[Federal Register Volume 64, Number 218 (Friday, November 12, 1999)]
[Notices]
[Pages 61581-61590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29206]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-846]


Brake Rotors From the People's Republic of China: Rescission of 
Second New Shipper Review and Final Results and Partial Rescission of 
First Antidumping Duty Administrative Review

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

SUMMARY: On May 6, 1999, the U.S. Department of Commerce published the 
preliminary results of the new shipper review and partial rescission of 
antidumping duty administrative review of the antidumping duty order on 
brake rotors from the People's Republic of China. See Preliminary 
Results of New Shipper Review and Preliminary Results and Partial 
Rescission of First Antidumping Duty Administrative Review: Brake 
Rotors from the People's Republic of China, 64 FR 24322 (May 6, 1999). 
This review covers seven exporters of the subject merchandise to the 
United States, which requested the review and responded to the 
Department's questionnaire, and the non-market economy entity, 
including three non-responding companies. The period of review is 
October 10, 1996, through March 31, 1998. We gave interested parties an 
opportunity to comment on our preliminary results.

EFFECTIVE DATE: November 12, 1999.

FOR FURTHER INFORMATION CONTACT: Brian C. Smith or Terre Keaton, 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) 482-1280, respectively.

The Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (``the Act'') by 
the Uruguay Round Agreements Act (``URAA''). In addition, unless 
otherwise indicated, all references are made to the Department's 
regulations at 19 CFR Part 351 (1998).

SUPPLEMENTARY INFORMATION: On April 14, 1998, the petitioner 
1 requested that the Department determine, in the context of 
this review, whether certain exporters 2 (who had been 
excluded from the antidumping duty order with respect to exports of 
brake rotors supplied by producers that furnished the factor data upon 
which the exclusion was based) had shipped merchandise during the 
period of review (``POR'') manufactured by other producers which would 
be subject to review. After analyzing the relevant shipment data and 
conducting verification, the Department is rescinding this review in 
part with respect to those exporter/producer combinations because they 
had no shipments during the POR of merchandise subject to the 
antidumping duty order. Furthermore, the Department is also rescinding 
this review, in part, with respect to a trading company 3 
which is subject to the order but which had no shipments of subject 
merchandise during the POR; and a trading company 4 which is 
subject to the order but which withdrew its request for review.
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    \1\  The petitioner is the Coalition for the Preservation of 
American Brake Drum and Rotor Aftermarket Manufacturers.
    \2\  These exporter/producer combinations are (1) China National 
Automobile Industry Import & Export Corporation (``CAIEC'') and 
Shandong Laizhou CAPCO Industry (``Laizhou CAPCO''); (2) Shenyang 
Honbase Machinery Co., Ltd. (``Shengyang Honbase'') and Laizhou 
Luyuan Automobile Fittings Co., Ltd. (``Laizhou Luyuan''); and (3) 
China National Machinery and Equipment Import & Export (Xinjiang) 
Co., Ltd. (``Xinjiang'') and Zibo Botai Manufacturing Co., Ltd. 
(``Zibo Botai'').
    \3\  This PRC trading company is Southwest Technical Import & 
Export Corporation (``Southwest'').
    \4\  This PRC trading company is Beijing Xinchangyuan Automobile 
Fittings Co., Ltd. (``Xinchangyuan'').
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    Six of the seven exporters that requested a review submitted full 
responses to the antidumping questionnaire were fully cooperative and 
are entitled to a separate rate. 5 For those six exporters, 
we have determined that U.S. sales have not been made below normal 
value. The one exporter requesting a new shipper review, Yantai Chen Fu 
Machinery Co., Ltd. (``Chen Fu''), did not permit the Department to 
verify its questionnaire response. Because the Department was unable to 
assure itself that Chen Fu was entitled to a separate rate, it will 
continue to consider Chen Fu part of the non-market economy (``NME'') 
entity. Therefore, we have determined that Chen Fu does not qualify as 
a new shipper and, accordingly, we are rescinding the new shipper 
review. For the NME entity (i.e., People's Republic of China (``PRC'') 
government-controlled companies, including PRC companies 6 
that did not respond to the antidumping questionnaire or did not permit 
verification), which is covered by the concurrent administrative 
review, we are basing the final results on ``facts available.''
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    \5\  The six exporters are (1) Jilin Provincial Machinery & 
Equipment Import & Export Corporation (``Jilin''); (2) Longjing 
Walking Tractor Works Foreign Trade Import & Export Corporation 
(``Longjing''); (3) Shandong Jiuyang Enterprise Corporation 
(``Jiuyang''); (4) Xianghe Zichen Casting Co., Ltd. (``Xianghe''); 
(5) Yantai Import & Export Corporation (``Yantai''); and (6) Yenhere 
Corporation (``Yenhere'').
    \6\  These PRC trading companies are Chen Fu (the new shipper) 
and the following companies for which the petitioner requested 
reviews, but which did not respond to the Department's 
questionnaires: (1) Hebei Metals and Minerals Import & Export 
Corporation (``Hebei''); (2) Qingdao Metals, Minerals & Machinery 
Import & Export Corporation (``Qingdao''); and (3) Shanxi Machinery 
and Equipment Import & Export Corporation (``Shanxi'').
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    We will instruct the U.S. Customs Service to assess no antidumping 
duties on entries from the six PRC exporters that cooperated in this 
review 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 NME entity companies at the PRC-wide rate. Entries from all 
other companies during this review period (including those for which 
the Department has rescinded the administrative review) will be 
assessed at the rates applicable at the time of entry.

