[Federal Register Volume 67, Number 3 (Friday, January 4, 2002)]
[Notices]
[Pages 557-562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-246]


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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-846]


Brake Rotors From the People's Republic of China: Preliminary 
Results, Preliminary Partial Rescission, and Postponement of Final 
Results of the Fourth Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results, partial rescission, and 
postponement of final results of fourth antidumping duty administrative 
review.

-----------------------------------------------------------------------

SUMMARY: The Department of Commerce is currently conducting an 
administrative review of the antidumping duty order on brake rotors 
from the People's Republic of China covering the period April 1, 2000, 
through March 31, 2001. This administrative review examines one 
exporter and five exporters included in three exporter/producer 
combinations.
    We have preliminarily determined that sales have not been made 
below normal value by Qingdao Gren (Group) Co., the exporter under 
review. If these preliminary results are adopted for the final results 
of this review, we will instruct the Customs Service to assess no 
antidumping duties on entries of the subject merchandise during the 
period of review from this exporter. We are also preliminarily 
rescinding the review with respect to five exporters included in three 
exporter/producer combinations, because none of those respondents made 
shipments of the subject merchandise during the period of review.
    Interested parties are invited to comment on these preliminary 
results. We will issue the final results of this review no later than 
300 days from the date of publication of this notice.

EFFECTIVE DATE: January 4, 2002.

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.

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's regulations are 
to 19 CFR part 351 (2001).

SUPPLEMENTARY INFORMATION:

Background

    On April 30, 2001, the petitioner \1\ requested an administrative 
review pursuant to 19 CFR 351.213(b) for one exporter \2\ included in 
the antidumping duty order and five exporters included in three 
exporter/producer combinations \3\ that received zero rates in the 
less-than-fair-value (``LTFV'') investigation and thus were excluded 
from the antidumping duty order only with respect to brake rotors sold 
through the specified exporter/producer combinations.
---------------------------------------------------------------------------

    \1\ The petitioner is the Coalition for the Preservation of 
American Brake Drum and Rotor Aftermarket Manufacturers.
    \2\ The exporter is Qingdao Gren (Group) Co. (``Gren'').
    \3\ The excluded exporters/producer combinations are: (1) China 
National Automobile Industry Import & Export Corporation (``CAIEC'') 
or Shandong Laizhou CAPCO Industry (``Laizhou CAPCO'')/Laizhou 
CAPCO; (2) Shenyang Honbase Machinery Co., Ltd. (``Shenyang 
Honbase'') or Laizhou Luyuan Automobile Fittings Co., Ltd. 
(``Laizhou Luyuan'')/Shenyang Honbase or Laizhou Luyuan and (3) 
China National Machinery and Equipment Import & Export (Xinjiang) 
Co., Ltd. (``Xinjiang'')/Zibo Botai Manufacturing Co., Ltd. 
(``Zibo'').
---------------------------------------------------------------------------

    On May 23, 2001, the Department initiated an administrative review 
covering Gren and the five exporters except with respect to excluded 
exporter/producer combinations (see Initiation of Antidumping and 
Countervailing Duty Administrative Reviews (66 FR 28421, May 23, 
2001)).
    On June 6, 2001, we issued a questionnaire to each company listed 
in the brake rotor initiation notice. On June 25, 2001, the Department 
provided the parties an opportunity to submit publicly available 
information for consideration in these preliminary results.
    On July 13, 2001, each of the exporters that received zero rates in 
the LTFV investigation stated that during the period of review 
(``POR'') it did not make U.S. sales of brake rotors produced by 
companies other than those included in its respective excluded 
exporter/producer combination. On July 19, 2001, the petitioner 
submitted a letter requesting the Department to conduct a verification 
of: (1) The response submitted by Gren; and (2) the no-shipment claims 
made by the five exporters named in the three exporter/producer 
combinations excluded from the antidumping duty order. On July 27, 
2001, Gren submitted its questionnaire response.
    On August 3, 2001, the petitioner submitted a letter in which it 
requested that the Department investigate a potential change in 
ownership of the five exporters included in the three exporter/producer 
combinations excluded from the antidumping duty order. On August 24, 
2001, the petitioner submitted another letter in which it requested 
that the Department also verify Laizhou Luyuan's and Shenyang Honbase's 
U.S. importer which held ownership during the

