[Federal Register Volume 64, Number 249 (Wednesday, December 29, 1999)]
[Notices]
[Pages 73007-73013]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33665]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-846]


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

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

SUMMARY: On May 28, 1999, the Department of Commerce published notices 
of initiation of the third new shipper review and second administrative 
review of the antidumping duty order on brake rotors from the People's 
Republic of China. The reviews cover nine exporters of the subject 
merchandise to the United States. The period of review is April 1, 
1998, through March 31, 1999. The Department of Commerce is also 
rescinding the administrative review with respect to three exporters of 
the subject merchandise which withdrew their requests for review in a 
timely manner and for which no other interested party requested a 
review. Interested parties are invited to comment on these preliminary 
results.

EFFECTIVE DATE: December 29, 1999.

FOR FURTHER INFORMATION CONTACT: Brian Smith or Terre Keaton, Import 
Administration, Internation 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 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 of Commerce's 
(``the Department's'') regulations are to 19 CFR Part 351 (1998).

SUPPLEMENTARY INFORMATION: For the nine respondents that submitted full 
responses to the antidumping questionnaire and have preliminarily been 
found to be entitled to a separate rate, we have preliminarily 
determined that U.S. sales have not been made below normal value 
(``NV''). If these preliminary results are adopted in our

[[Page 73008]]

final results of these reviews, we will instruct the Customs Service to 
assess no antidumping duties on entries from the nine exporters from 
the People's Republic of China (``PRC'') that cooperated in these 
reviews (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).

Background

    On April 30, 1999, the following eleven exporters requested an 
administrative review pursuant to section 751(a)(1) of the Act and 19 
CFR 351.213(b): (1) Jilin Provincial Machinery & Equipment Import & 
Export Corporation (``Jilin''); (2) Laizhou Auto Brake Equipments 
Factory (``LABEF''); (3) Longjing Walking Tractor Works Foreign Trade 
Import & Export Corporation (``Longjing''); (4) Longkou Haimeng 
Machinery Co. (``Haimeng''); (5) Quingdao (Gren) Co. (``GREN''); (6) 
Yantai Chen Fu Machinery Co., Ltd. (``Chen Fu''); (7) Yantai Import & 
Export Corporation (``Yantai''); (8) Yantai Winhere Auto-Part 
Manufacturing Co. (``Winhere''); (9) Yenhere Corporation (``Yenhere''); 
(10) Zibo Botai Machinery Manufacturing Co. (``Zibo''); and (11) Zibo 
Luzhou Automobile Parts Co. (``ZLAP'').
    On April 30, 1999, the Department received a timely request from 
Laizhou Hongda Auto Replacement Parts Co., Ltd. (``Laizhou Hongda''), 
Auto Replacement Parts Co., Ltd. (``Laizhou Hongda''), in accordance 
with section 751(a)(2)(B) of the Act and 19 CFR 351.214(c), for a new 
shipper review of this antidumping duty order.
    In its April 30, 1999, request for review, Laizhou Hongda certified 
that it did not export the subject merchandise to the United States 
during the period covered by the original less-than-fair-value 
(``LTFV'') investigation, and that it is not affiliated with any 
company which exported subject merchandise to the United States during 
the period of investigation. Laizhou Hongda also certified that its 
export activities are not controlled by the central government of the 
PRC. Pursuant to 19 CFR 351.214(b)(2)(iv), Laizhou Hongda 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. Laizhou Hongda also agreed to waive the time limits 
applicable to the new shipper review and to permit the Department to 
conduct the new shipper review concurrently with the administrative 
review.
    On May 20, 1998, the Department initiated an administrative review 
covering the eleven PRC exporters mentioned above (see Initiation of 
Antidumping and Countervailing Duty Administrative Review and Request 
for Revocation in Part (64 FR 28973, May, 1999)). In accordance with 
section 751(a)(2)(B) of the Act and 19 CFR 351.214(d), we initiated a 
new shipper review covering Laizhou Hongda. See Brake Rotors from the 
People's Republic of China: Initiation of New Shipper Antidumping Duty 
Review, 64 FR 28982 (May 28, 1999).
    On June 8, 1999, we issued a questionnaire to each PRC company 
which requested a new shipper or administrative review.
    On July 1, 1999, the Department provided the parties an opportunity 
to submit publicly available information (``PAI''), through August 16, 
1999, for consideration in these preliminary results. On July 13, 1999, 
GREN and Jilin requested an extension of time to file their responses 
to the antidumping duty questionnaire. On July 14, 1999, the Department 
granted the extension request made by GREN and Jilin. On July 15, 1999, 
Chen Fu, Longjing and ZLAP withdrew their requests for review in 
accordance with 19 CFR 351.213(d). On July 15, and 22, 1999, the 
remaining nine PRC companies \1\ submitted their questionnaire 
responses. On July 26, 1999, the petitioner \2\ submitted comments on 
the questionnaire responses.
---------------------------------------------------------------------------