Background

    Since the Department published in the Federal Register the 
preliminary results of its second new shipper review and first 
administrative review of the antidumping duty order on brake rotors 
from the PRC the following events have occurred.
    On June 18, 1999, the Department published in the Federal Register 
a notice of postponement of the final results until no later than 
November 2, 1999 (64 FR 32845). On June 29, 1999, the Department 
provided the parties to this proceeding an additional amount of time 
(until July 26, 1999), to submit publicly available information for 
consideration in the final results. No party submitted any such 
additional information. On July 28 and August 2, 1999, the Department 
issued verification outlines to Chen Fu, to Longjing, and to the 
exporter/producer combinations excluded from antidumping duty order 
(the latter solely with respect to the question of which producers had 
supplied the relevant exports). See Notice of Final Determinations of 
Sales

[[Page 61582]]

at Less Than Fair Value: Brake Drums and Brake Rotors from the People's 
Republic of China, 62 FR 9160 (February 28, 1997) (``Brake Rotors'').
    From August 2 through August 19, 1999, the petitioner filed 
comments related to the Department's conduct of verification in this 
case, the selection of respondents for verification and receipt of 
verification exhibits. In an August 4, 1999, memorandum to the file, 
the Department explained to the petitioner's counsel that it selected 
the verification site and number of companies to be verified in this 
case due to security/logistical considerations and Department resource 
constraints.
    From August 9 through August 17, 1999, the Department conducted 
verification of the information and statements submitted by Longjing 
and the exporter/producer combinations excluded from this order, in 
accordance with 19 CFR 351.307.
    In an August 20, 1999, memorandum to the file, the Department 
addressed the petitioner's verification concerns by stating that the 
Department had made decisions with respect to the verification site and 
number of companies verified in this case based on security/logistical 
considerations and the Department's resource constraints. See August 
20, 1999, memorandum to the File from Irene Darzenta Tzafolias. The 
Department also informed the petitioner that although the Department's 
preference is to verify at the company site, it was not possible to do 
so in this case. Moreover, the Department explained to the petitioner 
that it was the decision of the Department, not of the respondents, as 
to which companies the Department would verify in this review. From 
August 30, 1999, through September 10, 1999, the Department issued its 
verification reports.
    Because neither the respondents nor the petitioner requested a 
hearing, no hearing was held in this case. On September 27, 1999, the 
petitioner submitted its case brief. Jilin, Longjing, Jiuyang, Xianghe, 
Yantai, and Yenhere (hereafter referred to as the ``six respondents'') 
did not submit a case brief. On September 29, the Department returned 
the petitioner's case brief because it contained new factual 
information. On October 4, 1999, the petitioner resubmitted its case 
brief without the new factual information and the six respondents 
submitted their rebuttal brief.
    On October 12, the Department placed on the record a memorandum 
which elaborated on its decision to conduct off-site verifications in 
this proceeding along with documentation supporting that decision. The 
Department provided parties two business days to submit comments on the 
contents of the memorandum and attached documentation. On October 14, 
the petitioner submitted comments. No other party submitted comments.

Scope of Reviews

    The products covered by these reviews 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 of an 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 investigation are not certified by 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 
Harmonized Tariff Schedule of the United States (``HTSUS''). Although 
the HTSUS subheading is provided for convenience and customs purposes, 
our written description of the scope of these reviews is dispositive.

Period of Reviews

    The period of reviews covers the period October 10, 1996, through 
March 31, 1998.

Partial Rescission of Administrative Review

    Pursuant to 19 CFR 351.213(d)(3), we have determined that, during 
the POR, the exporters which received zero rates in the less-than-fair-
value (``LTFV'') investigation did not ship to the United States 
subject merchandise produced by a manufacturer whose production was not 
examined during the LTFV proceeding with respect to sales by the 
relevant exporters. Specifically, we 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 verification reports for CAIEC, Laizhou CAPCO, 
Shenyang Honbase, Laizhou Luyuan and Xinjiang dated August 30 through 
September 10, 1999). In order to make this determination, we confirmed 
shipment data furnished by the U.S. Customs Service relating to entries 
made by the exporters at issue by conducting verification of those 
exporters. Based on the results of our verification, we are rescinding 
this review with respect to CAIEC, Laizhou CAPCO, Shenyang Honbase, 
Laizhou Luyuan and Xinjiang.
    Furthermore, we have rescinded 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. The shipment data 
we examined did not show U.S. entries of brake rotors during the POR 
from Southwest. We have also rescinded this review with respect to 
Xinchangyuan because it withdrew its request for review and no other 
interested party requested a review of this company. See Preliminary 
Results at 24323.

Rescission of New Shipper Review

    We have rescinded the review of Chen Fu because Chen Fu did not 
allow the Department to conduct verification of its separate rates 
information. Therefore, we consider Chen Fu to be an uncooperative 
respondent and have made the adverse assumption that Chen Fu does not 
qualify for a separate rate and have treated it as part of the NME 
entity (see ``Separate Rates'' and ``Facts Available'' sections and 
Comment 1 in

[[Page 61583]]

the ``Interested Party Comments'' section of this notice for further 
discussion). As part of the NME entity, Chen Fu is not entitled to a 
rate as a new shipper, as the NME entity as a whole was subject to the 
LTFV investigation. Consequently, we are rescinding the new shipper 
review of Chen Fu.

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. Seven exporters submitted questionnaire 
responses in this review. As mentioned above, we have determined that 
Chen Fu does not qualify for a separate rate. (See ``De Facto Control'' 
section below for further discussion).
    The other six exporters that submitted questionnaire responses 
exhibit various ownership patterns. Xianghe is a joint venture between 
Chinese and U.S. companies. Yenhere is a limited liability corporation 
in the PRC. The four other respondents are either wholly owned by all 
the people (i.e., Jilin, Longjing, Yantai) or collectively owned (i.e., 
Jiuyang). For these six respondents, a separate rates analysis was 
conducted 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 nonmarket economy cases only if 
the respondent can demonstrate the absence of both de jure and de facto 
governmental 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 Enterprise 
Registration Regulations;'' 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.''
    In prior cases, we have analyzed these laws and have found them to 
sufficiently establish an absence of de jure control of companies 
``owned by the whole people,'' joint ventures, privately owned 
enterprises or 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 29571-29576 
(June 5, 1995). We have no new information in this proceeding which 
would cause us to reconsider this determination with regard to the six 
respondents (i.e., Jilin, Longjing, Jiuyang, Xianghe, Yantai and 
Yenhere) mentioned above. See Comment 3 in the ``Interested Party 
Comments'' section of this notice for further discussion.

