[Federal Register Volume 68, Number 31 (Friday, February 14, 2003)]
[Notices]
[Pages 7500-7503]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3729]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-601]


Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From the People's Republic of China: Preliminary Results of 
2001-2002 Administrative Review and Partial Rescission of Review

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

ACTION: Notice of Preliminary Results of 2001-2002 Administrative 
Review and Partial Rescission of the Review.

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SUMMARY: We preliminarily determine that sales of tapered roller 
bearings and parts thereof, finished and unfinished, from the People's 
Republic of China, were made below normal value during the period June 
1, 2001, through May 31, 2002. We are also rescinding the review, in 
part, in accordance with 19 CFR 351.213(d)(3).
    If these preliminary results are adopted in our final results of 
review, we will instruct the Customs Service to assess antidumping 
duties based on the differences between the constructed export price 
and normal value on all appropriate entries. Interested parties are 
invited to comment on these preliminary results.

EFFECTIVE DATE: February 14, 2003.

FOR FURTHER INFORMATION CONTACT: Andrew Smith or Daniel Alexy, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230; telephone: (202) 482-1276 and (202) 482-1540, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On May 27, 1987, the Department of Commerce (``the Department'') 
published in the Federal Register (52 FR 19748) the antidumping duty 
order on tapered roller bearings and parts thereof, finished and 
unfinished (''TRBs''), from the People's Republic of China (''PRC''). 
The Department notified interested parties of the opportunity to 
request an administrative review of this order on June 5, 2002 (67 FR 
38640). On June 25, 2002, Peer Bearing Company - Changshan (``CPZ'') 
requested an administrative review. On June 27, 2002, Wanxiang Group 
Corporation (``Wanxiang''), China National Machinery Import & Export 
Corporation (``CMC''), Tianshui Hailin Import and Export Corporation 
(``Hailin''), Luoyang Bearing Corporation (Group) (``Luoyang''), and 
Liaoning MEC Group Co. Ltd. (``Liaoning'') also requested 
administrative reviews. On June 28, 2002, the Koyo Corporation of 
U.S.A., an interested party in this proceeding pursuant to 19 CFR 
351.213(b)(1), requested that the Department conduct an administrative 
review of Yantai Timken Co., Ltd. (``Yantai Timken''). In accordance 
with 19 CFR 351.221(b)(1), we published a notice of initiation of this 
antidumping duty administrative review on July 24, 2002 (67 FR 48435).
    On August 6, 2002, we sent a questionnaire to the Secretary General 
of the Basic Machinery Division of the Chamber of Commerce for Import & 
Export of Machinery and Electronics Products and requested that the 
questionnaire be forwarded to all PRC companies identified in our 
initiation notice and to any subsidiary companies of the named 
companies that produce and/or export the subject merchandise. In this 
letter, we also requested information relevant to the issue of whether 
the companies named in the initiation notice are independent from 
government control. See the ``Separate Rates Determination'' section, 
below. On August 6, 2002, courtesy copies of the questionnaire were 
also sent to companies with legal representation.
    On September 10, 2002, the following companies requested that the 
Department rescind the administrative review with respect to these 
companies: Hailin, Wanxiang, Luoyang, Liaoning, and CMC. Pursuant to 19 
CFR 351.213(d)(1), because these companies withdrew their requests for 
review within 90 days of the date of publication of the notice of 
initiation of this review and no other party requested a review of 
these companies, we are rescinding the review with respect to Hailin, 
Wanxiang, Luoyang, Liaoning, and CMC.
    We received responses to the questionnaire in August, September, 
and October 2002 from CPZ and Yantai Timken. We sent out supplemental 
questionnaires to CPZ and Yantai Timken in November, December 2002, and 
January 2003, and received responses to these supplemental 
questionnaires in December 2002 and January 2003.

Scope of the Order

    Merchandise covered by this order includes TRBs and parts thereof, 
finished and unfinished, from the PRC; flange, take up cartridge, and 
hanger units incorporating tapered roller bearings; and tapered roller 
housings (except pillow blocks) incorporating tapered rollers, with or 
without spindles, whether or not for automotive use. This merchandise 
is currently classifiable under Harmonized Tariff Schedule of the 
United States (``HTSUS'') item numbers 8482.20.00, 8482.91.00.50, 
8482.99.30, 8483.20.40, 8483.20.80, 8483.30.80, 8483.90.20, 8483.90.30, 
8483.90.80, 8708.99.80.15, and 8708.99.80.80. Although the HTSUS item 
numbers are provided for convenience and customs purposes, the written 
description of the scope of the order is dispositive.

