[Federal Register Volume 66, Number 137 (Tuesday, July 17, 2001)]
[Notices]
[Pages 37211-37213]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17857]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-846]


Brake Rotors From the People's Republic of China: Final Results 
of Changed-Circumstances Antidumping Duty Administrative Review

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

ACTION: Notice of final results of changed-circumstances antidumping 
duty administrative review.

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SUMMARY: On November 20, 2000, the Department of Commerce published a 
notice of initiation and preliminary results of changed-circumstances 
antidumping duty review of the antidumping duty order on brake rotors 
from the People's Republic of China, in which we preliminarily 
determined that Laizhou Auto Brake Equipment Co., Ltd. is the 
successor-in-interest to Laizhou Auto Brake Equipments Factory for 
purposes of determining antidumping liability. We are now affirming our 
preliminary results.

EFFECTIVE DATE: July 17, 2001.

FOR FURTHER INFORMATION CONTACT: Brian Smith or Terre Keaton, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-1766 or (202) 482-1280, respectively.

SUPPLEMENTARY INFORMATION:

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 (April 2001).

Background

    Since the Department published in the Federal Register on November 
20, 2000, the initiation and preliminary results of this changed-
circumstances review of the antidumping duty order on brake rotors from 
the PRC (65 FR 69732), the following events have occurred.

[[Page 37212]]

    On January 16, 2001, the petitioner \1\ submitted its case brief. 
In its case brief, the petitioner alleged that the information on the 
record was insufficient for purposes of demonstrating that Laizhou Auto 
Brake Equipment Co., Ltd. (``LABEC'') is the successor-in-interest to 
Laizhou Auto Brake Equipments Factory (``LABEF''). In addition, the 
petitioner requested that the Department verify the data contained in 
LABEC's response for purposes of establishing whether LABEC is the 
successor-in-interest to LABEF.
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    \1\ The petitioner is the Coalition for the Preservation of 
American Brake Drum and Rotor Aftermarket Manufacturers.
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    On January 26, 2001, the Department issued a supplemental 
questionnaire to LABEC, which addressed the petitioner's concerns 
raised in its case brief. On February 5, 2001, LABEC requested an 
extension of time until February 16, 2001, to file its response to the 
supplemental questionnaire, which the Department subsequently granted 
on February 7, 2001. On February 16, 2001, LABEC submitted its 
supplemental questionnaire response.
    On January 31, 2001, the Department notified LABEC that it intended 
to conduct a verification of the data it submitted in support of its 
successor-in-interest claim and provided it with a sample verification 
outline for purposes of familiarizing LABEC with the verification 
process.
    On February 23, 2001, the Department provided the complete 
verification outline to LABEC. On March 16, 2001, the Department 
conducted its verification of the information submitted by LABEC in 
accordance with 19 CFR 351.307.
    On April 23, 2001, the Department issued its verification report. 
On June 7, 2001, we provided parties with an opportunity to submit 
comments on our verification findings for consideration in these final 
results. Neither party submitted comments.

Scope of Order

    The products covered by this order 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, 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 rotors which have undergone some drilling and on which the 
surface is not entirely smooth. 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, and Volvo). Brake rotors covered in this 
order 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 order 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 this order is dispositive.

Separate Rates

    Because LABEC is owned by individuals in the People's Republic of 
China (``PRC''), the Department as a matter of practice first must 
conduct a separate rates analysis of the company. 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.
    Based on information contained in its September 29, 2000, 
submission, LABEC is registered in the PRC as a limited liability 
company owned by private individuals. Thus, a separate rates analysis 
is necessary to determine whether LABEC is 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 19026 (April 30, 1996)).
    To establish whether a firm is sufficiently independent from 
government control, and therefore entitled to a separate rate, the 
Department analyzes each exporting entity under a test arising out of 
the Final Determination of Sales at Less Than Fair Value: Sparklers 
from the People's Republic of China, 56 FR 20588 (May 6, 1991) and 
amplified in the Final Determination of Sales at Less Than Fair Value: 
Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 
2, 1994) (``Silicon Carbide''). Under the separate rates criteria, the 
Department assigns separate rates in NME cases only if the respondent 
can demonstrate the absence of both de jure and de facto governmental 
control over export activities.

