[Federal Register Volume 68, Number 5 (Wednesday, January 8, 2003)]
[Notices]
[Pages 1031-1038]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-346]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-846]


Brake Rotors from the People's Republic of China: Preliminary 
Results and Preliminary Partial Rescission of the Fifth Antidumping 
Duty Administrative Review and Preliminary Results of the Seventh New 
Shipper Review

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

ACTION: Notice of preliminary results and preliminary partial 
rescission of the fifth antidumping duty administrative review and 
preliminary results of the seventh new shipper review.

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SUMMARY: The Department of Commerce is currently conducting the fifth 
administrative review and the seventh new shipper review of the 
antidumping duty order on brake rotors from the People's Republic of 
China (``PRC'') covering the period April 1, 2001, through March 31, 
2002. The administrative review examines 16 exporters, five of which 
are exporters included in three exporter/producer combinations. The new 
shipper review covers two exporters.
    We have preliminarily determined that no sales have been made below 
normal value with respect to the exporters subject to these reviews, 
with the exception of one exporter determined to be part of the PRC 
non-market economy (``NME'') entity. If these preliminary results are 
adopted in our final results of these reviews, we will instruct the 
U.S. Customs Service to assess antidumping duties on entries of subject 
merchandise during the period of review, for which the importer-
specific assessment rates are above de minimis. We are also 
preliminarily rescinding the administrative review with respect to five 
exporters included in the 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 no later than 120 days from 
the date of publication of this notice.

EFFECTIVE DATE: January 8, 2003.

FOR FURTHER INFORMATION CONTACT: Terre Keaton or Brian Smith, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, Washington, D.C. 20230; telephone: (202) 482-1280, and (202) 
482-1766, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On April 26, 2002, the petitioner\1\ requested an administrative 
review pursuant to 19 CFR 351.213(b) for 15 exporters,\2\ five of which 
are included in

[[Page 1032]]