Separate Rates Determination

    The Department has treated the PRC as a nonmarket economy (``NME'') 
country in all previous antidumping cases. In accordance with section 
771(18)(C)(i) of the Tariff Act of 1930, as amended (``the Act''), any 
determination that a foreign country is an NME shall remain in effect 
until revoked by the Department. None of the parties to this proceeding 
has contested such treatment in this review. Moreover, parties to this 
proceeding have not argued that the PRC TRBs industry is a market-
oriented industry.
    Therefore, we are treating the PRC as an NME country within the 
meaning of section 773(c) of the Act. We allow companies in NME 
countries to receive separate antidumping duty rates for purposes of 
assessment and cash deposits when those companies can demonstrate an 
absence of government control, both in law and in fact, with respect to 
export activities.
    To establish whether a company operating in an NME country is 
sufficiently independent to be entitled to a separate rate, the 
Department analyzes each exporting entity under the test established in 
the Final Determination of Sales at Less Than Fair Value: Sparklers 
from the People's

[[Page 7501]]

Republic of China, 56 FR 20588 (May 6, 1991) (``Sparklers''), as 
amplified by 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''). Evidence supporting, though not 
requiring, a finding of de jure absence of government control over 
export activities includes: 1) an absence of restrictive stipulations 
associated with the individual exporter's business and export licenses; 
2) any legislative enactments decentralizing control of companies; and 
3) any other formal measures by the government decentralizing control 
of companies. See Sparklers, 56 FR 20589. De facto absence of 
government control over exports is based on four factors: 1) whether 
each exporter sets its own export prices independently of the 
government and without the approval of a government authority; 2) 
whether each exporter retains the proceeds from its sales and makes 
independent decisions regarding the disposition of profits or financing 
of losses; 3) whether each exporter has the authority to negotiate and 
sign contracts and other agreements; and 4) whether each exporter has 
autonomy from the government regarding the selection of management. See 
Silicon Carbide, 59 FR 22587; Sparklers, 56 FR 20589.
    In Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From the People's Republic of China: Final Results of New 
Shipper Reviews, 67 FR 10665 (March 8, 2002), we determined that CPZ 
and Yantai Timken should receive separate rates. We preliminarily 
determine that the evidence on the record of this review also 
demonstrates an absence of government control, both in law and in fact, 
with respect to these companies' exports according to the criteria 
identified in Sparklers and Silicon Carbide. The evidence includes, 
among other things, the companies' business licenses and copies of 
relevant PRC laws on trade and incorporation. Therefore, we have 
continued to assign each of these companies a separate rate.