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 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 respondent asserted the following: (1) it establishes its own 
export prices; (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.
    In this proceeding, the Department selected two of the seven 
respondents for verification, namely Chen Fu and Longjing. The 
Department did not select the other five respondents (i.e., Jilin, 
Jiuyang, Xianghe, Yantai, and Yenhere) for verification in accordance 
with section 351.307(a) of the Department's regulations. One of the 
respondents selected for verification, Chen Fu, declined verification. 
Therefore, the Department considers Chen Fu's separate rate claim and 
response to be unverified (see discussion below).
    For Longjing, the Department found no evidence at verification of 
government involvement in Longjing's business operations. See Comment 3 
in the ``Interested Party Comments'' section of this notice for further 
discussion. Specifically, Department officials examined sales documents 
that showed that Longjing negotiated its contracts and set its own 
sales prices with its customers. In addition, the Department reviewed 
sales payments, bank statements and accounting documentation that 
demonstrated that Longjing received payment from its U.S. customers via 
bank wire transfer, which was deposited into its own bank account 
without government intervention. Finally, the Department examined 
internal company memoranda, such as appointment notices and election 
results, which demonstrated that Longjing selected its own management. 
See Department verification report on Longjing at page six, and exhibit 
one of the August 10, 1999, supplemental response. This information, 
taken in its entirety, supports a finding that there is a de facto 
absence of governmental control of Longjing's export functions.
    With regard to Jilin, Jiuyang, Xianghe, Yantai and Yenhere, the 
Department

[[Page 61584]]

elected not to verify these companies' responses. Based on 
documentation contained in each company's response, the Department also 
finds that each of these five respondents (1) negotiated its contracts 
and set its own sales prices with its customers; (2) received payment 
from its U.S. customers via bank wire transfer, which was deposited 
into its own bank account without government intervention; (3) retained 
its profits and, where applicable, arranged its own financing; and (4) 
selected its own management. Consequently, we have determined that 
Longjing, Jilin, Jiuyang, Xianghe, Yantai and Yenhere have each met the 
criteria for the application of separate rates either through 
documentation submitted on the record subject to verification or 
through actual verification. See Notice of Final Determination at Less 
Than Fair Value: Persulfates from the People's Republic of China, 62 FR 
27222 (May 19, 1997).
    Hebei, Qingdao and Shanxi, three of the 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. In addition, the new 
shipper respondent, Chen Fu, did not allow the Department to conduct 
verification of its questionnaire response which contained information 
claiming a de jure and de facto absence of government control with 
respect to its export functions. Therefore, we have determined that 
these four companies are not entitled to separate rates in this review 
and will be considered to be part of the non-responding PRC NME entity. 
See Comment 1 in the ``Interested Party Comments'' section of this 
notice for further discussion.

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 
provides that the Department may make an adverse inference in 
determining 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.
    For the reasons stated above, Chen Fu, Hebei, Qingdao and Shanxi 
failed to demonstrate that they are entitled to separate rates and 
therefore are presumed to be part of the PRC NME entity. Furthermore, 
because the PRC NME entity did not provide a questionnaire response, it 
failed to cooperate to the best of its ability. See Preliminary Results 
at 64 FR 24324. When the Department must base the entire dumping margin 
for a respondent in an administrative review on the facts available 
because that respondent has failed to cooperate to the best of its 
ability, section 776(b) of the Act also authorizes the Department to 
make an adverse inference in selecting from the facts available, and 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 Chen Fu, Hebei, Qingdao and Shanxi and any 
other producers/exporters which have not qualified for a separate rate 
in this or a prior review) will be subject to a PRC-wide rate of 43.32 
percent, which is based on the highest corroborated 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) 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'') (H. Doc. 316, 103d Cong., 2nd Sess., at 
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 Brake Rotors at 62 FR 9160, 9162, and 
Comment 1 in the ``Interested Party Comments'' section of this notice 
for further discussion. Thus, because we reviewed the petitioner's 
assumptions and the calculations from which the petition rates were 
derived, and made appropriate corrections, we determined in the LTFV 
investigation that the petition rates, as corrected, had probative 
value. We have no new information that would warrant reconsideration of 
that decision.

Comparisons

    To determine whether sales of the subject merchandise by each 
cooperative respondent to the United States were made at less than 
normal value (``NV''), we compared the export price (``EP'') to the NV, 
as described in the ``Export Price'' and ``Normal Value'' sections of 
this notice, below.

Export Price

    We calculated EP in accordance with section 772(a) of the Act, 
because the subject merchandise was sold directly by the PRC exporter 
to unaffiliated parties in the United States prior to importation into 
the United States and constructed export price methodology was not 
warranted based on the facts of record. We calculated EP based on the 
same methodology used in the preliminary results.

Normal Value

A. Non-Market Economy Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as an 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 and Indonesia are countries comparable to the PRC in terms of 
overall economic development (see Memorandum from Office of Policy to 
Louis Apple, dated June 23, 1998). In addition, based on publicly 
available information placed on the record, we 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 factor values from India, we used 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

[[Page 61585]]

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 values 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 
Memorandum from the Team to the File Regarding Factors Valuation for 
the Final Results, dated November 2, 1999 (``Final Results Valuation 
Memorandum'').
    We calculated surrogate values based on the same methodology used 
in the preliminary results with the following exception--we used the 
verified factors of Longjing, which is both an exporter and producer of 
the subject merchandise (see Comment 2 in the ``Interested Party 
Comments'' section of this notice 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.

Interested Party Comments

    We gave interested parties an opportunity to comment on the 
preliminary results. We received comments only from the petitioner. We 
received rebuttal comments only from Jilin, Longjing, Jiuyang, Xianghe, 
Yantai, and Yenhere.