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.
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    \1\ The petitioner is the Coalition for the Preservation of 
American Brake Drum and Rotor Aftermarket Manufacturers.
    \2\ The names of these exporters are as follows: (1) China 
National Industrial Machinery Import & Export Corporation 
(``CNIM''); (2) Laizhou Automobile Brake Equipment Company, Ltd. 
(``LABEC''); (3) Longkou Haimeng Machinery Co., Ltd. (``Haimeng''); 
(4) Laizhou Hongda Auto Replacement Parts Co., Ltd. (``Hongda''); 
(5) Hongfa Machinery (Dalian) Co., Ltd. (``Hongfa''); (6) Qingdao 
Gren (Group) Co. (``GREN''); (7) Qingdao Meita Automotive Industry 
Company, Ltd. (``Meita''); (8) Shandong Huanri (Group) General 
Company (``Huanri General''); (9) Yantai Winhere Auto-Part 
Manufacturing Co., Ltd. (``Winhere''); and (10) Zibo Luzhou 
Automobile Parts Co., Ltd. (``ZLAP''); (11) China National Machinery 
and Equipment Import & Export (Xianjiang) Corporation 
(``Xianjiang''); (12) China National Automotive Industry Import & 
Export Corporation (``CAIEC''); (13) Laizhou CAPCO Machinery Co., 
Ltd. (``Laizhou CAPCO''); (14) Laizhou Luyuan Automobile Fittings 
Co. (``Laizhou Luyuan''); and (15) Shenyang Honbase Machinery Co., 
Ltd. (``Shenyang'').
    \3\ The excluded exporter/producer combinations are: (1) 
Xianjiang/Zibo Botai; (2) CAIEC or Laizhou CAPCO/Laizhou CAPCO; and 
(3) Laizhou Luyuan or Shenyang/Laizhou Luyuan or Shenyang.
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    On April 30, 2002, the Department received timely requests from 
Shanxi Fengkun Metallurgical Ltd. Co. (``Shanxi Fengkun'') and Zibo 
Golden Harvest Machinery Limited Company (``Golden Harvest'') for a new 
shipper review of this antidumping duty order in accordance with 19 CFR 
351.214(c). On this same date, Beijing Concord Auto Technology Inc. 
(``Beijing Concord'') requested that the Department conduct an 
administrative review of its exports of subject merchandise for the 
period April 1, 2001, through March 31, 2002.
    On May 7, 2002, both Shanxi Fengkun and Golden Harvest agreed to 
waive the time limits applicable to the new shipper review and to 
permit the Department to conduct the new shipper review concurrently 
with the administrative review.
    On May 23, 2002, the Department initiated an administrative review 
covering the companies listed in the petitioner's April 26, 2002, 
request, as well as Beijing Concord (see Initiation or Antidumping and 
Countervailing Duty Administrative Reviews and Request for Revocation 
in Part, 67 FR 36148).
    On May 24, 2002, the Department initiated a new shipper review of 
Shanxi Fengkun and Golden Harvest (see Brake Rotors from the People's 
Republic of China: Initiation of New Shipper Antidumping Duty Reviews, 
67 FR 38642 (June, 5, 2002)).
    On June 3, 2002, we issued a questionnaire to each company listed 
in the above-referenced initiation notices. Also on June 3, 2002, the 
Department provided the parties an opportunity to submit publicly 
available information for consideration in these preliminary results.
    On June 19, 2002, each of the exporters that received a zero rate 
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.
    We received responses to the Department's questionnaire in July and 
August 2002. We issued supplemental questionnaires in August 2002, and 
received responses in September, October, and November 2002.
    Beijing Concord did not respond to the Department's June 3, 2002, 
antidumping questionnaire. Consequently, on October 16, 2002, we 
informed Beijing Concord that since the Department had not received a 
questionnaire response from it by the deadline granted to it, we would 
have to resort to facts available in accordance with section 776(b) of 
the Act (see ``Facts Available'' section of this notice below for 
further discussion).
    On October 2, 2002, 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 that they made no shipments of subject merchandise during the 
POR. As a result of the data query, the Department requested that the 
Customs Service confirm the actual manufacturer for 25 specific entries 
associated with the excluded exporter/producer combinations. On 
December 31, 2002, 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. For further discussion, 
see the section of this notice entitled ``Preliminary Partial 
Rescission of Administrative Review.''
    Also in October 2002, we issued verification outlines to Golden 
Harvest, GREN, and Shanxi Fengkun. We conducted verification of the 
responses submitted by Golden Harvest, GREN and its U.S. subsidiary, 
and Shanxi Fengkun during October and November 2002. We issued 
verification reports in December 2002. (See December 13, 2002, 
verification reports for Golden Harvest and Shanxi Fengkun in the 
Seventh Antidumping Duty New Shipper Review and December 20, 2002, 
verification report for GREN in the Fifth Antidumping Duty 
Administrative Review.)
    On December 23, 2002, GREN submitted revised U.S. sales and factors 
of production listings, pursuant to the Department's instructions, 
reflecting data corrections based on verification findings.

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 
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, 2001, through March 31, 2002.

Verification

    As provided in section 782(i)(2) of the Act, we verified 
information provided by GREN, Golden Harvest, and Shanxi Fengkun. We 
used standard verification procedures, including on-site inspection of 
the manufacturer's facilities and examination of relevant sales and 
financial records. Our verification

[[Page 1033]]

results are outlined in the verification report for each of these 
companies (see December 2002 verification reports for Golden Harvest, 
Shanxi Fengkun and GREN for further discussion).

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 Laizhou CAPCO nor CAIEC exported 
brake rotors to the United States that were manufactured by producers 
other than Laizhou CAPCO; ((2) Xinjiang did not export brake rotors to 
the United States that were manufactured by producers other than Zibo 
Botai, (3) Shenyang did not export brake rotors to the United Stated 
that were manufactured by producers other than Shenyang or Laizhou 
Luyuan, and (4) Laizhou Luyuan did not export brake rotors to the 
United States that were manufactured by producers other than Laizhou 
Luyuan or Shenyang.
    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, 2002, we placed on the record of this review a memorandum 
which summarized the data provided by the Customs Service in response 
to our query. Based on the results of our query, 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.