    \1\ These nine PRC exporters are (1) Jilin; (2) LABEF; (3) 
Laizhou Hongda; (4) Haimeng; (5) GREN; (6) Yantai; (7) Winhere; (8) 
Yenhere; and (9) Zibo.
    \2\ The petitioner is the Coalition for the Preservation of 
American Brake Drum and Rotor Aftermarket Manufacturers.
---------------------------------------------------------------------------

    On August 11, 1999, the respondents requested an extension of time 
until August 31, 1999, to submit PAI in this proceeding. On August 12, 
1999, the Department extended the time for both the respondents and the 
petitioner to submit PAI to August 31, 1999. On August 13, 1999, the 
petitioner objected to the extension arguing that the Department was 
denying the petitioner due process. On August 26, 1999, the Department 
responded to petitioner's concerns (see Memorandum to the File, dated 
August 24, 1999).
    On August 31, 1999, the respondents submitted PAI for use in 
valuing the factors of production. The petitioner elected not to submit 
PAI. Instead, the practitioner requested: (1) that the Department 
conduct verification of all companies which submitted antidumping 
questionnaire responses in this proceeding; (2) that the Department 
conduct a verification at the Ministry of Foreign Trade and Economic 
Cooperation (``MOFTEC'') and Ministry of Machinery Industry (``MMI''); 
and (3) that the Department include in this proceeding the Department's 
MMI verification report, and accompanying verification exhibits, from 
the LTFV investigation.
    On September 7, 1999, the petitioner submitted rebuttal comments on 
PAI. On September 10, 1999, the Department notified the petitioner by 
letter that the Department had rejected the petitioner's August 31, 
1999, request to include in the record of this proceeding the MMI 
verification report or exhibits obtained in the LTFV proceeding because 
the information in question was not relevant to the separate rates 
issue of whether government control existed with respect to the export 
activities of the respondent companies involved in this proceeding. The 
Department issued supplemental questionnaires to the respondents during 
September 18-27, 1999. In October, November, and December 1999, the 
Department received supplemental questionnaire responses from the 
respondents.

Scope of Review

    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 
these reviews 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

[[Page 73009]]

plate, but otherwise meet the above criteria. Excluded from the scope 
of the reviews 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, 
the written description of the scope of these reviews is dispositive.

Period of Reviews

    The period of review (``POR'') covers the period April 1, 1998, 
through March 31, 1999.

Rescission

    The Department's regulations at 19 CFR 351.213(d)(1) provide that 
the Department may rescind an administrative review if a party that 
requested a review withdraws the request within 90 days of the date of 
publication of the notice of initiation of the requested review. Chen 
Fu, Longjing, and ZLAP withdrew their request for an administrative 
review on July 15, 1999, which is within the 90-day deadline.
    The Department has determined to grant the request to rescind this 
administrative review with respect to Chen Fu, Longjing, and ZLAP, 
because these companies withdrew their requests for review in a timely 
manner and because no other interested party requested a review of 
these companies. Accordingly, for POR entries made by these PRC 
companies, the Department will instruct the Customs Service to assess 
ad valorem duties at the rates applicable at the time of entry.