Comment 1: Rate Assignment for Respondents That Did Not Respond to the 
Department's Questionnaire or Declined Verification

    The petitioner contends that, based on previous Department 
decisions, the Department should assign the highest petition rate 
rather than the PRC country-wide rate to four PRC companies (i.e., Chen 
Fu, Hebei, Qingdao and Shanxi) which either did not respond to the 
Department's questionnaire or declined verification. In support of its 
argument, the petitioner cites to the Final Results of Antidumping Duty 
Administrative Review: Extruded Rubber Thread from Malaysia, 64 FR 
12967 (March 16, 1999); the Final Results of Antidumping Duty 
Administrative Review: Certain Fresh Cut Flowers from Colombia, 61 FR 
42833 (August 19, 1996); the Final Results and Partial Recission of 
Antidumping Duty Administrative Review of Roller Chain, Other Than 
Bicycle Chain from Japan, 63 FR 63671 (November 16, 1998); the Final 
Determination of Sales at Less Than Fair Value: Circular Welded Non-
Alloy Steel Pipe from Romania, 61 FR 24274 (May 14, 1996); and the 
Preliminary Results of Antidumping Duty Administrative Review of 
Dynamic Random Access Memory Semiconductors of One Megabit or Above 
from the Republic of Korea, 64 FR 30841 (June 8, 1999).
    The respondent did not comment on this issue.

DOC Position

    We do not agree with the petitioner. We have determined that Chen 
Fu, Hebei, Qingdao and Shanxi have not fully cooperated with the 
Department in this proceeding either because they refused to submit 
questionnaire responses or because they refused verification. As a 
general practice in NME cases, when a respondent fails to cooperate in 
a proceeding to such an extent that the Department cannot ascertain 
whether it is entitled to a separate rate, we consider such 
uncooperative respondents to be part of the NME entity, and, as such, 
subject to the PRC country-wide rate. As adverse facts available, we 
normally assign as the country-wide rate the highest margin in the 
petition. However, in the LTFV proceeding, we revised the highest rate 
in the petition (64.56 percent) as a result of finding through 
corroboration procedures that the petitioner incorrectly treated 
certain factory overhead items as direct materials. As a result of 
recalculating NV in the petition by treating those items as part of 
factory overhead and reassigning an Indian surrogate value to one 
material for which a value based on a U.S. price was incorrectly 
assigned, we arrived at a revised and corroborated highest petition 
rate for brake rotors of 43.32 percent. See Brake Rotors at 62 FR 9162. 
Therefore, we have used this corroborated rate as adverse facts 
available for all of the companies within the NME entity. The 
administrative cases relied upon by the petitioner have no 
applicability in this case because they involve cases in which the 
Department was able to corroborate the highest rate alleged in the 
petition or assigned as adverse facts available the highest calculated 
rate from the investigation to uncooperative respondents.

Comment 2: Verification of Longjing's Data

    The petitioner argues that, as a result of verification, Longjing's 
response has been substantially revised, and that Longjing submitted 
new information at verification. Specifically, the petitioner claims 
that at verification the Department found errors in almost all of the 
raw material cost allocations, as well as in the labor, energy and 
production figures included in Longjing's response. In addition, the 
petitioner claims that a verification exhibit the Department collected 
to document Longjing's electrical usage contains electrical usage 
figures on an electricity vendor invoice which are inconsistent with 
the meter reading figures contained in Longjing's electrical records. 
The petitioner argues that the Department should not allow Longjing to 
use verification as an opportunity to reconstruct its questionnaire 
response, and that the errors noted in the verification report indicate 
that Longjing did not provide accurate and complete information prior 
to verification. Moreover, the petitioner claims that the number of 
errors noted in the verification report calls into question the 
reliability of information not verified. Therefore, the petitioner 
contends that the use of total facts available is warranted with regard 
to Longjing. In support of its arguments, the petitioner cites to the 
Final Results of Antidumping Duty Administrative Review: Silicon Metal 
from Brazil, 62 FR 1953, 1969 (January 14, 1997) (``Silicon Metal from 
Brazil''), and the Preliminary Results of Antidumping Duty 
Administrative Review: Circular Welded Non-Alloy Steel Pipe and Tube 
from Mexico, 64 FR 34190, 34191 (June 25, 1999) (``Pipe and Tube from 
Mexico'').
    Longjing maintains that the petitioner's claim that it failed 
verification because of the minor changes and clarifications Longjing 
brought to the attention of the Department prior to the start of 
verification has no merit. The respondent adds that the errors in its 
response were minor in nature and did not affect the overall integrity 
of the response, and that the Department was able to verify all of 
Longjing's corrections as accurate and reliable.

DOC Position

    We agree with Longjing. Longjing informed the Department of some 
minor clerical errors they found in preparation for verification at the 
commencement of verification. After thoroughly examining selected data 
reported by Longjing using standard verification techniques, we 
determined that these errors did not

[[Page 61586]]

