[Federal Register Volume 64, Number 87 (Thursday, May 6, 1999)]
[Notices]
[Pages 24322-24327]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11422]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-846]
Brake Rotors From the People's Republic of China: Preliminary
Results of New Shipper Review and Preliminary Results and Partial
Rescission of First Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: On May 29, 1998, the Department of Commerce (``the
Department'') published a notice of initiation of an administrative
review of the antidumping duty order on brake rotors from the People's
Republic of China (``PRC'') covering the period October 10, 1996,
through March 31, 1998. The Department is preliminarily rescinding this
review in part with respect to respondents who had no shipments of the
subject merchandise during the period of review (``POR'').
For those respondents that submitted full responses to the
antidumping questionnaire and are entitled to a separate rate, we have
preliminarily determined that U.S. sales have not been made below
normal value. For the PRC non-market economy (``NME'') entity (i.e.,
PRC government-controlled companies, including PRC companies that did
not respond to the antidumping questionnaire), we are basing the
preliminary results on ``facts available.''
If these preliminary results are adopted in our final results of
administrative review, we will instruct the U.S. Customs Service to
assess no antidumping duties on entries from the seven PRC exporters
that cooperated in this review (including the one new shipper
reviewed), for which the importer-specific assessment rates are zero or
de minimis (i.e., less than 0.50 percent), and to assess duties on
entries from the other uncooperative reviewed exporters at the PRC-wide
rate.
Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: May 6, 1999.
FOR FURTHER INFORMATION CONTACT: Brian Smith or Barbara Wojcik-
Betancourt, Import Administration, International Trade Administration,
U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230; telephone: (202) 482-1766 or (202) 482-0629,
respectively.
SUPPLEMENTARY INFORMATION: 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. In
addition, unless otherwise indicated, all citations to the Department's
regulations are to the regulations at 19 CFR Part 351 (1998).
Background
On April 14, 1998, the petitioner \2\ requested an administrative
review pursuant to section 751(a)(1) of the Act and section 351.213(b)
of the Department's regulations for three exporter/producer
combinations \2\ that received zero rates in the less-than-fair-value
(``LTFV'') investigation and thus were excluded from the antidumping
duty order only with respect to subject merchandise sold through the
specified exporter/producer combinations, and the following respondents
in the LTFV investigation: (1) Hebei Metals and Minerals Import &
Export Corporation (``Hebei''); (2) Jilin Provincial Machinery and
Equipment Import & Export Corporation (``Jilin''); (3) Shandong Jiuyang
Enterprise Corporation (``Jiuyang''); (4) Longjing Walking Tractor
Foreign Trade Import & Export Corporation (``Longjing''); (5) Qingdao
Metals, Minerals & Machinery Import and Export Corporation
(``Qingdao''); (6) Shanxi Machinery and Equipment Import Export
Corporation (``Shanxi''); (7) Southwest Technical Import & Export
Corporation (``Southwest''); (8) Xianghe Zichen Casting Co., Ltd.
(``Xianghe''); (9) Yantai Import & Export Corporation (``Yantai''); and
(10) Yenhere Corporation (``Yenhere''). The petitioner also requested
an adminsistrative review of all other PRC producers and exporters of
the subject merchandise.
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\1\ The petitioner is the Coalition for the Preservation of
American Brake Drum and Rotor Aftermarket Manufacturers.
\2\ The excluded exporters/producer combinations are (1) China
National Automobile Industry Import & Export Corporation (``CAIEC'')
or Shandong Laizhou CAPCO Industry (``Laizhou CAPCO'')/Laizhou
CAPCO; (2) Shenyang Honbase Machinery Co., Ltd. (``Shenyang
Honbase'') or Laizhou Luyuan Automobile fittings Co., Ltd.
(``Laizhou Luyuan'')/Shenyang Honbase or laizhou Luyuan; and (3)
China National Machinery and Equipment Import & Export (Xinjiang)
Co., Ltd. (``Xinjinag'')/Zibo Botai Manufacturing Co., Ltd.
(Zibo'').
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On April 29, 1998, the excluded exporters for which the petitioner
requested a review contended that the Department did not have the basis
for conducting an administrative review of them because they were
excluded from the antidumping duty order on brake rotors.
