[Federal Register Volume 61, Number 192 (Wednesday, October 2, 1996)]
[Notices]
[Pages 51427-51434]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25243]


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DEPARTMENT OF COMMERCE
[A-485-602]


Tapered Roller Bearings and Parts Thereof, Finished or 
Unfinished, From the Republic of Romania; Final Results and Rescission 
in Part of Antidumping Duty Administrative Review

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

ACTION: Notice of final results and rescission in part of antidumping 
duty administrative review.

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SUMMARY: On April 8, 1996, the Department of Commerce (the Department) 
published the preliminary results of its administrative review of the 
antidumping duty order on tapered roller bearings and parts thereof, 
finished or unfinished (TRBs), from Romania. This review covers the 
period June 1, 1994 through May 31, 1995.

EFFECTIVE DATE: October 2, 1996.

FOR FURTHER INFORMATION CONTACT: Karin Price or Maureen Flannery, 
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.

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
current regulations, as amended by the interim regulations published in 
the Federal Register on May 11, 1995 (60 FR 25130).

Background

    On April 8, 1996, the Department published in the Federal Register 
(61 FR 15465) the preliminary results of its administrative review of 
the antidumping duty order on TRBs from Romania (52 FR 23320, June 19, 
1987). We conducted a hearing on May 22, 1996. On July 30, 1996, we 
extended the time limit for the final results to September 25, 1996 (61 
FR 39631). We have now completed the administrative review in 
accordance with section 751 of the Act.

Scope of the Review

    Imports covered by this review are shipments of TRBs from Romania. 
These products include flange, take-up cartridge, and hanger units 
incorporating tapered roller bearings, and tapered roller housings 
(except pillow blocks) incorporating tapered rollers, with or without 
spindles, whether or not for automotive use. This merchandise is 
currently classifiable under Harmonized Tariff Schedule (HTS) item 
numbers 8482.20.00, 8482.91.00, 8482.99.30, 8483.20.40, 8483.30.40, and 
8483.90.20. Although the HTS item numbers are provided for convenience 
and Customs purposes, the written description of the scope of this 
order remains dispositive.
    This review covers eight companies and the period June 1, 1994 
through May 31, 1995. Of the eight companies for which petitioner 
requested a review, only Tehnoimportexport (TIE) made shipments of the 
subject merchandise to the United States during the period of review.

Analysis of Comments Received

    We invited interested parties to comment on the preliminary 
results. We received written comments from the respondent, TIE, and the 
petitioner, The

[[Page 51428]]

Timken Company (Timken). At the request of both parties, a public 
hearing was held on May 22, 1996.

Comment 1

    TIE argues that the Department should not use surrogate data from 
the Thailand bearing producers NMB Thai and Pelmec Thai (NMB/Pelmec) 
for overhead and selling, general, and administrative (SG&A) expenses, 
because the Thai producers manufacture ball bearings that are more 
sophisticated than TIE bearings. TIE cites NMB/Pelmec's own catalogs as 
evidence of the sophistication of those companies'' bearings, and notes 
that the Department recognized, in a review of antifriction bearings 
(AFBs) from Romania, that NMB/Pelmec may not be ideal for purposes of 
comparison to TIE.
    Timken counters that the rates from NMB/Pelmec used by the 
Department are the only reasonable values on the record regarding costs 
of producers of comparable merchandise in a country at a level of 
economic development comparable to that of Romania.

Department's Position

    We agree with Timken. As discussed in the preliminary results of 
this review, we determined that Thailand is at a level of economic 
development comparable to that of Romania and is a significant producer 
of bearings. Therefore, we selected Thailand as a surrogate country. 
Where we were unable to locate publicly available published information 
(PAPI) to establish surrogate values from the primary surrogate 
country, Poland, we used Thai values. Notwithstanding any differences 
in the level of sophistication of bearings between the Thai and 
Romanian companies, NMB/Pelmec was the best available source of 
surrogate values from Thailand. Furthermore, the degree of 
sophistication of the bearings sold by the Thai companies would not 
directly impact the amount of SG&A expenses incurred by the company.

Comment 2

    TIE argues that the Department's use of ranged Thai data to 
establish SG&A and overhead rates violates due process. TIE notes that 
the Department used ranged data based on the proprietary version of 
NMB/Pelmec's response--data TIE cannot independently verify. Further, 
TIE notes that the Department did not secure permission from NMB/Pelmec 
to use its data for this particular review, as it did when the data was 
used in a previous review of AFBs from Romania.
    Timken responds that the rates are the best available, and should 
be retained by the Department. Timken notes that in typical non-market 
economy (NME) cases, the Department historically has relied on rates 
supplied by the embassy of the surrogate country, without independently 
verifying the underlying data. See transcript of the hearing, May 22, 
1996, page 39.