[[Page 558]]

period of investigation (``POI'') in those two companies.
    On August 20, 2001, the Department issued a supplemental 
questionnaire to Gren, for which it received a response on September 
18, 2001.
    On October 2, 2001, the Department conducted a data query on brake 
rotor entries made during the POR from all exporters named in the 
excluded exporter/producer combinations in order to substantiate their 
claims of no shipments of subject merchandise made during the POR. As a 
result of the data query, the Department requested that the Customs 
Service confirm the actual manufacturer for specific entries associated 
with the excluded exporter/producer combinations.
    In response to the petitioner's August 3 and 6, 2001, letters, the 
Department notified the petitioner on September 5, 2001, that it 
considered the change-in-ownership allegation with respect to the 
exporter/producer combinations excluded from the antidumping duty order 
to be outside the scope of this review.
    On September 28, 2001, the petitioner submitted a letter in which 
it requested the Department to reconsider its decision not to 
investigate allegations of changes in ownership with respect to the 
exporter/producers combinations in this review.
    After reconsidering the petitioner's November 5, 2001, request to 
examine any change in ownership of Laizhou Luyuan and Shenyang Honbase 
since the POI, the Department issued Laizhou Luyuan and Shenyang 
Honbase questionnaires on November 6, 2001, regarding the ownership of 
both companies. On November 27, 2001, Laizhou Luyuan and Shenyang 
Honbase submitted their responses to the supplemental questionnaire.
    On December 31, 2001, the Department issued a memorandum stating 
that it preliminarily found no evidence that shipments of merchandise 
subject to the order were made by the five exporters included in the 
three exporter/producer combinations during the POR.

Postponement of Final Results

    In accordance with section 751(a)(3)(A) of the Act, as amended, we 
determine that it is not practicable to complete this review within the 
original time frame because of the Department's decision to verify 
certain respondents in this review (see ``Verification'' section of 
this notice for further discussion). We are currently unable to conduct 
verification and allow sufficient opportunity for the submission of 
interested party comments, prior to the current final results deadline. 
Thus, in accordance with section 751(a)(3)(A) of the Act and section 
351.213(h)(2) of the Department's regulations, the Department is 
extending the time limit for completion of the final results of these 
reviews until no later than 300 days from the date of publication of 
this notice.

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 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 
the 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 currently 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.

Period of Review

    The POR covers the period April 1, 2000, through March 31, 2001.

Verification

    As provided in section 782(i)(2) of the Act and 19 CFR 351.307, we 
intend to verify certain information relied upon in making our final 
results. On August 24, 2001, the petitioner requested that the 
Department conduct verification of the information and statements 
submitted by all exporter/producer combinations excluded from this 
order (i.e., Laizhou Luyuan and Shenyang Honbase, Xinjiang/Zibo, and 
CAIEC/Laizhou CAPCO), the U.S. importer MAT, and Gren. We intend to 
verify Laizhou Luyuan, Shenyang Honbase, and the company that purchased 
a significant share in Laizhou Luyuan in accordance with 19 CFR 
351.307. We also intend to verify CAIEC and Laizhou CAPCO. However, we 
do not intend to verify Gren because we do not find just cause has been 
demonstrated with respect to this company. In addition, verification of 
this company is not statutorily required, nor, has the petitioner 
provided a sufficient basis for examining Laizhou Luyuan's U.S. 
importer's data (i.e., MAT).

Preliminary Partial Rescission of Administrative Review

    Pursuant to 19 CFR 351.213(d)(3), we have preliminarily determined 
that the exporters which are part of the three exporter/producer 
combinations which received zero rates in the LTFV investigation did 
not make shipments of subject merchandise to the United States during 
the POR. Specifically, (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 
December 31, 2001, Memorandum from the case analyst to the file). In 
order to make this determination, we first examined PRC brake rotor 
shipment data maintained by the Customs Service. We then selected 
entries associated with each exporter and requested the Customs Service 
to provide documentation which would enable the Department to determine 
who manufactured the brake rotors included in those entries. On 
December 31, 2001, we placed on this record a memorandum which 
summarized the data provided by the Customs Service in response to our 
query. Based on the results of our query,

