[Federal Register Volume 62, Number 109 (Friday, June 6, 1997)]
[Notices]
[Pages 31075-31079]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14869]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration
[A-485-602]


Tapered Roller Bearings and Parts Thereof, Finished or 
Unfinished, from Romania; Final Results of Antidumping Duty 
Administrative Review

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

ACTION: Notice of final results of Antidumping Duty Administrative 
Review.

-----------------------------------------------------------------------

SUMMARY: On December 2, 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 (61 FR 
63826-28). The review covers one exporter and two producers of subject 
merchandise for the period June 1, 1993 through May 31, 1994. We 
received comments from interested parties with regard to the 
Department's preliminary determination to deny Tehnoimportexport a 
separate rate for this review (see Comment 4 below). Upon consideration 
of interested parties' comments, for the final results of review, we 
reaffirm our determination that TIE is not entitled to a separate rate. 
Based on our analysis of all comments received, we determine the 
country-wide dumping margin for Romania to be zero percent for this 
review period.

EFFECTIVE DATE: June 6, 1997.

FOR FURTHER INFORMATION CONTACT: Rick Johnson or Jean Kemp, AD/CVD 
Enforcement Group III, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Ave., N.W., Washington, D.C. 20230; telephone: (202) 482-
3793.

SUPPLEMENTARY INFORMATION:

Applicable Statutes and Regulations

    Unless otherwise stated, 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 December 2, 1996, the Department published in the Federal 
Register (61 FR 63826) the preliminary results of its administrative 
review of the antidumping duty order on TRBs from Romania (52 FR 
23320). We have now completed this administrative review in accordance 
with section 751 of the Tariff Act of 1930, as amended (the Tariff 
Act), and 19 C.F.R. 355.22.

Scope of 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, 1993 
through May 31, 1994. Of the eight companies for which petitioner 
requested a review, only Tehnoimportexport, S.A. (``TIE'') made 
shipments of the subject merchandise to the United States during the 
period of review. S.C. Rulmenti Alexandria and S.C. Rulmental S.A. 
Brasov produced the merchandise sold by TIE to the United States, but 
have stated that they did not ship TRBs directly to the United States. 
Tehnoforestexport, Rulmenti S.A. Birlad, S.C. Rulmenti Grei S.A. 
Ploiesti,

[[Page 31076]]

S.C. Rulmenti S.A. Slatina, and S.C. URB Rulmenti S.A. Suceava have 
responded that they did not produce or sell TRBs subject to this 
review.