On April 30, 1998, the Department received a timely request from
Yantai Chen Fu Machinery Co., Ltd. (``Chen Fu''), in accordance with
section 751(a)(2)(B) of the Act and section 351.214(c) of the
Department's regulations, for a new shipper review of this antidumping
duty order.
In its April 30, 1998, request for review, Chen Fu certified that
id did not export the subject merchandise to the United States during
the period covered by the original LTFV investigation (the ``POI''),
and that is it not affiliated with any company which exported subject
merchandise to the United States during the POI. Chen Fu also certified
that its export activities are not controlled by the central government
of the PRC. Pursuant to the Department's regulations at 19 CFR
351.214(b)(2)(iv), Chen Fu submitted documentation establishing the
date on which the merchandise was first entered for consumption in the
United States, the volume of that shipment, and the date of the first
sale to an unaffiliated customer in the United States.
In accordance with section 751(a)(2)(B) and 19 CFR 351.214(d), we
initiated a new shipper review covering Chen Fu (Brake Rotors from the
People's Republic of China: Initiation of New Shipper Antidumping Duty
Administrative Review (63 FR 28355, May 22, 1998)).
Also, on April 30, 1998, seven PRC exporters \3\ requested an
administrative review pursuant to section 751(a)(1) of the Act and
section 351.213(b) of the Department's regulations, all but one of
[[Page 24323]]
which (Xinchangyuan) were included in the petitioner's request.
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\3\ The seven PRC exporters are (1) Beijing Xinchangyuan
Automobile Fittings Co., Ltd. (``Xinchangyuan''); (2) Jilin; (3)
Longjing; (4) Jiuyang; (5) Xianghe; (6) Yantai; and (7) Yenhere.
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On May 11, 1998, Chen Fu agreed to waive time limits applicable to
the new shipper review and conduct the new shipper review concurrently
with the administrative review. On May 13, 1998, Xinchangyuan withdrew
its request for an administrative review.
On May 22, 1998, the Department initiated an administrative review
covering the exporters which received zero rates in the LTFV
investigation (only with respect to their U.S. sales of brake rotors
produced by companies other than those included in the excluded
exporter/producer combinations) and the other producers and exporters
for which the petitioner requested a review (Initiation of Antidumping
and Countervailing Duty Administrative Reviews and Requests for
Revocations in Part (63 FR 29370, 29371, May 29, 1998)).
During June 1998, we issued our questionnaire to the following
entities: (1) all companies listed in our initiation notices; (2) the
Ministry of Foreign Trade and Economic Cooperation (``MOFTEC'') for
review of the PRC-wide rate; and (3) the Chinese Chamber of Commerce of
Importers and Exporters of Machinery and Electronic Products (``the
China Chamber'').
On July 24, 1998, the respondents and the petitioners submitted
publicly available information (``PAI'') for use in valuing the factors
of production. On July 31, 1998, the parties submitted rebuttal
comments on PAI. On August 10, 1998, certain respondents (namely, Chen
Fu, Jilin, Longjing, Jiuyang Xianghe, Yantai and Yenhere) submitted
their responses to sections A, C and D of the antidumping
questionnaire. In September 1998, we issued supplemental questionnaires
to the respondents. In October 1998, we received supplemental
questionnaire responses from the respondents.
On November 10, 1998, the Department published in the Federal
Register a notice of postponement of the preliminary results no later
than April 30, 1999 (63 FR 63026).
On February 12, 1999, Jilin submitted corrections to its section C
response in anticipation of verification. On March 2, 1999, the
Department issued a decision memorandum which outlined the Department's
reasons for conducting a review of the exporters rates of zero in the
LTFV investigation with respect to shipments of merchandise produced by
manufacturers other than those in the respective excluded exporter/
producer combination. On March 11, 1999, the Department issued another
decision memorandum (``March 11, 1999, Memorandum'') which stated that
the Department preliminarily found no evidence that POR shipments of
merchandise subject to order were made by the exporters that are
excluded with respect to certain exporter/producer combinations.
Scope of Review
The products covered by this review are brake rotors made of gray
cast iron, whether finished, semifinished, or unfinished, ranging in
diameter from 8 to 16 inches (20.32 to 40.64 centimeters) and in weight
from 8 to 45 pounds (3.63 to 20.41 kilograms). The size parameters
(weight and dimension) of the brake rotors limit their use to the
following types of motor vehicles: automobiles, all-terrain vehicles,
vans and recreational vehicles under ``one ton and a half,'' and light
trucks designated as ``one ton and a half.''