Department's Position

    We agree with Timken. The data used for this review were publicly 
available information from producers in a comparable industry (NMB/
Pelmec), in a country deemed a suitable surrogate (Thailand). The fact 
that the underlying data used to arrive at the publicly available rates 
were proprietary is irrelevant; the ranged data are publicly available 
on the record of the 1988-90 antidumping review of AFBs from Romania, 
and we have placed these data on the record of this review. It is not 
necessary for the Department to secure permission to use data that is 
already in the public domain. Thus, the Department has continued to use 
the NMB/Pelmec values.

Comment 3

    TIE argues that the Department's use of the same Thai SG&A data in 
the 1988-90 review of AFBs from Romania was based on application of 
adverse best information available (BIA), which is not relevant to this 
review. TIE notes that its alleged failure to provide certain 
information regarding selling expenses during the course of the 1988-90 
AFB review resulted in the Department's applying the SG&A rate as 
adverse BIA. Further, this same rate was rejected in the subsequent AFB 
review because adverse BIA was not warranted.
    TIE further argues the rate should not be used as other than 
adverse BIA, because certain expenses included in the NMB/Pelmec SG&A 
calculation are not applicable to TIE. Since the Department has made no 
findings in this review that TIE has not provided all necessary 
information, TIE claims, adverse BIA is unwarranted, and by extension, 
use of the NMB/Pelmec rate is inappropriate.
    Timken notes that, unlike the numbers often used by the Department 
from embassy correspondence, or estimates from companies'' annual 
reports, the NMB/Pelmec rates are based on actual questionnaire 
responses. Timken concludes that these rates are as accurate as, if not 
more accurate than, any other rates used in NME antidumping duty 
proceedings.

Department's Position

    We recognize that, in the 1988-90 review of AFBs from Romania, the 
Thai SG&A rate was applied as adverse BIA, and we recognize that this 
rate includes non-SG&A expenses. As this rate was being used as adverse 
BIA in that review, we did not consider whether the rate included non-
SG&A expenses at that time. However, we agree that, if a surrogate SG&A 
value includes expenses that are generally not considered to be SG&A 
expenses, these components should be excluded from the surrogate value. 
After further analysis of the NMB/Pelmec SG&A rate, we find that the 
rate included adjustments for inland freight and import duties on raw 
materials, which generally are not categorized as SG&A expenses. 
Furthermore, because we have already accounted for inland freight costs 
elsewhere in our calculations, inclusion in the applied SG&A rate would 
double-count this expense. Therefore, for the purposes of this review, 
we have recalculated the Thai SG&A expense to exclude inland freight 
and import duties on raw material inputs.

Comment 4

    TIE argues that the Thai SG&A rate is aberrational, and that the 
Department has an obligation not to use aberrational data.
    According to TIE, because the SG&A expenses calculated by the 
Department are the highest ever calculated in any NME case, the data 
are aberrational, and should be rejected. TIE notes that the Department 
has refused to use data in other cases because it determined that such 
data conflicted with other publicly available data, and was, therefore, 
unrepresentative.
    Timken notes that because the NMB/Pelmec SG&A and overhead expense 
data are derived from actual questionnaire responses, it is likely that 
the rate is as accurate as, if not more accurate than, any other rates 
used in previous antidumping proceedings. Furthermore, petitioner 
claims, it is logical that overhead rates stated as a percentage of 
total cost of production will be higher in countries in which labor 
costs are lower, as is the case in developing countries such as 
Thailand.

Department's Position

    There is nothing on the record of this review to suggest that the 
NMB/Pelmec SG&A expense is not reflective of the Thai bearings 
industry. In fact, to our knowledge, NMB/Pelmec are the only bearing 
producers in Thailand. Accordingly, we do not view the NMB/Pelmec SG&A 
expense as aberrational.

[[Page 51429]]

Comment 5

    TIE argues that, instead of using the NMB/Pelmec SG&A value, the 
Department should use ``Yugoslavian or other data,'' and cites the data 
it put on the record on March 28, 1996. TIE notes that the Department 
used Yugoslavia as a surrogate country in the last completed review of 
Romanian TRBs, and argues that the ten percent rate used in that review 
is more logical than the NMB/Pelmec rate.
    Timken notes that TIE admits that this Yugoslavian rate was simply 
the former ten percent statutory minimum. Timken argues that, because 
the statutory minimum is no longer valid, the ten percent rate should 
be disregarded.

Department's Position

    We agree with Timken. Yugoslavia is not a valid surrogate country 
for this review, due to changed conditions since 1988-89, the period of 
the review to which respondent refers. Therefore, it would not be 
appropriate to use a Yugoslavian rate, except in the absence of a 
publicly available SG&A rate from one of the suitable surrogate 
countries, such as Thailand. Furthermore, although Yugoslavia was used 
as a surrogate country in a past review, the SG&A rate used was 
actually the ten percent statutory minimum, which is not valid under 
the controlling statute.