affect the overall integrity of Longjing's Section D response. The 
errors that the petitioner is alleging warrant resorting to adverse 
facts available involve the misreporting of seven material factors, the 
electricity factor and the labor factors for all control numbers 
included in Longjing's factors of production (``FOP'') listing. We 
verified that all of these errors resulted from Longjing using a 
slightly higher than actual total production amount in its allocation 
methodology. Longjing alerted us to this error at the start of 
verification and we were able to determine the nature and extent of the 
error and confirm that Longjing's corrected information was accurate 
based on its accounting and production records. See verification 
exhibits 0, 4, 5A, 15, 16A through 16C, 18A through 18K, 21, 22, 23, 
and pages 13 through 18 of the September 10, 1999, Longjing 
verification report.
    We note that although the change in the production quantity 
affected the allocation of more than one factor reported in the Section 
D listing, the resulting changes to the factor amounts reported in the 
Section D response (using the revised production quantity in the 
allocation formula) were minor in nature and had absolutely no impact 
on the final analysis. Moreover, the Department was able to verify all 
of the corrected information (see pages and exhibits noted above from 
the Longjing verification report). In addition, we examined and tested 
the accuracy of all of Longjing's reported factors data, and were able 
to determine that the only errors in Longjing's data (with the 
exception of one which was also minor in nature) were those brought to 
the Department's attention prior to the start of verification (see 
pages 4 and 5 of the Longjing verification report).
    With regard to the petitioner's claim that information in one 
particular exhibit does not support Longjing's reported electricity 
factor, we find the petitioner's claim has no merit. First, the sales 
invoice that the petitioner claims was the only one provided by 
Longjing is one of several examined by the Department and/or available 
for examination by the Department. The Department only requested a copy 
of one invoice in this instance because Longjing was able to tie its 
worksheets showing total electricity usage for each month of the POR 
back to its source documentation (invoices and payment receipts) and 
internal records. Second, the petitioner is factually incorrect in 
claiming that the total kilowatt usage on the August 1997 invoice from 
the electricity vendor to Longjing contained in the exhibit does not 
reconcile to the sum of two kilowatt usage figures noted for the 
corresponding month on Longjing's internal energy record (see pages 1 
and 6 of verification exhibit 23). As noted on the verification exhibit 
and in the verification report, Longjing apportioned part of its total 
factory electricity usage in each month to administrative (i.e., non-
production) operations as reflected in its internal energy records and 
accounting records (see page17 and verification exhibits 18I and 23 of 
the Longjing verification report).
    Hence, for the foregoing reasons, we find the application of facts 
available is unwarranted in this case and have used the corrected 
factors data noted in the verification report for Longjing in the final 
results. Unlike Pipe and Tube from Mexico, we do not find that the data 
errors of Longjing were so pervasive as to prevent the Department from 
relying on Longjing's response for the final results. See Pipe and Tube 
from Mexico at 64 FR 34191. Moreover, unlike Silicon Metal from Brazil, 
we find that Longjing fully substantiated all portions of its response. 
See Silicon Metal from Brazil at 62 FR 1955.

Comment 3: Request for Ministry Verifications

    The petitioner argues that the Department should have conducted 
verification at the Ministry of Foreign Trade and Economic Cooperation 
(``MOFTEC'') and the Ministry of Machinery Industry (``MMI'') in this 
proceeding in an effort to clarify questions it characterized as left 
unanswered during the LTFV investigation. For example, the petitioner 
claims that all respondents in this case failed to disclose to the 
Department that they had dealings with MOFTEC based on information 
obtained by the Department from MMI during the LTFV investigation. 
Moreover, the petitioner claims that MOFTEC failed to inform the 
Department that it had dealings with trading companies during the LTFV 
proceeding. In addition, the petitioner argues that, in the LTFV 
proceeding, MMI withheld information from the Department regarding its 
meetings with manufacturers, the macro-guidance it provided to 10 
industrial areas, and the field research it conducts to determine how 
government policies affect these industries. The petitioner argues that 
the Department should have conducted verifications of MMI and MOFTEC to 
further examine the relationships these ministries have with trading 
companies and manufacturers. However, since the Department did not 
conduct verification at these two PRC ministries, the petitioner 
alleges that the Department has not established the extent to which 
MOFTEC deals with trading companies and the extent to which MMI deals 
with manufacturers.
    In addition, the petitioner argues that the burden of proving de 
facto absence of government control has not been met by the respondents 
in this review because the petitioner claims they willfully withheld 
information relevant for determining whether they are entitled to 
separate rates. Based on this presumption, the petitioner contends that 
the respondents did not cooperate to the best of their ability, and 
that the Department should therefore apply adverse facts available by 
denying each respondent a separate rate. In support of its argument, 
the petitioner cites to the Preliminary Results of Antidumping Duty 
Administrative Review of Heavy Forged Hand Tools, Finished or 
Unfinished, With or Without Handles, from the People's Republic of 
China, 64 FR 5770, 5771 (February 5, 1999).
    The respondents maintain that the Department should not impute any 
alleged lack of cooperation by MMI and MOFTEC in a prior review or 
investigation to the respondents, who have cooperated fully with the 
Department's requests in this review, and who have independently 
established their entitlement to separate rates in this case. The 
respondents also maintain that the petitioner's insistence that the 
Department conduct a verification of MMI and MOFTEC is illustrative of 
petitioner's misunderstanding of the Department's NME practice with 
regard to separate rates analysis.

DOC Position

    We agree with the respondents. There is nothing on the record of 
this proceeding that suggests that a Department visit to MMI or MOFTEC 
was warranted. In the LTFV investigation, the petitioner provided us 
with documentary evidence in support of its claim that two respondents 
were still controlled by the PRC government. Thus, in the LTFV 
investigation, documentation submitted by the petitioner justified the 
Department's visit to MMI in order to examine in greater depth the 
relationship between MMI and two respondents in the LTFV proceeding. 
Neither of the two respondents involved in that case is a named 
respondent in this review. Furthermore, in this administrative review, 
we have no evidence of a similar relationship between any of the six 
cooperating respondents and MMI or MOFTEC. Therefore, we determined 
that there was no basis for conducting verification at either MMI or 
MOFTEC,

