[Federal Register Volume 62, Number 131 (Wednesday, July 9, 1997)]
[Notices]
[Pages 36764-36771]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17948]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-601]


Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From the People's Republic of China; Preliminary Results of 
Antidumping Administrative Review and Partial Termination of 
Administrative Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review of tapered roller bearings and parts thereof, 
finished and unfinished, from the People's Republic of China and 
partial termination of administrative review.

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SUMMARY: In response to requests by the petitioner and by Peer Bearing 
Company/Chin Jun Industrial, Ltd. (Chin Jun), the Department of 
Commerce is conducting an administrative review of the antidumping duty 
order on tapered roller bearings and parts thereof, finished and 
unfinished, from the People's Republic of China. The period of review 
is June 1, 1995, through May 31, 1996.
    Although we included Shanghai General Bearing Co., Ltd. in our 
initiation notice, we subsequently revoked the order with regard to 
this respondent. Therefore, we are terminating this review with respect 
to this respondent (see Background section below).
    We have preliminarily determined that sales have been made below 
normal

[[Page 36765]]

value by various companies subject to this review. If these preliminary 
results are adopted in our final results of administrative review, we 
will instruct U.S. Customs to assess antidumping duties on all 
appropriate entries.
    We invite interested parties to comment on these preliminary 
results. Parties who submit comments in this proceeding are requested 
to submit with each argument (1) a statement of the issue and (2) a 
brief summary of the argument.

EFFECTIVE DATE: July 9, 1997.

FOR FURTHER INFORMATION CONTACT: Thomas O. Barlow or the appropriate 
case analyst, for the various respondent firms listed below, at Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington D.C. 
20230; telephone (202) 482-4733: Andrea Chu: Jilin Machinery Import & 
Export Corporation (Jilin), Wanxiang Group Corporation (Wanxiang), 
China National Machinery & Equipment Import & Export Corporation 
(CMEC); Mike Panfeld: Xiangfan Machinery Foreign Trade Corporation 
(formerly Xiangfan International Trade Corporation) (Xiangfan), China 
National Automotive Industry Import & Export Corporation (Guizhou 
Automotive), Chin Jun; Charles Riggle: Shandong Machinery & Equipment 
Import & Export Corporation (Shandong), Tianshui Hailin Import & Export 
Corporation (Hailin), Zhejiang Machinery Import & Export Corporation 
(Zhejiang); Tom Schauer: Premier Bearing & Equipment, Ltd. (Premier), 
Shanghai General Bearing Co. Ltd. & General Bearing Corporation 
(Shanghai), Guizhou Machinery Import & Export Corporation (Guizhou 
Machinery); Kristie Strecker: China National Machinery Import & Export 
Corporation (CMC), Luoyang Bearing Factory (Luoyang), Liaoning MEC 
Group Co., Ltd. (Liaoning), Hangzhou Metals, Mineral, Machinery & 
Chemical Import Export Corp. (Hangzhou), China Great Wall Industry 
Corp. (Great Wall).

Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act (URAA). In addition, all references 
to the Department's regulations are to 19 CFR 353 (1997).

Background

    On May 27, 1987, the Department of Commerce (the Department) 
published in the Federal Register (52 FR 19748) the antidumping duty 
order on tapered roller bearings and parts thereof, finished and 
unfinished (TRBs), from the People's Republic of China (PRC). On June 
6, 1996, we published a notice of opportunity to request an 
administrative review of the order for the period June 1, 1995 through 
May 31, 1996 (61 FR 28840). In accordance with 19 CFR 353.22(a), the 
petitioner, The Timken Company, and Chin Jun requested that we conduct 
an administrative review. On August 8, 1996, in accordance with 19 CFR 
353.22(c), we published a notice of initiation of this antidumping duty 
administrative review (61 FR 41374) for the period of review (POR) June 
1, 1995, through May 31, 1996 (the 9th review period).
    On August 12, 1996, we sent a questionnaire to the secretary 
general of the Basic Machinery Division of the Chamber of Commerce for 
Import & Export of Machinery and Electronics Products (CCCME) and 
requested that the CCCME identify all companies that manufactured or 
exported the subject merchandise during the POR. We also requested that 
the questionnaire be forwarded to all PRC companies identified in our 
initiation notice for which we did not have addresses. In this letter 
we also requested information relevant to the issue of whether the 
companies named in the initiation request are independent from 
government control. See Separate Rates below. Finally, on September 20, 
1996, we sent questionnaires directly to the PRC companies for which we 
had addresses on the record. We also sent questionnaires to the Hong 
Kong companies listed in our initiation notice, using addresses 
supplied in the petitioner's initiation request as well as information 
from the Hong Kong branch of the U.S. & Foreign Commercial Service.
    We received responses to our questionnaire from the following 15 of 
the 324 companies named in the initiation notice: Jilin, Wanxiang, 
Xiangfan, Guizhou Automotive, Chin Jun, Shandong, Hailin, Zhejiang, 
Premier, Guizhou Machinery, CMC, Luoyang, Shanghai, CMEC and Liaoning.
    We also received a response to the Separate Rates section of the 
questionnaire from one company, Hangzhou, that was not named in the 
initiation notice but which was included in the review by virtue of the 
fact that our initiation was conditionally intended to include, in 
addition to companies specifically named, all exporters of TRBs from 
the PRC which were not entitled to rates separate from the PRC entity. 
See Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Request for Revocation In Part, 61 FR 41373, 41380 (August 
8, 1996).
    In addition, we received a response to the Separate Rates section 
of the questionnaire from Great Wall, which had received a separate 
rate in the 1994-95 review, but for which no review had been requested 
for the 1995-96 period. Because we are not reviewing Great Wall's 
entries for this POR we need not reconsider its separate-rates status 
at this time. Great Wall's rate will continue to be 25.56 percent, the 
rate established for that firm in the 1994-95 review.
    Shanghai was included by name in our notice of initiation of this 
review. However, on February 11, 1997, we published a notice of 
revocation of the order with respect to Shanghai (62 FR 6189). 
Therefore, we are terminating this review with respect to Shanghai.
    The Department is now conducting this administrative review in 
accordance with section 751 of the Act.

