[Federal Register Volume 67, Number 64 (Wednesday, April 3, 2002)]
[Notices]
[Pages 15787-15791]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-8071]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-874]


Notice of Initiation of Antidumping Duty Investigation: Certain 
Ball Bearings and Parts Thereof From the People's Republic of China

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

ACTION: Initiation of antidumping duty investigation.

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EFFECTIVE DATE: April 3, 2002.

FOR FURTHER INFORMATION CONTACT: Cindy Lai Robinson or Geoffrey Craig 
at (202) 482-3797 or (202) 482-4161, respectively; Office VI, Group II, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230.

[[Page 15788]]

Initiation of Investigation

The Applicable Statute and Regulations

    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, as amended 
(``the Act''), by the Uruguay Round Agreements Act (``URAA''). In 
addition, unless otherwise indicated, all citations to the Department 
of Commerce's (``the Department's'') regulations are references to the 
provisions codified at 19 CFR Part 351 (2001).

The Petition

    On February 13, 2002, the Department received a petition filed in 
proper form by the American Bearing Manufacturers Association (``ABMA'' 
or ``the petitioner''). On February 21, 2002, we sent the petitioner a 
letter with questions regarding the petition. The Department received 
information supplementing the petition on February 27, 2002.
    In accordance with section 732(b) of the Act, the petitioner 
alleges that imports of ball bearings and parts thereof from the 
People's Republic of China (``PRC'') are being, or are likely to be, 
sold in the United States at less than fair value within the meaning of 
section 731 of the Act, and that such imports are materially injuring, 
or are threatening to materially injure, an industry in the United 
States.
    The Department finds that the petitioner filed this petition on 
behalf of the domestic industry because it is an interested party, as 
defined in sections 771(9)(E) and 771(9)(F) of the Act and has 
demonstrated sufficient industry support with respect to the 
antidumping investigation that it is requesting the Department to 
initiate. (See the Determination of Industry Support for the Petition 
section below.)

Scope of Investigation

    The scope of the investigation includes all antifriction bearings, 
regardless of size, precision grade or use, that employ balls as the 
rolling element (whether ground or unground) and parts thereof (inner 
ring, outer ring, cage, balls, seals, shields, etc.) that are produced 
in China. Imports of these products are classified under the following 
categories: Antifriction balls, ball bearings with integral shafts and 
parts thereof, ball bearings (including thrust, angular contact, and 
radial ball bearings) and parts thereof, and housed or mounted ball 
bearing units and parts thereof. The scope includes ball bearing type 
pillow blocks and parts thereof; and wheel hub units incorporating 
balls as the rolling element. With regard to finished parts, all such 
parts are included in the scope of the petition. With regard to 
unfinished parts, such parts are included if (1) they have been heat-
treated, or (2) heat treatment is not required to be performed on the 
part. Thus, the only unfinished parts that are not covered by the 
petition are those that will be subject to heat treatment after 
importation.
    Imports of these products are classified under the following 
Harmonized Tariff Schedules of the United States (HTSUS) subheadings: 
3926.90.45, 4016.93.00, 4016.93.10, 4016.93.50, 6909.19.5010, 
8431.20.00, 8431.39.0010, 8482.10.10, 8482.10.50, 8482.80.00, 
8482.91.00, 8482.99.05, 8482.99.2580, 8482.99.35, 8482.99.6595, 
8483.20.40, 8483.20.80, 8483.30.40, 8483.30.80, 8483.50.90, 8483.90.20, 
8483.90.30, 8483.90.70, 8708.50.50, 8708.60.50, 8708.60.80, 
8708.70.6060, 8708.93.30, 8708.93.6000, 8708.93.75, 8708.99.06, 
8708.99.31, 8708.99.4000, 8708.99.4960, 8708.99.5800, 8708.99.8080, 
8803.10.00, 8803.20.00, 8803.30.00, 8803.90.30, and 8803.90.90.
    Specifically excluded from the scope are unfinished parts that are 
subject to heat treatment after importation. Also excluded from the 
scope are cylindrical roller bearings, mounted or unmounted, and parts 
thereof (``CRB'') and spherical plain bearings, mounted and unmounted, 
and parts thereof (``SPB''). CRB products include all antifriction 
bearings that employ cylindrical rollers as the rolling element. SPB 
products include all spherical plain bearings that employ a spherically 
shaped sliding element and include spherical plain rod ends. Although 
the HTSUS subheadings are provided for convenience and U.S. Customs 
Service (``Customs'') purposes, the written description of the 
merchandise under investigation is dispositive.
    During our review of the petition, we discussed the scope with the 
petitioner to ensure that the scope in the petition accurately reflects 
the product for which the domestic industry is seeking relief. 
Moreover, as discussed in the preamble to the Department's regulations 
(Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 
27323 (May 19, 1997)), we are setting aside a period for parties to 
raise issues regarding product coverage. The Department encourages all 
parties to submit such comments within 20 days of publication of this 
notice. Comments should be addressed to Import Administration's Central 
Records Unit at Room 1870, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230. The period for scope 
comments is intended to provide the Department with ample opportunity 
to consider all comments and consult with parties prior to the issuance 
of the preliminary determination.