Separate Rates

    In proceedings involving non-market economy (``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 nine 
respondents that submitted questionnaire responses, one of the PRC 
companies, Winhere, is wholly owned by private individuals. Three 
respondents (i.e., Haimeng, Laizhou Hongda and Zibo) are joint ventures 
between PRC and foreign companies. Another respondent, Yenhere, is a 
limited liability corporation in the PRC. The four other respondents 
are either wholly owned by ``all the people'' (i.e., Jilin and Yantai) 
or collectively owned (i.e., GREN and LABEF). Thus, for all nine 
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 this 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 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 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 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 nine 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 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 the disposition of profits or 
financing of losses (see Silicon Carbide and Furfuryl Alcohol).
    Each of the nine respondents 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. 
This information supports a preliminary finding that there is de facto 
absence of governmental control of the export functions of the 
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

[[Page 73010]]

of the respondents has met the criteria for the application of separate 
rates.

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 
export price (``EP'') to the 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. Haimeng, Jilin, LABEF, Winhere, Yenhere and Zibo

    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 a NME currency, we based those charges 
on surrogate rates from India (see ``Surrogate Country'' section 
below). To value foreign inland trucking charges, we used the average 
inflation-adjusted 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., Notice of Final Determinations of Sales at Less Than Fair 
Value: Brake Drums and Brake Rotors from the People's Republic of 
China, 62 FR 9160, 9163 (February 28, 1997)). 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: 
Rescission of Second New Shipper Review and Final Results and Partial 
Rescission of First Antidumping Duty Administrative Review, 64 FR 
61581, 61584 (November 12, 1999) (Brake Rotors First Administrative 
Review)).

2. GREN and Yantai

    We calculated EP based on packed, CIF, U.S. or 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, 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 (see Brake Rotors First 
Administrative Review, 64 FR at 61584). For ocean freight, we used a 
1996 price quote (adjusted for inflation) from a U.S. shipping company 
to calculate an average price for shipping. We did so because GREN used 
NME carriers and Yantai paid freight expenses to a U.S. freight 
forwarder which then contracted with NME carriers to ship the subject 
merchandise to the United States.

3. Laizhou Hongda

    We calculated EP based on packed, CIF 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 as reported in the antidumping investigation of sulfur 
dyes, including sulfur vat dyes, from India (see Brake Rotors First 
Administrative Review at 64 FR 61584). To value ocean freight, we used 
Laizhou Hongda's reported expense because Laizhou Hongda used market-
economy freight carriers (see, e.g., Brake Rotors from the People's 
Republic of China: Final Results of Antidumping Duty New Shipper 
Review, 64 FR 9972, 9974 (March 1, 1999).

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 a 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. India and Indonesia 
are among the countries comparable to the PRC in terms of overall 
economic development (see Memorandum from the Office of Policy to Irene 
Darzenta Tzafolias, dated June 24, 1999, which was included in the 
Department's July 1, 1999, letter sent to the interested parties in 
this proceeding for the submission of PAI). In addition, based on PAI 
placed on the record, 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. We used factors reported by 
companies in the PRC that produced brake rotors for export to the 
United States during the POR through reviewed exporters. To calculate 
NV, the reported unit factor quantities were multiplied by publicly 
available Indian or Indonesia values.
    In a September 7, 1999, submission, the petitioner alleged that 
there is widespread tax evasion in India and, therefore, insisted that 
the Department only subtract excise duties, levies and sales taxes from 
Indian domestic material prices used by the Department if the Indian 
brake rotor producers demonstrated that they paid their excise and 
sales taxes related to such materials used in production during the 
POR. In these preliminary results, we have not used Indian domestic 
prices to value the material inputs (see discussion below). Therefore, 
we do not deem it necessary to address the petitioner's allegation at 
this time.
    In addition, the petitioner requested that the Department not 
deduct an amount for duty drawback from the cost of inputs used to 
produce brake rotors which are exported from India, based on 
information submitted by the respondents which indicates that Indian