Constructed Export Price

    For all sales made by CPZ and Yantai Timken to the United States, 
we used constructed export price (``CEP'') in accordance with section 
772(b) of the Act. Section 772(b) of the Act defines CEP as the price 
at which the subject merchandise is first sold in the United States 
before or after the date of importation, by or for the account of the 
producer or exporter of the merchandise, or by a seller affiliated with 
the producer or exporter, to an unaffiliated purchaser, as adjusted 
under sections 772(c) and (d) of the Act.
    We calculated CEP based on the packed, ex-warehouse prices from 
CPZ's and Yantai Timken's U.S. subsidiaries to unaffiliated customers. 
We made deductions, where appropriate, from the starting price for CEP 
for international freight, foreign brokerage and handling, foreign 
inland freight, marine insurance, customs duties, U.S. warehousing, and 
U.S. inland freight. When foreign brokerage and handling, marine 
insurance, and ocean freight were provided directly by market-economy 
companies and paid for in a market-economy currency, we deducted the 
market-economy values reported by the responding companies for these 
services.
    In accordance with section 772(d)(1) of the Act, we made further 
deductions from the CEP starting price for the following selling 
expenses that related to economic activity in the United States: 
commissions, credit expenses, discounts, further manufacturing, 
rebates, repacking costs, and indirect selling expenses (including 
inventory carrying costs). For CPZ, we made an upward adjustment to its 
reported indirect selling expenses. For more information, see 
Preliminary Results Calculation Memorandum for CPZ(February 7, 2003), 
which is on file in the Department's Central Records Unit, which is 
located in Room B-099 of the main Department building (``CRU''). 
Additionally, in accordance with section 772(d)(3) of the Act, we have 
deducted from the starting price an amount for profit. For information 
on how profit was calculated, see ``Overhead, SG&A Expenses, and 
Profit'' in the ``Normal Value'' section below.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine normal value (``NV'') using a factors-of-production (``FOP'') 
methodology if: (1) the subject merchandise is exported from an NME 
country, and (2) the Department finds that the available information 
does not permit the calculation of NV under section 773(a) of the Act. 
We have no basis to determine that the available information would 
permit the calculation of NV using PRC prices or costs. Therefore, we 
calculated NV based on factors data in accordance with sections 
773(c)(3) and (4) of the Act and 19 CFR 351.408(c).
    Under the FOP methodology, we are required to value, to the extent 
possible, the NME producer's inputs in a market-economy country that is 
at a comparable level of economic development and that is a significant 
producer of comparable merchandise. We chose India as the surrogate 
country on the basis of the criteria set out in 19 CFR 351.408(b). 
Seethe October 21, 2002, Memorandum to File: ``Requests for Surrogate 
Values,'' which includes the August 6, 2002, Memorandum to Melani 
Miller from Jeff May: ``Administrative Review on Tapered Roller 
Bearings from the People's Republic of China,'' and the February 7, 
2003, Memorandum to John Brinkmann: ``Selection of a Surrogate Country 
and Steel Value Sources'' (``Steel Values Memorandum'') for a further 
discussion of our surrogate selection. (Both memoranda are on file in 
the CRU.)
    We used publicly available information from India to value the 
various factors. Pursuant to the Department's FOP methodology, we 
valued each respondent's reported factors of production by multiplying 
them by the values described below. For a complete description of the 
factor values used, see the Memorandum to John Brinkmann: ``Factors of 
Production Values Used for the Preliminary Results,'' dated February 7, 
2003, which is on file in the Department's CRU.
    1. Steel and Scrap. For hot-rolled alloy steel bars used in the 
production of cups, we used an adjusted weighted-average of Japanese 
export values to India from the Japanese Harmonized Schedule (``HS'') 
category 7228.30.900 obtained from Official Japan Ministry of Finance 
statistics. We adjusted this data to include costs incurred on ocean 
freight and marine insurance. This is the same valuation methodology 
used in Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, from the People's Republic of China: Final Results of 2000-
2001 Administrative Review, Partial Rescission of Review, and 
Determination to Revoke Order, in Part 67 FR 68990 (November 14, 2002) 
and Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, 
From the People's Republic of China: Amended Final Results of 2000-2001 
Administrative Review 67 FR 72147 (December 4, 2002) (collectively, 
``TRBs XIV'') and Tapered Roller Bearings and Parts Thereof, Finished 
and Unfinished, From the People's Republic of China: Final Results of 
1999-2000 Administrative Review, Partial Rescission of Review, and 
Determination Not to Revoke Order in Part, 66 FR 57420 (November 15, 
2001) (``TRBs XIII''). For further discussion of our calculation of 
this value, see Steel Values Memorandum.
    We valued scrap recovered from the production of cups, cones, and 
rollers using Indian import statistics from Indian HS category 
7204.2909. As in