Comment 6

    TIE advocates the use of the former statutory minimum of ten 
percent for the SG&A expense. TIE notes that the Department is using an 
eight percent figure for profit, the former statutory minimum for 
profit. Further, TIE notes that the Department has never used a figure 
other than the former statutory minimum of ten percent for SG&A, except 
where the Department selected an adverse BIA rate. Thus, TIE argues, 
there is little or no evidence that the SG&A rate exceeds ten percent. 
TIE claims that in market-economy bearings cases where SG&A has been 
calculated, the expense has rarely exceeded ten percent.
    Timken notes that as a result of Article 2.2.2 of the Uruguay 
Round's Agreement on Implementation of Article VI of the General 
Agreement on Tariffs and Trade, the statute eliminates the minimum rate 
for SG&A, and mandates use of actual rates where possible.

Department's Position

    We agree with Timken. Under the controlling statute, the statutory 
minimum of ten percent for SG&A is invalid, and the Department must use 
actual rates when possible. See 19 U.S.C. 1677b(e)(2). Hence, the 
Department has continued to use the actual SG&A rate from NMB/Pelmec, 
two producers of comparable merchandise from a qualifying surrogate 
country. Use of the former statutory minimum in previous reviews has no 
bearing on this review. Furthermore, TIE incorrectly states that the 
Department is using the former eight percent minimum for profit. We are 
using eight percent as the profit margin in this review not because it 
was formerly the statutory minimum profit figure, but because publicly 
available information indicates that the profit figure is not less than 
eight percent.

Comment 7

    TIE argues that the Department fails to describe the expenses 
included within the NMB/Pelmec overhead rate, and that the rate should 
therefore be rejected. TIE claims a breakdown of overhead expenses is 
impossible to generate, and that some components likely should be 
excluded to match the overhead for TIE.

Department's Position

    The Department generally does not dissect the overhead rate of a 
surrogate country and apply only components relevant to the producer. 
It is generally not possible to break the surrogate overhead value into 
its individual components, at the level of detail that would be 
necessary to value each individual component of the NME producer's 
overhead. See Notice of Preliminary Determination of Sales at Less Than 
Fair Value and Postponement of Final Determination: Certain Partial-
Extension Steel Drawer Slides with Rollers from the People's Republic 
of China (60 FR 29571, June 5, 1995) (Drawer Slides) and Notice of 
Final Determination of Sales at Less Than Fair Value: Disposable Pocket 
Lighters from the People's Republic of China (60 FR 22359, 29575, June 
5, 1995). Rarely, if ever, will it be known that there is an exact 
correlation between overhead expense components of the NME producer and 
the components of the surrogate overhead expenses. Therefore, as 
discussed in Drawer Slides, the Department normally bases normal value 
completely on factor values from a surrogate country on the premise 
that the actual experience in the NME cannot meaningfully be 
considered. Accordingly, Department practice is to accept a valid 
surrogate overhead rate as wholly applicable to the NME producer in 
question.

Comment 8

    TIE contends the NMB/Pelmec overhead rate is an improper surrogate 
for Romanian overhead costs. Because TIE uses technology and machinery 
from the 1960s, its equipment is fully depreciated. TIE argues NMB/
Pelmec's factories, which utilize expensive, modern equipment, have 
large depreciation expenses built into overhead. Therefore, the 
overhead rates as a percentage of the cost of manufacturing (COM) are 
not comparable to overhead rates for Romanian companies, or for 
comparable companies in Thailand or other surrogate countries, and 
should not be used as a surrogate for TIE's overhead.
    Further, TIE argues that NMB/Pelmec's miniature, high-precision 
bearings use less raw materials than do TIE's bearings, which are 
larger. Therefore, TIE reasons, overhead as a percentage of the cost of 
manufacturing is higher for smaller bearings. By extension, TIE argues, 
the overhead rate for TIE, as a percentage of raw materials and labor, 
should be lower than the rate from NMB/Pelmec.
    Timken notes that while TIE may have depreciated its equipment to 
zero, the rate at which an NME producer is able to depreciate equipment 
is irrelevant in the identification of appropriate, market economy 
surrogate values. Timken also notes that if machinery is old, then 
though depreciation costs are low, maintenance and repair expenses 
would be correspondingly high. Timken further argues that NMB/Pelmec's 
overhead rates are driven by low labor rates indicative of a developing 
country, and not by raw material costs.

Department's Position

    We disagree with TIE, again for the same reasons cited in our 
response to comment 7. The Department does not tailor surrogate 
overhead rates to match the circumstances in the NME country. 
Therefore, following Department practice, we have continued to use the 
valid surrogate overhead rate from Thailand.

Comment 9

    TIE suggests that, if the Department continues to use the NMB/
Pelmec data for overhead, it should use the lowest of the overhead 
rates for NMB/Pelmec bearings listed in NMB/Pelmec's 1988-90 cost 
printouts, as ranged by the Department. TIE points out that there is a 
large range in the bearings-specific overhead rates. TIE claims that 
the lowest of the overhead rates would more accurately reflect overhead 
for the larger bearings sold by TIE to the United States.