Finished brake rotors are those that are ready for sale and
installation without any further operations. Semi-finished rotors are
those on which the surface is not entirely smooth, and have undergone
some drilling. Unfinished rotors are those which have undergone some
grinding or turning.
These brake rotors are for motor vehicles, and do not contain in
the casting a logo or any original equipment manufacturer (``OEM'')
which produces vehicles sold in the United States (e.g, General Motors,
Ford, Chrysler, Honda, Toyota, Volvo). Brake rotors covered in this
review are not certified be OEM producers of vehicles sold in the
United States. The scope also includes composite brake rotors that are
made of gray cast iron, which contain a steel plate, but otherwise meet
the above criteria. Excluded from the scope of the review are brake
rotors made of gray cast iron, whether finished, semifinished, or
unfinished, with a diameter less than 8 inches or greater than 16
inches (less than 20.32 centimeters or greater than 40.64 centimeters)
and a weight less than 8 pounds or greater than 45 pounds (less than
3.63 kilograms or greater than 20.41 kilograms).
Brake rotors are classifiable under subheading 8708.39.5010 of the
HTSUS. Although the HTSUS subheading is provided for convenience and
customs purposes, our written description of the scope of this review
is dispositive.
Period of Review
The POR covers the period October 10, 1996, through March 31, 1998.
Rescission
Pursuant to 19 CFR 351.213(d)(3), we have preliminarily determined
that, during the POR, the exporters which received zero rates in the
LTFV investigation did not make shipments of subject merchandise to the
United States during the POR. Specifically, we preliminarily determined
that during the POR, (1) neither CAIEC nor Laizhou CAPCO exported brake
rotors to the United States that were manufactured by producers other
than Laizhou CAPCO; (2) neither Shenyang Honbase nor Laizhou Luyuan
exported brake rotors to the United States that were manufactured by
producers other than Shenyang Honbase or Laizhou Luyuan; and (3)
Xinjiang did not export brake rotors to the United States that were
manufactured by producers other than Zibo (see memoranda dated March 2
and 11, 1999, from the team to Louis Apple, Office Director). In order
to make this determination, we first examined POR subject merchandise
shipment data furnished by the U.S. Customs Service. We then requested
the U.S. Customs Service to examine the documentation filed at the U.S.
port for each entry made by the exporters at issue to determine the
manufacturer of the merchandise. Based on the results of our query (see
March 11, 1999, Memorandum), we are preliminarily rescinding this
review with respect to CAIEC, Laizhou CAPCO, Shenyang Honbase, Laizhou
Luyuan and Xinjiang. However, we intend to verify the U.S. shipments of
brake rotors made by these companies before issuing a final decision
with respect to these companies.
Furthermore, we are rescinding this review with respect to
Southwest, which reported that it made no shipments of subject
merchandise during this POR, based on the results of our examination of
shipment data furnished by the U.S. Customs Service. Because the
shipment data we examined did not show U.S. entries of brake rotors
during the POR from Southwest or its affiliated PRC producer, we
pursued no further this inquiry with the U.S. Customs Service. We are
also rescinding this review with respect to Xinchangyuan because it
withdrew its request for review and no other interested party requested
a review of this company.
Separate Rates
In proceedings involving NME countries, the Department begins with
a rebuttable presumption that all companies within the country are
subject to government control and thus should be assessed a single
antidumping duty deposit rate. Of the seven respondents that submitted
questionnaire responses, one of the PRC
[[Page 24324]]
companies, Chen Fu, is wholly-owned by private individuals. Another
respondent, Xianghe, is a joint venture between Chinese and U.S.
companies. Another respondent, Yenhere, is a limited liability
corporation in the PRC. The four other respondents are either wholly
owned by ``all the people'' (Jilin, Longjing, Yantai) or collectively
owned (Jiuyang). Thus, for all seven of these respondents, a separate
rates analysis is necessary to determine whether the exporters are
independent from government control (see Notice of Final Determination
of Sales at Less Than Fair Value: Bicycles From the People's Republic
of China (``Bicycles'') 61 FR 56570 (April 30, 1996)).