[[Page 61587]]

and no basis for inferring any lack of cooperation with respect to MMI, 
MOFTEC or the cooperating respondents. The Court of International Trade 
has already rejected a similar claim with respect to the LTFV 
investigation. See Coalition for the Preservation of American Brake 
Drum and Rotor Aftermarket Manufacturers v. United States, 44 F. 
Supp.2d 229, 242-246 (CIT 1999).
    As in a prior segment of this proceeding (i.e., the first new 
shipper review), the petitioner has sought to draw overly broad 
conclusions from a verification conducted during the LTFV 
investigation. The petitioner incorrectly claims that the same 
situation exists in this case with regard to two respondents in the 
LTFV proceeding, and has sought to apply those erroneous conclusions to 
the respondents in this review by placing on the record of this review 
the Department's verification report from the investigation. We find 
that the information in that report has no bearing on our findings in 
this segment of the proceeding. As mentioned above, our inquiries at 
the MMI during the investigation were limited to matters associated 
with two PRC companies which are not part of this review. In contrast, 
in this review, there is substantial evidence on the record which 
indicates that none of the six cooperative respondents is subject to 
government control. Because there is no evidence on this record to the 
contrary, we find that the petitioner's claim that the six respondents 
have withheld information on the separate rates issue to be without 
merit. Based on the information obtained in conducting numerous NME 
investigations, the Department considers MOFTEC's role vis-a-vis the 
trading companies to be compatible with the existence of separate rates 
for such companies (i.e., MOFTEC providing information on production 
and sales of the subject merchandise exported to the United States from 
the trading companies). We do not consider this relationship to 
constitute government control. See, e.g., Notice of Preliminary 
Determinations of Sales at Less Than Fair Value and Postponement of 
Final Determinations: Brake Drums and Brake Rotors from the People's 
Republic of China, 61 FR 53190, 53192 (October 10, 1996).
    As for MMI's dealings with manufacturers, we know that MMI meets 
with certain manufacturers in the automotive industry but we have no 
evidence that any of the brake rotor manufacturers in this proceeding 
have been a part of those meetings. Even if PRC manufacturers of the 
subject merchandise have attended meetings with MMI, however, we find 
that this is irrelevant because such a practice per se would not 
constitute government control. The U.S. government also holds regular 
meetings with companies in various industry sectors to facilitate 
communication with regard to issues affecting these industries. 
Furthermore, manufacturers are not entitled to a separate rate or do 
not have to meet the separate rates criteria, unless they are also 
exporters of the subject merchandise. Since we have no evidence that 
any respondents (i.e., exporters) in this proceeding are also 
manufacturers of the subject merchandise who have met with MMI, the 
fact that MMI has a practice of meeting with companies in the 
automotive and other sectors does not require a finding that the 
respondents in this proceeding do not qualify for a separate rate.

Comment 4: The Department's Discretion in Conducting Verifications

    The petitioner argues that the Department should have conducted 
verification of the exporter/producer combinations excluded from the 
antidumping duty order and Longjing at each company's facilities, 
rather than at a hotel in Beijing. In addition, although the Department 
stated that due to security reasons it intended to conduct verification 
of each company's records at a hotel in Beijing rather than at the 
company's facility, the petitioner claims that there is no evidence on 
the record supporting the Department's decision and that the 
Department's action is contrary to its own practice. Moreover, the 
petitioner contends that, because the Department conducted abbreviated 
and off-site verifications, the completeness and accuracy of the 
verification results are in question.
    First, the petitioner contends that the Department should either 
redo all of the verifications or resort to facts available for all 
respondents. The petitioner alleges that the value of verifications 
performed at a hotel is limited, because Department officials cannot 
actually verify the place where production or sale of the subject 
merchandise occurs or perform surprise inspections or document traces. 
In addition, the petitioner alleges that by verifying at the hotel, the 
Department was (1) unable to determine if the merchandise was 
transshipped from another manufacturer; (2) unable to check energy 
consumption meters; (3) and unable to check production operations. 
Moreover, the petitioner alleges that the respondents falsified their 
records because they had prior notice through the verification outlines 
of everything the Department intended to examine at verification and 
because the Department did not conduct verification at the companies' 
facilities. The petitioner cites to the Department's Antidumping Manual 
in support of its argument.
    Second, the petitioner contends that another reason why the 
Department should either redo the verification or resort to facts 
available is that each verification was one to two days in length, 
which the petitioner describes as contrary to established Department 
policy. The petitioner also cites to the Department's Antidumping 
Manual in support of this argument. In addition, the petitioner claims, 
based on a number of court decisions, that the Department abused its 
discretion when it decided to conduct abbreviated verifications at a 
hotel. See Rubberflex Sdn. Bhd. v. United States (``Rubberflex''), 
Slip. Op. 99-68 (CIT July 23, 1999); Rhone Poulenc, Inc. v. United 
States (``Rhone Poulenc''), 899 F.2d 1185, 1191 (Fed. Cir. 1990); 
Usinor Sacilor v. United States (``Usinor Sacilor''), 872 F. Supp. 1000 
(CIT 1994); and Sugiyama Chain Co., Ltd. v. United States 
(``Sugiyama''), 852 F. Supp. 1103 (CIT 1994).
    Finally, the petitioner contends that the Department should redo 
the verifications or resort to facts available because the respondents 
and the PRC government impeded these reviews. The petitioner argues 
that this conclusion is supported by the Department's security concerns 
with regard to conducting verification at the companies' facilities.
    The respondents maintain that the Department properly exercised its 
discretion in conducting verification, and that the petitioner has 
failed to demonstrate any factual support for its allegations that (1) 
``off-site'' and shortened verifications should be considered failed 
verifications; (2) such verifications cannot properly ensure the 
integrity of the responses; and (3) the Department should base 
respondents' margins on adverse facts available because any security 
concerns should be attributed to efforts by the PRC government and the 
respondents to impede these reviews.

DOC Position

    We disagree with the petitioner. Although it is the Department's 
preference to conduct on-site verifications, it is not a requirement. 
More importantly, when there are security considerations to take into 
account at the on-site verification location, the Department has the 
discretion to elect to verify at off-site locations. See Torrington v. 
United States, 68 F.3d 1347, 1350 (Fe. Circ.