Facts Available

    We issued Beijing Concord the Department's antidumping duty 
questionnaire on June 3, 2002. Although we provided Beijing Concord 
with three extensions of time for submitting its questionnaire 
response, it failed to provide its response by the final extended 
deadline date of August 9, 2002. As a result of not receiving a 
questionnaire response from it and in light of its counsel withdrawing 
its appearance on its behalf (see letter from counsel dated August 9, 
2002), we issued Beijing Concord a letter on August 22, 2002, which 
informed the company that we assumed that it did not intend to 
participate in this review. On September 3, and 16, 2002, Beijing 
Concord stated that it would not be able to participate in this review 
based on its decision to no longer retain counsel, particularly given 
its alleged lack of experience with our administrative process. 
However, in those same letters, Beijing Concord stated that it was 
willing to respond to the questionnaire if the Department wanted it to 
do so. In response to the September 3, and 16, 2002, letters submitted 
by Beijing Concord, we informed the company on October 16, 2002, that 
the deadline (which had been extended three times pursuant to its 
request) for submitting a response to the Department's June 3, 2002, 
antidumping questionnaire had long passed and that we would not be able 
to provide it with another opportunity to respond to the questionnaire 
in this review. In addition, we informed Beijing Concord that we would 
have to apply facts available to it in accordance with section 776(b) 
of the Act.
    Under section 782(c) of the Act, a respondent has a responsibility 
not only to notify the Department if it is unable to provide requested 
information, but also to provide a ``full explanation and suggested 
alternative forms.'' Beijing Concord's September 3, and 16, 2002, 
letters documented for the record the company's decision not to provide 
this information in a timely manner and it has otherwise failed to 
respond to our requests for information, thereby failing to comply with 
this provision of the statute. Therefore, we determine that Beijing 
Concord failed to cooperate to the best of its ability, making the use 
of an adverse inference appropriate. Consequently, Beijing Concord is 
not eligible to receive a separate rate and continues to be part of the 
PRC NME entity, subject to the PRC-wide rate.
    In this segment of the proceeding, in accordance with Department 
practice (see, e.g., Rescission of Second New Shipper Review and Final 
Results and Partial Rescission of First Antidumping Duty Administrative 
Review of Brake Rotors from the People's Republic of China, 64 FR 
61581, 61584 (November 12, 1999)), as adverse facts available, we have 
assigned to exports of the subject merchandise by Beijing Concord the 
PRC-wide rate of 43.32 percent, a rate that was calculated based on 
information contained in the petition. The Department's practice when 
selecting an adverse rate from among the possible sources of 
information is to ensure that the margin is sufficiently adverse ``as 
to effectuate the purpose of the facts available rule to induce a 
respondent to provide the Department with complete and accurate 
information in a timely manner.'' See Final Determination of Sales at 
Less than Fair Value: Static Random Access Memory Semiconductors from 
Taiwan, 63 FR 8909, 8932, February 23, 1998.
    Section 776 of the Act provides that where the Department selects 
from among the facts otherwise available and relies on ``secondary 
information,'' the Department shall, to the extent practicable, 
corroborate that information from independent sources reasonably at the 
Department's disposal. Secondary information is described in the SAA as 
``[i]nformation derived from the petition that gave rise to the 
investigation or review under section 751 concerning the subject 
merchandise.''
    With respect to the relevance aspect of corroboration, the 
Department stated in Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, from Japan, and Tapered Roller Bearings, Four 
Inches or Less in Outside Diameter, and Components Thereof, from Japan; 
Preliminary Results of Antidumping Duty Administrative Reviews and 
Partial Termination of Administrative Reviews, 61 FR 57391, 57392 
(November 6, 1996) (``TRBs''), that it will ``consider information 
reasonably at its disposal as to whether there are circumstances that 
would render a margin irrelevant. Where circumstances indicate that the 
selected margin is not appropriate as adverse facts available, the 
Department will disregard the margin and determine an appropriate 
margin.'' See also Fresh Cut Flowers from Mexico; Preliminary Results 
of Antidumping Duty Administrative Review, 61 FR 6812, 6814 (February 
22, 1996) (disregarding the highest margin in the case as best 
information available because the margin was based on another company's 
uncharacteristic business expense resulting in an extremely high 
margin).
    We corroborated the petition information in subsequent reviews to 
the extent that we noted the history of corroboration and found that we 
had not received any information that warranted revisiting the issue. 
See Fresh Garlic from the People's Republic of China: Preliminary 
Results of Antidumping Duty Administrative Review and Partial 
Rescission of Administrative Review, 65 FR 48464 (August 8, 2000). 
Similarly, no information has been presented in