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. We received comments from respondent, TIE; 
petitioner, the Timken Company; and Universal Automotive Trading 
Company, Ltd. (Universal), an interested party. Comments submitted 
consisted of petitioner's case brief of December 31, 1996 and rebuttal 
brief of January 9, 1997; respondents' case brief of January 2, 1997 
and rebuttal brief of January 8, 1997; and Universal's rebuttal brief 
of January 8, 1997.
    Comment 1: Petitioner asserts that the Department's use of factory 
overhead and selling, general and administrative (SG&A) data from the 
Preliminary Results of Review: Welded Carbon Steel Pipe and Tube from 
Turkey is contrary to law and otherwise unreasonable for several 
reasons. First, petitioner claims that the Department had available to 
it overhead and SG&A information for producers of bearings in Thailand, 
which the Department used in the 1994/95 review of this order. 
Petitioner maintains that the determination in the 1994/95 review that 
Thailand is at a level of economic development comparable to that of 
Romania should also apply to this review period, as the per capita GNP 
of Thailand in 1993 was closer to that of Romania than either Poland's 
or Turkey's (according to the World Bank's World Development Report 
1995).
    Second, petitioner argues that the use of data for pipes and tubes 
is inappropriate because the statute, at 19 U.S.C. Sec. 1677b(c) (1)(B) 
and (2)(A), requires use of surrogate values for production of 
comparable merchandise. Petitioner stresses that pipes and tubes are 
not comparable to bearings. Specifically, petitioner notes that the 
pipe and tube industry is a basic steel industry which does not require 
the same degree of precision and technology required to produce subject 
merchandise. Additionally, petitioner argues that no domestic or 
international classification system places pipes and tubes and bearings 
within groups of products or industries that can be defined as 
encompassing similar or comparable merchandise.
    Third, because the final results have not been issued in Turkish 
Pipe and Tube, petitioner argues that its results have not been 
approved or adopted by the Department as reliable.
    Respondent maintains that the Department should continue to use the 
statutory minimum for SG&A expenses for the purposes of the final 
results, rather than relying on the Thai data. Respondent argues that 
petitioner's proposal to use Thai data would be contrary to law and 
unacceptable for several reasons. First, respondent notes that Thailand 
was not selected as a potential surrogate country for Romania in this 
administrative review.
    Second, respondent argues that the Thailand data, which is from the 
period 1988-90, is out of date. In contrast, the Turkish data is based 
upon contemporaneous data and is therefore, according to respondent, 
more appropriate.
    Third, respondent asserts that the Thai data is flawed in numerous 
ways: (1) there are vast differences between the Thai producers and the 
Romanian producers of TRBs; (2) the Department's use of the Thai data 
from a previous review was based solely upon best information available 
(BIA); (3) the Thai data includes certain inapplicable SG&A and other 
expenses; and (4) the Thai data is aberrational, constituting the 
highest SG&A rate ever found by the Department.
    With regard to petitioner's assertion that the Turkish data is 
unusable because it pertains to an industry other than bearings, 
respondent claims that the Department ``regularly'' uses surrogate data 
from sources which are not identical to the industry being reviewed. 
Respondent also claims that the Turkish rate used was for galvanized 
pipe, a more complex product than regular pipe. Moreover, respondent 
states that the Thai data applies to the production of miniature 
bearings used in high-tech applications, while the Romanian factories 
employ a technology more akin to the manufacture of pipe than to 
``highly complex'' miniature bearings.
    Regarding petitioner's assertion that the Turkish data has not been 
``approved'' by the Department because it has not been used for a final 
results notice, respondent argues that the Department ``regularly'' 
uses unverified financial statements from companies which are not 
involved in antidumping reviews as the basis for surrogate data. 
Respondent stresses that it is public data of the type commonly used by 
the Department for NME cases.
    Department's Position: We disagree with petitioner that Thailand 
should be used as a surrogate instead of Turkey for overhead and SG&A 
values.
    While petitioner has stressed that Thailand's per capita GNP was 
similar to Romania's for the POR, we note that this factor does not 
provide the sole basis for determining economic comparability. As 
discussed in the Department's surrogate country selection memorandum, 
``the countries selected as potential surrogates were determined to be 
at a level of economic development comparable to Romania in terms of 
national distribution of labor and growth rates, as well as per capita 
GNP.'' See Memorandum to the File: Selection of the surrogate country 
in the 1993/1994 administrative review of tapered roller bearings and 
parts thereof, finished or unfinished, from Romania, page 3 (May 4, 
1996), which is on file in the Central Records Unit (room B099 of the 
Main Commerce Building). Considering all three factors together, 
Thailand was not included on the Department's list of surrogate 
countries for this review period. Therefore, Thailand is not the most 
appropriate choice to meet the requirement, under section 773(c)(4)(A), 
to use a surrogate country that is at a level of economic development 
comparable to that of Romania.
    With regard to petitioner's objection to the use of data from the 
Turkish pipe and tube industry because it is not an industry comparable 
to tapered roller bearings, as we noted in the Department's first 
surrogate country selection memorandum, the term ``comparable'' 
encompasses a larger set of products than ``such or similar.'' The 
Department also noted that it has, in past cases, identified comparable 
merchandise on the basis of similarities in production factors 
(physical and non-physical) and factor intensities. See Memorandum for 
Michael Rill: Surrogate Country Selection for Tapered Roller Bearings 
from Romania, page 1 (March 24, 1995), on file in the Central Records 
Unit, citing Notice of Preliminary Determination of Sales at Less than 
Fair Value and Postponement of Determinations: Magnesium and Alloy 
Magnesium from the PRC, 59 FR 55424 (1994). Moreover, in Beryllium from 
Kazakstan, the Department selected a surrogate country which was not a 
producer of either the same or comparable merchandise, because there 
was no information on a market economy country which produced beryllium 
and was at a level of development comparable to that of Kazakstan. See 
Notice of Preliminary Determination of Sales at Less than Fair Value 
and Postponement of Final Determination: Beryllium Metal and High 
Beryllium Alloys from Kazakstan, 61 FR 44213, 44295 (August 28, 1996).
    Concerning petitioner's assertion that the Department should not 
rely on data which has not been ``approved'' by the

