1996, parties 
to the Thailand proceeding submitted their case and rebuttal briefs, 
respectively. At the request of interested parties, we held a public 
hearing for the Thailand proceeding on February 14, 1996.
    The Department is conducting this administrative review in 
accordance with section 751 of the Tariff Act of 1930, as amended (the 
Act).

Scope of Review

    The products covered by this order, antifriction bearings (other 
than tapered roller bearings), mounted or unmounted, and parts thereof 
(AFBs) from Thailand, fall within the following class or kind of 
merchandise:
    Ball Bearings and Parts Thereof: These products include all AFBs 
that employ balls as the roller element. Imports of these products are 
classified under the following categories: antifriction balls, ball 
bearings with integral shafts, ball bearings (including radial ball 
bearings) and parts thereof, and housed or mounted ball bearing units 
and parts thereof. Imports of these

[[Page 33712]]

products are classified under the following Harmonized Tariff Schedule 
(HTS) subheadings: 3926.90.45, 4016.93.00, 4016.93.10, 4016.93.50, 
6909.19.5010, 8431.20.00, 8431.39.0010, 8482.10.10, 8482.10.50, 
8482.80.00, 8482.91.00, 8482.99.05, 8482.99.10, 8482.99.35, 
8482.99.6590, 8482.99.70, 8483.20.40, 8483.20.80, 8483.50.8040, 
8483.50.90, 8483.90.20, 8483.90.30, 8483.90.70, 8708.50.50, 8708.60.50, 
8708.60.80, 8708.70.6060, 8708.70.8050, 8708.93.30, 8708.93.5000, 
8708.93.6000, 8708.93.75, 8708.99.06, 8708.99.31, 8708.99.4960, 
8708.99.50, 8708.99.58, 8708.99.8080, 8803.10.00, 8803.20.00, 
8803.30.00, 8803.90.30, 8803.90.90.
    The size or precision grade of a bearing does not influence whether 
the bearing is covered by the order. For a further discussion of the 
scope of the orders being reviewed, including recent scope 
determinations, see Antifriction Bearings (Other Than Tapered Roller 
Bearings) and Parts Thereof from France, et al.; Final Results of 
Antidumping Duty Administrative Reviews, Partial Termination of 
Administrative Reviews, and Revocation in Part of Antidumping Duty 
Orders, 60 FR 10900 (February 28, 1995) (AFBs IV).

Changes Since the Preliminary Results

    Based on our analysis of comments received, we have made the 
following changes in the final results:
    In our computer calculations of profit for constructed value (CV) 
we inadvertently omitted interest expense. We have included this 
expense in our final calculations. We also changed the program to 
perform a test for profit so that the greater of actual profit or the 
statutory minimum of eight-percent profit is used. Finally, we 
improperly classified insurance as a direct selling expense. Since 
insurance identified in the response covers pre-sale transportation 
from the factory to the warehouse, we have reclassified it as an 
indirect selling expense for the final results.

Analysis of Comments Received

    We invited interested parties to comment on our preliminary results 
and intent to revoke the order. We received case and rebuttal briefs 
from The Torrington Company (Torrington), petitioner in this 
proceeding, and respondent, NMB/Pelmec Thailand. We held a public 
hearing on February 14, 1996.