[[Page 1034]]

the current review that calls into question the reliability or the 
relevance of the information contained in the petition. We thus find 
that the information is reliable; therefore, we have applied, as 
adverse facts available, the PRC-wide rate from prior administrative 
reviews of this order and have satisfied the corroboration requirements 
under section 776(c) of the Act. See Persulfates from the People's 
Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review, 66 FR 18439, 18441 (April 9, 2001) (employing a 
petition rate used as adverse facts available in a previous segment as 
the adverse facts available in the current review). We have determined 
that this rate has probative value and, therefore, is an appropriate 
rate to be applied in this review to exports of subject merchandise by 
Beijing Concord as facts otherwise available.

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).
    Of the 12 respondents that submitted questionnaire responses, three 
of the PRC companies (i.e., Hongfa, Meita, and Winhere) are wholly 
foreign-owned. Thus, for these three companies, because we have no 
evidence indicating that they are under the control of the PRC 
government, a separate rates analysis is not necessary to determine 
whether they are independent from government control (see Notice of 
Final Determination of Sales at Less Than Fair Value: Creatine 
Monohydrate from the People's Republic of China, 64 FR 71104, 71105 
(December 20, 1999); Preliminary Results of First New Shipper Review 
and First Antidumping Duty Administrative Review: Certain Preserved 
Mushrooms from the People's Republic of China, 65 FR 66703, 66705 
(November 7, 2000); and 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)).
    The remaining nine respondents (i.e., Golden Harvest, Haimeng, 
Hongda, ZLAP, CNIM, GREN, Huanri General, LABEC and Shanxi Fengkun) are 
either joint ventures between PRC and foreign companies, collectively-
owned enterprises and/or limited liability companies in the PRC. Thus, 
for these nine respondents, a separate rates analysis is necessary to 
determine whether the exporters are independent from government control 
(see Bicycles at 61 FR 56570). 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
    CNIM, Golden Harvest, GREN, Haimeng, Hongda, Huanri General, LABEC, 
Shanxi Fengkun, and ZLAP have each 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, joint ventures between PRC and foreign 
companies, and/or 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 CNIM, Golden Harvest, GREN, Haimeng, 
Huanri General, Hongda, LABEC, Shanxi Fengkun, and ZLAP.
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).
    CNIM, Golden Harvest, GREN, Haimeng, Hongda, Huanri General, LABEC, 
Shanxi Fengkun, and ZLAP have each 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, each of 
these companies' questionnaire responses indicates that its pricing 
during the POR does not suggest coordination among exporters.
    In this segment of the proceeding, the Department selected three of 
the 12 respondents for verification, namely Golden Harvest, GREN, and 
Shanxi Fengkun. The Department did not select the other nine 
respondents (i.e., CNIM, Haimeng, Hongda, Hongfa, Huanri General, 
LABEC, Meita, Winhere, and ZLAP) for verification.
    For Golden Harvest, GREN, and Shanxi Fengkun, the Department found 
no evidence at verification of government involvement in any of these 
companies' business operations. Specifically, Department officials 
examined sales documents that showed that each of these three 
respondents 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 
each of these three respondents 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