Determination of Industry Support for the Petition

    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, when determining 
the degree of industry support, the statute directs the Department to 
look to producers and workers who produce the domestic like product. 
The International Trade Commission (``ITC''), which is responsible for 
determining whether ``the domestic industry'' has been injured, must 
also determine what constitutes a domestic like product in order to 
define the industry. While both the Department and the ITC must apply 
the same statutory definition regarding the domestic like product 
(section 771(10) of the Act), they do so for different purposes and 
pursuant to separate and distinct authority. In addition, the 
Department's determination is subject to limitations of time and 
information. Although this may result in different definitions of the 
like product, such differences do not render the decision of either 
agency contrary to the law.\1\
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    \1\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp. 
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays 
and Display Glass from Japan: Final Determination; Rescission of 
Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-
81 (July 16, 1991).
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    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition. Moreover, the petitioner does not offer a definition of 
domestic like product distinct from the scope of the investigation.
    The petition covers ball bearings and parts thereof (``BB&P'') as 
defined in the Scope of the Investigation section, above, a single 
class or kind of merchandise. The Department has no basis on the record 
to find the petitioner's definition of the domestic like product to be 
inaccurate. The Department, therefore, has adopted the domestic like 
product definition set

[[Page 15789]]

forth in the petition. However, the Department will take into account 
any comments submitted by parties in connection with this issue during 
the course of the proceeding, and revisit the issue, if appropriate.
    On March 4, 2002, the Department received comments regarding 
industry support from the following six PRC producers of the 
merchandise subject to this investigation: Ningbo MOS Group, Ningbo 
Cixin Bearing, Ningbo Huanchi Group, Wangxiang China, Ningbo General 
Bearing Co., Limited, and Jiangsu General Ball & Roller Co., Limited.
    On March 5, 2002, the above six PRC producers filed additional 
information regarding their challenge to the standing of the 
petitioner. Specifically, they asserted that many products covered by 
the scope of the product definition are not represented by ABMA member 
companies.
    On March 5, 2002, the Department also received a submission from 
the petitioner to correct a ``software sorting error'' with respect to 
the shipment volumes reported for certain ABMA member companies. It 
claimed that this error does not affect the reported shipments to 
production ratio of ABMA member companies.
    The petitioner submitted another response on March 13, 2002, to 
rebut the industry support challenge filed by the six foreign producers 
on March 4 and 5, 2002. In this submission, the petitioner revised its 
ABMA member companies' production volume, and the shipments volume and 
value for ``complete bearings.'' It also provided similar information 
for ``parts.'' It demonstrated that the industry support for its 
petition is over 50 percent either by ``parts,'' or by ``complete 
bearings,'' or by ``ball bearings and parts thereof.'' In addition, it 
rebutted the six PRC producers' March 5, 2002, allegations by showing 
that none of the named products in the foreign producers' submission, 
(i.e., casters, constant velocity joints, hardware, and linear bearings 
(used, for example, in furniture and desk drawers)) are covered by the 
scope of the petition.
    On March 15, 2002, the above six PRC producers filed additional 
information regarding their challenge to the standing of the 
petitioner. Specifically, they state that if the petition excludes 
those products referenced in the March 5 submission (i.e., casters, 
constant velocity joints, hardware, and linear bearings) then the 
petition should be amended to say so explicitly. Further, they 
submitted a list of companies that they believe manufacture ball 
bearings or ball bearing parts that are not listed in the petition, and 
assert that by failing to provide the Department with a complete 
listing of the U.S. producers of ball bearings and ball bearings parts, 
the ABMA has complicated our effort to rule on its standing to petition 
for antidumping relief.