To establish whether a firm is sufficiently independent from
government control to be entitled to a separate rate, the Department
analyzes each exporting entity under a test arising out of the Final
Determination of Sales at Less Than Fair Value: Sparklers from the
People's Republic of China (56 FR 20588, May 6, 1991) and 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''). Under the separate rates criteria, the
Department assigns separate rates in NME cases only if the respondent
can demonstrate the absence of both de jure and de facto government
control over export activities.
1. De Jure Control
Each respondent has placed on the administrative record documents
to demonstrate absence of de jure control, including the ``Law of the
People's Republic of China on Industrial Enterprises Owned by the Whole
People,'' adopted on April 13, 1988 (``the Industrial Enterprises
Law''); ``The Enterprise Legal Person Registration Administrative
Regulations,'' promulgated on June 13, 1988; the 1990 ``Regulation
Governing Rural Collectively-Owned Enterprises of PRC;'' the 1992
``Regulations for Transformation of Operational Mechanisms of State-
Owned Industrial Enterprises'' (``Business Operation Provisions''); and
the 1994 ``Foreign Trade Law of the People's Republic of China.''
As in prior cases, we have analyzed these laws and have found them
to establish sufficiently an absence of de jure control of companies
``owned by the whole people,'' privately owned enterprises, joint
ventures, stock companies including limited liability companies, and
collectively owned enterprises. See, e.g., Final Determination of Sales
at Less than Fair Value: Furfuryl Alcohol from the People's Republic of
China (``Furfuryl Alcohol'') 60 FR 22544 (May 8, 1995), and Preliminary
Determination of Sales at Less Than Fair Value: Certain Partial-
Extension Steel Drawer Slides with Rollers from the People's Republic
of China (``Drawer Slides'') 60 FR 29571 (June 5, 1995). We have no new
information in this proceeding which would cause us to reconsider this
determination with regard to the seven respondents mentioned above.
2. De Facto Control
As stated in previous cases, there is some evidence that certain
enactments of the PRC central government have not been implemented
uniformly among different sectors and/or jurisdictions in the PRC. See
Silicon Carbide and Furfuryl Alcohol. Therefore, the Department has
determined that an analysis of de facto control is critical in
determining whether the respondents are, in fact, subject to a degree
of governmental control which would preclude the Department from
assigning separate rates.
The Department typically considers four factors in evaluating
whether each respondent is subject to de facto governmental control of
its export functions: (1) Whether the export prices (``EPs'') are set
by or subject to the approval of a governmental authority; (2) whether
the respondent has authority to negotiate and sign contracts and other
agreements; (3) whether the respondent has autonomy from the government
in making decisions regarding the selection of management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding disposition of profits or
financing of losses (see Silicon Carbide and Furfuryl Alcohol).
Each of these seven respondents asserted the following: (1) it
establishes its own EPs; (2) it negotiates contracts, without guidance
from any governmental entities or organizations; (3) it makes its own
personnel decisions; and (4) it retains the proceeds of its export
sales, uses profits according to its business needs, and has the
authority to sell its assets and to obtain loans. Additionally, the
respondents' questionnaire responses indicate that company-specific
pricing during the POR does not suggest coordination among exporters.
This information supports a preliminary finding that there is de facto
absence of governmental control of the export functions of these
respondents. See Pure Magnesium from the People's Republic of China:
Preliminary Results of Antidumping Duty New Shipper Administrative
Review, 62 FR 55215 (October 23, 1997). Consequently, we have
preliminarily determined that each of these respondents has met the
criteria for the application of separate rates.
Hebei, Qingdao and Shanxi, named respondents in this review, did
not respond to the questionnaire issued in this review. Hebei, Qingdao
and Shanxi also did not submit information which demonstrated a de jure
and de facto absence of government control with respect to each
company's export functions. Therefore, we have preliminarily determined
that these companies are not entitled to separate rates in this review
and will be considered to be part of the non-responding PRC NME entity.
Facts Available
Section 776(a)(1) of the Act mandates that the Department use the
facts available if necessary information is not available on the record
of an antidumping proceeding. In addition, section 776(a)(2) of the Act
mandates that the Department use the facts available where an
interested party or any other person: (A) withholds information
requested by the Department; (B) fails to provide requested information
by the requested date or in the form and manner requested; (C)
significantly impedes an antidumping proceeding; or (D) provides
information that cannot be verified.