[[Page 1035]]

examined internal company memoranda, such as appointment notices and 
election results, which demonstrated that each of these three companies 
selected its own management. See pages five through seven of the 
Department's verification report for Golden Harvest; pages 10 through 
12 of the Department's verification report for GREN; and pages six and 
seven of the Department's verification report for Shanxi Fengkun. This 
information, taken in its entirety, supports a finding that there is a 
de facto absence of governmental control of each of these companies' 
export functions.
    With regard to CNIM, Haimeng, Hongda, Huanri General, LABEC, and 
ZLAP (i.e., the other six respondents subject to the separate rates 
test in this review), the Department elected not to verify these 
companies' responses in accordance with section 351.307(b)(3). Based on 
documentation contained in each company's response, the Department also 
finds that each of these six respondents (1) negotiated its contracts 
and set its own sales prices with its customers; (2) received payment 
from its U.S. customers via bank wire transfer, which was deposited 
into its own bank account without government intervention; (3) retained 
its profits and, where applicable, arranged its own financing; and (4) 
selected its own management (see each respondent's questionnaire 
responses).
    Consequently, we have determined that CNIM, Golden Harvest, GREN, 
Haimeng, Hongda, Huanri General, LABEC, Shanxi Fengkun and ZLAP have 
each met the criteria for the application of separate rates either 
through documentation submitted on the record subject to verification 
or through actual verification. See Notice of Final Determination at 
Less Than Fair Value: Persulfates from the People's Republic of China, 
62 FR 27222 (May 19, 1997).

Normal Value Comparisons

    To determine whether sales of the subject merchandise by CNIM, 
Golden Harvest, GREN, Haimeng, Huanri General, Hongda, Hongfa, LABEC, 
Meita, Shanxi Fengkun, Winhere, and ZLAP to the United States were made 
at prices below normal value (``NV''), we compared each company's 
export prices to NV, as described in the ``Export Price,'' 
``Constructed Export Price,'' and ``Normal Value'' sections of this 
notice, below.

Export Price

    For 11 of the 12 respondents (i.e., CNIM, Golden Harvest, Haimeng, 
Huanri General, Hongda, Hongfa, LABEC, Meita, Shanxi Fengkun, Winhere, 
and ZLAP), we used export price methodology in accordance with section 
772(a) of the Act because the subject merchandise was first sold prior 
to importation by the exporter outside the United States directly to an 
unaffiliated purchaser in the United States, and constructed export 
price was not otherwise indicated.
1. CNIM, Golden Harvest, Hongfa, Meita, Shanxi Fengkun, Winhere, and 
ZLAP
    We calculated EP based on packed, FOB foreign port prices to the 
first unaffiliated purchaser in the United States. Where appropriate, 
we made deductions from the starting price (gross unit price) for 
foreign inland freight and foreign brokerage and handling charges in 
the PRC, in accordance with section 772(c) of the Act. Because foreign 
inland freight and foreign brokerage and handling fees were provided by 
NME service providers or paid for in an NME currency, we based those 
charges on surrogate rates from India (see ``Surrogate Country'' 
section below). To value foreign inland trucking charges, we used a 
November 1999 average truck freight value based on price quotes from 
Indian trucking companies. Based on our verification findings, we 
revised the reported distance from Golden Harvest to the port of 
exportation (see page 13 of the Golden Harvest verification report). To 
value foreign brokerage and handling expenses, we relied on public 
information reported in the 1997-1998 new shipper review of the 
antidumping duty order on stainless steel wire rod from India.
2. Haimeng, Hongda, Huanri General, and LABEC
    We calculated EP based on packed, CIF, CFR or FOB foreign port 
prices to the first unaffiliated purchaser in the United States. Where 
appropriate, we made deductions from the starting price (gross unit 
price) for foreign inland freight and foreign brokerage and handling 
charges in the PRC, marine insurance and international freight, in 
accordance with section 772(c) of the Act. As all foreign inland 
freight and foreign brokerage and handling fees were provided by NME 
service providers or paid for in an NME currency, we valued these 
services using the Indian surrogate values discussed above. For marine 
insurance, we used public information that was used in the 2000-2001 
administrative review of the antidumping duty order on tapered roller 
bearings and parts thereof, finished and unfinished, from the People's 
Republic of China. For international freight (i.e., ocean freight and 
U.S. inland freight expenses from the U.S. port to the warehouse (where 
applicable)), we used the reported expense because each of these four 
respondents used market-economy freight carriers and paid for those 
expenses in a market-economy currency (see, e.g., Brake Rotors from the 
People's Republic of China: Final Results of Antidumping Duty New 
Shipper Review, 64 FR 9972, 9974 (March 1, 1999)).