Company-Specific Issues

    Comment 1: Torrington argues that the Department was incorrect in 
applying the statutory minimum for calculating profit, selling, general 
and administrative expense (SG&A). The petitioner also claims that the 
Department did not compute average home market (HM) profits as a 
percentage of costs nor did it check to determine whether such profits 
exceed the statutory minimum. In addition, Torrington argues that the 
Department did not calculate profits based only on sales to unrelated 
parties. Torrington suggests that, in calculating profit for sales to 
unrelated parties, below-cost sales should be excluded since, in 
Torrington's opinion, such sales should not be considered to have been 
made in the ``ordinary course of trade.''
    NMB/Pelmec claims that it calculated weighted-average profit 
margins and determined whether actual profit was above or below the 
statutory minimum before applying it to CV. Thus, it contends, it 
performed a proper analysis of the profit margins prior to entering the 
information into the computer database. NMB/Pelmec also argues that 
Torrington's suggestion to exclude below-cost sales from the profit 
calculation is at odds with the Department's past determinations. 
Respondent claims that Torrington has not demonstrated that below-cost 
sales were not made in the ``ordinary course of trade.'' Therefore, 
NMB/Pelmec contends that the Department should include all HM sales in 
the profit calculation.
    Department's Position: We performed a partial analysis of the 
profit margins before applying them to CV. For the preliminary results, 
we calculated an average profit margin as a percentage of CV; however, 
we did not test this percentage to determine whether profit was above 
or below the statutory minimum. Therefore, for the final calculations, 
we have tested the profit information to ensure that we use the greater 
of actual profit or the statutory minimum of eight-percent profit.
    In response to Torrington's argument that the Department should 
limit its calculation of profit to sales to unrelated parties, such 
calculations were not possible in this case. Where the Department has 
calculated profit on sales to unrelated parties, it had HM cost of 
production (COP) data on the record of the segment of the proceeding. 
(See AFBs IV.) However, for this review, since we were not conducting a 
sales-below-cost investigation, we did not have the cost information 
necessary to calculate profit rates for related and unrelated parties. 
Therefore, we used the profit information that we requested and which 
NMB/Pelmec provided in calculating CV.
    Finally, we reject Torrington's suggestion that below-cost sales 
are per se outside the ordinary course of trade. See Torrington v. 
United States, 881 F. Supp. 622, 633 (CIT 1995). The Department 
considers a variety of circumstances in determining whether HM sales 
are outside the ordinary course of trade. In this review, Torrington 
has failed to provide any evidence demonstrating that below-cost sales 
are outside the ordinary course of trade.
    Comment 2: Torrington contends that interest expense should be 
included in the calculation of COP. According to petitioners, the 
formula for calculating profits in the Department's calculations does 
not include interest expenses, so that the calculation of profit is 
understated.
    Department's Position: We agree that, for our CV calculations, it 
is appropriate to include interest expenses in the cost figures we use 
to calculate profit. (See section above entitled ``Changes Since the 
Preliminary Results.'')
    Comment 3: Torrington argues that the Department has been 
inconsistent in its treatment of NMB/Pelmec's ``Route B'' sales to HM 
customers. Torrington refers to NMB/Pelmec's two methods for routing 
sales to customers in the home market: 1) Route A sales in which 
subject merchandise is sold directly to related and unrelated customers 
in Thailand, and 2) Route B sales in which subject merchandise is first 
shipped to an affiliated party in Singapore prior to sale to related 
and unrelated customers in Thailand. Torrington contends that Route B 
sales should be excluded for purposes of assessing the viability of 
Thailand as a comparison market. Torrington notes that the Court of 
International Trade (CIT) remanded the 1990-91 review of this order to 
the Department with two decisions: first, the CIT instructed the 
Department to explain its differing treatment of Route B sales from the 
original investigation and, second, that NMB/Pelmec did not establish 
that Route B sales were correctly classified in the 1990-91 review 
before including them as HM sales. Also, Torrington argues that, as in 
the original less-than-fair-value (LTFV) investigation, the fact that 
subject merchandise was exported to Singapore and was exempt from taxes 
and duties confirmed, in part, that Route B sales were export sales.
    NMB/Pelmec argues that the Department is correct in identifying 
Route B sales as HM sales. First, NMB/Pelmec points out that the record 
indicates that subject merchandise was shipped to Singapore with the 
knowledge that it would be returned for sale in Thailand. Second, NMB/
Pelmec contends that the Department's decision