Scope of Review

    Merchandise covered by this review includes TRBs and parts thereof, 
finished and unfinished, from the PRC. This merchandise is classifiable 
under the Harmonized Tariff Schedule (HTS) item numbers 8482.20.00, 
8482.91.00.60, 8482.99.30, 8483.20.40, 8483.20.80, 8483.30.80, 
8483.90.20, 8483.90.30 and 8483.90.80. Although the HTS item numbers 
are provided for convenience and customs purposes, our written 
description of the scope of the order and this review is dispositive.

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by CMC, Guizhou Machinery, Liaoning and Luoyang, using 
standard verification procedures, including on-site inspection of 
manufacturers' facilities, the examination of relevant sales and 
financial records, and selection of original documentation containing 
relevant information. Because of the large number of producers and 
resellers included in this review and the limited resources available 
to the Department, it was impractical to verify factual information for 
each company. In accordance with 19 CFR 353.36(a)(B) of the 
regulations, we selected for verification companies for which we had 
conducted no verification during either of the two immediately 
preceding reviews. Our verification results are outlined in the

[[Page 36766]]

public versions of the verification reports.

Separate Rates

1. Background and Summary of Findings

    It is the Department's standard policy to assign all exporters of 
the merchandise subject to review in non-market-economy (NME) countries 
a single rate unless an exporter can demonstrate an absence of 
government control, both in law and in fact, with respect to exports. 
To establish whether an exporter is sufficiently independent of 
government control to be entitled to a separate rate, the Department 
analyzes the exporter in light of the criteria established in the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China (56 FR 20588, May 6, 1991) (Sparklers), as 
amplified in the Final Determination of Sales at Less Than Fair Value: 
Silicon Carbide from the People's Republic of China (59 FR 22585, May 
2, 1994) (Silicon Carbide). Evidence supporting, though not requiring, 
a finding of de jure absence of government control over export 
activities includes: (1) An absence of restrictive stipulations 
associated with an individual exporter's business and export licenses; 
(2) any legislative enactments decentralizing control of companies; and 
(3) any other formal measures by the government decentralizing control 
of companies. See Sparklers at 20589. Evidence relevant to a de facto 
analysis of absence of government control over exports is based on four 
factors--whether the respondent: (1) sets its own export prices 
independent from the government and other exporters; (2) can retain the 
proceeds from its export sales; (3) has the authority to negotiate and 
sign contracts; and (4) has autonomy from the government regarding the 
selection of management. See Silicon Carbide at 22587; see also 
Sparklers at 20589.
    The Department determined in prior reviews that Guizhou Machinery, 
Jilin, Luoyang, Liaoning, Guizhou Automotive, CMC, Hailin, Zhejiang, 
Xiangfan, Shandong and Wanxiang were entitled to separate rates. See, 
e.g., Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From the People's Republic of China; Final Results and 
Partial Termination of Antidumping Administrative Review, 62 FR 6173 
(February 11, 1997). Information submitted by these companies for the 
record in the current review is consistent with these findings. 
Further, there have been no allegations regarding changes in control of 
these companies in this review. Therefore, we preliminarily determine 
that the government does not exercise control over the export 
activities of these firms.
    As shown below, Hangzhou also meets both the de jure and de facto 
criteria and is entitled, therefore, to a separate rate (see De Jure 
Analysis and De Facto Analysis, infra). Accordingly, we preliminarily 
determine to apply a rate separate from the PRC rate to Hangzhou.
    Finally, we note that Premier and Chin Jun are privately owned Hong 
Kong trading companies. Because we have determined that these firms, 
rather than their PRC-based suppliers, are the proper respondents with 
respect to their sales of TRBs to the United States, no separate-rates 
analyses of Premier's and Chin Jun's suppliers are necessary.