Constructed Export Price

    For GREN, we calculated constructed export price (``CEP'') in 
accordance with section 772(b) of the Act. We found that GREN made CEP 
sales during the POR because the sales were made for the account of 
GREN by the respondent's subsidiary in the United States to 
unaffiliated purchasers. We based CEP on packed, delivered or ex-
warehouse prices to the first unaffiliated purchaser in the United 
States. Where appropriate, we made deductions from the starting price 
(gross unit price) for movement expenses in accordance with section 
772(c)(2)(A) of the Act; these included, where appropriate, foreign 
inland freight and foreign brokerage and handling charges in the PRC, 
international freight (i.e., ocean freight and U.S. inland freight from 
the U.S. port to the warehouse), marine insurance, U.S. customs duties 
and fees (including harbor maintenance fees, merchandise processing 
fees, and brokerage and handling), and U.S. inland freight expenses 
(i.e., freight from the plant to the customer). As all foreign inland 
freight, foreign brokerage and handling, and marine insurance expenses 
were provided by NME service providers or paid for in an NME currency, 
we valued these services using the Indian surrogate values discussed 
above. For international freight (i.e., ocean freight and U.S. inland 
freight expenses from the U.S. port to the warehouse (where 
applicable)), we used the reported expense because the respondent used 
a market-economy freight carrier and paid for those expenses in a 
market-economy currency.
    In accordance with section 772(d)(1) of the Act, we also deducted 
those selling expenses associated with economic activities occurring in 
the United States, including direct selling expenses (commissions and 
credit expenses), and indirect selling expenses (including inventory 
carrying costs) incurred in the United States. We also made an 
adjustment for profit in accordance with section 772(d)(3) of the Act.

[[Page 1036]]

Normal Value

A. Non-Market Economy Status
    In every case conducted by the Department involving the PRC, the 
PRC has been treated as an NME country. Pursuant to section 
771(18)(C)(i) of the Act, any determination that a foreign country is 
an 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 an 
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 May 29, 2002). 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.
3. 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 each of the 12 respondents 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.
    Based on our verification findings at Golden Harvest, we revised 
the following data in its response: (1) the reported per-unit weight 
for tin clamps and steel strap for all models; (2) the reported per-
unit weight for corrugated paper cartons reported for two models; (3) 
the per-unit factor amounts for direct labor for all models; and (4) 
the distances from Golden Harvest to three of its suppliers (see pages 
17, 19, and 20 of the Golden Harvest verification report). Based on our 
verification findings at Shanxi Fengkun, we revised the reported per-
unit weight for five of its packing materials (i.e., corrugated paper 
cartons, nails, plastic bags, tape, and steel strap) (see page 18 of 
the Shanxi Fengkun verification report). Based on our verification 
findings at GREN, we revised the distances reported from GREN to four 
of its suppliers (see page 7 of the GREN verification report).
    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, coking coal and 
firewood, we used April 2001-December 2001 average import values from 
Monthly Statistics of the Foreign Trade of India (``Monthly 
Statistics''). We relied on the factor specification data submitted by 
the respondents for the above-mentioned inputs in their questionnaire 
and supplemental questionnaire responses 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-November 1999 product-specific import value from the Indonesian 
government publication Indonesian Foreign Trade Statistical Bulletin 
(see Bicycles, 61 FR at 19040 (Comment 17)). Certain respondents (i.e., 
Golden Harvest, Haimeng, Huanri General, LABEC, and ZLAP) stated in 
their responses they did not incur an expense for bearing cups and lug 
bolts because their U.S. customer provided these items to them free of 
charge. In support of their claim that they incurred no expense for 
these items, the respondents provided either the sales agreement or 
purchase order from their U.S. customers. Therefore, for the 
preliminary results, we have not valued these items for those 
respondents.
    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.
    We based our surrogate value for electricity on data obtained from 
Energy Data Directory & Yearbook (1999-2000).
    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 2000-2001 financial data of 
Kalyani Brakes Limited (``Kalyani'') and Rico Auto Industries Limited 
(``Rico'').
    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, 2002.
    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 paper cartons, nails, plastic bags and sheets/
covers, steel strip, tape, clamps, and labels, we used April 2001-
December 2001 average import values from Monthly Statistics. All 
respondents included the weight of the clamp in their reported steel 
strip weights. With the exception of one respondent (i.e., Golden 
Harvest), because the material of the clamp and steel strip was the 
same for both inputs, we valued these factors using the combined weight 
reported by those respondents. For Golden Harvest, we separately valued 
the two packing