[[Page 33713]]

in the preliminary results is consistent with the Department's prior 
decisions. NMB/Pelmec notes that the Department's explanation as to why 
Route B sales are reclassified as HM sales in the second and subsequent 
reviews is clear in the Final Results of Redetermination Pursuant to 
Court Remand at 12, filed on August 10, 1995, in Torrington Company v. 
United States, 881 F. Supp. 622 (CIT 1995).
    Finally, NMB/Pelmec claims that Torrington's argument that Route B 
sales were export sales because the sales were exempt from taxes and 
duties has already been addressed by the Department. NMB/Pelmec notes 
that in the remand in the second review, the Department stated, 
``Second, we recognize that HM sales can have different tax or duty 
treatments based on the particular circumstances of the sale. For 
example, certain bearings may be exempted from certain taxes and duties 
if they are consumed in the production of an export product such as a 
machine. However, since such bearings are consumed in the home market, 
they are undeniably HM sales of bearings regardless of the fact that 
the machine made from these bearings was ultimately exported and the 
tax treatment of these HM bearings sales is different from other HM 
sales of bearings.'' See Final Results of Redetermination Pursuant to 
Court Remand in Ct. No. 92-07-00483, August 14, 1995, at 12.
    Department's Position: We agree with NMB/Pelmec that Route B sales 
are properly classified as HM sales. Route B merchandise is shipped to 
NMB/Pelmec's Singapore selling affiliate with the knowledge that it 
will be returned to Thailand for delivery to the unrelated customer. 
Therefore, the first unrelated sale in this review for all Route B 
sales occurred in Thailand. This differs from the original LTFV 
investigation in which certain sales made through the affiliate in 
Singapore, which NMB Thailand classified as Route B sales, were sold to 
an unrelated customer in Singapore. In the LTFV investigation, we 
determined that those particular Route B sales were third country 
sales, not HM sales. This distinction is significant, since, under 
section 773(a)(1)(A) of the Act, the ultimate consideration as to 
whether the sales in question are HM sales is whether the merchandise 
``is sold, or in the absence of sales, offered for sale in the 
principal markets of the country from which exported, in the usual 
commercial quantities and in the ordinary course of trade for home 
consumption. . . .'' (emphasis added). We have not been inconsistent in 
our treatment of Route B sales since the fact pattern differs between 
the LTFV investigation and this review. In addition, although HM sales 
can have different tax or duty treatments based on the particular 
circumstances of the sale, this does not alter the fact that the sales 
were consumed in the home market, which we have previously addressed in 
the remand in the second review as noted by NMB/Pelmec above. 
Therefore, we have included NMB/Pelmec's Route B sales as HM sales in 
our analysis.
    Comment 4: The Torrington Company argues that NMB/Pelmec's reported 
movement expenses and charges for Route B sales should not be deducted 
from foreign market value (FMV) since Route B sales should not be 
considered HM sales. It contends that such expenses, i.e., pre-sale 
freight expenses, are unrelated to the sale of bearings in Thailand.
    NMB/Pelmec contends that pre-sale freight expenses for Route B 
sales are direct expenses and should be deducted from FMV through a 
circumstance-of-sale-adjustment. However, if the Department concludes 
that these expenses are indirect, NMB/Pelmec claims that it is still 
entitled to an adjustment under the exporter's sales price (ESP) offset 
provision of the regulations.
    Department's Position: We disagree with Torrington that Route B 
sales are not HM sales (see our response to comment 4). However, the 
record shows that charges NMB/Pelmec incurred in shipping the 
merchandise to Singapore are pre-sale freight charges. Since NMB/Pelmec 
has not demonstrated that these freight charges are related directly to 
particular sales made in Thailand, we have treated the charges in these 
final results as indirect selling expenses.
    Comment 5: Torrington argues that NMB/Pelmec should not be allowed 
adjustments for duty drawback. It claims that NMB/Pelmec did not 
demonstrate any link between the duties alleged to be paid and rebated 
and what was actually paid and rebated.
    NMB/Pelmec contends that the Department verified all aspects of 
what it claimed for the adjustment for uncollected duties, and refers 
to the Department's Verification Report of March 16, 1995.
    Department's Position: We agree with NMB/Pelmec that we verified 
respondent's claimed adjustments, as noted in our Verification Report 
of March 16, 1995, and found respondent's claim to be appropriate.

