[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]
=======================================================================
-----------------------------------------------------------------------
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.
-----------------------------------------------------------------------
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