[[Page 61588]]

1995) (upholding the Department's decision to cancel verification 
entirely in light of security concerns). In this case, the Department 
successfully examined the records of the companies it selected at the 
off-site location.
    In this proceeding, the Department had major concerns about the 
security situation in the PRC as a result of the May 1999 NATO bombing 
incident in Belgrade, Yugoslavia. The Department had planned on-site 
verifications for most of the companies it intended to examine in the 
PRC (with the exception of one company located in Xinjiang province) in 
early June 1999. Even though the U.S. State Department country advisory 
notice indicated no security concerns in early June 1999, our embassy 
in Beijing advised us to postpone our travel to the PRC until further 
notice. In light of the postponement in travel and uncertainty 
expressed by our embassy in the PRC, we delayed the verifications of 
the companies we selected until August 1999. The petitioner's comments 
submitted in early August 1999 immediately after the Department issued 
its verification outlines in this proceeding objected to the Department 
conducting off-site verifications in Beijing and questioned the 
Department's assessment of the security situation in the PRC. In an 
August 4, 1999, memorandum to the file, a Department official explained 
to the petitioner's counsel that the verification site and number of 
companies to be verified in this case was non-negotiable due to 
security/logistical considerations and the Department's resource 
constraints. The Department reiterated this explanation in an August 
20, 1999, memorandum to the file. In past cases, the Department has 
resorted to off-site verifications when it wished to conduct 
verification but had security concerns. See, e.g., Notice of Final 
Determination of Sales At Less Than Fair Value: Certain Preserved 
Mushrooms from Indonesia, 63 FR 72268 (December 31, 1998).
    Regarding the Department's assessment of the security situation in 
the PRC, even though the U.S. State Department country advisory notice 
did not refer to security concerns associated with travel in the PRC 
from early July through early August 1999, our embassy in Beijing 
advised us to conduct our verifications, if possible, within the 
confines of major cities in the PRC because of the continued 
uncertainty with respect to security. Therefore, the Department 
requested that all companies located outside of Beijing that it 
intended to verify bring all of their accounting records and support 
documentation to an off-site location in Beijing. The companies which 
the Department selected for verification were the four excluded 
exporter/producer combinations mentioned below, the new shipper (i.e., 
Chen Fu), and Longjing. The Department informed these companies that 
they would be held to the same level of accountability to which they 
normally are held during on-site verifications. Even though the 
verifications (except for one at CAIEC's headquarters in Beijing) were 
conducted at an off-site location, the Department was able to determine 
for each producer/exporter combination that no merchandise was 
transhipped from another manufacturer by thoroughly examining 
accounting records, and reconciling the production records of the 
manufacturer to the sales records of the exporter included in each 
producer/exporter combination. (See verification reports and exhibits 
for CAIEC, Laizhou CAPCO, Laizhou Luyuan, Shenyang Honbase, and 
Xinjiang for further discussion.) The Department also examined data 
from U.S. Customs obtained prior to the preliminary results. These data 
corroborate our verification findings. In contrast, the Department has 
no evidence that any exporter in the excluded exporter/producer 
combinations has shipped merchandise to the United States during the 
POR from a producer not included in those combinations.
    Petitioner's insistence that it was critical for the Department to 
conduct on-site verifications in order to examine the number of people 
at the factory, check meters to measure energy consumption figures, 
tour the production facilities or inspect the factory inventories for 
evidence of merchandise being transshipped from another manufacturer is 
without merit. First, it is not a requirement that the Department 
verify through physical inspection or verify all information reported 
by a respondent, especially if the information can be linked to 
accounting, production or sales records, backed up by support 
documentation. The only factory for which such a physical count of 
employees or meter reading checks might have had any possible relevance 
was Longjing. For all of the excluded exporter/producer combinations, 
the Department's emphasis was not on labor or electricity usage at the 
factories but on whether all of the brake rotor sales made by the 
exporter in the exporter/producer combinations were (based on sales, 
inventory and production records) manufactured by the producer with 
which it was linked in the exporter/producer combination. As for the 
verification of Longjing, even without a physical inspection, the 
Department was able to ascertain, to its satisfaction, through 
examination of salary, labor attendance, and energy records, payment 
documentation and production records, the number of employees and the 
amount of energy consumption at the factory. Therefore, it was not 
necessary to conduct a physical count of the employees at the factory 
or examine the electricity meter. In fact, such tests would have only 
provided data on the factory's current levels of employment and 
electricity usage, and not the levels associated with the POR, which 
ended at least one year and a half before the verifications. Therefore, 
any conclusions drawn from information gathered at the factory with 
respect to labor or energy factors would have been of minimal use in 
this proceeding.
    Second, the Department did not find it imperative in this 
proceeding to tour the production facilities or inspect the factory 
inventories in order to ascertain whether the exporter/producer 
combinations or Longjing were transshipping merchandise produced by 
manufacturers undisclosed to the Department. First of all, a tour of 
the production facility or physical inspection of inventory in the 
factory warehouses would have only provided information on: (1) What 
materials the factory currently uses to produce its merchandise; (2) 
the types of products the factory currently produces; and (3) the 
products the factory currently keeps in inventory rather than what the 
factory used or produced during the POR, a year and a half earlier. 
Therefore, any conclusions drawn from information gathered at the 
factory with respect to a plant tour or inspection of its production 
facilities and inventory warehouse would not have been directly 
relevant to the data the Department was verifying. For the same reason, 
the petitioner's unsupported allegation that the factories and/or 
trading companies we selected for verification had merchandise in their 
warehouses which was produced by manufacturers undisclosed to the 
Department is also of little value. Furthermore, the Department was 
able to resolve through a vigorous examination of each of the selected 
company's accounting, production and sales records and supporting 
documentation, the issue of whether any of the excluded exporters was 
transshipping merchandise not actually produced by the factory 
associated with its exclusion from the antidumping duty order.
    In addition, the Department's examination and testing of the 
records