As indicated above, Hebei, Qingdao and Shanxi failed to demonstrate
that they are entitled to separate rates and therefore are presumed to
be part of the PRC entity. In response to our antidumping
questionnaire, MOFTEC, on behalf of the PRC NME entity, referred the
Department to the China Chamber (see letter from MOFTEC to the
Department, dated June 26, 1998). The China Chamber provided no
response to our antidumping questionnaire, which it also received
directly from the Department (see the Department's cover letter and
questionnaire to the China Chamber, dated June 30, 1998). Thus, the PRC
NME entity provided no questionnaire response. Therefore, in this case,
the PRC NME entity, including Hebei, Qingdao and Shanxi, failed to
respond to the Department's questionnaire. Therefore, by failing to
respond to the Department's questionnaire in this case, the PRC NME
entity, including Hebei, Qingdao and Shanxi, failed to cooperate to the
best of its ability. Where the Department must base the entire dumping
margin for a respondent in an administrative review on the facts
[[Page 24325]]
available because that respondent failed to cooperate to the best of
its ability, section 776(b) 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.
As adverse facts available, imports of subject merchandise from the
PRC NME entity (including Hebei, Qingdao and Shanxi and other
producers/exporters who have not qualified for a separate rate) will be
subject to a PRC-wide rate of 43.32 percent, which is based on the
highest petition rate and which is the highest rate on the record of
this proceeding. Because information from the petition constitutes
secondary information, section 776(c) 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'') (H. Doc. 316, 103d Cong.,
2nd Sess. 870) provides that ``corroborate'' means that the Department
will satisfy itself that the secondary information to be used has
probative value.
During our analysis of the petition in the LTFV investigation, we
reviewed all of the data submitted and the assumptions that petitioners
had made when calculating estimated dumping margins. As a result of our
analysis, we recalculated the petition rate during the LTFV
investigation to correct the petitioner's methodology with respect to
certain factor values. See Final Determinations of Sales at Less Than
Fair Value: Brake Drums and Brake Rotors from the People's Republic of
China, 62 FR 9160, 9162 (February 28, 1997) (``Brake Rotors''). Thus,
because we reviewed the petitioner's assumptions and calculations from
which the petition rates were derived, and made appropriate
corrections, we had determined in the LTFV investigation that the
petition rates, as corrected, had probative value. We have no new
information that would warrant reconsidering that decision.
Fair Value Comparisons
To determine whether sales of the subject merchandise by each
respondent to the United States were made at LTFV, we compared the EP
to the normal value (``NV''), as described in the ``Export Price'' and
``Normal Value'' sections of this notice, below.
Export Price
We used EP methodology in accordance with section 772(a) of the
Act, because the subject merchandise was sold directly to unaffiliated
customers in the United States prior to importation and constructed
export price methodology was not otherwise indicated.
1. Chen Fu, Jilin, Jiuyang, Longjing, Xianghe, Yenhere
We calculated EP based on packed, FOB foreign port prices to the
first unaffiliated purchaser in the United States. Where appropriate,
we made deductions from the starting price (gross unit price) for
foreign inland freight and foreign brokerage and handling in the PRC,
in accordance with section 772(c) of the Act. Because foreign inland
freight and foreign brokerage and handling fees were provided by NME
service providers or paid for in an NME currency, we based those
charges on surrogate rates from India (see ``Surrogate Country''
section below). To value foreign inland freight, we used the average
1994 truck freight rate contained in the Indian periodical The Times of
India. We have used this same rate in numerous NME cases in which India
has been selected as the primary surrogate (see, e.g., Brake Rotors, 62
FR at 9163). To value foreign brokerage and handling expenses, we
relied on public information reported in the antidumping investigation
of stainless steel wire rod from India (see Brake Rotors from the
People's Republic of China: Final Results of New Shipper Antidumping
Duty New Shipper Administrative Review (64 FR 9972, 9974, March 1,
1999) (Brake Rotors New Shipper Review)).