    On March 19, 2002, the petitioner filed a rebuttal to the PRC 
producers' March 15, 2002 submission. The petitioner states that given 
its reported industry support figures, there is no need for the 
Department to poll individual companies since there is no possibility 
that the remaining companies represent more than a small minority of 
the domestic ball bearing industry. Further, the petitioner takes issue 
with the list of companies submitted by foreign producers, and notes 
that in any event none of the companies has registered opposition to 
the petition.
    The Department has reviewed the comments of these PRC producers and 
the petitioner's revision to its petition. For further discussion of 
the comments and the petitioner's revision to its petition, see the 
Industry Support Attachment to the Import Administration AD 
Investigation Checklist, dated March 25, 2002 (``Initiation 
Checklist'') (public version on file in the Central Records Unit of the 
Department of Commerce, Room B-099) for further description.
    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (1) At least 
25 percent of the total production of the domestic like product; and 
(2) more than 50 percent of the production of the domestic like product 
produced by that portion of the industry expressing support for, or 
opposition to, the petition.
    In order to estimate production for the domestic industry as 
defined for purposes of this case, the Department has relied on the 
petition. The only industry-wide data available was shipment data for 
calendar year (``CY'') 2000. Thus, the petition contained production 
and shipment data (by volume) of its members for CY 2000. To estimate 
industry-wide production, the petitioner compared its member companies' 
shipment data by volume with their production data by volume and 
derived a shipment to production ratio. The petitioner then divided the 
total industry-wide shipment figure by this ratio to derive an 
estimated total industry-wide ball bearing production.
    Foreign producers contend that the petitioners' calculation of 
industry support, in using ``complete bearings'' figures, would be 
inaccurate by not taking into account ``parts.'' The petitioner 
subsequently provided industry support information taking into account 
``parts'' as well as ``complete bearings.'' Based on this information, 
the petitioner has demonstrated that industry support was greater than 
50 percent. See Initiation Checklist.
    Accordingly, we find that information contained in the petition and 
its supplements demonstrate that the domestic producers or workers who 
support the petition account for over 50 percent of total production of 
the domestic like product. Therefore, the domestic producers or workers 
who support the petition account for at least 25 percent of the total 
production of the domestic like product, and the requirements of 
section 732(c)(4)(A)(i) and section 732(c)(4)(D) are met. See 
Initiation Checklist at Attachment I. Furthermore, because the 
Department received no domestic opposition to the petition, the 
domestic producers or workers who support the petition account for more 
than 50 percent of the production of the domestic like product produced 
by that portion of the industry expressing support for or opposition to 
the petition. See Initiation Checklist. Thus, the requirement of 
section 732(c)(4)(A)(ii) is met.
    Accordingly, the Department determines that the petition was filed 
on behalf of the domestic industry within the meaning of section 
732(b)(1) of the Act.

Period of Investigation

    The anticipated period of investigation is July 1, 2001, through 
December 31, 2001.

Export Price and Normal Value

    The following are descriptions of the allegations of sales at less 
than fair value upon which the Department has based its decision to 
initiate this investigation. The sources of data for the deductions and 
adjustments relating to home market and U.S. price are detailed in the 
Initiation Checklist.
    The Department has analyzed the information in the petition and 
considers the country-wide import statistics for the anticipated period 
of investigation (``POI'') and pricing information used to calculate 
the estimated margin to be sufficient for purposes of initiation. Based 
on the information submitted in the petition, adjusted where 
appropriate, we are initiating this investigation, as discussed below 
and in the Initiation

[[Page 15790]]

Checklist. Should the need arise to use any of this information as 
facts available under section 776 of the Act in our preliminary or 
final determination, we will re-examine the information and may revise 
the margin calculation, if appropriate.