[[Page 51430]]

Department's Position

    The record does not contain information which allows us to verify 
TIE's assertion that the NMB/Pelmec models with the highest cost of 
manufacture and lowest overhead are, in fact, the largest models made 
by NMB/Pelmec. Therefore, the Department has continued to use the 
average overhead rate of all NMB/Pelmec models.

Comment 10

    TIE asks the Department to use overhead data TIE submitted in its 
March 28, 1996 submission. In that submission, TIE asked the Department 
to consider rates from a Portuguese bearings company, a Yugoslavian 
metal processing company, and a Thai metal processor. TIE argues that 
these rates are more timely than the NMB/Pelmec rate.
    Timken points out that Romania is not at a level of economic 
development comparable to that of Portugal--and that TIE actually 
argued, in a previous review, that Romania's level of development has 
never been as high as that of Portugal, and that the Department should 
eliminate Portugal from consideration as a surrogate country. Timken 
also notes that TIE's proposal to use surrogate values from metal 
processors does not meet the comparable-merchandise requirement of the 
statute (19 U.S.C. 1677b(e)(2)).

Department's Position

    We agree with Timken. Neither Yugoslavia nor Portugal were found to 
be appropriate as surrogate countries for this review. The Thai 
overhead value submitted by TIE is from an industry other than 
bearings, and therefore inferior to the NMB/Pelmec overhead rate.

Comment 11

    TIE asks the Department to disregard the imported price of Swedish 
steel in calculating cost of production for bearings produced at the 
Alexandria factory. Because Alexandria purchased less than three 
percent of its steel from Sweden, the amount purchased is 
insignificant, and, consistent with Department practice and the 
proposed regulations, the price should be disregarded. At the very 
worst, argues TIE, only the corresponding percentage of Swedish steel 
used by Alexandria should be used in the Department's calculations.
    Timken argues that the amount of market economy steel purchased is 
irrelevant; import prices selected by the Department represent the 
price of steel available to TIE. Further, Timken argues that the 
Swedish price should be applied to both factories, since they are part 
of a single entity.

Department's Position

    We agree with TIE. In calculating surrogate prices, the Department 
routinely disregards quantities too small to be representative. See 
Heavy Forged Hand Tools, Finished or Unfinished, With or Without 
Handles, from the People's Republic of China; Final Results of 
Antidumping Duty Administrative Reviews (60 FR 49251, September 22, 
1995). We have therefore recalculated steel costs for the Alexandria 
plant using only surrogate prices from European Union (EU) exports to 
Poland.

Comment 12

    TIE argues that the number of hours worked per month, obtained from 
the International Labor Office (ILO) Yearbook of Labor Statistics, 1995 
and used to calculate surrogate wage rates in Poland, understates the 
true hours worked per month in Poland. TIE notes that information 
submitted by Timken, from Investing, Licensing & Trading Conditions 
Abroad, Poland 1995 (IL&T), published by the Economist Intelligence 
Unit, indicates a work week of 42 hours, and argues that the surrogate 
wage rate should be recalculated to reflect this.
    Timken responds that the IL&T referred to the statutory maximum 
number of hours permitted under Polish law, and that the hours actually 
worked may be lower in Polish industry.

Department's Position

    We agree with TIE. The ILO data used in the preliminary results was 
for actual hours worked, not paid hours (which would include, for 
example, paid vacation leave). The monthly wage statistics we used in 
the preliminary results, from the August 1995 issue of the Statistical 
Bulletin, published by the Polish government, however, are based on 
total compensation for paid hours, and not actual hours worked. 
Therefore, for these final results we recalculated the wage rate using 
the IL&T data, which represent paid hours.

Comment 13

    TIE argues that Polish labor rates used by the Department 
improperly included payments for bonuses from profits. According to 
TIE, the use of a wage which includes bonus payments from profits is 
improper, as it assumes profits were, in fact, made by Polish bearing 
companies. TIE asks that the Department use wages exclusive of payments 
from profit.
    Timken maintains the Department's goal is to identify and apply the 
fully-loaded labor costs (not just basic wages) of producers in the 
surrogate country. Profit bonuses, a portion of the cost to the 
employer, and of direct benefit to the employee, should be included in 
the Department's calculation.

Department's Position

    We agree with Timken. Wage rates should reflect, as accurately as 
possible, the actual cost to employers. See Notice of Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination: Certain Partial-Extension Steel Drawer Slides With 
Rollers From the People's Republic of China (60 FR 29571, 6/5/95). As 
is the case with SG&A and overhead, the Department generally does not 
dissect the wage rate of a surrogate country and apply only certain 
components to the producing country. See our response to comment 7. 
Department practice is to accept a valid surrogate wage rate as wholly 
applicable to the NME respondent in question.