[[Page 31077]]

Department because it has not been used for the final results, we note 
that this information is publicly available published information. 
Absent information on the record which leads the Department to question 
the accuracy and appropriateness of such data, the Department normally 
accepts publicly available published information as reliable.
    Because the Department had no useable information from Poland for 
this expense, and because both industries are processors of primary 
hot- and cold-rolled carbon steel products, the Department determines 
that the utilization of Turkish pipe and tube data is consistent with 
its statutory requirement.
    Comment 2: Petitioner claims that there is no assurance that the 
Turkish overhead and SG&A data includes costs for indirect labor. 
Petitioner states that the Department must assure that indirect labor 
is included in the final foreign market value.
    Respondent argues that the Turkish response implies that indirect 
labor costs have been included. Therefore, the derivation of a separate 
value for indirect labor would result in a double-counting of this 
factor.
    Department's Position: We disagree with petitioner's supposition 
that indirect labor costs and wages and salaries for non-production 
workers, which are standard components of a company's reported overhead 
and SG&A, have not been included in the Turkish data merely because 
this component has not been explicitly itemized in the public versions 
of the cost responses in Turkish Pipe and Tube. In the Turkish case, 
the Department asked for direct labor to be reported separately. The 
Department did not make this request for indirect labor or for the 
salaries paid to non-production workers. This Departmental practice 
should in no way be interpreted as an implication that indirect labor 
costs have not been included in the overhead and SG&A data. As the 
questionnaire in Turkish Pipe and Tube stated, general and 
administrative expenses would include ``general and administrative 
expenses of the corporate headquarters'' (at page 68), and variable 
overhead expenses ``may include * * * indirect labor'' (at page 67). 
Respondent Yucelboru Ihracat, Ithalat ve Pazarlama A.S., elaborated on 
its reporting in a November 7, 1996 submission, stating that variable 
overhead ``includes all overhead expenses except for depreciation.'' 
Therefore, there is no evidence suggesting that indirect labor has been 
excluded from the Turkish respondent's overhead and SG&A data.
    Comment 3: Petitioner maintains that the value used for Polish hot-
rolled scrap is unreasonably high in comparison with the value of the 
finished product, as scrap is assigned a value that is over 50% of the 
value of bar for cups and cones and over 40% of the value of the rod 
for rollers. Instead of the hot-rolled scrap value, petitioner asserts 
that the Department should apply values that bear the same relationship 
to the hot-rolled bar and rod values as the cold-rolled scrap value 
bears to the cold-rolled sheet value. Petitioner asserts that the Court 
of International Trade in fact has rejected scrap values that, when 
compared with the value of finished steel, were unreasonably high.
    Respondent supports the Department's allocation of steel scrap 
values. Respondent suggests that there is nothing aberrant about the 
fact that scrap values vary over time. Additionally, respondent states 
that the use of a steel scrap ratio derived from cold-rolled components 
would be, by its very nature, less accurate.
    Department's Position: We disagree with petitioner that the value 
for Polish hot-rolled scrap is unreasonably high in comparison with the 
value of the finished product. Petitioner seems to object to the use of 
the Polish hot-rolled scrap price based solely on the fact that the 
price is, in petitioner's opinion, too high. However, petitioner offers 
no evidentiary support to its claim that the scrap price is aberrant, 
or in any way out of line with hot-rolled scrap prices for that time 
period.
    Petitioner's claim that the Court of International Trade has 
rejected scrap values that were unreasonably high when compared with 
the value of finished steel is incorrect. In Timken Co. v. United 
States, 699 F. Supp. 300 (CIT 1988), the Court rejected the 
Department's use of two telexes whose ``inconsistency is laid bare when 
used in conjunction with the raw material prices listed in the Steel 
Authority of India's Statistics for Iron and Steel Industry in India.'' 
The inconsistency to which the Court refers is with regard to the 
information presented in the telexes (not with regard to the Indian raw 
material prices), as the Court stated that the Department ``provides no 
contemporaneous rationale for concluding that one cost quotation in the 
telex is more appropriate than the other.'' See Timken Co. v. United 
States, 699 F. Supp. at 307. Clearly, if all the information in the two 
telexes had indicated that a high scrap value relative to material cost 
was appropriate, no inconsistency would have existed. Thus, we find 
that petitioner's cite to Timken Co. v. United States is inapposite.
    As discussed above, petitioner has not shown why the Department 
should not use the Polish hot-rolled scrap value. Moreover, petitioner 
has failed to support its proposal that the Department should apply a 
hot-rolled scrap value based on the ratio of cold-rolled scrap value to 
cold-rolled sheet value. Even assuming that the hot-rolled scrap value 
is inappropriate, petitioner has not explained why the use of a ratio 
for cold-rolled components is an appropriate alternative (e.g., as 
opposed to some other type of steel, or a hot-rolled scrap value from 
another period).
    Comment 4: Respondent claims that it meets the criteria for a 
separate rate, and that the Department, in refusing to provide a 
separate rate for TIE, has overlooked ``substantial'' changes both in 
Romania and at TIE.
    Respondent states that the progression into private ownership of 
TIE, in which there is no government control over the daily activities 
of TIE or with respect to TIE's exports, substantiates a separate rate 
determination. Additionally, respondent argues that the Department has 
failed to establish a causal connection between governmental selection 
of management and actual control of export prices. Finally, 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.
    Universal Automotive Trading, Inc. (``Universal''), an interested 
party in this proceeding, supports respondent's argument.
    Petitioner argues that, because the Department found in a 
subsequent review that respondents did not meet the criteria for a 
separate rate, and nothing in the record of this review indicates any 
less government involvement, the Department should uphold its 
preliminary determination in this review that TIE is not entitled to a 
separate rate.
    Department's Position: We agree with petitioner. In the final 
results of review notice for the period 1994/95, the Department 
described the ownership and management structure of TIE. See 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, (``TRBs from Romania'') 61 FR 
51427, 51431 (October 2, 1996) (Comment 15). Significantly, there is no 
difference on the record in either the ownership or the management 
structure between that