[[Page 73011]]

brake rotor exporters are entitled to duty drawback if they used 
imported inputs to produce the exported finished good. A ``duty 
drawback'' is, by definition, a remission of an amount paid (or to be 
paid) as an import ``duty'' (i.e., tax). Such a ``drawback'' is often 
conditional upon exporting a certain volume of product using the 
imported inputs. The input prices the Department uses do not include 
Indian taxes because Indian government revenue-collection practices are 
not relevant to the question of what it would cost a PRC producer to 
produce the item in question, if the PRC were a market economy country. 
In this case, the input prices the Department is using based on the PAI 
specified below are already duty free. Therefore, we have not made any 
adjustment to these prices for duty drawback.
    Finally, to calculate surrogate percentages for selling, general 
and administrative (``SG&A'') expenses, factory overhead and profit, 
the petitioner requested that the Department use financial data from a 
group of Indian brake rotor producers, rather than just one Indian 
brake rotor producer, which are more representative of the experience 
of the Indian brake rotor industry as a whole. We agree with the 
petitioner on this point, and have used financial data from five known 
Indian brake rotor producers to calculate these percentages (see 
discussion below).
    The Department's 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.
    To value pig iron, we used average values based on import 
statistics for April 1997-March 1998 from Monthly Statistics of the 
Foreign Trade of India (``Monthly Statistics'') rather than domestic 
price data in India from the April 1996-March 1997 financial report of 
Lamina Foundries (``Lamina'') or from the 1996 financial report of 
Nagpur Alloy Castings Ltd. (``Nagpur''), because the import data was 
more contemporaneous with the POR. For iron scrap, steel scrap, 
ferrosilicon, ferromanganese, lubrication oil and limestone, we used 
April 1997-March 1998 average values from Monthly Statistics.
    Certain types of rotors use steel sheet, lug bolts and ball bearing 
cups. To value steel sheet, we used an April 1997-March 1998 average 
value from Monthly Statistics. Because we could not obtain a product-
specific price from India to value lug bolts (see Bicycles, 61 FR at 
19026 (Comment 17)), we used January-October 1998 product-specific 
import data 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.
    To value coking coal, we used an April 1997-March 1998 import price 
from Monthly Statistics rather than a price applicable during the 
fourth quarter of 1996 from the International Energy Agency's Energy 
Price and Taxes, because the import price was more contemporaneous with 
the POR. To value firewood, we used a 1990 domestic value from the 
USAID publication Marketing Opportunities for Social Forestry in Uttar 
Pradesh, which is the most recent value available for this input. To 
value electricity, we calculated an average 1996 industrial rate based 
on data contained in the financial reports of Lamina, Nagpur, and 
Jayaswals Neco Limited (``Jayaswals''). For a complete analysis of 
surrogate values, see the Preliminary Results Valuation Memorandum from 
the Team to the File, dated December 17, 1999 (``Preliminary Results 
Valuation Memorandum'').
    We valued labor based on a regression-based wage rate, in 
accordance with 19 CFR 351.408(c)(3).
    To value SG&A expenses, factory overhead and profit, we used the 
1998-1999 financial data of Kalyanti Brakes Limited (``Kalyani'') 
combined with the financial data of Indian producers whose data is less 
contemporaneous with the POR (i.e., the 1996-1997 financial data of 
Jayaswals, Krishna Engineering Works (``Krishna''), Nagpur, and Rico 
Auto Industries Limited (``Rico'')). We did so because we determined 
that it is more appropriate in this instance to calculate surrogate 
percentage averages which are representative of the experience of known 
Indian brake rotor producers, rather than to use the financial data of 
a sole Indian brake rotor producer just because that data is more 
contemporaneous with the POR as suggested by the respondents. In prior 
brake rotor administrative reviews, both the petitioner and the 
respondents have consistently submitted for the Department's 
consideration financial statements from multiple Indian producers of 
comparable merchandise which generally have been contemporaneous with 
the POR. Therefore, we had no reason to question the representativeness 
of the data being submitted. However, in this proceeding, the 
respondents submitted the financial statement of only one Indian 
producer of comparable merchandise (i.e., Kalyani). Because the 
Department generally prefers surrogate ratios which are based on the 
financial data of more than a single Indian producer and are more 
representative of the experience of all known Indian brake rotor 
producers, the Department has averaged the most recent financial data 
available for Jayawals, Kalyani, Krishna, Nagpur and Rico to calculate 
the surrogate ratios for factory overhead, SG&A, and profit.
    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 
ratios calculated as a result of reclassifying certain 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 progress. Based on 
PAL, we considered the modeling 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 manufacturing. 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 receipt 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.