Comment 14

    TIE argues that Polish labor rates are not representative of labor 
rates in Romania or comparable countries, and should be rejected. 
According to TIE, the per capita gross national product (GNP) of Poland 
is roughly double that of Romania. TIE argues it would, therefore, be 
unfair to use the Polish wage rate. TIE advocates use of an average 
wage rate, derived from rates placed on the record from Algeria and 
Ecuador, and a rate for Poland revised in accordance with comment 12, 
above. Even this average, TIE contends, far exceeds the Romanian labor 
rate. TIE notes that the Department's proposed regulations direct the 
Department to use what is essentially an average labor rate in 
economically comparable market economy countries, and argues that the 
Department should adopt this policy for this review.
    Timken discounts TIE's argument that Polish labor rates are not 
representative of Romanian labor rates, noting that the purpose of the 
surrogate value exercise is to find a rate to replace the Romanian 
rate, not to find a rate representative of the Romanian rate. Timken 
further counters that the components of the average wage rate proposed 
by TIE are invalid. Except for the rate for Poland, the other wage 
rates are minimum wage rates, not prevailing wage rates. Moreover, 
Algeria and Ecuador are not suitable surrogates, as they have no 
comparable industry.

Department's Position

    We agree with Timken. Although proposed regulations suggest use of 
an

[[Page 51431]]

average labor rate, current Department practice is to use wage data 
from the surrogate country. Of the countries suggested for use by TIE, 
only Poland has a comparable industry. Poland, as the chosen surrogate 
country, is the proper source for surrogate wage rates.

Comment 15

    Timken claims that TIE does not meet the Department's existing 
criteria for a separate rate determination. Timken contends that TIE 
does not have autonomy from the government in the selection of key 
management personnel, one of the criteria for determining de facto 
absence of government control. Timken notes the State Ownership Fund 
(SOF) owns seventy percent of TIE stock. Because of this, the SOF has a 
seat on the Council of Administration, which selects TIE's executive 
management. Its presence on the Council of Administration, Timken says, 
reflects participation in what is, by comparison with market-economy 
countries, the board of the company. According to Timken, presence on 
that board permits de facto control, by the Romania government, over 
the selection of TIE's key management personnel.
    TIE counters that it has made a clear, steady progression toward 
complete privatization over the years, and that changes effective in 
this review clearly indicate a lack of de facto government control. TIE 
compares the status of privatization in Romania with that of Poland, to 
which the Department granted market-economy status despite government 
stock ownership of Polish industry. TIE claims that, even in the 
context of a test for market-economy status, the Department does not 
determine that ``government ownership'' of state-owned enterprises 
precludes their independence.

Department's Position

    We agree with Timken. We have reexamined our position on this issue 
and have determined that TIE is not entitled to a separate rate. The 
record of the review indicates that the General Assembly of 
Shareholders consists of a representative of the SOF and a 
representative of the POF, and that voting power is commensurate with 
stock ownership. Seventy percent of the vote goes to the SOF, and 
thirty percent to the POF. The General Assembly of Shareholders chooses 
the Council of Administration, which is responsible for the hiring and 
firing of key personnel, such as the general director, and the 
designation of the Executive Committee, which controls the day-to-day 
running of TIE. The Council of Administration consists of three 
members, each with equal voting power; one of the members is from the 
SOF, one is from the POF, and one is from TIE. There is no record 
information indicating who any of these members are and whether they 
are representatives of the Romanian government or its ministries (see 
hearing transcript, pages 59-60) or otherwise how closely they are tied 
to the government. In addition, we note that TIE's management has 
remained the same since the composition of the Council of 
Administration changed. Accordingly, we find that TIE has not 
established that it has autonomy in making decisions regarding the 
selection of its management and, for this reason, there is insufficient 
record evidence of the absence of de facto government control over TIE 
to entitle TIE to a separate rate.

Comment 16

    Timken argues the Department's separate rate analysis should be 
made consistent with rules for evaluating affiliated parties and for 
collapsing firms in market-economy countries. Timken says that, since 
the Romanian government owns more than five percent of TIE, and of the 
bearings factories, it is in a position to shift export activities from 
TIE to the factories to avoid antidumping duties. Timken argues that 
the Romanian government, as a majority shareholder, has the ability to 
exercise restraint or direction over TIE and the producing factories. 
Citing 19 U.S.C. 1677(33) and section 351.401(f) of the proposed 
regulations, Timken contends that, in a market-economy review, the 
Department would normally treat two or more similarly affiliated 
companies as a single entity. Timken argues that TIE, the bearings 
factories, and the Romanian government should be treated likewise.
    TIE counters that, since the Romanian government does not exercise 
de facto control of TIE, despite its more than five percent stock 
ownership, the Department should not consider TIE and the Romanian 
government as affiliated parties. Nor should the Department view the 
factories as affiliated with the Romanian government. TIE notes there 
is no coordination between the two major stock-holding groups--the SOF 
and the POF--with regard to TIE and the two independent factories. TIE 
also notes that if the Department precluded a separate rate for a 
company because of more than five percent ownership by the government, 
no company could ever obtain a separate rate if its stock were owned by 
the government. This would contradict the Department's decisions in a 
number of cases, where the Department granted separate rates to Chinese 
trading companies owned by ``all the people'' when the supplying 
factories were also owned by ``all the people.''