2. De Jure Analysis: Hangzhou

    Information submitted during this review indicates that Hangzhou is 
owned ``by all of the people.'' In Silicon Carbide (at 22586), we found 
that the PRC central government had devolved control of state-owned 
enterprises, i.e., enterprises owned ``by all of the people.'' As a 
result, we determined that companies owned ``by all of the people'' 
were eligible for individual rates if they met the criteria developed 
in Sparklers and Silicon Carbide.
    The following laws, which have been placed on the record in this 
case, indicate a lack of de jure government control over these 
companies, and establish that the responsibility for managing companies 
owned by ``all of the people'' has been transferred from the government 
to the enterprises themselves. These laws include: ``Law of the 
People's Republic of China on Industrial Enterprises Owned by the Whole 
People,'' adopted on April 13, 1988 (1988 Law); ``Regulations for 
Transformation of Operational Mechanism of State-Owned Industrial 
Enterprises,'' approved on August 23, 1992 (1992 Regulations); and the 
``Temporary Provisions for Administration of Export Commodities,'' 
approved on December 21, 1992 (Export Provisions). The 1988 Law states 
that enterprises have the right to set their own prices (see Article 
26). This principle was restated in the 1992 Regulations (see Article 
IX). Finally, the 1992 ``Temporary Provisions for Administration of 
Export Commodities'' list those products subject to direct government 
control. TRBs do not appear on this list and are not subject, 
therefore, to the constraints of these provisions.
    Consistent with Silicon Carbide, we preliminarily determine that 
the existence of these laws demonstrates that Hangzhou, a company owned 
by ``all of the people,'' is not subject to de jure government control 
with respect to export activities. In light of reports 1 
indicating that laws shifting control from the government to the 
enterprises themselves have not been implemented uniformly, an analysis 
of de facto control is critical in determining whether respondents are, 
in fact, subject to government control with respect to export 
activities.
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    \1\ See ``PRC Government Findings on Enterprise Autonomy,'' in 
Foreign Broadcast Information Service--China--93-133 (July 14, 
1993), and 1992 Central Intelligence Agency Report to the Joint 
Economic Committee, Hearings on Global Economic and Technological 
Change: Former Soviet Union and Eastern Europe and China, Pt. 2 (102 
Cong., 2d Sess.).
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3. De Facto Analysis: Hangzhou

    After we reviewed Hangzhou's original response to the separate-
rates section of our questionnaire we sent a supplemental questionnaire 
in order to obtain additional information necessary for our 
determination of Hangzhou's eligibility for a separate rate. The 
following record evidence, which is contained in the questionnaire 
responses, indicates a lack of de facto government control over the 
export activities of Hangzhou. We have found that this respondent's 
pricing and export strategy decisions with respect to subject 
merchandise are not subject to any entity's review or approval and that 
there are no government policy directives that affect these decisions. 
There are no restrictions on the use of this respondent's revenues or 
profits, including export earnings.
    The company's general manager or chairman of the board has the 
right to negotiate and enter into contracts, and he may delegate this 
authority to other employees within the company. There is no evidence 
that this authority is subject to any level of governmental approval.
    The general manager is elected by an employees' assembly consisting 
of representatives of Hangzhou's employees. The representatives are 
elected by the general employees. The results of Hangzhou's management 
elections are recorded with the Foreign Trade and Economic Cooperation 
Commission. There is no evidence that this commission controls the 
selection process or that it has rejected a general manager selected 
through the election process.
    Decisions made by Hangzhou concerning purchases of subject

[[Page 36767]]

merchandise from other suppliers are not subject to government 
approval. Finally, Hangzhou's sources of funds are its own savings or 
bank loans, and it has sole control over, and access to, its bank 
accounts, which are held in Hangzhou's own name.
    Based on the foregoing analysis of the evidence of record, we find 
no evidence of either de jure or de facto government control over the 
export activities of Hangzhou. Accordingly, we preliminarily determine 
that Hangzhou is not part of the ``PRC enterprise'' under review and is 
entitled to a separate rate. Because no interested party requested a 
review of Hangzhou, it is not subject to this review. Therefore, 
consistent with our established practice, we have not reviewed 
Hangzhou's entries during the 1995-96 POR. See Tapered Roller Bearings 
and Parts Thereof, Finished and Unfinished, From the People's Republic 
of China; Final Results and Partial Termination of Antidumping Duty 
Administrative Review, 62 FR 6173, 6176 (February 11, 1997). Hangzhou's 
rate will remain 29.40 percent, the rate assigned to it as a part of 
the PRC entity in the 1994-95 review.