2. Yantai
We calculated EP based on packed, CIF, CNF or FOB U.S. port prices
to the first unaffiliated purchaser in the United States. Where
appropriate, we made deductions from the starting price (gross unit
price) for foreign inland freight and foreign brokerage and handling in
the PRC, marine insurance and international freight, in accordance with
section 772(c) of the Act. As all foreign inland freight and foreign
brokerage and handling fees were provided by NME service providers or
paid for in a NME currency, we valued these services using the Indian
surrogate values discussed above. For marine insurance, we used public
information reported in the antidumping investigation of sulfur dyes,
including sulfur vat dyes, from India. For ocean freight, we used
Yantai's reported expense because Yantai used market-economy freight
carriers (see, e.g., Brake Rotors New Shipper Review, 64 FR at 9974).
Normal Value
A. Non-Market Economy Status
In every case conducted by the Department involving the PRC, the
PRC has been treated as a NME country. None of the parties to this
proceeding has contested such treatment. Accordingly, we calculated NV
in accordance with section 773(c) of the Act, which applies to NME
countries.
B. Surrogate Country
Section 773(c)(4) of the Act requires the Department to value the
NME producer's factors of production, to the extent possible, in one or
more market economy countries that (1) are at a level of economic
development comparable to that of the NME country, and (2) are
significant producers of comparable merchandise. We determined that
India is a country comparable to the PRC in terms of overall economic
development (see Memorandum from the Office of Policy to Louis Apple,
dated June 23, 1998, which was included in the Department's June 24,
1998, letter sent to each interested party in this proceeding). In
addition, based on PAI placed on the record, we have determined that
India is a significant producer of the subject merchandise.
Accordingly, we considered India the primary surrogate country for
purposes of valuing the factors of production as the basis for NV
because it meets the Department's criteria for surrogate country
selection. Where we could not find surrogate values from India, we
valued those factors using values from Indonesia.
C. Factors of Production
In accordance with section 773(c) of the Act, we calculated NV
based on the factors of production reported by the companies in the PRC
which produced the subject merchandise for the exporters which sold the
subject merchandise to the United States during the POR. To calculate
NV, the reported unit factor quantities were multiplied by publicly
available Indian or Indonesian values.
The selection of the surrogate values applied in this determination
was based on the quality, specificity, and contemporaneity of the data.
As appropriate, we adjusted input prices to make them delivered prices.
For those values not contemporaneous with the POR and quoted in a
foreign currency, we adjusted for inflation using wholesale price
indices published in the International Monetary Fund's International
Financial Statistics. For a complete analysis of surrogate values, see
the Preliminary Results Valuation
[[Page 24326]]
Memorandum from the Team to the File, dated April 30, 1999
(``Preliminary Results Valuation Memorandum'').
To value pig iron, we used domestic price data in India from the
April 1996-March 1997 financial report of Lamina Foundries (``Lamina'')
and from the 1996 financial report of Nagpur Alloy Castings Ltd.
(``Nagpur''). We removed excise and sales taxes from the average pig
iron value because the financial reports indicated that these taxes
were included in the values. For steel scrap, ferrosilicon,
ferromanganese, lubrication oil and limestone, we used average values
based on import statistics spanning from April 1996-July 1997 from
Monthly Statistics of the Foreign Trade of India (``Monthly
Statistics''). For iron scrap, we used domestic price data from
Lamina's 1996-97 financial report and 1996-97 import price data from
Monthly Statistics.
Certain types of rotors use steel sheet, lug bolts and ball bearing
cups. For steel sheet, we used October 1997 prices from the Indian
publication Statistics for Iron and Steel Industry. For lug bolts, we
could not obtain a product-specific price from India (see Notice of
Final Determination of Sales at Less Than Fair Value: Bicycles from the
People's Republic of China (61 FR 19026, April 30, 1996) (Comment 17)).
Therefore, we used import data covering 1997 from the Indonesian
government publication Foreign Trade Statistical Bulletin. To value
ball bearing cups, we used April 1997-July 1997 import price data from
Monthly Statistics.
For coking coal, we used an average of prices applicable during the
fourth quarter of 1996 from the International Energy Agency's Energy
Price and Taxes, and a 1996-1997 price from the publication Federation
of Indian Chambers of Commerce. To value firewood, we used a 1990
domestic value from the USAID publication Marketing Opportunities for
Social Forestry in Uttar Pradesh. To value electricity, we used a price
applicable during the fourth quarter of 1996 from the International
Energy Agency's Energy Price and Taxes.
