[Federal Register Volume 67, Number 208 (Monday, October 28, 2002)]
[Notices]
[Pages 65779-65782]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27393]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-846]


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

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

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

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SUMMARY: On January 4, 2002, the Department of Commerce published the 
preliminary results, partial rescission and postponement of the fourth 
antidumping duty administrative review of the antidumping duty order on 
brake rotors from the People's Republic of China. See 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, 67 FR 557 (January 4, 2002) 
(Preliminary Results). This administrative review examines six PRC 
companies (i.e., one exporter whose entries are all subject to the 
antidumping duty order and five exporters included in three exporter/
producer combinations for which only certain entries are subject to the 
antidumping duty order) (see ``Background'' section below for further 
discussion). The period of review is April 1, 2000, through March 31, 
2001. We gave interested parties an opportunity to comment on our 
preliminary results.
    Based on the use of additional publicly available information and 
the comments received from the interested parties, we have made two 
changes to the margin calculation for the sole respondent in the 
administrative review for which we calculated an antidumping duty 
margin. The final weighted-average dumping margin for the reviewed firm 
in the administrative review is listed below in the section entitled 
``Final Results of Administrative Review.''

EFFECTIVE DATE: October 28, 2002.

FOR FURTHER INFORMATION CONTACT: Brian Smith or Terre Keaton, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, Washington, D.C. 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 (``URAA''). In addition, 
unless otherwise indicated, all citations to the Department of 
Commerce's (``the Department's'') regulations are to 19 CFR Part 351 
(2001).

Background

    On January 4, 2002, the Department published in the Federal 
Register the preliminary results, preliminary partial rescission, and 
postponement of final results of the fourth antidumping duty 
administrative review of the antidumping duty order on brake rotors 
from the People's Republic of China (``PRC'') (67 FR 557).
    On January 14, 2002, the petitioner\1\ requested the Department to 
reconsider its decision not to conduct verification of Qingdao Gren 
(Group) Co. (``Gren'') based on the argument that it submitted a timely 
request for that company to be verified and that there was good cause 
to verify Gren's data based on the concerns raised in its letter. On 
January 24, 2002, we informed the petitioner's counsel that it would 
not be possible to conduction verification of Gren's submitted data in 
this review because (1) a verification of Gren's data was not 
statutorily required; (2) the petitioner did not sufficiently 
demonstrate that good cause existed for verifying Gren's data; and (3) 
in the absence of good cause, the Department's team assigned to this 
case did not have the resources to verify any additional companies 
other than those companies it had already selected for verification 
(see Memorandum dated January 24, 2002, from Irene Darzenta Tzafolias, 
Program Manager, to the File).
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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 March 2, 2002, the Department provided a verification outline to 
certain respondents\2\ selected for verification

[[Page 65780]]

(i.e., four of the five exporters included in the three exporter/
producer combinations and as discussed in the Preliminary Results at 67 
FR 558). On March 7, 2002, the petitioner provided verification 
comments. From March 14 through April 2, 2002, the Department conducted 
its verification of data obtained for certain U.S. entries of brake 
rotors from four of the five exporters included in the three exporter/
producer combinations, in accordance with 19 CFR 351.307.
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    \2\ The respondents in this review are Gren and the following 
three exporters/producer combinations (which are excluded from the 
order on brake rotors only with respect to brake rotors sold through 
those combinations): (1) China National Automobile Industry Import & 
Export Corporation (``CAIEC'') or Laizhou CAPCO Machinery Co., Ltd. 
(``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'').
    As stated in the Preliminary Results, we selected CAIEC, Laizhou 
CAPCO, Shenyang Honbase, Laizhou Luyuan, and a company related to 
Laizhou Luyuan for verification. We did not select Gren for 
verification because we did not find good cause had been 
demonstrated with respect to this company and verification of this 
company was not statutorily required (see 67 FR at 558).
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    On April 16, 2002, the Department placed on the record certain 
publicly available information for consideration in the final results 
(see April 16, 2002, letter with attachment from Katherine Johnson, 
Acting Program Manager, to each interested party).
    On April 26, and May 2, 2002, the Department issued its 
verification reports. The petitioner submitted its case brief on June 
14, 2002. The respondents collectively submitted their rebuttal brief 
on June 21, 2002.
    The Department has conducted these reviews in accordance with 
section 751 of the Act.

Scope of the 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 
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 this 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, 
our written description of the scope of this order is dispositive.