4. Separate-Rate Determinations for Non-Responsive Companies

    We have determined that those companies for which we initiated a 
review and which did not respond to the questionnaire do not merit 
separate rates. See Use of Facts Otherwise Available, below.

Use of Facts Otherwise Available

    We preliminarily determine that, in accordance with section 776(a) 
of the Act, the use of partial facts available is appropriate for Chin 
Jun, Premier, Guizhou Machinery and Shandong and the use of total facts 
available is appropriate for Hailin, Guizhou Automotive, Jilin, CMEC 
and all companies which have not shown that they are independent of 
government control and which did not respond to our requests for 
information. Furthermore, we determine that, pursuant to section 776(b) 
of the Act, it is appropriate to make inferences adverse to the 
interests of the non-responding companies because they failed to 
cooperate by not responding to the best of their abilities.
    Where the Department must base its determination on facts available 
because that respondent failed to cooperate by not acting to the best 
of its ability to comply with a request for information, section 776(b) 
of the Act authorizes the Department to use inferences adverse to the 
interests of that respondent in choosing facts available. Section 
776(b) of the Act also authorizes the Department to use as adverse 
facts available information derived from the petition, the final 
determination, a previous administrative review, or other information 
placed on the record. Information from prior segments of the proceeding 
constitutes secondary information and section 776(c) of the Act 
provides that the Department shall, to the extent practicable, 
corroborate that secondary information from independent sources 
reasonably at its disposal. The Statement of Administrative Action 
(SAA) provides that ``corroborate'' means simply that the Department 
will satisfy itself that the secondary information to be used has 
probative value. (See H.R. Doc. 316, Vol. 1, 103d Cong., 2d Sess. 870 
(1994).)
    To corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information to be used. However, unlike other types of information, 
such as input costs or selling expenses, there are no independent 
sources for calculated dumping margins. Thus, in an administrative 
review, if the Department chooses as total adverse facts available a 
calculated dumping margin from a prior segment of the proceeding, it is 
not necessary to question the reliability of the margin for that time 
period. With respect to the relevance aspect of corroboration, however, 
the Department will consider information reasonably at its disposal as 
to whether there are circumstances that would render a margin 
inappropriate. Where circumstances indicate that the selected margin is 
not appropriate as adverse facts available, the Department will 
disregard the margin and determine an appropriate margin (see, e.g., 
Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty 
Administrative Review, 61 FR 6812, 6814 (Feb. 22, 1996) (where the 
Department disregarded the highest margin as adverse facts available 
because the margin was based on another company's uncharacteristic 
business expense resulting in an unusually high margin)).
    1. Companies that did not respond to the questionnaire: We have 
preliminarily assigned a margin of 29.40 percent to those companies for 
which we initiated a review and which did not respond to the 
questionnaire. This margin, calculated for sales by Wafangdian Bearing 
Factory during the 1994-95 review, represents the highest overall 
margin calculated for any firm during any segment of this proceeding. 
As discussed above, it is not necessary to question the reliability of 
a calculated margin from a prior segment of the proceeding. Further, 
there are no circumstances indicating that this margin is inappropriate 
as adverse facts available. Therefore, we preliminarily find that the 
29.40 percent rate is corroborated. As noted in the Separate Rates 
section above, we have also determined that the non-responsive 
companies do not merit separate rates. Therefore, the facts available 
for these companies forms the basis for the PRC rate, which is 29.40 
percent for this review.
    2. CMEC: The Department determined in the original investigation of 
this case that CMEC was entitled to a separate rate. See Tapered Roller 
Bearings From the People's Republic of China; Final Determination of 
Sales at Less Than Fair Value, 52 FR 19748 (May 27, 1987), and Tapered 
Roller Bearings From the People's Republic of China; Amendment to Final 
Determination of Sales at Less Than Fair Value and Antidumping Duty 
Order in Accordance With Decision Upon Remand, 55 FR 6669 (February 26, 
1990). However, the Department made the prior separate-rate 
determination before the development of its amplified analysis in 
Silicon Carbide, which added de facto criteria (3) and (4) noted above. 
Accordingly, for these preliminary results we have examined these two 
additional criteria with respect to CMEC. Because CMEC failed in its 
supplemental questionnaire response to provide information concerning 
the company's management-selection process, we are unable to determine 
that CMEC meets the de facto standards which would indicate an absence 
of government control. Therefore, we preliminarily determine that CMEC 
is not entitled to a separate rate and have applied the PRC rate of 
29.40 percent.
    3. Jilin: Jilin provided sufficient information in response to the 
separate rates section of our questionnaire for us to determine that it 
is entitled to a separate rate for this review. However, because Jilin 
did not provide information related to factors of production or to its 
U.S. sales during the POR as we requested, section 776(a) of the Act 
requires us to use the facts otherwise available in determining Jilin's 
margin for the 1995-96 review. Section 776(b) of the Act allows us to 
use an adverse inference in selecting from the facts otherwise 
available. As adverse facts available, we have selected 29.40 percent, 
the highest overall margin calculated in any segment of this 
proceeding.
    4. Premier: Premier provided factors data from its suppliers for 
some models which it sold to the United States. For