Export Price

    The petitioner based export prices \2\ on price lists and quotes of 
four representative sample products (6201-2RS, 6201ZZ, 6203-2RS, and 
6203ZZ) from Chinese distributors of Chinese ball bearings and U.S. 
distributors of Chinese ball bearings for the period October to 
December 2001. Some prices were FOB Chinese port, for which the 
petitioner made no deductions to arrive at a net-price. In most 
instances, the prices were FOB from a U.S. location. In these 
instances, the petitioner calculated a net price by deducting from the 
price movement expenses and a U.S. distributor markup of 15 percent. 
Movement expenses include costs for duties, ocean insurance and 
freight, and other import charges. See Initiation Checklist.
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    \2\ The petitioner states that its dumping analysis proceeded 
under the conservative assumption that the vast majority of Chinese 
ball bearing sales in the Untied States are export price 
transactions.
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Normal Value

    The petitioner asserts that the PRC is a nonmarket economy country 
(``NME'') within the meaning of section 771(18) of the Act. In previous 
investigations, the Department has determined that the PRC is an NME. 
See, e.g., Certain Hot-Rolled Carbon Steel Flat Products from the 
People's Republic of China; Notice of Preliminary Results of 
Antidumping Duty Administrative Review, 66 FR 22183 (May 31, 2001); 
Steel Wire Rope from the People's Republic of China; Notice of Final 
Determination of Sales at Less Than Fair Value, 66 FR 12759 (February 
28, 2001). In accordance with section 771(18)(C)(i) of the Act, the 
presumption of NME status remains in effect until revoked by the 
Department. The presumption of NME status for the PRC has not been 
revoked by the Department and, therefore, remains in effect for 
purposes of the initiation of this investigation. Accordingly, the 
normal value of the product appropriately is based on the producer's 
factors of production valued in a surrogate market economy country in 
accordance with section 773(c) of the Act.
    In the course of this investigation, all parties will have the 
opportunity to provide relevant information related to the issues of 
the PRC's NME status and the granting of separate rates to individual 
exporters. See, e.g., Final Determination of Sales at Less Than Fair 
Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 
(May 2, 1994).
    For the normal value calculation, the petitioner based the factors 
of production, as defined by section 773(c)(3) of the Act, on the 
quantities of inputs used to produce four representative ball bearings 
reported by one of its major member companies. The petitioner uses the 
actual usage rates of a U.S. production facility in accordance with 19 
CFR 351.202(b)(7)(B) because information on actual usage rates of 
representative Chinese bearing producers is not reasonably available to 
the petitioner. The petitioner claims that this company was selected 
because it is one of the most efficient ball bearing producers in the 
world. Therefore, this company's usage rates should yield conservative 
estimates of the degree of dumping for the selected products. The 
petitioner asserts that India is the most appropriate surrogate country 
for the PRC, claiming that India is: (1) A market economy; (2) a 
significant producer of comparable merchandise; and (3) at a level of 
economic development comparable to the PRC in terms of per capita gross 
national product. Based on the information provided by the petitioner, 
we believe that the petitioner's use of India as a surrogate country is 
appropriate for purposes of initiating this investigation.
    In accordance with section 773(c)(4) of the Act, the petitioner 
valued factors of production, where possible, on reasonably available, 
public surrogate country data. Specifically, the factor costs for all 
but one of the material inputs, including inner and outer rings, 
retainers, shields, and seats, were based on the Monthly Statistics of 
the Foreign Trade of India for the period January to December 2000. The 
petitioner did not rely on Indian import values for the factor cost of 
balls because it claims that such Indian import values are not 
reliable. Therefore, for balls, the petitioner conservatively used the 
value of steel used to produce rollers derived during the twelfth 
administrative review of tapered roller bearings. The value was 
adjusted for inflation. The petitioner asserts that using this value is 
appropriate because the balls used in the representative products, like 
the rollers reviewed, are made of AISI 52100 chrome steel.
    Where scrap from the production process is recyclable, the recovery 
value for the scrap is subtracted from the gross cost. Values for scrap 
steel and the scrap offset were based on Indian imports of scrap. Unit 
energy costs were obtained from publicly available Indian energy 
prices, TERI Energy Data Directory and Yearbook 1999/2000, adjusted for 
inflation.
    Labor was valued using the regression-based wage rate for China 
provided by the Department, in accordance with 19 CFR 351.408(c)(3).
    The factory overhead rate, selling, general & administrative 
expenses (``SG&A'') rate, and profit rate, were based on the average 
respective rates derived from the 1999 financial statements of three 
surrogate Indian ball bearing producers. The petitioner did not include 
costs of packing in its normal value calculation.
    Based on the information provided by the petitioner, we believe 
that the petitioner's factors of production methodology represents 
information reasonably available to the petitioner and is appropriate 
for purposes of initiating this investigation.
    Based on comparisons of export price to normal value, the 
petitioner calculated dumping margins ranging from 17 to 249 percent. 
See Initiation Checklist.