[[Page 7502]]

previous administrative reviews of this order, we eliminated from our 
scrap calculations imports from NME countries and small quantity 
imports from market-economy countries. See TRBs XIII and TRBs XIV. We 
also excluded, imports from countries that do not produce bearing-
quality steel (see,e.g., TRBs XIV). We made adjustments to the import 
values to include freight costs using the shorter of the reported 
distances from either the closest PRC port to the PRC respondent or the 
domestic supplier to the PRC respondent. See Notice of Final 
Determination of Sales at Less Than Fair Value: Collated Roofing Nails 
From the People's Republic of China, 62 FR 51410 (October 1, 1997) and 
Sigma Corporation v. United States, 117 F. 3d 1401 (Fed. Cir. 1997) and 
86 F. Supp. 2d 1344, 1348 (CIT 2000).
    Additionally, certain steel and steel parts used to make TRBs or 
TRB parts during the period of review (``POR'') were purchased from 
market-economy suppliers and paid for with market-economy currency. In 
accordance with 19 CFR 351.408(c)(1), we valued these steel inputs 
using the actual price reported by the PRC respondent, except as noted 
below.
    As explained in 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 
Notice of Intent to Revoke Order in Part, 66 FR 1953 (January 10, 2001) 
and Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, 
From the People's Republic of China: Amended Final Results of 1998-1999 
Administrative Review and Determination to Revoke Order in Part, 66 FR 
11562 (February 26, 2001) (collectively, ``TRBs XII'') and TRBs XIII, 
we found a reasonable basis to believe or suspect that certain market-
economy steel inputs purchased by PRC TRBs manufacturers for the 
production of TRBs were subsidized. Consistent with our treatment of 
subsidized inputs in TRBs XIV, TRBs XIII, and TRBs XII, we have not 
used the prices paid by PRC producers of TRBs for steel which we have 
continuing reason to believe or suspect is subsidized. Instead, we 
relied on surrogate values. (See individual company calculation 
memoranda for a more detailed company-specific discussion of this 
issue.)
    2. Labor. Section 19 CFR 351.408(c)(3) of the Department's 
regulations requires the use of a regression-based wage rate. We have 
used the regression-based wage rate available on Import 
Administration's internet website at www.ia.ita.doc.gov/wages.
    3. Overhead, SG&A Expenses, and Profit. For factory overhead, 
selling, general, administrative expenses, and profit, we used 
information obtained from the fiscal year 2001-2002 annual reports of 
five Indian bearing producers. We calculated factory overhead and 
selling, general, and administrative expenses as percentages of direct 
inputs and applied these ratios to the PRC respondent's direct input 
costs. These expenses were calculated exclusive of labor and 
electricity, but included employer provident funds and welfare expenses 
not reflected in the Department's regressed wage rate. This is 
consistent with the methodology we utilized in TRBs XIV and TRBs XIII. 
For profit, we totaled the reported profit before taxes for three of 
the five Indian bearing producers and divided by the total calculated 
cost of production (``COP'') of goods sold. Consistent with TRBs XIV, 
we excluded from our profit calculation the two companies that reported 
profit losses. This percentage was applied to each respondent's total 
COP to derive a company-specific profit value.
    4. Packing. Consistent with our methodology in prior reviews (see, 
e.g., TRBs XIV), we calculated packing costs as a percentage of COP for 
CPZ based on company-specific information submitted in a previous 
review. This ratio was applied to CPZ's COP for the current review to 
calculate its packing costs.
    We calculated surrogate values for the packing materials reported 
by Yantai Timken (e.g., wooden pallet, plastic bag, steel strip) using 
import statistics reported in Monthly Statistics of the Foreign Trade 
of India, Vol. II - Imports by Commodity. We multiplied these surrogate 
values by the reported usage factor to calculate Yantai Timken's 
packing costs.
    5. Electricity. We calculated our surrogate value for electricity 
based on electricity rate data from theEnergy Data Directory and 
Yearbook (1999/2000) published by Tata Energy Research Institute. We 
calculated a simple average of the rates for the ``industrial'' 
category listed for 19 Indian states or electricity boards. We adjusted 
the electricity value to the POR using the Reserve Bank of India 
electricity-specific price index.
    6. Natural Gas. Consistent with Structural Steel Beams from the 
People's Republic of China; Final Determination of Sales at Less than 
Fair Value, 67 FR 35479 (May 20, 2002) and Notice of Amended Final 
Determination of Sales at Less Than Fair Value: Structural Steel Beams 
From the People's Republic of China, 67 FR 41397 (June 18, 2002), we 
used publicly available information pertaining to natural gas prices in 
India derived from the ``India Infoline'' website which can be found at 
www.indiainfoline.com. The website reported an average market price for 
natural gas in India for June 2000, the most recent year for which 
natural gas data was available for India. We converted this value to 
dollars per cubic meter and adjusted the value to the current POR using 
the Indian wholesale price index (``WPI'') published by the 
International Monetary Fund.
    7. Foreign Inland Freight. We valued truck freight using an average 
of November 1999 truck freight rate quotes collected from Indian 
trucking companies by the Department and used in the Final 
Determination of Sales at Less than Fair Value: Bulk Aspirin from the 
People's Republic of China, 65 FR 33805 (May 25, 2000) and in past TRBs 
reviews (see, e.g., TRBs XIV and TRBs XIII). We inflated this truck 
freight rate to the POR using the Indian WPI.
    8. Brokerage and Handling. We used the public version of a U.S. 
sales listing reported in the questionnaire response submitted by 
Meltroll Engineering for Stainless Steel Bar from India; Final Results 
of Antidumping Duty Administrative Review and New Shipper Review and 
Partial Rescission of Administrative Review, 65 FR 48965 (August 10, 
2000). Because this information is not contemporaneous with the POR, we 
adjusted the data to the POR by using the Indian WPI.

