[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