[[Page 36768]]

a majority of its U.S. sales (see Analysis Memo from analyst to the 
file, June 23, 1997), Premier, a Hong Kong-based reseller, stated that 
it was unable to provide factors data from any of its PRC suppliers. 
However, for some models involved in those sales, Premier provided 
factors data from other PRC suppliers of the same models. For the 
remainder of its U.S. sales, Premier reported no factors data.
    We have determined that there is little variation in factor-
utilization rates among the TRB producers from which we have received 
factors-of-production data. For this reason we are using, as facts 
available, the factors data provided by Premier, including information 
from manufacturers which did not supply Premier during the POR, in 
order to calculate CV. For Premier's U.S. sales of models for which it 
reported no factors data, we have applied, as adverse facts available, 
a margin of 25.56 percent, the highest overall margin ever applicable 
to Premier. This margin was calculated for sales by Jilin during the 
1993-94 review. As discussed above, it is not necessary to question the 
reliability of a calculated margin from a prior segment of the 
proceeding. Further, there are no circumstances indicating that this 
margin is inappropriate as adverse facts are available. Therefore, we 
preliminarily find that the 25.56 percent rate is corroborated.
    5. Hailin: We find that Hailin failed to cooperate by not allowing 
us to conduct an on-site verification of the information the company 
supplied in its questionnaire responses. We have, therefore, rejected 
Hailin's submissions in accordance with section 782(e)(4) of the Act. 
Section 776(b) of the Act allows us to use an adverse inference in 
selecting from the facts otherwise available when a firm does not 
permit verification of the information contained in its response. As 
adverse facts are available, we have determined that Hailin is not 
entitled to a separate rate, and have applied the PRC rate of 29.40 
percent.
    6. Guizhou Automotive: Guizhou Automotive failed to respond to a 
supplemental questionnaire in a timely manner. The firm's initial 
questionnaire response was incomplete, particularly with regard to 
separate rate issues, SG&A, overhead, packing, scrap, and expenses 
related to CEP sales. Because Guizhou Automotive did not provide in a 
timely manner sufficient information for the Department to determine 
whether Guizhou Automotive is eligible to retain its separate rate, we 
have determined that Guizhou Automotive is not entitled to a separate 
rate and have applied the PRC rate of 29.40 percent.
    7. Chin Jun: Chin Jun provided factors data from its PRC-based 
supplier for substantially all of its U.S. sales during the POR, and we 
have used these data to calculate CV for the applicable models. For 
certain other models it sold to the United States, Chin Jun provided 
factors data from other PRC suppliers of the same models. However, we 
have determined that the data submitted by Chin Jun for two such 
suppliers is unacceptable and have rejected these data. Because our 
decision relies on business proprietary information it is discussed 
further in the business proprietary analysis memo from analyst to the 
file dated June 30, 1997. For the remainder of its U.S. sales, Chin Jun 
reported no factors data.
    We determined that there is little variation in factor-utilization 
rates among the TRBs producers from which we have received factors-of-
production data. For this reason we have calculated CV using, as facts 
available, the factors data provided by Chin Jun for PRC-based 
suppliers from which Chin Jun did not purchase the models in question. 
Chin Jun has stated that it attempted to obtain from its PRC-based 
suppliers factors data for the remaining U.S. sales. Because we 
preliminarily determine that Chin Jun cooperated to the best of its 
ability to provide data, we are applying to Chin Jun's U.S. sales for 
which no factors data were reported, as facts available, the weighted-
average margin calculated for those U.S. sales for which acceptable 
data were reported. However, we intend to seek documentation of Chin 
Jun's claim's that it attempted to solicit from all of its PRC-based 
suppliers the information requested in our questionnaires.
    8. Shandong: Shandong purchased TRBs for resale to the United 
States from a supplier whose factors data we determined to be 
unacceptable. Because our decision relies on business proprietary 
information it is discussed further in the business proprietary 
analysis memo from analyst to the file dated June 23, 1997. Therefore, 
for Shandong's sales of TRBs purchased from this particular supplier we 
have applied, as facts available, a margin of 29.40 percent, the 
highest rate calculated during any segment of this proceeding.
    9. Guizhou Machinery: Guizhou Machinery provided factors data from 
its suppliers for models which represented most of its U.S. sales 
during the POR. For some models, Guizhou Machinery failed to report 
factors data. For Guizhou Machinery's U.S. sales of models for which it 
did not provide factors data we have applied, as adverse facts 
available, a margin of 17.65 percent, the highest overall margin ever 
applicable to Guizhou Machinery.
    In addition, we used partial facts available for other factors data 
provided by Guizhou Machinery. However, because of the proprietary 
nature of this situation, we have discussed this use of partial facts 
available in Guizhou Machinery's preliminary analysis memorandum dated 
June 23, 1997.