Partial Rescission of Review

    Pursuant to 19 CFR 351.213(d)(3), we have determined that, during 
the period of review (``POR''), the exporters which are part of the 
three exporter/producer combinations which received zero rates in the 
less-than-fair-value (``LTFV'') investigation did not make shipments of 
subject merchandise to the United States during the POR. Specifically, 
we have determined that during the POR, (1) neither CAIEC nor Laizhou 
CAPCO exported brake rotors to the United States that were manufactured 
by producers other than Laizhou CAPCO; (2) neither Shenyang Honbase nor 
Laizhou Luyuan exported brake rotors to the United States that were 
manufactured by producers other than Shenyang Honbase or Laizhou 
Luyuan; and (3) Xinjiang did not export brake rotors to the United 
States that were manufactured by producers other than Zibo.
    In order to make this determination, we first examined POR-subject 
merchandise shipment data furnished by the Customs Service by 
performing a data query. Because the data from our initial query was 
voluminous, we randomly selected 25 entries (i.e., five entries per 
company) from the data query results for further examination by the 
Customs Service (see Memorandum dated October 2, 2001, from Brian C. 
Smith, Team Leader, to the File, titled, ``Request for Assistance: 
Shipments of Brake Rotors from the People's Republic of China 
Manufactured and/or Exported By Five PRC Companies During the Period 
April 1, 2000, Through March 31, 2001'').
    Specifically, we requested the Customs Service to examine further 
the documentation filed at the U.S. port for each of those selected 
entries made by the exporters at issue to determine the manufacturer of 
the merchandise. To check further the accuracy of the data for those 
entries, we conducted verification of the entry data selected for four 
of the five exporters included in the three exporter/producer 
combinations. At verification, we examined all documentation (i.e., 
bills of lading, invoices, payment documentation, production orders, 
etc.) pertaining to the entry data for those companies. See 
verification reports for CAIEC and Laizhou CAPCO dated April 26, 2002, 
and verification reports for Laizhou Luyuan and Shenyang Honbase dated 
May 2, 2002, for additional discussion.
    Therefore, based on the data contained on the record for all 25 
entries from our data query results and our findings with respect to 
these and other entries selected at verification, we found no evidence 
that any of the exporter/producer combinations which are the subject of 
this administrative review made shipments of subject merchandise during 
the POR. (See ``Issues and Decision Memorandum'' from Richard W. 
Moreland, Deputy Assistant Secretary for Import Administration, to 
Faryar Shirzad, Assistant Secretary for Import Administration, dated 
October 21, 2002 (Comments 1 through 4 and 6).) Therefore, we are 
rescinding this review with respect to CAIEC, Laizhou CAPCO, Shenyang 
Honbase, Laizhou Luyuan, and Xinjiang.
    Since the preliminary results, we have also examined whether any 
exporter/producer combinations in this review underwent changes in 
ownership and, if so, whether there are changed circumstances which 
would affect their order exclusion status. As a result of verification 
findings, although we did find that there had been changes in ownership 
since the LTFV investigation with respect to Laizhou Luyuan, Laizhou 
CAPCO, and CAIEC, we found no evidence that the change in ownership in 
each of these companies affects their exclusion status.
    With respect to Laizhou Luyuan, another company purchased a 
significant portion of it after the LTFV investigation. At 
verification, we thoroughly examined the facts behind that other 
company's investment in Laizhou Luyuan, and whether it was exporting 
through Laizhou Luyuan brake rotors to the U.S. market.
    In addition, 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 and whether this

[[Page 65781]]

relationship has significant potential for the manipulation of pricing, 
export, and production decisions pertaining to the subject merchandise. 
Based on our verification findings, we find that the export activities 
of Laizhou Luyuan and the company that purchased a significant portion 
of Laizhou Luyuan are sufficiently separate even though common 
ownership does exist. Specifically, based on our verification findings, 
we 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 
Laizhou Luyuan's April 26, 2002, verification report). Thus, we find 
that the export operations of Laizhou Luyuan and the other company are 
sufficiently separate from one another such that there is no 
significant potential for manipulation of pricing, export, or 
production decisions.
    Finally, after examining both companies' records at verification we 
found no instance that the other company is exporting Laizhou Luyuan-
made brake rotors to the U.S. market or that Laizhou Luyuan is 
exporting brake rotors sourced through the other company.