Department's Position

    The separate rates test for non-market economies is separate and 
distinct from the test to determine whether related producers in market 
economies should be treated as a single enterprise. Even the preamble 
to the proposed regulations, cited by Timken, specifically notes that 
section 351.401(f) ``does not address the issue of whether a producer 
or exporter in a nonmarket economy country is entitled to an individual 
antidumping rate.'' As set forth 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), the NME separate rates test focuses 
on government control over export activities. As discussed above in our 
response to Comment 15, we have found that TIE is not eligible for a 
separate rate in this review.

Comment 17

    Timken argues that a separate, non-zero rate for TIE, while the 
Romania-wide rate remains at zero, is contrary to the purpose of the 
antidumping duty law. Such a determination would encourage the shifting 
of production and export activities to avoid the reach of the 
antidumping duty law. Timken argues this is contrary to congressional 
intent and is an absurd conclusion, which should be rejected.
    Timken further argues that, if the Department maintains a separate 
rate for TIE, it should apply the margin from the investigation, 8.70 
percent, not the rate from the previous review, to all other firms. In 
UCF America v. United States, Ct. No. 92-01-00049, Slip Op. 96-42 (CIT 
February 27, 1996) (UCF), Timken argues, the Court of International 
Trade (the Court) held that companies that have never been individually 
reviewed should receive the margin found in the original investigation.

Department's Position

    The Department acknowledges the recent decision of the Court, cited 
by Timken, in UCF. In this decision, the Court affirmed the 
Department's remand results for reinstatement of the relevant cash 
deposit rate, but expressed disagreement with use of the ``PRC-wide'' 
rate as the underlying basis for reinstatement. The Court raised 
various concerns with the Department's application of a ``PRC-wide'' 
rate.

[[Page 51432]]

    The Court suggested that the Department lacks authority for 
applying a ``PRC-wide'' rate in lieu of an ``all others'' rate. We 
note, however, that section 777A(c) of the Act requires the Department 
to determine individual dumping margins for each known exporter or 
producer. Pursuant to this authority, the Department implements a 
policy in NME cases whereby all exporters or producers are presumed to 
comprise a single entity, the ``NME entity.'' The Court has upheld our 
NME policy in previous cases. See e.g., UCF America, Inc. v. United 
States, 870 F. Supp. 1120, 1126 (CIT 1994); Sigma Corp. v. United 
States, 841 F. Supp. 1255, 1266-67 (CIT 1993); Tianjin Machinery Import 
& Export Corp. v. United States, 806 F. Supp. 1008, 1013-15 (CIT 1992).
    The ``NME-wide'' rate is consistent with section 735(c)(1)(B)(i)(I) 
of the Act. This provision directs the agency to assign a dumping 
margin for each exporter or producer individually investigated. As 
discussed above, in NME cases, all producers and exporters comprise a 
single entity. Thus, we assign the NME rate to the NME entity just as 
we assign an individual rate to a single exporter or producer operating 
in a market economy. As a result, all exporters and producers that are 
part of the NME entity are assigned the ``NME-wide'' rate. Because the 
``NME-wide'' rate is the equivalent of a company-specific rate, it 
changes only when we review the NME entity (i.e., all NME producers and 
exporters that have not qualified for a separate rate).
    To qualify for a separate rate, an NME exporter or producer must 
provide evidence showing both de jure and de facto absence of 
government control. See Final Determination of Sales at Less Than Fair 
Value; Silicon Carbide from the People's Republic of China (59 FR 
22585, May 2, 1994). Until such evidence is presented, a company is 
presumed to be part of the NME entity and receives the ``NME-wide'' 
rate. Consequently, whenever the NME enterprise has been investigated 
or reviewed, calculation of an ``all others'' rate under section 
735(c)(1)(B)(i)(II) of the Act is unnecessary. All exporters or 
producers will either qualify for a separate company-specific rate, or 
be part of the NME enterprise, and receive the ``NME-wide'' rate. Thus, 
there can be no exporters or producers who have never been investigated 
or reviewed.
    In this review, we have determined that TIE is, and always has 
been, the sole exporter of the subject merchandise to the United 
States. The Romanian government stated in its response to our 
questionnaire, and we have confirmed with the U.S. Customs Service, 
that TIE was the only Romanian exporter of the subject merchandise to 
the United States during this period of review (POR). In addition, in 
past administrative reviews of this case, TIE has been the only 
exporter of the subject merchandise to the United States. However, we 
have determined that TIE is not eligible for a separate rate. Since 
TIE's exports represent the only exports of this merchandise to the 
United States, we have calculated a rate for TIE based on its exports 
to the United States during the POR, and TIE's rate becomes the all-
Romanian rate, or the ``NME-wide'' rate, and will be applied to all 
companies in Romania.