We valued labor based on a regression-based wage rate, in
accordance with 19 CFR 351.408(c)(3).
To value selling, general and administrative (``SG&A'') expenses,
factory overhead and profit, we calculated simple averages based on
financial data from five Indian producers. We used only those
producers' financial reports which were contemporaneous with the POR
and for which PAI demonstrated that those companies are producers of
the subject merchandise (i.e., Jayaswals Neco Limited (``Jayaswals''),
Kalyani Brakes Limited (``Kalyani''), Krishna Engineering Works
(``Krishna''), Nagpur, and Rico Auto Industries Limited (``Rico'')). We
did not use the financial reports of Lamina or Brakes India Limited in
calculating the surrogate percentages because we have no PAI which
demonstrates that these two companies are producers of the subject
merchandise. Where appropriate, we removed from the surrogate overhead
and SG&A calculations the excise duty amount listed in the financial
reports (see Brake Rotors, 62 FR at 9164). We made certain adjustments
to the percentages calculated as a result of reclassifying expenses
contained in the financial reports.
In utilizing the financial data of the Indian companies, we treated
the line item labeled ``stores and spares consumed'' as part of factory
overhead because stores and spares are not direct materials consumed in
the production process. Based on PAI, we considered the molding
materials (i.e., sand, bentonite, coal powder, steel pellets, lead
powder, waste oil) to be indirect materials included in the stores and
spares consumed category of the financial statements. We based our
factory overhead calculation on the cost of goods manufactured rather
than on the cost of goods sold. We also included interest and/or
financial expenses in the SG&A calculation. In addition, we only
reduced interest and financial expenses by amounts for interest income
if the Indian financial report noted that the income was short-term in
nature. Where a company did not distinguish interest income as a line
item within total ``other income,'' we used the ratio of interest
income to total other income as reported for the Indian metals industry
in the Reserve Bank of India Bulletin to calculate the interest expense
amount. For example, if an Indian company's financial statement
indicated that the company had miscellaneous receipts or other income
under the general category ``other income,'' we applied a ratio (based
on data contained in Reserve Bank of India Bulletin) to that
miscellaneous receipts or other income figure in the financial
statement to determine the amount associated with short-term interest
income. To avoid double-counting, we treated the line item ``packing,
freight and delivery charges'' as expenses to be valued separately.
Specifically, to determine the packing expense, we used the
respondents' reported packing factors. We used the respondents'
reported distances to determine the foreign inland freight expense. For
a further discussion of other adjustments made, see the Preliminary
Results Valuation Memorandum.
All inputs were shipped by truck. Therefore, to value PRC inland
freight, we used the April 1994 truck rate from the Times of India.
In accordance with the decision of the Court of Appeals for the
Federal Circuit in Sigma Corp. v. United States, 117 F. 3d 1401 (1997),
we revised our methodology for calculating source-to-factory surrogate
freight for those material inputs that are valued based on CIF import
values in the surrogate country. Therefore, we have added to CIF
surrogate values from India a surrogate freight cost using the shorter
of the reported distances from either the closest PRC port of
importation to the factory, or from the domestic supplier to the
factory on an import-specific basis.
To value adhesive tape, corrugated cartons, nails, polyethylene
material for bags, steel strap and steel strip, we used April 1996-July
1997 import values from Monthly Statistics. To value pallet wood, we
selected an April 1995-March 1996 import value from Monthly Statistics
rather than other 1996-97 values on the record because the more
contemporaneous values appeared aberrational relative to the overall
value of the subject merchandise (see Preliminary Results Valuation
Memorandum for further discussion).
Currency Conversion
We made currency conversions pursuant to section 773A(a) of the Act
and section 351.415 of the Department's regulations based on the rates
certified by the Federal Reserve Bank.
Verification
As provided in section 782(i) of the Act and 19 CFR 351.307, we
intend to verify certain information relied upon in making our final
results. In this review, on May 5, 1998, the petitioner requested the
Department to conduct verification of the information and statements
submitted by the exporter/producer combinations excluded from this
order. We intend to verify several respondents, including the exporter/
producer combinations excluded from the order, in accordance with 19
CFR 351.307.