[[Page 31078]]

review and this one. Therefore, for this review period, we find that 
TIE has not established that it has autonomy in making decisions 
regarding the selection of its management. 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 5: Respondent claims that the Department's labor 
calculation, based on Polish data, is erroneous. First, respondent 
claims that, in the event the Department utilizes the Polish data for 
the final results, it should exclude bonus payments from profits, as it 
assumes profits were made by Polish bearing companies. Universal 
supports respondent's argument.
    Second, respondent asserts that it is unfair to use a labor rate 
from Poland, a country with an allegedly much larger per capita income, 
without adjusting such labor rates to account for the disparity in 
incomes. Respondent proposes that the Department use an average labor 
rate, taking the simple average of Ecuador (a country with a similar 
per capita GNP to Romania) and Poland.
    Petitioner maintains that bonus payments are part of employees' 
remuneration and are properly included in a company's labor costs, and 
that it is irrelevant whether part of the compensation is paid in the 
form of bonuses or other fringe benefits. As costs incurred by the 
employer, petitioner claims that they must be included in any fully-
loaded calculation of labor costs.
    Petitioner rebuts respondent's assertion regarding the use of a 
Polish labor rate by noting that surrogate values are used in the 
Department's NME methodology because so-called ``actual'' costs 
incurred and prices paid in a nonmarket economy do not reflect market 
forces. Therefore, according to petitioner, costs and prices in Romania 
are irrelevant. Additionally, petitioner rejects respondent's proposal 
to incorporate Ecuadorean labor data, because there is no record 
evidence that Ecuador produces TRBs or any other kind of antifriction 
bearing.
    Department's Position: We agree with petitioner. The Department 
responded to these arguments in the final results notice for the 1994/
95 review. See TRBs from Romania, 51430-31. As discussed therein, the 
Department generally does not dissect the wage rate of a surrogate 
country and apply only certain components to the producing company; 
rather, it is our practice to accept a valid surrogate wage rate as 
wholly applicable to the NME respondent in question. Because there are 
no factually significant differences between that review and this one, 
the Department's determinations for the 1994/95 review apply here as 
well. Therefore, the Department will continue to apply the Polish labor 
rate, including bonus payments.
    Comment 6: Respondent objects to the Department's methodology of 
adding freight costs to raw materials costs by the CIF/FOB conversion 
factor of 1.15. Respondent claims that, because Poland is contiguous to 
the European Union, and because the Department has utilized steel 
prices for exports from the European Union to Poland, the use of a 
figure based on average costs around the world greatly overstates the 
actual freight cost. Respondent concludes that in the alternative, the 
Department should use inland freight rates selected for shipping 
bearings to the port as the basis for calculating the freight rates to 
be attached to raw material costs. Universal supports respondent's 
argument.
    Petitioner claims that respondent's assertion that most Polish 
steel was exported from Germany has no basis and is not logical, as 
steel imports are not dictated only or primarily by geographical 
proximity. Also, petitioner states that this issue was decided in the 
1994/95 review, and TIE has not offered any better alternative in its 
case brief for this segment of the proceeding.
    Department's Position: We disagree with respondent. As the 
Department noted in the final results notice of the 1994/95 review, 
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. See TRBs from Romania at 
51433 (Comment 21).
    With regard to respondent's proposed alternative, the Department's 
established methodology is to utilize information available from the 
primary surrogate country before turning to data pertaining to the 