Comment 18

    Timken argues that the Department should use European HTS 
subheading 7204.41 to classify nonalloy scrap generated in the 
production process. Cold-rolled steel is nonalloy steel; scrap produced 
from nonalloy steel is less costly, and should be reflected in the 
Department's scrap adjustment to material costs. If there are no 
significant exports of 7204.41 steel to Poland during the POR, it would 
be reasonable to use exports for a period preceding the POR.
    TIE argues that there is an insignificant variation in the scrap 
values between HTS subheading 7204.29, which the Department used in its 
preliminary results, and subheading 7204.41. Further, use of data from 
prior periods would be less accurate, and should be rejected.

Department's Position

    We agree with Timken. For these final results, we have calculated 
the portion of nonalloy scrap steel generated from the cold-rolled 
steel used, and have used HTS subheading 7204.41 for that portion in 
our calculation of the surrogate value for nonalloy scrap. For the 
remaining hot-rolled scrap steel, we have continued to use a surrogate 
price from the POR for subheading 7204.29.

Comment 19

    Timken requests the Department use different HTS classifications 
for the steel bar used by the Romanian factories. Timken claims that 
European HTS 7228.30.89, the category used by the Department in the 
preliminary results, excludes steel with a chemical composition 
suitable for manufacturing bearings. This category, according to 
Timken, also excludes steel bars and rods with a circular cross-
section, the same type of steel used in bearings production. Timken 
suggests the Department use the European HTS 7228.30.40 (for bearings 
produced in 1994) and 7228.30.41 and 7228.30.49 (for bearings produced 
in 1995). These classifications, Timken claims, are the closest matches 
with the U.S. definition of bearing-quality steel.
    TIE notes that, in prior reviews of this order, Timken advocated 
the use of category 7228.30.89, the predecessor to the Department's 
steel bar selection for the preliminary results of this review. TIE 
notes there is no indication on the record that the Romanian factories 
use steel precisely corresponding to the category 7228.30.40, and that 
Timken has not asserted that European HTS 7228.30.89 is aberrational. 
Furthermore, Timken has not provided any data or documentation 
regarding category 7228.30.89. In addition, recent EU data show 
virtually no exports of steel to Poland under Timken's suggested 
categories. Therefore, TIE concludes, the Department should continue to 
use category 7228.30.89 in steel calculations.

Department's Position

    We agree with TIE. We previously have found, in Tapered Roller 
Bearings and Parts Thereof, Finished or Unfinished, From the Republic 
of Romania; Final Results of Antidumping Duty Administrative Review (56 
FR 41518, August 21, 1991), that SAE 52100 steel, the type reported 
used by TIE, best corresponds with European HTS 7228.30.89. While other 
European HTS categories may closely match what the U.S. considers 
bearing-quality steel, there is no evidence on record that the Romanian 
factories used this type of steel. Since the steel type reported by TIE 
is SAE 52100, and since we have previously found this type matches most 
closely with European HTS 7228.30.89, we have continued to use this 
category in our calculations.

Comment 20

    Timken argues that the Department should use International Standard 
Industrial Classification (ISIC) category 382 instead of 381 when 
referring to the International Labour Office Yearbook of Labor 
Statistics to determine the number of hours worked in Poland. In 
Timken's February 26, 1996 submission, Timken provided the detailed 
descriptions of the ISIC categories. Ball and roller bearings, Timken 
points out, are classified in ISIC 3829, a subgroup of Major Group 382. 
Hence, Timken claims, the Department should use ISIC Group 382 instead 
of 381.
    TIE argues that, since the Department used information from the 
government of Poland which specifically lists the labor rate for the 
manufacture of metal

[[Page 51433]]

products (except machinery and equipment), to the extent that the 
Department continues to use ILO data, it should continue to use ISIC 
group 381: Manufacture of Fabricated Metal Products, Except Machinery 
and Equipment. To calculate wage rates using monthly income from one 
category and hours worked from another would, TIE claims, lead to an 
inaccurate valuation. TIE argues that industry group 381 has been used 
by the Department in previous bearings cases.

Department's Position

    We agree with Timken that the proper group for bearings is ISIC 
group 382 because bearings are included in one of its subgroups. 
However, for these final results we are using data on hours worked from 
the IL&T that are not industry-specific (see our response to comment 
12). With respect to monthly income data, we used, in the preliminary 
results, ISIC group 381 data from the Statistical Bulletin, published 
by the Polish government. For these final results, we have recalculated 
the wage rate using monthly incomes in the Statistical Bulletin from 
ISIC group 382.

Comment 21

    Timken argues that the Department should adjust its materials 
factor prices to account for insurance and freight costs incurred in 
shipping to Poland. The EUROSTAT export data used by the Department in 
the preliminary results reflected FOB values. Therefore, according to 
Timken, an appropriate adjustment must be made to reflect the cost of 
the materials when delivered to the importing country. Timken suggests 
the Department use the CIF-FOB conversion factor published by the 
International Monetary Fund in the International Financial Statistics 
Yearbook. Timken notes that the Department made such an adjustment in 
Final Results of Antidumping Duty Administrative Review: Tapered Roller 
Bearings and Parts Thereof from the People's Republic of China (56 FR 
67590, December 31, 1991).
    TIE replies that applying the CIF-FOB conversion factor to import 
prices into Poland would lead to distorted prices. First, TIE states 
that there is no evidence on record that Romanian factories insured 
their imports of raw materials. The CIF-FOB factor includes an 
adjustment for insurance that is not relevant in determining a 
surrogate value. Second, TIE argues that use of the CIF-FOB conversion 
factor would overstate freight costs between the EU and Poland. The 
CIF-FOB conversion factor is based on all imports into Poland, from all 
countries, and therefore includes ocean and air freight from distant 
countries. The EU and Poland, however, are contiguous, and most of the 
steel imported by Poland was from Germany, a contiguous country; 
therefore, freight methods and rates would be cheaper.