General Issues

    Comment 6: Torrington argues that the Department should require 
respondents to affirm that responses conform to any prior Department 
determinations in these reviews. As an example, Torrington comments 
that, if, as a result of litigation, the Department changed its 
methodology with respect to price adjustments for a firm, that firm 
should indicate that its response for this review conforms to the 
latest changes in methodology.
    Department's Position: Torrington's comment is directed at certain 
changes which do not apply in the case of NMB/Pelmec.
    Comment 7: Torrington argues that the Department's calculation of 
the deposit rate is not tax-neutral and is adversely affected by the 
Department's new value-added tax methodology. Torrington claims that, 
since United States price (USP) is likely to be higher than entered 
value, the Department's deposit rate calculation based on USP results 
in understated deposit rates. Therefore, Torrington argues that the 
Department should recalculate deposit rates using the relationship 
between the total dumping duties due and total entered value instead of 
using total adjusted USP in the denominator.
    Department's Position: Because we are revoking the order based on 
the fact that NMB/Pelmec has had a three-year period in which we have 
not calculated dumping margins greater than de minimis, we are not 
establishing a deposit rate for NMB/Pelmec. Therefore, this issue is 
moot for this order.
    Comment 8: Torrington argues that the Department should recalculate 
profit for constructed value to exclude below-cost sales. Petitioner 
contends that, in such calculations, losses incurred on below-cost 
sales will offset profits companies realize on above-cost sales, thus 
decreasing the calculated average profit. If the Department does not 
calculate profit based solely on above-cost sales, petitioner asks that 
the Department calculate average profit by totalling all profits 
realized on profitable sales and dividing the result by total COP on 
all sales.
    Department's Position: We disagree with Torrington's contention, as 
we have in prior reviews, that the calculation of profit should be 
based only on sales that are priced above the COP. (See Final Results 
of Antidumping Duty Administrative Reviews and Revocation in Part of an 
Antidumping Duty Order: Antifriction Bearings (Other Than Tapered 
Roller Bearings) and Parts Thereof From France, et al., 58 FR 39729, 
39752 (July 26, 1993), and AFBs IV at 10922.) The Department's 
methodology for calculating profit in determining CV is in compliance 
with section 773(e)(1)(B) of the Act. The

[[Page 33714]]

statute does not explicitly instruct us to disregard below-cost sales 
in the calculation of profit. Accordingly, it would be inappropriate 
for the Department to read such a requirement into the statute. Thus, 
the Department does not deem it necessary to change its methodology as 
further suggested by petitioner. (Comment 1 also relates to this 
issue.)
    Comment 9: Torrington argues that a sale should be presumed to be 
an export sale whenever the circumstances suggest that the sales are 
not for home market consumption. As an example, Torrington comments 
that, where the record for a company shows that either a HM customer 
(or related party) has U.S. manufacturing facilities which use bearings 
in a further-manufactured article or export documents were prepared by 
the manufacturer, the Department should presume that the manufacturer 
knew or should have known that the sales in question were for export. 
Petitioner further notes that, in this case, if the respondent provides 
adequate rebuttal evidence, the presumption is then defeated. 
Petitioner argues that this creates incentive for respondents to find 
out whether such sales are for home market consumption and to report 
relevant information.
    Department's Position: With the exception of Route B sales, we find 
no evidence on the record that HM sales of NMB/Pelmec's merchandise 
were exported. With respect to Route B sales, see our response to 
Comment 3.
    Comment 10: Torrington argues that the Department should not 
exclude U.S. sales of bearings used by a related party as a minor 
component in a further-manufactured article.
    Department's Position: Since NMB/Pelmec did not have sales of 
bearings used by a related party as a minor component in further 
manufacturing, and the Department did not exclude such sales in this 
case, this issue does not apply to the firm.
    Comment 11: Torrington argues that the Department should calculate 
profit on the basis of sampled, above-cost HM sales only. Petitioner 
contends that profit for CV should be based on profits on sampled HM 
sales, not on sales of the class or kind of merchandise generally in 
the home market. Petitioner claims that the use of the sampled sales 
insures that profit is based on a verified database of sales of in-
scope merchandise of the same general class or kind, as opposed to the 
use of general profit data, for which the Department has little 
assurance that the reported profits are actually based on sales of in-
scope merchandise of the same general class or kind.
    Department's Position: We disagree with Torrington's contention 
that profit should be calculated on the basis of the sampled sales. The 
Department consistently used profit information based on the general 
class or kind of merchandise. See AFBs IV at 10923. As far as above-
cost sales are concerned, see our response to Comment 3.
    Comment 12: Torrington asks that the Department reconsider its 
treatment of antidumping duties and deduct such duties from ESP as a 
selling cost.
    Department's Position: We disagree with petitioner. As stated in 
AFBs IV at 10905, it has been our consistent interpretation of 19 CFR 
353.26 that evidence of reimbursement is necessary before we can make 
an adjustment to USP. In this review, Torrington has not identified 
record evidence that there was reimbursement of antidumping duties, and 
we have not adjusted USP for the duties.