[[Page 559]]

in accordance with 19 CFR 351.213(d)(3), we are preliminarily 
rescinding the administrative review because we found no evidence that 
the exporters in question made U.S. shipments of the subject 
merchandise during the POR. Although we still have not received 
manufacturer confirmation on some of the entries we selected in our 
sample, we will continue to pursue this matter with the Customs Service 
and seek to obtain the necessary data for consideration in our final 
results.
    Based on information obtained in this proceeding, we issued 
supplemental questionnaires to two of the excluded companies, Laizhou 
Luyuan and Shenyang Honbase, in order to determine if a change in 
ownership occurred in either company.
    Based on the data submitted by Shenyang Honbase, we find that there 
has been no change in ownership in this company since the POI. 
Therefore, there is no ownership issue with respect to Shenyang 
Honbase. Since the LTFV investigation, another company has purchased a 
significant portion of Laizhou Luyuan. The petitioner claims that 
because brake rotors exported by this other company are covered by the 
order, and because it owns the majority shares in Laizhou Luyuan, the 
Department should consider Laizhou Luyuan and this other company as one 
entity. Although a change in ownership has occurred with respect to 
Laizhou Luyuan, we find no evidence that this change in ownership has 
resulted in Laizhou Luyuan exporting subject merchandise to the United 
States which was not produced by itself or Shenyang Honbase (i.e., the 
conditions under which Laizhou Luyuan's entries are excluded from the 
order).
    In order to determine whether these two companies should be treated 
as one entity, we examined the extent to which the export operations of 
Laizhou Luyuan and this other company were intertwined such that this 
relationship has the potential to impact pricing and export decisions 
pertaining to the subject merchandise and create a potential for 
manipulation. Based on information in the record, we find that the 
export activities of Laizhou Luyuan and the company that purchased a 
significant portion of Laizhou Luyuan are not under common control even 
though common ownership does exist. For example, information in Laizhou 
Luyuan's response indicates that Laizhou Luyuan retained the same 
management before and after its purchase by the other company. Thus, we 
preliminarily find the export operations of Laizhou Luyuan and the 
other company are sufficiently separate of one another such that there 
is no significant potential for manipulation of pricing or export 
decisions.
    Based on our examination of record evidence, we preliminarily 
determine that Laizhou Luyuan has not significantly changed its (1) 
management, (2) production facilities, (3) supplier relationships, or 
(4) customer base as a result of its purchase by the other company (see 
pages 4 through 10 of Laizhou Luyuan's November 27, 2001, submission). 
Although the petitioner claims that Laizhou Luyuan's management, 
suppliers, and customers have changed significantly since the LTFV 
proceeding, there is no evidence that these changes were a result of 
the other company's purchase of Laizhou Luyuan. On the contrary, 
information on the record indicates that the changes mentioned by the 
petitioner appear to have occurred prior to the other company 
purchasing a significant share of Laizhou Luyuan. However, we will 
examine this issue further at verification.
    Finally, we have no evidence at this time that the other company is 
exporting Laizhou Luyuan-made brake rotors which are not being assessed 
the PRC-wide rate upon entry into the United States or that Laizhou 
Luyuan is exporting brake rotors sourced through the other company.

Separate Rates

    In proceedings involving NME countries, the Department begins with 
a rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty deposit rate (i.e., a PRC-wide rate).
    The respondent in this review, Gren, is collectively-owned. Thus, a 
separate-rates analysis is necessary to determine whether this exporter 
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 56570 (April 30, 
1996)).
    To establish whether a firm is sufficiently independent in its 
export activities from government control to be entitled to a separate 
rate, the Department utilizes a test arising from the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588 (May 6, 1991) (``Sparklers''), 
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

    Gren has placed on the administrative record documents to 
demonstrate absence of de jure control, including the ``The Enterprise 
Legal Person Registration Administrative Regulations,'' promulgated on 
June 3, 1988; the 1990 ``Regulation Governing Rural Collectively-Owned 
Enterprises of PRC;'' 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 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 Gren.

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).

[[Page 560]]

    Gren has 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, Gren's questionnaire 
responses indicate that its 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 
export functions performed by Gren. 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 Gren has met the 
criteria for the application of separate rates.