Department's Position

    We agree with Timken that the FOB prices of EU exports to Poland do 
not state the true costs to Poland for raw materials. Although there is 
no evidence on record indicating whether Romanian factories insure 
their imports of raw materials, producers do incur costs to ship inputs 
to the factory. Therefore, the Department has used the CIF-FOB 
conversion factor suggested by Timken, as the best available surrogate 
information. This factor can not be separated into distinct rates for 
freight and insurance. Similarly, although freight distances for steel 
imported into Poland might differ from the average freight distance 
reflected in the conversion factor, we have no way to ascertain that 
difference.

Comment 22

    Timken asks the Department to recalculate factor prices to exclude 
data involving small quantities of a product. Specifically, Timken asks 
the Department to disregard a country's exports to Poland if the total 
quantity from that country during the POR is less than ten metric tons. 
Smaller quantities, Timken claims, often involve special products or 
peculiar transactions that yield unit values unrepresentative of 
overall price levels for that HTS category.

Department's Position

    We agree with Timken. In the preliminary results, we derived raw 
material surrogate prices based in part on quantities too small to be 
representative. Accordingly, the Department has recalculated factor 
prices after eliminating any data from a country exporting an 
insignificant amount to Poland during the POR. See Memorandum from Case 
Analyst to the File, dated September 25, 1996, ``Analysis for the final 
results of the 1994-1995 administrative review of tapered roller 
bearings and parts thereof, finished or unfinished, from Romania--
Tehnoimportexport, S.A. (TIE),'' which is on file in the Central 
Records Unit (room B-099 of the Main Commerce Building) for the amounts 
considered to be insignificant.

Clerical Errors

    TIE identified a clerical error with respect to the reporting of 
packing costs in its original submission. Review of the data shows that 
an obvious error was made in the reporting of a packing factor for one 
model. Accordingly, we have decided to correct the error, and 
recalculate the margins for the affected observations.
    TIE also identified clerical errors made by the Department in its 
preliminary results of review. Although the submission alleging the 
clerical errors was submitted to the Department after the deadlines for 
submission of case and rebuttal briefs, and after the public hearing, 
we have determined that we made such errors, and have corrected them 
for the final results.

Currency Conversion

    During the interim between the publication of the preliminary 
results and these final results, the Department was able to obtain 
daily exchange rates certified by the Federal Reserve Bank for the Thai 
Baht. Accordingly, we used these rates in place of the monthly rates 
used in the preliminary results.

Non-Shippers

    Tehnoforestexport, S.C. Rulmenti S.A. Alexandria, S.C. Rulmentul 
S.A. Brasov, S.C. Rulmenti S.A. Barlad, S.C. Rulmenti Grei S.A. 
Ploiesti, S.C. Rulmenti S.A. Slatina, and S.C. URB Rulmenti Suceava 
S.A. stated that they did not have shipments during the period of 
review, and we confirmed this with the United States Customs Service. 
Therefore, we are treating them as non-shippers for this review, and 
are rescinding this review with respect to these companies.

Final Results of Review

    As a result of our review of the comments received, we have 
determined the margin to be:

------------------------------------------------------------------------
                                                                 Margin 
           Manufacturer/exporter               Time period     (percent)
------------------------------------------------------------------------
Romania Rate..............................     6/1/94-5/31/95      14.89
------------------------------------------------------------------------

    The Department will instruct the Customs Service to assess 
antidumping duties on all appropriate entries. The Department will 
issue appraisement instructions directly to the Customs Service.
    Furthermore, the following deposit requirements will be effective 
upon publication of these final results for all shipments of TRBs from 
Romania entered, or withdrawn from warehouse, for consumption on or 
after the publication date, as provided for by section 751(a)(2)(c) of 
the Act: (1) The cash deposit rate for TIE and all other exporters will 
be 14.89 percent; and (2)

[[Page 51434]]

for non-Romanian exporters of subject merchandise from Romania, the 
cash deposit rate will be the rate applicable to the Romanian supplier 
of that exporter. These deposit requirements shall remain in effect 
until publication of the final results of the next administrative 
review.
    This notice also 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 a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d)(1). Timely written notification 
of the return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and terms of an APO is a sanctionable violation.
    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.

    Dated: September 25, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-25243 Filed 10-1-96; 8:45 am]
BILLING CODE 3510-DS-P