Preliminary Results of the Review

    We preliminarily determine that the following dumping margins exist 
for the period June 1, 2001, through May 31, 2002:

------------------------------------------------------------------------
                                                        Weighted-average
                Exporter/manufacturer                  margin percentage
------------------------------------------------------------------------
Peer Bearing Company - Changshan.....................               6.31
Yantai Timken Bearing Company, Ltd...................              20.41
------------------------------------------------------------------------

Public Comment

    Interested parties may request a hearing within 30 days of the date 
of publication of this notice. Any hearing, if requested, will be held 
two days after the scheduled date for submission of rebuttal briefs 
(see below). Interested parties may submit written arguments in case 
briefs within 30 days of the date of publication of this notice. 
Rebuttal briefs, limited to issues raised in case briefs, may be filed 
no later than five

[[Page 7503]]

days after the date of filing the case briefs. Parties who submit 
briefs in these proceedings should provide a summary of the arguments 
not to exceed five pages and a table of statutes, regulations, and 
cases cited. Copies of case briefs and rebuttal briefs must be served 
on interested parties in accordance with 19 CFR 351.303(f)(3).
    The Department will publish the final results of this 
administrative review, including the results of its analysis of issues 
raised in any such written briefs or hearing, within 120 days of 
publication of these preliminary results.

Assessment Rates

    Upon completion of this administrative review, 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 an exporter/importer (or customer)-specific assessment 
rate for merchandise subject to this review. We calculated importer (or 
customer)-specific ad valorem rates by aggregating the dumping duties 
due for all U.S. sales to each importer (or customer) and dividing this 
amount by the total entered value of the sales to that importer (or 
customer). In accordance with the requirement set forth in 19 CFR 
351.106(c)(2), where an importer (or customer)-specific ad valorem rate 
is less than de minimis, we will direct the Customs Service to 
liquidate without regard to antidumping duties. Where an importer (or 
customer)-specific ad valorem rate is greater than de minimis, we will 
direct the Customs Service to apply the ad valorem assessment rates 
against the entered value of each of the importer's/customer's entries 
during the review period.
    All other entries of the subject merchandise during the POR will be 
liquidated at the antidumping duty rate in place at the time of entry.

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(1) of the Act: (1) for the PRC companies 
named above, the cash deposit rates will be the rates for these firms 
established in the final results of this review, except that, for 
exporters with de minimis rates, i.e., less than 0.50 percent, no 
deposit will be required; (2) for previously-reviewed PRC and non-PRC 
exporters with separate rates, the cash deposit rate will be the 
company-specific rate established for the most recent period during 
which they were reviewed; (3) for all other PRC exporters, the rate 
will be the PRC country-wide rate, which is 33.18 percent; and (4) for 
all other non-PRC exporters of subject merchandise from the PRC, the 
cash deposit rate will be the rate applicable to the PRC supplier of 
that exporter. These deposit requirements, when imposed, shall remain 
in effect until publication of the final results of the next 
administrative review.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing these results in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: February 7, 2003.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 03-3729 Filed 2-13-03; 8:45 am]
BILLING CODE 3510-DS-S