Preliminary Results of the Review
We preliminarily determine that the following margins exist for the
seven respondents, who submitted full responses to the antidumping
questionnaire, during the period October 10, 1996, through March 31,
1998:
[[Page 24327]]
------------------------------------------------------------------------
Margin
Manufacturer/producer/exporter percent
------------------------------------------------------------------------
Yantai Chen Fu Machinery Co., Ltd............................ 0.00
Jilin Provincial Machinery & Equipment Import & Export 0.00
Corporation.................................................
Longjing Walking Tractor Works Foreign Trade Import & Export 0.00
Corporation.................................................
Shandong Jiuyang Enterprise Corporation...................... 0.00
Xianghe Zichen Casting Co., Ltd.............................. 0.00
Yantai Import & Export Corporation........................... 0.00
Yenhere Corporation.......................................... 0.00
PRC-Wide Rate................................................ 43.32
------------------------------------------------------------------------
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 45 days of publication. Any hearing, if
requested, will be held on July 22, 1999.
Issues raised in the hearing will be limited to those raised in the
respective case briefs and rebuttal briefs. Case briefs from interested
parties may be submitted not later than July 13, 1999. Rebuttal briefs,
limited to issues raised in the case briefs, will be due July 20, 1999.
Parties who submit case briefs or rebuttal briefs in this proceeding
are requested to submit with each argument (1) a statement of the issue
and (2) a brief summary of the argument. Parties are also encouraged to
provide a summary of the arguments not to exceed five pages and a table
of statutes, regulations and cases cited.
The Department will issue the final results of this administrative
and new shipper review, including the results of its analysis of issues
raised in any such written briefs or at the hearing, if held, not later
than 120 days after the date of publication of this notice.
Interested parties who wish to request a hearing or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, Room B-099, within 45 days of the
date of publication of this notice. Requests should contain: (1) the
party's name, address and telephone number; (2) the number of
participants; and (3) a list of issues to be discussed. See 19 CFR
351.310(c).
Assessment Rates
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Pursuant to 19
CFR 351.212(b)(1), we will calculate importer-specific ad valorem duty
assessment rates based on the ratio of the total amount of the dumping
margins calculated for the examined sales to the total entered value of
those same sales. In order to estimate the entered value, we will
subtract international movement expenses from the gross sales value. In
accordance with 19 CFR 351.106(c)(2), we will instruct the Customs
Service to liquidate without regard to antidumping duties all entries
of subject merchandise during the POR for which the importer-specific
assessment rate is zero or de minimis (i.e., less than 0.50 percent).
For entries subject to the PRC-wide rate, the Customs Service shall
assess ad valorem duties at the rate established in the final results.
The Department will issue appropriate appraisement instructions
directly to the Customs Service upon completion of this review.
Cash Deposit Requirements
Upon completion of this new shipper review, for entries from Chen
Fu, we will require cash deposits at the rate established in the final
results pursuant to section 751(a)(2)(B)(iii) of the Act and section
351.214(e) of the Department's regulations and as further described
below.
The following deposit requirements will be effective upon
publication of the final results of these administrative and new
shipper antidumping duty administrative reviews for all shipments of
brake rotors from the PRC entered, or withdrawn from warehouse, for
consumption on or after the publication date, as provided by section
751(a)(1) of the Act: (1) the cash deposit rate for each reviewed
company will be the rate established in the final results; (2) the cash
deposit rate for PRC exporters who received a separate rate in the LTFV
investigation but who did not export subject merchandise during the POR
or for whom there was no request for review (i.e., Southwest and
Xinchangyuan) will continue to be the rate assigned in that
investigation; (3) the cash deposit rate for the PRC NME entity (i.e.,
all other PRC exporters, including Hebei, Qingdao and Shanxi) will be
43.32 percent; and (4) the cash deposit rate for non-PRC exporters of
subject merchandise from the PRC will be the rate applicable to the PRC
supplier of that exporter. These requirements, when imposed, shall
remain in effect until publication of the final results of the next
administrative review.
Notification to Importers
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 351.402(f)(2) 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.
These administrative and new shipper administrative reviews and
notice are in accordance with section 751(a)(1) and (2)(B) of the Act
(19 U.S.C. 1675(a)(1) and (2)(B)) and 19 CFR 351.213 and 351.214.
Dated: April 30, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-11422 Filed 5-5-99; 8:45 am]
BILLING CODE 3510-DS-P