Duty Absorption

    On September 6, 1996, the Timken Company requested that the 
Department determine with respect to all respondents whether 
antidumping duties had been absorbed during the POR. This request was 
filed pursuant to section 751(a)(4) of the Act. On June 11, 1997, the 
Timken Company withdrew its request for a duty absorption determination 
in this review. Accordingly, we have not made a determination as to 
whether antidumping duties have been absorbed by a foreign producer or 
exporter subject to the order.

United States Sales

    Both Premier and Chin Jun reported that they maintain inventories 
in Hong Kong and, therefore, their PRC-based suppliers have no 
knowledge when they sell to these firms that the shipments are destined 
for the United States. Accordingly, Premier and Chin Jun are the first 
parties to sell the merchandise to the United States and export price 
(EP) and constructed export price (CEP) are properly based on their 
respective U.S. sales.
    For sales made by Guizhou Machinery, Liaoning, Luoyang, Premier, 
Xiangfan, Shandong and Zhejiang, we based the U.S. sales on export 
price (EP), in accordance with section 772(a) of the Act, because the 
subject merchandise was sold to unrelated purchasers in the United 
States prior to importation into the United States and because the 
constructed export price (CEP) methodology was not indicated by other 
circumstances. For sales made by Chin Jun we based the U.S. sales on 
CEP in accordance with section 772(b) of the Act because the first sale 
to an unrelated purchaser occurred after importation of the merchandise 
into the United States. CMC had a combination of EP and CEP sales 
subject to review.
    We calculated EP based on, as appropriate, the FOB, CIF or C&F port 
price to unrelated purchasers. We made deductions for brokerage and 
handling, foreign inland freight, ocean freight, and marine insurance. 
When marine insurance and ocean freight were provided by PRC-owned 
companies, we based the deduction on surrogate

[[Page 36769]]

values. See Final Determination of Sales at Less Than Fair Value: 
Saccharin from the People's Republic of China, 59 FR 58818, 58825 
(November 15, 1994). For Premier and Chin Jun, because marine insurance 
and ocean freight were provided by market-economy companies, we based 
the deduction on the actual expense values reported by Premier and Chin 
Jun for these services. We valued foreign inland freight deductions 
using surrogate data based on Indian freight costs. We selected India 
as the surrogate country for the reasons explained in the Normal Value 
section of this notice.
    We calculated CEP based on the packed, ex-warehouse price from the 
U.S. subsidiary to unrelated customers. We made deductions from the 
starting price for CEP for international freight, foreign brokerage & 
handling, foreign inland freight, marine insurance, customs duties, 
U.S. brokerage, U.S. inland freight insurance and U.S. inland freight. 
In accordance with section 772(d)(1) of the Act, we made further 
deductions from the starting price for CEP for the following selling 
expenses that related to economic activity in the United States: 
commissions; direct selling expenses, including advertising, 
warranties, and credit expenses; and indirect selling expenses, 
including inventory carrying costs. In accordance with section 
772(d)(3) of the Act, we have deducted from the starting price an 
amount for profit.