[[Page 1037]]

material inputs since the clamps were made out of tin.
    To value pallet wood, we used a January 1999-November 1999 pallet 
wood value from the Indonesian publication Indonesian Foreign Trade 
Statistical Bulletin because we consider the value for this input from 
Monthly Statistics to be unreliable (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) 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 margins exist during 
the period April 1, 2001, through March 31, 2002:

------------------------------------------------------------------------
      Manufacturer/producer/exporter               Margin Percent
------------------------------------------------------------------------
PRC NME entity (which includes Beijing                             43.32
 Concord).................................
China National Industrial Machinery Import             0.43 (de minimis)
 & Export Corporation.....................
Hongfa Machinery (Dalian) Co., Ltd........                          0.00
Laizhou Automobile Brake Equipment                     0.18 (de minimis)
 Company, Ltd.............................
Longkou Haimeng Machinery Co., Ltd........             0.07 (de minimis)
Laizhou Hongda Auto Replacement Parts Co.,                          0.00
 Ltd......................................
Qingdao Gren (Group) Co...................             0.09 (de minimis)
Qingdao Meita Automotive Industry Company,             0.12 (de minimis)
 Ltd......................................
Shanxi Fengkun Metallurgical Ltd. Co......                          0.00
Shandong Huanri (Group) General Company...             0.03 (de minimis)
Yantai Winhere Auto-Part Manufacturing                              0.00
 Co., Ltd.................................
Zibo Golden Harvest Machinery Limited                               0.00
 Company..................................
Zibo Luzhou Automobile Parts Co., Ltd.....             0.16 (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 March 31, 2003.
    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 February 21, 2003. Rebuttal briefs, 
limited to issues raised in the case briefs, will be due not later than 
February 28, 2003. 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 120 days 
after the date of publication of this notice.

Assessment Rates

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Pursuant to 19 
CFR 351.212(b)(1), we will calculate importer-specific ad valorem duty 
assessment rates based on the ratio of the total amount of the dumping 
margins calculated for the examined sales to the total entered value of 
those same sales. In order to estimate the entered value for those 
sales where this information was unavailable, 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 for the 
companies subject to this review directly to the Customs Service upon 
completion of this review. For entries of the subject merchandise 
during the POR from companies not subject to this review, we will 
instruct the Customs Service to liquidate them at the cash deposit rate 
in effect at the time of entry.

Cash Deposit Requirements

    Upon completion of these reviews, for entries from CNIM, Golden 
Harvest, GREN, Haimeng, Hongda, Hongfa, Huanri General, LABEC, Meita, 
Shanxi Fengkun, Winhere, and ZLAP, we will require cash deposits at the 
rate established in the final results as further described below.
    The following deposit requirements will be effective upon 
publication of the final results of these administrative and new 
shipper reviews for all shipments of brake rotors from the PRC entered, 
or withdrawn from warehouse, for consumption on or after the 
publication date, as provided by section 751(a)(1) of the Act: (1) the 
cash deposit rate for CNIM, Golden Harvest, GREN, Haimeng, Hongda, 
Hongfa, Huanri General, LABEC, Meita, Shanxi Fengkun, Winhere, and ZLAP 
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 within the 
meaning of 19 CFR 351.106(c)(1), 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 entity (e.g., which includes Beijing 
Concord) 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

[[Page 1038]]

regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    These administrative and new shipper reviews and notice are in 
accordance with sections 751(a)(1) and (2)(B) of the Act.

    Dated: December 31, 2002.
Susan Kuhbach,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-346 Filed 1-7-03; 8:45 am]
BILLING CODE 3510-DS-S