Analysis of Comments Received

    All issues raised in the case briefs are addressed in the Decision 
Memo, which is hereby adopted by this notice. A list of the issues 
raised, all of which are in the Decision Memo, is attached to this 
notice as an Appendix. Parties can find a complete discussion of all 
issues raised in the briefs and the corresponding recommendations in 
this public memorandum which is on file in the Central Records Unit, 
room B-099 of the main Department building. In addition, a complete 
version of the Decision Memo can be accessed directly on the Web at 
http://ia.ita.doc.gov. The paper copy and electronic version of the 
Decision Memo are identical in content.

Changes Since the Preliminary Results

    After the use of additional publicly available information and the 
comments received from the interested parties, we made two changes to 
Gren's margin calculation.
1. To value selling, general, and administrative expenses, factory 
overhead and profit, we used the 1998 financial data of Jayaswals Neco 
Limited, the 1998-1999 financial data of Rico Auto Industries Limited, 
and the 2000-2001 financial data of Kalyani Brakes Limited.
2. We used the updated value from the International Trade 
Administration website to value skilled, unskilled and packing labor.

Final Results of Review

    We determine that the following weighted-average margin percentage 
exists for the period April 1, 2000, through March 31, 2001:

------------------------------------------------------------------------
                       Exporter                         Margin (percent)
------------------------------------------------------------------------
Qingdao Gren (Group) Co..............................  0.02 (de minimis)
------------------------------------------------------------------------

Assessment Rates

    The Department will determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. In accordance 
with 19 CFR 351.212(b)(1), we have calculated importer-specific ad 
valorem duty assessment rates for merchandise subject to this review. 
In accordance with 19 CFR 351.106(c)(2), we will instruct the Customs 
Service to liquidate without regard to antidumping duties all entries 
of subject merchandise during the POR from Gren for which the importer-
specific assessment rate is zero or de minimis (i.e., less than 0.50 
percent). The Department will issue appropriate assessment instructions 
directly to the Customs Service within 15 days of publication of these 
final results of review. We will direct the Customs Service to assess 
the resulting percentage margin against the entered Customs values for 
the subject merchandise on each of that importer's entries during the 
review period. For entries made by PRC companies for which the 
Department has rescinded the administrative review (i.e., the exporter/
producer combinations listed in the ``Background'' section of this 
notice), the Customs Service shall continue not to assess ad valorem 
duties on those entries made by those exporter/producer combinations.

Cash Deposit Requirements

    The following deposit rates shall be required for merchandise 
subject to the order entered, or withdrawn from warehouse, for 
consumption on or after the publication date of these final results, as 
provided by section 751(a)(1) of the Act: (1) the cash deposit rate for 
Gren will be the rate indicated above; (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 or of 
whom the review was not requested for this POR will continue to be the 
rate assigned in that segment of the proceeding; (3) the cash deposit 
rate for all other PRC exporters 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 deposit requirements shall remain in effect until 
publication of the final results of the next administrative review.
    This notice also serves as a final reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of doubled antidumping duties.
    This notice also serves as the only reminder to parties subject to 
administrative protective orders (APO) of their responsibility 
concerning the return or destruction of proprietary information 
disclosed under APO in accordance with 19 CFR 351.305. Timely written 
notification of the return/destruction of APO materials or conversion 
to judicial protective order is hereby requested. Failure to comply 
with the regulations and terms of an APO is a violation which is 
subject to sanction.
    We are issuing and publishing this determination and notice in 
accordance with sections section 751(a)(1) and 777(i) of the Act and 19 
CFR 351.213.

    Dated: October 21, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.

Appendix--Issues in Decision Memo

Comments
1. Whether the Sampling Technique and Method Used for Collecting Data 
in this Review Violated the Petitioners' Rights of Due Process
2. Whether to Reverse the Preliminary Results With Respect to the 
Exporter/Producer Combinations
3. Whether the Exporter/Producer Combinations Excluded from the Order 
Violated the Exclusion Conditions Based on Examination of Selected U.S. 
Brake Rotor Entries during the Period of Review
4. Whether Two Companies Failed the Verification Process Based on the 
Verification Findings and Documents Obtained From Verification
5. Whether Certain Data Obtained from Verification Were Illegible
6. Whether the Change in Ownership Warrants Assigning Laizhou Luyuan 
the PRC-Wide Rate

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7. Whether We Should Have Conducted Verification of Gren's Data
[FR Doc. 02-27393 Filed 10-25-02; 8:45 am]
BILLING CODE 3510-DS-S