Normal Value

    Section 773(c) of the Act provides that the Department shall 
determine the normal value (NV) using a factors-of-production 
methodology if (1) the merchandise is exported from an NME country, and 
(2) available information does not permit the calculation of NV using 
home market prices, third-country prices, or constructed value (CV) 
under section 773(a). In such cases, the factors include, but are not 
limited to: (1) hours of labor required; (2) quantities of raw 
materials employed; (3) amounts of energy and other utilities consumed; 
and (4) representative capital cost, including depreciation.
    The Department has treated the PRC as an NME country in all 
previous cases. In accordance with section 771(18)(C)(i), any 
determination that a foreign country is an NME country shall remain in 
effect until revoked by the administering authority. Furthermore, 
available information does not permit the calculation of NV using home 
market prices, third-country prices, or CV under section 773(a). 
Therefore, except as noted below, we calculated NV based on factors of 
production in accordance with section 773(c) of the Act and section 
353.52 of our regulations. See Memorandum from the analyst to the file, 
dated June 20, 1997.
    Although Premier and Chin Jun are Hong Kong companies, we also 
calculated NV for Premier and Chin Jun based on factors-of-production 
data. We did not use these respondents' third-country sales (they had 
no Hong Kong sales) in calculating NV because their PRC-based suppliers 
knew at the time of sale that the subject merchandise was destined for 
exportation. See section 773(a)(3)(A) of the Act, providing that under 
such conditions NV of a product exported from an intermediate country 
to the United States may be determined in the country of origin of the 
subject merchandise. Accordingly, we calculated NV for Premier and Chin 
Jun on the basis of PRC production inputs and surrogate country factor 
prices. For certain models for which Premier and Chin Jun reported no 
factors data we based NV on the facts available in this review. See Use 
of Facts Otherwise Available above.
    In accordance with section 773(c)(4), we valued PRC factors of 
production, to the extent possible, using the prices or costs of 
factors of production in a market-economy country that is: (1) at a 
level of economic development comparable to that of the NME country, 
and (2) a significant producer of comparable merchandise.
    We chose India as the most comparable surrogate on the basis of the 
criteria set out in 19 CFR 353.52(b). See Memorandum from Director, 
Office of Policy to Office Director, AD/CVD Enforcement Group I, Office 
3, dated May 28, 1997. We chose Indonesia as the second-choice 
surrogate based on the same memorandum. Information on the record 
indicates that both India and Indonesia are significant producers of 
TRBs. See Memorandum from the analyst to the file, dated June 3, 1997. 
We used publicly available information relating to India to value the 
various factors of production with the exception of steel inputs and 
scrap. For valuing steel inputs and scrap we used publicly available 
information relating to Indonesia because we determined that publicly 
available information related to India was unreliable.
    We valued the factors of production as follows:
    For hot-rolled alloy steel bars used in the production of cups and 
cones, cold-rolled steel rods used in the production of rollers, cold-
rolled steel sheet, cold-rolled steel sheet used in the production of 
cages, and steel scrap, we used import prices obtained from Foreign 
Trade Statistical Bulletin, Imports, Jakarta, Indonesia. We used data 
from the November 1995 issue, which included cumulative data covering 
the period January 1995 through November 1995. We subtracted cumulative 
data from the May 1995 issue, covering the period January 1995 through 
May 1995, because these data were not within the POR. We applied data 
for the period June 1995 through November 1995, the first six months of 
the POR, to the entire POR because we were unable to obtain more recent 
information. However, for steel bar used to produce cups and cones, the 
steel rod used to produce rollers and for the relevant steel scrap 
category, interested parties provided data through December 1995, on a 
country-specific basis. We used these data because we were able to 
eliminate from our calculation steel imports sourced from NME countries 
and small quantities sourced from market-economy countries. We made 
adjustments to include freight costs incurred between the PRC-based 
steel suppliers and the TRB factories.
    For direct labor, we used 1996 data from Investing, Licensing & 
Trading Conditions Abroad, India, published in November 1996 by the 
Economist Intelligence Unit. We then adjusted the 1996 labor value to 
the POR to reflect inflation using consumer price indices (CPI) of 
India as published in the International Financial Statistics by the 
International Monetary Fund (IMF). We calculated the labor cost for 
each component by multiplying the labor time requirement by the 
surrogate labor rate. Indirect labor is reflected in the selling, 
general and administrative (SG&A) and overhead rates.
    For factory overhead, we used information obtained from the 1995-96 
annual report of SKF Bearings India, Ltd. (SKF India), a producer of 
similar merchandise in India. See SKF Bearings India, Ltd. Annual 
Report 1995-96. From this source, we were able to calculate factory 
overhead as a percentage of total cost of manufacture.
    For SG&A expenses, we used information obtained from the same 
financial report used to obtain factory overhead. This information 
showed SG&A expenses as a percentage of the cost of manufacture.
    For profit, we used SKF India's profit rate. The annual report 
showed profit as a percentage of cost of production.
    For export packing, we used the facts available because the 
respondents did not supply sufficient factor information for us to 
calculate packing costs. As facts available we used 1 percent of the 
sum of total ex-factory costs and SG&A expenses. This percentage, 
obtained from publicly available data, was used

[[Page 36770]]

in the Final Determination of Sales at Less than Fair Value: Tapered 
Roller Bearings from Italy, 52 FR 24198 (June 29, 1987). This 
methodology is consistent with the Department's valuation of packing in 
the Final Results of Antidumping Duty Administrative Review: Tapered 
Roller Bearings from the People's Republic of China, 56 FR 67590 
(December 31, 1991), and subsequent reviews of this order. We used this 
percentage because there was no publicly available information from a 
comparable surrogate country.
    For foreign inland freight, as the most recent publicly available 
published source, we used a rate derived from a newspaper article in 
the April 20, 1994 issue of The Times of India, as submitted in the 
antidumping duty investigation on honey from the PRC. We adjusted the 
value of freight to the POR using a wholesale price index (WPI) 
published by the International Monetary Fund (IMF).
    We made no adjustments to CV for selling expenses because the 
surrogate SG&A information we used did not allow a breakout of selling 
expenses.