[[Page 73012]]

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 input-specific basis.
    To value adhesive tape, corrugated cartons, nails, polyethylene 
material for bags, steel strap and steel strip, we used April 1997-
March 1998 import values from Monthly Statistics. To value pallet wood, 
we selected an April 1995-March 1996 import value from Monthly 
Statistics rather than values obtained after March 1996, because the 
more contemporaneous values appeared aberrational relative to the 
overall value of the subject merchandise (see Preliminary Results 
Valuation Memorandum for further discussion).

Preliminary Results of the Review

    We preliminarily determine that the following margins exist for the 
nine respondents during the period April 1, 1998, through March 31, 
1999:

------------------------------------------------------------------------
   Manufacturer/producer/exporter               Margin percent
------------------------------------------------------------------------
Jilin Provincial Machinery &          0.00
 Equipment Import & Export
 Corporation.
Laizhou Auto Brake Equipments         0.00
 Factory.
Laizhou Hongda Auto Replacement       0.00
 Parts Co., Ltd.
Longkou Haimeng Machinery Co........  0.10 (de minimis)
Qingdao (Gren) Co...................  0.49(de minimis)
Yantai Import & Export Corporation..  0.30(de minimis)
Yantai Winhere Auto-Part              0.00
 Manufacturing Co.
Yenhere Corporation.................  0.00
Zibo Botai Machinery Manufacturing    0.00
 Co.
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 30 days of publication of this notice. Any 
hearing, if requested, will be held on March 31, 2000.
    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 30 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).
    Issues raised in the hearing will be limited to those raised in 
case briefs and rebuttal briefs. Case briefs from interested parties 
may be submitted not later than March 24, 2000. Rebuttal briefs, 
limited to issues raised in the case briefs, will be due on March 29, 
2000. 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.

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 of subject merchandise from those PRC companies for which 
the Department has rescinded the review, the Customs Service shall 
assess ad valorem duties at the rates applicable at the time of entry, 
as stated in the ``Rescission'' section of this notice. For entries 
subject to the PRC-wide rate, the Customs Service shall assess ad 
valorem duties at the rate established in the LTFV investigation. 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 
Laizhou Hongda, 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 19 CFR 351.214(e) 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 a prior 
segment of the proceeding but for whom the Department has rescinded the 
review (i.e., Longjing and ZLAP) will continue to be the rate assigned 
in that segment of the proceeding; (3) the cash deposit rate for the 
PRC NME entity (i.e., all other exporters including Chen Fu) will 
continue to 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.


[[Page 73013]]


    Dated: December 21, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-33665 Filed 12-28-99; 8:45 am]
BILLING CODE 3510-DS-M