Fair Value Comparisons

    The Department has examined the adequacy and accuracy of the 
information the petitioner used in its calculations of U.S. and home 
market prices and has found that it represents information reasonably 
available to the petitioner supporting the allegation of dumping.
    Based on the data provided by the petitioner, there is reason to 
believe that imports of ball bearings and parts thereof from the PRC 
are being, or are likely to be, sold at less than fair value.

Allegations and Evidence of Material Injury and Causation

    The petitioner alleges that the U.S. industry producing the 
domestic like product is being materially injured, or is threatened 
with material injury, by reason of the imports of the subject 
merchandise sold at less than NV. The petitioner contends that the 
industry's injured condition is evident in the decline of U.S. 
producers' output, sales, market share, profits, productivity, return 
on investment, and capacity utilization, as well as negative effects on 
cash flow, inventories, employment, wages, growth, ability to raise 
capital, investment, and existing development and production efforts. 
The allegations of injury and causation are supported by relevant 
evidence including U.S. Customs import data, and lost sales, and 
pricing information. We have examined the accuracy and adequacy of the 
evidence provided in the petition and

[[Page 15791]]

have determined that the petition alleges the elements necessary for 
the imposition of a duty under section 731 of the Act and contains 
information reasonably available to the petitioner supporting the 
allegations (see Initiation Checklist at Attachment II).

Initiation of Antidumping Investigation

    Based upon our examination of the petition on ball bearings and 
parts thereof from the PRC and the petitioner's responses to our 
supplemental questionnaire clarifying the petition, we have found that 
the petition meets the requirements of section 732 of the Act. See 
Initiation Checklist. Therefore, we are initiating an antidumping duty 
investigation to determine whether imports of ball bearings and parts 
thereof from the PRC are being, or are likely to be, sold in the United 
States at less than fair value. Unless this deadline is postponed, we 
will make our preliminary determination no later than 140 days after 
the date of this initiation. See ``Case Calendar'' section of the 
Initiation Checklist.

Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of the petition has been provided to the representatives 
of the government of the PRC. We will attempt to provide a copy of the 
public version of the petition to each exporter named in the petition, 
as appropriate.

International Trade Commission Notification

    We have notified the ITC of our initiation, as required by section 
732(d) of the Act.

Preliminary Determination by the ITC

    The ITC will determine, no later than April 1, 2002, whether there 
is a reasonable indication that imports of ball bearings and parts 
thereof from the PRC are causing material injury, or threatening to 
cause material injury, to a U.S. industry. A negative ITC determination 
will result in the investigation being terminated; otherwise, this 
investigation will proceed according to statutory and regulatory time 
limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: March 25, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-8071 Filed 4-2-02; 8:45 am]
BILLING CODE 3510-DS-P