Partial Termination of Review

    Shanghai was included in our notice of initiation of this review. 
However, on February 11, 1997, we published a notice of revocation of 
the order with respect to Shanghai (62 FR 6189). Therefore, we are 
terminating this review with respect to Shanghai.
    Petitioner requested reviews for East Sea Bearing Co., Ltd. (East 
Sea), and Changshan Bearing Factory (Changshan). On August 26, 1996, 
East Sea and Changshan both reported no shipments of subject 
merchandise to the United States during the POR. We independently 
confirmed with U.S. Customs that there were no shipments from these two 
companies. Therefore, we have terminated the review with respect to 
East Sea. See Calcium Hypochlorite From Japan: Termination of 
Antidumping Duty Administrative Review, 62 FR 18086 (April 14, 1997). 
However, because Changshan has not been granted a separate rate the 
deposit rate applicable to Changshan will continue to be the PRC rate 
as established in the final results of this review.

Currency Conversion

    We made currency conversions in accordance with section 773A of the 
Act. Currency conversions were made at the rates certified by the 
Federal Reserve Bank. Section 773A(a) directs the Department to use a 
daily exchange rate to convert foreign currencies into U.S. dollars 
unless the daily rate involves a ``fluctuation.'' It is our practice to 
find that a fluctuation exists when the daily exchange rate differs 
from a benchmark rate by 2.25 percent or more. See Preliminary Results 
of Antidumping Duty Administrative Review: Certain Welded Carbon Steel 
Pipe and Tube from Turkey, 61 FR 35188, 35192 (July 5, 1996). The 
benchmark rate is defined as the rolling average of the rates for the 
past 40 business days.

Preliminary Results of the Review

    As a result of our comparison of the EP or CEP, as applicable, to 
NV, we preliminarily determine that the following dumping margins exist 
for the period June 1, 1995, through May 31, 1996:

------------------------------------------------------------------------
                                                                Margin  
                 Manufacturer/Exporter 2 3                    (percent) 
------------------------------------------------------------------------
Wanxiang...................................................         8.70
Shandong...................................................        14.65
Luoyang....................................................         3.16
CMC........................................................         0.00
Xiangfan...................................................         1.55
Guizhou Machinery..........................................        20.19
Zhejiang...................................................         0.10
Jilin......................................................        29.40
Liaoning...................................................         0.03
Premier....................................................         5.42
Chin Jun...................................................        3.41 
------------------------------------------------------------------------
\2\ Although Hangzhou has not been assigned a rate for this review we   
  note that its independent rate will continue to be 29.40 percent, the 
  rate assigned in the 1994-95 review, in which Hangzhou was considered 
  part of the PRC entity and was not specifically named.                
\3\ The PRC rate applies to CMEC, Hailin, Guizhou Automotive and all    
  firms which did not respond to the questionnaire and which are not    
  entitled to a separate rate.                                          

    Parties to the proceeding may request disclosure within five days 
of the date of publication of this notice. Any interested party may 
request a hearing within 10 days of publication. Any hearing, if 
requested, will be held approximately 44 days after the publication of 
this notice. Interested parties may submit written comments (case 
briefs) within 30 days of the date of publication of this notice. 
Rebuttal comments (rebuttal briefs), which must be limited to issues 
raised in the case briefs, may be filed not later than 37 days after 
the date of publication. The Department will issue a notice of final 
results of this administrative review, including the results of its 
analysis of issues raised in any such written comments, within 120 days 
of publication of these preliminary results.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between EP or CEP, as applicable, and NV may vary from the 
percentages stated above. The Department will issue appraisement 
instructions directly to the Customs Service.
    Furthermore, the following cash deposit requirements will be 
effective upon publication of the final results of this administrative 
review for all shipments of the subject merchandise entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date, as provided for by section 751(a)(1) of the Act: (1) For the PRC 
companies named above that have separate rates and were reviewed 
(Guizhou Machinery, Luoyang, Jilin, Liaoning, CMC, Zhejiang, Xiangfan, 
Shandong, Wanxiang), the cash deposit rates will be the rates for these 
firms established in the final results of this review, except that for 
exporters with de minimis rates, i.e., less than 0.50 percent, no 
deposit will be required; (2) for Hangzhou, which we preliminarily 
determine to be entitled to a separate rate, the rate will continue be 
29.40 percent, the rate which currently applies to this company; (3) 
for PRC companies (e.g., Great Wall) which established eligibility for 
a separate rate in a previous review and for which no review was 
requested, the cash deposit rate will continue to be the rate assigned 
in the previous review; (4) for all remaining PRC exporters, all of 
which were found to not be entitled to separate rates, the cash deposit 
will be 29.40 percent; and (5) for non-PRC exporters Premier and Chin 
Jun the cash deposit rates will be the rates established in the final 
results of this review; (6) for non-PRC exporters of subject 
merchandise from the PRC, other than Premier and Chin Jun, the cash 
deposit rate will be the rate applicable to the PRC supplier of that 
exporter. These deposit requirements, when imposed, shall remain in 
effect until publication of the final results of the next 
administrative review.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 353.26 to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.


[[Page 36771]]


    Dated June 30, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-17948 Filed 7-8-97; 8:45 am]
BILLING CODE 3510-DS-P