[[Page 61589]]

and statements of each company was not constrained by where the 
verification took place or the number of days during which the 
Department examined each company's records. As indicated above, the 
Department sought to verify only one issue (i.e., the source of 
exported merchandise) with respect to all verified companies other than 
Longjing (i.e., the exporters excluded from the order). Thus, it is not 
unusual that these verifications could be completed quickly. As the 
verification reports illustrate, the Department thoroughly examined the 
topics included in each company's verification outline and thoroughly 
tested the sales and production information noted in each company's 
accounting records in support of its statements or in support of data 
contained in its response. The number of days the Department spent 
examining each company's accounting records and covering the topics 
noted in the verification outlines did not hinder the Department from 
conducting comprehensive examinations of each company's data. For 
example, whenever the Department requested a document which a 
particular company did not have at the verification site, in every 
case, the company was able to supply the requested documentation by 
transmitting the requested documentation via facsimile from the 
company's facilities to the off-site verification location.
    Furthermore, the judicial cases the petitioner relies upon as the 
basis for its claim that the Department's decision to conduct an 
abbreviated, off-site verification is an abuse of discretion are 
inapposite. Rhone Poulenc simply stands for the broad premise that the 
Department strives to determine margins as accurately as possible. This 
case does not specify that verifications must be conducted either on-
site or for any particular number of days. See Rhone Poulenc, 889 F. 2d 
at 1191. Usinor Sacilor and Sugiyama likewise do not involve any issues 
related to abbreviated or off-site verifications. Rubberflex criticized 
the Department for not allowing the respondent sufficient time to 
prepare for verification, not the length or location of the 
verification. See Rubberflex, Slip Op. 99-68 at 21. Furthermore, the 
opinion in Rubberflex also acknowledges the Department's broad 
discretion with respect to the conduct of verification. Thus, 
Rubberflex cites to a different judicial precedent which addresses the 
specific question of the Department's discretion as to the length of 
verification. Id., at 16, citing Persico Pizzamiglio, S.A. v. United 
States, 18 CIT 299, 307 (1994)(rejecting respondent's claim that the 
Department devoted insufficient time to verification, on the grounds 
that ``there is no statutory mandate as to how long the process of 
verification must last,'' such that the Department is accorded 
discretion to make such determinations considering the time and 
resource constraints that the agency faces). As noted above, the Court 
of Appeals has held that the Department has extremely broad discretion 
in setting-up verification. See Torrington v. U.S., 68 F.3d at 1350.

Final Results of the Review

    We determine that the following margins exist for the six 
respondents, which fully cooperated in this review, and the PRC entity, 
for the period October 10, 1996, through March 31, 1998:

------------------------------------------------------------------------
                Manufacturer/producer/exporter                   Margin
------------------------------------------------------------------------
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
------------------------------------------------------------------------
Note: (A) Exports by the following exporter/producer combinations
  continue to be excluded from the antidumping duty order: (1) CAIEC or
  Laizhou CAPCO/Laizhou CAPCO; (2) Shenyang or Laizhou Luyuan/Shenyang
  or Laizhou Luyuan; (3) Xinjiang/Zibo.
(B) The separate rates established for the following companies in the
  investigation or in an earlier review remain in effect either because
  of non-shipment during this POR or because no review was requested for
  this POR: (1) Southwest; and (2) Xinchangyuan.
(C) All exporters other than the six cooperative respondents or those
  named above in (A) or (B) are subject to the PRC-wide rate.

Assessment Rates

    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
will issue appraisement instructions directly to the Customs Service. 
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 from the six PRC exporters that 
cooperated in this review for which the importer-specific assessment 
rate is zero or de minimis (i.e., less than 0.50 percent). Pursuant to 
19 CFR 351.212(b)(1), we have calculated importer-specific ad valorem 
duty assessment rates based on the ratio of the total amount of the 
dumping margins calculated for the examined sales (i.e., sales made 
during the POR by the above-referenced six PRC exporters who cooperated 
in this review) to the total entered value of those same sales. In 
order to estimate the entered value, we have subtracted international 
movement expenses from the gross sales value. The resulting ad valorem 
rates will be assessed uniformly on all entries made by the importers 
during the POR.
    For entries from the NME entity companies, the Customs Service 
shall assess ad valorem duties at the PRC-wide rate. For entries made 
by PRC companies for which the Department has rescinded the 
administrative review (i.e., Southwest and Xinchangyuan), the Customs 
Service shall assess ad valorem duties at the rates applicable at the 
time of entry.

Cash Deposit Requirements

    The following deposit rates shall be required for merchandise 
subject to the order 7 entered, or withdrawn from warehouse, 
for consumption on or after the publication date of these final results 
of administrative review, as provided by section 751(a)(1) of the Act: 
(1) The cash deposit rate for each company that fully cooperated in 
this review will be the rate established in the final results; (2) for 
imports of brake rotors from the PRC made by the exporter/producer 
combinations listed in this notice, entries of these exporters may be 
liquidated without regard to antidumping duties, except that, if the 
exporter listed in the exporter/producer combination sells subject 
merchandise which is not manufactured by the producer in that same 
exporter/producer combination, then those entries will be subject to 
the ``PRC-wide'' rate; (3) the cash deposit rate for PRC exporters 
which received a separate rate in the LTFV investigation but who did 
not export subject merchandise during the POR or for which there was no 
request for administrative review (e.g., Southwest and Xinchangyuan) 
will continue to be the rate assigned in that investigation; (4) the 
cash deposit rate for the PRC NME entity (i.e., all other PRC exporters 
subject to the order, including Chen Fu, Hebei, Qingdao and Shanxi) 
will be 43.32 percent; and (5) 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 deposit 
requirements shall remain in

[[Page 61590]]

effect until publication of the final results of the next 
administrative review.
---------------------------------------------------------------------------

    \7\ Merchandise excluded from the order includes merchandise 
produced and exported by the above-referenced exporter-producer 
combinations. Such merchandise should not be suspended.
---------------------------------------------------------------------------

Notification to Importers

    This notice serves as the final 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.
    This notice also serves as a reminder to parties subject to 
administrative protective order (``APO'') of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d). Timely written notification or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and terms of the APO is a sanctionable 
violation.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777i(1) of the Act and 19 CFR 351.213.

    Dated: November 2, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-29206 Filed 11-10-99; 8:45 am]
BILLING CODE 3510-DS-P