Final Results of Review

    We determine that, for the period May 1, 1993, through April 30, 
1994, NMB/Pelmec had a weighted-average antidumping duty margin of 0.19 
percent, which is de minimis. We further determine that NMB/Pelmec has 
not sold ball bearings at less than FMV for three consecutive review 
periods, including this review period. The certification from the firm 
(mentioned above) and the fact that there were no comments with respect 
to our intent to revoke this order in the preliminary results warrant 
revocation of the order. Therefore, the Department is revoking the 
order on antifriction bearings (other than tapered roller bearings) and 
parts thereof from Thailand, with regard to ball bearings, in 
accordance with section 751(c) of the Act and 19 CFR 353.25.
    This revocation applies to all entries of the subject merchandise 
entered, or withdrawn from warehouse, for consumption on or after May 
1, 1994. The Department will order the suspension of liquidation ended 
for all such entries and will instruct the Customs Service to release 
any cash deposit or bonds. The Department will further instruct Customs 
to refund with interest any cash deposits on post-May 1, 1994 entries. 
In addition, the Department will terminate the review covering subject 
merchandise from Thailand sold during the period May 1, 1994, through 
April 30, 1995, which was initiated on June 19, 1995 (60 FR 31952).
    Assessment Rates: The Department shall determine, and the Customs 
Service shall assess, antidumping duties on all appropriate entries. 
Because sampling and other simplification methods prevent entry-by-
entry assessments, we will calculate wherever possible an exporter/
importer specific assessment rate for each class or kind of 
antifriction bearings.
    Exporter's Sales Price Sales: For ESP sales, which we sampled, we 
divided the total dumping margin for the reviewed sales by the total 
entered value of those reviewed sales for the importer. We will direct 
Customs to assess the resulting percentage margin against the entered 
Customs values for the subject merchandise on entries under the 
relevant order during the review period. While the Department is aware 
that the entered value of sales during the period of review (POR) is 
not necessarily equal to the entered value of entries during the POR, 
use of entered value of sales as the basis of the assessment rate 
permits the Department to collect a reasonable approximation of the 
antidumping duties which would have been determined if the Department 
had reviewed those sales of merchandise actually entered during the 
POR.
    This notice serves as a final 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 notice also serves as the only reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the return or destruction of proprietary information 
disclosed under APO in accordance with 19 CFR 353.34(d). Failure to 
comply is a violation of the APO.
    This administrative review, revocation, and notice are in 
accordance with sections 751(a)(1) and 751(c) of the Act (19 U.S.C. 
1675(a)(1)) and sections 353.22 and 353.25 of the Department's 
regulations (19 CFR 353.22 and 19 CFR 353.25).

    Dated: June 21, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-16614 Filed 6-27-96; 8:45 am]
BILLING CODE 3510-DS-P