Normal Value Comparisons

    To determine whether sales of the subject merchandise by Gren to 
the United States were made at prices below normal value (``NV''), we 
compared its export prices to NV, as described in the ``Export Price'' 
and ``Normal Value'' sections of this notice, below.

Export Price

    We used export price methodology in accordance with section 772(a) 
of the Act because the subject merchandise was sold by the exporter 
directly to an unaffiliated customer in the United States prior to 
importation and constructed export price was not otherwise indicated.
    For Gren, we calculated export price based on packed, CIF U.S. port 
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, foreign brokerage 
and handling charges in the PRC, marine insurance, and ocean freight in 
accordance with section 772(c) of the Act. Because foreign inland 
freight, foreign brokerage and handling fees, marine insurance, and 
ocean freight were provided by PRC service providers or paid for in an 
NME currency (i.e., renminbi), we based those charges on surrogate 
rates from India (see ``Surrogate Country'' section below for further 
discussion of our surrogate country selection). To value foreign inland 
trucking charges, we used a November 1999 average truck freight value 
based on price quotes from Indian trucking companies. To value foreign 
brokerage and handling expenses, we relied on public information 
reported in the 1997-1998 antidumping duty new shipper review of 
stainless steel wire rod from India. To value marine insurance, we 
relied on public information reported in the antidumping duty 
investigation of sulfur dyes, including sulfur vat dyes, from India. To 
value ocean freight, we used a May 2000 price quote from a U.S. 
shipping company.

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. Pursuant to section 
771(18)(C)(i) of the Act, any determination that a foreign country is a 
NME country shall remain in effect until revoked by the administering 
authority (see Notice of Preliminary Results of Antidumping Duty 
Administrative Review and Preliminary Partial Rescission of Antidumping 
Duty Administrative Review: Freshwater Crawfish Tail Meat From the 
People's Republic of China, 66 FR 52100, 52103 (October 12, 2001). None 
of the parties to this proceeding has contested such treatment. 
Accordingly, we calculated normal value 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 21, 2001). In addition, based on 
publicly available information 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 because it meets the Department's criteria 
for surrogate country selection. Where we could not find surrogate 
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 which included, but were not limited 
to: (A) Hours of labor required; (B) quantities of raw materials 
employed; (C) amounts of energy and other utilities consumed; and (D) 
representative capital costs, including depreciation. We used the 
factors reported by Gren which produced the brake rotors it exported to 
the United States during the POR. To calculate NV, we multiplied the 
reported unit factor quantities by publicly available Indian or 
Indonesian values.
    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 or in U.S. dollars, we 
made adjustments for inflation using wholesale price indices published 
in the International Monetary Fund's International Financial 
Statistics.
    To value pig iron, steel scrap, ferrosilicon, ferromanganese, 
limestone, lubrication oil, ball bearing cups, and coking coal, we used 
April 2000-February 2001 average import values from Monthly Statistics 
of the Foreign Trade of India. We relied on the factor specification 
data submitted by the respondent for the above-mentioned inputs in its 
September 18, 2001, submission for purposes of selecting surrogate 
values from Monthly Statistics. Because we could not obtain a product-
specific price from India to value lug bolts, we used a January-March 
1999 product-specific import value from the Indonesian government 
publication Foreign Trade Statistical Bulletin (see Bicycles, 61 FR at 
19040 (Comment 17)). We also added an amount for loading and additional 
transportation charges associated with delivering coal to the factory 
based on June 1999 Indian price data contained in the periodical 
Business Line.
    To value firewood, we used April 2000-February 2001 rather than 
April 1997-March 1998 average import values from Monthly Statistics. In 
its August 28, 2001, submission, the petitioner argues that the 
Department should value this input using data from Monthly Statistics 
which is less contemporaneous to the POR because new articles (i.e., 
February 26, 2001, article from the Times of India and September 30, 
1997, U.S. Department of Agriculture Report) submitted by the 
petitioner indicate that firewood values in India may have been 
increasing since 1997 due to a greater dependence and demand in rural 
areas. For these preliminary results, we have relied on the April 2000-
February 2001 data from

[[Page 561]]