1. De Jure Control

    LABEC has placed on the administrative record documentation to 
demonstrate absence of de jure governmental control, including the 1994 
``Foreign Trade Law of the People's Republic of China,'' and the 
``Administrative Regulations of the People's Republic of China 
Governing the Registration of Legal Corporations,'' promulgated on June 
3, 1988.
    As in prior cases, we have analyzed these laws and have found them 
to establish sufficiently an absence of de jure control of stock 
companies including limited liability companies. 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 LABEC.

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 a 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,

[[Page 37213]]

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.
    LABEC 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, statements contained in 
LABEC's September 29, 2000, submission indicate that the company does 
not coordinate its prices with other exporters.
    The Department conducted verification of LABEC's separate rate 
claim and found no evidence at verification of government involvement 
in LABEC's business operations. Specifically, Department officials 
examined sales documents that showed that LABEC 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 LABEC 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 LABEC selected its own 
management. See Department verification report on LABEC at pages 3 
through 6. This information, taken in its entirety, supports a finding 
that there is an absence of de facto governmental control of LABEC's 
export functions. Consequently, we have determined that LABEC has met 
the criteria for the application of a separate rate.

Final Results of the Review

    We also verified data contained in LABEC's September 29, 2000, 
submission and February 16, 2001, supplemental submission as it 
pertained to the claim that LABEC is the successor-in-interest to 
LABEF.
    In accordance with section 751(b) of the Act and in order to 
determine whether LABEC is the successor-in-interest to LABEF, we 
examined several factors including, but not limited to, changes in: (1) 
Management; (2) production facilities; (3) supplier relationships; and 
(4) customer base. See, e.g., Brass Sheet and Strip from Canada: Final 
Results of Antidumping Duty Administrative Review, 57 FR 20460 (May 13, 
1992) (``Brass from Canada''). While no single factor or combination of 
these factors will necessarily provide a dispositive indication of a 
successor-in-interest relationship, the Department will generally 
consider the new company to be the successor to the previous company if 
the new company's resulting operation is not materially dissimilar to 
that of its predecessor. See, e.g., Industrial Phosphoric Acid from 
Israel: Final Results of Changed Circumstances Review, 59 FR 6944 
(February 14, 1994); Brass from Canada, and Fresh and Chilled Atlantic 
Salmon from Norway: Initiation and Preliminary Results of Changed 
Circumstances Antidumping Duty Administrative Review, 63 FR 50880 
(September 23, 1998). Thus, if the evidence demonstrates that, with 
respect to the production and sale of the subject merchandise, the new 
company operates as the same business entity as the former company, the 
Department will accord the new company the same antidumping treatment 
as its predecessor.
    Based on our verification findings, we determine that LABEC is the 
successor-in-interest to LABEF. Specifically, LABEF has demonstrated 
through registration and ownership documentation examined at 
verification that it changed its name to LABEC as a result of decisions 
made by LABEF's original owners. Moreover, LABEF has demonstrated 
through production and accounting records examined at verification that 
changing its name to LABEC has resulted in no significant changes in 
either production facilities, supplier relationships, customer base, or 
management. See Department verification report on LABEC at pages 7 
through 10.
    Thus, we determine that LABEC is the successor-in-interest to LABEF 
for purposes of determining antidumping duty liability, and should 
receive the same antidumping duty treatment with respect to brake 
rotors as the former LABEF.
    We will instruct the Customs Service to suspend shipments of 
subject merchandise made by LABEC at LABEF's cash deposit rate (i.e., 
zero percent). The shipments of subject merchandise to be suspended are 
those which are entered, or withdrawn from warehouse, for consumption 
on or after the publication date of the final results of this changed-
circumstances review.
    We are issuing and publishing this determination and notice in 
accordance with sections 751(b)(1) and 777(i)(1) of the Act and 19 CFR 
351.216.

    Dated: July 9, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-17857 Filed 7-16-01; 8:45 am]
BILLING CODE 3510-DS-P