secondary surrogate country. The CIF/FOB data is specific to Poland, 
our primary surrogate country for this review. Further, the Department 
only resorted to use of the Turkish freight rates for foreign inland 
freight because the Department had ``no useable information for this 
expense.'' See Memorandum to the File: Analysis for the preliminary 
results of the 1993/1994 administrative review of tapered roller 
bearings and parts thereof, finished or unfinished, from Romania--
Tehnoimportexport, S.A., October 28, 1996, page 2, which is on file in 
the Central Records Unit. Clearly, the Department had useable 
information pertaining to Poland for freight and insurance for raw 
materials inputs. Finally, use of the Turkish data would not provide a 
more acceptable alternative because the record of that case does not 
indicate whether the Turkish data includes insurance.
    Comment 7: Respondent states that the Department should utilize the 
former statutory minimum of eight percent to calculate profit. 
Universal supports respondent's assertion.
    Petitioner notes that respondent has offered no reason in support 
of its proposal. Petitioner maintains that the statutory minimum is 
only to be used if no data above the minimum are available. Therefore, 
the Department should continue to use the profit rate from the Turkish 
pipe and tube producer used in the preliminary results.
    Department's Position: We agree with petitioner. First, we note 
that, as this segment of the proceeding is controlled by the pre-URAA 
statute, the provision of that statute and the corresponding regulation 
regarding the eight percent statutory minimum for profit are fully 
applicable to this review. See section 773(e)(1)(B)(ii) of the Act; 19 
CFR Sec. 353.50(a)(2).
    The Department's Antidumping Manual states the Department's 
practice with regard to the calculation of profit when using the 
factors of production methodology. Specifically, it states that ``if 
the profit in the surrogate were higher than the eight percent 
statutory minimum, we would use the actual profit.'' See Antidumping 
Manual, Chapter 8, pp. 72-73.
    Moreover, as the Department noted in another case involving a non-
market economy, the statute requires that we ``value profit in a 
surrogate country, provided that the surrogate's profit percentage 
exceeds the statutory minimum of eight percent.'' See Comment 4, Final 
Results of Antidumping Duty Administrative Review: Certain Iron 
Construction Castings from the People's Republic of China, 57 FR 10644 
(March 27, 1992). As discussed in response to Comment 1, for purposes 
of this review, the Department has found that the Turkish pipe and tube 
industry is sufficiently comparable to Romania's tapered roller bearing 
industry to justify using values from that industry to calculate FMV in 
this review. Therefore, in the absence of surrogate profit information 
from bearing producers, it is appropriate for the Department to utilize 
the profit rate from the Turkish pipe and tube producer.

[[Page 31079]]

Final Results of the Review

    As a result of our review, we determine that the following margin 
exists:

------------------------------------------------------------------------
                                                                Margin  
           Manufacturer/exporter               Time period     (percent)
------------------------------------------------------------------------
Romania Rate..............................    6/1/93-5/31/94        0.00
------------------------------------------------------------------------

    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. 
Deposit rates are governed by the final results of the 1994/95 
administrative review of this proceeding. See Tapered Roller Bearings 
and Parts Thereof, Finished or Unfinished, from Romania; Final Results 
of Antidumping Duty Administrative Review, 61 FR 51434 (October 2, 
1996).
    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 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: May 27, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-14869 Filed 6-5-97; 8:45 am]
BILLING CODE 3510-DS-P