Monthly Statistics to value this input because it is contemporaneous 
with the POR and we find no basis for considering this value as 
aberrational or unrepresentative of firewood values applicable during 
the POR.
    We based our surrogate value for electricity on data obtained from 
Conference of Indian Industries: Handbook of Statistics (``CII 
Handbook'') and from the Centre for Monitoring Indian Economy (``CMIE 
data'').
    We valued labor based on a regression-based wage rate, in 
accordance with 19 CFR 351.408(c)(3).
    To value selling, general, and administrative (``SG&A'') expenses, 
factory overhead and profit, we used the 1998 financial data of 
Jayaswals Neco Limited and the 1998-1999 financial data of Kalyani 
Brakes Limited (``Kalyani'') and Rico Auto Industries Limited 
(``Rico''). We have not used the fiscal data obtained by the petitioner 
for Kalyani and Rico from the Indiainfoline.com web site because the 
data provided by this web site is incomplete for purposes of 
calculating ratios for SG&A, factory overhead profit. Specifically, the 
website data provided only expense data based on general categories of 
expenses and not on the basis of specific expenses. Specific expense 
data is necessary for determining whether a particular expense should 
be considered an overhead or selling expense and for calculating 
accurate surrogate value percentages.
    Where appropriate, we removed from the surrogate overhead and SG&A 
calculations the excise duty amount listed in the financial reports. We 
made certain adjustments to the ratios calculated as a result of 
reclassifying certain expenses contained in the financial reports. For 
further discussion of the adjustments made, see the Preliminary Results 
Valuation Memorandum, dated December 31, 2001.
    All inputs were shipped by truck. Therefore, to value PRC inland 
freight, we used a November 1999 average truck freight value based on 
price quotes from Indian trucking companies.
    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. 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 corrugated cartons, nails, paper cartons, paper cover, 
plastic bags, steel strip, tape, and tin clamps, we used April 2000-
February 2001 average import values from Monthly Statistics. To value 
pallet wood, we used a 1998 pallet wood value from the Indonesian 
publication Indonesia Foreign Trade Statistics which the Department has 
used to value pallet wood in two recent antidumping duty proceedings 
(see Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From the People's Republic of China: Final Results of 1998-
1999 Administrative Review, Partial Rescission of Review, and 
Determination Not To Revoke Order in Part, 66 FR 1953, 1955 (January 
10, 2001) (``TRBs'') and accompanying decision memorandum at Comment 
10, and Persulfates from the People's Republic of China: Final Results 
of Antidumping Duty Administrative Review and Partial Rescission of 
Administrative Review, 65 FR 46691 (July 31, 2000)).

Preliminary Results of the Review

    We preliminarily determine that the following margin exists for 
Gren during the period April 1, 2000, through March 31, 2001:

------------------------------------------------------------------------
                                                                Margin
               Manufacturer/producer/exporter                   percent
------------------------------------------------------------------------
Qingdao Gren (Group) Co.....................................     *0.02
------------------------------------------------------------------------
* De minimis.

    We will disclose the calculations used in our analysis to the 
parties to this proceeding 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 June 28, 2002.
    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 June 14, 2002. Rebuttal briefs, limited 
to issues raised in the case briefs, will be due not later than June 
21, 2002. 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 
review, including the results of its analysis of issues raised in any 
such written briefs or at the hearing, if held, not later than 300 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 applicable 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). 
The Department will issue appropriate appraisement instructions 
directly to the Customs Service upon completion of this review.

Cash Deposit Requirements

    Upon completion of this review, for entries from Gren, we will 
require cash deposits at the rate established in the final results 
pursuant to 19 CFR 351.214(e) and as further described below.
    The following deposit requirements will be effective upon 
publication of the final results of this administrative review 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 
Gren will be the rate determined in the final results of review (except 
that if the rate is de minimis, i.e., less than 0.50 percent, a cash 
deposit rate of zero will be required); (2) the cash deposit rate for 
PRC exporters who received a separate rate in a prior segment of the 
proceeding will continue to be the rate assigned in that segment of the 
proceeding; (3) the cash deposit rate for the PRC NME

[[Page 562]]

entity 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.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 351.213.

    Dated: December 28, 2001.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 02-246 Filed 1-3-02; 8:45 am]
BILLING CODE 3510-DS-P